SOURCE: First Choice Healthcare Solutions, Inc.

First Choice Healthcare Solutions, Inc.

April 15, 2015 11:24 ET

First Choice Healthcare Solutions Announces Record 2014 Year-End Results

Total Revenues Increased 32% and Net Losses Improved 47%

MELBOURNE, FL--(Marketwired - Apr 15, 2015) -  First Choice Healthcare Solutions, Inc. (OTCQB: FCHS) ("FCHS" or "First Choice"), a diversified holding company focused on delivering clinically superior, patient-centric, multi-specialty care through state-of-the-art medical centers of excellence, today announced its financial results for the fiscal year ended December 31, 2014.

Key 2014 Financial Highlights Compared to 2013

  • Total revenues climbed to a record $8,102,602, increasing 32% from $6,142,827.

    • Net patient service revenue generated by First Choice Medical Group, the Company's flagship medical center of excellence, rose 39% to $7,053,603 from $5,094,358. 

  • Net loss declined 47% to $2,489,539, or $0.14 loss per basic and diluted share, which compared to a net loss of $4,704,303, or $0.35 loss per basic and diluted share, for the previous year. 

  • Net cash used in the Company's operating activities dropped precipitously to $363,937 -- a 71% improvement over $1,264,058 net cash used in 2013.

  • As of December 31, 2014, the Company had cash and restricted cash totaling $597,346; and accounts receivable of $1,804,636 million, up from $1,272,155 in 2013.

Commenting on the results, Christian Romandetti, Chairman, President and CEO of First Choice, stated, "Throughout a challenging 2014, our medical operations continued to show significant and sustained quality improvement, as well as notable revenue growth. I commend the First Choice Medical Group team for doing an excellent job focusing on delivering superior quality care and outstanding patient satisfaction, both key operational priorities."

Continuing, he said, "We are also pleased that we succeeded in adhering to strict discipline in managing our cash resources during the year, as reflected by the notable 71% decline in the net cash used to run our businesses. When combined with the strong revenue performance of our medical operations and the reported enhanced quality of life being enjoyed by our staff physicians, it is abundantly clear that our business model, which uniquely empowers our Doctors to be Doctors, is proving to be highly impactful on our business, our team, and the thousands of patients who entrust their care to us.

"The industry imperative to care for more patients, provide higher quality care at less cost, and comply with increased regulatory reporting and tracking demands is undeniably serving to change how medical practices have historically operated. In today's environment, it requires sophisticated business management skill, vision and execution to effectively navigate and overcome the many challenges confronting the business of delivering healthcare. Consequently, the First Choice business model is not just smart and compelling, it is now necessary.

"This new era of value-based care -- with emphasis on care quality, collaboration and cost-effectiveness -- provides First Choice with tremendous growth opportunities, and ones that we intend to continue working very hard to optimize. With the aim of achieving several more game-changing objectives this year, we look forward to the months ahead and expect to announce several key developments that should collectively serve to position our Company for yet another record-breaking year," noted Romandetti.

The Company further reported that on April 9, 2015, Hillair Capital Investments, L.P. agreed to modified the redemption terms of the 8% Original Issue Discount Secured Convertible Debenture (the "Debenture") providing for the principal amount of the Debenture due on May 1, 2015 to be extended to August 1, 2015. In addition, the Company also has the right to further extend that redemption date to January 15, 2016, pursuant to certain defined terms and conditions being met by the Company. Romandetti added, "Once again, I'd like to express our appreciation to Hillair Capital for continuing to be a very supportive financial partner to our Company. We are pleased that they share our long term vision for First Choice, and continue to afford us the flexibility to focus on building our business." 

For more detailed information on First Choice's fiscal 2014 year-end results and the noted Hillair redemption modifications, please refer to the Company's 10-K filed with the U.S. Securities and Exchange Commission earlier today and accessible at www.sec.gov.

 
FIRST CHOICE HEALTHCARE SOLUTIONS, INC.
 CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2014 AND 2013
 
ASSETS   2014     2013  
Current assets                
Cash   $ 279,087     $ 739,158  
Cash-restricted     318,259       256,246  
Accounts receivable, net     1,804,636       1,272,155  
Prepaid and other current assets     153,296       140,580  
Capitalized financing costs, current portion     68,370       57,348  
  Total current assets     2,623,648       2,465,487  
                 
Property, plant and equipment, net of accumulated depreciation of $2,472,111 and $1,959,127     8,294,298       8,662,057  
                 
Other assets                
Capitalized financing costs, long term portion     37,775       131,540  
Patient list, net of accumulated amortization of $55,000 and $35,000     245,000       265,000  
Patents, net of accumulated amortization of $19,100 and $0.00     267,400       286,500  
Deposits     2,571       2,713  
  Total other assets     552,746       685,753  
Total assets   $ 11,470,692     $ 11,813,297  
                 
LIABILITIES AND STOCKHOLDERS' DEFICIT                
Current liabilities                
Accounts payable and accrued expenses   $ 1,457,275     $ 459,000  
Stock based payable     537,750       166,340  
Advances     224,000       -  
Line of credit, short term     1,237,000       800,000  
Notes payable, current portion     732,791       743,787  
Convertible note payable, current portion     2,148,835       -  
Unearned revenue     38,763       74,934  
  Total current liabilities     6,376,414       2,244,061  
                 
Long term debt:                
Deposits held     72,901       72,901  
Convertible note payable, long term portion     -       2,347,403  
Notes payable, long term portion     8,184,560       8,935,473  
  Total long term debt     8,257,461       11,355,777  
Total liabilities     14,633,875       13,599,838  
                 
Commitments and contingencies     -       -  
                 
Stockholders' deficit                
Preferred stock, $0.01 par value; 1,000,000 shares authorized, Nil issued and outstanding     -       -  
Common stock, $0.001 par value; 100,000,000 shares authorized, 17,951,055 and 16,747,248 shares issued and outstanding as of December 31, 2014 and 2013, respectively    
17,951
     
16,747
 
Additional paid in capital     12,671,942       11,560,249  
Accumulated deficit     (15,853,076 )     (13,363,537 )
  Total stockholders' deficit     (3,163,183 )     (1,786,541 )
Total liabilities and stockholders' deficit   $ 11,470,692     $ 11,813,297  
                 
 
FIRST CHOICE HEALTHCARE SOLUTIONS, INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
 
    Year ended December 31,  
    2014     2013  
Revenues:                
Net patient service revenue   $ 7,966,385     $ 5,459,373  
Provision for bad debts     (912,782 )     (365,015 )
Net patient service revenue less provision for bad debts     7,053,603       5,094,358  
Rental revenue     1,048,999       1,048,469  
  Total revenue     8,102,602       6,142,827  
                 
Operating expenses:                
Salaries and benefits     4,761,573       3,096,285  
Other operating expenses     1,897,780       1,350,927  
General and administrative     2,434,259       1,705,154  
Impairment of investment     -       450,000  
Depreciation and amortization     552,084       518,611  
  Total operating expenses     9,645,696       7,120,977  
                 
Net loss from operations:     (1,543,094 )     (978,150 )
                 
Other income (expense):                
Miscellaneous income     3,000       3,063  
Gain (loss) on change in fair value of derivative liability     -       32,218  
Amortization financing costs     (82,744 )     (57,348 )
Interest expense, net     (866,701 )     (3,704,086 )
  Total other (expense)     (946,445 )     (3,726,153 )
                 
Net loss before provision for income taxes     (2,489,539 )     (4,704,303 )
                 
Income taxes (benefit)     -       -  
                 
Net loss   $ (2,489,539 )   $ (4,704,303 )
                 
Net loss per common share, basic and diluted   $ (0.14 )   $ (0.35 )
Weighted average number of common shares outstanding, basic and diluted     17,249,921       13,529,294  
                 
 
FIRST CHOICE HEALTHCARE SOLUTIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013
 
    Year ended December 31,  
    2014     2013  
CASH FLOWS FROM OPERATING ACTIVITIES:                
    Net Loss   $ (2,489,539 )   $ (4,704,303 )
    Adjustments to reconcile net loss to cash used in operating activities:                
    Depreciation and amortization expenses     552,084       518,611  
    Amortization of financing costs     82,743       57,348  
    Bad debt expense     912,782       361,284  
    Amortization of debt discount in connection with convertible note     -       2,706,869  
    Stock-based compensation     997,750       549,441  
    Common stock issued for loan modification     -       96,000  
    Impairment of investment     -       450,000  
    Loss on change in fair value of debt derivative     -       (32,218 )
    Changes in operating assets and liabilities:                
    Accounts receivable     (1,445,263 )     (1,105,572 )
    Prepaid expenses and other     (12,574 )     (70,604 )
    Restricted funds     (62,013 )     (35,098 )
    Accounts payable and accrued expenses     1,136,264       (91,312 )
    Unearned income     (36,171 )     35,496  
  Net cash used in operating activities     (363,937 )     (1,264,058 )
CASH FLOWS FROM INVESTING ACTIVITIES:                
    Purchase of equipment     (145,225 )     (397,688 )
    Net decrease in deposits     -       25,502  
  Net cash used in investing activities     (145,225 )     (372,186 )
CASH FLOWS FROM FINANCING ACTIVITIES:                
    Net (payments) proceeds from related party line of credit     -       (10,846 )
    Proceeds from advances     224,000       -  
    Proceeds from convertible note payable     -       2,128,117  
    Proceeds from lines of credit     587,000       1,373,208  
    Proceeds from issuance of notes payable, net of financing costs     -       152,659  
    Net payments on notes payable     (761,909 )     (1,334,781 )
  Net cash provided by financing activities     49,091       2,308,357  
    Net (decrease) increase in cash and cash equivalents     (460,071 )     672,113  
    Cash and cash equivalents, beginning of period     739,158       67,045  
    Cash and cash equivalents, end of period   $ 279,087     $ 739,158  
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                
    Cash paid during the period for interest   $ 783,958     $ 731,877  
    Cash paid during the period for taxes   $ -     $ -  
                 
SUPPLEMENTAL DISCLOSURE ON NON-CASH INVESTING AND FINANCING ACTIVITIES:                
    Common stock issued in settlement of accrued expenses   $ 166,340     $ -  
    Common stock issued in settlement of note payable   $ -     $ 624,000  
    Common stock issued in settlement of related party line of credit   $ -     $ 142,484  
    Common stock issued in settlement of convertible note payable, line of credit and accrued interest   $ 486,557     $ -  
    Common stock issued in connection with acquisition of patent   $ -     $ 286,500  
    Common stock issued to acquire 10% interest in MedTechDiagnostics, LLC   $ -     $ 450,000  
    Beneficial conversion feature on convertible note credited to additional paid-in-capital   $ -     $ 1,871,117  
    Reclassification of derivative liability to additional paid-in-capital   $ -     $ 366,094  
                 

About First Choice Healthcare Solutions, Inc.
Headquartered in Melbourne, Florida, First Choice Healthcare Solutions (FCHS) is actively engaged in developing a network of multi-specialty medical centers of excellence throughout the southeastern U.S., which are distinguished as premier destinations for clinically superior, patient-centric care. Through its wholly owned subsidiary FCID Medical, Inc., the Company currently operates one Medical Center of Excellence, First Choice Medical Group of Brevard, which specializes in the delivery of musculoskeletal medicine and rehabilitative care. FCHS' commercial real estate interests, which house its medical centers of excellence, are managed by its wholly owned subsidiary, FCID Holdings, Inc. For more information, please visit www.myfchs.com or www.myfcmg.com

Safe Harbor Statement
Certain information set forth in this news announcement may contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond the control of First Choice Healthcare Solutions, Inc. Such forward-looking statements are based on current expectations, estimates and projections about the Company's industry, management beliefs and certain assumptions made by its management. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Information concerning factors that could cause the Company's actual results to differ materially from those contained in these forward-looking statements can be found in the Company's periodic reports on Form 10-K and Form 10-Q, and in its Current Reports on Form 8-K, filed with the Securities and Exchange Commission. Unless required by law, the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise to reflect future events or circumstances or reflect the occurrence of unanticipated events.

Contact Information

  • For additional information, please contact:
    First Choice Healthcare Solutions, Inc.
    Julie Hardesty
    800-941-0090, Extension 288