Quarterly Report for Quarter Ending September 30, 2025 (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, 2024, 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 future business plans and strategies;
●	anticipated operating results and sources of future revenue;
●	organization's growth;
●	adequacy of our financial resources;
●	development of markets;
●	competitive pressures;
●	changing economic conditions;
●	expectations regarding competition from other companies;
●	the duration and scope of the COVID-19 pandemic;
●	the impact of the COVID-19 pandemic on occupancy rates and on the operations of the Company's facilities and its operators/tenants;
●	actions governments take in response to the COVID-19 pandemic, including the introduction of public health measures and other regulations affecting our properties and our operations and the operations of our operators/tenants;
●	the effects of health and safety measures adopted by us and our operators/tenants in response to the COVID-19 pandemic;
●	increased operational costs because of health and safety measures related to COVID-19;
●	the impact of the COVID-19 pandemic on the business and financial conditions of our operators/tenants and their ability to pay rent;
●	disruptions to our property acquisition and disposition activities due to economic uncertainty caused by COVID-19; and
●	general economic uncertainty in key markets as a result of the COVID-19 pandemic and a worsening of global economic conditions or low levels of economic growth.

Properties

As of September 30, 2025, we owned twelve (12) long-term care facilities including a campus of three buildings in Tulsa, OK. The following table provides summary information regarding these facilities at September 30, 2025:

														Total Square Feet								# of Beds
														Operating				Leased
										Leased				Square				Square				Operating				Leased
State		Properties				Operations				Operations				Feet				Feet				Beds				Beds
Arkansas			1				-				1				-				40,737				-				141
Georgia (1)			4				4				-				78,197				-				382				-
Ohio			1				-				-				27,500				-				99				-
Oklahoma			6				5				-				162,976				-				412				-
Total			12				9				1				268,673				40,737				893				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 February 7, 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, the Company's four (4) skilled nursing facilities in the State of Georgia: Abbeville, Dodge, Warrenton and Sparta. If consummated, the PSA's would result in the Company no longer having facilities in the State of Georgia. Effective July 13, 2025, the Company received written notice from the Purchaser, that the Purchaser was terminating the PSA and OTA without consummation.

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 September 30, 2025, Compared to the Three Months Ended September 30, 2024

		Three Months Ended September 30,
		2025				2024
Revenue
Healthcare revenue		$	10,839,954			$	10,016,416
Total Revenue			10,839,954				10,016,416
Expenses
Property taxes, insurance and other operating			8,519,256				7,573,735
General and administrative			2,146,196				2,395,897
Provision for credit losses			106,763				844,429
Depreciation			364,699				374,118
Total Expenses			11,136,914				11,188,179
Loss from Operations			(296,960	)			(1,171,763	)
Other income (expense)
Interest expense, net			(205,700	)			(475,130	)
Income from employee retention credits			659,923				-
Other income			595,102				39,771
Total other income (expense)			1,049,325				(435,359	)
Net income (loss)		$	752,365			$	(1,607,122	)

Healthcare Revenue

Healthcare revenue for the three months ended September 30, 2025 was $10,839,954, compared to $10,016,416 for the three months ended September 30, 2024, an increase of $823,538 or 8%. Healthcare revenues increased due to the increase in Medicaid rates at our Georgia and Oklahoma facilities.

Operating Expenses

Property Taxes, Insurance, and Other Operating

Property taxes, insurance, and other operating expenses was $8,519,256 for the three months ended September 30, 2025, compared to $7,573,735 for the three months ended September 30, 2024, an increase of $945,521 or 12%. This increase can be attributed to higher operating cost as a result of inflation between the two periods.

General and Administrative

General and administrative expenses was $2,146,196 for the three months ended September 30, 2025, compared to $2,395,897 for the three months ended September 30, 2024, a decrease of $249,701 or 10%. The decrease can be attributed to a decrease in cost of professional services fees and payroll related cost.

Provision for Credit Losses

Provision for credit losses was $106,763 for the three months ended September 30, 2025, compared to $844,429 for the three months ended September 30, 2024, a decrease of $737,666 or 87%. The decrease can be attributed to the Company hiring outside professionals to assist with collections during the year.

Depreciation

Depreciation expense was $364,699 for the three months ended September 30, 2025, compared to $374,118 for the three months ended September 30, 2024, a decrease of $9,419 or 3%. This decrease is related to an increase in fully depreciated assets along with assets sold in the Goodwill Hunting sale as compared to the same period in the prior year.

Other Income (Expense)

Interest Expense, Net

Interest expense, net was $205,700 for the three months ended September 30, 2025, compared to $475,130 for the three months ended September 30, 2024, a decrease of $269,430 or 57%. The decrease was driven by a reduction in total debt payable, resulting from principal payments made from the prior year. In addition, the company recorded interest income associated with employee retention credit payments received during the three months ended September 30, 2025.

Income from Employee Retention Credit

Income from Employee Retention Credit was $659,923 for the three months ended September 30, 2025, compared to none for the three months ended September 30, 2024, an increase of $659,923 or 100%. The increase was due to the Company collecting previous claims made to obtain the credit.

Other Income

Other income was $595,102 for the three months ended September 30, 2025, compared to $39,771 for the three months ended September 30, 2024, an increase of $555,331 or 1,396%. This is primarily related to recording of income attributed to the state of Georgia as a result of state Medicaid credits received.

Nine months Ended September 30, 2025, Compared to the Nine months Ended September 30, 2024

		Nine months Ended September 30,
		2025				2024
Revenue
Rental revenue		$	-			$	321,352
Healthcare revenue			31,768,137				28,772,271
Total Revenue			31,768,137				29,093,623
Expenses
Property taxes, insurance and other operating			24,756,402				22,491,386
General and administrative			6,747,550				6,982,262
Provision for credit losses			342,719				1,044,665
Depreciation			1,090,461				1,207,247
Total Expenses			32,937,132				31,725,560
Loss from Operations			(1,168,995	)			(2,631,937	)
Other income (expense)
Interest expense, net			(974,358	)			(1,691,170	)
Income from employee retention credits			986,423				-
Gain on sale of asset			-				2,112,143
Other income			945,299				363,466
Total other income			957,364				784,439
Net loss		$	(211,631	)		$	(1,847,498	)

Rental Revenue

Rental revenue for the nine months ended September 30, 2025 was none compared to $321,352 for the nine months ended September 30, 2024, a decrease of $321,352 or 100%. This decrease was due to the sale of our Archway Property in June 2024 with which we had monthly rental revenues of approximately $53,000. Since this was the only property that we were leasing to a third party, rental revenue to third parties ceased after June 2024.

Healthcare Revenue

Healthcare revenue for the nine months ended September 30, 2025 was $31,768,137 compared to $28,772,271 for the nine months ended September 30, 2024, an increase of $2,995,866 or 10%. Healthcare revenues increased due to the increase in Medicaid rates at our Georgia and Oklahoma facilities.

Operating Expenses

Property Taxes, Insurance, and Other Operating

Property taxes, insurance, and other operating expenses was $24,756,402 for the nine months ended September 30, 2025, compared to $22,491,386 for the nine months ended September 30, 2024, an increase of $2,265,016 or 10%. This increase can be attributed to higher operating cost as a result of inflation between the two periods.

General and Administrative

General and administrative expenses was $6,747,550 for the nine months ended September 30, 2025, compared to $6,982,262 for the nine months ended September 30, 2024, a decrease of $234,712 or 3%. The decrease can be attributed to lower professional fees and payroll cost.

Provision for Credit Losses

Provision for credit losses was $342,719 for the nine months ended September 30, 2025, compared to $1,044,665 for the nine months ended September 30, 2024, a decrease of $701,946 or 67%. The decrease can be attributed to the Company hiring outside professionals to assist with collections.

Depreciation

Depreciation expense was $1,090,461 for the nine months ended September 30, 2025, compared to $1,207,247 for the nine months ended September 30, 2024, a decrease of $116,786 or 10%. This decrease is related to an increase in fully depreciated assets along with assets sold in the Goodwill Hunting sale as compared to the same period in the prior year.

Other Income (Expense)

Interest Expense, Net

Interest expense, net was $974,358 for the nine months ended September 30, 2025, compared to $1,691,170 for the nine months ended September 30, 2024, a decrease of $716,812 or 42%. The decrease was due to the repayment of our mortgage for our Archway Property upon the sale of that property in June 2024.

Income from Employee Retention Credit

Income from Employee Retention Credit was $986,423 for the nine months ended September 30, 2025, compared to none for the nine months ended September 30, 2024, an increase of $986,423 or 100%. The increase was due to the Company collecting previous claims made to obtain the credit.

Gain on Sale of Asset

For the nine months ended September 30, 2024, the Company recorded a $2,112,143 gain on the sale of our Goodwill Hunting property as a result of a sale to a third-party.

Below is a summary of the gain calculated as a result of the sale:

Description		Amount
Cash		$	2,484,800
Security Deposit			250,000
Interest Exp			21,470
Notes Payable			3,679,890
Prepaid Rent			(146,740	)
Land & Buildings			(4,177,277	)
Total Gain on Sale of Goodwill Hunting		$	2,112,143

Other Income

Other income was $945,299 for the nine months ended September 30, 2025, compared to $363,466 for the nine months ended September 30, 2024, a increase of $581,833 or 160%. 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. In addition the Company had recognized $590,404 in credit from the state of Georgia during the nine months ended September 30, 2025 as a result of state Medicaid credit received.

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 September 30, 2025, the Company had cash of $417,125 and restricted cash of $806,886. Our restricted cash is to be expended on repairs and capital expenditures associated with Providence of Sparta Nursing Home or Warrenton Health and Rehab. 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 $0.2 million for the nine months ended September 30, 2025 and had a working capital deficiency of $16.3 million as of September 30, 2025. 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.

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. 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 CARES Act provides an employee retention credit ("CARES Employee Retention Credit"), which is a refundable tax credit against certain employment taxes of up to $5,000 per employee for eligible employers. The tax credit is equal to 50% of qualified wages paid to employees during a quarter, capped at $10,000 of qualified wages per employee through December 31, 2020. Additional relief provisions were passed by the United States government, which extend and slightly expand the qualified wage caps on these credits through December 31, 2021. Based on these additional provisions, the tax credit is now equal to 70% of qualified wages paid to employees during a quarter, and the limit on qualified wages per employee has been increased to $10,000 of qualified wages per quarter. The Company qualified for the tax credit under the CARES Act for qualified wages for the years ended December 31, 2020 and 2021. In February 2023, the Company submitted filings for CARES Employee Retention Credits totaling $8,124,710. The Company has received a majority of the credits of $6,866,759 as of December 31, 2024 and received payments of $986,423 during the nine months ended September 30, 2025. The Company has fully reserved for the remaining receivable due in the amount of $271,528.

As of September 30, 2025 and December 31, 2024, our debt balances consisted of the following:

		September 30, 2025				December 31, 2024
Senior secured promissory notes		$	1,050,000			$	1,025,000
Senior secured promissory notes - related parties			775,000				750,000
Lines of credit			74,442				799,752
Fixed-rate mortgage loans			24,363,944				25,152,756
Other note payable			557,230				-
Variable-rate mortgage loans			4,571,813				4,675,991
Other debt, subordinated secured			173,500				173,500
Other debt, subordinated secured - seller financing			-				7,957
Total			31,565,929				32,584,956
Unamortized discount and debt issuance costs			(439,384	)			(451,936	)
Total debt, net of discount		$	31,126,545			$	32,133,020
As presented in the Condensed Consolidated Balance Sheets:
Current maturities of long term debt, net		$	11,764,959			$	11,450,406
Short term debt - related parties, net		$	775,000			$	750,000
Short term debt - line of credit		$	74,442			$	799,752
Long-term debt		$	18,512,144			$	19,132,862

Sources and Uses of Cash

The following table provides information regarding our cash flows for the nine months ended September 30, 2025 and 2024:

		Nine months ended September 30,
		2025				2024
Net cash provided by (used in) operating activities		$	1,238,060			$	(1,401,076	)
Net cash (used in) provided by investing activities			(386,988	)			2,458,573
Net cash used in financing activities			(1,019,027	)			(1,539,624	)
Net change in cash and cash equivalents and restricted cash		$	(167,955	)		$	(482,127	)

Cash Flows Provided By (Used In) Operating Activities

Cash flows provided by operating activities was $1,238,060 for the nine months ended September 30, 2025, compared to cash used in operation of $1,401,076 for the nine months ended September 30, 2024. The increase in cash provided by operations primarily resulted from the decrease in our net loss which went from a net loss of $1,847,498 for the nine months ended September 30, 2024 to a loss of $211,631 for the nine months ended September 30, 2025. The decrease in net loss was offset by non-cash charges of $1,445,732 largely comprised of depreciation and changes in the provision for credit losses. The remainder of our sources of cash provided by operating activities of $3,959 was from changes in our working capital, including $920,131 from increases of accounts receivable payments and $111,407 from timing of prepaids offset by an increase of $400,000 on other current liabilities and an increase of $627,597 from timing of accounts payable and accrued expenses.

Cash Flows (Used In) Provided By Investing Activities

Cash used in investing activities was $386,988 for the nine months ended September 30, 2025, compared to cash provided by of $2,458,573 for the nine months ended September 30, 2024. The cash used in investing activities for the nine months ended September 30, 2025 was attributed to purchases of property and equipment. The cash provided by investing activities for the nine months ended September 30, 2024 is primarily attributed to the $2,484,800 in proceeds from the sale of the Goodwill Hunting asset.

Cash Flows Used In Financing Activities

Cash used in financing activities was $1,019,027 for the nine months ended September 30, 2025, compared to $1,539,624 for the nine months ended September 30, 2024. During both periods we made payments on long-term debt, line of credit and related party debt.

Critical Accounting Policies

Set forth below is a summary of the accounting policies that management believes are critical to the preparation of the consolidated financial statements. Certain of these accounting policies are particularly important for an understanding of the financial position and results of operations presented in the consolidated financial statements set forth elsewhere in this report. These policies require the application of judgment and assumptions by management and, as a result, are subject to a degree of uncertainty. Actual results could differ as a result of such judgment and assumptions.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue Recognition. Under the accounting guidance our revenues are presented net of estimated allowances, and we no longer present the contractual allowance as a separate line item on our balance sheet.

The Company reviews its calculations for the realizability of gross service revenues monthly to make certain that we are properly allowing for the uncollectible portion of our gross billings and that our estimates remain sensitive to variances and changes within our payer groups. The contractual allowance calculation is made based on historical allowance rates for the various specific payer groups monthly with a greater emphasis given to current trends. This calculation is routinely analyzed by the Company based on actual allowances issued by payers and the actual payments made to determine what adjustments, if any, are needed.

Our revenues generally relate to contracts with patients in which our performance obligations are to provide health care services to the patients. Revenues are recorded during the period our obligations to provide health care services are satisfied. Our performance obligations for inpatient services are generally satisfied over periods that average approximately five days, and revenues are recognized based on charges incurred in relation to total expected charges. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, and Medicaid) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare, and Medicaid). Medicare generally pays for inpatient and outpatient services at prospectively determined rates based on clinical, diagnostic and other factors. Services provided to patients having Medicaid coverage are generally paid at prospectively determined rates per discharge, per identified service or per covered member.

Our revenues are based upon the estimated amounts we expect to be entitled to receive from patients and third-party payers. Estimates of contractual allowances under managed care are based upon the payment terms specified in the related contractual agreements.

Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation. Estimated reimbursement amounts are adjusted in subsequent periods as cost reports are prepared and filed and as final settlements are determined (in relation to certain government programs, primarily Medicare, this is generally referred to as the "cost report" filing and settlement process).

Recently Issued Accounting Pronouncements

The FASB and other entities issued new or modifications to, or interpretations of, existing accounting guidance during 2025. 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.