Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes appearing elsewhere in this report. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those discussed below. Factors that could cause or contribute to such differences include, but are not limited to, those identified below, and those discussed in the section titled "Item 1A. Risk Factors" included elsewhere in this Quarterly Report on Form 10-Q. All amounts in this report are in U.S. dollars, unless otherwise noted.

Overview

General

HealthLynked Corp. (the "Company," "we," "our," or "us") was incorporated in the State of Nevada on August 4, 2014. We currently operate in three distinct divisions:

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Health Services Division: This division is comprised of a single patient service practice under the NCFM brand that includes the combined service offerings of (i) NCFM, a functional medical practice engaged in improving the health of its patients through individualized and integrative health care, (ii) CCN, a primary care providing a comprehensive range of medical services, and (iii) AEU, a minimally and non-invasive cosmetic services. During October 2025, the Company sold the assets associated with its BTG practice, which had previously been included in the Health Services segment.

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Digital Healthcare Division: At the forefront of healthcare innovation, this division develops and manages an advanced online concierge medical service. The HealthLynked Network facilitates efficient management of medical records and care, allowing seamless patient appointment scheduling, comprehensive telemedicine services, and a cloud-based system for medical information and records management. It also supports physicians in expanding their practices and acquiring new patients through our robust online scheduling system.

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Medical Distribution Division: MedOffice Direct LLC ("MOD"), a part of this division, operates as a virtual distributor of discounted medical supplies to consumers and medical practices nationwide, ensuring timely and cost-effective delivery.

Critical accounting policies and significant judgments and estimates

For a discussion of our critical accounting policies, see Note 2, "Significant Accounting Policies," in the Notes to consolidated Financial Statements.

The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Management bases its estimates on historical experience, current conditions and various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from these estimates, and such differences could be material to our consolidated financial statements. Critical accounting estimates are those that involve a significant level of estimation uncertainty and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. Significant estimates used in the preparation of our consolidated financial statements include the following:

Derivative Financial Instruments

In evaluating our financial instruments, management assesses the terms of debt agreements, equity-linked contracts and other arrangements to determine whether embedded features require bifurcation and separate accounting as derivatives. This assessment involves significant judgment in evaluating contractual terms, including settlement provisions, conversion features, and adjustments to exercise prices or conversion ratios. Management also evaluates whether such instruments qualify for the scope exception for contracts indexed to and settled in the Company's own stock. Changes in the interpretation of contractual provisions or the issuance of new accounting guidance could result in different conclusions regarding derivative classification.

Derivative financial instruments are recorded at fair value, with changes in fair value recognized in earnings. Estimating fair value requires the use of valuation models that incorporate significant assumptions, including expected volatility of the Company's common stock, risk-free interest rates, expected term, and the probability of certain contingent events occurring. Because many of these inputs are not observable in active markets, the valuations may involve significant management judgment and are typically classified within Level 3 of the fair value hierarchy. Changes in these assumptions could materially affect the fair value of derivative liabilities or assets and result in significant fluctuations in our reported results of operations.

Contingent Sale Consideration Receivable

The fair value of contingent consideration receivable related to the sale of businesses or assets is estimated using probability-weighted cash flow models. These estimates require significant judgment regarding the likelihood of achieving performance targets, expected timing of payments, discount rates and other factors. Changes in assumptions regarding the expected performance of the divested business or other conditions could materially affect the estimated fair value of the receivable and may result in adjustments recognized in earnings.

Inventory Valuation

Inventory is stated at the lower of cost or net realizable value. We evaluate inventory quantities on hand relative to expected future demand, product life cycles, technological changes and market conditions. We record reserves for excess, slow-moving or obsolete inventory based on these assessments. Changes in demand forecasts or product pricing could result in additional inventory write-downs.

Stock-Based Compensation

We measure stock-based compensation expense based on the estimated fair value of equity awards granted to employees and non-employees. Determining the fair value of these awards requires judgment in estimating inputs to valuation models, including expected volatility, expected term, risk-free interest rates and expected forfeiture rates. Changes in these assumptions could materially impact the amount of stock-based compensation expense recognized in our consolidated financial statements.

Valuation Allowance on Deferred Tax Assets

We evaluate the realizability of our deferred tax assets and record a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. This assessment requires significant judgment and involves evaluating both positive and negative evidence, including historical operating results, future taxable income projections, the timing of reversal of temporary differences and available tax planning strategies. Changes in our operating performance or tax planning strategies could result in adjustments to the valuation allowance.

Lease Accounting and Incremental Borrowing Rate

For leases in which the implicit rate cannot be readily determined, we estimate the incremental borrowing rate used to measure our right-of-use assets and related lease liabilities under ASC 842. Determining the incremental borrowing rate requires judgment and considers factors such as our credit risk, the lease term, economic environment and collateralized borrowing rates available to us.

Useful Lives of Property and Equipment

Property and equipment are depreciated over their estimated useful lives. Determining the appropriate useful life for an asset requires judgment regarding the expected period over which the asset will provide economic benefit. Changes in technology, market conditions, or usage patterns could result in revisions to estimated useful lives and changes in depreciation expense.

Results of Operations

Comparison of Three Months Ended March 31, 2026 and 2025

The following table summarizes the changes in our results of operations for the three months ended March 31, 2026 and 2025:

		Three Months Ended March 31,								Change
		2026				2025				$				%
Patient service revenue, net		$	418,613			$	752,015			$	(333,402	)			-44	%
Subscription revenue			3,494				9,584				(6,090	)			-64	%
Product revenue			1,358				12,609				(11,251	)			-89	%
Total revenue			423,465				774,208				(350,743	)			-45	%
Operating Expenses and Costs
Practice salaries and benefits			142,104				402,366				(260,262	)			-65	%
Other practice operating expenses			99,819				313,976				(214,157	)			-68	%
Cost of product revenue			9,034				17,816				(8,782	)			-49	%
Selling, general and administrative expenses			847,281				629,415				217,866				35	%
Depreciation and amortization			26,040				28,024				(1,984	)			-7	%
Loss from operations			(700,813	)			(617,389	)			(83,424	)			14	%
Other Income (Expenses)
Gain on extinguishment of debt			1,328,069				42,726				1,285,343				3008	%
Loss on change in fair value of debt			(2,180,526	)			(49,186	)			(2,131,340	)			4333	%
Gain on change in fair value of derivative financial instruments			32,169				45,038				(12,869	)			-29	%
Amortization of original issue discounts on notes payable			(87,984	)			(405,113	)			317,129				-78	%
Interest expense and other			(12,219	)			(67,015	)			54,796				-82	%
Total other income (expenses)			(920,491	)			(433,550	)			(486,941	)			112	%
Net loss		$	(1,621,304	)		$	(1,050,939	)		$	(570,365	)			54	%

*

Denotes line item on statement of operations for which there was no corresponding activity in the same period of prior year.

Revenue

Patient service revenue decreased by $333,402, or 44% year-over-year, from $752,015 in the three months ended March 31, 2025, to $418,613 in the three months ended March 31, 2026, primarily as a result of (i) the downsizing and combination of services offerings for our Health Services Division into a single patient service practice under the NCFM brand in May 2025, representing a year-over-year decline in revenue of $226,341, or 35%, and (ii) the sale of the BTG practice assets in October 2025, representing a year-over-year decline in revenue of $107,061, or 100%. The overall reduction in patient service revenue was offset in part by a corresponding designed reduction in practice operating costs as described below in the fluctuation of "Practice salaries and benefits" and "Other practice operating costs," which declined by a combined $474,419, or 66%, from the three months ended March 31, 2025 to the three months ended March 31, 2026.

Subscription revenue in the three months ended March 31, 2026 decreased by $6,090, or 64% year-over-year, to $3,494 in the three months ended March 31, 2026, from $9,584 in the three months ended March 31, 2025, due primarily to a decrease in HealthLynked Network paid subscriptions that were paired with NCFM membership contracts.

Product revenue was $1,358 in the three months ended March 31, 2026, compared to $12,609 in the three months ended March 31, 2025, a decrease of $11,251, or 89%. Product revenue was earned by the Medical Distribution Division, comprised of the operations of MOD, which decreased due to decreased marketing efforts and demand for our products at our offered price points.

Operating Expenses and Costs

Practice salaries and benefits decreased by $260,262, or 65%, to $142,104 in the three months ended March 31, 2026, compared to $402,366 in the three months ended March 31, 2025, primarily as a result of focused cost reduction efforts at all of our practices starting in 2023 and continuing into 2025.

Other practice operating costs decreased by $214,157 or 68%, to $99,819 in the three months ended March 31, 2026 from $313,976 in the three months ended March 31, 2025, primarily as a result of focused cost reduction efforts at all of our practices starting in 2023 and continuing into 2025.

Cost of product revenue was $9,034 in the three months ended March 31, 2026, a decrease of $8,782, or 49%, compared to $17,816 in the same period of 2025, corresponding to the decline in product sales for the period compared to the same period in the prior year.

Selling, general and administrative costs increased by $217,866, or 35%, to $847,281 in the three months ended March 31, 2026 compared to $629,415 in the three months ended March 31, 2025, primarily due to higher stock based compensation charges by $290,396, offset by lower salaries, office and overhead costs in our corporate function resulting from focused cost cutting efforts.

Depreciation and amortization in the three months ended March 31, 2026 decreased by $1,984, or 7%, to $26,040, compared to $28,024 in the three months ended March 31, 2025, primarily as a result of a slightly lower depreciable fixed asset base in the three months ended March 31, 2026.

Loss from operations increased by $83,424, or 14%, to $700,813 in the three months ended March 31, 2026 compared to $617,389 in the three months ended March 31, 2025, primarily as a result of lower revenue from our scaled-down patient service practices and higher stock based compensation expense in 2026, offset by reduced practice operating costs and other cash-based corporate overhead costs.

Other Income (Expenses)

Gain on extinguishment of debt in the three months ended March 31, 2026 was a gain of $1,328,069, compared to $42,726 in the three months ended March 31, 2025. Gain on extinguishment of debt in the three months ended March 31, 2026 resulted from the refinancing on February 2, 2026 (the "Dent Refinancing") of all past outstanding notes with aggregate principal totaling $4,338,192, accrued interest totaling $737,180, undocumented advances totaling $339,840 and accrued compensation liabilities totaling $300,600 payable to Dr. Michael Dent (the "Prior Dent Debt") into a new consolidated Secured Convertible Promissory Note in the principal amount of $5,715,812 payable to a trust controlled by Dr. Michael Dent (the "February 2026 Dent Note"). Gain on extinguishment of debt in the three months ended March 31, 2025 resulted from the extension of 12 notes payable to Dr. Dent during the quarter.

Loss on the change in fair value of debt in the three months ended March 31, 2026 was $2,180,526 comprised of (i) a loss of $1,816,073 from the change in fair value of the February 2026 Dent Note between its issuance date of February 2, 2026 and March 31, 2026, and (ii) a loss of $364,453 from the change in fair value of certain notes payable including in the refinanced Prior Dent Debt between December 1, 2025 and the Dent Refinancing date of February 2, 2026. Loss on the change in fair value of debt in the three months ended March 31, 2025 was $49,186 related to 13 notes payable to Dr. Michael Dent that were recorded at fair value following extension of the maturity dates of the notes.

Gain on change in fair value of derivative financial instruments was $32.169 in the three months ended March 31, 2026, a decrease of $12.869, or 29%, compared to a gain of $45,038 in the three months ended March 31, 2025. These gains result from the change in fair value of derivative financial instruments related to beneficial conversion features embedded in third party notes issued during the period. Such derivative financial instruments are revalued at each period end.

Amortization of original issue and debt discounts on notes payable and convertible notes in the three months ended March 31, 2026 was $87,984, a decrease of $317,129, or 78%, compared to $405,113 in the three months ended March 31, 2025. Amortization of discounts arose from original issue discounts on notes payable, warrants attached to notes payable, and beneficial conversion features in convertible notes payable. The decrease was due to larger equity-based and original issue discounts offered for notes payable being amortized in 2025, and therefore larger corresponding amortizable discount balances, in 2025 compared to 2026.

Interest expense and other decreased by $54,796, or 82%, to $12,219 for the three months ended March 31, 2026, compared to $67,015 in the three months ended March 31, 2025, due primarily to debt associated with our largest debtholder, Dr. Michael Dent, being carried at fair value. Interest charges are reflected as future cash outflows, and therefore through the change in fair value of debt rather than through interest expense, for instruments carried at fair value.

Total other net expenses increased by $486,941, or 112%, to net expense of $920,491 in the three months ended March 31, 2026 compared to net expense of $433,550 in the three months ended March 31, 2025. The change was primarily a result of an increased loss on change in fair value of debt from the increase in fair value of the February 2026 Dent Note during the three months ended March 31, 2026, offset by higher gains on extinguishment of debt related to the Dent Refinancing, lower debt-related discount amortization and lower interest charges.

Net loss

Net loss increased by $570,365, or 54%, to $1,621,304 in the three months ended March 31, 2026, compared to net loss of $1,050,939 in the three months ended March 31, 2025, primarily as a result of (i) increased loss on change in fair value of debt from the increase in fair value of the February 2026 Dent Note during the three months ended March 31, 2026, (ii) lower revenue from our practices, and (iii) higher stock-based compensation expense, offset by (iv) higher gains on extinguishment of debt related to the Dent Refinancing, (v) reduced practice operating costs resulting from substantial downsizing and cost cutting measures, and (vi) and lower debt-related discount amortization and interest charges.

Seasonal Nature of Operations

We do not experience any material seasonality related to any of our operations.

Liquidity and Capital Resources

Liquidity Condition

During the 2014, the Financial Accounting Standards Board ("FASB") issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern. This update provided U.S. GAAP guidance on management's responsibility in evaluating whether there is substantial doubt about a company's ability to continue as a going concern and about related footnote disclosures. Under this standard, we are required to evaluate whether there is substantial doubt about our ability to continue as a going concern each reporting period, including interim periods. In evaluating our ability to continue as a going concern, management considered the conditions and events that could raise substantial doubt about our ability to continue as a going concern within 12 months after our financial statements were issued (May 15, 2027).

Management considered our current financial condition and liquidity sources, including current funds available, forecasted future cash flows and our obligations due before May 15, 2027 and concluded that, without additional funding, we will not have sufficient funds to meet our obligations within one year from the date the consolidated financial statements were issued. Without raising additional capital, there is substantial doubt about our ability to continue as a going concern through May 15, 2027. The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern. This basis of presentation contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business.

We are subject to a number of risks, including uncertainty related to product development and generation of revenues and positive cash flow from our Digital Healthcare Division and a dependence on outside sources of capital. The attainment of profitable operations is dependent on future events, including obtaining adequate financing to fulfill our growth and operating activities and generating a level of revenues adequate to support our cost structure.

As of March 31, 2026, we had cash balances of $23,973, a working capital deficit of $6,658,253 and an accumulated deficit of $52,196,869. For the three months ended March 31, 2026, we had a net loss of $1,621,304 and used cash from operating activities of $221,976. We expect to continue to incur net losses and have significant cash outflows for at least the next 12 months.

Significant Liquidity Transactions

Through March 31, 2026, we have funded our operations principally through a combination of sales of our common stock, convertible and non-convertible promissory notes, government issued debt, and related party debt, as described below.

During the three months ended March 31, 2026, we issued new convertible notes payable to related parties for aggregate net cash proceeds of $95,000 and refinanced existing notes payable to our CEO, Dr. Michael Dent, with an aggregate principal value of $4,338,192. We also issued notes payable to third parties for net cash proceeds of $350,000. We made repayments on related party and third-party notes of $236,187 in three months ended March 31, 2026.

On February 2, 2026, we refinanced all past outstanding notes with aggregate principal totaling $4,338,192, accrued interest totaling $737,180, undocumented advances totaling $339,840 and accrued compensation liabilities totaling $300,600 into the February 2026 Dent Note in the principal amount of $5,715,812. The February 2026 Dent Note accrues interest at a rate of 12% per year and matures on February 2, 2029, at which time all outstanding principal and interest is due. The February 2026 Dent Note is convertible into shares of common stock at any time at the holder's discretion at a conversion price of $4.25 per share, subject to adjustment in the event of a future offering by us at a price lower than the conversion price.

On February 9, 2026, we filed a Form S-1 registration statement with the SEC for the sale of up to $7,500,000 shares of our common stock at a proposed offering price between $4.00 and $6.00 per share (the "Common Stock Offering"). On April 30, 2026, we filed an amendment to Form S-1 registration statement with the SEC. Any proceeds from the offering are subject to effectiveness of the Offering Statement and demand from the market to purchase our common stock.

Without raising additional capital, whether via the sale of equity or debt instruments, from proceeds from the Common Stock Offering, from receipt of remaining contingent consideration related to the sale of AHP, from the sale of our current practices, or from other sources, there is substantial doubt about our ability to continue as a going concern through May 15, 2027. The accompanying condensed consolidated financial statements have been prepared assuming that we will continue as a going concern. This basis of presentation contemplates the recovery of our assets and the satisfaction of liabilities in the normal course of business.

Plan of operation and future funding requirements

Our plan of operations is to profitably operate our Health Services business and continue to invest in our Digital Healthcare business, including our cloud-based online personal medical information and record archiving system, the "HealthLynked Network."

Our business model employs both consumer (B2C) and enterprise (B2B) revenue streams, driven by patient subscriptions, telemedicine services, appointment booking fees for in-network providers, and strategic partnerships with insurers, employers, and research organizations. Beyond individual patients and providers, HealthLynked's business model can extend to strategic partnerships with insurance companies, large employers, pharmaceutical companies, and medical research organizations. If we fail to complete the development of, or successfully market, the HealthLynked Network, our ability to realize future increases in revenue and operating profits could be impacted, and our results of operations and financial position would be materially adversely affected.

We plan to raise additional capital to fund our ongoing plan of operation.

Historical Cash Flows

Cash flows during the years ended three months ended March 31, 2026 and 2025 were as follows:

		Three Months Ended March 31,
		2026				2025
Net cash (used in) provided by:
Operating activities		$	(221,976	)		$	(432,553	)
Investing activities			-				-
Financing activities			208,813				378,582
Net increase (decrease) in cash		$	(13,163	)		$	(53,971	)

Operating Activities - During the three months ended March 31, 2026, we used cash from operating activities of $221,976, as compared with $432,553 in the three months ended March 31, 2025. The decrease in cash usage results primarily from cost reduction efforts at our Health Services practices and corporate office.

Investing Activities - We did not have any cash flows from investing activities during the three months ended March 31, 2026 or 2025.

Financing Activities - During the three months ended March 31, 2026 and 2025, we received cash of $208,813 and $378,582, respectively, from financing activities. Cash provided by financing activities in 2026 was comprised of $350,000 from the issuance of notes payable to third parties and $95,000 from the issuance of notes payable to related parties, offset by $236,187 repayments made against notes payable balances to third parties and related party advances. During the three months ended March 31, 2025, cash provided by financing activities was $378,582, comprised of $10,000, from the sale of common stock, $305,000 from the issuance of notes payable to third parties and $175,000 from the issuance of notes payable to related parties, offset by $111,418 repayments made against notes payable balances to third parties.

Exercise of Warrants and Options

No warrants or options were exercised during the three months ended March 31, 2026 or 2025.

Other Outstanding Obligations at March 31, 2026

As of March 31, 2026, 672,824 shares of our common stock are issuable pursuant to the exercise of warrants with exercise prices ranging from $1.65 to $90.00.

As of March 31, 2026, 131,174 shares of our common stock are issuable pursuant to the exercise of options with exercise prices ranging from $2.20 to $16.10.

As of March 31, 2026, 95,031 shares of our common stock were earned but unissued pursuant to consulting and private placement agreements.

As of March 31, 2026, 1,345,032 shares of our common stock are issuable upon the conversion of outstanding convertible notes payable at the option of the beneficial holders of those instruments, Dr. Michael Dent and Jason Bishara.

Off Balance Sheet Arrangements

We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable Securities and Exchange Commission rules.