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Item 7. Management’s Discussion and Analysis

2024-07-24 compared with 2022-10-26 · 618 added, 332 removed, 6 unchanged (99% of the section changed)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS.

This Management’s Discussion and Analysis

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

and our expected future operations and actions.

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

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

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

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

These forward-looking statements are only our predictions

and involve numerous assumptions, risks, and uncertainties.

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

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

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

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

The following discussion of our consolidated financial

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

notes included in this report.

The following table provides segment reporting

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

For detailed financial information,

see the audited consolidated financial statements included in this report.

Affordable Housing Rentals

Financial Services

Cardiff Lexington

Consolidated assets

Affordable Housing Rentals

Financial Services

Consolidated revenues

Cost of Sales:

Affordable Housing Rentals

Financial Services

Consolidated cost of sales

Income (Loss) from operations from subsidiaries

Affordable Housing Rentals

Financial Services

Income (loss) from operations from subsidiaries

Loss from operations from Cardiff Lexington

$ (1,865,888 )

$ (1,573,435 )

Total income (loss) from operations

Income (Loss) before taxes

Affordable Housing Rentals

Financial Services

Corporate, admin and other non-operating expenses

Consolidated loss before taxes

$ (2,836,893 )

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

The following discussion and analysis summarizes

the significant factors affecting our operating results, financial condition, liquidity, and cash flows as of and for the periods presented

The following discussion and analysis should be read in conjunction with our financial statements and the related notes thereto

included elsewhere in this report.

The discussion contains forward-looking statements that are based on the beliefs of management, as

well as assumptions made by, and information currently available to, management.

Actual results could differ materially from those discussed

in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report,

particularly in the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements.”

We are an acquisition holding company focused

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

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

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

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

80% will be targeted to established

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

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

All of our operations are conducted through, and

our income derived from, our various subsidiaries.

As of December 31, 2023, we operate the following businesses through our wholly owned

subsidiaries.

· Healthcare Business .

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

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

interventional pain management, and specialty consultation services.

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

of EMC assessments.

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

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

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

are dedicated to helping patients return to active lifestyles.

· Real Estate Business .

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

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

six (6) acres zoned high-density residential

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

and twelve (12) acres zoned in Lemhi County as

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

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

Management has invested years working

to develop a new and exciting housing development in Salmon, Idaho and plans to enter into a joint venture agreement with a developer

for this planned concept development.

As of December 31, 2023, we had two reportable

operating segments as determined by management using the “management approach” as defined by the authoritative guidance on

Disclosures about Segments of an Enterprise and Related Information .

(1) Healthcare (Nova)

(2) Real Estate (Edge View)

These segments are a result of differences in

the nature of the products and services sold.

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

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

Other revenue consists of

nonrecurring items.

The healthcare segment provides a full range of

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

The real estate segment consists of Edge View,

a real estate company that owns five (5) acres zoned medium density residential (MDR) with 12 lots already platted, six (6) acres zoned

high-density residential (HDR) that can be platted in various configurations to meet current housing needs, and twelve (12) acres

zoned in Lemhi County as Agriculture that is available for further annexation into the City of Salmon for development, as well as a common

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

Management uses numerous tools and methods to

evaluate and measure our subsidiaries’ success.

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

them to do what they do best is run the business.

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

Discontinued Operations

On November 10, 2023, we sold Platinum Tax, which

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

Through this subsidiary we provided fee-based tax resolution

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

As part of the asset purchase agreement between us and the purchaser, the assets that were purchased included substantially all assets,

rights, interests, and licenses, except for bank accounts in place prior to the sale, for the purchase consideration of 15% of cash collected

by the purchaser within one year following the sale date.

We and the managers of AHI entered into a resignation,

release and buyback agreement and addendum, effective October 31, 2022, pursuant to which the managers purchased AHI in exchange for returning

175,045 shares of series F preferred stock.

There was a loss on disposal in the amount of $217,769 on October 31, 2022, which represented

net assets and liabilities at the time of sale back.

Results of Operations

We had revenues in the amount

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

in revenue was primarily due to:

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

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

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

Cost of Goods Sold.

We had costs of sales

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

The increase in revenue was primarily due to:

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

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

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

housing rentals.

Operating Expenses.

Comparison of Years Ended December 31, 2023

The following table sets forth key components

of our results of operations during the years ended December 31, 2023 and 2022, both in dollars and as a percentage of our revenue.

December 31, 2023

December 31, 2022

Total revenue

Total cost of sales

Operating expenses

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

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

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

The increase in operating expenses

was primarily due to:

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

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

Depreciation expense

Selling, general and administrative

Total operating expenses

Income from continuing operations

Other income (expense)

Gain on debt refinance and forgiveness

Penalties and fees

Interest expense

Amortization of debt discounts

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

$140,780 or 11.8%.

Amortization of debt discount is related to our convertible debt.

Interest Expense and finance charge.

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

$2,650,140 or 796.5%.

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

Nova Ortho factoring certain accounts receivables.

As a result of the foregoing,

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

Our activities have a focus on growing revenue

and cash flow.

We plan to continue this strategy into 2022.

To try to operate at a break-even level based

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

dollar of revenue is not directly tied to increasing costs.

We believe that we can become profitable without incurring additional costs

under our current operating cost structure.

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

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

purposes, although they have no obligation to do so.

On the other hand, if we decide that we cannot

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

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

In such event, we will probably continue

to not be profitable.

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

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

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

We cannot assure

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

We expect to incur operating losses in future

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

We expect approximately $6,400,000 in operating

costs over the next twelve months.

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

the future to cover these operating costs.

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

to go out of business.

Liquidity and Capital Resources

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

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

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

Net cash used in operating activities was $844,826

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

The improvement in

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

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

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

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

Net cash flows provided by financing activities

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

Total other income expense

Net income (loss) before discontinued operations

Loss from discontinued operations

Loss from disposal of discontinued operations

Net income (loss)

$ (5,429,521 )

For the years ended December

31, 2023 and 2022, all of our revenue was generated by our healthcare segment, which generates revenue through a full range of diagnostic

and surgical services.

Our total revenue increased by $1,160,070, or 10.85%, to $11,853,266 for the year ended December 31, 2023 from

$10,693,196 for the year ended December 31, 2022.

Such increase was primarily due to increased Personal

Injury Protection (PIP) services and the opening of a facility in the Healthcare segment .

Cost of sales .

Consists of surgical

center and laboratory fees, physician and professional fees, salaries and wages and medical supplies.

Our total cost of sales decreased

by $499,410, or 12.30%, to $3,560,624 for the year ended December 31, 2023 from $4,060,034 for the year ended December 31, 2022.

decrease was primarily due to a decrease in surgical contracted services and laboratory fees .

Gross profit .

As a result of the

foregoing, our total gross profit increased by $1,659,480, or 25.02%, to $8,292,642 for the year ended December 31, 2023 from $6,633,162

for the year ended December 31, 2022.

Our total gross margin (percent of revenue) increased from 62.03% for the year ended December 31,

2022 to 69.96% for the year ended December 31, 2023.

Depreciation expense .

Our depreciation

expense was $20,777, or 0.18% of revenue, for the year ended December 31, 2023, as compared to $23,132, or 0.22% of revenue, for the year

ended December 31, 2022.

The decrease in depreciation expense was due to certain assets becoming fully depreciated during the years ended

December 31, 2023 and 2022.

Selling, general and administrative expenses .

Our selling, general and administrative expenses consist primarily of accounting, auditing, legal and public reporting expenses, personnel

expenses, including employee salaries and bonuses plus related payroll taxes, advertising expenses, professional advisor fees, bad debts,

rent expense, insurance and other expenses incurred in connection with general operations.

Our selling, general and administrative expenses

increased by $373,679, or 13.82%, to $3,076,820 for the year ended December 31, 2023 from $2,703,141 for the year ended December 31, 2022.

As a percentage of revenue, our selling, general and administrative expenses were 25.96% and 25.28% for the years ended December 31, 2023

and 2022, respectively.

Increases were attributable to credit losses of $132,281, professional fees of $167,155, and management bonus

Total other expense .

We had $2,080,131

in total other expense, net, for the year ended December 31, 2023, as compared to other expense, net, of $7,157,527 for the year ended

December 31, 2022.

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

There can be no assurance that we will be able

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

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

portions of our technology or products.

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

position and may require cost reductions.

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

or at all, in the future.

In order to continue our operations, development

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

We are currently attempting to obtain additional

working capital in a term loan transaction.

During 2020 and 2021 both the Platinum Tax Subsidiary

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

The Company’s current funding is now concentrated

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

and leakout agreements.

Other expense, net, for the year ended December 31, 2023 consisted of interest expense of $1,956,266, amortization

of debt discounts of $136,518, financing penalties and fees of $53,000 and other expense of $49,795, offset by a gain on debt refinance

and forgiveness of $115,448.

Other expense, net, for the year ended December 31, 2022 consisted of interest expense of $6,387,309, financing

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

and other income of $150,250.

Discontinued operations .

the year ended December 31, 2023, we recorded a loss from disposal of discontinued operations of $86,520.

For the year ended December

31, 2022, we recorded a loss from discontinued operations of $2,178,883.

Net income (loss) .

As a result of

the cumulative effect of the factors described above, our net income was $3,028,394 for the year ended December 31, 2023, as compared

to a net loss of $5,429,521 for the year ended December 31, 2022, a net increase of $8,457,915, or 155.78%.

Liquidity and Capital Resources

As of December 31, 2023, we

had $866,943 in cash .

To date, we have financed our operations primarily through revenue generated from operations, sales of securities,

advances from stockholders and third-party and related party debt.

We believe, based on our operating plan, that

current working capital and current and expected additional financing should be sufficient to fund operations and satisfy our obligations

as they come due for at least one year from the financial statement issuance date.

However, additional

funds from new financing and/or future equity raises are required for continued operations and to execute our business plan and our strategy

of acquiring additional businesses.

The funds required to sustain operations ranges between

$600,000 to $1 million and additional funds execute our business plan will depend on the size, capital structure and purchase price consideration

that the seller of a target business deems acceptable in a given transaction.

The amount of funds needed to execute our business plan

also depends on what portion of the purchase price of a target business the seller of that business is willing to take in the form of

seller notes or our equity or equity in one of our subsidiaries.

Given these factors, we believe that the amount of outside additional

capital necessary to execute our business plan on the low end (assuming target company sellers accept a significant portion of the purchase

price in the form of seller notes or our equity or equity in one of our subsidiaries) ranges between $4 million to $8 million.

to the extent, that sellers are unwilling to accept a significant portion of the purchase price in seller notes and equity, then the cash

required to execute our business plan could be as much as $10 million.

We intend to raise capital for additional acquisitions

primarily through equity and debt financings.

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

incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial

covenants that would restrict our operations.

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

is no guarantee that we will be able to acquire additional businesses under the terms outlined above.

The financial statements were prepared on a going

concern basis and do not include any adjustment with respect to these uncertainties.

Summary of Cash Flow

The following table provides detailed information

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

Years Ended December 31,

Net cash used in operating activities from continuing operations

$ (1,807,987 )

$ (1,099,461 )

Net cash provided by financing activities

Net change in cash

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Our net cash used in operating activities from

continuing operations was $1,807,987 for the year ended December 31, 2023, as compared to $1,099,461 for the year ended December 31, 2022.

For the year ended December 31, 2023, our net income of $3,028,394, an increase in accrued officers’ compensation of $982,500, an

increase in accrued interest of $486,165, and an increase in accounts payable and accrued expense of $341,261, offset by an increase in

account receivable of $6,701,334, were the primary drivers of our net cash used in operating activities.

For the year ended December 31,

2022, our net loss of $5,429,521 and a gain on refinance of debt of $1,397,271, offset by goodwill impairment of $2,092,048, a loss on

finance penalties and fees of $2,063,916 and an increase in accrued officers’ compensation of $873,506, were the primary drivers

for the cash used in operations.

Prior to fiscal year 2022, we factored (sold)

the vast majority of our accounts receivable to third party(s) to generate working capital to fund ongoing business operations and growth,

which led to a significant increase in accounts receivable.

We have a 99% collection rate based on net settlements recorded to our accounts

receivable and revenue.

Collection rates are estimated considering our 48-month historical collections with primary emphasis to the most

current prior 12-month trailing payment and collection percentage rates.

We use the loss rate method to measure expected credit losses,

and in addition we qualitatively evaluate on an ongoing basis various factors, which include market conditions in which we operate, and

the status of claims being settled.

We have established billing rates, which are not the same as actual amounts recovered.

rates generally do not reflect what is ultimately paid by the customer, insurance carriers, law firms and other payors, which is typically

received eighteen to twenty-four months later, and are not reported in the consolidated financial statements at those established billing

Our customers, the patients, typically pay amounts based on established charges per procedure with guidance from the

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

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

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

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

The net revenue is recorded

at the time the services are rendered.

Collection of that revenue typically occurs eighteen to twenty-four months later and after the

patient claim develops and settles.

Historical collection rates are estimated using the most current prior 12-month historical payment

and collection percentages.

See also Note 1 to our consolidated financial statements.

We had no investing activities for the years ended

December 31, 2023 and 2022.

Our net cash provided by financing activities

was $2,369,325 for the year ended December 31, 2023, as compared to $788,794 for the year ended December 31, 2022.

Net cash provided by

financing activities for the year ended December 31, 2023 consisted of net proceeds from the line of credit of $2,164,338 and proceeds

from convertible notes payable of $421,375, offset by repayment of convertible notes payable of $175,000, repayment of line of credit

of $39,293 and repayments to directors and officers of $2,195.

Net cash provided by financing activities for the year ended December 31,

2022 consisted of proceeds from convertible notes payable of $879,083 and proceeds from preferred stock issuances of $25,000, offset by

dividends on preferred stock of $102,740, repayment of convertible notes payable of $5,908, repayments to directors and officers of $3,573

and repayment of the SBA loan described below of $3,068.

Convertible Notes

As of December 31, 2023, we had convertible debt

outstanding net of amortized debt discount of $3,807,030.

During the year ending December 31, 2023, we received net proceeds of $421,375

from convertible notes, repaid $175,000 and wrote off $12,406 to convertible noteholders.

The following is a schedule of convertible notes

payable outstanding as of December 31, 2023:

Unamortized Debt

On September 12, 2016, we issued

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

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

Note 10, 10-1, 10-2 and 10-3 .

24, 2017, we issued a convertible promissory note in the principal amount of $80,000 for services rendered, which matured on January 24,

Note 10 is currently in default and accrues interest at a default interest rate of 20% per annum.

On February 10, 2023, we executed

a second tranche under this note in the principal amount of $50,000 (Note 10-1).

On March 30, 2023, we executed a third tranche under

this note in the principal amount of $25,000 (Note 10-2).

On August 11, 2023, we executed a fourth tranche under this note in the principal

amount of $25,000 (Note 10-3).

Notes 10-1, 10-2 and 10-3 accrue interest at a rate of 15% per annum.

On May 10, 2019, we issued a

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

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

to an unrelated party.

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

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

Note 29-2 is currently

in default and accrues interest at a default interest rate of 24% per annum.

On August 28, 2019, we issued

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

The note is currently in default

and accrues interest at a default interest rate of 24% per annum.

There was no outstanding principal balance as of December 31, 2023.

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

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

be drawn in several tranches.

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

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

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

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

On December 29, 2020, we executed

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

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

Notes 40-1, 40-2, 40-3, 40-4, 40-5, 40-6, 40-7,

40-8, 40-9 and 40-10.

On September 22, 2022, we issued a convertible promissory note in the principal amount of $2,600,000 in exchange

for total of $4,791,099 of defaulted promissory notes balances (Note 40-1).

On November 4, 2022, we executed a second tranche under this

note in the principal amount of $68,667, less an original issue discount and fee of $18,667 (Note 40-2).

On November 28, 2022, we executed

the third tranche under this note in the principal amount of $68,667, less an original issue discount and fee of $18,667 (Note 40-3).

On December 21, 2022, we executed a fourth tranche under this note in the principal amount of $68,667, less an original issue discount

and fee of $18,667 (Note 40-4).

On January 24, 2023, we executed a fifth tranche under this note in the principal amount of $90,166, less

an original issue discount and fee of $25,166 (Note 40-5).

On March 21, 2023, we executed a sixth tranche under this note in the principal

amount of $136,666, less an original issue discount and fee of $39,166 (Note 40-6).

On June 5, 2023, we executed a seventh tranche under

this note in the principal amount of $136,667, less original issue discount and fee of $39,167 (Note 40-7).

On June 13, 2023, we executed

an eighth tranche under this note in the principal amount of $21,167, less original issue discount and fee of $5,167 (Note 40-8).

19, 2023, we executed a ninth tranche under this note in the principal amount of $35,500, less an original issue discount and fee of $8,875

On July 24, 2023, we executed a tenth tranche under this note in the principal amount of $14,000, less an original issue

discount and fee of $3,500 (Note 40-10).

On December 1, 2023, we executed amendment on Notes series 40 consolidated senior secured convertible

promissory note to extend the expired tranche note 40-1 through 40-5 due date to September 20, 2024.

All of the Note 40 tranches mature

in one year from the note issuance date and accrue interest at a rate of 10% per annum.

On August 25, 2023, we issued

a twelve-month convertible promissory note in the principal amount of $5,000 to our Chief Executive Officer for our operating expenses.

The rate of interest is 10% per annum.

Small Business Administration Loans

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

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

The principal balance and accrued

interest at December 31, 2023 was $149,655 and $956, respectively.

The principal balance and accrued interest at December 31, 2022 was

$144,609 and $5,723, respectively.

On March 12, 2009, we 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 balance of the debenture

was $10,989 at December 31, 2023 and the accrued interest was $7,547.

The principal balance and accrued interest at December 31, 2022

was $10,989 and $6,229, respectively.

We assigned all of our receivables from consumer activations of the rewards program as collateral

on this debenture.

Line of Credit

On September 29, 2023, our company and Nova entered

into a two-year revolving purchase and security agreement with DML HC Series, LLC to sell, with recourse, Nova’s accounts receivables

for a revolving financing up to a maximum advance amount of $4.5 million.

As of December 31, 2023, we had $2,120,100 outstanding

balance against the revolving receivable line of credit.

The revolving purchase and security agreement includes discounts recorded as

interest expense on each funding and matures on September 29, 2025.

Related Party Loans

In connection with the acquisition of Edge View

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

These amounts are due on demand and

do not bear interest.

The balance of these amounts are $4,979 as of December 31, 2023 and 2022.

We have obtained short-term advances from the

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

As of December 31, 2023 and 2022, we owed the Chairman $120,997

and $123,192, respectively.

Contractual Obligations

Our principal commitments consist mostly of obligations

under the loans described above.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements with

Plan of Operation

At Cardiff Lexington, we acquire or merge with

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

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

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

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

We target acquisitions of mature, high growth,

niche companies.

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

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

For investors, our

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

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

while providing diversification and risk mitigation for all shareholders.

Our portfolio is comprised of mature, high growth and niche

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

Current Business Operations

Cardiff Lexington Corp (formerly Cardiff International,

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

The following milestones are estimates only.

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

CARDIFF LEXINGTON CORP (FORMERLY CARDIFF INTERNATIONAL,

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

Cardiff Lexington targets acquisitions of

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

of which offer high returns for our investors.

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

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

Cardiff Lexington seeks to provide

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

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

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

AHI acquires both mobile homes and mobile

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

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

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

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

interest on the lease providing a “lease to own” option for their family home.

Most homes are 3 bedroom/2bath homes making

the dream of owning a home possible.

EDGE VIEW PROPERTIES LLC:

Edge View Properties

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

23.5 acres zoned MDR (Medium Density Residential)

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

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

Three lots were sold during 2021 for

a total price of $152,000.

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

park in the lower 48 states).

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

PLATINUM TAX DEFENDERS:

Platinum tax was

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

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

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

by assisting its clients to settle outstanding tax debts.

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

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

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

Platinum Tax team includes tax attorneys, accountants,

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

issues for thousands of clients.

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

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

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

From sports injuries, to sprains,

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

Orthopedic and pain procedure services

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

Critical Accounting Estimates

The discussion and analysis of our financial condition

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

accepted in the United States (“GAAP”).

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

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

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

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

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

our accounting policies.

Our actual results may differ from these estimates.

We consider our critical accounting estimates

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

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

We have discussed these critical accounting

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

of our Board of Directors.

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

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

They are discussed further below.

Share-based compensation expense

The Company accounts for its stock-based compensation

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

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

Pursuant to paragraph 718-10-30-6

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

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

issued, whichever is more reliably measurable.

The measurement date used to determine the fair

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

that performance will occur.

If the Company is a newly formed corporation or

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

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

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

The fair value of share options and similar instruments

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

The ranges of assumptions for inputs are as

Expected term of share options and similar instruments:

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

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

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

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

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

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

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

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

Risk-free rate(s).

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

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

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

Generally, all forms of share-based payments,

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

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

The expense resulting from share-based payments

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

Stock Based Compensation – Nonemployees

Equity Instruments Issued to Parties Other

Than Employees for Acquiring Goods or Services

The Company accounts for equity instruments issued

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

(“Subtopic 505-50”).

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

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

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

The measurement

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

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

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

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

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

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

The fair value of share options and similar instruments

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

The ranges of assumptions for inputs are as follows:

Expected term of share options and similar instruments:

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

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

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

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

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

Expected annual rate of quarterly dividends.

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

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

Risk-free rate(s).

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

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

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

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

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

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

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

A grantor shall recognize the equity

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

or a prepaid asset.

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

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

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

until they vest).

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

We have no off-balance sheet arrangements that

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

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

Critical Accounting Policies

The following discussion relates to critical accounting

policies for our consolidated company.

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

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

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

We have identified certain accounting policies that

are significant to the preparation of our financial statements.

These accounting policies are important for an understanding of our financial

condition and results of operation.

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

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

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

Certain accounting estimates

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

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

We believe the following critical accounting policies

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

Revenue Recognition .

source of revenue is our healthcare subsidiary, which records revenues from providing licensed and/or certified orthopedic procedures

Revenue is recognized at a point in time in accordance with Accounting Standards Codification, or ASC, 606.

Our healthcare subsidiary

does not have contract liabilities or deferred revenue as there are no amounts prepaid for services.

We apply the following five-step

ASC 606 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 obligations;

· recognition of revenue when performance obligations are satisfied.

We apply the five-step model when it is probable

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

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

and determine those that are a performance obligation and assesses whether each promised service is distinct

Our contracts for both our contract and service

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

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

price is allocated to this single performance obligation.

Accordingly, we recognize revenues (net) when

the patient receives orthopedic care services.

Our patient service contracts generally have performance obligations which are satisfied

at a point in time.

The performance obligation is for onsite or off-site care provided.

Patient service contracts are generally fixed-price,

and the transaction price is in the contract.

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

are satisfied;

generally, at the time of patient care.

Established billing rates are not the same as

actual amounts recovered for our healthcare subsidiary.

They generally do not reflect what we are ultimately paid by the customer,

insurance carriers and other payors, and therefore are not reported in the consolidated financial statements at that rate.

are typically paid amounts based on established charges per procedure with guidance from the annually updated Current Procedural Terminology,

or CPT, guidelines (a code set maintained by the American Medical Association through the CPT Editorial Panel), that designates relative

value units and a suggested range of charges for each procedure which is then assigned a CPT code.

This fee is discounted to reflect the percentage

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

adjustments which are deducted from the calculated fee.

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

Contract Fees (Non-PIP)

We have contract fees for amounts earned from

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

Historically,

these cases were sold to a factor who bears the risk of economic benefit or loss.

After selling patient cases to the factor, any additional

funds collected by us were remitted to the factor.

Service Fees – Net (PIP)

We generate services fees from performing various

procedures on the date the services are performed.

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

Fees are collected primarily from third party insurance providers.

These revenues are based on established insurance billing

rates, less allowances for contractual adjustments and uncollectible amounts.

These contractual adjustments vary by insurance company

and self-pay patients.

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

Completing the paperwork for each case and preparing

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

The majority of claims are then filed electronically

except for those remaining insurance carriers requiring paper filing.

An initial response is usually received within four weeks from

electronic filing and up to six weeks from paper filing.

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

Our healthcare revenues are generated from professional

medical billings including facility and anesthesia services.

With respect to facility and anesthesia services, we are the primary obligor

as the facility and anesthesia services are considered part of one integrated performance obligation.

Historically, we receive 49% of

collections from total gross billed.

Accordingly, we recognized net healthcare service revenue as 49% of gross billed amounts.

collection rates are estimated using the most current prior 12-month historical payment and collection percentages.

Historically through April 2023, our

healthcare subsidiary has had contractual medical receivable sales and purchase agreements with third party factors which result in an approximately

54% reduction from the accounts receivables amounts when a receivable is sold to the factors.

We evaluated the factored adjustments

considering the actual factored amounts per patient on a quarterly interval, and the reductions from accounts receivable that were

factored were recorded in finance charges as other expenses on the consolidated statement of operations.

a result of eighteen to twenty-four month collection timeframe, we have an accrued liability resulting from the collections of

receivables sold to the third party factors which fluctuates as collections are made and remitted to those third party factors.

These accounts receivables sold to these third party factors are not included in our financial statements accounts receivable

balance once sold and therefore are not part of the assessment of accounts receivable collectability.

Accounts Receivable .

In the normal

course of business, we are in the lien based medical industry providing orthopedic healthcare servicing an uninsured market insulated

by a letter of protection which insulates us and insures payment in full from insurance settlements.

A letter of protection is a legally

binding contract between the patient (i.e., our customer), the patient’s law firm and our company, as a medical provider.

as a critical legal agreement between an experienced personal injury attorney and a medical provider, allowing an injured victim to receive

vital medical treatment needed after an accident without paying exorbitant out-of-pocket medical expenses prior to settlement.

professionals, letters of protection provide guaranteed payment out of settlement proceeds for services rendered as the provider does

not have to attempt collection from an uninsured or underinsured injured patient.

The medical provider knows that payment will come directly

from the law firm out of the settlement.

This legally binding contract offers crucial protection when someone is hurt due to another party’s

negligence but lacks sufficient health insurance or faces denial of claim payments from insurance companies.

Medical bills may not be

paid for six months to two or more years until case resolution.

Providers must be willing to wait for payment.

Some complex cases settle

in increments over several years instead of one lump payment at the end.

A letter of protection enables injured clients to obtain essential

care, avoid collections, restore their credit, and focus wholly on recovery.

Attorneys utilize letters of protection to construct stronger

injury claims, while medical professionals gain guaranteed payment out of settlement proceeds even if treatment is lengthy or ongoing.

In a personal injury case, the at-fault party

is responsible for paying the medical bills of the injured person.

However, insurance companies will often refuse to pay these medical

expenses until liability has been determined.

This can leave an injured person unable to get the medical treatment needed, especially

if they do not have health insurance.

A letter of protection allows an accident victim to receive medical care while the personal injury

case is being resolved.

An attorney sends a letter of protection to the medical provider on behalf of the client patient.

states that the attorney is responsible for paying the client’s medical bills when the case is fully developed and settles.

medical professional agrees to provide treatment to the injured person and refrain from attempting to collect payment as it is developing

and until the case is resolved.

Once the personal injury case is finalized with the insurance company, the attorney pays the outstanding

medical bills from the settlement.

The letter of protection is fulfilled.

If no settlement is reached with the defendant’s insurance

company and the plaintiff (the patient) loses the case at trial, or the case is abandoned, then we will not be able to collect on our

letter of protection and the receivable will not be collected.

In the case of a partial settlement or award at trial, we might only be

able to collect a portion of the receivable.

We have a 99% collection rate based on net

settlements recorded to its accounts receivable and revenue.

Collection rates are estimated considering our 48-month historical collections

with primary emphasis to the most current prior 12-month trailing payment and collection percentage rates.

The method we use to measure

expected credit losses is the loss rate method, and in addition we qualitatively evaluate on an ongoing basis various factors, which include

market conditions in which we operate, and the status of claims being settled.

We have established billing rates, which are not the same

as actual amounts recovered.

These rates generally do not reflect what is ultimately paid by the customer, insurance carriers, law

firms and other payors, which is typically received eighteen to twenty-four months later, and are not reported in the consolidated financial

statements at those established billing rates.

Our customers, the patients, typically pay amounts based on established charges per

procedure with guidance from the annually updated CPT guidelines that designates relative value units and a suggested range of charges

for each procedure which is then assigned a CPT code.

This fee is discounted to reflect the percentage paid to us “using a modifier”

recognized by each insurance carrier for services, less deductible, co-pay, and contractual adjustments which are deducted from the calculated

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

Collection of that revenue typically occurs eighteen to twenty-four

months later and after the patient claim develops and settles.

Historical collection rates are estimated using the most current prior

12-month historical payment and collection percentages.

We have adopted ASU 2016-13, “Financial

Instruments – Credit Losses.” In accordance with this standard, we recognize an allowance for credit losses for our trade

receivables to present the net amount expected to be collected as of the balance sheet date.

This allowance is based on the credit losses

expected to arise over the life of the asset and are based on current expected credit losses.

Accounts receivable is reported on the balance

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

Management closely monitors outstanding accounts receivable and recognized an

additional allowance for credit losses in the amount of $122,190 and $0 as of December 31, 2023 and 2022, respectively.

As of December

31, 2023 and 2022, we had net accounts receivable of $13,305,254 and $6,603,920, respectively.

Accounts receivables are primarily generated

from our healthcare subsidiary in its normal course of business.

We calculate a forward-looking collectability

rate which we then apply to our gross billings.

The amount recorded in accounts receivables approximates the amount expected to actually

be collected.

The allowance for credit losses represents any adjustments deemed necessary to the collectability rate based upon an annual

review of both actual collections, as well as any changes in industry billing and collection, and/or legal practices.

Property and Equipment .

and equipment are carried at cost.

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

improvements are capitalized.

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

Depreciation is calculated

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

Classification

Equipment, furniture, and fixtures

Medical equipment

Leasehold improvements

10 years or lease term, if shorter

Goodwill and Other Intangible Assets .

Goodwill and indefinite-lived brands are not amortized,

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

Our impairment testing of goodwill

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

The annual evaluation for impairment of goodwill

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

cash flows and operating plans.

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

participants.

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

The Company based

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

We do not believe that inflation will negatively

impact our business plans.

We do not expect our revenues to be impacted by

seasonal demands for our services.

QUANTITATIVE AND QUALITATIVE DISCLOSURE

ABOUT MARKET RISK.

We are a smaller reporting company as defined

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

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

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

review goodwill for impairment on a reporting unit basis annually and whenever events or changes in circumstances indicate the carrying

value of goodwill may not be recoverable.

Goodwill is tested first for impairment based on qualitative factors on an annual basis or in

between if an event occurs or circumstances change that indicate the fair value may be below its carrying amount, otherwise known as a

‘triggering event’.

An assessment is made of these qualitative factors as such to determine whether it is more likely than

not the fair value is less than the carry amount, including goodwill.

The annual evaluation for impairment of indefinite-lived intangibles

and, if then needed after the first step, Goodwill, is based on valuation models that incorporate assumptions and internal projections

of expected future cash flows and operating plans.

We believe such assumptions are also comparable to those that would be used by other

marketplace participants.

For the year ended December 31, 2023, we determined there to be no impairment.

For the year ended December 31,

2022, we recognized goodwill impairment in the amount of $2,092,048 in our former financial services segment, which is now reflected in

discontinued operations.

We based this decision on impairment testing of the underlying assets, expected cash flows, decreased asset value

and other factors.

Valuation of Long-Lived Assets .

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

such as plant and equipment and construction in progress held and used by us 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 cash flows expected to be generated by the assets.

If such assets are considered

to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair

value of the assets.

Distinguishing Liabilities from Equity.

We account for our series N senior convertible preferred stock, series R convertible preferred stock, and series X senior convertible

preferred stock subject to possible redemption in accordance with ASC 480, “Distinguishing Liabilities from Equity”.

Conditionally

redeemable preferred shares are classified as temporary equity within our consolidated balance sheet.

Fair Value Measurements .

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

participants at the measurement date.

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

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

The fair value hierarchy distinguishes between

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

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

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

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

The three levels of the

fair value hierarchy are described below:

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

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

Stock-Based Compensation .

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

principles of the fair value recognition provisions of section 718-10-30 of the FASB ASC.

Pursuant to 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.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The full text of our audited consolidated financial statements begins

on page F-1 of this annual report.

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

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

What changed 10-K/A

Item 7. Management’s Discussion and Analysis