What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2023-06-06 compared with 2022-10-21 · 2184 added, 358 removed, 25 unchanged (99% of the section changed)

CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

Disclosure controls and procedures are designed

to ensure that information required to be disclosed in the reports that are filed and submitted under the Exchange Act is recorded, processed,

summarized, and reported, within the time periods specified by the SEC’s rules and forms.

Disclosure controls and procedures include,

without limitation, controls and procedures designed to ensure that information required to be disclosed in the reports that are filed

under the Exchange Act are accumulated and communicated to management, including the principal executive officer, as appropriate to allow

timely decisions regarding required disclosure.

Under the supervision of and with the participation of its executive officer, the Company

has evaluated the effectiveness of its disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of

the period covered by this Annual Report.

Based on that evaluation, the executive officers of the Company has concluded that, as of the

end of the period covered in this Annual Report, these disclosure controls and procedures were ineffective.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures

that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed,

summarized and reported within the time periods specified in the SEC’s rules forms, and that such information is accumulated and

communicated to our management, including our principal executive officer (our president) and our principal accounting and financial officer

(our chief financial officer) to allow for timely decisions regarding required disclosure.

In designing and evaluating our disclosure

controls and procedures, our 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 our management is required to apply its judgment in evaluation

the cost-benefit relationship of possible controls and procedures.

Our management does not expect that our disclosure

controls or our internal controls over financial reporting will prevent all error and fraud.

A control system, no matter how well conceived

and operated, can provide only reasonable, but no absolute, assurance that the objectives of a control system are met.

Further, any control

system reflects limitations on resources and benefits of a control system must be considered relative to its costs.

These limitations

also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management

override of a control.

A design of a control system is also based upon certain assumptions about potential future condition;

controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

As of December 31, 2021, the year-end period covered

by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our principal

executive officer and our principal financial officer, of the effectiveness of the design and operation of our disclosure controls and

Based on the foregoing, our chief executive officer and chief financial officer have concluded that our disclosure controls

and procedures were not effective as of the end of the period covered by this annual report.

Management’s Report on Internal Control

over Financial Reporting

(as defined in Rule 13a-15(e) under the Exchange Act).

Disclosure controls and procedures refer to controls and other procedures designed

to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized

and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated

to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding

required disclosure.

As required by Rule 13a-15(e) of the Exchange

Act, our management has carried out an evaluation, with the participation and under the supervision of our chief executive officer and

chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as of December 31,

Based upon, and as of the date of this evaluation, our chief executive officer and chief financial officer determined that, because

of the material weaknesses described below, our disclosure controls and procedures were not effective.

Management’s Annual Report on Internal

Control over Financial Reporting

Our management is responsible for establishing

and maintaining adequate internal control over financial reporting as defined in Rule 13a- 15(f) under the Exchange Act, and assessed

the effectiveness of our internal control over financial reporting as of December 31, 2021.

In making this assessment, our management

used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated

A material weakness is a deficiency or a combination of deficiencies, in internal control over financial reporting, such that

there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not

be prevented or detected on a timely basis.

We have identified the following material weaknesses:

As of December 31, 2021, our controls over the control environment were not effective.

Specifically, we have not developed and effectively

communicated to our employees our accounting policies and procedure.

This has resulted in inconsistent practices.

Further, the Board of

Directors does not currently have any independent members and no director qualifies as an audit committee financial expert as defined

in Item 407(d)(5)(ii) of Regulation S-K.

Since these entity level programs have a pervasive effect across the organization, management

has determined that these circumstances constitute a material weakness.

As of December 31, 2021, our controls over financial statement disclosure were not effective.

Specifically, controls were not designed

and in place to ensure that all disclosures required were originally addressed in our consolidated financial statements.

management has determined that this deficiency constitutes a material weakness.

of formal documentation over internal control procedures and environment.

of proper segregation of duties and multiple level of reviews.

of expertise in accounting of derivative liabilities.

Because of these material weaknesses, management

has concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2021, based on

the criteria established in “2013 Internal Control-Integrated Framework”

issued by COSO.

This annual report does not include an attestation

report of the company’s independent registered public accounting firm regarding internal control over financial reporting.

Management’s

report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the SEC that permit

the Company to provide only management’s report.

Changes in Internal Controls

We had a material weakness in our internal control

over financial reporting during the fiscal year ended December 31, 2021 and 2020 that have affected, or are reasonably likely to affect,

our internal control over financial reporting.

and maintaining adequate internal control over financial reporting for our company.

Internal control over financial reporting refers to

the process designed by, or under the supervision of, our principal executive officer and principal financial and accounting officer,

and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of our

financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, and includes those policies

and procedures that:

(1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions

and dispositions of our assets;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial

statements in accordance with GAAP, and that our receipts and expenditures are being made only in accordance with the authorization of

our management and directors;

(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use

or disposition of our assets that could have a material effect on the financial statements.

Our management evaluated the effectiveness of

our internal control over financial reporting as of December 31, 2022.

In making this evaluation, management used the framework established

in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO.

COSO framework summarizes each of the components of a company’s internal control system, including (i) the control environment,

(ii) risk assessment, (iii) control activities, (iv) information and communication, and (v) monitoring.

Based on our evaluation, we determined

that, as of December 31, 2022, our internal control over financial reporting was not effective due to the following material weaknesses.

· We have not developed and effectively communicated to our employees our accounting policies and procedure,

which has resulted in inconsistent practices.

· We lack formal documentation over internal control procedures and environment.

· We lack proper segregation of duties and multiple level of reviews.

· We lack expertise in accounting of derivative liabilities

In order to cure the foregoing material weakness,

we have taken or plan to take the following remediation measures:

· We plan to make necessary changes by providing training to our financial team and our other relevant personnel

on the GAAP accounting guidelines applicable to financial reporting requirements.

· We plan to implement proper documentation procedures for key functional areas, control objectives and

our workflows.

· We plan to reinforce effective compensating controls can improve the design of the current process with

limited human resources.

We intend to complete the remediation of the material

weaknesses discussed above as soon as practicable but we can give no assurance that we will be able to do so.

Designing and implementing

an effective disclosure controls and procedures is a continuous effort that requires us to anticipate and react to changes in our business

and the economic and regulatory environments and to devote significant resources to maintain a financial reporting system that adequately

satisfies our reporting obligations.

The remedial measures that we have taken and intend to take may not fully address the material weaknesses

that we have identified, and material weaknesses in our disclosure controls and procedures may be identified in the future.

discover such conditions, we intend to remediate them as soon as practicable.

We are committed to taking appropriate steps for remediation,

All internal control systems, no matter how well

designed, have inherent limitations.

Therefore, even those systems determined to be effective can provide only reasonable assurance with

respect to financial statement preparation and presentation.

Also, projections of any evaluation of effectiveness to future periods are

subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies

or procedures may deteriorate.

Changes in Internal Controls over Financial

We regularly review our system of internal control

over financial reporting and make changes to our processes and systems to improve controls and increase efficiency, while ensuring that

we maintain an effective internal control environment.

Changes may include such activities as implementing new, more efficient systems,

consolidating activities, and migrating processes.

Except for the matters described above, there

have been no changes in our internal control over financial reporting during the fourth quarter of fiscal year 2022 that have materially

affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION.

DIRECTORS, EXECUTIVE OFFICERS AND

CORPORATE GOVERNANCE.

Officers and Directors

Our directors will serve until successors are

elected and qualified.

Our Chief Executive Officer is appointed by the Board of Directors to a term of one year and serve until a successor

is duly elected and qualified, or until that person resigns or is removed from office.

Our Board of Directors has no nominating, or compensation

Our Board of Directors has two members.

The name, address, age and position of our officers

and directors is set forth below:

Name and Address

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS.

Not applicable.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Directors and Executive Officers

The following sets forth information about our

directors and executive officers as of the date of this report.

Daniel Thompson

Chairman of the Board of Directors

Chairman of the Board Directors

Alex Cunningham

Chief Executive Officer and President, Director

Rollan Roberts II

Chief Operating Officer

Steven Healy, CPA

Chief Financial Officer

Background of our officers and directors

Daniel Thompson , 73, Chairman of

the Board of Directors.

In June of 2010 Thompson was previously appointed Chairman and CEO of Cardiff Lexington formerly a television

and entertainment industry professional with a 30-year career that embraces network and cable advertising sales programming production

and product placement, Mr.

Thompson was president of Creative Entertainment Services, which he founded and successfully sold in a transaction.

Thompson also co-founded and successfully sold an industry service company –

Creative Television Marketing, a producer of short-form

advertising concepts:

Closed- Captioning Sponsorships, 10-Second Promotional Advertising vehicles, and network Game Show Merchandising.

He also oversaw new business for A Creative Group, a full-service entertainment marketing company.

Thompson also founded CableRep

USA, a media sales firm specializing in local market cable advertising, which he sold to Cox Cable in 1981.

Thompson attended Wayne

State University, Bellevue College, and College of Continuing Studies at University of Nebraska at Omaha.

Alex Cunningham, 66, Chief Executive

Officer, President, and Director.

Cunningham has agreed to join the Cardiff Lexington family in June of 2015.

Cunningham's background

is in Business Development.

His focus is on identifying prospects for franchising, mergers and acquisitions specializing in structuring

one or multiple franchise acquisitions;

and/or franchising existing businesses.

He is a founder of Fran Consult, Inc.

a business development

company representing over 300 Franchise operations;

owner, managing partner at AH Cunningham & Associates, LLC 2006 - Present;

Management Consulting, Inc., founder, President & CEO 1996-2005;

managed projects and staff of 85 for 20 years for over 2000 private

or closely held middle-market companies throughout 24 states.

He was a partner at London Capital Corporation 1991 - 1996;

CFO at Vance Communications, Inc.

Honors and Awards:

2010 Consultant of the Year - Franchise, Inc.

National Association of

Franchise Consultants.

MBA - Crummer Graduate School of Business Rollins College - Winter Park, Florida;

BBA's - Finance and Business

Administration University of Kentucky - Lexington, Kentucky.

Rollan Roberts II , 44, Chief

Operating Officer.

Roberts II turned around large, established companies, and has created high growth revenue organizations.

has passionately led with excellence a multi-billion, publicly held database company along with healthcare, technology, manufacturing,

and direct sales companies.

He has led nearly 1,500 employees at a given time servicing clients such as Capital One, IndyMac Bank, State

Farm, Allstate, Nationwide along with federal and state government agencies.

Roberts has authored four business and leadership

books, holds an MBA from Liberty University, a doctorate degree in International Business & Entrepreneurship from California InterContinental

University and was recognized as the “Top 100 Most Influential Floridians”

Healy, CPA 60, Chief Financial Officer brings to Cardiff Lexington over 25 years’

progressive public and private company

experience in finance and operations management.

He is familiar with and has been instrumental in numerous levels of consolidations in

manufacturing, distribution, retail, and service industries with start-ups, multi-location and multi-state companies.

founded Dania Solutions (2017–present) a financial and accounting consulting company working closely with the Board of Directors

of public companies providing SEC reporting including 10Qs, 10Ks, and 8Ks services, month end closings and reconciliations, financial

statements and reports, budgets and variance analysis.

He developed and rolled out performance metrics and has designed cash forecasting

and debt covenants sensitivity models.

Healy served as CFO (2014–2016) of NetTalk.COM, Inc., a public telecommunications

company and app developer which provides low cost phone service and business wireless service via devices and mobile apps using VoIP and

other technologies.

He was CFO (2009-2013) of National Molding, LLC, a private injection molding and tooling manufacturing company which

makes small plastic parts using custom molds primarily for the automotive industry and military with plants in South Florida, Pennsylvania,

and Shanghai, China.

Healy was CFO (2005-2008) of Imperial Industries, Inc., a public manufacturer and distributer of building materials

from 15 distribution centers and 2 manufacturing plants throughout Florida and the Southeast United States.

He managed rapid growth from

both organic and acquisitions.

Healy began his career with Deloitte (f/k/a Touche Ross & Co.) as an auditor and subsequently Audit

He holds a Bachelors in Accounting Degree from the University of Florida graduating with honors

Audit Committee Financial Expert

The functions of the Audit Committee are currently

carried out by our Board of Directors.

Our Board of Directors has determined that we do not have an audit committee financial expert on

our Board of Directors carrying out the duties of the Audit Committee.

The Board of Directors has determined that the cost of hiring a

financial expert to act as a director and to be a member of the Audit Committee or otherwise perform Audit Committee functions outweighs

the benefits of having a financial expert on the Audit Committee.

Our Board of Directors has two members.

Chief Executive Officer, President and Director

Thompson has been Chairman of our board of directors since May 2014.

Prior to serving as Chairman, Mr.

served Chief Executive Officer from February 2005 to May 2014 and also served as a consultant from January 2001 to February 2005.

to joining us, Mr.

Thompson was founder, president and chief executive officer of Creative Entertainment Services, a full-service entertainment

company specializing in Feature Film, Television, Closed Captioning and Game Show fulfilment, from 1982 to December 2001.

also founded CableRep USA, a media sales firm specializing in local market cable advertising, which he sold to Cox Cable in 1981.

Thompson attended Wayne State University, Bellevue College, and College of Continuing Studies at University of Nebraska at Omaha.

Thompson is well suited to serve as a director because of his previous business management and merger and acquisition experience.

Cunningham has been our Chief Executive Officer and President since June 2015 and has served on our board of directors

since June of 2015.

Prior to joining us in 2015, Mr.

Cunningham founded Francnsult, Inc., a business development company representing

franchise operations, where he was in charge of identifying prospects for franchising, mergers and acquisitions, and was the managing

partner at AH Cunningham & Associates, LLC, a firm which provided financial and operational consulting services to owners of small

and medium-sized businesses, EB-5 immigrant investors, passive investment, franchise owners, and franchisors.

Prior to his employment

at Francnsult, Inc.

and AH Cunningham & Associates, Mr.

Cunningham was the president and chief executive officer of Profit Management

Consulting, a management consulting company that assisted in the management of private and closely held middle-market companies, from

1996 to 2005.

From 1991 to 1996, Mr.

Cunningham was a partner at London Capital Corporation, a company which provides merger and acquisition

services to small and medium-sized businesses.

Cunningham received a BBA-Finance and Administration at the University of Kentucky

and an MBA from Rollins College.

We believe Cunningham is well suited to serve as a director because of his previous business management,

financial, and merger and acquisition experience.

Our directors currently have terms which will

end at our next annual meeting of the stockholders or until their successors are elected and qualify, subject to their prior death, resignation

Officers serve at the discretion of the board of directors.

There is no arrangement or understanding between any director

or executive officer and any other person pursuant to which he was or is to be selected as a director, nominee or officer.

Family Relationships

There are no family relationships among any of

our officers or directors.

Involvement in Certain Legal Proceedings

To the best of our knowledge, except as described

below, none of our directors or executive officers has, during the past ten years:

convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offences);

any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association

of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that

subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or

federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type

of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with

persons engaged in any such activity;

found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission or the Commodity Futures Trading

Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated;

the subject of, or a party to, any federal or state judicial or administrative order, judgment, decree, or finding, not subsequently

reversed, suspended or vacated (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation

of any federal or state securities or commodities law or regulation, any law or regulation respecting financial institutions or insurance

companies including, but not limited to, a temporary or permanent injunction, order of disgorgement or restitution, civil money penalty

or temporary or permanent cease-and-desist order, or removal or prohibition order, or any law or regulation prohibiting mail or wire

fraud or fraud in connection with any business entity;

the subject of, or a party to, any sanction or order, not subsequently reversed, suspended or vacated, of any self-regulatory organization

(as defined in Section 3(a)(26) of the Exchange Act (15 U.S.C.

78c(a)(26))), any registered entity (as defined in Section 1(a)(29) of

the Commodity Exchange Act (7 U.S.C.

1(a)(29))), or any equivalent exchange, association, entity or organization that has disciplinary

authority over its members or persons associated with a member.

Governance Structure

We chose to appoint a separate Chairman of the

Board who is not our Chief Executive Officer.

Our board of directors has made this decision based on their belief that a separate Chairman

of the Board can act as a balance to the Chief Executive Officer, who also serves as a non-independent director.

The Board’s Role in Risk Oversight

The board of directors oversees that the assets

of our company are properly safeguarded, that the appropriate financial and other controls are maintained, and that our business is conducted

wisely and in compliance with applicable laws and regulations and proper governance.

Included in these responsibilities is the board’s

oversight of the various risks facing our company.

In this regard, our board seeks to understand and oversee critical business risks.

Our board does not view risk in isolation.

Risks are considered in virtually every business decision and as part of our business strategy.

Our board recognizes that it is neither possible nor prudent to eliminate all risk.

Indeed, purposeful and appropriate risk-taking is

essential for our company to be competitive on a global basis and to achieve its objectives.

While the board oversees risk management, company

management is charged with managing risk.

Management communicates routinely with the board and individual directors on the significant

risks identified and how they are being managed.

Directors are free to, and indeed often do, communicate directly with senior management.

Our board administers its risk oversight function

as a whole by making risk oversight a matter of collective consideration;

however, much of the work will be delegated to committees, which

will meet regularly and report back to the full board.

We plan to establish a standing audit committee, compensation committee and nominating

and corporate governance committee of our board of directors.

We anticipate that the audit committee will oversee risks related to our

financial statements, the financial reporting process, accounting and legal matters, the compensation committee will evaluate the risks

and rewards associated with our compensation philosophy and programs, and the nominating and corporate governance committee will evaluate

risk associated with management decisions and strategic direction.

Material Changes to Director Nomination Procedures

There have been no material changes to the procedures

by which stockholders may recommend nominees to our board of directors since such procedures were last disclosed.

Code of Ethics

We have not adopted a code of ethics that applies

to our President, Chief Executive Officer, Secretary, Treasurer, Chief Financial Officer, or persons performing similar functions, because

of the small number of persons involved in the management of the Company.

Compliance with Section 16 (a) of the Exchange Act

Under Section 16(a) of the Exchange Act, requires

that our directors and executive officers and persons who beneficially own more than 10% of our Common Stock (referred to herein as the

“Reporting Persons”) file with the SEC various reports as to their ownership of and activities relating to our Common Stock.

Such Reporting Persons are required by the SEC regulations to furnish us with copies of all Section 16(a) reports they file.

upon our review of the copies of the forms we have received and representations that no other reports were required, we believe that all

Reporting Persons complied on a timely basis with all filing requirements applicable to them with respect to transactions during fiscal

year ended December 31, 2021 except as stated below.

We have adopted a code of ethics that applies

to all of our directors, officers and employees, including our principal executive officer, principal financial officer and principal

accounting officer.

Such code of ethics addresses, among other things, honesty and ethical conduct, conflicts of interest, compliance

with laws, regulations and policies, including disclosure requirements under the federal securities laws, and reporting of violations

We are required to disclose any amendment to,

or waiver from, a provision of our code of ethics applicable to our principal executive officer, principal financial officer, principal

accounting officer, controller, or persons performing similar functions.

We intend to use our website as a method of disseminating this

disclosure, as permitted by applicable SEC rules.

Any such disclosure will be posted to our website within four (4) business days following

the date of any such amendment to, or waiver from, a provision of our code of ethics.

Section 16(a) Beneficial Ownership Reporting

Section 16(a) of the Exchange Act requires our

directors and executive officers and beneficial holders of more than 10% of our common stock to file with the SEC initial reports of ownership

and reports of changes in ownership of our equity securities.

We believe, based solely on a review of the copies of such reports furnished

to us and representations of these persons, that all reports were timely filed for the year ended December 31, 2022.

EXECUTIVE COMPENSATION.

Summary Compensation Table

Daniel Thompson

Chairman of the Board of Directors

Summary Compensation Table - Years Ended December 31, 2022 and 2021

The following table sets forth information concerning

all cash and non-cash compensation awarded to, earned by or paid to the named persons for services rendered in all capacities during the

noted periods.

No other executive officers received total annual salary and bonus compensation in excess of $100,000.

Name and Principal Position

Alex Cunningham,

President and Chief Executive Officer

Rollan Roberts II

Chief Operating Officer

Chief Executive Officer

Daniel Thompson,

Chairman of the Board

Steven Healy,

Chief Financial Officer

Employment Agreements

The Company has an employment agreement with Mr.

Thompson whereby the Company provides for compensation of $360,000 per year plus additional performance bonus incentives with a term of

July 15, 2020 to December 31, 2025 with automatic extension for additional successive one (1) year renewals terms unless terminated as

defined in the agreement.

The Company has an employment agreement with Mr.

Cunningham whereby the Company provides for compensation of $360,000 per year plus additional performance bonus incentives with a term

of July 15, 2020 to December 31, 2025 with automatic extension for additional successive one (1) year renewals terms unless terminated

as defined in the agreement.

The Company has an employment agreement, with

the Chief Operating Officer, whereby the Company provides for compensation of $120,000 per year plus additional incentives with a term

of June 13, 2016 to December 31, 2021 with automatic extension for additional successive one (1) year renewals terms unless terminated

as defined in the agreement.

The Company has an employment agreement, with

the Chief Financial Officer, whereby the Company provides for compensation of $156,000 per year plus additional incentives with a term

of June 13, 2016 to December 31, 2021 with automatic extension for additional successive one (1) year renewals terms unless terminated

as defined in the agreement.

There are no other stock option plans, retirement,

pension, or profit-sharing plans for the benefit of our sole officer and director other than as described herein.

Long-Term Incentive Plan Awards

We do not have any long-term incentive plans that

provide compensation intended to serve as incentive for performance.

Compensation of Directors

Our directors do not receive any compensation

for serving as members of the Board of Directors.

Indemnification

Under our Articles of Incorporation and Bylaws,

we may indemnify an officer or director who is made a party to any proceeding, including a lawsuit, because of his position, if he acted

in good faith and in a manner he reasonably believed to be in our best interest.

We may advance expenses incurred in defended a proceeding.

To the extent that the officer or director is successful on the merits in a proceeding as to which he is to be indemnified, we must indemnify

him against all expenses incurred, including attorney's fees.

With respect to a derivative action, indemnity may be made only for expenses

actually and reasonably incurred in defended the proceeding, and if the officer or director is judged liable, only by a court order.

indemnification is intended to be to the fullest extent permitted by the laws of the State of Florida.

Regarding indemnification for liabilities arising

under the Securities Act of 1933, which may be permitted to directors or officers under Florida law, we are informed that, in the opinion

of the SEC, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The following table sets forth certain information

regarding our shares of common stock beneficially owned as of March 31, 2021 for (i) each shareholder known to be the beneficial owner

of 5% or more of our outstanding shares of common stock, (ii) each named executive officer and director, and (iii) all executive officers

and directors as a group.

A person is considered to beneficially own any shares:

(i) over which such person, directly or indirectly, exercises

sole or shared voting or investment power, or (ii) of which such person has the right to acquire beneficial ownership at any time within

60 days through an exercise of stock options or warrants.

Unless otherwise indicated, voting and investment power relating to the shares

shown in the table for our directors and executive officers is exercised solely by the beneficial owner or shared by the owner and the

owner’s spouse or children.

Name of Beneficial Owner and Address (1)

Common Stock (1)

Daniel Thompson

401 East Las Olas Blvd.

Lauderdale, Florida

Alex Cunningham

401 East Las Olas Blvd.

Lauderdale, Florida

All directors and officers and 5% shareholders as a group

(1) Based on 166,130,069 shares of common stock issued and outstanding

Effective July 15, 2020, we entered into an employment

agreement with Alex Cunningham, pursuant to which Mr.

Cunningham agreed to serve as President and Chief Executive Officer.

the employment agreement, Mr.

Cunningham will earn $360,000 per year as his base salary.

Cunningham is eligible for an annual bonus

with respect to each fiscal year ending during his employment.

Cunningham is also eligible to receive compensation in shares of preferred

stock in the event that we are unable to pay his base salary in dollars.

The term of employment agreement is from July 15, 2020 to December

31, 2025 with automatic extensions for additional successive one (1) year renewals terms unless terminated by notice of at least three

(3) months from us or Mr.

Cunningham of the termination.

The employment agreement may be terminated immediately for cause (as such term

is defined in the employment agreement), which would cause no severance payment obligations to Mr.

In the event of termination

without cause or for good reason, we must provide Mr.

Cunningham with thirty (30) days prior written notice and would be required to pay

all accrued payments, base salary and $200,000, Mr.

Cunningham’s maximum target bonus amount for the twelve months after the termination.

In the event of termination of employment without cause or for good reason following a change-in-control of our company, Mr.

would be entitled to all accrued payments, a lump sum separation allowance equal to two times the sum of his then base salary and then

target bonus, any annual incentive bonuses, payment of benefits until the earlier of twenty-four months after termination or receipt of

comparable benefits from subsequent employment and all then-outstanding equity awards under any equity plan will vest in full.

The employment

agreement also provides that Mr.

Cunningham may not compete against us for a period of twelve (12) months after termination of his employment

for any reason or solicit employees or customers from us for a period of twenty-four (24) months after termination of his employment for

Effective July 15, 2020, we entered into an employment

agreement with Daniel Thompson, pursuant to which Mr.

Thompson agreed to serve as Chairman of the Board.

Pursuant to the employment agreement,

Thompson will earn $360,000 per year as his base salary.

Thompson is eligible for an annual bonus with respect to each fiscal

year ending during his directorship.

Thompson is also eligible to receive compensation in shares of preferred stock in the event that

we are unable to pay his base salary in dollars.

The term of agreement is from July 15, 2020 to December 31, 2025 with automatic extensions

for additional successive one (1) year renewals terms unless terminated by notice of at least three (3) months from us or Mr.

of the termination.

The employment agreement may be terminated immediately for cause (as such term is defined in the employment agreement),

which would cause no severance payment obligations to Mr.

In the event of termination without cause or for good reason, we must

Thompson with thirty (30) days prior written notice and would be required to pay all accrued payments, base salary and $200,000,

Thompson’s maximum target bonus amount for the twelve months after the termination.

In the event of termination of employment

without cause or for good reason following a change-in-control of our company, Mr.

Thompson would be entitled to all accrued payments,

a lump sum separation allowance equal to two times the sum of his then base salary and then target bonus, any annual incentive bonuses,

payment of benefits until the earlier of twenty-four months after termination or receipt of comparable benefits from subsequent employment

and all then-outstanding equity awards under any equity plan will vest in full.

The employment agreement also provides that Mr.

may not compete against us for a period of twelve (12) months after termination of his employment for any reason or solicit employees

or customers from us for a period of twenty-four (24) months after termination of his employment for any reason.

Outstanding Equity Awards at Fiscal Year-End

No executive officer named above had any unexercised

options, stock that has not vested or equity incentive plan awards outstanding as of December 31, 2022.

Additional Narrative Disclosure

Retirement Benefits

We have not maintained, and do not currently maintain,

a defined benefit pension plan, nonqualified deferred compensation plan or 401(k) plan.

Potential Payments Upon Termination or Change

As described under “—Employment Agreements”

above, Messrs.

Cunningham and Thompson are entitled severance if their employment is terminated without cause.

Director Compensation

Except for our Chairman, no member of our board

of directors received any compensation for services as a director during the fiscal year ended December 31, 2022.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth information regarding

beneficial ownership of our common stock as of March 31, 2023 by (i) each of our executive officers and directors;

(ii) all of our executive

officers and directors as a group;

and (iii) each person who is known by us to beneficially own more than 5% of our common stock.

otherwise specified, the address of each of the persons set forth below is in care of our company, 3200 Bel Air Drive, Las Vegas, NV 89109.

Name and Address of Beneficial Owner

Title of Class

Amount and Nature of Beneficial Ownership (1)

Daniel Thompson, Chairman of the Board (3)

3,202,228,327

Alex Cunningham, Chief Executive Officer and Director (4)

Rollan Roberts II, Chief Operating Officer (5)

All executive officers and directors (3 persons)

3,239,941,955

___________________

(1) Beneficial Ownership is determined

in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities.

Except as otherwise

indicated, each of the beneficial owners listed above has direct ownership of and sole voting power and investment power with respect

to our common stock.

(2) A total of 789,796,735 shares of

common stock are considered to be outstanding pursuant to SEC Rule 13d-3(d)(1) as of the Record Date.

For each beneficial owner above,

any options exercisable within 60 days have been included in the denominator.

(3) Includes 25,004,127 shares of common

stock, 3,167,023,252 shares of common stock issuable upon the conversion of 1 share of series A preferred stock, 26,124 shares of common

stock issuable upon the conversion of 13,062 shares of series B preferred stock, 100,000 shares of common stock issuable upon the conversion

of 1 share of series C preferred stock and 10,074,824 shares of common stock issuable upon the conversion of 5,037,412 shares of series

I preferred stock.

(4) Includes 25,004,128 shares of common

stock, 12,500 shares of common stock issuable upon the conversion of 6,250 shares of series B preferred stock, 100,000 shares of common

stock issuable upon the conversion of 1 share of series C preferred stock and 12,475,000 shares of common stock issuable upon the conversion

of 6,237,500 shares of series I preferred stock.

(5) Represents 122,000 shares of common

stock issuable upon the conversion of 61,000 shares of series B preferred stock.

We do not currently have any arrangements which

if consummated may result in a change of control of our company.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Transactions with Related Persons

The following includes a summary of transactions

since the beginning of our 2021 fiscal year, or any currently proposed transaction, in which we were or are to be a participant and the

amount involved exceeded or exceeds the lesser of $120,000 or one percent of the average of our total assets at year-end for the last

two completed fiscal years, and in which any related person had or will have a direct or indirect material interest (other than compensation

described under Item 11 “ Executive Compensation ” above).

We believe the terms obtained or consideration that we paid

or received, as applicable, in connection with the transactions described below were comparable to terms available or the amounts that

would be paid or received, as applicable, in arm’s-length transactions.

We have obtained short-term advances from Daniel

Thompson, the Chairman of the Board, that are non-interest bearing and due on demand.

As of December 31, 2022 and 2021, we owed the Chairman

$123,192 and $126,765, respectively.

Director Independence

We do not have any independent directors within

the meaning of the rules of the Nasdaq Stock Market.

PRINCIPAL ACCOUNTING FEES AND SERVICES.

Independent Auditors’ Fees

The following is a summary of the fees billed to us for professional

services rendered for the fiscal years ended December 31, 2022 and 2021.

Fees for the year ended December 31, 2022 includes fees paid

to Grassi & Co., CPAs, P.C.

and fees for the year ended December 31, 2021 includes $205,500

paid to Grassi & Co., CPAs, P.C.

, $31,255 paid to Rosenberg Rich Baker Berman PA and

$37,806 paid to Daszkal Bolton LLP.

Year Ended December 31,

Audit-Related Fees

All Other Fees

“Audit Fees” consisted of fees billed

for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial

statements included in our Form 10-K and 10-Q or services that are normally provided by the accountant in connection with statutory and

regulatory filings or engagements.

“Audit-Related Fees” consisted of

fees billed for assurance and related services by the principal accountant that were reasonably related to the performance of the audit

or review of our financial statements and are not reported under the paragraph captioned “Audit Fees” above.

“Tax Fees” consisted of fees billed

for professional services rendered by the principal accountant for tax returns preparation.

“All Other Fees” consisted of fees

billed for products and services provided by the principal accountant, other than the services reported above under other captions of

this Item 14.

Pre-Approval Policies and Procedures

Under the Sarbanes-Oxley Act of 2002, all audit

and non-audit services performed by our auditors must be approved in advance by our board of directors to assure that such services do

not impair the auditors’ independence from us.

In accordance with its policies and procedures, our board of directors pre-approved

the audit service performed by Grassi & Co., CPAs, P.C.

for our financial statements

as of and for the year ended December 31, 2022.

EXHIBIT AND FINANCIAL STATEMENT SCHEDULES.

List of Documents Filed as a Part of This Report:

Index to Financial Statements:

Report of Independent Registered Public Accounting Firm

(PCAOB ID 606)

Consolidated Balance Sheets as of December 31, 2022 and

Consolidated Statements of Operations for the Years Ended

December 31, 2022 and 2021

Consolidated Statements of Stockholders’ Deficiency

for the Years Ended December 31, 2022 and 2021

Consolidated Statements of Cash Flows for the Years Ended

December 31, 2022 and 2021

Notes to Consolidated Financial Statements

Index to Financial Statement Schedules:

All schedules have been omitted because the required information

is included in the financial statements or the notes thereto, or because it is not required.

Index to Exhibits:

See exhibits listed under Part (b) below.

(b) Exhibits:

Articles of Incorporation Cardiff Lexington Corporation, as amended

Amended and Restated Bylaws of Cardiff Lexington Corporation

Certificate of Designation of Series N Senior Convertible Preferred Stock

Description of Securities of Cardiff Lexington Corporation

Common Stock Purchase Warrant issued by Cardiff Lexington Corporation to SILAC Insurance Company on May 21, 2021

Management Agreement, dated June 4, 2021, among by Cardiff Lexington Corporation, Nova Ortho and Spine, PLLC and Dr.

Marc D Brodsky, Michael Wycoki, Jr., PA and Dr.

Kevin Fitzgerald (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on June 7, 2021)

Securities Exchange and Purchase Agreement, dated September 22, 2022, among Cardiff Lexington Corporation, We Three, LLC, d/b/a Affordable Housing Initiative, Edge View Properties, Inc., Platinum Tax Defenders, Nova Ortho and Spine, PLLC and Leonite Capital LLC

Consolidated Senior Secured Convertible Promissory Note issued by Cardiff Lexington Corporation to Leonite Capital LLC on September 22, 2022, as amended

Pledge and Security Agreement, dated September 22, 2022, among Cardiff Lexington Corporation, We Three, LLC, d/b/a Affordable Housing Initiative, Edge View Properties, Inc., Platinum Tax Defenders, Nova Ortho and Spine, PLLC and Leonite Fund I, LP

Securities Purchase Agreement, dated June 1, 2021, between Cardiff Lexington Corporation and SILAC Insurance Company

Guaranty, dated June 1, 2021, by Nova Ortho and Spine, PLLC in favor of SILAC Insurance Company

Security Agreement, dated June 1, 2021, between Nova Ortho and Spine, PLLC and SILAC Insurance Company

Security and Stock Pledge Agreement, dated June 1, 2021, between Cardiff Lexington Corporation and SILAC Insurance Company

Securities Purchase Agreement, dated September 3, 2020, between Cardiff Lexington Corporation and GHS Investments, LLC

Senior Secured Convertible Promissory Note issued by Cardiff Lexington Corporation to GHS Investments, LLC on September 3, 2020

Security and Pledge Agreement, dated September 3, 2020, between Cardiff Lexington Corporation and GHS Investments, LLC

Convertible Promissory Note issued by Cardiff Lexington Corporation to Power Up Lending Group Ltd.

on April 26, 2021

Convertible Promissory Note issued by Cardiff Lexington Corporation to Power Up Lending Group Ltd.

on February 9, 2021

Convertible Promissory Note issued by Cardiff Lexington Corporation to Greentree Financial Group, Inc.

on January 24, 2017

Convertible Promissory Note issued by Cardiff Lexington Corporation to Greentree Financial Group, Inc.

on September 12, 2016

Agreement, dated July 15, 2020, between the Cardiff Lexington Corporation and Alex Cunningham (incorporated by reference to

Exhibit 10.2 to the Annual Report on Form 10-K filed on March 31, 2021)

Agreement, dated July 15, 2020, between Cardiff Lexington Corporation and Daniel Thompson (incorporated by reference to Exhibit

10.1 to the Annual Report on Form 10-K filed on March 31, 2021)

Code of Business Ethics and Conduct

List of Subsidiaries of the registrant

Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certifications of Principal Financial and Accounting Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certifications of Principal Executive Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certifications of Principal Financial and Accounting Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

XBRL Instance Document

Inline XBRL Taxonomy Extension Schema Document

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Inline XBRL Taxonomy Extension Definition Linkbase Document

Inline XBRL Taxonomy Extension Label Linkbase Document

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith

† Executive compensation plan or arrangement

FORM 10-K SUMMARY.

FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID 606 )

Consolidated Balance Sheets as of December 31, 2022 and

2021 (Restated)

Consolidated Statements of Operations for the Years

Ended December 31, 2022 and 2021 (Restated)

Consolidated Statements of Stockholders’

Deficiency for the Years Ended December 31, 2022 and 2021 (Restated)

Consolidated Statements of Cash Flows for the Years

Ended December 31, 2022 and 2021 (Restated)

Notes to Consolidated Financial Statements

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Board of Directors and

Stockholders of Cardiff Lexington Corp and Subsidiaries

Opinion on the Financial Statements

We have audited the accompanying consolidated balance

sheets of Cardiff Lexington Corp and Subsidiaries (the “Company”) as of December 31, 2022 and 2021 (restated), and the related

consolidated statements of operations, stockholders’ equity, and cash flows for the years in the two-year period ended December

31, 2022 and 2021 (restated), and the related notes (collectively referred to as the consolidated financial statements).

In our opinion,

the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31,

2022, and 2021 (restated), and the results of its operations and its cash flows for the years in the two-year period ended December 31,

2022 and 2021 (restated), in conformity with accounting principles generally accepted in the United States of America.

Restatement of Financial Statements

As discussed in Note 2 to the consolidated financial

statements, the Company’s consolidated financial statements as of and for the year ended December 31, 2021 have been restated to

correct certain misstatements.

Substantial Doubt Regarding the Company’s

Ability to Continue as a Going Concern

The accompanying consolidated financial statements

have been prepared assuming that the Company will continue as a going concern.

As described in Note 1 to the consolidated financial statements,

the Company has sustained net losses and has accumulated and working capital deficits, which raise substantial doubt about its ability

to continue as a going concern.

Management’s plans in regard to these matters are described in Note 1.

The consolidated financial

statements do not include any adjustments that might result from the outcome of this uncertainty.

Our opinion is not modified with respect

to this matter.

Basis for Opinion

These consolidated financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements

based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards

of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated

financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we

engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the

consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide

a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are

matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated

to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and

(2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter

in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit

matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter Description

At December 31, 2022, the Company had approximately

$5.7 million of goodwill.

Additionally, during the year ended December 31, 2022, the Company recorded an impairment of goodwill of approximately

$2.1 million related to its financial services segment goodwill.

As discussed in Note 1 and Note 14 to the consolidated financial statements,

goodwill is tested annually for impairment at the reporting unit level, or more frequently if impairment indicators arise.

In accordance with the FASB revised guidance on “Testing

of Goodwill for Impairment,” a company first has the option to assess qualitative factors to determine whether it is more likely

than not that the fair value of a reporting unit is less than its carrying amount.

If the company decides, as a result of its qualitative

assessment, that it is more-likely-than- not that the fair value of a reporting unit is less than its carrying amount, the quantitative

impairment test is mandatory.

Otherwise, no further testing is required.

The quantitative impairment test consists of a two-step

goodwill impairment test.

The first step compares the fair value of each reporting unit to its carrying amount.

If the fair value of each

reporting unit exceeds its carrying amount, goodwill is not considered to be impaired and the second step will not be required.

carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of goodwill to the carrying

value of a reporting unit’s goodwill.

The implied fair value of goodwill is determined in a manner similar to accounting for a business

combination with the allocation of the assessed fair value determined in the first step to the assets and liabilities of the reporting

The excess of the fair value of the reporting unit over the amounts assigned to the assets and liabilities is the implied fair value

This allocation process is only performed for purposes of evaluating goodwill impairment and does not result in an entry

to adjust the value of any assets or liabilities.

An impairment loss is recognized for any excess in the carrying value of goodwill over

the implied fair value of goodwill.

The principal consideration for our determination

that this was a critical audit matter resulted from the Company’s goodwill impairment analyses being complex and highly judgmental

due to the nature of qualitive assessment and, where necessary, the significant estimation required to determine the fair value of the

reporting units.

In particular, the fair value estimate was sensitive to significant assumptions, such as future operating results, cash

flows and the weighted average cost of capital.

These significant assumptions are forward looking and could be materially affected by

future market or economic conditions.

How we addressed the matter:

We obtained an understanding of the Company’s

goodwill impairment evaluation process, including controls over management’s review of the significant assumptions described above.

We considered the material weakness relating to management’s internal controls in determining the nature, timing and extent of audit

tests applied in our audit.

Our audit procedures to test the Company’s

goodwill impairment analyses included evaluating the reasonableness of management’s qualitative assessments and in certain instances

the estimated fair value of the Company’s reporting units.

In evaluating estimated fair value of a reporting unit, we evaluated

management’s significant assumptions used within the fair value method, and tested the completeness and accuracy of the underlying

We compared certain significant assumptions to existing market conditions and information and, where relevant, to the plans of the

Company, including management’s expectations with regard to the Company’s business model, customer base and other relevant

We also considered the historical accuracy of management’s projected cash flows.

Finally, we assessed the adequacy of the

disclosures in the consolidated financial statements.

/s/ Grassi & Co., CPAs, P.C.

We have served as the Company’s auditor since 2022.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31,

(2) The above table does not include 27,488,862

of shares of series A, B, C, D, E, F, F-1, I, J, K, K-1, L, N, and R preferred stock which are convertible into 49,558,962 shares of common

(3) Daniel Thompson owns 1 share of Preferred

“A”, 13,062 shares of Preferred “B”, 1 share of Preferred “C”

and 5,037,412 shares of Preferred “I”

and Alex Cunningham 6,250 shares of Preferred “B”, 1 share of Preferred “C”

and 6,237,500 shares of Preferred

“I”.

CERTAIN RELATIONSHIPS AND RELATED

TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

2022 AND 2021 (Restated)

Current assets

Accounts receivable-net

Prepaid and other current assets

Total current assets

Property and equipment, net

Right of use - assets

Due from related party

LIABILITIES, MEZZANINE EQUITY AND DEFICIENCY IN STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable and accrued expense

Accrued expenses - related parties

Accrued interest

Right of use - liability

Contingent consideration

Due to director & officer

Notes payable

Notes payable - related party

Convertible notes payable, net of debt discounts of $ 46,797 and $ 0 , respectively

Net liabilities of discontinued operations

Total current liabilities

Other liabilities

Notes payable

Operating lease liability – long term

Total liabilities

Mezzanine equity

Redeemable Series N Senior Convertible Preferred Stock - 3,000,000 shares authorized, $0.001 par value, stated value

$ 4.00 , 868,058 shares issued and outstanding at December 31, 2022 and 2021

Redeemable Series X Senior Convertible Preferred Stock - 5,000,000 shares authorized, $0.001 par value, stated value

of $ 4.00 par value;

375,000 and - 0 - shares issued and outstanding at December 31, 2022 and 2021

Total Mezzanine Equity

Stockholders' equity (deficit)

Series B Preferred Stock - 3,000,000 shares authorized, $0.001 par value, stated value of $ 4.00 , 2,131,328 and 1,945,078 shares issued and outstanding at December 31, 2022 and 2021, respectively

Series C Preferred Stock - 500 shares authorized, $0.001 par value, stated value of $ 4.00 , 122 shares issued and outstanding at December 31, 2022 and 2021, respectively

Series D Preferred Stock - 800,000

shares authorized, $0.001 par value, stated value $ 4.00 ,

zero 0 and 37,500 shares issued and outstanding at December 31, 2022 and 2021

Series E Preferred Stock - 1,000,000 shares authorized, $0.001 par value, stated value $ 4.00 , 150,750 shares issued and outstanding at December 31, 2022 and 2021, respectively

Series F Preferred Stock - 800,000

shares authorized, $0.001 par value, stated value $ 4.00 ,

zero 0 and 175,045 shares issued and outstanding at December 31, 2022 and 2021, respectively

Series F-1 Preferred Stock - 800,000 shares authorized, $0.001 par value, stated value $ 4.00 , 35,752 shares issued and outstanding at December 31, 2022 and 2021, respectively

Series H Preferred Stock - 4,859,379

shares authorized, $0.001 par value, stated value $ 4.00 ,

zero 0 and 37,500 shares issued and outstanding at December 31, 2022 and 2021, respectively

Series I Preferred Stock - 500,000,000 shares authorized, $ 0.001 par value, 14,885,000 issued and outstanding at December 31, 2022 and 2021, respectively

Series J Preferred Stock - 10,000,000 shares authorized, $0.001 par value, stated value $ 4 , 1,713,584 and 894,834 shares issued and outstanding at December 31, 2022 and 2021

Series K Preferred Stock - 10,937,500 shares authorized, $ 0.001 par value, 8,200,562 shares issued and outstanding at December 31, 2022 and 2021

Series L Preferred Stock - 100,000,000 shares authorized, $0.001 par value, stated value $ 4.00 , 319,493 shares issued and outstanding at December 31, 2022 and 2021

Series R Preferred Stock - 5,000 shares authorized, $0.001 par value, stated value of $ 1,200 , 165 shares issued and outstanding at December 31, 2022 and 2021

Common Stock;

7,500,000,000 shares authorized, $ 0.001 par value;

789,796,735 and 166,130,069 shares issued and outstanding at December 31, 2022 and 2021, respectively

Treasury stock;

zero 0 and 619,345 shares of Series H Preferred

stock at December 31, 2022 and 2021

( 4,967,686 )

Additional paid-in capital

( 8,554,368 )

( 3,479,127 )

Accumulated deficit

( 70,855,453 )

( 65,118,744 )

Total stockholders' equity

( 1,469,808 )

Total liabilities, mezzanine equity and

stockholders' equity

The accompanying notes are an integral part of

these consolidated financial statements

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND

2021 (Restated)

Financial services

Total revenue

COST OF SALES

Financial services

Total cost of sales

OPERATING EXPENSES

Depreciation expense

Goodwill impairment

Selling, general and administrative

Total operating expenses

INCOME (LOSS) FROM OPERATIONS

OTHER INCOME (EXPENSE)

Gain on divestiture

Gain on debt refinance and forgiveness

Gain on change of estimate

Penalties and fees

( 2,063,916 )

Interest expense

( 6,392,242 )

( 1,906,844 )

Conversion cost penalty and reimbursement

Amortization of debt discounts

( 1,051,264 )

Total other income (expenses)

( 7,162,454 )

( 1,965,736 )

NET LOSS BEFORE DISCONTINUED OPERATIONS

( 5,470,470 )

GAIN FROM DISCONTINUED OPERATIONS

LOSS FROM DISPOSAL OF DISCONTINUED OPERATIONS

( 1,201,171 )

INCOME FROM DISCONTINUED OPERATIONS

NET INCOME (LOSS) FOR THE YEAR

$ ( 5,429,521 )

BASIC LOSS PER SHARE

CONTINUED OPERATIONS

DISCONTINUED OPERATIONS

WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC

CONTINUED OPERATIONS

DISCONTINUED OPERATIONS

The accompanying notes are an integral part of

these consolidated financial statements

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

DEFICIENCY AND MEZZANINE EQUITY

FOR THE YEARS ENDED

DECEMBER 31, 2022 AND 2021 (Restated)

Preferred Stock Series

B, D, E, F, F-1, G, H, L

Preferred Stock

Series C and R

Treasury Stock

Balance December 31, 2020 (Restated)

$ 780,048,201

$ ( 2,365,864 )

Reclassify derivative liabilities to additional paid in capital

Surrender of series I preferred stock

( 180,000,000 )

( 720,000,000 )

Issuance of common stock in exchange for preferred stock

Issuance of series J preferred stock

Issuance of series N preferred stock

Issuance of series B preferred stock

Divestiture of subsidiary

( 2,561,241 )

( 2,601,822 )

Conversion of convertible notes payable

Reclassify warrant liabilities to additional paid in capital

Reclass of derivative liability due to change in accounting policy

Issuance of common stock for services

Distribution of dividends

Balance December 31, 2021 (Restated)

$ ( 4,967,686 )

Issuance of Series B preferred stock for contribution

Issuance of series B preferred stock in exchange for series D and H preferred stock

Cancellation of series D preferred stock

Cancellation of series H preferred stock

Issuance of series B preferred stock for settlement of employment

Issuance of series B preferred stock in exchange for series F

Cancellation of series F preferred stock

Issuance of series J preferred stock

Issuance of series X preferred stock

Issuance of common stock for settlement of RRT

Reclassification for cancelled shares

Distribution of dividend

Balance, December 31, 2022

The accompanying notes are an integral part of

these consolidated financial statements

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

DEFICIENCY (continued)

FOR THE YEARS ENDED

DECEMBER 31, 2022 AND 2021 (Restated)

Paid-in Capital

Shareholders’ Deficit

Convertible Preferred Stock

Mezzanine Equity

Balance December 31, 2020 (Restated)

$ ( 733,733,688 )

$ ( 65,583,255 )

( 8,872,334 )

Reclassify derivative liabilities

to additional paid in capital

Surrender of series I preferred stock

Issuance of common stock in exchange

for preferred stock

Issuance of series J preferred stock

Issuance of series N preferred stock

Issuance of series B preferred stock

Divestiture of subsidiary

Conversion of convertible notes payable

Reclassify warrant liabilities to

additional paid in capital

Reclass of derivative liability due

to change in accounting policy

Issuance of common stock for services

Distribution of dividends

Balance December 31, 2021 (Restated)

$ ( 3,479,127 )

$ ( 65,118,744 )

Issuance of Series B preferred stock

for contribution

Issuance of series B preferred stock

in exchange for series D and H preferred stock

Cancellation of series D preferred

Cancellation of series H preferred

Issuance of series B preferred stock

for settlement of employment

Issuance of series B preferred stock

in exchange for series F

Cancellation of series F preferred

Issuance of series J preferred stock

Issuance of series X preferred stock

Issuance of common stock for settlement

Prior period adjustment

Reclassification for cancelled shares

( 4,967,686 )

Distribution of dividend

( 5,429,521 )

Balance, December 31, 2022

$ ( 8,554,368 )

$ ( 70,855,453 )

( 1,469,808 )

The accompanying notes are an integral part of

these consolidated financial statements

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND

2021 (Restated)

CASH FLOWS FROM OPERATING ACTIVITIES

Net income (loss) from continuing operations

$ ( 5,429,521 )

Adjustments to reconcile net loss to net cash used in operating activities:

Amortization of loan discount

Goodwill impairment

Loss on finance penalties and fees

Gain on refinance of debt

( 1,397,271 )

Gain on forgiveness of debt

(Increase) decrease in:

Accounts receivable

( 2,157,880 )

Right of use - assets

Prepaids and other current assets

Increase(decrease) in:

Accounts payable and accrued expense

Due to from related party

Accrued officers compensation

Accrued interest

Right of use - liabilities

Deferred revenue

Net cash used in operating activities

( 1,100,327 )

Net cash used in Discontinued Operations – Operating

INVESTING ACTIVITIES

Purchase of property and equipment

Acquisition of Nova Ortho and Spine PLLC, net of cash acquired

( 2,320,235 )

Net cash (used in) investing activities

( 2,323,642 )

FINANCING ACTIVITIES

Repayments to directors and officers

Proceeds from convertible notes payable

Proceeds from PPP loan and SBA loans

Repayment of credit line

Repayment to convertible notes payable

Payment of notes payable - 3rd party

Dividend on preferred stock

Issuance of preferred stock

Net cash provided by financing activities

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS, END OF YEAR

SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION

Cash paid during the year for Interest

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Common stock issued upon conversion of notes payable

Common stock issued for settlement of accrued expense

Preferred stock issued for business acquisition

Preferred stock issued upon conversion of notes payable and accrued interest

Preferred stock issued upon exchange of defaulted convertible notes payable

Derivative liability settled upon conversion

The accompanying notes are an integral part of

these consolidated financial statements

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2022 AND 2021

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Operations

Cardiff Lexington Corporation (“Cardiff”)

was originally incorporated on September 3, 1986 in Colorado as Cardiff International Inc.

On November 10, 2005, Cardiff merged with Legacy

Card Company, LLC and changed its name to Cardiff Lexington Corporation.

On August 27, 2014, Cardiff redomiciled and became a corporation

under the laws of Florida.

On April 13, 2021, Cardiff redomiciled and became a corporation under the laws of Nevada.

Cardiff is 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 stockholders.

All of Cardiff’s operations are conducted through, and its income derived from, its various subsidiaries, which includes:

· We Three, LLC dba Affordable Housing Initiative (“AHI”),

which was acquired on May 15, 2014 and sold on October 31, 2022;

· Romeo’s Alpharetta, LLC dba Romeo’s NY Pizza (“Romeo’s”),

which was acquired on September 30, 2014 and sold on July 1, 2020;

· Edge View Properties, Inc.

(“Edge View”), which was

acquired on July 16, 2014;

· Repicci’s Franchise Group, LLC (“Repicci’s”),

which was acquired on August 10, 2016 and sold on June 1, 2020;

· Platinum Tax Defenders (“Platinum Tax”), which was acquired

on July 31, 2018;

· JM Enterprises 1, Inc.

dba Key Tax Group (“Key Tax”),

which was acquired on May 8, 2019 and sold on December 31, 2021;

· Red Rock Travel Group, LLC (“Red Rock”), which was acquired

on July 31, 2018 and discontinued on May 31, 2019;

· Nova Ortho and Spine, PLLC (“Nova”), which was acquired

on May 31, 2021.

Principles of Consolidation

The consolidated financial statements include the

accounts of Cardiff and its wholly owned subsidiaries AHI, Edge View, Platinum Tax, Nova, Red Rock, Romeo’s, Repicci’s and

Key Tax (collectively, the “Company”).

Subsidiaries shown as discontinued operations include Red Rock, Romeo’s, Repicci’s,

Key Tax and AHI.

All significant intercompany accounts and transactions are eliminated in consolidation.

Certain prior period amounts

may have been reclassified for consistency with the current period presentation.

These reclassifications would have no material effect

on the reported consolidated financial results.

Subsidiaries discontinued are shown as discontinued operations.

Use of Estimates

The preparation of financial statements in conformity

with United States generally accepted accounting principles (“U.S.

GAAP”) requires management to make estimates and assumptions

that affect certain reported amounts and disclosures.

Management uses its historical records and knowledge of its business in making estimates.

Accordingly, actual results could differ from those estimates.

COVID-19 Pandemic

of a novel coronavirus throughout the world, including the United States, during early calendar year 2020 has caused widespread business

and economic disruption through mandated and voluntary business closings and restrictions on the movement and activities of people (“COVID-19

The extent of the impact of the COVID-19 Pandemic on the Company's business is highly uncertain and difficult to predict,

as the response to the COVID-19 Pandemic is rapidly evolving in many countries, including the United States and other markets where the

Company operates.

It is expected that many of the Company's customers and suppliers could be impacted by these closings and restrictions

which could materially and adversely affect demand for our products, our ability to obtain or deliver inventory or services, and our ability

to collect accounts receivables as customers face higher liquidity and solvency risk.

Furthermore, capital markets and economies worldwide

have also been negatively impacted by the COVID-19 Pandemic, and it is possible that it could cause an economic downturn, recession, or

Such economic disruption could have a material adverse effect on our business.

Policymakers around the world have responded

with fiscal and monetary policy actions to support the economy.

The magnitude and overall effectiveness of these actions remains uncertain.

Accounts Receivable

Accounts receivable is reported on the balance

sheet at the net amounts expected to be collected by the Company.

Management closely monitors outstanding accounts receivable and charges

off to expense any balances that are determined to be uncollectible which was $ 0 and $ 21,870 as of December 31, 2022 and 2021, respectively.

As of December 31, 2022, and 2021, the Company had accounts receivable of $ 6,604,780 and $ 6,006,399 , respectively.

Accounts receivables

are primarily generated from our subsidiaries in their normal course of business.

Property and Equipment

Property and equipment are carried at cost.

for renewals and betterments that extend the useful lives of property, equipment or leasehold improvements are capitalized.

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:

Schedule of 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.

The Company’s impairment testing

of goodwill is performed separately from its 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, 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 Accounting

Standards Codification (“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 the 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.

Revenue Recognition

On January 1, 2018, the Company adopted ASC 606,

Revenue from contracts with customers (“Topic 606”) , using the modified retrospective method applied to those contracts

which were not completed as of January 1, 2018.

The Company applies 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.

The Company only applies the five-step model when

it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers

to the customer.

At contract inception and once the contract is determined to be within the scope of ASC 606, the Company assesses services

promised within each contract and determines those that are performance obligations and assesses whether each promised service is distinct.

The Company’s financial services sector

reports revenues as services are performed and its healthcare sector reports revenues at the time control of the services transfer to

the customer and from providing licensed and/or certified orthopedic procedures.

The Company’s healthcare subsidiary 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 the Company’s healthcare subsidiary.

They generally do not reflect what the Company is ultimately

paid and therefore are not reported in the consolidated financial statements.

The Company is typically paid amounts based on

established charges per procedure with guidance from the annually updated Current Procedural Terminology (“CPT”) guidelines

(a code set maintained by the American Medical Association through the CPT Editorial Panel), that designates relative value units (“RVU's”)

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 the Company “using a modifier” recognized by each insurance carrier for services, less deductible, co-pay, and contractual

adjustments which are deducted from the calculated fee.

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

Contract Fees (Non-PIP)

The Company has contract fees for amounts earned

from its Non-Personal Injury Protection (“PIP”) related procedures, typically car accidents, and are collected on a contingency

These 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 the Company are remitted to the factor.

Service Fees – Net (PIP)

The Company generates 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 services.

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.

The Company computes these contractual adjustments and collection allowances based on its historical collection

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 six 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,

the Company recorded $0 bad debt expense.

Additionally, the Company has not recorded any estimate for expected chargebacks.

The Company’s contracts for both its 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, the Company recognizes revenues (net)

when the patient receives orthopedic care services.

The Company’s 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

The Company generates revenue from providing tax

resolution services to individuals and business owners that have federal and state tax liabilities

by assisting its clients to settle outstanding tax debts.

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.

The Company recognizes revenues for these services as services are performed.

Rental Income

The Company’s rent revenue is derived from

the mobile home leases.

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 the accompanying consolidated balance sheets as of December 31, 2022 and 2021.

There are no contingent rentals included in

income in the accompanying consolidated statements of operations.

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.

Advertising Costs

Advertising costs are expensed as incurred.

costs are included as a component of cost of sales in the consolidated statements of operations and changes in stockholders’ equity.

The Company recognized advertising and marketing expense of $ 233,798 and $ 1,301,050 for the years ended December 30, 2022 and 2021, respectively.

Fair Value Measurements

Fair value 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

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 inputs).

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.

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.

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

Distinguishing Liabilities from Equity

The Company accounts for its Series N Preferred Shares

and Series X Preferred Shares subject to possible redemption in accordance with ASC 480, “Distinguishing Liabilities from Equity”.

Conditionally redeemable preferred shares are classified as temporary equity within the Company’s consolidated balance sheet.

Stock-Based Compensation

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 ASC.

Pursuant to paragraph 718-10-30-6 of the FASB ASC, 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 the consolidated statements of operations.

Equity Instruments Issued to Parties Other

Than Employees for Acquiring Goods or Services

FASB ASU No 2018-07 prescribes equity instruments

issued to parties other than employees.

Income taxes are determined in accordance with

ASC Topic 740, “ Income Taxes ”.

Under this method, deferred tax assets and liabilities are recognized for the future

tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their

respective tax basis.

Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income

in the years in which those temporary differences are expected to be recovered or settled.

Any effect on deferred tax assets and liabilities

of a change in tax rates is recognized in income in the period that includes the enactment date.

ASC 740 prescribes a comprehensive model for how

companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to

be taken on a tax return.

Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely

than not the position will be sustained upon examination by the tax authorities.

Such tax positions must initially and subsequently be

measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the

tax authority assuming full knowledge of the position and relevant facts.

For the periods ended December 31, 2022 and 2021,

the Company did not have any interest and penalties associated with tax positions and did no t have any significant unrecognized uncertain

tax positions.

Loss per Share

FASB ASC Subtopic 260, Earnings Per Share ,

provides for the calculation of "Basic" and "Diluted" earnings per share.

Basic earnings per common share is computed

by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding during the period.

Diluted earnings per common share is computed by dividing income available to common stockholders by the weighted-average number of shares

of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been

outstanding if the potentially dilutive securities had been issued.

Potentially dilutive securities include outstanding stock options,

warrants, and debts convertible into common stock.

The dilutive effect of potentially dilutive securities is reflected in diluted earnings

per common share by application of the treasury stock method.

Under the treasury stock method, an increase in the fair market value of

the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities.

Going Concern

The accompanying consolidated financial statements

have been prepared using the going concern basis of accounting, which contemplates continuity of operations, realization of assets and

liabilities and commitments in the normal course of business.

The Company has sustained operating losses since its inception and has negative

working capital and an accumulated deficit.

These factors raise substantial doubts about the Company’s ability to continue as a

going concern.

As of December 31, 2022, the Company has sustained recurring losses and accumulated a working capital deficit of approximately

$ 3,136,921 .

The accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and classification

of recorded asset amounts or the amounts and classifications of liabilities that might result if the Company is unable to continue as

a going concern.

The ability of the Company to continue as a going

concern and the appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusions.

has prospective investors and believes the raising of capital will allow the Company to fund its cash flow shortfalls and pursue new acquisitions.

There can be no assurance that the Company 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 it.

Should the Company be unable to raise sufficient funds, it may be required to

curtail its operating plans.

In addition, increases in expenses may require cost reductions.

No assurance can be given that the Company

will be able to operate profitably on a consistent basis, or at all, in the future.

Should the Company not be able to raise sufficient

funds, it may cause cessation of operations.

Recent Accounting Standards

Changes to accounting principles are established

by the FASB in the form of Accounting Standards Update (“ASU”) to the FASB's Codification.

The Company considers the applicability

and impact of all ASU's on its financial position, results of operations, stockholders’ deficit, cash flows, or presentation thereof.

In June 2016, the FASB issued ASU No.

Measurement of Credit Losses on Financial Instruments , which supersedes current guidance by requiring recognition of credit losses

when it is probable that a loss has been incurred.

The new standard requires the establishment of an allowance for estimated credit losses

on financial assets including trade and other receivables at each reporting date.

The new standard will result in earlier recognition

of allowances for losses on trade and other receivables and other contractual rights to receive cash.

In November 2019, the FASB issued

2019-10, Financial Instruments -- Credit Losses (Topic 326), Derivatives and hedging (Topic 815) and Leases (Topic 842) ,

which extends the effective date of Topic 326 for certain companies until fiscal years beginning after December 15, 2022.

The new standard

will be effective for the Company in the first quarter of fiscal year beginning January 1, 2023, and early adoption is permitted.

does not expect that the adoption of this standard will have a material effect on the Company's financial statements.

Reclassifications

Certain accounts relating to the prior year have

been reclassified to conform to the current period’s presentation.

These reclassifications had no effect on the net income or net

assets as previously reported.

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Subsequent to the initial issuance of the Company's

2021 financial statements on October 26, 2022, management identified certain errors and other items requiring restatement of 2021 amounts.

The Company agreed to issue 818,750 additional shares

of series J Preferred Stock with an aggregate stated value equal to $3,275,000 if, as of May 31, 2022, Nova’s trailing twelve months

minimum pre-tax net income exceeded $1,979,320 (the “Milestone”).

The Company finalized its purchase price accounting and

allocation in 2022 and recorded purchase consideration of $6,100,000 associated with the cash consideration, the fair value of the series

J preferred stock and the fair value of the contingent consideration.

The impact of the correction is reflected in $3,275,000 increase

to goodwill and contingent consideration liability on the consolidated balance sheet.

In December 2022, the Company identified an error

in its classification for its series N senior convertible preferred stock for the acquisition of NOVA as presented in its audited balance

sheet as of December 31, 2021.

Pursuant to ASC 250, “Accounting changes and error corrections” issued by FASB and SAB 99 “Materiality”

issued by SEC, the Company determined the impact of the error was immaterial.

The impact of the error correction is reflected in $3,125,002

increase to the mezzanine equity and offsetting decrease to the Series N Preferred Stock equity line item.

The Company and We3 managers entered into a resignation,

release and buyback agreement and addendum, effective October 31, 2022.

The Company presented in prior periods operating loss as loss

from discontinued operations in the amount of $49,300 on the consolidated statement of operations for the year ended December 31, 2021.

The Company identified that NOVA’s accounts

receivable as presented in its balance sheet as of December 31, 2021, was understated due to an error in the collection utilized to estimate

NOVA’s accounts receivable.

The impact of this correction on the accounting estimates is reflected in $1,076,000 increase to accounts

receivable as of December 31, 2021 and $1,076,000 decrease in finance charges for the year ended December 31, 2021.

The following table summarizes the impacts of the

error corrections on the Company's consolidated financial statements for the year ended December 31, 2021 presented below:

Balance sheet

Schedule of restated financial information

Impact of correction of error

December 31, 2021

As previously reported

Current liabilities

Net, liabilities of discontinued operations

Non-current liabilities

Total liabilities

Mezzanine equity

Preferred stock

( 3,472,224 )

Accumulated deficit

( 66,194,744 )

( 8,626,614 )

( 7,203,392 )

Total deficiency in shareholders' equity

$ ( 2,049,002 )

Statement of operations

Impact of correction of error - year

Year ended December 31, 2021

As previously reported

$ ( 129,803 )

Cost of sales

( 3,848,406 )

( 3,768,453 )

Operating expense

( 4,534,352 )

( 4,448,480 )

Income from operations

Other income (expense)

( 3,055,015 )

( 1,965,736 )

Net loss before discontinued operations

( 1,428,913 )

Income (loss) from discontinued operations

Net income (loss)

$ ( 409,707 )

Basic and Diluted Earnings (loss) per Share

Continued Operations

Discontinued Operations

Weighted Average Shares Outstanding - Basic Earnings (loss) per Share

Continued Operations

Discontinued Operations

On May 31, 2021, the Company completed the acquisition

of Nova pursuant to the terms of a securities purchase agreement acquiring 100% of the common shares of NOVA.

The sellers received a cash

payment in the amount of $ 2,500,000 and were issued 894,834 shares of series J preferred stock with an aggregate stated value equal to

In addition, the Company agreed to pay to the sellers 818,750 additional shares of series J preferred stock with an aggregate

stated value equal to $3,275,000 if, as of May 31, 2022, Nova’s trailing twelve months minimum pre-tax net income exceeded $1,979,320

(the “Milestone”).

The Company finalized its purchase price accounting and allocation in 2022 and recorded purchase consideration

of $6,100,000 associated with the cash consideration, the fair value of the series J preferred stock and the fair value of the contingent

consideration.

On August 25, 2022, the parties entered into an addendum

to the securities purchase agreement in which the parties recognized that an unanticipated series of events prevented alternative financing

and equity funding during the initial year that impacted the Milestone outcome, and the parties acknowledged the significant gains and

accomplishments during the initial year.

Based upon those accomplishments and the performance of Nova during its initial year, the Company

agreed to issue the supplemental payment of 818,750 additional shares of series J preferred stock.

The following table summarizes the consideration

transferred to acquire NOVA and the amounts of identified assets acquired and liabilities assumed at the acquisition date:

Schedule of identified assets acquired and liabilities assumed

Nova Ortho and Spine, PLLC

Accounts receivable

Property and equipment

NOVA contributed revenue of $ 5,413,890 and earnings

of $ 638,627 to the Company for the period from June 1, 2021 to December 31, 2021.

The following unaudited pro forma summary presents consolidated

information of the Company as if the business combination had occurred on January 1, 2020.

Schedule of unaudited pro forma information

Pro Forma Years Ended

These pro forma amounts have been calculated after

applying the Company’s accounting policies and adjusting the results of NOVA.

In 2021, the Company

paid legal fees of $ 24,127 and a consulting fee of $ 296,900 of acquisition-related costs.

The legal and consulting fees are included

in general and administrative expenses on the Company’s consolidated statement of operation for the year ended December 31, 2021

and are reflected as an adjustment in computing pro forma earnings for the year ended December 31, 2021 in the table above.

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Schedule of accrued expenses

Accounts payable

Accrued credit cards

Accrued expense – previously factored liability

Accrued income taxes, and other taxes

Accrued professional fees

Accrued advertising

Accrued payroll

Accrue expense - other

Accrued expense - dividend payable

The Company is delinquent paying certain income

and property taxes.

As of December 31, 2022 and 2021, the balance for these taxes, penalties and interest is $ 6,732 and $ 7,553 , respectively.

PLANT AND EQUIPMENT, NET

Property and equipment as of December 31, 2022

and 2021 is as follows:

Schedule of Property and Equipment

Medical equipment

Computer Equipment

Furniture, fixtures and equipment

Leasehold Improvement

accumulated depreciation

Property and equipment, net

For the years ended December 31, 2022 and 2021,

depreciation expense was $ 23,132 and $ 13,886 ,

respectively.

For the years end December 31, 2022 and 2021, the Company recorded depreciation expense of $ 23,132

in operations expense, respectively.

As of December 31, 2022 and 2021, the Company

had 27 acres of land of approximately $ 540,000 .

During the year ended December 31, 2021, the Company sold 3 lots for $ 152,000 .

is currently vacant and is expected to be developed into a residential community.

LINE OF CREDIT

At December 30, 2022 and 2021, the Company had

a revolving line of credit with a financial institution for $ 92,500 and was personally guaranteed by the manager of Platinum Tax Defender.

The loan accrues interest at 10.45 % at December 30, 2022 and 6.70 % at December 31, 2021.

As of December 31, 2022 and 2021, there were

no borrowings against the line of credit.

RELATED PARTY TRANSACTIONS

On February 11, 2021, the Chairman of the Board

and the Chief Executive Officer each converted 62,500 shares of series I preferred stock into 25,000,000 restricted shares of common stock

for a total of 125,000 shares of series I preferred stock into 50,000,000 restricted shares of common stock.

Effective December 28, 2021, the Chairman of the

Board and Chief Executive Officer each forfeited and surrendered for no consideration 90,000,000 shares of series I preferred stock totaling

180,000,000 shares.

From time to time, the previous owner who is currently

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

Amounts owed as of December 31, 2022 and

2021 were $ 37,025 and $ 37 , respectively.

In connection with the acquisition of Edge View

on July 16, 2014, the Company assumed amounts due to previous owners who are current managers Edge View.

These amounts are due on demand

and do not bear interest.

The balance of these amounts are $ 4,979 due from the previous owners as of December 31, 2022 and 2021, respectively.

On August 6, 2022, Edge View terminated one of its two employees for fraud, deceit, larceny, and thievery for selling property belonging

to Edge View and personally taking the $ 162,598 in proceeds.

The Company hired counsel to terminate the employee and handle all legal

matters for return of monies and criminal prosecution.

The Company obtained short-term advances from

2 unchanged sentences

$ 123,192 and $ 126,765 , respectively.

Blank Check Preferred Stock

As of December 31, 2021, the Company has designated

1,000,000,000 shares of Blank Check Preferred Stock zero of which have been issued.

2021 Preferred Stock Activity:

Series J Preferred Stock

On May 31, 2021 as part of the Nova Ortho acquisition,

the Company issued 894,834 shares of preferred stock series J with par value $.001 and a stated value of $4.00, for $3,579,336.

Series N Preferred Stock

On May 31, 2021 and also as part of the Nova Ortho

acquisition, the Company issued 868,056 shares of preferred stock series N with par value $.001 and a stated value of $4.00, for $3,000,000

including a discount of $472,224 which was recorded as a reduction to APIC.

Series Preferred B Stock

Effective March 29, 2021, $265,000 in principle

from convertible debt and conventional debt and $298,195 in accrued interest was converted into 140,799 shares of preferred stock series

B with a $4.00 stated value per share.

This has been reflected in the statement of deficiency in shareholders’

Onn July 22, 2021, the Chief Operating Officer

received 61,000 shares of preferred stock series B in exchange for accrued salaries of $244,000.

See also Note 15 for compensation paid to employees

of the Company.

NOTES AND LOANS PAYABLE

Notes payable at December 31, 2022 and 2021,

respectively, are summarized as follows:

Schedule of notes payable

Notes and Loans Payable

Less current portion

Long-term portion

Long-term debt matures as follows:

Schedule of Maturities of Long-term Debt

Loans and Notes Payable – Unrelated Party

On March 12, 2009, the Company issued a debenture

in the principal amount of $20,000.

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

The Company assigned

all of its receivables from consumer activations of the rewards program as collateral on this debenture.

The balance of the debenture

was $ 10,989 at December 31, 2022 and 2021.

The accrued interest of the debenture was $ 6,229 and $ 4,910 at December 31, 2022 and 2021,

respectively.

On September 7, 2011, the Company issued a promissory

note in the principal amount of $50,000.

The note bore interest at 8% per year and matured on September 7, 2016.

Effective March 29, 2021,

the principal balance of $50,000 and accrued interest of $37,282 were converted into 61,830 shares of series B preferred stock.

On November 17, 2011, the Company issued a promissory

note in the principal amount of $50,000.

The note bore interest at 8% per year and matured on November 17, 2016.

Effective March 29, 2021,

the principal balance of $50,000 and accrued interest of $36,505 were converted into 60,606 shares of series B preferred stock.

On March 11, 2009, the Company issued a promissory

note in the principal amount of $15,000.

The note bore interest at 12% per year and matured on April 29, 2014.

Effective March 29, 2021,

the principal balance of $15,000 and accrued interest of $19,465 were converted into 13,860 shares of series B preferred stock.

On September 9, 2019, the Company issued a promissory

note in the principal amount of $410,000.

The note bore interest at 10% per year and matured on September 9, 2020.

On November 10, 2020,

the Company entered into addendum No.

1 to the note extending the maturity date until December 31, 2021.

On May 4, 2021, the Company entered

into addendum No.

2, whereby the maturity date was extended to November 3, 2021 , accrued interest of $ 22,266 was added to the principal

balance of $ 410,000 resulting in a new principal balance of $ 432,266 , and the interest rate was increased to 24 %.

This note was consolidated

to Note 40-1 on September 22, 2022 (see Note 9).

The principal balance of the note was $ 0 and $ 432,266 at December 31, 2022 and 2021,

respectively.

The accrued interest of the note was $ 0 and $ 137,345 at December 31, 2022 and 2021, respectively.

Paycheck Protection Program (“PPP”)

On April 14, 2020, the Company obtained a PPP

loan in the principal amount of $ 127,400 with an interest rate of 1 % and a maturity date of April 14, 2022 .

This loan was forgiven in

2021 as part of the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) and was recognized as a gain from forgiveness

of debt in the amount of $128,640 recorded in other income and expenses in the consolidated statement of operations during the year ended

December 31, 2021.

On May 8, 2020, the Company obtained a PPP loan

in the principal amount of $ 257,500 with an interest rate of 1 % and a maturity date of May 8, 2022 .

This loan was forgiven in 2021 as

part of the CARES Act and was recognized as a gain from forgiveness of debt in the amount of $261,675 recorded in other income and expenses

in the consolidated statement of operations during the year ended December 31, 2021.

On February 19, 2021, the Company obtained a PPP

loan in the principal amount of $ 229,500 with an interest rate of 1 % and a maturity date of February 19, 2023 .

This loan was forgiven

in 2021 as part of the CARES Act and was recognized as a gain from forgiveness of debt in the amount of $ 231,374 recorded in other income

and expenses in the consolidated statement of operations during the year ended December 31, 2021.

On February 23, 2021, the Company obtained a PPP

loan in the principal amount of $ 117,550 with an interest rate of 1 % and a maturity date of February 23, 2023 .

This loan was forgiven

in 2021 as part of the CARES Act and was recognized as a gain from forgiveness of debt in the amount of $ 118,130 recorded in other income

and expenses in the consolidated statement of operations during the year ended December 31, 2021.

Small Business Administration (“SBA”)

On June 2, 2020, the Company obtained an SBA loan

in the principal amount of $ 150,000 with an interest rate of 3.75 % and a maturity date of June 2, 2050 .

The principal balance and accrued

interest at December 31, 2022 was $ 144,609 and $ 5,723 , respectively, and principal and accrued interest at December 31, 2021 was $ 147,677

and $ 5,723 , respectively.

On October 7, 2020, Key Tax obtained an SBA loan

in the principal amount of $ 150,000 with an interest rate of 3.50 % and a maturity date of October 7, 2050 .

On August 31, 2021, this SBA

loan was amended to add an additional $ 200,000 of principal to the original note and the interest rate was increased to 3.75 %.

The principal

and accrued interest at December 31, 2021 was $ 349,900 and $ 9,608 , respectively.

Key Tax was divested on December 31, 2021 and this loan

was eliminated.

On April 12 and June 16, 2020, the Company obtained

SBA loans totaling $ 20,000 with an interest rate of 5 % and maturity dates one year from advance, if not forgiven.

This was the grant a

part of the EIDL loan and was recognized as other income in the amount of $ 10,000 recorded in other income and expenses in the consolidated

statement of operations during the year ended December 31, 2022 and 2021, accordingly.

The principal balance and accrued interest at December

31, 2022 were both $ 0 and principal and accrued interest at December 31, 2021 was $ 10,000 and $ 860 , respectively.

CONVERTIBLE NOTES PAYABLE

As of December 31, 2022 and 2021, the Company

had convertible debt outstanding net of amortized debt discount of $ 3,515,752 and $ 2,077,753 , respectively.

During the year ending December

31, 2022, the Company received proceeds of $ 1,490,706 from convertible notes and repaid $ 5,908 to convertible noteholders.

year ending December 31, 2021, the Company received proceeds of $ 444,500 from convertible notes and repaid $ 66,315 to convertible noteholders.

There are debt discounts associated with the convertible debt of $ 46,798 and $ 0 at December 31, 2022 and 2021, respectively.

ended December 31, 2022 and 2021, the Company recorded amortization of debt discounts of $ 253,823 and $ 1,051,264 , respectively.

On September 22, 2022, the Company entered into

a security exchange and purchase agreement with its largest lender to consolidate all promissory notes held by them and related accrued

interest in exchange for (1) one consolidated senior secured convertible promissory note (“New Promissory Note”) in the amount

of $ 2,600,000 and (2) 375,000 shares of series X senior convertible preferred stock totaling $ 1,500,000 with a par value of $0.001, stated

value of $ 4.00 , convertible into common shares at a 1:1 conversion rate, non-dilutive and non-voting shares.

Prior to conversion, all

promissory notes with this lender totaled to $ 4,791,099 consisting of principal of $ 3,840,448 and accrued interest of $ 950,651 resulting

in a gain on debt consolidation of $ 1,397,271 .

During the year ended December 31, 2021, the Company

converted $ 885,691 of convertible debt, $ 388,143 in accrued interest and $ 13,000 in penalties and fees into 109,234,241 shares of the

Company’s common stock.

In addition to the conversions of convertible debt into common stock, the Company converted convertible

debt principal of $150,000 and accrued interest of $225,800 into 140,799 shares of series B preferred stock.

Convertible notes as of December 31, 2022 and

2021 are summarized as follows:

Schedule of convertible notes summary

Convertible notes payable

Discounts on convertible notes payable

Total convertible debt less debt discount

Current portion

Long-term portion

The following is a schedule of convertible notes

payable as of and for the year ended December 31, 2022.

Schedule of convertible notes details

Principal Balance 12/31/21

Debt Consolidation

Principal Balance 12/31/22

Accrued Interest on Convertible Debt at 12/31/21

Interest Expense On Convertible Debt For the Period Ended 12/31/22

Accrued Interest on Convertible Debt at 12/31/22

Unamortized Debt Discount At 12/31/22

$ ( 2,492,733 )

On October 28, 2016, the Company 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, the Company 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, the Company 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 March 16, 2017, the Company issued a convertible

promissory note in the principal amount of $40,000, which matured on March 16, 2018.

Note 11-2 was consolidated to Note 40-1 on September

On July 24, 2018, the Company issued a convertible

promissory note in the principal amount of $237,909, which matured on January 24, 2019.

Note 13-2 was consolidated to Note 40-1 on September

Notes 22, 22-1 and 22-3

On July 10, 2018, the Company issued a convertible

promissory note in the principal amount of $1,040,000 with an original issue discount of $103,000.

On February 20, 2019, the Company executed

an addendum to this note, whereby the Company will receive two additional tranches.

On February 20, 2019, the Company received $55,216

less expenses of $5,216 resulting in net cash to the Company of $50,000 and on April 10, 2019, the Company received $55,616 less expenses

of $5,616 resulting in net cash of $50,000, which was paid directly to a certain vendor.

The notes 22, 22-1 and 22-3 matured on January

Note 22, 22-1 and 22-3 were consolidated to Note 40-1 on September 22, 2022.

On August 10, 2017, the Company 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, 29 - 1 and 29-2

On May 10, 2019, the Company 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

The amount assigned was the existing principal amount of $150,000 and accrued interest of $5,917.81, which was issued as Note 29-1,

plus a new convertible promissory note in the principal amount of $62,367.12, which was issued as Note 29-2.

Notes 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, the Company issued a convertible

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

On May 22, 2019, the Company issued a convertible

promissory note in the principal amount of $25,000 from a draw on a line of credit, which matured on May 22, 2020.

Note 32 is currently

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

On May 18, 2020, the Company entered into a 6%

Convertible Promissory Note with an unrelated entity in the amount $63,000 and expenses of $3,000 resulting in net cash to the company

Note 34 matured May 18, 2021.

On August 24, 2020, the Company entered into a

6% Convertible Promissory Note with an unrelated entity in the amount $85,000 with expenses of $3,500 resulting in net cash to the company

Note 35 matured August 24, 2021.

Note 36-1, 36-2 and 36-3, 36-4, 36-5, 36-6,

36-7, 36-8, 36-9, 36-10 and 36-11

On September 3, 2020, the Company issued a convertible

promissory note in the principal amount of $733,500, with an original issue discount of $183,500, which could be drawn in several tranches.

On September 3, 2020, the first tranche executed the first tranche in the principal amount of $122,400, less original issue discount of

$30,000, which matured on January 3, 2021 (Note 36-1).

On November 3, 2020, the Company executed the

second tranche in the principal amount of $120,000, less original issue discount of $30,000, which matured on March 3, 2021 (Note 36-2).

On December 29, 2020, the Company executed the third tranche in the principal amount of $120,000, less original issue discount of $30,000,

which matured on April 29, 2021 (Note 36-3).

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

On September 3, 2020, the Company 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.

September 3, 2020, the Company 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, the Company 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, the Company 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 37-3).

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, the Company 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, the Company 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

On September 22, 2022, the Company 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

On November 4, 2022, the Company 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, the Company 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, the Company 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.

CAPITAL STOCK

Preferred Stock

The Company has designated multiple series of

preferred stock, including 4 shares of series A preferred stock, 3,000,000 shares of series B preferred stock, 500 shares of series C

preferred stock, 1,000,000 shares of series E preferred stock, preferred stock, 800,000 shares of series F-1 preferred stock, 500,000,000

shares of series I preferred stock, 10,000,000 shares of series J preferred stock, 100,000,000 shares of series L preferred stock, 3,000,000

shares of series N senior convertible preferred stock, 5,000 shares of series R preferred stock and 5,000,000 shares of series X senior

convertible preferred stock.

The following is a description of the rights and

preferences of each series of preferred stock.

Redeemable Preferred Stock

The Company recognized Series N Senior Convertible

Preferred Stock and Series X Senior Convertible Preferred Stock as mezzanine equity since the redeemable preferred stock may be redeemed

at the option of the holder, but is not mandatorily redeemable.

Series N Senior Convertible Preferred Stock

The series N senior convertible

preferred stock ranks, with respect to the payment of dividends and the distribution of assets upon liquidation, (i) senior to all common

stock and each other class or series that is not expressly made senior to or on parity with the series N senior convertible preferred

(ii) on parity with each class or series that is not expressly subordinated or made senior to the series N senior convertible preferred

and (iii) junior to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company

and each class or series that is expressly made senior to the series N senior convertible preferred stock.

Dividend Rights.

Holders of series N senior

convertible preferred stock are entitled to dividends at a rate per annum of 12.0% of the stated value ($4.00 per share);

provided that

upon an event of default (as defined in the certificate of designation for the series N senior convertible preferred stock), such rate

shall increase by 8% per annum.

Dividends shall accrue from day to day, whether or not declared, and shall be cumulative.

Dividends shall

be payable quarterly in arrears on each dividend payment date in cash or common stock at the Company’s discretion.

Dividends payable

in common stock shall be calculated based on a price equal to eighty percent (80%) of the volume weighted average price for the common

stock on the Company’s principal trading market (the “VWAP”) during the five (5) trading days immediately prior to the

applicable dividend payment date.

Liquidation Rights.

Subject to the rights

of creditors and the holders of any senior securities or parity securities (in each case, as defined in the certificate of designation),

upon any liquidation of the Company or its subsidiaries, before any payment or distribution of the assets of the Company (whether capital

or surplus) shall be made to or set apart for the holders of junior securities (as defined in the certificate of designation), including

the common stock, each holder of outstanding series N senior convertible preferred stock shall be entitled to receive an amount of cash

equal to 115% of the stated value of $4.00 per share, plus an amount of cash equal to all accumulated accrued and unpaid dividends thereon

(whether or not declared) to, but not including the date of final distribution to such holders.

Voting Rights .

Holders of series N senior

convertible preferred stock do not have any voting rights;

provided that, so long as any shares of series N senior convertible preferred

stock are outstanding, the affirmative vote of holders of a majority of the series N senior convertible preferred stock, which majority

must include SILAC Insurance Company so long as it holds any shares of series N senior convertible preferred stock, voting as a separate

class, shall be necessary for approving, effecting or validating any amendment, alteration or repeal of any of the provisions of the certificate

of designation or prior to the Company’s (or Nova’s) creation or issuance of any parity securities or new indebtedness (as

defined in the certificate of designation);

provided that the foregoing shall not apply to any financing transaction the use of proceeds

of which will be used to redeem the series N senior convertible preferred stock and the warrants issued in connection therewith.

the affirmative vote of holders of 66% of the series N senior convertible preferred stock, voting as a separate class, is required prior

to the Company’s (or Nova’s) creation or issuance of any senior securities.

Conversion Rights .

Each shares of series

N senior convertible preferred stock, plus all accrued and unpaid dividends thereon, shall be convertible, at the option of the holder

thereof, at any time and from time to time, into such number of fully paid and nonassessable shares of common stock determined by dividing

the stated value ($4.00 per share), plus the value of the accrued, but unpaid, dividends thereon, by a conversion price of $0.012 per

share (subject to standard adjustments in the event of any stock splits, stock combinations, stock reclassifications, dividends paid in

common stock, sales of substantially all assets, mergers, consolidations or similar transactions);

provided that in no event shall the

holder of any series N senior convertible preferred stock be entitled to convert any number of shares that upon conversion the sum of

(i) the number of shares of common stock beneficially owned by the holder and its affiliates and (ii) the number of shares of common stock

issuable upon the conversion of the series N senior convertible preferred stock with respect to which the determination of this proviso

is being made, would result in beneficial ownership by the holder and its affiliates of more than 4.99% of the then outstanding common

This limitation may be waived (up to a maximum of 9.99%) by the holder and in its sole discretion, upon not less than sixty-one

(61) days’ prior notice to the Company.

Redemption Rights .

The Company may redeem the

series N senior convertible preferred stock at any time by paying in cash therefore a sum equal to 115% of the stated value of $4.00 per

share, plus the amount of accrued and unpaid dividends and any other amounts due pursuant to the terms of the certificate of designation.

In addition, a ny holder may require the Company to redeem some or all of its shares of series

N senior convertible preferred stock on the same terms after a period of twelve months from the date of issuance;

provided, however, that

such redemption right shall only be exercisable if the Company raises at least $5,000,000 or the

common stock is trading on the Nasdaq Stock Market or the New York Stock Exchange.

Series X Senior Convertible Preferred Stock

The series X senior convertible

preferred stock ranks, with respect to the payment of dividends and the distribution of assets upon liquidation, (i) senior to all common

stock and each other class or series that is not expressly made senior to or on parity with the series X senior convertible preferred

(ii) on parity with each class or series that is not expressly subordinated or made senior to the series X senior convertible preferred

and (iii) junior to the series N senior convertible preferred stock, all indebtedness and other liabilities with respect to assets

available to satisfy claims against the Company and each class or series that is expressly made senior to the series X senior convertible

preferred stock.

Dividend Rights.

Holders of series X senior

convertible preferred stock are entitled to dividends at a rate per annum of 10.0% of the stated value ($4.00 per share);

provided that

upon an event of default (as defined in the certificate of designation for the series X senior convertible preferred stock), such rate

shall increase by 5% per annum.

Dividends shall accrue from day to day, whether or not declared, and shall be cumulative.

Dividends shall

be payable quarterly in arrears on each dividend payment date.

Liquidation Rights.

Subject to the rights

of creditors and the holders of any senior securities, including the series N senior convertible preferred stock, or parity securities

(in each case, as defined in the certificate of designation), upon any liquidation of the Company or its subsidiaries, before any payment

or distribution of the assets of the Company (whether capital or surplus) shall be made to or set apart for the holders of junior securities

(as defined in the certificate of designation), including the common stock, each holder of outstanding series N senior convertible preferred

stock shall be entitled to receive an amount of cash equal to 100% of the stated value of $4.00 per share, plus an amount of cash equal

to all accumulated accrued and unpaid dividends thereon (whether or not declared) to, but not including the date of final distribution

to such holders.

Voting Rights .

Holders of series X senior

convertible preferred stock do not have any voting rights;

provided that, so long as any shares of series X senior convertible preferred

stock are outstanding, the affirmative vote of holders of a majority of the series X senior convertible preferred stock, which majority

must include Leonite Capital LLC so long as it holds any shares of series X senior convertible preferred stock, voting as a separate class,

shall be necessary for approving, effecting or validating any amendment, alteration or repeal of any of the provisions of the certificate

of designation or prior to the creation or issuance of any parity securities or new indebtedness (as defined in the certificate of designation);

provided that the foregoing shall not apply to any financing transaction the use of proceeds of which will be used to redeem the series

X senior convertible preferred stock and the warrants issued in connection therewith.

In addition, the affirmative vote of holders of

66% of the series X senior convertible preferred stock, voting as a separate class, is required prior to the creation or issuance of any

senior securities.

Conversion Rights .

Each shares of series

X senior convertible preferred stock, plus all accrued and unpaid dividends thereon, shall be convertible, at the option of the holder

thereof, at any time and from time to time, into such number of fully paid and nonassessable shares of common stock determined by dividing

the stated value ($4.00 per share), plus the value of the accrued, but unpaid, dividends thereon, by a conversion price equal to the lower

of (i) the lowest VWAP during the five (5) trading days immediately prior to the applicable conversion date and (ii) the price per share

paid in any subsequent financing (the “Fixed Price”).

The Fixed Price is subject to standard adjustments in the event of any

stock splits, stock combinations, stock reclassifications, dividends paid in common stock, sales of substantially all assets, mergers,

consolidations or similar transactions, as well as a price based antidilution adjustment, pursuant to which, subject to certain exceptions,

if the Company issues common stock at a price lower than the Fixed Price, the Fixed Price shall decrease to such lower price.

Notwithstanding

the foregoing, in no event shall the holder of any series X senior convertible preferred stock be entitled to convert any number of shares

that upon conversion the sum of (i) the number of shares of common stock beneficially owned by the holder and its affiliates and (ii)

the number of shares of common stock issuable upon the conversion of the series X senior convertible preferred stock with respect to which

the determination of this proviso is being made, would result in beneficial ownership by the holder and its affiliates of more than 4.99%

of the then outstanding common stock.

This limitation may be waived (up to a maximum of 9.99%) by the holder and in its sole discretion,

upon not less than sixty-one (61) days’ prior notice to the Company.

Redemption Rights .

Commencing on September

22, 2023, a ny holder may require the Company to redeem its shares by the payment in cash

therefore of a sum equal to 100% of the stated value of $4.00 per share, plus the amount of accrued and unpaid dividends and any other

amounts due pursuant to the terms of the certificate of designation;

provided however, that in the event that the Company completes a

public offering prior to the redemption date, then any holder may only cause the Company to redeem any outstanding series X senior convertible

preferred stock by paying such redemption price in twelve (12) equal monthly installments with the first such payment due on the date

that is six (6) months following the date that the Company completes such public offering.

Non-redeemable Preferred Stock

Series A Preferred Stock

Each share of series A preferred stock is entitled

to a number of votes and converts to a number of shares equal to the sum of all shares of common stock and series B preferred stock issued

and outstanding, divided by the number shares of series A preferred stock held.

Holders of series A preferred stock do not have any dividend,

liquidation or redemption rights.

Series B Preferred Stock

Each share of series B preferred stock is entitled

to one (1) vote on all matters submitted to a vote of stockholders.

Each share of series B preferred stock is convertible into two (2)

shares of common stock (subject to adjustment for forward stock splits but not reverse stock splits).

Holders of series B preferred stock

do not have any dividend, liquidation or redemption rights.

Series C Preferred Stock

Each share of series C preferred stock is entitled

to one (1) vote on all matters submitted to a vote of stockholders.

Each share of series C preferred stock is convertible into 100,000

shares of common stock (subject to adjustment for forward stock splits but not reverse stock splits).

If the Company lists on an exchange,

it has the right to repurchase these shares at a purchase price of $ 50,000 per share.

Holders of series C preferred stock do not have

any dividend, liquidation or redemption rights.

Series D Preferred Stock

Each share of series D preferred stock is entitled

to one (1) vote on all matters submitted to a vote of stockholders.

Each share of series D preferred stock is convertible into two (2)

shares of common stock.

Holders of series D preferred stock do not have any dividend, liquidation or redemption rights.

Series E Preferred Stock

Each share of series E preferred stock is entitled

to one (1) vote on all matters submitted to a vote of stockholders.

Each share of series E preferred stock is convertible into two (2)

shares of common stock.

Holders of series E preferred stock do not have any dividend, liquidation or redemption rights.

Series F Preferred Stock

Each share of series F preferred stock is entitled

to one (1) vote on all matters submitted to a vote of stockholders.

Each share of series F preferred stock is convertible into two (2)

shares of common stock.

Holders of series F preferred stock do not have any dividend, liquidation or redemption rights.

Series F-1 Preferred Stock

Each share of series F-1 preferred stock is convertible

into two (2) shares of common stock.

Holders of series F-1 preferred stock do not have any voting, dividend, liquidation or redemption

Series H Preferred Stock

Each share of series H preferred stock is entitled

to one (1) vote on all matters submitted to a vote of stockholders.

Each share of series H preferred stock is convertible into two (2)

shares of common stock.

Holders of series H preferred stock do not have any dividend, liquidation or redemption rights.

Series I Preferred Stock

On December 31, 2021 Daniel Thompson and Alex

Cunningham Shareholders and officers of the Company each forfeited and surrendered for no consideration 90,000,000 Preferred Class I Shares

resulting in aggregate of 180,000,000 outstanding Preferred Class I Shares returned to the Treasury.

11, 2021 the Chairman of the Board and the CEO and each converted 62,500 Preferred Series I shares into 25,000,000 restricted common shares

for a total of 125,000 Preferred Series I shares into 50,000,000 restricted common shares.

Stock Issuances:

9, 2021 - the Company issued 351,604 shares of common stock in connection with a service agreement.

28, 2021 –

180,000,000 shares were surrendered back to the treasury.

29, 2021 - the Company issued 1,275,427 shares of common stock in connection with a service agreement.

Effective May 12, 2020 the Company completed a

reverse stock split of 10,000:1 for common shares.

In conjunction with the reverse stock split, the Company canceled 826 partial rounding

shares to balance the shares outstanding.

During the years ended December 31, 2021 and 2020,

respectively, the Company converted $855,691 and $196,291 of convertible debt and $208,143 and $74,866 in interest, penalties, and fees

into 109,234,241 and 5,014,696 shares of the Company’s commons stock.

PRINCIPAL ACCOUNTING FEES AND SERVICES.

The aggregate fees billed for the years ended

December 31, 2021 and 2020 for professional services rendered by the principal accountant for the audit of its annual financial statements

included in Form 10-K/A (“Audit Fees”), (2) tax compliance, advice, and planning (“Tax Fees”), and (3) other professional

services rendered by the Company’s principal accountant (“Other Fees”):

Daszkal Bolton

Rosenberg Rich Baker Berman & Company

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Description 1

Articles of Incorporation , (incorporated by reference to the Company’s Form 10 filed with the SEC on March 27, 2002

Articles of Amendment , (incorporated by reference to the Company’s Form 10 filed with the SEC on March 27, 2002

Articles of Amendment adopted July 18, 2012 , (incorporated by reference to the Company’s Form 8-K/A filed with the SEC on August 9, 2012

Articles of Incorporation dated August 22, 2014 , (incorporated by reference to the Company’s Form 8-K filed with the SEC on September 15, 2014

Bylaws , filed with the Company’s Form 8-K on September 15, 2014

Description of Cardiff Lexington Corp.

Employment Agreement by and between the Company and Daniel Thompson

Employment Agreement by and between the Company and Alex Cunningham

Employment Agreement by and between the Company and Dr.

Rollan Roberts

Employment Agreement by and between the Company and Patrick Lambert

List of Subsidiaries of the Company

Certification by the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification by the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification by the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification by the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

XBRL Instance Document

XBRL Taxonomy Schema

XBRL Taxonomy Calculation Linkbase

XBRL Taxonomy Definition Linkbase

XBRL Taxonomy Label Linkbase

XBRL Taxonomy Presentation Linkbase

Each share of series I preferred stock is entitled

to five (5) votes on all matters submitted to a vote of stockholders.

Each share of series I preferred stock is convertible into two (2)

shares of common stock.

Holders of series I preferred stock do not have any dividend, liquidation or redemption rights.

Series J Preferred Stock

Each share of series J preferred stock is entitled

to one (1) vote on all matters submitted to a vote of stockholders.

Each share of series J preferred stock is convertible into two (2)

shares of common stock.

Holders of series J preferred stock do not have any dividend, liquidation or redemption rights.

Series K Preferred Stock

Each share of series K preferred stock is entitled

to one (1) vote on all matters submitted to a vote of stockholders.

Each share of series K preferred stock is convertible into 1.25 shares

of common stock.

Holders of series K preferred stock do not have any dividend, liquidation or redemption rights.

Series L Preferred Stock

Each share of series L preferred stock is entitled

to one (1) vote on all matters submitted to a vote of stockholders.

Each share of series L preferred stock is convertible into two (2)

shares of common stock.

Holders of series L preferred stock do not have any dividend, liquidation or redemption rights.

Series R Preferred Stock

Each share of series R preferred stock is entitled

to one (1) vote on all matters submitted to a vote of stockholders.

Each share of series B preferred stock is convertible into one (1)

shares of common stock (subject to adjustment for forward stock splits but not reverse stock splits).

Holders of series R preferred stock

do not have any dividend, liquidation or redemption rights.

Preferred Stock Transactions

During the year ended December 31, 2022, the Company

executed the following transactions:

· In the second quarter of 2022, 37,500 shares of series D preferred stock were cancelled and exchanged

for 37,500 shares of series B preferred stock and 37,500 shares of series H preferred stock were cancelled and exchanged for 37,500 shares

of series B preferred stock.

· On September 7, 2022, the Company issued 818,750 shares of series J preferred stock in connection with

the acquisition of Nova.

What changed 10-K

Item 9A. Controls and Procedures