10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: June 30, 2014

or

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

For the transition period from __________ to __________

Commission File Number: 000-53012

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware	90-0687379
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

709 S. Harbor City Boulevard, Suite 250, Melbourne, Florida 32901

(Address of principal executive offices)

(321) 725-0090

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days.    Yes x No  ¨

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer, or a smaller reporting company. See the 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	¨	Smaller reporting company	x

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

As of August 14, 2014, there were 17,588,805 shares outstanding of the registrant’s common stock.

PART I.	FINANCIAL INFORMATION
	ITEM 1	Financial Statements
		Condensed consolidated balance sheets as of June 30, 2014 (unaudited) and December 31, 2013	3
		Condensed consolidated statements of operations for the three and six months ended June 30, 2014 and 2013 (unaudited)	4
		Condensed consolidated statement of stockholders’ deficit for the six months ended June 30, 2014 (unaudited)	5
		Condensed consolidated statements of cash flows for the six months ended June 30, 2014 and 2013 (unaudited)	6
		Notes to condensed consolidated financial statements (unaudited)	7
	ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
	ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	24
	ITEM 4.	Controls and Procedures	25
PART II.	OTHER INFORMATION
	ITEM 1.	Legal Proceedings	25
	ITEM 1A.	Risk Factors	25
	ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
	ITEM 3.	Defaults Upon Senior Securities	27
	ITEM 4.	Mine Safety Disclosures	27
	ITEM 5.	Other Information	27
	ITEM 6.	Exhibits	28
	SIGNATURES		30

PART I

ITEM 1. FINANCIAL STATEMENTS

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	June 30,			December 31,
	2014			2013
	(unaudited)
ASSETS
Current assets
Cash	$	70,812		$	739,158
Cash-restricted		281,453			256,246
Accounts receivable		2,055,245			1,272,155
Prepaid and other current assets		225,624			140,580
Capitalized financing costs, current portion		57,348			57,348
Total current assets		2,690,482			2,465,487
Property, plant and equipment, net of accumulated depreciation of 2,210,618 and $1,959,127, respectively		8,498,548			8,662,057
Other assets
Capitalized financing costs, long term portion		90,169			131,540
Patient list, net of accumulated amortization of $40,000 and $35,000, respectively		255,000			265,000
Patents		286,500			286,500
Deposits		2,713			2,713
Total other assets		634,382			685,753
Total assets	$	11,823,412		$	11,813,297
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	818,417		$	459,000
Stock based compensation payable		96,000			166,340
Line of credit, short term		1,000,000			800,000
Convertible note payable, short term portion		915,412			-
Notes payable, current portion		781,999			743,787
Unearned revenue		50,854			74,934
Total current liabilities		3,662,682			2,244,061
Long term debt:
Deposits held		72,901			72,901
Convertible note payable, long term portion		1,317,066			2,347,403
Notes payable, long term portion		8,515,934			8,935,473
Total long term debt		9,905,901			11,355,777
Total liabilities		13,568,583			13,599,838
Commitments and contingencies		-			-
Stockholders' deficit
Preferred stock, $0.01 par value; 1,000,000 shares authorized, Nil issued and outstanding		-			-
Common stock, $0.001 par value; 100,000,000 shares authorized, 17,385,947 and 16,747,247 shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively		17,386			16,747
Additional paid in capital		12,084,650			11,560,249
Accumulated deficit		(13,847,207	)		(13,363,537	)
Total stockholders' deficit		(1,742,171	)		(1,786,541	)
Total liabilities and stockholders' deficit	$	11,823,412		$	11,813,297

See the accompanying notes to these unaudited condensed consolidated financial statements

3

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

	Three months ended June 30,						Six months ended June 30,
	2014			2013			2014			2013
Revenues:
Patient Service Revenue	$	1,885,569		$	1,208,813		$	3,896,543		$	2,343,825
Provision for bad debts		(37,128	)		-			(75,272	)		-
Net patient service revenue less provision for bad debts		1,848,441			1,208,813			3,821,271			2,343,825
Rental Revenue		258,723			260,757			520,646			527,426
Total Revenue		2,107,164			1,469,570			4,341,917			2,871,251
Operating expenses:
Salaries & benefits		1,090,806			641,789			2,156,327			1,264,548
Other operating expenses		427,056			308,414			856,347			612,889
General & administrative		669,208			347,326			1,075,120			600,345
Depreciation and amortization		126,772			126,805			261,491			249,425
Total operating expenses		2,313,842			1,424,334			4,349,285			2,727,207
Net (loss) income from operations		(206,678	)		45,236			(7,368	)		144,044
Other income (expense):
Miscellaneous income		750			813			1,500			1,563
Gain on change in fair value of derivative liability		-			229,631			-			188,982
Amortization financing costs		(25,466	)		(14,337	)		(41,372	)		(28,674	)
Interest expense, net		(217,177	)		(381,735	)		(436,430	)		(681,376	)
Total other (expense)		(241,893	)		(165,628	)		(476,302	)		(519,505	)
Net loss before provision for income taxes		(448,571	)		(120,392	)		(483,670	)		(375,461	)
Income taxes (benefit)		-			-			-			-
NET LOSS	$	(448,571	)	$	(120,392	)	$	(483,670	)	$	(375,461	)
Net loss per common share, basic and diluted	$	(0.03	)	$	(0.01	)	$	(0.03	)	$	(0.03	)
Weighted average number of common shares outstanding, basic and diluted		16,988,149			12,841,154			16,873,038			12,796,777

See the accompanying notes to these unaudited condensed consolidated financial statements

4

FIRST CHOICE HEALTHCARE SOLUTIONS, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT

SIX MONTHS ENDED JUNE 30, 2014

(unaudited)

									Additional
	Preferred stock				Common stock				Paid in			Accumulated
	Shares		Amount		Shares		Amount		Capital			Deficit			Total
Balance, January 1, 2014		-	$	-		16,747,247	$	16,747	$	11,560,249		$	(13,363,537	)	$	(1,786,541	)
Common stock issued for services rendered		-		-		200,000		200		166,140			-			166,340
Common stock issued in settlement of convertible notes payable and line of credit		-		-		408,700		409		358,291			-			358,700
Common stock issued in connection with loan acquisition		-		-		30,000		30		(30	)		-			-
Net loss		-		-		-		-		-			(483,670	)		(483,670	)
Balance, June 30, 2014		-	$	-		17,385,947	$	17,386	$	12,084,650		$	(13,847,207	)	$	(1,745,171	)

See the accompanying notes to these unaudited condensed consolidated financial statements

5

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Six months ended June 30,
	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(483,670	)	$	(375,461	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization		261,491			249,425
Amortization of financing costs		41,371			28,674
Amortization of debt discount in connection with convertible note		-			207,026
Bad debt expense		75,272			-
Stock based compensation		96,000			68,500
Change in fair value of debt derivative		-			(188,982	)
Changes in operating assets and liabilities:
Accounts receivable		(858,362	)		(367,538	)
Prepaid expenses and other		(85,044	)		(87,274	)
Restricted funds		(25,207	)		(30,410	)
Accounts payable and accrued expenses		453,192			269,678
Unearned income		(24,080	)		(14,842	)
Net cash (used in) operating activities		(549,037	)		(241,204	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment		(87,982	)		(273,972	)
Net increase in long term deposits		-			12,757
Net cash used in investing activities		(87,982	)		(261,215	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (payments) proceeds from related party line of credit		-			(14,910	)
Proceeds from convertible note payable		-			103,500
Proceeds from lines of credit		350,000			750,004
Proceeds from notes payable		-			117,322
Net payments on notes payable		(381,327	)		(427,609	)
Net cash (used in) provided by financing activities		(31,327	)		528,307
Net (decrease) increase in cash and cash equivalents		(668,346	)		25,888
Cash and cash equivalents, beginning of period		739,158			67,045
Cash and cash equivalents, end of period	$	70,812		$	92,933
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	$	436,528		$	474,350
Cash paid during the period for taxes	$	-		$	-
Supplemental Disclosure on non-cash investing and financing activities:
Common stock issued in settlement of accrued expenses	$	166,340		$	-
Common stock issued in settlement of line of credit	$	150,000		$	-
Common stock issued in settlement of convertible note payable	$	208,700		$	-

See the accompanying notes to these unaudited condensed consolidated financial statements

6

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2014

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 June 30, 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 and six months ended June 30, 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.

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.

7

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2014

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 55,000 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).

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 June 30, 2014, the Company had $70,812 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.

8

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2014

· 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 June 30, 2014 and December 31, 2013, the Company’s provision for bad debts was $436,556 and $361,284, respectively.

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 5 to 39 years.

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 and six months ended June 30, 2014 was $25,466 and $41,372, respectively; and for the three and six months ended June 30, 2013 was $14,337 and $28,674, respectively.  Accumulated amortization of deferred financing costs was $189,998 and $133,812 at June 30, 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.

9

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2014

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 shares outstanding were 22,873,960 and 14,093,309 for the three months ended June 30, 2014 and 2013, respectively and 22,758,849 and 14,048,931 for the six months ended June 30, 2014 and 2013, respectively.

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 June 30, 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.

10

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2014

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 June 30, 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 June 30, 2014, the Company has used $1,000,000 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 55,000 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.

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 June 30, 2014 and December 31, 2013 are as follows:

	June 30, 2014			December 31, 2013
Land	$	1,000,000		$	1,000,000
Building		3,055,168			3,055,168
Building improvements		3,970,602			3,953,846
Automobiles		29,849			29,849
Computer equipment		270,184			210,698
Medical equipment		2,253,639			2,238,639
Office equipment		129,724			132,984
		10,709,166			10,621,184
Less: accumulated depreciation		(2,210,618	)		(1,959,127	)
	$	8,498,548		$	8,662,057

11

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2014

During the three and six months ended June 30, 2014, depreciation expense charged to operations was $126,772 and $261,491, respectively and during the three and six months ended June 30, 2013, depreciation expense charged to operations was $119,688 and $237,309, 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.

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.

During the six months ended June 30, 2014, the Company issued 200,000 shares of its common stock upon the election by Lender to convert $150,000 of outstanding principal amount under the line of credit.

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.

12

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2014

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, subject to certain conditions set forth in the Debenture, 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. 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.

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%.

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.

On June 30, 2014, Hillair elected to convert the aggregate amount of $104,700 of its Debenture, representing $100,000 of principal and $4,700 of interest, into 104,700 shares of the Company’s common stock..

NOTE 7 — NOTES PAYABLE

Notes payable as of June 30, 2014 and December 31, 2013 are comprised of the following:

	June 30, 2014			December 31, 2013
Mortgage payable	$	7,305,036		$	7,353,398
Note payable, GE Capital (construction), MRI		208,225			278,287
Note payable, GE Capital (construction), 2		73,495			100,977
Note Payable, GE Capital (MRI)		1,395,065			1,592,278
Note Payable, GE Capital (X-ray)		163,591			184,001
Note Payable, GE Arm		103,477			114,597
Note payable, Auto		19,381			22,211
Capital lease, Equipment		29,663			33,511
		9,297,933			9,679,260
Less: current portion		(781,999	)		(743,787	)
	$	8,515,934		$	8,935,473

13

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2014

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.

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 June 30, 2014 was $19,381.

14

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2014

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 June 30:

	Amount
Six months ended December 31, 2014	$	362,460
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	$	9,297,933

NOTE 8 — CAPITAL STOCK

During the six months ended June 30, 2014, the Company issued an aggregate of 200,000 shares of its common stock in settlement of accrued expenses.

During the six months ended June 30, 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.

During the six months ended June 30, 2014, the Company issued 408,700 shares of its common stock in settlement of convertible notes payable and line of credit.

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 June 30, 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 June 30, 2014:		4,195,000	$	2.36

15

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2014

As of June 30, 2014, the Company had no outstanding options.

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 June 30, 2014:

	Marina			FCID						Intercompany
	Towers			Medical			Corporate			Eliminations			Total
Revenue:
Net Patient Service Revenue	$	-		$	1,848,441		$	-		$	-		$	1,848,441
Rental revenue		367,460			-			-			(108,737	)		258,723
Total Revenue		367,460			1,848,441			-			(108,737	)		2,107,164
Operating expenses:
Salaries & benefits		3,000			996,555			91,251			-			1,090,806
Other operating expenses		109,989			425,804			-			(108,737	)		427,056
General and administrative		21,903			328,909			318,396			-			669,208
Depreciation and amortization		69,219			57,553			-			-			126,772
Total operating expenses		204,111			1,808,821			409,647			(108,737	)		2,313,842
Net income (loss) from operations:		163,349			39,620			(409,647	)		-			(206,678	)
Interest expense		(114,067	)		(55,951	)		(47,159	)		-			(217,177	)
Amortization of financing costs		(14,337	)		(11,129	)		-			-			(25,466	)
Other income (expense)		750			-			-			-			750
Net Income (loss):		35,695			(27,460	)		(456,806	)		-			(448,571	)
Income taxes		-			-			-			-			-
Net income (loss)	$	35,695		$	(27,460	)	$	(456,806	)	$	-		$	(448,571	)

16

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2014

Summary Statement of Operations for the three months ended June 30, 2013:

	Marina			FCID						Intercompany
	Towers			Medical			Corporate			Eliminations			Total
Revenue:
Net Patient Service Revenue	$	-		$	1,208,813		$	-		$	-		$	1,208,813
Rental revenue		366,902			-			-			(106,145	)		260,757
Total Revenue		366,902			1,208,813			-			(106,145	)		1,469,570
Operating expenses:
Salaries & benefits		3,000			535,105			103,684			-			641,789
Other operating expenses		93,140			321,488			-			(106,214	)		308,414
General and administrative		20,113			174,768			152,445			-			347,326
Depreciation and amortization		41,011			85,794			-			-			126,805
Total operating expenses		157,264			1,117,155			256,129			(106,214	)		1,424,334
Net income (loss) from operations:		209,638			91,658			(256,129	)		69			45,236
Interest expense		(118,775	)		(72,736	)		(190,224	)		-			(381,735	)
Amortization of financing costs		(14,337	)		-			-			-			(14,337	)
Gain on change in derivative liability		-			-			229,631			-			229,631
Other income (expense)		813			-			-			-			813
Net Income (loss):		77,339			18,922			(216,722	)		69			(120,392	)
Income taxes		-			-			-			-			-
Net income (loss)	$	77,339		$	18,922		$	(216,722	)	$	69		$	(120,392	)

Summary Statement of Operations for the six months ended June 30, 2014:

	Marina			FCID						Intercompany
	Towers			Medical			Corporate			Eliminations			Total
Revenue:
Net Patient Service Revenue	$	-		$	3,821,271		$	-		$	-		$	3,821,271
Rental revenue		736,971			-			-			(216,325	)		520,646
Total Revenue		736,971			3,821,271			-			(216,325	)		4,341,917
Operating expenses:
Salaries & benefits		6,000			1,976,438			173,889			-			2,156,327
Other operating expenses		213,601			859,071			-			(216,325	)		856,347
General and administrative		43,722			565,161			466,237			-			1,075,120
Depreciation and amortization		138,228			123,263			-			-			261,491
Total operating expenses		401,551			3,523,933			640,126			(216,325	)		4,349,285
Net income (loss) from operations:		335,420			297,338			(640,126	)		-			(7,368	)
Interest expense		(226,091	)		(115,288	)		(95,051	)		-			(436,430	)
Amortization of financing costs		(28,674	)		(12,698	)		-			-			(41,372	)
Other income (expense)		1,500			-			-			-			1,500
Net Income (loss):		82,155			169,352			(735,177	)		-			(483,670	)
Income taxes		-			-			-			-			-
Net income (loss)	$	82,155		$	169,352		$	(735,177	)	$	-		$	(483,670	)

17

FIRST CHOICE HEALTHCARE SOLUTIONS, INC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2014

Summary Statement of Operations for the six months ended June 30, 2013:

	Marina			FCID						Intercompany
	Towers			Medical			Corporate			Eliminations			Total
Revenue:
Net Patient Service Revenue	$	-		$	2,343,825		$	-		$	-		$	2,343,825
Rental revenue		738,566			-			-			(211,140	)		527,426
Total Revenue		738,566			2,343,825			-			(211,140	)		2,871,251
Operating expenses:
Salaries & benefits		6,000			1,008,751			249,797			-			1,264,548
Other operating expenses		194,076			636,321			-			(217,508	)		612,889
General and administrative		39,341			306,985			254,019			-			600,345
Depreciation and amortization		81,742			167,683			-			-			249,425
Total operating expenses		321,159			2,119,740			503,816			(217,508	)		2,727,207
Net income (loss) from operations:		417,407			224,085			(503,816	)		6,368			144,044
Interest expense		(232,165	)		(130,734	)		(318,477	)		-			(681,376	)
Amortization of financing costs		(28,674	)		-			-			-			(28,674	)
Gain on change in derivative liability		-			-			188,982			-			188,982
Other income (expense)		1,563			-			-			-			1,563
Net Income (loss):		158,131			93,351			(633,311	)		6,368			(375,461	)
Income taxes		-			-			-			-			-
Net income (loss)	$	158,131		$	93,351		$	(633,311	)	$	6,368		$	(375,461	)

NOTE 11 – COMMITMENTS AND CONTINGENCIES

On December 9, 2011, FCID Medical, Inc. and First Choice Medical Group of Brevard, LLC, both wholly-owned subsidiaries of the Company (collectively, the “Company”) entered into a five (5) year Billing and Collection Agreement (the “Agreement”) with MedTRX Health Care Solutions, LLC and MedTRX Collection Services LLC (collectively, “MedRX”). Under the terms of the Agreement, MedTRX was to provide the Company with proprietary IT billing and collection software systems. MedTRX has claimed that the Company breached the Agreement, and that the Agreement has been terminated. MedTRX, on July 25, 2014, filed a demand for arbitration with the American Arbitration Association to be conducted in New York, New York. The Company believes the claims of MedTRX are without merit and intends to file a counterclaim of its own for multiple breaches of the Agreement by MedTRX. Coin Halpern, a member of our Board of Directors, Is the Managing Member of MedTRX Provider Network, LLC, which is an affiliate of MedTRX. However, no assurance can be give that any amounts ultimately due by the Company, will not have a material impact on the Company’s financial condition.

On April 10, 2014, the Company terminated the employment of Dr. David E. Dominguez in accordance with the terms of his five (5) year Employment Agreement dated September 26, 2013 (the “Emploment Agreement”). Dr. Dominguez, on June 5, 2014, commenced an action against the Company in the Circuit of the Eighteenth Judicial Circuit and For Brevard County, Florida, alleging that his termination was in breach of the Employment Agreement. The Company has denied any liability to Dr. Dominguez and intends to vigorously defend this action.

NOTE 12 - SUBSEQUENT EVENTS

In July 2014, the Company terminated the services Elite Financial Communications Group, LLC d/b/a Hanover Elite. In accordance with terms of agreement, the Company issued an aggregate of 75,000 shares of its common stock at a cost of $96,000, which costs were accrued for the six months ended June 30, 2014. The shares were issued in reliance upon the exemption from resignation under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).

On July 28, 2014, Hillair elected to convert the aggregate amount of $127,857 of its Debenture, representing interest, into 127,857 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.

As of August 1, 2014, the Company entered in a 12-month agreement to engage the services of IRTH Communications, LLC. The agreement, which is cancellable in six months, provides for a monthly cash retainer and the issuance of 150,000 restricted shares of our common stock, which shall be deemed earned when issued. The shares will be issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act.

18

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This quarterly report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934 (“Exchange Act”). Forward-looking statements reflect the current view about future events. When used in this quarterly report on Form 10-Q, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions, as they relate to us or our management, identify forward-looking statements. Such statements, include, but are not limited to, statements contained in this quarterly report on Form 10-Q relating to our business strategy, our future operating results, and our liquidity and capital resources outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward–looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees of assurance of future performance. We caution you therefore against relying on any of these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, the execution of our strategy 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 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.

Company Overview

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

19

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 55,000 square feet of commercial office space to tenants.

New Accounting Pronouncements

We adopted the provisions of Accounting Standards Update No. 2011-07, “Presentation and Disclosure of Patient Service Revenue, Provision for Bad Debts, and the Allowance for Doubtful Accounts for Certain Health Care Entities” (“ASU 2011-07”), during the six months ended June 30, 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.

There are 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 our consolidated financial position, results of operations or cash flows.

Results of Operations for the Three Months Ended June 30, 2014 and 2013

Revenues

Total revenues increased 43% to $2,107,164 for the three months ended June 30, 2014, as compared to revenues of $1,469,570 for the same period in the prior year. The increase for the three months ended June 30, 2014 is attributed to growth in our net patient service revenue from our Medical Center of Excellence, FCMG, which increased 53% to $1,848,441 for the quarter, after factoring provision for doubtful accounts. Rental revenue remained relatively flat, totaling $258,723 and $260,757 for the three months ended June 30, 2014 and 2013, respectively.

The provision for doubtful accounts during the second quarter of 2014 totaled $37,128, or 2.09% of our total patient service revenues of $1,885,569 for the three months ended June 30, 2014. We adopted the provisions of ASU 2011-07, in 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.

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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 70% to $1,090,806 for the three months ended June 30, 2014, as compared to $641,789 for the same period in the prior year. The increase for the three months ended June 30, 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 38% for the three months ended June 30, 2014 to $427,056, as compared to $308,414 for the same period in the prior year.

General and administrative expenses for the three months ended June 30, 2014 increased 93% to $669,208, as compared to $347,326 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 decreased from $126,805 for the three months ended June 30, 2013 to $126,772 for same period in 2014.

Net Income (Loss) from Operations

Net loss from operations totaled $(206,678) for the three months ended June 30, 2014, as compared to net income from operations of $45,236 reported for the same period in the prior year. Notwithstanding non-cash expenses totaling $259,900 for the second quarter of 2014, which included depreciation, bad debt expense and stock based compensation, income from operations totaled $53,222, as compared to income from operations of $240,541 after factoring $195,305 in non-cash depreciation and stock-based compensation recorded for the second quarter of 2013.

Interest Expense

Interest expense was $217,177 for the three months ended June 30, 2014, as compared to $381,735 for the same period in the prior year. Interest expense reported for the three months ended June 30, 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 second quarter of 2013, interest expense was comprised of mortgage interest on the building, interest on equipment financing and interest on other corporate borrowings. In addition, we incurred a non-cash interest cost of $137,472 for the three month period ended June 30, 2013 relating to the amortization of debt discounts.

Net Loss

For the three months ended June 30, 2014, our net loss increased 273% to $448,571 from a net loss of $120,392 for the same period in the prior year.

Results of Operations for the Six Months Ended June 30, 2014 and 2013

Revenues

Total revenues increased 51% to $4,341,917 for the six months ended June 30, 2014, as compared to revenues of $2,871,251 for the same period in the prior year. The increase for the six months ended June 30, 2014 is attributed to growth in our net patient service revenue from our Medical Center of Excellence, FCMG, which increased 63% to $3,821,271 for the current six month period, after factoring provision for doubtful accounts. Rental revenue remained relatively flat, totaling $520,646 and $527,426 for the six months ended June 30, 2014 and 2013, respectively.

21

The provision for doubtful accounts during the second quarter of 2014 totaled $37,128, or 2.09% of our total patient service revenues of $1,885,569 for the three months ended June 30, 2014. We adopted the provisions of ASU 2011-07, in 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 $2,156,327 for the six months ended June 30, 2014, as compared to $1,264,548 for the same period in the prior year. The increase for the six months ended June 30, 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 40% for the six months ended June 30, 2014 to $856,347, as compared to $612,889 for the same period in the prior year.

General and administrative expenses for the six months ended June 30, 2014 increased 79% to $1,075,120, as compared to $600,345 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 $249,425 for the six months ended June 30, 2013 to $261,491 for same period in 2014.

Net Income (Loss) from Operations

Net loss from operations totaled $(7,368) for the six months ended June 30, 2014, as compared to net income from operations of $144,044 reported for the same period in the prior year. Notwithstanding non-cash expenses totaling $432,763 for the first half of 2014, which included depreciation, bad debt expense and stock based compensation, income from operations totaled $425,395, as compared to income from operations of $461,969 after factoring $317,925 in non-cash depreciation and stock-based compensation recorded for the first half of 2013.

Interest Expense

Interest expense was $436,430 for the six months ended June 30, 2014, as compared to $681,376 for the same period in the prior year. Interest expense reported for the six months ended June 30, 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 half of 2013, interest expense was comprised of mortgage interest on the building, interest on equipment financing and interest on other corporate borrowings. In addition, we incurred a non-cash interest cost of $207,026 for the six month period ended June 30, 2013 relating to the amortization of debt discounts.

Net Loss

For the six months ended June 30, 2014, our net loss increased 29% to $483,670 from a net loss of $375,461 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 loss by segment for the three months ended June 30, 2014 and 2013, respectively. The significant fluctuations in the line items are described above.

For the Three Months Ended June 30, 2014:

	Real		Healthcare					Intercompany
	Estate		Services		Corporate			Eliminations			Total
Revenue:
Net Patient Service Revenue	$	-	$	1,848,441	$	-		$	-		$	1,848,441
Rental revenue		367,460		-		-			(108,737	)		261,723
Total Revenue		367,460		1,848,441		-			(108,737	)		2,107,164
Total operating expenses		201,111		1,808,821		409,647			(108,737	)		2,313,842
Net income (loss) from operations:		166,349		39,620		(409,647	)		-			(206,378	)

For the Three Months Ended June 30, 2013:

	Real		Healthcare					Intercompany
	Estate		Services		Corporate			Eliminations			Total
Revenue:
Net Patient Service Revenue	$	-	$	1,208,813	$	-		$	-		$	1,208,813
Rental revenue		366,902		-		-			(106,145	)		260,757
Total Revenue		366,902		1,208,813		-			(106,145	)		1,469,570
Total operating expenses		157,264		1,117,155		256,129			(111,214	)		1,424,334
Net income (loss) from operations:		209,638		91,658		(256,129	)		69			45,236

The following are the revenues, operating expenses and net loss by segment for the six months ended June 30, 2014 and 2013, respectively. The significant fluctuations in the line items are described above.

For the Six Months Ended June 30, 2014:

	Real		Healthcare					Intercompany
	Estate		Services		Corporate			Eliminations			Total
Revenue:
Net Patient Service Revenue	$	-	$	3,821,271	$	-		$	-		$	3,821,271
Rental revenue		736,971		-		-			(216,325	)		520,646
Total Revenue		736,971		3,821,271		-			(216,325	)		4,341,917
Total operating expenses		401,551		3,523,933		640,126			(216,325	)		4,349,285
Net income (loss) from operations:		335,420		297,338		(640,126	)		-			(7,368	)

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For the Six Months Ended June 30, 2013:

	Real		Healthcare					Intercompany
	Estate		Services		Corporate			Eliminations			Total
Revenue:
Net Patient Service Revenue	$	-	$	2,343,825	$	-		$	-		$	2,343,825
Rental revenue		738,566		-		-			(211,140	)		527,426
Total Revenue		738,566		2,343,825		-			(211,140	)		2,871,251
Total operating expenses		321,159		2,119,740		503,816			(217,508	)		2,727,207
Net income (loss) from operations:		417,407		224,085		(503,816	)		6,368			144,044

Liquidity and Capital Resources

As of June 30, 2014, we had cash of $70,812, restricted cash of $281,453 and accounts receivable totaling $2,055,245.

Net cash used in our operating activities for the six months ended June 30, 2014 was $549,037, as compared to net cash used in our operating activities of $241,204 for the same period in the prior year. The increase in net cash used in operating activities for the six month period 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 our investing activities for the six months ended June 30, 2014 and 2013 was $87,982 and $261,215, respectively.

Net cash used in our financing activities for the six months ended June 30, 2014 was $31,327, as compared to net cash provided by our financing activities of $528,307 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.

Off Balance Sheet Arrangements

We currently have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies and Estimates

Our unaudited condensed consolidated financial statements have been prepared by management in accordance with U.S. GAAP.

Recently Issued Accounting Pronouncements

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

Management does not believe that any other recently issued but not yet effective accounting pronouncements, if adopted, would have an effect on the accompanying financial statements.

Inflation

The effect of inflation on our revenue and operating results was not significant.

Climate Change

We believe that neither climate change, nor government regulations related to climate change, have had, or are expected to have, any material effect on our operations.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we are electing scaled disclosure reporting obligations and therefore are not required to provide the information required by this Item.

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Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Exchange Act, we carried out an evaluation, with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting (as such term is defined in Rule 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2014, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.  Legal Proceedings

On December 9, 2011, FCID Medical, Inc. and First Choice Medical Group of Brevard, LLC, both wholly-owned subsidiaries of the Company (collectively, the “Company”) entered into a five (5) year Billing and Collection Agreement (the “Agreement”) with MedTRX Health Care Solutions, LLC and MedTRX Collection Services LLC (collectively, “MedTRX”). Under the terms of the Agreement, MedTRX was to provide the Company with proprietary IT billing and collection software systems. MedTRX has claimed that the Company breached the Agreement, and that the Agreement has been terminated. MedTRX, on July 25, 2014, filed a demand for arbitration with the American Arbitration Association to be conducted in New York, New York. The Company believes the claims of MedTRX are without merit and intends to file a counterclaim of its own for multiple breaches of the Agreement by MedTRX. Colin Halpern, a member of our Board of Directors, is the Managing Member of MedTRX Provider Network, LLC, which is an affiliate of MedTRX. However, no assurance can be give that any amounts ultimately due by the Company, will not have a material impact on the Company’s financial condition.

On April 10, 2014, the Company terminated the employment of Dr. David E. Dominguez in accordance with the terms of his five (5) year Employment Agreement dated September 26, 2013 (the “Employment Agreement”). Dr.  Dominguez, on June 5, 2014, commenced an action against the Company in the Circuit Court of the Eighteenth Judicial Circuit In and For Brevard County, Florida, alleging that his termination was in breach of the Employment Agreement. The Company has denied any liability to Dr. Dominguez and intends to vigorously defend this action.

Item 1A.  Risk Factors

In addition to the Risk Factors set forth on our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 31, 2014, we have additional risk factors as set forth below:

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.

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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. 

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 each new Medical Center of Excellence;

26

· 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.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Issuances to Directors, Officers, Employees and Service Providers

During the three months ended June 30, 2014, we issued an aggregate of 184,000 shares of our common stock to certain service providers and such shares had an aggregate fair value of $144,100. The shares were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act.

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 our common stock. The shares were issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act.

On June 30, 2014, Hillair elected to convert the aggregate amount of $104,700 of its Debenture, representing $100,000 of principal and $4,700 of interest, into 104,700 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.

CT Capital Conversion

On June 10, 2014, CT Capital elected to convert the aggregate amount of $150,000 of its Debenture, representing $150,000 of principal, into 200,000 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.

Item 3.  Defaults Upon Senior Securities

There has been no default in the payment of principal, interest, sinking or purchase fund installment, or any other material default, with respect to any indebtedness of our Company.

Item 4.  Mine Safety Disclosures

Not applicable.

Item 5.  Other Information

None.

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Item 6.  Exhibits

31.1	Certification by the Principal Executive Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).*
31.2	Certification by the Principal Accounting Officer of Registrant pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (Rule 13a-14(a) or Rule 15d-14(a)).*
32.1	Certification by the Principal Executive Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2	Certification by the Principal Accounting Officer pursuant to 18 U.S.C. 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

* Filed herewith.

28

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the registrant has duly caused this report on Form 10-Q to be signed on its behalf by the undersigned thereunto duly authorized.

	FIRST CHOICE HEALTHCARE SOLUTIONS, INC.
Dated: August 13, 2014	By:	/s/ Christian C. Romandetti
		Christian C. Romandetti
		Chief Executive Officer (Principal Executive Officer)

Dated: August 13, 2014	By:	/s/ Donald A. Bittar
		Donald A. Bittar
		Chief Financial Officer (Principal Accounting Officer)

29

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Christian C. Romandetti, certify that:

1.	I have reviewed this Form 10-Q of First Choice Healthcare Solutions, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
4.	The registrant’s other certifying officer and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 13, 2014	By:	/s/ Christian c. romandetti
		Christian C. Romandetti
		Principal Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Donald A. Bittar, certify that:

1.	I have reviewed this Form 10-Q of First Choice Healthcare Solutions, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods present in this report;
4.	The registrant’s other certifying officer and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f)) for the registrant and have:
	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d)	Disclosed in this report any change in the registrant’s internal control over financing reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	b)	Any fraud, whether or not material, that involved management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: August 13, 2014	By:	/s/ DONALD A. BITTAR
		Donald A. Bittar
		Principal Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of First Choice Healthcare Solutions, Inc. (the “Company”), on Form 10-Q for the quarter ended June 30, 2014, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Christian C. Romandetti, the Chief Executive Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) Such Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in such Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 13, 2014	By:	/s/ CHRISTIAN C. ROMANDETTI
		Christian C. Romandetti
		Chief Executive Officer

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with this Quarterly Report of First Choice Healthcare Solutions, Inc. (the “Company”), on Form 10-Q for the quarter ended June 30, 2014, as filed with the U.S. Securities and Exchange Commission on the date hereof, I, Donald A. Bittar, the Chief Financial Officer of the Company, certify to the best of my knowledge, pursuant to 18 U.S.C. Sec. 1350, as adopted pursuant to Sec. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) Such Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in such Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 13, 2014	By:	/s/ DONALD A. BITTAR
		Donald A. Bittar
		Principal Financial Officer

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CAPITAL STOCK (Details Textual)	6 Months Ended
	Jun. 30, 2014
Settlement of Accrued Expenses [Member]
Capital Stock [Line Items]
Stock Issued During Period, Shares, New Issues	200,000
Settlement of Placement Services [Member]
Capital Stock [Line Items]
Stock Issued During Period, Shares, New Issues	30,000
Settlement of Convertible Notes Payable [Member]
Capital Stock [Line Items]
Stock Issued During Period, Shares, New Issues	408,700

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LIQUIDITY (Details Textual) (USD $)	3 Months Ended		6 Months Ended	12 Months Ended
	Dec. 31, 2013	Jun. 30, 2014	Jun. 30, 2014 Marina Towers LLC [Member] acre	Dec. 31, 2013 CT Capital LTD [Member]	Jun. 30, 2014 CT Capital LTD [Member]	Jun. 30, 2014 Third Party Tenants [Member] acre
Liquidity Disclosures [Line Items]
Long-term Line of Credit				$ 1,500,000
Debt Instrument, Interest Rate During Period				12.00%
Debt Instrument, Interest Rate, Effective Percentage				6.00%
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures, Total				100,000
Line of Credit, Current	800,000	1,000,000			1,000,000
Area of Land, Percentage of Occupancy			95.00%
Area of Land			78,000
Land Subject to Ground Leases						55,000
Debt Conversion, Converted Instrument, Amount	$ 1,238,480

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SUBSEQUENT EVENTS (Details Textual) (USD $)	6 Months Ended		0 Months Ended		1 Months Ended	0 Months Ended
	Jun. 30, 2014	Jun. 30, 2014 Convertible Debt [Member]	Jul. 28, 2014 Subsequent Event [Member]	May 08, 2014 Subsequent Event [Member] Convertible Debt [Member]	Jul. 31, 2014 Subsequent Event [Member] Elite Financial Communications Group, LLC [Member]	Aug. 01, 2014 Subsequent Event [Member] IRTH Communications, LLC [Member]
Subsequent Event [Line Items]
Debt Conversion, Original Debt, Amount		$ 104,700	$ 127,857	$ 104,000
Debt Conversion, Converted Instrument, Shares Issued		104,700	127,857	104,000
Stock Issued During Period, Shares, Issued For Services					75,000
Stock Issued During Period, Value, Issued For Services	$ 166,340				$ 96,000
Stock Issued During Period, Shares, Restricted Stock Award, Gross						150,000

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CASH - RESTRICTED

6 Months Ended

Jun. 30, 2014

Cash and Cash Equivalents [Abstract]

Restricted Cash and Cash Equivalents Disclosure [Text Block]

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.

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CONVERTIBLE NOTE PAYABLE (Details Textual) (USD $)	6 Months Ended		0 Months Ended	6 Months Ended	12 Months Ended	6 Months Ended	0 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jul. 28, 2014 Subsequent Event [Member]	Jun. 30, 2014 Hillair Capital Investments L P [Member]	Dec. 31, 2013 Hillair Capital Investments L P [Member]	Jun. 30, 2014 Convertible Debt [Member]	May 08, 2014 Convertible Debt [Member] Subsequent Event [Member]
Debt Disclosure [Line Items]
Debt Instrument, Interest Rate, Stated Percentage					8.00%
Debt Instrument, Face Amount					$ 2,320,000	$ 100,000	$ 100,000
Proceeds From Convertible Debt	0	103,500			2,000,000
Fair Value Assumptions, Expected Dividend Rate				0.00%
Fair Value Assumptions, Risk Free Interest Rate				1.42%
Fair Value Assumptions, Expected Volatility Rate				147.94%
Fair Value Assumptions, Expected Term				3 years 7 months 6 days
Warrants Issued, Number of Warrants					2,320,000
Warrants Issued, Exercise Price					$ 1.35
Debt Instrument, Convertible, Conversion Price					$ 1.00
Debt Instrument, Periodic Payment, Principal					580,000
Debt Instrument, Frequency of Periodic Payment					quarterly
Debt Instrument, Prepayment terms, Percentage of Settlement Amount				120.00%
Debt Instrument, Unamortized Discount					320,000
Debt Instrument, Maturity Date, Description					convertible debenture, which was originally due on December 28, 2013 and subsequently extended on December 28, 2013 through November 1, 2015
Debentures and Warrants Conversion, Description					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 Companys common stock. Hillair may waive this 4.99% restriction with 61 days notice to the Company.
Adjustments to Additional Paid in Capital, Convertible Debt with Conversion Feature				1,871,117
Debt Conversion, Original Debt, Amount			127,857			104,700	104,000
Interest Expense, Debt						$ 4,700	$ 4,000
Debt Conversion, Converted Instrument, Shares Issued			127,857			104,700	104,000

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LINE OF CREDIT (Details Textual) (USD $)	6 Months Ended		12 Months Ended
	Jun. 30, 2014 Line of Credit [Member]	Jun. 30, 2013 Line of Credit [Member]	Dec. 31, 2013 Line of Credit, CT Capital [Member]
Line of Credit Facility [Line Items]
Short-term Debt, Maximum Amount Outstanding During Period			$ 1,500,000
Line Of Credit Facility, Interest Rate During Period			12.00%
Line Of Credit Facility, Expiration Date			Dec. 31, 2016
Line of Credit Facility, Collateral			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.
Debt Instrument, Convertible, Terms of Conversion Feature			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.
Stock Issued During Period, Shares, Restricted Stock Award, Net of Forfeitures, Total			100,000
Debt Instrument, Interest Rate During Period			12.00%
Debt Instrument, Interest Rate, Effective Percentage			6.00%
Debt Conversion, Original Debt, Amount	$ 150,000	$ 0
Debt Conversion, Converted Instrument, Shares Issued	200,000

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NOTES PAYABLE (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Mortgage payable [Member]	Dec. 31, 2013 Mortgage payable [Member]	Aug. 12, 2011 Mortgage payable [Member]	Jun. 30, 2014 Note Payable GE Capital Construction MRI [Member]	Dec. 31, 2013 Note Payable GE Capital Construction MRI [Member]	Jun. 30, 2014 Note Payable GE Capital Construction 2 [Member]	Dec. 31, 2013 Note Payable GE Capital Construction 2 [Member]	Jun. 30, 2014 Note Payable, GE Capital (MRI) [Member]	Dec. 31, 2013 Note Payable, GE Capital (MRI) [Member]	Jun. 30, 2014 Note Payable GE Capital (X-Ray) [Member]	Dec. 31, 2013 Note Payable GE Capital (X-Ray) [Member]	Jun. 30, 2014 Note Payable GE Arm [Member]	Dec. 31, 2013 Note Payable GE Arm [Member]	Jun. 30, 2014 Note Payable Auto [Member]	Dec. 31, 2013 Note Payable Auto [Member]	May 21, 2012 Note Payable Auto [Member]	Jun. 30, 2014 Capital lease, Equipment [Member]	Dec. 31, 2013 Capital lease, Equipment [Member]
Debt Instrument [Line Items]
Notes Payable	$ 9,297,933	$ 9,679,260	$ 7,305,036	$ 7,353,398	$ 7,550,000	$ 208,225	$ 278,287	$ 73,495	$ 100,977	$ 1,395,065	$ 1,592,278	$ 163,591	$ 184,001	$ 103,477	$ 114,597	$ 19,381	$ 22,211	$ 29,850	$ 29,663	$ 33,511
Less: current portion	(781,999)	(743,787)
Notes payable, long term portion	$ 8,515,934	$ 8,935,473

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NOTES PAYABLE (Details 1) (USD $)	Jun. 30, 2014
Long-term Debt, Fiscal Year Maturity [Abstract]
Six months ended December 31, 2014	$ 362,460
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	$ 9,297,933

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LIQUIDITY

6 Months Ended

Jun. 30, 2014

Liquidity Disclosures [Abstract]

Liquidity Disclosure [Text Block]

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 June 30, 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 June 30, 2014, the Company has used $1,000,000 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 55,000 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.

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NOTES PAYABLE (Details Textual) (USD $)			0 Months Ended		0 Months Ended			1 Months Ended	0 Months Ended				12 Months Ended							1 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Aug. 22, 2012 X Ray Equipment [Member]	Mar. 08, 2013 X Ray Equipment [Member]	Sep. 27, 2012 MRI Equipment [Member]	Mar. 08, 2013 MRI Equipment [Member]	Dec. 31, 2013 C-Arm Equipment [Member]	Jun. 30, 2013 Equipment Capital Lease [Member]	Aug. 12, 2011 Mortgage payable [Member]	Jun. 30, 2014 Mortgage payable [Member]	Dec. 31, 2013 Mortgage payable [Member]	Jun. 30, 2014 Note Payable GE Capital [Member] Equipment Finance Lease [Member]	Dec. 31, 2012 Note Payable GE Capital Construction MRI [Member]	Jun. 30, 2014 Note Payable GE Capital Construction MRI [Member]	Dec. 31, 2013 Note Payable GE Capital Construction MRI [Member]	May 29, 2012 Note Payable GE Capital Construction MRI [Member]	Jun. 30, 2014 Note Payable GE Capital Construction 2 [Member]	Dec. 31, 2013 Note Payable GE Capital Construction 2 [Member]	Sep. 24, 2012 Note Payable GE Capital Construction 2 [Member]	May 21, 2012 Note Payable Auto [Member]	Jun. 30, 2014 Note Payable Auto [Member]	Dec. 31, 2013 Note Payable Auto [Member]	May 21, 2012 GE Healthcare Financial Services [Member]
Debt Instrument [Line Items]
Notes Payable	$ 9,297,933	$ 9,679,260							$ 7,550,000	$ 7,305,036	$ 7,353,398			$ 208,225	$ 278,287		$ 73,495	$ 100,977		$ 29,850	$ 19,381	$ 22,211	$ 2,400,000
Debt Instrument, Interest Rate During Period									6.10%				7.38%							6.99%
Debt Instrument, Periodic Payment								956.45	45,752.61
Debt Instrument, Maturity Date								Jun. 01, 2017	Sep. 16, 2016											Jun. 30, 2017
Interest and Debt Expense									286,723
Capital Lease Obligations			212,389		1,771,390		117,322					2,288,679
Construction Loan																450,000			150,000
Debt Instrument, Periodic Payment, Principal																				593
Construction Loan Term			60 months		60 months								35 monthly
Debt Instrument, Interest Rate, Stated Percentage			7.9375%		7.9375%		7.39%
Capital Lease Obligations Due In First 3 Months			0	1,384	0	11,779	0
Capital Lease Obligations Due For Remaining Months			$ 4,300	$ 4,575	$ 38,152	$ 38,152	$ 2,388
Debt Instrument, Interest Rate, Effective Percentage								14.002%
Debt Instrument, Term									30 years
Capital Lease Equitpment, Lease Term								48 monthly

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $)	Jun. 30, 2014	Dec. 31, 2013
Current assets
Cash	$ 70,812	$ 739,158
Cash-restricted	281,453	256,246
Accounts receivable	2,055,245	1,272,155
Prepaid and other current assets	225,624	140,580
Capitalized financing costs, current portion	57,348	57,348
Total current assets	2,690,482	2,465,487
Property, plant and equipment, net of accumulated depreciation of 2,210,618 and $1,959,127, respectively	8,498,548	8,662,057
Other assets
Capitalized financing costs, long term portion	90,169	131,540
Patient list, net of accumulated amortization of $40,000 and $35,000, respectively	255,000	265,000
Patents	286,500	286,500
Deposits	2,713	2,713
Total other assets	634,382	685,753
Total assets	11,823,412	11,813,297
Current liabilities
Accounts payable and accrued expenses	818,417	459,000
Stock based compensation payable	96,000	166,340
Line of credit, short term	1,000,000	800,000
Convertible note payable, short term portion	915,412	0
Notes payable, current portion	781,999	743,787
Unearned revenue	50,854	74,934
Total current liabilities	3,662,682	2,244,061
Long term debt:
Deposits held	72,901	72,901
Convertible note payable, long term portion	1,317,066	2,347,403
Notes payable, long term portion	8,515,934	8,935,473
Total long term debt	9,905,901	11,355,777
Total liabilities	13,568,583	13,599,838
Commitments and contingencies
Stockholders' deficit
Preferred stock, $0.01 par value; 1,000,000 shares authorized, Nil issued and outstanding	0	0
Common stock, $0.001 par value; 100,000,000 shares authorized, 17,385,947 and 16,747,247 shares issued and outstanding as of June 30, 2014 and December 31, 2013, respectively	17,386	16,747
Additional paid in capital	12,084,650	11,560,249
Accumulated deficit	(13,847,207)	(13,363,537)
Total stockholders' deficit	(1,742,171)	(1,786,541)
Total liabilities and stockholders' deficit	$ 11,823,412	$ 11,813,297

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (483,670)	$ (375,461)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization	261,491	249,425
Amortization of financing costs	41,372	28,674
Amortization of debt discount in connection with convertible note	0	207,026
Bad debt expense	75,272	0
Stock based compensation	96,000	68,500
Change in fair value of debt derivative	0	(188,982)
Changes in operating assets and liabilities:
Accounts receivable	(858,362)	(367,538)
Prepaid expenses and other	(85,044)	(87,274)
Restricted funds	(25,207)	(30,410)
Accounts payable and accrued expenses	453,192	269,678
Unearned income	(24,080)	(14,842)
Net cash (used in) operating activities	(549,037)	(241,204)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment	(87,982)	(273,972)
Net increase in long term deposits	0	12,757
Net cash used in investing activities	(87,982)	(261,215)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (payments) proceeds from related party line of credit	0	(14,910)
Proceeds from convertible note payable	0	103,500
Proceeds from lines of credit	350,000	750,004
Proceeds from notes payable	0	117,322
Net payments on notes payable	(381,327)	(427,609)
Net cash (used in) provided by financing activities	(31,327)	528,307
Net (decrease) increase in cash and cash equivalents	(668,346)	25,888
Cash and cash equivalents, beginning of period	739,158	67,045
Cash and cash equivalents, end of period	70,812	92,933
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for interest	436,528	474,350
Cash paid during the period for taxes	0	0
Supplemental Disclosure on non-cash investing and financing activities:
Common stock issued in settlement of accrued expenses	166,340	0
Line of Credit [Member]
Supplemental Disclosure on non-cash investing and financing activities:
Debt Conversion, Original Debt, Amount	150,000	0
Convertible Notes Payable [Member]
Supplemental Disclosure on non-cash investing and financing activities:
Debt Conversion, Original Debt, Amount	$ 208,700	$ 0

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STOCK OPTIONS AND WARRANTS (Details 1) (Non Employees [Member], USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Number of Shares, Outstanding	4,195,000
Weighted Average Price Per Share, Outstanding	$ 2.36
Warrant [Member]
Number of Shares, Outstanding	4,195,000	1,875,000
Number of Shares, Granted	0	2,320,000
Number of Shares, Exercised	0	0
Number of Shares, Expired	0	0
Number of Shares, Outstanding	4,195,000	4,195,000
Weighted Average Price Per Share, Outstanding	$ 2.36	$ 3.60
Weighted Average Price Per Share, Granted	$ 0	$ 1.35
Weighted Average Price Per Share, Exercised	$ 0	$ 0
Weighted Average Price Per Share, Expired	$ 0	$ 0
Weighted Average Price Per Share, Outstanding	$ 2.36	$ 2.36

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STOCK OPTIONS AND WARRANTS (Tables)

6 Months Ended

Jun. 30, 2014

Stock Options and Warrants Disclosure [Abstract]

Schedule of Share-based Goods and Nonemployee Services Transaction by Supplier [Table Text Block]

The following table summarizes the warrants outstanding and the related exercise prices for the underlying shares of the Company's common stock as of June 30, 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

Schedule Of Warrants Outstanding and Related Prices [Table Text Block]

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 June 30, 2014:		4,195,000	$	2.36

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SEGMENT REPORTING (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenue:
Net Patient Service Revenue	$ 1,885,569	$ 1,208,813	$ 3,896,543	$ 2,343,825
Rental revenue	258,723	260,757	520,646	527,426
Total Revenue	2,107,164	1,469,570	4,341,917	2,871,251
Operating expenses:
Salaries & benefits	1,090,806	641,789	2,156,327	1,264,548
Other operating expenses	427,056	308,414	856,347	612,889
General and administrative	669,208	347,326	1,075,120	600,345
Depreciation and amortization	126,772	126,805	261,491	249,425
Total operating expenses	2,313,842	1,424,334	4,349,285	2,727,207
Net income (loss) from operations:	(206,678)	45,236	(7,368)	144,044
Interest expense	(217,177)	(381,735)	(436,430)	(681,376)
Amortization of financing costs	(25,466)	(14,337)	(41,372)	(28,674)
Gain on change in derivative liability	0	229,631	0	188,982
Other income (expense)	750	813	1,500	1,563
Net Income (loss):	(448,571)	(120,392)	(483,670)	(375,461)
Income taxes	0	0	0	0
Net income (loss)	(448,571)	(120,392)	(483,670)	(375,461)
Marina Towers [Member]
Revenue:
Net Patient Service Revenue	0	0	0	0
Rental revenue	367,460	366,902	736,971	738,566
Total Revenue	367,460	366,902	736,971	738,566
Operating expenses:
Salaries & benefits	3,000	3,000	6,000	6,000
Other operating expenses	109,989	93,140	213,601	194,076
General and administrative	21,903	20,113	43,722	39,341
Depreciation and amortization	69,219	41,011	138,228	81,742
Total operating expenses	204,111	157,264	401,551	321,159
Net income (loss) from operations:	163,349	209,638	335,420	417,407
Interest expense	(114,067)	(118,775)	(226,091)	(232,165)
Amortization of financing costs	(14,337)	(14,337)	(28,674)	(28,674)
Gain on change in derivative liability		0		0
Other income (expense)	750	813	1,500	1,563
Net Income (loss):	35,695	77,339	82,155	158,131
Income taxes	0	0	0	0
Net income (loss)	35,695	77,339	82,155	158,131
FCID Medical [Member]
Revenue:
Net Patient Service Revenue	1,848,441	1,208,813	3,821,271	2,343,825
Rental revenue	0	0	0	0
Total Revenue	1,848,441	1,208,813	3,821,271	2,343,825
Operating expenses:
Salaries & benefits	996,555	535,105	1,976,438	1,008,751
Other operating expenses	425,804	321,488	859,071	636,321
General and administrative	328,909	174,768	565,161	306,985
Depreciation and amortization	57,553	85,794	123,263	167,683
Total operating expenses	1,808,821	1,117,155	3,523,933	2,119,740
Net income (loss) from operations:	39,620	91,658	297,338	224,085
Interest expense	(55,951)	(72,736)	(115,288)	(130,734)
Amortization of financing costs	(11,129)	0	(12,698)	0
Gain on change in derivative liability		0		0
Other income (expense)	0	0	0	0
Net Income (loss):	(27,460)	18,922	169,352	93,351
Income taxes	0	0	0	0
Net income (loss)	(27,460)	18,922	169,352	93,351
Corporate [Member]
Revenue:
Net Patient Service Revenue	0	0	0	0
Rental revenue	0	0	0	0
Total Revenue	0	0	0	0
Operating expenses:
Salaries & benefits	91,251	103,684	173,889	249,797
Other operating expenses	0	0	0	0
General and administrative	318,396	152,445	466,237	254,019
Depreciation and amortization	0	0	0	0
Total operating expenses	409,647	256,129	640,126	503,816
Net income (loss) from operations:	(409,647)	(256,129)	(640,126)	(503,816)
Interest expense	(47,159)	(190,224)	(95,051)	(318,477)
Amortization of financing costs	0	0	0	0
Gain on change in derivative liability		229,631		188,982
Other income (expense)	0	0	0	0
Net Income (loss):	(456,806)	(216,722)	(735,177)	(633,311)
Income taxes	0	0	0	0
Net income (loss)	(456,806)	(216,722)	(735,177)	(633,311)
Intercompany Elimination [Member]
Revenue:
Net Patient Service Revenue	0	0	0	0
Rental revenue	(108,737)	(106,145)	(216,325)	(211,140)
Total Revenue	(108,737)	(106,145)	(216,325)	(211,140)
Operating expenses:
Salaries & benefits	0	0	0	0
Other operating expenses	(108,737)	(106,214)	(216,325)	(217,508)
General and administrative	0	0	0	0
Depreciation and amortization	0	0	0	0
Total operating expenses	(108,737)	(106,214)	(216,325)	(217,508)
Net income (loss) from operations:	0	69	0	6,368
Interest expense	0	0	0	0
Amortization of financing costs	0	0	0	0
Gain on change in derivative liability		0		0
Other income (expense)	0	0	0	0
Net Income (loss):	0	69	0	6,368
Income taxes	0	0	0	0
Net income (loss)	$ 0	$ 69	$ 0	$ 6,368

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SIGNIFICANT ACCOUNTING POLICIES; BASIS OF PRESENTATION (Details Textual) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Dec. 31, 2012
Summary of Significant Accounting Policies [Line Items]
Amortization Financing Costs	$ 25,466	$ 14,337	$ 41,372	$ 28,674
Investment Maturity Term			90 days or less
Property, Plant and Equipment, Depreciation Methods			straight-line method
Accumulated Amortization, Deferred Finance Costs	189,998		189,998		133,812
Allowance for Doubtful Accounts Receivable	436,556		436,556		361,284
Antidilutive Securities Excluded From Computation Of Earnings Per Share, Amount	22,873,960	14,093,309	22,758,849	14,048,931
Cash and Cash Equivalents, at Carrying Value, Total	70,812	92,933	70,812	92,933	739,158	67,045
Stock Issued During Period, Value, Purchase of Assets					286,500
Third Party Tenants [Member]
Summary of Significant Accounting Policies [Line Items]
Land Subject to Ground Leases	55,000		55,000
Marina Towers LLC [Member]
Summary of Significant Accounting Policies [Line Items]
Amortization Financing Costs	$ 14,337	$ 14,337	$ 28,674	$ 28,674
Area of Land, Percentage of Occupancy			95.00%
Area of Land	78,000		78,000
Common Stock [Member]
Summary of Significant Accounting Policies [Line Items]
Stock Issued During Period, Shares, Purchase of Assets					636,666
Maximum [Member]
Summary of Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life			39 years
Minimum [Member]
Summary of Significant Accounting Policies [Line Items]
Property, Plant and Equipment, Useful Life			5 years

XML

SIGNIFICANT ACCOUNTING POLICIES; BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Significant Accounting Policies [Text Block]

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 June 30, 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 and six months ended June 30, 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.

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 55,000 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).

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 June 30, 2014, the Company had $70,812 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 June 30, 2014 and December 31, 2013, the Company’s provision for bad debts was $436,556 and $361,284, respectively.

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 5 to 39 years.

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 and six months ended June 30, 2014 was $25,466 and $41,372, respectively; and for the three and six months ended June 30, 2013 was $14,337 and $28,674, respectively.  Accumulated amortization of deferred financing costs was $189,998 and $133,812 at June 30, 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 shares outstanding were 22,873,960 and 14,093,309 for the three months ended June 30, 2014 and 2013, respectively and 22,758,849 and 14,048,931 for the six months ended June 30, 2014 and 2013, respectively.

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 June 30, 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.

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CONDENSED CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $)	Jun. 30, 2014	Dec. 31, 2013
Accumulated depreciation of property plant and equipment (in dollars)	$ 2,210,618	$ 1,959,127
Accumulated amortization (in dollars)	$ 40,000	$ 35,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	17,385,947	16,747,247
Common stock, shares outstanding	17,385,947	16,747,247

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COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

NOTE 11 – COMMITMENTS AND CONTINGENCIES

On December 9, 2011, FCID Medical, Inc. and First Choice Medical Group of Brevard, LLC, both wholly-owned subsidiaries of the Company (collectively, the “Company”) entered into a five (5) year Billing and Collection Agreement (the “Agreement”) with MedTRX Health Care Solutions, LLC and MedTRX Collection Services LLC (collectively, “MedRX”). Under the terms of the Agreement, MedTRX was to provide the Company with proprietary IT billing and collection software systems. MedTRX has claimed that the Company breached the Agreement, and that the Agreement has been terminated. MedTRX, on July 25, 2014, filed a demand for arbitration with the American Arbitration Association to be conducted in New York, New York. The Company believes the claims of MedTRX are without merit and intends to file a counterclaim of its own for multiple breaches of the Agreement by MedTRX. Coin Halpern, a member of our Board of Directors, Is the Managing Member of MedTRX Provider Network, LLC, which is an affiliate of MedTRX. However, no assurance can be give that any amounts ultimately due by the Company, will not have a material impact on the Company’s financial condition.

On April 10, 2014, the Company terminated the employment of Dr. David E. Dominguez in accordance with the terms of his five (5) year Employment Agreement dated September 26, 2013 (the “Emploment Agreement”). Dr. Dominguez, on June 5, 2014, commenced an action against the Company in the Circuit of the Eighteenth Judicial Circuit and For Brevard County, Florida, alleging that his termination was in breach of the Employment Agreement. The Company has denied any liability to Dr. Dominguez and intends to vigorously defend this action.

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Document And Entity Information	6 Months Ended
	Jun. 30, 2014	Aug. 14, 2014
Document Information [Line Items]
Entity Registrant Name	First Choice Healthcare Solutions, Inc.
Entity Central Index Key	0001416876
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	FCHS
Entity Common Stock, Shares Outstanding		17,588,805
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2014
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2014

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2014

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 12 - SUBSEQUENT EVENTS

In July 2014, the Company terminated the services Elite Financial Communications Group, LLC d/b/a Hanover Elite. In accordance with terms of agreement, the Company issued an aggregate of 75,000 shares of its common stock at a cost of $96,000, which costs were accrued for the six months ended June 30, 2014. The shares were issued in reliance upon the exemption from resignation under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).

On July 28, 2014, Hillair elected to convert the aggregate amount of $127,857 of its Debenture, representing interest, into 127,857 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.

As of August 1, 2014, the Company entered in a 12-month agreement to engage the services of IRTH Communications, LLC. The agreement, which is cancellable in six months, provides for a monthly cash retainer and the issuance of 150,000 restricted shares of our common stock, which shall be deemed earned when issued. The shares will be issued in reliance upon the exemption from registration under Section 4(a)(2) of the Securities Act.

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenues:
Patient Service Revenue	$ 1,885,569	$ 1,208,813	$ 3,896,543	$ 2,343,825
Provision for bad debts	(37,128)	0	(75,272)	0
Net patient service revenue less provision for bad debts	1,848,441	1,208,813	3,821,271	2,343,825
Rental Revenue	258,723	260,757	520,646	527,426
Total Revenue	2,107,164	1,469,570	4,341,917	2,871,251
Operating expenses:
Salaries & benefits	1,090,806	641,789	2,156,327	1,264,548
Other operating expenses	427,056	308,414	856,347	612,889
General & administrative	669,208	347,326	1,075,120	600,345
Depreciation and amortization	126,772	126,805	261,491	249,425
Total operating expenses	2,313,842	1,424,334	4,349,285	2,727,207
Net (loss) income from operations	(206,678)	45,236	(7,368)	144,044
Other income (expense):
Miscellaneous income	750	813	1,500	1,563
Gain on change in fair value of derivative liability	0	229,631	0	188,982
Amortization financing costs	(25,466)	(14,337)	(41,372)	(28,674)
Interest expense, net	(217,177)	(381,735)	(436,430)	(681,376)
Total other (expense)	(241,893)	(165,628)	(476,302)	(519,505)
Net loss before provision for income taxes	(448,571)	(120,392)	(483,670)	(375,461)
Income taxes (benefit)	0	0	0	0
NET LOSS	$ (448,571)	$ (120,392)	$ (483,670)	$ (375,461)
Net loss per common share, basic and diluted (in dollars per share)	$ (0.03)	$ (0.01)	$ (0.03)	$ (0.03)
Weighted average number of common shares outstanding, basic and diluted (in shares)	16,988,149	12,841,154	16,873,038	12,796,777

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CONVERTIBLE NOTE PAYABLE

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

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, subject to certain conditions set forth in the Debenture, 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. 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.

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%.

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.

On June 30, 2014, Hillair elected to convert the aggregate amount of $104,700 of its Debenture, representing $100,000 of principal and $4,700 of interest, into 104,700 shares of the Company’s common stock..

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LINE OF CREDIT

6 Months Ended

Jun. 30, 2014

Line Of Credit Facility [Abstract]

Line Of Credit Facilities [Text Block]

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.

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.

During the six months ended June 30, 2014, the Company issued 200,000 shares of its common stock upon the election by Lender to convert $150,000 of outstanding principal amount under the line of credit.

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SEGMENT REPORTING (Tables)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Summary Statement of Operations for the three months ended June 30, 2014:

	Marina		FCID				Intercompany
	Towers		Medical		Corporate		Eliminations		Total
Revenue:
Net Patient Service Revenue	$	-	$	1,848,441	$	-	$	-	$	1,848,441
Rental revenue		367,460		-		-		(108,737)		258,723
Total Revenue		367,460		1,848,441		-		(108,737)		2,107,164
Operating expenses:
Salaries & benefits		3,000		996,555		91,251		-		1,090,806
Other operating expenses		109,989		425,804		-		(108,737)		427,056
General and administrative		21,903		328,909		318,396		-		669,208
Depreciation and amortization		69,219		57,553		-		-		126,772
Total operating expenses		204,111		1,808,821		409,647		(108,737)		2,313,842
Net income (loss) from operations:		163,349		39,620		(409,647)		-		(206,678)
Interest expense		(114,067)		(55,951)		(47,159)		-		(217,177)
Amortization of financing costs		(14,337)		(11,129)		-		-		(25,466)
Other income (expense)		750		-		-		-		750
Net Income (loss):		35,695		(27,460)		(456,806)		-		(448,571)
Income taxes		-		-		-		-		-
Net income (loss)	$	35,695	$	(27,460)	$	(456,806)	$	-	$	(448,571)

Summary Statement of Operations for the three months ended June 30, 2013:

	Marina		FCID				Intercompany
	Towers		Medical		Corporate		Eliminations		Total
Revenue:
Net Patient Service Revenue	$	-	$	1,208,813	$	-	$	-	$	1,208,813
Rental revenue		366,902		-		-		(106,145)		260,757
Total Revenue		366,902		1,208,813		-		(106,145)		1,469,570
Operating expenses:
Salaries & benefits		3,000		535,105		103,684		-		641,789
Other operating expenses		93,140		321,488		-		(106,214)		308,414
General and administrative		20,113		174,768		152,445		-		347,326
Depreciation and amortization		41,011		85,794		-		-		126,805
Total operating expenses		157,264		1,117,155		256,129		(106,214)		1,424,334
Net income (loss) from operations:		209,638		91,658		(256,129)		69		45,236
Interest expense		(118,775)		(72,736)		(190,224)		-		(381,735)
Amortization of financing costs		(14,337)		-		-		-		(14,337)
Gain on change in derivative liability		-		-		229,631		-		229,631
Other income (expense)		813		-		-		-		813
Net Income (loss):		77,339		18,922		(216,722)		69		(120,392)
Income taxes		-		-		-		-		-
Net income (loss)	$	77,339	$	18,922	$	(216,722)	$	69	$	(120,392)

Summary Statement of Operations for the six months ended June 30, 2014:

	Marina		FCID				Intercompany
	Towers		Medical		Corporate		Eliminations		Total
Revenue:
Net Patient Service Revenue	$	-	$	3,821,271	$	-	$	-	$	3,821,271
Rental revenue		736,971		-		-		(216,325)		520,646
Total Revenue		736,971		3,821,271		-		(216,325)		4,341,917
Operating expenses:
Salaries & benefits		6,000		1,976,438		173,889		-		2,156,327
Other operating expenses		213,601		859,071		-		(216,325)		856,347
General and administrative		43,722		565,161		466,237		-		1,075,120
Depreciation and amortization		138,228		123,263		-		-		261,491
Total operating expenses		401,551		3,523,933		640,126		(216,325)		4,349,285
Net income (loss) from operations:		335,420		297,338		(640,126)		-		(7,368)
Interest expense		(226,091)		(115,288)		(95,051)		-		(436,430)
Amortization of financing costs		(28,674)		(12,698)		-		-		(41,372)
Other income (expense)		1,500		-		-		-		1,500
Net Income (loss):		82,155		169,352		(735,177)		-		(483,670)
Income taxes		-		-		-		-		-
Net income (loss)	$	82,155	$	169,352	$	(735,177)	$	-	$	(483,670)

Summary Statement of Operations for the six months ended June 30, 2013:

	Marina		FCID				Intercompany
	Towers		Medical		Corporate		Eliminations		Total
Revenue:
Net Patient Service Revenue	$	-	$	2,343,825	$	-	$	-	$	2,343,825
Rental revenue		738,566		-		-		(211,140)		527,426
Total Revenue		738,566		2,343,825		-		(211,140)		2,871,251
Operating expenses:
Salaries & benefits		6,000		1,008,751		249,797		-		1,264,548
Other operating expenses		194,076		636,321		-		(217,508)		612,889
General and administrative		39,341		306,985		254,019		-		600,345
Depreciation and amortization		81,742		167,683		-		-		249,425
Total operating expenses		321,159		2,119,740		503,816		(217,508)		2,727,207
Net income (loss) from operations:		417,407		224,085		(503,816)		6,368		144,044
Interest expense		(232,165)		(130,734)		(318,477)		-		(681,376)
Amortization of financing costs		(28,674)		-		-		-		(28,674)
Gain on change in derivative liability		-		-		188,982		-		188,982
Other income (expense)		1,563		-		-		-		1,563
Net Income (loss):		158,131		93,351		(633,311)		6,368		(375,461)
Income taxes		-		-		-		-		-
Net income (loss)	$	158,131	$	93,351	$	(633,311)	$	6,368	$	(375,461)

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SIGNIFICANT ACCOUNTING POLICIES; BASIS OF PRESENTATION (Policies)

6 Months Ended

Jun. 30, 2014

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

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.

Use of Estimates, Policy [Policy Text Block]

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, Policy [Policy Text Block]

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 55,000 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).

Cash and Cash Equivalents, Policy [Policy Text Block]

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 June 30, 2014, the Company had $70,812 in cash.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

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.

Trade and Other Accounts Receivable, Policy [Policy Text Block]

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 June 30, 2014 and December 31, 2013, the Company’s provision for bad debts was $436,556 and $361,284, respectively.

Patents [Policy Text Block]

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, Plant and Equipment, Policy [Policy Text Block]

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 5 to 39 years.

Capitalized Financing Cost [Policy Text Block]

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 and six months ended June 30, 2014 was $25,466 and $41,372, respectively; and for the three and six months ended June 30, 2013 was $14,337 and $28,674, respectively.  Accumulated amortization of deferred financing costs was $189,998 and $133,812 at June 30, 2014 and December 31, 2013, respectively.

Segment Reporting, Policy [Policy Text Block]

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 Tax, Policy [Policy Text Block]

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.

Earnings Per Share, Policy [Policy Text Block]

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 shares outstanding were 22,873,960 and 14,093,309 for the three months ended June 30, 2014 and 2013, respectively and 22,758,849 and 14,048,931 for the six months ended June 30, 2014 and 2013, respectively.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

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 June 30, 2014, the Company had no non-employee options outstanding to purchase shares of common stock.

Fair Value of Financial Instruments, Policy [Policy Text Block]

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.

New Accounting Pronouncements, Policy [Policy Text Block]

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.

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STOCK OPTIONS AND WARRANTS

6 Months Ended

Jun. 30, 2014

Stock Options and Warrants Disclosure [Abstract]

Stock Options and Warrants Disclosure [Text Block]

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 June 30, 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 June 30, 2014:		4,195,000	$	2.36

As of June 30, 2014, the Company had no outstanding options.

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NOTES PAYABLE

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Long-term Debt [Text Block]

NOTE 7 — NOTES PAYABLE

Notes payable as of June 30, 2014 and December 31, 2013 are comprised of the following:

	June 30,  2014		December 31, 2013
Mortgage payable	$	7,305,036	$	7,353,398
Note payable, GE Capital (construction), MRI		208,225		278,287
Note payable, GE Capital (construction), 2		73,495		100,977
Note Payable, GE Capital (MRI)		1,395,065		1,592,278
Note Payable, GE Capital (X-ray)		163,591		184,001
Note Payable, GE Arm		103,477		114,597
Note payable, Auto		19,381		22,211
Capital lease, Equipment		29,663		33,511
		9,297,933		9,679,260
Less: current portion		(781,999)		(743,787)
	$	8,515,934	$	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.

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 June 30, 2014 was $19,381.

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 June 30:

	Amount
Six months ended December 31, 2014	$	362,460
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	$	9,297,933

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CAPITAL STOCK

6 Months Ended

Jun. 30, 2014

Capital Stock [Abstract]

Capital Stock [Text Block]

NOTE 8 — CAPITAL STOCK

During the six months ended June 30, 2014, the Company issued an aggregate of 200,000 shares of its common stock in settlement of accrued expenses.

During the six months ended June 30, 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.

During the six months ended June 30, 2014, the Company issued 408,700 shares of its common stock in settlement of convertible notes payable and line of credit.

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SEGMENT REPORTING

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

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 June 30, 2014:

	Marina		FCID				Intercompany
	Towers		Medical		Corporate		Eliminations		Total
Revenue:
Net Patient Service Revenue	$	-	$	1,848,441	$	-	$	-	$	1,848,441
Rental revenue		367,460		-		-		(108,737)		258,723
Total Revenue		367,460		1,848,441		-		(108,737)		2,107,164
Operating expenses:
Salaries & benefits		3,000		996,555		91,251		-		1,090,806
Other operating expenses		109,989		425,804		-		(108,737)		427,056
General and administrative		21,903		328,909		318,396		-		669,208
Depreciation and amortization		69,219		57,553		-		-		126,772
Total operating expenses		204,111		1,808,821		409,647		(108,737)		2,313,842
Net income (loss) from operations:		163,349		39,620		(409,647)		-		(206,678)
Interest expense		(114,067)		(55,951)		(47,159)		-		(217,177)
Amortization of financing costs		(14,337)		(11,129)		-		-		(25,466)
Other income (expense)		750		-		-		-		750
Net Income (loss):		35,695		(27,460)		(456,806)		-		(448,571)
Income taxes		-		-		-		-		-
Net income (loss)	$	35,695	$	(27,460)	$	(456,806)	$	-	$	(448,571)

Summary Statement of Operations for the three months ended June 30, 2013:

	Marina		FCID				Intercompany
	Towers		Medical		Corporate		Eliminations		Total
Revenue:
Net Patient Service Revenue	$	-	$	1,208,813	$	-	$	-	$	1,208,813
Rental revenue		366,902		-		-		(106,145)		260,757
Total Revenue		366,902		1,208,813		-		(106,145)		1,469,570
Operating expenses:
Salaries & benefits		3,000		535,105		103,684		-		641,789
Other operating expenses		93,140		321,488		-		(106,214)		308,414
General and administrative		20,113		174,768		152,445		-		347,326
Depreciation and amortization		41,011		85,794		-		-		126,805
Total operating expenses		157,264		1,117,155		256,129		(106,214)		1,424,334
Net income (loss) from operations:		209,638		91,658		(256,129)		69		45,236
Interest expense		(118,775)		(72,736)		(190,224)		-		(381,735)
Amortization of financing costs		(14,337)		-		-		-		(14,337)
Gain on change in derivative liability		-		-		229,631		-		229,631
Other income (expense)		813		-		-		-		813
Net Income (loss):		77,339		18,922		(216,722)		69		(120,392)
Income taxes		-		-		-		-		-
Net income (loss)	$	77,339	$	18,922	$	(216,722)	$	69	$	(120,392)

Summary Statement of Operations for the six months ended June 30, 2014:

	Marina		FCID				Intercompany
	Towers		Medical		Corporate		Eliminations		Total
Revenue:
Net Patient Service Revenue	$	-	$	3,821,271	$	-	$	-	$	3,821,271
Rental revenue		736,971		-		-		(216,325)		520,646
Total Revenue		736,971		3,821,271		-		(216,325)		4,341,917
Operating expenses:
Salaries & benefits		6,000		1,976,438		173,889		-		2,156,327
Other operating expenses		213,601		859,071		-		(216,325)		856,347
General and administrative		43,722		565,161		466,237		-		1,075,120
Depreciation and amortization		138,228		123,263		-		-		261,491
Total operating expenses		401,551		3,523,933		640,126		(216,325)		4,349,285
Net income (loss) from operations:		335,420		297,338		(640,126)		-		(7,368)
Interest expense		(226,091)		(115,288)		(95,051)		-		(436,430)
Amortization of financing costs		(28,674)		(12,698)		-		-		(41,372)
Other income (expense)		1,500		-		-		-		1,500
Net Income (loss):		82,155		169,352		(735,177)		-		(483,670)
Income taxes		-		-		-		-		-
Net income (loss)	$	82,155	$	169,352	$	(735,177)	$	-	$	(483,670)

Summary Statement of Operations for the six months ended June 30, 2013:

	Marina		FCID				Intercompany
	Towers		Medical		Corporate		Eliminations		Total
Revenue:
Net Patient Service Revenue	$	-	$	2,343,825	$	-	$	-	$	2,343,825
Rental revenue		738,566		-		-		(211,140)		527,426
Total Revenue		738,566		2,343,825		-		(211,140)		2,871,251
Operating expenses:
Salaries & benefits		6,000		1,008,751		249,797		-		1,264,548
Other operating expenses		194,076		636,321		-		(217,508)		612,889
General and administrative		39,341		306,985		254,019		-		600,345
Depreciation and amortization		81,742		167,683		-		-		249,425
Total operating expenses		321,159		2,119,740		503,816		(217,508)		2,727,207
Net income (loss) from operations:		417,407		224,085		(503,816)		6,368		144,044
Interest expense		(232,165)		(130,734)		(318,477)		-		(681,376)
Amortization of financing costs		(28,674)		-		-		-		(28,674)
Gain on change in derivative liability		-		-		188,982		-		188,982
Other income (expense)		1,563		-		-		-		1,563
Net Income (loss):		158,131		93,351		(633,311)		6,368		(375,461)
Income taxes		-		-		-		-		-
Net income (loss)	$	158,131	$	93,351	$	(633,311)	$	6,368	$	(375,461)

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STOCK OPTIONS AND WARRANTS (Details) (Non Employees [Member], USD $)	6 Months Ended
	Jun. 30, 2014
Warrants Outstanding	4,195,000
Warrants Outstanding, Weighted Price	$ 2.36
Warrants Exercisable	4,195,000
Warrants Exercisable, Weighted Price	$ 2.36
Warrant One [Member]
Warrants Outstanding, Prices	$ 1.35
Warrants Outstanding	2,320,000
Warrants Outstanding, Expiration Date	Nov. 08, 2018
Warrants Outstanding, Weighted Price	$ 1.35
Warrants Exercisable	2,320,000
Warrants Exercisable, Weighted Price	$ 1.35
Warrant Two [Member]
Warrants Outstanding, Prices	$ 3.60
Warrants Outstanding	1,875,000
Warrants Outstanding, Expiration Date	Dec. 31, 2016
Warrants Outstanding, Weighted Price	$ 3.60
Warrants Exercisable	1,875,000
Warrants Exercisable, Weighted Price	$ 3.60

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NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2014

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments [Table Text Block]

Notes payable as of June 30, 2014 and December 31, 2013 are comprised of the following:

	June 30,  2014		December 31, 2013
Mortgage payable	$	7,305,036	$	7,353,398
Note payable, GE Capital (construction), MRI		208,225		278,287
Note payable, GE Capital (construction), 2		73,495		100,977
Note Payable, GE Capital (MRI)		1,395,065		1,592,278
Note Payable, GE Capital (X-ray)		163,591		184,001
Note Payable, GE Arm		103,477		114,597
Note payable, Auto		19,381		22,211
Capital lease, Equipment		29,663		33,511
		9,297,933		9,679,260
Less: current portion		(781,999)		(743,787)
	$	8,515,934	$	8,935,473

Schedule of Maturities of Long-term Debt [Table Text Block]

Aggregate maturities of long-term debt as of June 30:

	Amount
Six months ended December 31, 2014	$	362,460
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	$	9,297,933

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PROPERTY, PLANT, AND EQUIPMENT (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 10,709,166	$ 10,621,184
Less: accumulated depreciation	(2,210,618)	(1,959,127)
Property, plant and equipment, net	8,498,548	8,662,057
Land [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	1,000,000	1,000,000
Building [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	3,055,168	3,055,168
Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	3,970,602	3,953,846
Automobiles [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	29,849	29,849
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	270,184	210,698
Medical Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	2,253,639	2,238,639
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 129,724	$ 132,984

XML

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT (USD $)	Total	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Deficit [Member]
Balance at Dec. 31, 2013	$ (1,786,541)	$ 0	$ 16,747	$ 11,560,249	$ (13,363,537)
Balance (in shares) at Dec. 31, 2013		0	16,747,247
Common stock issued for services rendered	166,340	0	200	166,140	0
Common stock issued for services rendered (in shares)		0	200,000
Common stock issued in settlement of convertible notes payable and line of credit	358,700	0	409	358,291	0
Common stock issued in settlement of convertible notes payable and line of credit (in shares)		0	408,700
Common stock issued in connection with loan acquisition	0	0	30	(30)	0
Common stock issued in connection with loan acquisition (in shares)		0	30,000
Net loss	(483,670)	0	0	0	(483,670)
Balance at Jun. 30, 2014	$ (1,742,171)	$ 0	$ 17,386	$ 12,084,650	$ (13,847,207)
Balance (in shares) at Jun. 30, 2014		0	17,385,947

XML

PROPERTY, PLANT, AND EQUIPMENT

6 Months Ended

Jun. 30, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

NOTE 4 — PROPERTY, PLANT, AND EQUIPMENT

Property, plant and equipment at June 30, 2014 and December 31, 2013 are as follows:

	June 30, 2014		December 31, 2013
Land	$	1,000,000	$	1,000,000
Building		3,055,168		3,055,168
Building improvements		3,970,602		3,953,846
Automobiles		29,849		29,849
Computer equipment		270,184		210,698
Medical equipment		2,253,639		2,238,639
Office equipment		129,724		132,984
		10,709,166		10,621,184
Less: accumulated depreciation		(2,210,618)		(1,959,127)
	$	8,498,548	$	8,662,057

During the three and six months ended June 30, 2014, depreciation expense charged to operations was $126,772 and $261,491, respectively and during the three and six months ended June 30, 2013, depreciation expense charged to operations was $119,688 and $237,309, respectively.

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PROPERTY, PLANT, AND EQUIPMENT (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Property, Plant and Equipment [Line Items]
Depreciation	$ 126,772	$ 119,688	$ 261,491	$ 237,309

XML

PROPERTY, PLANT, AND EQUIPMENT (Tables)

6 Months Ended

Jun. 30, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Property, plant and equipment at June 30, 2014 and December 31, 2013 are as follows:

	June 30, 2014		December 31, 2013
Land	$	1,000,000	$	1,000,000
Building		3,055,168		3,055,168
Building improvements		3,970,602		3,953,846
Automobiles		29,849		29,849
Computer equipment		270,184		210,698
Medical equipment		2,253,639		2,238,639
Office equipment		129,724		132,984
		10,709,166		10,621,184
Less: accumulated depreciation		(2,210,618)		(1,959,127)
	$	8,498,548	$	8,662,057