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

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is Management's Discussion and Analysis of Financial Condition and Results of Operations and should be read in conjunction with the interim financial statements and notes thereto contained in this report. This section contains forward-looking statements, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based. These forward-looking statements generally are identified by the words "believes," "projects," "expects," "anticipates," "estimates," "intends," "strategy," "plan," "may," "will," "would," "will be," "will continue," "will likely result," and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise. All forward-looking statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the SEC.

Actual future results and trends may differ materially from expectations depending on a variety of factors discussed in our filings with the SEC. These factors include without limitation:

	*	strategic business relationships;
	*	statements about our future business plans and strategies;
	*	anticipated operating results and sources of future revenue;
	*	our organization's growth;
	*	adequacy of our financial resources;
	*	development of markets;
	*	competitive pressures;
	*	changing economic conditions; and
	*	expectations regarding competition from other companies.

Although we believe that any forward-looking statements, we make in this Quarterly Report are reasonable, because forward-looking statements involve future risks and uncertainties, there are factors that could cause actual results to differ materially from those expressed or implied. For example, a few of the uncertainties that could affect the accuracy of forward-looking statements, besides the specific factors identified above in the Risk Factors section of this Quarterly Report, include:

	*	changes in general economic and business conditions affecting the healthcare industry;
	*	developments that make our facilities less competitive;
	*	changes in our business strategies;
	*	the level of demand for our facilities; and
	*	regulatory changes affecting the healthcare industry and third-party payor practices.

Properties

As of March 31, 2026, we owned ten (10) long-term care facilities including a campus of three buildings in Tulsa, OK. The following table provides summary information regarding these facilities at March 31, 2026:

														Total Square Feet								# of Beds
State		Properties				Operations				Leased Operations				Operating Square Feet				Leased Square Feet				Operating Beds				Leased Beds
Arkansas			1				-				1				-				40,737				-				141
Georgia (1)			2				2				-				63,616				-				201				-
Ohio			1				-				-				27,500				-				99				-
Oklahoma			6				5				-				162,976				-				412				-
Total			10				7				1				254,092				40,737				712				141

(1)	As a result of the sale of Goodwill Hunting LLC on June 18, 2024 the Company had no more operating leases recorded on its consolidated balance sheet.

Effective December 5, 2025, the Company executed two Purchase and Sale Agreements, and corresponding Operations Transfer Agreements, pursuant to which the Company agreed to sell to an unrelated third party, two (2) of the Company's skilled nursing facilities in the State of Georgia: Warrenton and Sparta. The completion of the sale of the PSA's resulted in the Company having two (2) remaining facilities in the State of Georgia. The Company closed on this transaction in January 2026.

Effective March 5, 2026, the Company executed two Purchase and Sale Agreements, and corresponding Operations Transfer Agreements, pursuant to which the Company agreed to sell to an unrelated third party, the Company's remaining two (2) skilled nursing facilities in the State of Georgia: Glen Eagle and Eastman. This transaction closed in May 2026, therefore the Company would no longer own any healthcare facilities in the State of Georgia.

RESULTS OF OPERATIONS

The following discussion of the financial condition, results of operations, cash flows, and changes in our financial position should be read in conjunction with our interim consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q.

		Three Months Ended March 31,
		2026				2025
Revenue
Healthcare revenue		$	7,181,161			$	10,486,939
Management Fee Revenue			107,441
Total Revenue			7,288,602				10,486,939
Expenses
Property taxes, insurance and other operating			6,068,043				8,080,969
General and administrative			2,129,484				2,365,088
Provision for credit losses			20,357				99,608
Depreciation			333,211				363,020
Total Expenses			8,551,095				10,908,685
Loss from Operations			(1,262,493	)			(421,746	)
Other (income) expense
Gain on sale of asset			(8,896,309	)			-
Interest expense, net			923,784				542,667
Other income			(226,085	)			(308,444	)
Total other (income) expense			(8,198,610	)			234,223
Income (loss) before income taxes			6,936,117				(655,969	)
Provision for income taxes			409,735				-
Net Income (Loss)		$	6,526,382			$	(655,969	)

Three Months Ended March 31, 2026, Compared to the Three Months Ended March 31, 2025

Revenues

Healthcare Revenue

Healthcare revenue for the three months ended March 31, 2026 was $7,181,161, compared to $10,486,939 for the three months ended March 31, 2025, a decrease of $3,305,778 or 32%. Healthcare revenues decreased due to the sale of two of our Georgia facilities in mid-January 2026.

Management Fee Revenue

Management fee revenue for the three months ended March 31, 2026 was $107,441 compared to $0 for the three months ended March 31, 2025, an increase of $107,441 or 100%. Management fee revenues increased due to the start of a management fee arrangement in November 2025.

Operating Expenses

Property Taxes, Insurance, and Other Operating

Property taxes, insurance, and other operating expenses was $6,068,043 for the three months ended March 31, 2026, compared to $8,080,969 for the three months ended March 31, 2025, a decrease of $2,012,926 or 25%. This decrease can be attributed to lower operating cost and the sale of our two Georgia facilities.

General and Administrative

General and administrative expenses was $2,129,484 for the three months ended March 31, 2026, compared to $2,365,088 for the three months ended March 31, 2025, a decrease of $235,604 or 10%. The decrease can be attributed to a decrease in salary and benefits expense.

Provision for Credit Losses

Provision for credit losses was $20,357 for the three months ended March 31, 2026, compared to $99,608 for the three months ended March 31, 2025, a decrease of $79,251 or 80%. The change can be attributed to the improvement made on collections and less accounts receivable outstanding due to the sale of two of our facilities during the three months ended March 31, 2026.

Depreciation

Depreciation expense was $333,211 for the three months ended March 31, 2026, compared to $363,020 for the three months ended March 31, 2025, a decrease of $29,809 or 8%. This decrease is related to an increase in fully depreciated assets along with assets sold at our two Georgia facilities as compared to the same period in the prior year.

Other Income (Expense)

Gain on Sale of Asset

Gain on sale of asset was income of $8,896,309 for the three months ended March 31, 2026, compared to $0 for the three months ended March 31, 2025. The increase was the result of the gain recognized due to the completion of the sale of our two Georgia facilities.

Interest Expense, Net

Interest expense, net was $923,784 for the three months ended March 31, 2026, compared to $542,667 for the three months ended March 31, 2025, an increase of 381,117 or 70%. The increase was due higher interest rates on our debt compared to the prior year in addition due prepayment premium fees and fees attributed to the payoff of debt.

Other Income

Other income was $226,085 for the three months ended March 31, 2026, compared to $308,444 for the three months ended March 31, 2025, a decrease of $82,359 or 27%. This is primarily related to recording the principal reduction payments made by the operator for the Arkansas facility as other income. We will continue to record this as the operator continues to satisfy the debt.

Provision for income taxes

Income tax expense was $409,735 for the three months ended March 31, 2026, compared to $0 for the three months ended March 31, 2025. Income tax expense was the result of the gain recognized due to the completion of the sale of our two Georgia facilities.

LIQUIDITY AND CAPITAL RESOURCES

Current Financial Condition

Throughout its history, the Company has experienced shortages in working capital and has relied, from time to time, upon sales of debt and equity securities to meet cash demands generated by our acquisition activities.

At March 31, 2026, the Company had cash of $1,286,452 and restricted cash of $192,129. Our restricted cash is to be expended on repairs and capital expenditures associated with Warrenton Health and Rehab facilities and decreased from December 31, 2025 as a result of the sale of two of our Georgi facilities. Our liquidity is expected to increase from potential equity and debt offerings and decrease as net offering proceeds are expended in connection with our various property improvement projects. Our continuing short-term liquidity requirements consisting primarily of operating expenses and debt service requirements, excluding balloon payments at maturity, are expected to be achieved from healthcare operations, rental revenues received, and existing cash on hand.

As reflected in our condensed consolidated financial statements included elsewhere in this Quarterly Report, we have a history of losses and incurred a net loss of $1.0 million for the year ended December 31, 2025 and had a working capital deficiency of $6.5 million as of March 31, 2026. These factors, among others, raise substantial doubt about our ability to continue as a going concern within one year from the date that the financial statements are issued. Our consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. Our ability to continue as a going concern is dependent on our ability to execute our strategy and on our ability to raise additional funds through the sale of equity and/or debt securities via public and/or private offerings. There can be no assurance that management's attempts at any or all of these endeavors will be successful.

Our long-term ability to continue as a going concern is dependent upon our ability to increase revenue, reduce costs, achieve a satisfactory level of profitable operations, and obtain additional sources of suitable and adequate financing. Our ability to continue as a going concern is also dependent its ability to further develop and execute on our business plan (including possible asset sales). We may also have to reduce certain overhead costs through the reduction of salaries and other means and settle liabilities through negotiation. There can be no assurance that management's attempts at any or all of these endeavors will be successful.

Sources of Liquidity

The Company's current sources of liquidity include the sale of it's properties. During the three months ended March 31, 2026 the Company received gross proceeds of $13.2 million as a result of the sale of two of our Georgia Facilities. In addition, on May 1, 2026, the Company received gross proceeds of $15.7 million as a result of the sale of an additional two of our Georgia Facilities.

As of March 31, 2026 and December 31, 2025, our debt balances consisted of the following:

		March 31, 2026				December 31, 2025
Senior Secured Promissory Notes		$	-			$	1,591,238
Promissory Note			484,094				-
Senior Secured Promissory Notes - Related Parties			-				775,000
Fixed-Rate Mortgage Loans			17,698,311				24,258,870
Variable-Rate Mortgage Loans			4,408,468				4,485,462
Line of Credit			-				325,192
			22,590,873				31,435,762
Unamortized Discount and Debt Issuance Costs			(202,368	)			(435,200	)
		$	22,388,505			$	31,000,562
As presented in the Consolidated Balance Sheets:
Current Maturities of Long-Term Debt, Net		$	3,876,312			$	10,938,102
Current Maturities of Long-Term Debt, Net classified within liabilities held for sale (1)			5,184,308				5,554,463
Short Term Debt - Related Parties, Net			-				775,000
Line of Credit - Current			-				325,192
Long-Term Debt			13,327,885				13,407,805
		$	22,388,505			$	31,000,562

The weighted average interest rate and term of our fixed rate debt are 6.41% and 13.19 years, respectively, as of March 31, 2026. The weighted average interest rate and term of our variable rate debt are 8.35% and 11.88 years, respectively, as of March 31, 2026.

The weighted average interest rate and term of our fixed rate debt are 6.21% and 13.76 years, respectively, as of December 31, 2025. The weighted average interest rate and term of our variable rate debt are 8.35% and 12.12 years, respectively, as of December 31, 2025.

Sources and Uses of Cash

The following table provides information regarding our cash flows for the three months ended March 31, 2026 and 2025:

		Three months ended March 31,
		2026				2025
Net cash (used in) provided by operating activities		$	(2,289,812	)		$	1,035,411
Net cash provided by (used in) investing activities			5,023,930				(219,240	)
Net cash used in financing activities			(3,109,230	)			(182,439	)
Net change in cash and cash equivalents and restricted cash		$	(375,112	)		$	633,732

Cash Flows (Used In) Provided By Operating Activities

Cash flows used operating activities was $2,289,812 for the three months ended March 31, 2026, compared to cash provided $1,035,411 for the three months ended March 31, 2025. The decrease primarily resulted from our change in net loss during the prior period of $655,969 compared to income of $6,526,382, a $7,182,351 change. This change was offset by a non-cash adjustment of $8,776,721 which is primarily due to a change of $8,896,309 attributed to a gain on sale of assets. The change in working capital accounts year-over-year was $1,730,853 which is primarily due to our change in accounts payable and accrued liabilities, liabilities held for sale and other liabilities offset by a changes attributed to accounts receivable and prepaid expenses and other assets.

Cash Flows Provided By (Used In) Investing Activities

Cash provided by investing activities was $5,023,930 for the three months ended March 31, 2026, compared to cash used of $219,240 for the three months ended March 31, 2025. Cash provided by investing activities can be attributed to the proceeds received from the sale of our two Georgia facilities. The cash used in investing activities during the three months ended March 31, 2025 was attributed to purchases of property and equipment.

Cash Flows Used In Financing Activities

Cash used in financing activities was $3,109.230 for the three months ended March 31, 2026, compared to $182,439 for the three months ended March 31, 2025. The increase in cash used in finance activities can be attributed to repayments made on our line of credit and senior secured notes.

Critical Accounting Policies and Estimates

The preparation of consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements. Estimates and assumptions are continually evaluated and are based on historical experience and management's assessment of current events and other facts and circumstances that are considered to be relevant. Actual results could differ from these estimates.

Our critical accounting estimates reflecting management's estimates and judgments are described in our Annual Report on Form 10-K for the year ended December 31, 2025. We have reviewed recently issued accounting pronouncements and are evaluating the potential impact, if any, on our condensed consolidated financial statements. Accordingly, there have been no material changes to critical accounting policies and estimates as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.

Recently Issued Accounting Pronouncements

The FASB and other entities issued new or modifications to, or interpretations of, existing accounting guidance during 2026. Management has carefully considered the new pronouncements that altered generally accepted accounting principles and does not believe that any other new or modified principles will have a material impact on the Company's reported financial position or operations in the near term.