UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                          ----------------------------

                                   FORM 10-QSB
   (Mark One)
       |X|  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
            EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2004

                                       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: 0-23511

                          ----------------------------

                      Integrated Healthcare Holdings, Inc.
        (Exact name of small business issuer as specified in its charter)

                Nevada                                 87-0412182
    (State or other jurisdiction of         (I.R.S. Employer Identification No.)
     incorporation or organization)

    695 Town Center Drive, Suite 260,
         Costa Mesa, California                           92626
(Address of principal executive offices)                (Zip Code)

                                 (714) 434-9191
                (Issuer's telephone number, including area code)


         (Former name, former address and former fiscal year, if changed
                               since last report)

                          ----------------------------

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the  Exchange  Act  during the  preceding  12 months (or for such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing  requirements  for the past 90 days.
Yes |X| No |_|

As of November 8, 2004, there were outstanding 20,390,000 shares of the issuer's
common stock, par value $0.0001 per share.

Transitional Small Business Disclosure Format (Check one): Yes |_|; No |X|
<PAGE>

                      INTEGRATED HEALTHCARE HOLDINGS, INC.
                                   FORM 10-QSB

                                TABLE OF CONTENTS
--------------------------------------------------------------------------------
                                                                          Page
                                                                         Number

PART I      FINANCIAL INFORMATION

Item 1.     Financial Statements:

            Unaudited Consolidated Balance Sheet as of September 30,
            2004 and December 31, 2003                                       1

            Unaudited Consolidated Statement of Operations for the
            three and nine months ended September 30, 2004 and 2003          2

            Unaudited Consolidated Statement of Cash Flows for the
            nine months ended September 30, 2004 and 2003                    3

            Notes to Unaudited Consolidated Financial Statements             4

Item 2.     Management's Discussion and Analysis or Plan of Operation       12

Item 3.     Controls and Procedures                                         13

PART II     OTHER INFORMATION

Item 1.     Legal Proceedings                                               14

Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds     14

Item 3.     Defaults Upon Senior Securities                                 14

Item 4.     Submission of Matters to a Vote of Security Holders             14

Item 5.     Other Information                                               15

Item 6.     Exhibits                                                        15

SIGNATURES                                                                  16
--------------------------------------------------------------------------------
<PAGE>

PART I. FINANCIAL INFORMATION

        ITEM 1. FINANCIAL STATEMENTS.

                      INTEGRATED HEALTHCARE HOLDINGS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                      UNAUDITED CONSOLIDATED BALANCE SHEET

                                                     September 30,  December 31,
                                                        2004             2003
                                                     ------------   -----------
                                                    (Unaudited)
                                     ASSETS
Current assets
   Cash and cash equivalents                          $  14,464       $ 265,000
                                                      ---------       ---------
        Total current assets                             14,464         265,000

Property and equipment:
   Office equipment                                      39,834          26,537
   Furniture and fixtures                                27,347          21,095
                                                      ---------       ---------
                                                         67,181          47,632
   Accumulated depreciation                              (8,474)           (651)
                                                      ---------       ---------
                                                         58,707          46,981
Intangible asset, net of accumulated
   amortization of $44,971 and $6,424                    57,819          96,366
Due from shareholders                                        --          60,000
Deposits                                                  7,794              --
                                                      ---------       ---------
   Total assets                                       $ 138,784       $ 468,347
                                                      =========       =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
   Accounts payable                                 $    70,797    $    15,727
   Accrued compensation and benefits                    739,540             --
   Notes payable to shareholders                         60,000             --
   Note payable                                              --        100,000
                                                    -----------    -----------
     Total current liabilities                          870,337        115,727

Commitments and contingencies                                --             --

Stockholders' equity:
   Common stock, $0.001 par value; 50,000,000
        shares authorized; 24,380,000 and 19,380,000
        shares issued and outstanding, respectively      20,100         19,380
   Additional paid in capital                           920,302        551,021
   Deficit accumulated during the development stage  (1,671,955)      (217,781)
                                                    -----------    -----------
        Total stockholders' equity                     (731,553)       352,620

                                                    -----------    -----------
Total liabilities and stockholders' equity          $   138,784    $   468,347
                                                    ===========    ===========

    The accompanying condensed notes are an integral part of these unaudited
                  condensed consolidated financial statements


                                       1
<PAGE>

                      INTEGRATED HEALTHCARE HOLDINGS, INC.
                          (A DEVELOPMENT STAGE COMPANY)
                 UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                      Cumulative from
                                         inception          Three Months Ended               Nine Months Ended
                                      (July 31, 1984)   ---------------------------    ----------------------------
                                          through
                                        September 30,    September       September       September       September
                                            2004         30, 2004        30, 2003        30, 2004        30, 2003
                                        ------------    ------------    ------------    ------------    ------------
                                         (Unaudited)     (Unaudited)     (Unaudited)     (Unaudited)    (Unaudited)
<S>                                     <C>             <C>             <C>             <C>             <C>
Revenue                                 $         --    $         --    $         --    $         --    $         --

General and administrative expenses        1,631,569         491,048           3,838       1,413,788          23,635
                                        ------------    ------------    ------------    ------------    ------------

Loss from operations before provision
   for income taxes                       (1,631,569)       (491,048)         (3,838)     (1,413,788)        (23,635)
Provision for income taxes                        --              --              --              --              --
                                        ------------    ------------    ------------    ------------    ------------
Net loss                                $ (1,631,569)   $   (491,048)   $     (3,838)   $ (1,413,788)   $    (23,635)
                                        ============    ============    ============    ============    ============

Basic and diluted net loss per share                          ($0.02)         ($0.00)         ($0.07)         ($0.02)

Weighted average shares outstanding                       20,115,652       1,342,000      19,781,971       1,342,000
</TABLE>

    The accompanying condensed notes are an integral part of these unaudited
                  condensed consolidated financial statements


                                       2
<PAGE>

                      INTEGRATED HEALTHCARE HOLDINGS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
                 UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                         Nine Months Ended
                                                                                      --------------------------
                                                       Cumulative From Inception
                                                        (July 31, 1984) Through      September 30,  September 30,
                                                          September 30, 2004             2004            2003
                                                       -------------------------      -----------    -----------
                                                              (Unaudited)             (Unaudited)    (Unaudited)

<S>                                                           <C>                     <C>            <C>
Cash flows from operating activities:
Net loss                                                      $(1,631,569)            $(1,413,788)   $   (23,635)
Adjustments to reconcile net loss to cash
     used in operating activities:
          Depreciation and amortization expense                    53,445                  46,370
          Noncash expense                                          39,255                      --
          Stock issued for relief of debt                           1,000                      --
          Increase in accounts payable                             60,797                  45,070
          Increase in accrued compensation and benefits           739,540                 739,540
          Increase in accounts payable - related parties               --                      --         18,080
          Increase in due to officers                                  --                      --          4,355
                                                              -----------             -----------    -----------
             Net cash used in operating activities               (737,532)               (582,808)            --
                                                              -----------             -----------    -----------
Cash flows from investing activities:
          Purchase of property and equipment                      (67,181)                (19,549)            --
          Acquisition of MMG Inc., net of cash acquired             8,536                   8,536             --
                                                              -----------             -----------    -----------
             Net cash used in investing activities                (58,645)                (11,013)            --

Cash flows from financing activities:
          Proceeds from issuance of stock                         897,356                 370,000             --
          Repayment of promissory note                           (100,000)               (100,000)            --
          Advances from shareholders                               13,285                  73,285             --
                                                              -----------             -----------    -----------
             Net cash provided by financing activities            810,641                 343,285             --
                                                              -----------             -----------    -----------

Net increase (decrease) in cash                                    14,464                (250,536)            --
Cash and cash equivalents, beginning of period                         --                 265,000             --
                                                              -----------             -----------    -----------
Cash and cash equivalents, end of period                      $    14,464             $    14,464    $        --
                                                              ===========             ===========    ===========
Supplemental cash flow information:

Cash paid for interest and income taxes                       $        --             $        --    $        --

Supplemental Schedule of Noncash Financing Activities:
   Issuance of a promissory note and common stock
        in exchange for a letter of indemnification           $   102,790             $        --    $        --

   Issuance of promissory notes for acquisition
        of Mogel Management Group, Inc.                       $    60,000             $    60,000    $        --
</TABLE>

         The accompanying condensed notes are an integral part of these
             unaudited condensed consolidated financial statements


                                       3

<PAGE>

                      INTEGRATED HEALTHCARE HOLDINGS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
         CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

      NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      Organization - First Deltavision, Inc. (the "Company") was organized under
the laws of the  State  of Utah on July 31,  1984  under  the name of  Aquachlor
Marketing.  The Company never engaged in business  activities  and was suspended
for  failure to file annual  reports and tax  returns.  In  December  1988,  all
required  reports and tax returns were filed and the Company was  reinstated  by
the State of Utah. In December 1988, the Company merged with Aquachlor,  Inc., a
Nevada  corporation  incorporated  on December 20, 1988. The Nevada  corporation
became the surviving  entity and changed its name to Deltavision,  Inc. In March
1997,  the Company  received a  Certificate  of Revival from the State of Nevada
using the name First Deltavision, Inc.

      Effective  March 4, 2004,  the  Company's  board of directors  changed the
Company's name to "Integrated Healthcare Holdings, Inc."

      Company  Operations  -  The  Company  has  not  engaged  in  any  business
activities  that  have  produced  revenues  and,  therefore,   is  considered  a
development  stage  company as  defined in  Statement  of  Financial  Accounting
Standards  No. 7. The Company seeks to acquire,  own, and operate  hospitals and
surgical services throughout the United States.

      The  accompanying  financial  statements  have  been  prepared  on a going
concern basis,  which  contemplates  the realization of assets and settlement of
obligations in the normal course of business.  The Company generated losses from
continuing  operations of $1,413,788 and $1,631,569 during the nine months ended
September  30, 2004 and from  inception  (July 31, 1984)  through  September 30,
2004,  respectively.  In addition,  the Company had negative  working capital of
$855,873 as of September 30, 2004. The Company has raised $370,000 through stock
sales during the nine months ended September 30, 2004.  Management  believes the
Company has sufficient funds, the ability to raise additional  capital,  and the
ability to reduce administrative expenses to meet its continuing obligations for
the foreseeable future.

      Basis of  Presentation - In January 2004, the Company's board of directors
changed  the  Company's  fiscal  year  end  from  June 30 to  December  31.  The
accompanying  financial  statements have been audited for the  transitional  six
month  period  ended  December  31,  2003.  In the  opinion of  management,  all
adjustments  (which  include  only normal  recurring  adjustments)  necessary to
present fairly the financial  position,  results of operations and cash flows at
September 30, 2004 and for the nine months period then ended have been made.

      Condensed  Financial  Statements - The accompanying  financial  statements
have been prepared by the Company  without audit.  In the opinion of management,
all adjustments (which include only normal recurring  adjustments)  necessary to
present fairly the financial  position,  results of operations and cash flows at
September 30, 2004 and 2003 and for the periods then ended have been made.

      Certain  information  and  footnote   disclosures   normally  included  in
financial  statements  prepared in accordance with generally accepted accounting
principles in the United States of America have been condensed or omitted. It is
suggested that these condensed financial  statements be read in conjunction with
the financial  statements and notes thereto  included in the Company's  December
31, 2003 audited financial statements. The results of operations for the periods
ended  September  30,  2004  and  2003  are not  necessarily  indicative  of the
operating results for the full year.


                                       4
<PAGE>

                      INTEGRATED HEALTHCARE HOLDINGS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
         CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

      Cash and Cash  Equivalents - The Company  considers all highly liquid debt
investments  purchased  with a  maturity  of  three  months  or  less to be cash
equivalents.

      Accounting   Estimates  -  The  preparation  of  financial  statements  in
conformity with generally accepted accounting principles in the United States of
America  required  management to make estimates and assumptions  that effect the
reported amounts of assets and liabilities, the disclosures of contingent assets
and  liabilities  at the  date of the  financial  statements,  and the  reported
amounts of revenues and expenses  during the reporting  period.  Actual  results
could differ from those estimated by management.

      Stock-Based Compensation - Statement of Financial Accounting Standards No.
123, Accounting for Stock Based Compensation,  encourages, but does not require,
companies to record  compensation  cost for  stock-based  employee  compensation
plans  at fair  value.  The  Company  has  chosen  to  account  for  stock-based
compensation  using the intrinsic value method  prescribed in previously  issued
standards. Accordingly,  compensation cost for stock options issued to employees
is  measured as the excess,  if any, of the fair market  value of the  Company's
stock at the date of grant over the amount an  employee  must pay to acquire the
stock.  Compensation  is charged to expense  over the  shorter of the service or
vesting period.  Stock options issued to non-employees  are recorded at the fair
value  of the  services  received  or the  fair  value  of the  options  issued,
whichever is more reliably  measurable,  and charged to expense over the service
period.

      Fair Value of Financial  Instruments  - The Company  considers  all liquid
interest-earning investments with a maturity of three months or less at the date
of purchase to be cash  equivalents.  Short-term  investments  generally  mature
between  three  months  and six  months  from the  purchase  date.  All cash and
short-term  investments are classified as available for sale and are recorded at
market using the specific identification method; unrealized gains and losses are
reflected  in other  comprehensive  income.  Cost  approximates  market  for all
classifications of cash and short-term investments.

      Net Loss per Common Share - Net loss per share is calculated in accordance
with Statement of Financial  Accounting  Standards No. 128,  Earnings Per Share.
Basic net loss per share is based  upon the  weighted  average  number of common
shares  outstanding.  Diluted net loss per share is based on the assumption that
options are included in the  calculation of diluted  earnings per share,  except
when their effect would be  anti-dilutive.  Dilution is computed by applying the
treasury stock method. Under this method, options and warrants are assumed to be
exercised at the beginning of the period (or at the time of issuance, if later),
and as if funds  obtained  thereby  were used to  purchase  common  stock at the
average market price during the period.

      Impairment of Long-Lived Assets - The Company continually  monitors events
or changes in  circumstances  that could  indicate  that the carrying  amount of
long-lived assets to be held and used,  including  intangible assets, may not be
recoverable.  The  determination  of  recoverability  is based on an estimate of
undiscounted  future  cash  flows  resulting  from the use of the  asset and its
eventual  disposition.  When impairment is indicated for a long-lived asset, the
amount of  impairment  loss is the  excess of net book  value  over fair  value.
Long-lived assets to be disposed of are reported at the lower of carrying amount
or fair value less costs to sell.  As of  September  30,  2004,  the Company has
determined that no impairment of its long-lived assets exists.

      Goodwill  and  Intangible  Assets  -  On  July  20,  2001,  the  Financial
Accounting  Standards  Board (FASB)  issued  Statement  of Financial  Accounting
Standards  ("SFAS")  141,  Business  Combinations,  and SFAS 142,  Goodwill  and
Intangible  Assets.  Under these new standards,  all acquisitions  subsequent to
June 30, 2001 must be accounted for using the purchase method of accounting. The
cost of  intangible  assets with  indefinite  lives and  goodwill  are no longer
amortized,  but are  subject  to an annual  impairment  test based upon its fair
value.


                                       5
<PAGE>

                      INTEGRATED HEALTHCARE HOLDINGS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
         CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

      Goodwill  and   intangible   assets   principally   result  from  business
acquisitions.  The Company  accounts for business  acquisitions by assigning the
purchase  price to  tangible  and  intangible  assets  and  liabilities.  Assets
acquired and liabilities  assumed are recorded at their fair values;  the excess
of the purchase price over the net assets acquired is recorded as goodwill.

      Recently Enacted Accounting  Standards - Statement of Financial Accounting
Standards  ("SFAS")  No.  144,  "Accounting  for the  Impairment  or Disposal of
Long-Lived  Assets,"  No. 146,  "Accounting  for Costs  Associated  with Exit or
Disposal  Activities",   SFAS  No.  147,   "Acquisitions  of  Certain  Financial
Institutions  - an  Amendment  of  FASB  Statements  No.  72 and  144  and  FASB
Interpretation No. 9", SFAS No. 148, "Accounting for Stock-Based  Compensation -
Transition and  Disclosure - an Amendment of FASB  Statement No. 123",  SFAS No.
149,  "Amendment  of  Statement  133  on  Derivative   Instruments  and  Hedging
Activities",  and SFAS No. 150,  "Accounting for Certain  Financial  Instruments
with Characteristics of both Liabilities and Equity", were recently issued. SFAS
No. 144, 146, 147, 148, 149 and 150 have no current applicability to the Company
or their effect on the financial statements would not have been significant.

      Restatement - The financial  statements have been restated for all periods
presented  to  reflect  a  4-for-1  forward  stock  split on April  4,  2002,  a
248.399-for-1  reverse stock split on April 23, 1997 and a 5-for-1 forward stock
split on December 9, 1988.

      NOTE 2 - ACQUISITIONS AND RESCISSION OF ACQUISITION

      On April 9, 2002, the Company entered into a share exchange agreement with
KyoMedix Corporation ("KyoMedix"). The agreement called for the Company to issue
15,166,550 shares of common stock to the shareholders of KyoMedix for all of the
issued and  outstanding  shares of common stock of KyoMedix.  The agreement also
called for the repurchase and cancellation of 746,592 shares of common stock for
a $250,000  note  payable  and  effecting a 4-for-1  forward  stock  split.  The
$250,000 note payable was due 90 days from signing and was secured by 13,916,000
shares of common  stock of the  Company.  Any unpaid  portion of the note was to
accrue  interest  at 10% per annum after the 90-day  term.  The  agreement  also
called for the resignation of the Company's officers and directors, the adoption
of the  2002  Stock  Plan of  KyoMedix,  changing  the  name of the  Company  to
KyoMedix,  Inc.  and the  grant  of  similar  options  to  replace  the  options
previously granted by KyoMedix.  The acquisition closed April 9, 2002;  however,
subsequently, former and current shareholders of the Company sued to rescind the
merger claiming that certain conditions of the agreement were not satisfied.  On
November 11, 2002, the Company signed a Compromise and Settlement  Agreement and
the Company cancelled the 15,166,550 shares of common stock that had been issued
to the  shareholders  of  KyoMedix.  As part of the  rescission  agreement,  the
Company reissued 746,592 shares of common stock to the previous  shareholder and
the $250,000 note payable was voided. As part of the rescission  agreement,  the
Company's former officers and directors were  re-appointed,  the adoption of the
2002 Stock Plan of KyoMedix  was voided and options  granted to KyoMedix  option
holders were cancelled.  The financial  statements have been restated to reflect
the acquisition as having been rescinded.


                                       6
<PAGE>

                      INTEGRATED HEALTHCARE HOLDINGS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
         CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

      On  January  1, 2004,  the  Company  entered  into a  Securities  Purchase
Agreement and Plan of Reorganization  with Mogel Management Group, Inc. ("MMG"),
an entity with certain common  ownership with the Company,  and the shareholders
of MMG. The Company purchased all of the issued and outstanding stock of MMG, 48
million shares,  in exchange for the issuance of three  promissory  notes to the
stockholders of MMG with a total face value of $60,000. The stockholders of MMG,
Inc. are also the officers and  directors of the Company.  The fair value of the
tangible assets acquired in excess of liabilities  assumed  amounted to $15,000,
which  resulted in goodwill of $45,000.  During the three  months ended June 30,
2004,  the  Company  recorded  an  impairment  charge of $45,000  related to the
goodwill from the MMG, Inc. acquisition. The notes bear interest at 6% per annum
and are due and payable on December 31, 2004.  MMG was organized  under the laws
of the State of Nevada on  October 2, 2003 and has not  engaged in any  business
activities  that have  produced any revenues  and,  therefore,  is  considered a
development  stage  company as  defined in  Statement  of  Financial  Accounting
Standards No. 7.

      On September 29, 2004,  the Company  entered into an Asset Sale  Agreement
with Tenet  Healthcare  Corp.  ("Tenet") to purchase four  hospitals  located in
Orange  County,  California  (AHM CGH,  Inc.,  Health  Resources  Corporation of
America-California,   SHL/O  Corp.,   and  UWMC   Hospital   Corporation)   (the
"Hospitals").  The Company will be acquiring  substantially all of the assets of
the Hospitals  for $70 million,  less certain  defined  items  including (a) the
amount of the seller's  capital lease  obligations with respect to the Hospitals
closing date, if any, that are assumed by the purchaser pursuant to Section 1.11
of the Asset Sale Agreement,  less (b) the net present value on the closing date
of the employee loan liabilities,  less (c) $750,000, reflecting the credit made
available to the  purchaser  hereunder  for  assuming  accrued sick pay to hired
employees,  less (d) the accrued  paid time off amount on the closing  date.  In
October  2004,  the Company made a good faith deposit to Tenet of $10 million in
connection  with the purchase.  The balance of the purchase price defined in the
Asset Sale  Agreement is due at the closing date,  which is  contemplated  to be
November 30, 2004, if all closing conditions have been met.

      On  September  29,  2004,  in  connection  with the  Company's  Asset Sale
Agreement with Tenet,  the Company  entered into a secured  promissory note with
Dr. Kali Chaudhuri for $10 million.  The note bears interest at 7.25% and is due
at the earlier of (a) the closing of the Asset Sale  Agreement  with Tenet noted
above or (b) the termination,  for any reason,  of the Asset Sale Agreement with
Tenet noted above.  Interest  only is payable on the first  business day of each
calendar  quarter  beginning  January 2, 2005. The Company received the proceeds
from this note in October 2004 and used the  proceeds as its good faith  deposit
in connection with the Asset Sale Agreement with Tenet noted above.

      On September 29, 2004, the Company entered into a secured convertible note
purchase  agreement  with Dr. Kali  Chaudhuri,  whereby the Company  issued a 5%
Secured  Promissory  Note.  The original  face amount of the note of $500,000 is
presently  convertible  into up to  160,000,000  shares of the Company's  Common
Stock. The Company may draw advances on this note to be used for certain defined
Company  purposes.  As of September 30, 2004, the Company has not made any draws
on this note. If the Company is not able to obtain  financing to close the Asset
Sale Agreement with Tenet, Dr. Kali Chaudhuri may elect to proceed to obtain his
own   financing   and  close  the  Tenet   transaction   without  the  Company's
participation.  In  addition,  if the Asset Sale  Agreement  with Tenet fails to
close,  for a period of 30 days, the Company shall have the opportunity to repay
all advances made under the convertible  secured note with accrued  interest and
thus causing the  conversion  right of the note to lapse.  All or any portion of
the outstanding principal and interest accrued under this note may be converted,
at the option of the note holder, into shares of the Company's common stock at a
conversion  price of  $0.003125  per share.  Dr.  Kali  Chaudhuri  will  receive
preemptive rights to participate in additional  issuances of the Company's stock
shares, and receive piggyback registration rights relating to his stock.


                                       7
<PAGE>

                      INTEGRATED HEALTHCARE HOLDINGS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
         CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

      In  connection  with the two  promissory  notes entered into with Dr. Kali
Chaudhuri  noted  above,  the Company  entered  into an Option  Agreement  dated
September 29, 2004 with Dr. Kali Chaudhuri.  Pursuant to this Option  Agreement,
the  Company  granted Dr.  Kali  Chaudhuri  an option to acquire all of the real
estate of the Hospitals,  which the Company  intends to acquire from Tenet (i.e.
Western Medical Center- Santa Ana, Western Medical Center - Anaheim, and Coastal
Community  Hospital) for the price of $5 million.  The option has a term of five
years subsequent to the close of the Company's Asset Sale Agreement with Tenet.

      NOTE 3 - COMMON STOCK

      The Company issued 91,452 shares of stock upon incorporation for $57,576.

      During the year ended June 30, 1989,  the Company  issued 96,640 shares of
common stock for $1,200.

      During  1996,  the  Company  issued  611,908  shares of  common  stock for
consulting  fees valued at $38,000 (or $.25 per share)  resulting in a change in
control of the Company.

      During the year ended June 30, 1998,  the Company issued 142,000 shares of
common stock for services  rendered.  Total proceeds amounted to $1,255 (or $.04
per share).  The Company  previously  reported the issuance as 140,000 shares of
common stock.  The financial  statements  have been restated for the years ended
June 30, 1999 and 1998 to reflect the issuance of an additional  2,000 shares of
common stock related to services previously rendered.

      On December 9, 1988, the Company  effected a 5-for-1  forward stock split.
On April 23, 1997, the Company effected a 248.399-for-1  reverse stock split. On
April 4, 2002, the Company effected a 4-for-1 forward stock split. The financial
statements  for all periods  presented have been restated to reflect these stock
splits.

      In January 2000, the board of directors approved a compensation  agreement
that  included the issuance of a total of 400,000  shares of common stock to two
shareholders,  200,000 to each,  for  services  rendered  which  were  valued at
$1,000. The shares were issued in August 2000 for $.0025 per share.

      In  November  2003,  the  board of  directors  approved  the  issuance  of
16,128,000 shares of common stock to three  individuals  ("the  Purchasers") for
$100,000,  pursuant to a certain Stock Purchase  Agreement.  In connection  with
this stock sale, the Company issued a promissory note for $100,000 to the former
president and director of the Company and 450,000  shares of common stock to the
former president and director of the Company, and a shareholder, in exchange for
a certain letter of  indemnification.  The letter of  indemnification  holds the
Company and the Purchasers  harmless from and against any and all liabilities of
any type or nature, whatsoever, of the Company that existed prior to the closing
of the Stock Purchase Agreement, including fees of legal counsel for the Company
in  connection  with the  completion  of the Stock  Purchase  Agreement  and the
promissory note due to the former president and director of the Company.


                                       8
<PAGE>

                      INTEGRATED HEALTHCARE HOLDINGS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
         CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

      In December 2003, the Company issued  1,460,000 shares of its common stock
at $0.25 per share for cash proceeds of $365,000.  In January 2004,  the Company
issued an additional  200,000  shares of its common stock at $0.25 per share for
cash proceeds of $50,000.

      During the three months ended March 31, 2004,  the Company  issued 200,000
and  150,000  shares  of  its  common  stock  at  $0.25  and  $1.00  per  share,
respectively, for net cash proceeds of $200,000.

      During  the  three  months  ended  June 30,  2004 the  Company  issued  an
additional  50,000  shares of its  common  stock at $1.00 per share for net cash
proceeds of $50,000.

      In July,  2004,  the  Board of  Directors  approved  the  issuance  of one
additional  common  share for each  common  share  purchased  at $1.00 per share
during the six months ended June 30, 2004.  As a result,  the Company  issued an
additional 200,000 common shares to these investors.

During the three months ended  September 30, 2004,  the Company  issued  240,000
shares of its common stock at $0.50 per share for net cash proceeds of $120,000.

      On August 25, 2004, the Company's Board of Directors  resolved to amend to
increase the number of  authorized  shares of its common  stock to  250,000,000.
This amendment is subject to shareholder approval.

      NOTE 4 - NOTES PAYABLE

      In connection  with the Company's sale of 16,128,000  shares of its common
stock in November  2003,  the  Company  issued a  promissory  note to the former
president  and  director of the Company in the amount of  $100,000.  The Company
received a letter of indemnification  which holds the Company and the Purchasers
harmless  from  and  against  any and all  liabilities  of any  type or  nature,
whatsoever,  of the  Company  that  existed  prior to the  closing  of the Stock
Purchase  Agreement,  including  fees  of  legal  counsel  for  the  Company  in
connection  with  the  completion  of  the  Stock  Purchase  Agreement  and  the
promissory  note due to the former  president  and director of the Company.  The
promissory note dated November 18, 2003 had a term of 90 days and bears interest
at 10% per annum. The Company repaid the promissory note in full on February 18,
2004.

In connection  with the Company's  purchase of all of the issued and outstanding
stock of MMG, Inc. (see Note 2), the Company  issued three  promissory  notes to
the  stockholders  of  MMG,  Inc.  with a  total  face  value  of  $60,000.  The
stockholders  of MMG,  Inc. are also the officers and  directors of the Company.
The notes bear  interest at 6% per annum and are due and payable on December 31,
2004.  For the nine months  ended  September  30,  2004,  the  Company  incurred
interest expense of $2,700.

      NOTE 5 - INTANGIBLE ASSET

      In connection  with the Company's  stock sale of 16,128,000  shares of its
common stock in November 2003, the Company issued a promissory  note of $100,000
and  450,000   shares  of  its  common   stock  in  exchange  for  a  letter  of
indemnification from the Company's former President and shareholder. The 450,000
shares of common  stock were  valued by the  Company at $0.0062  per share.  The
letter of indemnification holds the Company and the Purchasers harmless from and
against  any and all  liabilities  of any  type or  nature,  whatsoever,  of the
Company  that  existed  prior to the  closing of the Stock  Purchase  Agreement,
including  fees of  legal  counsel  for  the  Company  in  connection  with  the
completion of the Stock Purchase  Agreement and the  promissory  note due to the
former  president  and  director of the  Company.  The Company has  recorded the
letter of  indemnification as an intangible asset of $102,790 based on the total
fair market value of the promissory note and common stock issued. The Company is
amortizing  the  intangible  asset  using  the  straight-line  method  over  the
enforceable life of the letter of indemnification of two years.  During the nine
months ended  September  30, 2004 and 2003,  the Company  incurred  amortization
expense of $38,547 and nil, respectively.


                                       9
<PAGE>

                      INTEGRATED HEALTHCARE HOLDINGS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
         CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

      NOTE 6 - INCOME TAXES

      The  Company  has not made a  provision  for income  taxes  because of its
financial  statement  and tax losses  since its  inception  on July 31,  1984. A
valuation  allowance has been used to offset the recognition of any deferred tax
assets related to net operating  loss  carryforwards  due to the  uncertainty of
future realization.

      The Company  accounts for income  taxes in  accordance  with  Statement of
Financial  Accounting  Standards  No. 109  "Accounting  for Income  Taxes" which
requires the liability approach for the effect of income taxes.

      At  September  30,  2004 and  December  31,  2003,  the Company had unused
operating  loss   carryforwards  of   approximately   $1,300,000  and  $116,000,
respectively,  which may be applied  against  future  taxable  income in various
years through 2023. If certain  substantial  changes in the Company's  ownership
should occur, there could be an annual limitation on the amount of net operating
loss carryforwards which can be utilized. The amount of and ultimate realization
of the benefits from the operating loss carryforwards for income tax purposes is
dependent,  in part,  upon the tax laws in effect,  the future  earnings  of the
Company and other  future  events,  the effects of which  cannot be  determined.
Because  of  the   uncertainty   surrounding   the   realization   of  the  loss
carryforwards,  the Company has  established a valuation  allowance equal to the
tax effect of the loss carryforwards,  therefore, no deferred tax asset has been
recognized for the loss  carryforwards.  The net deferred  federal and state tax
assets  were  approximately  $561,000  and  $41,000 at  September  30,  2004 and
December 31, 2003,  respectively,  with an offsetting valuation allowance of the
same amount  resulting in a change in the valuation  allowance of  approximately
$520,000 during the nine months ended September 30, 2004.

      NOTE 7 - RELATED PARTY TRANSACTIONS

      Due  to/from  Shareholders  and  Officers - During the nine  months  ended
September 30, 2004 and 2003, the Company's  President paid expenses on behalf of
the Company  totaling nil and $1,676,  respectively.  At September  30, 2004 and
December 31, 2003,  the total amount due to the Company's  president was nil and
$38,031,  respectively.  At September 30, 2004 and December 31, 2003,  the total
amount due from the  Company's  officers and majority  shareholders  was nil and
$60,000,  respectively.  The amounts due from  shareholders and officers bear no
interest and are due when funds are available.

      The  Company's  corporate  facility  is leased by a company  with  certain
common ownership and officers with the Company.  There is no sub-lease agreement
and  management  of the Company  intends to assume this lease.  See Note 9 for a
description of this lease.  The Company  receives the full benefit of the leased
office and is responsible for paying the lease payments.

      A relative of an officer and shareholder of the Company is employed by the
Company to perform  administrative  duties in 2004. During the nine months ended
September 30, 2004 and 2003 this relative earned approximately  $35,000 and nil,
respectively, from the Company.


                                       10
<PAGE>

                      INTEGRATED HEALTHCARE HOLDINGS, INC.
                        (A Development Stage Enterprise)
         CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

      NOTE 8 - LOSS PER SHARE

      The following  data show the amounts used in computing  loss per share for
the periods presented:

<TABLE>
<CAPTION>
                                                  Three Months Ended               Nine Months Ended
                                            ----------------------------    ----------------------------
                                            September 30    September 30,   September 30,  September 30,
                                                2004            2003           2004            2003
                                            ------------------------------------------------------------
                                                                             (Unaudited)    (Unaudited)
<S>                                         <C>             <C>             <C>             <C>
Loss from continuing operations available
   to common shareholders (numerator)       $  (491,048)   $     (3,838)   $ (1,413,788)   $    (23,635)

Weighted average number of common
   shares used in loss per share during
   the period (denominator)                   20,115,652       1,342,000      19,781,971       1,342,000
</TABLE>

      Dilutive  loss per share was not  presented,  as the Company had no common
equivalent shares for all periods presented that would effect the computation of
diluted loss per share.

NOTE 9 - COMMITMENTS AND CONTINGENCIES

      Contingencies - In the ordinary course of business, the Company is subject
to legal proceedings and claims. The Company is not currently aware of any legal
proceedings  or claims that the Company  believes  are likely to have a material
adverse effect on the Company's financial position and results of operations.

      Commitments - The Company leases its operating facility under an operating
lease agreement.  The Company's  facility lease expires in January 2006.  Future
minimum lease payments under the non-cancelable  lease agreement as of September
30, 2004 are:

             September 30,
             -------------
                2005            $51,960
                2006             17,320
                                -------
                                $69,280
                                =======


                                       11
<PAGE>

                      INTEGRATED HEALTHCARE HOLDINGS, INC.
                        (A DEVELOPMENT STAGE ENTERPRISE)
         CONDENSED NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                               SEPTEMBER 30, 2004

INTRODUCTION

      As used in this report,  the terms "we",  "us",  "our",  "the  Company" or
"Integrated  Healthcare  Holdings" mean Integrated  Healthcare  Holdings,  Inc.,
unless otherwise indicated. In the first quarter of 2004, the Board of Directors
and  shareholders  of the  Company  approved a change in the  Company's  name to
"Integrated Healthcare Holdings, Inc." from "First Deltavision,  Inc." to better
reflect our planned  operations.  The name change  became  effective  on May 18,
2004.

      This Quarterly Report on Form 10-QSB contains  forward-looking  statements
as that term is defined in the Private Securities Litigation Reform Act of 1995.
These statements relate to future events or our future financial performance. In
some cases, you can identify  forward-looking  statements by terminology such as
"may",  "will",  "should",   "expects",  "plans",   "anticipates",   "believes",
"estimates",  "predicts",  "potential"  or  "continue"  or the negative of these
terms or other comparable terminology. These statements are only predictions and
involve known and unknown risks,  uncertainties and other factors, including the
risks  discussed  under the caption "Risk Factors" in our  Transition  Report on
Form  10-K  filed  on April  15,  2004,  that may  cause  our  company's  or our
industry's actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements.

      Although we believe that the expectations reflected in the forward-looking
statements  are  reasonable,  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.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.

      During the  quarter  ended  September  30,  2004,  the  Company  earned no
revenues. The Company had $491,048 in general and administrative expenses during
the quarter, relating primarily to the transactions described below.

      On September 29, 2004, the Company entered into a definitive  agreement to
acquire four hospitals located in Orange County, California from subsidiaries of
Tenet Healthcare Corporation (collectively, "Tenet"). The four hospitals are:

      o     280-bed Western Medical Center - Santa Ana;
      o     188-bed Western Medical Center - Anaheim;
      o     114-bed Chapman Medical Center in Orange; and
      o     178-bed Coastal Communities Hospital in Santa Ana.

      The net  purchase  price  to the  Company  for the  acquisition  of  these
facilities  will be  approximately  $70  million,  subject  to  certain  closing
adjustments.  The purchase is expected to close on or before  November 30, 2004,
subject to customary closing conditions, including regulatory approvals.

      On  September  29, 2004,  the Company  entered  into  definitive  forms of
agreements with Dr. Kali P. Chaudhuri  involving a new investment in the Company
and financial  support to enable the Company to acquire hospitals and healthcare
facilities  from  Tenet.  The  following  material  terms were  agreed to by the
Company and Dr. Chaudhuri:


                                       12
<PAGE>

      o     Dr.  Chaudhuri will invest  $500,000 in the Company in the form of a
            Convertible  Secured  Promissory  Note,  and may provide  additional
            financing directly to the Company as needed;

      o     Dr. Chaudhuri will loan $10 million to the Company to be used by the
            Company as a good  faith  deposit  towards  the  Company's  proposed
            acquisition of hospitals from Tenet;

      o     Dr. Chaudhuri will provide a personal  guaranty of up to $10 million
            to cover Tenet's  post-closing  liability on a lease for the Chapman
            Hospital  that the Company  proposes to acquire  from Tenet.  If the
            Company  acquires  the  Chapman  Hospital,  it  will  assign  to Dr.
            Chaudhuri the underlying  lease and operating assets relating to the
            hospital;

      o     Dr.  Chaudhuri will have an option to acquire all of the real estate
            which the  Company  acquires  from  Tenet for $5  million,  and will
            assume the  underlying  debt and other  obligations  relating to the
            real estate;

      o     The   Convertible   Secured   Promissory   Note  will  be  initially
            convertible  into 160 million shares of the Company's  Common Stock,
            or 88.8% of the Company's  outstanding shares after giving effect to
            the new issuance (and  possibly an  additional 10 million  shares if
            additional financing is provided to the Company); and

      o     Dr.  Chaudhuri  will receive  pre-emptive  rights to  participate in
            additional  issuances  of  Company  shares,  and  receive  piggyback
            registration rights relating to his stock.

      The Company's plan of operation over the next 12 months is to complete the
pending transactions  discussed above and successfully  integrate and manage the
newly acquired healthcare facilities.  The Company expects that, upon completion
of its  acquisition of the facilities,  most or all of the current  employees of
the acquired facilities  (approximately 2,500 individuals) will become employees
of the Company or its  subsidiaries.  In connection  with its acquisition of the
Tenet facilities and related transactions, the Company expects that it will need
to raise  additional  funds over the next 12 months,  which will likely take the
form of sales of additional equity securities and/or borrowings.

      Currently  there are four full time  employees of the  Company.  As of the
September  30,  2004,  the Company had no  off-balance  sheet  arrangements,  as
defined by Regulation S-B Item 303(c).

ITEM 3. CONTROLS AND PROCEDURES.

      The Company maintains disclosure controls and procedures that are designed
to ensure that  information  required to be disclosed in the Company's  Exchange
Act reports is recorded,  processed,  summarized  and  reported  within the time
periods  specified in the SEC's rules and forms,  and that such  information  is
accumulated and  communicated to the Company's  management,  including its Chief
Executive Officer and Chief Financial Officer,  as appropriate,  to allow timely
decisions  regarding  required  disclosure  based  closely on the  definition of
"disclosure controls and procedures" in Rule 15d-15(e). The Company's disclosure
controls and procedures are designed to provide a reasonable  level of assurance
of reaching the Company's desired  disclosure control  objectives.  In designing
and evaluating the disclosure  controls and  procedures,  management  recognized
that any controls and procedures,  no matter how well designed and operated, can
provide only reasonable  assurance of achieving the desired control  objectives,
and management  necessarily was required to apply its judgment in evaluating the
cost-benefit  relationship of possible  controls and  procedures.  The Company's
certifying  officers have concluded that the Company's  disclosure  controls and
procedures are effective in reaching that level of assurance.


                                       13
<PAGE>

      As of the end of the period of this  report,  the  Company  carried out an
evaluation,  under the supervision and with the  participation  of the Company's
management,  including the Company's Chief  Executive  Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's  disclosure  controls  and  procedures.  Based on the  foregoing,  the
Company's Chief Executive Officer and Chief Financial Officer concluded that the
Company's disclosure controls and procedures were effective.

      There have been no significant  changes in the Company's internal controls
or in other  factors  that  could  significantly  affect the  internal  controls
subsequent to the date the Company completed its evaluation.

PART II. OTHER INFORMATION.

ITEM 1. LEGAL PROCEEDINGS

      The Company is not a party to any legal proceedings.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

      On September 29, 2004, the Company entered into an agreement with Dr. Kali
P.  Chaudhuri  involving  a new  investment  in the  Company.  Pursuant  to this
agreement,  Dr.  Chaudhuri will invest  $500,000 in the Company in the form of a
Convertible Secured Promissory Note which will be initially convertible into 160
million  shares  of the  Company's  Common  Stock,  or  88.8%  of the  Company's
outstanding  shares  after  giving  effect  to the  new  issuance  based  on the
Company's current  capitalization,  and possibly an additional 10 million shares
if  additional  financing is provided to the Company.  Dr.  Chaudhuri  will also
receive  pre-emptive  rights to participate  in additional  issuances of Company
shares,  and receive piggyback  registration  rights relating to his stock. Also
pursuant to this agreement, Dr. Chaudhuri agreed to provide financial support to
enable  the  Company  to  acquire  hospitals  and  healthcare   facilities  from
subsidiaries  of  Tenet  Healthcare  Corporation.  The  definitive  form  of the
agreement  with Dr.  Chaudhuri is filed as Exhibit  10.1 to this Report,  and is
incorporated by reference herein in its entirety.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

      None.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

      On or about August 31, 2004,  holders of  16,128,000  shares of our common
stock,  constituting a majority of the  outstanding  shares of our common stock,
took  action by written  consent  to  approve  the  amendment  of the  Company's
Articles of Incorporation  to increase the authorized  shares of common stock to
250,000,000  shares.  Shareholders of the Company received notice of this action
in a definitive  Information Statement on Schedule 14C mailed to shareholders of
record at the close of  business  on  August  31,  2004.  The  amendment  became
effective on or about November 9, 2004.


                                       14
<PAGE>

ITEM 5. OTHER INFORMATION.

      None.

ITEM 6. EXHIBITS.

                  Exhibit
                  Number            Description
                  -------           -----------

                  3.1               Certificate  of  Amendment  to  Articles  of
                                    Incorporation  (incorporated by reference to
                                    Appendix   A  to   Registrant's   Definitive
                                    Information  Statement on Schedule 14C filed
                                    on October 20, 2004).

                  10.1              Secured Convertible Note Purchase Agreement,
                                    dated  as of  September  28,  2004,  by  and
                                    between   the   Registrant   and   Kali   P.
                                    Chaudhuri,  M.D.  (incorporated by reference
                                    to  Exhibit  10.1  to  Registrant's  Current
                                    Report  on Form  8-K  filed  on  October  5,
                                    2004).

                  10.2              Asset Sale  Agreement,  dated  September 29,
                                    2004,  by and  among AHM CGH,  Inc.,  Health
                                    Resources    Corporation    of   America   -
                                    California,   SHL/O  Corp.,   UWMC  Hospital
                                    Corporation,      and     the     Registrant
                                    (incorporated  by  reference to Exhibit 10.2
                                    to  Registrant's  Current Report on Form 8-K
                                    filed on October 5, 2004).

                  31.1              Certification  of  Chief  Executive  Officer
                                    Pursuant    to    Section    302    of   the
                                    Sarbanes-Oxley Act of 2002.

                  31.2              Certification  of  Chief  Financial  Officer
                                    Pursuant    to    Section    302    of   the
                                    Sarbanes-Oxley Act of 2002.

                  32.1              Certification  of  Chief  Executive  Officer
                                    Pursuant    to    Section    906    of   the
                                    Sarbanes-Oxley Act of 2002.

                  32.2              Certification  of  Chief  Financial  Officer
                                    Pursuant    to    Section    906    of   the
                                    Sarbanes-Oxley Act of 2002.


                                       15
<PAGE>

                                    SIGNATURE

      In accordance  with the  requirements  of the  Securities  Exchange Act of
1934,  the  registrant  caused  this  report to be  signed on its  behalf by the
undersigned, thereunto duly authorized.

                                    INTEGRATED HEALTHCARE HOLDINGS, INC.


Dated: November 15, 2004            By:  /s/ James Ligon
                                         -------------------------------------
                                         James Ligon
                                         Chief Financial Officer and Secretary
                                         (Principal Financial Officer)


                                       16