FUTURE HEALTHCARE OF AMERICA

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued

Other recent accounting pronouncements issued by the FASB did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

NOTE 2 - GOING CONCERN

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles of the United States of America, which contemplate continuation of the Company as a going concern.  However, the Company has incurred losses, an accumulated deficit and has a short-term note payable in excess of anticipated cash, which is currently past due.  These factors raise substantial doubt about the ability of the Company to continue as a going concern. There is no assurance that the Company will be successful in achieving profitable operations.  The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

7NOTE 3 – NOTE RECEIVABLE

FUTURE HEALTHCARE OF AMERICA

CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 – INCOME/ (LOSS) PER SHARE - Continued

At JuneSeptember 30, 2015 and 2014, the Company had 3,030,000 and 3,030,000, respectively, warrants to purchase common stock of the Company at $0.50 per share, 0 and 2,000,000, respectively, greenshoe to purchase common stock of the Company at $0.25 per share and a convertible debenture payable wherein the holder could convert the note and underlying accrued interest into a minimum of 4,763,8334,812,716 and 4,139,652, respectively shares of common stock which were not included in the loss per share computation because their effect would be anti-dilutive.

NOTE 1213 – RELATED PARTY TRANSACTIONS

During the sixnine months ended JuneSeptember 30, 2015, an entity controlled by the CEO and shareholder of the Company used and paid $84,732$98,784 for the leased office space in Palm Beach, Florida. Additionally, the entity controlled by the CEO and shareholder paid for all expenses related to running the office.

NOTE 1314 - SUBSEQUENT EVENTS

Subsequent events have been evaluated through the date and time of this report.

The entity controlledOn October 6, 2015, the Company received written notice from F3 & Associates, Inc., a California corporation (“F3”), that F3 has elected to terminate the Merger and Share Exchange Agreement executed by the CEOCompany and shareholderF3 on September 4, 2015 (the “Merger Agreement”).  The notice of termination was given pursuant to Section 11.1 of the Merger Agreement, which gives to each party the right to terminate the Agreement without liability to the other party if closing of the transactions contemplated thereby has subsequently usednot occurred by September 30, 2015. The termination of the F3 Merger Agreement was disclosed in our Current Report on Form 8-K dated October 6, 2015, filed with the Securities and paid $14,122Exchange Commission on October 13, 2015.  Management will continue to work diligently to find acquisition candidates the fit within the direction of the Company, the industry and current customer demand.

On November 2, 2015, the company received a $40,000 check from F3 & Associates, Inc., for repayment of the leased office space in Palm Beach, Florida.

outstanding Note Receivable.

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

Safe Harbor Statement.

Statements made in this Form 10-Q which are not purely historical are forward-looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and business of the Company, including, without limitation, (i) our ability to gain a larger share of the home healthcare industry, our ability to continue to develop services acceptable to our industry, our ability to retain our business relationships, and our ability to raise capital and the growth of the home healthcare industry, and (ii) statements preceded by, followed by or that include the words "may", "would", "could", "should", "expects", "projects", "anticipates", "believes", "estimates", "plans", "intends", "targets", "tend" or similar expressions.

Forward-looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond the Company's control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, in addition to those contained in the Company's reports on file with the Securities and Exchange Commission: general economic or industry conditions, nationally and/or in the communities in which the Company conducts business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, changes in the home healthcare industry, the development of services that may be superior to the services offered by the Company, competition, changes in the quality or composition of the Company's services, our ability to develop new services, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting the Company’s operations, services and prices.

Accordingly, results actually achieved may differ materially from expected results in these statements.  Forward-looking statements speak only as of the date they are made.  The Company does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements.

Business Highlights

Based in Casper, Wyoming, and Billings, Montana, FHA’s wholly-owned subsidiary, Interim Healthcare of Wyoming, Inc., a Wyoming corporation (“Interim”), is an independent franchisee of Interim HealthCare that has been serving its community for 18 years and is providing a wide range of visiting nurse services to the elderly, wounded and sick. It is one of the 300 independent home health agencies that comprise the Interim HealthCare network. Our business consists of providing healthcare services for those in need.  We record all revenue and expenses and provide all services under one umbrella.  Below is a description of our Home Healthcare and Staffing operations.

As the census (number of patients utilizing facilities) in the hospitals fluctuates, we are taking the necessary steps to position ourselves for the ups and downs of the census for these facilities.  Our home healthcare service continued to generate the majority of our revenue during the first sixnine months of 2015.

During the first sixnine months of 2015, FHA experienced a 2% increase1% decrease in revenue over the first sixnine months of 2014. This was driven by increases in our Billings, Montana location, off-set by the revenue decreases in Casper, Wyoming home health businesses.

In 2015, we have seen an increase in the census within the hospitals in our Billings, Montana location as well as the utilization of our staffing services in Billings.  During 2015, we have seen a significant decrease in the utilization of our private pay business in the Casper, Wyoming location. We have re-established our priorities and goals for this location for the remainder of 2015.  As for our operations, we anticipate the trends seen in the first sixnine months of 2015 to continue into the second half ofthroughout 2015.  As such, we will continue to evaluate opportunities to expand the realm of services we offer.  Promotional activities and operations are being managed as the offices experience fluctuations in the day-to-day activities and as we embark on new business opportunities.  

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Our home healthcare business continues to be a substantial revenue generator for our Company as our country's population ages and new methods of patient data capture become critical components for delivering high quality, affordable healthcare services in a patient's home.  Although this has been a gradual process, we continue to build a solid business that will offer a complimentary package of new technology and traditional services.

Home Healthcare

Through trained health care professionals, FHA provides home care services including senior care and pediatric nursing; physical, occupational and speech therapy.  FHA offices deliver quality home care and treat each patient with genuine compassion, kindness and respect.  FHA provides health care professionals at all skill levels, including registered nurses, therapists, LPN's and certified home health aides. FHA derives its revenue from multiple payer sources.  These include Medicare, Medicaid, Insurance, Medicaid LTW, and Private Payers.  Because our officers are located in areas that do not contain a large population base (less than 200,000 residents), we continually explore opportunities to increase our revenue with our current payer sources and expand through new sources of revenue.   The healthcare team is utilized across all payer sources, including staffing services.  Our customer base comes from referrals from hospitals, rehab facilities, nursing homes, assisted living facilities and previous patients.

In addition to our professional team, we employ a management team at each facility to handle the day to day direction of the office.  This is provided by our Administrators.  We also have a Director of Nursing in each location.  This person is responsible for the day to day oversight of the service providers and ensuring the certified professionals obtain the necessary training to maintain their certificates as well as the training necessary to be in compliance with all regulating organizations.

Staffing

FHA provide nurses, nurse aides and management services to hospitals, prisons, schools, corporations and other health care facilities.  FHA’s success is based on our ability to recruit the best health care professionals and the responsiveness of our local managers to fill the needs of our clients in a timely manner.   Additionally, we work with our clients should they decide they would like to hire our service professional on a full time basis.  Another key to our success is the personal relationship that our management and sales team build with each of our existing and new clients.  As noted previously, in order to reduce turnover of our service team by providing as many hours as possible, similar to the hours of a full-time employee, we utilize the same service team members across all payer sources.

As each of our businesses is located in smaller based population areas of the country, the competition is significantly heightened and the relationships maintained with our clients become very critical to the continued success of our operations.

As we provide diversified services and accept payments from multiple payer sources, we are not heavily dependent on a few clients in order for our business to be successful.

Potential AcquisitionTermination of Merger Agreement

Management has been working diligently to find acquisition candidates.   In this regard, on June 18,On October 6, 2015, we executed a non-binding letter of intent withthe Company received written notice from F3 & Associates, Inc., a California corporation (“F3”), a leading provider of precision measurement, 3D visualizationthat F3 has elected to terminate the Merger and data management services designed to reduce downtime and mitigate risk for critical, capital-intensive assets such as oil refineries, power plants and other high-traffic sites.  The letter of intent contemplates the parties’ execution of a binding Share Exchange Agreement executed by which F3 is to become a wholly-owned subsidiary of the Company and F3’s stockholders immediately priorF3 on September 4, 2015 (the “Merger Agreement”).  The notice of termination was given pursuant to Section 11.1 of the Merger Agreement, which gives to each party the right to terminate the Agreement without liability to the closing will collectively own a controlling interest in the Company.  Theother party if closing of the proposed Share Exchange Agreement will be conditioned upon certain additional matters, including buttransactions contemplated thereby has not limited to the execution of an agreement to spin-off the Company’s current healthcare business to its stockholders of record immediately prior to the closingoccurred by September 30, 2015. The termination of the Share Exchange Agreement.  The material provisions of the letter of intent wereF3 Merger Agreement was disclosed in our Current Report on Form 8-K dated June 18,October 6, 2015, and filed with the Securities and Exchange Commission on June 22,October 13, 2015.  Management will continue to work diligently to find acquisition candidates the fit within the direction of the Company, the industry and current customer demand.

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The parties have not yet executed a definitive, binding Share Exchange Agreement.  Management continues to work on this specific transaction opportunity, and while there can be no guarantee that a definitive agreement will be signed or closed, we intend to do so in the near future, at which time we will file a Current Report on Form 8-K disclosing the material terms thereof.

Results of Operations

SixNine Months Ended JuneSeptember 30, 2015 and 2014.

During the sixnine months ended JuneSeptember 30, 2015, FHA recorded revenues of $1,901,693,$2,875,340, a 2% increase1% decrease over revenues of $1,864,618$2,894,224 for the same period in 2014.  The increasedecrease for 2015 reflects an increasea decrease in revenue for both home healthcare and staffing services in the Billings, MontanaCasper, Wyoming location, with an off-set from a decreasean increase in revenue in the Casper, WyomingBillings, Montana location.  

For the sixnine months ended JuneSeptember 30, 2015, cost of services totaled $1,338,312,$1,987,266, a 5%7% decrease compared to $1,404,955$2,143,797 in the comparable period of 2014. This is a reflection of the costs associated with the change in the mix of revenue as well as the locations managing employment levels. FHA posted a gross profit of $563,381$888,074 during the first sixnine months of 2015, versus a gross profit of $459,663$750,427 for the first sixnine months of 2014, an increase of 23%18%.  The increase in gross margin was driven because revenue increased, and we were able to manage our employment levels.

FHA recorded total operating expenses of $703,721$1,090,610 during the first sixnine months of 2015, a 6%2% decrease as compared to operating expenses of $749,331$1,109,772 in the same period of 2014.  General and administrative expenses totaled $207,971$329,938 in the first sixnine months of 2015 versus $265,107$412,042 in the first sixnine months of 2014, a decrease of 22%20%, due to a decrease in rent and office supplies.  Consulting fees increased from $138,327$183,722 to $146,579$198,191 when comparing the first sixnine months of 2014 versus 2015.  The increase was driven by consulting fees incurred as the company continuescontinued to search for growth opportunities through potential acquisition strategies. Salaries, wages and related expenses decreased to $283,917$458,951 in the first sixnine months of 2015 from $313,747$466,823 in 2014, a decrease of 10%2% due to a reduction in personnel.  Selling expenses in the first sixnine months of 2015 were $65,254$103,530 versus $32,150$47,185 in the comparable period of 2014 driven by increased investor relations services.

For the first sixnine months of 2015, other expense included a $122,707$652,413 for recognition of a loss on the derivative liability and interest expense of $364,994 for the accretion of the discount on the note payable as well as $75,750 of interest expense on the note payable.

For the first nine months of 2014, other expense included a $560,501 for recognition of a gain on the derivative liability and interest expense of $389,259$288,844 for the accretion of the discount on the note payable as well as $50,500 of interest expense on the note payable.

For the first six months of 2014, other expense included a $301,931 for recognition of a gain on the derivative liability and interest expense of $336,667 for the accretion of the discount on the note payable as well as $40,400$61,788 of interest expense on the note payable.

FHA’s net loss available to common shareholders was $286,188$1,295,555 for the first sixnine months of 2015.  This represents a 17% decrease$1,166,474 increase from our net loss of $344,457$129,081 in the first sixnine months of 2014.2014, driven by non-cash expense for loss on derivative liability and accretion of the discount on the note payable.

Three Months Ended JuneSeptember 30, 2015 and 2014.

During the three months ended JuneSeptember 30, 2015, FHA recorded revenues of $971,772, an 11% increase$973,647, a 5% decrease over revenues of $872,087$1,029,606 for the same period in 2014.  The increasedecrease reflects an increasea decrease in revenue driven by our staffing services in Billings, Montana off-set by a revenue decrease in our home healthcare business in Casper, Wyoming.Wyoming off-set by staffing services in Billings, Montana.

For the quarter ended JuneSeptember 30, 2015, cost of services totaled $673,544, flat$648,954, a 12% decrease as compared to $672,105$738,842 in the comparable period of 2014. This is a reflection ofour focus to obtain more profitable business in Casper, Wyoming with a shift in the revenue mix to the higher margin staffing business, coupled with an improved flexing of available staff with the decrease in revenue in Casper, Wyoming, thus resulting in FHA posting a gross profit of $298,228$324,693 during the secondthird quarter 2015, versus a gross profit of $199,982$290,764 for the secondthird quarter of 2014, an increase of 49%12%.

FHA recorded total operating expenses of $326,884$386,889 during the secondthird quarter of 2015, a 17% decrease7% increase as compared to operating expenses of $394,739$360,441 in the same period of 2014.  General and administrative expenses totaled $106,631$121,967 in the secondthird quarter 2015 versus $147,354$146,935 in the secondthird quarter 2014, a decrease of 28%17%, due to a

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