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Item 7. Management’s Discussion and Analysis

2023-06-06 compared with 2022-10-21 · 605 added, 331 removed, 10 unchanged (99% of the section changed)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS.

This Management’s Discussion and Analysis

or Financial Condition and Results of Operation contains forward-looking statements that involve future events, our future performance

and our expected future operations and actions.

In some cases, you can identify forward-looking statements by the use of words such as

“may”, “will”, “should”, “anticipate”, “believe”, “expect”, “plan”,

“future”, “intend”, “could”, “estimate”, “predict”, “hope”, “potential”,

“continue”, or the negative of these terms or other similar expressions.

These forward-looking statements are only our predictions

and involve numerous assumptions, risks, and uncertainties.

Our actual results or actions may differ materially from these forward-looking

statements for many reasons, including, but not limited to, the matters discussed in this report under the caption “Risk Factors”.

We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus.

no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

The following discussion of our consolidated financial

condition and consolidated results of operations should be read in conjunction with our consolidated financial statements and the related

notes included in this report.

The following table provides segment reporting

for selected financial data about the Company as of and for the years ended December 31, 2021 and 2020.

For detailed financial information,

see the audited consolidated financial statements included in this report.

Affordable Housing Rentals

Financial Services

Cardiff Lexington

Consolidated assets

Affordable Housing Rentals

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and

cash flows as of and for the periods presented below.

The following discussion and analysis should be read in conjunction with our financial

statements and the related notes thereto included elsewhere in this report.

The discussion contains forward-looking statements that are

based on the beliefs of management, as well as assumptions made by, and information currently available to, management.

Actual results

could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those

discussed below and elsewhere in this report, particularly in the sections titled “Risk Factors” and “ Special

Note Regarding Forward-Looking Statements.

We are an acquisition holding company focused

on locating undervalued and undercapitalized companies, primarily in the healthcare industry, and providing them capitalization and leadership

to maximize the value and potential of their private enterprises while also providing diversification and risk mitigation for our stockholders.

Specifically, we have and will continue to look at a diverse variety of acquisitions in the healthcare sector in terms of growth stages

and capital structures and we intend to focus our portfolio of subsidiaries approximately as follows:

80% will be targeted to established

profitable niche small to mid-sized healthcare companies and 20% will be targeted to second stage startups in healthcare and related financial

services (emerging businesses with a strong organic growth plan that is materially cash generative).

All of our operations are conducted through, and

our income derived from, our various subsidiaries.

We operate the following businesses through our wholly owned subsidiaries.

· Healthcare Business .

Nova, which we acquired May 31, 2021, operates a group of regional

primary specialty and ancillary care facilities throughout Florida that provide traumatic injury victims with primary care evaluations,

interventional pain management, and specialty consultation services.

We focus on plaintiff related care are and a highly efficient provider

of EMC assessments.

We provide a full range of diagnostic and surgical services for injuries and disorders of the skeletal system and

associated bones, joints, tendons, muscles, ligaments, and nerves.

From sports injuries, to sprains, strains, and fractures, our doctors

are dedicated to helping patients return to active lifestyles.

· Financial Services (Tax Resolution) Business .

Platinum Tax, which we acquired on July 31,

2018, is a full-service tax resolution firm located in Los Angeles, California.

Since 2011, we have been assisting all types of taxpayers

resolve any and all issues with the IRS and applicable state tax agencies.

We provide fee-based tax resolution services to individuals

and companies that have federal and state tax liabilities by assisting clients to settle outstanding tax debts.

· Real Estate Business .

Edge View, which we acquired on July 16, 2014, is a real estate company

that owns five (5) acres zoned medium density residential (MDR) with 12 lots already platted;

six (6) acres zoned high-density residential

(HDR) that can be platted in various configurations to meet current housing needs;

and twelve (12) acres zoned in Lemhi County as

Agriculture that is available for further annexation into the City of Salmon for development, as well as a common area for landowners

to view wildlife, provide access to the Salmon River and fishing in a two (2) acre pond.

Salmon is known as Idaho’s premier

whitewater destination as well as one of the easier accesses to the Frank Church Wilderness Area - the largest wilderness in the

lower 48 states.

Salmon’s airport has service to Boise, Idaho and serves as a hub to access whitewater rafting start points

and wilderness landing strips.

Management has invested years working to develop a new and exciting housing development in Salmon, Idaho

and plans to enter into a joint venture agreement with a developer for this planned concept development.

Impact of Coronavirus Pandemic

In December 2019, a novel coronavirus disease,

or COVID-19, was initially reported and on March 11, 2020, the World Health Organization characterized COVID-19 as a pandemic.

has had a widespread and detrimental effect on the global economy as a result of the number of cases and affected countries and actions

by public health and governmental authorities, businesses, other organizations, and individuals to address the outbreak, including travel

bans and restrictions, quarantines, shelter in place, stay at home or total lock-down orders and business limitations and shutdowns.

COVID-19 pandemic is adversely affecting, and is expected to continue to adversely affect, our operations, and we have experienced and

expect to continue to experience unpredictable reductions in demand for certain of our services.

Due to the COVID-19 pandemic, client enrollment

at Platinum Tax has been at a slower pace than initially expected.

In addition, during 2022, Platinum Tax experienced reduced enrollment

due to governmental policy.

As a result, the performance of Platinum Tax was effected and the pandemic had a material adverse impact on

its market share growth plans and timelines.

Additionally, in accordance with recommendations from public health officials to mitigate

the spread of COVID-19, we have during periods of 2020 temporarily closed certain operations for several months.

All operations are now

open and functioning.

Our results will be adversely impacted by any new closures and other actions taken to contain or treat the impact

of COVID-19, and the extent of such impact will depend on future developments, which are highly uncertain and cannot be predicted.

Furthermore, the global deterioration in economic

conditions, which may have an adverse impact on discretionary consumer spending or investing, could also impact our business and demand

for our services.

For instance, consumer spending and investing may be negatively impacted by general macroeconomic conditions, including

a rise in unemployment, and decreased consumer confidence resulting from the pandemic.

Our efforts to help mitigate the negative impact

of the outbreak on our business may not be effective, and we may be affected by a protracted economic downturn.

Furthermore, while many

governmental authorities around the world have and continue to enact legislation to address the impact of COVID-19, including measures

intended to mitigate some of the more severe anticipated economic effects of the virus, we may not benefit from such legislation, or such

legislation may prove to be ineffective in addressing COVID-19’s impact on our and our customer’s businesses and operations.

Even after the COVID-19 outbreak has subsided, we may continue to experience impacts to our business as a result of COVID-19’s global

economic impact and any recession that has occurred or may occur in the future.

Further, as the COVID-19 situation is unprecedented and

continuously evolving, COVID-19 may also affect our operating and financial results in a manner that is not presently known to us or in

a manner that we currently do not consider that may present significant risks to our operations.

The extent to which the COVID-19 pandemic may

impact our results will depend on future developments, which are highly uncertain and cannot be predicted as of the date of this prospectus.

Nevertheless, the pandemic and the current financial, economic and capital markets environment, and future developments in the global

supply chain and other areas present material uncertainty and risk with respect to our performance, financial condition, results of operations

and cash flows.

See also “ Risk Factors ” for more information.

During the years ended December 31, 2022 and 2021,

we had four reportable operating segments as determined by management using the “management approach” as defined by the authoritative

guidance on Disclosures about Segments of an Enterprise and Related Information :

(1) Affordable Housing (AHI), which was sold on October 31, 2022

(2) Financial Services (Platinum Tax)

(3) Healthcare (Nova)

(4) Real Estate (Edge View)

These segments are a result of differences in

the nature of the products and services sold.

Corporate administration costs, which include, but are not limited to, general accounting,

human resources, legal and credit and collections, are partially allocated to the three operating segments.

Other revenue consists of

nonrecurring items.

The affordable housing segment leases and sells

mobile homes as an option for a homeowner wishing to avoid large down payments, expensive maintenance costs, large monthly mortgage payments

and high property taxes and insurance which is a common trait of brick-and-mortar homes.

Additionally, if bad credit is an issue preventing

potential home owners from purchasing a traditional house, we will provide a “lease to own” option so people secure their

The financial services segment provides tax resolution

services to individuals and companies that have federal and state tax liabilities.

It collects fees based on efforts to negotiate and

assist in the settlement of outstanding tax debts.

The healthcare segment provides a full range of

diagnostic and surgical services for injuries and disorders of the skeletal system and associated bones, joints, tendons, muscles, ligaments,

The real estate segment consists of Edge View,

which owns 30 acres of land, including 23.5 acres zoned MDR (medium density residential) with 12 lots already platted and sold and 48

lots zoned HDR (high density residential), 4 acres of dedicated river front property zoned for recreation on the Salmon River, Idaho’s

premier whitewater river, and 2.5 acres zoned for commercial use.

All land is in the city limits of Salmon and adjacent to the Frank church

Wilderness Park (the largest wilderness park in the lower 48 states).

Management uses numerous tools and methods to

evaluate and measure of its subsidiaries success.

To help succeed, management retains the prior owners of the subsidiaries and allow them

to do what they do best is run the business.

Additionally, management monitors key metrics primarily revenues and net income from operations.

Discontinued Operations

On May 1, 2018, we entered into a stock for stock

purchase agreement with the sellers of Red Rock Travel, LLC, or Red Rock, and a related management agreement to manage Red Rock.

and conditions of those agreements were subsequently violated causing the transaction to be reversed and dissolved on May 31, 2019.

Rock reverted to its previous ownership, we canceled the shares of series K preferred stock related to the aborted acquisition and

we filed notice with the State of Florida of the dissolution.

On April 26, 2021, we filed a lawsuit against

investors in Red Rock seeking a judgement declaring that convertible secured notes issued to them by Red Rock purportedly convertible

into our common stock to be null and void, and defendants subsequently filed a counterclaim.

On July 29, 2022, the parties entered into

a mediated settlement agreement whereby defendants agreed to dismiss all claims against our company related to the notes and accrued interest

in the amount of $510,418 and further agreed to cancel and return common stock and warrants issued to claimants in a related 2020 settlement.

We agreed to issue defendants 592,000,000 shares of common stock.

As a result of the settlement agreement, the convertible notes and accrued

interest were written-off in the third quarter of 2022 resulting in a gain of $510,417, which is recorded in discontinued operations.

As of December 31, 2022, in a separate settlement an additional 66,666,666 shares were added to the settlement for a total of 658,666,666

shares issued and recorded in common stock for $658,666, additional paid in capital for $(409,775).

The settlement also required the previous owners to relinquish 35,000,000 shares of common stock.

Prior to the settlement, we continued to

carry Red Rock liabilities on our balance sheet including accounts payables and accrued expenses of $1,872,086, convertible notes

payable of $240,000, accrued interest of $214,318 and a derivative liability of $378,877 as of September 30, 2021.

party responsible for the convertible notes and related accrued interest is in dispute and is currently in litigation.

derivative liability is a function of the convertible notes and accrued interest and the accounts payable and accrued expenses of

$1,872,086 is deemed to be the responsibility of the current owners of Red Rock and was written-off by us in the third quarter of

2021 resulting in a gain of $328,718, which is recorded in discontinued operations.

Results of Operations

Comparison of Years Ended December 31, 2022

The following table sets forth key components

of our results of operations during the years ended December 31, 2022 and 2021, both in dollars and as a percentage of our revenue.

December 31, 2022

December 31, 2021

Financial services

Consolidated revenues

Total revenue

Cost of sales

Affordable Housing Rentals

Financial services

Consolidated cost of sales

Income (Loss) from operations from subsidiaries

Affordable Housing Rentals

Financial Services

Income (loss) from operations from subsidiaries

Loss from operations from Cardiff Lexington

$ (1,865,888 )

$ (1,573,435 )

Total income (loss) from operations

Income (Loss) before taxes

Affordable Housing Rentals

Financial Services

Corporate, admin and other non-operating expenses

Consolidated loss before taxes

$ (2,836,893 )

Results of Operations

We had revenues in the amount

of 10,008,860 and $3,453,058 for the years ended December 31, 2021 and 2020, respectively, an increase of $6,555,802 or 189.9%.

in revenue was primarily due to:

(i) the acquisition of Nova Ortho which generated revenue of $5,413,890 for the seven months ending December

31, 2021, (ii) the sale of three parcels of land by Edge View for $152,000 and (iii) higher sales in the financial services sector for

the twelve months ended December 31, 2021 due primarily to the impact of the COVID-19 pandemic during 2020, offset by a decrease in housing

Cost of Goods Sold.

We had costs of sales

in the amount of $3,848,406 and $1,668,146 for the years ended December 31, 2021 and 2020, respectively, an increase of $2,180,260 or

The increase in revenue was primarily due to:

(i) the acquisition of Nova Ortho which incurred cost of sales of $1,685,625 for

the seven months ending December 31, 2021, (ii) the sale of three parcels of land by Edge View which incurred cost of sales of $79,481

and (iii) higher cost of sales for the financial services sector for the twelve months ended December 31, 2021, offset by a decrease in

housing rentals.

Operating Expenses.

Total cost of sales

Operating expenses

consist of acquisition costs, depreciation expense, and general and administrative expenses.

We had operating expenses of $4,534,352 and

$3,589,063 for the years ended December 31, 2021 and 2020, respectively, an increase of $945,289 or 26.3%.

The increase in operating expenses

was primarily due to:

(i) the acquisition of Nova Ortho which incurred operating expenses of $395,088 for the seven months ending December

31, 2021, and (ii) higher operating expenses for the financial services sector for the twelve months ended December 31, 2021.

Depreciation expense

Goodwill impairment

Selling, general and administrative

Total operating expenses

Income from operations

Other income (expense)

Gain on divestiture

Gain on debt refinance and forgiveness

Gain on change of estimate

Penalties and fees

Interest expense

Conversion cost penalty and reimbursement

Amortization of debt discounts

had amortization of debt discount of $1,051,264 and $1,192,044 for years ended December 31, 2021 and 2020, respectively, a decrease of

$140,780 or 11.8%.

Amortization of debt discount is related to our convertible debt.

Interest Expense and finance charge.

the years end December 31, 2021 and 2020, interest expense and finance charge was $2,982,844 and $332,704, respectively, an increase of

$2,650,140 or 796.5%.

The increase is due primarily to finance charges of $2,633,634 for the seven months ended December 31, 2021 for

Nova Ortho factoring certain accounts receivables.

Total other income (expense)

Net loss before discontinued operations

Gain from discontinued operations

Loss from disposal of discontinued operations

Net income (loss)

$ (5,429,521 )

Our total revenue increased

by $2,119.216, or 21.45%, to $11,998,273 for the year ended December 31, 2022 from $9,879,057 for the year ended December 31, 2021.

increase was primarily due to the increase in revenue from the healthcare segment due to the acquisition of Nova in May 2021 and a slight

increase in revenue from the affordable housing segment, offset by decreases in revenue from the financial services segment and real estate

The financial services segment generates revenue

through the provision of tax resolution services to individuals and business owners.

Revenue from the financial services segment decreased

by $3,008,090, or 69.74%, to $1,305,077 for the year ended December 31, 2022 from $4,313,167 for the year ended December 31, 2021.

decrease was primarily due to the loss of leads from Optima Tax Relief which affected the significant revenue reduction in the tax resolution

The healthcare segment generates revenue through

a full range of diagnostic and surgical services.

Revenue from the healthcare services segment increased by $5,279,306, or 97.51%, to

$10,693,196 for the year ended December 31, 2022 from $5,413,890 for the period of May 31, 2021 (date of acquisition) to December 31,

The real estate segment generates revenue through

the sale of parcels of land.

Revenue from the real estate segment decreased by $152,000, or 100%, to $0 for the year ended December 31,

2022 from $152,000 for the year ended December 31, 2021.

Such decrease was primarily due to the sale of three parcels of land in 2021.

Cost of sales .

Our total cost of sales

increased by $688,928, or 18.28%, to $4,457,381 for the year ended December 31, 2022 from $3,768,453 for the year ended December 31, 2021.

Such increase was primarily due an increase from the healthcare segment due to the acquisition of Nova in May 2021, offset by decreases

from the other segments.

As a percentage of revenue, our total cost of sales was 37.15% and 38.15% for the years ended December 31, 2022

and 2021, respectively.

Cost of sales for the financial services segment consists

of advertising, contract labor and merchant fees.

Cost of sales for the financial services segment decreased by $1,545,064, or 79.54%,

to $397,347 for the year ended December 31, 2022 from $1,942,411 for the year ended December 31, 2021.

Such decrease was generally in

line with the decrease in revenue from this segment.

Cost of sales for the healthcare segment consists

of surgical center fees, physician and professional fees, salaries and wages and medical supplies.

Cost of sales from the healthcare services

segment increased by $2,313,473, or 132.46%, for the year ended December 31, 2022 from $1,746,561 for the period from May 31, 2021 (date

of acquisition) to December 31, 2021.

Cost of sales for the real estate segment was

$0 for the year ended December 31, 2022, as compared to $79,481 the year ended December 31, 2021, which consisted of costs related to

the sale of the three parcels of land by Edge View.

Gross profit .

As a result of the foregoing,

we had a net loss of $409,707 for the year ending December 31, 2021, compared to a net loss for the year ending December 31, 2020 of $2,836,893.

Our activities have a focus on growing revenue

and cash flow.

We plan to continue this strategy into 2022.

To try to operate at a break-even level based

upon our current level of proposed business activity, we believe that we must generate approximately $9,000,000 in revenue per year.

dollar of revenue is not directly tied to increasing costs.

We believe that we can become profitable without incurring additional costs

under our current operating cost structure.

However, if our forecasts are inaccurate, we will need to raise additional funds.

additional capital, our directors have informally agreed to borrow such funds as may be necessary for the next 12 months for working capital

purposes, although they have no obligation to do so.

On the other hand, if we decide that we cannot

operate at a profit in our current configuration, we may choose to scale back our operations to operate at break-even with a smaller level

of business activity, while adjusting our overhead to meet the revenue from current operations.

In such event, we will probably continue

to not be profitable.

In addition, we expect that we will need to raise additional funds if we decide to pursue more rapid expansion,

the development of new or enhanced services or products, appropriate responses to competitive pressures, or the acquisition of complementary

businesses or technologies, or if we must respond to unanticipated events that require us to make additional investments.

We cannot assure

that additional financing will be available when needed on favorable terms, or at all.

We expect to incur operating losses in future

periods because we will be incurring expenses and not generating sufficient revenues.

We expect approximately $6,400,000 in operating

costs over the next twelve months.

We cannot guarantee that we will be successful in generating sufficient revenues or other funds in

the future to cover these operating costs.

Failure to generate sufficient revenues or additional financing when needed could cause us

to go out of business.

our total gross profit increased by $1,430,288, or 23.41%, to $7,540,892 for the year ended December 31, 2022 from $6,110,604 for the

year ended December 31, 2021.

Our total gross margin (percent of revenue) increased from 61.85% for the year ended December 31, 2021 to

62.85% for the year ended December 31, 2022.

Gross profit for the financial services segment

decreased by $1,463,026, or 61.71%, to $907,730 for the year ended December 31, 2022 from $2,370,756 for the year ended December 31, 2021.

Gross margin (percent of revenue) for the financial services segment increased from 54.97% for the year ended December 31, 2021 to 69.55%

for the year ended December 31, 2022.

Gross profit for the healthcare services segment

was $6,633,162 for the year ended December 31, 2022, as compared to $3,667,329 for the period from May 31, 2021 (date of acquisition)

to December 31, 2021.

Gross margin (percent of revenue) for the healthcare segment was 62.03% and 67.74% for the year ended December 31,

2022 and for the period from May 31, 2021 (date of acquisition) to December 31, 2021, respectively.

Gross profit for the real estate segment was $72,519

for the year ended December 31, 2021 and gross margin (percent of revenue) was 47.71%.

Depreciation expense .

Our depreciation

expense was $23,132, or 0.19% of revenue, for the year ended December 31, 2022, as compared to $13,886, or 0.14% of revenue, for the

year ended December 31, 2021.

Goodwill impairment .

the goodwill impairment test of the underlying assets, expected cash flows, decreased asset value and other factors.

As a result, we

recognized a goodwill impairment in the amount of $2,092,048 and $0 for the years ended December 31, 2022 and 2021, respectively.

general and administrative expenses .

Our selling, general and administrative expenses consist primarily of accounting, auditing,

legal and public reporting expenses, personnel expenses, including employee salaries and bonuses plus related payroll taxes, advertising

expenses, professional advisor fees, bad debts, rent expense, insurance and other expenses incurred in connection with general operations.

Our selling, general and administrative expenses decreased by $700,866, or 15.80%, to $3,733,728 for the year ended December 31, 2022

from $4,434,594 for the year ended December 31, 2021.

As a percentage of revenue, our selling, general and administrative expenses were

31.12% and 44.89% for the years ended December 31, 2022 and 2021, respectively.

Such decrease was primarily due to the decline in our

financial services business.

Total other income (expense) .

$7,162,454 in total other expense, net, for the year ended December 31, 2022, as compared to other expense, net, of $1,965,736 for the

year ended December 31, 2021.

Other expense, net, for the year ended December 31, 2022 consisted of interest expense of $6,392,242, financing

penalties and fees of $2,063,916, and amortization of debt discounts of $253,823, offset by a gain on forgiveness of debt of $1,397,271

and other income of $150,256.

Other expense, net, for the year ended December 31, 2021 consisted of interest expense of $1,906,844, amortization

of debt discounts of $1,051,264 and a conversion cost penalty and reimbursement of $13,000, offset by a gain on divestiture of $788,500

related to Key Tax, a gain on change of estimate of $170,964 related to a change in income tax provision and other income of $32,629,

which consisted primarily of a gain from conversion of debt to preferred stock.

Discontinued operations .

the year ended December 31, 2022, we recorded a gain from discontinued operations of $40,949 and a loss from disposal of discontinued

operations of $0.

For the year ended December 31, 2021, we recorded a gain from discontinued operations of $2,171,076 and a loss from

disposal of discontinued operations of $1,201,171.

Net income (loss) .

As a result of the

cumulative effect of the factors described above, our net loss was $5,429,521 for the year ended December 31, 2022, as compared to net

income of $666,293 for the year ended December 31, 2021, an decrease of $6,095,814, or 914.9%.

Liquidity and Capital Resources

As of December 31, 2021, we had cash of $595,987

and a working capital deficit of $2,502,813.

As of December 31, 2020, we had cash of $279,311 and a working capital deficit of $13,107,015.

Net cash used in operating activities was $844,826

for the year ended December 31, 2021, representing a $903,416 decrease from the prior year ended December 31, 2020.

The improvement in

cash used in operating activities is primarily due to a $903,416 reduction in loss from operating income.

Net cash used in investing activities was $2,323,642

for the year ended December 31, 2021, used for the acquisition of the new business, compared with cash provided by investing activities

of $0 for the year ended the December 31, 2020.

Net cash flows provided by financing activities

was $3,676,648 for the year ended December 31, 2021, compared with cash provided by financing activities of $1,150,423 for the year ended

As of December 31, 2022, we

had $ 226,802 in cash .

To date, we have financed our operations primarily through

revenue generated from operations, sales of securities, advances from stockholders

and third-party and related party debt .

We believe, based on our operating plan, that current working capital and current

and expected additional financing should be sufficient to fund operations and satisfy our obligations as they come due for at least one

year from the financial statement issuance date.

However, additional funds from new financing and/or

future equity raises are required for continued operations and to execute our business plan and our strategy of acquiring additional

The funds required to sustain operations ranges between $600,000 to $1 million and additional funds execute our business

plan will depend on the size, capital structure and purchase price consideration that the seller of a target business deems acceptable

in a given transaction.

The amount of funds needed to execute our business plan also depends on what portion of the purchase price of

a target business the seller of that business is willing to take in the form of seller notes or our equity or equity in one of our subsidiaries.

Given these factors, we believe that the amount of outside additional capital necessary to execute our business plan on the low end (assuming

target company sellers accept a significant portion of the purchase price in the form of seller notes or our equity or equity in one

of our subsidiaries) ranges between $5 million to $7 million.

If, and to the extent, that sellers are unwilling to accept a significant

portion of the purchase price in seller notes and equity, then the cash required to execute our business plan could be as much as $10

We intend to raise capital for additional acquisitions primarily through equity and debt financings.

The sale of additional equity securities could result in dilution to our stockholders.

The incurrence of indebtedness would result in

increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations.

Financing may not be available in amounts or on terms acceptable to us, if at all.

There is no guarantee that we will be able to acquire

additional businesses under the terms outlined above.

Summary of Cash Flow

The following table provides detailed information

about our net cash flow for all financial statement periods presented in this prospectus.

Years Ended December 31,

Net cash used in operating activities

$ (1,100,327 )

Net cash from discontinued operations

Net cash used in investing activities

Net cash provided by financing activities

Net change in cash

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Our net cash used in operating activities from continuing

operations was $1,100,327 for the year ended December 31, 2022, as compared to $850,141 for the year ended December 31, 2021.

year ended December 31, 2022, our net loss of $5,429,521, a gain on refinance of debt of $1,397,271, offset by a loss on finance penalties

and fees of $2,063,916, impairment of goodwill of $2,092,048 and an increase in accrued officers’ compensation of $873,506, were

the primary drivers for the cash used in operations.

For the year ended December 31, 2021, our net income of $666,293 an decrease in accounts

receivable of $2,157,880 and a gain on forgiveness of debt of $739,450, offset by amortization of loan discount of $1,051,264 and an increase

in accrued officers’ compensation of $764,835, were the primary drivers for the cash used in operations.

We had no investing activities for the year ended

December 31, 2022.

The increase is due primarily issuance of preferred stock for the acquisition of Nova Ortho.

There can be no assurance that we will be able

to obtain sufficient capital from debt or equity transactions or from operations in the necessary time frame or on terms acceptable to

Should we be unable to raise sufficient funds, we may be required to curtail our operating plans and possibly relinquish rights to

portions of our technology or products.

In addition, increases in expenses or delays in product development may adversely impact our cash

position and may require cost reductions.

No assurance can be given that we will be able to operate profitably on a consistent basis,

or at all, in the future.

In order to continue our operations, development

of our products, and implementation of our business plan, we need additional financing.

We are currently attempting to obtain additional

working capital in a term loan transaction.

During 2020 and 2021 both the Platinum Tax Subsidiary

and the Key Tax Subsidiary (sold at December 31, 2021) secured PPP Funding to sustain their respective payrolls.

The Company’s current funding is now concentrated

with 3 primary lenders and the Company is currently in discussions with each to convert those outstanding notes to equity to include lockup

and leakout agreements.

For the year ended December 31, 2021, our net cash used in investing activities was $2,323,642, which consisted of

cash used for the acquisition of Nova of $2,320,235 and purchases of furniture and equipment of $3,407.

Our net cash provided by financing activities

was $788,794 for the year ended December 31, 2022, as compared to $3,676,648 for the year ended December 31, 2021.

Net cash provided by

operating activities for the year ended December 31, 2022 consisted of proceeds from convertible notes payable of $879,083, proceeds from

share issuance of $25,000, dividend payout of $102,740, repayment of convertible notes payable of $5,908, repayments of related party

notes payable of $3,068, and repayments to directors and officers of $3,573.

Net cash provided by financing activities for the year ended

December 31, 2021 consisted of proceeds from the issuance of series N preferred stock of $3,000,000, proceeds from paycheck protection

program and small business administration loans of $547,050, and proceeds from convertible notes payable of $444,500, offset by preferred

stock dividends of $203,880, repayment of line of credit of $51,927, repayment of convertible notes payable of $30,777 and payment of

notes payable of $28,318.

Convertible Notes

As of December 31, 2022, we had convertible debt

outstanding net of amortized debt discount of $3,515,752.

During the year ending December 31, 2022, we received proceeds of $1,490,706

from convertible notes and repaid $5,908.

The following is a schedule of convertible notes

payable outstanding as of December 31, 2022:

Unamortized Debt

On October 28, 2016, we issued

a convertible promissory note in the principal amount of $50,000, which matured on October 28, 2017.

Note 7-1 is currently in default

and accrues at a default interest rate of 20% per annum.

On September 12, 2016, we issued

a convertible promissory note in the principal of $80,000 for services rendered, which matured on September 12, 2017.

Note 9 is currently

in default and accrues at a default interest rate of 20% per annum.

On January 24, 2017, we issued

a convertible promissory note in the principal of $80,000 for services rendered, which matured on January 24, 2018.

Note 10 is currently

in default and accrues at a default interest rate of 20% per annum.

On August 10, 2017, we issued

a convertible promissory note in the principal amount of $20,000, which matured on January 27, 2018.

Note 26 is currently in default and

accrues interest at a default interest rate of 15% per annum.

Note 29-1 and 29-2 .

On May 10, 2019, we

issued a convertible promissory note in the principal amount of $150,000.

On November 8, 2019, this note (Note 29) was purchased by and

assigned to an unrelated party.

The amount assigned was the existing principal amount of $150,000 and accrued interest of $5,918, which

was issued as Note 29-1, plus a new convertible promissory note in the principal amount of $62,367, which was issued as Note 29-2.

29-1 and 29-2 are currently in default and accrue interest at a default interest rate of 24% per annum.

On August 28, 2019, we issued a convertible promissory

note in the principal amount of $120,000, which matured on August 28, 2020.

The note is currently in default and accrue interest at a

default interest rate of 24% per annum.

Notes 37-1, 37-2 and 37-3 .

3, 2020, we issued a convertible promissory note in the principal amount $200,000, with original issue discount of $50,000, which could

be drawn in several tranches.

On September 3, 2020, we executed the first tranche in the principal amount of $67,000, less original issue

discount of $17,000, which matured on June 30, 2021 (Note 37-1).

On November 2, 2020, we executed the second tranche in the principal

amount of $66,500, less original issue discount of $16,500, which matured on August 31, 2021 (Note 37-2).

On December 29, 2020, we executed

the third tranche in the principal amount of $66,500, less original issue discount of $16,500, which matured on September 30, 2021 (Note

Notes 37-1, 37-2 and 27-3 are currently in default and accrue interest at a default interest rate of 18% per annum.

On February 9, 2021, we issued

a convertible promissory note in the principal amount $103,500, which matured on February 9, 2022.

Note 38 is currently in default and

accrues interest at a default interest rate of 22% per annum.

On April 26, 2021, we issued a

convertible promissory note in the principal amount $153,500, which matured on May 10, 2022.

Note 19 is currently in default and accrues

interest at a default interest rate of 22% per annum.

Note 40-1, 40-2, 40-3 and 40-4 .

22, 2022, we issued a convertible promissory note in the principal amount of $2,600,000 in exchange for total of $4,791,099 of defaulted

promissory notes balances (Note 40-1).

On November 4, 2022, we executed a second tranche under this note principal amount of $68,667,

less original issue discount and fee of $18,667 (Note 40-2).

On November 28, 2022, we executed the third tranche under this note in the

principal amount of $68,667, less original issue discount and fee of $18,667 (Note 40-3).

On November 28, 2022, we executed a fourth tranche

under this note in the principal amount of $68,667, less original issue discount and fee of $18,667 (Note 40-4).

Notes 40-1, 40-2, 40-3

and 40-4 mature on the first anniversary of issuance and accrued interest at a rate of 10% per annum.

Small Business Administration Loans

On June 2, 2020, we obtained a loan from the Small

Business Administration of $150,000 at an interest rate of 3.75% with a maturity date of June 2, 2050.

The principal balance and accrued

interest at December 31, 2022 was $144,609 and $5,723, respectively.

On March 12, 2009, we entered into a preferred

debenture agreement for $20,000.

The debenture bears interest at 12% per year and matured on September 12, 2009.

As of December 31, 2022,

the balance of the debenture was $10,989 and it had interest of $6,229.

Related Party Loans

From time to time, the previous owner and current

manager of Platinum Tax loaned funds to Platinum Tax to cover short term operating needs.

The amount owed as of December 31, 2022 was

As of December 31, 2022, the amounts due from

the previous owners of Edge View is $4,979.

Contractual Obligations

Our principal commitments consist mostly of obligations

under the loans described above and the operating leases described under Item 2 “ Properties ”.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements with

Plan of Operation

At Cardiff Lexington, we acquire or merge with

middle market companies in the financial services and healthcare sectors by providing them the ability to have an infusion of equity into

their business or providing them the ability to exit out of their company.

Our focus is not industry or geographic-specific, but rather

proven management, market, and margin - we are opportunity oriented.

We target acquisitions of mature, high growth,

niche companies.

Our target companies' proven management maintains full operational control, meaning our acquisitions become standalone

autonomous subsidiaries that gain the advantages of a public company without losing their operational independence.

For investors, our

goal is to provide a diversified lower risk platform to protect and safely enhance their investment by continually adding assets and holdings.

By employing a merge or acquire and hold strategy, we expect to maximize the value and potential of private, often family run, enterprises

while providing diversification and risk mitigation for all shareholders.

Our portfolio is comprised of mature, high growth and niche

companies with great management, in an identifiable market, which they have penetrated through a significant advantage, and have acceptable

Current Business Operations

Cardiff Lexington Corp (formerly Cardiff International,

Inc.) is currently structured as a company with holdings of various companies.

The following milestones are estimates only.

working capital requirements and the projected milestones are approximations only and subject to adjustment based on sales, costs and

CARDIFF LEXINGTON CORP (FORMERLY CARDIFF INTERNATIONAL,

INC.) is a publicly-traded holding company utilizing a form of collaborative governance.

Cardiff Lexington targets acquisitions of

undervalued, niche companies with high growth potential, income-producing businesses, including commercial real estate properties all

of which offer high returns for our investors.

Our goal is to provide a form of governance enabling businesses to take advantage of the

potential access to capital markets of a publicly-traded company without losing management control.

Cardiff Lexington seeks to provide

companies the ability to raise money and investors a low-risk environment that protects their investment.

WE THREE, LLC (D/B/A AFFORDABLE HOUSING INITIATIVE)

(“AHI”):

AHI was acquired on May 15, 2014 is located in Maryville, Tennessee.

AHI acquires both mobile homes and mobile

home parks offering an alternative to traditional housing and sells them or rents the homes or properties to individual families.

acquisition of mobile homes and mobile home parks allows AHI to provide an alternative to traditional housing, which is a popular option

for a homeowner wishing to avoid large down payments, expensive maintenance costs, monthly mortgage payments and high property taxes.

If bad credit is an issue preventing people from purchasing a traditional house, AHI will provide a financial leasing option with “O”

interest on the lease providing a “lease to own”

option for their family home.

Most homes are 3 bedroom/2bath homes making

the dream of owning a home possible.

EDGE VIEW PROPERTIES LLC:

Edge View Properties

was acquired on July 16, 2014, is a real estate company that owns 30 prime acres of land;

23.5 acres zoned MDR (Medium Density Residential)

with 12 lots already platted and 48 lots zoned HDR (High Density Residential), 4 acres of dedicated river front property zoned for recreation

on the Salmon River, Idaho’s premier whitewater river and 2.5 acres zoned for commercial use.

Three lots were sold during 2021 for

a total price of $152,000.

All land is in the city limits of Salmon and adjacent to the Frank church Wilderness Park (the largest wilderness

park in the lower 48 states).

Edgeview’s plan is to enter into a joint venture agreement with a planned concept developer to develop

PLATINUM TAX DEFENDERS:

Platinum tax was

acquired on July 31, 2018 and is a full-service tax resolution firm located in Los Angeles, CA.

Since 2011, Platinum Tax has been assisting all types of taxpayers resolve any and all issues with IRS and applicable state tax

Platinum Tax provides fee-based tax resolution services to individuals and companies that have federal and state tax liabilities

by assisting its clients to settle outstanding tax debts.

Specifically, the Platinum Tax teams tax relief services include but are not

limited to, back taxes, offer in compromise, audit representation, amending tax returns, tax preparation, tax resolution, wage garnishment

relief, removal of bank levies and liens, bookkeeping, and other financial challenges.

Platinum Tax team includes tax attorneys, accountants,

and enrolled agents that have an aggregate of more than 90 years of experience in the financial services industry and have resolved tax

issues for thousands of clients.

NOVA ORTHO AND SPINE, PLLC (“NOVA ORTHO”)

which we acquired on May 31, 2021 is a company in which doctors provides a full range of diagnostic and surgical services for injuries

and disorders of the skeletal system and associated bones, joints, tendons, muscles, ligaments, and nerves.

From sports injuries, to sprains,

strains, and fractures, our doctors are dedicated to helping you return to your active lifestyle.

Orthopedic and pain procedure services

include hip and knee replacement, shoulder reconstruction, fracture care and hand surgery, as well as spinal surgery in the State of Florida.

Critical Accounting Estimates

The discussion and analysis of our financial condition

and results of operations is based upon our financial statements, which have been prepared in accordance with accounting principles generally

accepted in the United States (“GAAP”).

GAAP requires management to make estimates, judgments and assumptions that affect

the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities.

estimates on experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which

form the basis for making judgments about the carrying values of assets and liabilities that may not be readily apparent from other sources.

On an on-going basis, we evaluate the appropriateness of our estimates and we maintain a thorough process to review the application of

our accounting policies.

Our actual results may differ from these estimates.

We consider our critical accounting estimates

to be those that (1) involve significant judgments and uncertainties, (2) require estimates that are more difficult for management to

determine, and (3) may produce materially different results when using different assumptions.

We have discussed these critical accounting

estimates, the basis for their underlying assumptions and estimates and the nature of our related disclosures herein with the audit committee

of our Board of Directors.

We believe our accounting policies specific to share-based compensation expense and estimation of the fair

value of derivative liability involve our most significant judgments and estimates that are material to our consolidated financial statements.

They are discussed further below.

Share-based compensation expense

The Company accounts for its stock-based compensation

in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of

the fair value recognition provisions of section 718-10-30 of the FASB Accounting Standards Codification.

Pursuant to paragraph 718-10-30-6

of the FASB Accounting Standards Codification, all transactions in which goods or services are the consideration received for the issuance

of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument

issued, whichever is more reliably measurable.

The measurement date used to determine the fair

value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable

that performance will occur.

If the Company is a newly formed corporation or

shares of the Company are thinly traded, the use of share prices established in the Company’s most recent private sales to third

parties, or weekly or monthly price observations would generally be more appropriate than the use of daily price observations as such

shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

The fair value of share options and similar instruments

is estimated on the date of grant using a lattice-binomial option pricing valuation model.

The ranges of assumptions for inputs are as

Expected term of share options and similar instruments:

The expected life of options and similar instruments represents the period of time the option and/or warrant are expected to be outstanding.

Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and employees expected exercise and post vesting employment termination behavior into the fair value (or calculated value) of the instruments.

Pursuant to paragraph 718-10-S99-1, it may be appropriate to use the simplified method, i.e., expected term = ((vesting term + original contractual term) / 2), if (i) A company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term due to the limited period of time its equity shares have been publicly traded; (ii) A company significantly changes the terms of its share option grants or the types of employees that receive share option grants such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term; or (iii) A company has or expects to have significant structural changes in its business such that its historical exercise data may no longer provide a reasonable basis upon which to estimate expected term.

The Company uses the simplified method to calculate expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.

Expected volatility of the entity’s shares and the method used to estimate it.

Pursuant to ASC Paragraph 718-10-50-2(f) (2)(ii) a thinly traded or nonpublic entity that uses the calculated value method shall disclose the reasons why it is not practicable for the Company to estimate the expected volatility of its share price, the appropriate industry sector index that it has selected, the reasons for selecting that particular index, and how it has calculated historical volatility using that index.

The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility.

If shares of a company are thinly traded the use of weekly or monthly price observations would generally be more appropriate than the use of daily price observations as the volatility calculation using daily observations for such shares could be artificially inflated due to a larger spread between the bid and asked quotes and lack of consistent trading in the market

Risk-free rate(s).

An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used.

The risk-free interest rate is based on the U.S.

Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments.

Generally, all forms of share-based payments,

including stock option grants, warrants and restricted stock grants and stock appreciation rights are measured at their fair value on

the awards’

grant date, based on estimated number of awards that are ultimately expected to vest.

The expense resulting from share-based payments

is recorded in general and administrative expense in the statements of operations.

Stock Based Compensation –

Equity Instruments Issued to Parties Other

Than Employees for Acquiring Goods or Services

The Company accounts for equity instruments issued

to parties other than employees for acquiring goods or services under guidance of Subtopic 505-50 of the FASB Accounting Standards Codification

(“Subtopic 505-50”).

Pursuant to ASC Section 505-50-30, all transactions

in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value

of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

The measurement

date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete

or the date on which it is probable that performance will occur.

If the Company is a newly formed corporation or shares of the Company

are thinly traded the use of share prices established in the Company’s most recent private placement memorandum, or weekly or monthly

price observations would generally be more appropriate than the use of daily price observations as such shares could be artificially inflated

due to a larger spread between the bid and asked quotes and lack of consistent trading in the market.

The fair value of share options and similar instruments

is estimated on the date of grant using a Black-Scholes option pricing valuation model.

The ranges of assumptions for inputs are as follows:

Expected term of share options and similar instruments:

Pursuant to Paragraph 718-10-50-2(f)(2)(i) of the FASB Accounting Standards Codification the expected term of share options and similar instruments represents the period of time the options and similar instruments are expected to be outstanding taking into consideration of the contractual term of the instruments and holder’s expected exercise behavior into the fair value (or calculated value) of the instruments.

The Company uses historical data to estimate holder’s expected exercise behavior.

If the Company is a newly formed corporation or shares of the Company are thinly traded the contractual term of the share options and similar instruments is used as the expected term of share options and similar instruments as the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate expected term.

Expected volatility of the entity’s shares and the method used to estimate it.

The Company uses the average historical volatility of the comparable companies over the expected contractual life of the share options or similar instruments as its expected volatility.

Expected annual rate of quarterly dividends.

An entity that uses a method that employs different dividend rates during the contractual term shall disclose the range of expected dividends used and the weighted average expected dividends.

The expected dividend yield is based on the Company’s current dividend yield as the best estimate of projected dividend yield for periods within the expected term of the share options and similar instruments.

Risk-free rate(s).

An entity that uses a method that employs different risk-free rates shall disclose the range of risk-free rates used.

The risk-free interest rate is based on the U.S.

Treasury yield curve in effect at the time of grant for periods within the expected term of the share options and similar instruments.

Pursuant to ASC paragraph 505-50-257, if fully

vested, no forfeitable equity instruments are issued at the date the grantor and grantee enter into an agreement for goods or services

(no specific performance is required by the grantee to retain those equity instruments), then, because of the elimination of any obligation

on the part of the counterparty to earn the equity instruments, a measurement date has been reached.

A grantor shall recognize the equity

instruments when they are issued (in most cases, when the agreement is entered into), whether the corresponding cost is an immediate expense

or a prepaid asset.

Pursuant to ASC paragraph 505-50-30-S99-1, if

the Company receives a right to receive future services in exchange for unvested, forfeitable equity instruments, those equity instruments

are treated as unissued for accounting purposes until the future services are received (that is, the instruments are not considered issued

until they vest).

Consequently, there would be no recognition at the measurement date and no entry should be recorded.

We have no off-balance sheet arrangements that

have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues

or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies

The following discussion relates to critical accounting

policies for our consolidated company.

The preparation of financial statements in conformity with United States generally accepted accounting

principles, or GAAP, requires our management to make assumptions, estimates and judgments that affect the amounts reported, including

the notes thereto, and related disclosures of commitments and contingencies, if any.

We have identified certain accounting policies that

are significant to the preparation of our financial statements.

These accounting policies are important for an understanding of our financial

condition and results of operation.

Critical accounting policies are those that are most important to the portrayal of our financial condition

and results of operations and require management’s difficult, subjective, or complex judgment, often as a result of the need to

make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

Certain accounting estimates

are particularly sensitive because of their significance to financial statements and because of the possibility that future events affecting

the estimate may differ significantly from management’s current judgments.

We believe the following critical accounting policies

involve the most significant estimates and judgments used in the preparation of our financial statements:

Revenue Recognition .

1, 2018, we adopted Accounting Standards Codification, or ASC, 606, Revenue from contracts with customers , using the modified retrospective

method applied to those contracts which were not completed as of January 1, 2018.

We apply the following five-step model to determine

revenue recognition:

· Identification of a contract with a customer

· Identification of the performance obligations in the contact

· Determination of the transaction price

· Allocation of the transaction price to the separate performance allocation

· Recognition of revenue when performance obligations are satisfied

We only apply the five-step model when it is probable

that we will collect the consideration we are entitled to in exchange for the goods or services transferred to the customer.

At contract inception and once the contract is determined to be within the scope of ASC 606, we assess services promised within each contract

and determine those that are performance obligations and assesses whether each promised service is distinct.

Our financial services segment reports revenues

as services are performed and our healthcare segment reports revenues at the time control of the services transfer to the customer and

from providing licensed and/or certified orthopedic procedures.

Nova does not have contract liabilities or deferred revenue as there are

no amounts prepaid for services.

Healthcare Income

Established billing rates are not the same as

actual amounts recovered for Nova.

They generally do not reflect what Nova is ultimately paid and therefore are not reported

in our consolidated financial statements.

We are typically paid amounts based on established charges per procedure with guidance

from the annually updated Current Procedural Terminology, or CPT, guidelines (a code set maintained by the American Medical Association

through the CPT Editorial Panel), that designates relative value units and a suggested range of charges for each procedure which is then

assigned a CPT code.

This fee is discounted to reflect the percentage paid to us “using a modifier” recognized by each insurance

carrier for services, less deductible, co-pay, and contractual adjustments which are deducted from the calculated fee.

net revenue is recorded at the time the services are rendered.

Contract Fees (Non-PIP)

We have contract fees for amounts earned from

our non- personal injury protection, or PIP, related procedures, typically car accidents, and are collected on a contingency basis.

cases are sold to a factor, who bears the risk of economic benefit or loss.

After selling patient cases to the factor, any additional

funds collected by us are remitted to the factor.

Service Fees – Net (PIP)

We generate services fees from performing various

procedures on the date the services are performed.

These services primarily include slip and falls as well as smaller nominal non-PIP

Fees are collected primarily from third party insurance providers.

These revenues are based on established insurance billing

rates less allowances for contractual adjustments and uncollectible amounts.

These contractual adjustments vary by insurance company and

self-pay patients.

We compute these contractual adjustments and collection allowances based on our historical collection experience.

Completing the paperwork for each case and preparing

it for billing takes approximately ten business days after a procedure is performed.

The majority of claims are then filed electronically

except for those remaining insurance carriers requiring paper filing.

An initial response is usually received within four weeks from electronic

filing and up to nine weeks from paper filing.

Responses may be a payment, a denial, or a request for additional information.

Historical collection rates are estimated using the

most current prior 12-month historical payment and collection percentages.

The Company generally receives all of its collections within

12 months from the date of service.

Historically the Company receives 49.9% of collections billed and these net collection receipts represent

The Company recognizes the remaining 51.1% of uncollectible portions as finance charges as other expenses on the Consolidated

Statement of Operations.

The Company accounts for chargebacks as they occur and records an estimate for expected chargebacks as they are

received from insurance companies.

For the years ended December 31, 2022 and 2021,

we recorded $0 bad debt expense.

Additionally, we have not recorded any estimate for expected chargebacks.

Our contracts for both our contract and service

fees each contain a single performance obligation (providing orthopedic services), as the promise to transfer the individual services

is not separately identifiable from other promises in the contracts and, therefore, not distinct, as a result, the entire transaction

price is allocated to this single performance obligation.

Accordingly, we recognize revenues (net) when the patient receives orthopedic

care services.

Our patient service contracts generally have performance obligations which are satisfied at a point in time.

The performance

obligation is for onsite or off-site care provided.

Patient service contracts are generally fixed-price, and the transaction price is

in the contract.

Revenue is recognized when obligations under the terms of the contract with our patients are satisfied;

generally, at

the time of patient care.

Financial Services Income

We generate revenue from providing tax resolution

services to individuals and business owners that have federal and state tax liabilities by assisting clients to settle outstanding tax

Additionally, services include back taxes, offer in compromise, audit representation, amending tax returns, tax preparation, wage

garnishment relief, removal of bank levies and liens, and other financial challenges.

We recognize revenues for these services as services

are performed.

Rental Income

Our rent revenue is derived from the mobile home

The expired leases are considered month-to-month leases.

In accordance with section ASC 842, the cost of property held for leasing

by major classes of property according to nature or function, and the amount of accumulated depreciation in total, is presented in our

consolidated balance sheets.

There are no contingent rentals included in income.

With the exception of the month-to-month leases, revenue

was recognized on a straight-line basis and amortized into income on a monthly basis, over the lease term.

Property and Equipment .

and equipment are carried at cost.

Expenditures for renewals and betterments that extend the useful lives of property, equipment or leasehold

improvements are capitalized.

Expenditures for maintenance and repairs are charged to expense as incurred.

Depreciation is calculated

using the straight-line method for financial reporting purposes based on the following estimated useful lives:

Classification

Equipment, furniture, and fixtures

Medical equipment

Leasehold improvements

10 years or lease term, if shorter

Goodwill and Other Intangible Assets .

Goodwill and indefinite-lived brands are not amortized,

but are evaluated for impairment annually or when indicators of a potential impairment are present.

Our impairment testing of goodwill

is performed separately from our impairment testing of indefinite-lived intangibles.

The annual evaluation for impairment of goodwill

and indefinite-lived intangibles is based on valuation models that incorporate assumptions and internal projections of expected future

cash flows and operating plans.

The Company believes such assumptions are also comparable to those that would be used by other marketplace

participants.

During the years ended December 31, 2021 and 2020, the Company did not recognize any goodwill impairment.

The Company based

this decision on impairment testing of the underlying assets, expected cash flows, decreased asset value and other factors.

We do not believe that inflation will negatively

impact our business plans.

We do not expect our revenues to be impacted by

seasonal demands for our services.

QUANTITATIVE AND QUALITATIVE DISCLOSURE

ABOUT MARKET RISK.

We are a smaller reporting company as defined

by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

Goodwill and indefinite-lived brands are not amortized but are evaluated for impairment annually or when indicators of a potential impairment

Our impairment testing of goodwill is performed separately from our impairment testing of indefinite-lived intangibles.

annual evaluation for impairment of goodwill and indefinite-lived intangibles is based on valuation models that incorporate assumptions

and internal projections of expected future cash flows and operating plans.

We believe such assumptions are also comparable to those that

would be used by other marketplace participants.

During the years ended December 31, 2022 and 2021, the Company recognized goodwill impairment

in the amount of $2,092,048 and $0, respectively.

The Company based this decision on impairment testing of the underlying assets, expected

cash flows, decreased asset value and other factors.

Valuation of Long-Lived Assets .

In accordance with the provisions of ASC Topic 360-10-5, Impairment or Disposal of Long-Lived Assets , all long-lived assets such

as plant and equipment and construction in progress held and used by our company are reviewed for impairment whenever events or changes

in circumstances indicate that the carrying amount of an asset may not be recoverable.

Recoverability of assets to be held and used is

evaluated by a comparison of the carrying amount of assets to estimated discounted net cash flows expected to be generated by the assets.

If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts

of the assets exceed the fair value of the assets.

Distinguishing Liabilities from Equity.

Company accounts for its series N senior convertible preferred stock subject to possible redemption in accordance with ASC 480, “Distinguishing

Liabilities from Equity”.

Conditionally redeemable preferred shares are classified as temporary mezzanine equity within the Company’s

consolidated balance sheet.

Fair Value Measurements .

is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date.

Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized

based upon the level of judgment associated with the inputs used to measure their fair value.

The fair value hierarchy distinguishes between

(1) market participant assumptions developed based on market data obtained from independent sources (observable inputs), and (2) an entity’s

own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable

The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active

markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

The three levels of the

fair value hierarchy are described below:

Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.

Inputs, other than quoted prices included in Level 1, which are observable for the asset or liability through corroboration with market data at the measurement date.

Unobservable inputs that reflect management's best estimate of what market participants would use in pricing the asset or liability at the measurement date.

Stock-Based Compensation .

for our stock-based compensation in which we obtain employee services in share-based payment transactions under the recognition and measurement

principles of the fair value recognition provisions of section 718-10-30 of the FASB ASC, pursuant to which all transactions in which

goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the

consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

The measurement date

used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the

date on which it is probable that performance will occur.

Generally, all forms of share-based payments, including stock option grants,

warrants and restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based

on estimated number of awards that are ultimately expected to vest.

The expense resulting from share-based payments is recorded in general

and administrative expense in our consolidated statements of operations.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The full text of our audited consolidated financial statements begins

on page F-1 of this annual report.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis