Quarterly Report for Quarter Ending September 30, 2025 (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, 2025, and September 30, 2024, we reported a net loss of $3,500,214 and $3,954,535, respectively, a decrease of $454,319 or 11.5%. The decrease in the net loss was attributable to decreased interest for the nine months ending September 30, 2025 and PPP forgiveness in the amount of $471,300 as compared to September 30, 2024.

Results of Operations

Nine months ended September 30, 2025, as Compared to Nine months ended September 30, 2024

The following is a discussion of the results of operations for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.

Revenues

Total revenue was $5,686 for the nine months ended September 30, 2025, increasing from ($19,801) in the prior year. Net patient service revenue accounted for all of total revenue in 2025. The effective increase in patient service revenue was the result of a write-off in 2024.

Operating Expenses

Operating expenses include the following:

		Nine Months Ended Sept. 30, 2025				Nine Months Ended Sept, 30, 2024
Salaries and benefits		$	400,854			$	330,815
Other operating expenses			792,356				810,983
General and administrative			578,674				238,210
Depreciation and amortization			13,836				25,965
Total operating expenses		$	1,785,720			$	1,405,973

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

General and administrative expenses were $578,674 for the nine months ended September 30, 2025 as compared to $238,210 for the nine months ended September 30, 2024, an increase of $340,464. The increase in spending is primarily due to additional rent expenses for the new leases in Minnesota.

Net Loss from Operations

Net loss from operations for the nine months ended September 30, 2025 totaled $3,500,214, which compared to a loss from operations of $3,954,535 for the nine months ended September 30, 2024. The decrease is a result of the interest expenses and PPP forgiveness as discussed above.

Interest Income (expense)

Interest expense decreased to $2,143,153 for the nine months ended September 30, 2025, which compared to interest expense of $2,464,385 for the nine months ended September 30, 2024. The decrease in 2025 was primarily due to forgiveness of the PPP loan.

Net Loss attributable to FCHS Shareholders

As a result of all the above, we reported net loss attributable to common shareholders of $3,500,514 for the nine months ended September 30, 2025 as compared to net loss attributable to common shareholders of $3,954,535 reported for the same year period in the prior year.

Liquidity and Capital Resources

As of September 30, 2025, we had cash of $2,430 and accounts receivables of $0. This is compared to cash of $19,915 and accounts receivable of $0 as of December 31, 2024.

The Company believes that the current cash balance as of September 30, 2025, 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, 2025 totaled $552,485, which compared to net cash provided in our operations for the nine months ended September 30, 2024 of $685,385. The decrease in cash used for the nine months ended September 30, 2025 was due primarily to a decrease in accounts payable.

Net cash flow in investing activities was $10,000 for the nine months ended September 30, 2025, compared to net cash used in investing activities of $1,638,987 for the nine months ended September 30, 2024 was primarily the result of proceeds from the sale of assets.

Net cash provided in financing activities was $525,000 for nine months ended September 30, 2025, compared to net cash provided in financing activities of $942,500 for the nine months ended September 30, 2024. The cash flows provided in our financing activities were the result of additional convertible debt investment.

		Nine Months Ended				Nine Months Ended
		Sept. 30, 2025				Sept. 30, 2024
Proceeds from issuance of convertible notes		$	615,000			$	942,500
Interest paid			(90,000	)			-
Net cash provided by financing activities		$	525,000			$	942,500

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, 2025, 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 will have a material impact on our condensed consolidated financial position, results of operations or cash flows. See Footnote 2 in the accompanying condensed consolidated financial statements for additional information.