S-1/A

As filed with the Securities and Exchange Commission on June 10, 2014

Registration No. 333-195632

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549

Amendment No. 1

To

FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware	8741	90-0687379
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

709 S. Harbor City Boulevard, Suite 250
Melbourne, Florida 32901-1932
(321) 725-0090

(Address, including zip code, and telephone number, including area code, of principal executive offices)

Christian C. Romandetti, Chief Executive Officer
First Choice Healthcare Solutions, Inc.
709 S. Harbor City Boulevard, Suite 250

Melbourne, Florida 32901-1932
(321) 725-0090

(Name, address and telephone number, including area code, of agent for service)

Copies to:

Richard G. Satin, Esq.	Barbara A. Jones, Esq.
Meyer, Suozzi, English & Klein, P.C.	Greenberg Traurig, LLP
1350 Broadway, Suite 501	One International Place
New York, NY 10018	Boston, MA 02110
(212) 239-4999	(617) 310-6000
(212) 239-4111 (fax)	(617) 310-6001 (fax)

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this registration statement.

If any securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

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

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company x

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS  SUBJECT TO COMPLETION, DATED JUNE 10, 2014

[*] Units

Each Unit Consisting of Two Shares of Common Stock
and
One Warrant to Purchase One Share of Common Stock

This is a firm commitment public offering of the securities of First Choice Healthcare Solutions, Inc. (the “Offering”). We are offering an aggregate of [*] units, each of which consists of two (2) shares of our common stock, par value $0.001 per share, and one (1) warrant to purchase one (1) share of our common stock for the purchase price per unit of [*]. The last reported sale price of our common stock on June 6, 2014 on the OTCQB was $1.75 per share. The warrants will have an initial exercise price of [*] per share, or 150% of the public offering price per share of common stock in the Offering (the “Warrant”). The Warrants will be immediately exercisable for one share of common stock and will expire on the fifth anniversary of the date of issuance. The units will not be certificated and the common stock and the Warrants may be transferred separately immediately upon issuance.

The shares of common stock issuable from time to time upon the exercise of the Warrants are also being offered pursuant to this prospectus.

We intend to apply to have our shares of common stock listed on NYSE MKT LLC under the symbol “FCHS.” No assurance can be given that such application will be approved. Our common stock is currently quoted on the OTCQB under the symbol “FCHS.” We do not intend to list the Warrants on any securities exchange or other trading market and we do not expect that a public trading market will develop for any of the Warrants.

Investing in our securities involves a high degree of risk. Before making any investment in our securities, you should read and carefully consider the risks described in this prospectus under “Risk Factors” beginning on page 12 of this prospectus.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

	Per Unit (1)	Total
Public offering price
Underwriting discounts and commissions (2)
Offering proceeds to us, before expenses (3)

(1) The public offering price is [*] per unit, and each unit consists of two shares of our common stock and one warrant to purchase one share of our common stock. If broken down, the public offering price consists of $[*] per share of common stock and $[*] per warrant to purchase one share of common stock, though the common stock and the warrants included in the units can only be purchased together as a unit.

(2) The underwriters will receive compensation in addition to the underwriting discount. See “Underwriting” beginning on page 82 of this prospectus for a description of compensation payable to the underwriters.

(3) Assumes no exercise of the warrants being issued in this Offering.

We have granted a 45-day option to the underwriters to purchase additional units in an amount equal to 15% of the units sold in the Offering to cover over-allotments, if any. If the underwriters exercise the option in full, the total underwriting discounts and commissions payable by us will be $[*], and the total proceeds to us, before expenses, will be $[*].

It is anticipated that delivery of the securities sold in this Offering will be made on or about [*], 2014. The shares included in the units will be delivered through the book-entry facilities of The Depository Trust Company.

Sole Book-Running Manager

Laidlaw & Company (UK) Ltd.

The date of this prospectus is [*], 2014.

TABLE OF CONTENTS 

	Page
Special Note Regarding Forward-Looking Statements	5
Prospectus Summary	6
Risk Factors	12
Use of Proceeds	29
Dividend Policy	30
Dilution	31
Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Business	42
Description of Properties	55
Legal Proceedings	56
Market Price and Dividends on the Registrant’s Common Equity and Related Stockholder Matters	57
Management	58
Executive Compensation	64
Certain Relationships and Related Transactions	67
Security Ownership of Certain Beneficial Owners and Management	69
Description of Capital Stock	71
Description of Securities We Are Offering	74
Shares Eligible for Future Sale	76
Material U.S. Federal Income Tax Consequences	78
Underwriting	82
Legal Matters	91
Experts	91
Where You Can Find More Information	91
Index to Financial Statements	F-1

You should rely only on the information contained in this prospectus and any free writing prospectus prepared by us or on our behalf. We have not, and the underwriters have not, authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer is not permitted. The information contained in this prospectus and any free writing prospectus that we have authorized for use in connection with this Offering is accurate only as of the date of those respective documents, regardless of the time of delivery of this prospectus or any authorized free writing prospectus or the time of issuance or sale of any securities. Our business, financial condition, results of operations and prospects may have changed since those dates. You should read this prospectus and any free writing prospectus that we have authorized for use in connection with this Offering in their entirety before making an investment decision. You should also read and consider the information in the documents to which we have referred you in the section of this prospectus entitled “Where You Can Find More Information.”

Unless the context otherwise requires, references in this prospectus to “we,” “us,” “our,” and the “Company” refer to First Choice Healthcare Solutions, Inc. and its subsidiaries.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934 (“Exchange Act”). Forward-looking statements reflect the current view about future events. When used in this prospectus, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions, as they relate to us or our management, identify forward-looking statements. Such statements, include, but are not limited to, statements contained in this prospectus relating to our business strategy, our future operating results, and our liquidity and capital resources outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward–looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees of assurance of future performance. We caution you therefore against relying on any of these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, the execution of our strategy to grow our business by hiring additional physicians to create Medical Centers of Excellence that fit our defined criteria; evolving healthcare laws and regulations; changes in the rates or methods of third-party reimbursements for medical services; accelerated pace of consolidation in the hospital industry; changes in our medical technology as it relates to our services and procedures; any failures in our information technology systems to protect the privacy and security of protected information and other similar cybersecurity risks; our ability to raise capital to fund continuing operations; and other factors (including the risks contained in the section of this prospectus entitled “Risk Factors”) relating to our industry, our operations and results of operations and any new Medical Centers of Excellence that we may open. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned.

Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

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PROSPECTUS SUMMARY

This summary highlights information contained throughout this prospectus and is qualified in its entirety to the more detailed information and financial statements included elsewhere in this prospectus. This summary does not contain all of the information that should be considered before investing in our securities. Investors should read the entire prospectus carefully, including the more detailed information regarding our business, the risks of purchasing our securities discussed in this prospectus under “Risk Factors” beginning on page 12 of this prospectus and our financial statements and the accompanying notes beginning on page F-7 of this prospectus.

Our Business

Overview

First Choice Healthcare Solutions, Inc. (“FCHS,” the “Company,” “we,” “our” or “us”) is engaged in the creation of state-of-the-art, multi-specialty “Medical Centers of Excellence” in select markets primarily in the southeastern and western parts of the United States. We intend to own and operate these “Medical Centers of Excellence” under the FCHS brand.

We believe by integrating the synergistic mix of orthopaedic, neurology and interventional pain specialties with related diagnostic and ancillary services and state-of-the-art equipment and technologies all in one location or “Medical Center of Excellence,” we are able to:

· provide patients with convenient access to musculoskeletal and rehabilitative care via orthopaedic, neurology and interventional pain medicine treatment, diagnostics and ancillary care services, including, but not limited to magnetic resonance imaging (“MRI”), x-ray (“X-ray”), durable medical equipment (“DME”) and physical therapy (“PT”);

· empower physicians to collaborate as a unified care team, optimizing care coordination and improving outcomes;

· advance the quality and cost effectiveness of our patients’ healthcare; and

· achieve strong, sustainable financial performance that serves to create long-term value for our stockholders.

Our goal is to build a network of non-physician-owned and operated Medical Centers of Excellence in diverse locations, primarily throughout the southeastern and western parts of the United States. By centralizing current and future centers’ business management functions, including call center operations, scheduling, billing, compliance, accounting, marketing, advertising, legal, information technology and record-keeping, at our corporate headquarters, we will maintain efficiencies and scales of economies. We believe our structure will enable our staff physicians to focus on the practice of medicine and the delivery of quality care to the patients we serve, as opposed to having their time and attention focused on business administration responsibilities. We currently have 44 employees, including physicians and physician assistants.

We currently own and operate First Choice Medical Group of Brevard, LLC (“FCMG”), our model multi-specialty Medical Center of Excellence. FCMG will serve as the model for replicating our “Medical Center of Excellence” strategy in our target expansion markets. Located in Melbourne, Florida, FCMG specializes in the delivery of musculoskeletal medicine, via our strategically aligned sub-specialties in orthopaedics, neurology and interventional pain medicine, coupled with on-site diagnostic and ancillary services, including MRI, X-ray, DME and rehabilitative care with multiple quality-focused goals centered on enriching our patients’ care experiences.

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We also currently own and manage Marina Towers, LLC, a 78,000 square foot, Class A, six-story building located in Melbourne, Florida, which, among other tenants, houses our corporate headquarters and our model Medical Center of Excellence, FCMG.

Our Definition of a “Medical Center of Excellence”

As there are numerous definitions of a “Medical Center of Excellence,” we have strictly defined what we believe qualifies as a “Medical Center of Excellence” to ensure that our high standards for patient care and attention can be fostered and preserved. More specifically, each of our proprietary Medical Centers of Excellence will:

• be limited to eight to ten specialty physicians – all of whom are subject to our rigorous qualification and hiring process;

• provide for the combination of synergistic medical disciplines in orthopaedics, neurology and interventional pain medicine, while supported by related in-house diagnostic and ancillary services, including, but not limited to MRI, X-ray, DME and PT using advanced technologies;

• be capable of generating revenues of up to $20 million when operating at full capacity, based on current reimbursement rates;

• be housed in a commercial building, in close geographic proximity to a primary hospital(s); and

• allow for 12,000-16,000 square feet of usable space for build-out consideration.

Our Strategy

We aim to distinguish our Medical Centers of Excellence from our competition by designing our Centers as premier destinations for clinically superior, patient-centric care that is coordinated across a patient’s entire care continuum. By doing so, we expect to deliver more meaningful and collaborative doctor-patient experiences, more accurate diagnoses due to the care coordination, effective treatment plans, faster recoveries and materially reduced costs. Our strategic focus is to grow primarily in select southeastern and western U.S. markets by hiring additional physicians to create FCHS-branded Medical Centers of Excellence that fit our defined criteria. Our criteria includes the following:

• opportunities for us to introduce additional revenue channels (i.e. synergistic musculoskeletal medical disciplines; on-site MRI, X-ray, DME and PT; related health and wellness products, etc.) that will support and promote enhanced, well-coordinated, patient-centric care while supporting and promoting profitable business operations;

• opportunities that support economies of scale in billing, collections, purchasing, advertising and compliance which can be fully leveraged to reduce expenses and fuel income growth; and

• opportunities to increase awareness of our brand by aligning with patients, referring physicians, medical institutions, insurers, employers and other healthcare stakeholders in local markets that share our values of patient care.

Our business model is to employ all of our multi-specialty physicians, thereby permitting us to optimize revenue generation from both physician and ancillary services, while also providing our employed care providers with the ability to refer patients to our on-site diagnostic services. Physician-owned practices, on the other hand, may be subject to prevailing federal regulations (e.g. The Ethics in Patient Referral Act of 1989, as amended) which may limit their ability to refer patients for certain healthcare services provide by entities in which the physician-owner(s) has a financial interest.

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Our centralized system of back office operations will allow us to achieve measurable cost and productivity efficiencies as we expand the number of Centers we own and operate. We have specifically designed our centralized system to alleviate our staff physicians from business administration responsibilities associated with operating a medical practice or clinic, enabling them to focus on caring for the patients we serve. Physicians who own and manage their own private practices or clinics typically have to devote valuable time and resources to addressing business concerns, time and resources that might otherwise be spent on treating their patients.

Medical Service Mix

Like other business models for professional medical services, our Medical Center of Excellence model is designed to offer the most synergistic and profitable medical service mix. By their nature, some combinations of medical specialties can generate more revenue than others. Physicians need access to diagnostic equipment and ancillary services, such as MRI, X-ray, DME and PT. Moreover, patients expect their physicians to have access to the best diagnostic and service delivery equipment. Without diagnostic services, many medical practices would find it difficult to maintain their current margins of profitability.

We integrate both medical specialties and diagnostic services in our Center to maintain or enhance our profits. While one medical specialty may have high reimbursements for their professional services but insufficient volume to profitably support the necessary diagnostic equipment, another medical specialty may have lower professional service reimbursements but a higher volume of diagnostic equipment use. Operating independently, each specialty group would face retreating profit margins and confront significant challenges to maintaining high service levels with adequate and technologically advanced equipment. However, operating together, they create the optimal mix of professional service fee income and diagnostic equipment procedure income. Since the combination is more profitable than either of its components, there is a favorable opportunity to sustain profit margins that will allow each Center to maintain high service levels with state-of-the-art equipment.

Scalable Back Office and Economies of Scale

Fixed cost legacy administrative functions have subjected many established medical centers to a downward spiral of diminishing profit margins and losses. In legacy medical centers, administrative management, billing, compliance, accounting, marketing, advertising, scheduling, customer service and record keeping functions represent fixed overhead for the practice. The fixed administrative overhead of a practice has the effect of reducing profit margins if the practice experiences declining revenues as a result of lower patient volumes from increasing competition, lower pricing, lower reimbursements or patient migration to competitors.

A key to our success will be our ability to continue to employ a highly experienced team of business managers supported by an array of professional, experienced and compliant subcontractors. Using project management best practices, our corporate team manages all billing, compliance, accounting, marketing, advertising, legal, information technology and record keeping functions on behalf of FCMG and will do so on behalf of our future Centers. It is our plan that the cost of our “back office operations” will not increase in direct relation to the growth of our Medical Centers of Excellence, which will allow us to sustain profit margins across our entire business operations with a cost effective and scalable back office. As the number of employed physicians and operated Medical Centers of Excellence increases, the economies of scale for our back office operations will also increase. The economies of scale support selecting the best and not the lowest cost subcontractors, while allowing FCMG and our other future Medical Centers of Excellence to operate cost effectively with higher service levels.

High Technology Infrastructure Supporting High Touch Patient Experiences

Successful retail models in other industries already effectively use telecommunications, remote computing, mobile computing, cloud computing, virtual networks and other leading-edge technologies to manage geographically diverse operating units. These technologies create the infrastructure to allow a central management team to monitor, direct and control geographically dispersed operating units and subcontractors, including national operations.

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We believe that our business model incorporates the best of these technologies. A central management team monitors, directs and controls FCMG, and will control our future multi-specialty Medical Centers of Excellence, and all the necessary support subcontractors required by the operations. Our administrative operations center uses 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 X-ray and MRI images, diagnoses, patient and doctor notes, visit reports, billing information, insurance coverage, patient identification and personalized care delivery requirements. Our EMR system fully complies with Stage 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.

We intend to grow by replicating the successful model currently in place by FCMG, supported by our standardized policies, procedures and clinic setup guidelines. The administrative functions can be quickly scaled to handle multiple additional Centers. As we roll out our business model, we expect our administrative core and retail clinic model to maintain the economies of scale for all of our future multi-specialty Medical Centers of Excellence.

Our Real Estate Business

FCID Holdings, Inc. (“FCID Holdings”) is our wholly owned subsidiary which operates our real estate interests. Currently, FCID Holdings has one real estate holding, Marina Towers, LLC, a 78,000 square foot, Class A, six-story building located on the Indian River in Melbourne, Florida. In addition to housing our corporate headquarters and FCMG, the building, which averages 95% annual occupancy, also leases approximately 63,200 square feet of commercial office space to tenants.

Our Corporate History

We were incorporated in the State of Colorado on May 30, 2007 as Medical Billing Assistance, Inc. to act as a holding corporation for I.V. Services Ltd., Inc. (“IVS”), a Florida corporation engaged in providing billing services to providers of medical services. IVS was incorporated in the State of Florida on September 28, 1987, and on June 30, 2007, we issued 2,429,000 shares of common stock to Mr. Michael West and other IVS shareholders in exchange for 100% of the capital stock of IVS. In the second quarter of 2011, we disposed of IVS, which, at the time, was an inactive, wholly-owned subsidiary of Medical Billing Assistance, Inc.

On December 29, 2010, we entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with FCID Medical, Inc., a Florida corporation (“FCID Medical”), FCID Holdings, Inc., a Florida corporation (“FCID Holdings”), and the shareholders of FCID Medical and FCID Holdings (the “FCID Shareholders”). Pursuant to the terms of the Share Exchange Agreement, the FCID Shareholders exchanged 100% of the outstanding common stock of FCID Medical and FCID Holdings for 10,000,000 shares of our common stock, resulting in FCID Medical and FCID Holdings becoming 100% owned subsidiaries of Medical Billing Assistance, Inc.

On February 13, 2012, Medical Billing Assistance, Inc. merged with First Choice Healthcare Solutions, Inc., (“FCHS”), a Delaware corporation formed exclusively for the merger, pursuant to which (a) our state of incorporation changed from Colorado to Delaware, (b) our name changed from Medical Billing Assistance, Inc. to First Choice Healthcare Solutions, Inc., (c) every four shares of Medical Billing Assistance Inc.’s common stock was exchanged for one share of FCHS common stock (effectively resulting in a four-to-one reverse split of our common stock), and (d) FCHS inherited the rights and property of Medical Billing Assistance, Inc. and assumed its liabilities. The effective date for the reincorporation and the reverse split was April 4, 2012. We now operate as First Choice Healthcare Solutions, Inc.

Our address is 709 S. Harbor City Blvd., Suite 250, Melbourne, Florida, 32901 and our phone number is (321) 725-0090. Our website address is www.myfchs.com. We have not incorporated by reference into this prospectus the information on our website, and you should not consider it to be a part of this prospectus.

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THE OFFERING

Securities we are offering:	[*] units, with each unit consisting of two shares of our common stock and one Warrant to purchase one share of our common stock, at a purchase price per unit of $[*]. The last reported sale price of our common stock on June 6, 2014 on the OTCQB was $1.75 per share. The units will not be certificated and the shares of common stock and Warrants may be transferred separately immediately upon issuance. The Warrants will be immediately exercisable for one share of common stock at an initial exercise price of $[*] per share, or 150% of the public offering price per share of common stock in the Offering, and will expire on the fifth anniversary of the issuance date. The shares of common stock issuable from time to time upon the exercise of the Warrants are also being offered pursuant to this prospectus.
Public offering price:	$[*] per unit.
Common stock outstanding before this Offering:	17,081,248 shares.
Common stock included in the units:	[*] shares, which assumes no exercise of the Warrants; or [*] shares, which assumes the full exercise of the Warrants sold in this Offering.
Common stock to be outstanding immediately after this Offering:	[*] shares, which assumes no exercise of the Warrants.
Over-allotment option	We have granted a 45-day option to the representative of the underwriters to purchase additional units in an amount equal to 15% of the units sold in this Offering, solely to cover over-allotments, if any.
Use of proceeds:	We estimate that the net proceeds from this Offering will be approximately $[*], or approximately $[*] if the underwriters exercise their over-allotment option in full, after deducting the underwriting discounts and commissions and estimated Offering expenses payable by us. We intend to use the net proceeds to create FCHS-branded Medical Centers of Excellence in the southeastern and western United States, and for general corporate purposes, including working capital and operating purposes.  For a more complete description of our intended use of proceeds from this Offering, see the “Use of Proceeds” section of this prospectus on pg. 29.
Market symbol and listing:	We intend to apply to list our common stock on the NYSE MKT LLC under the symbol “FCHS.” Our common stock is currently quoted on the OTCQB under the same symbol. There will be no established trading market for the Warrants and we do not expect a market to develop.  In addition, we do not intend to apply for listing of the units or the Warrants on any national securities exchange or other trading market.

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Risk factors: Investing in our securities involves substantial risks.  You should carefully review and consider the “Risk Factors” section beginning on page 12 of this prospectus for a discussion of factors to consider before deciding to invest in our securities.

The number of shares of our common stock outstanding prior to and to be outstanding immediately after this Offering, as set forth in the table above, is based on 17,081,248 shares outstanding as of June 6, 2014 and excludes as of that date:

• up to 4,195,000 shares of common stock issuable upon the exercise of warrants outstanding at June 6, 2014 with a weighted average exercise price of $2.36 per share;

• 4,653,333 shares of common stock issuable upon the conversion of certain outstanding securities at a weighted average conversion price of $0.90 per share;

• 500,000 shares of common stock reserved for future grants, awards and issuance under our equity compensation plan as of June 6, 2014;

• up to [*] shares of common stock issuable upon the full exercise of the Warrants offered hereby; and

• [*] shares of common stock underlying the warrants to be issued to the representative of the underwriters in connection with this Offering. For a more complete description of the representative’s warrants, please see “Underwriting” beginning on page 82 of this prospectus.

Unless otherwise indicated, all information in this prospectus assumes:

· no exercise of the representative’s warrants described above; and

· no exercise by the representative of the underwriters of its option to purchase additional units in an amount equal to 15% of the units sold in this Offering to cover over-allotments, if any.

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RISK FACTORS

An investment in our securities has a high degree of risk. Before making an investment decision, you should carefully consider the risks and uncertainties described below and other information in this prospectus. The occurrence of any of the adverse developments described in the following risk factors could materially and adversely harm our business, operating results, financial conditions, or prospects. In that case, the value of our stock could go down and you could lose all or a part of your investment.

GENERAL RISKS REGARDING OUR HEALTHCARE SERVICES BUSINESS

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

We have only owned and operated our model Medical Center of Excellence, FCMG, since 2012 and have experienced net losses to date. Using FCMG as our model “Medical Center of Excellence,” we plan to hire additional physicians to create state-of-the-art Medical Centers of Excellence committed to delivering patient-centric care in select markets in the United States. Our limited operating history makes it difficult for us to evaluate our future business prospects and make decisions based on estimates of our future performance. To address these risks and uncertainties, we must do the following:

· Successfully execute our business strategy to establish and extend the “First Choice Healthcare Solutions” brand and reputation as a profitable, well-managed enterprise committed to delivering quality and cost-effective health care primarily in parts of the southeastern and western United States and then pursue select other U.S. markets;

· Respond to competitive developments;

· Effectively and efficiently integrate new Medical Centers of Excellence; and

· Attract, integrate, retain and motivate qualified personnel.

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

We are implementing a strategy to grow our business by hiring additional physicians to create FCHS-branded Medical Centers of Excellence in select U.S. markets, which requires significant additional capital and may not generate income.

We intend to grow our business by hiring additional physicians to create FCHS-branded Medical Centers of Excellence in select U.S. markets. We estimate the cost to create each additional Medical Center of Excellence to be approximately $4-5 million. Although we are taking steps to raise funds through equity offerings to implement our growth strategy, these funds may not be adequate to offset all of the expenses we incur in expanding our business. We will need to generate revenues to offset expenses associated with our growth, and we may be unsuccessful in achieving sufficient revenues, despite our attempts to grow our business. If our growth strategies do not result in sufficient revenues and income, we may have to abandon our plans for further growth and/or cease operations, which could have a material and adverse effect on our business, prospects and financial condition.

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In order 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 will need to raise additional capital to pursue our business plan, which includes hiring additional physicians in order to expand our business operations and develop our FCHS brand of Medical Centers of Excellence. We believe that we have access to capital resources through possible public or private equity offerings, debt financings, corporate collaborations or other means. If the economic climate in the United States does not 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 in order to conserve our cash in amounts sufficient to sustain operations and meet our obligations.

We may not be able to achieve the expected benefits from opening new Medical Centers of Excellence, which would adversely affect our financial condition and results.

We plan to rely on hiring additional physicians to create FCHS-branded Medical Center of Excellence as a method of expanding our business. If we do not successfully integrate such new Medical Centers of Excellence, we may not realize anticipated operating advantages and cost savings. The integration of these new Medical Centers of Excellence into our business operations involves a number of risks, including:

· Demands on management related to the increase in our Company’s size with the establishment of each new Medical Center of Excellence, 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 Medical Centers of Excellence;

· Difficulties in the assimilation and retention of employees;

· Potential adverse effects on operating results; and

· Challenges in retaining patients from the new physicians.

Further, the successful integration of the new physicians will depend upon our ability to manage the new physicians and to eliminate redundant and excess costs. Difficulties in integrating new physicians may not be able to achieve the cost savings and other size-related benefits that we hoped to achieve, which would harm our financial condition and operating results.

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If we are unable to attract and retain qualified medical professionals, our ability to maintain operations at our existing Medical Center of Excellence, attract patients or open new multi-specialty Medical Centers of Excellence could be negatively affected.

We generate our revenues through physicians and medical professionals who work for us to perform medical services and procedures. The retention of those physicians and medical professionals is a critical factor in the success of our medical multi-specialty Centers, and the hiring of qualified physicians and medical professionals is a critical factor in our ability to launch new multi-specialty Medical Centers of Excellence successfully. However, at times it may be difficult for us to retain or hire qualified physicians and medical professionals. If we are unable consistently to hire and retain qualified physicians and medical professionals, our ability to open new Centers, maintain operations at existing medical multi-specialty Centers, 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.

Since a significant percentage of our operating expenses are fixed, a relatively small decrease in revenues could have a significant negative impact on our financial results.

A significant percentage of our expenses are currently fixed, meaning they do not vary significantly with our increase or decrease in revenues. Such expenses include, but will not be limited to, debt service and capital lease payments, rent and operating lease payments, salaries, maintenance and insurance. As a result, a small reduction in the prices we charge for our services or procedure volume could have a disproportionately negative effect on our financial results.

Loss of key executives, limited experience in operating a public company and failure to attract qualified managers and sales persons could limit our growth and negatively impact our operations.

We depend upon our management team to a substantial extent. In particular, we depend upon Christian C. Romandetti, our President and Chief Executive Officer, for his skills, experience and knowledge of our Company and industry contacts. The loss of Mr. Romandetti or other members of our management team could have a material adverse effect on our business, results of operations or financial condition.

Our limited experience in dealing with the increasingly complex laws pertaining to public companies could be a significant disadvantage to us in that it is likely that an increasing amount of management’s time will be devoted to these activities which will result in less time being devoted to the management and growth of our Company. It is possible that we will be required to expand our employee base and hire additional employees to support our operations as a public company which will increase our operating costs in future periods.

We require medical clinic managers, medical professionals and marketing persons with experience in our industry to operate and market our medical 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 persons at economically reasonable compensation levels could adversely affect our ability to operate and grow our business.

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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. Although there currently are no known hazards associated with any of our procedures or technologies when performed or used properly, hazards may be discovered in the future. For example, there is a risk of harm to a patient during an MRI if the patient has certain types of metal implants or cardiac pacemakers within his or her body. Although patients are screened to safeguard against this risk, screening may nevertheless fail to identify the hazard. There also is potential risk to patients treated with therapy equipment secondary to inadvertent or excessive over- or under- exposure to radiation. We maintain professional liability insurance with coverage that we believe is consistent with industry practice and appropriate in light of 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 divert 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 uncertain and evolving.

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

In March 2010, President Barack Obama signed a health care reform measure, which provides healthcare insurance for approximately 30 million more Americans. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (collectively, the “PPACA”), which includes a variety of healthcare reform provisions and requirements that will become effective at varying times through 2018, substantially changes the way health care is financed by both governmental and private insurers, including several payment reforms that establish payments to hospitals and physicians based in part on quality measures, and may significantly impact our industry. The PPACA requires, among other things, payment rates for services using imaging equipment that costs over $1 million to be calculated using revised equipment usage assumptions and reduced payment rates for imaging services paid under the Medicare Part B fee schedule. Many of the provisions of the PPACA will phase in over the course of the next several years, and we are unable to predict what effect the PPACA or other healthcare reform measures that may be adopted in the future will have on our business.

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 and physicians’ medical practices, including the healthcare and other services that we and our affiliated physicians provide, are 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;

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· 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 physicians from referring Medicare patients to an entity for the provision of certain “designated health services” if the physician or a member of such physician’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 material 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 physicians’ medical decisions or engaging in certain practices, such as splitting fees with physicians;

· 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.

We may in the future become the subject of regulatory or other investigations or proceedings, and our interpretations of applicable laws, rules and regulations may be challenged.

Regulatory authorities or other parties may assert that our arrangements with our affiliated professional contractors constitute fee splitting or the corporate practice of medicine and seek to invalidate these arrangements. Such parties also could assert that our relationships, including fee arrangements, among our affiliated professional contractors, hospital clients or referring physicians violate the anti-kickback, fee splitting or self-referral laws and regulations or that we have submitted false claims or otherwise failed to comply with government program reimbursement requirements.

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Such investigations, proceedings and challenges could result in substantial defense costs to us and a diversion of management’s time and attention. In addition, violations of these laws are punishable by monetary fines, civil and criminal penalties, exclusion from participation in government-sponsored healthcare programs, and forfeiture of amounts collected in violation of such laws and regulations, 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.

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, third-party billing, research 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 to our financial position.

Third-party payors such as Medicare, TRICARE 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, for the majority of 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.

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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.

Managed care organizations may prevent their members from using our services which would cause us to lose current and prospective patients.

Healthcare providers participating as providers under managed care plans may be required to refer medical services to specific medical clinics depending on the plan in which each covered patient is enrolled. These requirements may inhibit their members from using our medical services in some cases. The proliferation of managed care may prevent an increasing number of their members from using our services in the future which would cause our revenues to decline.

We may need to restructure our services and practices if our methods are determined not to comply with the Stark Law.

The Ethics in Patient Referral Act of 1989, as amended (the "Stark Law"), is a civil statute that generally (i) prohibits physicians from making referrals for designated health services to entities in which the physicians have a direct or indirect financial relationship and (ii) prohibits entities from presenting or causing to be presented claims or bills to any individual, third-party payor, or other entity for designated health services furnished pursuant to a prohibited referral. Under the Stark Law, a physician may not refer patients for certain designated health services to entities with which the physician has a direct or indirect financial relationship, unless allowed under an enumerated exception. Under the Stark Law, there are numerous statutory and regulatory exceptions for certain otherwise prohibited financial relationships. A transaction must fall entirely within an exception to be lawful under the Stark Law.

We believe that any referrals between or among our Company, the physicians providing services and the facilities where procedures are performed will be for services compliant under the Stark Law. If these arrangements are found to violate the Stark Law, we may be required to restructure such services or be subject to civil or criminal fines and penalties, including the exclusion of our Company, the physicians, and the facilities from the Medicare programs, any of which events could have a material adverse effect on our business, financial condition and results of operations.

Some states have enacted statutes, similar to the federal Anti-Kickback Statute and Stark Law, applicable to our operations because they cover all referrals of patients regardless of the payer or type of healthcare service provided. These state laws vary significantly in their scope and penalties for violations. Although we have endeavored to structure our business operations to be in material compliance with such state laws, authorities in those states could determine that our business practices are in violation of their laws, which would have a material adverse effect on our business, financial condition and results of operations.

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

The growth of our healthcare business is dependent on advertising, which is subject to regulation by the Federal Trade Commission ("FTC"). We believe that we have structured 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.

In addition, the laws of many states restrict certain advertising practices by and on behalf of physicians. Many states do not offer clear guidance on the bounds of acceptable advertising practices or on the limits of advertising provided by management companies on behalf of physicians. Although we have endeavored to structure our advertising practices to be in material compliance with such state laws, authorities in those states could determine that our advertising practices are in violation of those laws.

Fee-splitting prohibitions in some states may limit our financial prospects.

Many states prohibit medical professionals from paying a portion of a professional fee to another individual unless that individual is an employee or partner in the same professional practice. If we violate a state's fee-splitting prohibition, we may be subject to civil or criminal fines, and the physician participating in such arrangements may lose his or her licensing privileges. Many states do not offer clear guidance on what relationships constitute fee-splitting, particularly in the context of providing management services for doctors. We have endeavored to structure our business operations in material compliance with these laws. However, state authorities could find that fee-splitting prohibitions apply to our business practices in their states. If any aspect of our operations were found to violate fee-splitting laws or regulations, this could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Facility licensure requirements in some states may be costly and time-consuming, thereby limiting or delaying our operations.

State Departments of Health may require us to obtain licenses in the various states in which we will establish our future multi-specialty Medical Centers of Excellence or other business operations. We intend to obtain the necessary material licensure in states where required. However, not all of the regulations governing the need for licensure are clear and there is limited guidance available regarding certain interpretative issues. Therefore, it is possible that a state regulatory authority could determine that we are improperly conducting business operations without a license in that state. This could subject us to significant fines or penalties, result in our being required to cease operations in that state or otherwise have a material adverse effect on our business, financial condition and results of operations. Although we currently have no reason to believe that we will be unable to obtain the necessary licenses without unreasonable expense or delay, there can be no assurance that we will be able to obtain any required licensure.

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

Our Company and our physicians are covered entities under HIPAA if we or our physicians provide services that are reimbursable under Medicare or other third-party payors (e.g., orthopedic services). Although the covered health care 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.

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Our medical business may be reliant upon direct-to-patient marketing.

The effectiveness of our marketing programs and messages to patients can have a significant impact on our financial performance. The effectiveness of marketing may fluctuate, resulting in changes in the cost of marketing per procedure, and variations in our margins. Less effective marketing programs could materially and adversely affect our business, financial condition and results of operations.

If technological changes occur rendering our equipment or services obsolete, or increase our cost structure, we may need to make significant capital expenditures or modify our business model, which could cause our revenues or results of operations to decline.

Industry competitive or clinical factors, among others, may require us to introduce alternate medical technology for the services and procedures we offer than those that may currently be in use in our medical multi-specialty Centers. Introducing such technology could require significant capital investment or force us to modify our business model in such a way as to make our revenues or results of operations decline. An increase in costs could reduce our ability to maintain our margins. An increase in prices could adversely affect our ability to attract new patients. If we are unable to obtain or maintain state of the art equipment that is essential to the professional medical services provided by our clinics, our business, prospects, results of operations and financial condition could be materially and adversely affected.

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.

FCMG and our future multi-specialty Medical Centers of Excellence will compete with medical clinics and other technologies currently under development. Competition comes from other clinics and from hospitals, hospital-affiliated group entities and physician group practices.

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.

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If more competitors begin to offer healthcare services in our geographic markets, we might find it necessary to reduce the prices we charge, particularly if competitors offer the services at lower prices than we do. If that were to happen or we were not successful in cost effectively acquiring patients for our procedures, we may not be able to make up for the reduced gross profit margin by increasing the number of procedures that we perform, and our business, financial condition and results from operations could be adversely affected.

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

After payments by commercial healthcare insurance companies or government programs, including Medicare and TRICARE, 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 FCMG, or services they may receive at our future Medical Centers of Excellence, 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 elective medical procedures performed by FCMG or our future Centers, 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 collection experience.

Adverse changes in general domestic and worldwide economic conditions and instability and disruption of credit markets could adversely affect our operating results, financial condition, or liquidity.

We are subject to risks arising from adverse changes in general domestic and global economic conditions, including recession or economic slowdown and disruption of credit markets. We continue to see domestic and global weakness due to economic uncertainties and volatility in financial markets. We believe our healthcare clinics may be impacted by unemployment rates, the number of under-insured or uninsured patients and other conditions arising from the global economic conditions described above. At this time, it is unclear what impact this might have on our future revenues or business.

The cost and availability of credit has been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. Concern about the stability of the markets generally and the strength of counterparties specifically has led many lenders and institutional investors to reduce, and in some cases, cease to provide funding to borrowers.

Turbulence in the United States and international markets and economies may adversely affect our liquidity and financial condition, and the liquidity and financial condition of our patients. Deterioration in market conditions could limit our ability, and the ability of our patients, to timely pay expenses, and access the capital markets to meet liquidity needs, resulting in material and adverse effects on our business, prospects, financial condition and results of operations.

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Risks related to our real estate BUSINESS

Our performance and value are subject to risks associated with our real estate asset and with the real estate industry.

Since approximately 16% of our current revenue is derived from our real estate asset, we are subject to the risk that if our property does not generate revenues sufficient to meet our operating expenses, including debt service and capital expenditures, our ability to operate and grow could be materially and adversely affected. The following factors, among others, may adversely affect the revenues generated by our property:

· Competition from other office and commercial properties;

· Local real estate market conditions, such as oversupply or reduction in demand for office or other commercial space;

· Costs to comply with new local, state and federal laws;

· Changes in interest rates and availability of financing;

· Vacancies, changes in market rental rates and the need to periodically repair, renovate and re-let space;

· Increased operating costs, including insurance expense, utilities, real estate taxes, state and local taxes and heightened security costs;

· Civil disturbances, hurricanes and other natural disasters, or terrorist acts or acts of war which may result in uninsured or undermined losses; and

· Declines in the financial condition of our tenants and our ability to collect rents from our tenants.

We may face risks associated with the use of debt, including refinancing risk.

We are subject to the risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required payments of principal and interest. Our wholly owned subsidiary, Marina Towers, LLC, is a party to a loan agreement with Guggenheim Life and Annuity Company in the principal aggregate amount of $7,550,000 that matures on September 16, 2016 as more fully described in the section titled “Certain Relationships and Related Transactions.” We anticipate that only a small portion of the principal of our debt will be repaid prior to maturity. Therefore, we are likely to need to refinance at least a portion of our outstanding debt as it matures. There is a risk that we may not be able to refinance existing debt or that the terms of any refinancing will not be as favorable as the terms of our existing debt. If principal payments due at maturity cannot be refinanced, extended or repaid with proceeds from other sources, such as new equity capital, our cash flow may not be sufficient to repay all maturing debt when a significant "balloon" payment come due. There is a risk that we may be unable to refinance on favorable terms or at all. This risk is currently heightened because of tightened underwriting standards and increased credit risk premiums. These conditions, which may increase the cost and reduce the availability of debt, may continue or worsen in the future.

The risks associated with the physical effects of weather could have a material adverse effect on our property.

The physical effects of weather could have a material adverse effect on our property, operations and business. For example, our property is located on the riverfront in Brevard County, Florida. To the extent weather patterns change, our market could experience increases in storm intensity or rising sea-levels that would make the property less desirable to tenants. Over time, these conditions could result in declining demand for office space in our building or the inability of us to operate the building at all. These conditions may also have indirect effects on our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable, increasing the cost of energy and increasing the cost of snow removal at our properties. There can be no assurance that weather will not have a material adverse effect on our properties, operations or business.

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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 limited. We are quoted on the OTCQB under the trading symbol “FCHS.” It is anticipated that there will continue to be a limited trading market for our common stock on the OTCQB. We intend to apply to list our common stock on the NYSE MKT LLC (“NYSE MKT”) and trading is expected to start following the effectiveness of this registration statement and upon completion of this Offering. Although we believe that this Offering and the listing of our common stock on the NYSE MKT, if our application is so approved, will improve the liquidity of our common stock, our trading volume may not improve, our volatility may not be reduced and our share price may not be stabilized. 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 NYSE MKT may not list our securities for quotation on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

We intend to apply for, and anticipate that, our securities will be listed on the NYSE MKT, a national securities exchange, upon consummation of this Offering. Although, after giving effect to this Offering, we expect to meet, on a pro forma basis, the NYSE MKT’s minimum initial listing standards, which generally only mandate that we meet certain requirements relating to stockholders’ equity, market capitalization, aggregate market value of publicly held shares and distribution requirements, we cannot assure you that we will be able to meet those initial listing requirements. If the NYSE MKT does not list our securities for trading on its exchange, we could face significant material adverse consequences, including:

· a limited availability of market quotations for our securities;

· reduced liquidity with respect to our securities;

· a determination that our shares of common stock are “penny stock,” which will require brokers trading in our shares of common stock to adhere to more stringent rules, possibly reducing in a reduced level of trading activity in the secondary trading market for our shares of common stock;

· a limited amount of news and analyst coverage for our Company; and

· a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as “covered securities.” Because we expect that our units consisting of common stock and common stock issuable upon exercise of the warrants will be listed on the NYSE MKT, such securities will be covered securities. Although the states are preempted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case. Further, if we were no longer listed on the NYSE MKT, our securities would not be covered securities and we would be subject to regulation in each state in which we offer our securities.

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Our failure to meet the continued listing requirements of the NYSE MKT could result in a delisting of our common stock.

If our application to list on the NYSE MKT is approved and thereafter we fail to satisfy the continued listing requirements of the NYSE MKT, such as the corporate governance requirements or the minimum closing bid price requirement, the NYSE MKT may take steps to delist our common stock. Such a delisting would likely have a negative effect on the price of our common stock and would impair your ability to sell or purchase our common stock when you wish to do so. In the event of a delisting, we would take actions to restore our compliance with the NYSE MKT’s listing requirements, but we can provide no assurance that any such action taken by us would allow our common stock to remain listed on the NYSE MKT, stabilize our market price, improve the liquidity of our common stock, prevent our common stock from dropping below the NYSE MKT’s minimum bid price requirement, or prevent future non-compliance with the NYSE MKT’s listing requirements.

If our common stock is not listed on a national securities exchange, U.S. holders of warrants may not be able to exercise their warrants without compliance with applicable state securities laws and the value of your warrants may be significantly reduced.

If the NYSE MKT does not approve our listing of our securities for trading on its exchange, or if our common stock is subsequently delisted from the NYSE MKT and is not eligible to be listed on another national securities exchange, the exercise of the warrants by U.S. holders may not be exempt from state securities laws. As a result, depending on the state of residence of a holder of the warrants, a U.S. holder may not be able to exercise its warrants unless we comply with any state securities law requirements necessary to permit such exercise or an exemption applies. Although we plan to use our reasonable efforts to assure that U.S. holders will be able to exercise their warrants under applicable state securities laws if no exemption exists, there is no assurance that we will be able to do so. As a result, in the event that the NYSE MKT does not list our securities or our common stock is delisted from the NYSE MKT and is not eligible to be listed on another securities exchange, your ability to exercise your warrants may be limited. The value of the warrants may be significantly reduced if U.S. holders are not able to exercise their warrants under applicable state securities laws.

You may have difficulty trading and obtaining quotations for our common stock.

Our common stock may not be actively traded, and the bid and asked prices for our common stock on the NYSE MKT, if our proposed application for listing on the NYSE MKT is accepted, or on the OTCQB as our common stock is currently quoted, may fluctuate widely. As a result, investors may find it difficult to dispose of, or to obtain accurate quotations of the price of, our securities. This severely limits the liquidity of the common stock, and would likely reduce the market price of our common stock and hamper our ability to raise additional capital.

The market price for our common stock may be volatile, and your investment in our common stock could decline in value.

The stock market in general has experienced extreme price and volume fluctuations. The market prices of the securities of healthcare services companies have been highly historically 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:

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· 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; and

· the loss of any of our key physicians 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 market our services and to 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 foreseeable 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 the common stock we are offering.

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.

A sale or perceived sale of a substantial number of shares of our common stock may cause the price of our common stock to decline.

All of our executive officers and directors and certain of our stockholders have agreed not to sell shares of our common stock for a period of three (3) months following this Offering, subject to extension under specified circumstances.

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Common stock subject to these lock-up agreements will become eligible for sale in the public market upon expiration of these lock-up agreements, subject to limitations imposed by Rule 144 under the Securities Act. If our stockholders sell substantial amounts of our common stock in the public market, the market price of our common stock could fall. Moreover, the perceived risk of this potential dilution could cause stockholders to attempt to sell their shares and investors to short our common stock. These sales also may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.

“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.

If our shares of common stock are not listed for trading by the NYSE MKT and our common stock continues to be quoted on the OTCQB or any quotation system maintained by OTC Markets, Inc., trading in our securities will be 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 foreseeable future. The SEC has adopted regulations that generally 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 current directors and officers hold significant control over our common stock and they may be able to control our Company indefinitely.

Our current directors and officers currently have beneficial ownership of approximately 60.16% of our outstanding common stock. These significant stockholders therefore have considerable influence over the outcome of all matters submitted to our stockholders for approval, including the election of directors, the approval of significant corporate transactions.

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.

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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.

RISKS RELATING TO THIS OFFERING

Our management will have broad discretion in allocating the net proceeds of this Offering, and may use the proceeds in ways in which you disagree.

Our management has significant flexibility in applying the net proceeds we expect to receive in this Offering. Because we have not currently allocated the net proceeds to the creation of any new Medical Center of Excellence, and therefore you cannot determine at this time the value or propriety of our application of those proceeds, you and other stockholders may not agree with our decisions. In addition, our use of the proceeds from this Offering may not yield a significant return or any return at all for our stockholders. The failure by our management to apply these funds effectively could have a material adverse effect on our business, results of operations or financial condition. See “Use of Proceeds” for a further description of how management intends to apply the proceeds from this Offering.

You will experience immediate dilution in the book value per share of the common stock you purchase.

Because the public offering price per unit is expected to be substantially higher than the book value per share of our common stock, you will suffer substantial dilution in the net tangible book value of the common stock you purchase in this Offering. After giving effect to assumed sale of [*] units in this Offering at an assumed public offering price of $[*] per unit, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, and attributing $[*] value to the Warrants, if you purchase units in this Offering, you will suffer immediate and substantial dilution of approximately $[*] per share in the net tangible book value of the common stock you acquire. In the event that you exercise your Warrants, you will experience additional dilution to the extent that the exercise price of those warrants is higher than the book value per share of our common stock. See “Dilution” below for a more detailed discussion of the dilution you will incur if you purchase securities in this Offering.

There is no guarantee that our common stock will be listed on NYSE MKT.

We intend to apply to have our shares of common stock listed for trading on the NYSE MKT. After the effectiveness of this registration statement and the completion of this Offering, we believe that we will satisfy the listing requirements and expect that our common stock will be listed on the NYSE MKT. Such listing, however, is not guaranteed. Therefore, it may be difficult to sell any shares you purchase in this Offering if you desire or need to sell them. Our lead underwriter, Laidlaw & Company (U.K.) Ltd., can discontinue market making at any time without notice. Neither we nor the underwriters can provide any assurance that an active and liquid trading market in our common stock will develop or, if developed, that the market will continue.

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Future sales and issuances of our common stock or rights to purchase common stock, including pursuant to our equity incentive plan, could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.

We expect that significant additional capital will be needed in the future to continue our planned operations. To the extent we raise additional capital by issuing equity securities, our stockholders may experience substantial dilution. We may sell common stock, convertible securities or other equity securities. If we sell common stock, convertible securities or other equity securities, your investment in our common stock will be diluted. These sales may also result in material dilution to our existing stockholders, and new investors could gain rights superior to our existing stockholders.

Due to the speculative nature of warrants, there is no guarantee that it will ever be profitable for holders of the Warrants to exercise the Warrants.

The Warrants being offered do not confer any rights of common stock ownership on its holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of common stock at a formulaic price that is subject to adjustment for a limited period of time. Specifically, commencing on the pricing of this Offering when the Warrants are issued, holders of the Warrants may exercise their right to acquire additional shares of our common stock. In order to do so, they must pay an exercise price equal to 150% of the public offering price per share of common stock in this Offering within the five years following the date of issuance, after which date any unexercised Warrants will expire and have no further value. There can be no assurance that the market price of our common stock will equal or exceed the exercise price of the Warrants, and consequently, whether it will ever be profitable for holders of the Warrants to exercise the Warrants.

There is no public market for the Warrants being sold in this Offering.

There is no established public trading market for the Warrants being offered in this Offering, and we do not expect a market to develop. We do not intend to apply for listing of any such Warrants on any securities exchange or other trading market. Without an active market, the liquidity of the Warrants will be limited.

Holders of our Warrants will have no rights as a common stockholder until they acquire our common stock.

Until you acquire shares of our common stock upon exercise of your Warrants, you will have no rights with respect to our common stock. Upon exercise of your Warrants, you will be entitled to exercise the rights of a common stockholder only as to matters for which the record date occurs after the exercise date.

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USE OF PROCEEDS

We estimate that the net proceeds to us from the sale of the units offered by this prospectus will be approximately $[*] million, or approximately $[*] million if the underwriters exercise their over-allotment option in full, assuming the sale by us of [*] units at an assumed public offering price of $[*] per unit and after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. This amount does not include the proceeds which we may receive in connection with the exercise of the Warrants. We cannot predict when or if the Warrants will be exercised, and it is possible that the Warrants may expire and never be exercised.

A $1.00 increase (decrease) in the assumed public offering price of $[*] per unit would increase (decrease) the expected net cash proceeds of the Offering to us by approximately $[*] million. A [*] increase (decrease) in the assumed number of units sold in this Offering would increase (decrease) the expected net cash proceeds of the Offering to us by approximately $[*] million. See the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operation.”

We expect to use the net proceeds from this Offering to create FCHS-branded Medical Centers of Excellence by hiring additional physicians and formulating a team of 8-10 physicians who can work together for care coordination. The creation of each new Medical Center of Excellence is estimated to require approximately $4-5 million per Center. Consequently, we estimate the net proceeds from this Offering will allow us to create one new Center in a target geographic region primarily within the southeastern or western parts of the United States in the second half of 2014. We also plan to use approximately $[*] of the net proceeds for working capital, with emphasis on enhancing our current corporate infrastructure. Immediate attention will be given to expanding our corporate management team and making further investments in advanced technology, administrative systems and human resources that will allow us to support and accelerate our growth over the next several years.

This expected use of net proceeds from this Offering represents our intentions based upon our current plans and business conditions. The amounts and timing of our actual expenditures may vary significantly depending on numerous factors, including delays or setbacks associated with the possible creation of a proposed Medical Center of Excellence. As a result, our management will retain broad discretion over the allocation of the net proceeds from this Offering. We may find it necessary or advisable to use the net proceeds from this Offering for other purposes, and we will have broad discretion in the application of net proceeds from this Offering.

Pending our use of the net proceeds from this Offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities.

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DIVIDEND POLICY

We have never declared or paid any cash dividends on our common stock and do not intend to do so in the future.  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. The holders of our common stock are entitled to receive only such dividends (cash or otherwise) as may be declared by our Board of Directors.

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DILUTION

If you purchase any of the units offered by this prospectus, you will experience dilution to the extent of the difference between the offering price per unit you pay in this Offering and the net tangible book value per share of our common stock immediately after this Offering, assuming no value is attributed to the Warrants included in the units. Our net tangible book value as of March 31, 2014 was approximately $(2.11) million, or approximately $(0.13) per share of common stock. Net tangible book value per share is equal to our total tangible assets minus total liabilities, divided by the number of shares of common stock outstanding.

After giving effect to the assumed sale by us of [*] units in this Offering at an assumed public offering price of $[*] per unit, assuming no value is attributed to the Warrants included in the units, and after deducting estimated underwriting discounts and commissions and expenses payable by us, our as adjusted net tangible book value as of March 31, 2014 would have been approximately $[*] million, or approximately $[*] per share of common stock. This represents an immediate increase in net tangible book value of approximately $[*] per share to existing stockholders and an immediate dilution of approximately $[*] per share to new investors. The following table illustrates this per share dilution:

Assumed offering price per unit				$	[*]
Net tangible book value per share as of March 31, 2014	$	(0.13	)
Increase per share attributable to new investors	$	[*]
As adjusted net tangible book value per share after this Offering				$	[*]
Dilution per share to new investors				$	[*]

Investors that acquire additional shares of common stock through the exercise of the Warrants offered hereby may experience additional dilution depending on our net tangible book value at the time of exercise.

The information in the table above is based on 17,081,248 shares of our common stock outstanding on June 6, 2014, and does not include:

• up to 4,195,000 shares of common stock issuable upon the exercise of warrants outstanding at June 6, 2014 with a weighted average exercise price of $2.36 per share;

• 4,653,333 shares of common stock issuable upon the conversion of certain outstanding securities at a weighted average conversion price of $0.90 per share;

• 500,000 shares of common stock reserved for future grants, awards and issuance under our equity compensation plan as of June 6, 2014;

• up to [*] shares of common stock issuable upon the exercise of the Warrants offered hereby; and

• [*] shares of common stock underlying the warrants to be issued to the representative of the underwriters in connection with this Offering;

If the underwriters exercise their over-allotment option to purchase additional units in an amount equal to 15% of the units sold in this Offering, the following will occur:

· the percentage of shares of our common stock held by existing stockholders will decrease to approximately [*]% of the total number of shares of our common stock outstanding after this Offering; and

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· the number of shares of our common stock held by new investors will increase to [*], or approximately [*]% of the total number of shares of our common stock outstanding after this Offering.

A $1.00 increase (decrease) in the assumed public offering price of $[*] per unit would increase (decrease) our pro forma as adjusted net tangible book value by approximately $[*] million, our as adjusted net tangible book value per share by approximately $[*] and dilution per share to new investors by approximately $[*], assuming that the number of units offered by us, remains the same. A [*] increase (decrease) in the number of units offered by us would increase (decrease) our pro forma as adjusted net tangible book value by approximately $[*] million, our as adjusted net tangible book value per share by approximately $[*] and dilution per share to new investors by approximately $[*].

In addition, we may choose to raise additional capital due to market conditions or strategic considerations even if we believe we have sufficient funds for our current or future operating plans. To the extent that additional capital is raised through the sale of equity or convertible debt securities, the issuance of these securities may result in further dilution to our stockholders.

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes appearing elsewhere in this prospectus. This discussion and analysis may contain forward-looking statements that involve substantial risks and uncertainties. You can identify these statements by forward-looking words such as “may,” “will,” “expect,” “anticipate,” “believe,” “estimate” and “continue,” or similar words. You should read statements that contain these words carefully because they:

•          discuss our future expectations;

•          contain projections of our future results of operations or of our financial condition; and

•          state other “forward-looking” information.

We believe it is important to communicate our expectations. However, there may be events in the future that we are not able to accurately predict or over which we have no control. Our actual results and the timing of certain events could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under “Risk Factors,” “Business” and elsewhere in this prospectus.

Overview

First Choice Healthcare Solutions, Inc. (“FCHS,” the “Company,” “we,” “our” or “us”) is engaged in the creation of state-of-the-art, multi-specialty “Medical Centers of Excellence” primarily in select markets in the southeastern and western parts of the United States. We intend to own and operate these “Medical Centers of Excellence” under the FCHS brand.

We believe by integrating the synergistic mix of orthopaedic, neurology and interventional pain specialties with related diagnostic and ancillary services and state-of-the-art equipment and technologies all in one location or “Medical Center of Excellence,” we are able to:

· provide patients with convenient access to musculoskeletal and rehabilitative care via orthopaedic, neurology and interventional pain medicine treatment, diagnostics and ancillary care services, including, but not limited to magnetic resonance imaging (“MRI”), x-ray (“X-ray”), durable medical equipment (“DME”) and physical therapy (“PT”);

· empower physicians to collaborate as a unified care team, optimizing care coordination and improving outcomes;

· advance the quality and cost effectiveness of our patients’ healthcare; and

· achieve strong, sustainable financial performance that serves to create long-term value for our stockholders.

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Our goal is to build a network of non-physician-owned and operated Medical Centers of Excellence in diverse locations, primarily throughout the southeastern and western parts of the United States. By centralizing current and future centers’ business management functions, including call center operations, scheduling, billing, compliance, accounting, marketing, advertising, legal, information technology and record-keeping, at our corporate headquarters, we will maintain efficiencies and scales of economies. We believe our structure will enable our staff physicians to focus on the practice of medicine and the delivery of quality care to the patients we serve, as opposed to having their time and attention focused on business administration responsibilities. We currently have 44 employees, including physicians and physician assistants.

Our Healthcare Services Business

We currently own and operate First Choice Medical Group of Brevard, LLC (“FCMG”), our model multi-specialty Medical Center of Excellence. FCMG will serve as the model for replicating our “Medical Center of Excellence” strategy in our target expansion markets. Located in Melbourne, Florida, FCMG specializes in the delivery of musculoskeletal medicine, via our strategically aligned sub-specialties in orthopaedics, neurology and interventional pain medicine, coupled with on-site diagnostic and ancillary services, including MRI, X-ray, DME and rehabilitative care with multiple quality-focused goals centered on enriching our patients’ care experiences.

Our Real Estate Business

FCID Holdings, Inc. (“FCID Holdings”) is our wholly owned subsidiary which operates our real estate interests. Currently, FCID Holdings has one real estate holding, Marina Towers, LLC, a 78,000 square foot, Class A, six-story building located on the Indian River in Melbourne, Florida. In addition to housing our corporate headquarters and FCMG, the building, which averages 95% annual occupancy, also leases approximately 63,200 square feet of commercial office space to tenants.

Results of Operations

We anticipate that our results of operations will fluctuate for the foreseeable future due to several factors, such as the progress of our research and development efforts and the timing and outcome of regulatory submissions. Due to these uncertainties, it is difficult to accurately predict our future operations are difficult to make.

Fiscal Year Ended December 31, 2013 Compared to Fiscal Year Ended December 31, 2012

Revenues

Total revenues rose 71% to $6,507,842 for the year ended December 31, 2013, compared to revenue of $3,805,347 for the year ended December 31, 2012. The increase in revenue is primarily due to the increase in net patient service revenue to $5,459,373 for the year ended December 31, 2013, compared to $2,645,310 for the year ended December 31, 2012. The increase in net patient service revenue is attributable to the full-year results from the acquisition of FCMG completed in April 2012, and the growth of the medical practice.

Operating Expenses

Operating expenses include the following:

	Year Ended 12/31/2013		Year Ended 12/31/2012
Salaries and Benefits	$	3,096,285	$	1,593,245
Other operating expenses		1,715,942		865,641
General and administrative		1,705,154		1,314,302
Impairment of investment		450,000		-
Depreciation and amortization		518,611		309,899
Total operating expenses	$	7,485,992	$	4,083,087

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The major components of operating expenses include practice salaries and benefits, practice supplies and other operating costs, write down of doubtful accounts totaling $361,284, depreciation and general and administrative expenses, which included legal, accounting and professional fees associated with being a public entity.

Salaries and benefits increased 94% to $3,096,285 for the year ended December 31, 2013, compared to $1,593,245 for the year ended December 31, 2012. The increase is attributable to the full-year results from acquisition of FCMG completed in April 2012, coupled with the hiring of five additional physicians and their support staff during 2013. For the same reason, other operating expenses increased 98% to $1,715,942 from $865,641.

General and administrative expenses for the year ended December 31, 2013 increased 30% to $1,705,154, compared to $1,314,302, an increase attributable to expenses related to our growth and capital restructuring. We believe that each additional sale or service and corresponding gross profit of such sale or service has minimal incremental offsetting operating expenses. Thus, additional sales could contribute to profit at a higher rate of return on sales as a result of not needing to expand operating expenses at the same pace as sales.

At December 31, 2013, our management performed an evaluation of our investment in MedTech Diagnostics LLC (“Medtech”) for purposes of determining the implied fair value of the asset at December 31, 2013. We acquired a 10% interest in Medtech on September 13, 2013 for 1,000,000 shares of our common stock. The test indicated that the recorded remaining book value of our investment exceeded its fair value for the year ended December 31, 2013.  As a result, upon completion of the assessment, management recorded a non-cash impairment charge of $450,000, net of tax, or $0.03 per share during the year ended December 31, 2013, to reduce the carrying value of the investment to $0.

Depreciation and amortization increased from $367,247 for the year ended December 31, 2012 to $575,959 for the year ended December 31, 2013. The increase is a direct result of the full year of depreciation and amortization of assets acquired in April 2012 from FCMG, as well as the addition of new equipment in 2013. This compared to only nine months of depreciation and amortization in 2012.

Net Income (Loss) on Operations

The loss from operations for the year ended December 31, 2013 increased to $978,150, compared to a loss from operations of $277,740 for the prior year. Notwithstanding non-cash expenses totaling $1,575,400 for the 12 months in 2013, which included stock-based compensation, impairment of investment, depreciation and amortization, income from operations totaled $597,250, compared to income from operations of $89,507 after factoring $367,247 in non-cash depreciation and amortization recorded for the full year 2012.

Interest Expense

Interest expense was $3,704,086 for the year ended December 31, 2013, compared to $563,391 for the year ended December 31, 2012. Historically, interest expense was primarily attributable to our mortgage interest on our building. The increase in interest expense, however, was a result of corporate interest expense of $2,970,243 for the year ended December 31, 2013, compared to $19,381 for the year ended December 31, 2012. In the second half of 2013, we increased our borrowings to grow our medical business and restructured our debt and, as a result, incurred additional non-cash interest expense.

On November 8, 2013, we entered into a securities purchase agreement with Hillair Capital Investments L.P. ("Hillair") whereby we issued Hillair (i) a $2,320,000, 8% original issue discount convertible debenture due initially due December 28, 2013, subsequently extended through November 1, 2015 and (ii) a common stock purchase warrant to purchase up to 2,320,000 shares of our common stock. We issued detachable warrants granting the holder the right to acquire an aggregate of 2,320,000 shares of our common stock at $1.35 per share on a cashless basis. During the year ended December 31, 2013, we amortized $1,871,117 of the debt discount associated with the debenture and the warrant as interest expense.

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Further, during the years ended December 31, 2013 and 2012, we amortized and wrote off $2,706,869 and $10,457 of debt discount as non-cash interest expense for convertible notes.

Net Loss

As a result of all the above, we had a net loss of $4,704,303 for the year ended December 31, 2013, compared to net loss of $873,363 for the year ended December 31, 2012.

Three Months Ended March 31, 2014 Compared to Three Months Ended March 31, 2013

Revenues

Total revenues increased 59% to $2,234,753 for the three months ended March 31, 2014, as compared to revenues of $1,401,681 for the same period in the prior year. The increase for the three months ended March 31, 2014 is attributed to growth in our net patient service revenue from our Medical Center of Excellence, FCMG, which increased 74% to $1,972,830 for the quarter, after factoring provision for doubtful accounts. Rental revenue remained relatively flat, totaling $261,923 and $266,669 for the three months ended March 31, 2014 and 2013, respectively.

The provision for doubtful accounts during the first quarter of 2014 totaled $38,144, or 1.9% of our total patient service revenues of $2,010,974 for the three months ended March 31, 2014. We adopted the provisions of ASU 2011-07, during the period ended March 31, 2014. ASU 2011-07 requires health care entities to change the presentation of the statement of operations by reclassifying the provision for doubtful accounts from an operating expense to a deduction from patient service revenues. All periods presented have been reclassified in accordance with ASU 2011-07.

Operating Expenses

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 increased 71% to $1,065,521 for the three months ended March 31, 2014, as compared to $622,759 for the same period in the prior year. The increase for the three months ended March 31, 2014 is attributed to the hiring of five additional physicians and their support staff during the fourth quarter of 2013. For the same reason, other operating expenses increased 41% for the three months ended March 31, 2014 to $429,291, as compared to $304,475 for the same period in the prior year.

General and administrative expenses for the three months ended March 31, 2014 increased 60% to $405,912, as compared to $253,019 for the same period in the prior year, and the increase was attributed to expenses related to our growth and capital restructuring. We believe that each additional sale or service and corresponding gross profit of such sale or service has minimal incremental offsetting operating expenses. Thus, additional sales could contribute to profit at a higher rate of return on sales as a result of not needing to expand operating expenses at the same pace as sales.

Depreciation and amortization increased from $122,620 for the three months ended March 31, 2013 to $129,940 for same period in 2014.

Net Income (Loss) from Operations

Net income from operations totaled $199,310 for the three months ended March 31, 2014, as compared to net income from operations of $98,808 reported for the same period in the prior year. Notwithstanding non-cash expenses totaling $172,863 for the first quarter of 2014, which included depreciation and bad debt expense, income from operations totaled $372,173, as compared to income from operations of $281,428 after factoring $182,620 in non-cash depreciation and stock-based compensation recorded for the first quarter of 2013.

Interest Expense

Interest expense was $219,253 for the three months ended March 31, 2014, as compared to $299,641 for the same period in the prior year. Interest expense reported for the three months ended March 31, 2014 was primarily attributable to mortgage interest on Marina Towers; interest on financings related to equipment acquired for use in our Medical Center of Excellence, FCMG; and the debt discount associated with the issuance of the debenture, related warrant to Hillair and other corporate borrowings. In the first quarter of 2013, interest expense was comprised of mortgage interest on the building, interest on equipment financing and interest on other corporate borrowings.

On November 8, 2013, we entered into a securities purchase agreement with Hillair Capital Investments L.P. (“Hillair”) for the issuance of (i) a $2,320,000, 8% original issue discount convertible debenture which was due initially on December 28, 2013 and was subsequently extended on December 28, 2013 through November 1, 2015 (the “Debenture”) and (ii) a detachable common stock purchase warrant to purchase up to 2,320,000 shares of our common stock at $1.35 per share on a cashless basis.

Net Loss

For the three months ended March 31, 2014, our net loss decreased 86% to $35,099 from a net loss of $255,069 for the same period in the prior year.

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Segment Results

We report segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of our reportable segments. The following are the revenues, operating expenses and net income (loss) by segment for the years ended December 31, 2013 and December 31, 2012 and for the three months ended March 31, 2014 and March 31, 2013. The significant fluctuations in the line items are described above.

For the Year ended December 31, 2013

	Real		Healthcare					Intercompany
	Estate		Services		Corporate			Eliminations			Total
Revenue:
Net patient service revenue	$	-	$	5,459,373	$	-		$	-		$	5,459,373
Rental revenue		1,473,048		-		-			(424,579	)		1,048,469
Total revenue		1,473,048		5,459,373		-			(424,579	)		6,507,842
Total operating expenses		644,782		5,314,808		1,950,981			(424,579	)		7,485,992
Net income (loss) from operations:	$	828,266	$	144,565	$	(1,950,981	)	$	-		$	(978,150	)

For the Year ended December 31, 2012

	Real		Healthcare						Intercompany
	Estate		Services			Corporate			Eliminations			Total
Revenue:
Net patient service revenue	$	-	$	2,645,310		$	-		$	-		$	2,645,310
Rental revenue		1,459,092		-			-          -			(299,055	)		1,160,037
Total Revenue		1,459,092		2,645,310			-			(299,055	)		3,805,347
Total operating expenses		619,210		2,800,812			962,120			(299,055	)		4,083,087
Net income (loss) from operations:	$	839,882	$	(155,502	)	$	(962,120	)	$	-		$	(277,740	)

For the Three Months Ended March 31, 2014:

	Real		Healthcare					Intercompany
	Estate		Services		Corporate			Eliminations			Total
Revenue:
Net Patient Service Revenue	$	-	$	1,972,830	$	-		$	-		$	1,972,830
Rental revenue		369,511		-		-			(107,588	)		261,923
Total Revenue		369,511		1,972,830		-			(107,588	)		2,234,753
Total operating expenses		197,440		1,715,112		230,479			(107,588	)		2,035,443
Net income (loss) from operations:		172,071		257,718		(230,479	)		-			199,310

For the Three Months Ended March 31, 2013:

	Real		Healthcare					Intercompany
	Estate		Services		Corporate			Eliminations			Total
Revenue:
Net Patient Service Revenue	$	-	$	1,135,012	$	-		$	-		$	1,135,012
Rental revenue		371,664		-		-			(104,995	)		266,669
Total Revenue		371,664		1,135,012		-			(104,995	)		1,401,681
Total operating expenses		163,895		1,002,585		247,687			(111,294	)		1,302,873
Net income (loss) from operations:		207,769		132,427		(247,687	)		6,299			98,808

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Liquidity and Capital Resources

Sources of Liquidity

We incurred various non-recurring expenses in 2012 in connection with operating startup costs relating to the acquisition of FCMG.  Our management believes the positive year-end earnings before interest, taxes, depreciation and amortization and the continuing trend of positive growth before interest, taxes, depreciation and amortization through 2014 will support improved liquidity of our Company. Moreover, we issued and sold to Hillair Capital Investments, L.P. a $2,320,000 8% Original Issue Discount Convertible Debenture, raising net proceeds of $2,000,000 less customary legal and due diligence fees. We then paid off or converted to equity a total of $1,238,480 in debt and modified our $1.5 million accounts receivable line of credit with CT Capital, Ltd. (“CT Capital”), providing for the reduction of the annual interest rate from 12% per annum to 6% per annum in exchange for the issuance to CT Capital of 100,000 restricted shares of our common stock. As of December 31, 2013, we used $800,000 of the available CT Capital accounts receivable line of credit, leaving an available balance of $700,000.

The Marina Towers building is 95% occupied. We believe the ongoing operations of Marina Towers, LLC, including its current positive cash balance along with continued execution of Marina Tower’s business development plan, will allow us to further improve our working capital, and that we will have sufficient capital resources to meet projected cash flow requirements.  However, there can be no assurance that we will be successful in fully executing our business development plan.

Cash Flows

We significantly increased our cash and current assets during the year ended December 31, 2013 due to cash flows provided by financing activities. As of December 31, 2013, we had cash or cash equivalents, restricted cash and total current assets of $739,158; $256,246 and $2,465,487, respectively, compared to cash or cash equivalents and total current assets of $67,045; $221,148 and $934,378, respectively, as of December 31, 2012.

As of March 31, 2014, we had cash of $310,617, restricted cash of $303,772 and accounts receivable totaling $1,747,000.

Net cash used in operating activities was $(1,264,058) for the year ended December 31, 2013, compared to cash used in operating activities of $(788,853) for the same period last year. The increase in cash used was a result of a $3,830,940 higher net loss partially offset by non-cash items that affected the net loss, including $2,706,869 for the amortization of debt discount, $361,284 for the write down of doubtful accounts, $450,000 for the impairment of an investment, $549,441 for stock-based compensation and $518,611 in depreciation. Cash used in operations was also impacted by the use of cash associated with the increase of accounts receivable, which increased to $1,272,155 as of December 31, 2013, compared to $527,867 as of December 31, 2012.

Net cash used in our operating activities for the three months ended March 31, 2014 was $320,305, as compared to net cash provided by our operating activities of $7,817 for the same period in the prior year. The increase in net cash used in operating activities for the quarter was attributable to the growth and expansion of our Medical Center of Excellence, FCMG, which included the hiring of five new physicians and related support staff in 2013; investments in strengthening our infrastructure in anticipation of commencing the scaling and replication of our Medical Center of Excellence business model in 2014; and higher corporate expenses related to the preparation and filing of a registration statement on Form S-1.

Net cash flows used in  investing activities was $(372,186) for the year ended December 31, 2013, compared to $(2,852,259) used in  investing activities for the year ended December 31, 2012. The increased level of cash used in investing activities during the year ended December 31, 2012 was the result of $2,773,450 in equipment purchases in 2012, as we acquired FCMG, compared with $397,688 in equipment purchases in 2013.

Net cash flows used in our investing activities for the three months ended March 31, 2014 and 2013 was $10,998 and $2,103, respectively.

Cash flows provided by financing activities was $2,308,357 for year ended December 31, 2013, compared to net cash provided by financing activities of $3,179,854 for the year ended December 31, 2012. The cash flows provided by financing activities were the result of:

	Year ended 12/31/2013			Year ended 12/31/2012
Net (payments) proceeds from related party line of credit	$	(10,846	)	$	190,000
Proceeds from convertible note payable		2,128,117			203,500
Proceeds from lines of credit		1,373,208			-
Proceeds from issuance of notes payable, net of financing costs		152,659			2,871,058
Proceeds from common stock subscription		-			100,000
Net payments on notes payable		(1,334,781	)		(184,704	)
Net cash provided by financing activities	$	2,308,357		$	3,179,854

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On June 13, 2013, we entered into a Loan and Security Agreement (the “Loan Agreement”) with CT Capital. Ltd., d/b/a CT Capital, LP, a Florida limited liability partnership (the “Lender”). Under the Loan Agreement, the Lender has committed to make an accounts receivable line of credit in the maximum aggregate amount of $1,500,000 to the Borrower with an interest rate of 12% per annum (the “Loan”). The maturity date of the Loan is December 31, 2016 (the “Maturity Date”). Interest shall be due and payable monthly. Upon default, the interest may be adjusted to the highest rate permissible by law. The Loan is secured by our accounts receivable and certain of our assets, which constitute collateral for the repayment of the Loan. The Loan Agreement also includes covenants, representations, warranties, indemnities and events of default that are customary for facilities of this type. The advance rate is defined as: 80% of all receivables to be 120 days or less at the true collection rate of approximately 27% of total billings, excluding patient billings and collections. Additionally, allowable accounts will also include 50% of all accounts protected by Legal Letters of Protection. At any time, the Lender may convert all or any portion of the outstanding principal amount or interest on the Loan into our common stock at a price equal to $0.75 per share.

On November 8, 2013, in consideration for a fee of 100,000 shares of our common stock, restricted pursuant to Rule 144, CT Capital agreed to modify the line of credit to our subsidiary, FCMG. Under the loan modification agreement, the annual rate of interest was reduced from 12% per annum to 6% per annum and will remain at 6% until November 1, 2015. All other terms under the Loan Agreement remain the same.

As discussed above, on November 8, 2013, we entered into a securities purchase agreement with Hillair whereby we issued Hillair (i) a $2,320,000, 8% original issue discount convertible debenture that was initially due December 28, 2013, but subsequently extended on December 28, 2013 through November 1, 2015, and (ii) a common stock purchase warrant to purchase up to 2,320,000 shares of our common stock. The securities purchase agreement contains certain terms and conditions regarding Hillair’s right to participate in our future financings. Hillair has waived its right to participate in this Offering on the condition that (i) this Offering closes by October 1, 2014; (ii) the price of the common stock sold in this Offering is not less than $2.00 per share and (iii) so long as we do not, for a period lasting until October 1, 2014, redeem more than $500,000 of the securities held by Hillair in any one calendar month, or we do not make such redemption after the fifteenth of any month.

Net cash used in our financing activities for the three months ended March 31, 2014 was $97,238, as compared to net cash provided by our financing activities of $40,250 for the same period in the prior year.

Over the next 12 months, we expect to incur significant capital costs to further develop and expand our operations. We plan to add another Medical Center of Excellence and purchase additional diagnostic equipment for our operations in 2014, which will require $4-5 million in additional capital. We intend to raise additional capital to help fund our expansion. However, there can be no guarantee that such capital will be raised upon acceptable terms or at all. There can be no assurance that our cash flow will increase in the near future from anticipated new business activities, even if additional capital is raised, or that revenues generated from our existing operations will be sufficient to allow us to continue to pursue new customer programs, profitable ventures or the addition of any new Medical Centers of Excellence. If we are unable to secure additional capital, we may be required to curtail our business development initiatives and take additional measures to reduce costs in order to conserve our cash.

Contractual Obligations⁽¹⁾

At December 31, 2013, we had certain obligations and commitments under our loans and capital leases totaling approximately $9,679,261 as follows:

	Total		2014		2015		2016		2017		2018 and Later
Leases	$	1,924,387	$	406,670	$	447,897	$	485,433	$	519,892	$	64,495
Loans		7,754,874		337,117		267,188		7,146,853		3,716
Total	$	9,679,261	$	743,787	$	715,085	$	7,632,286	$	523,608	$	64,495

⁽¹⁾  See Notes to the Consolidated Financial Statements December 31, 2013 and 2012, Note 11 – Notes Payable, for a description of the contractual obligations.

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Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements as defined under Securities and Exchange Commission rules.

Critical Accounting Policies and Estimates

Derivative Financial Instruments

Accounting Standards Codification subtopic 815-40, Derivatives and Hedging, Contracts in Entity’s own Equity (“ASC 815-40”) became effective for us on October 1, 2009. Our convertible debt has conversion provisions based on a discount to the market price of our common stock.

Stock-Based Compensation

Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period. We measure the fair value of the share-based compensation issued to non-employees using the stock price observed in the arms-length private placement transaction nearest the measurement date (for stock transactions) or the fair value of the award (for non-stock transactions), which were considered to be more reliably determinable measures of fair value than the value of the services being rendered. The measurement date is the earlier of (1) the date at which commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete.

Revenue Recognition

We recognize revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and 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.

ASC 605-10 incorporates Accounting Standards Codification subtopic 605-25, Multiple-Element Arraignments (“ASC 605-25”). ASC 605-25 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. The effect of implementing 605-25 on our financial position and results of operations was not significant.

Long-Lived Assets

We follow FASB ASC 360-10-15-3, “Impairment or Disposal of Long-lived Assets,” which established 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.

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At December 31, 2013, our management performed an evaluation of our investment in MedTech for purposes of determining the implied fair value of the asset at December 31, 2013. The test indicated that the recorded remaining book value of our investment exceeded its fair value for the year ended December 31, 2013.  As a result, upon completion of the assessment, management recorded a non-cash impairment charge of $450,000, net of tax, or $0.03 per share during the year ended December 31, 2013 to reduce the carrying value of the investment to $0. Considerable management judgment is necessary to estimate the fair value.  Accordingly, actual results could vary significantly from management’s estimates.

Fair Value

Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of our Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.

We follow Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments and certain other items at fair value. Neither of these statements had an impact on our financial position, results of operations nor cash flows.

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BUSINESS

Overview

First Choice Healthcare Solutions, Inc. (“FCHS,” the “Company,” “we,” “our” or “us”) is engaged in the creation of state-of-the-art, multi-specialty “Medical Centers of Excellence” primarily in select markets in the southeastern and western parts of the United States. We intend to manage these “Medical Centers of Excellence” under the FCHS brand.

We believe by integrating the synergistic mix of orthopaedic, neurology and interventional pain specialties with related diagnostic and ancillary services and state-of-the-art equipment and technologies all in one location or “Medical Center of Excellence,” we are able to:

· provide patients with convenient access to musculoskeletal and rehabilitative care via orthopaedic, neurology and interventional pain medicine treatment, diagnostics and ancillary care services, including, but not limited to magnetic resonance imaging (“MRI”), x-ray (“X-ray”), durable medical equipment (“DME”) and physical therapy (“PT”);

· empower physicians to collaborate as a unified care team, optimizing care coordination and improving outcomes;

· advance the quality and cost effectiveness of our patients’ healthcare; and

· achieve strong, sustainable financial performance that serves to create long-term value for our stockholders.

Our goal is to build a network of non-physician-owned and operated Medical Centers of Excellence in diverse locations, primarily throughout the southeastern and western parts of the United States. By centralizing current and future Centers’ business management functions, including call center operations, scheduling, billing, compliance, accounting, marketing, advertising, legal, information technology and record-keeping, at our corporate headquarters, we will maintain efficiencies and scales of economies. We believe our structure will enable our staff physicians to focus on the practice of medicine and the delivery of quality care to the patients we serve, as opposed to having their time and attention focused on business administration responsibilities. We currently have 44 employees, including physicians and physician assistants.

Our Healthcare Services Business

We currently own and operate First Choice Medical Group of Brevard, LLC (“FCMG”), our model multi-specialty Medical Center of Excellence. FCMG will serve as the model for replicating our “Medical Center of Excellence” strategy in our target expansion markets. Located in Melbourne, Florida, FCMG specializes in the delivery of musculoskeletal medicine, via our strategically aligned sub-specialties in orthopaedics, neurology and interventional pain medicine, coupled with on-site diagnostic and ancillary services, including MRI, X-ray, DME and rehabilitative care with multiple quality-focused goals centered on enriching our patients’ care experiences.

Our Real Estate Business

FCID Holdings, Inc. (“FCID Holdings”) is our wholly owned subsidiary which operates our real estate interests. Currently, FCID Holdings has one real estate holding, Marina Towers, LLC, a 78,000 square foot, Class A, six-story building located on the Indian River in Melbourne, Florida. In addition to housing our corporate headquarters and FCMG, the building, which averages 95% annual occupancy, also leases approximately 63,200 square feet of commercial office space to tenants.

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History

We were incorporated in the State of Colorado on May 30, 2007 as Medical Billing Assistance, Inc. to act as a holding corporation for I.V. Services Ltd., Inc. (“IVS”), a Florida corporation engaged in providing billing services to providers of medical services. IVS was incorporated in the State of Florida on September 28, 1987, and on June 30, 2007, we issued 2,429,000 shares of common stock to Mr. Michael West and other IVS shareholders in exchange for 100% of the capital stock of IVS. In the second quarter of 2011, we disposed of IVS, which, at the time, was an inactive, wholly-owned subsidiary of Medical Billing Assistance, Inc.

On December 29, 2010, we entered into a Share Exchange Agreement (the “Share Exchange Agreement”) with FCID Medical, Inc., a Florida corporation (“FCID Medical”), FCID Holdings, Inc., a Florida corporation (“FCID Holdings”), and the shareholders of FCID Medical and FCID Holdings (the “FCID Shareholders”). Pursuant to the terms of the Share Exchange Agreement, the FCID Shareholders exchanged 100% of the outstanding common stock of FCID Medical and FCID Holdings for 10,000,000 shares of our common stock, resulting in FCID Medical and FCID Holdings becoming 100% owned subsidiaries of Medical Billing Assistance, Inc.

On February 13, 2012, Medical Billing Assistance, Inc. merged with First Choice Healthcare Solutions, Inc., (“FCHS”), a Delaware corporation formed exclusively for the merger, pursuant to which (a) our state of incorporation changed from Colorado to Delaware (b) our name changed from Medical Billing Assistance, Inc. to First Choice Healthcare Solutions, Inc., (c) every four shares of Medical Billing Assistance Inc.’s common stock was exchanged for one share of FCHS common stock (effectively resulting in a four-to-one reverse split of our common stock), and (d) FCHS inherited the rights and property of Medical Billing Assistance, Inc. and assumed its liabilities. The effective date for the reincorporation and the reverse split was April 4, 2012. We operate as First Choice Healthcare Solutions, Inc.

Operating Segments

We operate in two segments, healthcare services and real estate, through five wholly-owned subsidiaries:

· FCID Medical, Inc. (“FCID Medical”), which is the subsidiary under which all of our Medical Centers of Excellence are and will be owned and operated. First Choice Medical Group of Brevard, LLC, is our first Medical Center of Excellence and is located in Melbourne, Florida. First Choice Medical Group is our model multi-specialty Medical Center of Excellence and is wholly-owned and operated by FCID Medical.

· FCID Holdings, Inc. (“FCID Holdings”) operates Marina Towers, a 78,000 square foot, Class A, six-story building located on the Indian River in Melbourne, Florida. Marina Towers is owned by Marina Towers, LLC, a subsidiary owned by FCID Holdings (99%) and MTMC of Melbourne, Inc. (1%).

Our Healthcare Services Business

We own and operate First Choice Medical Group of Brevard, LLC (“FCMG”), a multi-specialty medical Center in Melbourne, Florida. FCMG is our model multi-specialty Medical Center of Excellence and specializes in the delivery of musculoskeletal medicine, diagnostic services and rehabilitative care.

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Using FCMG as a model, we plan to create world class, state-of-the-art Medical Centers of Excellence committed to delivering patient-centric care in select U.S. markets.

FCID Medical, Inc.

FCID Medical is our wholly-owned subsidiary under which all of our Medical Centers of Excellence will be owned and operated. FCID Medical independently managed FCMG as of November 2011 until we acquired FCID Medical as a subsidiary in April 2012. Since acquiring FCID Medical, we have succeeded in increasing monthly patient visits, improving management of account payables/receivables, and expanding the number of physicians and care specialists on staff.

First Choice Medical Group of Brevard, LLC

Based in Melbourne, Florida, FCMG is our model multi-specialty Medical Center of Excellence. The Center specializes in the delivery of musculoskeletal medicine, diagnostic services and rehabilitative care with multiple quality-focused goals centered on enriching patient care experience. Our physicians and care specialists are recruited and retained with an emphasis on best practices and attitude: that being committed to meeting and exceeding the needs of patients and their families. Moreover, all employees of FCMG, from the receptionists to the doctors, are considered caregivers who put the patient first. All caregivers cooperate with one another through a common focus on the best interests and personal goals of each patient. Unique to FCMG, we also consider families and friends of patients to be vital components of the care team.

Care is focused on each patient’s full continuum of care, which requires a more personalized approach to treatment. It is the mission of our team to customize care to ensure that each patient’s needs, values and choices are always considered, which squarely aligns with our slogan of “transforming healthcare delivery, one patient at a time.”

Diagram 1. First Choice Medical Group’s Patient-Centric Care Delivery Model

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We strive every day to ensure that our patients are never kept waiting to see our physicians. Based upon FCMG’s patient exit polling results collected in 2013, our patient wait time has remained consistently below the industry average of approximately 23 minutes (source: Vitals.com).

Our caregivers listen to and honor the perspectives and choices of patients and their families. Moreover, our caregivers intend to continue to communicate and share complete and unbiased information with patients and families in ways that are affirming and useful in decision-making processes. Our care delivery practices exemplify the very definition of patient-centric care, explicitly recognizing the importance of human interaction in terms of personalized care, kindness and being ‘present’ with patients.

FCMG’s patient-centric culture strives to include providing an inviting, easily accessible, peaceful, healing environment that is aesthetically pleasing and designed specifically to allay patient fear, anxiety and discomfort. The design and décor of FCMG’s lobby and diagnostic and treatment areas are intended to define and reinforce a strong and relevant brand image of quality, patient-centered care.

FCMG also engages the most advanced diagnostic technologies coupled with the latest in individualized care, including trigger point injections and pharmacological, physical, neurological, orthopedic, chiropractic and massage therapy treatments. Our care facilities house both a digital GE X-Ray system and a GE 450 MRI Gem Suite system, which is physically positioned to capitalize on the expansive waterfront view of the Indian River, promoting patient relaxation and soothing fear and anxiety.

Our physicians currently have hospital and surgical privileges at several hospitals serving Brevard County, Florida, including Health First, Inc., Melbourne Same-Day Surgery Center, SCA Surgery Center and Merritt Island Surgery Center. Patients at FCMG are seen by physicians and care specialists who are our employees, not contractors, and patient clinical care and approach to treatment is well coordinated across a patient’s full care continuum.

Our Definition of a “Medical Center of Excellence”

As there are numerous definitions of a “Medical Center of Excellence,” we have strictly defined what we believe is qualified as a “Medical Center of Excellence” to ensure that our high standards for patient care and attention can be fostered and preserved. More specifically, each of our Medical Centers of Excellence will:

• be limited to eight to ten specialty physicians – all of whom are subject to our rigorous qualification and hiring process;

• provide for the combination of synergistic medical disciplines in orthopaedics, neurology and interventional pain medicine, while supported by related in-house diagnostic and ancillary services, including, but not limited to MRI, X-ray, DME and PT using advanced technologies;

• be capable of generating revenues of up to $20 million when operating at full capacity, based on current reimbursement rates;

• be housed in a commercial building, in close geographic proximity to a primary hospital(s); and

• allow for 12,000-16,000 square feet of usable space for build-out consideration.

Because we believe in ideals relating to optimal patient experience of care, we continually reinforce the importance of hiring, training, evaluating, compensating and supporting a workforce committed to patient-centered care. Just as vital, we engage our employees in all aspects of process design and treat them with the same dignity and respect that they are expected to show patients and family members. Central to our long term growth strategy is attracting and recruiting top tier physicians and care specialists that rank in the top percentile of performance in the local markets we serve; and creating a work environment and corporate culture that serves to engage, motivate and retain them.

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Due to sweeping healthcare reform, increased regulatory and reimbursement mandates and the financial challenges each of these impose, remaining in private practice is quickly losing its appeal for many physicians. In fact, according to a nationwide survey published in 2013 by recruiting firm Jackson Healthcare, one-third of U.S. physicians plan to leave private medical practice within the next ten years in favor of employment by hospitals and multi-specialty medical groups. Thus, the opportunity for our Company to attract key medical talent has never been more robust.

Our systems of operation unburden our physicians from business administration responsibilities associated with operating a medical practice or clinic. More specifically, we believe that physicians will choose employment with us because we can offer advantages and benefits such as being able to focus exclusively on delivering excellent patient care; higher income potential; freedom from day-to-day practice administration, including marketing and generating new patient leads; access to state-of-the-art technology, diagnostics and services; and camaraderie and collaboration with a cadre of first rate caregivers dedicated to common, patient-centered goals and objectives. The requirements for running the day-to-day business functions of the Centers are the sole responsibility of our management team – and not the physicians. Simply put, doctors get to be doctors.

Currently, we are actively engaged in identifying and pursuing discussions with prospective physicians in our key target markets – with those being primarily in the southeastern and western parts of the United States. We anticipate investing $4-5 million to create one or more Medical Centers of Excellence during the next 12 months; and each Center may require up to 6-12 months to achieve optimal economic capacity, depending on the number of physicians and physician assistants to be employed, the medical service mix and the type of diagnostic and ancillary services to be offered. However, there can be no assurance that we will be able to negotiate acceptable terms for, or find suitable candidates for, such positions.

Our Strategy

We aim to distinguish our Medical Centers of Excellence from our competition by designing our Centers as premier destinations for clinically superior, patient-centric care that is coordinated across a patient’s entire care continuum. By doing so, we expect to deliver more meaningful and collaborative doctor-patient experiences, more accurate diagnoses due to the care coordination, effective treatment plans, faster recoveries and materially reduced costs. Our strategic focus is to grow primarily in select southeastern and western U.S. markets by hiring additional physicians, organizing the physicians into teams for care coordination and ultimately, creating FCHS-branded Medical Centers of Excellence that fit our defined criteria. Our criteria includes the following:

• opportunities for us to introduce additional revenue channels (i.e. synergistic musculoskeletal medical disciplines; on-site MRI, X-ray, DME and PT; related health and wellness products, etc.) that will support and promote enhanced, well-coordinated, patient-centric care while supporting and promoting profitable business operations;

• opportunities that support economies of scale in billing, collections, purchasing, advertising and compliance which can be fully leveraged to reduce expenses and fuel income growth; and

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• opportunities to increase awareness of our brand by aligning with patients, referring physicians, medical institutions, insurers, employers and other healthcare stakeholders in local markets that share our values of patient care.

Our business model is to employ all of our multi-specialty physicians, thereby permitting us to optimize revenue generation from both physician and ancillary services, while also providing our employed care providers with the ability to refer patients to our on-site diagnostic services. Physician-owned practices, on the other hand, may be subject to prevailing federal regulations (e.g. The Ethics in Patient Referral Act of 1989, as amended) which may limit their ability to refer patients for certain healthcare services provide by entities in which the physician-owner(s) has a financial interest.

Our centralized system of back office operations will allow us to achieve measurable cost and productivity efficiencies as we expand the number of Centers we own and operate. We have specifically designed our centralized system to alleviate our staff physicians from business administration responsibilities associated with operating a medical practice or clinic, enabling them to focus on caring for the patients we serve. Physicians who own and manage their own private practices or clinics typically have to devote valuable time and resources to addressing business concerns, time and resources that might otherwise be spent on treating their patients.

Medical Service Mix

Like other business models for professional medical services, our Medical Center of Excellence model is designed to offer the most synergistic and profitable medical service mix. By their nature, some combinations of medical specialties can generate more revenue than others. Physicians need access to diagnostic equipment and ancillary services, such as MRI, X-ray, DME and PT. Moreover, patients expect their physicians to have access to the best diagnostic and service delivery equipment. Without diagnostic services, many medical practices would find it difficult to maintain their current margins of profitability.

We integrate both medical specialties and diagnostic services in our Center to maintain or enhance our profits. While one medical specialty may have high reimbursements for their professional services but insufficient volume to profitably support the necessary diagnostic equipment, another medical specialty may have lower professional service reimbursements but a higher volume of diagnostic equipment use. Operating independently, each specialty group would face retreating profit margins and confront significant challenges to maintaining high service levels with adequate and technologically advanced equipment. However, operating together, they create the optimal mix of professional service fee income and diagnostic equipment procedure income. Since the combination is more profitable than either of its components, there is a favorable opportunity to sustain profit margins that will allow each Center to maintain high service levels with state-of-the-art equipment.

Scalable Back Office and Economies of Scale

Fixed cost legacy administrative functions have subjected many established medical centers and our competitors, to a downward spiral of diminishing profit margins and losses. In legacy medical centers, administrative management, billing, compliance, accounting, marketing, advertising, scheduling, customer service, record keeping functions represent fixed overhead for the practice. The fixed administrative overhead of a practice has the effect of reducing profit margins if the practice experiences declining revenues as a result of lower patient volumes from increasing competition, lower pricing, lower reimbursements or patient migration to competitors.

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A key to our success will be our ability to continue to employ a highly experienced team of business managers supported by an array of professional, experienced and compliant subcontractors. Using project management best practices, our corporate team manages billing, compliance, accounting, marketing, advertising, legal, information technology and record keeping functions on behalf of FCMG and will do so on behalf of our future Centers. It is our plan that the cost of our “back office operations” will not increase in direct relation to the growth of our Medical Centers of Excellence, which will allow us to sustain profit margins across our entire business operation with a cost effective and scalable back office. As the number of employed physicians and operated Medical Centers of Excellence increase, the economies of scale for our back office operations will also increase. The economies of scale support selecting the best and not the lowest cost subcontractors, while allowing FCMG and our other future Medical Centers of Excellence to operate cost effectively with higher service levels.

Specifically, we currently provide all of the administrative services to support the practice of medicine by our physicians and improve operating efficiencies of FCMG and our future Medical Centers of Excellence:

· Recruiting and Credentialing. We have proven experience in locating, qualifying, recruiting and retaining experienced physicians. In addition to the verification of credentials, licenses and references of all prospective physician candidates, each caregiver undergoes level two background checks. We maintain a national database of practicing physicians. In addition to our database of physicians, we recruit locally through trade advertising, the American Academy of Orthopaedic Surgeons and referrals from our physicians.

· Billing, Collection and Reimbursement. We assume responsibility for contracting with third-party payors for all of our physicians, and we are responsible for billing, collection and reimbursement for services rendered by our physicians. In all instances, however, we do not assume responsibility for charges relating to services provided by hospitals or other referring physicians with whom we collaborate. Such charges are separately billed and collected by the hospitals or other physicians. The majority of our third-party payors remit by EFT and wire transfers. Accordingly, every aspect of the business is positioned to achieve high productivity and lower administrative headcounts and per capita expense. We provide our physicians with a training curriculum that emphasizes detailed documentation of and proper coding protocol for all procedures performed and services provided, and we provide comprehensive internal auditing processes, all of which are designed to achieve appropriate coding, billing and collection of revenue for physician services. All of our billing and collection operations are controlled and will continue to be controlled from our business offices located at our corporate headquarters in Melbourne, Florida.

· Risk Management and Other Services. We maintain a risk management program focused on reducing risk, including the identification and communication of potential risk areas to our medical staff. We maintain professional liability coverage for our group of healthcare professionals. Through our risk management staff, we conduct risk management programs for loss prevention and early intervention in order to prevent or minimize professional liability claims. In addition, we provide a multi-faceted compliance program that is designed to assist our multi-specialty Medical Centers of Excellence in complying with increasingly complex laws and regulations. We also manage all information technology, facilities management, legal support, marketing support, regulatory compliance and other services.

Developing and operating additional multi-specialty Medical Centers of Excellence in other geographic areas will take advantage of the economies of scale for our administrative back office functions. Our business development plan calls for opening up multiple Centers in multiple states and cities at a pace that will allow us to maintain the same levels of quality and acceptable profitability from each location. We believe that the scalable structure of our administrative back office functions will efficiently support our expansion plans.

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High Technology Infrastructure Supporting High Touch Patient Experiences

Successful retail models in other industries already effectively use telecommunications, remote computing, mobile computing, cloud computing, virtual networks and other leading-edge technologies to manage geographically diverse operating units. These technologies create the infrastructure to allow a central management team to monitor, direct and control geographically dispersed operating units and subcontractors, including national operations.

We believe that our business model incorporates the best of these technologies. A central management team monitors, directs and controls FCMG, and will control our future multi-specialty Medical Centers of Excellence, as well as the necessary support subcontractors required by the operations. 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 X-ray and MRI images, diagnoses, patient and doctor notes, visit reports, billing information, insurance coverage, patient identification and personalized care delivery requirements. Our EMR system fully complies with Stage 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.

We intend to grow by replicating the successful model currently in place by FCMG, as we hire additional physicians to create future Medical Centers of Excellence, all of which will be supported by our standardized policies, procedures and clinic setup guidelines. We believe our administrative functions can be quickly scaled to handle multiple additional Centers. As we roll out our business model, we expect our administrative core and retail clinic model will assist us in maintaining the economies of scale for our current Medical Center of Excellence as well as our future Medical Centers of Excellence.

Referral and Partnering Relationships

Our business model is influenced by the direct contact and daily interaction that our physicians have with their patients, and emphasizes a patient-centric, shared clinical approach that also serves to address the needs of our various “partners,” including hospitals, third-party payors and referring physicians, our physicians and, most importantly, our patients. Our relationships with our partners are important to our continued success.

Hospitals

Our relationships with our hospital partners are critical to our operations. We work with our hospital partners to market our services to referring physicians, an important source of hospital admissions, within the communities served by those hospitals. In addition, a majority of our physicians maintain regular hospital privileges, as well as trauma privileges where available, to ensure best in class is available to our patients and the community. Under our contracts with hospitals, we are responsible for billing patients and third-party payors for services rendered by our physicians separately from other related charges billed by the hospital or other physicians within the hospital to the same payors.

Third-Party Payors

Our relationships with government-sponsored plans, including Medicare and TRICARE, 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. In addition, through our quality initiatives and continuing research and education efforts, we have sought to enhance clinical care provided to patients, which we believe benefits third-party payors by contributing to improved patient outcomes and reduced long-term health system costs.

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We receive compensation for professional services provided by our physicians to patients based upon rates for specific services provided, principally from third-party payors. Our billed charges are substantially the same for all parties in a particular geographic area, regardless of the party responsible for paying the bill for our services. Approximately one-third of our net patient service revenue is received from government-sponsored plans, principally Medicare and TRICARE programs.

Medicare is a health insurance program primarily for individuals 65 years of age and older, certain younger people with disabilities and people with end-stage renal disease. The program is provided without regard to income or assets and offers beneficiaries different ways to obtain their medical benefits. The most common option selected today by Medicare beneficiaries is the traditional fee-for-service payment system. The other options include managed care, preferred provider organizations, private fee-for-service and specialty plans. TRICARE is the healthcare program for U.S. military service members (active, Guard/Reserve and retired) and their families around the world. TRICARE is managed by the Defense Health Agency under leadership of the Assistant Secretary of Defense. Both Medicare and TRICARE compensation rates are generally lower in comparison to commercial health plans. In order to participate in government programs, our Medical Center of Excellence must comply with stringent and often complex enrollment and reimbursement requirements.

We also receive compensation pursuant to contracts with commercial payors that offer a wide variety of health insurance products, such as health maintenance organizations, preferred provider organizations and exclusive provider organizations that are subject to various state laws and regulations, as well as self-insured organizations subject to federal Employee Retirement Income Security Act (“ERISA”) requirements. We seek to secure mutually agreeable contracts with payors that enable our physicians to be listed as in-network participants within the payors’ provider networks

If we do not have a contractual relationship with a health insurance payor, we 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 also provide discounts and/or payment option plans in certain hardship situations where patients and their families do not have 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.

Referring Physicians and Practice Groups

Our relationships with our referring physicians and referring practice groups are critical to our success. Our physicians seek to establish and maintain long-term professional relationships with referring physicians in the communities where we practice. We believe that our community presence, through our hospital coverage and FCMG, assists referring physicians with further enhancing their practices by providing well-coordinated and highly responsive care to their patients who require our musculoskeletal services, diagnostic services and rehabilitative care.

U.S. Healthcare Market Outlook

According to the Kaiser Family Foundation in 2013, using data from Centers for Medicare and Medicaid Services, total healthcare spending in the United States is expected to reach $4.8 trillion in 2021, up from $2.8 trillion in 2012 and $75 billion in 1970 (see Graph 1.). To put it in context, this means that healthcare spending will account for nearly 20% of gross domestic product (GDP), or one-fifth of the U.S. economy, by 2021 – perpetuating the U.S.’s ranking as the highest percentage in the developed world. Of total healthcare spending of $2.6 trillion in 2010, half (51%) went to pay the cost of medical services provided by hospitals and physicians.

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Graph 1. Projections of National Health Expenditures and

Their Share of Gross Domestic Product, 2012-2021

 

Despite the high cost of healthcare in our country, the quality of care in America also ranks among the worst in the developed world, with chronic diseases causing approximately 87% of all U.S. deaths in 2011 and affecting 45% of all Americans as of 2009. (Source: Partnership to Fight Chronic Disease website).

The care environment has long been characterized by unacceptable levels of practice variation. Incentives for consumers to adopt healthy behaviors, and for providers to optimize care, have simply proven inadequate. It is believed that it is these complex challenges that have helped create our healthcare affordability crisis. Moreover, much has been written about the belief that stakeholders in the healthcare supply chain – consumers, providers, purchasers – are disconnected from one another, and their incentives are misaligned. Healthcare information does not flow easily among them, and they sometimes work at cross purposes. This fragmentation has fostered tremendous inefficiency, waste and unnecessary redundancy, which ultimately compromises the delivery of quality care and the achievement of optimal outcomes.

The Patient Protection and Affordable Care Act (“PPACA”) and The Healthcare and Education Reconciliation Act of 2010 were signed into law by the current Administration to provide economic incentives and influence healthcare providers to facilitate delivery of coordinated, cost-conscious and affordable care to all Americans. In early 2014, the Health Insurance Marketplace began making it easier for people to compare qualified health plans, get answers to questions, find out if they are eligible for lower costs for private insurance or health programs like Medicaid and the Children’s Health Insurance Program, and enroll in health coverage.

In Brevard County, Florida, where we own and operate our first Medical Center of Excellence, First Choice Medical Group, 88,000 people, or approximately 16% of the population, were uninsured in 2013 and are now eligible for medical insurance coverage under PPACA. (Source: Florida Today article published on October 31, 2013)

The Camden Group, a leading healthcare consulting group, recently published its 2014 Top 10 Trends in Healthcare, and noted that despite the uneven start in 2014 for insurance sign-ups and subsequent delays in enacting parts of the health insurance mandate in accordance with the PPACA, the pressures for providers and payers to adapt to healthcare reform will accelerate this year. Significant shifts in the provider landscape are expected to occur, with an increase in deal-making by hospitals and health systems to gain economies of scale and expand their continuum of care, employers forging more direct arrangements with health systems, and non-traditional players and models extending their reach.

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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 physicians or physician 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 PPACA 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 physicians 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 overpayments 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.

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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 also would 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 generally 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, a number of proposals to limit or reduce Medicare reimbursement for various services. Our business may be significantly and adversely affected by any such changes in reimbursement policies and other legislative initiatives aimed at reducing healthcare costs associated with Medicare, TRICARE and other government healthcare programs.

Our business also could be adversely affected by reductions in or limitations of reimbursement amounts or rates under these government programs, reductions in funding of these programs or elimination of coverage for certain individuals or treatments under these programs.

Antitrust

The healthcare industry is subject to close antitrust scrutiny. In recent years, the Federal Trade Commission (the “FTC”), the DOJ and state Attorney General have increasingly taken steps to review and, in some cases, taken enforcement action against business conduct and acquisitions in the healthcare industry. Violations of antitrust laws may be punishable by substantial penalties, including significant monetary fines, civil penalties, criminal sanctions, consent decrees and injunctions prohibiting certain activities or requiring divestiture or discontinuance of business operations. Any of these penalties could have a material adverse effect on our business, financial condition and results of operations. We consider the antitrust laws in connection with the hiring of additional physicians and the operation of our business, and we believe our operations are in compliance with applicable laws.

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.

Pursuant to HIPAA, the U.S. Department of Health and Human Services (“HHS”) has adopted standards to protect the privacy and security of individually identifiable health information, known as the Privacy Standards and Security Standards. HHS’s Privacy Standards apply to medical records and other individually identifiable health information in any form, whether electronic, paper or oral, that is used or disclosed by healthcare providers, hospitals, health plans and healthcare clearinghouses, which are known as “Covered Entities.” We have implemented privacy policies and procedures, including training programs, designed to be compliant with the HIPAA Privacy Standards.

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HHS’s 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 a number of 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 health care 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 Medical Centers of Excellence; 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.

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Government Investigations

We expect that audits, inquiries and investigations from government authorities, agencies, contractors and payors will occur in the ordinary course of business. Such audits, inquiries and investigations and their ultimate resolutions, individually or in the aggregate, could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our common stock. To the best of our knowledge, as of this time, our health care business is not the subject of any pending audit, inquiry or investigation by any governmental authority.

Employees

As of June 6, 2014, we employed 44 full-time employees, which included seven physicians and two physician assistants.

Our Real Estate Business

FCID Holdings, Inc.

Our wholly owned subsidiary, FCID Holdings, Inc., operates our Company’s real estate interests. Currently, FCID Holdings has one real estate holding, Marina Towers, a 78,000 square foot, Class A, six-story building located on the Indian River in Melbourne, Florida. In addition to housing our corporate headquarters and First Choice Medical Group, the building, which averages 95% annual occupancy, also leases approximately 63,200 square feet of commercial office space to tenants. Our corporate headquarters currently utilizes approximately 9,380 square feet located on the second floor of Marina Towers, and FCMG, including its MRI center, currently occupy approximately 17,300 square feet on the ground and first floor.

Marina Towers is owned by Marina Towers, LLC, a subsidiary owned by FCID Holdings (99%) and MTMC of Melbourne, Inc. (1%).

DESCRIPTION OF PROPERTIES

We maintain our principal office at 709 S. Harbor City Boulevard, Suite 250, Melbourne, Florida 32901-1932. Our current office space, including the space that occupies FCMG, consists of approximately 17,000 square feet spanning three floors in Marina Towers, which is owned by Marina Towers, LLC, a subsidiary owned by FCID Holdings, Inc. (99%) and MTMC of Melbourne, Inc. (1%), both wholly owned subsidiaries of our Company.

We believe that our existing facilities are suitable and adequate to meet our current business requirements. The following table details our contracted leasing terms for the current tenants of Marina Towers:

Tenant	Leased Space (sq. ft.)		Lease Term		Lease Expiration		Renewable Terms
First Choice Healthcare Solutions, Inc.		4,274		—		—	—
First Choice Medical Group of Brevard, LLC		13,796		7 Years		04/20/2017	2-5 Year Options
First Choice Medical Group MRI Center		3,500		—		—	—
FCID Medical, Inc.		5,106		7 Years		12/31/2017	2-5 Year Options
Tenant A		14,533		10 Years		3/31/2019	5 Year Option
Tenant B		1,324		10 Years		7/31/2018	—
Tenant C		6,000		Five Years		05/31/2018	5 Year Option
Tenant D		8,945		10 Years		07/31/2017	3-5 Year Options
Tenant E		6,864		6 Years		6/30/2015	3 Year Option
Tenant F		6,668		1 Year		06/30/2015	—

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LEGAL PROCEEDINGS

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. 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. We are currently not aware of any such legal proceedings or claims that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.

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MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our common stock is currently quoted on the OTCQB, the OTC market tier for companies that report to the SEC, under the symbol “FCHS.” On June 6, 2014, the closing price of our common stock as quoted on the OTCQB was $1.75. The following table sets forth the high and low sales prices per share of our common stock as reported by the OTCQB.

2014	High		Low
First Quarter	$	3.70	$	0.76
2013
First Quarter	$	2.20	$	1.00
Second Quarter	$	1.75	$	0.05
Third Quarter	$	1.35	$	0.40
Fourth Quarter	$	2.10	$	1.00
2012
First Quarter	$	4.04	$	2.60
Second Quarter	$	3.00	$	2.70
Third Quarter	$	2.95	$	2.25
Fourth Quarter	$	2.38	$	1.50

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. There is currently no public trading market for our preferred stock.

Except as otherwise indicated, all information in this prospectus relating to our common stock and price per share reflects the 1-for-4- reverse split of outstanding common stock that was effected on April 4, 2012.

Holders

As of June 6, 2014, we had approximately 228 individual stockholders of record of our common stock. The number of record holders does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies. The transfer agent of our common stock is Corporate Stock Transfer, Inc. located at 3200 Cherry Creek Drive South, Suite 430, Denver, Colorado 80209.

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MANAGEMENT

The names of our executive officers, directors and director nominees and their age, title, and biography as of June 6, 2014 are set forth below:

Name	Age	Position	Officer and/or Director Since
Christian C. Romandetti	54	President, Chief Executive Officer and Director	December 2010
Donald A. Bittar	72	Chief Financial Officer, Treasurer, Secretary and Director	December 2010
Colin Halpern	76	Director	November 2012
Ivan Berkowitz	66	Director Nominee	__________
Daniel Dicker	54	Director Nominee	__________
Thomas Kruse	57	Director Nominee	__________

Directors are elected annually and hold office until our next annual meeting of stockholders and until their successors are elected. Officers are elected annually and serve at the discretion of the Board of Directors.

Christian C. Romandetti – President, Chief Executive Officer and Director

A serial entrepreneur and senior executive with extensive experience in a broad range of industries, Mr. Romandetti has served as our Chairman, President and CEO since December 2010. In this role, he is responsible for articulating our vision and executing strategies that place clinically superior, patient-centric care and improved clinical outcomes at the core of our corporate mission.

Since 2003 through to the present, Mr. Romandetti has been the Managing Member of Marina Towers, LLC, which is our wholly owned subsidiary; and the Managing Member of C&K, LLC, a property holding company. Since 2007, he has also lent his business building expertise to medical practices and MRI centers as a professional business consultant to the healthcare industry. Previously, he was a founding director of Sunrise Bank, a community bank serving local businesses in Florida’s Space Coast and served as an executive officer for numerous companies in the real estate, marine, automotive and construction products industries. As our President and CEO, Mr. Romandetti brings significant senior leadership and extensive industry and technical experience to our Board. Our Board believes that this experience enables him to effectively serve as a director.

Donald A. Bittar – Chief Financial Officer and Director

In December 2010, Mr. Bittar was appointed as our Chief Financial Officer, Treasurer and Secretary and a member of the Board of Directors. He brings to us more than 30 years of experience working with companies as an officer, board member and consultant. Before joining our leadership team, Mr. Bittar served as President and Chairman of Associated Mortgage of North America and President of DA Bittar and Associates, Inc., a management and technology consulting firm that he founded in 1980. From 1969 to 1980, he was Chairman, President and CEO of Marine Telephone, Inc. Since 1969, he has also taught finance, management and information technology at several leading undergraduate and graduate schools. Currently, Mr. Bittar is an Adjunct Professor at Florida Institute of Technology, College of Business, where he was honored as Online Teacher of the Year in 2013.

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In addition to authoring Getting Under the Hood of an Annual Report and Knowing What is Inside and A Good Business Plan is a Beautiful Thing, Mr. Bittar invented and was granted a U.S. patent for an adjustable sling that can be used to hold a patient’s arm, wrist and hand in multiple positions while eliminating stress to the neck and shoulder. He has been a frequent speaker at the National Association of Mortgage Bankers, National Council of Savings Institutions, Council of Presidents, New England Bankers Association and National Corporate Cash Managers Association. Mr. Bittar received a Master of Business Administration degree from Long Island University. Our Board believes that Mr. Bittar’s experience allows him to offer valuable perspectives on our corporate planning, budgeting, and financial reporting, thereby enabling him to effectively serve as a director.

Colin Halpern, Director

Mr. Halpern became a Director in November 2012. A highly accomplished multi-national business executive, entrepreneur and real estate developer, he currently serves as the Non-Executive Chairman of Domino’s Pizza Group UK and IRL PLC, the holder of the Domino’s Pizza Master Franchise Rights for the United Kingdom and Republic of Ireland. Mr. Halpern acquired the exclusive rights to own, operate and franchise Domino’s Pizza in 1993 through International Franchise Systems, Inc. In November 1999, with him as Chairman, this company was taken public and listed on the London Stock Exchange, and now is a constituent of the FTSE 250 Index with 2012 sales of approximately US$390 Million and 20,000 employees worldwide.

Mr. Halpern also serves as the Managing Director of HS Real Company, LLC; Chairman of Calumet Holdings, LLC; Chairman of Dayenn Limited; President and CEO of NPS Technologies Group; and Chairman of Universal Services Group and Managing Member of MedTRX Provider Network, LLC (“MedTRX”), among many others. Affiliates of MedTRX provide proprietary IT billing and collection software systems to us. Mr. Halpern’s extensive management and operating experience supports our Board’s efforts in overseeing and advising on corporate strategy, thus enabling him to effectively serve as a director.

Nominees to Our Board of Directors

Upon completion of this Offering and approval of our application for listing on the NYSE MKT, the following nominees have agreed to serve as members of our Board of Directors:

Ivan Berkowitz, PhD, Director Nominee

Dr. Berkowitz is a corporate executive and advisor with 40 years of professional experience in the financial and real estate industries. He has acted as a corporate advisor on matters that pertain to corporate structure and governance, transfer pricing, EEC antitrust law, mergers and international syndication. In 2003, he co-founded and has since served as the Chairman of Great Court Capital, a global structured finance and traditional merchant banking firm based in New York City, active in identifying, investing and managing the investment process for a syndicate of high net worth individuals, hedge funds and institutions.

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Until its sale in 2003, Dr. Berkowitz served as senior managing partner of Avatar Associates, a New York-based institutional asset management firm managing $1.8 billion in assets. He has been a member of the boards of directors of both public and private companies, domestically and internationally. In addition to these activities, he is a Board member of the Council for Economic Education, is a past board member of Yeshiva College and Cambridge in America, and is also a Life Member of the Cambridge Union. Dr. Berkowitz holds a Ph.D. in International Law from Cambridge University, an MBA in Finance (honors) from Baruch College and a B.A. cum laude in Economics from Brooklyn College. He has guest lectured at professional and academic forums that have included Young Presidents’ Organization, Cambridge University, Whittier College, School of Law, and New York University’s Center for Law and Business. Over the years, he has contributed to media, business, law and academic journals, including the Cambridge Law Journal and Juris Doctor. Since 2013, Mr. Berkowitz has served as a director and chairman of the audit committee of Trunity Holdings, Inc. Our Board believes that Dr. Berkowitz’s extensive experience in executive level financial and management roles enables him to provide critical insight and expertise in financial, operating and strategic matters which impact us, thus enabling him to effectively serve as a director.

Daniel Dicker, Director Nominee

Mr. Dicker has been a floor trader at the New York Mercantile Exchange with more than 25 years of oil trading experience. He is a licensed commodities trade adviser. He is currently President of MercBloc LLC, a wealth management firm and is the author of "Oil's Endless Bid," published in March of 2011 by John Wiley and Sons. Mr. Dicker has appeared as an energy analyst since 2002 with all the major financial news networks. He has lent his expertise in hundreds of live radio and television broadcasts on CNBC, Bloomberg US and UK and CNNfn. Mr. Dicker obtained a Bachelor of Arts degree from the State University of New York at Stony Brook in 1982. Our Board believes that Mr. Dicker’s extensive experience in acquisition financing, capital raising and debt agreement negotiations enables him to provide critical insight into the capital markets and the assessment of our growth strategic initiatives thus enabling him to effectively serve as a director.

Thomas Kruse, Director Nominee

For over 30 years, Mr. Kruse has focused his career on the homebound and physically disabled population. From his previous background in nursing, rehabilitation, and rehabilitation equipment specification and design, Mr. Kruse has successfully built and operates Hoveround Corporation, a vertical platform, direct-to-consumer, mobility and rehabilitation manufacturing and supply company. Hoveround is a ISO 9001/2008 and JCAHO Accredited Healthcare enterprise. Currently, Hoveround employs over 500 employees nationwide and generates over $90 million in annual sales.

Mr. Kruse graduated from a nationally accredited program in nursing from the State University of New York and held a variety of nursing positions thereafter. He previously graduated from the United States Navy's School of Advanced Electronics and Fire Control Technology in Great Lakes, Illinois, completing courses in basic and advanced electronics. He received an Honorable discharge after six years of service in both regular and reserve units of the U.S. Navy. In addition, he has completed multiple courses and certifications in Medical/Rehab Equipment assessment and related seating and positioning techniques. He holds numerous patents for innovative and successful products in both the mobility and seating systems areas.

His first product invention, the Hoveround MPV, won the Product of the Year award from both the Governor of Florida and the National Society of Professional Engineers. These innovative products propelled Hoveround to the position of being the Inc. 500's 16th fastest-growing company in the United States in 1997. Mr. Kruse continues to be an active force in recognizing and addressing the problems of the mobility-challenged. Our Board believes that Mr. Kruse’s extensive experience in the healthcare industry allows him to provide guidance to our Board on the strategic challenges and opportunities of our Company, thus enabling him to effectively serve as a director.

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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.

Board Composition and Director Independence

We intend to apply to list our common stock on the NYSE MKT LLC (“NYSE MKT”). Under the rules of the NYSE MKT, independent directors must comprise at least 50% of our Board of Directors, in addition to certain other independence requirements of our Board committees.

Our Board of Directors undertook a review of its composition, the formation of committees and the independence of each director. Based upon information requested from and provided by each director and nominee concerning his background, employment and affiliations, including family relationships, our Board of Directors has determined that the current members of our Board, Christian C. Romandetti, Donald A. Bittar and Colin Halpern, are not independent directors. However, we anticipate that our director nominees will qualify as “independent” under the listing standards of NYSE MKT, federal securities laws and SEC rules with respect to members of boards of directors and members of all board committees on which he serves.

Board Committees

Our Board of Directors does not have any standing committees at this time. Upon the completion of this Offering, however, our Board of Directors will have the following committees: an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. The composition and responsibilities of each committee are described below. Members will serve on these committees until their resignation or until otherwise determined by our Board of Directors. Each committee will be governed by a written charter approved by our Board.

Audit Committee

Our Audit Committee will consist of Dr. Berkowitz, Mr. Dicker and Mr. Kruse, each of whom will satisfy the independence requirements under NYSE MKT and SEC rules and regulations applicable to audit committee members and have an understanding of fundamental financial statements. Dr. Berkowitz will serve as chairman of the Audit Committee.

It is expected that Dr. Berkowitz will qualify as an “audit committee financial expert” as that term is defined in the rules and regulations of the SEC. The designation of Dr. Berkowitz as an “audit committee financial expert” will not impose on him any duties, obligations or liability that are greater than those that are generally imposed on him as a member of our Audit Committee and our Board of Directors, and his designation as an “audit committee financial expert” pursuant to this SEC requirement will not affect the duties, obligations or liability of any other member of our Audit Committee or Board of Directors.

The Audit Committee will monitor our corporate financial statements and reporting and our external audits, including, among other things, our internal controls and audit functions, the results and scope of the annual audit and other services provided by our independent registered public accounting firm and our compliance with legal matters that have a significant impact on our financial statements. Our Audit Committee also will consult with our management and our independent registered public accounting firm prior to the presentation of financial statements to stockholders and, as appropriate, initiate inquiries into aspects of our financial affairs. Our Audit Committee will be responsible for establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters, and for the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters, and will have established procedures to become effective upon the effectively upon the effectiveness of the registration statement of which this prospectus forms a part. In addition, our Audit Committee will be directly responsible for the appointment, retention, compensation and oversight of the work of our independent auditors, including approving services and fee arrangements. All related party transactions will be approved by our Audit Committee before we enter into them.

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Both our independent auditors and internal financial personnel will regularly meet with, and will have unrestricted access to, the Audit Committee.

Compensation Committee

Our Compensation Committee will consist of Dr. Berkowitz, Mr. Dicker and Mr. Kruse, each of whom will satisfy the independence requirements of NYSE MKT and SEC rules and regulations. Each member of this Committee will be a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Exchange Act, and an outside director, as defined pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended. Dr. Berkowitz will serve as chairman of the Compensation Committee.

The Compensation Committee will review and approve our compensation policies and all forms of compensation to be provided to our executive officers and directors, including, among other things, annual salaries, bonuses, and other incentive compensation arrangements. In addition, our Compensation Committee will administer our stock option and employee stock purchase plans, including granting stock options to our executive officers and directors. Our Compensation Committee also will review and approve employment agreements with executive officers and other compensation policies and matters.

Nominating and Corporate Governance Committee

Our Nominating and Corporate Governance Committee will consist of Dr. Berkowitz, Mr. Dicker and Mr. Kruse, each of whom will satisfy the independence requirements of NYSE MKT and SEC rules and regulations. Dr. Berkowitz will serve as chairman of the Nominating and Corporate Governance Committee.

Our Nominating and Corporate Governance Committee will identify, evaluate and recommend nominees to our Board of Directors and committees of our Board of Directors, conduct searches for appropriate directors and evaluate the performance of our Board of Directors and of individual directors. The Nominating and Corporate Governance Committee also will be responsible for reviewing developments in corporate governance practices, evaluating the adequacy of our corporate governance practices and reporting and making recommendations to the Board of Directors concerning corporate governance matters.

Meetings and Committees of the Board of Directors

During the fiscal year ended December 31, 2013, our Board of Directors held 7 meetings and approved certain actions by unanimous written consent.

Effective as of the completion of this Offering, our Board of Directors has established an audit committee, a compensation committee and a nominating and corporate governance committee. Our Board of Directors and its committees set schedules for meeting throughout the year and can also hold special meetings and act by written consent from time to time, as appropriate. Our Board of Directors has delegated various responsibilities and authority to its committees as generally described below.

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Involvement in Certain Legal Proceedings

Our 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 Securities and Exchange Commission 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.

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EXECUTIVE COMPENSATION

The following table sets forth compensation information for services rendered by certain of our executive officers in all capacities during the last two completed fiscal years.  The following information includes the dollar value of base salaries and certain other compensation, if any, whether paid or deferred.  Our executive officers did not receive any option award, non-equity incentive plan compensation, or nonqualified deferred compensation earnings during the last two completed years.

Summary Compensation Table

Name and Position(s)	Year		Salary ($)(1)		Bonus ($)(2)		Stock Awards ($)(3)		Other ($)(4)		Total Compensation ($)
Christian C. Romandetti		2013		240,000		23,750		33,000		36,347		333,097
President, CEO and Director		2012		168,000		9,000		-		60,108		237,108
Donald A. Bittar, CFO,		2013		26,500				33,000				59,500
Secretary, Treasurer and Director		2012		12,350		-		-				12,350

(1) Represents the actual aggregate cash payments made during the fiscal year in the form of base salary.

(2) The amounts reported in the “Bonus” column represent discretionary bonus amounts the Board of Directors determined to pay to the Named Executive Officers for fiscal year 2013.

(3) Values in this column represent the aggregate grant date fair value of stock awards paid to such person for services rendered as a member of our Board of Directors, computed in accordance with FASB ASC Topic 718 – Stock Compensation.  Assumptions used in the calculation of these amounts are included in the notes to the consolidated financial statements included in this registration statement for each of the fiscal years ended December 31, 2013 and 2012.

(4) Consists of provision of an automobile, computer equipment and reimbursement of business expenses.

Employment Agreement

We entered a formal five-year employment agreement (the “Employment Agreement”) with Christian C. Romandetti, dated March 20, 2014 and effective January 1, 2014, to serve as our President and Chief Executive Officer. Pursuant to the terms and conditions set forth in the Employment Agreement, Mr. Romandetti is entitled to receive an annual base salary of $250,000, which shall increase no less than 5% per annum for the term of the Employment Agreement. Mr. Romandetti is entitled to (i) five weeks of vacation per year that if not used in any given one year will accrue and (ii) participate in all benefit plans we provide to our senior executives and we will pay 100% of all costs associated with such plans and will reimburse Mr. Romandetti for all reasonable out-of-pocket expenses and $1,000 per month for auto expenses.

Mr. Romandetti, upon successfully achieving annual revenue milestones, is entitled to receive a bonus equal to 10% of his salary when $7.1 million in total annual revenue is reported in a fiscal year scaling up to a bonus equal to 800% of his salary if and when $100 million in total annual revenue is reported in a fiscal year. If we are unable to pay any portion of the bonus compensation when due because of insufficient liquidity or applicable restrictions under prevailing debt financing agreements, then, as an accommodation to us, Mr. Romandetti shall be able to convert bonus compensation into shares of our common stock at a 30% discount to the average closing price during the first calendar month after the end of the fiscal year. Mr. Romandetti will also be entitled to receive a strategic bonus of $100,000, payable in cash, on the sixth month anniversary of opening each new Medical Center of Excellence.

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Pursuant to the achievement by us of specific financial performance benchmarks established by the Board of Directors, Mr. Romandetti will also be entitled to receive a cashless option to purchase up to 1 million shares of common stock per year. The exercise price of the options will be the fair market value of the average closing price of the stock during the first calendar month after the end of the fiscal year. Mr. Romandetti shall have up to five years from the date of the annual option grant to exercise the option. In addition to the above compensation consideration, Mr. Romandetti will be entitled to receive annual restricted stock compensation equal to 100% of the total base salary and bonus compensation. The fair market value of the restricted stock grant shall be determined using the average closing price of the common stock during the first calendar month after the end of the fiscal year.

Upon the expiration of the initial five-year term, the Employment Agreement shall automatically be extended for additional terms of one year each unless either party gives 90 day prior written notice of non-renewal. In addition, Mr. Romandetti’s Employment Agreement provides that, upon Mr. Romandetti’s death, disability, termination for any reason other than “Cause” (as such term is defined in the Employment Agreement) or resignation for “Good Reason” (as such term is defined in the Employment Agreement), we will pay to Mr. Romandetti 12 months of his annual base salary at the time of separation in accordance with the our usual payroll practices and in case of disability additionally the payment on a prorated basis of any bonus or other payments earned in connection with our then-existing bonus plan in place at the time of such termination. Finally, Mr. Romandetti is subject to standard non-compete and non-solicit covenants during the course of his employment and for a period of 12 months after the date that he is no longer employed by us.

Compensation of Directors

The following table sets forth the compensation paid to our non-employee Board of Directors in fiscal 2013:

Name	Fees earned or paid in cash ($)		Stock awards ($)(1)		All other compensation ($)		Total ($)
Colin Halpern		-	$	77,250		-	$	77,250
Mel Lazar (2)		-	$	52,500		-	$	52,500

(1) This column includes the grant date fair value of the option awards granted during the fiscal year, computed in accordance with FASB ASC Topic 718. These amounts reflect our accounting valuation of these awards and do not correspond to the actual value that will be recognized by our directors.

(2) In March 2013, Mel Lazar resigned as a member of our Board of Directors.

We do not maintain a compensation plan for our directors. With respect to compensation for our directors, we operate on an ad hoc basis. On February 26, 2013 and September 13, 2012, we issued an aggregate of 225,000 shares of our common stock to members of our Board of Directors for services rendered during fiscal year 2013. The shares of common stock were valued, in the aggregate, at $195,750 which was estimated to be approximate the fair value of our common stock during the period covered.

Outstanding Equity Awards at Fiscal Year-End

We had no outstanding equity awards as of December 31, 2013.

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Potential Payments upon Termination or Change in Control

Pursuant to the Employment Agreement we entered into with Christian C. Romandetti, if Mr. Romandetti terminates his employment with good reason (as defined in the Employment Agreement) or if we terminate Mr. Romandetti’s employment without cause (as defined in the Employment Agreement) or upon a change of control (as defined in the Employment Agreement), Mr. Romandetti will be entitled to receive: (1) twelve (12) months’ base salary and bonus Mr. Romandetti would have earned pursuant to the Employment Agreement; (2) payment of Mr. Romandetti’s base salary during any restricted period (as defined in the Employment Agreement) in accordance with our usual payroll practices, including the withholding of all applicable taxes; and (3) continued provision for a period of the remainder of the term of the Employment Agreement after the date of termination of the benefits under benefit plans extended from time to time by us to our senior executives. Termination payments are also triggered in the event of Mr. Romandetti’s death or disability during the term of the Employment Agreement or upon the expiration of the initial term or any renewal term, generally equal to (1) twelve (12) months’ base salary; (2) accrued but unpaid compensation and vacation pay through the date of termination and (3) continued provision of benefits for a certain period.

2011 Incentive Stock Plan

In March 2012, we approved the 2011 Incentive Stock Plan (“2011 Plan”). The 2011 Plan provides for the issuance of options to purchase up to 500,000 shares of our common stock to officers, directors, employees, advisors and consultants. Under the terms of the 2011 Plan, we may issue Incentive Stock Options, as defined by the Internal Revenue Code, and non-statutory options. The Board of Directors determines the exercise price, vesting and expiration period of the options granted under the 2011 Plan. However, the exercise price of an Incentive Stock Option must be at least 100% of fair value of the common stock at the date of the grant (or 110% for any stockholder that owns 10% or more of our common stock) and may not be exercisable more than five (5) years from the date of grant. The fair market value of the common stock determined based on quoted market price or in absence of such quoted market price, by the Board of Directors in good faith. Additionally, the expiration date may not be more than ten (10) years from the date of grant. We reserved 500,000 shares of our common stock for future issuance under the terms of the 2011 Plan. The term of the 2011 Plan is ten years from January 6, 2012, its effective date. No grants have been made to date under the 2011 Plan.

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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Guggenheim Life and Annuity Company

On August 12, 2011 Marina Towers, LLC, a Florida limited liability company (“Marina Towers”) and an indirect and wholly-owned subsidiary of Medical Billing Assistance, Inc., a Colorado company (the “Company”) entered into a Loan Agreement (the “Loan Agreement”) with Guggenheim Life and Annuity Company, a Delaware life insurance company (“Guggenheim”). The closing and funding of the Loan occurred on August 15, 2011 (the "Closing Date"). Under the Loan Agreement, Guggenheim has committed to make a loan in the aggregate amount of $7,550,000.00 to Marina Towers with an interest rate of 6.10% per annum (the “Loan”). The maturity date of the Loan is September 16, 2016 (the “Maturity Date”). The Loan is evidenced by that certain Consolidated, Amended and Restated Promissory Note, dated August 12, 2011 (the “Note”) and is secured primarily by: (i) that certain first priority Consolidated, Amended and Restated Mortgage and Security Agreement, dated August 12, 2011, encumbering the real and personal property (the “Property”) of Marina Towers (the “Mortgage”); and (ii) that certain first priority Assignment of Leases and Rents, dated August 12, 2011, from Marina Towers, as assignor, to Guggenheim as assignee, pursuant to which Marina Towers assigned to Guggenheim all of Marina Towers’ right, title and interest in and to certain leases and rents as security for the Loan.

The proceeds of the Loan were used to: (i) repay and discharge existing loans relating to the Property; (ii) pay all past-due basic carrying costs, if any, with respect to the Property; (iii) make deposits into the reserve funds, or any escrow accounts established pursuant to the loan documents, on the Closing Date in the amounts set forth in the Loan Agreement; (iv) pay costs and expenses incurred in connection with the closing of the Loan; (v) fund any working capital requirements of the Property; and (vi) distribute the balance, if any, to Marina Towers.

Pursuant to the Loan Agreement, Marina Towers does not have the right to prepay the Loan, in whole or in part, prior to the Maturity Date without a pre-payment penalty. After the payment date occurring three months prior to the Maturity Date, Marina Towers may, provided no event of default has occurred and is continuing, at its option and upon thirty days’ prior notice to Guggenheim, prepay the Loan in whole on any date without payment of any prepayment penalty or premiums.

The Loan Agreement is guaranteed by Christian C. Romandetti, our Chief Executive Officer, pursuant to that certain Guaranty Agreement, dated August 12, 2011, made by Mr. Romandetti for the benefit of Guggenheim (the “Guaranty”). Pursuant to the non-recourse Guaranty, Mr. Romandetti agreed to a limited personal guarantee to Guggenheim of the payments and performance of the obligations of and liabilities of Marina Towers pursuant to the Loan Agreement.

CCR of Melbourne, Inc.

On February 1, 2012, we opened a $500,000 unsecured, revolving line of credit loan with CCR of Melbourne, Inc., an entity jointly owned and controlled at that time by Christian C. Romandetti, our Chief Executive Officer and Carmen Romandetti, our Chief Executive Officer’s father. The revolving line of credit loan was to mature on October 1, 2015 with interest at a per annum rate of 8.5% beginning March 1, 2012. Advances on the line of credit were at the sole discretion of CCR of Melbourne, Inc. On November 8, 2013, CCR converted the then outstanding balance of $142,483.52, representing all of the outstanding related party principal and interest amount on the loan, into shares of our common stock at a price equal to $0.45 per share for a total of 316,631 shares issued. On November 8, 2013, Christian C. Romandetti relinquished all rights, title to and ownership in CCR to Carmen Romandetti in consideration of a personal loan made to Christian C Romandetti by Carmen Romandetti.

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HS Real Company, LLC

We entered into an unsecured loan agreement with HS Real Company, LLC (“HSR”) on May 17, 2012 for $100,000 at an interest rate of 12% per annum (the "HSR Note"). On August 5, 2012, HSR increased the principal amount to $250,000, and subsequently HSR advanced an additional $50,000 to us, bringing the aggregate principal amount of the HSR Note to $300,000, all of which was due and payable to HSR on December 31, 2012. We paid $27,556 and $17,053 as interest on the HSR note for the years ended December 31, 2013 and 2012, respectively. Mr. Colin Halpern is both an affiliate of HSR and a member of our Board of Directors. On November 8, 2013, we paid off the HSR Note, remitting HSR $300,000 for the outstanding principal and interest balance due on the HSR Note.

Daniel Dicker

On May 1, 2013, we entered into a loan commitment whereby MTI Capital LLC (“MTI”) provided us with a line of credit up to $2,000,000 in the form of a convertible loan with interest at 12% per annum, payable monthly with principal due two years from the effective date of the loan. On August 28, 2013, we amended the loan agreement to change the conversion rate from $0.75 per share to $0.45 per share. On September 27, 2013, Daniel Dicker, a nominee for our Board of Directors, loaned $50,000 to MTI.

On November 8, 2013, MTI converted the then outstanding balance of $624,000 principal and interest amount on the loan, into restricted shares of our common stock, at a price equal to $0.45 per share for a total of 1,386,667 shares issued. Subsequently, in repayment of Mr. Dicker’s loan to MTI, MTI transferred 112,259 shares of our Company to Mr. Dicker.

Donald A. Bittar

On September 7, 2013, we acquired a patent, US 7,789,842 B2, for an orthopedic adjustable arm sling from Donald A. Bittar, the inventor and our Chief Financial Officer. Based on the independent, third-party evaluation of Professional Business Brokers, Inc., the patent was valued at $286,500. We issued Mr. Bittar 636,666 shares of our common stock, valued at $286,500, or $0.45 per share, which was estimated to approximate fair value of the patent acquired and did not materially differ from the fair value of the common stock at the time of issuance.

MedTRX Provider Network, LLC

Colin Halpern, a member of our Board of Directors, is the Managing Member of MedTRX Provider Network, LLC (“MedTRX”). Affiliates of MedTRX provide proprietary IT billing and collection software systems to us. For the year ended December 31, 2013, we paid $272,000 to affiliates of MedTRX for billing and collection services.

On December 23, 2011 (the “Effective Date”), we entered into a registration rights agreement (the “Registration Rights Agreement”) and common stock warrant (the “Warrant”) with MedTRX. Pursuant to the Warrant, we issued to MedTRX, for services provided between June 6, 2011 and December 23, 2011, warrants to purchase up to 1,875,000 shares of common stock at an exercise price of $3.60 for a term of seven years. Pursuant to the Registration Rights Agreement, we agreed, subject to the applicable rules, regulations and interpretations of the Securities and Exchange Commission (the “SEC”), to (a) use our reasonable best efforts to file a registration statement with the SEC, covering the resale of the shares of common stock issuable upon exercise of the Warrant (the “Registrable Securities”) within 30 days of the earlier of (i) the date when we become eligible to file a registration statement on Form S-3 covering the Registrable Securities, or (ii) five years from the Effective Date, and (b) cause such registration statement to become and remain continuously effective until eight years after the Effective Date. Pursuant to the Registration Rights Agreement, we also granted to MedTRX “piggyback” registration rights, pursuant to which we agreed to, at any time and from time to time for a period of eight years commencing on the Effective Date, if we propose to file a registration statement (other than on Form S-4, Form S-8 or in conjunction with a firm commitment underwriting), provide written notice to MedTRX of such proposed filing and offer to MedTRX the opportunity to register the resale of the Registrable Securities on such registration statement, subject to (a) the applicable rules, regulations and interpretations of the SEC, and (b) with respect to an underwritten offering, our right to exclude any Registrable Securities from a registration statement if in the sole discretion of the managing underwriter or underwriters of such underwritten offering, the inclusion of such Registrable Securities would adversely affect the underwritten offering. Pursuant to the terms of the Registration Rights Agreement, we are entitled to exclude the Registrable Securities from this Offering because it is being made pursuant to a firm commitment underwriting.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information as of the date hereof with respect to the beneficial ownership of the outstanding shares of Common Stock by (i) each person or group, to the best of our knowledge that own more than 5% of the Company’s Common Stock; (ii) each of our officers and directors; and (iii) our current officers and directors as a group.

As used in the table below, the term “beneficial ownership” means the sole or shared power to vote or direct the voting, or to dispose or direct the disposition, of any security. A person is deemed as of any date to have beneficial ownership of any security that such person has a right to acquire within sixty (60) days of June 6, 2014. Except as otherwise indicated, the stockholders listed below have sole voting and investment powers with respect to the shares indicated. Accordingly, the number of shares and percentage set forth opposite each stockholder’s name in the table include the shares of common stock issuable upon exercise, conversion or exchange of certain derivative securities beneficially owned by such person, both with respect to the number of shares of common stock deemed to be beneficially owned and the adjusted percentage of outstanding common stock resulting from such rights.

Name and Address of Beneficial Owner (1)	Number of Shares of Common Stock Owned		Percent of Shares Beneficially Owned*
Christian C. Romandetti (2)		7,760,000		45.43	%
Donald A. Bittar (3)		696,666		4.07	%
Colin Halpern (4)		1,950,000		10.29	%
All directors and executive officers as a group (3 persons)		10,406,666		59.79	%
MedTRX Provider Network, LLC (4)		1,875,000		9.89	%
Hillair Capital Investments L.P. (5)		4,540,000		20.10	%
GIRTFT, LLC		5,750,000		33.66	%
Marina Towers Holdings, LLC		1,800,000		10.54	%
CT Capital, Ltd. (6)		1,300,000		7.11	%

* On June 6, 2014, we had 17,081,248 shares of common stock outstanding.

(1) Unless otherwise stated, the address of each beneficial owner listed on the table is c/o First Choice Healthcare Solutions, Inc., 709 S. Harbor Blvd., Suite 250, Melbourne, Florida 32901.

(2) Of the reported securities, 5,750,000 shares are owned by GIRTFT, LLC, a Florida limited liability company (“GIRTFT”), 1,800,000 shares are owned by Marina Towers Holdings, LLC, a Florida limited liability company (“Holdings”) and 150,000 shares are owned by Mr. Romandetti’s wife. Mr. Romandetti serves as the managing member of GIRTFT and Holdings, and as such, may be deemed to beneficially own the securities held by GIRTFT and Holdings. Mr. Romandetti disclaims beneficial ownership of the reported securities, except to the extent of his pecuniary interest therein.

(3) Includes 60,000 shares owned by Mr. Bittar’s wife, which he may be deemed to beneficially own.

(4) Of the reported securities, 1,875,000 shares are issuable upon the exercise of a warrant issued to MedTRX Provider Network, LLC (“MedTRX”) for services rendered to us. Mr. Halpern, a director of the Company, serves as the managing member of MedTRX, and as such may be deemed to beneficially own the securities held by MedTRX. The warrant may be exercised on or before December 31, 2016 at an exercise price of $3.60 per share. The address of MedTRX is 1 Kalisa Way, Suite 201, Paramus, New Jersey 07652.

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(5) On November 8, 2013, we entered into a Securities Purchase Agreement with Hillair Capital Investments LP (“Hillair”) whereby we issued and sold to Hillair (i) a $2,320,000, 8% Original Issue Discount Convertible Debenture due December 28, 2013 (the “Debenture”), subject to extension through November 1, 2015 and convertible into 2,320,000 shares of our common stock, and (ii) a Common Stock Purchase Warrant (the “Warrant”) to purchase up to 2,320,000 shares of our common stock at an exercise price of $1.35 per share. The Warrants are exercisable on or before November 8, 2018, and may be exercised on a cashless basis. On May 8, 2014, Hillair elected to convert the aggregate amount of $104,000 of its Debenture, representing $100,000 of principal and $4,000 of interest, into 104,000 shares of the Company’s common stock. For purposes of the percent ownership calculation, we have assumed that the Warrants were exercised on a cash basis at an exercise price of $1.35 per share. The Debenture and the Warrants may not be converted if such conversion would result in Hillair beneficially owning in excess of 4.99% of our common stock. Hillair may waive this 4.99% restriction with 61 days’ notice to us. Hillair Capital Management LLC serves as the investment manager of Hillair Capital Investments LP and, as such Hillair Capital Management LLC has the voting and dispositive power with respect to the securities held to Hillair Capital Investments LP. As a manager of Hillair Capital Management LLC, each of Sean McAvoy, Scott Kaufman and Neil Kaufman also shares voting and investment power on behalf of Hillair Capital Investments LP. The address of Hillair Capital Investments LP is 330 Primrose Road, Suite 660, Burlingame, California 94010.

(6) On June 13, 2013, we entered into a Loan and Security Agreement (the “Loan Agreement”) with CT Capital, Ltd., a Florida limited liability partnership. Under the Loan Agreement, CT Capital committed to make an accounts receivable line of credit in the maximum aggregate amount of $1,500,000. As of June 6, 2014, $900,000 was outstanding under the line of credit. At any time up until December 31, 2016, CT Capital may convert all or any portion of the outstanding principal amount or interest on the loan into our common stock at a price equal to $0.75 per share. The address of CT Capital, Ltd. is 6300 NE First Avenue, Suite 201, Fort Lauderdale, FL 33334.

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DESCRIPTION OF CAPITAL STOCK

The following is a summary of the material characteristics of our capital stock as set forth in our articles of incorporation and bylaws. The summary does not purport to be complete and is qualified in its entirety by reference to our articles of incorporation and bylaws, and to the provisions of the Delaware General Corporation Law, as amended.

We have 100,000,000 Common Stock, par value $0.001 per share, authorized for issuance and 1,000,000 Preferred Stock, par value $0.10 per share, authorized for issuance. As of June 6, 2014, there were 17,081,248 shares of common stock issued and outstanding. The outstanding shares of our common stock are validly issued, fully paid and nonassessable. We effected a 1-for-4 reverse stock split of our common stock on April 4, 2012. All common stock share numbers in this prospectus give effect to the reverse stock split.

Common Stock

Holders of our common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of our common stock do not have cumulative voting rights. Therefore, holders of a majority of the shares of our common stock voting for the election of directors can elect all of the directors. Holders of our common stock representing a third of the voting power of our capital stock issued, outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of stockholders.

Holders of our common stock are entitled to share in all dividends that our Board of Directors, in its discretion, declares from legally available funds. In the event of a liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over our common stock. Our common stock has no pre-emptive, subscription or conversion rights and there are no redemption provisions applicable to our common stock.

Preferred Stock

We are authorized to issue up to 1,000,000 shares of preferred stock, par value $0.10 per share, none of which are currently outstanding. The shares of preferred stock may be issued in series, and shall have such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated and expressed in the resolution or resolutions providing for the issuance of such stock adopted from time to time by our Board of Directors. The Board of Directors is expressly vested with the authority to determine and fix in the resolution or resolutions providing for the issuances of preferred stock the voting powers, designations, preferences and rights, and the qualifications, limitations or restrictions thereof, of each such series to the full extent now or hereafter permitted by the laws of the State of Delaware.

Warrants

At December 31, 2013, we had (i) warrants outstanding to purchase 1,875,000 shares of our common stock at an exercise price of $3.60 per share which expire on December 23, 2018 and (ii) warrants to purchase 2,320,000 shares of our common stock at an exercise price of $1.35 which may be exercised on a cashless basis, until November 8, 2018.

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Anti-Takeover Provisions of Delaware Law

The provisions of Delaware law discussed below could discourage or make it more difficult to accomplish a proxy contest or other change in our management or the acquisition of control by a holder of a substantial amount of our voting stock. It is possible that these provisions could make it more difficult to accomplish, or could deter, transactions that stockholders may otherwise consider to be in their best interests or in our best interests. These provisions are intended to enhance the likelihood of continuity and stability in the composition of our Board of Directors and in the policies formulated by our Board and to discourage certain types of transactions that may involve an actual or threatened change of our control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal and to discourage certain tactics that may be used in proxy fights. Such provisions also may have the effect of preventing changes in our management.

Delaware Anti-Takeover Statute

We are subject to the provisions of Section 203 of the Delaware General Corporation Law regulating corporate takeovers. In general, Section 203 prohibits a publicly held Delaware corporation from engaging, under certain circumstances, in a business combination with an interested stockholder for a period of three years following the date the person became an interested stockholder unless:

· prior to the date of the transaction, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;

· upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, calculated as provided under Section 203; or

· at or subsequent to the date of the transaction, the business combination is approved by our board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.

Generally, a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An interested stockholder is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporation’s outstanding voting stock. We expect the existence of this provision to have an anti-takeover effect with respect to transactions our board of directors does not approve in advance. We also anticipate that Section 203 may also discourage attempts that might result in a premium over the market price for the shares of common stock held by stockholders.

Representative’s Warrants

We have agreed to issue to the representative of the underwriters in this Offering warrants to purchase up to [*] shares of our common stock. The representative’s warrants are exercisable at a per share exercise price equal to 125% of the public offering price per share of common stock in the Offering. A complete description of these warrants is included in the “Underwriting — Representative’s Warrants” section of this prospectus.

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Stock Market Listing

We intend to apply to have our shares of common stock listed for trading on NYSE MKT under the symbol “FCHS.” No assurance can be given that such listing will be approved. We have not applied, and do not intend to apply, for any listing of the Warrants.

Transfer Agent and Registrar

The transfer agent and registrar for our common stock and our Warrants is Corporate Stock Transfer, Inc. located at 3200 Cherry Creek Drive South, Suite 430, Denver, Colorado 80209.

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DESCRIPTION OF SECURITIES WE ARE OFFERING

We are offering units, each unit consisting of two (2) shares of our common stock and one (1) Warrant to purchase one share of our common stock.

The units will not be issued or certificated. Although issued together, the shares of common stock and the Warrants that we are issuing are immediately separable upon issuance. Each Warrant is exercisable for one share of common stock. We are also registering the shares of common stock issuable from time to time upon exercise of the Warrants offered hereby.

Common Stock

The material terms and provisions of our common stock and each other class of our securities which qualifies or limits our common stock are described under the caption “Description of Capital Stock” in this prospectus.

Warrants

The following summary of certain terms and provisions of Warrants that are being offered hereby is not complete and is subject to, and qualified in its entirety by the provisions of the Warrant, the form of which has been filed as an exhibit to the registration statement of which this prospectus is a part. Prospective investors should carefully review the terms and provisions of the form of Warrant for a complete description of the terms and conditions of the Warrants.

Duration and Exercise Price. The Warrants offered hereby will entitle the holders thereof to purchase up to an aggregate of [*] shares of our common stock at an initial exercise price per share of common stock of $[*], representing 150% of the public offering price per share in the Offering. The Warrants will be immediately exercisable and will expire on the fifth anniversary of the date of issuance. The Warrants will be issued separately from the common stock included in the units, and may be transferred separately immediately thereafter. Warrants will be issued in certificated form only.

Exercisability. The Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number of shares of our common stock purchased upon such exercise.

Transferability. Subject to applicable laws and the restriction on transfer set forth in the Warrant, the Warrant may be transferred at the option of the holder upon surrender of the Warrant to us together with the appropriate instruments of transfer.

Exchange Listing. We do not intend to list the Warrants on any securities exchange or other trading market.

Right as a Stockholder. Except as otherwise provided in the Warrants or by virtue of such holder’s ownership of shares of our common stock, the holders of the Warrants do not have the rights or privileges of holders of our common stock, including any voting rights or dividend entitlements, until they exercise their Warrants.

Waivers and Amendments. Subject to certain exceptions, any term of the Warrants may be amended or waived with our written consent and the written consent of the holders of at least a majority of the then-outstanding Warrants.

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Fundamental Transactions. If, at any time while the Warrants are outstanding, (i) we enter into a merger or consolidation with another entity in which we are not the surviving company or our stockholders do not own at least 50% of the surviving company, (ii) we enter into a sale of all or substantially all of our assets or a majority of our common stock is acquired by a third party, (iii) any tender offer or exchange offer is completed, pursuant to which all or substantially all of our holders of common stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) we effect any reclassification of our common stock or any compulsory share exchange (any such case or event specified in clauses (i) through (iv) above, a “Fundamental Transaction”), then the holders of Warrants shall have the right to receive, upon exercise of the Warrants, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of the Warrants.

Representative’s Warrants

We have agreed to issue to the representative of the underwriters warrants to purchase up to 2% of the shares of common stock included in the units sold (including shares issuable upon exercise of the Warrants) in this Offering (excluding shares sold in the over-allotment). The shares of common stock issuable upon exercise of these warrants are identical to those offered by this prospectus. The representative’s warrants are exercisable for cash or on a cashless basis at per share exercise price equal to 125% of the public offering price per share of common stock included in the units sold in this Offering commencing on a date which is one year from the date of effectiveness of the registration statement of which this prospectus is a part and expiring on a date which is no more than five years from such effective date in compliance with FINRA Rule 5110(f)(2)(H)(i). The representative’s warrants will have customary antidilution protections for stock splits, recapitalizations and the like and are not transferable for one year from the date of effectiveness of the registration statement of which this prospectus is a part, except as allowed by FINRA Rule 5110(g).

If, at any time while the representative’s warrants are outstanding, (i) we enter into a merger or consolidation with another entity in which we are not the surviving company or our stockholders do not own at least 50% of the surviving company, (ii) we enter into a sale of all or substantially all of our assets or a majority of our common stock is acquired by a third party, (iii) any tender offer or exchange offer is completed, pursuant to which all or substantially all of our holders of common stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) we effect any reclassification of our common stock or any compulsory share exchange (any such case or event specified in clauses (i) through (iv) above, a “Fundamental Transaction”), then the representative shall have the right to receive, upon exercise of the representative’s warrants, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of warrant shares then issuable upon exercise in full of the representative’s warrants.

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SHARES ELIGIBLE FOR FUTURE SALE

Only a limited number of shares of our common stock will be available for sale in the public market for a period of several months after completion of this Offering due to contractual and legal restrictions on resale described below. Nevertheless, sales of a substantial number of shares of our common stock in the public market after such restrictions lapse, or the perception that those sales may occur, could materially and adversely affect the prevailing market price of our common stock. Although we intend to apply to list our common stock on the NYSE MKT, we cannot assure you that there will be an active market for our common stock.

Upon the completion of this Offering, we will have [*] shares of common stock outstanding and we expect that the [*] shares to be sold in this Offering will be freely tradable without restriction under the Securities Act unless purchased by our “affiliates,” as that term is defined in Rule 144 under the Securities Act. These restricted securities may be sold in the public market only if registered or pursuant to an exemption from registration, such as Rule 144 or Rule 701 under the Securities Act.

Of the remaining [*] shares of our common stock outstanding after this Offering, [*] shares are “restricted securities” as such term is defined in Rule 144 under the Securities Act and/or are subject to lock-up agreements with us as described below. Following the expiration of the lock-up period, restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration under the Securities Act, as described in greater detail below.

Rule 144

Affiliate Resales of Restricted Securities

Our affiliates must generally comply with Rule 144 if they wish to sell any shares of our common stock in the public market, whether or not those shares are “restricted securities.” “Restricted securities” are any securities acquired from us or one of our affiliates in a transaction not involving a public offering. The shares of our common stock sold in this Offering are not considered to be restricted securities.

Resales of restricted shares of our common stock by affiliates are required to comply with the public information, holding period, manner of sale, volume limitation, and notice provisions of Rule 144.

Non-Affiliate Resales of Restricted Securities

Any person or entity who is not an affiliate of ours and who has not been an affiliate of ours at any time during the three months preceding a sale is only required to comply with Rule 144 in connection with sales of restricted shares of our common stock. A person who is not an affiliate of ours at the time such person sells shares of our common stock, and has not been an affiliate of ours at any time during the three months preceding such sale, and who has beneficially owned such shares of our common stock, as applicable, for at least six months but less than a year, is entitled to sell such shares so long as there is adequate current public information, as defined in Rule 144, available about us.

Resales of restricted shares of our common stock by non-affiliates are not subject to the manner of sale, volume limitation or notice filing provisions of Rule 144.

Rule 701

Rule 701 generally allows a stockholder who purchased shares of our common stock pursuant to a written compensatory plan or contract and who is not deemed to have been an affiliate of ours during the immediately preceding 90 days to sell these shares in reliance upon Rule 144, but without being required to comply with the public information, holding period, volume limitation, or notice provisions of Rule 144.

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Rule 701 also permits affiliates of ours to sell their Rule 701 shares under Rule 144 without complying with the holding period requirements of Rule 144.

Stock Incentive Plans

There are 500,000 shares of our common stock authorized for issuance under the 2011 Plan. Subject to Rule 144 volume limitations applicable to affiliates, shares registered under any registration statements will be available for sale in the open market, except to the extent that the shares are subject to vesting restrictions with us or the contractual restrictions described below.

Lock-Up Agreements

We and each of our directors and executive officers have agreed that, without the prior written consent of the representative of the underwriters, we and they will not, subject to limited exceptions, during the period ending 90 days after the date of the underwriting agreement, subject to extension in specified circumstances:

· offer, sell, assign, transfer, pledge, contract to sell, encumber, grant any option for the sale of or otherwise dispose of, or announce the intention to otherwise dispose of, any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock;

· enter into any swap, hedge or similar agreement or arrangement that transfers in whole or in part, the economic risk of ownership of our common stock, whether now owned or hereafter acquired or with respect to which the holder has or hereafter acquires the power of disposition; or

· engage in any short selling of our common stock or securities convertible into or exercisable or exchangeable our common stock.

Representative’s Warrants

We are registering the warrants and shares of our common stock underlying the warrants we have agreed to issue to the representative of the underwriters in this Offering to purchase up to 2% of the shares of common stock included in the units sold (including shares issuable upon exercise of the Warrants) in this Offering (excluding shares sold in the over-allotment), at a per share exercise price equal to 125% of the public offering price per share of common stock. The warrants will not be exercisable until one year after the date of effectiveness of the registration statement of which this prospectus is a part. A complete description of the warrants is included in the “Underwriting — Representative’s Warrants” section of this prospectus.

Registration Rights

On December 23, 2011, we entered into a registration rights agreement with MedTRX Provider Network, LLC (“MedTRX”), whereby we granted MedTrx certain piggyback registration rights. Colin Halpern, a member of our Board of Directors, is the managing member of MedTRX. However, pursuant to the terms of the registration rights agreement, we are entitled to exclude the registrable securities, as defined in the registration rights agreement, because this Offering is a firm commitment underwriting.

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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

The following is a summary of the U.S. federal income tax consequences of the ownership and disposition of our common stock by a non-U.S. holder (as defined below) that holds our common stock as a capital asset (generally, investment property). This summary does not discuss all of the aspects of U.S. federal income taxation that may be relevant to a non-U.S. holder in light of the non-U.S. holder’s particular investment or other circumstances. In addition, this summary also does not address any tax considerations arising under the laws of any U.S. state or local jurisdiction or non-U.S. jurisdiction or under the U.S. federal gift tax laws. Accordingly, all prospective non-U.S. holders should consult their own tax advisors with respect to the U.S. federal, state, local and non-U.S. tax consequences of the ownership and disposition of our common stock.

This summary is based on provisions of the U.S. Internal Revenue Code of 1986, as amended, or the Code, applicable U.S. Treasury regulations and administrative and judicial interpretations, all as in effect or in existence on the date of this prospectus. Subsequent developments in U.S. federal income tax law, including changes in law or differing interpretations, which may be applied retroactively, could alter the U.S. federal income tax consequences of owning and disposing of our common stock as described in this summary. We cannot assure you that the U.S. Internal Revenue Service, or the IRS, will not challenge one or more of the tax consequences described in this summary, and we have not obtained, nor do we intend to obtain, any ruling from the IRS or opinion of counsel with respect to any of the tax consequences of the ownership or disposition of our common stock by a non-U.S. holder.

As used in this summary, the term “non-U.S. holder” means a beneficial owner of our common stock that is not, for U.S. federal income tax purposes:

• an individual who is a citizen or resident of the United States;

• a corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the United States or of any state thereof or the District of Columbia;

• an entity or arrangement treated as a partnership for U.S. federal income tax purposes;

• an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or

• a trust, if (1) a U.S. court is able to exercise primary supervision over the trust’s administration and one or more “United States persons” (within the meaning of the Code) has the authority to control all of the trust’s substantial decisions, or (2) the trust has a valid election in effect under applicable U.S. Treasury regulations to be treated as a United States person.

If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds our common stock, the tax treatment of a partner of the partnership generally will depend upon the status of the partner, the activities of the partnership and certain determinations made at the partner level. Partnerships, and partners in partnerships, that hold our common stock should consult their own tax advisors as to the particular U.S. federal income tax consequences of owning and disposing of our common stock that are applicable to them.

This summary does not consider any specific facts or circumstances that may apply to a non-U.S. holder and does not address any special tax rules that may apply to particular non-U.S. holders, such as:

• financial institutions, insurance companies, tax-exempt organizations, pension plans, brokers, dealers or traders in stocks, securities or currencies, certain former citizens or long-term residents of the United States, controlled foreign corporations or passive foreign investment companies; or

• a non-U.S. holder holding our common stock as part of a conversion, constructive sale, wash sale or other integrated transaction or a hedge, straddle or synthetic security; or

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• a non-U.S. holder that at any time owns, directly, indirectly or constructively, 5% or more of our capital stock.

THE FOLLOWING IS NOT A SUBSTITUTE FOR CAREFUL TAX PLANNING AND ADVICE. EACH NON-U.S. HOLDER SHOULD CONSULT WITH THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES RELATING TO THE OWNERSHIP AND POSSIBLE DISPOSITION OF OUR COMMON STOCK, INCLUDING THE EFFECTS OF U.S. FEDERAL, STATE, AND LOCAL AND NON-U.S. TAX LAWS.

Dividends

Distributions on our common stock generally will constitute dividends for U.S. federal income tax purposes to the extent paid from our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. If a distribution exceeds our current and accumulated earnings and profits, the excess will be treated as a tax-free return of the non-U.S. holder’s investment, up to such non-U.S. holder’s tax basis in the common stock. Any remaining excess will be treated as capital gain, subject to the tax treatment described below in “Gain on Disposition of Our Common Stock.”

As discussed above in the section titled “Dividend Policy,” we do not intend to pay cash dividends on our common stock for the foreseeable future. In the event that we do make cash distributions on our common stock, the gross amounts paid to a non-U.S. holder that are treated as dividends not effectively connected with such non-U.S. holder’s conduct of a trade or business in the United States will be subject to withholding of U.S. federal income tax at a rate of 30%, or a lower rate under an applicable income tax treaty. In order to claim the benefit of an applicable income tax treaty, a non-U.S. holder will be required to provide to the applicable withholding agent a properly executed IRS Form W-8BEN (or other applicable form) in accordance with the applicable certification and disclosure requirements. Special rules apply to partnerships and other pass-through entities, and these certification and disclosure requirements also may apply to beneficial owners of partnerships and other pass-through entities that hold our common stock. A non-U.S. holder that is eligible for a reduced rate of withholding of U.S. federal income tax under an income tax treaty may obtain a refund or credit of any excess amounts withheld by timely filing an appropriate claim for a refund with the U.S. Internal Revenue Service. Non-U.S. holders should consult their own tax advisors regarding their entitlement to benefits under a relevant income tax treaty and the manner of claiming the benefits.

Dividends paid on our common stock that are effectively connected with a non-U.S. holder’s conduct of a trade or business in the United States and, if required by an applicable income tax treaty, are attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the United States, will be taxed on a net income basis at the regular graduated rates and in the manner applicable to United States persons. In that case, withholding of U.S. federal income tax discussed above will not apply if the non-U.S. holder provides to the applicable withholding agent a properly executed IRS Form W-8ECI (or successor form) in accordance with the applicable certification and disclosure requirements. In addition, a non-U.S. holder that is treated as a corporation for U.S. federal income tax purposes may be subject to a “branch profits tax” at a 30% rate, or a lower rate under an applicable income tax treaty, on the non-U.S. holder’s earnings and profits (attributable to dividends on our common stock or otherwise) that are effectively connected with the non-U.S. holder’s conduct of a trade or business within the United States, subject to adjustments.

Gain on Disposition of Our Common Stock

A non-U.S. holder generally will not be subject to U.S. federal income tax (including withholding thereof) on any gain recognized on a sale or other taxable disposition of our common stock unless:

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· the gain is effectively connected with the non-U.S. holder’s conduct of a trade or business in the United States and, if required by an applicable income tax treaty, is attributable to a permanent establishment or fixed base maintained by the non-U.S. holder in the United States; in this case, the gain will be subject to U.S. federal income tax on a net income basis at the regular graduated rates and in the manner applicable to United States persons (unless an applicable income tax treaty provides otherwise) and, if the non-U.S. holder is treated as a corporation for U.S. federal income tax purposes, the “branch profits tax” described above may also apply;

· the non-U.S. holder is an individual who is present in the United States for a period aggregating more than 182 days in the taxable year of the disposition and meets other requirements (in which case, except as otherwise provided by an applicable income tax treaty, the gain, which may be offset by U.S. source capital losses recognized in the same taxable year, generally will be subject to a flat 30% U.S. federal income tax, even though the non-U.S. holder is not considered a resident alien under the Code); or

· we are or have been a “U.S. real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the period that the non-U.S. holder held our common stock.

Generally, a corporation is a “U.S. real property holding corporation” if the fair market value of its “U.S. real property interests” equals or exceeds 50% of the sum of the fair market value of its worldwide real property interests (including “U.S. real property interests”) plus its other assets used or held for use in a trade or business. The tax relating to stock in a U.S. real property holding corporation generally will not apply to a non-U.S. holder whose holdings, direct, indirect and constructive, at all times during the applicable period, constituted 5% or less of our common stock, provided that our common stock was regularly traded on an established securities market. We believe that we are not currently, and we do not anticipate becoming in the future, a U.S. real property holding corporation. No assurance can be provided that our common stock will be regularly traded on an established securities market for purposes of the rules described above.

U.S. Information Reporting and Backup Withholding

The applicable withholding agent with respect to a non-U.S. holder generally will be required to report to the IRS and to such non-U.S. holder payments of dividends on our common stock and the amount of U.S. federal income tax, if any, withheld with respect to those payments. Copies of the information returns reporting such dividends and any withholding may also be made available to the tax authorities in the country in which the non-U.S. holder resides under the provisions of a treaty or agreement. A non-U.S. holder will be exempt from backup withholding on dividends paid on our common stock if the non-U.S. holder provides to the applicable withholding agent a properly executed IRS Form W-8BEN or otherwise meets documentary evidence requirements for establishing that it is not a United States person or otherwise establishes an exemption.

The gross proceeds from the disposition of our common stock may be subject to U.S. information reporting and backup withholding. If a non-U.S. holder sells our common stock outside the United States through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to the non-U.S. holder outside the United States, then the U.S. backup withholding and information reporting requirements generally will not apply to that payment. However, U.S. information reporting, but not U.S. backup withholding, will apply to a payment of sales proceeds, even if that payment is made outside the United States, if a non-U.S. holder sells our common stock through a non-U.S. office of a broker that is a United States person or has certain enumerated connections with the United States, unless the broker has documentary evidence in its files that the non-U.S. holder is not a United States person and certain other conditions are met or the non-U.S. holder otherwise establishes an exemption.

If a non-U.S. holder receives payments of the proceeds of a sale of our common stock to or through a U.S. office of a broker, the payment is subject to both U.S. backup withholding and information reporting unless the non-U.S. holder provides to the broker a properly executed IRS Form W-8BEN certifying that the non-U.S. holder is not a United States person or the non-U.S. holder otherwise establishes an exemption.

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Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund to a non-U.S. holder, or a credit against a non-U.S. holder’s U.S. federal income tax liability, provided the required information is timely furnished to the IRS.

Additional Withholding Requirements

Under legislation enacted in 2010 and administrative guidance, the relevant withholding agent will be required to withhold 30% of any dividends paid after June 30, 2014 and the proceeds of a sale of our common stock occurring after December 31, 2016, in each case paid to (i) a non-U.S. financial institution (whether such non-U.S. financial institution is the beneficial owner of our common stock or an intermediary) unless such non-U.S. financial institution enters into an agreement with the U.S. government to collect and report to the U.S. government substantial information regarding its U.S. accountholders and such non-U.S. financial institution meets certain other specified requirements or (ii) a non-U.S. entity (whether such non-U.S. entity is the beneficial owner of our common stock or an intermediary) that is not a financial institution unless such entity or the beneficial owner of our common stock certifies that the beneficial owner of our common stock does not have any substantial U.S. owners or provides the name, address and taxpayer identification number of each substantial U.S. owner of the beneficial owner of our common stock and certain other specified requirements are satisfied. If payment of this withholding tax is made, non-U.S. holders that are otherwise eligible for an exemption from, or reduction of, withholding of U.S. federal income tax with respect to such dividends or proceeds will be required to seek a credit or refund from the IRS to obtain the benefit of such exemption or reduction. Non-U.S. holders should contact their own tax advisors regarding the particular consequences to them of this legislation.

THIS SECTION IS NOT INTENDED TO BE, AND SHOULD NOT BE CONSTRUED TO BE, LEGAL, BUSINESS OR TAX ADVICE TO ANY PARTICULAR SHAREHOLDER. SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSEQUENCES OF THE DESCRIBED TRANSACTIONS IN THEIR PARTICULAR CIRCUMSTANCES.

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UNDERWRITING

Laidlaw & Company (U.K.) Ltd. (“Laidlaw”) is acting as the sole bookrunner of the Offering and as representative of the underwriters. Subject to certain terms and conditions set forth in the underwriting agreement dated as of the date of this prospectus among us and Laidlaw as the representative of the underwriters, we have agreed to sell to the underwriters, and each underwriter has severally agreed to purchase from us, at the public offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of units listed next to its name in the following table:

Underwriters	Number of Units
Laidlaw & Company (U.K.) Ltd.
Total

The underwriters are committed to purchase all the units offered by us if they purchase any units. Furthermore, pursuant to the underwriter agreement, the underwriters’ obligations are subject to customary conditions, representations and warranties contained in the underwriting agreement, such as the receipt by the underwriters of officer’s certificates and legal opinions. The obligations of the underwriters may be terminated upon the occurrence of certain events specified in the underwriting agreement. The underwriting agreement also provides that if an underwriter defaults, the purchase commitments of nondefaulting underwriters may be increased or the Offering may be terminated. The underwriter is obligated to take and pay for all of the units if any such units are taken. However, an underwriter will not be under any obligation to purchase any of the over-allotment prior to the exercise of the over-allotment option by the representative.

The underwriters are offering the units, subject to prior sale, when, as and if issued to and accepted by them, subject to the approval of legal matters by their counsel and other conditions specified in the underwriting agreement.

Over-Allotment Option

We have granted to the underwriter an over-allotment option. The option, which is exercisable no later than 45 calendar days after the date of the underwriting agreement, permits the underwriters to purchase additional units in an amount equal to 15% of the units sold in this Offering upon the same terms. The representative may exercise this option only to cover over-allotments, if any, made in connection with this Offering. If this option is exercised in full, the total price to the public will be $[*] and the total net proceeds to us, after deducting the underwriting discount but before offering expenses, will be $[*].

Discounts, Commissions and Expenses

The following table shows the public offering price, underwriting discounts and proceeds before expenses to us in connection with this Offering. Such amounts are shown assuming both no exercise and full exercise of the underwriters’ over-allotment option we granted to the representative of the underwriters.

	Per Unit (1)	Total Without Over- Allotment Option	Maximum Total With Over-Allotment Option
Public offering price	$	$	$
Underwriting discount (7%)(2)
Non-accountable expense allowance
Proceeds, before expenses, to us	$	$	$

(1) The public offering price is [*] per unit, and each unit consists of two shares of our common stock and one warrant to purchase one share of our common stock.

(2) We have agreed to pay the underwriters a cash fee equal in the aggregate to 7% of the gross proceeds delivered on a closing date, including gross proceeds attributable to any exercise of the over-allotment option.

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We estimate that the total expenses of the Offering, excluding underwriting discount, will be approximately $[*]. We have agreed to pay a non-accountable expense allowance to the representative of the underwriters equal to 1.5% of the gross amount raised in this Offering (excluding gross proceeds attributable to any exercise of the over-allotment option).

We have also agreed to pay the underwriters’ expenses including (a) legal and filings fees in any states or foreign jurisdictions in which the underwriter reasonably requests and are required in connection with the Offering; (b) all filing fees and communication expenses relating to the registration of the common stock to be sold in the Offering (including the over-allotment) with the Securities and Exchange Commission; (c) filing fees related to the Financial Institutions Regulatory Authority, Inc., or FINRA; (d) the costs of all mailing and printing of the underwriting documents, registration statements, prospectuses and all amendments; (e) transfer agent fees; (f) underwriters’ legal fees; and (g) all fees, expenses and disbursements relating to background checks of our officers and directors in an amount not to exceed $2,500 per individual. The accountable expenses described in (a)-(g) above shall not exceed $100,000 in the aggregate and the parties may not agree to increase that amount. We have also paid an advance of $35,000 to the representative which will be applied against these expenses, and will be refunded to the extent not fully incurred.

Representative’s Warrants

We have agreed to issue to the representative of the underwriters, or its designees, warrants to purchase up to 2% of the shares of common stock included in the units sold (including shares issuable upon exercise of the Warrants) in this Offering (excluding shares sold in the over-allotment) and accordingly, we plan to issue the representative [*] warrants to purchase shares of common stock. The shares of common stock issuable upon exercise of these warrants are identical to those offered by this prospectus. The representative’s warrants are exercisable for cash or on a cashless basis at a per share exercise price equal to 125% of the public offering price per share of common stock in the Offering (a per share exercise price of $[*] per share of common stock), commencing on a date which is one year from the date of effectiveness of the registration statement of which this prospectus is a part and expiring on a date which is no more than five years from such effective date in compliance with FINRA Rule 5110(f)(2)(H)(i). Accordingly, the representative’s warrants are subject to a one-year lock-up period from the date of effectiveness of the registration statement of which this prospectus is a part. We are registering hereby the issuance of the representative’s warrants. In addition, we have agreed to file a post-effective amendment to register the resale of the shares of common stock issuable upon the exercise of the representative’s warrants. The representative’s warrants and the underlying shares of common stock have been deemed compensation by FINRA, and are therefore subject to FINRA Rule 5110(g)(1). In accordance with FINRA Rule 5110(g)(1), the representative (or permitted assignees under the Rule) will not sell, transfer, assign, pledge or hypothecate these warrants or the securities underlying these warrants, nor will it engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of such securities by any person for a period of one year following the date of effectiveness of the registration statement of which this prospectus is a part and pursuant to which the representative’s warrants are being issued, except the transfer of any security:

• by operation of law or by reason of reorganization of our Company;

• to any FINRA member firm participating in this Offering and the officers or partners thereof, if all securities so transferred remain subject to the lock-up restriction described above for the remainder of the time period;

• where the aggregate amount of our securities held by either an underwriter or a related person do not exceed 1% of the securities being offered;

• that is beneficially owned on a pro-rata basis by all equity owners of an investment fund, provided that no participating member manages or otherwise directs investments by the fund, and participating members in the aggregate do not own more than 10% of the equity in the fund; or

• where all securities received, upon exercise or conversion of any security, remain subject to the lock-up restriction set forth above for the remainder of the time period.

The exercise price and number of shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary cash dividend or our recapitalization, reorganization, merger or consolidation. However, the warrant exercise price or underlying shares will not be adjusted for issuances of common stock at a price below the warrant exercise price. In addition, we have agreed to file a post-effective amendment to this registration statement to register the resale of the shares underlying the representative’s warrants after the applicable one-year lock-up period expires.

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If, at any time while the representative’s warrants are outstanding, (i) we enter into a merger or consolidation with another entity in which we are not the surviving company or our stockholders do not own at least 50% of the surviving company, (ii) we enter into a sale of all or substantially all of our assets or a majority of our common stock is acquired by a third party, (iii) any tender offer or exchange offer is completed, pursuant to which all or substantially all of our holders of common stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) we effect any reclassification of our common stock or any compulsory share exchange (any such case or event specified in clauses (i) through (iv) above, a “Fundamental Transaction”), then the representative shall have the right to receive, upon exercise of the representative’s warrants, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of warrant shares then issuable upon exercise in full of the representative’s warrants.

Indemnification

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, and liabilities arising from breaches of representations and warranties contained in the underwriting agreement, or to contribute to payments that the underwriters may be required to make in respect of those liabilities.

Right of First Refusal

Subject to certain limited exceptions, we granted the representative of the underwriters in this Offering, for a period of one year after the date of effectiveness of the registration statement of which this prospectus is a part, a right of first refusal to act as our lead or managing underwriter, exclusive placement agent, exclusive financial advisor or in any similar capacity, as applicable, in the event we retain or otherwise use (or seek to retain or use) the services of an investment bank or similar financial advisor to pursue a registered, underwritten public offering of securities (in addition to the Offering), a private placement of securities, a merger, acquisition of another company or business, change of control, sale of substantially all assets or other similar transaction during such period.

Discretionary Accounts

The underwriters do not intend to confirm sales of the securities offered hereby to any accounts over which they have discretionary authority.

Lock-Up Agreements

Pursuant to certain “lock-up” agreements, we and each of our directors and executive officers have agreed that, without the prior written consent of the representative of the underwriters, we and they will not, subject to limited exceptions, during the period ending 90 days after the date of the underwriting agreement, subject to extension in specified circumstances:

· offer, sell, assign, transfer, pledge, contract to sell, encumber, grant any option for the sale of or otherwise dispose of, or announce the intention to otherwise dispose of, any shares of common stock or any securities convertible into or exercisable or exchangeable for common stock;

· enter into any swap, hedge or similar agreement or arrangement that transfers in whole or in part, the economic risk of ownership of our common stock, whether now owned or hereafter acquired or with respect to which the holder has or hereafter acquires the power of disposition; or

· engage in any short selling of our common stock or securities convertible into or exercisable or exchangeable our common stock.

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NYSE MKT Listing

We intend to apply to have our shares of common stock listed for trading on the NYSE MKT under the symbol “FCHS.” No assurance can be given that such listing will be approved; however, underwriters’ obligation to purchase the securities in this Offering is conditioned upon the approval of the listing of our common stock (but not the warrants) on the NYSE MKT.

Price Stabilization, Short Positions and Penalty Bids

The underwriters may engage in stabilizing transactions, syndicate covering transactions, and penalty bids or purchasers for the purpose of pegging, fixing or maintaining the price of the common stock, in accordance with Regulation M under the Exchange Act:

· Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.

· Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. A naked short position is more likely to be created if the underwriter is concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the Offering.

Penalty bids permit the underwriters to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

These stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a decline in the market price of the common stock. As a result, the price of the common stock may be higher than the price that might otherwise exist in the open market. These transactions may be effected in the over-the-counter market or otherwise and, if commenced, may be discontinued at any time.

Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of the common stock. In addition, neither we nor any of the underwriters make representation that the underwriters will engage in these stabilizing transactions or that any transaction, once commenced, will not be discontinued without notice.

Passive Market Making

In connection with this Offering, the underwriters and selling group members may engage in passive market making transactions in our common stock in accordance with Rule 103 of Regulation M under the Exchange Act, during a period before the commencement of offers or sales of the shares and extending through the completion of the distribution. A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However, if all independent bids are lowered below the passive market maker’s bid, that bid must then be lowered when specified purchase limits are exceeded.

Electronic Distribution

This prospectus in electronic format may be made available on websites or through other online services maintained by the underwriter, or by its affiliates. Other than this prospectus in electronic format, the information on the underwriter’s website and any information contained in any other website maintained by the underwriter is not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or any underwriter in its capacity as underwriter, and should not be relied upon by investors.

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Other Relationships

From time to time, our underwriters, and/or their affiliates, have provided, and may in the future provide, various investment banking and other financial services for us for which services they have received and, may in the future receive, customary fees. Except for services provided in connection with this Offering and as described above under “Right of First Refusal,” no underwriter has provided any financing, investment banking and/or other advisory financial services during the 180 day period preceding the filing date of the registration statement of which this prospectus is a part through the 90 days after the effectiveness of this Offering.

Offer Restrictions Outside the United States

Other than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the Offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

Australia

This document (a) does not constitute a prospectus or a product disclosure statement under the Corporations Act 2001 of the Commonwealth of Australia (“Corporations Act”); (b) does not purport to include the information required of a prospectus under Part 6D.2 of the Corporations Act or a product disclosure statement under Part 7.9 of the Corporations Act; has not been, nor will it be, lodged as a disclosure document with the Australian Securities and Investments Commission (“ASIC”), the Australian Securities Exchange operated by ASX Limited or any other regulatory body or agency in Australia; and (c) may not be provided in Australia other than to select investors (“Exempt Investors”) who are able to demonstrate that they (i) fall within one or more of the categories of investors under section 708 of the Corporations Act to whom an offer may be made without disclosure under Part 6D.2 of the Corporations Act and (ii) are “wholesale clients” for the purpose of section 761G of the Corporations Act.

The securities may not be directly or indirectly offered for purchase or sold, and no invitations to subscribe for, or buy, the securities may be issued, and no draft or definitive offering memorandum, advertisement or other offering material relating to any securities may be distributed, received or published in Australia, except where disclosure to investors is not required under Chapters 6D and 7 of the Corporations Act or is otherwise in compliance with all applicable Australian laws and regulations. By submitting an application for the securities, each purchaser of securities represents and warrants to the Company, the Underwriter and their affiliates that such purchaser is an Exempt Investor. As any offer of securities under this document, any supplement or the accompanying prospectus or other document will be made without disclosure in Australia under Parts 6D.2 and 7.9 of the Corporations Act, the offer of those securities for resale in Australia within 12 months may, under the Corporations Act, require disclosure to investors if none of the exemptions in the Corporations Act applies to that resale. By applying for the securities each purchaser of securities undertakes to the Company and the Underwriter that such purchaser will not, for a period of 12 months from the date of issue or purchase of the securities, offer, transfer, assign or otherwise alienate those securities to investors in Australia except in circumstances where disclosure to investors is not required under the Corporations Act or where a compliant disclosure document is prepared and lodged with ASIC.

European Economic Area

The information in this document has been prepared on the basis that all offers of securities will be made pursuant to an exemption under the Prospectus Directive, as implemented in Member States of the European Economic Area (each, a “Relevant Member State”), from the requirement to produce a prospectus for offers of securities.

An offer to the public in a Relevant Member State of any securities may only be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

(a) to any legal entity which is a qualified investor as defined under the Prospectus Directive;

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(b) to fewer than 100 or, if the Relevant Member State has implemented the relevant provisions of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive) in such Relevant Member State subject to obtaining prior consent of the Placing Agents for any such offer; or

(c) in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of securities shall result in a requirement for the publication by the Company or the Underwriter of a prospectus pursuant to Article 3 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer to the public” in relation to any offer of securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any securities to be offered so as to enable an investor to decide to purchase or subscribe for the securities, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (and any amendments, thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

During the period up to but excluding the date on which the Prospectus Directive is implemented in member states of the EEA, this document may not be used for, or in connection with, and does not constitute, any offer of securities or an invitation to purchase or subscribe for any securities in any member state of the EEA in which such offer or invitation would be unlawful.

France

Neither this document nor any other offering material relating to the offering of the securities has been prepared in the context of a public offer of securities (offre au public d’instruments financiers) in France within the meaning of article L. 411-1 of the French Financial Code (Code Monétaire et Financier) and articles 211-1 et seq. of the General Regulation of the Autorité des Marchés Financiers and has therefore has not been and will not be submitted to the clearance procedures of the Autorité des Marchés Financiers or notified to the Autorité des Marchés Financiers by the competent authority of another member state of the EEA.

Neither the Company nor the Underwriter have offered, sold or otherwise transferred and will not offer, sell or otherwise transfer, directly or indirectly, the securities to the public in France, and have not distributed, released or issued or caused to be distributed, released or issued and will not distribute, release or issue or cause to be distributed, released or issued to the public in France, this Document or any other offering material relating to the securities. Such offers, sales and distributions have been made and will be made in France only to (a) investment services providers authorised to engage in portfolio management on a discretionary basis on behalf of third parties, (b) qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors, in each case, and except as otherwise stated under French laws and regulations, investing for their own account, all as defined in, and in accordance with, articles L. 411-1, L. 411-2, D. 411-1 and D. 411-4 of the French Financial Code or (c) in a transaction that, in accordance with article L. 411-2 of the French Financial Code and article 211-2 of the General Regulation of the Autorité des Marchés Financiers, does not constitute a public offer of securities.

As required by article 211-4 of the General Regulation of the Autorité des Marchés Financiers, such qualified investors and restricted circle of investors are informed that: (i) no prospectus or other offering documents in relation to the securities have been lodged or registered with the Autorité des Marchés Financiers; (ii) they must participate in the offering on their own account, in the conditions set out in articles D. 411-1, D. 411-2, D.734-1, D. 744-1, D. 754-1 and D.764-1 of the French Financial Code; and (iii) the direct or indirect offer or sale, to the public in France, of the securities can only be made in accordance with articles L. 411-1, L.411-2, L. 412-1 and L. 621-8 to L. 621-8-3 of the French Financial Code.

This document does not constitute and may not be used for or in connection with either an offer to any person to whom it is unlawful to make such an offer or a solicitation (démarchage) by anyone not authorised so to act in accordance with articles L. 341-1 to L. 341-17 of the French Financial Code. Accordingly, no securities will be offered, under any circumstances, directly or indirectly, to the public in France.

The securities may not be resold directly or indirectly other than in compliance with articles L.411-1, L.411-2, L.412-1, L.621-8 et seq. and L.341-1 to L.341-17 of the French Financial Code.

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Ireland

In connection with offers or sales of securities, each of the underwriters (i) will only issue or pass on in Ireland any documents received by it in connection with the issue of the units to persons who are persons to whom the document may lawfully be issued or passed on, (ii) has complied and will comply with all applicable provisions of Directive 1004/39/EC and the European Communities (Markets in Financial Instruments) Regulation 2007 of Ireland (the “2007 Regulation”) and has complied, or will comply, with any applicable codes of conduct or practice made thereunder. The securities have not been offered or sold, and will not be offered, sold or delivered directly or indirectly in Ireland by way of a public offering, except to (i) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations and (ii) fewer than 100 natural or legal persons who are not qualified investors.

Israel

This document does not constitute a prospectus under the Israeli Securities Law, 5728-1968, and has not been filed with or approved by the Israel Securities Authority. A prospectus has not been prepared or filed and will not be prepared or filed with the Israeli Securities Authority in connection with this offering. In Israel, this prospectus may be distributed or directed solely to investors enumerated in the first addendum (the “Addendum”) to the Israeli Securities Law to whom an offer of securities may be made without the publication of a prospectus, consisting primarily of provident funds, insurance companies, banks, portfolio managers, investment advisors, members of the Tel Aviv Stock Exchange, underwriters purchasing for their own account, venture capital funds, entities with equity in excess of NIS 50 million and “qualified individuals”, each as defined in the Addendum (as it may be amended from time to time), collectively referred to as qualified investors. Qualified investors may be required to submit written confirmation that they fall within the scope of the Addendum. Any material provided to such an offeree in Israel may not be reproduced or used for any other purpose, nor be furnished to any other person other than those to whom copies have been provided directly. Subject to applicable law, the securities offered by in this offering may not be offered or sold in the State of Israel to more than thirty-five offerees, in the aggregate, who are not listed in the Addendum.

Italy

No offering of the securities has been cleared by the relevant Italian supervisory authorities. Thus, no offering of the securities can be carried out in the Republic of Italy, and this document or any other document relating to the securities shall not be circulated therein—not even solely to professional investors or under a private placement—unless the requirements of Italian law concerning the offering of securities have been complied with, including (i) the requirements of Article 42 and Article 94 and seq. of Legislative Decree no. 58 of 24 February 1998 and CONSOB Regulation no. 11971 of 14 May 1999, and (ii) all other Italian securities and tax laws and any other applicable laws and regulations, all as amended from time to time.

Japan

The securities have not been, and will not be, registered under the Financial Instruments and Exchange Law of Japan (Law No. 25 of 1948 as amended, the “FIEL”) and disclosure under the FIEL has not been, and will not be, made with respect to the securities. Neither the securities nor any interest therein may be offered, sold, resold, or otherwise transferred, in Japan or to, or for the benefit of, any resident of Japan, except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the FIEL and all other applicable laws, regulations and guidelines promulgated by the relevant Japanese governmental and regulatory authorities. As used in this paragraph, a resident of Japan is any person that is resident in Japan, including any corporation or other entity organised under the laws of Japan.

People’s Republic of China (excluding Hong Kong, Macau and Taiwan)

This document does not constitute a recommendation to acquire, an invitation to apply for or buy, an offer to apply for or buy, a solicitation of interest in the application or purchase, of any securities, any interest in any securities investment fund or any other financial investment product, in the People’s Republic of China (for the purpose of this Document excluding Taiwan, Hong Kong and Macau) (“PRC”). This document is solely for use by Qualified Domestic Institutional Investors duly licensed in accordance with applicable laws of the PRC and must not be circulated or disseminated in the PRC for any other purpose. Any person or entity resident in the PRC must satisfy himself/itself that all applicable PRC laws and regulations have been complied with, and all necessary government approvals and licenses (including any investor qualification requirements) have been obtained, in connection with his/its investment outside of the PRC.

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Portugal

This document is not being distributed in the context of a public offer of financial securities (ofertapública de valoresmobiliários) in Portugal, within the meaning of Article 109 of the Portuguese Securities Code (Código dos ValoresMobiliários). The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in Portugal. This document and any other offering material relating to the securities have not been, and will not be, submitted to the Portuguese Securities Market Commission (Comissão do Mercado de ValoresMobiliários) for approval in Portugal and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in Portugal, other than under circumstances that are deemed not to qualify as a public offer under the Portuguese Securities Code. Such offers, sales and distributions of securities in Portugal are limited to persons who are “qualified investors” (as defined in the Portuguese Securities Code). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.

Qatar and the Qatar Financial Centre

This document is provided on an exclusive basis to the specifically intended recipient thereof, upon that person’s request and initiative, and for the recipient’s personal use only.

Nothing in this document constitutes, is intended to constitute, shall be treated as constituting or shall be deemed to constitute, any offer or sale of securities in the State of Qatar or in the Qatar Financial Centre or the inward marketing of an investment fund or an attempt to do business, as a bank, an investment company or otherwise in the State of Qatar or in the Qatar Financial Centre.

This document and the underlying instruments have not been approved, registered or licensed by the Qatar Central Bank, the Qatar Financial Centre Regulatory Authority, the Qatar Financial Markets Authority or any other regulator in the State of Qatar.

This document and any related documents have not been reviewed or approved by the Qatar Financial Centre Regulatory Authority or the Qatar Central Bank.

Recourse against the Company and the Underwriter may be limited or difficult and may have to be pursued in a jurisdiction outside Qatar and the Qatar Financial Centre.

Any distribution of this document by the recipient to third parties in Qatar or the Qatar Financial Centre beyond the terms hereof is not authorised and shall be at the liability of such recipient.

Sweden

This document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority). Accordingly, this document may not be made available, nor may the securities be offered for sale in Sweden, other than under circumstances that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980) omhandel med finansiella instrument). Any offering of securities in Sweden is limited to persons who are “qualified investors” (as defined in the Financial Instruments Trading Act). Only such investors may receive this document and they may not distribute it or the information contained in it to any other person.

Switzerland

This document is being communicated in or from Switzerland to a small number of selected investors only. Each copy of this document is addressed to a specifically named recipient and may not be copied, reproduced, distributed or passed on to others without the Company’s prior written consent. The securities may not be publicly offered, distributed or re- distributed on a professional basis in or from Switzerland and neither this document nor any other solicitation for investments in the securities may be communicated or distributed in Switzerland in any way that could constitute a public offering within the meaning of Article 652a of the Swiss Code of Obligations. This document does not constitute a prospectus within the meaning of Article 652a of the Swiss Code of Obligations or a listing prospectus according to Article 27 et seq. of the Listing Rules of the SIX Swiss Exchange and may not comply with the information standards required thereunder. No application has been or will be made for a listing of the securities on any Swiss stock exchange and this document may not comply with the information required under the relevant listing rules.

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The Company is not a foreign collective investment scheme pursuant to the Swiss Collective Investment Schemes Act of 23 June 2006, as amended (“CISA”). Accordingly, the Company has not been and will not be registered with the Swiss Financial Market Supervisory Authority FINMA.

United Arab Emirates and any of the free zones

The offering contemplated hereunder has not been approved or licensed by the Central Bank of the United Arab Emirates (“UAE”), Securities and Commodities Authority of the UAE and/or any other relevant licensing authority in the UAE including any licensing authority incorporated under the laws and regulations of any of the free zones established and operating in the territory of the UAE, in particular the Dubai Financial Services Authority (“DFSA”), a regulatory authority of the Dubai International Financial Centre (“DIFC”). This offering does not constitute a public offer of securities in the UAE, DIFC and/or any other free zone in accordance with the Commercial Companies Law, Federal Law No. 8 of 1984 (as amended) or the DFSA Markets Rules, accordingly, or otherwise. The securities may not be offered to the public in the UAE and/or any of the free zones.

The securities may be offered and issued only to a limited number of investors in the UAE or any of its free zones who qualify as sophisticated investors under the relevant laws and regulations of the UAE or the free zone concerned. The Company represents and warrants that the shares will not be offered, sold, transferred or delivered to the public in the UAE or any of its free zones.

None of the Company or the Underwriter is a licensed broker, dealer, investment advisor or financial adviser under the laws of the United Arab Emirates and/or any of the free zones established and operating in the UAE, in particular, the Dubai Financial Services Authority (DFSA) a regulatory authority of the Dubai International Financial Centre and none of the Company or the Underwriter provide in the United Arab Emirates and/or any of the free zones operating in the UAE, any brokerage, dealer, investment advisory or financial advisory services.

United Kingdom

Neither the information in this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority (the “FCA”) in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets Act 2000, as amended (“FSMA”)) has been published or is intended to be published in respect of the securities.

This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed by recipients to any other person in the United Kingdom.

Any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with the issue or sale of the securities has only been communicated or caused to be communicated and will only be communicated or caused to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to us.

In the United Kingdom this document is for distribution to, and is directed only at, legal entities which are qualified investors as defined under the Prospectus Directive and are (i) persons having professional experience in matters relating to investments who fall within the definition of investment professionals in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); or (ii) high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Order; or (iii) persons to whom it may otherwise be lawfully distributed under the Order, (all such persons together being “Relevant Persons”). In the United Kingdom, any investment or investment activity to which this document relates is only available to and will only be engaged in with Relevant Persons. Persons who are not Relevant Persons should not act or rely on this document or any of its contents.

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LEGAL MATTERS

The legality of the securities offered hereby has been passed on for us by Meyer, Suozzi, English & Klein, P.C., New York City, New York. Greenberg Traurig, LLP, Boston, Massachusetts, is acting as counsel for the underwriters in connection with this Offering.

EXPERTS

RBSM, LLP, an independent registered public accounting firm, has audited, as set forth in its report thereon appearing elsewhere herein, our financial statements at December 31, 2013 and 2012 and for the years then ended that appear in the prospectus. The financial statements referred to above are included in this prospectus in reliance upon the independent registered public accounting firm’s report given on their authority as experts in accounting and auditing.

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form S-1 under the Securities Act, relating to the shares of common stock and warrants being offered by this prospectus, and reference is made to such registration statement. This prospectus constitutes the prospectus of First Choice Healthcare Solutions, Inc., filed as part of the registration statement, and it does not contain all information in the registration statement, as certain portions have been omitted in accordance with the rules and regulations of the Securities and Exchange Commission. Whenever we make reference in this prospectus to any of our contracts, agreements or other documents, the references are not necessarily complete, and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.

We file annual, quarterly and special reports and other information with the SEC (Commission File Number 000-54879). These filings contain important information that does not appear in this prospectus. For further information about us, you may read and copy any reports, statements and other information filed by us at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549-0102. You may obtain further information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our SEC filings are also available on the SEC Internet site at http://www.sec.gov, which contains periodic reports and other information regarding issuers that file electronically. You can find information about us on our corporate website at http://www.myfchs.com. Information found on our website is not part of this prospectus. You may also request a copy of any of our periodic reports filed with the SEC by writing or telephoning us at the following address:

Donald Bittar

Chief Financial Officer

First Choice Healthcare Solutions, Inc.

709 S. Harbor City Boulevard, Suite 250

Melbourne, Florida 32901-1932
Telephone: (321) 725-0090

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INDEX TO FINANCIAL STATEMENTS

CONTENTS	PAGE NO.
For the Years Ended December 31, 2013 and 2012
Reports of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets at December 31, 2013 and 2012	F-3
Consolidated Statements of Operations  for the Years Ended December 31, 2013 and 2012	F-4
Consolidated Statement of Stockholders’ Deficit for the Years Ended December 31, 2013 and 2012	F-5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2013 and 2012	F-6
Notes to the Consolidated Financial Statements	F-7

For the Three Months Ended March 31, 2014 and 2013
Condensed Consolidated Balance Sheets as of March 31, 2014 (unaudited) and December 31, 2013	F-29
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2014 and 2013 (unaudited)	F-30
Condensed Consolidated Statement of Stockholders’ Deficit for the Three Months Ended March 31, 2014 (unaudited)	F-31
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2014 and 2013 (unaudited)	F-32
Notes to Condensed Consolidated Financial Statements (unaudited)	F-33

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

First Choice Healthcare Solutions, Inc.

Melbourne, Florida

We have audited the accompanying balance sheet of First Choice Healthcare Solutions, Inc. (the “Company”), as of December 31, 2013 and 2012, and the related statements of operations, stockholders’ deficit and cash flows for each of the two years in the period ended December 31, 2013. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We have conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, 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. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of First Choice Healthcare Solutions, Inc. as of December 31, 2013 and 2012, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.

/s/ RBSM LLP

New York, New York

March 28, 2014

F-2

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2013 AND 2012

	2013			2012
ASSETS
Current assets
Cash	$	739,158		$	67,045
Cash-restricted		256,246			221,148
Accounts receivable		1,272,155			527,867
Prepaid and other current assets		140,580			69,970
Capitalized financing costs, current portion		57,348			57,348
Total current assets		2,465,487			943,378
Property, plant and equipment, net of accumulated depreciation of $1,959,127 and $1,465,939		8,662,057			8,756,631
Other assets
Capitalized financing costs, long term portion		131,540			152,911
Patient list, net of accumulated amortization of $35,000 and $24,391		265,000			275,609
Patents		286,500			-
Deposits		2,713			2,719
Total other assets		685,753			431,239
Total assets	$	11,813,297		$	10,131,248
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	459,000		$	576,209
Stock based payable		166,340			-
Line of credit, short term		800,000			-
Notes payable, current portion		743,787			690,586
Note payable, related party		-			300,000
Convertible note payable, net of unamortized debt discount of $160,543		-			43,537
Unearned revenue		74,934			39,438
Total current liabilities		2,244,061			1,649,770
Long term debt:
Deposits held		72,901			47,399
Revolving line of credit, related party		-			153,330
Convertible note payable, long term portion		2,347,403			-
Notes payable, long term portion		8,935,473			9,410,296
Derivative liability		-			171,987
Total long term debt		11,355,777			9,783,012
Total liabilities		13,599,838			11,432,782
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, 16,747,248 and 12,706,795 shares issued and outstanding as of December 31, 2013 and 2012, respectively		16,747			12,707
Additional paid in capital		11,560,249			7,244,993
Common stock subscriptions		-			100,000
Accumulated deficit		(13,363,537	)		(8,659,234	)
Total stockholders' deficit		(1,786,541	)		(1,301,534	)
Total liabilities and stockholders' deficit	$	11,813,297		$	10,131,248

See the accompanying notes to these consolidated financial statements 

F-3

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year ended December 31,
	2013			2012
Revenues:
Net patient service revenue	$	5,459,373		$	2,645,310
Rental revenue		1,048,469			1,160,037
Total revenue		6,507,842			3,805,347
Operating expenses:
Salaries and benefits		3,096,285			1,593,245
Other operating expenses		1,715,942			865,641
General and administrative		1,705,154			1,314,302
Impairment of investment		450,000			-
Depreciation and amortization		518,611			309,899
Total operating expenses		7,485,992			4,083,087
Net income (loss) from operations		(978,150	)		(277,740	)
Other income (expense):
Miscellaneous income		3,063			3,000
Gain (loss) on change in fair value of derivative liability		32,218			(987	)
Amortization financing costs		(57,348	)		(57,348	)
Interest expense, net		(3,704,086	)		(563,391	)
Total other (expense)		(3,726,153	)		(618,726	)
Net loss before provision for income taxes		(4,704,303	)		(896,466	)
Income taxes (benefit)		-			(23,103	)
Net loss	$	(4,704,303	)	$	(873,363	)
Net loss per common share, basic and diluted	$	(0.35	)	$	(0.07	)
Weighted average number of common shares outstanding, basic and diluted		13,529,294			12,644,784

See the accompanying notes to these consolidated financial statements 

F-4

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

STATEMENT OF STOCKHOLDERS' DEFICIT

TWO YEARS ENDED DECEMBER 31, 2013

									Additional		Common
	Preferred stock				Common stock				Paid in		Stock			Accumulated
	Shares		Amount		Shares		Amount		Capital		Subscriptions			Deficit			Total
Balance, December 31, 2011		-	$	-		12,462,750	$	12,463	$	6,747,512	$	-		$	(7,785,871	)	$	(1,025,896	)
Common stock issued to acquire First Choice Medical Group, Inc., net of fair value of 70,529 shares of common stock to be returned from post-acquisition adjustments		-		-		244,045		244		497,481					-			497,725
Common stock subscriptions received		-		-		-		-		-		100,000			-			100,000
Net loss		-		-		-		-		-		-			(873,363	)		(873,363	)
Balance, December 31, 2012		-	$	-		12,706,795	$	12,707	$	7,244,993	$	100,000		$	(8,659,234	)	$	(1,301,534	)
Common stock issued for services rendered		-		-		533,822		534		382,567		-			-			383,101
Common stock issued in settlement of line of credit		-		-		1,386,667		1,386		622,614		-			-			624,000
Common stock issued in settlement of related party line of credit		-		-		316,631		317		142,167		-			-			142,484
Common stock issued in connection with loan modification		-		-		100,000		100		95,900		-			-			96,000
Common stock issued for subscription		-		-		66,666		66		99,934		(100,000	)		-			-
Common stock issued to acquire 10% in MedTech Diagnostics, LLC		-		-		1,000,000		1,000		449,000		-			-			450,000
Common stock issued to acquire patent rights		-		-		636,666		637		285,863		-			-			286,500
Reclassification of derivative liability to equity upon convertible note payoff		-		-		-		-		366,094		-			-			366,094
Beneficial conversion feature in connection with note payable		-		-		-		-		1,871,117		-			-			1,871,117
Net loss		-		-		-		-		-		-			(4,704,303	)		(4,704,303	)
Balance, December 31, 2013		-	$	-		16,747,247	$	16,747	$	11,560,249	$	-		$	(13,363,537	)	$	(1,786,541	)

See the accompanying notes to these consolidated financial statements 

F-5

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year ended December 31,
	2013			2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(4,704,303	)	$	(873,363	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation		518,611			309,899
Amortization of financing costs		57,348			57,348
Bad debt expense		361,284			-
Amortization of debt discount in connection with convertible note		2,706,869			10,457
Stock based compensation		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	)		987
Changes in operating assets and liabilities:
Accounts receivable		(1,105,572	)		(329,375	)
Accounts receivable-other		-			(205,000	)
Prepaid expenses and other		(70,604	)		(40,265	)
Restricted funds		(35,098	)		(131,209	)
Accounts payable and accrued expenses		(91,312	)		419,417
Unearned income		35,496			15,354
Deferred income taxes		-			(23,103	)
Net cash provided by operating activities		(1,264,058	)		(788,853	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash received from acquisition		-			48,761
Cash payments for acquisition		-			(143,366	)
Purchase of equipment		(397,688	)		(2,773,450	)
Net increase in deposits		25,502			15,796
Net cash used in investing activities		(372,186	)		(2,852,259	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (payments) proceeds from related party line of credit		(10,846	)		190,000
Proceeds from convertible note payable		2,128,117			203,500
Proceeds from lines of credit		1,373,208			-
Proceeds from issuance of notes payable, net of financing costs		152,659			2,871,058
Proceeds from common stock subscription		-			100,000
Net payments on notes payable		(1,334,781	)		(184,704	)
Net cash provided by (used in) financing activities		2,308,357			3,179,854
Net increase (decrease) in cash and cash equivalents		672,113			(461,258	)
Cash and cash equivalents, beginning of period		67,045			528,303
Cash and cash equivalents, end of period	$	739,158		$	67,045
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	731,877		$	467,670
Cash paid during the period for taxes	$	-		$	-
Supplemental Disclosure on non-cash investing and financing activities:
Common stock issued in connection with acquisition of First Choice Medical Group, Inc.	$	-		$	497,725
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 connection with acquisition of patent	$	286,500		$	-
Common stock issued to acquire 10% interest in MedTech Diagnostics, 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		$	-

See the accompanying notes to these consolidated financial statements 

F-6

NOTE 1 – ORGANIZATION, BUSINESS AND PRINCIPLES OF CONSOLIDATION

A summary of the significant accounting policies applied in the presentation of the accompanying consolidated financial statements follows:

Basis and business presentation

First Choice Healthcare Solutions, Inc., a Delaware corporation (the “Company" or "FCHS”) filed a certificate of merger (the “Certificate of Merger”) of Medical Billing Assistance, Inc., a Colorado corporation incorporated on May 30, 2007 (“Medical Billing”), into the Company. The effective date for the Certificate of Merger was April 4, 2012. Pursuant to the Certificate of Merger, Medical Billing was merged with and into the Company. The effect of the merger was that Medical Billing reincorporated from Colorado to Delaware (the “Reincorporation”). The Company is deemed to be the successor issuer of Medical Billing under Rule 12g-3 of the Exchange Act.

Contemporaneously with the Reincorporation, the Company changed its name to First Choice Healthcare Solutions, Inc. to more closely align the Company’s name with its target market.  Otherwise, the reincorporation does not result in any change in the business, management, fiscal year, accounting, and location of the principal executive offices, assets or liabilities of the Company, formerly known as Medical Billing Assistance, Inc.

On December 29, 2010, First Choice Healthcare Solutions, Inc., formerly known as Medical Billing Assistance, Inc., entered into a share exchange agreement (the "Agreement") with FCID Holdings, Inc. and FCID Medical, Inc., acquiring 100% of the outstanding common stock of FCID Holdings, Inc. and FCID Medical, Inc. through the issuance of 10,000,000 shares of its common stock. The transaction was accounted for as a reverse acquisition as the shareholders of FCID Holdings, Inc. and FCID Medical, Inc. retained the majority of the outstanding common stock of Medical Billing Assistance, Inc. after the share exchange.  Effective with the Agreement, First Choice Healthcare Solutions, Inc.’s stockholders' equity was retroactively recapitalized as that of FCID Holdings, Inc. while 100% of the assets and liabilities of First Choice Healthcare Solutions, Inc. valued at $(100,550), consisting of cash $242, investment in subsidiary of $(66,286), accounts payable of $16,677, notes payable of $16,600, interest payable of $1,079, and other liabilities of $150 were recorded as being acquired in the reverse acquisition for its 2,429,000 outstanding common shares on the acquisition date. Subsequent to the December 29, 2010 recapitalization, First Choice Healthcare Solutions, Inc., FCID Holdings, Inc. and FCID Medical, Inc. remain separate legal entities (with First Choice Healthcare Solutions, Inc. as the parent of FCID Holdings, Inc. and FCID Medical, Inc.). All references to the “Company” or “we” or “us” or “our” refer to First Choice Healthcare Solutions, Inc. and its Subsidiaries unless otherwise differentiated.  For accounting purposes, FCID Holdings, Inc. and Subsidiaries is treated as the surviving entity and accounting acquirer, although First Choice Healthcare Solutions, Inc. was the legal acquirer.  Accordingly, the Company’s historical financial statements are those of FCID Holdings, Inc. and Subsidiaries.

All references to common stock, share and per share amounts have been retroactively restated to reflect the reverse capitalization as if the transaction had taken place as of the beginning of the earliest period presented.

FCID Holdings, Inc. was incorporated in the State of Florida on February 25, 2010. FCID Holdings, Inc. was formed to act as a holding corporation for other business entities as needed, including Marina Towers, LLC, a Florida limited liability company that owns and manages a commercial real estate office building. Marina Towers, LLC was formed in the State of Florida on July 24, 2003. Effective September 30, 2010, in an acquisition classified as a transaction between parties under common control, FCID Holdings, Inc. acquired all the outstanding membership interests of Marina Towers, LLC (12,000,000 FCID Holdings, Inc. common shares were issued for 60 Class A and 40 Class B membership interests of Marina Towers, LLC), making Marina Towers, LLC a wholly owned subsidiary of FCID Holdings, Inc.

F-7

The consolidated financial statements include the activity of Marina Towers, LLC from the date of its formation as if the transaction between the parties under common control had taken place as of the beginning of the earliest period presented.

On April 2, 2012, The Company, First Choice Healthcare Solutions, completed its acquisition of First Choice Medical Group of Brevard, LLC (“First Choice – Brevard”), pursuant to the Membership Interest Purchase Closing Agreement (the “Purchase Agreement”), dated the same date. The Company has been managing the practice of First Choice – Brevard since November 1, 2011, pursuant to a Management Services Agreement (the “Management Agreement”).

The purchase price for the acquisition was $2,360,848, as adjusted, of which approximately $1.15 million was paid in cash, accounts receivable due the Company of $508,000 and the balance, net of closing adjustments including invoiced service fees, was paid by issuing to the members of First Choice – Brevard 244,045 shares, as adjusted, of the Company’s restricted common stock.

First Choice - Brevard is a multi-specialty medical group including orthopedics (both operative and non-operative), sports medicine, pain management and neurology.  The practice is located in Marina Towers, a Class A office building owned by the Company.

A preliminary estimate of the fair values of the assets acquired and liabilities assumed at the date of acquisition are as follows:

Assets acquired:
Current assets:
Cash	$	48,761
Accounts receivable		325,300
Total current assets		374,061
Property and equipment		1,731,590
Other assets:
Customer list		300,000
Total acquired assets		2,405,651
Liabilities assumed:
Accounts payable		44,802
Net assets acquired	$	2,360,849

The consolidated financial statements include the accounts of the Company, including FCID Holdings, Inc., FCID Medical, Inc., First Choice Medical Group of Brevard, LLC and Marina Towers, LLC which are all wholly-owned subsidiaries of FCHS. All significant intercompany balances and transactions have been eliminated in consolidation.

F-8

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of the financial statements in conformity with 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.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, Revenue Recognition (“ASC 605-10”) which requires that four basic criteria must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred; (3) the selling price is fixed and 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.

ASC 605-10 incorporates Accounting Standards Codification subtopic 605-25, Multiple-Element Arraignments (“ASC 605-25”). ASC 605-25 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. The effect of implementing 605-25 on the Company's financial position and results of operations was not significant.

Accounts Receivable

Trade receivables are carried at their estimated collectible amounts. Trade credit is generally extended on a short-term basis; thus trade receivables do not bear interest. Trade accounts receivable are periodically evaluated for collectability based on past credit history with customers and their current financial condition. As of December 31, 2013 and 2012, the Company wrote off $361,284 and $-0- and charged to operations respectively.

Capitalized financing costs

Capitalized financing costs represent costs incurred in connection with obtaining the debt financing.  These costs are amortized ratably and charged to financing expenses over the term of the related debt. The amortization for the years ended December 31, 2013 and 2012 was $57,348 and $57,348, respectively.  Accumulated amortization of deferred financing costs were $133,812 and $76,464 at December 31, 2013 and 2012, respectively.

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to a concentration of credit risk are cash and accounts receivable.   Generally, 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.

F-9

Cash and Cash Equivalents

The Company considers cash and cash equivalents to consist of cash on hand and investments having an original maturity of 90 days or less that are readily convertible into cash. As of December 31, 2013, the Company had $739,158 in cash.

Segment Information

Accounting Standards Codification subtopic Segment Reporting 280-10 (“ASC 280-10”) establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The information disclosed herein materially represents all of the financial information related to the Company’s principal two operating segments (see Note 15).

Patient list

Patient list is comprised of acquired patients in connection with the acquisition of First Choice - Brevard and is amortized ratably over the estimated useful life of 15 years. Amortization for the years ended December 31, 2013 and 2012 was $20,000 and $15,000, respectively.  Accumulated amortization of patient list costs were $35,000 and $24,391 at December 31, 2013 and 2012, respectively.

Long-Lived Assets

The Company follows FASB ASC 360-10-15-3, “Impairment or Disposal of Long-lived Assets,” which established 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.

At December 31, 2013, the Company’s management performed an evaluation of its investment in MedTech for purposes of determining the implied fair value of the asset at December 31, 2013. The test indicated that the recorded remaining book value of its investment exceeded its fair value for the year ended December 31, 2013.  As a result, upon completion of the assessment, management recorded a non-cash impairment charge of $450,000, net of tax, or $0.03 per share during the year ended December 31, 2013 to reduce the carrying value of the investment to $0. Considerable management judgment is necessary to estimate the fair value.  Accordingly, actual results could vary significantly from management’s estimates. (see Note 6).

Property and Equipment

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 20 to 39 years.

F-10

Net Loss Per Share

The Company accounts for net loss per share in accordance with Accounting Standards Codification subtopic 260-10, Earnings Per Share (“ASC 260-10”), which requires presentation of basic and diluted earnings per share (“EPS”) on the face of the statement of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS.

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during each period.  It excludes the dilutive effects of potentially issuable common shares such as those related to our issued convertible debt, warrants and stock options.   Diluted net loss per share for years ending December 31, 2013 and 2012 does not reflect the effects of 3,414,070 and 2,029,686 shares, respectively, potentially issuable upon the conversion of our convertible note payable or the exercise of the Company's stock options and warrants (calculated using the treasury stock method) as of December 31, 2013 and 2012 as including such would be anti-dilutive.

Stock-Based Compensation

Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period.  The Company measures the fair value of the share-based compensation issued to non-employees using the stock price observed in the arms-length private placement transaction nearest the measurement date (for stock transactions) or the fair value of the award (for non-stock transactions), which were considered to be more reliably determinable measures of fair value than the value of the services being rendered. The measurement date is the earlier of (1) the date at which commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. As of December 31, 2013, the Company had no non-employee options outstanding to purchase shares of common stock.

Derivative Instrument Liability

The Company accounts for derivative instruments in accordance with ASC 815, which establishes accounting and reporting standards for derivative instruments and hedging activities, including certain derivative instruments embedded in other financial instruments or contracts and requires recognition of all derivatives on the balance sheet at fair value, regardless of hedging relationship designation. Accounting for changes in fair value of the derivative instruments depends on whether the derivatives qualify as hedge relationships and the types of relationships designated are based on the exposures hedged. At December 31, 2013 and 2012, the Company did not have any derivative instruments that were designated as hedges.

Fair Value

Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.

F-11

The Company follows Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments and certain other items at fair value. Neither of these statements had an impact on the Company’s financial position, results of operations nor cash flows.

Patents

Intangible assets with finite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are not amortized, but are tested for impairment annually. The Company’s intangible assets with finite lives are patent costs, which are amortized over their economic or legal life, whichever is shorter. These patent costs were acquired on September 7, 2013 by the issuance of 636,666 shares of the Company’s common stock to a related party (See Note 12). The shares of common stock were valued at $286,500, which was estimated to be approximately the fair value of the patent acquired and did not materially differ from the fair value of the common stock.

Income Taxes

The Company follows Accounting Standards Codification subtopic 740-10, Income Taxes (“ASC 740-10”) for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability during each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse and are considered immaterial.

Recent Accounting Pronouncements

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s condensed consolidated financial position, results of operations or cash flows.

NOTE 3 – LIQUIDITY

The Company incurred various non-recurring expenses in 2012 in connection with operating startup costs relating to the acquisition of a medical practice.  Management believes the positive year-end earnings before interest, taxes, depreciation and amortization and the continuing trend of positive growth before interest, taxes, depreciation and amortization through 2014 will support improved liquidity. Moreover, the Company issued and sold to Hillair Capital Investments, L.P. a $2,320,000 8% Original Issue Discount Convertible Debenture, raising net proceeds of $2,000,000 less customary legal and due diligence fees. The Company then paid off or converted to equity a total of $1,238,480 in debt and modified its $1.5 million line of credit with CT Capital, providing for the reduction of the annual interest rate from 12% per annum to 6% per annum in exchange for the issuance of 100,000 restricted shares of the Company’s common stock. As of December 31, 2013, the Company has used $800,000 of the available CT Capital line of credit.

F-12

The Marina Towers building is fully occupied. The Company believes that ongoing operations of Marina Towers, LLC, the current strong, positive cash balance along with continued execution of its business development plan will allow the Company to further improve its working capital; and that it will have sufficient capital resources to meet projected cash flow requirements through the date that is one year plus a day from the filing date of this report.  However, there can be no assurance that the Company will be successful in fully executing its business development plan.

NOTE 4 – CASH - RESTRICTED

Cash-restricted is comprised of funds deposited to and held by the mortgage lender for payments of property taxes, insurance, replacements and major repairs of the Company's commercial building. The majority of the restricted funds are reserved for tenant improvements.

NOTE 5 — PROPERTY, PLANT, AND EQUIPMENT

Property, plant and equipment at December 31, 2013 and 2012 are as follows:

	2013			2012
Land	$	1,000,000		$	1,000,000
Building		3,055,168			3,055,168
Building improvements		3,953,846			3,806,771
Automobiles		29,849			29,849
Computer equipment		210,698			186,549
Medical equipment		2,238,639			2,039,393
Office equipment		132,984			104,840
		10,621,184			10,222,570
Less: accumulated depreciation		(1,959,127	)		(1,465,939	)
	$	8,662,057		$	8,756,631

During the year ended December 31, 2013 and 2012, depreciation expense charged to operations was $483,797 and $309,899, respectively.

NOTE 6 — INVESTMENTS

On September 7, 2013, the Company acquired an aggregate 10% membership interest in MedTech Diagnostics, LLC, a Florida distributor of multi-test medical diagnostic equipment. The investment is recorded at an aggregate cost of $450,000, which was determined at the date of the acquisition, and based on the fair value of the underlying issued common shares, or $0.45 per share. More specifically, the Company acquired a 3.75% membership interest for 375,000 shares of its common stock valued at the date of the acquisition of $168,750; and a 6.25% membership interest valued at the date of the acquisition of $281,250. At December 31, 2013, the Company’s management performed an evaluation of its investment in MedTech for purposes of determining the implied fair value of the asset at December 31, 2013. The test indicated that the recorded remaining book value of its investment exceeded its fair value for the year ended December 31, 2013.  As a result, upon completion of the assessment, management recorded a non-cash impairment charge of $450,000, net of tax, or $0.03 per share during the year ended December 31, 2013 to reduce the carrying value of the investment to $0. Considerable management judgment is necessary to estimate the fair value.  Accordingly, actual results could vary significantly from management’s estimates.

F-13

NOTE 7 — LINES OF CREDIT

Line of Credit, CT Capital

On June 13, 2013, the Company’s subsidiary, First Choice Medical Group of Brevard, LLC, entered into a Loan and Security Agreement (the “Loan Agreement”) with CT Capital, Ltd., d/b/a CT Capital, LP, a Florida limited liability partnership (the “Lender”). Under the Loan Agreement, the Lender committed to make an accounts receivable line of credit in the maximum aggregate amount of $1,500,000 to First Choice Medical Group of Brevard, LLC with an interest rate of 12% per annum (the “Loan”). The maturity date of the Loan is December 31, 2016 (the “Maturity Date”). Interest shall be due and payable monthly. Upon default, the interest may be adjusted to the highest rate permissible by law. The Loan is secured by the accounts receivable, and assets of the Company’s subsidiary, First Choice Medical Group of Brevard, LLC. The assets constitute the collateral for the repayment of the Loan. The Loan Agreement also includes covenants, representations, warranties, indemnities and events of default that are customary for facilities of this type. The advance rate is defined as: 80% of all receivables to be 120 days or less at the net collection rate of approximately 27% of total billings, excluding patient billings and collections. Additionally, allowable accounts receivable will also include 50% of all accounts receivable protected by Legal Letters of Protection.  At any time, the Lender may convert all or any portion of the outstanding principal amount or interest on the Loan into the common stock of the Company at a price equal to $0.75 per share. The Company did not record an embedded beneficial conversion feature in the note since the fair value of the common stock did not exceed the conversion rate at the date of commitment.

On November 8, 2013, in consideration for a fee of 100,000 shares of the Company’s common stock, restricted pursuant to Rule 144, CT Capital agreed to modify the line of credit to the Company’s subsidiary, First Choice Medical Group of Brevard, LLC. Under the loan modification agreement, the annual rate of interest was reduced from 12% per annum to 6% per annum and will remain at 6% until November 1, 2015. All other terms under the June 13, 2013 Loan and Security Agreement will remain the same.

The obligations of the Company under the Loan Agreement are guaranteed by certain affiliates of the Company, including a personal guarantee issued by the Company’s Chief Executive Officer.

Line of Credit, MTI Capital

On May 1, 2013, the Company entered into a loan commitment whereby MTI Capital LLC provided a line of credit up to $2,000,000 in the form of a convertible loan with interest at 12% per annum, payable monthly with principal due two years from the effective date of the loan. On August 28, 2013, the Company amended the loan agreement to change the conversion rate from $0.75 per share to $0.45 per share.

In the third quarter 2013, the Company did not record an embedded beneficial conversion feature in the note since the fair value of the common stock did not exceed the conversion rate at the date of commitment or amendment.

F-14

On November 8, 2013, MTI converted the then outstanding balance of $624,000 principal and interest amount on the loan, into shares of the Company’s common stock at a price equal to $0.45 per share for a total of 1,386,667 shares issued. Our corporate transfer agent reported to us that MTI redistributed the majority of its shares in our Company to unaffiliated third parties.

NOTE 8 — LINE OF CREDIT, RELATED PARTY

On February 1, 2012, the Company opened a $500,000 unsecured, revolving line of credit loan with CCR of Melbourne, Inc., an entity jointly owned and controlled at that time by the Company's Chief Executive Officer and Carmen Romandetti, the Chief Executive Officer’s father. The revolving line of credit loan was to mature on October 1, 2015 with interest at a per annum rate of 8.5% beginning March 1, 2012. Advances on the line of credit were at the sole discretion of CCR of Melbourne, Inc. The Company accrued $11,153 and $6,339 as related party interest for the years ended December 31, 2013 and 2012, respectively.

On November 8, 2013, CCR converted the then outstanding balance of $142,483.52, representing all of the outstanding related party principal and interest amount on the loan, into shares of the Company’s common stock at a price equal to $0.45 per share for a total of 316,631 shares issued.

On November 20, 2013, the Chief Executive Officer relinquished all rights, title to and ownership in CCR to Carmen Romandetti in consideration of a personal loan made to the Chief Executive Officer by Carmen Romandetti.

NOTE 9 — NOTE PAYABLE, RELATED PARTY

The Company entered into an unsecured loan agreement with HS Real Company, LLC (“HSR”) on May 17, 2012 for $100,000 at an interest rate of 12% per annum (the "HSR Note"). On August 5, 2012, HSR increased the principal amount to $250,000, and subsequently HSR advanced an additional $50,000 to the Company, bringing the aggregate principal amount of the HSR Note to $300,000, all of which was due and payable to HSR on December 31, 2012. The Company paid $27,556 and $17,053 as interest on the HSR note for the years ended December 31, 2013 and 2012, respectively.

On November 8, 2013, the Company paid off the HSR Note in full, remitting HSR $300,000 for the outstanding principal and interest balance due on the HSR Note.

Convertible notes payable at December 31, 2013 and 2012 are as follows:

	2013			2012
Note payable, 8% per annum due November 1, 2015, including accrued interest	$	2,347,403		$	-
Note payable, 8% per annum due September 18, 2013, net of unamortized debt discount of $160,543 including accrued interest		-			43,537
		2,347,403			43,537
Less: current portion		(-	)		(43,537	)
	$	2,347,403		$	-

F-15

Hillair Capital Investments, L.P.

On November 8, 2013, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Hillair Capital Investments L.P. ("Hillair") whereby the Company received $2,000,000 in gross proceeds from Hillair in exchange for (i) a $2,320,000, 8% Original Issue Discount Convertible Debenture due December 28, 2013, subject to an extension through November 1, 2015 (the “Debenture”), and (ii) a Common Stock Purchase Warrant (the “Warrant”) to purchase up to 2,320,000 shares of the Company’s common stock (the “Common Stock”) at an exercise price of $1.35 per share, which may be exercised on a cashless basis, until November 8, 2018.

The Company issued to Hillair the Debenture with the Warrant for the net purchase price of $2,000,000 (reflecting the $320,000 original issue discount). Until the Debenture is no longer outstanding, the Debenture shall be convertible, in whole or in part at the option of Hillair, into shares of Common Stock, subject to certain conversion limitations set forth in the Debenture. The Company, however, has reserved the right to pay the Debenture in cash. The conversion price for the Debenture is $1.00 per share, subject to adjustment for stock splits, stock dividends, sales of securities for less than $1.00 per share or other distributions by the Company. As a result of the Company achieving certain milestones, however, the conversion price shall not be reduced to less than $1.00 per share as a result of any subsequent sales of securities for less than $1.00 per share of common stock.

The Company will be obligated to redeem $580,000 of principal on February 1, 2015, May 1, 2015, August 1, 2015 and November 1, 2015, plus accrued but unpaid interest and any other amounts that may be owed to the holder of the Debenture on those dates. Interest on the Debenture accrues at the rate of 8% annually and is payable quarterly on August 1, November 1, February 1, and May 1, beginning on August 1, 2014. Interest is payable in cash or at the Company’s option in shares of the Company’s common stock; provided certain conditions are met.

On or after May 8, 2014, the Company may elect to prepay any portion of the principal amount of the Debenture, subject to providing advance notice to the holder of the Debenture, at 120% of the then outstanding principal amount of the Debenture, plus accrued but unpaid interest and any other amounts then owed to the holder of the Debenture as further set forth therein, subject to certain conditions set forth in the Debenture.

To secure the Company’s obligations under the Debenture, the Company granted Hillair a security interest in certain of its and its subsidiaries’ assets in the Company as described in the Security Agreement. In addition, certain of the Company’s subsidiaries agreed to guarantee the Company’s obligations pursuant to the Subsidiary Guarantees.

As described above, in connection with the issuance of the debenture, the Company issued detachable warrants granting the holder the right to acquire an aggregate of 2,320,000 shares of the Company’s common stock at $1.35 per share. In accordance with ASC 470-20, the Company recognized the value attributable to the warrants and the conversion feature in the amount of $1,871,117 to additional paid-in capital and a discount against the notes. The Company valued the warrants in accordance with ASC 470-20 using the Black-Scholes pricing model and the following assumptions: contractual terms of 3.6 years, an average risk free interest rate of 1.42%, a dividend yield of 0%, and volatility of 147.94%. During the year ended December 31, 2013, the Company amortized $1,871,117 of the debt discount to operations as interest expense.

Convertible Notes

On December 14, 2012, February 19, 2013, and August 14, 2013, the Company entered into Securities Purchase Agreements for the sale of 8% convertible notes in the original principal amounts of $203,500, $103,500 and $153,500, respectively, with a lender in reliance upon the exemption from registration under Section 4(a)(2) (formerly Section 4(2) of the Securities Act). During the year ended December 31, 2013, the Company paid off each of these notes payable in cash.

F-16

The Company has identified the embedded derivatives related to the above described Notes. These embedded derivatives included certain conversion features and reset provision. The accounting treatment of derivative financial instruments requires that the Company record fair value of the derivatives as of the inception date of Lender’s Note and to fair value as of each subsequent reporting date.

At the inception of the Notes, the Company determined the aggregate fair value of $397,325 of embedded derivatives. The fair value of the embedded derivatives was determined using the Binomial Lattice Option Pricing Model based on the following assumptions: (1) dividend yield of 0%; (2) expected volatility of 98.67 to 119.96%, (3) weighted average risk-free interest rate of 0.12 % to 0.17% (4) expected life of 0.76 years, and (5) estimated fair value of the Company’s common stock of $0.60 to $2.14 per share.

During the year ended December 31, 2013, the Company paid off all outstanding Asher notes. As such, the Company marked to market the fair value of the debt derivative at the date(s) of payoff and reclassified the determined aggregate fair values of $366,094 to equity. The fair values of the embedded derivatives was determined using Binomial Lattice Option Pricing Model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 116.11% to 147.94%, (3) weighted average risk-free interest rate of 0.03% to 09%, (4) expected life of 0.25 to 0.52 year, and (5) estimated fair value of the Company’s common stock of $0.55 to 1.40 per share.

During the years ended December 31, 2013 and 2012, the Company amortized and wrote off $2,706,869 and $10,457 of debt discount to operations as interest expense.

NOTE 11 — NOTES PAYABLE

Notes payable as of December 31, 2013 and 2012 are comprised of the following:

	2013			2012
Mortgage payable	$	7,353,398		$	7,444,580
Note payable, GE Capital (construction), MRI		278,287			450,604
Note payable, GE Capital (construction), 2		100,977			153,340
Note Payable, GE Capital (MRI)		1,592,278			1,806,932
Note Payable, GE Capital (X-ray)		184,001			213,126
Note Payable, GE Arm		114,597			-
Note payable, Auto		22,211			27,300
Capital lease, Equipment		33,511			-
Note payable, Dr. Richard  Newman		-			5,000
		9,679,260			10,100,882
Less: current portion		(743,787	)		(690,586	)
	$	8,935,473		$	9,410,296

F-17

Mortgage Payable

On August 12, 2011, the Company refinanced its existing mortgage note payable as described below providing additional working capital funds. The aggregate amount of the note of $7,550,000 bears 6.10% interest per annum with monthly payments of $45,752.61 beginning in October 2011 based on a 30 year amortization schedule with all remaining principal and interest due in full on September 16, 2016.  The note is secured by land and the building along with first priority assignment of leases and rents.  Tenant rents are mailed to lockbox operated by the mortgage service company.  In addition, the Company's Chief Executive Officer provided a limited personal guaranty.

In connection with the refinancing of the mortgage note payable, the Company incurred financing costs of $286,723.  The capitalized financing costs are amortized ratably over the term of the mortgage note payable.

Note Payable – Equipment Financing

On May 21, 2012, the Company completed a financing with GE Healthcare Financial Services (“GE Capital”) for approximately $2.4 million.

As of September 30, 2012, the Company had drawn down a total of $450,000 against the first construction loan. This construction loan is payable in 35 monthly payments (first three payments are $nil) including interest at 7.38%, beginning the earlier of a) December 2012 or b) total advances have been made in the amount of $450,000.

On September 24, 2012, the Company drew down a total of $150,000 against the second construction loan. This construction loan is payable in 35 monthly payments (first three payments are $nil) including interest at 7.38%, beginning the earlier of a) December 2012 or b) total advances have been made in the amount of $150,000

The Company entered into an aggregate of $2,288,679 equipment finance leases subject to delivery and acceptance. All notes and finance leases have been personally guaranteed by the Company's Chief Executive Officer.

On August 22, 2012, the Company accepted the delivery of X-ray equipment under the equipment finance leases discussed above. As such, the component piece accepted of $212,389 is due over 60 months at $-0- the first three months; $4,300 for the remaining 57 months including interest at 7.9375% per annum. On March 8, 2013, the Company amended the finance lease to interest only payments of $1,384 for three months; $4,575 for the remaining 56 monthly payments.

On September 27, 2012, the Company accepted the delivery of MRI equipment under the equipment finance leases discussed above. As such, the component piece accepted of $1,771,390 is due over 60 months at $-0- the first three months; $38,152 for the remaining 57 months including interest at 7.9375% per annum. On March 8, 2013, the Company amended the finance lease to interest only payments of $11,779 for three months; $38,152 for the remaining 56 monthly payments.

On February 25, 2013, the Company accepted the delivery of C-arm equipment under the equipment finance leases discussed above. As such, the component piece accepted of $117,322 is due over 63 months at $-0- the first three months; $2,388 for the remaining 60 months including interest at 7.39% per annum.

F-18

Note Payable – Auto

On May 21, 2012, the Company issued a note payable, in the amount of $29,850, due in monthly installments of $593 including interest of 6.99%, due to mature in June 2017, and secured by related equipment. The outstanding balance on the note payable as of December 31, 2013 was $22,211.

Capital Lease – Equipment

On June 11, 2013, the Company entered into a lease agreement to acquire equipment with 48 monthly payments of $956.45 payable through June 1, 2017 with an effective interest rate of 14.002% per annum. The Company may elect to acquire the leased equipment at a nominal amount at the end of the lease.

Note Payable – Newman

In January 2013, the following note was paid in full.

In connection with the acquisition of First Choice – Brevard as described in Note 1 above, the Company assumed a $45,000 non-interest bearing, unsecured note payable to Dr. Richard Newman at $5,000 per month, matured on January 1, 2013.

Aggregate maturities of long-term debt as of December 31:

	Amount
Year ended December 31, 2014	$	743,787
Year ended December 31, 2015		715,085
Year ended December 31, 2016		7,632,286
Year ended December 31, 2017		523,608
Year ended December 31, 2018 and thereafter		64,494
Total	$	9,679,260

NOTE 12 — RELATED PARTY TRANSACTIONS

As more fully described in Note 8 – Line of Credit, Related Party above, CCR of Melbourne, Inc., an entity jointly owned and controlled at that time by the Company's Chief Executive Officer and Carmen Romandetti, the Chief Executive Officer’s father, provided a $500,000 unsecured revolving line of credit to the Company. The Company accrued $11,153 and $6,339 as related party interest for the years ended December 31, 2013 and 2012, respectively. On November 8, 2013, CCR converted the then outstanding balance of $142,483.52, representing all of the outstanding related party principal and interest amount on the loan, into shares of the Company’s common stock at a price equal to $0.45 per share for a total of 316,631 shares issued. On November 20, 2013, the Chief Executive Officer relinquished all rights, title to and ownership in CCR to Carmen Romandetti in consideration of a personal loan made to the Chief Executive Officer by Carmen Romandetti.

F-19

As more fully described in Note 9 – Note Payable, Related Party above, the Company entered into an unsecured loan agreement with HS Real Company, LLC (“HSR”) on May 17, 2012 for $100,000 at an interest rate of 12% per annum (the "HSR Note"). On August 5, 2012, HSR increased the principal amount to $250,000, and subsequently HSR advanced an additional $50,000 to the Company, bringing the aggregate principal amount of the HSR Note to $300,000, all of which was due and payable to HSR on December 31, 2012. The Company paid $27,556 and $17,053 as interest on the HSR note for the years ended December 31, 2013 and 2012, respectively. Mr. Colin Halpern is both an Affiliate of HSR and a member of the Board of Directors of First Choice Healthcare Solutions, Inc. On November 8, 2013, the Company paid off the HSR Note, remitting HSR $300,000 for the outstanding principal and interest balance due on the HSR Note.

On September 7, 2013, the Company acquired a patent, US 7,789,842 B2, for an orthopedic adjustable arm sling from Donald A. Bittar, the inventor and the Company’s Chief Financial Officer. Based on the independent, third-party evaluation of Professional Business Brokers, Inc., the patent was valued at $286,500. The Company issued Mr. Bittar 636,666 shares of its common stock, valued at $286,500, or $0.45 per share, which was estimated to approximate fair value of the patent acquired and did not materially differ from the fair value of the common stock at the time of issuance.

F-20

NOTE 13 — CAPITAL STOCK

Preferred stock

The Company is authorized to issue 1,000,000 shares $0.01 par value preferred stock.  As of December 31, 2013 and 2012, none was issued and outstanding.

Common stock

The Company is authorized to issue 100,000,000 shares of $0.001 par value common stock.  As of December 31, 2013 and 2012, 16,747,248 and 12,706,795 shares were issued and outstanding, respectively.

On April 4, 2012, the Company affected a four-to-one (4 to 1) reverse stock split of its issued and outstanding shares of common stock, $0.001 par value (whereby every four shares of Company’s  common stock will be exchanged for one share of FCHS common stock). All references in the consolidated financial statements and the notes to consolidated financial statements, number of shares, and share amounts have been retroactively restated to reflect the reverse split. The Company has restated from 49,851,000 to 12,462,750 shares of common stock issued and outstanding as of December 31, 2011 to reflect the reverse split.

In April 2012, the Company issued an aggregate of 244,045 shares of its common stock in connection with the acquisition of First Choice Medical Group of Brevard, LLC.

In July 2012, the Company sold 66,666 shares of common stock as part of a stock subscription agreement which expired December 2012. The Company received $100,000 in July 2012. The shares were issued in February 2013.

In December 2011, the Company issued 33,750 shares of its common stock for services rendered.  The shares of common stock were valued at $116,100, which was estimated to be approximate the fair value of the Company’s common shares during the period covered by the service provided.

During the year ended December 31, 2013, the Company issued an aggregate of 533,822 shares of its common stock to officers, employees and service providers at an aggregate fair value of $383,101.

NOTE 14 — STOCK OPTIONS AND WARRANTS

Warrants

The following table summarizes the warrants outstanding and the related exercise prices for the underlying shares of the Company's common stock as of December 31, 2013:

		Warrants Outstanding					Warrants Exercisable
					Weighted				Weighted
Price		Outstanding		Expiration Date	Price		Exercisable		Price
$	1.35		2,320,000	November 8, 2018	$	1.35		2,320,000	$	1.35
	3.60		1,875,000	December 31, 2016		3.60		1,875,000		3.60
			4,195,000		$	2.36		4,195,000	$	2.36

F-21

The warrant to purchase up to 2,320,000 shares of the Company’s common stock may be exercised on a cashless basis. The warrant to purchase up to 1,875,000 shares of the Company’s common stock may not be exercised on a cashless basis.

Transactions involving stock warrants issued to non-employees are summarized as follows:

	Number of Shares		Weighted Average Price Per Share
Outstanding at December 31, 2011:		1,875,000	$	3.60
Granted		-		-
Exercised		-		-
Expired		-		-
Outstanding at December 31, 2012:		1,875,000		3.60
Granted		2,320,000		1.35
Exercised		-		-
Expired		-		-
Outstanding at December 31, 2013:		4,195,000	$	2.36

On November 8, 2013, the Company issued 2,320,000 warrants to purchase the Company’s common stock at $1.35, expiring November 18, 2018, in connection with the securities purchase agreement dated November 8, 2013. See Note 10 above.

As of December 31, 2013, the Company had no outstanding options.

F-22

NOTE 15 — SEGMENT REPORTING

The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company’s reportable segments. The Company has two reportable segments: Marina Towers, LLC and FCID Medical, Inc.

The Marina Towers, LLC segment derives revenue from the operating leases of its owned building, whereas FCID Medical segment derives revenue for medical services provided to patients.

Information concerning the operations of the Company's reportable segments is as follows:

Summary Statement of Operations for the year ended December 31, 2013:

	Marina			FCID						Intercompany
	Towers			Medical			Corporate			Eliminations			Total
Revenue:
Net patient service revenue	$	-		$	5,459,373		$	-		$	-		$	5,459,373
Rental revenue		1,473,048			-			-			(424,579	)		1,048,469
Total Revenue		1,473,048			5,459,373			-			(424,579	)		6,507,842
Operating expenses:
Salaries and benefits		12,000			2,537,024			547,261			-			3,096,285
Other operating expenses		385,712			1,754,809			-			(424,579	)		1,715,942
General and administrative		82,186			669,248			953,720			-			1,705,154
Impairment of investment		-			-			450,000			-			450,000
Depreciation and amortization		164,884			353,727			-			-			518,611
Total operating expenses		644,782			5,314,808			1,950,981			(424,579	)		7,485,992
Net income (loss) from operations:		828,266			144,565			(1,950,981	)		-			(978,150	)
Interest expense		(464,250	)		(269,593	)		(2,970,243	)		-			(3,704,086	)
Amortization of financing costs		(57,348	)		-			-			-			(57,348	)
Gain on change in derivative liability		-			-			32,218			-			32,218
Other income (expense)		3,063			-			-			-			3,063
Net Income (loss):		309,731			(125,028	)		(4,889,006	)		-			(4,704,303	)
Income taxes		-			-			-			-			-
Net income (loss)	$	309,731		$	(125,028	)	$	(4,889,006	)	$	-		$	(4,704,303	)

F-23

NOTE 15 — SEGMENT REPORTING (Continued)

Summary Statement of Operations for the year ended December 31, 2012:

	Marina			FCID						Intercompany
	Towers			Medical			Corporate			Eliminations			Total
Revenue:
Net patient service revenue	$	-		$	2,645,310		$	-		$	-		$	2,645,310
Rental revenue		1,459,092			-			-			(299,055	)		1,160,037
Total Revenue		1,459,092			2,645,310			-			(299,055	)		3,805,347
Operating expenses:
Practice salaries & benefits		12,000			1,257,948			323,297			-			1,593,245
Practice supplies and other operating expenses		-			1,164,696			-			(299,055	)		865,641
General and administrative		445,392			230,087			638,823			-			1,314,302
Depreciation and amortization		161,818			148,081			-			-			309,899
Total operating expenses		619,210			2,800,812			962,120			(299,055	)		4,083,087
Net income (loss) from operations:		839,882			(155,502	)		(962,120	)		-			(277,740	)
Interest expense		(463,205	)		(80,805	)		(19,381	)		-			(563,391	)
Amortization of financing costs		(57,348	)		-			-			-			(57,348	)
Other income (expense)		3,000			-			(987	)		-			2,013
Net Income (loss):		322,329			(236,307	)		(982,488	)		-			(896,466	)
Income taxes		(8,307	)		6,090			25,320			-			23,103
Net income (loss)	$	314,022		$	(230,217	)	$	(957,168	)	$	-		$	(873,363	)

	Marina		FCID				Intercompany
	Towers		Medical		Corporate		Eliminations		Total
Assets:
At December 31, 2013:	$	6,873,839	$	4,178,091	$	761,367	$	-	$	11,813,297
At December 31, 2012:	$	4,938,954	$	5,183,592	$	8,702	$	-	$	10,131,248
Assets acquired
Year ended December 31, 2013:	$	221,902	$	175,786	$	-	$	-	$	397,688
Year ended December 31, 2012:	$	29,263	$	2,753,578	$	-	$	-	$	2,773,450

F-24

NOTE 16 - COMMITMENTS AND CONTINGENCIES

Service contracts

The Company carries various service contracts on its office building for repairs, maintenance and inspections. Certain contracts are long term and non-cancellable. The Company’s future minimum payments under no cancellable service contracts by year from December 31, 2013 forward are approximately: 2014: $8,411; 2015: $16,835: total: $25,246.

Employment and Consulting Agreements

Subsequent to the end of 2013, the Company entered a formal five-year employment agreement (the “Agreement”) with Christian Romandetti, dated March 20, 2014 and effective January 1, 2014, to serve as the Company’s President and Chief Executive Officer. See Note 19 – Subsequent Events for a description of the terms of the employment agreement.

Hanover|Elite

On October 2, 2013, the Company entered into a cancelable 12-month agreement to engage the services of Elite Financial Communications Group, LLC, d/b/a Hanover|Elite. The terms of the agreement provide for a monthly retainer of $6,000 for the first six months of services, which shall increase to $10,000 per month in months 7-12; and 300,000 shares of the Company’s common stock, subject to SEC Rule 144 restrictions, which shall be earned and issued quarterly as follows: 37,500 shares on January 3, 2014; 37,500 shares on April 3, 2014; 37,500 shares on July 3, 2014; and 187,500 shares on October 3, 2014.

As the Company’s investor and public relations counsel of record, Hanover|Elite will collaborate with management on developing, implementing and supporting a fully integrated corporate and shareholder communications platform; and generating meaningful awareness among and measurable support from the retail and institutional investment banking community for the Company, its compelling business plan and promising future growth potential. Jim Hock, Co-Managing Partner of Hanover|Elite and Co-Chairman of the National Investment Banking Association, will lead the IR/PR effort for the Company.

The Company has other consulting agreements with outside contractors, certain of whom are also Company stockholders. The Agreements are generally expire one year or less.

Litigation

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. 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. We are not aware of any such legal proceedings that we believe will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.

F-25

NOTE 17 – (LOSS) INCOME PER SHARE

The following table presents the computation of basic and diluted loss per share:

	2013			2012
Net loss available for common shareholders	$	(4,704,303	)	$	(873,363	)
Basic net loss per share	$	(0.35	)	$	(0.07	)
Weighted average common shares outstanding-basic		13,529,294			12,644,784
Diluted net loss share	$	(0.35	)		(0.07	)
Weighted average common shares outstanding-Diluted		13,529,294			12,644,784

During the year ended December 31, 2013 and 2012, common stock equivalents are not considered in the calculation of the weighted average number of common shares outstanding because they would be anti-dilutive, thereby decreasing the net loss per common share.

NOTE 18 - INCOME TAXES

The Company has adopted Accounting Standards Codification subtopic 740-10, Income Taxes (“ASC 740-10”) which requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the financial statement or tax returns. Under this method, deferred tax liabilities and assets are determined based on the difference between financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Temporary differences primarily include stock compensation and other equity-related non-cash charges, capitalized financing costs, the basis difference of derivative liabilities and certain accruals.

Due to the reverse acquisition of First Choice Healthcare Solutions, Inc. by FCID Holdings, Inc. on December 29, 2010, the net operating loss carry forwards of First Choice Healthcare Solutions, Inc. incurred prior to that date may not be useable for income tax purposes. As through September 30, 2010 FCID Holdings, Inc. was inactive, and FCID Holdings, Inc.’s active subsidiary is a limited liability company and through September 30, 2010 passed no income through to FCID Holdings, Inc. for federal and state income tax purposes, FCID Holdings, Inc. through September 30, 2010 incurred no income tax at the corporate level.

At December 31, 2013, the Company has available for federal income tax purposes a net operating loss carry forward of approximately $1,400,000 that may be used to offset future taxable income. Components of deferred tax assets as of December 31, 2013 are comprised primarily of stock based compensation and debt discounts in connection with convertible notes.  No income taxes were recorded on the earnings in 2013 and 2012 as a result of the utilization of any carry forwards.

Deferred net tax assets consist of the following at December 31, 2013 and 2012:

	2013			2012
Deferred tax asset	$	490,000		$	-
Less valuation allowance		(490,000	)		(-	)
Net deferred tax asset	$	0		$	0

The provision for income taxes consists of the following:

	2013		2012
Current tax (benefit)	$	-	$	-
Adjustment for prior year accrual		-		(23,103	)
Net provision (benefit)	$	-	$	(23,103	)

F-26

The provision for Federal taxes differs from that computed by applying Federal statutory rates to the loss before any Federal income tax (benefit), as indicated in the following:

	2013			2012
Federal statutory rate		35.0	%		35.0	%
State income taxes net of Federal benefit		-			-
		35.0	%		35.0	%

The Company files income tax returns in the U.S. Federal jurisdiction, and various state jurisdictions. The Company is no longer subject to U.S. Federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2010.

The Company follows the provision of uncertain tax positions as addressed in FASB Accounting Standards Codification 740-10-65-1. The Company recognized no increase in the liability for unrecognized tax benefits. The Company has no tax position for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax benefits in interest expense and penalties in operating expenses. No such interest or penalties were recognized during the periods presented. The Company had no accruals for interest and penalties at December 31, 2013 and 2012.

NOTE 19 - SUBSEQUENT EVENTS

Employment Agreement with Christian Romandetti

The Company entered a formal five-year employment agreement (the “Employment Agreement”) with Christian Romandetti, dated March 20, 2014 and effective January 1, 2014, to serve as the Company’s President and Chief Executive Officer. Pursuant to the terms and conditions set forth in the Employment Agreement, Mr. Romandetti is entitled to receive an annual base salary of $250,000, which shall increase no less than 5% per annum for the term of the Employment Agreement.

Mr. Romandetti, upon successfully achieving annual revenue milestones, is entitled to receive a bonus equal to 10% of his salary when $7.1 million in total annual revenue is reported in a fiscal year scaling up to a bonus equal to 800% of his salary if and when $100 million in total annual revenue is reported in a fiscal year. If the Company is unable to pay any portion of the bonus compensation when due because of insufficient liquidity or applicable restrictions under prevailing debt financing agreements, then, as an accommodation to the Company, Mr. Romandetti shall be able to convert bonus compensation into shares of the Company’s common stock at a 30% discount to the average closing price during the first calendar month after the end of the fiscal year. Mr. Romandetti will also be entitled to receive a strategic bonus of $100,000, payable in cash, on the sixth month anniversary of opening each new Medical Center of Excellence.

F-27

Pursuant to the Company achieving specific financial performance benchmarks established by the Board of Directors, Mr. Romandetti will also be entitled to receive a cashless option to purchase up to 1 million shares of common stock per year. The exercise price of the options will be the fair market value of the average closing price of the stock during the first calendar month after the end of the fiscal year. Mr. Romandetti shall have up to five years from the date of the annual option grant to exercise the option. In addition to the above compensation consideration, Mr. Romandetti will be entitled to receive annual restricted stock compensation equal to 100% of the total base salary and bonus compensation. The fair market value of the restricted stock grant shall be determined using the average closing price of the common stock during the first calendar month after the end of the fiscal year.

In addition, Mr. Romandetti’s Employment Agreement provides that, upon Mr. Romandetti’s death, disability, termination for any reason other than “Cause” (as such term is defined in the Employment Agreement) or resignation for “Good Reason” (as such term is defined in the Employment Agreement), the Company will pay to Mr. Romandetti twelve months of his annual base salary at the time of separation in accordance with the Corporation’s usual payroll practices.

F-28

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2014			2013
	(unaudited)
ASSETS
Current assets
Cash	$	310,617		$	739,158
Cash-restricted		303,772			256,246
Accounts receivable		1,747,000			1,272,155
Prepaid and other current assets		153,159			140,580
Capitalized financing costs, current portion		57,348			57,348
Total current assets		2,571,896			2,465,487
Property, plant and equipment, net of accumulated depreciation of $2,084,066 and $1,959,127, respectively		8,548,115			8,662,057
Other assets
Capitalized financing costs, long term portion		110,855			131,540
Patient list, net of accumulated amortization of $40,000 and $35,000, respectively		260,000			265,000
Patents		286,500			286,500
Deposits		2,713			2,713
Total other assets		660,068			685,753
Total assets	$	11,780,079		$	11,813,297
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	536,038		$	459,000
Stock based payable		144,100			166,340
Line of credit, short term		900,000			800,000
Convertible note payable, short term portion		598,666			-
Notes payable, current portion		782,978			743,787
Unearned revenue		49,754			74,934
Total current liabilities		3,011,536			2,244,061
Long term debt:
Deposits held		72,901			72,901
Convertible note payable, long term portion		1,795,998			2,347,403
Notes payable, long term portion		8,699,044			8,935,473
Total long term debt		10,567,943			11,355,777
Total liabilities		13,579,479			13,599,838
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, 16,793,248 and 16,747,248 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively		16,793			16,747
Additional paid in capital		11,582,443			11,560,249
Accumulated deficit		(13,398,636	)		(13,363,537	)
Total stockholders' deficit		(1,799,400	)		(1,786,541	)
Total liabilities and stockholders' deficit	$	11,780,079		$	11,813,297

See the accompanying notes to these unaudited condensed consolidated financial statements

F-29

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three Months Ended March 31,
	2014			2013
Revenues:
Patient service revenue	$	2,010,974		$	1,135,012
Provision for bad debts		(38,144	)		-
Net patient service revenue		1,972,830			1,135,012
Rental revenue		261,923			266,669
Total revenue		2,234,753			1,401,681
Operating expenses:
Salaries & benefits		1,065,521			622,759
Other operating expenses		429,291			304,475
General & administrative		405,912			253,019
Depreciation and amortization		134,719			122,620
Total operating expenses		2,035,443			1,302,873
Net income from operations		199,310			98,808
Other income (expense):
Miscellaneous income		750			750
Loss on change in fair value of derivative liability		-			(40,649	)
Amortization financing costs		(15,906	)		(14,337	)
Interest expense, net		(219,253	)		(299,641	)
Total other income (expense)		(234,409	)		(353,877	)
Net loss before provision for income taxes		(35,099	)		(255,069	)
Income taxes (benefit)		-			-
NET LOSS	$	(35,099	)	$	(255,069	)
Net loss per common share, basic and diluted	$	(0.00	)	$	(0.02	)
Weighted average number of common shares outstanding, basic and diluted		16,756,648			12,751,906

See the accompanying notes to these unaudited condensed consolidated financial statements

F-30

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

condensed Consolidated STATEMENT OF STOCKHOLDERS' DEFICIT

THREE MONTHS ENDED MARCH 31, 2014

(unaudited)

									Additional
	Preferred stock				Common stock				Paid in			Accumulated
	Shares		Amount		Shares		Amount		Capital			Deficit			Total
Balance, January 1, 2014		-	$	-		16,747,248	$	16,747	$	11,560,249		$	(13,363,537	)	$	(1,786,541	)
Common stock issued for services rendered in prior period		-		-		16,000		16		22,224			-			22,240
Common stock issued in connection 2013 loan acquisition		-		-		30,000		30		(30	)		-			-
Net loss		-		-		-		-		-			(35,099	)		(35,099	)
Balance, March 31, 2014		-	$	-		16,793,248	$	16,793	$	11,582,443		$	(13,398,636	)	$	(1,799,400	)

See the accompanying notes to these unaudited condensed consolidated financial statements

F-31

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Three Months Ended March 31,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$	(35,099	)	$	(255,069	)
Adjustments to reconcile net loss to cash (used in) provided by operating activities:
Depreciation		129,940			122,620
Amortization of financing costs		20,685			14,337
Amortization of debt discount in connection with convertible note		-			69,553
Bad debt expense		38,144			-
Stock based compensation		-			60,000
Loss on change in fair value of debt derivative		-			40,649
Changes in operating assets and liabilities:
Accounts receivable		(512,989	)		(131,581	)
Prepaid expenses and other		(12,579	)		13,066
Restricted funds		(47,526	)		(55,838	)
Accounts payable and accrued expenses		124,299			130,161
Unearned income		(25,180	)		(81	)
Deferred income taxes		-			-
Net cash (used in) provided by operating activities		(320,305	)		7,817
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		(10,998	)		(2,103	)
Net cash used in investing activities		(10,998	)		(2,103	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from related party line of credit		-			36,206
Proceeds from convertible note payable		-			103,500
Proceeds from lines of credit		100,000			-
Net payments on notes payable		(197,238	)		(99,456	)
Net cash (used in) provided by financing activities		(97,238	)		40,250
Net (decrease) increase in cash and cash equivalents		(428,541	)		45,964
Cash and cash equivalents, beginning of period		739,158			67,045
Cash and cash equivalents, end of period	$	310,617		$	113,009
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	219,253		$	175,297
Cash paid during the period for taxes	$	-		$	-
Supplemental disclosure on non-cash investing and financing activities:
Common stock issued in settlement of accrued expenses	$	22,240		$	-

See the accompanying notes to these unaudited condensed consolidated financial statements

F-32

NOTE 1 — SIGNIFICANT ACCOUNTING POLICIES; BASIS OF PRESENTATION

A summary of the significant accounting policies applied in the presentation of the accompanying unaudited condensed consolidated financial statements follows:

General

The (a) condensed consolidated balance sheet as of December 31, 2013, which has been derived from the audited financial statements of First Choice Healthcare Solutions, Inc. (“FCHS” and including, where appropriate, its consolidated subsidiaries, the “Company”), and (b) the unaudited condensed consolidated interim financial statements as of March 31, 2014 of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and the instructions to Form 10-Q and Rule 8-03 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2014 are not necessarily indicative of results that may be expected for the year ending December 31, 2014. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2013 included in the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2014.

Basis of Presentation

Effective April 4, 2012, Medical Billing Assistance, Inc., a Colorado corporation (“Medical Billing”), merged with and into the Company. The effect of the merger was that Medical Billing reincorporated from Colorado to Delaware (the “Reincorporation”). The Company is deemed to be the successor issuer of Medical Billing under Rule 12g-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

As a result of the Reincorporation, the Company changed its name to First Choice Healthcare Solutions, Inc. and its shares underwent an effective four-for-one reverse split.  Other than the foregoing, the Reincorporation did not result in any change in the business, management, fiscal year, accounting, and location of the principal executive offices, assets or liabilities of the Company.

On April 2, 2012, the Company completed its acquisition of First Choice Medical Group of Brevard, LLC (“First Choice – Brevard”), pursuant to the Membership Interest Purchase Closing Agreement (the “Purchase Agreement”). The Company has been managing the practice of First Choice – Brevard since November 1, 2011, pursuant to a Management Services Agreement.

The unaudited condensed consolidated financial statements include the accounts of the Company and its direct and indirect wholly owned subsidiaries FCID Holdings, Inc., MTMC of Melbourne, Inc., Marina Towers, LLC, FCID Medical Inc. and First Choice - Brevard. All significant intercompany balances and transactions have been eliminated in consolidation.

F-33

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures.  Accordingly, actual results could differ from those estimates.

Revenue Recognition

The Company recognizes revenue in accordance with Accounting Standards Codification subtopic 605-10, “Revenue Recognition” (“ASC 605-10”) which requires that four basic criteria be met before revenue can be recognized: (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.

ASC 605-10 incorporates Accounting Standards Codification subtopic 605-25, “Multiple-Element Arraignments” (“ASC 605-25”). ASC 605-25 addresses accounting for arrangements that may involve the delivery or performance of multiple products, services and/or rights to use assets. The effect of implementing ASC 605-25 on the Company's financial position and results of operations was not significant.

Patient Service Revenue

The Company recognizes patient service revenue associated with services provided to patients who have third-party payer coverage on the basis of contractual rates for the services provided. For uninsured or self-pay patients that do not qualify for charity care, the Company recognizes revenue on the basis of its standard rates for services provided (or on the basis of discounted rates, if negotiated or provided by policy). On the basis of historical experience, a portion of the Company’s patient service revenue may be potentially uncollectible due to patients who are unable or unwilling to pay for the services provided or the portion of their bill for which they are responsible. Thus, the Company records a provision for bad debts related to potentially uncollectible patient service revenue in the period the services are provided.

Rental Revenue

FCID Holdings, Inc. has one real estate holding, Marina Towers, LLC, a 78,000 square foot, Class A, six-story building located on the Indian River in Melbourne, Florida. In addition to housing our corporate headquarters and First Choice-Brevard, the building, which averages 95% annual occupancy, also leases approximately 63,200 square feet of commercial office space to third party tenants. The Company recognizes rental revenue associated with the period of time facility is leased at the contractual lease rates (or on the basis of discounted rates, if negotiated).

F-34

Cash and Cash Equivalents

The Company considers cash and cash equivalents to consist of cash on hand and investments having an original maturity of 90 days or less that are readily convertible into cash. As of March 31, 2014, the Company had $310,617 in cash.

Concentrations of Credit Risk

The Company’s financial instruments that are exposed to a concentration of credit risk are cash and accounts receivable.   Generally, 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.

Accounts Receivable

Accounts receivables are carried at their estimated collectible amounts net of doubtful accounts. The Company analyzes its past 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 allowance for doubtful accounts.

· Rental receivables. Accounts receivables from rental activities are periodically evaluated for collectability in determining the appropriate allowance for doubtful account provision for bad debts and provision of bad debts.

· Patient receivables.  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.

As of March 31, 2014 and December 31, 2013, the Company’s provision for bad debts was $399,428 and $361,284.

Patents

Intangible assets with finite lives are amortized over their estimated useful lives. Intangible assets with indefinite lives are not amortized, but are tested for impairment annually. The Company’s intangible assets with finite lives are patent costs, which are amortized over their economic or legal life, whichever is shorter. These patent costs were acquired on September 7, 2013 by the issuance of 636,666 shares of the Company’s common stock to a related party. The shares of common stock were valued at $286,500, which was estimated to be approximately the fair value of the patent acquired and did not materially differ from the fair value of the common stock.

Property and Equipment

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 five to 39 years.

F-35

Capitalized Financing Costs

Capitalized financing costs represent costs incurred in connection with obtaining the debt financing.  These costs are amortized ratably and charged to financing expenses over the term of the related debt. The amortization for the three months ended March 31, 2014 and 2013 was $20,685 and $14,337, respectively.  Accumulated amortization of deferred financing costs was $169,312 and $133,812 at March 31, 2014 and December 31, 2013, respectively.

Segment Information

Accounting Standards Codification subtopic “Segment Reporting” 280-10 (“ASC 280-10”) establishes standards for reporting information regarding operating segments in annual financial statements and requires selected information for those segments to be presented in interim financial reports issued to stockholders. ASC 280-10 also establishes standards for related disclosures about products and services and geographic areas. Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions how to allocate resources and assess performance. The information disclosed herein represents all of the material financial information related to the Company’s two principal operating segments (see Note 10 – Segment Information).

Income Taxes

The Company follows Accounting Standards Codification subtopic 740-10, “Income Taxes” (“ASC 740-10”) for recording the provision for income taxes. Deferred tax assets and liabilities are computed based upon the difference between the financial statement and income tax basis of assets and liabilities using the enacted marginal tax rate applicable when the related asset or liability is expected to be realized or settled. Deferred income tax expenses or benefits are based on the changes in the asset or liability during each period. If available evidence suggests that it is more likely than not that some portion or all of the deferred tax assets will not be realized, a valuation allowance is required to reduce the deferred tax assets to the amount that is more likely than not to be realized. Future changes in such valuation allowance are included in the provision for deferred income taxes in the period of change. Deferred income taxes may arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse and are considered immaterial.

Net Loss Per Share

The Company accounts for net loss per share in accordance with Accounting Standards Codification subtopic 260-10, “Earnings Per Share” (“ASC 260-10”), which requires presentation of basic and diluted earnings per share (“EPS”) on the face of the statement of operations for all entities with complex capital structures and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS.

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during each period.  It excludes the dilutive effects of potentially issuable shares of common stock such as those related to the Company’s issued convertible debt, warrants and stock options (calculated using the treasury stock method).   Fully diluted weighted average shares outstanding were 22,671,312 and 13,087,425 for the three months ended March 31, 2014 and 2013, respectively.

F-36

Stock-Based Compensation

Share-based compensation issued to employees is measured at the grant date, based on the fair value of the award, and is recognized as an expense over the requisite service period.  The Company measures the fair value of the share-based compensation issued to non-employees using the stock price observed in the arms-length private placement transaction nearest the measurement date (for stock transactions) or the fair value of the award (for non-stock transactions), which were considered to be more reliably determinable measures of fair value than the value of the services being rendered. The measurement date is the earlier of (1) the date at which commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. As of March 31, 2014, the Company had no non-employee options outstanding to purchase shares of common stock.

Fair Value

Accounting Standards Codification subtopic 825-10, “Financial Instruments” (“ASC 825-10”) requires disclosure of the fair value of certain financial instruments. The carrying value of cash and cash equivalents, accounts payable and accrued liabilities, and short-term borrowings, as reflected in the balance sheets, approximate fair value because of the short-term maturity of these instruments. All other significant financial assets, financial liabilities and equity instruments of the Company are either recognized or disclosed in the financial statements together with other information relevant for making a reasonable assessment of future cash flows, interest rate risk and credit risk. Where practicable the fair values of financial assets and financial liabilities have been determined and disclosed; otherwise only available information pertinent to fair value has been disclosed.

The Company follows Accounting Standards Codification subtopic 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”) and Accounting Standards Codification subtopic 825-10, Financial Instruments (“ASC 825-10”), which permits entities to choose to measure many financial instruments and certain other items at fair value. Neither of these statements had an impact on the Company’s financial position, results of operations nor cash flows.

Recent Accounting Pronouncements

There were various updates recently issued, most of which represented technical corrections to the accounting literature or application to specific industries and are not expected to a have a material impact on the Company’s condensed consolidated financial position, results of operations or cash flows.

NOTE 2 – LIQUIDITY

The Company incurred various non-recurring expenses in 2013 in connection with development of its medical practice.  Management believes the positive year-end earnings before interest, taxes, depreciation and amortization and the continuing trend of positive growth before interest, taxes, depreciation and amortization through March 31, 2014 will support improved liquidity. In the fourth quarter of 2013, the Company paid off or converted to equity a total of $1,238,480 in outstanding debt. Currently, the Company has two main sources of liquidity, its line of credit with CT Capital, LP and revenue received from its real estate interest, FCID Holdings, Inc.

On June 13, 2013, the Company’s subsidiary, First Choice – Brevard entered into a loan and security agreement with CT Capital, Ltd., d/b/a CT Capital, LP, a Florida limited liability partnership for an accounts receivable line of credit in the maximum aggregate amount of $1,500,000. Under the line of credit with CT Capital, the Company reduced the annual interest rate from 12% per annum to 6% per annum in exchange for the issuance to CT Capital of 100,000 restricted shares of the Company’s common stock. As of March 31, 2014, the Company has used $900,000 of the amount available under the line of credit.

The Company’s wholly owned subsidiary, FCID Holdings, Inc. (“FCID Holdings”) operates its real estate interests. Currently, FCID Holdings has one real estate holding, Marina Towers, LLC, a 78,000 square foot, Class A, six-story building located on the Indian River in Melbourne, Florida. In addition to housing the Company’s corporate headquarters and First Choice – Brevard, the building, which averages 95% annual occupancy, also leases approximately 63,200 square feet of commercial office space to tenants.

The Company believes that ongoing operations of Marina Towers, LLC and the current strong, positive cash balance along with continued execution of its business development plan will allow the Company to further improve its working capital and currently anticipates that it will have sufficient capital resources to meet projected cash flow requirements through April 2015.  However, in order to execute the Company’s business development plan, which there can be no assurance it will do, 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.

F-37

NOTE 3 — CASH - RESTRICTED

Cash-restricted is comprised of funds deposited to and held by the mortgage lender for payments of property taxes, insurance, replacements and major repairs of the Company's commercial building. The majority of the restricted funds are reserved for tenant improvements.

NOTE 4 — PROPERTY, PLANT, AND EQUIPMENT

Property, plant and equipment at March 31, 2014 and December 31, 2013 are as follows:

	March 31, 2014			December 31, 2013
Land	$	1,000,000		$	1,000,000
Building		3,055,168			3,055,168
Building improvements		3,964,282			3,953,846
Automobiles		29,849			29,849
Computer equipment		214,519			210,698
Medical equipment		2,238,639			2,238,639
Office equipment		129,724			132,984
		10,632,181			10,621,184
Less: accumulated depreciation		(2,084,066	)		(1,959,127	)
	$	8,548,115		$	8,662,057

During the three months ended March 31, 2014 and 2013, depreciation expense charged to operations was $129,940 and $117,620, respectively.

NOTE 5 — LINE OF CREDIT

Line of Credit, CT Capital

On June 13, 2013, the Company’s subsidiary, First Choice – Brevard entered into a loan and security agreement (the “Loan Agreement”) with CT Capital, Ltd., d/b/a CT Capital, LP, a Florida limited liability partnership (the “Lender”). Under the Loan Agreement, the Lender committed to make an accounts receivable line of credit in the maximum aggregate amount of $1,500,000 to First Choice - Brevard with an interest rate of 12% per annum (the “Loan”). The maturity date of the Loan is December 31, 2016. Interest is due and payable monthly. Upon default, the interest may be adjusted to the highest rate permissible by law. The Loan is secured by the accounts receivable and assets of the Company’s subsidiary, First Choice – Brevard, which constitute the collateral for the repayment of the Loan. The Loan Agreement also includes covenants, representations, warranties, indemnities and events of default that are customary for facilities of this type. The advance rate is defined as: 80% of all receivables to be 120 days or less at the net collection rate of approximately 27% of total billings, excluding patient billings and collections. Additionally, allowable accounts receivable will also include 50% of all accounts receivable protected by legal letters of protection.  At any time, the Lender may convert all or any portion of the outstanding principal amount or interest on the Loan into common stock of the Company at a conversion price of $0.75 per share. The Company did not record an embedded beneficial conversion feature in the note since the fair value of the common stock did not exceed the conversion rate at the date of commitment.

F-38

On November 8, 2013, in consideration for the issuance of 100,000 restricted shares of the Company’s common stock, the Lender agreed to modify its Loan. Under the Loan Agreement, as amended, the annual rate of interest of the Loan was reduced from 12% per annum to 6% per annum and will remain at 6% until November 1, 2015. All other terms under the Loan Agreement remain the same.

The obligations of the Company under the Loan Agreement, as amended, are guaranteed by certain affiliates of the Company, including a personal guarantee issued by the Company’s Chief Executive Officer.

NOTE 6 — CONVERTIBLE NOTE PAYABLE

On November 8, 2013, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with Hillair Capital Investments L.P. ("Hillair") in exchange for the issuance of (i) a $2,320,000, 8% original issue discount convertible debenture, which was originally due on December 28, 2013 and subsequently extended on December 28, 2013 through November 1, 2015 (the “Debenture”), and (ii) a common stock purchase warrant (the “Warrant”) to purchase up to 2,320,000 shares of the Company’s common stock at an exercise price of $1.35 per share, which may be exercised on a cashless basis, until November 8, 2018. The Debenture and the Warrant may not be converted if such conversion would result in Hillair beneficially owning in excess of 4.99% of the Company’s common stock. Hillair may waive this 4.99% restriction with 61 days’ notice to the Company.

The Company issued to Hillair the Debenture with the Warrant for the net purchase price of $2,000,000 (reflecting the $320,000 original issue discount of the Debenture). Until the Debenture is no longer outstanding, the Debenture is convertible, in whole or in part at the option of Hillair, into shares of common stock, subject to certain conversion limitations set forth above. The Company, however, has reserved the right to pay the Debenture in cash. The conversion price for the Debenture is $1.00 per share, subject to adjustment for stock splits, stock dividends, sales of securities for less than $1.00 per share or other distributions by the Company. As a result of the Company achieving certain milestones set forth in the Securities Purchase Agreement, however, the conversion price of the Debenture will not be reduced to less than $1.00 per share as a result of any subsequent sales of securities for less than $1.00 per share of common stock.

The Company will be obligated to redeem $580,000 of principal on February 1, 2015, May 1, 2015, August 1, 2015 and November 1, 2015, plus accrued but unpaid interest and any other amounts that may be owed to the holder of the Debenture on those dates. Interest on the Debenture accrues at the rate of 8% annually and is payable quarterly on August 1, November 1, February 1, and May 1, beginning on August 1, 2014. Interest is payable in cash or at the Company’s option in shares of the Company’s common stock; provided certain conditions are met.

On or after May 8, 2014, the Company may elect to prepay any portion of the principal amount of the Debenture, subject to providing advance notice to the holder of the Debenture, at 120% of the then outstanding principal amount of the Debenture, plus accrued but unpaid interest and any other amounts then owed to the holder of the Debenture as further set forth therein, subject to certain conditions set forth in the Debenture. On May 8, 2014, Hillair elected to convert the aggregate amount of $104,000 of its Debenture, representing $100,000 of principal and $4,000 of interest, into 104,000 shares of the Company’s common stock.

To secure the Company’s obligations under the Debenture, the Company granted Hillair a security interest in certain of its and its subsidiaries’ assets in the Company as described in the Securities Purchase Agreement. In addition, certain of the Company’s subsidiaries agreed to guarantee the Company’s obligations pursuant to the guaranty agreements.

F-39

In connection with the issuance of the Debenture, the Company issued the Warrant, granting the holder the right to acquire an aggregate of 2,320,000 shares of the Company’s common stock at $1.35 per share. In accordance with ASC 470-20, the Company recognized the value attributable to the Warrant and the conversion feature of the Debenture in the amount of $1,871,117 to additional paid-in capital and a discount against the notes. The Company valued the warrants in accordance with ASC 470-20 using the Black-Scholes pricing model and the following assumptions: contractual terms of 3.6 years, an average risk free interest rate of 1.42%, a dividend yield of 0%, and volatility of 147.94%.

NOTE 7 — NOTES PAYABLE

Notes payable as of March 31, 2014 and December 31, 2013 are comprised of the following:

	March 31, 2014			December 31, 2013
Mortgage payable	$	7,328,175		$	7,353,398
Note payable, GE Capital (construction), MRI		167,468			278,287
Note payable, GE Capital (construction), 2		87,332			100,977
Note Payable, GE Capital (MRI)		1,560,739			1,592,278
Note Payable, GE Capital (X-ray)		177,265			184,001
Note Payable, GE Arm		109,090			114,597
Note payable, Auto		20,317			22,211
Capital lease, Equipment		31,636			33,511
		9,482,022			9,679,260
Less: current portion		(782,978	)		(743,787	)
	$	8,699,044		$	8,935,473

Mortgage Payable

On August 12, 2011, the Company refinanced its existing mortgage note payable as described below providing additional working capital funds. The aggregate amount of the note of $7,550,000 bears 6.10% interest per annum with monthly payments of $45,752.61 beginning in October 2011 based on a 30 year amortization schedule with all remaining principal and interest due in full on September 16, 2016.  The note is secured by land and the building along with first priority assignment of leases and rents.  Tenant rents are mailed to a lockbox operated by the mortgage service company.  In addition, the Company's Chief Executive Officer provided a limited personal guaranty.

In connection with the refinancing of the mortgage note payable, the Company incurred financing costs of $286,723.  The capitalized financing costs are amortized ratably over the term of the mortgage note payable.

Note Payable – Equipment Financing

On May 21, 2012, the Company entered into a note payable with GE Healthcare Financial Services (“GE Capital”) in the amount of approximately $2.4 million for equipment financing.

F-40

The Company also currently has two construction loans outstanding. As of December 2012, the construction loans are payable in 35 monthly payments (first three payments are $nil) including interest at 7.38%. On May 29, 2012, the Company drew down a total of $450,000 against the first construction loan. On September 24, 2012, the Company drew down a total of $150,000 against the second construction loan.

The Company entered into equipment finance leases for a total aggregate amount of $2,288,679, subject to delivery and acceptance of the underlying equipment. All notes and finance leases have been personally guaranteed by the Company's Chief Executive Officer.

On August 22, 2012, the Company accepted the delivery of X-ray equipment under the equipment finance lease. As such, the component piece accepted of $212,389 is due over 60 months and the associated monthly payment is $0 for the first three months and $4,300 per month for the remaining 57 months including interest at 7.9375% per annum. On March 8, 2013, the Company amended the equipment finance lease to interest only payments of $1,384 for the first three months and $4,575 per month for the remaining monthly payments.

On September 27, 2012, the Company accepted the delivery of MRI equipment under the equipment finance lease. As such, the component piece accepted of $1,771,390 is due over 60 months and the associated monthly payment is $0 for the first three months and $38,152 per month for the remaining 57 months including interest at 7.9375% per annum. On March 8, 2013, the Company amended the equipment finance lease to interest only payments of $11,779 for the first three months and $38,152 per month for the remaining monthly payments.

On February 25, 2013, the Company accepted the delivery of C-arm equipment under the equipment finance lease. As such, the component piece accepted of $117,322 is due over 63 months and the associated monthly payment is $0 for the first three months and $2,388 for the remaining 60 months, including interest at 7.39% per annum.

Note Payable – Auto

On May 21, 2012, the Company issued a note payable, in the amount of $29,850, due in monthly installments of $593 including interest of 6.99%. The note is set to mature in June 2017, and is secured by related equipment. The outstanding balance on the note payable as of March 31, 2014 was $20,317.

Capital Lease – Equipment

On June 11, 2013, the Company entered into a lease agreement to acquire equipment with 48 monthly payments of $956.45 payable through June 1, 2017 with an effective interest rate of 14.002% per annum. The Company may elect to acquire the leased equipment at a nominal amount at the end of the lease.

Aggregate maturities of long-term debt as of March 31:

	Amount
Nine months ended December 31, 2014	$	546,549
Year ended December 31, 2015		715,085
Year ended December 31, 2016		7,632,286
Year ended December 31, 2017		523,608
Year ended December 31, 2018 and thereafter		64,494
Total	$	9,482,022

F-41

NOTE 8 — CAPITAL STOCK

During the three months ended March 31, 2014, the Company issued an aggregate of 16,000 shares of its common stock in settlement of accrued expenses.

During the three months ended March 31, 2014, the Company issued an aggregate of 30,000 shares of its common stock in settlement of placement services relating to the Debenture issued to Hillair, a financing which occurred in the fourth quarter of 2013.

NOTE 9 — STOCK OPTIONS AND WARRANTS

Warrants

The following table summarizes the warrants outstanding and the related exercise prices for the underlying shares of the Company's common stock as of March 31, 2014:

		Warrants Outstanding					Warrants Exercisable
					Weighted				Weighted
Price		Outstanding		Expiration Date	Price		Exercisable		Price
$	1.35		2,320,000	November 8, 2018	$	1.35		2,320,000	$	1.35
	3.60		1,875,000	December 31, 2016		3.60		1,875,000		3.60
			4,195,000		$	2.36		4,195,000	$	2.36

Transactions involving stock warrants issued to non-employees are summarized as follows:

	Number of Shares		Weighted Average Price Per Share
Outstanding at December 31, 2012:		1,875,000	$	3.60
Granted		2,320,000		1.35
Exercised		-		-
Expired		-		-
Outstanding at December 31, 2013:		4,195,000		2.36
Granted		-		-
Exercised		-		-
Expired		-		-
Outstanding at March 31, 2014:		4,195,000	$	2.36

As of March 31, 2014, the Company had no outstanding options.

F-42

NOTE 10 — SEGMENT REPORTING

The Company reports segment information based on the “management” approach. The management approach designates the internal reporting used by management for making decisions and assessing performance as the source of the Company’s reportable segments. The Company has two reportable segments: real estate and healthcare services.

The real estate segment derives revenue from the operating leases of its owned building, whereas the healthcare services segment derives revenue for medical services provided to patients.

Information concerning the operations of the Company's reportable segments is as follows:

Summary Statement of Operations for the three months ended March 31, 2014:

	Real			Healthcare						Intercompany
	Estate			Services			Corporate			Eliminations			Total
Revenue:
Net Patient Service Revenue	$	-		$	1,972,830		$	-		$	-		$	1,972,830
Rental revenue		369,511			-			-			(107,588	)		261,923
Total Revenue		369,511			1,972,830			-			(107,588	)		2,234,753
Operating expenses:
Salaries & benefits		3,000			979,883			82,638			-			1,065,521
Other operating expenses		103,612			433,267			-			(107,588	)		429,291
General and administrative		21,819			236,252			147,841			-			405,912
Depreciation and amortization		69,009			65,710			-			-			134,719
Total operating expenses		197,440			1,715,112			230,479			(107,588	)		2,035,443
Net income (loss) from operations:		172,071			257,718			(230,479	)		-			199,310
Interest expense		(112,024	)		(59,337	)		(47,892	)		-			(219,253	)
Amortization of financing costs		(14,337	)		(1,569	)		-			-			(15,906	)
Other income (expense)		750			-			-			-			750
Net Income (loss):		46,460			196,812			(278,371	)		-			(35,099	)
Income taxes		-			-			-			-			-
Net income (loss)	$	46,460		$	196,812		$	(278,371	)	$	-		$	(35,099	)

F-43

Summary Statement of Operations for the three months ended March 31, 2013:

	Real			Healthcare						Intercompany
	Estate			Services			Corporate			Eliminations			Total
Revenue:
Net Patient Service Revenue	$	-		$	1,135,012		$	-		$	-		$	1,135,012
Rental revenue		371,664			-			-			(104,995	)		266,669
Total Revenue		371,664			1,135,012			-			(104,995	)		1,401,681
Operating expenses:
Salaries & benefits		3,000			473,646			146,113			-			622,759
Other operating expenses		100,936			314,833			-			(111,294	)		304,475
General and administrative		19,228			132,217			101,574			-			253,019
Depreciation and amortization		40,731			81,889			-			-			122,620
Total operating expenses		163,895			1,002,585			247,687			(111,294	)		1,302,873
Net income (loss) from operations:		207,769			132,427			(247,687	)		6,299			98,808
Interest expense		(113,390	)		(57,998	)		(128,253	)		-			(299,641	)
Amortization of financing costs		(14,337	)		-			-			-			(14,337	)
Loss on change in derivative liability		-			-			(40,649	)		-			(40,649	)
Other income (expense)		750			-			-			-			750
Net Income (loss):		80,792			74,429			(416,589	)		6,299			(255,069	)
Income taxes		-			-			-			-			-
Net income (loss)	$	80,792		$	74,429		$	(416,589	)	$	6,299		$	(255,069	)

Assets:

	Real		Healthcare				Intercompany
	Estate		Services		Corporate		Eliminations		Total
Assets:
At March 31, 2014:	$	6,790,803	$	4,623,411	$	326,645	$	-	$	11,740,859
At December 31, 2013:	$	6,873,839	$	4,178,091	$	761,367	$	-	$	11,813,297
Assets acquired
Three month ended March 31, 2014:	$	10,439	$	559	$	-	$	-	$	10,998
Three months ended March 31, 2013:	$	-	$	2,103	$	-	$	-	$	2,103

NOTE 11 - SUBSEQUENT EVENTS

Hillair Waiver

As discussed in Note 6, on November 8, 2013, the Company entered into a Securities Purchase Agreement with Hillair and it contained certain terms and conditions regarding Hillair’s right to participate in the Company’s future financings. On April 30, 2014, Hillair agreed to waive its right to participate in the Company’s future financings for a certain time period and under certain circumstances, as disclosed in the Company’s Registration Statement on Form S-1, filed with the Securities and Exchange Commission on May 1, 2014.

Hillair Conversion

On May 8, 2014, Hillair elected to convert the aggregate amount of $104,000 of its Debenture, representing $100,000 of principal and $4,000 of interest, into 104,000 shares of the Company’s common stock.

Issuances to Employees and Service Providers

In April 2014, the Company issued an aggregate of 184,000 shares of its common stock to certain employees and service providers. The total costs associated with these issuances was $144,100 and such costs were expensed in fiscal 2013.

F-44

First Choice Healthcare Solutions, Inc.

[*] Units

Each Unit Consisting of Two Shares of Common Stock
and
One Warrant to Purchase One Share of Common Stock

PROSPECTUS

Laidlaw & Company (U.K.) Ltd.

_____________________, 2014

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the various expenses to be incurred in connection with the registration of the securities being registered hereby, all of which will be borne by the registrant. All amounts shown are estimates except the SEC registration fee, the FINRA filing fee and the NYSE MKT listing fee.

SEC registration fee	$	2,130
FINRA filing fee	$	2,981
NYSE MKT listing fee	$	50,000
Legal fees and expenses	$	*
Accounting fees and expenses	$	*
Transfer agent fees and expenses	$	*
Printing and engraving expenses	$	*
Miscellaneous expenses	$	*
Total	$	*

* To be completed by amendment

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Our bylaws provide to the fullest extent permitted by Delaware law, our directors or officers shall not be personally liable to us or our stockholders for damages for breach of such director’s or officer’s fiduciary duty. The effect of this provision of our bylaws is to eliminate our right and our stockholders (through stockholders’ derivative suits on behalf of our Company) to recover damages against a director or officer for breach of the fiduciary duty of care as a director or officer (including breaches resulting from negligent or grossly negligent behavior), except under certain situations defined by statute. In addition, we have entered into indemnification agreements with our directors. We believe that the indemnification provisions in our bylaws and the indemnification agreements are necessary to attract and retain qualified persons as directors and officers.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has 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. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

II-1

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

Scarsdale Equities, LLC-Equity Consideration for Financial Advisory and Consulting Services

On December 23, 2011, we issued an aggregate of 33,750 shares to Scarsdale Equities, LLC for financial advisory and consulting services. The issuances were exempt from registration, pursuant to Section 4(a)(2) of the Securities Act.

MedTRX Provider Network, LLC-Equity Consideration for Services

On December 23, 2011 (the “Effective Date”), we entered into a registration rights agreement (the “Registration Rights Agreement”) and common stock warrant (the “Warrant”) with MedTRX Provider Network, LLC (“MedTRX”). Pursuant to the Warrant, we issued to MedTRX, for services provided between June 6, 2011 and December 23, 2011, warrants to purchase up to 1,875,000 shares of common stock at an exercise price of $3.60 for a term of seven years. Pursuant to the Registration Rights Agreement, we agreed, subject to the applicable rules, regulations and interpretations of the Securities and Exchange Commission (the “SEC”), to (a) use our reasonable best efforts to file a registration statement with the SEC, covering the resale of the shares of common stock issuable upon exercise of the Warrant (the “Registrable Securities”) within 30 days of the earlier of (i) the date when we become eligible to file a registration statement on Form S-3 covering the Registrable Securities, or (ii) five years from the Effective Date, and (b) cause such registration statement to become and remain continuously effective until eight years after the Effective Date. Pursuant to the Registration Rights Agreement, we also granted to MedTRX “piggyback” registration rights, pursuant to which we agreed to, at any time and from time to time for a period of eight years commencing on the Effective Date, if we propose to file a registration statement (other than on Form S-4, Form S-8, or pursuant to a firm commitment underwriting), provide written notice to MedTRX of such proposed filing and offer to MedTRX the opportunity to register the resale of the Registrable Securities on such registration statement, subject to (a) the applicable rules, regulations and interpretations of the SEC, and (b) with respect to an underwritten offering, our right to exclude any Registrable Securities from a registration statement if in the sole discretion of the managing underwriter or underwriters of such underwritten offering, the inclusion of such Registrable Securities would adversely affect the underwritten offering. Colin Halpern, a member of our Board of Directors, is the managing member of MedTRX. Pursuant to the terms of the Registration Rights Agreement, we are entitled to exclude the Registrable Securities from this Offering because it is being made pursuant to a firm commitment underwriting.

CCR of Melbourne – Conversion of Debt to Equity

On February 1, 2012, we opened a $500,000 unsecured, revolving line of credit loan with CCR of Melbourne, Inc., an entity jointly owned and controlled at that time by Christian C. Romandetti, our Chief Executive Officer, and Carmen Romandetti, our Chief Executive Officer’s father. The revolving line of credit loan was to mature on October 1, 2015 with interest at a per annum rate of 8.5% beginning March 1, 2012. Advances on the line of credit were at the sole discretion of CCR of Melbourne, Inc. On November 8, 2013, CCR converted the then outstanding balance of $142,483.52, representing all of the outstanding related party principal and interest amount on the loan, into shares of our common stock at a price equal to $0.45 per share for a total of 316,631 shares issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act. On November 8, 2013, Christian C. Romandetti relinquished all rights, title to and ownership in CCR to Carmen Romandetti in consideration of repayment of a personal loan made to Christian C. Romandetti by Carmen Romandetti.

II-2

Acquisition of First Choice Medical Group of Brevard, LLC

On April 2, 2012, we acquired 100% of the membership interests of FCMG for a purchase price of $2,524,000, of which approximately $1.14 million was paid in cash and the balance, net of closing adjustments, was paid to the selling members by issuing 244,045 shares our common stock valued at $0.90 per share. The shares were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act.

Stock Subscription Agreement

In July 2012, we sold 66,666 shares of common stock as part of a stock subscription agreement for a purchase price of $100,000. The shares were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act.

MTI Capital – Conversion of Debt to Equity

On May 1, 2013, we entered into a loan commitment whereby MTI Capital LLC (“MTI”) provided us with a line of credit up to $2,000,000 in the form of a convertible loan with interest at 12% per annum, payable monthly with principal due two years from the effective date of the loan. On August 28, 2013, we amended the loan agreement to change the conversion rate from $0.75 per share to $0.45 per share. On September 27, 2013, Daniel Dicker, a nominee for our Board of Directors, loaned $50,000 to MTI.

On November 8, 2013, MTI converted the then outstanding balance of $624,000 principal and interest amount on the loan, into restricted shares of our common stock, in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act, at a price equal to $0.45 per share for a total of 1,386,667 shares issued. Subsequently, in repayment of Mr. Dicker’s loan to MTI, MTI transferred 112,259 shares of common stock of our Company to Mr. Dicker.

CT Capital, Ltd. – Modification of Line of Credit Involving Equity Consideration

On June 13, 2013, we entered into a Loan and Security Agreement (the “Loan Agreement”) with CT Capital, Ltd., d/b/a CT Capital, LP, a Florida limited liability partnership (the “Lender”). Under the Loan Agreement, the Lender committed to make an accounts receivable line of credit in the maximum aggregate amount of $1,500,000 to us with an interest rate of 12% per annum (the “Loan”). The maturity date of the Loan is December 31, 2016 (the “Maturity Date”). Interest shall be due and payable monthly. Upon default, the interest may be adjusted to the highest rate permissible by law. The Loan is secured by our accounts receivable and assets. The assets constituted the collateral for the repayment of the Loan. The Loan Agreement also included covenants, representations, warranties, indemnities and events of default that are customary for facilities of this type. The advance rate was defined as: 80% of all receivables to be 120 days or less at the true collection rate of approximately 27% of total billings, excluding patient billings and collections. Additionally, allowable accounts also included 50% of all accounts protected by Legal Letters of Protection. At any time up until December 31, 2016, the Lender may convert all or any portion of the outstanding principal amount or interest on the Loan into the our common stock at a price equal to $0.75 per share.

On November 8, 2013, in consideration for a fee of 100,000 shares of our common stock, issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act, CT Capital agreed to modify the line of credit to our subsidiary, FCMG. Under the loan modification agreement, the annual rate of interest was reduced from 12% per annum to 6% per annum and will remain at 6% until November 1, 2015. All other terms under the Loan Agreement remain the same.

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Convertible Notes

On December 14, 2012, February 19, 2013, and August 14, 2013, we entered into Securities Purchase Agreements for the sale of 8% convertible notes in the original principal amounts of $203,500, $103,500 and $153,500, respectively, with a lender in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act. During the year ended December 31, 2013, we paid off the principal and interest of the notes in cash.

Acquisition of Patent

On September 7, 2013, we acquired a patent, US 7,789,842 B2, for an orthopedic adjustable arm sling from Donald A. Bittar, the inventor and our Chief Financial Officer. Based on the independent, third-party evaluation of Professional Business Brokers, Inc., the patent was valued at $286,500. We issued, in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act, to Mr. Bittar 636,666 shares of our common stock, valued at $286,500, or $0.45 per share, which was estimated to approximate the fair value of the patent acquired and did not materially differ from the fair value of the common stock at the time of issuance.

Acquisition of 10% of the Membership Interests of Medtech Diagnostics LLC

On September 13, 2013, we acquired 10% of the membership interests of Medtech Diagnostics LLC for 1,000,000 shares of our common stock. The shares were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act.

Hanover|Elite – Equity Compensation for Services

On October 2, 2013, we entered into a cancelable 12-month agreement to engage the services of Elite Financial Communications Group, LLC, d/b/a Hanover|Elite. The terms of the agreement provide for a monthly cash retainer, and 300,000 restricted shares of our common stock, which are earned and issued quarterly as follows: 37,500 shares on January 3, 2014, April 3, 2014, and July 3, 2014; and 187,500 shares on October 3, 2014. The shares were and will be issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act.

Hillair Capital Investments, L.P. – Convertible Debenture

On November 8, 2013, we entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with Hillair Capital Investments L.P. ("Hillair") whereby we received $2,000,000 in gross proceeds from Hillair in exchange for (i) a $2,320,000 8% Original Issue Discount Convertible Debenture due December 28, 2013, and extended on December 28, 2013 to November 1, 2015 (the “Debenture”), and (ii) a Common Stock Purchase Warrant (the “Warrant”) to purchase up to 2,320,000 shares of our common stock (the “Common Stock”) at an exercise price of $1.35 per share, which may be exercised on a cashless basis, until November 8, 2018.

We issued to Hillair the Debenture with the Warrant, pursuant to Section 4(a)(2) of the Securities Act, for the net purchase price of $2,000,000 (reflecting the $320,000 original issue discount). Until the Debenture is no longer outstanding, the Debenture shall be convertible, in whole or in part at the option of Hillair, into shares of Common Stock, subject to certain conversion limitations set forth in the Debenture. We, however, have reserved the right to pay the Debenture in cash. The conversion price for the Debenture is $1.00 per share, subject to adjustment for stock splits, stock dividends, sales of securities for less than $1.00 per share of common stock or other distributions by us. As a result of us achieving certain milestones, however, the conversion price shall not be reduced to less than $1.00 per share as a result of any subsequent sales of securities for less than $1.00 per share of common stock.

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Until the Debenture is no longer outstanding, the Securities Purchase Agreement also contains certain terms and conditions regarding Hillair’s right to participate in our future financings. Hillair has waived its right to participate in this Offering on the condition that (i) this Offering closes by October 1, 2014; (ii) the price of the common stock sold in this Offering is not less than $2.00 per share and (iii) so long as we do not, for a period lasting until October 1, 2014, redeem more than $500,000 of the securities held by Hillair in any one calendar month, or we do not make such redemption after the fifteenth of any month.

We will be obligated to redeem $580,000 of principal on February 1, 2015, May 1, 2015, August 1, 2015 and November 1, 2015, plus accrued but unpaid interest and any other amounts that may be owed to the holder of the Debenture on those dates. Interest on the Debenture accrues at the rate of 8% annually and is payable quarterly on August 1, November 1, February 1, and May 1, beginning on August 1, 2014. Interest is payable in cash or at our option in shares of our common stock, provided certain conditions are met.

On or after May 8, 2014, we may elect to prepay any portion of the principal amount of the Debenture, subject to providing advance notice to the holder of the Debenture, at 120% of the then outstanding principal amount of the Debenture, plus accrued but unpaid interest and any other amounts then owed to the holder of the Debenture as further set forth therein, subject to certain conditions set forth in the Debenture. On May 8, 2014, Hillair elected to convert the aggregate amount of $104,000 of its Debenture, representing $100,000 of principal and $4,000 of interest, into 104,000 shares of the Company’s common stock. The shares were issued in reliance upon the exemption from registration under Section 3(a)(9) of the Securities Act.

To secure our obligations under the Debenture, we granted Hillair a security interest in certain of our and our subsidiaries’ assets as described in the Security Agreement. In addition, certain of our subsidiaries agreed to guarantee our obligations.

Issuances to Directors, Officers, Employees and Service Providers

From February 2013 through March 2014, we issued an aggregate of 721,322 shares of our common stock to directors, officers, employees and service providers at an aggregate fair value of $560,520.78. The shares were issued in reliance upon the exemption from registration under 4(a)(2) of the Securities Act.

In April 2014, the Company issued an aggregate of 184,000 shares of its common stock to certain employees and service providers. The total costs associated with these issuances was $144,100 and such costs were expensed in fiscal 2013. The shares were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

The following exhibits are included as part of this Form S-1. References to “the Company” in this Exhibit List mean First Choice Healthcare Solutions, Inc., a Delaware company.

1.1+	Form of Underwriting Agreement
3.1	Articles of Incorporation of Medical Billing Assistance, Inc. (the “Company”) (incorporated by reference to the Company’s Form SB-2 Registration Statement as filed December 20, 2007)
3.1(a)	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)
3.1(b)	Certificate of Merger between First Choice Healthcare Solutions, Inc., a Delaware and surviving corporation, and Medical Billing Assistance, Inc., a Colorado corporation. (incorporated by reference to Exhibit 3.1(B) to the Company’s Current Report on Form 8-K, filed with the SEC on April 9, 2012)
3.2	By-laws of the Company (incorporated by reference to the Company’s Form SB-2 Registration Statement as filed December 20, 2007)
3.2(a)	By-laws of First Choice Healthcare Solutions, Inc. (incorporated by reference to Annex C to the Company’s Information Statement on Schedule 14C, filed with the SEC on March 14, 2012)

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4.1	Medical Billing Assistance, Inc. 2011 Incentive Stock Plan (incorporated by reference to Annex E to the Company’s Information Statement on Schedule 14C, filed with the SEC on March 14, 2012)
4.2+	Form of Warrant to be Issued in the Offering
4.3+	Form of Representative’s Warrant to be Issued in the Offering
5.1+	Opinion of Meyer, Suozzi, English & Klein, P.C.
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)
10.5	Loan Agreement, dated as of August 12, 2011, between Marina Towers, LLC (“Marina”) and Guggenheim Life and Annuity Company (“Guggenheim”) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 22, 2011)
10.6	Florida Consolidated, Amended and Restated Promissory Note, dated August 12, 2011, made by Marina to Guggenheim (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on August 22, 2011)
10.7	Guaranty Agreement, dated as of August 12, 2011, made by Christian C. Romandetti for the benefit of Guggenheim (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on August 22, 2011)
10.8	Common Stock Warrant, issued December 23, 2011, to MedTRX Provider Network, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 13, 2012)
10.9	Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on February 13, 2012)
10.10	Agreement and Plan of Merger, made as of February 13, 2012, by and between the Company and First Choice Healthcare Solutions, Inc. (incorporated by reference to Appendix A to the Company’s Information Statement on Schedule 14C, filed with the SEC on March 14, 2012)
10.11	Membership Interest Purchase Closing Agreement between Seller, FCID Medical, Inc. and First Choice Medical Group of Brevard, LLC (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on April 9, 2012)
10.12	Management Services Agreement between FCID Medical, Inc. and First Choice Medical Group of Brevard, LLC (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on April 9, 2012)
10.13	Loan Agreement, dated February 1, 2012, between FCID of Medical, Inc. and CCR of Melbourne, Inc. (incorporated by reference to Exhibit 10.11 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 15, 2012)

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10.14	Revolving Line of Credit Promissory Note, dated February 15, 2012, in the amount of $500,000, issued by FCID Medical, Inc. to CCR of Melbourne, Inc. (incorporated by reference to Exhibit 10.12 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 15, 2012)
10.15	Promissory Note, dated as of May 18, 2012, made by First Choice Medical Group of Brevard, LLC to the order of General Electric Capital Corporation, in the amount of $450,000 (incorporated by reference to Exhibit 10.14 to the Company’s Current Report on Form 8-K, filed with the SEC on May 25, 2012)
10.16	Master Lease Agreement, dated as of May 10, 2012, between First Choice Medical Group of Brevard, LLC and General Electric Capital Corporation, with schedules (incorporated by reference to Exhibit 10.15 to the Company’s Current Report on Form 8-K, filed with the SEC on May 25, 2012)
10.16(a)	Guaranty, dated May 10, 2012, by Christian Romandetti to General Electric Capital Corporation (incorporated by reference to Exhibit 10.16 to the Company’s Current Report on Form 8-K, filed with the SEC on May 25, 2012)
10.16(b)	Guaranty, dated May 10, 2012, by First Choice Healthcare Solutions, Inc. to General Electric Capital Corporation (incorporated by reference to Exhibit 10.17 to the Company’s Current Report on Form 8-K, filed with the SEC on May 25, 2012)
10.17	Securities Purchase Agreement, made as of December 14, 2012, with note as an exhibit thereto, for the sale of an 8% convertible note in the principal amount of $203,500  (incorporated by reference to Exhibit 10.17 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014)
10.18	Securities Purchase Agreement, made as of February 19, 2013, with note as an exhibit thereto, for the sale of an 8% convertible note in the principal amount of $103,500 (incorporated by reference to Exhibit 10.18 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014)
10.19	Securities Purchase Agreement, made as of August 14, 2013, for the sale of an 8% convertible note in the principal amount of $153,500, with note as an exhibit thereto (incorporated by reference to Exhibit 10.19 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014)
10.20	Agreement, dated as of May 1, 2013, between MTI Capital LLC and First Choice Healthcare Solutions, Inc. (incorporated by reference to Exhibit 10.20 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014)
10.21	Loan and Security Agreement, dated as of June 13, 2013, by and between CT 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)

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10.21(a)	Agreement to Modify Loan Interest Rate and Consent to FCHS Secured Debt Issuance, dated June 13, 2013, by and between CT Capital Ltd and First Choice Medical Group of Brevard, LLC (incorporated by reference to Exhibit 10.21(a) to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014)
10.22	Form of Membership Interest Purchase Agreement, dated August 28, 2013, by and between the Company and the sellers of the membership interests in MedTech Diagnostics LLC (incorporated by reference to Exhibit 10.22 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014)
10.23	License Agreement, dater August 28, 2013, by and between Donald Bittar and First Choice Healthcare Solutions, Inc. (incorporated by reference to Exhibit 10.23 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014)
10.24	Amendment to Loan Agreement, dated as of August 28, 2013, by and among MTI Capital LLC and First Choice Healthcare Solutions, Inc. (incorporated by reference to Exhibit 10.24 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014)
10.25	Form of Securities Purchase Agreement, dated as of November 8, 2013, between the Company and Hillair Capital Investments, L.P. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 14, 2013)
10.26	Form of Common Stock Purchase Warrant, dated as of November 8, 2013, issued to Hillair Capital Investments, L.P (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed with the SEC on November 14, 2013)
10.27	Form of Debenture, dated as of November 8, 2013 issued to Hillair Capital Investments, L.P (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 14, 2013)
10.28	Form of Security Agreement, dated as of November 8, 2013 between Hillair Capital Investments, L.P., the Company and certain of its subsidiaries (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed with the SEC on November 14, 2013)
10.28(a)	Form of Subsidiary Guarantee, dated as of November 8, 2013, to the Securities Purchase Agreement, dated as of November 8, 2013, between the Company and Hillair Capital Investments, L.P. (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed with the SEC on November 14, 2013)
10.29	Loan Agreement, dated May 17, 2012 between HS Real Company, LLC and First Choice Medical Group of Brevard, LLC (incorporated by reference to Exhibit 10.29 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014)
10.29(a)	Promissory Note, dated May 17, 2012, to HS Real Company, LLC (incorporated by reference to Exhibit 10.29(a) to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014)

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10.29(b)	Amendment to Loan Agreement dated August 5, 2012, with HS Real Company LLC, and First Choice Medical Group of Brevard, LLC (incorporated by reference to Exhibit 10.29(b) to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014)
10.30	Employment Agreement, dated March 20, 2014, between the Company and Christian Charles Romandetti (incorporated by reference to Exhibit 10.30 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014)
10.31 #	Form of Indemnification Agreement entered into between the Company and its directors
10.32	Waiver dated April 30, 2014 by and between Hillair Capital Investments L.P. and the Company (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed with the SEC on May 15, 2014)
14	Code of Ethics (incorporated by reference to Exhibit 14 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 30, 2012)
21.1	List of Subsidiaries (incorporated by reference to Exhibit 21.1 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 31, 2014)
23.1 +	Consent of RBSM LLP
23.2	Consent of Meyer, Suozzi, English & Klein, P.C. (included in Exhibit 5.1)
24.1	Power of Attorney (included on signature page to the Registration Statement filed on May 1, 2014 and incorporated herein by reference)
99.1(a) #	Consent of Director Nominee
99.1(b) #	Consent of Director Nominee
99.1(c) #	Consent of Director Nominee

+ Filed herewith

# Previously filed

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ITEM 17. UNDERTAKINGS.

(a) The undersigned registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

(i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

(iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

(2) That, for the purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(5) (ii) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

(6) For the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;

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(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and

(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

(h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities, other than the payment by the registrant of expenses incurred and paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding, is asserted by such director, officer or controlling person in connection with the securities being registered hereby, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

(i) The undersigned Registrant hereby undertakes that it will:

(1) for determining any liability under the Securities Act, treat the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant under Rule 424(b)(1), or (4) or 497(h) under the Securities Act as part of this registration statement as of the time the Commission declared it effective.

(2) for determining any liability under the Securities Act, treat each post-effective amendment that contains a form of prospectus as a new registration statement for the securities offered in the registration statement, and that offering of the securities at that time as the initial bona fide offering of those securities.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Amendment No. 1 to the Registration Statement on Form S-1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Melbourne, State of Florida, on this 10^th day of June, 2014.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

/s/ Christian C. Romandetti

Christian C. Romandetti

President, Chief Executive Officer and Director

(Principal Executive Officer)

Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 1 to the Registration Statement on Form S-1 has been signed by the following persons in the capacities and on the dates indicated below.

Signature	Title	Date
/s/ Christian C. Romandetti	President, Chief Executive Officer and Director	June 10, 2014
Christian C. Romandetti	(Principal Executive Officer)
/s/ Donald A. Bittar	Chief Financial Officer, Secretary, Treasurer and Director	June 10, 2014
Donald A. Bittar	(Principal Financial Officer and Principal Accounting Officer)
/s/ Colin Halpern	Director	June 10, 2014
Colin Halpern

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EX-1.1

Exhibit 1.1

UNITS, COMPRISED OF SHARES OF COMMON STOCK AND WARRANTS

OF

FIRST CHOICE HEALTHCARE SOLUTIONS, INCORPORATED

UNDERWRITING AGREEMENT

____________, 2014

Laidlaw & Company (UK) Ltd.

As the Representative of the

several underwriters, if any, named in Schedule I hereto

546 Fifth Avenue, 5^th Floor

New York, New York 10036

Ladies and Gentlemen:

The undersigned, First Choice Healthcare Solutions, Incorporated, a company incorporated under the laws of the State of Delaware (collectively with its subsidiaries and affiliates, including, without limitation, all entities disclosed or described in the Registration Statement as being subsidiaries or affiliates of First Choice Healthcare Solutions, Incorporated (the "Company"), hereby confirms its agreement (this "Agreement") with the several underwriters (such underwriters, including the Representative (as defined below), the "Underwriters" and each an "Underwriter") named in Schedule I hereto for which Laidlaw & Company (UK) Ltd. is acting as representative to the several Underwriters (the "Representative" and if there are no Underwriters other than the Representative, references to multiple Underwriters shall be disregarded and the term Representative as used herein shall have the same meaning as Underwriter) on the terms and conditions set forth herein.

The Company proposes to issue and sell to the several Underwriters, upon the terms and conditions set forth herein, an aggregate of ____________ units (the “Firm Units”), each unit consisting of two shares (the “Firm Shares”) of its common stock, par value $0.001 per share (the “Common Stock”), and one warrant (the “Firm Warrants”) to purchase one share of Common Stock. The Company also proposes to issue and sell to the several Underwriters up to an additional ________ Units, representing 15% of the Firm Units (the “Option Units”) at the option of the Underwriters as provided in Section 2.2 below.

ARTICLE I

DEFINITIONS

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:

"Applicable Time" means [     ] p.m., New York City time, on the date of this Agreement.

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"Affiliate" means with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with such Person as such terms are used in and construed under Rule 405 under the Securities Act.

"Board of Directors" means the board of directors of the Company.

"Business Day" means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

"Closing" means the closing of the purchase and sale of the Closing Securities pursuant to Section 2.1.

"Closing Date" means the hour and the date on the Trading Day on which all conditions precedent to (i) the Underwriters' obligations to pay the Closing Purchase Price and (ii) the Company's obligations to deliver the Closing Securities, in each case, have been satisfied or waived, but in no event later than 10:00 a.m. Eastern time on the third Trading Day following the date hereof or at such earlier time as shall be agreed upon by the Representative and the Company.

"Closing Securities" shall have the meaning ascribed to such term in Section 2.1(a)(ii).

"Commission" means the United States Securities and Exchange Commission.

"Common Stock" means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"Common Stock Equivalents" means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

"Company Auditor" means RBSM LLP, with offices located at 5 W. 37^th Street, New York, New York 10018.

"Company Counsel" means Meyer, Suozzi, English & Klein, P.C., with offices located at 1350 Broadway, Suite 501, New York, New York 10018.

“Company’s Free-Writing Prospectus” shall mean any “issuer free writing prospectus,” as defined in Rule 433 of the Rules and Regulations relating to the Securities in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) of the Rules and Regulations. “Permitted Free Writing Prospectus” means any issuer free writing prospectus that is identified on Schedule II to this Agreement.

"Disclosure Schedules" means the Disclosure Schedules of the Company delivered concurrently herewith.

"Effective Date" shall mean the date upon which the Registration Statement is declared effective by the Commission.

"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

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"Execution Date" shall mean the date on which the parties execute and enter into this Agreement.

"Exempt Issuance" means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities, and (d) shares of Common Stock or options to Christian Romandetti pursuant to that certain Employment Agreement dated as of March 30, 2014 by and between the Company and Christian Romandetti.

"FCPA" means the Foreign Corrupt Practices Act of 1977, as amended.

"FINRA" means the Financial Industry Regulatory Authority.

"GAAP" shall have the meaning ascribed to such term in Section 3.1(p).

“GT” means Greenberg Traurig, LLP, with offices located at MetLife Building, 200 Park Avenue, New York, New York 10166.

"Indebtedness" means (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company's consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business, and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP.

"Liens" means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

"Lock-Up Agreements" shall mean the lock-up agreements, in the form of Exhibit A attached hereto, delivered at the Closing by each of the Company's officers, directors, each of their respective Affiliates and associated partners, and each holder of 5% or more of the outstanding shares of Common Stock as of the Effective Date.

"Material Adverse Effect" means (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under any Transaction Document.

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"Offering" shall have the meaning ascribed to such term in Section 2.1(c).

"Option Closing Date" shall have the meaning ascribed to such term in Section 2.2(c).

"Over-Allotment Option" shall have the meaning ascribed to such term in Section 2.2(a).

"Person" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"Preliminary Prospectus" means, if any, any preliminary prospectus relating to the Securities included in the Registration Statement or filed with the Commission pursuant to Rule 424 under the Securities Act.

“Pricing Disclosure Package” means the Preliminary Prospectus relating to the Securities, if any, as amended or supplemented immediately prior to the Applicable Time, any Permitted Free-Writing Prospectus, and the information contained in Schedule I hereto.

"Proceeding" means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

"Prospectus" means the prospectus relating to the Securities in the form first filed with the Commission pursuant to Rule 424(b) under the Securities Act.

"Registration Statement," “Initial Registration Statement,” and “462(b) Registration Statement” shall each have the meaning ascribed to such term in Section 3.1(a).

"SEC Reports" shall have the meaning ascribed to such term in Section 3.1(o).

"Securities" means the Closing Securities, the Option Securities and the Warrant Shares.

"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"Shares" means, collectively, the shares of Common Stock delivered to the Underwriters in accordance with Section 2.1(a)(i) and Section 2.2(a).

"Subsidiary" means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

"Trading Day" means a day on which the principal Trading Market is open for trading.

"Trading Market" means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).

"Transaction Documents" means this Agreement, the Warrants, the Lock-Up Agreements, the Representative’s Warrant Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.

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"Transfer Agent" means Corporate Stock Transfer Company, the current transfer agent of the Company, with a mailing address of 3200 Cherry Creek Drive South, Suite 430, Denver Colorado 80209 and a facsimile number of (303) ________, and any successor transfer agent of the Company.

"Underwriter Free Writing Prospectus" shall have the meaning ascribed to such term in Section 4.22(a).

"Warrants" means, collectively, the Common Stock purchase warrants delivered to the Underwriters in accordance with Section 2.1(a)(ii) and Section 2.2(a), which shall be exercisable immediately, have a term of exercise equal to five years, and have an exercise price of $_____, representing 150% of the initial public offering price per share of the Firm Shares, subject to adjustment as provided therein, in the form of Exhibit B attached hereto.

"Warrant Shares" means the shares of Common Stock issuable upon exercise of the Closing Warrants and the Option Warrants.

ARTICLE II

PURCHASE AND SALE

2.1 Closing.

(a) On the basis of the representations, warranties, covenants and agreements herein contained, and upon the terms and subject to the conditions set forth herein, the Company agrees to sell, in the aggregate, _______________ Units, representing an aggregate of ___________shares of Common Stock and an aggregate of ____________Warrants to purchase up to an aggregate of ______________ shares of Common Stock, and each Underwriter agrees to purchase, severally and not jointly, at the Closing, the following securities of the Company:

(i) the number of shares of Common Stock (the "Closing Shares") set forth opposite the name of such Underwriter on Schedule I hereof; and

(ii) Warrants to purchase up to the number of shares of Common Stock set forth opposite the name of such Underwriter on Schedule I hereof (the "Closing Warrants" and, collectively with the Closing Shares, the "Closing Securities"); and

(iii) any additional number of Closing Securities which such Underwriter may become obligated to purchase pursuant to the provisions of Article V hereof, subject, however, to such adjustments to eliminate fractional shares as the Representative in its sole discretion shall make.

(b) The aggregate purchase price for the Closing Securities shall equal the amount set forth opposite the name of such Underwriter on Schedule I hereto (the "Closing Purchase Price"). The purchase price for one Unit (representing two (2) Shares and one (1) Warrant to purchase one (1) Share) shall be $_______ (the "Combined Purchase Price"), which shall be allocated as $________ per share (the "Share Purchase Price") and $_________ per Warrant (the "Warrant Purchase Price").

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(c) On the Closing Date, each Underwriter shall deliver or cause to be delivered to the Company, via wire transfer, in same day funds, an amount equal to such Underwriter's Closing Purchase Price and the Company shall deliver to such Underwriter its respective Closing Securities through the facilities of The Depository Trust Company, or as otherwise directed by the Representative, together with such other items required pursuant to Section 2.4 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.4 and 2.5, the Closing shall occur at the offices of GT or such other location as the Company and Representative shall mutually agree. Upon authorization of the release of the Closing Securities by the Representative, the Underwriters propose to offer the Closing Securities for sale to the public upon the terms and conditions and at the offering price set forth in the Prospectus (the "Offering").

2.2 Over-Allotment Option.

(a) For the purposes of covering any over-allotments in connection with the distribution and sale of the Closing Securities, the Representative is hereby granted an option (the "Over-Allotment Option") to purchase, in the aggregate, up to ____________Option Units, representing in the aggregate an amount equal to 15% of the Firm Units sold in the Offering upon the same terms as the Firm Units. Each Option Unit shall be comprised of two (2) Shares and one (1) Warrant to purchase one (1) Share.

(b) In connection with an exercise of the Over-Allotment Option, the purchase price to be paid for the Option Units shall be equal to the Combined Purchase Price multiplied by the number of Option Units to be purchased (the aggregate purchase price to be paid on an Option Closing Date, the "Option Closing Purchase Price").

(c) The Over-Allotment Option granted pursuant to this Section 2.2 may be exercised by the Representative as to all (at any time) or any part (from time to time) of the Option Securities within 45 days after the Execution Date. An Underwriter will not be under any obligation to purchase any Option Units prior to the exercise of the Over-Allotment Option by the Representative. The Over-Allotment Option granted hereby may be exercised by providing oral notice to the Company from the Representative, which must be confirmed in writing by overnight mail or facsimile or other electronic transmission setting forth the number of Option Units to be purchased and the date and time for delivery of and payment therefor (each, an "Option Closing Date"), which will not be later than three (3) full Business Days after the date of the notice or such other time as shall be agreed upon by the Company and the Representative, at the offices of GT or at such other place (including remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative. If such delivery and payment for the Option Securities does not occur on the Closing Date, each Option Closing Date will be as set forth in the notice.

(d) Upon each exercise of the Over-Allotment Option, the Company will become obligated to convey to the Underwriters, and, subject to the terms and conditions set forth herein, the Underwriters will become obligated to purchase, the number of Option Units specified in such notice. The Representative may cancel the Over-Allotment Option at any time prior to the expiration of the Over-Allotment Option by written notice to the Company. Payment of the Option Closing Purchase Price for the Option Securities shall be made by wire transfer in same day funds to the Company upon delivery of certificates for the Option Units to the Representative through the facilities of The Depository Trust Company for the respective accounts of the several Underwriters, or as otherwise instructed by the Representative, together with such other items required pursuant to Section 2.4 deliverable at such Option Closing Date.

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2.3 Representative’s Warrants.

(a) Purchase Warrants. The Company hereby agrees to issue and sell to the Representative (and/or its designees) on the Closing Date a registered warrant (the “Representative’s Warrant”) for the purchase of an aggregate of ______________shares of Common Stock, representing 2% of the number of Shares sold in the Firm Units (and excluding Shares sold in the Option Units). The Representative’s Warrant agreement, in the form attached hereto as Exhibit C (the “Representative’s Warrant Agreement”), shall be exercisable at any time and from time to time, in whole or in part, commencing on a date which is one (1) year after the Effective Date and expiring on the five-year anniversary of the Effective Date at an initial exercise price per share of Common Stock of $_____, which is equal to 125.0% of the initial public offering price per share of the Firm Shares included in the Firm Units. Accordingly, the Representative’s Warrant is subject to a one-year lock-up period from the Effective Date. The Representative’s Warrant and the shares of Common Stock issuable upon exercise thereof are hereinafter referred to together as the “Representative’s Securities.” The Representative understands and agrees that there are significant restrictions pursuant to FINRA Rule 5110 against transferring the Representative’s Warrant and the underlying shares of Common Stock during the one hundred eighty (180) days after the Effective Date and by its acceptance thereof shall agree that it will not sell, transfer, assign, pledge or hypothecate the Representative’s Warrant, or any portion thereof, or be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of such securities for a period of one year following the Effective Date to anyone other than (i) an Underwriter or a selected dealer in connection with the Offering, or (ii) a bona fide officer or partner of the Representative or of any such Underwriter or selected dealer; and only if any such transferee agrees to the foregoing lock-up restrictions.

(b) Delivery of the Representative’s Warrant Agreement. Delivery of the Representative’s Warrant Agreement shall be made on the Closing Date and shall be issued in the name or names and in such authorized denominations as the Representative may request.

2.4 Deliveries. The Company shall deliver or cause to be delivered to the Representative the following:

(a) Contemporaneously herewith, a comfort letter from the Company Auditor, addressed to the Underwriters and in form and substance satisfactory in all respects to the Representative, dated as of the date of this Agreement, containing statements and information of the type customarily included in accountants’ comfort letters with respect to financial statements and certain financial information contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus, and a bring-down letter dated as of the Closing Date, each Option Closing Date, if any, and on the effective date of any post-effective amendment to the Registration Statement from the Company Auditor, addressed to the Underwriters and in form and substance satisfactory in all respects to the Representative, to the effect that the Company Auditor reaffirms the statements made in the comfort letter referred to above, except that the date referred to shall be a date not more than three (3) business days prior to the Closing Date or the Option Closing Date, if any;

(b) Contemporaneously herewith, duly executed and delivered Lock-Up Agreements from each of the Company’s executive officers, directors and director-nominees.

(c) On the Closing Date, the Closing Shares and, as to each Option Closing Date, if any, the applicable Option Shares, which shares shall be delivered via The Depository Trust Company Deposit or Withdrawal at Custodian system for the accounts of the several Underwriters;

(d) On the Closing Date, the Closing Warrants and, as to each Option Closing Date, if any, the applicable Option Warrants in certificated form registered in the name or names, and in such authorized denominations, as the applicable Underwriter may request in writing at least one Business Day prior to the Closing Date and, if any, each Option Closing Date;

(e) On the Closing Date, the Company shall have delivered to the Representative executed copies of the Representative’s Warrant Agreement;

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(f) On and as of the Closing Date, a legal opinion of Company Counsel addressed to the Underwriters, including, without limitation, a negative assurance letter, substantially in the form of Exhibit D attached hereto and acceptable to the Representative, and as to each Option Closing Date, if any, a bring-down opinion and letter from Company Counsel addressed to the Underwriters and in form and substance reasonably satisfactory to the Representative;

(g) On and as of the Closing Date and on each Option Closing Date, if any, the duly executed and delivered Officer's Certificate, substantially in the form required by Exhibit E attached hereto; and

(h) On and as of the Closing Date and on each Option Closing Date, if any, the duly executed and delivered Secretary's Certificate, substantially in the form required by Exhibit F attached hereto, which shall include, among other things, satisfactory evidence of the good standing of the Company in the State of Delaware and existence as a foreign corporation in the State of Florida.

2.5 Closing Conditions. The respective obligations of each Underwriter hereunder in connection with the Closing and each Option Closing Date, if any, are subject to the following conditions being met (or being waived by the Representative):

(a) the continuing accuracy, when made and as of the Applicable Time, on the Closing Date and on each Option Closing Date, if any (unless as of a specific date therein), of the representations and warranties of the Company contained herein, and the accuracy of the statements of the Company made in any certificates delivered pursuant to the provisions of Section 2.4 of this Agreement;

(b) all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date and each Option Closing Date, if any, shall have been performed;

(c) the delivery by the Company of the items set forth in Section 2.4 of this Agreement and such other certificates, opinions or other documents as they may have reasonably requested;

(d) the Registration Statement shall have become effective under the Securities Act, and no stop order suspending the effectiveness of the Registration Statement or any part thereof, preventing or suspending the use of any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus or any part thereof shall have been issued and no proceedings for that purpose or pursuant to Section 8A under the Securities Act shall have been initiated or threatened by the Commission, and all requests for additional information on the part of the Commission (to be included or incorporated by reference in the Registration Statement or the Prospectus or otherwise) shall have been complied with to the reasonable satisfaction of the Representatives; the Rule 462(b) Registration Statement, if any, each Permitted Free Writing Prospectus and the Prospectus shall have been filed with, the Commission within the applicable time period prescribed for such filing by, and in compliance with, the rules promulgated under the Securities Act and in accordance with the terms and conditions of this Agreement, and the Rule 462(b) Registration Statement, if any, shall have become effective immediately upon its filing with the Commission; the Registration Statement and the Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the rules and regulations thereunder and shall conform in all material respects to the requirements of the Securities Act and the rules and regulations thereunder, and none of the Registration Statement, the Pricing Disclosure Package, any Permitted Free Writing Prospectus, nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

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(e) by the Execution Date, if required by FINRA, the Underwriters shall have received confirmation from FINRA that it has not raised any objection with respect to the fairness and reasonableness of the terms of this Agreement or the transaction contemplated hereby, including, but not limited to, the amount of compensation allowable or payable to the Underwriters as described in the Registration Statement;

(f) by the Execution Date, the Closing Shares, the Option Shares and the Warrant Shares (including shares of Common Stock issuable upon exercise of the Representative’s Warrant Agreement) shall have been approved for listing on the NYSE MKT, subject only to official notice of issuance, and as of the Closing Date, the Company shall have received no notice from the NYSE MKT withdrawing, delaying or suspending such approval;

(g) None of the Underwriters shall have discovered and disclosed to the Company on or prior to the Closing Date that any Registration Statement or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion of counsel for the Underwriters, is material or omits to state any fact which, in the opinion of such counsel, is material and is required to be stated therein or is necessary to make the statements therein not misleading, or that the Pricing Disclosure Package, any Permitted Free Writing Prospectus or the Prospectus or any amendment or supplement thereto contains an untrue statement of fact which, in the opinion of such counsel, is material or omits to state any fact which, in the opinion of such counsel, is material and is necessary in order to make the statements, in the light of the circumstances in which they were made, not misleading;

(h) Since the date of the latest audited financial statements included in the Pricing Disclosure Package or incorporated by reference in the Pricing Disclosure Package as of the date hereof, (i) the Company shall not have sustained any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth in the Pricing Disclosure Package, and (ii) there shall not have been any change in the capital stock (other than stock option and warrant exercises and stock repurchases in the ordinary course of business) or long-term debt of the Company or any of its Subsidiaries, or any change, or any development involving a prospective change, in or affecting the business, general affairs, management, financial position, stockholders’ equity or results of operations of the Company or any of its Subsidiaries, otherwise than as set forth in the Pricing Disclosure Package, the effect of which, in any such case described in clause (i) or (ii) of this paragraph (h) is, in the judgment of the Representatives, so material and adverse as to make it impracticable or inadvisable to proceed with the sale or delivery of the Securities on the terms and in the manner contemplated in the Pricing Disclosure Package;

(i) No action shall have been taken and no law, statute, rule, regulation or order shall have been enacted, adopted or issued by any governmental agency or body which would prevent the issuance or sale of the Securities or materially and adversely affect or potentially materially and adversely affect the business or operations of the Company; and no action, suit, or proceeding, at law or in equity, shall have been pending or threatened against the Company, and no injunction, restraining order or order of any other nature by any federal or state court of competent jurisdiction shall have been issued which would prevent the issuance or sale of the Securities or materially and adversely affect or potentially materially and adversely affect the business or operations of the Company; and

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(j) Subsequent to the execution and delivery of this Agreement there shall not have occurred any of the following: (i) trading in securities generally on the NASDAQ Global Market, New York Stock Exchange, the NYSE MKT or in the over-the-counter market, or trading in any securities of the Company on any exchange or in the over-the-counter market, shall have been suspended or materially limited, or minimum or maximum prices or maximum range for prices shall have been established on any such exchange or such market by the Commission, by such exchange or market or by any other regulatory body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been declared by Federal or state authorities or a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States, (iii) the United States shall have become engaged in hostilities, or the subject of an act of terrorism, or there shall have been an outbreak of or escalation in hostilities involving the United States, or there shall have been a declaration of a national emergency or war by the United States or (iv) there shall have occurred such a material adverse change in general economic, political or financial conditions (or the effect of international conditions on the financial markets in the United States shall be such) as to make it, in the judgment of the Representative, impracticable or inadvisable to proceed with the sale or delivery of the Securities on the terms and in the manner contemplated in the Pricing Disclosure Package and the Prospectus.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1 Representations and Warranties of the Company. Except as set forth in the Registration Statement, the Pricing Disclosure Package, the SEC Reports or the Disclosure Schedules, the Company represents and warrants to, and agrees with, the Underwriters as of the Execution Date, as of the Closing Date and as of each Option Closing Date, if any, as follows:

(a) Registration Statement. The Company has prepared and filed with the Commission a registration statement, including the related preliminary prospectus or prospectuses, relating to the Securities under the Securities Act on Form S-1 (No. 333-195632) (the “Initial Registration Statement”); and such Initial Registration Statement, and any post-effective amendment thereto, each in the form previously delivered to you, have been declared effective by the Commission, in such form. Other than a Rule 462(b) Registration Statement, no other document with respect to the Initial Registration Statement has heretofore been filed with the Commission. The various parts of the Initial Registration Statement and the 462(b) Registration Statement, if any, including all exhibits thereto and including the information contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) under the Securities Act and deemed by virtue of Rule 430A under the Securities Act to be part of the Initial Registration Statement at the time it became effective under the Securities Act, each as amended at the time such part of the Initial Registration Statement or Rule 462(b) Registration Statement, if any, became or hereafter becomes effective under the Securities Act, are hereafter collectively referred to as the “Registration Statement.”

(b) No Stop Orders. No stop order suspending the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been initiated or, to the Company’s knowledge, threatened by the Commission. No order preventing or suspending the use of any Preliminary Prospectus or the Prospectus has been issued and no proceeding for that purpose has been initiated or, to the Company’s knowledge, threatened by the Commission. The Company has complied in all material respects with each request (if any) from the Commission for additional information. All references in this Agreement to the Registration Statement, the Rule 462(b) Registration Statement, any Preliminary Prospectus, Permitted Free Writing Prospectus or the Prospectus, or any amendments or supplements to any of the foregoing, shall be deemed to include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”).

(c) No Ineligible Issuer. At the time of filing the Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the Securities Act) of the Securities and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405 under the Securities Act, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.

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(d) Compliance with Form. Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the requirements of the Securities Act and the rules and regulations of the Commission thereunder (the “Rules and Regulations”). Each Preliminary Prospectus, the Prospectus and any amendment or supplement thereto, at the time each was filed with the Commission, complied in all material respects with the requirements of the Securities Act and the Rules and Regulations. Each Preliminary Prospectus delivered to the Underwriters for use in connection with this offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(e) Disclosure in Registration Statement. The Registration Statement, when it became effective, did not contain and, as amended or supplemented, if applicable, will not contain, as of the date of such amendment or supplement, an untrue statement of a material fact or omitted or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to any information contained in or omitted from the Registration Statement or any amendment thereto in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representatives specifically for use therein. The parties hereto agree that such information provided by or on behalf of any Underwriter through the Representatives consists solely of the material referred to in Section 6.3 hereof.

(f) Disclosure in Pricing Disclosure Package and Prospectus. The Pricing Disclosure Package, as of the Applicable Time, did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Prospectus will not, as of its date, as of the Closing Date or as of the Option Closing Date, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Each Permitted Free Writing Prospectus complies in all material respects with the applicable provisions of the Securities Act and the Rules and Regulations, and does not conflict with the information contained in the Registration Statement, the Preliminary Prospectus or the Prospectus, and each Permitted Free Writing Prospectus listed in Schedule II hereto, as supplemented by and taken together with the Pricing Disclosure Package did not, as of the Applicable Time, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. No representation and warranty is made in this Section 1(f) with respect to any information contained in or omitted from the Pricing Disclosure Package, the Prospectus or any Permitted Free Writing Prospectus in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Underwriter through the Representatives specifically for use therein. The parties hereto agree that such information provided by or on behalf of any Underwriter through the Representative consists solely of the material referred to in Section 6.3 hereof.

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(g) Permitted Free Writing Prospectuses. Each Permitted Free Writing Prospectus conformed or will conform in all material respects to the requirements of the Securities Act and the Rules and Regulations on the date of first use, and the Company has complied with the requirements of Rule 433 under the Securities Act with respect to each Permitted Free Writing Prospectus including, without limitation, all prospectus delivery, filing, record retention and legending requirements applicable to any such Permitted Free Writing Prospectus. The Company has not (i) distributed any offering material in connection with the Offering other than any Preliminary Prospectus, the Prospectus, and any Permitted Free Writing Prospectus set forth on Schedule II hereto, or (ii) filed, referred to, approved, used or authorized the use of any “free writing prospectus” as defined in Rule 405 under the Securities Act with respect to the Offering or the Shares, except for any Permitted Free Writing Prospectus set forth in Schedule II hereto and any electronic road show previously approved by the Representatives. The Company has retained in accordance with the Securities Act and the Rules and Regulations all Permitted Free Writing Prospectuses that were not required to be filed pursuant to the Securities Act and the Rules and Regulations. The Company has taken all actions necessary so that any “road show” (as defined in Rule 433 under the Securities Act) in connection with the offering of the Securities will not be required to be filed pursuant to the Securities Act and the Rules and Regulations.

(h) Subsidiaries. All of the direct and indirect Subsidiaries of the Company are set forth in, or incorporated by reference into, the Registration Statement, the Pricing Disclosure Package and the Prospectus. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. Except as described in the Pricing Disclosure Package and the Prospectus, no Subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such Subsidiary’s capital stock, from repaying to the Company any loans or advances to such Subsidiary from the Company or from transferring any of such Subsidiary’s properties or assets to the Company or any other Subsidiary of the Company

(i) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization. The Company and each of the Subsidiaries has the requisite power and authority to own and use its properties and assets and to carry on its business as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus. Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in a Material Adverse Effect and, to the knowledge of the Company, no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

(j) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary action on the part of the Company and no further corporate action is required by the Company in connection therewith. This Agreement has been executed and delivered by the Company and constitutes and valid and binding obligation of the Company. Each of the other Transaction Documents has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

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(k) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company, the issuance and sale of the Securities by the Company at the Closing and at any Option Closing (including the use or proceeds from the sale of the Securities as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus), and the consummation by the Company of the other transactions contemplated hereby and by the Registration Statement, the Pricing Disclosure Package and the Prospectus do not and will not (with or without notice or lapse of time or both) (i) conflict with or violate any provision of the Company's or any Subsidiary's certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, violate or constitute a default under, or result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary pursuant to, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement (written or oral), note, credit facility, debt, lease or other agreement, instrument, license, or permit (evidencing a Company or Subsidiary debt or otherwise) to which the Company or any Subsidiary is a party or by which any property, operation or asset of the Company or any Subsidiary may be bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any statute, law, rule, regulation, ordinance, order, judgment, injunction, decree or other restriction of any federal, state, local or other court or governmental or regulatory authority, agency or self-regulatory organization to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary may be bound or affected, except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

(l) Filings, Consents and Approvals. Except as set forth in Disclosure Schedule 3.1(l), the Company is not required to obtain any consent, waiver, authorization, approval or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority having jurisdiction over the Company or its Subsidiaries, its stockholders or the Trading Market in connection with the execution, delivery and performance by the Company of this Agreement or the other Transaction Documents, the issuance and sale of the Securities (including the use of proceeds from the sale of the Securities as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus), the issuance of the Representative’s Securities, the listing or quotation (as applicable) of the Common Stock, the Closing Shares, the Option Shares and the Warrant Shares (and the shares of Common Stock issuable upon exercise of the Representative’s Warrant Agreement) on the NYSE MKT, and the consummation of the transactions contemplated hereby and by the Registration Statement, the Pricing Disclosure Package and the Prospectus, other than: (i) the registration of the Securities under the Securities Act, which has been obtained and is in full force and effect, (ii) the filing with the Commission of the Prospectus, (iii) applications to and filings with, and approval for listing of the Common Stock and the Closing Shares, the Option Shares, the Warrant Shares and the shares of Common Stock issuable upon exercise of the Representative’s Warrant Agreement by, the NYSE MKT, (iv) such filings and consents as may be required under FINRA rules and by-laws in connection with the purchase and distribution of the Securities by the Underwriters, and (v) such filings, consents and qualifications as may be required to be made under applicable state securities or blue sky laws (collectively, the "Required Approvals"). All corporate approvals necessary for the Company to consummate the transactions contemplated by this Agreement have been obtained and are in effect.

(m) Issuance of Securities. The Securities and the Representative’s Securities have been duly and validly authorized and, when issued and delivered by the Company against payment therefor in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to the Transaction Documents. The holder of the Securities will not be subject to personal liability by reason of being such holders. Except as set forth in Disclosure Schedule 3.1(m), the Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company. All corporate action required to be taken for the authorization, issuance and sale of the Securities and the Representative’s Securities has been duly and validly taken. The Securities and the Representative’s Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus.

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(n) Capitalization. The capitalization of the Company is as set forth in the Pricing Disclosure Package and the Prospectus. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as set forth in the Registration Statement and Pricing Disclosure Package, and except as a result of the purchase and sale of the Securities and the issuance of the Representative’s Warrant Agreement, there are no outstanding options, warrants, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. Except as set forth in Disclosure Schedule 3.1(n), the issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Underwriters and except as set forth in the Warrants and the Representative’s Warrant Agreement), and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and nonassessable and have been issued in compliance with all federal and state securities laws and the requirements of the Trading Market, and none of such outstanding shares was issued in violation of any preemptive rights, rights of first refusal or similar rights to subscribe for or purchase securities. The authorized and outstanding shares of capital stock of the Company conform to all statements relating thereto contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus. The offers and sales of the Company's securities were, at the time effected, either registered under the Securities Act and the applicable state securities or Blue Sky laws or, based in part on the representations and warranties of the purchasers, exempt from such registration requirements. Except as set forth in Disclosure Schedule 3.1(n), there are no registration rights agreements, stockholders agreements, voting agreements or other similar agreements with respect to the Company's capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's stockholders. The description of the Company’s stock option plan, restricted stock plan, employee stock purchase plan and other stock plans or arrangements, and the options or other rights granted thereunder, as described in the Pricing Disclosure Package and the Prospectus, accurately and fairly present the information required to be shown with respect to the share option plan, restricted share unit plan, employee stock purchase plan and such other plans and arrangements, and the options and rights granted thereunder.

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(o) SEC Reports. The Company has filed or furnished all reports, schedules, forms, statements and other documents (and exhibits thereto) required to be filed or furnished by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof (the foregoing materials, as the same may be amended, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the "SEC Reports") and any notices, reports or other filings pursuant to applicable requirements of the Trading Market for a period of 12 months preceding the date hereof (or such shorter period as the Company was required by law to file or furnish such material) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports and notices, reports or other filings pursuant to applicable requirements of the Trading Market prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied as to form in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as applicable, and the Rules and Regulations, including but not limited to Regulation S-X. None of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The agreements and documents described in the Registration Statement, the Pricing Disclosure Package, the Prospectus and the SEC Reports conform to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the Rules and Regulations to be described in the Registration Statement, Pricing Disclosure Package, the Prospectus, or the SEC Reports or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Pricing Disclosure Package, the Prospectus, or the SEC Reports, or (ii) is material to the Company's business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company's knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefore may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the best of the Company's knowledge, any other party is in default thereunder and, to the best of the Company's knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the best of the Company's knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses, including, without limitation, those relating to environmental laws and regulations.

(p) Financial Statements. The financial statements of the Company, together with the related notes and schedules, included in the SEC Reports and included or incorporated by reference in the Registration Statement, Pricing Disclosure Package and the Prospectus comply as to form in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements and related notes and schedules (i) have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved ("GAAP"), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and (ii) fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. No other financial statements or supporting schedules or exhibits are required by Regulation S-X to be described, included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package or the Prospectus. There is no pro forma or as adjusted financial information which is required to be included in the Registration Statements, the Pricing Disclosure Package, and the Prospectus or a document incorporated by reference therein in accordance with Regulation S-X which has not been included or incorporated as so required. All information contained in the Registration Statement, the Pricing Disclosure Package and the Prospectus regarding “non-GAAP financial measures” (as defined in Regulation G) complies with Regulation G and Item 10 of Regulation S-K, to the extent applicable.

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(q) Material Changes; Undisclosed Events, Liabilities or Developments. Except as set forth in Disclosure Schedule 3.1(q), since the date of the latest audited financial statements included within the Registration Statement and the Pricing Disclosure Package, (i) neither the Company nor any of its Subsidiaries has sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Pricing Disclosure Package; (ii) there has been no event, occurrence or development or prospective development that has had or that could reasonably be expected to result in a Material Adverse Effect; (iii) the Company has not incurred any liabilities or obligations (direct, contingent or otherwise) that are material to the Company or its Subsidiaries other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company's financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission; (iv) the Company has not altered its method of accounting in any material respect except as otherwise required pursuant to GAAP; (v) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock; (vi) the Company has not issued any equity securities, except pursuant to existing Company stock option plans; and (vii) no officer or director of the Company has resigned from any position with the Company. The Company does not have pending before the Commission any request for confidential treatment of information. Other than the issuance of the Securities as contemplated by this Agreement, there is no event, liability, fact, circumstance, occurrence or development that has occurred or which exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that is required to be disclosed by the Company under applicable securities laws on the date that this representation is made or deemed to be made that has not already been publicly disclosed at least one Trading Day prior to the date that this representation is made or deemed to be made.

(r) Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective officers or directors (in any such officer's or director's capacity as such) or their properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an "Action") which is required to be described in the Registration Statement, the Pricing Disclosure Package or the Prospectus and is not described therein or which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or the performance by the Company of its obligations thereunder, (ii) could, if there were an unfavorable decision, ruling or finding, have or reasonably be expected to result in a Material Adverse Effect or (iii) involves a claim or violation of, or liability under, any federal or state securities law or which involves a claim of breach of fiduciary duty. There has not been and, to the knowledge of the Company, there is not currently pending or contemplated, any investigation by the Commission involving the Company or any Subsidiary or any current or former director or officer of the Company or any Subsidiary (in his or her capacity as such).

(s) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, or of any of its suppliers, customers or contractors, which, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the Company's or its Subsidiaries' employees is a member of a union that relates to such employee's relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company is not aware that any key employee or significant group of employees of the Company or any Subsidiary plans to terminate employment with the Company or any such Subsidiary.

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(t) ERISA. No “prohibited transaction” (as defined in Section 406 of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended from time to time (the “Code”)) or “accumulated funding deficiency” (as defined in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other than events with respect to which the thirty (30)-day notice requirement under Section 4043 of ERISA has been waived) has occurred or could reasonably be expected to occur with respect to any employee benefit plan of the Company or any of its Subsidiaries which could, singularly or in the aggregate, have a Material Adverse Effect. Each employee benefit plan of the Company or any of its Subsidiaries is in compliance in all material respects with applicable law, including ERISA and the Code. The Company and its Subsidiaries have not incurred and could not reasonably be expected to incur liability under Title IV of ERISA with respect to the termination of, or withdrawal from, any pension plan (as defined in ERISA). Each pension plan for which the Company or any of its Subsidiaries would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified, and nothing has occurred, whether by action or by failure to act, which could, singularly or in the aggregate, cause the loss of such qualification.

(u) Environmental Laws. The Company and its Subsidiaries are in compliance with all foreign, federal, state and local rules, laws and regulations relating to the use, treatment, storage and disposal of hazardous or toxic substances or waste and protection of health and safety or the environment which are applicable to the Company’s business (“Environmental Laws”), except where the failure to comply would not, singularly or in the aggregate, have a Material Adverse Effect. There has been no storage, generation, transportation, handling, treatment, disposal, discharge, emission, or other release of any kind of toxic or other wastes or other hazardous substances by, due to, or caused by the Company or any of its Subsidiaries (or, to the Company’s knowledge, any other entity for whose acts or omissions the Company or any of its Subsidiaries is or may otherwise be liable) upon any of the property now or previously owned or leased by the Company or any of its Subsidiaries, or upon any other property, in violation of any law, statute, ordinance, rule, regulation, order, judgment, decree or permit or which would, under any law, statute, ordinance, rule (including rule of common law), regulation, order, judgment, decree or permit, give rise to any liability except for any violation or liability which would not have, singularly or in the aggregate with all such violations and liabilities, a Material Adverse Effect; and there has been no disposal, discharge, emission or other release of any kind onto such property or into the environment surrounding such property of any toxic or other wastes or other hazardous substances with respect to which the Company or any of its Subsidiaries has knowledge, except for any such disposal, discharge, emission, or other release of any kind which would not have, singularly or in the aggregate with all such discharges and other releases, a Material Adverse Effect.

(v) Compliance. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, could reasonably be expected to result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental or regulatory authority or (iii) is in violation of any statute, rule, ordinance or regulation of any governmental or regulatory authority or the Trading Market, including without limitation all foreign, federal, state and local laws applicable to its business, including without limitation, in connection with taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as would not have or reasonably be expected to result in a Material Adverse Effect.

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(w) Regulatory Permits. The Company and the Subsidiaries possess all licenses, certificates, authorizations and permits issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign regulatory authorities necessary to own or lease their respective properties and to conduct their respective businesses as described in the Registration Statement, Pricing Disclosure Package and the Prospectus, except where the failure to possess or make the same, individually or in the aggregate, would not result in a Material Adverse Effect (each, a "Material Permit"). The Company and its Subsidiaries are in compliance with all such Material Permits; all such Material Permits are valid and in full force and effect, except where the validity or failure to be in full force and effect would not, singularly or in the aggregate, have a Material Adverse Effect. Neither the Company nor any Subsidiary has received any notice of proceedings relating to the limitation, revocation, cancellation, suspension, modification or non-renewal of any Material Permit and to the knowledge of the Company, no event has occurred that allows or results in, or after notice or lapse of time or both would allow or result in, revocation, suspension, termination or invalidation (or proceedings related thereto) of any such Material Permit. The disclosures in the Registration Statement, Pricing Disclosure Package and the Prospectus concerning the effects of federal, state, local and all foreign regulation on the Company's business as currently conducted and contemplated are correct in all material respects.

(x) Title to Assets. Except as set forth in Disclosure Schedule 3.1(x), the Company and the Subsidiaries have good and marketable title in fee simple to, or have valid and marketable rights to lease or otherwise use, all real property and all personal property that is material to the business of the Company and the Subsidiaries, taken as a whole, as described in the Registration Statement, the Pricing Disclosure Package and the Prospectus, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made in accordance with GAAP, and the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance. Neither the Company nor any of its Subsidiaries has received any written notice of any claim (i) adverse to the rights of the Company or any of its Subsidiaries under any of the leases or subleases mentioned above, or (ii) affecting or questioning the rights of the Company or any of its Subsidiaries to the continued possession of the leased or subleased premises under any such lease or sublease, which in each of clauses (i) and (ii) would reasonably be expected to result in a Material Adverse Effect.

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(y) Intellectual Property. The Company and its Subsidiaries own or possess the right to use all (i) patents, patent applications, trademarks, trademark registrations, service marks, service mark registrations, Internet domain name registrations, copyrights, copyright registrations, licenses, trade secret rights (“Intellectual Property Rights”) and (ii) inventions, software, works of authorships, trade marks, service marks, trade names, databases, formulae, know how, Internet domain names and other intellectual property (including trade secrets and other unpatented and/or unpatentable proprietary confidential information, systems, or procedures) (collectively, "Intellectual Property Assets") necessary to conduct its businesses as currently conducted, and as currently proposed to be conducted and described in the Registration Statement, Pricing Disclosure Package and the Prospectus. Neither the Company nor any Subsidiary has received any opinion from its legal counsel concluding that any activities of their respective businesses infringe, misappropriate, or otherwise violate, valid and enforceable Intellectual Property Rights of any other person, and have not received written notice of any challenge, which is to their knowledge still pending, by any other person to the rights of the Company and its Subsidiaries with respect to any Intellectual Property Rights or Intellectual Property Assets owned or used by the Company and its Subsidiaries. To the knowledge of the Company, the business of the Company and its Subsidiaries as now conducted does not give rise to any infringement of, any misappropriation of, or other violation of, any valid and enforceable Intellectual Property Rights of any other person. To the knowledge of the Company, all licenses for the use of the Intellectual Property Rights described in the Registration Statement, Pricing Disclosure Package and the Prospectus are valid, binding upon, and enforceable by or against the parties thereto in accordance to its terms. The Company and its Subsidiaries have complied in all material respects with, and are not in breach nor has received any written notice of any asserted or threatened claim of breach of any Intellectual Property license, and the Company has no knowledge of any breach by any other person to any Intellectual Property license. Except as described in the Pricing Disclosure Package and the Prospectus, no claim has been made against the Company nor any of its Subsidiaries alleging the infringement by the Company or any of its Subsidiaries of any patent, trademark, service mark, trade name, copyright, trade secret, license in or other intellectual property right or franchise right of any person. The Company and its Subsidiaries have taken reasonable steps to protect, maintain and safeguard its Intellectual Property Rights, including the execution of appropriate nondisclosure and confidentiality agreements. The consummation of the transactions contemplated by this Agreement will not result in the loss or impairment of or payment of any additional amounts with respect to, nor require any further consent of any other person in respect of, the right of the Company and its Subsidiaries to own, use, or hold for use any of the Intellectual Property Rights as owned, used or held for use in the conduct of the business as currently conducted. The Company and its Subsidiaries have taken reasonable actions to obtain ownership of works of authorship and inventions made by its employees, consultants and contractors during the time they were employed by or under contract with the Company and its Subsidiaries and which relate to the business of the Company, or licenses to use such works of authorship or inventions.

(z) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers liability insurance coverage. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost. None of the Company or any of its Subsidiaries insures risk of loss through any captive insurance, risk retention group, reciprocal group or by means of any fund or pool of assets specifically set aside for contingent liabilities other than as described in the Pricing Disclosure Package.

(aa) Transactions With Affiliates and Employees. Except as set forth in the Registration Statement and Pricing Disclosure Package, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from, any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $100,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

(bb) Sarbanes-Oxley. The Company and the Subsidiaries are in material compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date and any Option Closing Date.

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(cc) Certain Fees. Except as set forth in the Registration Statement and the Pricing Disclosure Package and the Prospectus, no brokerage or finder's fees or commissions are or will be payable by the Company, any Subsidiary or Affiliate of the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. To the Company's knowledge, there are no other arrangements, agreements or understandings of the Company or, to the Company's knowledge, any of its stockholders that may affect the Underwriters' compensation, as determined by FINRA. Except as set forth in Schedule 3.1(cc), the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder's fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) other than to the Representative in connection with the Offering, any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve (12) months prior to the Execution Date. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein. The Underwriters shall have no obligation or liability with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be or become due in connection with the transactions contemplated by the Transaction Documents.

(dd) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities will not be, or be an Affiliate of, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an "investment company" subject to registration under the Investment Company Act of 1940, as amended.

(ee) Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. The Company is subject to and in compliance in all material respects with the reporting requirements of Section 13(a) or Section 15(d) of the Exchange Act. The Company has not, in the 12 months preceding the date hereof or the Closing Date or any Option Closing Date, received notice from any Trading Market on which the Common Stock is or has been listed or quoted (as applicable) to the effect that the Company is not in compliance with the listing or quotation (as applicable) or maintenance requirements of such Trading Market. The Common Stock and the Closing Shares, Option Shares, Warrant Shares and shares of Common Stock issuable upon exercise of the Representative’s Warrant Agreement have been approved for listing on the NYSE MKT, subject to official notice of issuance. As of the Closing Date, the Company will be in compliance in all material respects with all applicable corporate governance requirements set forth in the rules of the NYSE MKT that are then in effect and is actively taking steps to ensure that it will be in compliance with other applicable corporate governance requirements set forth in the NYSE MKT rules as may be required.

(ff) Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company's certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable as a result of the Underwriters and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including, without limitation, the Company's issuance of the Securities and the Underwriters' ownership of the Securities.

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(gg) No Integrated Offering. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of Section 5 of the Securities Act and with respect to any applicable shareholder approval provisions of the NYSE MKT or any Trading Market on which any of the securities of the Company are listed or quoted.

(hh) Certain Disclosures. The statements set forth in the Pricing Disclosure Package and the Prospectus under the caption “Description of Capital Stock,” insofar as they purport to constitute a summary of the terms of the Common Stock, under the caption “Material U.S. Federal Tax Consequences,” and under the caption “Underwriting,” insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate and complete in all material respects.

(ii) Solvency. Based on the consolidated financial condition of the Company as of the Closing Date and any Option Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company's assets exceeds the amount that will be required to be paid on or in respect of the Company's existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company's assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. The Registration Statement and the Pricing Disclosure Package set forth as of the date of such information, documents or reports included or incorporated by reference therein all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments.

(jj) Tax Status. The Company and its Subsidiaries each (i) have timely filed all necessary federal, state, local and foreign tax returns (or timely filed applicable extensions therefor) that have been required to be filed, and all such returns were true, complete and correct, (ii) have paid all federal, state, local and foreign taxes, assessments, governmental or other charges due and payable for which it is liable, including, without limitation, all sales and use taxes and all taxes which the Company or any of its Subsidiaries is obligated to withhold from amounts owing to employees, creditors and third parties, and (iii) do not have any tax deficiency or claims outstanding or assessed or, to its knowledge, proposed against any of them, except those, in each of the cases described in clauses (i), (ii) and (iii) of this paragraph (jj), that would not, singularly or in the aggregate, have a Material Adverse Effect. The Company and its Subsidiaries have not engaged in any transaction which is a corporate tax shelter or which could be characterized as such by the Internal Revenue Service or any other taxing authority. The accruals and reserves on the books and records of the Company and its Subsidiaries in respect of tax liabilities for any taxable period not yet finally determined are adequate to meet any assessments and related liabilities for any such period, and since December 31, 2013 the Company and its Subsidiaries have not incurred any liability for taxes other than in the ordinary course. There is no tax lien, whether imposed by any federal, state, foreign or other taxing authority, outstanding against the assets, properties or business of the Company.

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(kk) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA. The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all respects with the FCPA.

(ll) Anti-Money Laundering Laws. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with all applicable financial recordkeeping and reporting requirements, including those of the Bank Secrecy Act, as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), the Currency and Foreign Transactions Reporting Act of 1970, as amended, and the applicable anti-money laundering statutes of jurisdictions where the Company and its Subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its Subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

(mm) OFAC. Neither the Company, any of its Subsidiaries or controlled affiliates or any director or officer of the Company, nor, to the Company’s knowledge, any agent or representative of the Company or any of its Subsidiaries, is an individual or entity (“Person”) that is, or is owned or controlled by a Person that is the subject or target of any sanctions administered or enforced by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), the United Nations Security Council, the European Union, Her Majesty’s Treasury, or other relevant sanctions authority (collectively, “Sanctions”), nor located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, Libya, North Korea, Sudan and Syria).

(nn) Medicare and Medicaid Programs. To the extent required in connection with their respective businesses, each of the Company and its Subsidiaries has the requisite provider number or other authorization to bill the Medicare program and the respective Medicaid program in the state or states in which such entity operates unless failure to maintain such provider number or other authorization would not, individually or in the aggregate, have a Material Adverse Effect; neither the Company nor any of its Subsidiaries is subject to any pending or, to the Company’s knowledge, threatened or contemplated action which could reasonably be expected to result either in a revocation of any provider number or authorization or in the Company’s or any Subsidiary’s exclusion from the Medicare or any state Medicaid programs; the Company’s and each of its Subsidiaries’ business practices have been structured in a manner reasonably designed to comply with the federal or state laws governing Medicare and state Medicaid programs, including, without limitation, Sections 1320a-7a and 1320a-7b of Title 42 of the United States Code, and the Company reasonably believes that it is in compliance with such laws; the Company and its Subsidiaries have taken reasonable actions designed to ensure that they do not: (i) violate the False Claims Act, 31 U.S.C. §§ 3729-3733 or (ii) allow any individual with an ownership or control interest (as defined in 42 U.S.C. § 1320a-3(a)(3)) in the Company or any of its Subsidiaries or have any officer, director or managing employee (as defined in 42 U.S.C. § 1320a-5(b)) of the Company or any of its Subsidiaries who would be a person excluded from participation in any federal health care program (as defined in 42 U.S.C. § 1320a-7b(f)) as described in 42 U.S.C. § 1320a-7(b)(8); and the Company and its Subsidiaries have structured their respective businesses practices in a manner designed to comply with the federal and state laws regarding physician ownership of (or financial relationship with), and referral to, entities providing healthcare-related goods or services, and with laws requiring disclosure of financial interests held by physicians in entities to which they may refer patients for the provisions of healthcare-related goods or services, and the Company and its Subsidiaries are in compliance with such laws.

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(oo) Third-Party Payors. Except as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus and except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, the accounts receivable of the Company and each of its Subsidiaries have been adjusted to reflect contractual allowances provided to third-party payors, such as Blue Cross/Blue Shield, private insurance companies, health maintenance organizations, preferred provider organizations, alternative delivery systems, managed care systems, government contracting agencies and other third-party payors and the rates established by governmental payors, including Medicare, Medicaid and, in some instances, for workers' compensation claims. In particular, accounts receivable relating to such third-party payors do not exceed amounts any obligee is entitled to receive under any capitation arrangement, fee schedule, discount formula, cost-based reimbursement or other adjustment or limitation to its usual charges.

(pp) Healthcare Regulations. The statements in the Registration Statement, the Pricing Disclosure Package and the Prospectus under the captions: ["Risk Factors—Risks Related to Healthcare Regulation" and "Business—Government Regulation",] insofar as such statements describe the state (but only such states in which the Company presently operates), federal and administrative healthcare laws, rules and regulations relating to the provision of healthcare services which are applicable to the Company or any of its Subsidiaries, including but not limited to the federal Anti-kickback Statute (42 U.S.C. § 1320a-7b(b)), the Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (“HIPAA”), and the Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Affordability Reconciliation Act of 2010, the regulations promulgated pursuant to such laws, and any successor government programs, [and comparable state laws and regulations relating to Good Clinical Practices and Good Laboratory Practices] (collectively, the "Healthcare Laws"), are true and correct in all material respects; to the knowledge of the Company there are no applicable state (but only such states in which the Company presently operates), federal and/or administrative healthcare laws, rules and regulations relating to the provision of healthcare services which as of this date are material to the business of the Company or any of its Subsidiaries, which are not described in the Registration Statement, the Pricing Disclosure Package or the Prospectus. Neither the Company nor any of its Subsidiaries is in violation of any Healthcare Laws, except for any violation that would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) each of the Company and its Subsidiaries has filed, maintained and obtained all notices, reports, documents, forms, notifications, submissions, supplements, amendments or other information required to be filed under the Healthcare Laws, and (ii) all such notices were complete and correct on the date filed, or have been subsequently corrected or supplemented. To the knowledge of the Company, neither the Company nor any of its subsidiaries has received any written notice of potential or actual material non-compliance by, or material liability of, the Company or any of its Subsidiaries under any Healthcare Laws.

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(qq) Privacy and Data Security. The Company and each of its Subsidiaries, taken as a whole, have used commercially reasonable efforts to (i) make all disclosures to, and obtain all necessary consents from, users, customers and workers (i.e., employees, independent contractors and temporary employees) of Company and its Subsidiaries required by applicable law relating to privacy and data security and (ii) file registrations as required with the applicable data protection authority. The Company and its Subsidiaries also have ensured that each of them has complied with any cross-border limitation relating to the transfer of Personal Information (as defined below). As used in this Agreement, “Personal Information” means any information that (alone or in combination with other information held by a Person) can be used to identify a specific individual. The Company and each of its Subsidiaries, taken as a whole, maintain policies and procedures regarding data security, privacy and data use that are commercially reasonable and, in any event, comply with the Company’s obligations to its customers and applicable laws, rules and regulations. To the knowledge of the Company, there have not been, and the transaction contemplated under this Agreement will not result in, any security breaches of any security policy, data use restriction or privacy breach under any such policies or any applicable laws, rules or regulations. No claims have been asserted or, to the knowledge of the Company, threatened against the Company or any Subsidiary by any person alleging a violation of such person’s privacy, personal or confidentiality rights under any applicable rules, policies or procedure.

(rr) Accountants. The Company Auditor (i) is an independent registered public accounting firm as required by Regulation S-X and the Public Company Accounting Oversight Board and (ii) has expressed its opinion with respect to the financial statements for the fiscal year ending December 31, 2013 and included in or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus. Except as disclosed in the Registration Statement, the Pricing Disclosure Package and the Prospectus, the Company Auditor has not, during the periods covered by the financial statements included therein, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.

(ss) Internal Controls. The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15 of the General Rules and Regulations under the Exchange Act (the “Exchange Act Rules”)) that complies with the requirements of the Exchange Act and has been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the Pricing Disclosure Package, since the end of the Company’s most recent audited fiscal year, there has been (A) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (B) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

(tt) [Reserved.]

(uu) Disclosure Controls. The Company maintains disclosure controls and procedures (as such is defined in Rule 13a-15 of the Exchange Act Rules) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that information required to be disclosed by the Company is accumulated and communicated to the Company’s management, including the Company’s principal executive officer and principal financial officer by others within those entities; such disclosure controls and procedures are effective in all material respects to perform the functions for which they were established.

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(vv) FINRA Affiliation and Information. No (i) officer or director, (ii) any beneficial owner of 5% or more of the Company's securities, or (iii) beneficial owner of the Company’s unregistered securities acquired during the 180-day period immediately preceding the filing of the Registration Statement is an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA). All information provided by the Company in its FINRA Questionnaire to counsel to the Underwriters specifically for use by such counsel in connection with its Public Offering System filings (and related disclosure) with FINRA is true, correct and complete in all material respects.

(ww) Margin Securities. The Company does not own any “margin securities” as that term is defined in Regulation U of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), and none of the proceeds of the sale of the Securities will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security, for the purpose of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Securities to be considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal Reserve Board.

(xx) Officers' Certificate. Any certificate signed by any duly authorized officer of the Company and delivered to the Representative or to GT shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.

(yy) Board of Directors. The Board of Directors is comprised of the persons set forth in the Registration Statement, Pricing Disclosure Package and Prospectus. The qualifications of the director-nominees set forth in the Registration Statement, Pricing Disclosure Package and Prospectus comply with the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder applicable to the Company and the rules of the Trading Market. At least one of the director-nominees qualifies as a "financial expert" as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and the rules of the Trading Market. In addition, each of the director-nominees qualify as "independent" as defined under the rules of the Trading Market.

(zz) Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased or paid any compensation for soliciting purchases of any of the Securities or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company.

(aaa) Minute Book; Company Information. The minute books of the Company and each Subsidiary have been made available to the Underwriters and counsel for the Underwriters, and such books (i) contain a complete summary of all meetings and actions of the board of directors (including each board committee) and stockholders of the Company and each Subsidiary since the time of its respective incorporation or organization through the date of the latest meeting and action, and (ii) accurately in all material respects reflect all transactions referred to in such minutes. All appropriate and material information, documents, contracts and agreements relating to the Company (“Company Information”) have been provided to or otherwise disclosed to the Underwriters and is accurate and complete. The Company is not aware of any other Company Information that has not been so provided or disclosed.

(bbb) Forward Looking Statements; Market Data. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in either the Pricing Disclosure Package or the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith. The statistical and market related data included or incorporated by reference in the Registration Statement, the Pricing Disclosure Package and the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate, and such data agree in all material respects with the sources from which they are derived.

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ARTICLE IV

OTHER AGREEMENTS OF THE PARTIES

4.1 Registration Statement. The Company has delivered, or will as promptly as practicable deliver, to the Underwriters complete conformed copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof, and conformed copies of the Registration Statement (without exhibits), any Preliminary Prospectus, any Permitted Free Writing Prospectus and the Prospectus, as amended or supplemented, in such quantities and at such places as an Underwriter reasonably requests no later than 10:00 A.M., New York time, on the business day following the Execution Date and from time to time thereafter. Neither the Company nor any of its directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering material in connection with the offering and sale of the Securities other than the Prospectus, the Preliminary Prospectus, any Permitted Free Writing Prospectus, the Registration Statement, and copies of the documents incorporated by reference therein. The Company shall not file any such amendment or supplement to which the Representative shall reasonably object in writing.

4.2 Federal Securities Laws.

(a) Compliance. The Company shall prepare the Prospectus in a form approved by the Representative and file such Prospectus pursuant to, and within the time period specified in, Rule 424(b) and Rule 430A under the Securities Act; prior to the last date on which an Option Closing Date, if any, may occur, the Company shall file no further amendment to the Registration Statement or amendment or supplement to the Prospectus to which the Representative shall object in writing after being furnished in advance a copy thereof and given a reasonable opportunity to review and comment thereon; the Company shall notify the Representative promptly (and, if requested by the Representative, confirm such notice in writing) (i) when the Registration Statement and any amendments thereto become effective, (ii) of any request by the Commission for any amendment of or supplement to the Registration Statement or the Prospectus or for any additional information, (iii) of the Company’s intention to file, or prepare any supplement or amendment to, the Registration Statement, any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus, (iv) of the mailing or the delivery to the Commission for filing of any amendment of or supplement to the Registration Statement or the Prospectus, including but not limited to Rule 462(b) under the Securities Act, (v) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto, or suspending the use of any Preliminary Prospectus, the Prospectus or any Permitted Free Writing Prospectus or, in each case, of the initiation or threatening of any proceedings therefore, (vi) of the receipt of any comments from the Commission, and (vii) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for that purpose. If the Commission shall propose or enter a stop order at any time, the Company will make every reasonable effort to prevent the issuance of any such stop order and, if issued, to obtain the lifting of such order as soon as possible.

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(b) Amendments and Supplements. If at any time when a prospectus relating to the Securities (or, in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act) is required to be delivered under the Securities Act, any event shall have occurred as a result of which the Pricing Disclosure Package (prior to the availability of the Prospectus) or the Prospectus as then amended or supplemented would, in the judgment of the Underwriters or the Company, include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time of delivery of such Pricing Disclosure Package or Prospectus (or, in lieu thereof, the notice referred to in Rule 173(a) under the Securities Act) to the purchaser, not misleading, or if to comply with the Securities Act, the Exchange Act or the Rules and Regulations it shall be necessary at any time to amend or supplement the Pricing Disclosure Package, the Prospectus or the Registration Statement, the Company will notify the Representative promptly and prepare and file with the Commission an appropriate amendment or supplement (in form and substance satisfactory to the Representative) that will correct such statement or omission or effect such compliance, and will use its best efforts to have any amendment to the Registration Statement declared effective as soon as possible.

(c) Exchange Act Registration. For a period of three years from the Execution Date, the Company will use its commercially reasonable efforts to maintain the registration of the Common Stock under the Exchange Act. The Company will not deregister the Common Stock under the Exchange Act without the prior written consent of the Representative.

(d) Free Writing Prospectuses. The Company represents and agrees that it has not made and will not make any offer relating to the Securities that would constitute an “issuer free writing prospectus,” as defined in Rule 433 under the Securities Act, without the prior consent of the Representative. Any such free writing prospectus consented to by the Representative is hereinafter referred to as a "Permitted Free Writing Prospectus." The Company represents that it will treat each Permitted Free Writing Prospectus as an "issuer free writing prospectus" as defined in the rules and regulations under the Securities Act, and has complied and will comply with the applicable requirements of Rule 433 of the Securities Act, including timely Commission filing, where required, legending and record-keeping. If at any time any event shall have occurred as a result of which any Permitted Free Writing Prospectus as then amended or supplemented would, in the judgment of the Representative or the Company, conflict with the information in the Registration Statement, the Pricing Disclosure Package or the Prospectus as then amended or supplemented or would, in the judgment of the Representative or the Company, include an untrue statement of a material fact or omit to state any material necessary in order to make the statements therein, in the light of the circumstances existing at the time of delivery to the purchaser, not misleading, or if to comply with the Securities Act or the Rules and Regulations it shall be necessary at any time to amend or supplement any Permitted Free Writing Prospectus, the Company will notify the Representative promptly and, if requested by the Representative, prepare and furnish without charge to each Underwriter an appropriate amendment or supplement (in form and substance satisfactory to the Representative) that will correct such statement, omission or conflict or effect such compliance.

4.3 Delivery to the Underwriters of Prospectuses. The Company will deliver to the Underwriters, without charge, from time to time during the period when the Prospectus is required to be delivered under the Securities Act or the Exchange Act such number of copies of each Prospectus as the Underwriters may reasonably request.

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4.4 Effectiveness and Events Requiring Notice to the Underwriters. The Company will use its commercially reasonable efforts to cause the Registration Statement to remain effective with a current prospectus until the later of 12 months from the Execution Date and the date upon which the Warrants are no longer outstanding and will notify the Underwriters and holders of the Warrants immediately and confirm the notice in writing: (i) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that purpose; (ii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement or Prospectus under the Securities Act in respect of the Securities; (iv) of the receipt of any comments or request for any additional information from the Commission; and (v) of the happening of any event during the period described in this Section 4.4 that, in the judgment of the Company, makes any statement of a material fact made in the Registration Statement, the Prospectus or any Prospectus Supplement untrue or that requires the making of any changes in the Registration Statement, the Prospectus or any Prospectus Supplement in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification at any time, the Company will make commercially reasonable efforts to obtain promptly the lifting of such order. Notwithstanding the foregoing, as soon as practicable after the one-year anniversary of the Closing Date but in no event later than ten (10) days thereafter, the Company agrees to prepare and file with the Commission a post-effective amendment to the Registration Statement for the resale of the shares of Common Stock issuable upon exercise of the Representative’s Warrant.

4.5 State Securities Laws Filings. Promptly from time to time, the Company will use its best efforts, in cooperation with the Representative, to qualify the Securities for offering and sale under the securities laws relating to the offering or sale of the Securities of such jurisdictions, domestic or foreign, as the Representative may designate and to maintain such qualification in effect for so long as required for the distribution thereof; except that in no event shall the Company be obligated in connection therewith to qualify as a foreign corporation or to execute a general consent to service of process.

4.6 [Reserved.]

4.7 Reports to the Underwriters. For a period of two (2) years from the Execution Date, the Company will furnish to the Underwriters copies of such financial statements and other periodic and special reports as the Company from time to time furnishes generally to holders of any class of its securities and also promptly furnish to the Underwriters: (i) a copy of each periodic report the Company has filed with the Commission; (ii) a copy of each Form 8-K prepared and filed by the Company; and (iii) a copy of each registration statement filed by the Company under the Securities Act, provided that documents filed with the Commission pursuant to its EDGAR system shall be deemed to have been delivered to the Underwriters pursuant to this Section.

4.8 General Expenses Related to the Offering. The Company hereby agrees to pay on each of the Closing Date and each Option Closing Date, if any (to the extent not paid on the Closing Date), all expenses incident to the performance of the obligations of the Company under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration of the Securities to be sold in the Offering with the Commission; (b) all actual FINRA filing fees associated with the review of the Offering by FINRA up to a maximum of $15,000, including legal fees and disbursements of counsel to the Underwriters in connection with such FINRA filings; (c) all actual fees, expenses and disbursements relating to background checks of the Company’s officers and directors in an amount not to exceed $2,500 per individual, such expenses to be documented prior to being reimbursed; (d) all fees, expenses and disbursements relating to the registration or qualification of such securities to be sold hereunder under the “blue sky” securities laws of such states and other jurisdictions as the Representative may reasonably designate and are required in connection with the Offering up to a maximum of $15,000 (including, without limitation, all filing and registration fees and legal fees and disbursements of counsel to the Underwriters in connection with such “blue sky” registrations or qualifications)); (e) all fees, expenses and disbursements relating to the registration, qualification or exemption of such securities to be sold hereunder under the securities laws of such foreign jurisdictions as the Representative may reasonably designate and are required in connection with the Offering (including related legal fees and disbursements of counsel to the Underwriters); (f) the costs of all mailing and printing of the underwriting documents (including, without limitation, this Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney), Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as Laidlaw may reasonably deem necessary; (g) the costs of preparing, printing and delivering certificates representing any of the securities to be sold hereunder; (h) fees and expenses of the transfer agent for the Common Stock and Warrants; (i) stock transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the Representative; (j) all fees, expenses and disbursements of counsel to the Underwriters; (k) all fees and expenses relating to the application and listing of the Common Stock, Closing Shares, Option Shares and Warrant Shares on the NYSE MKT; (l) the fees and expenses of the Company’s accountants; and (m) the fees and expenses of the Company’s legal counsel and other agents and representatives; and (n) the fees and expenses associated with a public relations firm engaged by the Company; provided, however, that the Company’s obligation with respect to the fees and expenses described in clauses (a) through (j) above shall not exceed an aggregate of $100,000. The Company has paid the Representative an advance of $35,000, which will be applied against the accountable expenses that will be paid to the Underwriters in connection with the Offering on each of the Closing Date and each Option Closing Date, and will be refunded to the extent not fully incurred. The Underwriters may also deduct from the net proceeds of the Offering payable to the Company on the Closing Date or each Option Closing Date, if any, the expenses set forth herein to be paid by the Company to the Underwriters.

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4.9 Non-Accountable Expenses. The Company further agrees that, in addition to the expenses payable pursuant to Section 4.8, on the Closing Date it shall pay to the Representative, by deduction from the net proceeds of the Offering contemplated herein, a non-accountable expense allowance equal to one and a half percent (1.5%) of the gross proceeds received by the Company from the sale of the Firm Units (excluding the Option Units).

4.10 Application of Net Proceeds. The Company will apply the net proceeds from the Offering received by it in a manner consistent with the application described under the caption "Use of Proceeds" in the Prospectus.

4.11 Delivery of Earnings Statements to Security Holders. The Company will make generally available to its security holders as soon as practicable, but not later than the first day of the fifteenth full calendar month following the Execution Date, an earnings statement (which need not be certified by independent public or independent certified public accountants unless required by the Securities Act or the Rules and Regulations, but which shall satisfy the provisions of Section 11(a) of the Securities Act and, at the Company’s option, Rule 158) covering a period of at least twelve consecutive months beginning after the Effective Date (as defined in Rule 158(c) under the Securities Act). Such earnings statement filed with the Commission pursuant to its EDGAR system shall be deemed to have been made available to the security holders pursuant to this Section.

4.12 Stabilization. Until the Representatives shall have notified the Company of the completion of the distribution of the Securities, the Company will not, and will use its reasonable best efforts to cause its affiliated purchasers (as defined in Regulation M under the Exchange Act) not to, either alone or with one or more other persons, bid for or purchase, for any account in which it or any of its affiliated purchasers has a beneficial interest, any Securities, or attempt to induce any person to purchase any Securities; and not to, and to use its reasonable best efforts to cause its affiliated purchasers not to, make bids or purchase for the purpose of creating actual, or apparent, active trading in or of raising the price of the Securities.

4.13 Internal Controls. The Company will maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

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4.14 Accountants. For a period of three (3) years following the Execution Date, the Company shall continue to retain an independent certified public accounting firm. The Underwriters acknowledge that the Company Auditor is an independent certified public accounting firm acceptable to the Underwriters.

4.15 FINRA. The Company shall advise the Underwriters (who shall make an appropriate filing with FINRA) if it is aware that any 5% or greater shareholder of the Company becomes an affiliate or associated person of a FINRA member firm.

4.16 No Fiduciary Duties. The Company acknowledges and agrees that the Underwriters' responsibility to the Company is solely contractual and commercial in nature, based on arms-length negotiations and that neither the Underwriters nor their affiliates or any selected dealer shall be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering and the other transactions contemplated by this Agreement. Notwithstanding anything in this Agreement to the contrary, the Company acknowledges that the Underwriters may have financial interests in the success of the Offering that are not limited to the difference between the price to the public and the purchase price paid to the Company by the Underwriters for the shares and the Underwriters have no obligation to disclose, or account to the Company for, any of such additional financial interests. The Company further acknowledges and agrees that (i) the purchase and sale of the Shares pursuant to this Agreement, including the determination of the initial public offering price of the Shares and any related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the several Underwriters, on the other hand; (ii) in connection with the Offering and the process leading thereto, each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company or its stockholders, creditors, employees or any other party; (iii) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to the Offering or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) and no Underwriter has any obligation to the Company with respect to the Offering except the obligations expressly set forth in this Agreement; (iv) the Underwriters and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company; (v) any duties and obligations that the Underwriters may have to the Company shall be limited to those duties and obligations specifically stated herein; and (vi) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the Offering and the Company has consulted its own respective legal, accounting, regulatory and tax advisors to the extent it deemed appropriate. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Underwriters with respect to any breach or alleged breach of fiduciary duty.

4.17 Warrant Shares. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the issuance of the Warrant Shares or if the Warrant is exercised via cashless exercise at a time when such Warrant Shares would be eligible for resale under Rule 144 by a non-affiliate of the Company, the Warrant Shares issued pursuant to any such exercise shall be issued free of all restrictive legends. If at any time following the date hereof the Registration Statement (or any subsequent registration statement registering the sale or resale of the Warrant Shares) is not effective or is not otherwise available for the sale of the Warrant Shares, the Company shall immediately notify the holders of the Warrants in writing that such registration statement is not then effective and thereafter shall promptly notify such holders when the registration statement is effective again and available for the sale of the Warrant Shares (it being understood and agreed that the foregoing shall not limit the ability of the Company to issue, or any holder thereof to sell, any of the Warrant Shares in compliance with applicable federal and state securities laws).

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4.18 Board Composition and Board Designations. The Company shall ensure that: (i) the qualifications of the persons serving as board members and the overall composition of the Board of Directors comply with the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and with the listing requirements of the NYSE MKT and (ii) at least one member of the Board of Directors qualifies as a "financial expert" as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.

4.19 Securities Laws Disclosure; Publicity. At the request of the Representative, no later than 9:00 a.m. Eastern time on the date succeeding the Effective Date, the Company shall issue a press release disclosing the material terms of the Offering. The Company agrees not to issue any other press release or engage in any other publicity, without the Representative’s prior written consent, for a period of forty (40) days from the Closing Date, other than normal and customary releases issued in the ordinary course of the Company’s business.

4.20 Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, by any other Person, that any Underwriter of the Securities is an "Acquiring Person" under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Underwriter of Securities could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities.

4.21 Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Option Shares pursuant to the Over-Allotment Option, Warrant Shares pursuant to any exercise of the Warrants, and shares of Common Stock pursuant to any exercise of the Representative’s Warrant Agreement.

4.22 Listing of Common Stock. For a period of three (3) years from the Closing Date, the Company hereby agrees to use commercially reasonable efforts to maintain the listing or quotation of the Common Stock and the Securities, when issued, on the NYSE MKT, including shares of Common Stock issuable upon exercise of the Representative’s Warrant Agreement. The Company further agrees that, if the Company applies to have the Common Stock listed or quoted on any other Trading Market, it will then include in such application all of the Closing Shares, Option Shares and Warrant Shares (including shares of Common Stock issuable upon exercise of the Representative’s Warrant Agreement), and will take such other action as is necessary to cause all such securities to be listed or quoted on such other Trading Market as promptly as possible.

4.23 Subsequent Equity Sales. From the date hereof until six (6) months following the Closing Date, neither the Company nor any Subsidiary shall:

(a) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock or Common Stock Equivalents, without the prior written consent of the Representative, provided that this Section 4.23(a) shall not apply in respect of an Exempt Issuance;

(b) file or cause to be filed any registration statement with the Commission relating to the offering of any shares or Common Stock or Common Stock Equivalents; or

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(c) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of Common Stock or Common Stock Equivalents, whether any such transaction described in this Section 4.23 is to be settled by delivery of shares of Common Stock or such other securities, in cash or otherwise.

4.24 Research Independence. The Company acknowledges that each Underwriter's research analysts and research departments, if any, are required to be independent from their respective investment banking divisions and are subject to certain regulations and internal policies, and that such Underwriter's research analysts may hold and make statements or investment recommendations and/or publish research reports with respect to the Company and/or the offering that differ from the views of its investment bankers. The Company acknowledges that the Representative is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold long or short position in debt or equity securities of the Company.

4.25 Right of First Refusal. The Representative shall have an irrevocable right of first refusal (the “Right of First Refusal”), for a period of twelve (12) months from the Effective Date, to act as lead or managing underwriter, exclusive placement agent, exclusive financial advisor or in any other similar capacity, on the Representative’s customary terms and conditions, in the event the Company or any Subsidiary retains or otherwise uses (or seeks to retain or use) the services of an investment bank or similar financial advisor to pursue a registered, underwritten public offering of securities (in addition to the Offering), a private placement of securities, a merger, acquisition of another company or business, change of control, sale of substantially all assets or other similar transaction (regardless of whether the Company would be considered an acquiring party, a selling party or neither in such transaction) (each, a “Subject Transaction”). The Company shall notify the Representative of its intention to pursue a Subject Transaction, including the material terms thereof, by providing written notice thereof by registered mail or overnight courier service addressed to the Representative. If the Representative fails to exercise its Right of First Refusal with respect to any Subject Transaction within ten (10) Business Days after the mailing of such written notice, then the Representative shall have no further claim or right with respect to the Subject Transaction. The Representative may elect, in its sole and absolute discretion, not to exercise its Right of First Refusal with respect to any Subject Transaction; provided that any such election by the Representative shall not adversely affect the Representative’s Right of First Refusal with respect to any other Subject Transaction. The terms and conditions of any such engagements shall be set forth in separate agreements and may be subject to, among other things, satisfactory completion of due diligence by the Representative, market conditions, the absence of a material adverse change to the Company’s business, financial condition and prospects, approval of the Representative’s internal committee and any other conditions that the Representative may deem appropriate for transactions of such nature.

4.26 Other Actions. The Company agrees with and covenants to the Underwriters that (i) it will use its reasonable efforts not to take any action prior the latest of the Closing Dates which would require the Prospectus to be amended or supplemented; (ii) it will maintain, at its expense, a DWAC fast-eligible registrar and transfer agent for the Securities; (iii) it will update its website on at least a quarterly basis to include timely and informative disclosure of the Company’s operations and such disclosures as may be required by applicable federal and state laws; and (iv) it will use its reasonable efforts to do and perform all things required to be done or performed under this Agreement by the Company prior to each Closing Date and to satisfy all conditions precedent to the delivery of the Securities.

4.27 Certain Agreements of the Underwriters. The Underwriters hereby represent to and agree with the Company that:

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(a) They have not used, authorized the use of, referred to or participated in the planning for use of, and will not use, authorize the use of, refer to or participate in the planning for use of, any "free writing prospectus", as defined in Rule 405 under the Securities Act (which term includes use of any written information furnished to the Commission by the Company and not incorporated by reference into the Registration Statement and any press release issued by the Company) other than (i) a free writing prospectus that contains no "issuer information" (as defined in Rule 433(h)(2) under the Securities Act) that was not included (including through incorporation by reference) in the Preliminary Prospectus or a previously filed Permitted Free Writing Prospectus, or (ii) any Permitted Free Writing Prospectus prepared pursuant to Section 4.2(d) above (including any electronic road show), or (iii) any free writing prospectus prepared by an Underwriter and approved by the Company in advance in writing (each such free writing prospectus referred to in clauses (i) or (iii), an "Underwriter Free Writing Prospectus");

(b) They have not and will not, without the prior written consent of the Company, use any free writing prospectus that contains the final terms of the Securities unless such terms have previously been included in a free writing prospectus filed with the Commission, provided that the Underwriters may use a term sheet substantially in the form of Annex A hereto without the consent of the Company; provided, further, that the Underwriters using such term sheet shall notify the Company, and provide a copy of such term sheet to the Company, prior to, or substantially concurrently with, the first use of such term sheet; and

(c) They are not subject to any pending proceeding under Section 8A of the Securities Act with respect to the Offering (and will promptly notify the Company if any such proceeding against them is initiated during the period when the Prospectus is required to be delivered under the Securities Act or the Exchange Act).

ARTICLE V

DEFAULT BY UNDERWRITERS

If, on the Closing Date or any Option Closing Date, if any, any Underwriter shall fail to purchase and pay for the portion of the Closing Securities or Option Securities, as the case may be, which such Underwriter has agreed to purchase and pay for on such date (otherwise than by reason of any default on the part of the Company), the Representative, or if the Representative is the defaulting Underwriter, the non-defaulting Underwriters, shall use their commercially reasonable efforts to procure within 36 hours thereafter one or more of the other Underwriters, or any others, to purchase from the Company such amounts as may be agreed upon and upon the terms set forth herein, the Closing Securities or Option Securities, as the case may be, which the defaulting Underwriter or Underwriters failed to purchase. If during such 36 hours the Representative shall not have procured such other Underwriters, or any others, to purchase the Closing Securities or Option Securities, as the case may be, agreed to be purchased by the defaulting Underwriter or Underwriters, then (a) if the aggregate number of Closing Securities or Option Securities, as the case may be, with respect to which such default shall occur does not exceed 10% of the Closing Securities or Option Securities, as the case may be, covered hereby, the other Underwriters shall be obligated, severally, in proportion to the respective numbers of Closing Securities or Option Securities, as the case may be, which they are obligated to purchase hereunder, to purchase the Closing Securities or Option Securities, as the case may be, which such defaulting Underwriter or Underwriters failed to purchase, or (b) if the aggregate number of Closing Securities or Option Securities, as the case may be, with respect to which such default shall occur exceeds 10% of the Closing Securities or Option Securities, as the case may be, covered hereby, the Company or the Representative will have the right to terminate this Agreement without liability on the part of the non-defaulting Underwriters or of the Company, except to the extent provided in Article VI hereof. In the event of a default by any Underwriter or Underwriters, as set forth in this Article V, the applicable Closing Date may be postponed for such period, not exceeding seven (7) days, as the Representative, or if the Representative is the defaulting Underwriter, the non-defaulting Underwriters, may determine in order that the required changes in the Prospectus or in any other documents or arrangements may be effected. The term "Underwriter" includes any Person substituted for a defaulting Underwriter. Any action taken under this Section shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.

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ARTICLE VI

INDEMNIFICATION

6.1 Indemnification of the Underwriters. Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless each of the Underwriters, and each dealer selected by each Underwriter that participates in the offer and sale of the Securities (each a "Selected Dealer") and each of their respective affiliates (as defined under Rule 405 of the Securities Act), directors, officers and employees and each person, if any, who controls such Underwriter or any Selected Dealer ("Controlling Person") within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever and any and all amounts paid in settlement of any claim or litigation, whether arising out of any action between such Underwriter and the Company or between such Underwriter and any third party or otherwise) to which they or any of them may become subject under the Securities Act, the Exchange Act or otherwise, based upon or arising out of (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading, or (ii) any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or supplement thereto), any Preliminary Prospectus, any Permitted Free Writing Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d) under the Securities Act, any other materials or information provided to investors by or with the approval of the Company in connection with the Offering, including any “road show” (as defined in Rule 433 under the Securities Act), or any information or documents contained in the Pricing Disclosure Package (including any information contained therein that has subsequently been amended), or any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representative expressly for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in Section 6.3 below. With respect to any untrue statement or omission or alleged untrue statement or omission made in the Preliminary Prospectus, if any, the indemnity agreement contained in this Section 6.1 shall not inure to the benefit of an Underwriter to the extent that any loss, liability, claim, damage or expense of such Underwriter results from the fact that a copy of the Prospectus was not given or sent to the Person asserting any such loss, liability, claim or damage at or prior to the written confirmation of sale of the Securities to such Person as required by the Securities Act and the rules and regulations thereunder, and if the untrue statement or omission has been corrected in the Prospectus, unless such failure to deliver the Prospectus was a result of non-compliance by the Company with its obligations under this Agreement. The Company agrees promptly to notify each Underwriter of the commencement of any litigation or proceedings against the Company or any of its officers, directors or Controlling Persons in connection with the issue and sale of the Securities or in connection with the Registration Statement or Prospectus.

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6.2 Procedure. If any action is brought against an Underwriter, a Selected Dealer or a Controlling Person in respect of which indemnity may be sought against the Company pursuant to Section 6.1, such Underwriter, such Selected Dealer or Controlling Person, as the case may be, shall promptly notify the Company in writing of the institution of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to the reasonable approval of such Underwriter or such Selected Dealer, as the case may be) and payment of actual expenses. The Company agrees that it shall not, without the prior written consent of such Underwriter, Selected Dealer or Controlling Person (which consent shall not be unreasonably withheld, conditioned or delayed), enter into any settlement agreement, settle, compromise or consent to the entry of any judgment (or pay any amounts in respect thereof) in any pending or threatened Proceeding in respect of which indemnification may be sought hereunder (whether or not any indemnified person is an actual or potential party to such Proceeding), unless such settlement, compromise or consent includes an unconditional release of the Representative and each other indemnified party hereunder from all liability arising out of such Proceeding. Such Underwriter, such Selected Dealer or Controlling Person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Underwriter, such Selected Dealer or Controlling Person unless (i) the employment of such counsel at the expense of the Company shall have been authorized in writing by the Company in connection with the defense of such action, or (ii) the Company shall not have employed counsel to have charge of the defense of such action, or (iii) such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events the reasonable fees and expenses of not more than one additional firm of attorneys selected by such Underwriter (in addition to local counsel), Selected Dealer and/or Controlling Person, taken together as a group, shall be borne by the Company. In no event shall the Company be liable for fees and expenses of more than one firm of attorneys (in additional to any local counsel) separate from its own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. Notwithstanding anything to the contrary contained herein, if any Underwriter, Selected Dealer or Controlling Person shall assume the defense of such action as provided above, the Company shall have the right to approve the terms of any settlement of such action which approval shall not be unreasonably withheld.

6.3 Indemnification of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its affiliates (as defined in Rule 405 under the Securities Act), directors, officers and employees and agents who control the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the Company to such Underwriter, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions made in made in reliance upon and in conformity with any information relating to such Underwriter furnished to the Company in writing by such Underwriter through the Representative expressly for use in the Registration Statement, any Preliminary Prospectus, or the Prospectus (or any amendment or supplement thereto), it being understood and agreed upon that the only such information furnished by any Underwriter consists of the following information in the Prospectus furnished on behalf of each Underwriter: (i) the concession and reallowance figures appearing in the ___ paragraph under the caption “Underwriting” and, the information contained in the ___ paragraph under the caption “Underwriting”. In case any action shall be brought against the Company or any other Person so indemnified based on any Preliminary Prospectus, if any, the Registration Statement or Prospectus or any amendment or supplement thereto, any Permitted Free Writing Prospectus or the Pricing Disclosure Package, and in respect of which indemnity may be sought against such Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each other Person so indemnified shall have the rights and duties given to such Underwriter by the provisions of this Article VI. Notwithstanding the provisions of this Section 6.3, no Underwriter shall be required to indemnify the Company for any amount in excess of the underwriting discounts and commissions applicable to the Securities purchased by such Underwriter. The Underwriters' obligations in this Section 6.3 to indemnify the Company are several in proportion to their respective underwriting obligations and not joint.

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6.4 Contribution.

(a) Contribution Rights. In order to provide for just and equitable contribution under the Securities Act in any case in which (i) any Person entitled to indemnification under this Article VI makes a claim for indemnification pursuant hereto but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Article VI provides for indemnification in such case, or (ii) contribution under the Securities Act, the Exchange Act or otherwise may be required on the part of any such Person in circumstances for which indemnification is provided under this Article VI, then, and in each such case, the Company and each Underwriter, severally and not jointly, shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and such Underwriter, as incurred, in such proportions that such Underwriter is responsible for that portion represented by the percentage that the underwriting discount appearing on the cover page of the Prospectus bears to the initial offering price appearing thereon and the Company is responsible for the balance, provided that no Person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each director, officer and employee of such Underwriter or the Company, as applicable, and each Person, if any, who controls such Underwriter or the Company, as applicable, within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act shall have the same rights to contribution as such Underwriter or the Company, as applicable. Notwithstanding the provisions of this Section 6.3, no Underwriter shall be required to indemnify the Company for any amount in excess of the underwriting discounts and commissions applicable to the Securities purchased by such Underwriter. The Underwriters' obligations in this Section 6.4 to contribute are several in proportion to their respective underwriting obligations and not joint.

(b) Contribution Procedure. Within fifteen (15) days after receipt by any party to this Agreement (or its representative) of notice of the commencement of any action, suit or Proceeding, such party will, if a claim for contribution in respect thereof is to be made against another party ("Contributing Party"), notify the Contributing Party of the commencement thereof, but the failure to so notify the Contributing Party will not relieve it from any liability which it may have to any other party other than for contribution hereunder. In case any such action, suit or Proceeding is brought against any party, and such party notifies a Contributing Party or its representative of the commencement thereof within the aforesaid fifteen (15) days, the Contributing Party will be entitled to participate therein with the notifying party and any other Contributing Party similarly notified. Any such Contributing Party shall not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution without the written consent of such Contributing Party. The contribution provisions contained in this Section 6.4 are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange Act or otherwise available.

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ARTICLE VII

MISCELLANEOUS

7.1 Termination.

(a) Termination Right. The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date or to terminate the obligations of the Underwriters to purchase the Option Securities at any time prior to an Option Closing Date, (i) if any domestic or international event or act or occurrence has materially disrupted, or in its opinion will in the immediate future materially disrupt, the market for the Company’s securities or the general securities markets in the United States, or (ii) if trading on any Trading Market shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other government authority having jurisdiction, or (iii) if the United States shall have become involved in a new war or an increase in major hostilities, or (iv) if a banking moratorium has been declared by a New York State or federal authority or any material disruption in commercial banking or securities settlement or clearance services shall have occurred, or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities markets, or (vi) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis, either within or outside the United States, or (vii) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, which will, in the Representative's opinion, make it inadvisable to proceed with the delivery of the Securities, or (viii) if the Company is in material breach of any of its representations, warranties or covenants hereunder, or (ix) if the Representative shall have become aware after the date hereof of such a material adverse change in the conditions or prospects of the Company, or such adverse material change in general market conditions, as in the Representative's judgment would make it impracticable to proceed with the offering, sale and/or delivery of the Securities or to enforce contracts made by the Underwriters for the sale of the Securities.

(b) Expenses. In the event this Agreement shall be terminated pursuant to Section 7.1(a), within the time specified herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Representative its actual and accountable out of pocket expenses related to the transactions contemplated herein then due and payable (including the fees and disbursements of GT) up to $50,000; provided, however, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement.

(c) Indemnification. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Article VI shall not be in any way effected by such election or termination or failure to carry out the terms of this Agreement or any part hereof.

7.2 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Preliminary Prospectus and the Prospectus, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

7.3 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

7.4 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Representative. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

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7.5 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

7.6 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, other than the persons mentioned in the preceding sentence, any legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained, this Agreement and all conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of such persons and for the benefit of no other person; except that the representations, warranties, covenants, agreements and indemnities of the Company contained in this Agreement shall also be for the benefit of the Underwriter indemnified parties, and the indemnities of the several Underwriters shall be for the benefit of the Company indemnified parties. It is understood that each Underwriter’s responsibility to the Company is solely contractual in nature and the Underwriters do not owe the Company, or any other party, any fiduciary duty as a result of this Agreement. No purchaser of any of the Securities from any Underwriter shall be deemed to be a successor or assign by reason merely of such purchase.

7.7 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Article VI, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys' fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

7.8 Survival. The representations, warranties, covenants, agreements, and other statements of the Company contained in this Agreement, or in certificates of officers of the Company submitted pursuant hereto, shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its officers or directors or any person controlling the Company or (ii) the delivery of and payment for the Securities.

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7.9 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof.

7.10 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

7.11 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Underwriters and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

7.12 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

7.13 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

7.14 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE FOREVER ANY RIGHT TO TRIAL BY JURY.

(Signature Pages Follow)

39

If the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among the Company and the several Underwriters in accordance with its terms.

Very truly yours,

First Choice Healthcare Solutions, Inc.

By:

Name: Christopher Romandetti

Title: Chief Executive Officer

Address for Notice:

709 S. Harbor City Boulevard, Suite 250

Melbourne, FL 32901

Attention: Christopher Romandetti

Facsimile: (321) 308-0635

Copy to:

Richard G. Satin, Esq.

Meyer, Suozzi, English & Klein, P.C.

1350 Broadway, Suite 501

New York, NY 10018

ACCEPTED ON THE DATE FIRST ABOVE WRITTEN.

LAIDLAW & COMPANY (UK) LTD.

As the Representative of the several

Underwriters listed on Schedule I

By:

Name:

Title:

Address for Notice:

546 Fifth Avenue, 5^th Floor

New York, New York 10036

Attention:

Facsimile:

Copy to:

Barbara A. Jones, Esq.

Greenberg Traurig, LLP

One International Place

Boston, MA 02110

40

SCHEDULE I

SCHEDULE OF UNDERWRITERS

			Closing
Underwriter	Closing Shares	Closing Warrants	Purchase Price
Laidlaw & Company (UK) Ltd.

41

SCHEDULE II

PERMITTED FREE WRITING PROSPECTUSES

42

EX-4.2

Exhibit 4.2

FORM OF WARRANT

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

WARRANT TO PURCHASE COMMON STOCK

Warrant No.:  WA-__ Original Issue Date:  ____________, 2014

FIRST CHOICE HEALTHCARE SOLUTIONS, INC., a Delaware corporation (the “Company”), hereby certifies that, for value received, ___________________________ or his/its permitted registered assigns (the “Holder”), is entitled to purchase from the Company up to a total of __________ shares of common stock, $0.001 par value per share (“Common Stock”), of the Company (each such share, a “Warrant Share” and all such shares, collectively, the “Warrant Shares”) at an exercise price per share equal to $_____ per share (as may be adjusted from time to time as provided in Section 9 hereof, the “Exercise Price”), at any time and from time to time on or after the “Original Issue Date” indicated on the face of this Warrant (the “Original Issue Date”) through and including the Expiration Time (as hereinafter defined), upon and subject to the terms and conditions set forth herein.

This Warrant (this “Warrant”) is one of a series of similar warrants issued pursuant to and in connection with that certain Underwriting Agreement, dated as of ___________, 2014, by and among the Company and the Underwriters named therein, relating to a firm commitment public offering of Units, each Unit comprised of two shares of Common Stock and one warrant to purchase one share of Common Stock. All such warrants are collectively referred to herein as the “Warrants.”

1.          Definitions. Capitalized terms that are used and not otherwise defined herein have the respective meanings ascribed to such terms in the Underwriting Agreement.

2.          Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company’s transfer agent for such purpose (the “Warrant Register”), in the name of the record Holder of this Warrant (which shall include the initial Holder or, as the case may be, any registered assignee to which this Warrant is permissibly assigned hereunder) from time to time. The Company may deem and treat the registered Holder of this Warrant as reflected in the Warrant Register as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

3.          Registration of Transfers. Subject to the restrictions on transfer in accordance with all applicable securities laws, the Company shall register or cause its transfer agent to register, the transfer of all or any portion of this Warrant in the Warrant Register upon surrender of this Warrant, together with the Form of Assignment attached as Annex II hereto, duly completed and executed, to the Company’s transfer agent. Upon any such registration or transfer, a new warrant to purchase Common Stock in substantially the form of this Warrant (any such new warrant, a “New Warrant”) evidencing the portion of this Warrant so transferred shall be issued to the transferee, and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations in respect of the New Warrant that the Holder has in respect of this Warrant. The Company shall prepare, issue and deliver at its own expense any New Warrant under this Section 3.

4.           Exercise and Duration of Warrants.

(a)          All or any part of this Warrant shall be exercisable by the registered Holder in accordance with Section 10 hereof at any time and from time to time on or after the Original Issue Date of this Warrant but not after 5:30 p.m., New York City time, on the five (5)-year anniversary of the Original Issue Date (the “Expiration Time”). As of the Expiration Time, any portion of this Warrant not exercised prior thereto shall be and become void and of no value and this Warrant shall be terminated and no longer outstanding.

(b)          The Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in the form attached as Annex I hereto (the “Exercise Notice”), completed and duly executed, and (ii) payment of the Exercise Price for the number of Warrant Shares as to which this Warrant is being exercised (the “Aggregate Exercise Price”). The date on which such items are delivered to the Company (as determined in accordance with the notice provisions hereof) is an “Exercise Date.” The Holder shall not be required to deliver the original Warrant in order to effect an exercise hereunder. Execution and delivery of the Exercise Notice shall have the same effect as cancellation of the original Warrant and issuance of a New Warrant evidencing the right to purchase the remaining number of Warrant Shares.

5.           Delivery of Warrant Shares.

(a)          Upon exercise of this Warrant, the Company shall promptly (but in no event later than five Trading Days after the Exercise Date) issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate (provided that, if the Registration Statement is not effective and if the Holder directs the Company to deliver a certificate for the Warrant Shares in a name other than that of the Holder or an Affiliate of the Holder, it shall deliver to the Company on the Exercise Date an opinion of counsel reasonably satisfactory to the Company to the effect that the issuance of such Warrant Shares in such other name may be made pursuant to an available exemption from the registration requirements of the Securities Act and all applicable state securities or blue sky laws), (i) a certificate for the Warrant Shares issuable upon such exercise, free of restrictive legends, or (ii) an electronic delivery of the Warrant Shares to the Holder’s account at the Depository Trust Company (“DTC”) or another established clearing corporation performing similar functions, unless, in the case of clauses (i) and (ii) above, restrictive legends are required under Section 4.17 of the Underwriting Agreement, in which case, such Holder shall receive a certificate for the Warrant Shares issuable upon such exercise with appropriate restrictive legends. The Holder, or any Person permissibly so designated by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date. If the Warrant Shares are to be issued free of all restrictive legends as provided under Section 4.17 of the Underwriting Agreement, the Company shall, upon the written request of the Holder, use its reasonable best efforts to deliver, or cause to be delivered, Warrant Shares hereunder electronically through DTC or another established clearing corporation performing similar functions, if available; provided that the Company may, but shall not be required to, change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically through such a clearing corporation.

(b)          To the extent permitted by law, the Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance that might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

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6.           Charges, Taxes and Expenses. Issuance and delivery of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; provided, however, that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the registration of any certificates for Warrant Shares or the Warrants in a name other than that of the Holder or an Affiliate thereof. The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

7.           Replacement of Warrant. If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction, as applicable, and, in each case, a customary and reasonable indemnity and surety bond, if requested by the Company. Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third party costs as the Company may prescribe. If a New Warrant is requested as a result of a mutilation of this Warrant, then, if practicable, the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.

8.           Reservation of Warrant Shares. From and after the issuance of this Warrant through the Expiration Time, the Company covenants that it will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved Common Stock, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares that are initially issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of persons other than the Holder (taking into account the adjustments and restrictions of Section 9 hereof). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized and issued and fully paid and nonassessable. The Company shall take all such action as may be reasonably necessary to assure that such shares of Common Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any securities exchange or automated quotation system upon which the Common Stock may be listed or quoted.

9.           Certain Adjustments. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as set forth in this Section 9.

(a)           Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides its outstanding shares of Common Stock into a larger number of shares, or (iii) combines its outstanding shares of Common Stock into a smaller number of shares, then, in each such case, the Exercise Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately before such event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clauses (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.

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(b)          Fundamental Transactions. If, at any time while this Warrant is outstanding, (i) the Company effects any merger or consolidation of the Company with or into another Person, in which the Company is not the survivor or the stockholders of the Company, immediately prior to such merger or consolidation, do not own, directly or indirectly, at least 50% of the voting securities of the surviving entity, (ii) the Company effects any sale of all or substantially all of its assets or a majority of its Common Stock is acquired by a third party, in each case, in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed, pursuant to which all or substantially all of the holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 9(a) above) (any such case or event specified in clauses (i) through (iv) above, a “Fundamental Transaction”), then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (the “Alternate Consideration”).

(c)          Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) of this Section 9, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that immediately following such adjustment, the aggregate Exercise Price payable hereunder for the increased or decreased number of Warrant Shares, as applicable, shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment.

(d)          Calculations. All calculations under this Section 9 shall be made to the nearest cent or the nearest share, as applicable.

(e)          Notice of Adjustments. Upon the occurrence of any adjustment pursuant to this Section 9, the Company, at its expense, shall, at the written request of the Holder, promptly compute such adjustment, in good faith, in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustment and showing in detail the facts upon which such adjustment is based. Upon written request, the Company shall promptly deliver a copy of each such certificate to the Holder and to the Company’s transfer agent.

(f)          Notice of Corporate Events. If, at any time while this Warrant is outstanding, the Company (i) declares a dividend or any other distribution of cash, securities or other property in respect of its Common Stock, including, without limitation, any granting of rights or warrants to subscribe for or purchase any capital stock of the Company or any subsidiary, (ii) authorizes or approves, enters into any agreement contemplating or solicits stockholder approval for any Fundamental Transaction, or (iii) authorizes the voluntary dissolution, liquidation or winding-up of the affairs of the Company, then, unless such notice and the contents thereof shall be deemed to constitute material, non-public information in the reasonable judgment of the Company and its counsel, the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction at least five (5) business days prior to the applicable record or effective date on which a Person would need to hold Common Stock in order to participate in, or vote with respect to, such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of its subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K.

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10.         Payment of Exercise Price. The Holder shall pay the Exercise Price in immediately available funds, by means of (a) wire transfer in accordance with the wire instructions specified by the Company or (b) cashier’s check drawn on a U.S. bank made out to the Company.

11.         No Fractional Shares. No fractional Warrant Shares shall be issued in connection with any exercise of this Warrant. In lieu of any fractional shares that would otherwise be issuable, the number of Warrant Shares to be issued shall be rounded down to the nearest whole number and the Company shall pay the Holder in cash the amount of the fair market value based on the Closing Sale Price (as hereinafter defined) for any such fractional Warrant Shares. For purposes of this Warrant, “Closing Sale Price” means, for any security as of any date, the last trade price for such security on the principal securities exchange or trading market for such security, as reported by Bloomberg Financial Markets, or, if such exchange or trading market begins to operate on an extended hours basis and does not designate the last trade price, then the last trade price of such security prior to 4:00 p.m., New York City time, as reported by Bloomberg Financial Markets, or if neither of the foregoing shall apply, the last trade price of such security in the over-the-counter market on the electronic bulletin board for such security as reported by Bloomberg Financial Markets, or, if no last trade price is reported for such security by Bloomberg Financial Markets, the average of the bid prices, or the ask prices, respectively, of any market makers for such security as reported in the “pink sheets” by Pink Sheets LLC. If the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then the Board of Directors of the Company shall use its good faith judgment to determine the fair market value. The Board of Directors’ determination shall be binding upon all parties absent demonstrable error. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during the applicable calculation period.

12.         Notices. Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified below prior to 5:30 p.m., New York City time, on a Trading Day, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified below on a day that is not a Trading Day or later than 5:30 p.m., New York City time, on any Trading Day, (iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service specifying next business day delivery, or (iv) upon actual receipt by the party to whom such notice is required to be given, if by hand delivery. The address and facsimile number of a party for such notices or communications shall be as set forth below unless changed by such party by two (2) Trading Days’ prior notice to the other party in accordance with this Section 12.

(a) if to the Company, to:

First Choice Healthcare Solutions, Inc.

709 S. Harbor Blvd., Suite 250

Melbourne, FL 32901

Attn: Donald A. Bittar, Chief Financial Officer

Facsimile: (321) 308-0635

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with a copy to (which shall not constitute notice):

Meyer, Suozzi, English & Klein, P.C.

1350 Broadway, Suite 501

New York, NY 10018

Attn: Richard G. Satin, Esq.

Facsimile: (212) 763-7024

(b)          if to the Holder, at the address and facsimile number of the Holder appearing on the books of the Company.

13.         Warrant Agent. The Company’s transfer agent shall initially serve as warrant agent under this Warrant. Upon thirty (30) days’ notice to the Holder, the Company may appoint a new warrant agent. Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its assets or its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act on the part of any party. Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder’s last address as shown on the Warrant Register.

14.         Miscellaneous.

(a)          No Rights as a Stockholder. The Holder, solely in such Person’s capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in such Person’s capacity as the Holder of this Warrant, any of the rights of a stockholder of the Company or any right to vote, or to give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, amalgamation, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of any Warrant Shares which such Person is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by any creditors of the Company.

(b)          Successors and Assigns. Subject to the restrictions on transfer set forth in this Warrant and in compliance with applicable securities laws, this Warrant may be assigned by the Holder without the consent of the Company. This Warrant may not be assigned by the Company without the written consent of the Holder, except to a successor in the event of a Fundamental Transaction (and subject, in such case, to the terms and conditions of Section 9(b) hereof). This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and permitted assigns. Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant. This Warrant may be amended only in writing signed by the Company and the Holder, or their successors and permitted assigns.

(c)          Amendment and Waiver. Except as otherwise provided herein, the provisions of the Warrants may be amended, and the Company may take any action prohibited hereunder, or omit to perform any act required to be performed by it hereunder, only if the Company has obtained the prior written consent of the Holders of Warrants representing a majority of the Warrant Shares obtainable upon exercise of the Warrants then outstanding.

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(d)          Acceptance. Receipt of this Warrant by the Holder shall constitute acceptance of and agreement to all of the terms and conditions contained herein.

(e)          Governing Law; CONSENT TO Jurisdiction; WAIVER OF RIGHT TO TRIAL BY JURY. ALL QUESTIONS CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF. EACH PARTY HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS SITTING IN THE CITY OF NEW YORK, BOROUGH OF MANHATTAN, FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR WITH ANY TRANSACTION CONTEMPLATED HEREBY OR DISCUSSED HEREIN (INCLUDING WITH RESPECT TO THE ENFORCEMENT OF ANY OF THE TRANSACTION DOCUMENTS), AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF VIA REGISTERED OR CERTIFIED MAIL OR OVERNIGHT DELIVERY (WITH EVIDENCE OF DELIVERY) TO SUCH PARTY AT THE ADDRESS IN EFFECT FOR NOTICES TO IT UNDER THE UNDERWRITING AGREEMENT AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE GOOD AND SUFFICIENT SERVICE OF PROCESS AND NOTICE THEREOF. NOTHING CONTAINED HEREIN SHALL BE DEEMED TO LIMIT IN ANY WAY ANY RIGHT TO SERVE PROCESS IN ANY MANNER PERMITTED BY LAW. EACH PARTY HEREBY WAIVES ALL RIGHTS TO A TRIAL BY JURY.

(f)          Headings. The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to in any way limit or affect any of the provisions hereof.

(g)          Severability. In the event that any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby, and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

[SIGNATURE PAGE FOLLOWS] 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by the undersigned authorized officer as of the date first indicated above.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

By: ____________________________

Name:  Donald A. Bittar

Title:    Chief Financial Officer

Address:  709 S. Harbor City Blvd., Suite 250

Melbourne, FL  32901

Facsimile:  (321) 308-0635

CORPORATE STOCK TRANSFER COMPANY

As Warrant Agent

By:___________________________________

Name:

Title:

Signature Page to Warrant to Purchase Common Stock

ANNEX I

FORM OF EXERCISE NOTICE

(To be executed by the Holder to exercise the right to purchase shares
of Common Stock under the Warrant)

To: First Choice Healthcare Solutions, Inc.

(1) The undersigned holder (the “Holder”) hereby intends that the payment of the Aggregate Exercise Price of US$___________ of US $_______ per share of common stock (the “Warrant Shares”) of First Choice Healthcare Solutions, Inc., a Delaware corporation (the “Company”), pursuant to the above-referenced Warrant (the “Warrant”), shall be made with respect to _________________ Warrant Shares.

(2) The undersigned Holder shall pay the Aggregate Exercise Price of US$___________ to the Company in immediately available funds in accordance with the terms of the Warrant.

(3) Pursuant to this Exercise Notice, the Company shall deliver to the Holder such number of Warrant Shares set forth in paragraph 1 of this Notice of Exercise in accordance with the terms of the Warrant.

Dated: _______________, 201_

Name of Holder*:

By:
	Name:
	Title:

Tax identification number: ________________________________

*Signature must conform in all respects to name of Holder as specified on the face of the Warrant.

ANNEX II

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

FORM OF ASSIGNMENT
(To be completed and signed only upon transfer of Warrant)

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto                                                                     (the “Transferee”) the right represented by the within Warrant to purchase                                    shares of common stock of First Choice Healthcare Solutions, Inc., a Delaware corporation (the “Company”), to which the within Warrant relates, and appoints                                                                   as attorney to transfer said right on the books of the Company with full power of substitution in the premises. In connection therewith, the undersigned represents, warrants, covenants and agrees to and with the Company that:

(a) the offer and sale of the Warrant contemplated hereby is being made in compliance with Section 4(a)(1) of the Securities Act of 1933, as amended (the “Securities Act”), or another valid exemption from the registration requirements of Section 5 of the Securities Act, and in compliance with all applicable securities laws of the states of the United States;

(b) the undersigned has not offered to sell the Warrant by any form of general solicitation or general advertising, including, but not limited to, any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, and any seminar or meeting whose attendees have been invited by any general solicitation or general advertising;

(c) the undersigned has read the Transferee’s investment letter included herewith, and, to its actual knowledge, the statements made therein are true and correct in all material respects; and

(d) the undersigned understands that the Company may condition the transfer of the Warrant contemplated hereby upon the delivery to the Company by the undersigned or the Transferee, as the case may be, of a written opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that such transfer may be made without registration under the Securities Act and under applicable securities laws of the states of the United States.

Dated: _______________, 201__

Name of Holder*: In the presence of:

By:
	Name:	Name:
	Title:

Address of Transferee:

*Signature must conform in all respects to name of Holder as specified on the face of the Warrant.

EX-4.3

Exhibit 4.3

FORM OF REPRESENTATIVE’S WARRANT AGREEMENT

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PLEDGED, OR HYPOTHECATED, OR BE THE SUBJECT OF ANY HEDGING, SHORT SALE, DERIVATIVE, PUT, OR CALL TRANSACTION THAT WOULD RESULT IN THE EFFECTIVE ECONOMIC DISPOSITION OF SUCH SECURITIES BY ANY PERSON FOR A PERIOD OF ONE YEAR FOLLOWING THE DATE OF EFFECTIVENESS OF THE REGISTRATION STATEMENT NO. 333-195632 AS FILED BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

REPRESENTATIVE’S WARRANT TO PURCHASE COMMON STOCK

Warrant No.:  WA-__ Original Issue Date:  ____________, 2014

FIRST CHOICE HEALTHCARE SOLUTIONS, INC., a Delaware corporation (the “Company”), hereby certifies that, for value received, LAIDLAW & COMPANY (UK) LTD., or its permitted registered assigns (the “Holder”), is entitled to purchase from the Company up to a total of __________ shares of common stock, $0.001 par value per share (“Common Stock”), of the Company (each such share, a “Warrant Share” and all such shares, collectively, the “Warrant Shares”) at an exercise price per share equal to $_____ per share (as may be adjusted from time to time as provided in Section 9 hereof, the “Exercise Price”), at any time, and from time to time, on or after the one year anniversary of the date of effectiveness of the registration statement related to the Offering (the “Exercise Date”) but not after the Expiration Time (as hereinafter defined), upon and subject to the terms and conditions set forth herein.

This Warrant (this “Warrant”) is issued pursuant to and in connection with that certain Underwriting Agreement, dated as of ___________, 2014, by and among the Company and the Underwriters named therein, relating to a firm commitment public offering of Units, each Unit comprised of two shares of Common Stock and one warrant to purchase one share of Common Stock, underwritten by the Underwriters. This Warrant is subject to a one-year lock-up period from the date of effectiveness of the registration statement related to this Offering. The terms not otherwise defined herein shall have the meaning ascribed to them in the Underwriting Agreement.

1. Date of Warrant Exercise. This Warrant shall become exercisable on the Exercise Date, which is one (1) year after the date of effectiveness of the registration statement related to the Offering. Except as otherwise provided for herein or as permitted by applicable rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”), neither this Warrant nor the underlying Warrant Shares shall be sold, transferred, assigned, pledged or hypothecated prior to the date that is one (1) year following the date of effectiveness of the registration statement related to the Offering pursuant to FINRA Rule 5110(g)(1), except as permitted under FINRA Rule 5110(g)(2).

2. Expiration of Warrant. This Warrant shall expire on the five (5) year anniversary of the date of effectiveness of the registration statement related to the Offering (the “Expiration Date”).

3. Exercise of Warrant. This Warrant shall be exercisable pursuant to the terms of this Section 3.

3.1 Manner of Exercise.

(a) This Warrant may only be exercised by the Holder hereof on or after the Exercise Date and on or prior to the Expiration Date, in accordance with the terms and conditions hereof, in whole or in part (but not as to fractional shares) with respect to any portion of this Warrant, during the Company’s normal business hours on any day other than a Saturday or a Sunday or a day on which commercial banking institutions in New York, New York are authorized by law to be closed (a “Business Day”), by surrender of this Warrant to the Company at its office maintained pursuant to Section 10.2(a) hereof, accompanied by a written exercise notice in the form attached as Exhibit A to this Warrant (or a reasonable facsimile thereof) duly executed by the Holder, together with the payment of the aggregate Exercise Price for the number of Warrant Shares purchased upon exercise of this Warrant. Upon surrender of this Warrant, the Company shall cancel this Warrant document and shall, in the event of partial exercise, replace it with a new Warrant document in accordance with Section 3.3.

(b) Except as provided for in Section 3.1(c) below, each exercise of this Warrant must be accompanied by payment in full of the aggregate Exercise Price in cash by check or wire transfer in immediately available funds for the number of Warrant Shares being purchased by the Holder upon such exercise.

(c) The aggregate Exercise Price for the number of Warrant Shares being purchased may also, in the sole discretion of the Holder, be paid in full or in part on a “cashless basis” at the election of the Holder:

(i) in the form of Common Stock owned by the Holder (based on the Fair Market Value (as defined below) of such Common Stock on the date of exercise);

(ii) in the form of Warrant Shares withheld by the Company from the Warrant Shares otherwise to be received upon exercise of this Warrant having an aggregate Fair Market Value on the date of exercise equal to the aggregate Exercise Price of the Warrant Shares being purchased by the Holder; or

(iii) by a combination of the foregoing, provided that the combined value of all cash and the Fair Market Value of any shares surrendered to the Company is at least equal to the aggregate Exercise Price for the number of Warrant Shares being purchased by the Holder.

For purposes of this Warrant, the term “Fair Market Value” means with respect to a particular date, the average closing price of the Common Stock for the five (5) trading days immediately preceding the applicable exercise herein as officially reported by the principal securities exchange on which the Common Stock is then listed or admitted to trading, or, if the Common Stock is not listed or admitted to trading on any securities exchange as determined in good faith by resolution of the Board of Directors of the Company, based on the best information available to it.

For purposes of illustration of a cashless exercise of this Warrant under Section 3.1 (c)(ii) (or for a portion thereof for which cashless exercise treatment is requested as contemplated by Section 3.1(c)(iii) hereof), the calculation of such exercise shall be as follows:

X = Y (A-B)/A

where:

X = the number of Warrant Shares to be issued to the Holder (rounded to the nearest whole share).

Y = the number of Warrant Shares with respect to which this Warrant is being exercised.

A = the Fair Market Value of the Common Stock.

B = the Exercise Price.

(d) For purposes of Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”) and sub-section (d)(3)(ii) thereof, it is intended, understood, and acknowledged that the Common Stock issuable upon exercise of this Warrant in a cashless exercise transaction as described in Section 3.1(c) above shall be deemed to have been acquired at the time this Warrant was issued. Moreover, it is intended, understood, and acknowledged that the holding period for the Common Stock issuable upon exercise of this Warrant in a cashless exercise transaction as described in Section 3.1(c) above shall be deemed to have commenced on the date this Warrant was issued.

3.2 When Exercise Effective. Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the Business Day on which this Warrant shall have been duly surrendered to the Company as provided in Sections 3.1 and 12 hereof, and, at such time, the Holder in whose name any certificate or certificates for Warrant Shares shall be issuable upon exercise as provided in Section 3.3 hereof shall be deemed to have become the holder or holders of record thereof of the number of Warrant Shares purchased upon exercise of this Warrant.

3.3 Delivery of Common Stock Certificates and New Warrant.

(a) Upon exercise of this Warrant, the Company shall promptly (but in no event later than five Trading Days after the Exercise Date) issue or cause to be issued and cause to be delivered to or upon the written order of the Holder and in such name or names as the Holder may designate (provided that, if the Registration Statement is not effective and if the Holder directs the Company to deliver a certificate for the Warrant Shares in a name other than that of the Holder or an Affiliate of the Holder, it shall deliver to the Company on the Exercise Date an opinion of counsel reasonably satisfactory to the Company to the effect that the issuance of such Warrant Shares in such other name may be made pursuant to an available exemption from the registration requirements of the Securities Act and all applicable state securities or blue sky laws), (i) a certificate for the Warrant Shares issuable upon such exercise, free of restrictive legends, or (ii) an electronic delivery of the Warrant Shares to the Holder’s account at the Depository Trust Company (“DTC”) or another established clearing corporation performing similar functions, unless, in the case of clauses (i) and (ii) above, restrictive legends as may be required under the Securities Act, in which case, such Holder shall receive a certificate for the Warrant Shares issuable upon such exercise with appropriate restrictive legends. The Holder, or any Person permissibly so designated by the Holder to receive Warrant Shares, shall be deemed to have become the holder of record of such Warrant Shares as of the Exercise Date. If the Warrant Shares are to be issued free of all restrictive legends, the Company shall, upon the written request of the Holder, use its reasonable best efforts to deliver, or cause to be delivered, Warrant Shares hereunder electronically through DTC or another established clearing corporation performing similar functions, if available; provided that the Company may, but shall not be required to, change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically through such a clearing corporation.

(b) To the extent permitted by law, the Company’s obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance that might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares. Nothing herein shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

(c) In case exercise is in part only, the Company shall cause to be issued a new Warrant document of like tenor, dated the date hereof, for the remaining number of Warrant Shares issuable upon exercise of this Warrant after giving effect to the partial exercise of this Warrant (including the delivery of any Warrant Shares as payment of the Exercise Price for such partial exercise of this Warrant) and delivered to and in the name of the Holder, without charge.

4. Certain Adjustments. For so long as this Warrant is outstanding:

4.1 Fundamental Transactions. If, at any time while this Warrant is outstanding, (i) the Company effects any merger or consolidation of the Company with or into another Person, in which the Company is not the survivor or the stockholders of the Company, immediately prior to such merger or consolidation, do not own, directly or indirectly, at least 50% of the voting securities of the surviving entity, (ii) the Company effects any sale of all or substantially all of its assets or a majority of its Common Stock is acquired by a third party, in each case, in one or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed, pursuant to which all or substantially all of the holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (other than as a result of a subdivision or combination of shares of Common Stock covered by Section 4.1 below) (any such case or event specified in clauses (i) through (iv) above, a “Fundamental Transaction”), then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (the “Alternate Consideration”).

4.2 Splits and Subdivisions; Dividends. In the event the Company should at any time or from time to time effectuate a split or subdivision of the outstanding shares of Common Stock or pay a dividend in or make a distribution payable in additional shares of Common Stock or other securities, or rights convertible into, or entitling the holder thereof to receive, directly or indirectly, additional shares of Common Stock (hereinafter referred to as “Common Stock Equivalents”) without payment of any consideration by such holder for the additional shares of Common Stock or Common Stock Equivalents (including the additional shares of Common Stock issuable upon conversion or exercise thereof), then, as of the applicable record date (or the date of such distribution, split or subdivision if no record date is fixed), the per share Exercise Price shall be appropriately decreased and the number of Warrant Shares shall be appropriately increased in proportion to such increase (or potential increase) of outstanding shares; provided, however, that no adjustment shall be made in the event the split, subdivision, dividend or distribution is not effectuated.

4.3 Combination of Shares. If the number of shares of Common Stock outstanding at any time after the date hereof is decreased by a combination of the outstanding shares of Common Stock, the per share Exercise Price shall be appropriately increased and the number of shares of Warrant Shares shall be appropriately decreased in proportion to such decrease in outstanding shares.

5. No Impairment. The Company will not, by amendment of its certificate of incorporation or by-laws or through any consolidation, merger, reorganization, transfer of assets, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all of the terms and in the taking of all actions necessary or appropriate in order to protect the rights of the Holder against impairment.

6. Notice as to Adjustments. With respect to each adjustment pursuant to Section 4 of this Warrant, the Company, at its expense, will promptly compute the adjustment or re-adjustment in accordance with the terms of this Warrant and furnish the Holder with a certificate certified and confirmed by the Secretary or Chief Financial Officer of the Company setting forth, in reasonable detail, the event requiring the adjustment or re-adjustment and the amount of such adjustment or re-adjustment, the method of calculation thereof and the facts upon which the adjustment or re-adjustment is based, and the Exercise Price and the number of Warrant Shares or other securities purchasable hereunder after giving effect to such adjustment or re-adjustment, which report shall be mailed by first class mail, postage prepaid to the Holder.

7. Reservation of Shares. The Company shall, solely for the purpose of effecting the exercise of this Warrant, at all times during the term of this Warrant, reserve and keep available out of its authorized shares of Common Stock, free from all taxes, liens and charges with respect to the issue thereof and not subject to preemptive rights of shareholders of the Company, such number of its shares of Common Stock as shall from time to time be sufficient to effect in full the exercise of this Warrant. If at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect in full the exercise of this Warrant, in addition to such other remedies as shall be available to Holder, the Company will promptly take such corporate action as may, in the opinion of its counsel, be necessary to increase the number of authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes, including without limitation, using its Reasonable Best Efforts (as defined in Section 14 hereof) to obtain the requisite shareholder approval necessary to increase the number of authorized shares of Common Stock. The Company hereby represents and warrants that all shares of Common Stock issuable upon exercise of this Warrant shall be duly authorized and, when issued and paid for upon exercise, shall be validly issued, fully paid and nonassessable.

8. Post-Effective Amendment. As soon as practicable after the Exercise Date, and in no event later than ten (10) days thereafter, the Company shall, at its sole expense, prepare and file a post-effective amendment to Registration Statement No. 333-195632 for the registration for resale of the Warrant Shares.

9. Restrictions on Transfer. Notwithstanding any other provision of this Warrant: (a) prior to the Exercise Date, this Warrant may only be transferred or assigned to the persons permitted under FINRA Rule 5110(g), and (b) subject at all times to FINRA Rule 5110(g), no opinion of counsel shall be necessary for a transfer of the Warrant or Warrant Shares by the holder thereof to any Person employed by or owning equity in the Holder, if the transferee agrees in writing to be subject to the terms hereof to the same extent as if the transferee were the original purchaser hereof and such transfer is permitted under applicable securities laws.

10. Ownership, Transfer, Sale and Substitution of Warrant.

10.1 Ownership of Warrant. The Company may treat any Person in whose name this Warrant is registered in the Warrant Register maintained pursuant to Section 10.2(b) hereof as the owner and holder thereof for all purposes, notwithstanding any notice to the contrary, except that, if and when any Warrant is properly assigned in blank, the Company may (but shall not be obligated to) treat the bearer thereof as the owner of such Warrant for all purposes, notwithstanding any notice to the contrary. Subject to Sections 9 and 10 hereof, this Warrant, if properly assigned, may be exercised by a new holder without a new Warrant first having been issued.

10.2 Office; Exchange of Warrant.

(a) The Company will maintain its principal office at the location identified in the prospectus relating to the Offering or at such other offices as set forth in the Company’s most current filing (as of the date notice is to be given) under the Securities Exchange Act of 1934, as amended, or as the Company otherwise notifies the Holder.

(b) The Company shall cause to be kept at its office maintained pursuant to Section 10.2(a) hereof a warrant register (the “Warrant Register”) for the registration and transfer of the Warrant. The name and address of the holder of the Warrant, the transfers thereof and the name and address of the transferee of the Warrant shall be registered in such Warrant Register. The Person in whose name the Warrant shall be so registered shall be deemed and treated as the owner and holder thereof for all purposes of this Warrant, and the Company shall not be affected by any notice or knowledge to the contrary.

(c) Upon the surrender of this Warrant, properly endorsed, for registration of transfer or for exchange at the office of the Company maintained pursuant to Section 10.2(a) hereof, the Company at its expense will (subject to compliance with Section 9 hereof, if applicable) execute and deliver to or upon the order of the Holder thereof a new Warrant of like tenor, in the name of such holder or as such holder (upon payment by such holder of any applicable transfer taxes) may direct, calling in the aggregate on the face thereof for the number of shares of Common Stock called for on the face of the Warrant so surrendered (after giving effect to any previous adjustment(s) to the number of Warrant Shares).

10.3 Replacement of Warrant. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of any such loss, theft or destruction of this Warrant, upon delivery of indemnity reasonably satisfactory to the Company in form and amount or, in the case of any mutilation, upon surrender of this Warrant for cancellation at the office of the Company maintained pursuant to Section 10.2(a) hereof, the Company will execute and deliver, in lieu thereof, a new Warrant of like tenor and dated the date hereof.

10.4 Opinions. In connection with the sale of the Warrant Shares by Holder, the Company agrees to cooperate with the Holder, and at the Company’s expense, have its counsel provide any legal opinions required to remove any restrictive legends from the Warrant Shares in connection with a sale, transfer or legend removal request of Holder.

11. No Rights or Liabilities as Stockholder. No Holder shall be entitled to vote or receive dividends or be deemed the holder of any shares of Common Stock or any other securities of the Company which may at any time be issuable on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization, issuance of stock, reclassification of stock, change of par value, consolidation, merger, conveyance, or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall have been exercised and the shares of Common Stock purchasable upon the exercise hereof shall have become deliverable, as provided herein. The Holder will not be entitled to share in the assets of the Company in the event of a liquidation, dissolution or the winding up of the Company.

12. Notices. Any notice or other communication in connection with this Warrant shall be given in writing and directed to the parties hereto as follows: (a) if to the Holder, at the address of the holder in the Warrant Register maintained pursuant to Section 10 hereof, or (b) if to the Company, to the attention of its Chief Executive Officer at its office maintained pursuant to Section 10.2(a) hereof; provided, that the exercise of the Warrant shall also be effected in the manner provided in Section 3 hereof. Notices shall be deemed properly delivered and received when delivered to the notice party (i) if personally delivered, upon receipt or refusal to accept delivery, (ii) if sent via facsimile or electronic means, upon mechanical confirmation of successful transmission thereof generated by the sending telecopy machine or confirmation of electronic delivery, (iii) if sent by a commercial overnight courier for delivery on the next Business Day, on the first Business Day after deposit with such courier service, or (iv) if sent by registered or certified mail, five (5) Business Days after deposit thereof in the U.S. mail.

13. Payment of Taxes. The Company will pay all documentary stamp taxes attributable to the issuance of shares of Common Stock underlying this Warrant upon exercise of this Warrant; provided, however, that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the transfer or registration of this Warrant or any certificate for shares of Common Stock underlying this Warrant in a name other that of the Holder. The Holder is responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving shares of Common Stock underlying this Warrant upon exercise hereof.

14. Miscellaneous. This Warrant and any term hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the change, waiver, discharge or termination is sought. This Warrant shall be construed and enforced in accordance with and governed by the laws of the State of New York. Each of the parties consents to the exclusive jurisdiction of the Federal courts whose districts encompass any part of the County of New York located in the City of New York in connection with any dispute arising under this Agreement and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non conveniens, to the bringing of any such proceeding in such jurisdictions. Each party to this Agreement irrevocably consents to the service of process in any such proceeding by any manner permitted by law. The section headings in this Warrant are for purposes of convenience only and shall not constitute a part hereof. When used herein, the term “Reasonable Best Efforts” means, with respect to the applicable obligation of the Company, reasonable best efforts for similarly situated, publicly-traded companies.

IN WITNESS WHEREOF, the Company has caused this Representative’s Warrant to be duly executed as of the date first above written.

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.
By:
	Name: Donald A. Bittar
	Title:   Chief Financial Officer

EXHIBIT A

FORM OF EXERCISE NOTICE
[To be executed only upon exercise of Warrant]

To FIRST CHOICE HEALTHCARE SOLUTIONS, INC.:

The undersigned registered holder of the within Warrant hereby irrevocably exercises the Warrant pursuant to Section 3.1 of the Warrant with respect to [_____] Warrant Shares, at an exercise price of $[____] per share, and requests that the certificates for such Warrant Shares be issued, subject to Sections 9 and 10, in the name of and delivered to:

The undersigned is hereby making payment for the Warrant Shares in the following manner:

[check one]

¨ by cash in accordance with Section 3.1(b) of the Warrant

¨ via cashless exercise in accordance with Section 3.1(c) of the Warrant in the following manner:

The undersigned hereby represents and warrants that it is, and has been since its acquisition of the Warrant, the record and beneficial owner of the Warrant.

Dated:

Print or Type Name

(Signature must conform in all respects to name of

holder as specified on the face of Warrant)

 (Street Address)

(City) (State) (Zip Code)

EXHIBIT B

FORM OF ASSIGNMENT

[To be executed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto                                                                     (the “Transferee”) the right represented by the within Warrant to purchase                                    shares of common stock of First Choice Healthcare Solutions, Inc., a Delaware corporation (the “Company”), to which the within Warrant relates, and appoints                                                                   as attorney to transfer said right on the books of the Company with full power of substitution in the premises.

Dated:
	(Signature must conform in all respects to name of holder as specified on the face of Warrant)
	(Street Address)
	(City) (State) (Zip Code)
Signed in the presence of:
	(Signature of Transferee)
	(Street Address)
	(City) (State) (Zip Code)

EX-5.1

Exhibit 5.1

Meyer, Suozzi, English & Klein, p.c.

One Commerce Plaza Suite 1705 Albany, New York 12260 518-465-5551 facsimile: 518-465-2033 ──── 1300 Connecticut Avenue, N.W. Suite 600 Washington, DC 20036 202-496-2103 facsimile: 202-223-0358 Counselors at Law 990 Stewart Avenue, Suite 300 P.O. Box 9194 Garden City, New York 11530-9194 516-741-6565 facsimile: 516-741-6706 E-mail: meyersuozzi@msek.com Website: http://www.msek.com 1350 Broadway, Suite 501 P.O. Box 822 New York, New York 10018-0026 212-239-4999 facsimile: 212-239-1311 ────

June 10, 2014

VIA ELECTRONIC TRANSMISSION

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Re: First Choice Healthcare Solutions, Inc.

Form S-1 Registration Statement (File No. 333-195632)

Ladies and Gentlemen:

We refer to the above-captioned registration statement on Form S-1 (the “Registration Statement”) under the Securities Act of 1933, as amended (the “Act”), filed by First Choice Healthcare Solutions, Inc., a Delaware corporation (the “Company”), with the Securities and Exchange Commission.

We have examined the originals, photocopies, certified copies or other evidence of such records of the Company, certificates of officers of the Company and public officials, and other documents as we have deemed relevant and necessary as a basis for the opinion hereinafter expressed. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as certified copies or photocopies and the authenticity of the originals of such latter documents.

Based on our examination mentioned above, we are of the opinion that the securities being sold pursuant to the Registration Statement are duly authorized and will be, when issued in the manner described in the Registration Statement, validly issued, fully paid and non-assessable.

IRS Circular 230 disclosure:  Any tax advice contained in this communication (including any attachments or enclosures) was not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.  (The foregoing disclaimer has been affixed pursuant to U.S. Treasury regulations governing tax practitioners.)

Securities and Exchange Commission

Page 2

June 10, 2014

We hereby consent to the filing of this opinion as Exhibit 5.1 to the Registration Statement and to the reference to our firm under “Legal Matters” in the related Prospectus. In giving the foregoing consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Act, or the rules and regulations of the Securities and Exchange Commission.

Very truly yours,
MEYER, SUOZZI, ENGLISH & KLEIN, P.C.
By:	/s/ Meyer, Suozzi, English & Klein, P.C.

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the reference to our firm under the caption “Experts” and the use of our report dated March 28, 2014 on the consolidated financial statements of First Choice Healthcare Solutions, Inc. as of December 31, 2013 and 2012 and for each of the two years ended December 31, 2013 which appear in this Amendment No.1 to the Registration Statement on Form S-1.

/s/ RBSM LLP

New York, New York

June 10, 2014