Selectis Health Narrows Losses, Cites Retention Credits Amid Going Concern Doubts

TL;DR

**GBCS is still a high-risk bet, despite a better quarter, as 'going concern' warnings and negative working capital signal deep-seated financial instability.**

AI Summary

Selectis Health, Inc. (GBCS) reported a net income of $752,365 for the three months ended September 30, 2025, a significant improvement from a net loss of $1,607,122 in the same period of 2024. For the nine months ended September 30, 2025, the company still posted a net loss of $211,631, though this is a substantial reduction from the $1,847,498 net loss in the prior year. Healthcare revenue increased to $10,839,954 for the quarter, up from $10,016,416, and to $31,768,137 for the nine months, compared to $28,772,271 in 2024. The company recognized $986,423 in income from employee retention credits for the nine months ended September 30, 2025, which significantly offset operating losses. Despite these improvements, Selectis Health maintains a negative net working capital of approximately $16.3 million and management acknowledges substantial doubt about its ability to continue as a going concern, contingent on increasing occupancy, controlling expenses, and securing additional capital.

Why It Matters

Selectis Health's improved quarterly net income, driven by employee retention credits and increased healthcare revenue, offers a glimmer of hope for investors, but the persistent 'going concern' warning casts a long shadow. The company's ability to increase occupancy in its assisted living, independent living, and skilled nursing facilities, alongside controlling operating expenses, will be crucial for its survival in a competitive healthcare real estate market. Employees and customers face uncertainty if the company fails to secure additional capital or improve its financial stability, potentially impacting service quality or job security. The broader market will watch to see if GBCS can execute its liquidity plan, as its struggles highlight the capital-intensive nature and operational challenges within the senior care sector.

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 $0.2 million and negative net working capital of approximately $16.3 million for the nine months ended September 30, 2025. This is a direct and severe warning from management regarding its financial viability.

Analyst Insight

Investors should exercise extreme caution and consider this a highly speculative investment. Given the explicit 'going concern' warning and negative working capital, potential investors should wait for clear evidence of successful execution of management's liquidity plans, such as securing significant new capital or sustained profitability, before considering a position.

Financial Highlights

debt To Equity

N/A

revenue

$10,839,954

operating Margin

N/A

total Assets

$33,264,355

total Debt

$38,916,242

net Income

$752,365

eps

$0.24

gross Margin

N/A

cash Position

$417,125

revenue Growth

+8.2%

Revenue Breakdown

Key Numbers

• $752,365 — Net income (For the three months ended September 30, 2025, a significant improvement from a $1,607,122 net loss in Q3 2024.)
• $211,631 — Net loss (For the nine months ended September 30, 2025, a reduction from $1,847,498 net loss in the prior year.)
• $10,839,954 — Healthcare Revenue (For the three months ended September 30, 2025, up from $10,016,416 in Q3 2024.)
• $31,768,137 — Healthcare Revenue (For the nine months ended September 30, 2025, up from $28,772,271 in the prior year.)
• $986,423 — Income from employee retention credits (Recognized for the nine months ended September 30, 2025, significantly offsetting operating losses.)
• $16.3 million — Negative net working capital (As of September 30, 2025, indicating liquidity challenges.)
• 3,067,059 — Common Shares Outstanding (As of November 12, 2025, and consistent across reporting periods.)
• $0.24 — Basic and diluted EPS (For the three months ended September 30, 2025, a positive shift from $(0.52) in Q3 2024.)

Key Players & Entities

• SELECTIS HEALTH, INC. (company) — Registrant
• GBCS (company) — Ticker
• U.S. Securities and Exchange Commission (regulator) — Regulatory body
• $752,365 (dollar_amount) — Net income for Q3 2025
• $1,607,122 (dollar_amount) — Net loss for Q3 2024
• $211,631 (dollar_amount) — Net loss for nine months ended Sept 30, 2025
• $1,847,498 (dollar_amount) — Net loss for nine months ended Sept 30, 2024
• $10,839,954 (dollar_amount) — Healthcare revenue for Q3 2025
• $16.3 million (dollar_amount) — Negative net working capital as of Sept 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 contingent upon increasing occupancy rates, effective expense control, and the successful procurement of additional capital. The company reported negative net working capital of approximately $16.3 million as of September 30, 2025.
• Negative Net Working Capital [high — financial]: The company has a negative net working capital of approximately $16.3 million as of September 30, 2025. This indicates a shortfall in current assets to cover current liabilities, posing a liquidity risk.
• Occupancy Rate Dependence [medium — operational]: The company's ability to continue as a going concern is significantly dependent on increasing occupancy rates. Fluctuations or declines in occupancy can directly impact revenue and profitability.
• Reliance on Additional Capital [high — financial]: The company's going concern status is contingent on securing additional capital. Failure to obtain necessary funding could lead to financial distress and impact operations.
• Expense Control Challenges [medium — financial]: Management's ability to control expenses is a critical factor for the company's going concern assessment. Inadequate expense management could exacerbate financial difficulties.

Industry Context

The healthcare sector, particularly senior living and related services, is characterized by increasing demand due to an aging population. However, it is also subject to stringent regulatory oversight, labor cost pressures, and reimbursement rate fluctuations. Companies in this space often face challenges related to occupancy management and operational efficiency.

Regulatory Implications

As a healthcare provider, Selectis Health is subject to various federal and state regulations concerning patient care, facility operations, and financial reporting. Compliance with these regulations is critical and can involve significant costs. Changes in healthcare policy or reimbursement rates could materially impact financial performance.

What Investors Should Do

1. Monitor occupancy rates and expense management initiatives.
2. Assess the company's ability to secure additional capital.
3. Evaluate the sustainability of recent revenue growth.
4. Analyze the impact of employee retention credits.

Key Dates

• 2025-09-30: End of Third Quarter 2025 — Reported net income of $752,365 and healthcare revenue of $10,839,954 for the quarter. Negative net working capital of $16.3 million noted.
• 2024-09-30: End of Third Quarter 2024 — Reported a net loss of $1,607,122 and healthcare revenue of $10,016,416 for the quarter.
• 2025-09-30: Nine Months Ended September 30, 2025 — Reported a net loss of $211,631, a reduction from the prior year. Healthcare revenue was $31,768,137. Recognized $986,423 in employee retention credits.
• 2024-09-30: Nine Months Ended September 30, 2024 — Reported a net loss of $1,847,498 and healthcare revenue of $28,772,271.
• 2025-11-12: Common Shares Outstanding Date — Reported 3,067,059 common shares outstanding, consistent with prior periods.

Glossary

Going Concern

An accounting assumption that a business will continue to operate for the foreseeable future. If there is substantial doubt about this, it must be disclosed. (Management has stated substantial doubt about Selectis Health's ability to continue as a going concern, highlighting significant financial risks.)

Net Working Capital

The difference between a company's current assets and current liabilities. A negative value indicates potential liquidity issues. (Selectis Health has a negative net working capital of $16.3 million, signaling a need for improved liquidity management or financing.)

Employee Retention Credits

Government-provided tax credits designed to encourage businesses to keep employees on their payroll during challenging economic periods. (These credits significantly offset operating losses for Selectis Health, contributing to the improved net income for the nine-month period.)

Accumulated Deficit

The total cumulative net losses of a company since its inception, minus any cumulative net income. (Selectis Health has a substantial accumulated deficit of $(20,433,267) as of September 30, 2025, reflecting historical unprofitability.)

Year-Over-Year Comparison

For the three months ended September 30, 2025, Selectis Health reported a net income of $752,365, a significant turnaround from a net loss of $1,607,122 in the prior year. Healthcare revenue saw a modest increase to $10,839,954 from $10,016,416. For the nine-month period, the net loss narrowed substantially to $211,631 from $1,847,498, with healthcare revenue growing to $31,768,137 from $28,772,271. A key factor in the improved profitability was $986,423 in income from employee retention credits. However, the company continues to face significant financial challenges, including negative net working capital of $16.3 million and substantial doubt about its ability to continue as a going concern.

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) — 1103KB
• 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
• 0001493152-25-023586.txt ( ) — 5050KB
• gbcs-20250930.xsd (EX-101.SCH) — 31KB
• gbcs-20250930_cal.xml (EX-101.CAL) — 46KB
• gbcs-20250930_def.xml (EX-101.DEF) — 160KB
• gbcs-20250930_lab.xml (EX-101.LAB) — 262KB
• gbcs-20250930_pre.xml (EX-101.PRE) — 221KB
• form10-q_htm.xml (XML) — 788KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) 3 Condensed Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 3 Condensed Consolidated Statements of Operations for the Three and Nine months Ended September 30, 2025, and 2024 (Unaudited) 4 Condensed Consolidated Statements of Changes in Stockholders' Deficit for the Three and Nine months Ended September 30, 2025, and September 30, 2024 (Unaudited) 5 Condensed Consolidated Statements of Cash Flows for the Nine months Ended September 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 September 30, 2025 December 31, 2024 Unaudited ASSETS Current Assets Cash and cash equivalents $ 417,125 $ 680,332 Accounts receivable, net 3,194,341 2,616,929 Prepaid expenses and other current assets 344,564 233,157 Total current assets 3,956,030 3,530,418 Long Term Assets: Restricted cash 806,886 711,634 Property and equipment, net 27,424,531 28,128,004 Goodwill 1,076,908 1,076,908 Total Assets $ 33,264,355 $ 33,446,964 LIABILITIES AND STOCKHOLDERS' DEFICIT Liabilities: Accounts payable and accrued liabilities $ 7,201,797 $ 6,574,200 Dividends payable 83,100 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 11,764,959 11,450,406 Lines of credit 74,442 799,752 Other current liabilities 400,000 - Total Current Liabilities 20,299,298 19,627,458 Long-term debt, net of issuance costs of $ 422,648 and $ 434,776 , respectively 18,512,144 19,132,862 Lease security deposit 104,800 96,900 Total Liabilities $ 38,916,242 $ 38,857,220 Commitments and Contingencies - - Deficit: Preferred stock: Series A - no dividends, $ 2.00 shares authorized, 200,500 shares issued and outstanding at September 30, 2025 and December 31, 2024 401,000 401,000 Series D - 8 % cumulative, convertible, $ 1.00 shares authorized, 375,000 shares issued and outstanding at September 30, 2025 and December 31, 2024 375,000 375,0

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