First Choice Healthcare Solutions, Inc. (Form: 10-K, Received: 05/13/2024 10:19:20)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 000-53012

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware

90-0687379

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

95 Bulldog Blvd, Suite 202 Melbourne, FL.		32901		(321) 725-0090
(Address of principal executive office)		(Zip Code)		(Registrant’s telephone number, Including area code)

Securities Registered Pursuant to Section 12(b) of the Act

None

Securities Registered pursuant to Section 12(g) of the Act:

Title of Each Class		Trading Symbol		Name of Exchange on Which Registered
Common Stock, Par Value $0.001 Per Share		FCHS		OTC Capital Markets

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes☐ No ☒

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b–2 of the Exchange Act.

(Check one):

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to filed by Section 12, 13 and 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☒

The aggregate market value of the voting common equity held by non-affiliates of the registrant as of June 30, 2023 (the last business day of the registrant’s most recently completed second fiscal quarter), based on the per share closing sale price of $0.01 on that date and the assumption for the purpose of this computation only that all of the registrant’s directors and executive officers are affiliates, was approximately $329,583.

The number of shares of the registrant’s common stock, $0.001 par value, outstanding as of May 13, 2024 was 35,725,788.

Documents incorporated by reference: None.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

Table of Contents

		PAGE
PART I

Item 1.	Business	4
Item 1A.	Risk Factors	11
Item 1B.	Unresolved Staff Comments	21
Item 2.	Properties	23
Item 3.	Legal Proceedings	23
Item 4.	Mine Safety Disclosures	24

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	24
Item 6.	Reserved	26
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	30
Item 8.	Financial Statements and Supplementary Data	30
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosures	31
Item 9A.	Controls and Procedures	31
Item 9B.	Other Information	32

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	32
Item 11.	Executive Compensation	35
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	37
Item 13.	Certain Relationships and Related Transactions, and Director Independence	38
Item 14.	Principal Accounting Fees and Services	39

PART IV

Item 15.	Exhibits, Financial Statement Schedules	39

	Signatures	41

EXPLANATORY NOTE

On June 15, 2020 (the “Petition Date”), we, First Choice Healthcare Solutions, Inc., and our wholly owned subsidiaries, First Choice Medical Group of Brevard, LLC, FCID Medical, Inc., and Marina Towers, LLC (collectively, the “Debtors”), filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code in the Bankruptcy Court for the Middle District of Florida (the “Bankruptcy Court”). As of the Petition Date, we were defendants in multiple lawsuits, our main goal in filing Bankruptcy was to confirm a plan of reorganization assuring a fair distribution of assets to our creditors, attempt to bring as many assets in the form of settlements with the various claimants and establish a claims resolution process to resolve the securities arbitration and litigation claims in a fair and cost-effective manner.

The Debtors Amended Joint Plan of Bankruptcy under Chapter 11 of the United States Bankruptcy Code (the “Plan”) was confirmed by the Bankruptcy Court on February 23, 2021 and became effective on April 28, 2022, the date on which the Company emerged from bankruptcy (the “Effective Date”). We installed a new board of directors, with our operations continuing to be overseen by the existing executive officers.

We do not believe FCHS experienced an ownership change under Section 382 of the Internal Revenue Code (the “Code”). We believe that the total available and utilizable net operating loss (“NOL”) at December 31, 2023 was approximately $6.4 million and there was no limit under Section 382 of the Code on the use of these NOLs as of December 31, 2023.

Due to there being no change to the equity interests in the Company as a result of the bankruptcy, the criteria for applying fresh-start reporting on emergence were not met.

Upon emergence from bankruptcy, our Common Stock was quoted on OTC Markets, Inc. and we file alternative periodic reports as required. We are quoted on the OTC Markets under the trading symbol “FCHS.”

Forward-Looking Statements

From time to time, in reports filed with the U.S. Securities and Exchange Commission (the “SEC”) (including this Annual Report on Form 10-K), in press releases, and in other communications to shareholders or the investment community, First Choice Healthcare Solutions, Inc. d/b/a Emerge Healthcare (“FCHS,” “the Company,” “we,” “our” or “us”) may provide forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995, concerning possible or anticipated future results of operations or business developments. These statements are based on management’s current expectations or predictions of future conditions, events, or results based on various assumptions and management’s estimates of trends and economic factors in the markets in which we are active, as well as its business plans. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “projects,” “forecasts,” “continue,” “may,” “should,” “will,” “would,” “goals,” and variations of such words and similar expressions are intended to identify such forward-looking statements.

The forward-looking statements in this Form 10-K involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We discuss many of these risks in greater detail in “Risk Factors.” Given these uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this report. You should read this report and the documents that we reference in this report and have filed as exhibits to the report completely and with the understanding that our actual future results may be materially different from what we expect. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

PART I

ITEM 1.

BUSINESS

Overview

First Choice Healthcare Solutions, Inc. (“FCHS,” “the Company,” “we,” “our” or “us”) is actively engaged in pivoting the Company’s strategy away from our historic orthopedic business model to a strategy of developing a national chain of innovative primary care and wellness clinics focused on providing life improvement services (anti-aging, weight management, and hormone replacement) and pharmacy services, in key high growth markets throughout the U.S. We still provide rehabilitative services, such as physical therapy, but our strategy is to move to the operation of primary care and wellness clinics.

Operating Subsidiaries

We have operated as First Choice Healthcare Solutions, Inc., a Delaware corporation, since February 13, 2012. Our corporate address is 95 Bulldog Blvd., Suite, 202, Melbourne, Florida, 32901 and our phone number is 321-725-0090. Our corporate website address is www.myfchs.com. The information contained on our website is not incorporated by reference herein. We have historically operated our business through two wholly owned subsidiaries. FCID Medical, Inc. (“FCID Medical”) is the subsidiary under which we own and operate First Choice Medical Group of Brevard, LLC, (“FCMG”), our original medical services practice.

Our Legacy Healthcare Services Business

Historically, we offered fully integrated orthopedic services, delivering diagnostics, surgery and treatment services. In addition, we offered a suite of imaging services, including X-Ray, MRI and ultrasound. The scope of ancillary services included interventional and pain management, orthopedic urgent care services, as well as physical and occupational therapy recovery services in the below areas.

Orthopedic

	●	Foot & ankle service treating achilles tendonitis, tears, bunions, diabetic foot problems and ankle arthritis.
	●	Hand & arm Service treating hand and elbow disorders, carpal tunnel syndrome, trigger finger, nerve injuries, and complex hand & elbow fractures.
	●	Hip & knee replacement service with healthcare providers specializing in innovative approaches to total hip replacement and total knee replacement using minimally invasive techniques.
	●	Sports medicine services providing comprehensive treatment for sports-related injuries from recreational, amateur and professional sports.

Interventional Pain and Pain Management

	●	First Choice Medical Group was a full musculoskeletal (MSK) wellness center for patients who have chronic musculoskeletal pain. Patients received treatment, guidance, and support to get back to living pain free.
	●	Pharmoco genetic testing was used to minimize patient reactions to medications.
	●	First Choice Medical Group offered alternatives to opioids such as pain pumps which are considered more effective than oral medication that allows meds to be absorbed quicker and more directly.
	●	Outpatient ambulatory surgery for pain management
	●	L2 procedure room with Phillips C-arm, offering efficient procedures in a timely manner.

Physical Therapy/Occupational Therapy

	●	First Choice Medical Group had multiple locations for physical therapy, geographically pinpointed for patient convenience.
	●	First Choice Medical Group offered on-site custom splinting.
	●	Physical therapists were trained in multiple modalities of treatment: Graston Technique®, Lymphedema wrapping, Acupuncture, Dry Needling, and Cupping.
	●	First Choice Physical Therapy conducted free educational classes for the community to receive education regarding balance, back pain, etc.
	●	Offered on site support to community for workplace ergonomics.
	●	Provided onsite occupational health, including employer testing and exams.

In 2023, as we began the transition to our future growth strategy, we curtailed offerings in certain services and focused on offering physical and occupational therapy.

Material Corporate Events

As a result of the criminal charges brought against our former Chief Executive Officer, which he pled guilty to, we became involved in multiple legal proceedings which ultimately resulted in the Company being forced to file bankruptcy. See “Risk Factors-Our former Chief Executive Officer, Christian C. Romandetti, Sr. was arrested November 15, 2018, on a conspiracy to commit securities fraud charges.” On June 15, 2020, the Company and its operating subsidiaries filed for bankruptcy in the Middle district of Florida. On February 22, 2021, the Company’s reorganization plan related to the Company’s June 15, 2020, filing of bankruptcy in the Middle district of Florida was confirmed. As a result of the confirmation, all litigation was settled or converted into unsecured creditors. In addition, the temporary equity classification relating to Steward Healthcare’s March 2018 investment in the Company was eliminated as part of a settlement agreement with Steward Healthcare. The final decree was granted on April 27, 2022, whereby the Company exited bankruptcy. See the Explanatory Note to this report above and further details in Note 13 to the consolidated financial statements of the Company for the fiscal year ended December 31, 2023.

On June 25, 2020, a new board was seated, and our current CEO was appointed.

Strategic Pivot

In February of 2023, three of our four board members resigned as the Company’s management made the strategic decision to pivot away from the orthopedic services model, described above, to leveraging our management services infrastructure to support the development and growth of a national chain of branded primary care and wellness clinics following our exit from bankruptcy. The Company has eliminated all former services other than select physical therapy support. Following these resignations and shift in company strategy, our sole board member is Mr. Lance Friedman, the Company’s Chief Executive Officer (“CEO”). The Company has identified new board members and intends to bring in such persons to fill the full board of directors in conjunction with becoming current with regulatory requirements and relisting with a major exchange.

To establish this new strategy, we took the following steps:

●

On July 20, 2023, the Company entered into a definitive purchase agreement to acquire all of the shares of the capital common stock of Pointe Medical Services, Inc., a Florida corporation, Pointe Med Pharmacy, Inc., a Florida corporation, Livewell MD, Inc., a Florida corporation, and Livewell Drugstore, Inc., d/b/a TruLife Pharmacy, a Florida corporation for $15,800,000 to be paid in a combination of cash, assumption and/or payoff of debt, stock issuance, earn out, and performance bonus. Minority shareholders of Livewell Drugstore, Inc. will be given as consideration a fixed amount of restricted common stock in connection with the stock purchase of Livewell Drugstore, Inc. as is allocated based upon the Seller’s valuation of Livewell Drugstore multiplied by the minority shareholder ownership percentage.

●

On January 25, 2024, the Company entered into an asset purchase agreement to acquire all of the physical and intellectual property known as The Good Clinic from Leading Primary Care, LLC, a Minnesota company, which is a primary care clinic concept specializing in providing whole person primary care and wellness, in an all stock deal for $3,500,000.

Our Growth Strategy

Our go forward strategy is to utilize our two acquisitions and the current administrative infrastructure to create a national system of innovative, branded primary care and wellness clinics. Our strategic commitment is to provide a more effective medical “home” by redefining primary care, through personalization of care and a broad spectrum of healthcare services that focus on improving the quality of life for our clients at every stage of their lives. We intend to deliver on this promise by providing a care plan based on the client’s specific health needs / goals and their individual body chemistries. This will include an assessment of their current health state, a review of their current diet and lifestyle choices, as well as a battery of lab and genetic tests designed to determine any imbalances in their body functions.

Our provider staff will be comprised almost exclusively of nurse practitioners (“Nurse Practitioners”). The lower labor costs of employing Nurse Practitioners provides an approximate 25% margin improvement over the traditional primary care offices staffed with medical doctors. Additionally, studies prove Nurse Practitioners deliver care equal to and in some measures better than their physician counterparts. Our primary care clinics will provide holistic functional health and wellness which is primarily cash pay. We intend to differentiate our clinics from our competition by establishing our centers as the premier destinations for patient-centric personalized care, coordinated across our patients’ entire care continuums. By doing so, we expect to deliver more meaningful and collaborative provider-patient experiences, more effective treatment plans, faster recoveries, and materially reduced costs resulting from improved care coordination.

Our business model is centered on providing the right personalized care to patients with the objective of improving their overall quality of life, as well as lower healthcare costs. Our providers will have the ability to refer patients to our on-site laboratory diagnostic, internal compounding pharmacy, and ancillary services to include, anti-aging regenerative medicine, hormone replacement therapy, women’s health, men’s health, medically assisted weight management, and biohacking when medically appropriate. By consolidating these cutting-edge ancillary services (which are generally cash pay services) with our internal compounding pharmacy we believe that we will not only deliver a better healthcare experience for our clients, but we will also deliver greater revenue opportunity for the clinics through the sale of prescription medications and over the counter nutraceuticals at attractive margins for the Company.

In conjunction with the Company’s clinic expansion plans, we intend to expand the capacity of the complementary compounding pharmacy included in our acquisitions. This will facilitate our differentiating operating strategy of offering personalized treatment plans with personalized prescription medication, when medically appropriate, at a significantly lower cost for our clients. Our ability to deliver on this promise is our centralized medication compounding facility, both sterile and nonsterile, that will fulfill most of the recommended prescribed therapies for our patients on a nationwide scale. This centra-fill approach to pharmacy care facilitates the Company’s ability to provide an enhanced patient experience with initial medication fills, refill management, personalized medication counseling and the secure and private delivery of prescribed medications directly to the patient’s home or their choice of clinic location while simultaneously maximizing profitability via consolidated overhead and operating expenses. In addition to the fulfillment of individualized patient medication orders, also referred to as 503A, the Company intends to expand its compounding services to include non-patient specific medications, referred to as 503B, which will enable it to provide sterile and non-sterile medication inventories to patient care facilities that are owned and operated by the Company, as well as any unaffiliated patient care centers wishing to purchase compounded inventories.

Every clinical member of our provider teams will have cloud-based access to a robust EMR. Our EMR system fully complies with Stages 1 and 2 Meaningful Use standards defined by the Centers for Medicare & Medicaid Services Incentive Programs. These programs govern the use of electronic health records and allow us to earn incentive payments from the U.S. government, pursuant to the Health Information Technology for Economic and Clinical Health (HITECH) Act, which was enacted as part of the American Recovery and Reinvestment Act of 2009. By employing this shared electronic medical record infrastructure, all patent information will be available across all Company supported healthcare locations including our compounding pharmacy. This technological investment and its utilization will significantly reduce the hazards associated with disparate healthcare information systems. The Company’s centra-fill pharmacists will have both the electronic prescription order as well as the complete medical record available to allow a rapid and thorough evaluation for any potential drug-drug interaction as well as drug-disease state contraindications. The ability to rapidly communicate with the prescribers regarding alternative medication therapies, when clinical scenarios arise warranting a change in pharmaceuticals, also allows for an enhanced personalized patient experience and higher quality outcome. This powerful combination of personalized treatment plans and individualized medication therapeutics will provide us with a significant competitive advantage for attracting and retaining our patients. We anticipate that our clinics will have the added benefit of economies of scale, via billing, collections, purchasing, advertising, and compliance, which can each be fully leveraged to reduce expense and fuel income growth. We also aim to increase awareness of our brand by aligning with patients, medical institutions, insurers, employers, and other healthcare stakeholders in local markets that share our core values.

We believe that our centralized system of administrative infrastructure will allow us to achieve measurable cost and productivity efficiencies, as we expand the number of clinics we own and operate. We have specifically designed our centralized back-office system to alleviate care providers from business administration responsibilities associated with operating a medical practice or clinic, enabling them to focus strictly on caring for the patients we serve.

It is our plan that the cost of our “back-office operations” will not increase in direct relation to the growth of our network of primary care clinics, which will allow us to sustain profit margins across our business operations with a cost effective and scalable back office. As the numbers of our care providers and primary care clinics increase, the economies of scale for our back-office operations will also increase.

High Technology Infrastructure Supporting High Touch Patient Experiences

Successful retail models in other industries have proven effective at using telecommunications, remote computing, mobile computing, cloud computing, virtual networks, and other leading-edge technologies to manage geographically diverse operating units. These technologies create an electronically distributed infrastructure which allows a central management team to monitor, support and control geographically dispersed operating units of a national operation.

We believe that our business model incorporates the best distributed infrastructure supported by these technologies. A central management team monitors and supports our medical operations and will support our future primary care clinics.

Our administrative operations are centered on a secure paperless practice management platform. We utilize a state-of-the-art, cloud-based electronic medical record (“EMR”) management system, which provides ready access to each patient’s test results from anywhere in the world where there is Internet connectivity, including diagnosis, patient, and provider notes, visit reports, billing information, insurance coverage, patient identification, and personalized care delivery requirements. Our EMR system fully complies with Stages 1 and 2 Meaningful Use standards defined by the Centers for Medicare & Medicaid Services Incentive Programs. These programs govern the use of electronic health records and allow us to earn incentive payments from the U.S. government, pursuant to the HITECH Act, which was enacted as part of the American Recovery and Reinvestment Act of 2009.

We intend to grow by replicating the client satisfaction and acceptance of our clinics in other geographic markets, and by hiring additional Nurse Practitioners to serve patients in our current and future primary care clinics, all of which will be supported by our standardized policies, procedures, and clinic setup guidelines.

Third-Party Payors

Our current relationships with government-sponsored plans, including Medicare, managed care organizations and commercial health insurance payors are vital to our business. We seek to maintain professional working relationships with our third-party payors, streamline the administrative process of billing and collection, and assist our patients and their families in understanding their health insurance coverage and any balances due for co-payments, co-insurance, deductibles, or out-of-network benefit limitations.

We have also received compensation for professional services provided by our providers to patients based upon established rates for specific services provided, principally from third-party payors. Our billed charges are substantially the same for all parties in a geographic area, regardless of the party responsible for paying the bill for our services.

If we do not have a contractual relationship with a health insurance payor, we will generally bill the payor our full billed charges. If payment is less than billed charges, we bill the balance to the patient, subject to state and federal laws regulating such billing. Although we maintain standard billing and collections procedures, we will also provide discounts and/or payment option plans in certain hardship situations where patients and their families do not have the financial resources necessary to pay the amount due at the time services are rendered. Any amounts written-off related to private-pay patients are based on the specific facts and circumstances related to each individual patient account and are reviewed and approved by senior management.

Many of our health and wellness programs are cash pay from the individual patient and generally earn higher margins.

Competitive Environment

We anticipate that we will compete primarily on the basis of establishing our centers as the premier destinations for patient-centric personalized care, coordinated across our patients’ entire care continuums. By doing so, we expect to deliver more meaningful and collaborative provider-patient experiences, more effective treatment plans, faster recoveries, and materially reduced costs resulting from improved care coordination.

Government Regulation

The healthcare industry is governed by a framework of federal and state laws, rules and regulations that are extensive and complex and for which, in many cases, the industry has the benefit of only limited judicial and regulatory interpretation. If one of our healthcare providers or their practices is found to have violated these laws, rules or regulations, our business, financial condition, and results of operations could be materially adversely affected. Moreover, the Affordable Care Act signed into law in March 2010 contains numerous provisions that are reshaping the United States healthcare delivery system, and healthcare reform continues to attract significant legislative interest, regulatory activity, new approaches, legal challenges, and public attention that create uncertainty and the potential for additional changes. Healthcare reform implementation, additional legislation or regulations, and other changes in government policy or regulation may affect our reimbursement, restrict our existing operations, limit the expansion of our business, or impose additional compliance requirements and costs, any of which could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our Common Stock.

Fraud and Abuse Provisions

Existing federal laws governing Medicare, TRICARE, and other federal healthcare programs (the “FHC Programs”), as well as similar state laws, impose a variety of fraud and abuse prohibitions on healthcare companies like us. These laws are interpreted broadly and enforced aggressively by multiple government agencies, including the Office of Inspector General of the Department of Health and Human Services, the Department of Justice (the “DOJ”) and various state authorities.

The fraud and abuse laws include extensive federal and state regulations applicable to our financial relationships with hospitals, referring to healthcare providers and other healthcare entities. In particular, the federal anti-kickback statute prohibits the offer, payment, solicitation, or receipt of any remuneration in return for either referring Medicare, TRICARE or other FHC Program business, or purchasing, leasing, ordering, or arranging for or recommending any service or item for which payment may be made by an FHC Program. In addition, federal physician self-referral legislation, commonly known as the “Stark Law,” prohibits a physician from ordering certain designated health services reimbursable by Medicare from an entity with which the physician has a prohibited financial relationship. These laws are broadly worded and, in the case of the anti-kickback statute, have been broadly interpreted by federal courts, and potentially subject many healthcare business arrangements to government investigation and prosecution, which can be costly and time consuming.

There are a variety of other types of federal and state fraud and abuse laws, including laws authorizing the imposition of criminal, civil and administrative penalties for filing false or fraudulent claims for reimbursement with government healthcare programs. These laws include the civil False Claims Act (“FCA”), which prohibits the submitting of or causing to be submitted false claims to the federal government or federal government programs, including Medicare, the TRICARE program for military dependents and retirees, and the Federal Employees Health Benefits Program. The FCA also applies to the improper retention of known over payments and includes “whistleblower” provisions that permit private citizens to sue a claimant on behalf of the government and thereby share in the amounts recovered under the law and to receive additional remedies.

In addition, federal and state agencies that administer healthcare programs have at their disposal statutes, commonly known as “civil money penalty laws,” that authorize substantial administrative fines and exclusion from government programs in cases where an individual or company that filed a false claim, or caused a false claim to be filed, knew or should have known that the claim was false or fraudulent. As under the FCA, it often is not necessary for the agency to show that the claimant had actual knowledge that the claim was false or fraudulent in order to impose these penalties.

If we were excluded from any government-sponsored healthcare programs, not only would we be prohibited from submitting claims for reimbursement under such programs, but we would also be unable to contract with other healthcare providers, such as hospitals, to provide services to them. It could also adversely affect our ability to contract with, or to obtain payment from, non-governmental payors.

Government Reimbursement Requirements

In order to participate in the Medicare program, we must comply with stringent and often complex enrollment and reimbursement requirements. These programs provide for reimbursement on a fee-schedule basis rather than on a charge-related basis, we generally cannot increase our revenue by increasing the amount we charge for our services. To the extent our costs increase, we may not be able to recover our increased costs from these programs, and cost containment measures and market changes in non-governmental insurance plans have generally restricted our ability to recover, or shift to non-governmental payors, these increased costs. In attempts to limit federal and state spending, there have been, and we expect that there will continue to be, several proposals to limit or reduce Medicare reimbursement for various services.

HIPAA and Other Privacy Laws

Numerous federal and state laws, rules and regulations govern the collection, dissemination, use and confidentiality of protected health information, including the federal Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”), and its implementing regulations, violations of which are punishable by monetary fines, civil penalties and, in some cases, criminal sanctions. As part of our medical record keeping, third-party billing, research, and other services, we and our affiliated practices collect and maintain protected health information on the patients that we serve.

Health and Human Services Security Standards require healthcare providers to implement administrative, physical, and technical safeguards to protect the integrity, confidentiality and availability of individually identifiable health information that is electronically received, maintained, or transmitted (including between us and our affiliated practices). We have implemented security policies, procedures and systems designed to facilitate compliance with the HIPAA Security Standards.

In February 2009, Congress enacted the Health Information Technology for Economic and Clinical Health Act (“HITECH”) as part of the American Recovery and Reinvestment Act (“ARRA”). Among other changes to the law governing protected health information, HITECH strengthens and expands HIPAA, increases penalties for violations, gives patients new rights to restrict uses and disclosures of their health information, and imposes several privacy and security requirements directly on our “Business Associates,” which are third parties that perform functions or services for us or on our behalf.

In addition to the federal HIPAA and HITECH requirements, numerous other state and certain other federal laws protect the confidentiality of patient information, including state medical privacy laws, state social security number protection laws, human subjects research laws and federal and state consumer protection laws. In some cases, state laws are more stringent than HIPAA and therefore, are not preempted by HIPAA.

Environmental Regulations

Our healthcare operations generate medical waste that must be disposed of in compliance with federal, state, and local environmental laws, rules, and regulations. Our office-based operations are subject to compliance with various other environmental laws, rules, and regulations. Such compliance does not, and we anticipate that such compliance will not materially affect our capital expenditures, financial position, or results of operations.

Compliance Program

We maintain a compliance program that reflects our commitment to complying with all laws, rules, and regulations applicable to our business and that meets our ethical obligations in conducting our business (the “Compliance Program”). We believe our Compliance Program provides a solid framework to meet this commitment and our obligations as a provider of healthcare services, including:

	●	a Compliance Committee consisting of our senior executives;

	●	our Code of Ethics, which is applicable to our employees, officers, and directors;

	●	a disclosure program that includes a mechanism to enable individuals to disclose on a confidential or anonymous basis to our Chief Executive Officer, or any person who is not in the disclosing individual’s chain of command, issues or questions believed by the individual to be a potential violation of criminal, civil, or administrative laws;

	●	an organizational structure designed to integrate our compliance objectives into our corporate offices and clinics; and

	●	education, monitoring, and corrective action programs, including a disclosure policy designed to establish methods to promote the understanding of our Compliance Program and adherence to its requirements.

The foundation of our Compliance Program is our Code of Ethics which is intended to be a comprehensive statement of the ethical and legal standards governing the daily activities of our employees, affiliated professionals, independent contractors, officers, and directors. All our personnel are required to abide by, and are given thorough education regarding, our Code of Ethics. In addition, all employees are expected to report incidents that they believe in good faith may be in violation of our Code of Ethics.

Legal Proceedings

Our contracts with hospitals generally require us to indemnify them and their affiliates for losses resulting from the negligence of our care providers. Although we currently maintain liability insurance coverage intended to cover professional liability and certain other claims, we cannot assure that our insurance coverage will be adequate to cover liabilities arising out of claims asserted against us in the future where the outcomes of such claims are unfavorable to us. Liabilities in excess of our insurance coverage, including coverage for professional liability and certain other claims, could have a material adverse effect on our business, financial condition, and results of operations.

We are not a party to any pending legal proceeding, nor is our property the subject of a pending legal proceeding, that is not in the ordinary course of business or otherwise material to the financial condition of our business. None of our directors, officers or affiliates are involved in a proceeding adverse to our business or have a material interest adverse to our business.

Professional and General Liability Coverage

Although we currently maintain liability insurance coverage intended to cover professional liability and certain other claims, we cannot assure that our insurance coverage will be adequate to cover liabilities arising out of claims asserted against us in the future where the outcomes of such claims are unfavorable to us. Liabilities in excess of our insurance coverage, including coverage for professional liability and certain other claims, could have a material adverse effect on our business, financial condition, and results of operations.

Employees

As of December 31, 2023, our workforce included one (1) full-time, salaried, employee and seven contract staff professionals located in the United States. We have never experienced any employment-related work stoppages and consider relations with our employees to be good.

Corporate Information

Our corporate headquarters is located in the heart of downtown Melbourne, Florida, close to all major hospitals. The address is 95 Bulldog Blvd, Suite 202, Melbourne, Florida 32901. Our corporate website is: www.myfchs.com.

Available Information

Our website address is http://www.myfchs.com. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and other reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934 (the Exchange Act), as well as amendments thereto, are filed with the SEC and are available free of charge on our website at investors.myfchs.com.com promptly after such reports are available on the SEC’s website. We may use our investors.myfchs.com website as a means of disclosing material non-public information and complying with our disclosure obligations under Regulation FD.

The SEC maintains an internet site that contains reports, proxy, information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov.

The information contained in or accessible through our website or contained on other websites is not incorporated into this filing. Further, any references to URLs contained in this report are intended to be inactive textual references only.

ITEM 1A.

RISK FACTORS

The risk factors discussed below could cause our actual results to differ materially from those expressed in any forward-looking statements. Although we have attempted to list comprehensively these important factors, we caution you that other factors may in the future prove to be important in affecting the results of operations. New factors the Company from time to time and it is not possible for us to predict all of these factors, nor can we assess the impact of each such factor on the business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement.

The risks described below set forth what we believe to be the most material risks associated with the purchase of our Common Stock. Before you invest in our Common Stock, you should carefully consider these risk factors, as well as the other information contained in this report.

Going Concern

During the financial year ended December 31, 2023, the Company experienced operating losses of approximately $8.2 million and corresponding cash outflows from operations of $6.8 million. This performance reflected challenges in operating and restructuring the Company as a result of previous issues that confronted the Company in the healthcare market such as growing referral bases and negotiating favorable contract rates with third party payors for services rendered as well as the negative impact of the former CEO’s indictment in November 2018 and the bankruptcy from June 2020 and COVID-19. As a result of the CEO’s actions, the Company has been subject to litigation as well as incurring damage to its relationships with its employees and referral sources. The Company’s ability to continue as a going concern is dependent upon the success of its continuing efforts to acquire profitable companies, grow its revenue base, reduce operating costs, especially as related to provider services, and access additional sources of capital, and/or sell assets. The Company believes that it will be successful in repairing its relationships with employees and referral sources, generating growth and improved profitability resulting in improved cash flows from operations. Additionally, headcount was reduced in October 2021 and again in January 2023 to generate reductions in operating costs while the Company focused on developing and executing its future business strategy.

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 financing, corporate collaborations or other means and potentially reduce operating expenditures. If the Company is unable to secure additional capital, it may have to curtail its business development initiatives and take additional measures to reduce costs in order to conserve its cash, thus raising substantial doubt about its ability to continue as a going concern more than one year from the date of issuance of the 2023 financial statements included in this filing.

Risks Related to our Financial Position and Capital Needs

Our business has posted minimal profit since commencing operations.

We have posted net losses and negative cash flows from operations for the years ended December 31, 2023, and 2022. The adverse effects of a limited operating history include reduced management visibility into forward sales, marketing costs, and customer acquisition, which could lead to missing targets for achievement of future profitability.

If our cash from operations is not sufficient to meet our current or future operating needs, expenditures and debt service obligations, our business, financial condition, and results of operations may be materially adversely affected.

Our ability to generate cash to meet our operating needs, expenditures and debt service obligations will depend on our future performance and financial condition, which will be affected by financial, business, economic legislative, regulatory, and other factors, including potential changes in costs, pricing, competitive pressure, and consumer preferences. If our cash flow and capital resources are insufficient to fund our debt service obligations and other cash needs, we could face substantial liquidity problems and could be forced to reduce or delay investments and capital expenditures or to dispose of material assets or operations, seek additional debt or equity capital or restructure or refinance our indebtedness. Even if we are successful in taking any such alternative actions, such actions may not allow us to meet our scheduled debt service obligations and, as a result, our business, financial condition, and results of operations may be materially adversely affected.

We need additional capital to expand operations; if we do not raise additional capital, we will need to curtail or cease operations.

Since our inception, we have financed our operations primarily through the sale of our common stock. To execute our business plan successfully, we will need to raise additional money in the future. Additional financing may not be available on favorable terms, or at all. The exact amount of funds raised, if any, will determine how quickly we can maintain the profitability of our operations. No assurance can be given that we will be able to raise capital when needed or at all, or that such capital, if available, will be on terms acceptable to us. If we are not able to raise additional capital, we will likely need to curtail or cease operations.

Raising additional capital may cause dilution to our existing stockholders, restrict our operations, or require us to relinquish rights to our technologies or other assets.

We may seek additional capital through a combination of private and public equity offerings, debt financing, strategic partnerships and alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, existing ownership interests will be diluted, and the terms of such financings may include liquidation or other preferences that adversely affect the rights of existing stockholders. Debt financing may be coupled with an equity component, such as warrants to purchase shares, which could also result in dilution of our existing stockholders’ ownership. The incurrence of indebtedness would result in increased fixed payment obligations and could also result in certain restrictive covenants, such as limitations on our ability to incur additional debt, limitations on our ability to acquire or license intellectual property rights and other operating restrictions that could adversely impact our ability to conduct our business and may result in liens being placed on our assets and intellectual property. If we were to default on such indebtedness, we could lose such assets and intellectual property.

Our potential for rapid growth and our entry into new markets make it difficult for us to evaluate our current and future business prospects, and we may be unable to effectively manage any growth associated with these new markets, which may increase the risk of your investment and could harm our business, financial condition, results of operations and cash flow.

Our proliferation into new markets may place a significant strain on our resources and increase demands on our executive management, personnel, and systems, and our operational, administrative, and financial resources may be inadequate. We may also not be able to effectively manage any expanded operations or achieve planned growth on a timely or profitable basis. If we are unable to manage expanded operations effectively, we may experience operating inefficiencies, the quality of our products and services could deteriorate, and our business and results of operations could be materially adversely affected.

Changes in tax laws and unanticipated tax liabilities could adversely affect our effective income tax rate and ability to achieve profitability.

Our effective income tax rate in the future could be adversely affected by a number of factors including changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities and changes in tax laws. We regularly assess all of these matters to determine the adequacy of our tax provision which is subject to discretion. If our assessments are incorrect, it could have an adverse effect on our business and financial condition. There can be no assurance that income tax laws and administrative policies with respect to the income tax consequences generally applicable to us or to our subsidiaries will not be changed in a manner which adversely affects our shareholders.

We expect our quarterly financial results to fluctuate.

We expect our net sales and operating results to vary significantly from quarter to quarter due to a number of factors, including changes in:

	●	Demand for our services;
	●	Our ability to obtain and retain existing clients;
	●	General economic conditions, both domestically and in foreign markets;
	●	Advertising and other marketing costs; and
	●	Costs of creating and expanding clinic locations.

As a result of the variability of these and other factors, our operating results in future quarters may be below the expectations of our stockholders.

Volatility in the financial markets could have a material adverse effect on our business.

While we believe we will generate significant cash flows from our ongoing operations and have had access to credit markets through our various financing activities, credit markets may experience significant disruptions. Deterioration in global financial markets could make future financing difficult or more expensive. This could leave us with reduced borrowing capacity, which could have a material adverse effect on our business, financial condition, and results of operations.

Potential profit margins may decline due to increasing pressure on margins.

The industry in which we plan to operate is subject to potentially significant pricing pressure caused by many factors. If our estimated gross margin declines and we fail to sufficiently reduce our operating costs or grow our future net revenues, we could incur significant operating losses that we may be unable to fund or sustain for extended periods of time, if at all. This could have a material adverse effect on the results of operations, liquidity, and financial condition.

Our indebtedness may have a material adverse effect on our business, financial condition, and results of operations.

Our indebtedness could have significant consequences, including:

	●	requiring a substantial portion of our cash flows to be dedicated to debt service payments instead of funding growth, working capital, capital expenditures, investments, or other cash requirements;
	●	reducing our flexibility to adjust to changing business conditions or obtain additional financing;
	●	exposing us to the risk of increased interest rates as certain of our borrowings, including borrowings under our term loan facilities are at variable rates;
	●	making it more difficult for us to make payments on our indebtedness;
	●	restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;
	●	subjecting us to restrictive covenants that may limit our flexibility in operating our business; and
	●	limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements and general corporate or other purposes.

General Risks Related to our Healthcare Services Business

We have a limited operating history that impedes our ability to evaluate our potential future performance and strategy.

Our limited primary care clinic operating history makes it difficult for us to evaluate our future business prospects and make decisions based on estimates of our future performance. It will take time and marketing / messaging investment to successfully build a financially viable panel of patients for each of our clinics. It is difficult to predict with certainty how long the process of patient acquisition will take. To address these risks and uncertainties, we must do the following:

	●	Successfully execute our business strategy to establish our brand and reputation as a profitable, well-managed enterprise committed to delivering quality and cost-effective healthcare;

	●	Respond to competitive developments;

	●	Provide Nurse Practitioners with a compelling alternative to other medical practice or hospital employment; and

	●	Attract, integrate, retain, and motivate qualified clinic personnel.

We cannot be certain that our business strategy will be successful or that we will successfully address these risks. If we do not successfully address these risks, our business, prospects, financial condition, and results of operations may be materially and adversely affected.

Acquisitions involve risks that could adversely affect our business/internal controls.

As part of our growth strategy, the Company has made strategic transactions with the expectation that such transactions will result in various benefits, including, among others, an expanded range of healthcare services to patients in the community, cost savings and increased profitability of the businesses by improving operating efficiencies. Achieving the anticipated benefits is subject to a number of uncertainties, including whether we integrate our acquired companies in an efficient and effective manner, and general competitive factors in the marketplace. Failure to achieve these anticipated benefits could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and resources.

In addition, effective internal controls are necessary for us to provide reliable and accurate financial reports and to effectively prevent fraud. The integration of acquired businesses is likely to result in our systems and controls becoming increasingly complex and more difficult to manage.

We devote significant resources and time to complying with the internal control over financial reporting requirements of the Sarbanes-Oxley Act of 2002. However, we cannot be certain that these measures will ensure that we design, implement and maintain adequate control over our financial processes and reporting in the future, especially in the context of acquisitions or assuming management control over other businesses. Any difficulties in the assimilation of acquired businesses into our Company’s control system could harm our operating results or cause us to fail to meet our financial reporting obligations. Inferior internal controls could also cause investors to lose confidence in our Company’s reported financial information, which could have a negative effect on the trading price of the Company’s stock and our access to capital.

To pursue our business strategy, we will need to raise additional capital. If we are unable to raise additional capital, our business may fail.

We may need to raise additional capital to pursue our business plan, which includes hiring additional Nurse Practitioners to expand our business operations and to acquire or develop new primary care clinics. We believe that we have access to capital resources through possible public or private equity offerings, debt financing, corporate collaborations, or other means. If the economic climate in the United States does not continue to improve or further deteriorates, our ability to raise additional capital could be negatively impacted. If we are unable to secure additional capital, we may be required to curtail our initiatives and take additional measures to reduce costs to conserve our cash in amounts sufficient to sustain operations and meet our financial obligations.

We may not be able to achieve the expected benefits from opening new primary care clinics, which would adversely affect our financial condition and results.

We plan to rely on hiring additional Nurse Practitioners to create branded primary care clinics as a method of expanding our business. If we do not successfully integrate such new primary care clinics, we may not realize the anticipated operating advantages and cost savings. The integration of these new primary care clinics into our business operations involves several risks, including:

	●	Demands on management related to the increase in our Company’s size with the establishment of each new clinics, which is crucial to our business plan;

	●	The diversion of management’s attention from the management of daily operations to the integration of operations of the new primary care clinics;

	●	Difficulties in the assimilation and retention of employees; and

	●	Potential adverse effects on operating results.

Further, the successful integration of the new Nurse Practitioners will depend upon our ability to manage the new staff and to eliminate redundancies and excess costs. Difficulties in integrating new clinical staff may impede our ability to achieve the cost savings and other size-related benefits that we hoped to achieve, which would harm our financial condition and operating results.

If we are unable to attract and retain qualified medical professionals, our ability to maintain operations attract patients or open new primary care clinics could be negatively affected.

We generate our revenues through Nurse Practitioners and clinical staff who work for us to perform medical services and procedures. The retention of those medical professionals is a critical factor in the success of our clinics, and the hiring of qualified medical professionals is a critical factor in our ability to launch new primary care clinics successfully. However, at times it may be difficult for us to retain or hire qualified medical professionals. If we are unable consistently to hire and retain qualified medical professionals, our ability to open new clinics, maintain operations at existing clinics, and attract patients could be materially and adversely affected.

We may have difficulties managing our Company’s growth, which could lead to higher operating losses, or we may not grow at all.

Rapid growth could strain our human and capital resources, potentially leading to higher operating losses. Our ability to manage operations and control growth will be dependent upon our ability to raise and spend capital to successfully attract, train, motivate, retain, and manage new employees and continue to update and improve our management and operational systems, infrastructure and other resources, financial and management controls, and reporting systems and procedures. Should we be unsuccessful in accomplishing any of these essential aspects of our growth in an efficient and timely manner, then management may receive inadequate information necessary to manage our operations, possibly causing additional expenditures and inefficient use of existing human and capital resources or we otherwise may be forced to grow at a slower pace that could slow or eliminate our ability to achieve and sustain profitability. Such slower than expected growth may require us to restrict or cease our operations and go out of business.

Loss of key executives and failure to attract qualified managers could limit our growth and negatively impact our operations.

We require medical professionals and marketing persons with experience in our industry to operate and market our primary care clinic services. It is impossible to predict the availability of qualified persons or the compensation levels that will be required to hire them. The loss of the services of any member of our senior management or our inability to hire qualified people at economically reasonable compensation levels could adversely affect our ability to operate and grow our business.

We may be subject to medical professional liability risks, which could be costly and could negatively impact our business and financial results.

We may be subject to professional liability claims. We maintain professional liability insurance with coverage that we believe is consistent with industry practice and appropriate considering the risks attendant to our business. However, any claim made against us could be costly to defend against, resulting in a substantial damage award against us and diverting the attention of our management team from our operations, which could have an adverse effect on our financial performance.

The healthcare regulatory and political framework is evolving.

Healthcare laws and regulations may change significantly in the future which could adversely affect our financial condition and results of operations. We will continuously monitor these developments and modify our operations from time to time as the legislative and regulatory environment changes. It may require significant resources to make these modifications.

The healthcare industry is highly regulated, and government authorities may determine that we have failed to comply with applicable laws or regulations.

The healthcare industry is subject to extensive and complex federal, state and local laws and regulations, compliance with which imposes substantial costs on us. Of particular importance are the provisions summarized as follows:

	●	federal laws (including the federal False Claims Act) that prohibit entities and individuals from knowingly or recklessly making claims to Medicare and other government programs that contain false or fraudulent information or from improperly retaining known overpayments;

	●	a provision of the Social Security Act, commonly referred to as the “anti-kickback” law, that prohibits the knowing and willful offer, payment, solicitation or receipt of any bribe, kickback, rebate, or other remuneration, in cash or in kind, in return for the referral or recommendation of patients for items and services covered, in whole or in part, by federal healthcare programs, such as Medicare;

●

a provision of the Social Security Act, commonly referred to as the Stark Law, that, subject to limited exceptions, prohibits providers from referring Medicare patients to an entity for the provision of certain “designated health services” if the provider or a member of such provider’s immediate family has a direct or indirect financial relationship (including a compensation arrangement) with the entity;

	●	similar state law provisions pertaining to anti-kickback, fee splitting, self-referral and false claims issues, which typically are not limited to relationships involving federal payors;

	●	provisions of HIPAA that prohibit knowingly and willfully executing a scheme or artifice to defraud a healthcare benefit program or falsifying, concealing, or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services;

	●	state laws that prohibit general business corporations from practicing medicine, controlling providers’ medical decisions or engaging in certain practices, such as splitting fees with providers;

	●	federal and state laws that prohibit providers from billing and receiving payment from Medicare and TRICARE for services unless the services are medically necessary, adequately, and accurately documented and billed using codes that accurately reflect the type and level of services rendered;

	●	federal and state laws pertaining to the provision of services by non-physician practitioners, such as advanced nurse practitioners, physician assistants and other clinical professionals, physician supervision of such services and reimbursement requirements that may be dependent on the manner in which the services are provided and documented; and

	●	federal laws that impose civil administrative sanctions for, among other violations, inappropriate billing of services to federally funded healthcare programs, inappropriately reducing hospital care lengths of stay for such patients or employing individuals who are excluded from participation in federally funded healthcare programs.

In addition, we believe that our business will continue to be subject to increasing regulation, the scope and effect of which we cannot predict.

Federal and state laws that protect the privacy and security of protected health information may increase our costs and limit our ability to collect and use that information and subject us to penalties if we are unable to fully comply with such laws.

Numerous federal and state laws and regulations govern the collection, dissemination, use, security and confidentiality of individually identifiable health information. These laws include:

	●	Provisions of HIPAA that limit how healthcare providers may use and disclose individually identifiable health information, provide certain rights to individuals with respect to that information and impose certain security requirements;

	●	HITECH, which strengthens and expands the HIPAA Privacy Standards and Security Standards;

	●	Other federal and state laws restricting the use and protecting the privacy and security of protected information, many of which are not preempted by HIPAA;

	●	Federal and state consumer protection laws; and

	●	Federal and state laws regulating the conduct of research with human subjects.

As part of our medical record keeping, billing and other services, we collect and maintain protected health information in paper and electronic format. New protected health information standards, whether implemented pursuant to HIPAA, HITECH, congressional action or otherwise, could have a significant effect on the manner in which we handle healthcare-related data and communicate with payors, and compliance with these standards could impose significant costs on us or limit our ability to offer services, thereby negatively impacting the business opportunities available to us.

If we do not comply with existing or new laws and regulations related to protected health information, we could be subject to remedies that include monetary fines, civil or administrative penalties or criminal sanctions.

Changes in the rates or methods of third-party reimbursements for medical services could result in reduced demand for our services or create downward pricing pressure, which would result in a decline in our revenues and harm our financial position.

Third-party payors such as Medicare and commercial health insurance companies, may change the rates or methods of reimbursement for the services we currently provide or plan to provide and such changes could have a significant negative impact on those revenues. At this time, we cannot predict the impact that rate reductions will have on our future revenues or business. Moreover, patients on whom we currently depend, and expect to continue to depend on, our medical clinic revenues generally rely on reimbursement from third-party payors for the payment of medical services. If our patients begin to receive decreased reimbursement from third-party payors for their medical services and as such are forced to pay for the remainder of their medical services out of pocket, then a reduced demand for our services or downward pricing pressures could result, which could have a material impact on our financial position.

Future requirements limiting access to or payment for medical services may negatively impact our future revenues or business. If legislation substantially changes the way healthcare is reimbursed by both governmental and commercial insurance carriers, it may negatively impact payment rates for certain medical services. We cannot predict at this time whether or the extent to which other proposed changes will be adopted, if any, or how these or future changes will affect the demand for our services.

We are subject to federal and state restrictions on advertising that may adversely affect our ability to advertise our clinics and services.

The growth of our healthcare business is dependent, in part, on advertising, which is subject to regulation by the Federal Trade Commission (“FTC”). We believe that we can structure our advertising practices to be in material compliance with FTC regulations and guidance. However, we cannot be certain that the FTC will not determine that our advertising practices are in violation of such laws and guidance.

Health Insurance Portability and Accountability Act (“HIPAA”) compliance is critically import to our continuing operations.

Our Company and our providers are covered entities under HIPAA if we or our clinical staff provide services that are reimbursable under Medicare or other third-party payors (e.g., orthopedic services). Although the covered healthcare providers themselves are primarily liable for HIPAA compliance, as a “business associate” to these covered entities we are bound indirectly to comply with the HIPAA privacy regulations, and we are directly bound to comply with certain of the HIPAA security regulations. Although we cannot predict the total financial or other impact of these privacy and security regulations on our business, compliance with these regulations could require us to incur substantial expenses, which could have a material adverse effect on our business, financial condition and results of operations. In addition, we will continue to remain subject to any state laws that are more restrictive than the privacy regulations issued under the Administrative Simplification Provisions.

We rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology, including any cybersecurity incidents, could harm our ability to operate our business effectively.

Our internal computer systems and those of third parties with which we contract may be vulnerable to damage from cyber-attacks, computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunication and electrical failures despite the implementation of security measures. System failures, accidents or security breaches could cause interruptions in our operations and could result in a material disruption of our business operations, in addition to possibly requiring substantial expenditures of resources to remedy. To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and our collections from third-party payors could be delayed.

If we are forced to lower our procedure prices in order to compete with a better-financed or lower-cost provider of medical healthcare services, our medical revenues and results of operations could decline.

Some of our current competitors, or other companies which may choose to enter the industry in the future, may have substantially greater financial, technical, managerial, marketing, or other resources and experience than we do and may be able to compete more effectively. Similarly, competition could increase if the market for healthcare services does not experience growth, and existing providers compete for market share. Additional competition may develop, particularly if the price for services or reimbursement decreases. Our management, operations, strategy, and marketing plans may not be successful in meeting this competition.

A decline in consumer disposable income could adversely affect the number of clinical visits could have a negative impact on our financial results.

After payments by commercial healthcare insurance companies or government programs, including Medicare, the remaining portion of the cost of medical care is paid by the patient. Some of our patients may not have the financial resources to pay for the services they receive at our primary care clinics, which are ultimately not reimbursed by their healthcare provider. Accordingly, our operating results may vary based upon the impact of changes in the disposable income of patients using our services, among other economic factors. A significant decrease in consumer disposable income in a weak economy may result in a decrease in the number of visits to our clinics, and a related decline in our revenues and profitability. In addition, weak economic conditions may cause some of our patients to experience financial distress or declare bankruptcy, which may negatively impact our accounts receivable and collection experience.

To pursue our business strategy, we will need to raise additional capital. If we are unable to raise additional capital, our business may fail.

Risks Related to Our Common Stock

There has been a limited trading market for our Common Stock to date.

While our Common Stock is currently quoted on OTC Markets, Inc., the trading volume is extremely limited. We are quoted on the OTC Markets under the trading symbol “FCHS.” We intend to list our common stock on the CBOE. There can be no assurance that an active market for the Company’s common stock. A lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair market value of your shares. An inactive market may also impair our ability to raise capital by selling shares of capital stock and may impair our ability to acquire other companies or technologies by using Common Stock as consideration.

The market for our common stock may fluctuate significantly.

The stock market in general has experienced extreme price and volume fluctuations. The market prices of the securities of healthcare services companies have historically been highly volatile and may be highly volatile in the future. This volatility has often been unrelated to the operating performance of particular companies. The following factors, in addition to other risk factors described in this section, may have a significant impact on the market price of our Common Stock:

	●	changes in government regulation of the medical industry;

	●	changes in reimbursement policies of third-party insurance companies, self-insured companies or government agencies;

	●	actual or anticipated fluctuations in our operating results;

	●	changes in financial estimates or recommendations by securities analysts;

	●	developments involving corporate collaborators, if any;

	●	changes in accounting principles;

	●	the loss of any of our key providers or management personnel;

In the past, securities class action litigation has often been brought against companies that experience volatility in the market price of their securities. Whether or not meritorious, litigation brought against us could result in substantial costs and a diversion of management’s attention and resources, which could adversely affect our business, operating results and financial condition.

We have not paid dividends in the past and have no immediate plans to pay dividends.

We plan to reinvest all of our earnings, to the extent we have earnings, in order to grow, market our services and cover operating costs and to otherwise become and remain competitive. We do not plan to pay any cash dividends with respect to our securities in the near future. We cannot assure you that we would, at any time, generate sufficient surplus cash that would be available for distribution to the holders of our Common Stock as a dividend. Therefore, you should not expect to receive cash dividends on our Common Stock.

We expect that our quarterly results of operations will fluctuate, and this fluctuation could cause our stock price to decline.

Our quarterly operating results are likely to fluctuate in the future. These fluctuations could cause our stock price to decline. The nature of our business involves variable factors, such as the timing of the research, development, and regulatory pathways of our product candidates, which could cause our operating results to fluctuate. Due to the possibility of fluctuations in our revenues and expenses, we believe that quarter-to-quarter comparisons of our operating results are not a good indication of our future performance.

“Penny stock” rules may make buying or selling our securities difficult which may make our stock less liquid and make it harder for investors to buy and sell our securities.

Trading in our securities is subject to the SEC’s “penny stock” rules and it is anticipated that trading in our securities will continue to be subject to the penny stock rules for the near future. The SEC has adopted regulations that define a penny stock to be any equity security that has a market price of less than $5.00 per share, subject to certain exceptions. These rules require that any broker-dealer who recommends our securities to persons other than prior customers and accredited investors must, prior to the sale, make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to execute the transaction. Unless an exception is available, the regulations require the delivery, prior to any transaction involving a penny stock, of a disclosure schedule explaining the penny stock market and the risks associated with trading in the penny stock market. In addition, broker-dealers must disclose commissions payable to both the broker-dealer and the registered representative and current quotations for the securities they offer. The additional burdens imposed upon broker-dealers by these requirements may discourage broker-dealers from recommending transactions in our securities, which could severely limit the liquidity of our securities and consequently adversely affect the market price for our securities.

Our former Chief Executive officer, Christian C. Romandetti, Sr. was arrested November 15, 2018, on a conspiracy to commit securities fraud charge.

Our former Chief Executive Officer, Christian C. Romandetti, Sr. pled guilty to conspiracy to commit securities fraud and has tarnished the Company’s reputation which has led to a precipitous decline in the Company’s goodwill and business.

Our charter documents and Delaware law may inhibit a takeover that stockholders consider favorable.

Provisions of our Certificate of Incorporation (“Certificate”) and bylaws and applicable provisions of Delaware law may delay or discourage transactions involving an actual or potential change in control or change in our management, including transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise deem to be in their best interests. The provisions in our Certificate and bylaws:

	●	limit who may call stockholder meetings;
	●	do not provide for cumulative voting rights; and
	●	provide that all vacancies may be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum.

In addition, Section 203 of the Delaware General Corporation Law may limit our ability to engage in any business combination with a person who beneficially owns 15% or more of our outstanding voting stock unless certain conditions are satisfied. The restriction lasts for a period of three years following the share acquisition. These provisions may have the effect of entrenching our management team and may deprive you of the opportunity to sell your shares to potential acquirers at a premium over prevailing prices. The potential inability to obtain a control premium could reduce the price of our Common Stock.

Failure to achieve and maintain internal controls in accordance with Sections 302 and 404 of the Sarbanes-Oxley Act of 2002 could have a material adverse effect on our business and stock price.

If we fail to maintain adequate internal controls or fail to implement required new or improved controls, as we grow or as such control standards are modified, supplemented, or amended from time to time, we may not be able to assert that we can conclude on an ongoing basis that we have effective internal controls over financial reporting. Effective internal controls are necessary for us to produce reliable financial reports and are important in the prevention of financial fraud. If we cannot produce reliable financial reports or prevent fraud, our business and operating results could be harmed, investors could lose confidence in our reported financial information, and there could be a material adverse effect on our stock price.

ITEM 1B.

UNRESLOVED STAFF COMMENTS

Not applicable.

ITEM 1C.

CYBERSECURITY

Risk Management and Strategy

We review cybersecurity risk as part of our overall enterprise risk management program. This ensures that cybersecurity risk management remains a top priority in our business strategy and operations.

Our risk management strategy includes, among other elements:

Identification: We aim to proactively identify sources of risk, areas of impact, and relevant events that could give rise to cybersecurity risks, such as changes to our infrastructure, service providers, or personnel.

Assessment: We conduct periodic risk assessments to identify cybersecurity threats. We also conduct likelihood and impact assessments with the goal of identifying reasonably foreseeable internal and external risks, the likelihood and potential damage that could result from such risks, and the sufficiency of existing policies, procedures, systems, and safeguards in place to manage such risks.

Management: Following our risk assessments, we design and implement reasonable safeguards to address any identified gaps in our existing processes and procedures.

We have processes in place to identify, review and evaluate cybersecurity risks associated with our use of third-party service providers. These reviews are conducted at onboarding and periodically throughout the tenure of the service provider based on risk tier rating of each service provider. We believe these processes enable us to evaluate a third-party service provider’s security posture, identify risks that may arise out of our use of the third party’s service, and make decisions regarding acceptable levels of risk and risk mitigation.

Governance

The Board of Directors is aware of the critical nature of managing risks associated with cybersecurity threats. The Board has established robust oversight mechanisms to ensure effective governance in managing risks associated with cybersecurity threats because we recognize the significance of these threats to our operational integrity and stakeholder confidence.

Board of Directors Oversight

The Audit Committee is central to the Board’s oversight of cybersecurity risks and bears the primary responsibility for this domain. On a periodic basis, our Board of Directors reviews the adequacy of our computer systems controls, cybersecurity risk management and related governance and incident disclosures.

Management’s Role Managing Risk

Our Chief Financial Officer plays a pivotal role in informing the Board of Directors on cybersecurity risks and provides briefings to the Board of Directors on a regular basis, with a minimum frequency of once per year. These briefings encompass a broad range of topics, including:

●	Current cybersecurity landscape and emerging threats;

●	Status of ongoing cybersecurity initiatives and strategies;

●	Incident reports and learnings from any cybersecurity events; and

●	Compliance with regulatory requirements and industry standards.

Risk Management Personnel

Primary responsibility for assessing, monitoring and managing our cybersecurity risks rests with our information technology provider, who leads testing of our compliance with standards, remediation of known risks, and our employee training program.

Monitor Cybersecurity Incidents

Our information technology providers lead our implementation and oversight of processes for the regular monitoring of our information systems.

Reporting to Board of Directors

Our information technology providers regularly inform the COO and CFO about matters related to cybersecurity risks and incidents. Together, our COO and CFO then update our Board on significant cybersecurity matters, and strategic risk management.

ITEM 2.

PROPERTIES

We lease and maintain our principal office at 95 Bulldog Blvd, Suite 202, Melbourne, Florida, 32901.

Our Physical Therapy center leases and operates one full service physical and occupational therapy clinic is located at 95 Bulldog Blvd., Suite 201, Melbourne, FL 32901.

ITEM 3.

LEGAL PROCEEDINGS

From time to time, we may become involved in lawsuits and legal proceedings which arise in the ordinary course of business including potential disputes with patients. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. Our contracts with hospitals require us to indemnify them and their affiliates for losses resulting from the negligence of our care providers.

Although we currently maintain liability insurance coverage intended to cover certain claims to cover medical liability and certain other claims, we cannot assure that our insurance coverage will be adequate to cover liabilities arising out of claims asserted against us in the future where the outcomes of such claims are unfavorable to us. Liabilities in excess of our insurance coverage, including coverage for medical liability and certain other claims, could have a material adverse effect on our business, financial condition, and results of operations.

On May 31, 2018, the Company entered into a lease agreement for the use of equipment with 60 monthly payments of $2,112 payable through April 2023 with an effective interest rate of 5.00% per annum. The Company failed to make all payments as required under the lease agreement which resulted in the lender filing a complaint in the County Court of Brevard County, Florida (“Brevard Court”). In June 2023 the Brevard Court issued an order to the Company to return the equipment. The lender subsequently liquidated the equipment from which the proceeds were netted against the total claim. On January 25, 2024, the Brevard Court granted a $19,473 judgement in favor of the lessor of an equipment lease. In March 2024, the Company and the creditor negotiated a revised settlement amount of $9,000 which has been paid in full.

On June 15, 2020, Ackerman, LLP was engaged by the Company to represent the Company in its bankruptcy filing and proceedings. Ackerman was awarded fees by the court totaling $584,658, inclusive of a payment plan. The Company defaulted on the payment plan obligation and as a result, Ackerman filed a motion for summary judgment for the unpaid fees. The motion was granted by the court. The Company was able to partially satisfy the judgment, however, $203,115 of these legal fees remain unpaid.

On September 20, 2021, GMR Melbourne, LLC (“GMR”) filed a complaint in The Eighteenth Judicial Circuit Court in Brevard County, Florda for breach of contract as it relates to a facilities Lease Agreement entered into in March 2017, claiming the Company defaulted on the lease payments totaling $1,455,095. During October 2021, the Company, through The Eighteenth Judicial Circuit Court in Brevard County, Florda, received an order approving joint stipulation for alternative resolution to the Company’s real estate lease in Melbourne, Florida. The order terminated the Company’s use of floors three and four of the building immediately, while terminating its right to possession and use of floors three and five on December 31, 2021. The order also replaced the existing lease payment schedule with a series of eight payments to be completed by February 15, 2022. Upon receipt of the order, the Company recorded a liability and lease settlement expense for the amount of the order, or $1,443,498. As of December 31, 2023, the Company has paid approximately $200,000 of this obligation and has an open accounts payable liability remaining of approximately $1,200,000. The Company is working to reach a settlement with the landlord.

On May 11, 2023, Coastal Neurology, Inc. (“Coastal”) filed a complaint in The Circuit Court of the Seventh Judicial Circuit in and for Volusia County, Florida, for breach of contract as it relates to an Escrow Agreement and a failure to pay Coastal $100,000, seeking damages, costs, and interest. The Company asserts that no funds were required to be deposited under the escrow agreement, and that the escrow agreement is not valid and enforceable under Florida law.

On May 31, 2023, MBABJB Holdings Family Limited Partnership (“MBAB”) filed a complaint in The Circuit Court of the Eighteenth Judicial Circuit in and for Brevard County, Florida for breach of contract as it relates to a facilities Lease Agreement entered into on January 4, 2017, claiming the Company defaulted on the lease payments totaling $87,350. On August 24, 2023, the plaintiffs filed a motion for a summary judgment to Default. At December 12, 2023, the Plaintiff’s motion was granted for the sum of $102,884 including attorney fees and costs which is accrued by the company.

At December 7, 2023, the Company received correspondence from attorneys retained by CBL & Associates Properties, Inc. (“CBL”) as it relates to the collection of remaining lease payments plus collection costs on a care facility lease agreement where the Company vacated the premises on August 24, 2022, and defaulted on the remaining lease payments totaling $66,999. The total amount being sought by the collection attorney including collection costs is $84,051 which is accrued by the Company. The Company is working to reach a settlement with CBL.

ITEM 4.

MINE SAFETY DISCLOSURES

Not Applicable.

PART II

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is currently quoted under the symbol “FCHS” on the OTC Markets, the OTCIQ tier for companies that file alternative reports with the OTC. On April 28, 2024, the last reported closing sale price of our common stock on the OTCIQ was $.006 per share.

The following table sets forth, for the period indicated, the quarterly high and low per share sales prices (per share of our Common Stock for each quarter during our last two fiscal years as reported by OTCIQ):

2023	High		Low
First Quarter	$	0.013	$	0.008
Second Quarter	$	0.008	$	0.003
Third Quarter	$	0.015	$	0.005
Fourth Quarter	$	0.010	$	0.012

2022	High		Low
First Quarter	$	0.510	$	0.025
Second Quarter	$	0.045	$	0.022
Third Quarter	$	0.030	$	0.015
Fourth Quarter	$	0.030	$	0.012

The above information was obtained from Nasdaq.com. Because these are over-the-counter market quotations, these quotations reflect inter-dealer prices, without retail mark-up, markdown or commissions and may not represent actual transactions.

Shareholders

As of May 13, 2024, we had 35,725,788 shares of common stock outstanding, and approximately 454 common shareholders of record, based upon information received from our stock transfer agent. However, this number does not include beneficial owners whose shares were held of record by nominees or broker dealers. Additional information called for by this item is incorporated herein by reference to the following sections of this Report: “Note 8 – Capital Stock” of the Notes to Consolidated Financial Statements included in Item 8; and Part III, Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters – Equity Compensation Plan Information”.

Dividend Policy

We have never declared or paid any cash dividends on our shares of Common Stock. Under Delaware law, we may declare and pay dividends on our capital stock either out of our surplus, as defined in the relevant Delaware statutes, or if there is no such surplus, out of our net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal year. If, however, the capital of our company, computed in accordance with the relevant Delaware statutes, has been diminished by depreciation in the value of our property, or by losses, or otherwise, to an amount less than the aggregate amount of the capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets, we are prohibited from declaring and paying out of such net profits and dividends upon any shares of our capital stock until the deficiency in the amount of capital represented by the issued and outstanding stock of all classes having a preference upon the distribution of assets shall have been repaired. We do not intend to declare or pay any cash dividends on our Common Stock in the foreseeable future. The holders of our Common Stock are entitled to receive only such dividends (cash or otherwise) as may be declared by our Company’s Board of Directors.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

We did not repurchase any of our securities in 2022 or 2023.

Recent Sales of Unregistered Securities

Series A Convertible Preferred Stock

In the second quarter of 2022, the Company issued 141 shares of Series A convertible preferred stock (the “Series A Preferred Stock”) with a par value of $0.01 per share and a purchase price of $6,750 per share to 15 investors for $1,057,200 which included a 10% discount of $105,450 and cash of $951,750. The terms of these Series A Preferred Stock issuances included a 10% dividend payable in Series A Preferred Stock. The Company paid $53,994 in fees to brokers related to these issuances.

In the second quarter of 2023, the Company sold 6 shares of Series A Preferred Stock, with a par value of $0.01 per share and a purchase price of $7,500 per share to 1 investor for $50,000 which included a 10% discount of $5,000 and cash of $45,000. The Company paid $0 in fees to brokers related to this issuance.

As of December 31, 2023, and 2022, the total shares of Series A Preferred Stock outstanding were 147 and 141 shares, respectively.

Common Stock

During the years ended December 31, 2023, and December 31, 2022, the Company did not issue any shares of its common stock.

In connection with the issuance of the 35% OID Super Priority Secured Convertible Notes in 2022, the Company was to issue 1,000,000 incentive shares of unrestricted common stock. In connection with the issuance of the 35% OID Super Priority Secured Convertible Notes in 2023, the Company was to issue 100,000 incentive shares of unrestricted common stock. In connection with the issuance of the 20% OID Convertible Notes in 2023, the Company was to issue 468,250 incentive shares of unrestricted common stock. As of December 31, 2023, none of the incentive shares were issued and were therefore recorded as a Common Share Payable current liability.

Securities Authorized for Issuance Under Equity Compensation Plans

See Part III, Item 12 “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

ITEM 6.

RESERVED

ITEM 7.

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

The following discussion highlights the principal factors that have affected our financial condition and results of operations, as well as our liquidity and capital resources for the periods described. The following discussion should be read in conjunction with our consolidated financial statements and the related notes thereto contained in Item 8 Part III of this Form 10-K, “Forward-Looking Statements” contained in Part I of this Form 10-K, “Risk Factors” contained in the Item 1A of this Form 10-K and other information appearing elsewhere in, or incorporated by reference into, this Form 10-K. Dollar amounts reference in this Item 7 are in US dollars, except for share amounts.

Results of Operations

Overview

For the years ended December 31, 2023, and 2022, we reported a net loss of $8,171,232 and $9,943,702, respectively, a decrease of $1,772,470 or 18%. The decrease in the net loss was attributable to a reduction in operating expenses for the year ended December 31, 2023 as compared to December 31, 2022, partially offset by an increase in non-operating expenses. The reduction in operating expenses was primarily the result of lower compensation-related expenses. The increase in non-operating expenses was the result of increases in interest expenses, including the amortization of original issue discount and deferred financing costs.

The following table sets forth, for the periods indicated, our results of operations expressed as dollars and percentages of total revenues:

	For the Year Ended December 31,
	2023						2022
	Amount			% of Revenue			Amount			% of Revenue
Revenue
Revenue, net of discounts	$	29,985			100	%	$	1,068,979			100	%
Rental revenues		—						—
Gross (deficit) profit		29,985			100	%		1,068,979			100	%

Operating expenses
Salaries expense		253,844			847	%		4,465,765			418	%
Selling, general and administrative expenses		2,186,571			7292	%		3,618,273			338	%
Total operating expenses		2,440,415			8139	%		8,084,038			756	%
Operating loss		(2,410,430	)					(7,015,059	)

Other income (expenses)
Loss on sale of equipment		(56,751	)					(113,137	)
Impairment of Investment		—						(150,000	)
PPP Loan Forgiveness		—						—
Miscellaneous income (expense)		215,206						1,011,178
Gain on Bankruptcy		—						32,158
Interest expense, net		(5,919,257	)					(3,708,842	)
Total other income (expenses), net		(5,760,802	)					(2,815,506	)
Loss from continuing operations before income taxes		(8,171,232	)					(9,943,702	)
Net loss from continuing operations		(8,171,232	)					(9,943,702	)
Discontinued operations, net of tax		—						—
Net loss		(8,171,232	)					(9,943,702	)

Revenues

Total revenue was $29,985 for the year ended December 31, 2023, decreasing 97.2% from $1,068,979 in the prior year. Net patient service revenue accounted for all of total revenue in 2023. This compared to net patient service revenue of $1,068,979 for the year ended December 31, 2022. The 97.2% decrease in patient service revenue was the result of eliminating service offerings with the exception of physical therapy and fewer patient visits.

Operating Expenses

Operating expenses include the following:

	Year Ended 12/31/2023		Year Ended 12/31/2022
Salaries and benefits	$	253,844	$	4,465,765
Other operating expenses		—		—
General and administrative		2,144,390		3,529,711
Depreciation and amortization		42,181		88,562
Total operating expenses	$	2,440,415	$	8,084,038

The major components of operating expenses include practice 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.

Salaries and benefits decreased 94.3% to $253,844 for the year ended December 31, 2023, compared to $4,465,765 for the year ended December 31, 2022. The decrease was primarily related to releasing physicians to focus on physical therapy services as well as restructuring certain support staff.

General and administrative was $2,144,390 for the year ended December 31, 2023, as compared to $3,529,711 for the year ended December 31, 2022. The 39.6% decrease was primality the result of lower legal fees from our exit from bankruptcy.

Depreciation and amortization decreased 52.4%. The decrease was primarily the result of certain assets becoming fully depreciated and the sale of some unused assets.

Net Loss from Operations

Net loss from operations for the year ended December 31, 2023, totaled ($8,171,232), which compared to a net loss from operations of ($9,943,702) for the prior year. The decrease in the net loss from operations is a result of the items discussed above.

Other Income/(Expense)

Net other income (expense) included in the Net Loss from Operations increased to ($5,760,802) for the year ended December 31, 2023, which compared to total net other income (expense) of ($2,928,643) for the year ended December 31, 2022. The increase in net other net income (expense) primarily is due to an increase in interest expense and financing costs in 2023 partially offset by a decrease in the loss on sale of unused assets, a decrease in asset impairment expense, and a write of taxes payable.

Liquidity and Capital Resources

As of December 31, 2023, we had cash of $12,607 and medical accounts receivable, net totaling $92,444. This compared to cash of $7,219 and medical accounts receivable, net of $304,873 as of the end of 2022. At December 31, 2022, other receivables also included $1,011,128 of Employee Retention Credits under the CARES Act.

During the fiscal year ended December 31, 2023, the Company experienced operating losses of $8,171,232 and corresponding cash outflows from operations of $6,795,445. The Company’s ability to continue as a going concern is dependent upon the success of its continuing efforts to grow its revenue base, reduce operating costs, especially as related to services provided by healthcare providers or nurse practitioners, acquire growth oriented profitable businesses, and access additional sources of capital, and/or sell assets. The Company believes that it will be successful in repairing its relationships with employees and referral sources, generating growth and improved profitability resulting in improved cash flows from operations. Additionally, headcount was reduced in October 2021 and January 2023 to generate reductions in operating costs.

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 in order to conserve its cash, thus raising substantial doubt about its ability to continues a going concern more than one year from the date of issuance of the 2023 financial statements included in this filing.

Net cash used in our operating activities for the year ended December 31, 2023, totaled $6,795,445, which compared to net cash used in our operations for the year ended December 31, 2022, of $3,379,319. The increase in cash used for the year ended December 31, 2023, was due primarily to net lower revenues and increases in interest expense.

Net cash flows from investing activities were $63,779 for the year ended December 31, 2023, compared to ($80,680) used by investing activities for the year ended December 31, 2022. The increase in cash from investing activities for the year ended December 31, 2023 resulted from the sale of certain fixed assets.

Net cash provided from financing activities was $6,737,053 for the year ended December 31, 2023, compared to net cash from financing activities of $3,460,075 for the year ended December 31, 2022. The increase in cash flows from financing activities were the result of increased debt borrowings, partially offset by a decrease in the sale of preferred stock, to support the ongoing operating loss and restructuring and repositioning activities.

Inflation

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

Climate Change

Our opinion is that neither climate change, nor governmental regulations related to climate change, have had, or are expected to have, any material effect on our operations.

Off-Balance Sheet Arrangements

At December 31, 2023, 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.

Critical Accounting Policies

The preparation of the financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Significant estimates include the recoverability and, provision against bad debt, the fair value of the Company’s stock, and stock-based compensation. Actual results may differ from these estimates.

Basis of Accounting

Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of these consolidated financial statements requires our management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and related notes. Future events and their effects cannot be determined with absolute certainty. Therefore, the determination of estimates requires the exercise of judgment. We believe the following critical accounting policies affect its more significant judgments and estimates used in the preparation of financial statements.

Accounts Receivable

Accounts receivables are carried in their estimated collectible amounts net of doubtful accounts. The Company analyzes its history and identifies trends for each major payer sources of revenue to estimate the appropriate allowance for doubtful accounts and provision for bad debts. Management regularly reviews data about these major payer sources of revenue in evaluating the sufficiency of the contractual allowances.

Patient receivables are accounts receivables from services provided to patients who have third-party coverage. The Company analyzes contractually due amounts and provides a provision for bad debts, if necessary. The Company records a provision for bad debts in the period of service on the basis of past experience or when indications are the patients are unable or unwilling to pay the portion of their bill for which they are responsible. The difference between the standard rates (or the discounted rates if negotiated) and the amounts actually collected after all reasonable collection efforts have been exhausted, is charged off against the allowance for doubtful accounts

Revenue Recognition

On January 1, 2018, the Company adopted the new revenue recognition accounting standard issued by the Financial Accounting Standards Board (“FASB”) and codified in the ASC as Topic 606 (“ASC 606”). The revenue recognition standard in ASC 606 outlines a single comprehensive model for recognizing revenue as performance obligations, defined in a contract with a customer as goods or services transferred to the customer in exchange for consideration, are satisfied. The standard also requires expanded disclosures regarding the Company’s revenue recognition policies and significant judgments employed in the determination of revenue.

The Company applied the modified retrospective approach to all contracts when adopting ASC 606. As a result, at the adoption of ASC 606 what was previously classified as the provision for bad debts in the statement of operations is now reflected as implicit price concessions (as defined in ASC 606) and therefore included as a reduction to net operating revenues in 2018. For changes in credit issues not assessed at the date of service, the Company will prospectively recognize those amounts in other operating expenses in the statement of operations. For periods prior to the adoption of ASC 606, the provision for bad debts has been presented consistent with the previous revenue recognition standards that required it to be presented separately as a component of net operating revenues.

Patient Service Revenue

Our revenues generally relate to net patient fees received from various payers and patients themselves under contracts in which our performance obligations are to provide services to the patients. Revenues are recorded during the period our obligations to provide services are satisfied. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges and generally provide for payments based upon predetermined rates for services or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals.

Stock-Based Compensation

The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is re-measured on vesting dates and interim financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Stock-based compensation expense is recorded by the Company in the same expense classifications in the consolidated statements of operations, as if such amounts were paid in cash. Upon exercise of a common stock equivalent, the Company issues new shares of common stock out of its authorized shares.

Income Tax

Deferred taxes are provided on liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

New Accounting Pronouncements

We do not expect recent accounting pronouncements will have a material impact on our consolidated financial position, results of operations or cash flows. See Footnote 2 in the accompanying consolidated financial statements for additional information.

ITEM 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

This Item is not required for a Smaller Reporting Company.

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our consolidated financial statements are contained in pages F-1 through F-39 below.

INDEX TO FINANCIAL STATEMENTS

CONTENTS		PAGE NO.

Report of Independent Registered Public Accounting Firm (PCAOB ID: 6797)		F-2

Consolidated Balance Sheets at December 31, 2023 and 2022		F-3

Consolidated Statements of Operations for the Years Ended December 31, 2023 and 2022		F-4

Consolidated Statement of Stockholders’ Equity for the Years Ended December 31, 2023 and 2022		F-5

Consolidated Statements of Cash Flows for the Years Ended December 31, 2023 and 2022		F-6

Notes to the Consolidated Financial Statements		F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders,

First Choice Healthcare Solutions, Inc.

Melbourne, Florida

OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS

We have audited the accompanying consolidated balance sheets of First Choice Healthcare Solutions, Inc. (the “Company”) as of December 31, 2023 and 2022, and the related statements of operations and comprehensive income, changes in stockholders’ deficit, and cash flows for each of the years then ended, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022 and the results of their operations and their cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming that the entity will continue as a going concern. As discussed in Note 12 to the financial statements, the entity has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 12. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

BASIS FOR OPINION

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/Bush & Associates CPA LLC

Bush & Associates CPA LLC

We have served as the Company’s auditor since 2024.

Henderson, Nevada

May 12, 2024

F-2

FIRST CHOICE HEALTHCARE SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in dollars)

	2023			2022
	As of December 31,
	2023			2022
ASSETS
Current assets:
Cash and cash equivalents	$	12,607		$	7,219
Accounts receivable, net		92,444			304,873
Accounts receivable, other		—			1,011,128
Other Current Assets		206,631			9,116
Total current assets		311,682			1,332,336
Property, plant and equipment, net		262,243			470,703
Operating lease right-of-use assets		2,437,358			4,481,445

Other Assets:
Deferred tax asset		111,949			111,949
Deposits		—			119,589
Total other assets		111,949			231,538
Total assets	$	3,123,232		$	6,516,022

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable and accrued expenses	$	8,410,879		$	9,777,530
Operating lease liabilities, current portion		299,244			486,806
Tax payable		—			215,146
Notes payable, current portion		19,217,018			11,099,954
Total current liabilities		27,927,141			21,579,436

Long term liabilities:
PPP loan payable		1,283,624			1,283,624
Operating lease liabilities, non-current portion		2,442,519			4,058,455
Convertible notes		—			—
Total liabilities		31,653,284			26,921,515

Stockholders’ equity (deficit):
Series A Convertible Preferred stock; $0.01 par value, 40,000 shares authorized, 147 and 141 shares issued and outstanding at December 31, 2023 and 2022, respectively		1			1
Common stock, $0.001 par value, 100,000,000 shares authorized 32,958,288 and 32,958,288 shares issued and outstanding at December 31, 2022 and 2021, respectively		32,958			32,958
Additional paid-in capital		35,369,995			35,323,323
Treasury stock, 74,453 common shares, at cost		—			—
Accumulated deficit		(63,933,006	)		(55,761,775	)
Total stockholders’ equity (deficit)		(28,530,052	)		(20,405,493	)
Total liabilities and stockholders’ equity (deficit)	$	3,123,232		$	6,516,022

The accompanying notes are an integral part of these consolidated financial statements.

F-3

FIRST CHOICE HEALTHCARE SERVICES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in dollars)

	2023			2022
	For the Year Ended December 31,
	2023			2022
Revenue
Revenue, net of discounts	$	29,985		$	1,068,979
Rental revenues		—			—
Gross (deficit) profit		29,985			1,068,979

Operating expenses
Compensation expense		253,844			4,465,765
Selling, general and administrative expenses		2,186,571			3,618,273
Total operating expenses		2,440,415			8,084,038
Operating loss		(2,410,430	)		(7,015,059	)
Other income (expenses)
Loss on sale of equipment		(56,751	)		(113,137	)
Impairment of Investment		—			(150,000	)
Miscellaneous income (expense)		215,206			1,011,178
Gain on Bankruptcy		—			32,158
Interest expense, net		(5,919,257	)		(3,708,842	)
Total other income (expenses), net		(5,760,802	)		(2,928,643	)
Loss from continuing operations before income taxes		(8,171,232	)		(9,943,702	)
Income taxes expense (benefit)		—			—
Net loss		(8,171,232	)		(9,943,702	)
Preferred stock dividends		(90,732	)		(53,912	)
Net loss attributable to common shareholders	$	(8,261,964	)	$	(9,997,614	)

Basic and diluted income (loss) per common share
Net loss per common share	$	(0.25	)	$	(0.30	)
Weighted average number of common shares outstanding, basic and diluted		32,958,288			32,958,288

The accompanying notes are an integral part of these consolidated financial statements.

F-4

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

TWO YEARS ENDED DECEMBER 31, 2023

(in dollars)

	Shares		Amount		Shares		Amount		Capital		Deficit			Total
									Additional
	Common stock				Preferred stock				Paid in		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance, December 31, 2021		32,958,288	$	32,958		—	$	—	$	26,703,190	$	(45,818,073	)	$	(19,081,925	)
Stock based compensation		—		—		—		—		4,188		—			4,188
Warrants issued for debt discount		—		—		—		—		164,196		—			164,196
Proceeds from issuance of Preferred stock		—		—		141		1		951,749		—			951,750
Adjust Steward (Bankruptcy) Settlement		—		—		—		—		7,500,000		—			7,500,000
Net loss		—		—		—		—		—		(9,943,702	)		(9,943,702	)
Balance, December 31, 2022		32,958,288	$	32,958		141	$	1	$	35,323,323	$	(55,761,775	)	$	(20,405,493	)
Balance		32,958,288	$	32,958		141	$	1	$	35,323,323	$	(55,761,775	)	$	(20,405,493	)

Stock based compensation		—		—		—		—		—		—			—
Warrants issued for debt discount		—		—		—		—		1,672		—			1,672
Proceeds from issuance of Preferred stock		—		—		6		—		45,000		—			45,000
Net loss		—		—		—		—		—		(8,171,232	)		(8,171,232	)
Balance, December 31, 2023		32,958,288	$	32,958		147	$	1	$	35,369,995	$	(63,933,006	)	$	(28,530,052	)
Balance		32,958,288	$	32,958		147	$	1	$	35,369,995	$	(63,933,006	)	$	(28,530,052	)

The accompanying notes are an integral part of these consolidated financial statements.

F-5

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in dollars)

	2023			2022
	For the Year Ended December 31,
	2023			2022
Cash flows from operating activities:
Net loss	$	(8,171,232	)	$	(9,943,702	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		44,805			88,562
Loss on disposition of assets		189,867			113,138
Accretion of debt modification		-			12,259
Amortization of debt discount		1,429,386			1,493,975
Amortization of warrants issued for debt discount		-			193,231
Amortization of deferred financing costs		76,927			-
Amortization of debt discount		-			70,096
Share-based compensation		-			4,188
Preferred dividends - accrued		90,732			53,911
Provision for bad debts		41,513			133,130
Changes in operating assets and liabilities:
Accounts receivable		1,182,044			(1,003,577	)
Other current assets		(77,926	)		253,458
(Increase) decrease in leased assets		2,044,087			508,393
Accounts payable and accrued liabilities		(1,842,150	)		5,102,147
(Increase) decrease in lease liabilities		(1,803,498	)		(458,528	)
Net cash provided by (used in) operating activities	$	(6,795,445	)	$	(3,379,319	)

Cash flows from investing activities:
Proceeds from sale of fixed assets		146,697			-
Purchase of property and equipment		(82,918	)		(80,680	)
Net cash (used in) provided by investing activities	$	63,779		$	(80,680	)

Cash flows from financing activities :
Payments on notes payable		(173,764	)		(860,457	)
Proceeds from issuance of convertible notes		6,865,817			3,368,782
Proceeds from sale of preferred stock		45,000			951,750
Net cash provided by (used in) financing activities		6,737,053			3,460,075

Net change in cash		5,387			74
Cash, beginning of period		7,219			7,145
Cash, end of period	$	12,606		$	7,219

Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	-
Cash paid for income taxes	$	-			-

Supplemental disclosure of cash flow information:
Reverse temporary equity for bankruptcy	$	-		$	7,500,000
Convertible notes exchanged		-			375,000
Fixed asset purchased under capital lease		-			3,358,002
Note Payable addition from DFC		-			244,954
Note Payable addition from OID		351,712			1,428,154
Warrants issued for debt discount		1,672			164,196
Common shares issued for convertible notes - inducement	$	2,703		$	47,904

See the accompanying notes to these consolidated unaudited financial statements

F-6

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

NOTE 1— ORGANIZATION, BUSINESS AND PRINCIPLES OF CONSOLIDATION

First Choice Healthcare Solutions, Inc. (the “Company”) was incorporated on December 15, 2011 in the state of Delaware. The consolidated financial statements are those of the Company and its owned subsidiary FCID Medical, Inc., incorporated on November 5, 2010 in the state of Florida, and its wholly owned subsidiary First Choice Medical Group of Brevard, LLC, incorporated on September 16, 2011 in the state of Delaware. All significant intercompany accounts and transactions have been eliminated in consolidation.

On June 15, 2020, the Company filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code in the Bankruptcy Court for the Middle District of Florida (the “Bankruptcy Court”). The Plan of Affiliated Debtors Pursuant to Chapter 11 of the United States Bankruptcy Code, as amended, modified or supplemented (the “Plan”) was confirmed by the Bankruptcy Court on February 23, 2021 and became effective on April 28, 2022, the date on which the Company emerged from bankruptcy (the “Effective Date”), with a new board of directors and certain new officers (see Note 13).

The Company is actively engaged in implementing a defined growth strategy aimed at building a network of localized, integrated healthcare services platforms, comprised of nurse practitioner driven primary care clinics providing services including family primary care, anti-aging, dermatology, weight loss, hormone replacement therapy, functional and genetic testing, nutritional counseling, as well as behavioral health.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Use of estimates

The preparation of the financial statements in conformity with U. S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Significant estimates include the recoverability and useful lives of long-lived assets, provision against bad debt, the fair value of the Company’s stock, and stock-based compensation. Actual results may differ from these estimates.

Revenue Recognition

The Company applied the modified retrospective approach to all contracts when adopting ASC 606. As a result, at the adoption of ASC 606 what was previously classified as the provision for bad debts in the statement of operations is now reflected as implicit price concessions (as defined in ASC 606) and therefore included as a reduction to net operating revenues in 2018. For changes in credit issues not assessed at the date of service, the Company will prospectively recognize those amounts in other operating expenses on the statement of operations. For periods prior to the adoption of ASC 606, the provision for bad debts has been presented consistent with the previous revenue recognition standards that required it to be presented separately as a component of net operating revenues.

The Company recognizes revenue when: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed or determinable; and (4) collectability is reasonably assured. Determination of criteria (3) and (4) are based on management’s judgments regarding the fixed nature of the selling prices of the products delivered and the collectability of those amounts. Provisions for discounts and rebates to customers, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded.

F-7

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

Patient Service Revenue

Our revenues relate to net patient fees received from various payers and patients themselves under contracts in which our performance obligations are to provide services to the patients. Revenues are recorded during the period our obligations to provide services are satisfied. The contractual relationships with patients, in most cases, also involve a third-party payer (Medicare, Medicaid, managed care health plans and commercial insurance companies, including plans offered through the health insurance exchanges) and the transaction prices for the services provided are dependent upon the terms provided by (Medicare and Medicaid) or negotiated with (managed care health plans and commercial insurance companies) the third-party payers. The payment arrangements with third-party payers for the services we provide to the related patients typically specify payments at amounts less than our standard charges and provide for payments based upon predetermined rates for services or discounted fee-for-service rates. Management continually reviews the contractual estimation process to consider and incorporate updates to laws and regulations and the frequent changes in managed care contractual terms resulting from contract renegotiations and renewals.

Concentrations of credit risk

The Company’s financial instruments are exposed to a concentration of customer risk and accounts receivable risk. Occasionally, the Company’s cash and cash equivalents in interest-bearing accounts may exceed FDIC insurance limits. The financial stability of these institutions is periodically reviewed by senior management. Revenues and accounts receivable are concentrated between two major payers with the approximate risk level outlined below.

Concentration of Risk
Revenue Concentration:

	2023			2022
	Year ended December 31,
	2023			2022
Commercial Payor 1		10.9	%		32.0	%
Commercial Payor 2		6.5	%		21.0	%

Receivable Concentration:

	December 31,			December 31,
	2023			2022
Legal		32.3	%		14.6	%
Commercial Payor 1		10.9	%		28.6	%
Commercial Payor 2		6.5	%		22.5	%
Concentration of Risk		6.5	%		22.5	%

Accounts receivables

Accounts receivables are carried at their estimated collectible amounts net of doubtful accounts. The Company analyzes its history and identifies trends for each major payer sources of revenue to estimate the appropriate allowance for doubtful accounts and provision for bad debts. Management regularly reviews data about these major payer sources of revenue in evaluating the sufficiency of the contractual allowances.

F-8

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

Net loss per share

Basic net loss per common share is based upon the weighted-average number of common shares outstanding. Diluted net income per common share is based on the weighted-average number of common shares outstanding and potentially dilutive common shares outstanding and computed as follows:

	2023			2022
	Year ended December 31,
	2023			2022
Numerator:
Net loss attributable to First Choice Healthcare Solutions, Inc.	$	(8,261,964	)	$	(9,997,614	)

Denominator:
Weighted-average common shares, basic		32,958,288			32,958,288
Weighted-average common shares, diluted		32,958,288			32,958,288

Basic:	$	(0.25	)	$	(0.30	)
Diluted:	$	(0.25	)	$	(0.30	)

The computation excludes potentially dilutive securities when their inclusion would be anti-dilutive, or if their exercise prices were greater than the average market price of the common stock during the period.

Basic net loss per share is computed on the basis of the weighted average number of common shares outstanding during each year. Diluted net loss per share is computed similar to basic net loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. The Company uses the “if-converted” method for calculating the earnings per share impact of outstanding convertible debentures, whereby the securities are assumed converted and an earnings per incremental share is computed. Options, warrants and their equivalents are included in EPS calculations through the treasury stock method. In periods where losses are reported, the weighted-average number of common stock outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. In addition, there were no vested restricted stock for periods presented. Potentially dilutive securities excluded from the basic and diluted net income per share are as follows:

	2023		2022
	December 31,
	2023		2022
Convertible debt		2,810,648,817		430,902,049
Warrants to purchase common stock		11,774,164		11,246,433
Incentive shares payable issued with convertible notes		1,568,250		1,000,000
Restricted stock awards		1,357,308		1,357,308
Options to purchase common stock		—		—
Total		2,825,348,539		444,505,790

Stock-based compensation

The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on vesting dates and interim financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period. Stock-based compensation expense is recorded by the Company in the same expense classifications in the consolidated statements of operations, as if such amounts were paid in cash. Upon exercise of a common stock equivalent, the Company issues new shares of common stock out of its authorized shares.

Long-lived assets

The Company follows a “primary asset” approach to determine the cash flow estimation period for a group of assets and liabilities that represents the unit of accounting for a long-lived asset to be held and used. Long-lived assets to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The carrying amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less cost to sell.

F-9

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

Property and equipment are stated at cost. When retired or otherwise disposed, the related carrying value and accumulated depreciation are removed from the respective accounts and the net difference less any amount realized from disposition, is reflected in earnings. For financial statement purposes, property and equipment are recorded at cost and depreciated using the straight-line method over their estimated useful lives of 5 to 15 years.

The Company evaluates the recoverability of long-lived assets based upon forecasted undiscounted cash flows. Should impairment in value be indicated, the carrying value of intangible assets will be adjusted, based on estimates of future discounted cash flows resulting from the use and ultimate disposition of the asset. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

Leases

In February 2016, the FASB issued ASC 842, Leases, (“ASC 842”) to increase transparency and comparability among organizations by requiring the recognition of right-of-use (ROU) assets and lease liabilities on the balance sheet for leases previously classified as operating leases. The Company adopted ASC 842 effective January 1, 2022 and recognized and measured operating leases existing at, or entered into after, January 1, 2021 (the beginning of the earliest comparative period presented) using a modified retrospective approach, with certain practical expedients available (see Note X). The Company’s accounting for finance leases under ASC 842 remained substantially unchanged,

In accordance with ASC 842, the Company determines if an arrangement is a lease at inception. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, we estimate incremental borrowing rates corresponding to the reasonably certain lease term. If the estimate of our incremental borrowing rate was changed, our operating lease assets and liabilities could differ materially.

Finance leases lease assets and liabilities are recognized at the lease commencement date at the present value of the future lease payments not yet paid using the Company’s incremental borrowing rate, Assets acquired under finance lease are included in property and equipment, while finance lease obligations are included in other current liabilities and other long- term liabilities on the consolidated balance sheets.

Income taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of items that have been included or excluded in the financial statements or tax returns. Deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (“temporary differences”) at enacted tax rates in effect for the years in which the temporary differences are expected to reverse.

The Company follows a recognition threshold and measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company’s consolidated financial statements as of December 31, 2023 and 2022. The Company does not expect any significant changes in its unrecognized tax benefits within twelve months of the reporting date.

Treasury Stock

The Company uses the cost method when it purchases its own common stock as treasury shares and displays treasury stock as a reduction of shareholders’ equity.

F-10

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

Fair Value of Financial Instruments

Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value:

	●	Level 1 – Quoted prices in active markets for identical assets or liabilities.
	●	Level 2 – Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.
	●	Level 3 – Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed and is determined based on the lowest level input that is significant to the fair value measurement.

The carrying value of the Company’s cash, accounts receivable, accounts payable, short-term borrowings (including lines of credit and notes payable), and other current assets and liabilities approximate fair value because of their short-term maturity.

As of December 31, 2023, and 2022, the Company did not have any items that would be classified as level 1, 2 or 3 disclosures.

Reclassifications

Certain reclassifications have been made to prior year data to conform to the current year’s presentation. These reclassifications had no impact on reported income or losses.

Recent accounting pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its consolidated financial statements. The Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its consolidated financial position or results of operations.

Unlisted other accounting standards that have been issued by the FASB or other standards-setting bodies are not currently expected to have a material effect on the Company’s consolidated financial position, results of operations or cash flows.

In July 2023, the FASB issued ASU 2023-03, Presentation of Financial Statement (Topic 205), Income Statement - Reporting Comprehensive Income (Topic 220), Distinguishing Liabilities from Equity (Topic 480), Equity (Topic 505), and Compensation - Stock Compensation (Topic 718), to amend various SEC paragraphs in the Accounting Standards Codification to reflect the issuance of SEC Staff Accounting Bulletin No. 120, among other things. The ASU does not provide any new guidance so there is no transition or effective date associated with it. The Company is currently assessing the impact of adopting ASU 2023-03 on the consolidated financial statements and related disclosures.

F-11

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, that would enhance disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC 280. ASC 280 requires a public entity to report for each reportable segment a measure of segment profit or loss that its chief operating decision maker (“CODM”) uses to assess segment performance and to make decisions about resource allocations. The amendments in ASU 2023-07 are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is currently assessing the impact of adopting ASU 2023-07 on the consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. Early adoption is permitted. A public entity should apply the amendments in ASU 2023-09 prospectively to all annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent updates. ASU 2016-13 changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The new guidance will replace the current incurred loss approach with an expected loss model. The new expected credit loss impairment model will apply to most financial assets measured at amortized cost and certain other instruments, including trade and other receivables, loans, held-to-maturity debt instruments, net investments in leases, loan commitments and standby letters of credit. ASU 2016-13 is effective for smaller public companies in fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company’s results within the consolidated statements of operations and financial condition.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which is intended to provide temporary optional expedients and exceptions to the U.S. GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burden related to the expected market transition from the London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. This ASU, along with recently issued ASU 2021-01, which further clarifies the scope of Topic 848, is available immediately and may be implemented in any period prior to the guidance expiration on December 31, 2022. ASU 2020-04 was effective beginning on March 12, 2020, and the Company may elect to apply the amendments prospectively through December 31, 2022. The Company has not applied any optional expedients and exceptions to date and will continue to evaluate the impact of the guidance and whether it will apply the optional expedients and exceptions.

In July 2021, the FASB issued ASU 2021-05, Lessors—Certain Leases with Variable Lease Payments (“ASU 2021-05”). ASU 2021-05 was issued to address the day-one loss issue related to a lessor’s accounting for certain leases with variable lease payments, requiring a lease with variable lease payments that do not depend on an index or a rate to be classified as operating under certain conditions. ASU 2021-05 was effective for the Company for interim periods beginning after December 15, 2021, the January 1, 2022 adoption did not have an impact to the Company’s results of operations and financial condition.

In May 2021, the FASB issued ASU 2021-04, Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (“ASU 2021-04”). ASU 2021-04 codifies how an issuer should account for modifications made to equity-classified written call options. The guidance in ASU 2021-04 requires the issuer to treat a modification of an equity-classified warrant that does not cause the warrant to become liability-classified as an exchange of the original warrant for a new warrant. This guidance applies whether the modification is structured as an amendment to the terms and conditions of the warrant or as termination of the original warrant and issuance of a new warrant. ASU 2021-04 was effective for fiscal years beginning after December 15, 2021, the adoption on January 1, 2022 did not have an impact to the Company’s results of operations and financial condition.

F-12

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity by removing the separation models for convertible debt with cash conversion and beneficial conversion features by requiring entities not to separately present in equity an embedded conversion feature in such debt and instead will account for a convertible debt instrument and convertible preferred stock as a single unit of account unless a convertible instrument contains features that require bifurcation as a derivative under ASC 815 or was issued at a substantial premium. The ASU was early adopted for the fiscal year ending December 31, 2021. The adoption of ASU 2020-06 on January 1, 2022 did not have an impact to the Company’s results of operations and financial condition.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (ASC 740) – Simplifying the Accounting for Income Taxes, which is intended to reduce complexity in the accounting for income taxes while maintaining or improving the usefulness of information provided to financial statement users. The guidance amends certain existing provisions under ASC 740 to address a number of distinct items. The Company adopted ASU 2019-12 effective January 1, 2021. Adoption of the amendments in this ASU did not have an impact to the Company’s results of operations and financial condition.

NOTE 3 — PROPERTY, PLANT, AND EQUIPMENT

Property, plant and equipment at December 31, 2023 and 2022 are as follows:

		2023			2022
	2023			2022
Building improvements	$	110,838		$	114,980
Computer equipment		70,636			100,510
Medical equipment		221,297			579,508
Office equipment		20,866			39,854
Property plant and equipment, gross		423,637			834,852
Less: accumulated depreciation		(161,394	)		(364,149	)
Property plant and equipment, net	$	262,243		$	470,703

During the year ended December 31, 2023 and 2022, depreciation expense charged to operations was $42,181 and $88,562, respectively.

During January 2022, as a result of its Bankruptcy Plan approval (see Note 13), the Bankruptcy Court approved the rejection of two satellite clinic location leases in Melbourne, Florida and Merritt Island. As a result, $30,578 in unamortized leasehold improvements were written off as loss on disposal.

During 2023, the Company disposed of physical therapy equipment and furniture and fixtures with a book value of $113,869, recognizing a loss on disposal. During October of 2022, the Company disposed of physical therapy equipment with a book value of $82,560, recognizing a loss on disposal.

NOTE 4 — INVESTMENTS

On September 10, 2021 the Company entered in a Member Interest Purchase Agreement to acquire the Membership Interests in Care America at Maitland, LLC, a licensed but inoperative pharmacy services provider, for the purchase price of $150,000 with a closing date of October 1, 2021. In 2022, the company re-evaluated this strategic direction which absolved the requirement for a retail-based pharmacy. As a result, during the year ended December 31, 2022, Care America of Maitland, LLC was dissolved and the Company realized $150,000 in loss on impairment in its investment in its Membership Interest in Care America at Maitland, LLC.

On March 1, 2023, the Company entered an agreement with Coastal Neurology, Inc. (“Coastal”) to provide for the escrow of a non-refundable good faith deposit of $150,000 to cover transaction costs in conjunction with the Company’s proposed stock purchase agreement of Coastal. Under the terms of the agreement, if the Company failed to undertake a funding offering as specified in the agreement by March 31, 2023, and therefor was unable to close the acquisition by May 30, 2023 because of lack of funds, then the escrow deposit was to be released in full to Coastal no later than May 31, 2023. As the Company was only able to make $103,000 of the required good faith deposit in full to the escrow agent, the proposed Coastal acquisition was abandoned and the $103,000 was written off.

F-13

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

NOTE 5 — LINES OF CREDIT

Line of credit, CT Capital

On June 13, 2013, we entered into a Loan and Security Agreement (the “Loan Agreement”) with C.T. Capital, Ltd, (“Lender”) a Florida Limited Partnership. Under the Loan Agreement and subsequent amendments, Lender committed to make an accounts receivable line of credit to a maximum aggregate amount of $2,500,000. The Lender was also allowed to convert all or any portion of the outstanding principal or interest up to $2,000,000 on the loan into the Company’s common stock at a price equal to $0.75 per share. During 2021, the Loan Agreement was determined to be a general unsecured creditor under the Bankruptcy Plan, eligible to receive pro rata share distributions. At the time of the Bankruptcy Plan approval, the balance of the Loan Agreement was $1,108,851 and Lender was paid its portion of the distribution of $21,872 in April 2022.

NOTE 6— NOTES PAYABLE

Non-Convertible Notes Payable

During the years ended December 31, 2022 and December 31, 2021, the Company issued eighteen non-convertible notes payable to individuals for a total face value of $2,076,158. The notes were due within 60 days from the dates of issuance, were interest free, have original issuance discounts totaling $408,000 and were unsecured. During the years ended December 31, 2023, 2022, and 2021, the Company repaid or refinanced principal of $156,000, $310,000, and $817,521, respectively. The balance of the non-convertible notes payable as of December 31, 2023 and 2022 is $792,637 and $792,637, respectively.

PPP Loans

In 2020, the Company and its two subsidiaries received Paycheck Protection Plan (“PPP”) loans under the Cares Act totaling $1,386,580. The PPP loans were expected to be forgiven by the U.S. Small Business Association (“SBA”) and as such, were not made eligible for any distributions under the amended joint Plan of Reorganization which was approved on February 23, 2021(the “Plan”). The Plan further required the Company to file proper forgiveness applications with the SBA no later than February 19, 2021. The Company successfully filed for and received forgiveness confirmation for one of the PPP loans for $103,618 plus interest. The remaining two PPP loans forgiveness applications were never properly completed and filed by former management. As of January 17, 2023, the SBA’s website shows those two remaining PPP loans reflected as “Charged Off”. As a result of this recent discovery, the Company has reinitiated forgiveness applications with the SBA and expects those loans to be forgiven in full. As of December 31, 2023 and December 31, 2022, the Company had a total of PPP loans payable of $1,283,624 and $1,283,624, respectively, including accrued interest, which are expected to be forgiven by the SBA in mid 2024.

Non-convertible notes payable as of December 31, 2023 and 2022 are comprised of the following:

		December 31,			December 31,
	December 31,			December 31,
	2023			2022
Notes Payable	$	2,909,119		$	1,113,925
Note Payable - Equipment		-			36,538
PPP Loans Payable		1,283,624			1,283,624
Less current portion		(2,909,119	)		(1,150,463	)
Long term portion	$	1,283,624		$	1,283,624

F-14

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

Fees and discounts are deferred and amortized over the life of the related note payable. During the years ended December 31, 2023 and 2022, the Company recognized a total of $2,135,500 and $441,703, respectively, from the amortization of original issuance debt discounts. The outstanding balance of debt discount at December 31, 2023 and 2022 was $0 and $0, respectively.

Convertible Notes Payable

10% OID Senior Secured Convertible Notes

During 2020 to 2022, the Company entered into Security Purchase Agreements with lenders for the sale of 10% original issue discount senior secured promissory notes (“10% Notes”)and warrants to purchase shares of the Company’s common stock equal to 50% of the face value. The 10% Notes accrue interest at 10% per annum payable quarterly, are convertible into shares of the Company’s common stock at the option of the holder at any time at a fixed ceiling price of $0.75 per share. The 10% Notes have full ratchet and anti-dilution provisions, a principal adjustment provision upon default, providing for a principal increase to 110% at maturity if unpaid, 120% at six months if unpaid and 130% at 12 months if unpaid. The 10% Notes were due March 31, 2022 and to date, all default provisions have been waived. The amounts due under the 10% Secured Convertible Notes are secured by assets of the Company pursuant to a security agreement.

During the year ended December 31, 2022, the Company issued one 10% Note with a face amount of $660,000 and an original issuance discount of $60,000 for cash of $600,000. The holder received 330,000 warrants to purchase the Company’s common stock, recognizing $7,616 in a debt discount from warrant valuation.

Warrants to purchase shares of the Company’s common stock warrants have a five-year term, are exercisable upon the completion of a “Qualified Financing” at a cash exercise price equal to the lower of 93.75% of the per share price of Company’s common stock sold to third-party investors in that Qualified Financing, or $0.75 per share, subject to adjustment. The value of the warrants was recorded as debt discounts that are being amortized to interest expense over the life of the notes.

At December 31, 2023 and 2022, the balance of 10% notes was $5,973,000 and $5,973,000, original issuance discounts were $0 and $175,491, discounts from warrants were $0 and $155,261, discounts from deferred finance costs were $0 and $40,311, and accrued interest was $828,527 and $1,489,291, respectively. During the years ended December 31, 2023 and 2022, the Company recognized $0 and $235,491 in interest expense from the amortization of original issuance discounts, $0 and $162,877 in interest expense from the amortization of debt discounts from warrants, $0 and $40,311 from the amortization of deferred finance costs, and $660,764 and $594,769 in accrued interest, respectively.

35% OID Super Priority Senior Secured Convertible Notes

During the years ended December 31, 2023 and 2022, the Company entered into Security Purchase Agreements with lenders for the sale of 35% original issue discount senior secured promissory notes (“35% Notes”), warrants to purchase shares of the Company’s common and shares of the Company’s common stock as incentives. The 35% Notes have a 35% original issuance discount being amortized to interest expense through maturity, are non-interest bearing, are due at the earlier of six months from the date of issue or upon the occurrence of a liquidity event and are prepayable by the Company at any time at a premium of 120% of the outstanding balance. Upon an occurrence of default, the holder shall have the right to convert the 35% Note and outstanding interest at the lower of a discount to market or subsequent financings. The amounts due under the 35% Notes are secured by assets of the Company pursuant to a security agreement.

During the years ended December 31, 2023 and 2022, the Company issued 35% Notes with a face value of $538,462 and $5,062,000, original issuance discounts of $188,462 and $1,772,000 and $70,000 and $241,000 of deferred financing costs for cash of $280,000 and $2,659,000, refinancing of 10% notes of $0 and $390,000, respectively. The holders received 269,231 and 3,005,960 warrants to purchase the Company’s common stock and 100,000 and 1,000,000 shares of the Company’s common stock during the years ended December 31, 2023 and 2022, respectively.

F-15

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

Warrants to purchase shares of the Company’s common stock warrants have a five-year term, are exercisable upon the completion of a Qualified Financing at a cash exercise price equal to 93.75% of the per share price of Company’s common stock sold to third-party investors in a Qualified Financing.

At December 31, 2023 and 2022, the balance of 35% notes was $5,600,462 and $5,062,000, original issuance discounts were $0 and $203,195, discounts from warrants were $0 and $4,806, discounts from deferred finance costs were $0 and $12,940 and discounts from incentive shares were $0 and $3,084, respectively.

The original issuance discount, deferred financing costs and the relative fair value of the warrants and incentive shares are being amortized to interest expense through maturity. During the years ended December 31, 2023 and 2022, the Company recognized $224,025 and $1,568,805 in interest expense from the amortization of original issuance discounts, $1,672 and $151,774 in interest expense from the amortization of debt discounts from warrants, $0 and $228,060 from the amortization of deferred finance costs, and $48,774 and $900 in amortization of incentive shares, respectively.

20% OID Senior Secured Convertible Notes Payable

During 2023, the Company entered into Security Purchase Agreements with lenders for the sale of 20% original issue discount senior secured promissory notes (“20% Notes”), warrants to purchase shares of the Company’s common stock with a five-year term, exercisable at any time at the option of the holder at a cash exercise price equal to 93.75% of the per share price of Company’s common stock sold to third-party investors in a qualified financing and incentive shares of the Company’s common stock. The 20% Notes accrue interest at 10% per annum, principal and interest are due at the earlier of six months from the date of issue or upon the occurrence of a liquidity event.

The holder shall have the right to convert the 20% Notes and outstanding interest on a Qualified Financing at a price equal to 85% of the offering price, or a 15% discount to the volume weighted average price of the Company’s common stock for the five days preceding the dates of conversions, subject to a maximum price of $1.00. The amounts due under the 20% Notes are secured by assets of the Company pursuant to a security agreement.

During the year ended December 31, 2023, the Company issued 20% Notes with a face value of $468,250 and original issuance discounts of $93,250 for cash of $375,00. The holders received warrants to purchase 233,500 shares of the Company’s common stock and 468,250 incentive shares of the Company’s common stock. At December 31, 2023 and 2022, the balance of 20% notes was $468,250 and original issuance discounts were $85,000. Accrued interest totaled $1,727 at December 31, 2023.

The original issuance discount, relative fair value of the warrants and incentive shares are being amortized to interest expense through maturity. During the year ended December 31, 2023, the Company recognized $8,250 in interest expense from the amortization of original issuance discounts of the 20% Notes and $1,803 in amortization of incentive shares and $1,727 in accrued interest on the 20% Notes.

Convertible notes payable as of December 31, 2023 and 2022 are comprised of the following:

SCHEDULE OF CONVERTIBLE NOTES PAYABLE

	December 31, 2023			December 31, 2022
10% OID Senior Convertible Notes Payable, past due, interest at 10%, secured by assets, convertible at $0.75 per share	$	5,973,000		$	5,973,000
35% OID Super Priority Senior Convertible Notes Payable, due in 2 years from date of issuance, interest at 35%, secured by assets, convertible upon qualifying financing		5,600,462			5,062,000
20% OID Senior Convertible Notes Payable, past due, interest at 10%, secured by assets, convertible at max $1.00 per share		468,250			-
Total		12,041,712			11,035,000
Less: unamortized discounts		-			(595,108	)
Total	$	12,041,712		$	10,439,892
Less current portion		(12,041,712	)		(10,439,892	)
Long-term portion	$	-		$	-

F-16

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

As a result of the issuance of the above convertible debt, the Company incurred approximately $527,051 in fees and commissions as well as $3,002,702 in original issuance discounts. Fees and discounts are deferred and amortized over the life of the related convertible note. During the years ended December 31, 2023 and 2022, the Company recognized a total of $281,712 and $1,894,500, respectively, from the amortization of original issuance debt discounts. The outstanding balance of debt discount at December 31, 2023 and 2022 was $85,000 and $0, respectively.

NOTE 7— LEASES

Operating Leases

As a result of the adoption of ASC 842 on January 1, 2021, the Company recognized a lease liability which represents the present value of the remaining operating lease payments discounted using our incremental borrowing rate of 5.0%, and a right-of-use asset.

Operating leases consist of an office and a clinic location and have remaining terms of approximately 7 and 1 years, respectively, and both include options to extend the leases for additional periods. Generally, the lease term is the minimum of the noncancelable period of the lease or the lease term inclusive of reasonably certain renewal periods. If the estimate of our reasonably certain lease term was changed, our depreciation and rent expense could differ materially.

Maturities of the above lease liabilities are as follows as of December 31, 2023:


2024	$	299,244
2025		596,223
2026		368,340
2027		377,442
Thereafter		1,452,951
Total Lease Payments		3,094,200
Less Interest		(352,437	)
Total Lease Liabilities	$	2,741,763
Less: Current Portion		(299,244	)
Long-Term Liabilities	$	2,442,519

Sale/Leaseback

On March 31, 2016, the Company entered into a lease of Marina Towers under a sale/leaseback transaction, via a 10-year absolute triple-net master lease agreement, to expire in 2026. The Company has two successive options to renew the lease for five-year periods on the same terms and conditions and did not have any residual interest or the option to repurchase the facility at the end of the lease term.

During October 2021, the Company, through the eighteenth judicial circuit court in Brevard County, Florda, received an order approving joint stipulation for alternative resolution to the Company’s real estate lease in Melbourne, Florida. The order terminated the Company’s use of floors three and four of the building immediately, while terminating its right to possession and use of floors three and five at December 31, 2021. The order also terminated the existing lease payment schedule, replacing it with the following:

●

Payment of $50,000 on October 12, 2021

●

The following rent installment payments:

SCHEDULE OF RENT INSTALLMENT PAYMENTS

	I.	$200,000 by October 19, 2021
	II.	$250,000 by November 15, 2021
	III.	$306,166 by December 15, 2021
	IV.	$275,000 by January 7, 2022
	V.	$31,166 by January 15, 2022
	VI.	$300,000 by February 8, 2022
	VII.	$31,166 by February 15, 2022

F-17

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

Upon receipt of the order, the Company recorded a liability and lease settlement expense for the amount of the order, or $1,443,498. As of December 31, 2023, the Company has paid approximately $200,000 of this obligation and has an open accounts payable liability remaining of approximately $1,200,000. The Company is working to reach a settlement with the landlord.

Finance Leases

The Company adopted ASC 842 on January 1, 2021.

On May 31, 2018, the Company entered into a lease agreement for the use of equipment with 60 monthly payments of $2,112 payable through April 2023 with an effective interest rate of 5.00% per annum. The Company failed to make all payments as required under the lease agreement which resulted in the lender filing a complaint in the County Court of Brevard County, Florida (“Court”). In June 2023 the Court issued an order to the Company to return the equipment. The Company has accrued $19,473 to cover final payment and subsequently has reached an agreement to settle this debt for $9,000.

NOTE 8 — CAPITAL STOCK

Series A Preferred Convertible Stock

The Company is authorized to issue 40,000 shares, $0.01 par value Series A preferred stock.

Each share of the Series A preferred stock is convertible into 10,000 shares of common stock in the Company. The Series A 10% Convertible Preferred Stock shall have a 10% dividend rate and have preference in liquidation so that holders of Series A 10% Convertible Preferred Stock are paid in full prior to any payments to holders of common stock of the Corporation. The Series A 10% Convertible Preferred Stock shall be automatically converted into shares of common stock of the Corporation on the effective date of the Corporation’s S-1 filing with the Securities Exchange Commission.

In the second quarter of 2022, the Company issued 141 shares of Series A preferred stock with a par value of $0.01 per share and a purchase price of $6,750 per share to 15 investors for $1,057,200 which includes a 10% discount of $105,450 and cash of $951,750. The terms of these Series A issuances included a 10% share price discount and a 10% dividend. The Company paid $53,994 in fees to brokers related to these issuances.

In the second quarter of 2023, the Company sold 6 shares of Series A, 10% convertible preferred stock, with a par value of $0.01 per share and a purchase price of $7,500 per share to 1 investor for $50,000 which includes a 10% discount of $5,000 and cash of $45,000. The Company paid $0 in fees to brokers related to these issuances.

As of December 31, 2023, and 2022, the total Series A preferred shares outstanding were 147 and 141 shares, respectively.

F-18

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

Proposed Series B Preferred Convertible Stock

In the fourth quarter of 2023, contingent to a Qualified Financing occurring no later than November 30, 2023, the Company proposed the exchange of (i) all outstanding 10% Senior Secured Convertible Notes including accrued interest, (ii) all outstanding 35% Senior Secured Convertible Notes including accrued interest, (iii) all outstanding Promissory Notes including accrued interest, (iv) all outstanding Series A Preferred Convertible Stock including accrued dividends payable, and (v) all open trade payables, for shares of a newly proposed Series B preferred stock with an exchange value of $10 per share. The proposed exchange also included the exchange of all warrants to purchase common stock previously issued in conjunction with (i), (ii), (iii), and (iv) above for new warrants at a quantity calculated at 80% of the original face value of each of the notes and a holder’s initial investment in the Series A Preferred Convertible Stock. The proposed exchange agreements all stated that the proposed exchange would be null and void if the Company did not close a Qualified Financing by November 30, 2023. Since no such transaction took place by November 30, 2023, the proposed exchange did not occur.

Common stock

During the years ended December 31, 2023, and December 31, 2022, the Company did not issue any shares of its common stock.

In connection with the issuance of the 35% OID Super Priority Convertible Notes in 2022, the Company was to issue 1,000,000 incentive shares of unrestricted common stock. In connection with the issuance of the 35% OID Super Priority Convertible Notes in 2023, the Company was to issue 100,000 incentive shares of unrestricted common stock. In connection with the issuance of the 20% OID Convertible Notes in 2023, the Company was to issue 468,250 incentive shares of unrestricted common stock. As of December 31, 2023, none of the incentive shares were issued and were recorded as a Common Share Payable current liability.

In the first quarter 2018, the Company and Steward Health Care System LLC (“Steward”) entered into a Stock Purchase Agreement (the “Purchase Agreement”). Pursuant to the terms of the Purchase Agreement, the Company issued five (5) million shares of common stock in exchange for cash proceeds of $7.5 million.

The Company agreed that, upon demand from Steward after the six month anniversary of the Closing Date, the Company shall use its reasonable best efforts to prepare and file with the SEC, a registration statement and such other documents as may be necessary in the advice of counsel for the Company, and use its commercially reasonable efforts to have such registration statement declared effective in order to comply with the provisions of the Securities Act of 1933, as amended, so as to permit the registered resale of the common shares.

In addition, the Company has agreed that, on or after April 1, 2022, upon ninety (90) days prior written notice, Steward may sell fifty percent (50%) of the common stock to the Company one-time during each of the following two (2) calendar years thereafter at a price equal to the purchase price under the Purchase Agreement pro-rated for the number of shares being purchased. Notwithstanding the foregoing, the put option shall automatically terminate and be of no further force and effect in the event the market capitalization (as defined in the Purchase Agreement) of the Company is equal to or more than $100,000,000 at any time after the date of the Purchase Agreement. The put option was eliminated as part of the final bankruptcy decree (see Note 13).

NOTE 9 — STOCK OPTIONS, WARRANTS AND RESTRICTED STOCK UNITS

Options

On March 14, 2012, we adopted our 2011 Incentive Stock Plan (the “2011 Plan”), pursuant to which 500,000 shares of our Common Stock are reserved for issuance as awards to employees, directors, officers, consultants, and other service providers of our Company and its subsidiaries (an “Optionee”). The term of the 2011 Plan is ten years from January 6, 2012, its effective date. On December 29, 2023, by resolution, the Company’s Board of Directors formally terminated the 2011 Plan.

F-19

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

Restricted Stock Units (“RSU”)

Transactions involving restricted stock units issued are summarized as follows:

Restricted shares units issued as of December 31, 2021			1,357,308
Granted			—
Forfeited			—
Restricted shares units issued as of December 31, 2022			1,357,308
Granted			—
Forfeited			—
Total Restricted Shares Issued at December 31, 2023			1,357,308

During the years ended December 31, 2023 and December 31, 2022, the Company granted 0 performance-based, restricted stock units.

As of December 31, 2023, stock-based compensation related to restricted stock awards of $0 remains unamortized.

Warrants

The Company issued 4,210,960 and 527,731 warrants in 2023 and 2022 respectively to employees, consultants, and in connection with debt issuances. In the years ended December 31, 2023 and 2022, the issued warrants had an estimated fair value of $1,672 and $164,196, on the date of issuance, respectively.

Transactions involving stock warrants issued are summarized as follows:

SCHEDULE OF STOCK WARRANT ISSUED

	Number of
	Shares
Outstanding at December 31, 2021:		7,035,473
Issued		4,210,960
Exercised		—
Expired		—
Outstanding at December 31, 2022:		11,246,433
Issued		527,731
Exercised		—
Expired		—
Outstanding at December 31, 2023:		11,774,164

NOTE 10 - COMMITMENTS AND CONTINGENCIES

Employee employment contracts

The Company, from time to time, enters into employment contracts with its healthcare providers. These contracts are generally for a three (3) year term; may be terminated for “Cause,” as defined therein; include customary provisions for restrictive covenants; and provide for compensation that is derived from the revenue generated by work performed by the healthcare providers.

Litigations, Claims and Assessments

F-20

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

On May 31, 2018, the Company entered into a lease agreement for the use of equipment with 60 monthly payments of $2,112 payable through April 2023 with an effective interest rate of 5.00% per annum. The Company failed to make all payments as required under the lease agreement which resulted in the lender filing a complaint in the County Court of Brevard County, Florida (“Brevard Court”). In June 2023 the Brevard Court issued an order to the Company to return the equipment. The lender subsequently liquidated the equipment from which the proceeds were netted against the total claim. On January 25, 2024, the Brevard Court granted a $19,473 judgement in favor of the lessor of an equipment lease. In March 2024, the Company and the creditor have negotiated a revised settlement amount of $9,000.

On September 20, 2021, GMR Melbourne, LLC (“GMR”) filed a complaint in The Eighteenth Judicial Circuit Court in Brevard County, Florda for breach of contract as it relates to a facilities Lease Agreement entered into in March 2017, claiming the Company defaulted on the lease payments totaling $1,455,095. During October 2021, the Company, through The Eighteenth Judicial Circuit Court in Brevard County, Florda, received an order approving joint stipulation for alternative resolution to the Company’s real estate lease in Melbourne, Florida. The order terminated the Company’s use of floors three and four of the building immediately, while terminating its right to possession and use of floors three and five at December 31, 2021. The order also replaced the existing lease payment schedule with a series of eight payments to be completed by February 15, 2022. Upon receipt of the order, the Company recorded a liability and lease settlement expense for the amount of the order, or $1,443,498. As of December 31, 2023, the Company has paid approximately $200,000 of this obligation and has an open accounts payable liability remaining of approximately $1,200,000. The Company is working to reach a settlement with the landlord.

At December 7, 2023, the Company received correspondence from attorneys retained by CBL & Associates Properties, Inc. (“CBL”) as it relates to the collection of remaining lease payments plus collection costs on a care facility Lease Agreement where the Company vacated the premises on August 24, 2022, and defaulted on the remaining lease payments totaling $66,999. The total amount being sought by the collection attorney including collection costs is $84,051 which is accrued by the company The Company is working to reach a settlement with CBL.

On June 15, 2020, Ackerman, LLP was engaged by the Company to represent the Company in its bankruptcy filing and proceedings. Ackerman was awarded fees by the court totaling $548,000, inclusive of a payment plan. The Company defaulted on the payment plan obligation and as a result, Ackerman filed a motion for summary judgment for the unpaid fees. The motion was granted by the court. The Company was able to partially satisfy the judgment, however, $203,115 of these legal fees remain unpaid.

The Company is named as a defendant in several employment related matters primarily resulting from unpaid wages following restructuring related staff reductions and terminations, the majority of the cases have been settled and paid directly or through DOL minimum wage collection and distribution to hourly employees.

F-21

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

NOTE 11 - INCOME TAXES

The following is a breakdown of the loss before the provision for income taxes:


	Year Ended December 31,
	2023			2022
Loss before provision for income taxes	$	(8,171,232	)	$	(9,943,702	)

The Company has not filed federal or state tax returns and has not recorded any impacts to its deferred tax amounts carried on the balance sheet for any years after the calendar year ended December 31, 2019. As a result, the deferred tax amounts carried on the balance sheets as of December 31, 2023 and December 31, 2022 have remained unchanged.


	Year ending December 31,
	2023			2022
Current
Federal	$	—		$	—
State		—			—
Total current		—			—

Deferred
Federal		(1,853,757	)		(1,853,757	)
State		(189,451	)		(189,451	)
Total deferred		(2,043,708	)		(2,043,708	)
Change in valuation allowance		2,043,708			2,043,708
Total income tax expense/(benefit)	$	—		$	—

The Company accounts for income taxes in accordance with ASC 740, which requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. Because of the Company’s recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be fully realized and, accordingly, has provided a valuation allowance as of December 31, 2023 and 2022.

The Company follows the asset and liability method of accounting for income taxes under FASB ASC 740,”Income Taxes”. Deferred tax assets are recognized for deductible temporary differences and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws on the date of enactment.

The Company’s deferred tax assets are as follows:

SCHEDULE OF DEFERRED TAX ASSETS


	Year Ended December 31,
	2023			2022
Deferred tax assets:
NOL Carryforward	$	6,391,691		$	6,391,691
AMT Credit		111,950			111,950
Fixed assets and intangibles		—			—
Stock Compensation		—			—
Accruals and other		—			—
Total deferred tax assets	$	6,503,641			6,503,641
Valuation allowance		(6,391,641	)		(6,391,641	)
Net deferred tax asset	$	111,950		$	111,950

F-22

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

Net operating losses and tax credit carryforwards as of December 31, 2023, are as follows:

		Amount
Net operating losses, federal & state		$	6,391,691

The net operating loss and tax credit carryforwards was last calculated upon the filing of the Company’s 2019 Federal tax returns. Subsequent returns have not been filed as of the date of this report due to ongoing liquidity constraints. The Company has only experienced additional operating losses in the fiscal periods since 2019.

Utilization of U.S. net operating losses and tax credit carryforwards may be limited by “ownership change” rules, as defined in Section 382 of the Internal Revenue Code. Similar rules may apply under state tax laws. The Company has not conducted a study to-date to assess whether a limitation would apply under Section 382 of the Internal Revenue Code as and when it starts utilizing its net operating losses and tax credits. The Company will continue to monitor activities in the future. In the event the Company previously experienced an ownership change, or should experience an ownership change in the future, the amount of net operating losses and research and development credit carryovers available in any taxable year could be limited and may expire unutilized.

The Company establishes reserves for uncertain tax positions based on the largest amount that is more-likely-than-not to be sustained. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. It is the Company’s policy to recognize interest and penalties related to income tax matters in income tax expense. As of December 31, 2023, and 2022, respectively, the Company has no accrued interest or penalties related to uncertain tax positions.

FASB ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. There were no unrecognized tax benefits as of December 31, 2023. The Company is not currently aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

NOTE 12 – GOING CONCERN

The accompanying consolidated financial statements have been prepared on a going concern basis of accounting which contemplates continuity of operations, realization of assets, liabilities, and commitments in the normal course of business. The accompanying consolidated financial statements do not reflect any adjustments that might result if the Company is unable to continue as a going concern. The Company has a working capital deficit as of December 31, 2023 and has generated recurring net losses since its emergence from bankruptcy in April 2022.

During the fiscal year ended December 31, 2023, the Company experienced operating losses of approximately $8.2 million and corresponding cash outflows from operations of $6.8 million. This performance reflected challenges in operating and restructuring the company as a result of the previous issues that confronted the Company in the healthcare market, such as growing referral bases and negotiating favorable contract rates with third party payors for services rendered, as well as the negative impact of the CEO indictment in November 2018 and the bankruptcy from June 2020. As a result of the former CEO’s actions the Company has been subject to litigation as well as incurring damage to its relationships with its employees and referral sources. The Company’s ability to continue as a going concern is dependent upon the success of its continuing efforts to acquire profitable companies, grow its revenue base, reduce operating costs, especially as related to provider services, and access additional sources of capital, and/or sell assets. The Company believes that it will be successful in repairing its relationships with employees and referral sources, generating growth and improved profitability resulting in improved cash flows from operations. Additionally, headcount was reduced in October 2021 and again in January 2023 to generate reductions in operating costs while the Company focused on developing and executing its future business strategy.

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 have to curtail its business development initiatives and take additional measures to reduce costs in order to conserve its cash, thus raising substantial doubt about its ability to continue as a going concern more than one year from the date of issuance of the 2023 financial statements included in this filing.

F-23

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

NOTE 13 – BANKRUPTCY

On June 15, 2020 (the “Petition Date”), the Company, First Choice Healthcare Solutions, Inc., and its wholly owned subsidiaries, First Choice Medical Group of Brevard, LLC, FCID Medical, Inc., and Marina Towers, LLC (collectively, the “Debtors”), filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code in the Bankruptcy Court for the Middle District of Florida (the “Bankruptcy Court”). As of the Petition Date, the Debtors were defendants in multiple lawsuits. The main goals of the Debtors in filing Bankruptcy was to confirm a plan of reorganization assuring a fair distribution of the Debtors’ assets to its creditors, attempt to bring as many assets in the form of settlements with the Debtors’ various claimants into the estate, and also establish a claims resolution process to resolve the securities arbitration and litigation claims in a fair and cost-effective manner.

The Debtors Amended Joint Plan of Bankruptcy Under Chapter 11 of the United States Bankruptcy Code (the “Plan”) was confirmed by the Bankruptcy Court on February 23, 2021 and became effective on April 28, 2022, the date on which the Company emerged from bankruptcy (the “Effective Date”). The Company installed a new board of directors, with the operations of the Debtors continuing to be overseen by the Debtors existing executive officers.

The Company did not experience an ownership change under Section 382 of the Internal Revenue Code (the “Code”). and believe the total available and utilizable net operating loss (“NOL”) at December 31, 2023 is approximately $6.4 million with was no limit under Section 382 of the Code on the use as of December 31, 2023 (see Note 11: Federal Income Taxes to the consolidated financial statements in Item 8 of this Annual Report on 10-K).

Due to there being no change to the equity interests in the Company as a result of the Bankruptcy, the criteria for applying fresh-start reporting on emergence were not met.

In connection with the Plan becoming effective, among other things:

●

The Debtors were approved to fund distributions under the Plan with a capital raise in an amount of up to $2,500,000 with an overallotment amount of an additional $500,000, for an aggregate of $3,000,000 million dollars through the insurance of secured convertible promissory notes (“Secured Convertible Notes”) issued at an original issue discount of 10%. The Secured Convertible Notes are due two years from the date of issuance, accrue interest at a rate of 10% per annum to be paid quarterly either in cash or in shares of the Company’s common stock, as determined by the Debtor, secured by a first priority lien on all Debtor assets other than those already subject to first priority liens.

Principal and accrued interest is to be converted on or before the maturity date into shares of Debtor common stock issued its next common stock offering in an aggregate amount of at least $10,000,000 (“Qualified Financing”). The number of shares of Common Stock issuable upon conversion of each Note in a Qualified Financing shall be equal to (i) the amount of principal and accrued interest, divided by (ii) the lessor of 75% of the price per share of common stock paid by other investors for a majority of the common stock issued in the Qualified Financing or seventy-five cents ($0.75).

Each Secured Convertible Note holder will also receive 5-Year warrants (“Warrants”) to purchase shares of the Company’s common stock in an amount equal to 50% of the face value of its Secured Convertible Note. The Warrants will be exercisable upon the consummation of a Qualified Financing, five-year term and a cash exercise provision. The exercise price of the Warrants are equal to 93.75% of the per share price of common stock sold to third-party investors in the Qualified Financing.

●	FCHS was approved to sell $124,195 in accounts receivable and certain property.

●	FCHS was approved the rejection of two satellite clinic location leases in Melbourne, Florida and Merritt Island, Florida and to sublease an entire floor of its Melbourne Florida corporate headquarters. All other unexpired real estate leases were not rejected.

F-24

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

●	The Bankruptcy Court rejected a 2018 stock purchase agreement with Stewart Health Care System, LLC (“Stewart”), whereby, Stewart held a $7,500,000 put option to require the repurchase of the Company’s common stock.

The Plan provided for the following debtor classes of claims and settlement terms:

Class 1 – Priority Claims / Taxing Authorities, includes taxing authorities claims, including but not limited to an Allowed Claim of the Internal Revenue Service. Class 1 claims are deemed to be allowed priority claims to be paid in full in three equal quarterly cash installments, commencing on the first day of the first month following the effective date of the Plan, over a period of nine months, with interest.

Class 2 – Secured Claims (Equipment), includes claims from the financing of medical equipment and are deemed allowed secured claims, to be paid in full in two equally installment payments. The first installment payment due within forty-five days after the effective date of the Plan and the second and final installment payment shall be made within ninety days after the effective date of the Plan.

Class 3 – General Unsecured Claims holders are to receive distributions equal to their pro rata share of $500,000, with plan interest, payable within ninety (90) days from the effective date of the Plan.

Class 4 – Ongoing Trade Claims are those that are allowed at the election of the Debtor and are to be paid in full in two equal installment payments. The first installment payment will occur within ninety days after the effective date of the Plan and the second and final installment payment shall be made within one hundred-fifty days after the effective date of the Plan.

Class 5 – Class Action Claims are to be settled through the establishment of a settlement fund (the “Settlement Fund”) in the amount of $1 million, to be contributed from the Debtors director and officer liability insurance policy provider. Accordingly, the Debtors accepted a settlement of a putative class action lawsuit by a group of its shareholders that was pending in the United States District Court for the Middle District of Florida. Class 5 consists of individuals or entities which purchased or otherwise acquired Debtor common stock between April 1, 2014, and November 14, 2018. The class action lawsuit was settled through an insurance claim in the amount of $1,000,000 not requiring any monetary settlement by the Company.

Additionally, prior to the effective date of the Plan, the Debtor agreed to the payment of $79,518 as settlement of a complaint filed in the Middle District of Florida alleging securities law violations, breaches of fiduciary duties, and unjust enrichment by certain current or former officers and directors of the Debtor.

Class 6- Truist PPP Loan Claim Class contains all claims related to the Debtors’ Payroll Protection Loans in the of $1,387,599, anticipated to be forgiven in accordance with SBA regulations with no distribution of Plan assets.

Class 7 – Equity Interests, permits Debtors equity to be retained in the same proportion existing as of the Petition Date.

As a result of the above, the Company was relieved of approximately $4,098,541 in book value and $25,350,151 in litigation approved value of general unsecured claims for total payments of $500,000, resulting in the recognition of a total gain on discharge of prepetition liabilities of $2,203,581, with $32,157 and $2,174,424 being recognized in the years ended December 31, 2022 and December 31, 2021, respectively.

F-25

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

NOTE 14 – UNAUDITED QUARTERLY DATA

Explanatory Note:

The Company is providing quarterly and year-to-date unaudited consolidated financial information for interim periods occurring within years ended December 31, 2023 and 2022 in order to comply with SEC requirements.

($ in dollars, except per share data)	2023			2023			2023			2023
	Three months ended
	December 31,			September 30,			June 30,			March 31,
($ in dollars, except per share data)	2023			2023			2023			2023
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenue	$	43,435		$	12,556		$	58,832		$	(84,838	)
Operating loss	$	47,173		$	(648,256	)	$	(783,047	)	$	(1,083,051	)
Net (loss) income from continuing operations	$	(467,417	)	$	(3,027,807	)	$	(2,654,957	)	$	(2,021,051	)
Net (loss) income	$	(467,417	)	$	(3,027,807	)	$	(2,654,957	)	$	(2,021,051	)
Preferred stock dividends	$	(23,209	)	$	(23,208	)	$	(22,721	)	$	(21,594	)
Net (loss) income applicable to common shares	$	(490,626	)	$	(3,051,015	)	$	(2,677,678	)	$	(2,042,645	)

Continuing operations loss per common share:
Net (loss) income per common share – basic	$	(0.01	)	$	(0.09	)	$	(0.08	)	$	(0.06	)
Net (loss) income per common share – diluted	$	(0.01	)	$	(0.09	)	$	(0.08	)	$	(0.06	)

Weighted average number of common shares outstanding – basic		32,958,288			32,958,288			32,958,288			32,958,288
Weighted average number of common shares outstanding – diluted		32,958,288			32,958,288			32,958,288			32,958,288

($ in dollars, except per share data)	2023			2023			2023			2023
	Three months ended
($ in dollars, except per share data)	December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Revenue	$	144,084		$	243,284		$	444,510		$	237,101
Operating loss	$	783,419		$	2,034,426		$	2,596,564		$	2,782,766
Net (loss) income from continuing operations	$	(639,335	)	$	(1,791,142	)	$	(2,152,054	)	$	(2,545,665	)
Net (loss) income	$	(1,074,953	)	$	(2,369,419	)	$	(2,888,399	)	$	(3,610,931	)
Preferred stock dividends	$	(22,074	)	$	(22,119	)	$	(9,719	)	$	-
Net (loss) income applicable to common shares	$	(1,097,027	)	$	(2,391,538	)	$	(2,898,118	)	$	(3,610,931	)

Net (loss) income per common share – basic	$	(0.03	)	$	(0.07	)	$	(0.09	)	$	(0.11	)
Net (loss) income per common share – diluted	$	(0.03	)	$	(0.07	)	$	(0.09	)	$	(0.11	)

Weighted average number of common shares outstanding – basic		32,958,288			32,958,288			32,958,288			32,958,288

F-26

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

The quarterly balance sheets are as follows:

(in dollars)	As of September 30, 2023			As of June 30, 2023			As of March 31, 2023
ASSETS
Current Assets:
Cash and cash equivalents	$	1,470		$	6,658		$	12,368
Accounts receivable, net		92,747			121,023			383,146
Other current assets		100,576			174,115			310,078
Total Current Assets		194,793			301,796			705,593

Property and equipment, net		191,801			314,179			360,197
Operating lease right-of-use assets		2,536,408			2,634,063			4,348,838
Other long term assets		89,991			89,991			-
Deferred tax assets		111,949			111,949			111,949
Total Assets	$	3,124,942		$	3,451,978		$	5,526,577

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable		9,241,859			9,259,754			10,039,310
Accrued expenses and other current liabilities		547,591			524,104			499,915
Notes payable, current portion		16,222,107			220,962			220,962
Convertible notes payable, net of original issue discount and deferred financing costs		-			14,185,264			11,395,155
Current maturities of long term lease obligations		315,075			330,699			474,446
Paycheck Protection Program		1,283,624			1,283,624			1,283,624
Total Current Liabilities		27,610,256			25,804,407			23,913,412

Notes payable, non-current portion		-			-			-
Long-term lease obligations		2,519,859			2,594,793			3,951,597
Deferred tax liability		52,758			52,608			51,441
Temporary Equity		969,706			-			35,000
Total Liabilities		31,152,579			28,451,808			27,951,450

Stockholders’ Equity (Deficit):
Preferred stock; $0.01 par value, 1,000,000 shares authorized:
Series A Convertible Preferred stock; $0.01 par value, 147 issued and outstanding		1			1			1
Common stock, $0.001 par value, 100,000,000 shares authorized 32,958,288 and 32,958,288 shares issued and outstanding at December 31, 2022 and 2021, respectively		32,958			32,958			32,958
Additional paid-in capital		35,404,995			35,404,995			35,324,995
Accumulated (deficit) earnings		(63,465,591	)		(60,437,784	)		(57,782,827	)
Total Stockholders’ Equity (Deficit)		(28,027,637	)		(24,999,830	)		(22,424,873	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	3,124,942		$	3,451,978		$	5,526,577

F-27

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

(in dollars)	As of September 30, 2022			As of June 30, 2022			As of March 31, 2022
ASSETS
Current Assets:
Cash and cash equivalents	$	4,172		$	6,270		$	22,137
Accounts receivable, net		296,565			309,217			292,783
Other current assets		369,248			377,813			402,838
Total Current Assets		669,985			693,300			717,758

Property and equipment, net		572,729			596,322			619,912
Operating lease right-of-use assets		4,611,591			4,740,318			4,867,648
Other long term assets		-			-			-
Deferred tax assets		111,949			111,949			111,949
Total Assets	$	5,966,254		$	6,141,889		$	6,317,267

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable		8,262,160			6,636,305			5,719,266
Accrued expenses and other current liabilities		305,760			279,687			261,268
Notes payable, current portion		241,398			244,147			327,006
Convertible notes payable, net of original issue discount and deferred financing costs		10,717,899			10,273,343			9,465,409
Current maturities of long term lease obligations		476,790			466,930			457,192
Paycheck Protection Program		1,283,624			1,283,624			1,283,624
Total Current Liabilities		21,287,631			19,184,036			17,513,765

Notes payable, non-current portion		-			-			-
Long-term lease obligations		4,010,631			3,929,764			3,849,897
Deferred tax liability		-			-			-
Temporary Equity		-			7,500,000			7,500,000
Total Liabilities		25,298,262			30,613,800			28,863,662

Stockholders’ Equity (Deficit):
Preferred stock; $0.01 par value, 1,000,000 shares authorized:
Series A Convertible Preferred stock; $0.01 par value, 147 issued and outstanding		1			1			-
Common stock, $0.001 par value, 100,000,000 shares authorized 32,958,288 and 32,958,288 shares issued and outstanding at December 31, 2022 and 2021, respectively		32,958			32,958			32,958
Additional paid-in capital		35,321,856			27,812,533			26,849,651
Accumulated (deficit) earnings		(54,686,823	)		(52,317,403	)		(49,429,004	)
Total Stockholders’ Equity (Deficit)		(19,332,008	)		(24,471,911	)		(22,546,395	)
Total Liabilities and Stockholders’ Equity (Deficit)	$	5,966,254		$	6,141,889		$	6,317,267

F-28

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

The Company’s quarterly statement of operations are as follows:

	Three months ended			Three months ended			Three months ended			Three months ended
	December 31,			September 30,			June 30,			March 31,
	2023			2023			2023			2023
(in dollars, except per share data)	(unaudited)			(unaudited)			(unaudited)			(unaudited)

Revenues, net of discounts	$	43,435		$	12,556		$	58,832		$	(84,838	)
Cost of revenues		-			-			-			-
Gross profit		43,435			12,556			58,832			(84,838	)

Operating Expenses
Compensation expense		(275,220	)		171,795			171,213			186,056
Selling, general and administrative expenses		296,782			388,275			695,482			806,032
Loss on sale of assets		(25,300	)		100,742			(24,816	)		6,125
Amortization of intangible assets		-			-			-			-
Total operating expenses		(3,738	)		660,812			841,879			998,213
Operating (loss) income		47,173			(648,256	)		(783,047	)		(1,083,051	)

Other (Expense) Income
Interest (expense) income		(729,796	)		(2,379,551	)		(1,871,910	)		(938,000	)
Amortization of deferred financing costs and debt discount		-			-			-			-
Other (expense) income		215,206			-			-			-
Total other (expense) income		(514,590	)		(2,379,551	)		(1,871,910	)		(938,000	)
(Loss) income before (benefit)provision for income taxes		(467,417	)		(3,027,807	)		(2,654,957	)		(2,021,051	)
(Benefit) provision for income taxes		-			-			-			-

Net (loss) income		(467,417	)		(3,027,807	)		(2,654,957	)		(2,021,051	)
Preferred stock dividends		(23,209	)		(23,208	)		(22,721	)		(21,594	)
Net (loss) income attributable to common shareholders		(490,626	)		(3,051,015	)		(2,677,678	)		(2,042,645	)

Continuing operations loss per common share:
Basic and diluted	$	(0.01	)	$	(0.09	)	$	(0.08	)	$	(0.06	)

Weighted average number of common shares outstanding, basic and diluted		32,958,288			32,958,288			32,958,288			32,958,288

F-29

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

	Three months ended			Three months ended			Three months ended			Three months ended
	December 31,			September 30,			June 30,			March 31,
	2022			2022			2022			2022
(in dollars, except per share data)	(unaudited)			(unaudited)			(unaudited)			(unaudited)

Revenues, net of discounts	$	144,084		$	243,284		$	444,510		$	237,101
Cost of revenues		-			-			-			-
Gross profit		144,084			243,284			444,510			237,101

Operating Expenses
Compensation expense		78,065			1,007,175			1,394,775			1,985,750
Selling, general and administrative expenses		622,795			1,027,251			1,201,789			766,438
Loss on sale of assets		82,559			-			-			30,578
Amortization of intangible assets		-			-			-			-
Total operating expenses		783,419			2,034,426			2,596,564			2,782,766
Operating (loss) income		(639,335	)		(1,791,142	)		(2,152,054	)		(2,545,665	)

Other (Expense) Income
Interest (expense) income		(1,296,563	)		(578,304	)		(768,502	)		(1,065,473	)
Amortization of deferred financing costs and debt discount		-			-			-			-
Other (expense) income		860,945			27			32,157			207
Total other (expense) income		(435,618	)		(578,277	)		(736,345	)		(1,065,266	)
(Loss) income before (benefit)provision for income taxes		(1,074,953	)		(2,369,419	)		(2,888,399	)		(3,610,931	)
(Benefit) provision for income taxes		-			-			-			-

Net (loss) income		(1,074,953	)		(2,369,419	)		(2,888,399	)		(3,610,931	)
Preferred stock dividends		(22,074	)		(22,119	)		(9,719	)		-
Net (loss) income attributable to common shareholders	$	(1,097,027	)	$	(2,391,538	)	$	(2,898,118	)	$	(3,610,931	)

Continuing operations loss per common share:
Basic and diluted	$	(0.03	)	$	(0.07	)	$	(0.09	)	$	(0.11	)

Weighted average number of common shares outstanding, basic and diluted		32,958,288			32,958,288			32,958,288			32,958,288

F-30

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

The Company’s year-to-date statement of operations are as follows:

	Nine months ended			Six months ended			Three months ended
	September 30,			June 30,			March 31,
	2023			2023			2023
(in dollars, except per share data)	(unaudited)			(unaudited)			(unaudited)

Revenues, net of discounts	$	(13,450	)	$	(26,006	)	$	(84,838	)
Cost of revenues		-			-			-
Gross profit		(13,450	)		(26,006	)		(84,838	)

Operating Expenses
Compensation expense		529,064			357,269			186,056
Selling, general and administrative expenses		1,889,789			1,501,514			806,032
Loss on sale of assets		82,051			(18,691	)		6,125
Amortization of intangible assets		-			-			-
Total operating expenses		2,500,904			1,840,092			998,213
Operating (loss) income		(2,514,354	)		(1,866,098	)		(1,083,051	)

Other (Expense) Income
Interest (expense) income		(5,189,461	)		(2,809,910	)		(938,000	)
Amortization of deferred financing costs and debt discount		-			-			-
Other (expense) income		-			-			-
Total other (expense) income		(5,189,461	)		(2,809,910	)		(938,000	)
(Loss) income before (benefit)provision for income taxes		(7,703,815	)		(4,676,008	)		(2,021,051	)
(Benefit) provision for income taxes		-			-			-

Net (loss) income		(7,703,815	)		(4,676,008	)		(2,021,051	)
Preferred stock dividends		(67,523	)		(44,315	)		(21,594	)
Net (loss) income attributable to common shareholders		(7,771,338	)		(4,720,323	)		(2,042,645	)

Continuing operations loss per common share:
Basic and diluted	$	(0.24	)	$	(0.14	)	$	(0.06	)

Weighted average number of common shares outstanding, basic and diluted		32,958,288			32,958,288			32,958,288

F-31

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

	Nine months ended			Six months ended			Three months ended
	September 30,			June 30,			March 31,
	2022			2022			2022
(in dollars, except per share data)	(unaudited)			(unaudited)			(unaudited)

Revenues, net of discounts	$	924,895		$	681,611		$	237,101
Cost of revenues		-			-			-
Gross profit		924,895			681,611			237,101

Operating Expenses
Compensation expense		4,387,700			3,380,525			1,985,750
Selling, general and administrative expenses		2,995,478			1,968,227			766,438
Loss on sale of assets		30,578			30,578			30,578
Amortization of intangible assets		-			-			-
Total operating expenses		7,413,756			5,379,330			2,782,766
Operating (loss) income		(6,488,861	)		(4,697,719	)		(2,545,665	)

Other (Expense) Income
Interest (expense) income		(2,412,279	)		(1,833,975	)		(1,065,473	)
Amortization of deferred financing costs and debt discount		-			-			-
Other (expense) income		32,391			32,364			207
Total other (expense) income		(2,379,888	)		(1,801,611	)		(1,065,266	)
(Loss) income before (benefit) provision for income taxes		(8,868,749	)		(6,499,330	)		(3,610,931	)
(Benefit) provision for income taxes		-			-			-

Net (loss) income		(8,868,749	)		(6,499,330	)		(3,610,931	)
Preferred stock dividends		(31,838	)		(9,719	)		-
Net (loss) income attributable to common shareholders	$	(8,900,587	)		(6,509,049	)		(3,610,931	)

Continuing operations loss per common share:
Basic and diluted	$	(0.27	)	$	(0.20	)	$	(0.11	)

Weighted average number of common shares outstanding, basic and diluted		32,958,288			32,958,288			32,958,288

F-32

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

The Company’s statement of cash flows are as follows:

	Three months ended			Three months ended			Three months ended			Three months ended
	December 31,			September 30,			June 30,			March 31,
($ in dollars)	2023			2023			2023			2023
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Cash flows from operating activities:
Net loss	$	(467,417	)	$	(3,027,807	)	$	(2,654,957	)	$	(2,021,051	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		8,682			8,681			13,766			13,676
Loss on disposition of assets		89,991			-			17,252			82,624
Amortization of debt discount		8,250			74,275			919,348			427,513
Amortization of deferred financing costs		166,918			-			(89,991	)		-
Share-based compensation		-			-			(35,000	)		35,000
Preferred dividends - accrued		23,208			23,208			22,722			21,594
Provision for bad debts		3,216			3,194			11,237			23,866
Changes in operating assets and liabilities:
Accounts receivable		(2,913	)		25,082			250,886			908,989
Other current assets		(106,055	)		(307	)		25,194			3,242
(Increase) decrease in leased assets		99,050			97,655			1,714,775			132,607
Accounts payable and accrued liabilities		(1,447,249	)		(17,895	)		(744,556	)		367,550
(Increase) decrease in lease liabilities		(93,169	)		(90,559	)		(1,500,550	)		(119,220	)
Net cash provided by (used in) operating activities	$	(1,717,488	)	$	(2,904,472	)	$	(2,049,875	)	$	(123,610	)

Cash flows from investing activities:
Proceeds from sale of fixed assets		-			113,697			15,000			18,000
Purchase of property and equipment		(79,124	)		-			-			(3,794	)
Net cash (used in) provided by investing activities	$	(79,124	)	$	113,697		$	15,000		$	14,206

Cash flows from financing activities:
Payments on notes payable		-			-			-			(173,764	)
Proceeds from issuance of convertible notes		1,807,749			2,785,586			1,984,166			288,316
Proceeds from sale of preferred stock		-			-			45,000			-
Net cash provided by (used in) financing activities	$	1,807,749		$	2,785,587		$	2,029,165		$	114,552

Net change in cash		11,137			(5,188	)		(5,710	)		5,148
Cash, beginning of period		1,469			6,657			12,367			7,219
Cash, end of period	$	12,606		$	1,469		$	6,657		$	12,367

Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	-		$	-		$	-
Cash paid for income taxes	$	-		$	-		$	-		$	-

Supplemental disclosure of cash flow information:
Note Payable addition from OID	$	93,250		$	-		$	-		$	258,462
Warrants issued for debt discount		-			-			-			1,672
Common shares issued for convertible notes - inducement	$	1,803		$	-		$	-		$	900

F-33

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

	Nine months ended			Six months ended			Three months ended
	September 30,			June 30,			March 31,
($ in dollars)	2023			2023			2023
	(unaudited)			(unaudited)			(unaudited)
Cash flows from operating activities:
Net loss	$	(7,703,815	)	$	(4,676,008	)	$	(2,021,051	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		36,123			27,442			13,676
Loss on disposition of assets		99,876			99,876			82,624
Amortization of debt discount		1,421,136			1,346,861			427,513
Amortization of deferred financing costs		(89,991	)		(89,991	)		-
Share-based compensation		-			-			35,000
Preferred dividends - accrued		67,524			44,316			21,594
Provision for bad debts		38,297			35,103			23,866
Changes in operating assets and liabilities:
Accounts receivable		1,184,957			1,159,875			908,989
Other current assets		28,129			28,436			3,242
(Increase) decrease in leased assets		1,945,037			1,847,382			132,607
Accounts payable and accrued liabilities		(394,901	)		(377,006	)		367,550
(Increase) decrease in lease liabilities		(1,710,329	)		(1,619,770	)		(119,220	)
Net cash provided by (used in) operating activities	$	(5,077,957	)	$	(2,173,485	)	$	(123,610	)

Cash flows from investing activities:
Proceeds from sale of fixed assets		146,697			33,000			18,000
Purchase of property and equipment		(3,794	)		(3,794	)		(3,794	)
Net cash (used in) provided by investing activities	$	142,903		$	29,206		$	14,206

Cash flows from financing activities:
Payments on notes payable		(173,764	)		(173,764	)		(173,764	)
Proceeds from issuance of convertible notes		5,058,068			2,272,480			288,316
Proceeds from sale of preferred stock		45,000			45,000			-
Net cash provided by (used in) financing activities	$	4,929,304		$	2,143,717		$	114,552

Net change in cash		(5,750	)		(562	)		5,148
Cash, beginning of period		7,219			7,219			7,219
Cash, end of period	$	1,469		$	6,657		$	12,367

Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	-		$	-
Cash paid for income taxes	$	-		$	-		$	-

Supplemental disclosure of cash flow information:
Note Payable addition from OID	$	258,462		$	258,462		$	258,462
Warrants issued for debt discount		1,672			1,672			1,672
Common shares issued for convertible notes - inducement	$	900		$	900		$	900

F-34

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

	Three months ended			Three months ended			Three months ended			Three months ended
	December 31,			September 30,			June 30,			March 31,
($ in dollars)	2022			2022			2022			2022
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Cash flows from operating activities:
Net loss	$	(1,074,953	)	$	(2,369,419	)	$	(2,888,399	)	$	(3,610,931	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		19,466			23,593			23,591			21,912
Loss on disposition of assets		82,560			-			-			30,578
Accretion of debt modification		-			-			-			12,259
Amortization of debt discount		63,836			(82,882	)		361,861			1,151,160
Amortization of warrants issued for debt discount		4,623			-			-			188,608
Amortization of debt discount		3,000			60,090			-			7,006
Share-based compensation		-			625			1,125			2,438
Preferred dividends - accrued		22,074			22,118			9,719			-
Provision for bad debts		90,472			(151,363	)		57,204			136,817
Changes in operating assets and liabilities:
Accounts receivable		(1,109,908	)		164,015			(73,638	)		15,954
Other current assets		240,544			8,565			25,025			(20,676	)
(Increase) decrease in leased assets		130,146			128,726			127,331			122,190
Accounts payable and accrued liabilities		1,401,020			1,625,855			917,039			1,158,232
(Increase) decrease in lease liabilities		57,840			90,727			89,603			(696,698	)
Net cash provided by (used in) operating activities	$	(69,280	)	$	(479,350	)	$	(1,349,539	)	$	(1,481,151	)

Cash flows from investing activities:
Purchase of property and equipment		-			-			-			(80,680	)
Net cash (used in) provided by investing activities	$	-		$	-		$	-		$	(80,680	)

Cash flows from financing activities:
Payments on notes payable		(2,672	)		(62,749	)		(82,859	)		(712,177	)
Proceeds from issuance of convertible notes		75,000			540,000			464,781			2,289,000
Proceeds from sale of preferred stock		-			-			951,750			-
Net cash provided by (used in) financing activities	$	72,328		$	477,251		$	1,333,672		$	1,576,823

Net change in cash		3,048			(2,099	)		(15,867	)		14,992
Cash, beginning of period		4,171			6,270			22,137			7,145
Cash, end of period	$	7,219		$	4,171		$	6,270		$	22,137

Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	-		$	-		$	-
Cash paid for income taxes	$	-		$	-		$	-		$	-

Supplemental disclosure of cash flow information:
Reverse temporary equity for bankruptcy	$	-		$	7,500,000		$	-		$	-
Convertible notes exchanged		-			210,000			-			165,000
Fixed asset purchased under capital lease		-			403,846			-			2,954,156
Note Payable addition from DFC		15,000			3,954			-			226,000
Note Payable addition from OID		48,462			-			199,231			1,180,461
Warrants issued for debt discount		1,467			8,698			10,008			144,023
Common shares issued for convertible notes - inducement	$	1,662		$	-		$	8,700		$	37,542

F-35

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

	Nine months ended			Six months ended			Three months ended
	September 30,			June 30,			March 31,
($ in dollars)	2022			2022			2022
	(unaudited)			(unaudited)			(unaudited)
Cash flows from operating activities:
Net loss	$	(8,868,749	)	$	(6,499,330	)	$	(3,610,931	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation		69,096			45,503			21,912
Loss on disposition of assets		30,578			30,578			30,578
Accretion of debt modification		12,259			12,259			12,259
Amortization of debt discount		1,430,139			1,513,021			1,151,160
Amortization of warrants issued for debt discount		188,608			188,608			188,608
Amortization of debt discount		67,096			7,006			7,006
Share-based compensation		4,188			3,563			2,438
Preferred dividends - accrued		31,837			9,719			-
Provision for bad debts		42,658			194,021			136,817
Changes in operating assets and liabilities:
Accounts receivable		106,331			(57,684	)		15,954
Other current assets		12,914			4,349			(20,676	)
(Increase) decrease in leased assets		378,247			249,521			122,190
Accounts payable and accrued liabilities		3,701,126			2,075,271			1,158,232
(Increase) decrease in lease liabilities		(516,368	)		(607,095	)		(696,698	)
Net cash provided by (used in) operating activities	$	(3,310,040	)	$	(2,830,690	)	$	(1,481,151	)

Cash flows from investing activities:
Purchase of property and equipment		(80,680	)		(80,680	)		(80,680	)
Net cash (used in) provided by investing activities	$	(80,680	)	$	(80,680	)	$	(80,680	)

Cash flows from financing activities :
Payments on notes payable		(857,785	)		(795,036	)		(712,177	)
Proceeds from issuance of convertible notes		3,293,781			2,753,781			2,289,000
Proceeds from sale of preferred stock		951,750			951,750			-
Net cash provided by (used in) financing activities	$	3,387,746		$	2,910,495		$	1,576,823

Net change in cash		(2,974	)		(875	)		14,992
Cash, beginning of period		7,145			7,145			7,145
Cash, end of period	$	4,171		$	6,270		$	22,137

Supplemental disclosure of cash flow information:
Cash paid for interest	$	-		$	-		$	-
Cash paid for income taxes	$	-		$	-		$	-

Supplemental disclosure of cash flow information:
Reverse temporary equity for bankruptcy	$	7,500,000		$	-		$	-
Convertible notes exchanged		375,000			165,000			165,000
Fixed asset purchased under capital lease		3,358,002			2,954,156			2,954,156
Note Payable addition from DFC		229,954			226,000			226,000
Note Payable addition from OID		1,379,692			1,379,692			1,180,461
Warrants issed for debt discount		162,729			154,031			144,023
Common shares issued for convertible notes - inducement	$	46,242		$	46,242		$	37,542

F-36

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

The Company’s statement of changes in stockholders’ equity are as follows:

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

TWO YEARS ENDED DECEMBER 31, 2023

(in dollars)

	Shares		Amount		Shares		Amount		Capital			Deficit			Total
									Additional
	Common stock				Preferred stock				Paid in			Accumulated
	Shares		Amount		Shares		Amount		Capital			Deficit			Total
Balance, December 31, 2022		32,958,288	$	32,958		141	$	1	$	35,323,323		$	(55,761,775	)	$	(20,405,493	)
Stock based compensation		—		—		—		—		—			—			—
Warrants issued for debt discount		—		—		—		—		1,672			—			1,672
Proceeds from issuance of Preferred stock		—		—		—		—		—			—			—
Adjust Steward (Bankruptcy) Settlement		—		—		—		—		—			—			—
Net loss		—		—		—		—		—			(2,021,051	)		(2,021,051	)
Balance, March 31, 2023		32,958,288	$	32,958		141	$	1	$	35,324,995		$	(57,782,826	)	$	(22,424,873	)
Stock based compensation		—		—		—		—		35,000			—			35,000
Warrants issued for debt discount		—		—		—		—		—			—			—
Proceeds from issuance of Preferred stock		—		—		6		—		45,000			—			45,000
Net loss		—		—		—		—		—			(2,654,957	)		(2,654,957	)
Balance, June 30, 2023		32,958,288	$	32,958		147	$	1		35,404,995		$	(60,437,783	)		(24,999,830	)
Stock based compensation		—		—		—		—		—			—			—
Warrants issued for debt discount		—		—		—		—		—			—			—
Proceeds from issuance of Preferred stock		—		—		—		—		—			—			—
Net loss		—		—		—		—		—			(3,027,807	)		(3,027,807	)
Balance, September 30, 2023		32,958,288	$	32,958		147	$	1	$	35,404,995		$	(63,465,590	)	$	(28,027,637	)
Stock based compensation		—		—		—		—		(35,000	)		—			(35,000	)
Warrants issued for debt discount		—		—		—		—		—			—			—
Net loss		—		—		—		—		—			(467,417	)		(467,417	)
Balance, December 31, 2023		32,958,288	$	32,958		147	$	1	$	35,369,995		$	(63,933,007	)	$	(28,530,053	)

F-37

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

THE YEAR ENDED DECEMBER 31, 2022

(in dollars)

									Additional
	Common stock				Preferred stock				Paid in		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit			Total
Balance, December 31, 2021		32,958,288	$	32,958		—	$	—	$	26,703,190	$	(45,818,073	)	$	(19,081,925	)
Stock based compensation		—		—		—		—		2,438		—			2,438
Warrants issued for debt discount		—		—		—		—		144,023		—			144,023
Proceeds from issuance of Preferred stock		—		—		—		—		—		—			—
Adjust Steward (Bankruptcy) Settlement		—		—		—		—		—		—			—
Net loss		—		—		—		—		—		(3,610,931	)		(3,610,931	)
Balance, March 31, 2022		32,958,288	$	32,958		—	$	—	$	26,849,651	$	(49,429,004	)	$	(22,546,395	)
Stock based compensation		—		—		—		—		1,127		—			1,127
Warrants issued for debt discount		—		—		—		—		10,008		—			10,008
Proceeds from issuance of Preferred stock		—		—		141		1		951,748		—			951,748
Adjust Steward (Bankruptcy) Settlement		—		—		—		—		—		—			—
Net loss		—		—		—		—		—		(2,888,399	)		(2,888,399	)
Balance, June 30, 2022		32,958,288	$	32,958		141	$	1	$	27,812,534	$	(52,317,403	)	$	(24,471,911	)

Stock based compensation		—		—		—		—		624		—			624
Warrants issued for debt discount		—		—		—		—		8,698		—			8,698
Proceeds from issuance of Preferred stock		—		—		—		—		7,500,000		—			7,500,000
Net loss		—		—		—		—		—		(2,369,419	)		(2,369,419	)
Balance, September 30, 2022		32,958,288	$	32,958		141	$	1	$	35,321,856	$	(54,686,822	)	$	(19,332,008	)
Balance		32,958,288	$	32,958		141	$	1	$	35,321,856	$	(54,686,822	)	$	(19,332,008	)

Stock based compensation		—		—		—		—		—		—			—
Warrants issued for debt discount		—		—		—		—		1,467		—			1,467
Proceeds from issuance of Preferred stock		—		—		—		—		—		—			—
Adjust Steward (Bankruptcy) Settlement		—		—		—		—		—		—			—
Net loss		—		—		—		—		—		(1,074,953	)		(1,074,953	)
Balance, December 30, 2022		32,958,288	$	32,958		141	$	1	$	35,323,323	$	(55,761,775	)	$	(20,405,493	)
Balance		32,958,288	$	32,958		141	$	1	$	35,323,323	$	(55,761,775	)	$	(20,405,493	)

F-38

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2023

NOTE 15 – SUBSEQUENT EVENTS

On January 1, 2024, Phillip Keller, the Company’s Chief Financial Officer began a leave of absence for personal reasons.

On January 25, 2024, the County Court of Brevard County (“Court”), Florida granted a $19,473 judgement in favor of the lessor of an equipment lease. On May 31, 2018, the Company entered into a lease agreement for the use of equipment with 60 monthly payments of $2,112 payable through April 2023 with an effective interest rate of 5.00% per annum. The Company failed to make all payments as required under the lease agreement which resulted in the lender filing a complaint in the Court. In June 2023 the Court issued an order to the Company to return the equipment. The lender subsequently liquidated the equipment from which the proceeds were netted against the total claim. This judgment and claim was settled for $9,000 in March 2024, and paid in full on April 26, 2024.

On January 25, 2024, the company entered into an asset purchase agreement to acquire all the physical and intellectual assets known as The Good Clinic from Leading Primary Care, LLC, a primary care clinic concept specializing in providing whole person primary care and wellness, in an all-stock deal for $3,500,000.

On March 26, 2024, Phillip Keller, the Company’s Chief Financial Officer was formally terminated in accordance with the terms of his CFO Employment Agreement.

In March and April 2024, the Company issued 20% OID Senior Secured Convertible Notes payable with a face amount, including the 20% OID, totaling $1,078,125.00. The 20% OID Senior Secured Convertible Notes mature on the earlier of the effective date of an S-1 registration Statement or six months from the dates of issuance, have a 20% original issuance discount, bear interest at 10% per annum due and payable on the maturity date in cash or common stock at the option of the Company, 150% Warrant Coverage, and three (3) commitment shares for every dollar that was invested. The notes are automatically converted to the Company’s common stock upon a qualified financing of the Company of no less than $5,000,000 in aggregate proceeds from the sales of its common stock at the conversion rate of the lessor of 85% of the price per share paid by investors in the qualified financing, or $1.00 per share, subject to automatic adjustment for stock splits and dividends.

F-39

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On February 21, 2024, the Audit Committee of the Board of Directors dismissed B.F. Borgers, LLP (“Borgers”) as the Company’s independent registered public accounting firm.

Borgers did not provide a report on the Company’s financial statements during any fiscal years. There were (i) no disagreements between the Company and Borgers on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, and (ii) no “reportable events” as that term is defined in Item 304(a)(1)(v) of Regulation S-K.

ITEM 9A.

CONTROLS AND PROCEDURES

Evaluation of Disclosure and Control Procedures

Our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures as of December 31, 2023, and concluded that our disclosure controls and procedures are effective. The term disclosure controls and procedures mean controls and other procedures that are designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining an adequate system of internal control over financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with Generally Accepted Accounting Principles (“U.S. GAAP”).

Because of its inherent limitations, a system of internal control over financial reporting can provide only reasonable assurance of such reliability and may not prevent or detect misstatements. Also, projection of any evaluation of effectiveness to future periods is subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management has conducted, with the participation of our Chief Executive Officer and Chief Financial Officer, an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023. Management’s assessment of internal control over financial reporting used the criteria set forth in SEC Release 33-8810 based on the framework established by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control over Financial Reporting — Guidance for Smaller Public Companies. Based on this evaluation, management concluded that our system of internal control over financial reporting was effective as of December 31, 2023 based on these criteria.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. As a smaller reporting company, our management’s report was not subject to attestation by our registered public accounting firm pursuant to rules of the SEC that permit us to provide only the management’s report.

Changes in Internal Control over Financial Reporting

Due to the appointment of Phillip J. Keller as Interim CEO as well as CFO effective November 18, 2018, and re-appointment as CFO on June 25, 2021, there were some changes in internal controls related to segregation of duties over financial reporting, as defined in Rules 13a-15(t) and 15d-15(f) under the Exchange Act. Furthermore, the reduction in staff restructurings including the bankruptcy, and subsequently, due to liquidity constraints as the operations contracted, resulted in limitations on the Company’s ability to fully segregate duties and maintain other internal controls. In addition, Mr. Keller began a personal leave of absence on January 1, 2024 which led to a permanent termination in March, 2024. While management is establishing plans to mitigate potential risks, restore staff and adequate segregation of duties, management does not believe that these changes had a material effect, or are reasonably likely to materially affect, our internal controls over financial reporting.

ITEM 9B.

OTHER INFORMATION

None.

ITEM 9C.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

PART III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table and biographical summaries set forth information, including principal occupation and business experience for our executive officers:

Name	Age	Positions Held
Lance Friedman	62	Chief Executive Officer and Director
Michael C. Howe	71	President and COO
Ernest J. Scheidemann, Jr.	63	Interim Chief Financial Officer

Lance B. Friedman is the CEO and Chairman of the Board of the Company since June 25, 2020. Additionally, he is the founder and principal of Blackstone Capital Advisors, Inc., since 1999, and Cobra Alternative Capital Strategies LLC, both international corporate and capital markets advisory firms. Mr. Friedman is a founding member and Director of Investor Relations at Aspire BioPharma Inc., a biotechnology firm based in Puerto Rico, since April 2021.

Michael C. Howe is the Chief Operations Officer & President of the Company since February 1, 2024. Mr. Howe has driven growth in consumer and healthcare industries for over 40 years. He served as CEO and founder of Leading Primary Care, LLC (from which the Company purchased certain assets known as The Good Clinic) since November 2019 and has had leadership positions of several consumer businesses including playing the pivotal role in scaling MinuteClinic, now part of CVS, as well as serving as CEO of Arby’s and Verify Brand.

Ernest J. Scheidemann, Jr. is the Interim Chief Financial Officer of the Company. Mr. Scheidemann is a Partner in the Florida CFO Group since February 2024, and the founding member of an interim / fractional CFO firm. Over the past 25 years, Mr. Scheidemann has led all financial activities for numerous start-ups, high growth, restructuring and turnaround situations in a variety of industries. Previously he was the CFO for several publicly traded as well as privately held companies.

The following table and biographical summaries set forth information, including principal occupation and business experience for our directors:

Directors		Age		Position		Officer and/or Director Since
Lance Friedman		62		Director		June 2020

Board of Directors’ Resignations

On February 24, 2023, Eric Weiss, Evan Kostorizos, and Terence Herzog, each mutually agreed to resign as Directors of the Company. Each of the separation agreements provided for consideration of $25,000.00 to be paid from the receipt of a minimum of $150,000.00, net of commissions to ERC broker, collected from ERC IRS reimbursements; and a second payment of $25,000.00 from the next series of ERC IRS reimbursements in the minimum net amount of $150,000.00. In addition, upon execution of the separation agreements, the Company agreed to issue to each Director 25,000 5-year Warrants in Company at a strike price of $1.00 per share.

As of December 31, 2023, due to liquidity constraints, the Company has only partially satisfied the consideration terms of the three separation agreements (see Compensation of Directors below). The Company intends to completely satisfy the remaining conditions in early 2024.

Board of Directors’ Term of Office

Directors are elected at our annual meeting of shareholders and serve for one year until the next annual meeting of shareholders or until their successors are elected and qualified.

Family Relationships

There are no family relationships among the Officers and Directors, nor are there any arrangements or understanding between any of the Directors or Officers of our Company or any other person pursuant to which any Officer or Director was or is to be selected as an Officer or Director.

Involvement in Certain Legal Proceedings

To our knowledge, with the exception of our former Chief Executive Officer Chris Romandetti, Sr., our current directors and executive officers have not been involved in any of the following events during the past ten years:

any bankruptcy petition filed by or against such person or any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

being subject to any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting his involvement in any type of business, securities, or banking activities or to be associated with any person practicing in banking or securities activities;

being found by a court of competent jurisdiction in a civil action, the SEC, or the Commodity Futures Trading Commission to have violated a Federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

being subject of, or a party to, any Federal or state judicial or administrative order, judgment decree, or finding, not subsequently reversed, suspended, or vacated, relating to an alleged violation of any Federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance companies, or any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

being subject of or party to any sanction or order, not subsequently reversed, suspended, or vacated, of any self-regulatory organization, any registered entity or any equivalent exchange, association, entity, or organization that has disciplinary authority over its members or persons associated with a member.

Board Meetings; Committee Meetings; and Annual Meeting Attendance

During 2023, the Board of Directors held no in-person meetings.

Committees of the Board of Directors

The Company presently has no committees of the Board of Directors. Prior to the February 2023 board resignations, the Company had three (3) committees of the Board of Directors: (i) the Audit Committee; (ii) the Nominating and Governance Committee; and (iii) the Compensation Committee. Each committee was comprised solely of independent directors within the meaning of the applicable rules and regulations of the Securities and Exchange Commission and the Nasdaq Stock Market LLC. The Company plans to appoint new directors and re-establish the three (3) committees described above and discussed below in the second quarter of 2024.

Audit Committee

The Audit Committee will be responsible for assisting the Board in oversight and monitoring of the Company’s financial statements and other financial information provided by the Company to its shareholders and others; compliance with legal, regulatory, and public disclosure requirements; the independent auditors, including their qualifications and independence; treasury and finance matters; and the auditing, accounting, and financial reporting process generally.

Compensation Committee

The Compensation Committee will be responsible for reviewing and approving the compensation arrangements for the Board’s executive officers, including the CEO, administers the Company’s equity compensation plans, and reviewing the Board’s compensation.

Nominating and Governance Committee

The Nominating and Governance Committee will be responsible for assisting the Board in identifying qualified individuals to become directors, recommends director nominees for election at each annual shareholder meeting, and developing and recommending corporate governance guidelines and standards for business conduct and ethics.

Changes in Nominating Process

There are no material changes to the procedures by which security holders may recommend nominees to our Board of Directors.

Compliance with Section 16(a) of the Exchange Act

Section 16(a) of the Exchange Act requires our Company’s directors, officers and stockholders who beneficially own more than 10% of any class of equity securities of our Company registered pursuant to Section 12 of the Exchange Act, collectively referred to herein as the “Reporting Persons,” to file initial statements of beneficial ownership of securities and statements of changes in beneficial ownership of securities with respect to our Company’s equity securities with the SEC. All Reporting Persons are required by SEC regulation to furnish us with copies of all reports that such Reporting Persons file with the SEC pursuant to Section 16(a). We believe that all Section 16(a) filing requirements applicable to such Reporting Persons will be filed by the end of the second quarter.

Code of Ethics

We have adopted a Code of Ethics for adherence by our Chief Executive Officer and Chief Financial Officer to ensure honest and ethical conduct, full, fair and proper disclosure of financial information in our periodic reports filed pursuant to the Securities Exchange Act of 1934, and compliance with applicable laws, rules, and regulations. Any person may obtain a copy of our Code of Ethics, without charge, by mailing a request to our Company at the address appearing on the front page of this Annual Report on Form 10-K.

ITEM 11.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table summarizes for the fiscal years ended December 31, 2023 and 2022, the total compensation of the Company’s Chief Executive Officer and Chief Financial Officer (“Named Executive Officers”).

Name and Position(s)	Year	Salary ($)		Bonus ($)		Stock Awards ($)		Other ($)		Total Compensation ($)
Lance Friedman (1)	2023	$	56,166	$	—	$	—	$	255,562	$	311,728
Chief Executive Officer	2022		112,000		—		—		166,893		178,893

Phillip J. Keller (2)	2023	$	127,562	$	—	$	—	$	119,141	$	246,703
CFO, Secretary & Treasurer	2022		103,830		—		—		78,812		182,642

(1)

Mr. Friedman was appointed as CEO as of June 2020

(2)

Mr. Keller was appointed CFO as of July 24, 2017, interim CEO as of November 19, 2018, and re-appointed CFO on July 1, 2022. Mr. Keller began a leave of absence on January 1, 2024 and his employment was terminated in March 2024.

Employment and Consulting Agreements

Employment agreement with Lance Friedman, CEO

The Company entered into an employment agreement (the “CEO Employment Agreement”) with Lance Friedman dated March 1, 2021 and amended as of March 1, 2024, to serve as the Company’s Chief Executive Officer. Pursuant to the terms and conditions set forth in the CEO Employment Agreement, Mr. Friedman is entitled to receive an annual base salary of $375,000.

In addition to the base salary, Mr. Friedman shall be eligible to receive an annual bonus in an amount equal to 100% of the base salary (60% cash and 40% stock grant) for achievement of target-level performance objectives (“Target Bonus”) with the eligible amount of such bonus being more or less than the Target Bonus in the event of achievement below or above target-performance objectives, in each case as determined by the Board in its discretion.

Employment agreement with Michael Howe, COO

The Company entered into a two-year employment agreement (“COO Employment Agreement”) with Michael Howe, dated February 1, 2024, to serve as the Company’s Chief Operating Officer. Pursuant to the terms and conditions set forth in the COO Employment Agreement, Mr. Howe is entitled to receive an annual base salary of $250,000.

In addition to the base salary, Mr. Howe shall be eligible to receive an annual bonus in an amount equal to 100% of the base salary (60% cash and 40% stock grant) for achievement of target-level performance objectives (“Target Bonus”) (with the eligible amount of such bonus being more or less than the Target Bonus in the event of achievement below or above target-performance objectives, in each case as determined by the Board in its discretion).

Consulting agreement with FinTrust Consulting, LLC (of which the Interim CFO is the Managing Member)

The Company entered into a consulting agreement (“Consulting Agreement”) with FinTrust Consulting, LLC (of which Ernest J. Scheidemann, Jr. is the Managing Member), dated December 19, 2023 to perform such duties and services as required by the Company relating to finance, strategy, accounting, business planning, insurance, capital raising initiatives, and other related activities as may be reasonably requested from time to time by the Company’s senior officers. Pursuant to the terms and conditions set forth in the Consulting Agreement, FinTrust Consulting, LLC is entitled to receive a fixed monthly fee of $17,250, among other payments. The Consulting Agreement can be terminated by either party upon providing 30 days’ notice.

Outstanding Equity Awards at 2023 Fiscal Year-End

Outstanding equity awards at 2023 fiscal year-end are comprised of Restricted Stock Units (“RSU”). There were no equity awards granted during the years ended December 31, 2023 and December 31, 2022.

Compensation of Directors

The following table sets forth the compensation paid our Board of Directors for fiscal 2023:

Name	Cash ($)		Shares (#)		Shares ($)
Lance Friedman	$	0
Eric Weiss (1)		35,000		—		—
Evan Kostorizos (1)		35,000		—		—
Terence Herzog (1)		40,000		—		—
Total	$	164,000		—	$	—

(1)

Directors Weiss, Kostorizos and Herzog resigned on February 24, 2023.

Potential Payments upon Termination or Change in Control

We do not have any contract, agreement, plan or arrangement that provides for any payment to any of our Named Executive Officers at, following, or in connection with a termination of the employment of such Named Executive Officer, a change in control of our Company or a change in such Named Executive Officer’s responsibilities.

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Security beneficial ownership table

The following table sets forth information as of May 13, 2024 based on information obtained from the persons named below, with respect to the beneficial ownership of our common and preferred stock by (i) each person (including groups) known to us to be the beneficial owner of more than five percent (5%) of our Common Stock, or (ii) each Director and Officer, and (iii) all Directors and Officers of our Company, as a group. Except as otherwise indicated, all stockholders have sole voting and investment power with respect to the shares listed as beneficially owned by them, subject to the rights of spouses under applicable community property laws.

Name of Beneficial Owner	Shares of Common Stock beneficially owned (1) (2)		Percentage

Beneficial Owners of more than 5%
Kristen Jones Romandetti (3)		8,750,078		24.49	%
Steward Physician Contracting (4)		5,000,000		14.00	%
C.T. Capital, Ltd. (5)		2,666,667		7.46	%

(1)

Except as otherwise indicated, we believe that the beneficial owners of the Common Stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of Common Stock subject to options or warrants currently exercisable or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage ownership of the person holding such option or warrants but are not deemed outstanding for purposes of computing the percentage ownership of any other person.

(2)	Based on 35,725,788 shares of Common Stock issued and outstanding as of May 13, 2024.

(3)	Kristen Jones Romandetti is the spouse of our former Chief Executive Officer, Christian C. Romandetti, Sr. and her address is 3540 Charlton Pl., Melbourne, FL 32934.

(4)	The address of Steward Physician Contracting is 111 Huntington Avenue, Suite 1800, Boston, MA 021999

(5)	On June 13, 2013, we entered into a Loan and Security Agreement (the “Loan Agreement”) with C.T. Capital, Ltd, a Florida Limited Partnership. Under the Loan Agreement and subsequent amendments, C.T. Capital committed to make an accounts receivable line of credit to a maximum aggregate amount of $2,500,000. C.T. Capital may convert all or any portion of the outstanding principal amount – up to $2,000,000 – or interest on the loan into our Common Stock at a price equal to $0.75 per share. In December 2016, C.T. Capital converted $1,400,000 of the outstanding principal amount to 1,866,667 shares of Common Stock. For purposes of percent ownership calculation, we have assumed that the remaining $600,000 eligible for conversion to equity was converted into our Common Stock at a price of $0.75 per share. The address of C.T. Capital, Ltd. is 6300 NE First Avenue, Suite 201, Fort Lauderdale, Florida 33334. (See “Note 15 – Subsequent Events” to the consolidated financial statements in Item 8 of this Annual Report on 10-K).

Equity Compensation Plans

On March 14, 2012, we adopted our 2011 Incentive Stock Plan (the “2011 Plan”), pursuant to which 500,000 shares of our Common Stock are reserved for issuance as awards to employees, directors, officers, consultants, and other service providers of our Company and its subsidiaries (an “Optionee”). The term of the 2011 Plan is ten years from January 6, 2012, its effective date. On December 29, 2023, by written resolution, the Company’s Board of Directors terminated the 2011 Plan.

Description of Securities

The Company has 100,000,000 shares of Common Stock, par value $0.001 per share, authorized for issuance, 1,000,000 Preferred Stock, par value $0.01 per share, 1,000,000 shares of Series A Convertible Preferred Stock, par value $0.01 per share, and 3,000,000 of Series B Preferred Stock, par value $0.0001, authorized for issuance.

As of December 31, 2023, there were 32,958,288 shares of Common Stock and 147 shares of Series A 10% Convertible Preferred Stock, and 0 shares of Series B Convertible Preferred Stock that are issued and outstanding.

ITEM 13.

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Director Independence

The Board evaluates the independence of each nominee for election as a director of our Company in accordance with the applicable provisions of the CBOE listing standards and the Exchange Act. Currently, none of our directors qualify as independent directors under the CBOE listing standards and Rule 10A-3 and Rule 10C-1 of the Exchange Act.

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

We engaged Bush and Associates CPAs (“Bush”) as our independent registered public accounting firm for the audit of our financial statements for the years ended December 31, 2023 and 2022.

Our independent auditor, Bush was engaged in 2024 and therefore billed $0 for the year ended December 31, 2023. Audit Fees consist of fees billed for professional services rendered for auditing our Financial Statements, reviews of interim Financial Statements included in quarterly reports, services performed in connection with other filings with the Securities & Exchange Commission and related comfort letters and other services that are normally provided by our independent auditors in connection with statutory and regulatory filings or engagements. Tax Fees consists of fees billed for professional services for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state and local tax compliance and consultation in connection with various transactions and acquisitions. All Other Fees consists of fees billed by accountants other than Bush for non-audit or tax related professional services. This category also includes fees billed by our former audit firm, BF Borgers CPA PC.

	2023		2022
Audit Fees	$	—	$	165,000
Tax Fees		—		5,000
All Other Fees		55,000		—
Total	$	55,000	$	170,000

PART IV

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Exhibit No.		Description

3.1		Certificate of Incorporation of First Choice Healthcare Solutions, Inc. (incorporated by reference to Annex B to the Company’s Information Statement on Schedule 14C, filed with the SEC on March 14, 2012)

3.2		By-laws of the Company (incorporated by reference to Annex C to the Company’s Information Statement on Schedule 14C, filed with the SEC on March 14, 2012)

4.1*		Description of Registrant’s Securities

10.1		Share Exchange Agreement dated December 29, 2010, by and between the Company, FCID Medical, Inc., and FCID Holdings, Inc. (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 3, 2011)

10.2		Loan and Security Agreement dated as of June 13, 2013, by and between C.T. Capital Ltd and First Choice Medical Group of Brevard, LLC (incorporated by reference to Exhibit 10.21 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014).

10.3*		Asset Purchase Agreement dated January 25, 2024 by and between the Company and Leading Primary Care, LLC

10.4*		Stock Purchase Agreement dated July 20, 2023 by and between the Company and Gary C. Bernard, as amended by addendum dated May 8, 2024.

10.5*		Employment agreement dated June 6, 2022 between the Company and Lance Friedman, as amended by the addendum dated March 1, 2024

10.6*		Employment agreement dated February 1, 2024 between the Company and Michael Howe

10.7*		Consulting agreement dated December 19, 2023 between the Company and FinTrust Consulting, LLC

21		List of Subsidiaries of the Company

24.1		Power of Attorney (as seen on signature page herein)

23.1		Consent of Bush & Associates CPA LLC

31.1*		Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended.

31.2*		Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act, as amended.

32.1**		Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rules 13a-14(b) or 15d-14(b) of the Securities Exchange Act, as amended, and 18 U.S.C. Section 1350.

97.1*		Clawback Policy

EX-101.INS		INLINE XBRL INSTANCE DOCUMENT+
EX-101.SCH		INLINE XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT+
EX-01.CAL		INLINE XBRL TAXONOMY EXTENSION CALCULATION LINKBASE+
EX-101.DEF		INLINE XBRL TAXONOMY EXTENSION DEFINITION LINKBASE+
EX-01.LAB		INLINE XBRL TAXONOMY EXTENSION LABELS LINKBASE+
EX-101.PRE		INLINE XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE+
104		Interactive Data File

* Filed herewith

** Furnished herewith

SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	By:	/s/ Lance Friedman
		Lance Friedman
		Chief Executive Officer

	By:	/s/ Ernest J. Scheidemann, Jr.
		Ernest J. Scheidemann, Jr.
		Interim Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

	FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

Dated: May 13, 2024	By:	/s/ Lance Friedman
		Lance Friedman
		Chief Executive Officer

Dated: May 13, 2024	By:	/s/ Ernest J. Scheidemann, Jr.
		Ernest J. Scheidemann, Jr.
		Interim Chief Financial Officer

Exhibit 4.1

DESCRIPTION OF REGISTRANT’S SECURITIES

The following summary of the material terms of our securities is not intended to be a complete summary of the rights and preferences of such securities, and is qualified by reference to First Choice Healthcare Solutions, Inc.’s Certificate of Incorporation (as amended, the “Certificate of Incorporation”) and the Bylaws, which are exhibits to First Choice Healthcare Solutions, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023. We encourage you to read each of the Certificate of Incorporation, the Bylaws and the applicable provisions of the Delaware General Corporation Law (“DGCL”) in their entirety for a complete description of the rights and preferences of our securities.

General

Our authorized capital stock consists of 100,000,000 shares of common stock, par value $0.001 per share, and 1,000,000 shares of preferred stock, par value $0.10 per share.

Common Stock

Common stock outstanding

As of December 31, 2023, there were 32,958,288 shares of our common stock outstanding.

Voting rights

Each share of common stock entitles the holder to one vote, either in person or by proxy, at meetings of stockholders. The holders are not permitted to vote their shares cumulatively.

Dividend rights

Holders of common stock are entitled to receive ratably such dividends, if any, as may be declared by the Board out of funds legally available.

Rights upon liquidation

Upon our liquidation, dissolution or winding up, the holders of our common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities.

Other rights

Holders of our common stock do not have any pre-emptive rights or other subscription rights, conversion rights, redemption or sinking fund provisions.

Preferred Stock

Under the terms of our certificate of incorporation, our Board is authorized to issue shares of preferred stock in one or more series without stockholder approval. Our Board has the discretion to determine the rights, preferences, privileges, and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

The purpose of authorizing our Board to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings, and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from seeking to acquire, a majority of our outstanding voting stock.

Series A Preferred Convertible Stock

The Company is authorized to issue 40,000 shares, $0.01 par value Series A preferred stock.

Each share of the Series A preferred stock is convertible into 10,000 shares of common stock in the Company. The Series A 10% Convertible Preferred Stock shall have a 10% dividend rate and have preference in liquidation so that holders of Series A 10% Convertible Preferred Stock are paid in full prior to any payments to holders of common stock of the Corporation. The Series A 10% Convertible Preferred Stock shall be automatically converted into shares of common stock of the Company on the effective date of the Company’s S-1 filing with the U.S. Securities and Exchange Commission.

As of December 31, 2023, and 2022, the total Series A preferred shares outstanding were 147 and 141 shares, respectively.

Anti-Takeover Effects

Our certificate of incorporation and bylaws will include a number of provisions that may have the effect of delaying, deferring, or preventing a party from acquiring control of us and encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our Board rather than pursue non-negotiated takeover attempts. The provisions include the items described below.

Potential Effects of Authorized but Unissued Stock

We have shares of common stock available for future issuance without stockholder approval. We may utilize these additional shares for a variety of corporate purposes, including future public offerings to raise additional capital, to facilitate corporate acquisitions or payment as a dividend on the capital stock.

The existence of unissued and unreserved common stock and preferred stock may enable our Board to issue shares to persons friendly to current management or to issue preferred stock with terms that could render more difficult or discourage a third-party attempt to obtain control of us by means of a merger, tender offer, proxy contest or otherwise, thereby protecting the continuity of our management. In addition, our Board has the discretion to determine designations, rights, preferences, privileges, and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences of each series of preferred stock, all to the fullest extent permissible under the Delaware General Corporation Law and subject to any limitations set forth in our second amended and restated certificate of incorporation. The purpose of authorizing the Board to issue preferred stock and to determine the rights and preferences applicable to such preferred stock is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing desirable flexibility in connection with possible financings, acquisitions, and other corporate purposes, could have the effect of making it more difficult for a third party to acquire, or could discourage a third party from acquiring, a majority of our outstanding voting stock.

Limitations of Director Liability and Indemnification of Directors, Officers, and Employees

Our certificate of incorporation limits the liability of directors to the maximum extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors.

Our bylaws provide that we will indemnify our directors and officers to the fullest extent permitted by law and may indemnify employees and other agents. Our bylaws also provide that we are obligated to advance expenses incurred by a director or officer in advance of the final disposition of any action or proceeding.

We currently do not have a policy of directors’ and officers’ liability insurance but intend to obtain such a policy in the near future.

Our bylaws, subject to the provisions of Delaware Law, contain provisions which allow the corporation to indemnify any person against liabilities and other expenses incurred as the result of defending or administering any pending or anticipated legal issue in connection with service to us if it is determined that person acted in good faith and in a manner which he or she reasonably believed was in the best interest of the corporation. Insofar as indemnification for liabilities arising under the Securities Act of 1933 as amended, or the Securities Act, may be permitted to our directors, officers and controlling persons, we have been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

The limitation of liability and indemnification provisions in our bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against directors and officers, even though an action, if successful, might provide a benefit to us and our stockholders. The results of operations and financial condition may be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification provisions.

At present, there is no pending litigation or proceeding involving any of our directors or officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification.

Requirements for Advance Notification of Stockholder Nominations and Proposals

Our bylaws establish advance notice procedures with respect to stockholder proposals and nomination of candidates for election as directors.

Limits on Special Meetings

Special meetings may be called for any purpose and at any time by the Chairman of the Board, the President (if there be one) or by any member of the Board. Business transacted at each special meeting shall be confined to the purposes stated in the notice of such meeting.

Election and Removal of Directors

Our Board is elected annually by our stockholders. The number of directors that shall constitute the whole Board shall not be less than three (3) nor more than seven (7) directors. Directors are elected by a plurality of the votes of shares of our capital stock present in person or represented by proxy at a meeting and entitled to vote in the election of directors. Each director shall hold office until a successor is duly elected and qualified or until his or her earlier death, resignation, or removal.

Newly created directorships resulting from any increase in the number of directors or any vacancies in the Board resulting from death, resignation, retirement, disqualification, removal from office or any other cause may be filled, so long as there is at least one remaining director, only by the Board, provided that a quorum is then in office and present, or by a majority of the directors then in office, if less than a quorum is then in office, or by the sole remaining director. Directors elected to fill a newly created directorship or other vacancies shall hold office until such director’s successor has been duly elected and qualified or until his or her earlier death, resignation or removal as hereinafter provided.

Any director may be removed from office at any time for cause, at a meeting called for that purpose, but only by the affirmative vote of the holders of at least 50% of the voting power of all outstanding shares of our capital stock entitled to vote generally in the election of directors, voting together as a single class.

Our certificate of incorporation and bylaws do not provide for cumulative voting in the election of directors.

Amendments to Our Governing Documents

The affirmative vote of the holders of at least 50%% of the voting power of all outstanding shares of our capital stock entitled to vote generally in the election of directors, shall be required to adopt any provision inconsistent with, to amend or repeal any provision of, or to adopt a bylaw inconsistent with, Article VI of our Certificate of Incorporation.

Our bylaws may be amended or repealed, and new bylaws may be adopted by the stockholders and/or the Board. Any bylaws adopted, amended, or repealed by the Board may be amended or repealed by the stockholders.

Listing

We intend to apply to list our common stock on the CBOE under the symbol “FCHS” No assurance can be given that our application will be approved.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock is VStock Transfer, LLC.

Exhibit 10.3

ASSET PURCHASE AGREEMENT

BETWEEN

FIRST CHOICE HEALTHCARE SOLUTIONS, INC. (“BUYER”)

AND

Leading Primary Care. LLC
(THE “COMPANY”)

DATED JANUARY 25, 2024

ASSET PURCHASE AGREEMENT

This Asset Purchase Agreement (the “Agreement”) is made as of January 25, 2024 by and among FIRST CHOICE HEALTHCARE SOLUTIONS, INC. (“Buyer”), and Leading Primary Care, LLC. (the “Company”).

WHEREAS, this Agreement contemplates a transaction in which the Buyer will purchase and the Company will sell certain assets related to the Company’s Intellectual Property (“IP”) and locations and equipment known as The Good Clinic including but not limited to patents, trade secrets and know-how, signage, FF&E, brochures, logo and marketing materials (collectively the “Assets”,) in consideration of the Purchase Price (as defined below)

NOW, THEREFORE, in consideration of the premises and the mutual promises herein made, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration of the representations, warranties, and covenants herein contained, the Parties agree as follows:

1. Definitions.

“Acquired Assets” has the meaning set forth in Section 2.1.

“Agreement” has the meaning set forth in the preamble above.

“Assumed Liabilities has the meaning set forth in Section 2.3.

“Business” means the Company’s development, marketing and distribution of the Product. “Closing Date” shall be on or about April 1, 2024.

“Confidential information” means information concerning the Product and the Business other than that information which is already generally or readily obtainable by the public or is publicly known or becomes publicly known through no fault of the Company.

“Excluded Assets” has the meaning set forth in Section 2.2 below.

“Intellectual Property” or “IP” means the entire right, title and interest in and to all proprietary rights of every kind and nature, copyrights, trademarks, trade secrets and proprietary information, all applications for any of the foregoing, content, materials, layouts, photographs, articles, advertising, services, customer lists, telephone and contact information, the current website and technology in use or previously used in the Business; or (ii) that are owned, licensed or controlled in whole or in part by the Company and relate to the Business. “Intellectual Property” includes, without limitation, all right, title and interest in and to the names “THE GOOD CLINIC” and Good Clinic and all variations thereof, and endorsement rights of Company, and all of the goodwill and exclusive rights of use associated with any of the foregoing.

“Liability” means any liability or obligation (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether liquidated or unliquidated, whether incurred or consequential and whether due or to become due), which existed or accrued prior to Closing, including any liability for any taxes. “Liability”.

“Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or a governmental entity (or any department, agency, or political subdivision thereof).

“Purchase Price” has the meaning set forth in Section 2.4 below.

2. Acquisition of Assets by the Buyer.

2.1. Purchase and Sale of Assets. The Company hereby sells and transfers to the Buyer, and the Buyer hereby purchases from the Company, subject to and upon the terms and conditions contained herein, free and clear of all liens, all of the Company’s right, title and interest in the following (collectively, the “Acquired Assets”):

	(1)	All assets listed on Schedule 2.1;

	(2)	Any other assets Buyer and Company agree in writing to be included in the transaction.

2.2. Excluded Assets. The following assets, properties and rights are excluded from the Acquired Assets to be sold, transferred, and delivered to the Buyer hereunder and shall be retained by the Company (collectively, the “Excluded Assets”): All assets listed on Schedule 2.2.

2.3 Liabilities Assumed. Notwithstanding anything else in this Agreement to the contrary, the Buyer will assume only those liabilities listed in schedule 2.3 and does not assume or agree to satisfy or perform any additional Liability of the Company. The Company, prior to Closing, and as of the Closing date, warrants that it will pay or keep current payments on any and all credit card debt, trade payments, and all payroll and associated payments to or for the benefit of the Company’s employees.

2.4 Purchase Price. The purchase price for the Acquired Assets shall be THREE MILLION FIVE HUNDRED DOLLARS ($3,500,000.00), (the “Purchase Price”), payable as follows:

	a.	The Buyer shall deliver to Company $3,500,000.00 in the Buyer’s common stock which shall be publicly traded in the amount of $1,500,000.00 in registered freely tradable securities which shall have a six (6) month make good should the per share stock price in the aggregate yield below $1,500,0000.00, and $2,000,000 in restricted common stock which shall have a six (6) month make good from the time the securities can be sold through Rule 144 or other permitted sale.

	b.	At the Closing, the Company shall deliver to Buyer a Bill of Sale and any ancillary required Assignment Agreement. Both Parties state that the representations and warranties are true and correct at Closing, and that Company has satisfied all its covenants and agreements herein.

3 Representations and Warranties of the Company. The Company represents and warrants to the Buyer that the statements contained in this Section 3 are correct and complete.

3.1 Organization of the Company. The Company is a Limited Liability corporation, duly organized and in good standing with the State of Minnesota.

3.2 Authorization of Transaction. This Transaction shall be subject to approval of the Company’s shareholders, either at a meeting duly held for the purpose of approving the Transaction or by a signed resolution of a majority of the Shareholders. Upon such approval, the Company shall have the power and authority to execute and deliver this Agreement and to perform its obligations hereunder. Upon approval of the Company, all actions or proceedings to be taken by or on the part of the Company to authorize and permit the execution and delivery by Company of this Agreement and the instruments required to be executed and delivered by the Company pursuant hereto, the performance by the Company’s shareholders, of its obligations hereunder, and the con- summation by the Company of the transactions contemplated herein, have been duly and properly taken. This Agreement has been duly and validly executed and delivered by the Company and constitutes the legal, valid and binding obligation of the Company and its shareholders, enforceable in a court of law of competent jurisdiction.

3.3 Non-Contravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby will result in violation of, be in conflict with or constitute a default under any term or provision of any agreement or document to which Company is a party or by which Company is bound, nor under any judgment. decree, order, statute, regulation, rule or license applicable to Company.

3.4 Brokers’ Fees. No broker’s fees are payable with respect to the Transaction.

3.5 Title to Assets. The Company hereby conveys all of such interest it has in the Acquired Assets and IP to the Buyer. The Company is unaware of any third party making a claim to the Acquired Assets and IP.

3.6 Legal Compliance. The Company is in compliance with all applicable laws and no action, suit, proceeding, hearing, investigation, charge, complaint, claim, demand, or notice has been filed or commenced against the Company alleging any failure so to comply. The Company is unaware of any environmental claim or liability regarding the Acquired Assets or Property, of any kind.

3.7 Taxes. With respect to the Business, all tax returns required to be filed on or before the Closing Date have been filed, all taxes due have been paid in full and all tax payments or deposits for any interim or partial periods have been made.

3.8 Intellectual Property. The Company has not received any notice that the use by the Company of the Intellectual Property infringes or has infringed any rights of any third party. To the Company’s knowledge such use does not actually infringe and has not actually infringed any such rights; and that to the Company’s knowledge no activity of any third party infringes upon the rights of the Company with respect to any of the Intellectual Property of or used in the Business.

3.9 Contracts. There are no defaults under any of the Company’s contracts, and each of the contracts is in full force and effect.

4. Litigation. There are no judicial, insurance or administrative actions, claims, suits, proceedings or investigations pending or, to the Company’s knowledge, threatened, related to the Business, or that question the validity of this Agreement or of any action taken or to be taken pursuant to or in connection with the provisions of this Agreement. There are no judgments, orders, decrees, citations, fines or penalties heretofore assessed against the Company or Owner affecting the Acquired Assets, or the Business.

5. Representations and Warranties of the Buyer. The Buyer represents and warrants to the Company that the statements contained in this Section 5 are correct and complete.

5.1 Organization of the Buyer. The Buyer is a Delaware corporation, duly organized and in good standing with the State of Delaware.

5.2 Authorization of Transaction. The Buyer has the power and authority to execute and deliver this Agreement and to perform its obligations hereunder. All company and other actions or proceedings to be taken by or on the part of the Buyer to authorize and permit the execution and delivery by the Buyer of this Agreement and the instruments required to be executed and delivered by the Buyer pursuant hereto, the performance by the Buyer of its obligations hereunder, and the consummation by the Buyer of the transactions contemplated herein, have been duly and properly taken. This Agreement has been duly and validly executed and delivered by the Buyer and constitutes the legal, valid and binding obligation of the Buyer, enforceable in accordance with its terms and conditions.

5.3 Non-Contravention. Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby will result in violation of, be in conflict with or constitute a default under any term or provision of any agreement or document to which the Buyer is a party or by which the Buyer is bound, nor under any judgment, decree, order, statute, regulation, rule or license applicable to the Buyer.

6. Covenants. The parties agree as follows:

6.1 General. Each of the parties will use its reasonable business efforts to take all action and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement.

6.2 Access. Company will afford Buyer’s employees, auditors, legal counsel and other authorized representatives all reasonable opportunity and access during normal business hours to inspect, investigate and audit the Acquired Assets before Closing. Buyer will conduct such inspection, investigation and audit in a reasonable manner during regular business hours. Buyer acknowledges that Buyer is purchasing the Acquired Assets in AS-IS WITH ALL FAULTS conditions, with no representations or warranties, unless otherwise expressly stated herein.

6.3 Consents. Company shall obtain any necessary consents, licenses, titles or approvals requested by Buyer with respect to the Acquired Assets.

6.4 Future Assurances. At any time and from time to time after the Closing Date, at the request of Buyer and without further consideration, the Company will execute and deliver such other instruments of sale, transfer, conveyance, assignment and confirmation and take such action reasonably necessary to transfer, convey and assign to Buyer, and to confirm Buyer’s title to or interest in the Acquired Assets, to put Buyer in actual possession and operating control thereof and to assist Buyer in exercising all rights with respect thereto.

7. Confidentiality/Publicity. Neither the terms of this Agreement nor the fact that the parties are discussing this transaction will be disclosed by a party to the public without the prior written consent of the other party. The parties will consult with one another and agree on the desirability, timing and substance of any press release, public announcement, publicity statement or other dis- closure relating to the proposed acquisition of the Acquired Assets by Buyer.

8. Noncompetition. The Company agrees for itself that, in consideration of the Buyer’s obligation to make certain payments in the event that it generates revenue from the sale of the Products that the Company, the Company’s officers and directors, other than those persons who are employed by or are advisors to Buyer, and related and affiliated entities shall not, directly or indi- rectly, for a period of three years, run, own, manage, operate, control, participate in, invest in or be connected in any manner with the management, ownership, operation or control of any business, venture or activity which engages in or solicits the customers, accounts or employees of Buyer with respect to the Product and the Company’s business, anywhere the Buyer is doing business.

9. Non-Disclosure and Non-Solicitation. Following the Closing, Company shall not disclose any proprietary information of any nature, pertaining to the functioning, processes or operation of Buyer, to any third party.

10. Indemnification.

10.1 Indemnity by Company. The Company hereby agrees to indemnify, defend and hold harmless the Buyer and its members, managers, officers and affiliates against and in respect of all liabilities, obligations, judgments, liens, injunctions, orders, decrees, rulings, damages, assessments, taxes, losses, fines, penalties, expenses, costs and amounts paid in settlement (including reasonable attorneys’ and expert witness fees and disbursements in connection with investigating, defending or settling any action or threatened action), arising out of any claim, damages, com- plaint, demand, cause of action, audit, investigation, hearing, action, suit or other proceeding as- serted or initiated or otherwise existing in respect of any matter (collectively, the “Losses”) that result from:

	(1)	the inaccuracy of any material representation or warranty made by the Com- pany or herein, or resulting from any misrepresentation, breach of warranty or nonfulfillment of any agreement or covenant of the Company or Owner contained herein or in any agreement or instrument required to be entered into in connection herewith or from any misrepresentation in or omission from any schedule, document, certificate or other instrument required to be furnished by the Company hereunder; and

	(2)	any Liability of the Company other than the liability listed on Schedule 2.3.

Buyer shall provide the Company written notice for any claim made in respect of the in- demnification provided in this Section, whether or not arising out of a claim by a third party.

(3)

Buyer acknowledges that Company is selling, and Buyer is buying, only whatever right, title and interest the Company has in the Acquired Assets, and IP.

10.2. Indemnity by Buyer. Buyer hereby agrees to indemnify, defend and hold harmless the Company and its respective managers, members officers, directors and affiliates in respect of all Losses that result from:

	(1)	the inaccuracy of any material representation or warranty made by Buyer herein, or resulting from any misrepresentation, breach of warranty or non- fulfillment of any agreement or covenant of Buyer contained herein or in any agreement or instrument required to be entered into in connection here- with or from any misrepresentation in or omission from any schedule, doc- ument, certificate or other instrument required to be furnished by Buyer hereunder; and

	(2)	any liabilities or obligations of Buyer or the Business incurred or accruing after Closing.

Company and Owner shall provide the Buyer written notice for any claim made in respect of the indemnification provided in this Section, whether or not arising out of a claim by a third party.

10.3. Method of Payment. All claims for indemnification shall be paid in cash.

10.4. Mediation. All disputes arising under this Agreement shall be subject to mediation. If the Parties cannot agree to a mutually agreeable mediator, each Party shall select a mediator, and the two selected mediators shall appoint a third party as mediator. Mediation shall take place in a mutually agreeable location.

11. Miscellaneous.

11.1 No Third-Party Beneficiaries. This Agreement shall not confer any rights or rem- edies upon any Person other than the parties and their respective successors and permitted assigns.

11.2. Entire Agreement. This Agreement (including the Schedules attached hereto) con- stitutes the entire agreement between the parties and supersedes any prior understandings, agree- ments, or representations by or between the parties, written or oral, to the extent they relate in any way to the subject matter hereof.

11.3 Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the parties named herein and their respective successors and permitted assigns. Company

may not assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of Buyer. Buyer may assign its rights, interests and obligations hereun- der to an entity controlled by Buyer without consent.

11.4 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together will constitute one and the same instrument.

11.5 Headings. The section headings contained in this Agreement are inserted for con- venience only and shall not affect in any way the meaning or interpretation of this Agreement.

11.6 Notices. All notices, requests, demands, claims, and other communications here- under will be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) upon personal delivery, confirmation of facsimile or upon date of electronic mail transmission absent credible claim of non-receipt, (ii) one business day following the date sent when sent by overnight delivery and (iii) three business days following the date mailed when mailed by registered or certified mail return receipt requested and postage prepaid at the following addresses:

If to the Company or Owner:

Leading Primary Care, LLC.

Michael C. Howe

29607 Arbor Drive

Grey Eagle, MN 56336

Any party may change the address to which notices, requests, demands, claims, and other commu- nications hereunder are to be delivered by giving the other party notice in the manner herein set forth.

11.7 Governing Law. This Agreement shall be governed by and construed in accordance with the domestic laws of the State of Delaware without giving effect to any choice or conflict of law provision or rules to the contrary.

11.8 Amendments and Waivers. No amendment of any provision of this Agreement shall be valid unless the same shall be in writing and signed by all parties hereto. No waiver by any party of any default, misrepresentation, or breach of warranty or covenant hereunder, whether in- tentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

11.9 Severability. Any term or provision of this Agreement that is invalid or unen- forceable in any situation in any jurisdiction shall not affect the validity or enforceability of the

remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

11.10 Expenses. Each of the Buyer and the Company will bear its own costs and expenses incurred in connection with the drafting of this Agreement and the closing of the transactions con- templated hereby.

11.11 Construction. The parties have participated jointly in the negotiation of this Agree- ment. In the event an ambiguity or question of intent or interpretation arises, no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.

11.12 Incorporation of Schedules. The Schedules identified in this Agreement are incor-porated herein by reference and made a part hereof.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on January 25, 2024.

	BUYER

	First Choice Healthcare Solutions

	By:

	THE COMPANY

	Leading Primary Care, LLC

	By:

SCHEDULES

2.1. Acquired Assets: See attached.

2.2 Excluded Assets: None

2.3 Assumed Liabilities:

Exhibit 10.4

STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (the “Agreement”), is made and entered into as of the 20th day of July, by and among First Choice Healthcare Solutions, Inc., a corporation organized and existing under the laws of the State of Delaware, with an address at 95 Bulldog Blvd., Suite 202, Melbourne, Florida 32901 (the “Buyer”), and GARY C. BERNARD, MD an individual residing in St. Johns County, Florida (“Bernard”) (Bernard is individually referred to as a “Seller”) (the Buyer and Seller is sometimes referred to as a “Party” and collectively referred to as the “Parties”).

WITNESSETH:

WHEREAS, the Seller owns and holds all of the issued and outstanding shares of the capital common stock (the “Company Stock”) of Pointe Medical Services, Inc., a Florida corporation, Pointe Med Pharmacy, Inc., a Florida corporation, Livewell MD, Inc., a Florida corporation, and in excess of 50% of the Company Stock of Livewell Drugstore, Inc., D/B/A Trulife Pharmacy, a Florida corporation (collectively, the “Company”). Each “Minority Shareholder”, of Live Well Drug Store, Inc. will be offered stock equal to 1.2 times the valuation of Livewell Drug stores multiplied by the Minority Shareholder ownership percentage.

WHEREAS, the Buyer desires to acquire all the Company Stock from the Sellers, and the Sellers desire to sell all the Company Stock to the Buyer in accordance with and subject to the terms and conditions set forth herein; and

WHEREAS, the Parties hereto desire to enter into this Agreement pursuant to which Buyer will purchase from Sellers all the Company Stock as set forth in this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual promises, representations, warranties and covenants hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1 Definitions. The following words shall have the respective meanings given to them in this Article 1.

	1.1.1	“Accounts Receivable” has the meaning set forth in Section 3.8.

	1.1.2	“Acquired Company(ies)” means the Company and the Subsidiaries

	1.1.3	“Action” has the meaning set forth in Section 3.11.

	1.1.4	“Affiliate” means with respect to any Person, any other Person which is controlling, controlled by, or under common control with, directly or indirectly through any Person, the Person referred to, and, if the Person referred to is a natural Person, any member of such Person’s immediate family. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”) as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

	1.1.5	“Agreement” means this Agreement as executed on the date hereof and as amended or supplemented in accordance with the terms hereof, including all Schedules and Exhibits attached hereto.

	1.1.6	“Business” means any and all business activities in which the Acquired Companies are engaged, as such business is conducted by the Acquired Companies on the date hereof and as of the Effective Time.

	1.1.7	“Business Day” means any day excluding Saturday, Sunday and any day that is a legal holiday under the Laws of the State of New York or is a day on which banking institutions located in such State are authorized or required by Law to close.

	1.1.8	“Buyer” has the meaning set forth in the Preamble to this Agreement.

	1.1.9	“Change of Control” means the sale of all or substantially all the assets of Buyer; any merger, consolidation, or acquisition of Buyer with, by or into another corporation, entity, or person; or any change in the ownership of more than fifty percent (50%) of the voting capital stock of Buyer in one or more related transactions.

	1.1.10	“Closing” means the consummation of the transactions contemplated in this Agreement as set forth in Section 2.8.

	1.1.11	“Closing Payment” has the meaning set forth in Section 2.2.1(b).

	1.1.12	“Closing Date” means the date on which the Closing occurs pursuant to this Agreement as set forth in Section 2.8.

	1.1.13	“Code” means the Internal Revenue Code of 1986, as amended from time to time.

	1.1.14	“Company Stock” has the meaning set forth in the Recitals to this Agreement.

	1.1.15	“Company” has the meaning set forth in the Recitals to this Agreement.

	1.1.16	“Confidential Information” has the meaning set forth in Section 6.1.

	1.1.17	“Contract” means any written or oral contract, agreement, arrangement, understanding, lease, indenture, mortgage, deed of trust, evidence of indebtedness, commitment or instrument, open purchase order or offer, to which the Acquired Companies are a party or by which it or any of its assets is bound.

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	1.1.18	“Disclosure Schedules” means the disclosure schedules: (a) constituting exceptions to an applicable disclosures with the Acquired Companies representations and warranties set forth in Article 3 of this Agreement; (b) constituting exceptions to an applicable disclosure with the Acquired Companies covenants, statement, or representation otherwise set forth in a provision in this Agreement, and which are prepared and delivered by the Acquired Companies prior to Closing, as the same may be amended and supplemented from time to time, as required and/or permitted herein.

	1.1.19	“Effective Time” means the effective time of the Closing, which shall be deemed to be as of 5:00pm Eastern Standard Time on the Closing Date.

	1.1.20	“Environmental Claim(s)” means all Actions, Liens, or Orders asserted by a Person other than Buyer, the Acquired Companies, Sellers, or any of its Affiliates, and arising out of any violation or alleged violation of any Environmental Laws or Environmental Permits, including, but not limited to, (i) any and all Actions, Liens, or Orders asserted by a Government for enforcement, cleanup, removal, response, closure, remedial or other actions, or damages pursuant to any applicable Environmental Laws or Environmental Permits, and (ii) any and all Actions, Liens, or Orders asserted by a Person other than Buyer, Sellers, or any of its Affiliates, arising out of any violation or alleged violation of any Environmental Laws or Environmental Permits, seeking damages, contribution, indemnification, cost recovery, compensation, private or Governmental enforcement, or injunctive relief resulting from Hazardous Materials.

	1.1.21	“Environmental Law” means all applicable laws, statutes, enactments, orders, regulations, rules and ordinances of any Government relating to pollution or protection of human health, safety, the environment, natural resources or laws relating to releases or threatened releases of Hazardous Materials into the indoor or outdoor environment (including, without limitation, ambient air, surface water, groundwater, land, surface and subsurface strata) or otherwise relating to the manufacture, generation, processing, distribution, use, treatment, storage, release, transport, disposal or handling of Hazardous Materials.

	1.1.22	“Environmental Permits” means all permits, registrations, approvals, licenses, filings and submissions to any Government or other authority required by or made by or on behalf of the Acquired Companies under or pursuant to any Environmental Law.

	1.1.23	“Environmental Property” means any assets or real property currently or previously owned, leased, operated or used by the Acquired Companies or any Affiliate thereof to the extent liability for an Environmental Claim could be asserted against the Acquired Companies under any applicable Environmental Law.

	1.1.24	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

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	1.1.25	“Estimated Net Working Capital” has the meaning set forth in Section 2.3(a).

	1.1.26	“Excess Net Working Capital Amount” has the meaning set forth in Section 2.3(a).

	1.1.27	“Financial Statements” means (a) the unaudited balance sheets and income statements on an accrual basis of the Acquired Companies as of December 31, 2021, December 31, 2022, and December 31, 2023, (the “Year End Financial Statements”).

	1.1.28	“GAAP” means the accounting principles generally accepted in the United States, including as set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board, applied consistently throughout the periods involved.

	1.1.29	“Government” means the United States of America, any other nation or state, any federal, bilateral or multilateral governmental authority, state, any possession, territory, local, county, district, city or other governmental unit or subdivision, and any branch, entity, agency, or judicial body of any of the foregoing.

	1.1.30	“Hazardous Materials” means any chemicals, materials, other substances or wastes, in any amount or concentration, which are “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants” or words of similar import, and/or which are defined or regulated as dangerous, toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous or as a pollutant or contaminant, in each case under any applicable Environmental Law.

	1.1.31	“Income Taxes’’ means any Tax imposed upon or measured by net income or gross income (excluding any Tax based solely on gross receipts) including any interest, penalty, or additions thereto, whether disputed or not.

	1.1.32	“IRS” means the United States Internal Revenue Service.

	1.1.33	“Intellectual Property” means all intellectual property owned or used by the Acquired Companies, including, without limitation, all:

(a)

inventions, models, designs, developments, ideas, concepts, shop rights, proprietary processes and formulae, and items of proprietary know-how, information or data whether or not patentable, whether or not reduced to practice or whether or not yet made the subject of a pending patent application or applications;

(b)

ideas and conceptions of potentially patentable subject matter, including, without limitation, any patent disclosures, whether or not reduced to practice and whether or not yet made the subject of a pending patent application or applications;

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(c)

national (including the United States) and multinational statutory invention registrations, patents, patent registrations and patent applications (including all reissues, divisions, continuations, continuations-in-part, extensions and reexaminations) and all rights therein provided by multinational treaties or conventions and all improvements to the inventions disclosed in each such registration, patent or application or applications;

(d)

trademarks, service marks, trade dress, logos, trade names, domain names, business names and corporate names, whether or not registered, including all common law rights and registrations and applications for registration thereof, including, but not limited to, all marks registered in the United States Patent and Trademark Office, and the trademark offices of other nations throughout the world, and all rights therein provided by multinational treaties or conventions,

(e)

copyrights (registered or otherwise), copyrighted works, mask works, derivative works, and registrations and applications for registration thereof, and all rights therein provided by multinational treaties or conventions;

(f)

computer software, including, without limitation, source code, operating systems and specifications, data, data bases, files, programs, documentation and other materials related thereto;

(g)

trade secrets and confidential, technical or business information (including ideas, formulas, compositions, inventions, and conceptions of inventions whether patentable or unpatentable and whether or not reduced to practice);

(h)

whether or not confidential, technology (including know-how and show-how), manufacturing and production process and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, copyrightable works, financial, marketing and business data, projections, market studies, pricing and cost information, business and marketing plans and prospects, customer and supplier lists and information;

(i)

copies and tangible embodiments of all of the foregoing, in whatever form or medium;

(j)

rights to obtain and rights to apply for patents, to claim priority to earlier-filed patent applications, and to register trademarks and copyrights;

(k)

rights to sue and recover and retain damages and costs and attorneys’ fees for any present or past infringement of any of the intellectual property rights set forth above;

(l)

all intangible rights, in whatever form, recognized as protectable intellectual property under the laws of any country; and

(m)

all the goodwill associated with any of the foregoing, and licenses, sublicenses, assignments, and agreements in respect of any of the foregoing, in each case which are owned, used, licensed or assigned by or to the Acquired Companies.

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1.1.34 “Knowledge” means, with respect to any Person, such Person’s actual knowledge of facts or other information. The words “know,” “knowing” and “known” shall be construed accordingly.

1.1.35 “Law” means any statute, law, ordinance, decree, order, injunction, rule, directive, or regulation of any Government or quasi-governmental authority, and includes rules and regulations of any regulatory or self-regulatory authority compliance with which is required by any such statute, law, ordinance, decree, order, injunction, rule, directive, or regulation.

1.1.36 “Leased Real Property” has the meaning set forth in Section 3.12(b).

1.1.37 “Liabilities” or “Liability” means all debts, adverse claims, liabilities and/or obligations, direct, indirect, absolute or contingent, liquidated or unliquidated, whether accrued, vested or otherwise, and whether or not reflected or required to be reflected on the financial statements of a Person.

1.1.38 “Lien” means any lien, security interest, mortgage, indenture, deed of trust, pledge, charge, adverse claim, easement, restriction or other encumbrance, including, without limitation, any liens arising pursuant to any Environmental Law or in respect of any Tax.

1.1.39 “Material Adverse Effect” means any material adverse change to the Business, properties, assets, liabilities, profits, operations, results of operations or condition (financial or otherwise) of the Company, excluding, however, any of the following (either alone or in combination): (a) any adverse changes resulting from general economic, regulatory or political conditions; (b) any general condition affecting the industry in which the Company is engaged; (c) changes in any Law or appliable accounting regulations or principles; (d) the announcement or pendency of this Agreement or any of the transactions contemplated in this Agreement; (e) acts of war or terrorism or any escalation or material worsening of any such acts of war or terrorism existing as of the date of this Agreement; (f) a change against which the Company is fully insured; (g) an act of God, such as a hurricane, flood, pandemic, or other natural disaster; or (h) any matters set forth in a Disclosure Schedule.

1.1.40 “Material Contracts” has the meaning set forth in Section 3.19(a).

1.1.41 “Material Market Lease” is defined as the current operating premises at the current lease rate for an initial term of five (5) years with an Option for an additional five (5) year period at the then-market rate available, at a Two (2%) Percent escalation (to be provided by Seller’s).

1.1.42 “Net Working Capital” and “Working Capital” means the difference between (a) Current Assets of the Acquired Companies as of the close of business on the Closing Date, and (b) Current Liabilities of the Acquired Companies as of the close of business on the Closing Date. For the purposes of calculating Net Working Capital and Working Capital, the following costs and expenses shall be excluded: (i) all costs arising out of or relating to stock issuance, capital raising, or litigation expenses; and (ii) all finance charges. The accounts receivable letters and work-in-process shall be subject to a reserve for uncollectible and bad debt consistent with the Acquired Companies’ past practices and historical rates of collectability. All calculations of Net Working Capital and Working Capital in this Agreement shall be consistent with the sample calculation set forth on Schedule 1.1.42, which is to be provided prior to Closing.

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1.1.43 “Neutral Accounting Firm” means an independent accounting firm of nationally recognized standing that has not rendered services to any of Buyer, the Acquired Companies or the Sellers, or any Affiliate thereof, within twenty-four (24) months prior to the Agreement.

1.1.44 “Non-Income Taxes” means any Taxes other than Income Taxes.

1.1.45 “Order” means an order, writ, injunction, or decree of any court or Government.

“Ordinary Course” means, with respect to the Business of the Acquired Companies, only the ordinary course of commercial operations customarily engaged in by the Acquired Companies consistent with industry norms and the Acquired Companies’ prior practices, and specifically does not include (a) any activity (i) involving the purchase or sale of the Acquired Companies or of any product line or business unit of the Acquired Companies, (ii) involving modification or adoption of any Plan, or (iii) which requires approval by the board of directors or shareholders of the Acquired Companies, or (b) the incurrence of any material Liability for any tort or any breach or violation of or default under any Contract or Law.

1.1.46 “Owned Real Property” has the meaning set forth in Section 3.12(a).

1.1.47 “Party” or “Parties” means any one or more of the parties to this Agreement, as the context may require.

1.1.48 “Permitted Liens” means, collectively, (a) Liens that are disclosed in the Disclosure Schedule, (b) Liens for Taxes, fees, levies, duties or other governmental charges of any kind which are not yet delinquent or are being contested in good faith by appropriate proceedings, (c) Liens for landlords, common carriers, warehousemen, mechanics, materialmen, laborers, employees, suppliers or similar liens arising by operation of law for amounts which are owed, but not yet delinquent, (d) purchase money security interests relating to the acquisition of goods in the Ordinary Course equal to, or less than, Five Thousand Dollars ($5,000) per individual acquisition, (e) in the case of real property, any matters, restrictions, covenants, conditions, limitations, rights, rights of way, encumbrances, encroachments, reservations, easements, agreements and other matters of record, such state of facts of which an accurate survey of the property would reveal, and (f) Liens arising from or related to immaterial indebtedness or capital leases of the Acquired Companies or its Subsidiaries equal to, or less than, Five Thousand Dollars ($5,000) in each case.

1.1.49 “Person” shall be construed broadly and shall include an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a Government entity (or any department, agency or political subdivision thereof).

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1.1.50 “Plan” means any agreement, arrangement, plan, or policy, whether or not written, that involves (a) any pension, retirement, profit sharing, savings, deferred compensation, bonus, stock option, stock purchase, phantom stock, health, welfare, or incentive plan; or (b) welfare or “fringe” benefits, including without limitation vacation, holiday, severance, disability, medical, hospitalization, dental, life and other insurance, tuition, company car, club dues, sick leave, maternity, paternity or family leave, or other benefits; or (c) any employment, consulting, engagement, or retainer agreement.

1.1.51 “Pre-Closing Tax Period” has the meaning set forth in Section 6.5(a).

1.1.52 “Purchase Price” has the meaning set forth in Section 2.2.1.

1.1.53 “Qualified Offering” shall be defined as a public offering of $15,000,000 or more on a nationally listed exchange as set forth in Section 2.8.

1.1.54 “Real Property” means, collectively, the Owned Real Property and the Leased Real Property.

1.1.55 “SBA Loans” means, collectively, the loans owed and outstanding by the various Sellers to the United States Small Business Administration.

1.1.56 “Seller(s)” has the meaning set forth in the Preamble to this Agreement.

1.1.57 “Sellers Knowledge” means each Seller’s separate and actual knowledge of facts or other information.

1.1.58 “Shortfall Net Working Capital Amount” has the meaning set forth in Section 2.3(a).

1.1.59 “Subsidiary” has the meaning set forth in the Recitals to this Agreement.

1.1.60 “Target Net Working Capital” means the result of net current assets (including but not limited to the IRS retention credit receivable) minus net current liabilities. At the time of the closing the net working capital of all entities combined will not be less than zero.

1.1.61 “Tax” or “Taxes” means all taxes, charges, fees, levies, or other like assessments, including without limitation, all federal, possession, state, city, county and foreign (or governmental unit, agency, or political subdivision of any of the foregoing) income, profits, employment (including Social Security, unemployment insurance and employee income tax withholding), franchise, gross receipts, sales, use, transfer, stamp, occupation, property, capital, severance, premium, windfall profits, customs, duties, ad valorem, value added and excise taxes; pension guaranty and other similar premiums; and any other Government charges of the same or similar nature; including any interest, penalty or addition thereto, whether disputed or not and including any obligations to indemnify or otherwise assume or succeed to the Tax Liability of any other Person. Any one of the foregoing Taxes shall be referred to sometimes as a “Tax.”

1.1.62 “Tax Dispute Accountant” has the meaning set forth in Section 6.5(g)(i).

1.1.63 “Tax Gross-Up Payment” has the meaning set forth in Section 2.2.1 (f).

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1.1.64 “Tax Returns” means all reports, estimates, declarations, claims for refund, information statements and returns relating to or required by Law to be filed by the Acquired Companies in connection with any Taxes, and all information returns (e.g., Form W-2, Form 1099) and reports relating to Taxes and Taxes payable by, pursuant to, or in connection with, any Plans, including any amendment or supplement thereof. Any one of the foregoing Tax Returns shall be referred to sometimes as a “Tax Return.”

1.1.65 “Third Earn-Out Payment” has the meaning set forth in Section 2.6(d).

1.1.66 “Working Capital Accounting Arbitrator” has the meaning set forth in Section 2.5(d).

1.1.67 “Working Capital Accounting Arbitration Delivery Date” has the meaning set forth in Section 2.5(d).

1.1.68 “Working Capital Adjustment” means the positive or negative adjustment to the Closing Payment on a dollar-for-dollar basis to the extent that the Net Working Capital is greater than or less than the Target Net Working Capital.

1.1.69 “Working Capital Objection Notice” has the meaning set forth in Section 2.5(d).

1.1.70 “Working Capital Objection Period” has the meaning set forth in Section 2.5(d).

1.2 Intentionally Omitted

ARTICLE 2

COVENANTS AND UNDERTAKINGS

2.1 Purchase and Sale of Shares. At the Closing, subject to the terms and conditions of this Agreement, Buyer shall purchase and accept from Sellers and the Sellers shall sell, transfer, and deliver to Buyer, the Company Stock, in exchange for the Purchase Price set forth in Sections 2.2.

2.2 Consideration for Sale of Company Stock.

2.2.1 Consideration and Payment Terms. The aggregate consideration for the Company Stock (the “Purchase Price”) shall be: (a) the sum of Fifteen Million, Eight Hundred Thousand Dollars ($15,800,000.00) to be paid in combination of cash, earn out, performance bonus, and Buyer equity as set forth below;

(a) A cash payment to the Sellers of One Hundred Thousand Dollars ($100,000), as a nonrefundable deposit, prior to the execution of this Agreement.

(b) A cash payment to the Sellers, of the greater of Five Million Dollars ($5,000,000) or the amount sufficient to pay the SBA Loans in full, on the Closing Date (the “Closing Payment”) which payment will first be used to satisfy the outstanding balance of the SBA Loans.

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(c) An additional cash payment to the Sellers in an amount equal to Nine Million Five Hundred Thousand ($9,500,000) minus the amounts previously paid at closing pursuant to Sections 2.2.1(a) and (b) above, payable within one twenty (120) days of the Closing Date and secured by a pledge of the Company Stock.

(d) The issuance in equity from First Choice Healthcare Solutions, Inc.equal to Two Million Four Hundred Thousand Dollars ($2,400,000.00) (the “NEW Equity Consideration”) allocated to the Sellers as set forth in Schedule 2.2.1(d), which is to be provided prior to Closing, and subject to the terms and conditions of the Equity Agreement set forth in Schedule___________________ which includes a “Make Good” One Hundred-Eighty (180) day Collar which terminates at such time Sellers can either sell such securities or 180 days from the date of Closing, whichever is earlier.

(e) A revenue based earnout calculated as five (5%) percent of the net revenue collections of the Seller capped at a maximum amount of $2,900,000 to be paid quarterly to Seller. In addition to the specified Consideration, Seller shall be entitled to a bonus payment (“Bonus Payment”) in accordance with the terms of paragraph 4 (f) below. The allocation of the cash payments to Seller shall be 100% allocated 60%-40% to Point Medical Services, Inc. and PointeMed Pharmacy Inc., and $1,000,000 of the revenue share earnout shall be allocated to Livewell Drugstore, Inc. acquisition subject to adjustment as reasonably determined by Seller’s accountant.

(f) Seller will receive a “Bonus Payment” of $1,000,000 if during the one (1) year period starting with the sixth (6) full month after closing, the Company experiences a thirty (30%) increase in net collectible revenue compared to the most recent twelve (12) month period prior to the Closing. . Buyer shall pay to Seller, or its designee a 60% cash and/or 40% stock Bonus Payment (issued at the rolling 20-day Variable Weighted Average Price. For the purposes of Net Revenue calculation, accounting shall be done using GAAP on a consistent basis with past practices and treating the operations of CPI as a stand-alone enterprise.

2.3 Working Capital Adjustment. The Closing Payment shall be subject to the Working Capital Adjustment on a dollar-for-dollar basis to the extent that the Net Working Capital is greater than the Target Net Working Capital as set forth below:

(a) Within ten (10) Business Days prior to the Closing Date, but in no event less than three (3) Business Days prior to the Closing Date, the Sellers shall (or shall cause the Acquired Companies’ accountants to) prepare and deliver to Buyer a certificate that contains a good faith and reasonable best estimate of the Net Working Capital as of 11:59 p.m. Eastern Standard Time (“EST”) on the Closing Date (the “Estimated Net Working Capital”) which Estimated Net Working Capital shall be attached as Schedule 2.3(a) to this Agreement, which is to be provided prior to Closing. If the Estimated Net Working Capital exceeds the Target Net Working Capital (the “Excess Net Working Capital Amount”), then the Closing Payment payable to the Sellers by the Buyer shall be increased by the Excess Net Working Capital Amount. If the Estimated Net Working Capital is less than the Target Net Working Capital (the “Shortfall Net Working Capital Amount”), then the Closing Payment payable to the Sellers by the Buyer shall be decreased by the Shortfall Net Working Capital Amount. If the Estimated Net Working Capital is equal to the Target Net Working Capital, then no adjustments shall be made pursuant to this Section 2.3(a).

2.4 - 2.7 Intentionally Omitted.

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2.8 Closing. The Closing shall occur at the offices of the Company located at 1996 Kingsley Avenue, Orange Park, Florida 32073 or at such other time or place as the Parties may mutually agree in writing. The Closing shall occur contemporaneously with the date the Buyer’s registration statement for common stock in a minimum amount of Ten Million Dollars ($10,000,000.00) (the “Qualified Offering”) is declared effective by the SEC (the “Closing Date”), which shall occur no later than April 30, 2024. Buyer shall notify Sellers of the Closing Date at least ten (10) Business Days prior. In the event Buyer does not close on this transaction by, Seller shall be entitled to $100,000 in liquidated damages as a break-up fee and shall offset the Break-up Fee against the $100,000 nonrefundable deposit made at the signing this Agreement.

2.9 Sellers Closing Documents. At the Closing, the Sellers shall deliver to Buyer the following:

(a)

a Closing Certificate meeting the requirements set forth in Section 7.1;

(b)

an Employment Agreement for Dr. Gary C. Bernard in the form acceptable to Dr. Gary C. Barnard and to be attached when agreed to as Schedule 2.9(b), which is to be provided prior to Closing, including a 2- year noncompetition clause applicable within a twenty (20) mile radius of the Orange Park Location. The Employment Agreement will also contain a Confidentiality Clause and a mutual Non-Disparagement Clause.

(c)

certificates (or a duly signed and notarized Affidavit of Lost Stock Certificate) representing all of the Company Stock, free and clear of all Liens (other than restrictions solely evidencing the restricted nature of such Shares pursuant to applicable state and federal securities laws) duly endorsed to Buyer or in blank or accompanied by duly executed stock powers;

(d)

the written resignation of each member of the Board of Directors, and each executive officer of the Acquired Companies effective as of the Closing Date;

(e)

all required consents and approvals from Governments and third parties under Material Contracts;

(f)

the written release of all Liens (other than Permitted Liens) relating to the assets of the Acquired Companies and the Company Stock, executed by the holder of or parties to each such Lien, which releases shall be reasonably satisfactory in substance and form to Buyer and its counsel;

(g)

a Certificate, signed by the Secretary of the Acquired Companies, attaching thereto, and certifying as true and correct, (i) copies of resolutions duly passed by the Board of Directors of the Acquired Companies approving the entry of the Acquired Companies into this Agreement, and authorizing the Acquired Companies to perform all of its obligations thereunder; (ii) the Articles of Incorporation of the Acquired Companies, including all amendments thereto, and (iii) the Bylaws of the Acquired Companies, including all amendments thereto;

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(h)

a certificate of good standing of the Acquired Companies dated within ten (10) Business Days of the Closing Date from the Florida Secretary of State (and of the Secretary of State of each State in which the Acquired Companies are qualified or licensed as a foreign corporation);

(i)

a new ten (10) year Material Market Lease on the current operating premises at the initial term of ten (10) years with an Option for an additional ten (10) year period at the then-market rate available. The Lease will include a five (5%) Percent escalation per year (to be provided by Seller’s).

	(j)	a Selling Shareholder Agreement with a Non-Disparagement, executed by Bernard.

	(k)	INTENTIONALLY LEFT BLANK

(l)

all share transfer books, minute books and other corporate records of the Acquired Companies; and

(m)

all other documents, certificates, schedules, agreements, instruments or writings reasonably required to be delivered by the Sellers at or prior to the Closing pursuant to this Agreement.

2.10 Buyer’s Closing Documents. At the Closing, Buyer shall deliver to the Sellers the following:

(a)

The Closing Payment by wire transfer to the Seller in the amounts set forth on Schedule 2.10(a) which is to be provided prior to Closing;

(b)

The payment in full of the outstanding balance of the SBA Loans by wire transfer;

(c)

The Post-Closing Working Capital shall be paid directly to Seller if applicable;

(d)

The NEW Equity Consideration allocated to the Sellers as set forth in Schedule 2.2.1(d) which is to be provided prior to Closing;

(e)

A Closing Certificate meeting the requirements set forth in Section 8.1;

(f)

Certificate, signed by the Secretary of the Buyer, attaching thereto, and certifying as true and correct, (i) copies of resolutions duly passed by the Board of Directors of the Buyer approving the entry of the Buyer into this Agreement, and authorizing the Buyer to perform all of its obligations thereunder; (ii) the Articles of Incorporation of the Buyer, including all amendments thereto, and (iii) the Bylaws of the Buyer, including all amendments thereto;

(g)

a certificate of good standing of the Buyer, dated within five (5) Business Days of the Closing Date, from the Delaware Secretary of State; and

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(h)

all other documents, certificates, schedules, agreements, instruments or writings required to be delivered by the Sellers or the Acquired Companies at or prior to the Closing pursuant to this Agreement.

(i)

An executed promissory note and pledge agreement for the amounts to be paid per Section 2.10(c).

ARTICLE 3

REPRESENTATIONS AND WARRANTIES OF THE ACQUIRED COMPANIES

To the Seller’s Knowledge, the Sellers represent and warrant the following, as of the date of this Agreement and as of the Closing Date with respect to the Acquired Companies. For the avoidance of doubt, each and every representation and warranty set forth in this Article 3 is subject to the Seller’s Knowledge and each and every representation is to be interpreted as if the words “To the Seller’s Knowledge” preceded each and every sentence and/or independent clause in this Article 3.

3.1	Corporate Existence and Power.

(a)

Each Acquired Company is a corporation validly existing and in good standing under the laws of the State of Florida. The Sellers have made available to Buyer true, complete and correct copies of its Articles of Incorporation and Bylaws, as currently in effect.

(b)

The Acquired Companies have all requisite corporate power and authority to own, lease and use their assets and to transact the Business, and hold all authorizations, franchises, licenses and permits required therefor and all such authorizations, franchises, licenses and permits are valid and subsisting. Each Acquired Company is in good standing in each of the jurisdiction(s) where it is duly licensed or qualified to do business as a foreign corporation and in any other jurisdiction where such license or qualification is required, and is in good standing in each such jurisdiction, except for jurisdictions where the failure to be so licensed or qualified would not, individually or in the aggregate, have a Material Adverse Effect.

(c)

The Acquired Companies have the corporate power, authority and capacity to execute and deliver this Agreement, to perform each of their obligations hereunder and in each Schedule attached hereto, and to consummate the transactions contemplated hereby and thereby.

3.2	Valid and Enforceable Agreement; Authorization; Non-contravention.

(a)

This Agreement has been duly executed and delivered by the Acquired Companies, and constitutes a legal, valid and binding obligation of the Acquired Companies, enforceable against the Acquired Companies in accordance with its terms.

(b)

The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby do not require any independent corporate action on the part of the Acquired Companies.

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(c)

The Acquired Companies are not a party to, subject to or bound by any Contract, Law or Order which does or would (i) conflict with or be breached or violated or their obligations thereunder accelerated or increased (whether or not with notice or lapse of time or both) by the execution, delivery or performance by the Acquired Companies of this Agreement, or (ii) prevent the carrying out of the transactions contemplated hereby. Except as otherwise set forth in Section 3.2(c), no permit, consent, waiver, approval or authorization of, or declaration to or filing or registration with, any Government or third party is required in connection with the execution, delivery or performance of this Agreement by the Acquired Companies, or the Acquired Companies’ consummation of the transactions contemplated hereby, except for any such permits, consents, waivers, approvals, authorizations, declarations, filings or registrations the failure of which to obtain would not have a Material Adverse Effect. The transactions contemplated hereby will not result in the creation of any Lien against the Acquired Companies or any of its properties or assets, nor in the cancellation or modification of any license, agreement or arrangement to which an Acquired Company is a party, except for any such cancellations or modifications which would not, individually or in the aggregate, produce a Material Adverse Effect.

3.3	Capitalization and Ownership.

(a)

The authorized capital stock of the Acquired Companies, and the names, addresses and holdings of the record holders thereof are set forth in Schedule 5.3 which is to be provided prior to Closing. All of the Company Stock was duly authorized and validly issued, and are fully paid and non-assessable without restriction on the right of transfer thereof (other than restrictions on transfer solely pursuant to applicable state and federal securities laws). Except for the Buyer’s rights pursuant to this Agreement, or as otherwise set forth on Schedule 3.3 which is to be provided prior to Closing, (i) there are no authorized or outstanding (A) securities of the Acquired Companies other than the Company Stock, or (B) warrants, preemptive rights, other rights, or options with respect to any securities of the Acquired Companies, and (ii) neither the Acquired Companies nor any Seller is subject to any obligation to issue, sell, deliver, redeem, exchange, convert, repurchase, substitute or otherwise transfer, acquire or retire the Company Stock Shares or any other securities of the Acquired Companies.

(b)

Other than the Subsidiary, the Company does not have any other subsidiaries. Except as set forth on Schedule 3.3 which is to be provided prior to Closing, the Acquired Companies do not directly or indirectly own or have any capital stock or other equity interest in any other Person (including, without limitation, any contractual, joint venture, profit sharing or other similar quasi-equity arrangement), and there are no Contracts to effect any of the foregoing to which an Acquired Company is a party.

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3.4

Financial Statements. Attached hereto as Schedule 3.4, which is to be provided prior to Closing, are the most recent Financial Statements. The Financial Statements (i) have been prepared from, and are in accordance with, the books and records of the Acquired Companies consistently applied, (ii) are complete and correct and in accordance with such books and records, (iii) present fairly the financial position and results of operations of the Acquired Companies in all material respects at the dates and for the periods indicated, (iv) have been prepared in accordance with GAAP (except for year-end adjustments and notes with respect to any interim financial statements) or are accompanied by a statement disclosing any deviations from GAAP.

3.5	Events Subsequent to June 30, 2023. Since June 30, 2023, except as clearly reflected in the Interim Financial Statements or as set forth on Schedule 3.5, which is to be provided prior to Closing, there has been no:

(a)

change in the business or condition (financial or otherwise), operations or results of operations of the Acquired Companies, current prospects, other than changes in the Ordinary Course (which changes have not, individually or in the aggregate, had a Material Adverse Effect);

(b)

damage, destruction or loss, whether covered by insurance or not, affecting the tangible assets of the Acquired Companies which individually exceeds $25,000 or in the aggregate exceeds $100,000;

(c)

material adverse change in the Acquired Companies’ relationship with any of the suppliers, customers, distributors, employees, consultants, lessors, licensors, licensees or other third parties;

(d)

declaration, setting aside, or payment of any dividend or any distribution (in cash or in kind) with respect to any securities of the Acquired Companies;

(e)

sale or direct or indirect redemption, purchase or other acquisition of securities of the Acquired Companies;

(f)

increase in or commitment to increase compensation, benefits, or other remuneration to or for the benefit of any employee, shareholder, director, officer, or agent of the Acquired Companies, or any benefits granted under any Plan with or for the benefit of any such employee, director, officer, or agent, except for increases in salary, wages or benefits in the Ordinary Course and provided that such increase or commitment does not individually exceeds $10,000 or in the aggregate exceeds $40,000;

(g)

accrual or arrangement, whether direct or indirect, for, or payment of, bonuses or special compensation of any kind, or any severance or termination pay, to any present or former officer, director, or employee of the Acquired Companies, other than in the Ordinary Course and provided that any such accrual or arrangement does not individually exceed $10,000 or in the aggregate exceed 40,000;

(h)

labor dispute or activity or proceeding by a labor union or threat thereof or other event or condition of any character that could have a Material Adverse Effect;

(i)

material transaction entered into or carried out by the Acquired Companies in connection with the Business other than in the Ordinary Course or as disclosed in the Financial Statements or Interim Financial Statements;

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(j)

borrowing or incurrence of any indebtedness (including letters of credit and foreign exchange contracts), contingent or otherwise, by or on behalf of the Acquired Companies or any endorsement, assumption, or guarantee of payment or performance of any such indebtedness or any Liabilities of any other Person by or on behalf of the Acquired Companies other than in the Ordinary Course and provided that any such borrowing or incurrence of indebtedness does not individually exceed $10,000 or in the aggregate exceed $ 40,000;

(k)

change made by the Acquired Companies with respect to its Tax or financial accounting, or the making of any Tax election;

(l)

grant of any Lien (other than a Permitted Liens) with respect to the assets, properties or rights of the Acquired Companies;

(m)

transfer of any material assets, properties or rights (tangible or intangible) of the Acquired Companies, other than arm’s-length sales, leases, or dispositions in exchange for not less than the fair market value thereof and in the Ordinary Course;

(n)

issuance by the Acquired Companies of any security, including without limitation any option, warrant or right to receive any security;

(o)

change in the authorized capital or outstanding securities of the Acquired Companies;

(p)

payment of any obligation or liability (absolute or contingent) by the Acquired Companies, other than current liabilities reflected in or shown on the Financial Statements and cunent liabilities incurred in the Ordinary Course;

(q)

change in any accounting methods or practices by the Acquired Companies (including, without limitation, any change in depreciation or amortization methods, policies, or rates);

(r)

entry into, or amendment, modification, or termination of, any Material Contracts;

(s)

waiver or release of any right or claim of the Acquired Companies or cancellation of any debts or claims, except in the Ordinary Course and provided that any such waiver or release does not individually exceed $5,000 or in the aggregate exceed $25,000 other than those currently being negotiated by Seller which will be paid prior to closing;

(t)

capital expenditure by the Acquired Companies individually exceeding $ 10,000 or in the aggregate exceeding $40,000; and

(u)

any agreement by, or Board resolution authorizing, the Acquired Companies to do any of the foregoing items.

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3.6	Undisclosed Liabilities.

(a)

The Acquired Companies do not have any Liabilities, except:

(i)

those Liabilities identified on the Financial Statements and/or the Interim Financial Statements; or

(ii)

as incurred in the Ordinary Course since the date of the most recent Financial Statements or the Interim Financial Statements (none of which has had or may reasonably be expected to have a Material Adverse Effect on the Acquired Companies).

(b)

Except as disclosed herein, there is no currently existing condition or circumstance which would reasonably be expected to result in such a Liability which would have a Material Adverse Effect.

3.7

Taxes.

(a)

The Acquired Companies have filed (or will have filed), or caused to be filed, on a timely basis all Tax Returns and such Tax Returns are true, correct and complete in all respects. Without limiting the foregoing, none of the Tax Returns contains any position that is, or would be, subject to penalties under Section 6662 of the Code (or any corresponding provisions of state, local or foreign Tax law). The Acquired Companies have not entered into any “listed transactions” as defined in Section 1.6011-4(b)(2) of the Treasury Regulations, and the Acquired Companies have properly disclosed all reportable transactions as required by Section 1.6011-4 of the Treasury Regulations.

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(b)

Schedule 3.7, which is to be provided prior to Closing, lists all Tax Returns for periods up to the Closing Date (whether or not the period ends on such date) that have not been filed on or before the Closing Date.

(c)

All Taxes due and owing by the Acquired Companies (whether or not reflected on any Tax Return) have been timely and fully paid when due and there are no grounds for the assertion or assessment of additional Taxes against the Acquired Companies or their assets.

(d)

The Acquired Companies have timely and properly withheld and paid all Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder or other third party, including, but not limited to, amounts required to be withheld under Sections 1441 and 1442 of the Code, or any similar provision under foreign law.

(e)

The Acquired Companies have filed or caused to be filed with the appropriate Government entity all unclaimed property reports required to be filed and has remitted to the appropriate Government entity all unclaimed property required to be remitted.

(f)

There are no Liens for Taxes (other than for current Taxes not yet due and payable) upon any assets of the Acquired Companies.

(g)

The Acquired Companies are not a party to or bound by any Tax indemnity, Tax sharing, Tax allocation or other similar agreement.

(h)

The Acquired Companies (i) are not and never has been a member of an “affiliated group” within the meaning of Section 1504 of the Code; and (ii) do not have any Liability for the Taxes of any Person under Treasury regulation Section 1.1502-6 (or similar provision of state, local or foreign law) as a transferee or successor, by contract or otherwise.

(i)

The Acquired Companies are not a party to or a partner in any joint venture, partnership or other arrangement or contract that is, or could be, treated as a “partnership” for federal income tax purposes.

(j)

The Acquired Companies have not conducted business outside the State of Florida in any manner that would subject it to the income tax of a state other than the State of Florida. The Acquired Companies do not have and have not had a permanent establishment in any foreign country, as defined in any applicable tax treaty or convention between the United States and such foreign country, or a presence in a foreign country that could subject an Acquired Company to income tax in such foreign country.

(k)

No federal, state, local or foreign Tax audits or administrative or judicial Tax proceedings are pending or being conducted with respect to the Acquired Companies.

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(l)

The Acquired Companies have not received from any federal, state, local or foreign Tax authority (including jurisdictions where an Acquired Company has not filed a Tax Return) any (i) notice indicating an intent to open an audit or other review; (ii) request for information related to Tax matters; or (iii) notice or deficiency or proposed adjustment for any amount of Tax proposed, asserted, or assessed by any Tax authority against the Acquired Companies.

(m)

The Acquired Companies have not waived any statutes of limitation in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.

(n)

True, correct, and complete copies of all income Tax Returns, Tax examination reports and statements of deficiencies assessed against, or agreed to with respect to the Acquired Companies with respect to the last five (5) years with the IRS or any taxing authority have been made available to Buyer.

3.8

Accounts Receivable. The accounts receivable of the Acquired Companies (collectively, the “Accounts Receivable”) are (to the extent not yet paid in full) valid, genuine and existing and arose or will have arisen from bona fide sales of products or services actually made in the Ordinary Course. The Accounts Receivable are not subject to, and the Acquired Companies have received no notice of, any counterclaim, set-off, defense or Lien with respect to the Accounts Receivable. Except to the extent of any reserve set forth on the Financial Statements, the Interim Financial Statements, or to the extent paid prior to Closing, the Accounts Receivable are and will at Closing be generally collectible at a forty percent (40%) rate. No agreement for deduction, free goods, discount or deferred price or quantity adjustment has been made with respect to any Accounts Receivable, except in the Ordinary Course, and

3.9

Inventories; Consignment. Seller and Buyer shall conduct a closing inventory two (2) days from the Closing Date. Any and all inventory of Seller shall be owned without any liens, claims or encumbrances, except any liens from the SBA, which will be paid in full at Closing and Community Bank which will be released prior to Closing.

3.10

No Breach of Law or Governing Document. The Acquired Companies are not (i) in default under or in breach or violation of any Law, or of any provision of their Articles of Incorporation or Bylaws, or (ii) the provisions of any Government permit, franchise, or license, which breach or violation of such permit, franchise, or license would have a Material Adverse Effect on the Acquired Companies.

Neither the Acquired Companies nor the Sellers have received any notice alleging such default, breach or violation. Neither the execution of this Agreement nor any Schedule, nor the Closing, does or will constitute or result in any such default, breach or violation.

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Litigation.

(a)

Except as set forth in Schedule 3.10, which is to be provided prior to Closing, there is no suit, claim, litigation, proceeding (administrative, judicial, or in arbitration, mediation or alternative dispute resolution), Government or grand jury investigation, or other action (any of the foregoing, an “Action”), pending, threatened, anticipated or contemplated, against the Acquired Companies (or against any Acquired Companies, solely with respect to the Acquired Companies or the Business), involving the Business, or involving any of the Acquired Companies’ properties, assets, rights or capital stock, or any of its directors, officers, agents, or other personnel in their capacity as such, including without limitation any Action challenging, enjoining, or preventing this Agreement, or the consummation of the transactions contemplated hereby.

(b)

The Acquired Companies are not currently and have not been, subject to any Order other than Orders of general applicability.

(c)

The Acquired Companies have not been or been threatened to be subject to any Action or Order relating to personal injury, death, or property or economic damage arising from products sold, licensed or leased and services performed by the Acquired Companies.

3.11	Owned and Leased Real Property.

(a)

Neither the Company nor the Subsidiary own any real property (the “Owned Real Property

(b)

Set forth in Schedule 3.11(b), which is to be provided prior to Closing, is a description of each lease under which the Acquired Companies are the lessee of any real property (“Leased Real Property”). The Acquired Companies have made available to Buyer a true, correct and complete copy of each lease identified on Schedule 3.11(b) which is to be provided prior to Closing. The premises or property described in such leases are presently occupied or used by the Acquired Companies as lessee under the terms of such leases. All rentals due under such leases have been paid and there exists no default by the Acquired Companies or by any other party to such leases under the terms of such leases and no event has occurred which, upon passage of time or the giving of notice, or both, would result in any event of default by the Acquired Companies or by any other party to such leases, or prevent or limit the Acquired Companies from exercising and obtaining the benefits of any rights or options contained therein. The Acquired Companies have all right, title and interest of the lessee under the terms of said leases, free of all Liens other than Permitted Liens and, all such leases are valid and in full force and effect.

(c)

All improvements located on, and the use presently being made of, the Leased Real Property comply with all applicable zoning and building codes, ordinances and regulations and all applicable fire, environmental, occupational safety and health standards and similar standards established by Law and the same use thereof by the Acquired Companies and Buyer following Closing will not result in any violation of any such code, ordinance, regulation or standard. The present use and operation of the Leased Real Property does not constitute a non-conforming use and is not subject to a variance. There is no proposed, pending or threatened change in any such code, ordinance, regulation or standard which would have a Material Adverse Effect.

(d)

No proceeding is pending or, threatened which could adversely affect the zoning classification of the Leased Real Property.

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(e)

There is no condition affecting the Leased Real Property or the improvements located thereon which requires repair or correction to restore the same to reasonable operating condition.

3.12	Personal Property; Title to Assets.

(a)

Schedule 3.12, which is to be provided prior to Closing, sets forth a complete and correct list and brief description of each item of equipment, furniture, fixtures and other tangible personal property owned or leased by the Acquired Companies and having an individual book value in excess of $10,000.

(b)

Except with respect to leases set forth in Schedule 3.12 and Schedule 3.13 hereof, (or which, by the terms of such Sections, are not required to be set forth in said Schedules), the Acquired Companies have good and marketable title to and is the sole and exclusive owner of all right, title and interest in and to all of the property used by it or necessary to conduct their Business, including in each case all personal property reflected on the Financial Statements or acquired after the date thereof (except any personal property subsequently sold in the Ordinary Course), free and clear of all Liens except for Permitted Liens.

3.13

Personal Property Leases. Set forth in Schedule 3.13, which is to be provided prior to Closing, is a description of each lease having annual lease payments in excess of $50,000 under which an Acquired Company is the lessee of any personal property, and including the location of such property. The Acquired Companies have made available to Buyer a tiue, correct and complete copy of each lease identified on Schedule 3.13. The property described in such leases is presently used by the Acquired Companies as lessee in compliance with the terms of such leases. All rentals due under such leases have been paid and there exists no default by the Acquired Companies or, by any other party to such leases under the terms of such leases and no event has occurred which, upon passage of time or the giving of notice, or both, would result in any event of default by the Acquired Companies or, by any other party to such leases, or prevent the Acquired Companies from exercising and obtaining the benefits of any rights or options contained therein. The Acquired Companies have all right, title and interest in the leasehold interests of the lessee under the terms of said leases, free of all Liens other than Permitted Liens and all such leases are valid and in full force and effect.

3.14

Necessary Property. The assets owned or leased by the Acquired Companies constitute all of the property and property rights used or necessary for the conduct of the Business in the manner and to the extent presently conducted by the Acquired Companies. There exists no condition, restriction or reservation affecting the title to or utility of such assets of the Acquired Companies which would prevent the Acquired Companies or Buyer from utilizing such assets, or any part thereof, after the Closing to the same full extent that the Acquired Companies might continue to do so if the transactions contemplated hereby did not take place.

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3.15

Use and Condition of Property, Location. All the assets of the Acquired Companies are in good operating condition and repair, subject to ordinary and normal wear and tear, as reasonably required for its use as presently conducted or planned by the Acquired Companies, and conform in all material respects to all applicable Laws, and no notice of any violation of any Law relating to any of such property or assets has been received by the Acquired Companies except such as have been fully complied with. No property or assets of the Acquired Companies, other than inventory in transit or on consignment or bailment, are in the possession of others and the Acquired Companies do not hold any property, other than inventory on consignment. All of the tangible property of the Acquired Companies have been maintained in accordance with normal industry practice and is suitable for the purposes for which it is presently used.

3.16

Licenses and Permits. The Acquired Companies possess all licenses, permits and other authorizations and Governmental approvals required for the conduct of the Business in the manner in which it is currently being conducted. Each such license or permit is valid and in full force and effect and is not subject to any pending or, threatened or contemplated administrative or judicial proceeding to revoke, cancel or declare such license or permit invalid in any respect, except where such action would not have a Material Adverse Effect on the Business. Upon Closing, the Acquired Companies will have all right and authority to conduct its activities pursuant to such licenses and permits. The Acquired Companies are in compliance in all respects with such licenses and permits except where such noncompliance would have a Material Adverse Effect. No such license or permit has been, or is threatened to be, revoked, canceled, suspended or materially adversely modified. Neither the execution of this Agreement nor the Closing does or will constitute or result in a material default under or violation of any such license or permit.

3.17	Environmental Matters.

(a)

There is no Environmental Claim pending or, threatened or contemplated, against the Acquired Companies, or pending, or, threatened or contemplated, against any Person whose Liability for such Environmental Claim the Acquired Companies have or may have incurred, retained, succeeded to, or assumed either contractually, by operation of law or otherwise, relating to the Environmental Property, and the Acquired Companies have received no notice or other communication from any Governmental agency with respect to any such Liability or alleging or asserting against the Acquired Companies or any Affiliate thereof any violation of Environmental Law.

(b)

There are no past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the handling, manufacture, treatment, storage, use, generation, release, emission, discharge, presence or disposal of any Hazardous Materials, either collectively, individually, or severally, that could form the basis of any Environmental Claim against the Acquired Companies, or against any Person whose Liability for any Environmental Claim the Acquired Companies have incurred, retained, succeeded to, or assumed either contractually, by operation of law or otherwise, relating to the Environmental Property.

(c)

There has been no release of any Hazardous Material on, in, at, under or from the Environmental Property, which would or may result in material Liabilities of or to the Acquired Companies, and the Acquired Companies have no Liability for any off-site disposal of any Hazardous Materials which would or may result in material Liabilities of or to the Acquired Companies.

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(d)

There are no above ground or underground storage tanks currently or formerly located on any Environmental Property or which would or may result in Liabilities which would or may result in material Liabilities of or to the Acquired Companies. There are no Hazardous Materials on any Environmental Property which would or may result in Liabilities which would or may result in material Liabilities of or to the Acquired Companies.

3.18	Contracts and Commitments.

(a)

Schedule 3.18, which is to be provided prior to Closing, lists each of the Contracts of the Acquired Companies described below (such Contracts being hereinafter referred to as the “Material Contracts”), true and complete copies of which have been or will be provided to the Buyer:

(i)

any Contract providing for the sale of products or the provision of services, in any such case, by the Acquired Companies to any other Person with a value reflected on the books of the Acquired Companies (representing, as applicable, the aggregate value of the money, services, goods, property or products to be expended, transferred or received by the Acquired Companies) in excess of $25,000;

(ii)

any single Contract providing for an expenditure by the Acquired Companies in excess of $25,000, or Contracts with the same or affiliated vendor(s) providing for an expenditure by the Acquired Companies in excess of $50,000;

(iii)

any Contract to sell products or to provide services to third parties which (i) the Acquired Companies know is at a price which would result in a net loss on the sale of such products or provision of such services or (ii) contains terms or conditions which the Acquired Companies cannot reasonably expect the Acquired Companies to satisfy or fulfill in all material respects;

(iv)

any Contract for materials, supplies, component parts or other items or services in excess of the normal, ordinary, usual and current requirements of the Acquired Companies or at a price in excess of the current reasonable market price at the time of such Contract;

(v)

any Contract pursuant to which the Acquired Companies are the lessor or sublessor of, or permits any third party to operate, any real or personal property;

(vi)

any revocable or irrevocable power of attorney granted to any Person for any purpose whatsoever;

(vii)

any loan agreement, indenture, promissory note, conditional sales agreement, mortgage, security agreement, pledge, letter of credit arrangement, guarantee, endorsement, assumption, indemnity, surety, foreign exchange contract, accommodation or other similar type of Contract;

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(viii)

any other Contract which involves (i) a sharing of profits, (ii) future payments of $25,000 individually or $50,000 or more in the aggregate per annum to other persons, or (iii) any joint venture, strategic alliance, partnership or similar Contract;

(ix)

any sales agency, sales representation, consultant, distributorship or franchise Contract that is not terminable unilaterally by the Acquired Companies without penalty within sixty (60) days;

(x)

any Contract providing for the payment of any cash or other benefits upon the sale or change of control of the Acquired Companies or a substantial portion of its assets;

(xi)

any Contract prohibiting or limiting competition, prohibiting or limiting the Acquired Companies from freely engaging in any business anywhere in the world, or prohibiting or limiting the disclosure of trade secrets or other confidential or proprietary information;

(xii)

any Contract not made in the Ordinary Course (irrespective of whether such Contract was permitted to be left off of any other Schedule hereto by virtue of the monetary value thereof or otherwise);

(xiii)

any Contract pursuant to which the Acquired Companies have or have agreed to acquire, redeem, repurchase, or dispose of any securities or acquire or dispose of any business, product line or the like;

(xiv)

any shareholder agreements or agreements relating to the issuance of any securities of the Acquired Companies and/or the granting of registration rights with respect thereto; and

(xv)

to the extent not included within Clauses (i) through (xiv) above, any Contract not made in the Ordinary Course, or otherwise requiring special authorization by the Seller’s Board of Directors, regardless of monetary value.

(b)

The Acquired Companies have not received any notice of any intention to terminate, repudiate, rescind or disclaim any Material Contract.

3.19

Validity of Contracts. Each of the Material Contracts is a valid, binding and enforceable obligation of the Acquired Companies and, the other parties thereto, in accordance with its terms and conditions, subject to the qualification that the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws, now or hereafter in effect, affecting creditors’ rights generally, and except that the availability of equitable remedies, including specific performance, is subject to the discretion of the court before which any proceeding for the enforcement thereof may be brought, and further subject to any other legal defenses to enforcement that may be available to the Acquired Companies or the Seller’s Affiliates, as applicable, or any of them. The Acquired Companies are not, to the extent it would create a current or future Liability of Buyer and/or the Seller, the Seller has not been, and, no other party to a Material Contract is, in material breach or violation of or default under any Material Contract, and no event has occurred that, through the passage of time or the giving of notice, or both, would constitute, and neither the execution of this Agreement nor the Closing hereunder do or will constitute or result in, such a breach, violation or default on the part of any party thereto, cause the acceleration of any Liability of the Acquired Companies or any other party thereto, or the creation of a Lien upon any assets of the Acquired Companies or the Shares, or require any consent thereunder. The Acquired Companies have provided or made available to Buyer a true, complete and accurate copy of each Material Contract.

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3.20

Intellectual Property. Schedule 3.20, which is to be provided prior to Closing, sets forth all registered and unregistered Intellectual Property owned or claimed by the Acquired Companies (excluding non-proprietary information, know-how or processes otherwise available to the industry or public or rights obtained pursuant to licenses associated with software and other Intellectual Property generally made available for purchase or use by the industry or the public) and accurately identifies, where applicable, the following for each item applicable to such registered Intellectual Property: the filing date, issue date, classification of invention or goods or services covered, country of origin, licensor, license date, licensed subject matter, territorial limitations and the degree of exclusivity of use.

(a)

Schedule 3.20(a), which is to be provided prior to Closing, sets forth a complete and accurate list, showing in each case, where applicable, the registered owner, title (in the case of patents), mark, applicable jurisdiction, application number, registration number and date of filing or registration (if any)) of all (i) patents, (ii) trademarks, trade names, service marks and assumed or fictitious names currently or previously used by the Acquired Companies during the past three (3) years, (iii) material Internet domain names currently or previously used by the Acquired Companies during the past three (3) years, (iv) registered copyrights, and (v) material software (excluding software and other Intellectual Property generally made available for purchase or use by the industry or the public), in each case which are owned by the Acquired Companies.

(b)

Schedule 3.20(b), which is to be provided prior to Closing,, sets forth a complete and accurate list and description of all material Contracts pursuant to which the Acquired Companies use or grant the right to use any Intellectual Property, including software of the Acquired Companies (excluding non-proprietary information, know-how or processes otherwise available to the industry or public or rights obtained pursuant to licenses associated with software and other Intellectual Property generally made available for purchase or use by the industry or the public).

(c)

The Acquired Companies either own or have the valid right to use all Intellectual Property (excluding non-proprietary information, know-how or processes otherwise available to the industry or public or rights obtained pursuant to licenses associated with software and other Intellectual Property generally made available for purchase or use by the industry or the public) currently used in connection with the Business.

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(d)

All of the registrations or applications set forth in Schedule 3.20(a), which is to be provided prior to Closing, are valid and subsisting, in full force and effect, and have not expired or been canceled or abandoned; and there is no pending or, threatened opposition, interference or cancellation proceeding before any court or registration authority in any jurisdiction against the Intellectual Property described in Schedule 3.20(a), which is to be provided prior to Closing.

(e)

The licenses or sublicenses granted by the Acquired Companies to Third Parties, and the terms and conditions of any licenses or sublicenses granted to the Acquired Companies by Third Parties, in each case as described in Schedule 3.20(b),, are valid and binding obligations of the Acquired Companies, enforceable in accordance with its terms against the Acquired Companies and, against each other Party thereto, in accordance with its respective terms. There currently exists no event or condition which will result in a material violation or breach of or constitutes (with or without due notice or lapse of time or both) a default by, the Acquired Companies under any such agreement.

(f)

The manufacture, advertising, sale or use of any products manufactured or sold by the Acquired Companies did not and does not infringe (nor has any claim been made that any such action infringes) the intellectual property rights of any Third Party, and the Acquired Companies have not received any notice of a Third Party claim or suit, (i) alleging that the Acquired Companies’ activities or the conduct of the business of the Acquired Companies infringes or constitutes the unauthorized use of the intellectual property rights of any third party, or (ii) challenging the ownership, use, validity or enforceability of any of the Intellectual Property.

(g)

No Person (other than the Acquired Companies) is infringing on the Intellectual Property (excluding non-proprietary information, know how or processes otherwise available to the industry or public or rights obtained pursuant to licenses associated with software and other Intellectual Property generally made available for purchase or use by the industry or the public) or upon the rights of the Acquired Companies therein.

(h)

The Acquired Companies own or have the right to use all intellectual property set forth in Schedule 3.20(a) and Schedule 3.20(b).

3.21

Insurance. The Acquired Companies have at all times since September 30, 2022, maintained insurance as required by Law or under any agreement to which the Acquired Companies are or have been a party, including without limitation general comprehensive liability, unemployment and workers’ compensation coverage. Schedule 3.21, which is to be provided prior to Closing, sets forth all policies of insurance maintained by the Acquired Companies, together with the amount of coverage for each policy, and indicates which of such insurance policies are claims- made policies and which of such policies are occurrence-based policies. Such policies evidence insurance in such amounts and against such risks and losses as are generally maintained with respect to comparable companies and properties, or as otherwise required pursuant to Law, any Contract or any permit, bond or other authorization. All of such insurance policies are in full force and effect (with respect to the applicable coverage periods), and the Acquired Companies are not in default with respect to any of its respective obligations under any of such insurance policies.

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3.22	Employees. Officers, Directors and Consultants.

(a)

Schedule 3.22(a), which is to be provided prior to Closing, contains a complete and accurate list of the following information for each director, officer and employee of the Acquired Companies, including each employee on leave of absence or layoff status: name; job title; current compensation paid or payable and any change in compensation since December 31, 2020, and vacation accrued.

(b)

Schedule 3.22(b), which is to be provided prior to Closing, is a list of: (i) all current paid consultants to the Acquired Companies, and (ii) all retirees and terminated employees of the Acquired Companies for whom the Acquired Companies have any benefits responsibility or other continuing or contingent Liability, together, with the current rate of compensation, fees and benefits (if any) payable to each such Person and any incentive or bonus payments.

(c)

Except as set forth on Schedule 3.22(c), which is to be provided prior to Closing, the Acquired Companies are not indebted to any Seller, nor any director, officer, employee or agent of the Seller, except for amounts due as normal salaries, wages, fees, employee benefits, and bonuses and in reimbursement of ordinary expenses on a current basis not in excess of $1,000 in each single instance, or $10,000 in the aggregate.

(d)

No officer, director, employee or consultant of the Acquired Companies are indebted to the Seller for any amount in excess of $ 1,000 in each single instance and $10,000 in the aggregate, other than for advances for ordinary business expenses on a basis consistent with past practices.

(e)

All payments to agents, consultants and others made by the Acquired Companies have been in payment of bona fide fees and commissions and not as bribes, kickbacks or as otherwise illegal payments, including, without limitation, any payment in violation of the Foreign Corrupt Practices Act (15 U.S.C. §78dd, et seq.). All such payments have been made directly to or for the account of the parties providing the goods or services for which such payments were made, and no such payment has been paid in a manner intended to avoid currency controls or any Party’s Tax reporting or payment obligations. The Acquired Companies have properly and accurately reflected on its books and records: (i) all compensation paid to and prerequisites provided to or on behalf of its agents and employees; and (ii) all compensation and perquisites that are due and payable to such persons, but which have not been paid or provided at the Closing Date. Such compensation and perquisites have been properly and accurately reflected in the Financial Statements, records and government filings of the Acquired Companies, to the extent required by Law.

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(f)

No former or current employee or current or former officer or director of the Acquired Companies are a party to, or is otherwise bound by, any agreement, including any confidentiality, non-competition, or proprietary rights agreement, between such employee or officer or director and any other Person that in any way adversely affected, affects, or will affect (i) the performance of his or her duties as an employee or officer or director of the Acquired Companies, or (ii) the ability of the Acquired Companies to conduct the Business, which agreement cannot be terminated without further Liability on thirty (30) days’ notice by the Acquired Companies.

3.23	Bank Accounts of the Acquired Companies. Set forth on Schedule 3.23, which is to be provided prior to Closing, is a list of the locations and numbers of all bank accounts, investment accounts and safe deposit boxes maintained by or on behalf of the Acquired Companies, together with the names of all persons who are authorized signatories or have access thereto or control thereunder. The Acquired Companies are not a party to any lock-box or other similar arrangement, and all funds received by the Acquired Companies in the Ordinary Course are entitled to be, and are, deposited in its operating account(s) identified on said Schedule 3.23.

3.24	Labor Matters.

(a)

The Acquired Companies are not a party to or bound by any collective bargaining, works council, union representation or similar agreement;

(b)

There is no controversy existing, pending or, threatened with any association or union or collective bargaining representative of the employees of the Acquired Companies;

(c)

There is no charge or complaint relating to unfair labor practices pending against the Acquired Companies, nor is there any labor strike, work stoppage, material grievance or other labor dispute pending or, threatened against the Acquired Companies;

(d)

The Acquired Companies are not and has not engaged in any unfair labor practice and there is no pending or threatened claim, investigation or other proceeding before any tribunal (including, without limitation, the National Labor Relations Board, the Equal Employment Opportunity Commission), and all state, local, foreign or other similar agencies responsible for the enforcement of labor or employment laws;

(e)

There is no labor strike, dispute, slowdown, or stoppage pending or, threatened against the Acquired Companies;

(f)

At the Closing, there are no current or former employee of the Acquired Companies have any claim against the Acquired Companies on account of or for (i) overtime pay, other than overtime pay for the current payroll period and which the Acquired Companies agree is payable, (ii) wages or salary (excluding current bonus accruals and amounts accruing under pension and profit sharing plans) for any period other than the current payroll period and which the Acquired Companies agree is payable, (iii) vacation, time off or pay in lieu of vacation or time off, other than that earned in respect of the current fiscal year and which the Acquired Companies agree is payable, or (iv) any violation of any Law relating to minimum wages or maximum hours of work;

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(g)

At the Closing, there are no claims that have been made against the Acquired Companies that remains outstanding for breach of any contract of employment or for services or for severance or redundancy payments or protective awards or for compensation for unfair dismissal or for failure to comply with any Law with regard to employment rights or in relation to any alleged sex or race discrimination or for any other Liability accruing from the termination or variation of any contract of employment or for services, nor are the Acquired Companies aware that any such claim has been threatened or is pending;

(h)

There is no contract of service in force between Acquired Companies and any of their directors, officers or employees which is not terminable by the Acquired Companies without compensation or other consideration on less than three months’ notice given at any time or which provides for compensation or other consideration specifically in connection with the transactions contemplated by this Agreement;

(i)

The Acquired Companies are not a party to (i) any outstanding employment, consulting or management Contracts with any Person that are not terminable at will, or that provide for the non-discretionary payment of any bonus or commission, or (ii) any Contract, policy, guideline or practice that does or would require it to pay termination or severance pay to salaried, non-exempt or hourly employees (other than as required by applicable Law); and

(j)

The Acquired Companies have complied with any and all obligations arising under the Worker Adjustment and Retraining Notification Act.

Employee Benefit Matters. The Acquired Companies have no Plan, whether or not subject to ERISA, which the Acquired Companies or its ERISA Affiliates maintains, or to which the Acquired Companies or its ERISA Affiliates contributes or has any obligation to contribute.

3.25	Books and Records and Financial Controls.

(a)

True, correct and complete copies of the books of account, stock record books, minute books, bank accounts, and other corporate records solely relating to the Acquired Companies (where necessary, redacted to exclude information not solely related to the Acquired Companies) have been made available to Buyer and such books and records have been maintained in accordance with good business practices consistently applied. The minute books of the Acquired Companies contains accurate and complete records of all meetings held, and corporate action taken by, the stockholders, the Board of Directors, any special committees of the Board of Directors of the Acquired Companies, and no meeting of any such stockholders, Board of Directors, or special committee has been held for which minutes have not been prepared and are not contained in such minute books.

(b)

The Acquired Companies use commercially reasonable efforts to establish proper and adequate internal accounting controls which provide reasonable assurance that (i) transactions are executed with management’s authorization; (ii) transactions are recorded as necessary to permit preparation of the financial statements of the Acquired Companies and to maintain accountability for the Acquired Companies’ assets; (iii) access to the Acquired Companies’ assets is permitted only in accordance with management’s authorization; (iv) the reporting of the Acquired Companies’ assets is compared with existing assets at regular intervals; and (v) accounts, notes and other receivables and inventory are recorded accurately, and proper and adequate procedures are implemented to effect the collection thereof on a current and timely basis.

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3.26

Propriety of Past Payments. Except as set forth in Schedule 3.26, which is to be provided prior to Closing, no finder’s fee or other payment has been, or will be, made by or on behalf of the Acquired Companies in respect of, or in connection with, any commitment to any person, firm, corporation or other entity which is not a party to such Contract or commitment. No funds or assets of the Acquired Companies have been used for illegal purposes; no unrecorded funds or assets of the Acquired Companies have been established for any purpose; no accumulation or use of the Acquired Companies’ corporate funds or assets has been made without being properly accounted for in the respective books and records of the Acquired Companies; all payments by or on behalf of the Acquired Companies have been duly and properly recorded and accounted for in its books and records; no false or artificial entry has been made in the books and records of the Acquired Companies for any reason; no payment has been made by or on behalf of the Acquired Companies with the understanding that any part of such payment is to be used for any purpose other than that described in the documents supporting such payment; and the Acquired Companies have not made, directly or indirectly, any illegal contributions to any political party or candidate, either domestic or foreign.

3.27

Change in Ownership. Neither the acquisition of the Company Stock by the Buyer, nor the consummation of the transactions contemplated by this Agreement, will cause any Material Adverse Effect upon the Business, operations or financial condition of the Acquired Companies, or result in the loss of the benefits of any relationships it has with any customer, supplier, or other business relationship.

3.28

Accuracy of Information. None of the representations, warranties or statements of the Acquired Companies or any Seller contained in this Agreement contains any untrue statement of a material fact or omits to state any material fact necessary in order to make any of such representations, warranties or statements in this Agreement or in any Schedule or Exhibit hereto not misleading.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF BUYER

The Buyer represents and warrants to the Acquired Companies and each Seller that, as of the date of this Agreement and the Closing, the statements contained in this Article 4 are true and correct except for events, transactions or occurrences contemplated or required by this Agreement, or set forth on any Schedule hereto and to be provided prior to Closing.

4.1	Corporate Existence and Power.

(a)

The Buyer is a corporation, validly existing and in good standing under the laws of the State of Delaware.

(b)

The Buyer has all requisite corporate power and authority to own and use its assets and to transact the business in which it is engaged, and holds all franchises, licenses and permits required therefore. Buyer is duly licensed or qualified to do business as a foreign corporation and is in good standing in each jurisdiction where such license or qualification is required except for jurisdictions where the failure to be so qualified would not, individually or in the aggregate, have a Material Adverse Effect.

(c)

Buyer has the corporate power, authority and capacity to enter into this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby.

(d)

Buyer is not a party to, subject to or bound by any Contract, Law or Order which would (i) be breached or violated or its obligations thereunder accelerated or increased (whether or not with notice or lapse of time or both) by the execution or delivery by Buyer of this Agreement or the performance by Buyer of the transactions contemplated by this Agreement, or (ii) prevent the carrying out of the transactions contemplated hereby. Except as otherwise provided for herein, no waiver or consent of any third Person is required for the execution of this Agreement by Buyer or the consummation by Buyer of the transactions contemplated hereby.

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4.2 Valid and Enforceable Agreement; Authorization. This Agreement constitutes a legal, valid and binding obligation of Buyer, enforceable against it in accordance with its terms, except that such enforcement may be subject to (i) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally and (ii) general principles of equity. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized, approved and ratified by all necessary action on the part of Buyer.

4.3 Brokers. Finders. No finder, broker, agent, or other intermediary, acting on behalf of Buyer, is entitled to a commission, fee, or other compensation or Liability in connection with the negotiation or consummation of this Agreement or any of the transactions contemplated hereby.

4.4 Solvency. At the Closing, Buyer: (a) is and shall be solvent; (b) can and shall be able to meet its Liabilities as they become due (including the obligations contained in this Agreement); and (c) has or will have sufficient funds or binding credit arrangements available to it to meet and pay its Liabilities under this Agreement to which it is a party.

4.5 Litigation. At the Closing, there will be no action pending or, to the Buyer’s knowledge, threatened, anticipated or contemplated, against the Buyer (solely with respect to the Buyer or the Business), involving the Business, or involving any of the Buyer’s properties, assets, rights or capital stock, or any of its directors, officers, agents, or other personnel in their capacity as such, including without limitation any Action challenging, enjoining, or preventing this Agreement, or the consummation of the transactions contemplated hereby other than as listed on Scheduled 4.5, which is to be provided prior to Closing. The Buyer is not currently and, to the Buyer’s knowledge, has not been, subject to any Order other than Orders of general applicability. The Buyer has not been or been threatened to be subject to any action or Order relating to personal injury, death, or property or economic damage arising from products sold, licensed or leased and services performed by the Acquired Companies.

4.6 Accuracy of Information. To the Buyer’s Knowledge, none of the representations, warranties or statements of the Buyer contained in this Agreement contains any untrue statement of a material fact or omits to state any material fact necessary in order to make any of such representations, warranties or statements in this Agreement or in any Schedule or Exhibit hereto not misleading.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF THE SELLERS

Each of the Sellers, individually and not jointly, hereby represents and warrants to the Buyer that, as of the date of this Agreement and the Closing, the statements contained in this Article 5 are true and correct except for events, transactions or occurrences contemplated or required by this Agreement, or set forth on any Schedule hereto or to be provided prior to Closing:

5.1 Authorization. Such Seller is an adult individual residing in Florida. Each such Seller has full power and capacity (or authority, as the case may be) to enter into, execute and perform this Agreement, which Agreement, once executed by such Seller, shall be the valid and binding obligation of such Seller, enforceable against such Seller by any court of competent jurisdiction in accordance with its terms.

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5.2 No Violation. Each Seller is not bound by or subject to any contract, agreement, law, court order or judgment, administrative ruling, regulation or any other item which prohibits or restricts such Seller from entering into and performing this Agreement in accordance with its terms, or requiring the consent of any Third Party prior to the entry into or performance of this Agreement in accordance with its terms by such Seller.

5.3 Title to the Company Stock. Schedule 5.3, which is to be provided prior to Closing, correctly sets forth next to such Seller’s name and information the number of Company Stock owned by such Seller of record and beneficially, which Company Stock constitutes the only securities of the Seller issued to such Seller except as otherwise set forth on said Schedule 5.3. Such Seller has valid and marketable title in and to the Company Stock identified as belonging thereto. Upon purchase of the Company Stock, and delivery to Buyer thereof in accordance with the terms of this Agreement, the Company Stock shall be transferred at Closing free and clear of all Liens other than Permitted Liens. No Seller is a party to any voting trust, proxy, or other agreement or understanding with the respect to the Company Stock that will survive the Closing Date.

5.4 Investor Representations. With respect to the Equity Consideration issued to Seller pursuant to Section 2.2.1(e):

(a)

such Seller understands and acknowledges that the common stock paid to Seller, to which such Seller is entitle hereunder may not be delivered to such Seller unless and until a registration statement covering such Buyer Shares has been filed with, and declared effective by, the US Securities and Exchange Commission, and that the Buyer has no control over whether or when such registration statement shall be declared effective;

(b)

each Seller hereby acknowledges that: (i) such Seller has had (or prior to Closing will have) full access to material concerning the Seller’s planned business and operations, which material was furnished or made available to such Seller upon request by officers or representatives of the Seller; (ii) the Seller has given (or prior to Closing will give) such Seller the opportunity to ask any questions and obtain all additional information desired in order to verify or supplement the material so furnished; and (iii) such Seller understands and acknowledges that a purchaser of the common stock, must be prepared to bear the economic risk of such investment for an indefinite period because of the heightened nature of the risks associated with an investment in a “penny stock” Seller listed on the Pink Sheets, and the inability of the Buyer to control whether or when a registration statement covering the common stock may be made effective by the US Securities and Exchange Commission;

(c)	each Seller has been advised to consult with his or her own attorney regarding legal matters concerning the purchase and ownership of the common stock, and with a tax advisor regarding the tax consequences of acquiring such Buyer Shares through the exchange of shares contemplated by this Agreement.

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(d)

Guarantees. Other than the SBA Loans which will be paid in full at Closing and the Community Bank loan, Seller is not a guarantor, indemnitor, surety or accommodation party or, to the Seller’s Knowledge, otherwise liable for any indebtedness of any other Person, firm or corporation except as endorser of checks received and deposited in the Ordinary Course.

ARTICLE 6

ADDITIONAL COVENANTS OF THE PARTIES

6.1 Confidentiality. Buyer acknowledges that, in the course of its investigations of the Acquired Companies, Buyer and its representatives have and will become aware of confidential information and documents of the Sellers (the “Confidential Information”), and that its use of such confidential information and documents, or communication of such information to third parties, could be detrimental to the Sellers. Buyer covenants that prior to Closing all information and documents concerning the Sellers reviewed by Buyer or its representatives in connection with this Agreement or the transactions contemplated hereby shall be maintained in confidence and shall not be disclosed or used by Buyer or its representatives without both Sellers prior written consent, unless Buyer can demonstrate that such information is (a) otherwise publicly available, (b) in Buyer’s possession through disclosure by a third party not in violation of any confidentiality or other agreement or applicable Law, (c) required to be disclosed pursuant to judicial order, regulation or law, or (d) required to be disclosed by the rules of a securities exchange on which Buyer may from time to time be listed. In the event that Buyer or any of its representatives becomes legally compelled to disclose any such information or documents as referred to in this Section, Buyer shall, to the extent reasonably practicable, provide Sellers with prompt written notice before such disclosure, in order that Sellers may either seek a protective order, at Sellers’ expense, or seek another appropriate remedy preventing or prohibiting such disclosure or to waive compliance with the provisions of this Section 6.1 or both. With respect to information and documents related to the Seller, at Seller’s request, in the event that the Closing shall not occur, or as soon as practicable following termination of this Agreement, (a) Buyer shall, and shall cause its representatives to, promptly destroy all information and documents concerning the Seller (including any copies thereof or extracts therefrom); (b) an officer of Buyer shall certify to Seller such destruction; and (c) Buyer shall and shall cause its representatives to keep confidential and not use any such information or documents unless required to disclose such information or documents pursuant to judicial order, regulation or law.

6.2 Public Disclosures. Each Seller and the Acquired Companies understands that the Buyer is a publicly-listed corporation, and that the disclosure of information concerning the Buyer and its business affairs and financial condition is strictly regulated by the US Securities and Exchange Commission and other legal and administrative bodies. Accordingly, each Seller and the Acquired Companies hereby agrees that under no circumstances shall such Party make or disseminate, or permit any other person to make or disseminate, any public statement, press release or other disclosure concerning this Agreement, any Schedule or Exhibit hereto, or the several transactions and relationships contemplated hereby and thereby, without the prior, written consent of the Buyer (which consent may be given or withheld in its sole discretion.

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6.3 Due Diligence Review. The Parties understand and acknowledge that each Party’s obligations to consummate the transactions contemplated by this Agreement are contingent upon, among other things, the completion to the Buyer’s reasonable satisfaction of a comprehensive due diligence review of the Acquired Companies. To such end, the Acquired Companies shall, and the Sellers controlling the Acquired Companies shall cause the Acquired Companies to, permit the Buyer and its representatives with such information, documents, books and records, and reasonable access to the Acquired Companies’ executive officers and key management, as it may reasonably require to conduct and complete such due diligence review in a timely fashion. Similarly, the Buyer shall permit the Sellers, or their representatives, with such information, documents, books and records as they may reasonably require to conduct and complete a comprehensive due diligence review of the Buyer in a timely fashion.

6.4 Public Filings. From and after the Closing, each Seller shall provide to Buyer, upon its reasonable request, such further information or documentation as it may require in order to make such public filings with the US Securities and Exchange Commission as it may be required to make from time to time in connection with, and following, its filing of the registration statement contemplated by this Agreement.

6.5 Tax Matters.

(a) Tax Periods Ending on or Before the Closing Date. Buyer shall prepare or cause to be prepared and file or cause to be filed all Tax Returns for the Acquired Companies for all periods ending on or prior to the Closing Date (“Pre-Closing Tax Period”) that are filed after the Closing Date. Such Tax Returns shall be prepared consistently with the past practice of the Acquired Companies, unless otherwise required by applicable Law. Buyer shall permit Sellers to review and comment on each such Tax Return described in the preceding sentence prior to filing and shall accept all comments that are reasonable. The Sellers, jointly and severally, shall reimburse Buyer for Taxes of the Acquired Companies with respect to such periods within five (5) days of payment by Buyer or the Acquired Companies of such Taxes, except to the extent such Taxes are taken into account in the adjustments contemplated under Section 2.3 and Section 2.4.

(b) Tax Periods Beginning Before and Ending After the Closing Date. Buyer shall prepare or cause to be prepared and file or cause to be filed any Tax Returns of the Acquired Companies for Tax periods that begin before the Closing Date and end after the Closing Date (a “Straddle Tax Period”). Such Tax Returns shall be prepared consistently with the past practice of the Acquired Companies unless otherwise required by applicable Law. Buyer shall permit Sellers to review and comment on each such Tax Return described in the preceding sentence prior to filing and shall accept all comments that are reasonable. The Sellers, jointly and severally, shall reimburse Buyer within five (5) days of the date on which Taxes are paid with respect to such periods an amount equal to the portion of such Taxes which relates to the portion of such taxable period ending on the Closing Date, except to the extent such Taxes are taken into account in the adjustments contemplated under Section 2.3 and Section 2.4. For purposes of this Section 6.5(b), in the case of any Taxes that are imposed on a periodic basis and are payable for a taxable period that includes (but does not end on) the Closing Date, the portion of such Tax which relates to the portion of such taxable period ending on the Closing Date shall (i) in the case of any Taxes other than the Taxes based upon or related to income or receipts, be deemed to be the amount of such Tax for the entire taxable period multiplied by a fraction the numerator of which is the number of days in the taxable period ending on the Closing Date and the denominator of which is the number of days in the entire taxable period, and (ii) in the case of any Tax based upon or related to income or receipts be deemed equal to the amount which would be payable if the relevant taxable period ended on the Closing Date. For purposes of this Section 6.5(b), in the case of any Tax credit relating to a taxable period that begins before and ends after the Closing Date, the portion of such Tax credit which relates to the portion of such taxable period ending on the Closing Date shall be the amount which bears the same relationship to the total amount of such Tax credit as the amount of Taxes described in (y) above bears to the total amount of Taxes for such taxable period.

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(i) Buyer, the Acquired Companies and the Sellers shall cooperate fully, as and to the extent reasonably requested by the other Party, in connection with the filing of Tax Returns pursuant to this Section 6.5(c) and any audit or Action, with respect to Taxes. Such cooperation shall include the retention and (upon the other Party’s request) the provision of records and information which are reasonably relevant to any such audit, Action or Proceeding and making employees available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder. The Acquired Companies and the Sellers agree (A) to retain all books and records with respect to Tax matters pertinent to the Acquired Companies relating to any taxable period beginning before the Closing Date until the expiration of the statute of limitations (and, to the extent notified by Buyer or the Sellers, any extensions thereof) of the respective taxable periods, and to abide by all record retention agreements entered into with any taxing authority, and (B) to give the other Party reasonable written notice prior to transferring, destroying or discarding any such books and records and, if the other Party so requests, the Acquired Companies, Buyer, or the Sellers, as the case may be, shall allow the other Party to take possession of such books and records.

(ii) Buyer and the Sellers further agree, upon request, to use their commercially reasonable efforts to obtain any certificate or other document from any Government Entity or any other Person as may be necessary to mitigate, reduce or eliminate any Tax that could be imposed (including with respect to the Transactions).

(d) Amended Tax Returns.

(i) Any amended Tax Return of any of the Acquired Companies or claim for Tax refund on behalf any of the Acquired Companies for any period ending on or prior to the Closing Date shall be filed, or caused to be filed, only by Sellers. The Sellers shall not, without the prior written consent of Buyer (which consent shall not be unreasonably withheld or delayed), make or cause to be made, any such filing, to the extent such filing, if accepted, reasonably might change the Tax Liability of Buyer for any period ending after the Closing Date.

(ii) Any amended Tax Return of any Acquired Company or claim for Tax refund on behalf of an Acquired Company for any period ending after the Closing Date shall be filed, or caused to be filed, only by Buyer. Buyer shall not, without the prior written consent of Sellers (which consent shall not be unreasonably withheld or delayed), make or cause to be made, any such filing, to the extent such filing, if accepted, reasonably might change the Tax Liability of the Sellers for any period or portion thereof ending on or prior to the Closing Date.

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(e) Audits.

(i) Buyer shall provide the Sellers with notice of any written inquiries, audits, examinations or proposed adjustments by the Internal Revenue Service (“IRS”) or any other taxing authority, which relate to any Pre-Closing Tax Periods within ten (10) days of the receipt of such notice. Sellers shall have the sole right to represent the interests of the Acquired Companies in any Tax audit or other proceeding relating to any Pre- Closing Tax Periods, to employ counsel of its choice at its own expense, and to settle any issues and to take any other actions in connection with such proceedings relating to such taxable periods; provided that the Sellers shall inform Buyer of the status of any such proceedings, shall provide Buyer (at Buyer’s cost and expense) with copies of any pleadings, correspondence, and other documents as Buyer may reasonably request and shall consult with Buyer prior to the settlement of any such proceedings and shall obtain the prior written consent of Buyer prior to the settlement of any such proceedings that could reasonably be expected to adversely affect Buyer in a material manner in any taxable period ending after the Closing Date, which consent shall not be unreasonably withheld or delayed; provided further that Buyer and counsel of its own choosing shall have the right to participate in, but not direct, the prosecution or defense of such proceedings at Buyer’s sole expense.

(ii) Buyer and the Sellers shall provide each other with notice of any written inquiries, audits, examinations or proposed adjustments by the IRS or any other taxing authority that relate to any Straddle Tax Period within ten (10) days of the receipt of such notice. Buyer and the Sellers shall jointly control the conduct of any Tax audits or other proceedings relating to Taxes for a Straddle Tax Period, and neither Party shall settle any such Tax audit or other proceeding without the written consent of the other Party, which consent shall not be unreasonably withheld or delayed.

(iii) Buyer shall have the right to control all other Tax audits or proceedings of the Acquired Companies. Buyer shall obtain the prior written consent of Sellers prior to the settlement of any such proceedings that could reasonably be expected to increase the Sellers’ Tax Liability for a Pre-Closing Tax Period, which consent shall not be unreasonably withheld or delayed.

(iv) The Acquired Companies shall execute and deliver to the Sellers such powers of attorney and other documents as may be necessary or appropriate to give effect to the foregoing.

(f) Certain Taxes. All transfer, documentary, sales, use, stamp, registration and other such transfer-related Taxes and fees (including any penalties and interest) incurred in connection with this Agreement shall be paid by the Sellers when due, and the Sellers will, at their own respective expense, file all necessary Tax Returns and other documentation with respect to all such transfer, documentary, sales, use, stamp, registration and other such transfer Taxes and fees, and, if required by applicable Law, Buyer or the Acquired Companies will join in the execution of any such Tax Returns and other documentation.

(g) Tax Covenants.

(i) Buyer covenants that without obtaining the prior written consent of Sellers will not, and will not cause or permit any Acquired Company or any Affiliate of Buyer, to (A) take any action on or after the Closing Date other than in the ordinary course of business that could give rise to any Tax Liability of the Sellers or any indemnification obligation of the Sellers under Section 6.5(g), or (B) make or change any material Tax election (including a Section 338(g) election), amend any Tax Return, take any Tax position on any Tax Return, or compromise or settle any Tax Liability, in each case if such action could have the effect of increasing the Tax Liability of the Sellers or reducing any Tax asset of any Acquired Company with respect to any Pre-Closing Tax Period or portion of a Straddle Tax Period ending on the Closing Date. For the avoidance of doubt, the Parties agree that Buyer may not make any 338 elections with respect to the purchase of the Company Stock.

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(ii) After the Closing Date, Buyer and the Acquired Companies will not, without obtaining the written consent of Sellers, agree to the waiver or any extension of the statute of limitations relating to any Taxes of the Acquired Companies for any Pre- Closing Tax Period or any Straddle Tax Period.

(iii) The Sellers shall have the right to (A) any Tax refunds received by any Acquired Company for any Pre-Closing Tax Period or portion of any Straddle Tax Period that ends on the Closing Date (except to the extent such amounts are taken into consideration in calculating the Net Working Capital) or (B) any credits against Taxes in lieu of refunds described in clause (A). Buyer shall pay such amounts to the Sellers no later than ten (10) days after the receipt by any such Acquired Company of such Tax refunds or credits. Buyer will cooperate with Sellers to prepare and file any Tax Returns required to claim Tax refunds that the Sellers are entitled to pursuant to this Section 5.18(g)(iii).

(i) All Tax Disputes will be litigated.

Tax Dispute Resolution Mechanism. Any dispute among the Parties involving Taxes arising under this Agreement shall be resolved as follows: (i) the Parties will in good faith attempt to negotiate a prompt resolution of the dispute; (ii) if the Parties are unable to negotiate a resolution of the dispute within thirty (30) days, the dispute will be submitted to the national office of a firm of independent accountants of nationally recognized standing reasonably satisfactory to Sellers and Buyer (the “Tax Dispute Accountant”); (iii) the Tax Dispute Accountant shall resolve the dispute, in a fair and equitable manner and in accordance with applicable Tax Law and the provisions of this Agreement, within thirty (30) days after the Parties have submitted the dispute to the Tax Dispute Accountant, whose decision shall be final, conclusive and binding on the Parties, absent fraud or manifest error; (iv) any payment to be made as a result of the resolution of a dispute shall be made, and any other action taken as a result of the resolution of a dispute shall be taken, on or before the fifth (5^th) day following the date on which the dispute is resolved (except that if the resolution requires the filing of an amended Tax Return, such amended Tax Return shall be filed within thirty (30) days following the date on which the dispute is resolved); and (v) the fees and expenses of the Tax Dispute Accountant shall be paid by the Party who the Tax Dispute Accountant determines has derived the least benefit from the issues to be resolved by the Tax Dispute Accountant; provided that, (A) if the Parties are unable to agree on a national office of a firm of independent accountants of nationally recognized standing to act as Tax Dispute Accountant, Sellers and Buyer shall each select a national office of a firm of independent accountants of nationally recognized standing and such firms together shall select the national office of a firm of independent accountants of nationally recognized standing to act as the Tax Dispute Accountant; and (B) if any Party does not select a national office of a firm of independent accountants of nationally recognized standing within ten (10) days of written demand therefor by the other Party, the firm selected by the other Party shall act as the Tax Dispute Accountant.

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ARTICLE 7

CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER

The obligation of the Buyer to proceed with the Closing shall be subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions precedent, any of which may be waived in whole or in part by Buyer:

7.1

Accuracy of Representations and Warranties and Performance of Obligations. All representations and warranties made by the Acquired Companies and each Seller in or pursuant to this Agreement shall be true and correct in all material respects, and the Acquired Companies and each Seller shall have performed or complied in all material respects with all covenants, agreements and conditions contained in this Agreement on its part required to be performed or complied with at or prior to the Closing. The Sellers shall deliver to Buyer at the Closing a Certificate, signed by the President of the Acquired Companies, certifying that the conditions stated in this Section 7.1 respecting the Acquired Companies have been fulfilled.

7.2

Consents and Approvals. All necessary filings with Government authorities or any other third parties shall have been made and any necessary authorizations, consents or approvals required from such authorities or third parties shall have been obtained and shall be in full force and effect.

7.3

No Litigation or Contrary Judgment. On the Closing Date, if any cases exist, it will be expected to not have a Material Adverse Effect.

7.4

No Material Adverse Effect. There shall not have occurred, and/or be continuing at Closing, any event that has had or reasonably would be expected to have a Material Adverse Effect.

ARTICLE 8

CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLERS

The obligations of the Sellers to proceed with the Closing shall be subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions precedent, any of which may be waived in whole or in part by unanimous consent of the Sellers at or prior to the Closing:

8.1 Accuracy of Representations and Warranties and Performance of Obligations. All representations and warranties made by Buyer in this Agreement shall be true and correct in all material respects, except for those representations and warranties that are qualified as to materiality which shall be true and correct in all respects, on and as of the Closing Date with the same effect as if such representations and warranties had been made on and as of the Closing Date, except to the extent that any such representation or warranty by its terms relates to an earlier date, and Buyer shall have performed or complied in all material respects with all covenants, agreements and conditions contained in this Agreement on its part required to be performed or complied with at or prior to the Closing. Buyer shall deliver to Sellers at the Closing a certificate of the President of Buyer certifying that the conditions stated in this Section 8.1 have been fulfilled.

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8.2 Consents and Approvals. All required filings with Government authorities or any other third parties shall have been made and any necessary authorizations, consents or approvals required from such authorities or third parties shall have been obtained and shall be in full force and effect.

8.3 No Litigation or Contrary Judgment. On the Closing Date, there shall exist no valid Order, statute, rule regulation, executive order, stay decree, judgment or injunction which prohibits or prevents the consummation of the transactions contemplated by this Agreement that has not been vacated, dismissed or withdrawn by the Effective Time.

ARTICLE 9

SURVIVAL

9.1 Survival of Representations and Warranties. All of the representations and warranties made by any Party in this Agreement, or any certificates or documents delivered hereunder shall survive the Closing Date and consummation of the transaction contemplated hereby and will continue for a period of twelve (12) months following the Closing Date, at which time they shall expire.

9.2 No Special Damages. Notwithstanding anything to the contrary contained herein, no Party shall be liable to or otherwise responsible to any other Party hereto, or any Affiliate of any other Party, for consequential, incidental, punitive or special damages or for diminution in value or lost profits that arise out of or relate to this Agreement or the performance or breach hereof or any Liability retained or assumed hereunder.

ARTICLE 10

MISCELLANEOUS PROVISIONS

10.1 Notices. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given (a) when delivered in person, (b) by facsimile, receipt confirmed, (c) on the next Business Day when sent by overnight courier, or (d) on the second succeeding Business Day when sent by registered or certified mail (postage prepaid, return receipt requested), to the respective Parties at the following addresses (or at such other address for a Party as shall be specified by like notice):

If to Buyer:		First Choice Healthcare Solutions, Inc.

		95 Bulldog Blvd., Suite 202 Melbourne, FL 32901 Attention: Lance B. Friedman, CEO and Director

With a copy (which shall not constitute notice) to:		Sichenzia Ross Ference, LLP

If to the Sellers:		[INSERT]

With a copy (which shall not constitute notice) to:

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10.2 Termination. This Agreement may be terminated at any time prior to the Effective Time only by mutual written consent of the Buyer and the Sellers. In the event of any termination of this Agreement as provided in this Section 10.2, this Agreement shall forthwith become wholly void and of no further force and effect and there shall be no Liability on the part of Buyer or Sellers, except that the provisions of Article 6 shall survive any such termination of this Agreement.

10.3 Entire Agreement. This Agreement and the Schedules and Exhibits hereto embody the entire agreement and understanding of the Parties hereto with respect to the subject matter hereof, and supersede all oral or written, prior or contemporaneous, agreements and understandings relative to such subject matter.

10.4 Amendment and Modification. To the extent permitted by applicable Law, this Agreement shall be amended, modified or supplemented only by a written agreement signed by all of the Parties to this Agreement.

10.5 Assignment; Binding Agreement. This Agreement and various rights and obligations arising hereunder shall inure to the benefit of and be binding upon the Parties hereto and their respective successors, and permitted assigns. Neither this Agreement nor any of the rights, interests, or obligations hereunder shall be transferred, delegated, or assigned (by operation of law or otherwise), by the Parties hereto without the prior written consent of the other Parties, other than in the case of the Seller by will upon his death and also except that the Buyer may assign its rights hereunder to any subsidiary corporation formed for the purpose of accomplishing the acquisition contemplated by this Agreement. However, not withstanding anything to the contrary contained herein, this Agreement shall not be binding on Seller until all Disclosure Schedules to be provided by Buyer are provided and accepted by Seller in writing. Until such point as the Disclosure Statements are accepted by Seller in writing, Seller may cancel this Agreement and retain the $100,000.00 as a breakup fee.

10.6 Waiver of Compliance; Consents. Any failure of the Acquired Companies and any Seller, on the one hand, or the Buyer, on the other hand, to comply with any obligation, covenant, agreement or condition herein may be waived by the Buyer, on the one hand, or the Acquired Companies and unanimous consents of the Sellers, on the other hand, and then only by a written instrument signed by the Party or Parties granting such waiver, but such waiver or failure to insist upon strict compliance with such obligation, covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of any Party hereto, such consent shall be given in writing in a manner consistent with the requirements for a waiver of compliance as set forth in this Section 10.6.

10.7 Expenses. Except as otherwise set forth in this Agreement, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the Party incurring such costs or expenses.

10.8 Counterparts. Facsimiles. This Agreement may be executed in multiple counterparts, and on separate counterparts, including electronically by DocuSign, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Facsimiles containing original signatures shall be deemed for all purposes to be originally signed copies of the documents which are the subject of such facsimiles.

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10.9 Severability. If any provision of this Agreement shall be determined to be contrary to Law and unenforceable by any court of Law, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby are not affected in any manner materially adverse to any Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

10.10 Governing Law: Venue.

(a)

This Agreement shall be governed by and construed in accordance with the internal laws of the State of Florida applicable to the performance and enforcement of contracts made within such state, without giving effect to the law of conflicts of laws applied thereby. In the event that any dispute shall occur between the parties arising out of or resulting from the construction, interpretation, enforcement or any other aspect of this Agreement, the Parties may bring an action in any federal court of competent jurisdiction in the County of Brevard In the event either Party shall be forced to bring any legal action to protect or defend its rights hereunder, then the prevailing party in such proceeding shall be entitled to reimbursement from the non-prevailing party of all fees, costs and other expenses (including, without limitation, the reasonable expenses of its attorneys) in bringing or defending against such action.

(b)

EACH AND EVERY PARTY HEREBY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS IN THIS SECTION 10.10(b).

10.11 No Third-Party Beneficiaries or Other Rights. Nothing herein shall grant to or create in any Person not a Party hereto, , any right to any benefits hereunder, and no such Party shall be entitled to sue any Party to this Agreement with respect thereto. Nothing in this section shall prevent the Seller’s heirs from being assigned all rights under this Agreement upon the death of Seller. The representations and warranties contained in this Agreement are made for purposes of this Agreement only and shall not be construed to confer any additional rights on the Parties under applicable state and federal securities laws.

10.12 Further Assurances. Each Party hereto shall execute and/or cause to be delivered to each other Party hereto such instruments and other documents, and shall take such other actions, as such other party may reasonably request (prior to, at or after the Effective Date) for the purpose of carrying out or evidencing any of the transactions contemplated herein.

(SIGNATURES ON FOLLOWING PAGES)

-41-

IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be executed as of the date first above written.

	THE BUYER:

	FIRST CHOICE HEALTHCARE SOLUTIONS, INC., a Delaware corporation

	By:	/s/ Lance B.Friedman
		Lance B. Friedman
		CEO and Director

	THE SELLERS:

	GARY C. BERNARD, MD

	By:	/s/ GARY C. BERNARD
		12/29/2023

	THE ACQUIRED COMPANIES:

	POINTE MEDICAL SERVICES INC., a Florida corporation

	By:	/s/ GARY C BERNARD
		GARY C BERNARD, President

	POINTEMED PHARMACY, INC., a Florida corporation

	By:	/s/ GARY C. BERNARD
		GARY C. BERNARD, President

	LIVEWELLMD, INC.

	By:	/s/ GARY C BERNARD
		GARY C BERNARD, President

	LIVEWELL DRUGSTORE, INC.,
	DBA Trulife Pharmacy

	By:	/s/ GARY C BERNARD
		GARY C BERNARD, President

-42-

Additional Signature Page:

THE SHAREHOLDERS:

/s/ GARY C BERNARD
GARY C BERNARD, Shareholder

-43-

THIS ADEMNUM TO STOCK PURCHASE AGREEMENT (the “Agreement”), is made and entered into as of the 5th day of May , 2024 by and among First Choice Healthcare Solutions, Inc., a corporation organized and existing under the laws of the State of Delaware, with an address at 95 Bulldog Blvd., Suite 202, Melbourne, Florida 32901 (the “Buyer”), and GARY C. BERNARD, MD an individual residing in St. Johns County, Florida (“Bernard”) (Bernard is individually referred to as a “Seller”) (the Buyer and Seller is sometimes referred to as a “Party” and collectively referred to as the “Parties”).

W I T N E S S E T H:

WHEREAS, the Parties entered into a Stock Purchase Agreement dated July 20^th;

WHEREAS, the Parties wish to add this addendum to such Stock Purchase Agreement;

WHEREAS, the Parties acknowledge in the Stock Purchase Agreement that each “Minority Shareholder”, of Live Well Drug Store, Inc. will be offered stock in return for his or her ownership interest;

WHEREAS, the Parties wish to allocate a portion of the NEW Equity Consideration under Section 2.2.1(d) among the Minority Shareholders as contained here.

At Closing, $1,500,000 or 300,000 of the amount due under Section 2.2.1(d) of the Purchase Agreement shall be allocated as follows:

Minority Shareholder	Value		Shares
Domingo Figueredo	$	625,000.00		125,000
Doug Nichols	$	175,000.00		35,000
Michelle Germain	$	150,000.00		30,000
Linda Allen	$	125,000.00		25,000
Sal Romeo	$	425,000.00		85,000
Totals	$	1,500,000.00		300,000

[Signatures on Following Page]

IN WITNESS WHEREOF, each of the Parties hereto has caused this Addendum to be executed as of the date first above written.

THE BUYER:

FIRST CHOICE HEALTHCARE SOLUTIONS, INC., a Delaware corporation

By:	/s/ Lance B. Friedman
	Lance B. Friedman
	CEO and Director

THE SELLERS:

/s/ GARY C. BERNARD
GARY C. BERNARD, MD

THE ACQUIRED COMPANIES:

POINTE MEDICAL SERVICES INC., a Florida corporation

By:	/s/ GARY C BERNARD
	GARY C BERNARD, President

POINTEMED PHARMACY, INC., a Florida corporation

By:	/s/ GARY C. BERNARD
	GARY C. BERNARD, President

LIVEWELLMD, INC.

By:	/s/ GARY C BERNARD
	GARY C BERNARD, President

LIVEWELL DRUGSTORE, INC., DBA Trulife Pharmacy

By:	/s/ GARY C BERNARD
	GARY C BERNARD, President

Exhibit 10.5

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is effective as of March 1, 2021 by and between First Choice Healthcare Solutions, Inc., a Delaware corporation (the “Company”), and Mr. Lance Friedman (“Executive”).

WHEREAS, the Executive is employed by the Company and the parties hereto desire to provide for the terms of Executive’s employment by the Company; and

WHEREAS, the Board of Directors of the Company has determined that it is in the best interests of the Company to enter into this Agreement.

NOW, THEREFORE, in consideration of the premises and the respective covenants and agreements contained herein, and intending to be legally bound hereby, the Company and Executive agree as follows:

Section 1. Employment. The Company shall employ Executive, and Executive hereby accepts employment with the Company, upon the terms and conditions set forth in this Agreement for the period beginning on the date hereof and ending as provided in Section 4 (the “Employment Period”).

Section 2. Position and Duties.

(a) During the Employment Period, Executive shall serve as the Chief Executive Officer of the Company and shall have the normal duties, responsibilities, functions, and authority of such position. Executive shall render such administrative, financial, and other executive and managerial services to the Company that are consistent with Executive’s position as the Company’s board of directors (the “Board”) may from time to time direct.

(b) During the Employment Period, Executive shall report to the Board and shall devote Executive’s best efforts and Executive’s full business time and attention (except for permitted vacation periods and reasonable periods of illness or other incapacity) to the business and affairs of the Company. Executive shall perform Executive’s duties, responsibilities, and functions for the Company hereunder to the best of Executive’s abilities in a diligent, trustworthy, professional, and efficient manner and shall comply with the Company’s and its subsidiaries’ policies and procedures in all material respects. In performing Executive’s duties and exercising Executive’s authority under this Agreement, Executive shall support and implement the business and strategic plans approved from time to time by the Board and shall support and cooperate with the Company’s and its subsidiaries’ efforts to expand their businesses and operate profitably and in conformity with the business and strategic plans approved by the Board. During the Employment Period, Executive shall not serve as an officer, manager, or director of, or otherwise perform services for compensation for, any other person or entity without the prior written consent of the Board; provided that Executive may serve as an officer, manager, or director of, or otherwise participate in, solely charitable, educational, welfare, social, religious and civic organizations so long as such activities do not interfere with Executive’s employment with the Company.

Section 3. Compensation and Benefits.

(a) During the Employment Period, Executive’s base salary shall be $350,000.00 per annum or such higher rate as the Board may determine from time to time (as adjusted from time to time, the “Base Salary”), which salary shall be payable by the Company in regular installments in accordance with the Company’s general payroll practices in effect from time to time, but in no event less frequently than monthly. In addition, during the Employment Period, Executive shall be entitled to participate in all of the Company’s employee benefit programs for which senior executive employees of the Company and its subsidiaries are generally eligible.

(b) During the Employment Period, the Company shall reimburse Executive for all reasonable business expenses incurred by Executive in the course of performing Executive’s duties and responsibilities under this Agreement which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment, and other business expenses, subject to the Company’s requirements with respect to reporting and documentation of such expenses.

(c) In addition to the Base Salary, Executive shall be eligible to receive an annual bonus in an amount equal to 100% of the Base Salary (60% cash and 40% stock grant) for achievement of target-level performance objectives (“Target Bonus”) (with the eligible amount of such bonus being more or less than the Target Bonus in the event of achievement below or above target-performance objectives, in each case as determined by the Board in its discretion).The Target Bonus objective for the first two years are listed on Exhibit A The annual bonus, to the extent earned in a given fiscal year as determined in the sole discretion of the Board, will be paid to Executive within 30 days following the completion of the audit for such fiscal year during the Employment Period based upon Executive’s performance and the Company’s achievement of financial, operating, and other objectives set by the Board and communicated to Executive not later than 90 days after the commencement of the applicable fiscal year.

(d) All amounts payable to Executive as compensation hereunder shall be subject to all required and customary withholding by the Company and its subsidiaries.

Section 4. Term.

(a) The Employment Period shall begin on the date of this Agreement and terminate upon the first to occur of (i) Executive’s resignation, (ii) Executive’s death or Disability and (iii) the Company’s termination of Executive for Cause or without Cause.

(b) If the Employment Period is terminated by the Company without Cause (or by Executive’s resignation within 30 days following a Sale of the Company in which Executive is not retained in his current or a comparable position at a principal work location located within 50 miles of Executive’s principal work location at the time of such Sale of the Company), Executive shall be entitled to receive Executive’s Base Salary, accrued unused vacation (in accordance with the Company’s vacation plan) and employee benefits through the date of termination and shall not be entitled to any other salary, compensation or benefits from the Company thereafter, except as follows:

(i) subject to the terms and conditions of Section 10, Executive shall be entitled to continue to receive a cash amount equal to Executive’s Base Salary, payable in regular payroll installments, and to continue to participate in health benefit plans for senior executive employees of the Company to the extent permitted under the terms of such plans and programs and such participation would not result in excise or other similar taxes payable by the Company or loss of benefits by the Company, for a period of 12 months after the date of such termination (the “Severance Period”). As a result of such termination, Executive shall also be entitled to payment of (x) any unpaid annual bonus earned for any completed fiscal year (“Prior Year Bonus”), which bonus shall be payable at such time as such bonus is otherwise payable pursuant to Section 3(c), and (y) a pro rata bonus for the fiscal year in which such termination occurs in an amount equal to (A) 100% of the Base Salary, multiplied by (B) the ratio of the number of days Executive is employed in such fiscal year to 365 (“Pro Rata Bonus”), which bonus shall be payable in equal installments over the Severance Period on regular payroll dates.

(ii) Executive shall not be entitled to any other salary, compensation, or benefits after termination of the Employment Period, except as otherwise specifically provided for under the Company’s employee benefit plans or as expressly required by applicable law, and

(iii) In no event shall Executive be obliged to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under Section 4(b)(i), nor shall the amount of any payment hereunder be reduced by any compensation earned by the Executive as a result of employment by another employer.

Any amounts payable pursuant to Section 4(b)(i) shall not be paid until the first scheduled payment date following the date the General Release is executed and no longer subject to revocation, with the first such payment being in an amount equal to the total amount to which Executive would otherwise have been entitled during the period following the date of termination if such deferral had not been required; provided, however, that any such amounts that constitute nonqualified deferred compensation within the meaning of Code §409A shall not be paid until the 60th day following such termination to the extent necessary to avoid adverse tax consequences under Code §409A, and, if such payments are required to be so deferred, the first payment shall be in an amount equal to the total amount to which Executive would otherwise have been entitled during the period following the date of termination if such deferral had not been required. Notwithstanding any other provision of this Agreement, if following the termination of the Employment Period, Executive is entitled to payments or other benefits under this Section 4(b), but it is later determined that Executive was terminable for Cause, (i) Executive shall not be entitled to any payments or other benefits pursuant to this Section 4(b), (ii) any and all payments to be made by the Company shall cease and (iii) any such payments previously made to Executive shall be returned immediately to the Company by Executive.

(c) If the Employment Period is terminated due to Executive’s death, Disability or resignation, or due to Executive’s termination for Cause, Executive shall be entitled to receive Executive’s Base Salary, accrued and unused vacation (in accordance with the Company’s vacation plan), and employee benefits through the date of such termination and Executive shall not be entitled to any other salary, compensation or benefits from the Company thereafter, except as otherwise specifically provided for under the Company’s employee benefit plans or as expressly required by applicable law; provided, if such termination is due to Executive’s death or Disability, Executive shall also be entitled to receive any Prior Year Bonus and a Pro Rata Bonus, in each case as payable at the times provided in Section 4(b)(i).

(d) Except as otherwise expressly provided in this Agreement, all of Executive’s rights to salary, bonuses, employee benefits and other compensation hereunder which would have accrued or become payable after the termination of the Employment Period shall cease upon such termination or expiration, other than those expressly required under applicable law (such as COBRA). Nothing contained herein is intended to limit or otherwise restrict the availability of any COBRA benefits to Executive required to be provided pursuant to Section 601 of Title I of the Employee Retirement Income Security Act of 1974 and Section 4980B of the Internal Revenue Code. Except as otherwise provided in Section 10, the Company may offset any undisputed amounts Executive owes the Company against any amounts the Company owes Executive.

(e) “Cause” shall mean with respect to Executive one or more of the following: (i) the commission of a felony or other crime involving moral turpitude; (ii) the commission of any act or omission involving dishonesty, disloyalty or fraud with respect to the Company; (iii) reporting to work under the influence of alcohol or illegal drugs, the use of illegal drugs (whether or not at the workplace) or other repeated conduct causing the Company substantial public disgrace or substantial economic harm; (iv) substantial and repeated failure to perform duties as reasonably directed by the officer to which Executive reports or the Board; (v) any intentional act or omission aiding or abetting a competitor, supplier or customer of the Company to the material disadvantage of the Company (vi) breach of fiduciary duty or willful misconduct with respect to the Company or (vii) any other material breach of this Agreement; provided, Executive shall be entitled to notice and an opportunity to cure any act or omission (if curable) under clause (vii) which is not cured to the Board’s reasonable satisfaction within 30 days after written notice thereof to Executive.

(f) “Company” means the Company and its subsidiaries.

(g) “Disability” shall mean Executive’s inability to perform the essential duties, responsibilities and functions of Executive’s position with the Company and its subsidiaries for such period as entitles Executive to monthly income replacement benefits under the Company’s long-term disability plan in which Executive participates; provided, if there shall not be such a plan in which Executive is a participant, such period shall be for 90 consecutive days or for a total of 180 days during any 12-month period as a result of any mental or physical illness, disability or incapacity even with reasonable accommodations for such illness, disability or incapacity provided by the Company and its subsidiaries or if providing such accommodations would be unreasonable, all as determined by the Board in its reasonable good faith judgment. Executive shall cooperate in all respects with the Company if a question arises as to whether Executive has become disabled (including, without limitation, submitting to reasonable examinations by one or more medical doctors and other health care specialists selected by the Company and authorizing such medical doctors and other health care specialists to discuss Executive’s condition with the Company).

Section 5. Confidential Information.

(a) Executive acknowledges that the information, observations, and data (including trade secrets) obtained by Executive while employed by the Company both before and after the date of this Agreement concerning the business or affairs of the Company (“Confidential Information”) are the property of the Company. In addition, Executive shall not disclose to any person or entity or use for Executive’s own purposes any Confidential Information or any confidential or proprietary information of other persons or entities in the possession of the Company (“Third Party Information”), without the prior written consent of the Board except as necessary for Executive to discharge Executive’s duties hereunder as determined in Executive’s reasonable discretion, unless and to the extent that the Confidential Information or Third Party Information (i) becomes generally known to and available for use by the public other than as a result of Executive’s acts or omissions or (ii) is required to be disclosed pursuant to applicable law or a court order or decree (in which case Executive shall give prior written notice to the Company of such disclosure). Executive shall deliver to the Company at the termination or expiration of the Employment Period, or at any other time the Company may reasonably request, all memoranda, notes, plans, records, reports, computer files, disks and tapes, printouts and software and other documents and data (and copies thereof) embodying or relating to Confidential Information, Third Party Information, Work Product, or the business of the Company which Executive may then possess or have under Executive’s control.

(b) In connection with rendering services to the Company hereunder, Executive shall be prohibited from using or disclosing any confidential information or trade secrets that Executive learned in connection with any prior employment with the Company or its affiliates at such time and that Executive is prohibited from using or disclosing by law or by contract. If at any time during the Employment Period Executive believes that Executive is being asked to engage in work that will, or will be likely to, jeopardize any confidentiality or other obligations Executive may have to former employers, Executive shall immediately advise the Board so that Executive’s duties can be modified appropriately.

Section 6. Intellectual Property, Inventions and Patents. Executive acknowledges that all discoveries, concepts, ideas, inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, patent applications, copyrightable work and mask work (whether or not including any Confidential Information) and all registrations or applications related thereto, all other proprietary information and all similar or related information (whether or not patentable) which relate to the Company’s actual or anticipated business, research and development or existing or future products or services and which are conceived, developed or made by Executive (whether alone or jointly with others) while employed by the Company or its predecessor and its subsidiaries, whether before or after the date of this Agreement (collectively referred to as “Work Product”), are the property of the Company or such other member of the Company. Executive shall promptly disclose such Work Product to the Board and, at the Company’s expense, perform all actions reasonably requested by the Board (whether during or after the Employment Period) to establish and confirm such ownership (including, without limitation, executing and delivering assignments, consents, powers of attorney and other instruments). Executive acknowledges that all Work Product shall be deemed to constitute “works made for hire” under the U.S. Copyright Act of 1976, as amended.

Section 7. Non-Compete, Non-Solicitation.

(a) As additional consideration for the compensation to be paid to Executive under this Agreement, Executive acknowledges that during the course of Executive’s employment with the Company Executive shall have access to and shall become familiar with the Company’s trade secrets and with other Confidential Information concerning the Company and that Executive’s services have been and shall continue to be of special, unique and extraordinary value to the Company, and therefore, Executive agrees that, during the Employment Period and for twelve (12) months thereafter (the “Non-compete Period”), Executive shall not directly or indirectly own any interest in, manage, control, participate in, consult with, render services for, be employed by, or in any manner engage in, any person, business or entity that engages in the Business or is otherwise competing with the Company as such businesses exist or are substantially in process on the date of the termination of the Employment Period, within any geographical area in which a member of the Company engages or substantially plans to engage in such businesses. Nothing herein shall prohibit Executive from being a passive owner of not more than 2% of the outstanding stock of any class of a corporation which is publicly traded, so long as Executive has no active participation in the business of such corporation. For purposes of this Agreement, “Business” shall mean the business carried on by the Company from time to time, and which shall include the business of providing orthopedic healthcare services within Brevard County, FL.

(b) In addition, during the Non-compete Period, Executive shall not directly or indirectly through another person, business or entity (i) induce or attempt to induce any employee of the Company to leave the employ of the Company, or in any way interfere with the relationship between the Company and any employee thereof, (ii) hire any person who was an employee of the Company at any time during the Employment Period or (iii) induce or attempt to induce any customer, supplier, licensee, licensor, franchisee or other business relation of the Company to cease doing business with the Company, or in any way interfere with the relationship between any such customer, supplier, licensee or business relation and the Company.

(c) During the Non-compete Period, Executive shall not make any negative or disparaging statements or communications regarding the Company or any of their officers, directors or employees, and no member of the Board of Directors shall make any negative or disparaging statements or communications regarding Executive; provided, however, that nothing in this Section 7(c) shall prevent Executive from providing truthful testimony or information in any proceeding or in response to any request from any governmental agency, or judicial, arbitral or self-regulatory forum, nor prevent the Company from assessing Executive’s performance and sharing such information with Company employees and members of the Board who have a need to know such information.

(d) If, at the time of enforcement of this Section 7, a court shall hold that the duration, scope or area restrictions stated herein are unreasonable under circumstances then existing, the parties agree that the maximum duration, scope or geographical area reasonable under such circumstances shall be substituted for the stated duration, scope or area and that the court shall be allowed to revise the restrictions contained herein to cover the maximum period, scope and area permitted by law. Executive acknowledges that the restrictions contained in this Section 7 are reasonable and that Executive has reviewed the provisions of this Agreement with Executive’s legal counsel.

(e) In the event of the breach or a threatened breach by Executive of any of the provisions of this Section 7, the Company would suffer irreparable harm, and in addition and supplementary to other rights and remedies existing in its favor, the Company shall be entitled to specific performance and/or injunctive or other equitable relief from a court of competent jurisdiction in order to enforce or prevent any violations of the provisions hereof (without posting a bond or other security). In addition, in the event of a breach or violation by Executive of this Section 7, the Non-compete Period shall be extended automatically by the amount of time between the initial occurrence of the breach or violation and when such breach or violation has been duly cured.

Section 8. Additional Acknowledgments. Executive acknowledges that the provisions of Section 5, Section 6 and Section 7 are in consideration of employment with the Company, other good and valuable consideration as set forth in this Agreement and the grant of equity in Holdings to Executive pursuant to the Unit Award Agreement. Executive also acknowledges that (i) the restrictions contained in Section 5, Section 6 and Section 7 do not preclude Executive from earning a livelihood, nor do they unreasonably impose limitations on Executive’s ability to earn a living, (ii) the business of the Company will be national in scope and (iii) notwithstanding the jurisdiction of formation or principal office of the Company or residence of any of its executives or employees (including Executive), it is expected that the Company will have business activities and have valuable business relationships within its industry throughout the United States. Executive agrees and acknowledges that the potential harm to the Company resulting from the non-enforcement of Section 5, Section 6 and Section 7 outweighs any potential harm to Executive of the enforcement of such provisions by injunction or otherwise. Executive acknowledges that Executive has carefully read this Agreement and has given careful consideration to the restraints imposed upon Executive by this Agreement and is in full agreement regarding their necessity for the reasonable and proper protection of the business goodwill, competitive positions and confidential and proprietary information of the Company now existing or to be developed in the future and that each and every restraint imposed by this Agreement is reasonable with respect to subject matter, time period and geographical area.

Section 9. Executive’s Representations. Executive hereby represents and warrants to the Company that (i) the execution, delivery and performance of this Agreement by Executive do not and shall not conflict with, breach, violate or cause a default under any contract, agreement, instrument, order, judgment or decree to which Executive is a party or by which Executive is bound, (ii) Executive is not a party to or bound by any employment agreement, non-compete agreement or confidentiality agreement with any other person, business or entity or any agreement or contract requiring Executive to assign inventions to another party and (iii) upon the execution and delivery of this Agreement by the Company, this Agreement shall be the valid and binding obligation of Executive, enforceable in accordance with its terms. Executive hereby acknowledges and represents that Executive has consulted with independent legal counsel regarding Executive’s rights and obligations under this Agreement and that Executive fully understands the terms and conditions contained herein.

Section 10. Deferred Compensation Matters.

(a) It is the intent of the Company and Executive that the payments and benefits under this Agreement shall comply with or be exempt from Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively, “Code §409A”), and accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance with or exempt from Code §409A. Executive agrees and acknowledges that the Company and its respective Subsidiaries make no representations with respect to the application of Code §409A and other tax consequences to any payments hereunder and, by entering into this Agreement, Executive agrees to accept the potential application of Code §409A and the other tax consequences of any payments made hereunder.

(b) A termination of the Employment Period shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code §409A, and for purposes of any such provision of this Agreement, references to a “termination”, “termination of the Employment Period”, “termination of employment” or similar terms shall mean “separation from service.” Notwithstanding anything to the contrary in this Agreement, if Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Code §409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered deferred compensation under Code §409A payable on account of a “separation from service,” such payment or benefit shall not be made or provided until the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of Executive, and (B) the date of the Executive’s death, to the extent required under Code Section 409A. Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this Section 10(b) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to Executive in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

(c) To the extent any reimbursements or in-kind benefits under this Agreement constitute “non-qualified deferred compensation” for purposes of Code §409A, (i) all such expenses or other reimbursements under this Agreement shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Executive, (ii) any right to such reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit and (iii) no such reimbursement, expenses eligible for reimbursement or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.

(d) For purposes of Code §409A, Executive’s right to receive any installment payment pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days (e.g., “payment shall be made within 30 days following the date of termination”), the actual date of payment within the specified period shall be within the Company’s sole discretion. Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “non-qualified deferred compensation” for purposes of Code §409A be subject to offset, counterclaim or recoupment by any other amount unless otherwise permitted by Code §409A.

Section 11. Survival. Section 4 through Section 24, inclusive, shall survive and continue in full force in accordance with their terms notwithstanding the termination of the Employment Period.

Section 12. Notices. All notices, demands, or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given or made (i) when delivered personally to the recipient, (ii) when telecopied to the recipient, or delivered by means of electronic mail (with hard copy sent to the recipient by reputable overnight courier service (charges prepaid) that same day) if telecopied/emailed before 5:00 p.m. Melbourne, FL time on a business day, and otherwise on the next business day, or (iii) one (1) business day after being sent to the recipient by reputable overnight courier service (charges prepaid). Such notices, demands, and other communications shall be sent to the Company at the following address and to Executive at Executive’s Address or to the address for Executive set forth from time to time in the Company’s books and records (and if Executive has notified the Company that he or she is represented by legal counsel in connection with the transactions contemplated hereby, with a copy (which shall not constitute notice) to such counsel’s address as listed by Executive on the signature page hereto), or to such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party.

First Choice Healthcare Solutions Inc.

95 Bulldog Blvd

Melbourne, FL 32901

Attention: Chief Financial Officer

or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement shall be deemed to have been given when so delivered, sent, or mailed.

Section 14. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any action in any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

Section 15. Complete Agreement. This Agreement, and any other agreement expressly referred to herein embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings, agreements, or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.

Section 16. No Strict Construction. The language used in this Agreement shall be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction shall be applied against any party.

Section 17. Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

Section 18. Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive, the Company and their respective heirs, successors, and assigns, except that Executive may not assign Executive’s rights or delegate Executive’s duties or obligations hereunder without the prior written consent of the Company.

Section 19. Choice of Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement and the exhibits and schedules hereto shall be governed by, and construed in accordance with, the laws of the State of Florida, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Florida or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Florida.

Section 20. Amendment and Waiver. The Original Employment Agreement is hereby amended, restated, and superseded by this Agreement. The provisions of this Agreement may be amended or waived only with the prior written consent of the Company (as approved by the Board) and Executive, and except as expressly provided herein, no course of conduct or course of dealing or failure or delay by any party hereto in enforcing or exercising any of the provisions of this Agreement (including, without limitation, the Company’s right to terminate the Employment Period for Cause) shall affect the validity, binding effect or enforceability of this Agreement or be deemed to be an implied waiver of any provision of this Agreement.

Section 21. Insurance. The Company may, at its discretion, apply for and procure in its own name and for its own benefit life and/or disability insurance on Executive in any amount or amounts considered advisable. Executive shall cooperate in any medical or other examination, supply any information, and execute and deliver any applications or other instruments in writing as may be reasonably necessary to obtain and maintain such insurance. Executive hereby represents that Executive has no reason to believe that Executive’s life is not insurable at rates now prevailing for healthy men of Executive’s age. The Company will maintain in strictest confidence all information obtained in connection with such medical or other examination and use such information only for the purposes of this Section 21.

Section 22. Withholding Tax Indemnification and Reimbursement of Payments on Behalf of Executive. The Company shall be entitled to deduct or withhold from any amounts owing from the Company to Executive any federal, state, local or foreign withholding taxes, excise tax or employment taxes (“Taxes”) imposed with respect to Executive’s compensation or other payments from the Company or Executive’s ownership interest in the Company (including, without limitation, wages, bonuses, dividends, the receipt, or exercise of equity options and/or the receipt or vesting of restricted equity). In the event the Company does not make such deductions or withholdings, Executive shall indemnify the Company for any amounts paid with respect to any such Taxes, together with any interest, penalties, and related expenses thereto.

Section 23. Waiver of Jury Trial. As a specifically bargained for inducement for each of the parties hereto to enter into this Agreement (after having the opportunity to consult with legal counsel), the Company and Executive each expressly waives the right to trial by jury in any lawsuit or proceeding relating to or arising in any way from this Agreement or the matters contemplated hereby.

Section 24. Executive’s Cooperation, During the Employment Period and thereafter, Executive shall cooperate with the Company in any internal investigation, any administrative, regulatory or judicial investigation or proceeding or any dispute with a third party as reasonably requested by the Company (including, without limitation, Executive being available to the Company upon reasonable notice for interviews and factual investigations, appearing at the Company’s request to give testimony without requiring service of a subpoena or other legal process, volunteering to the Company all pertinent information and turning over to the Company all relevant documents which are or may come into Executive’s possession, all at times and on schedules that are reasonably consistent with Executive’s other permitted activities and commitments). In the event the Company requires Executive’s cooperation in accordance with this Section 24, the Company shall reimburse Executive solely for reasonable travel expenses (including lodging and meals) upon submission of receipts.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first written above.

	FIRST CHOICE HEALTHCARE SOLUTIONS, INC,

	By:	PHILLIP KELLER
	Its:	Chief Financial Officer


	By:	LANCE FRIEDMAN
	Its:	Chief Executive Officer

EXHBIT A

The target bonus of $350,000 will be paid 60% in cash and 40% in stock grants for hitting the following strategic financial and operational objectives with each objective caring equal weight and will be earned individually. The $140,000 potential stock bonus will be converted into shares equivalents at the closing price of the stock on the date the bonus is approved by the board of directors. Any stock awards earned will have full anti-dilution rights.

Year One (1)

	●	Raises $8 million in equity capital.

	●	Acquire a new business

	●	On board 4 new physicians

Year Two (2)

	●	Consolidated Annual Net Revenue of $15,000,000

	●	Successfully exit bankruptcy

	●	Up list to national exchange

	●	Acquire a second business

Year Three (3)

	●	Consolidated Annual Net Revenue of $50,000,000

	●	Achieve 10% growth over prior year’s EBITDA

	●	Acquire a third new business

ADDENDUM

This Employment Agreement Addendum (the “Addendum”), is made on 1 MARCH 2024 by and between by and between First Choice Healthcare Solutions, Inc., a Delaware corporation (the “Company”), and Mr. Lance Friedman (“Executive”).

The aforementioned Employment Agreement is hereby supplemented as follows:

Year Four (4)

	1.	Base Salary Adjustment: The Executive’s base salary shall be adjusted to $375,000.00 per annum, effective as of the date stipulated in this addendum.
	2.	S-1 Filing Requirement: The Executive is tasked with overseeing and ensuring the successful filing of Form S-1 with the U.S. Securities and Exchange Commission, in accordance with the timeline and guidelines detailed herein.
	3.	Completion of Company Acquisitions: The Executive shall finalize the acquisitions of two specified companies, ensuring all legal, financial, and operational criteria are met as per the terms set forth in this addendum..

The Executive, agrees to the aforementioned additions to the Employment Agreement. Any changes made are legally binding upon signature of both Parties.

Agreed and Accepted:

Employee Signature:

		Date: 1 March 2024
Name:	Lance Friedman
Title:	CEO & Chairman of the Board

Page 1 of 1

Exhibit 10.6

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is effective as of February 1, 2024 by and between First Choice Healthcare Solutions, Inc., a Delaware corporation (the “Company”), and Mr. Michael C. Howe (“Executive”).

WHEREAS, the Executive is employed by the Company and the parties hereto desire to provide for the terms of Executive’s employment by the Company; and

WHEREAS, the Board of Directors of the Company has determined that it is in the best interests of the Company to enter into this Agreement.

NOW, THEREFORE, in consideration of the premises and the respective covenants and agreements contained herein, and intending to be legally bound hereby, the Company and Executive agree as follows:

Section 2. Position and Duties.

(a) During the Employment Period, Executive shall serve as the President and Chief Operating Officer of the Company and shall have the normal duties, responsibilities, functions, and authority of such position. Executive shall render such administrative, financial, and other executive and managerial services to the Company that are consistent with Executive’s position as the Company’s board of directors (the “Board”) may from time to time direct.

(b) During the Employment Period, Executive shall report to the Chief Executive Officer and shall devote Executive’s best efforts and Executive’s full business time and attention (except for permitted vacation periods and reasonable periods of illness or other incapacity) to the business and affairs of the Company. Executive shall perform Executive’s duties, responsibilities, and functions for the Company hereunder to the best of Executive’s abilities in a diligent, trustworthy, professional, and efficient manner and shall comply with the Company’s and its subsidiaries’ policies and procedures in all material respects. In performing Executive’s duties and exercising Executive’s authority under this Agreement, Executive shall support and implement the business and strategic plans approved from time to time by the Board and shall support and cooperate with the Company’s and its subsidiaries’ efforts to expand their businesses and operate profitably and in conformity with the business and strategic plans approved by the Board. During the Employment Period, Executive shall not serve as an officer, manager, or director of, or otherwise perform services for compensation for, any other person or entity without the prior written consent of the CEO; provided that Executive may serve as an officer, manager, or director of, or otherwise participate in, solely charitable, educational, welfare, social, religious and civic organizations so long as such activities do not interfere with Executive’s employment with the Company.

Section 3. Compensation and Benefits.

(a) During the Employment Period, Executive’s base salary shall be $250,000.00 per annum or such higher rate as the Board may determine from time to time (as adjusted from time to time, the “Base Salary”), which salary shall be payable by the Company in regular installments in accordance with the Company’s general payroll practices in effect from time to time, but in no event less frequently than monthly. In addition, during the Employment Period, Executive shall be entitled to participate in all of the Company’s employee benefit programs for which senior executive employees of the Company and its subsidiaries are generally eligible. Cash compensation and employee benefits will commence concurrently with the effective date of the company stock being offered on a national exchange.

(c) In addition to the Base Salary, Executive shall be eligible to receive an annual bonus in an amount equal to 100% of the Base Salary (60% cash and 40% stock grant subject to ratio adjustments annually at the discretion of the Board of Directors for all Executive level payouts) for achievement of target-level performance objectives (“Target Bonus”) (with the eligible amount of such bonus being more or less than the Target Bonus in the event of achievement below or above target-performance objectives, in each case as determined by the Board in its discretion).The Target Bonus objective for the first two years are listed on Exhibit A The annual bonus, to the extent earned in a given fiscal year as determined in the sole discretion of the Board, will be paid to Executive within 30 days following the completion of the audit for such fiscal year during the Employment Period based upon Executive’s performance and the Company’s achievement of financial, operating, and other objectives set by the Board and communicated to Executive not later than 90 days after the commencement of the applicable fiscal year.

(d) All amounts payable to Executive as compensation hereunder shall be subject to all required and customary withholding by the Company and its subsidiaries.

Section 4. Term.

(a) The initial Employment Period shall begin on the date of this Agreement and terminate upon December 31, 2025, annual extensions will be subject to mutual agreement between the Executive and the Company to be completed no later than November 30 of each subsequent year. Employment is additionally subject to termination upon the first to occur of (i) Executive’s resignation, (ii) Executive’s death or Disability and (iii) the Company’s termination of Executive for Cause or without Cause.

(f) “Company” means the Company and its subsidiaries.

Section 5. Confidential Information.

Section 7. Non-Compete, Non-Solicitation.

Section 10. Deferred Compensation Matters.

Section 11. Survival. Section 4 through Section 24, inclusive, shall survive and continue in full force in accordance with their terms notwithstanding the termination of the Employment Period.

First Choice Healthcare Solutions Inc.

95 Bulldog Blvd

Melbourne, FL 32901

Attention: Chief Financial Officer

Section 17. Counterparts. This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the date first written above.

	FIRST CHOICE HEALTHCARE SOLUTIONS, INC,

	By:	Lance Friedman
	Its:	Chief Executive Officer

	By:	Michael C. Howe
	Its:	President and Chief Operating Officer

EXHBIT A

The target bonus of $250,000 will be paid 60% in cash and 40% in stock grants (subject to ratio adjustments annually at the discretion of the Board of Directors for all Executive level payouts) for hitting the following strategic financial and operational objectives with each objective carrying equal weight and will be earned individually. The annual potential stock bonus will be converted into shares equivalents at the closing price of the stock on the date the bonus is approved by the board of directors. Any stock awards earned will have full anti-dilution rights.

Year One (1)

	●	Open three Good Clinic sites in MN.

	●	Hire and staff Clinics.

	●	On board, credential and sign four Major Insurance payors

	●	Integrate operations with Live Well

Year Two (2)

	●	Open seven addition clinics in MN

	●	Expand The Good Clinic into a new territory.

Year Three (3)

	●	Consolidated Annual Net Revenue of $50,000,000

	●	Achieve 10% growth over prior year’s EBITDA.

Exhibit 10.7

CONSULTING AGREEMENT

CONSULTING AGREEMENT effective as of December 19, 2023 between First Choice Healthcare Solutions, Inc. (“Client”) having an office at 95 Bulldog Blvd, Suite 202, Melbourne, FL 32901, and FinTrust Consulting, LLC (“Consultant”) having an office at 355 Heron Ave, Naples, FL 34108.

	1.	*Services*. Consultant agrees perform such duties and services as required by Client relating to finance, strategy, accounting, business planning, insurance, capital raising initiatives, and other related activities as may be reasonably requested from time to time by Client’ senior officers (“Professional Services”). Consultant is hereby retained by Client to accomplish the objectives described above. Consultant will render his services on a basis sufficient to accomplish the purposes of the parties but shall be free to determine his own means and manner of accomplishing those purposes. Client shall not exercise or retain the right to control, direct or supervise the manner in which Consultant performs any of his services for Client.

	2.	*Compensation*. Client agrees to pay Consultant the following. Invoices are due upon receipt.

	2.1.	Monthly Fee. Client agrees to pay for the Professional Services of Consultant at a monthly rate of $17,250.00 for the duration of this agreement. Consultant will bill Client monthly and invoices shall be payable by Client upon receipt.
	2.2.	Super 10-K and S-1 Fee. Client agrees to pay Consultant a flat fee of $8,000.00. Consultant will be considered to have earned this fee on the earlier of completion of these documents and final acceptance by the SEC.
	2.3.	Equity. Upon execution of this agreement, Client agrees to deliver to Consultant a Warrant agreement for 100,000 shares of Common Stock, in a form consistent with other Warrant agreements issued by the Client.
	2.4.	IPO or Uplisting. Client agrees to pay the Consultant a cash bonus of $100,000, due within 15 days of an IPO or Uplisting closing.

	3.	*Retainer*. Upon execution and as a condition precedent to effectuating this agreement, Client agrees to pay a retainer of $17,250.00 which the Consultant will hold to apply against final billings upon termination of this Agreement as per Paragraph 4 below. Should the Consultant determine in his own judgement that this retainer should be applied against any fees in Section 2 above, then Client must replenish the Retainer to resume services under this agreement.

	4.	*Term.* (A) This Agreement shall be effective as of the date set forth above and shall remain in effect until terminated by either party in writing. Client or Consultant may terminate this Agreement at any time and for any reason by providing thirty (30) calendar days prior notice to Consultant or Client, respectively. (B) In addition, this Agreement may be terminated at any time by either party if in such party’s reasonable discretion, the other party has committed any act which amounts to fraud, dishonesty, gross misconduct, gross negligence or moral turpitude, or which constitutes a breach of Client’ or Consultant’s standards of ethical business conduct (“Dishonest Acts”). Notwithstanding anything to the contrary in Paragraph 2 or this Paragraph 3, in the event either party terminates this Agreement due to the other’s Dishonest Acts, then the canceling party shall have no further obligations or payments required hereunder and termination shall be effective immediately upon verbal notification.

	5.	*Expenses.* Client will be responsible for any reasonable out of pocket or travel expenses of Consultant that have been pre-approved by an authorized representative of Client.

Consultant/Client Agreement

Page 1 of 3

	6.	*Warranty*. Consultant’s obligation under this Agreement is to provide Client with professional and workmanlike services. NO WARRANTY IS MADE BY CONSULTANT, EXCEPT AS AFORESAID, IN REGARD TO ANY PROFESSIONAL SERVICES PROVIDED UNDER THIS AGREEMENT, EITHER EXPRESS, IMPLIED OR STATUTORY, NOR IS ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE GIVEN.

	7.	*Indemnity*. Client agrees to indemnify and hold Consultant harmless from any claim or demand, including reasonable attorneys’ fees, made by any third party due to or arising out of this Agreement, the services and work products provided through this Agreement, information or content provided by Client to Consultant under this Agreement, or resulting from Client’ own actions or violation of any rights of another.

	8.	*Personnel*. Client and Consultant agree that Consultant is acting in the capacity of an independent contractor and shall have full and direct responsibility for compliance with all federal, state and municipal requirements pertaining to Income, Social Security, and Medicare taxes. Client shall not (a) pay or be responsible for payment of Social Security, Medicare, unemployment or any other federal, state or municipal employment taxes on behalf of Consultant, (b) provide workers’ compensation coverage for Consultant or (c) withhold income, Social Security, or any other federal, state or municipal employment taxes from Consultant’s pay. Any payment for consulting services made pursuant to this Agreement shall be made without statutory deduction.

	9.	*Confidentiality.* Client, Consultant and their officers and agents mutually agree to maintain confidentiality pertaining to the specific terms of this Agreement. This confidentiality may be released by either party with written notice to the other. The confidentiality provisions of this Agreement shall remain in full force and effect after the termination of this Agreement.

	*10.*	*Working Conditions.* During such time that services under this Agreement are furnished, Client agrees to provide office space and facilities for use relating to services provided Client, at the option of the Consultant.

	*11.*	*Disclosure*. Consultant is required to disclose any outside activities or interests that conflict or may conflict with the best interests of Client. Prompt disclosure is required under this paragraph if the activity or interest is related, directly or indirectly, to other consulting or employment relationships that may conflict Client interest under this Agreement.

	*12.*	Severability. If any provision of this Agreement shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Agreement is invalid or unenforceable, but that by limiting such provision it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.

	*13.*	*Applicable Law.* This Agreement shall be governed by the laws of the State of New York and any actions or other agreed upon dispute resolution shall take place in a venue or Court located in Florida.

Consultant/Client Agreement

Page 2 of 3

14.

Miscellaneous.

	14.1.	This Agreement shall be binding upon and inure to the benefit of the parties hereto, their respective successors and assigns. Neither party shall be liable for delay in performance hereunder due to causes beyond its reasonable control. This Agreement shall be interpreted under the law of the State of Florida.

	14.2.	All notices hereunder shall be in writing and shall be either delivered personally, via email, or sent to the respective party’s address shown above.

	14.3.	This Agreement contains the entire Agreement between the parties relating to the subject matter hereof and supersede all previous and collateral Agreements, representations, statements, warranties, promises and understandings with regard thereto.

	14.4.	No representations or statements not expressly set forth herein (including trade practice and the course of dealing between the parties) shall be binding upon either party as a warranty or otherwise. No waiver, alteration, or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by an authorized representative of the party to be charged and only to the extent therein set forth.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives and the individuals signing warrant that they are duly authorized to sign for and on behalf of their respective party.

CLIENT		CONSULTANT

By:		By:
Name:	Lance Friedman	Name:	Ernest J. Scheidemann, Jr.
Title:	CEO	Title:	Managing Member
Date:		Date:

Consultant/Client Agreement

Page 3 of 3

Exhibit 21

List of Subsidiaries of the Company

1.	FCID Medical, Inc.

2.	First Choice Medical Group of Brevard, LLC

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To Whom It May Concern:

We hereby consent to the use in the Annual Report on Form 10-K of First Choice Healthcare Solutions, Inc. of our Report of Independent Registered Public Accounting Firm, dated May 12, 2024 on the balance sheet of First Choice Healthcare Solutions, Inc. as of December 31, 2023 and 2022 and the related statements of operations, changes in stockholder’s equity and cash flows for the years then ended.

Very truly yours,

/s/ Bush & Associates CPA LLC

Bush & Associates CPA LLC (PCAOB 6797)

Henderson, Nevada

May 13, 2024

179 N. Gibson Rd., Henderson, NV 89014 ● 702.703.5979 ● www.bushandassociatescpas.com

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Lance Friedman, certify that:

1. I have reviewed this annual report on Form 10-K of First Choice Healthcare Solutions, Inc., a Delaware corporation (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	Date: May 13, 2024

	/s/ Lance Friedman
	Lance Friedman
	Chief Executive Officer and Director

	(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Ernest J. Scheidemann, Jr., certify that:

I have reviewed this Annual Report on Form 10-K of First Choice Healthcare Solutions, Inc. (the ‘registrant’).

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material aspects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this report;

The small business issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	By:	/s/ Ernest J. Scheidemann Jr.
		Ernest J. Scheidemann, Jr.
		Interim Chief Financial Officer

		Date: May 13, 2024

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 10-K of First Choice Healthcare Solutions, Inc. (the “Company”), as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), I, Ernest J. Scheidemann, Jr., the Interim Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

The information contained in such Report fairly presents, in all material respects, the financial condition and results of the Company.

	By:	/s/ Ernest J. Scheidemann, Jr.
		Ernest J. Scheidemann, Jr.
		Interim Chief Financial Officer

		Date: May 13, 2024

Exhibit 97.1

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

CLAWBACK POLICY

Introduction

The Board of Directors (“Board”) of First Choice Healthcare Solutions, Inc. (the “Company”) believes that it is in the best interests of the Company and its stockholders to adopt this policy which provides for the recoupment of certain executive compensation in the event of an accounting restatement resulting from material noncompliance with financial reporting requirements under the federal securities laws (the “Policy”). This Policy is designed to comply with Section 10D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rule 10D-1 promulgated under the Exchange Act (“Rule 10D-1”), and Listing Rule 5608 of The Nasdaq Stock Market LLC (“Nasdaq”).

Administration

This Policy shall be administered by the Board or, if so designated by the Board, the Compensation Committee of the Board (the “Compensation Committee”) or the Audit Committee of the Board (the “Audit Committee”), or any special committee comprised of members of the Compensation Committee or Audit Committee (the “Administrator”). Any determinations made by the Administrator shall be final and binding on all affected individuals. Subject to any limitation under applicable law, the Administrator may authorize and empower any officer or employee of the Company to take any and all actions necessary or appropriate to carry out the purpose and intent of this Policy (other than with respect to any recovery under this Policy involving such officer or employee).

Covered Executives

This Policy applies to the Company’s current and former executive officers, as determined by the Administrator in accordance with Section 10D of the Exchange Act and the listing standards of the national securities exchange on which the Company’s securities are listed, and such other senior executives/employees who may from time to time be deemed subject to the Policy by the Administrator (each, a “Covered Executive”).

For the purposes of this Policy, “executive officers” shall include persons subject to reporting and short-swing liability provisions of Section 16 under the Exchange Act. This shall include the Company’s president, principal financial officer, principal accounting officer (or if there is no such accounting officer, the controller), any vice president in charge of a principal business unit, division, or function (such as sales, administration, or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the Company and any person identified under Regulation S-K Item 401(b) in the Company’s annual reports and proxy statements. Executive officers of a parent or subsidiary are deemed executive officers of the listed company if they perform such policy-making functions for the listed company or such parent or subsidiary. The policy-making function is not intended to include policy-making functions that are not significant.

Recoupment; Accounting Restatement

In the event the Company is required to prepare an accounting restatement of its financial statements due to the Company’s material noncompliance with any financial reporting requirement under the securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period, the Administrator will require, as promptly as it reasonably can, reimbursement or forfeiture of any Incentive Compensation, as defined below, received by any Covered Executive during the three (3) completed fiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement (the “Restatement Date”), so long as the Incentive Compensation received by such Covered Executive is in excess of what would have been awarded or vested after giving effect to the accounting restatement. The amount to be recovered will be the excess of Incentive Compensation paid to the Covered Executive based on the erroneous data in the original financial statements over the Incentive Compensation that would have been paid to the Covered Executive had it been based on the restated results, without respect to any taxes paid.

The Restatement Date is defined as the earlier of (i) the date the Board, a Board committee, or management (if no Board action is required) concludes, or reasonably should have concluded, that the Company is required to prepare an accounting restatement; or (ii) the date a court, regulator, or other legally authorized body directs the Company to prepare an accounting restatement.

Incentive Compensation

For purposes of this Policy, “Incentive Compensation” means any of the following; provided that, such compensation is granted, earned, or vested based wholly or in part on the attainment of a financial reporting measure:

●

Annual bonuses and other short-term and long-term cash incentives.

●

Stock options.

●

Stock appreciation rights.

●

Restricted stock.

●

Restricted stock units.

●

Performance shares.

●

Performance units.

●

Non-equity incentive plan awards.

Financial reporting measures include any measure that is determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measure that is derived wholly or in-part from such measure. The following examples (and any measures derived therefrom) are non-exhaustive:

●

Company stock price.

●

Total shareholder return.

●

Revenues.

●

Net income.

●

Operating income.

●

Earnings before interest, taxes, depreciation, and amortization (EBITDA).

●

Funds from operations and adjusted funds from operations.

●

Liquidity measures such as working capital or operating cash flow.

●

Return measures such as return on invested capital or return on assets.

●

Earnings measures such as earnings per share.

●

Profitability of one or more reportable segments.

●

Financial ratios such as accounts receivable turnover.

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Cost per employee, where cost is subject to any accounting restatement.

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Any of such financial reporting measures relative to a peer group, where the Company’s financial reporting measure is subject to an accounting restatement and tax basis income.

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Capital raised through debt or equity financing.

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Reductions in accounts receivables.

For the avoidance of doubt, Incentive Compensation does not include annual salary, compensation awarded based on completion of a specified period of service, or compensation awarded based on subjective standards, strategic measures, or operational measures.

Incentive Compensation includes incentive-based compensation received by a person:

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after beginning service as an executive officer;

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who serves as an executive officer at any time during the performance period for the incentive-based compensation;

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who served as an executive officer while the Company has a class of securities listed on a national securities exchange; and

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who serves as an executive officer during the three (3) fiscal years preceding the Restatement Date.

For the avoidance of doubt, subsequent changes in a Covered Executive’s employment status, including retirement or termination of employment, do not affect the Company’s rights to recover incentive-based compensation pursuant to this Policy.

Excess Incentive Compensation: Amount Subject to Recovery

The amount to be recovered will be the excess of the Incentive Compensation paid to the Covered Executive based on the erroneous data over the Incentive Compensation that would have been paid to the Covered Executive had it been based on the restated results, as determined by the Administrator. Incentive Compensation is deemed “received” during the fiscal period during which the financial reporting measure specified in the incentive-based compensation award is attained, even if payment or grant of the Incentive Compensation occurs after the end of the period.

If the Administrator cannot determine the amount of excess Incentive Compensation received by the Covered Executive directly from the information in the accounting restatement, then it will make its determination based on a reasonable estimate of the effect of the accounting restatement.

Method of Recoupment

The Administrator will determine, in its sole discretion, the method for recouping excess Incentive Compensation hereunder, which may include, without limitation:

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requiring reimbursement of cash Incentive Compensation previously paid;

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seeking recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other disposition of any equity-based awards;

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offsetting the recouped amount from any compensation otherwise owed by the Company to the Covered Executive;

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canceling outstanding vested or unvested equity awards; and/or

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taking any other remedial and recovery action permitted by law, as determined by the Administrator.

No Indemnification of Covered Executives

The Company shall not indemnify any current or former Covered Executive against the loss of any incorrectly awarded Incentive Compensation, and shall not pay, or reimburse any Covered Executive for premiums for any insurance policy to fund such executive’s potential recovery obligations.

Indemnification of the Administrator

Any members of the Administrator who assist in the administration of this Policy, shall not be personally liable for any action, determination, or interpretation made with respect to this Policy and shall be fully indemnified by the Company to the fullest extent under applicable law and Company policy with respect to any such action, determination, or interpretation. The foregoing sentence shall not limit any other rights to indemnification of the Administrator under applicable law or Company policy.

Interpretation

The Administrator is authorized to interpret and construe this Policy and to make all determinations necessary, appropriate, or advisable for the administration of this Policy. It is intended that this Policy be interpreted in a manner that is consistent with the requirements of Section 10D of the Exchange Act, Rule 10D-1, Nasdaq Listing Rule 5608, and any other applicable rules or standards adopted by the Securities and Exchange Commission or any national securities exchange on which the Company’s securities are then listed.

Effective Date

This Policy shall be effective as of the date it is adopted by the Administrator (the “Effective Date”) and shall apply to Incentive Compensation that is approved, awarded, or granted to any Covered Executive on or after that date.

Amendment; Termination

The Board may amend this Policy from time to time in its discretion and shall amend this Policy as it deems necessary to reflect final regulations adopted by the Securities and Exchange Commission under Section 10D of the Exchange Act, Rule 10D-1, and Nasdaq Listing Rule 5608 and to comply with any other rules or standards adopted by a national securities exchange on which the Company’s securities are then listed. The Board may terminate this Policy at any time.

Other Recoupment Rights

The Administrator intends that this Policy will be applied to the fullest extent of the law. The Administrator may require that any employment agreement, equity award agreement, or similar agreement entered into on or after the Effective Date shall, as a condition to the grant of any benefit thereunder, require a Covered Executive to agree to abide by the terms of this Policy. Any right of recoupment under this Policy is in addition to, and not in lieu of, any other remedies or rights of recoupment that may be available to the Company pursuant to the terms of any similar policy in any employment agreement, equity award agreement, or similar agreement and any other legal remedies available to the Company.

Impracticability

The Administrator shall recover any excess Incentive Compensation in accordance with this Policy unless such recovery would be impracticable, as determined by the Administrator in accordance with Rule 10D-1 of the Exchange Act and the listing standards of the national securities exchange on which the Company’s securities are listed.

Successors

This Policy shall be binding and enforceable against all Covered Executives and their beneficiaries, heirs, executors, administrators, or other legal representatives.

Exhibit Filing Requirement

A copy of this Policy and any amendments thereto shall be posted on the Company’s website and filed as an exhibit to the Company’s Annual Report on Form 10-K.