Quarterly Report for Quarter Ending March 31, 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 Three Months Ended March 31, 2026, and March 31, 2025, we reported a net loss of $1,435,869 and $1,397,892, respectively, an increase of $37,977 or 2.7%. The increase in net loss was attributable primarily to increased SG&A expenses for the three months ending March 31, 2026, as compared to March 31, 2025.

Results of Operations

Three months ended March 31, 2026, as Compared to Three months ended March 31, 2025

The following is a discussion of the results of operations for the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Revenues

Total revenue was $141 for the three months ended March 31, 2026, decreasing from $4,033 in the prior year. Net patient service revenue accounted for all of total revenue in 2026.

Operating Expenses

Operating expenses include the following:

		Three Months Ended March 31, 2026				Three Months Ended March 31, 2025
Salaries and benefits		$	102,251			$	111,661
Other operating expenses			263,410				265,081
General and administrative			362,907				206,117
Depreciation and amortization			2,906				5,630
Total operating expenses		$	731,474			$	588,489

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 $362,907 for the three months ended March 31, 2026, as compared to $206,117 for the three months ended March 31, 2025, an increase of $156,790. The increase in spending is primarily due to additional legal, accounting and professional fees.

Net Loss from Operations

Net loss from operations for the three months ended March 31, 2026, totaled $1,435,869, which compared to a loss from operations of $1,397,892 for the three months ended March 31, 2025. The increase is a result of higher SG&A expenses offset by lower interest expense.

Interest Income (expense)

Interest expense decreased to $704,537 for the three months ended March 31, 2026, which compared to interest expense of $785,896 for the three months ended March 31, 2025.

Net Loss attributable to FCHS Shareholders

As a result of all the above, we reported net loss attributable to common shareholders of $1,435,869 for the three months ended March 31, 2026, as compared to net loss attributable to common shareholders of $1,397,892 reported for the same year period in the prior year.

Liquidity and Capital Resources

As of March 31, 2026, we had cash of $3,859 and accounts receivable of $0. This is compared to cash of $29,644 and accounts receivable of $0 as of March 31, 2025.

The Company believes that the current cash balance as of March 31, 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 three months ended March 31, 2026, totaled $327,037, which compared to net cash provided in our operations for the three months ended March 31, 2025, of $292,031. The decrease in cash used for the three months ended March 31, 2026, was due primarily to an increase in accounts payable.

Net cash flow in investing activities was $0 for the three months ended March 31, 2026, compared to net cash flow in investing activities of $10,000 for the three months ended March 31, 2025. The decrease was primarily the result of proceeds from the sale of assets in 2025.

Net cash provided in financing activities was $325,000 for three months ended March 31, 2026, compared to net cash provided in financing activities of $291,760 for the three months ended March 31, 2025. The cash flows provided in our financing activities were the result of convertible debt investments.

		Three Months Ended				Three Months Ended
			31-Mar-26				31-Mar-25
Proceeds from issuance of convertible notes		$	525,000			$	336,761
Interest paid			-				(45,000	)
Repayment of Notes Payable			(200,000	)			-
Net cash provided by financing activities			325,000				291,761

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 March 31, 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.