Selectis Health Swings to Deeper Loss Amidst Liquidity Concerns

TL;DR

**GBCS is bleeding cash and facing a going concern warning; get out now before it's too late.**

AI Summary

Selectis Health, Inc. (GBCS) reported a net loss of $963,996 for the six months ended June 30, 2025, a significant increase from the net loss of $240,376 in the prior year period. For the three months ended June 30, 2025, the company posted a net loss of $308,027, a reversal from the net income of $794,344 in the same period of 2024. Healthcare revenue increased to $20,928,183 for the six months ended June 30, 2025, up from $18,755,856 in the prior year, representing an 11.5% increase. However, total expenses also rose to $21,800,218 for the six months, compared to $20,537,383 in 2024. The company's accumulated deficit grew to $21,178,132 as of June 30, 2025, from $20,191,636 at December 31, 2024. Cash and cash equivalents decreased to $559,983 from $680,332, and the company reported negative net working capital of approximately $17.2 million. Management acknowledges substantial doubt about the company's ability to continue as a going concern, citing plans to increase occupancy, control expenses, and seek additional capital.

Why It Matters

Selectis Health's deepening net loss and negative working capital raise significant red flags for investors, indicating a challenging financial position and potential for further share price volatility. The company's reliance on increasing occupancy and Medicaid reimbursement rates, alongside seeking additional capital, highlights the precariousness of its strategic outlook. For employees and customers, this financial instability could signal potential operational disruptions or changes in service quality if the company struggles to secure necessary funding. In the competitive healthcare real estate and operations market, Selectis Health's 'going concern' warning could erode confidence and make it harder to attract new investments or maintain existing partnerships, potentially impacting its ability to compete effectively with more financially stable rivals.

Risk Assessment

Risk Level: high — The company explicitly states 'substantial doubt exists about the Company's ability to continue as a going concern' due to a net loss of approximately $1.0 million for the six months ended June 30, 2025, and negative net working capital of approximately $17.2 million. This direct admission of financial distress, coupled with a significant accumulated deficit of $21,178,132, indicates a very high risk profile.

Analyst Insight

Investors should consider divesting GBCS shares given the explicit 'going concern' warning and deteriorating financial metrics. The company's plans to improve liquidity are speculative, and the risk of further capital dilution or even bankruptcy is substantial. Avoid new positions until there is clear evidence of sustained profitability and a strengthened balance sheet.

Financial Highlights

debt To Equity

N/A

revenue

$20,928,183

operating Margin

N/A

total Assets

$33,637,759

total Debt

$39,931,573

net Income

-$963,996

eps

N/A

gross Margin

N/A

cash Position

$559,983

revenue Growth

+11.5%

Revenue Breakdown

Key Numbers

• $963,996 — Net Loss (Increased from $240,376 in the prior year for the six months ended June 30, 2025, indicating worsening profitability.)
• $17.2 million — Negative Net Working Capital (As of June 30, 2025, highlighting severe liquidity issues and contributing to going concern doubt.)
• $20,928,183 — Healthcare Revenue (Increased by 11.5% for the six months ended June 30, 2025, showing growth in core operations despite losses.)
• $21,800,218 — Total Expenses (Increased for the six months ended June 30, 2025, outpacing revenue growth and contributing to net loss.)
• $21,178,132 — Accumulated Deficit (As of June 30, 2025, indicating a significant historical loss position and eroding shareholder equity.)
• $559,983 — Cash and Cash Equivalents (Decreased from $680,332 at December 31, 2024, reflecting declining cash reserves.)
• $308,027 — Net Loss (Q2 2025) (A reversal from a net income of $794,344 in Q2 2024, showing a sharp decline in quarterly performance.)

Key Players & Entities

• SELECTIS HEALTH, INC. (company) — Registrant and primary entity in the filing
• U.S. Securities and Exchange Commission (regulator) — Governing body for the filing
• FASB (regulator) — Financial Accounting Standards Board, issuing accounting pronouncements
• $963,996 (dollar_amount) — Net loss for the six months ended June 30, 2025
• $17.2 million (dollar_amount) — Negative net working capital as of June 30, 2025
• $20,928,183 (dollar_amount) — Healthcare Revenue for the six months ended June 30, 2025
• $21,178,132 (dollar_amount) — Accumulated deficit as of June 30, 2025
• $559,983 (dollar_amount) — Cash and cash equivalents as of June 30, 2025
• Chief Executive Officer (person) — Chief operating decision maker (CODM)

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: Management has substantial doubt about the company's ability to continue as a going concern. This is due to a significant net loss of $963,996 for the six months ended June 30, 2025, a substantial accumulated deficit of $21,178,132, and a decrease in cash and cash equivalents to $559,983.
• Negative Net Working Capital [high — financial]: The company reported negative net working capital of approximately $17.2 million as of June 30, 2025. This indicates that current liabilities ($21,234,962) significantly exceed current assets ($4,003,914), highlighting severe liquidity constraints.
• Worsening Profitability [high — financial]: The company reported a net loss of $963,996 for the six months ended June 30, 2025, a significant increase from $240,376 in the prior year. Furthermore, the second quarter of 2025 saw a net loss of $308,027, a reversal from a net income of $794,344 in Q2 2024.
• Rising Expenses [medium — operational]: Total expenses increased to $21,800,218 for the six months ended June 30, 2025, from $20,537,383 in the prior year. This increase in expenses outpaced revenue growth, contributing to the net loss.
• Declining Cash Reserves [medium — financial]: Cash and cash equivalents decreased to $559,983 as of June 30, 2025, down from $680,332 at December 31, 2024. This reduction in liquid assets exacerbates liquidity concerns.
• Growing Accumulated Deficit [medium — financial]: The accumulated deficit increased to $21,178,132 as of June 30, 2025, from $20,191,636 at December 31, 2024. This trend indicates ongoing historical losses and erosion of shareholder equity.

Industry Context

The healthcare services industry is highly competitive and subject to significant regulatory oversight. Companies in this sector often face challenges related to reimbursement rates, operational costs, and patient care quality. Selectis Health operates within this complex environment, where revenue growth must be carefully managed against rising expenses to achieve profitability.

Regulatory Implications

As a healthcare provider, Selectis Health is subject to numerous regulations concerning patient care, billing, and data privacy (e.g., HIPAA). Non-compliance can lead to substantial fines, reputational damage, and operational disruptions, further impacting its already precarious financial situation.

What Investors Should Do

1. Monitor management's ability to secure additional capital, as this is critical for addressing the going concern issue and funding operations.
2. Closely track expense control measures and occupancy rate improvements, as these are key strategies management is employing to improve financial performance.
3. Evaluate the sustainability of healthcare revenue growth in light of the increasing net losses and negative working capital.

Key Dates

• 2025-06-30: Six Months Ended — Reported a net loss of $963,996 and healthcare revenue of $20,928,183, with significant negative working capital and a growing accumulated deficit.
• 2025-06-30: Quarter Ended — Reported a net loss of $308,027, a reversal from net income in the prior year, highlighting deteriorating quarterly performance.
• 2025-06-30: Balance Sheet Date — Cash and cash equivalents stood at $559,983, and total liabilities were $40,034,511, resulting in a substantial stockholders' deficit.

Glossary

Accumulated deficit

The total net losses of a company over its lifetime that have not been offset by net income. (Indicates the company's historical unprofitability, which has grown to $21,178,132 as of June 30, 2025.)

Net working capital

The difference between a company's current assets and its current liabilities. (Selectis Health has negative net working capital of approximately $17.2 million, signaling significant short-term liquidity challenges.)

Going concern

An assumption that a company will continue to operate for the foreseeable future. (Management has substantial doubt about Selectis Health's ability to continue as a going concern, a critical warning for investors.)

Stockholders' Deficit

The amount by which a company's liabilities exceed its assets, meaning the company has a negative net worth. (Selectis Health has a total stockholders' deficit of $6,396,752 as of June 30, 2025, reflecting its financial distress.)

Year-Over-Year Comparison

For the six months ended June 30, 2025, Selectis Health reported an 11.5% increase in healthcare revenue to $20,928,183, up from $18,755,856 in the prior year. However, this revenue growth was overshadowed by a significant increase in net loss to $963,996 from $240,376. Total expenses also rose, contributing to a worsening financial position, evidenced by a growing accumulated deficit and declining cash reserves.

Key Financial Figures

• $10.00 — their original maturity date. For every $10.00 in principal amount of note, investors

Filing Documents

• form10-q.htm (10-Q) — 862KB
• ex31-1.htm (EX-31.1) — 18KB
• ex31-2.htm (EX-31.2) — 18KB
• ex32-1.htm (EX-32.1) — 8KB
• ex32-2.htm (EX-32.2) — 8KB
• 0001641172-25-024135.txt ( ) — 4483KB
• gbcs-20250630.xsd (EX-101.SCH) — 30KB
• gbcs-20250630_cal.xml (EX-101.CAL) — 46KB
• gbcs-20250630_def.xml (EX-101.DEF) — 154KB
• gbcs-20250630_lab.xml (EX-101.LAB) — 258KB
• gbcs-20250630_pre.xml (EX-101.PRE) — 216KB
• form10-q_htm.xml (XML) — 639KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) 3 Condensed Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024 3 Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2025, and 2024 (Unaudited) 4 Condensed Consolidated Statements of Changes in Stockholders' Deficit for the Three and Six Months Ended June 30, 2025, and June 30, 2024 (Unaudited) 5 Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2025, and 2024 (Unaudited) 6 Notes to Condensed Consolidated Financial Statements (Unaudited) 7 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 17 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 24 Item 4.

Controls and Procedures

Controls and Procedures 24

- OTHER INFORMATION

PART II - OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 25 Item 1A.

Risk Factors

Risk Factors 25 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 25 Item 3. Defaults Upon Senior Securities 25 Item 4. Mine Safety Disclosures 25 Item 5. Other Information 25 Item 6 . Exhibits 25 2 PART 1. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) SELECTIS HEALTH, INC. CONDENSED CONSOLIDATED BALANCE SHEETS June 30, 2025 December 31, 2024 Unaudited ASSETS Current Assets Cash and cash equivalents $ 559,983 $ 680,332 Accounts receivable, net 3,042,377 2,616,929 Prepaid expenses and other current assets 401,554 233,157 Total current assets 4,003,914 3,530,418 Long Term Assets: Restricted cash 771,940 711,634 Property and equipment, net 27,784,997 28,128,004 Goodwill 1,076,908 1,076,908 Total Assets $ 33,637,759 $ 33,446,964 LIABILITIES AND STOCKHOLDERS' DEFICIT Liabilities: Accounts payable and accrued liabilities $ 7,950,044 $ 6,574,200 Dividends payable 75,600 53,100 Short-term debt, related parties 775,000 750,000 Current maturities of long-term debt, net of issuance costs of $ 16,736 and $ 17,160 , respectively 11,326,024 11,450,406 Lines of credit 708,294 799,752 Other current liabilities 400,000 - Total Current Liabilities 21,234,962 19,627,458 Long-term debt, net of issuance costs of $ 426,832 and $ 434,776 . respectively 18,696,749 19,132,862 Lease security deposit 102,800 96,900 Total Liabilities $ 40,034,511 $ 38,857,220 Commitments and Contingencies - - Deficit: Preferred stock: Series A - no dividends, $ 2.00 stated value, non-voting; 2,000,000 shares authorized, 200,500 shares issued and outstanding 401,000 401,000 Series D - 8 % cumulative, convertible, $ 1.00 stated value, non-voting; 1,000,000 shares authorized, 375,000 shares issued and outstanding 375,000 375,000 Preferred stock value 375,000 375,000 Common stock - $ 0.05 par value; 800,000,000 shares a

View Full Filing

View this 10-Q filing on SEC EDGAR