What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-08-08 compared with 2024-07-24 · 92 added, 27 removed, 597 unchanged (17% of the section changed)

231 unchanged sentences

See also Note 1 to our consolidated financial statements.

We had no investing activities for the years ended

December 31, 2023 and 2022.

For the year ended December 31, 2022, the Company factored

a total of $3,406,356 of our accounts receivable in exchange for cash of $1,451,448.

For the year ended December 31, 2023, the Company

factored a total of $544,196 of our accounts receivable in exchange for cash of $253,750.

The Company ceased factoring of accounts receivable

in the first quarter of 2023.

The most recent average collection time for accounts receivable net was approximately 470 days from patient

initial date of service.

Typically, a patient will have a series of dates of service over an average 12-16 month time period.

The following

table summarizes accounts receivables factored and corresponding cash received for each of the most recent quarterly reporting periods

when factored:

Quarter ended

Cash received

March 31, 2023

December 31, 2022

September 30, 2022

March 31, 2022

We had no investing activities for the years

ended December 31, 2023 and 2022.

Our net cash provided by financing activities

212 unchanged sentences

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

We satisfy performance obligations as services

are performed and then billed to the patient.

Payment in most cases is made by an attorney for such services to our patients which are

due upon final settlement of patients claims.

During the claims process, legal counsel warranties such claim through the letter of protection,

which is sent to us, as a medical provider, on behalf of the client patient.

This letter states that the attorney is responsible for

paying the client’s medical bills when the case is fully developed and settles.

The 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.

Historically through April 2023, our

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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.

We have a 99% collection rate based on net settlements

recorded to its accounts receivable and revenue.

Our accounts receivable balance each reporting period does not include accounts receivables

that were factored (sold).

Further, accounts receivable and revenue are recorded at what the company anticipates will ultimately be collected,

which historically is 99% of the net recognized upon billing to its patients of gross amounts for services.

In the past, for those receivables

that were factored, we were advanced 46% of the accounts receivable balance and recorded 54% to finance charge.

We last factored its

accounts receivable in the first quarter of fiscal 2023.

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

We acquired Nova in May

Nova was founded in January 2019.

As of December 31, 2023, the Company based its 48-month historical collections analysis on look

back period from December 31, 2023 to 48 months, part of which was a period of time we did not yet own Nova.

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 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.

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 may incur instances whereby patient claims are not

However, these instances are very rare.

For example, the death of a patient during the claim’s development period and

there is no estate to bequeath.

Settlements that are less than what was billed to the patient is covered in the Company’s 99% collectability

We have adopted ASU 2016-13, “Financial

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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.

We recognize credit losses when such losses

are expected.

These credit losses include those amounts we determine will not be collectible when billed.

Historically, we conduct an

annual assessment of our collectability rate of patients accounts receivables, and then record a provision for changes to this collectability

rate as a provision.

We calculate this forward-looking collectability rate which we apply to our gross billings.

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.

For the period

ending December 31, 2023, we recorded bad debt expense in excess of credit loss recognized in that period,

which is as a result of our recording direct write offs when deemed uncollectible in accordance with ASC 326-20-35-8 and accounts receivable

true up adjustments to bad debt expense.

During the year ended December 31, 2023, we recorded a $270,000 provision less a $147,810 adjustment

to that provision for the change in collectability rate to the roll forward of allowance for credit losses.

Also, during this period,

we recorded bad debt expense of $132,281, which consisted of the $270,000 charge and the $147,810 credit as well as direct write offs

We continue to assess our collections of its accounts receivable through industry analysis and its collectability rate assessment

of 99% by applying a 12-month look back to collections from settlements made on claims.

Based on our accounts receivable balances and

its revenue, we do not believe the bad debt is a material amount.

Property and Equipment .

81 unchanged sentences

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