Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

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

This quarterly report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934 ("Exchange Act"). Forward-looking statements reflect the current view about future events. When used in this quarterly report on Form 10-Q, the words "anticipate," "believe," "estimate," "expect," "future," "intend," "plan," or the negative of these terms and similar expressions, as they relate to us or our management, identify forward-looking statements. Such statements include, but are not limited to, statements contained in this quarterly report on Form 10-Q relating to our business strategy, our future operating results, and our liquidity and capital resources outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees of assurance of future performance. We caution you therefore against relying on any of these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, the execution of our strategy; evolving healthcare laws and regulations; changes in the rates or methods of third-party reimbursements for medical services; accelerated pace of consolidation in the hospital industry; changes in our medical technology as it relates to our services and procedures; any failures in our information technology systems to protect the privacy and security of protected information and other similar cyber security risks; our ability to raise capital to fund continuing operations; and other factors relating to our industry, our operations and results of operations. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Overview

For the Nine Months Ended September 30, 2026, and September 30, 2025, we reported a net loss of $19,129,123 and $3,500,215, respectively, an increase of $15,628,908. The increase in net loss was attributable primarily to an increase in interest expense related to the conversion of Notes payable to Series C and Series E for the nine months ending September 30, 2026, as compared to September 30, 2025.

Results of Operations

Nine months ended September 30, 2026, as Compared to Nine months ended September 30, 2025

The following is a discussion of the results of operations for the nine months ended September 30, 2026, compared to the nine months ended September 30, 2025.

Revenues

Total revenue was $0 for the nine months ended September 30, 2026, decreasing from $5,686 in the prior year.

Operating Expenses

Operating expenses include the following:

The major components of operating expenses include salaries and benefits, practice supplies and other operating costs, depreciation and general and administrative expenses, which include legal, accounting and professional fees associated with being a public entity.

General and administrative expenses were $1,256,007 for the nine months ended September 30, 2026, as compared to $578,674 for the nine months ended September 30, 2025, an increase of $677,333. The increase in spending is primarily due to additional legal, accounting and professional fees.

Net Loss from Operations

Net loss from operations for the nine months ended September 30, 2026, totaled $1,957,683, which compared to a loss from operations of $1,780,034 for the nine months ended September 30, 2025. The increase is a result of slightly higher SG&A expenses.

Interest Income (expense)

Interest expense increased to $17,369,765 for the nine months ended September 30, 2026, which compared to interest expense of $2,143,153 for the nine months ended September 30, 2025 due to finalized investor debt to Series C and Series E equity conversion.

Net Loss attributable to FCHS Shareholders

As a result of all the above, we reported net loss attributable to common shareholders of $19,129,123 for the nine months ended September 30, 2026, as compared to net loss attributable to common shareholders of $3,500,215 reported for the same year period in the prior year.

Liquidity and Capital Resources

As of September 30, 2026, we had cash of $135,212 and accounts receivable of $0. This is compared to cash of $2,430 and accounts receivable of $0 as of September 30, 2025.

The Company believes that the current cash balance as of September 30, 2026, along with the continued execution of its business development plan, will allow the Company to further improve its working capital.

However, in order to execute the Company's business development plan, which there can be no assurance we will achieve, the Company may need to raise additional funds through public or private equity offerings, debt financings, corporate collaborations or other means and potentially reduce operating expenditures. If the Company is unable to secure additional capital, it may be required to curtail its business development initiatives and take additional measures to reduce costs to conserve its cash. See Note 7 Going Concern.

Net cash used in our operating activities for the nine months ended September 30, 2026, totaled $2,604,296, which compared to net cash used in our operations for the nine months ended September 30, 2025, of $552,485. The increase in cash used for the nine months ended September 30, 2026, was due primarily to a decrease in accounts payable and more spending on SG&A expenses.

Net cash flow in investing activities was $0 for the nine months ended September 30, 2026, compared to net cash flow in investing activities of $10,000 for the nine months ended September 30, 2025. The decrease was primarily the result of proceeds from the sale of assets in 2025.

Net cash provided in financing activities was $2,733,612 for the nine months ended September 30, 2026, compared to net cash provided in financing activities of $525,000 for the nine months ended September 30, 2025. The cash flows provided in our financing activities were the result of proceeds from convertible debt investments.

Inflation

Our opinion is that inflation has not had, and is not expected to have, a material effect on our operations.

Off-Balance Sheet Arrangements

At September 30, 2026, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

New Accounting Pronouncements

We do not expect recent accounting pronouncements to have a material impact on our condensed consolidated financial position, results of operations or cash flows. See NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES in the accompanying condensed consolidated financial statements for additional information.