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Item 1. Financial Statements

2024-10-17 compared with 2023-01-09 · 1805 added, 982 removed, 246 unchanged (92% of the section changed)

Item 1 - Financial Statements

FINANCIAL STATEMENTS.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023 (Unaudited and restated)

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited and restated)

Condensed Consolidated Statements of Stockholders’ Equity (Deficiency) for the Six Months Ended June 30, 2024 and 2023 (Unaudited and restated)

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 (Unaudited)

Notes to Condensed Consolidated

Financial Statements (Unaudited and restated)

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2022 AND DECEMBER 31, 2021

September 30,

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

June 30, 2024

December 31, 2023

Current assets

2 unchanged sentences

Total current assets

Property and equipment, net of accumulated depreciation of $ 247,861 and $ 218,471 , respectively

Due from related party

Property and equipment, net

Right of use - assets

LIABILITIES AND DEFICIENCY IN SHAREHOLDERS' EQUITY

Due from related party

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY

Current liabilities

2 unchanged sentences

Accrued interest

Operating lease liability

Common stock to be issued

Due to director & officer

Due to related party

Right of use – liabilities

Due to director and officer

Notes payable – current portion

Line of credit

Convertible notes payable, net of debt discounts of $ 0 and $ 24,820 , respectively

1 unchanged sentence

Total current liabilities

Other Liabilities

Notes payable – net of current portion

Operating lease liability – net of current portion

Notes payable

Operating lease liability – long term

Total liabilities

The accompanying notes are an integral part of

these condensed consolidated financial statements

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF SEPTEMBER 30, 2022 AND DECEMBER 31, 2021

September 30,

Shareholders' equity

Preferred stock

Preferred Stock Series B - 3,000,000 shares authorized, par value $.001, stated value $ 4.00 , 2,020,078 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Preferred Stock Series C- 500 shares authorized, par value $.001, stated value $ 4.00 , 122 shares issued and outstanding at September 30, 2022 and December 31, 2021

Preferred Stock Series D- 800,000 shares authorized, par value $.001, stated value $ 4.00 , - 0 - shares issued and outstanding at September 30, 2022 and 37,500 shares issued and outstanding at December 31, 2021

Preferred Stock Series E- 1,000,000 shares authorized, par value $.001, stated value $ 4.00 , 150,750 shares issued and outstanding at September 30, 2022 and December 31, 2021

Preferred Stock Series F- 800,000 shares authorized, par value $.001, stated value $ 4.00 , 175,045 shares issued and outstanding at September 30, 2022 and December 31, 2021

Preferred Stock Series F-1- 800,000 shares authorized, par value $.001, stated value $ 4.00 , 35,752 shares issued and outstanding at September 30, 2022 and December 31, 2021

Preferred Stock Series H- 4,859,379 shares authorized, par value $.001, stated value $ 4.00 , - 0 - shares issued and outstanding at September 30, 2022 and 37,500 shares issued and outstanding December 31, 2021

Preferred Stock Series I- 500,000,000 shares authorized, par value $.001, stated value $ 4.00 , 14,885,000 shares issued and outstanding at September 30, 2022 and December 31, 2021

Preferred Stock Series J- 10,000,000 shares authorized, par value $.001, stated value of $ 4.00 , 1,713,584 shares issued and outstanding at September 30, 2022 and 894,834 shares issued and outstanding at December 31, 2021, respectively

Preferred Stock Series K- 10,937,500 shares authorized, par value of $ .001 , 8,200,562 shares issued and outstanding at September 30, 2022 and December 31, 2021

Preferred Stock Series L- 100,000,000 shares authorized, par value $.001, stated value $ 4.00 , 319,493 shares issued and outstanding at September 30, 2022 and December 31, 2021

Preferred Stock Series N- 3,000,000 shares authorized, par value $.001, stated value of $ 4.00 , 868,056 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Preferred Stock Series R- 5,000 shares authorized, par value $.001, stated value of $ 1,200 , 165 shares issued and outstanding at September 30, 2022 and December 31, 2021

Preferred Stock Series X- 5,000,000 shares authorized, par value $.001, stated value of $ 4.00 , 375,000 and 0 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Mezzanine equity

Redeemable Series N Senior Convertible Preferred Stock - 3,000,000

shares authorized, $0.001 par value, stated value $ 4.00 , 868,056

shares issued and outstanding at June 30, 2024 and December 31, 2023

Redeemable Series R Senior Convertible Preferred Stock - 5,000 shares authorized, $0.001 par value, stated value of $ 1,200 , 0 and 165 , shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

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 shares issued and outstanding at June 30, 2024 and December 31, 2023

Total Mezzanine Equity

Stockholders' equity

Series B Preferred Stock - 3,000,000 shares authorized, $0.001 par value, stated value of $ 4.00 , 980,179 and 2,139,478 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Series C Preferred Stock - 500 shares authorized, $0.001 par value, stated value of $ 4.00 , 60 and 123 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Series E Preferred Stock - 1,000,000 shares authorized, $0.001 par value, stated value $ 4.00 , 75,375 and 155,750 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Series F-1 Preferred Stock - 50,000 shares authorized, $0.001 par value, stated value $ 4.00 , 25,750 and 35,752 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Series I Preferred Stock - 15,000,000 shares authorized, $0.001 par value, stated value $ 4.00 , 11,640,500 and 14,885,000 issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Series J Preferred Stock - 2,000,000 shares authorized, $0.001 par value, stated value $ 4.00 , 0 and 1,713,584 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Series L Preferred Stock - 400,000 shares authorized, $0.001 par value, stated value $ 4.00 , 319,493 shares issued and outstanding at June 30, 2024 and December 31, 2023

Series Y Senior Convertible Preferred Stock - 1,000,000 shares authorized, $0.001 par value, stated value of $ 4.00 , 938,908 and 0 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Common Stock;

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

197,796,735 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Treasury stock;

at cost, 212,500 shares of series D preferred stock, 81,601 of series H preferred stock and 325,244 shares of series G preferred stock at September 30, 2022 and December 31, 2021, respectively,

( 4,967,686 )

300,000,000 shares authorized, $ 0.001 par value;

13,626,376 and 25,121 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

( 7,581,212 )

( 3,826,349 )

Accumulated deficit

1 unchanged sentence

( 68,684,115 )

Total shareholders' equity

Total liabilities and shareholders' equity

Total stockholders’ equity

Total liabilities, mezzanine equity and stockholders’ equity

The accompanying notes are an integral part of

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

2024 AND 2023

THREE MONTHS ENDED

SEPTEMBER 30,

NINE MONTHS ENDED

SEPTEMBER 30,

Rental income

Financial Services

Total revenue

Ended June 30,

COST OF SALES

Rental business

Financial Services

Total cost of sales

OPERATING EXPENSES

Depreciation expense

Transaction costs

Share based compensation

Selling, general and administrative

Total operating expenses

PROFIT (LOSS) FROM OPERATIONS

( 1,665,830 )

(LOSS) INCOME FROM CONTINUING OPERATIONS

OTHER INCOME (EXPENSE)

Change in value of derivative liability

( 1,305,596 )

Gain on forgiveness of debt

Gain on change of estimate

Loss on disposal

Interest expense & finance charge

( 1,506,869 )

( 3,686,856 )

( 1,409,481 )

Financing penalties & fees

( 1,923,916 )

Gain on debt refinance and forgiveness

Penalties and fees

Interest expense

( 1,537,579 )

Amortization of debt discounts

( 1,050,014 )

Total other income (expenses)

( 2,126,384 )

Total other income (expense)

( 1,617,601 )

NET (LOSS) INCOME BEFORE DISCONTINUED OPERATIONS

LOSS FROM DISCONTINUED OPERATIONS

NET (LOSS) INCOME FOR THE PERIOD

$ ( 131,585 )

NET INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS

$ ( 414,689 )

PREFERRED STOCK DIVIDENDS

$ ( 125,744 )

LOSS FROM DISCONTINUED OPERATIONS

GAIN FROM DISPOSAL OF SUBSIDIARY

Total income (loss) from discontinued operations

NET INCOME (LOSS) FOR THE PERIOD

$ ( 477,808 )

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS

$ ( 457,759 )

$ ( 892,497 )

BASIC AND DILUTED INCOME (LOSS) PER SHARE

BASIC (LOSS) INCOME PER SHARE

CONTINUING OPERATIONS

DISCONTINUED OPERATIONS

WEIGHTED AVERAGE NUMBER OF COMMON SHARES – CONTINUED AND DISCONTINUED OPERATIONS

DILUTED (LOSS) INCOME PER SHARE

CONTINUING OPERATIONS

DISCONTINUED OPERATIONS

WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC

WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED

The accompanying notes are an integral part of

1 unchanged sentence

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

EQUITY (DEFICIENCY)

FOR THE PERIOD ENDED SEPTEMBER 30, 2021

Preferred Stock Series

B,D,E,F,F-1,G,H,J,L,N,X

Preferred Stock, Series

Balance December 31, 2020 (Restated)

$ 780,048,201

Conversion of convertible notes payable

Reclassify Derivative liabilities to Additional Paid in Capital

Issuance of Common Stock for preferred I shares

Reclassify warrant liabilities to additional paid in capital

Issuance of preferred stock series J

Issuance of preferred stock series N

Issuance of preferred stock series B

Issuance of common stock for services

Distribution of dividend

Issuance of warrant

Balance, September 30, 2021 (unaudited)

$ 779,548,201

Treasury Stock

SIX MONTHS ENDED JUNE 30, 2024 AND 2023

E, F-1, J and L

Additional Paid-In

Stockholders’ (Deficit)

Balance, December 31, 2022 (Restated)

4 unchanged sentences

Conversion of convertible notes payable

Reclassify Derivative liabilities to Additional Paid in Capital

Issuance of Common Stock for preferred I shares

Reclassify warrant liabilities to additional paid in capital

Issuance of preferred stock series J

Issuance of preferred stock series N

Preferred stock Dividends

Issuance of preferred stock series B

Issuance of common stock for services

Distribution of dividend

Issuance of warrant

Balance, June 30, 2023 (Restated)

$ 59,540,000 –

$ ( 9,802,172 )

Balance September 30, 2021 (unaudited)

$ ( 68,228,975 )

$ ( 1,074,413 )

E, F-1, J and L

Additional Paid-In

Stockholders’ (Deficit)

Balance, December 31, 2023 (Restated)

$ ( 7,581,212 )

$ ( 68,684,115 )

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’

EQUITY (DEFICIENCY)

FOR THE PERIOD ENDED SEPTEMBER 30, 2022

Preferred Stock Series

B,D,E,F,F-1,G,H,J,L,N,X

Preferred Stock, Series

Balance, December 31, 2021

Issuance of preferred B in exchange of

preferred D and H

Cancellation of common stock

Cancellation of preferred stock series D

Cancellation of preferred stock series H

Issuance of preferred stock series X

Issuance of preferred stock series J

Distribution of dividend

Balance, September 30, 2022

Treasury Stock

Balance, December 31, 2021

Conversion of convertible notes payable

Conversion of series B preferred stock

( 1,159,299 )

( 4,637,196 )

Conversion of series C preferred stock

Conversion of series E preferred stock

Conversion of series F-1 preferred stock

Conversion of series I preferred stock

( 3,377,000 )

Issuance of preferred B in exchange of preferred D and H

Cancellation of common stock

( 13,508,000 )

Cancellation of preferred stock series D

Cancellation of preferred stock series H

Issuance of preferred stock series X

Issuance of preferred stock series J

Issuance of common stock for settlement of red Rock Travel

Distribution of dividend

Balance, September 30, 2022

Conversion of series J preferred stock

( 1,713,584 )

( 6,854,336 )

Issuance of series I preferred stock to officers

Issuance of series Y preferred stock

Cancellation of series C preferred stock

Common stock issued for services

Common stock issued to board members

Common stock issued in Red Rock settlement

Preferred stock Dividends

Net income (Restated)

Balance, June 30, 2024 (Restated)

$ ( 69,576,612 )

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022

NINE MONTHS ENDED SEPTEMBER 30,

FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

Net Loss for the period

$ ( 813,054 )

Net (loss) income from continuing operations

$ ( 414,689 )

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

Amortization of loan discount

Other noncash items, net

Loss on disposal

Change in value of derivative liability

Warrant issued for transaction costs

Loss on finance penalties and fees

Gain on refinance of debt

( 1,397,271 )

Reduction from forgiveness of PPP Loans

Amortization of debt discount

Conversion and note issuance cost

Share issuance for compensations to directors and officers

Share issuance for service rendered

Fair value settled upon conversion

Gain on settlement or forgiveness of debt

(Increase) decrease in:

1 unchanged sentence

( 1,555,885 )

Assets held for sale

( 2,859,607 )

Right of use – assets

Prepaid expenses and other current assets

Intangible assets

Prepaids and other current assets

Increase (decrease) in:

Accounts payable & accrued expense

Accrued officer’s compensation

Due (to) from related parties

Accounts payable and accrued expense

Accrued officers compensation

Accrued interest

Right of use – liabilities

Capital stock to be issued

Deferred revenue

Net cash used in operating activities

Net cash used in discontinued operations - operating activities

( 1,980,727 )

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of furniture & equipment

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

( 2,320,235 )

Net cash used in investing activities

( 2,323,642 )

CASH FLOWS FROM FINANCING ACTIVITIES

Due to director

Proceeds from convertible notes payable

Repayment of convertible notes payable

Proceeds from PPP loans

Payment of PPP loan

Dividend on preferred stock

Repayment of credit line

Issuance of preferred stock series N

Payment of notes payable

Payment of notes payable related party

Proceeds of notes payable related party

Net cash provided by (used in) Discontinued Operations – Operating

FINANCING ACTIVITIES

Payments to director

Repayment of SBA loans

Payment of convertible notes

Proceeds from line of credit

Payment of line of credit

Payment of dividends on preferred stock

Net cash provided by financing activities

NET INCREASE(DECREASE) IN CASH

CASH, BEGINNING OF PERIOD

CASH, END OF PERIOD

Net cash provided by Discontinued Operations – Financing

NET INCREASE IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD

CASH AND CASH EQUIVALENTS, END OF PERIOD

SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION

Cash paid during the period for:

Cash paid during the year for Interest

NON-CASH INVESTING AND FINANCING ACTIVITIES:

Payment of notes payable

Preferred stock issued for business acquisition

Preferred stock issued upon conversion of notes payable and accrued interest

Derivative liability settled upon conversion

Preferred stock issued for debt refinance

Common stock issued upon conversion of notes payable

Common stock issued upon conversion of preferred stock

Series Y preferred stock issued in exchange of convertible notes payable

Promissory note payable issued in settlement agreement

Right of use assets acquired

The accompanying notes are an integral part of

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Operations

Legacy Card Company, LLC (“Legacy”)

was formed as a Limited Liability Company on August 29, 2001.

On April 18, 2005, Legacy converted from a California Limited Liability

Company to a Nevada Corporation.

On November 10, 2005, Legacy merged with Cardiff Lexington Corporation (“Cardiff Lexington”,

the “Company”), a publicly held corporation.

On April 13, 2021, Cardiff Lexington Corporation converted from a Florida Corporation

to a Nevada Corporation.

In the first quarter of 2013, it was decided to

restructure Cardiff Lexington into a holding company that adopted a new business model known as "Collaborative Governance,"

a form of governance enabling businesses to take advantage of the potential access to capital markets provided by affiliation with a publicly-traded

Cardiff Lexington began targeting the acquisition of niche companies with high growth potential.

The reason for this strategy

was to protect the Company’s shareholders by acquiring businesses with little to no debt, seeking support with both financing and

management that had the ability to offer a return to investors.

Description of Business

Cardiff Lexington consists of the following wholly owned subsidiaries:

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

acquired May 15, 2014

Romeo’s Alpharetta, LLC dba Romeo’s NY Pizza (“Romeo’s

Pizza”), acquired September 30, 2014;

Sold July 1, 2021.

Edge View Properties, Inc., (“Edge View”) acquired

July 16, 2014

Repicci’s Franchise Group, LLC (“Repicci’s

Group”), acquired August 10, 2016;

Sold September 1, 2021.

Platinum Tax Defenders, LLC (“Platinum Tax”),

acquired July 31, 2018

JM Enterprises 1, Inc.

dba Key Tax Group (“Key Tax”),

acquired May 8, 2019;

Sold December 31, 2021

Red Rock Travel Group, LLC (“Red Rock”), acquired

July 31, 2018, discontinued May 31, 2019

Nova Ortho and Spine, PLLC (“Nova”), acquired

Basis of Presentation and Principles of Consolidation

The accompanying September 30, 2022 interim condensed

consolidated financial statements (“financial statements”) have been prepared pursuant to the rules and regulations of the

Securities and Exchange Commission.

Certain information and note disclosures normally included in the annual financial statements prepared

in accordance with U.S.

generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those

rules and regulations, but we believe the disclosures made are adequate to make the information presented not misleading.

In the opinion

of management, all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation have been included in

the condensed consolidated financial statements included herein.

These statements should be read in conjunction with the audited condensed

consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021.

results of operations for the periods presented are not necessarily indicative of results to be expected for the full fiscal year or any

other periods.

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:

Edge View Properties, Inc.

(“Edge View”), which was acquired on July 16, 2014;

Platinum Tax Defenders (“Platinum Tax”), which was acquired on July 31, 2018 and sold on November 10, 2023;

Nova Ortho and Spine, LLC (“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, Edge View, Platinum Tax and Nova (collectively, the “Company”).

Subsidiaries shown as discontinued operations include Platinum Tax.

All significant intercompany accounts and transactions are eliminated

in consolidation.

Subsidiaries discontinued are shown as discontinued operations.

Reverse Stock Split

On January 9, 2024, the Company effected a 1-for-75,000 reverse split of its outstanding common stock.

All outstanding shares of common stock and warrant to purchase common stock were adjusted

to reflect the 1-for-75,000 reverse split, with respective exercise prices of the warrants proportionately increased.

The conversion prices

of the outstanding convertible notes and certain series of preferred stock were adjusted to reflect a proportional decrease in the number

of shares of common stock to be issued upon conversion.

All share and per share data throughout these

consolidated financial statements have been retroactively adjusted to reflect the reverse stock split.

The total number of authorized

shares of common stock did not change.

As a result of the reverse stock split, an amount equal to the decreased value of the common stock

was reclassified from “common stock” to “additional paid-in capital.”

Use of Estimates

The preparation of financial statements in conformity

GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures.

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

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.

of a novel coronavirus throughout the world, including the United States, during early calendar year 2021 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 zero 0 as of September 30, 2022

and December 31, 2021, respectfully.

As of September 30, 2022 and December 31, 2021, the Company had accounts receivable of

$ 6,829,160 and $ 4,948,796 , respectively.

Accounts receivables are primarily generated from our subsidiaries in their normal course

In the normal course of business, the Company

is in the lien based medical industry providing orthopedic healthcare servicing an uninsured market insulated by a letter of protection

which insulates the Company and insures payment in full from insurance settlements.

Accounts receivable consists of amounts due from attorneys

and insurance providers for services provided to patients under the letter of protection.

The accounts receivable are recorded at the

expected settlement realization amount, which is less contractual adjustments and an allowance for credit losses.

The Company recognizes

an allowance for credit losses for its accounts receivable to present the net amount expected to be collected as of the balance sheet

This allowance is determined based on the history of net settlements received, where the net settlement amount is not collected.

No collection can happen 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 the Company will not be able to collect on its letter of protection and its receivable

will not be collected.

Additionally, the Company considers economic factors and events or trends expected to affect future collections

The no collection history of the Company’s customers is considered in future assessments of collectability as these

patterns are established over a longer period.

The Company uses the term collection and collection rate in its disclosures to describe

the historical less than 1% occurrence of not collecting under a contract, which aligns with the Company’s credit loss accounting

under ASC 326.

The Company does not have a significant

exposure to credit losses as it has historically had a less than 1.0% loss rate where the Company received no settlement amount for

its outstanding accounts receivable.

Although possible, claims resulting in zero collection upon settlement are rare based on the

Company’s historical experience and has historically been 0.5% to 1.0% of its outstanding accounts receivable, thereby

resulting in a collection rate of 99%.

The Company uses the loss rate method to record its allowance for credit losses.

applies the loss rate method by reviewing its zero collection history on a regular basis and updating its estimates of credit losses

to adjust for changes in loss data.

The Company typically collects on its accounts receivable between eighteen and twenty-four

months after recording.

The Company does not record an allowance for credit losses based on an aging of its accounts receivable as

the aging of the Company’s receivables do not influence the credit loss rate due to the nature of its business and the letter

of protection.

The Company does not adjust its receivables for the effects of a significant financing component at contract

inception as the timing of variable consideration is determined by the settlement, which is outside of the Company’s control.

As of June 30, 2024 and December 31, 2023, the Company’s allowance for credit losses was $ 122,190 .

The Company recognized $ 0

and $ 270,000 of credit loss expense during the six months ended June 30, 2024 and 2023, respectively, which is included in selling,

general and administrative expenses in the condensed consolidated statement of operations.

Property and Equipment

11 unchanged sentences

Goodwill and Other Intangible Assets

Goodwill and indefinite-lived brands are not amortized,

Goodwill and indefinite-lived assets 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 nine months ended September 30, 2022 and 2021, the Company did no t recognize any goodwill impairment.

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

The Company’s impairment testing

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

The Company reviews 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

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.

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

During the six months ended June 30, 2024 and 2023, the Company did no t 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.

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.

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 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, we 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:

The Company’s primary source of revenue

is its healthcare subsidiary, which records revenues from providing licensed and/or certified orthopedic procedures.

Revenue is recognized

at a point in time in accordance with ASC 606 and at an estimated net settlement realization rate based on gross billed charges.

Company’s healthcare subsidiary does not have contract liabilities or deferred revenue as there are no amounts prepaid for services.

The Company applies the following five-step ASC 606 model to determine revenue recognition:

Identification of a contract with a customer

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Determination of the transaction price

Allocation of the transaction price to the separate performance allocation

Allocation of the transaction price to the separate performance obligations

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.

Our healthcare subsidiary does not have contract liabilities

or deferred revenue as there are no amounts prepaid for services.

Established billing rates are not the same as

actual amounts recovered for our healthcare subsidiary.

They generally do not reflect what the Company is ultimately paid and

therefore are not reported in our condensed unaudited 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 Nine weeks from paper filing.

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

Historical collection rates are estimated using

the most current prior 18-month historical payment and collection percentages.

The Company generally receives all of its collections within

18 months from the date of service.

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

as they are received from insurance companies.

For the Nine months ended September 30, 2022 and

2021, respectively, the Company did not record any bad debt expense.

Additionally, the Company has not recorded any estimate for expected

The Company applies the five-step model when

it is probable that the Company will settle 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 a performance obligation and assesses whether each

promised service is distinct.

The Company’s contracts for both its contract

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price is allocated to this single performance obligation.

Accordingly, the Company recognizes revenues (net)

Accordingly, the Company recognizes net revenue

when the patient receives orthopedic care services.

Our patient service contracts generally have performance obligations which are satisfied

at a point in time.

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;

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 the Company’s 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 condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021.

There are no contingent

rentals included in income in the accompanying condensed 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.

In determining net revenue to record under ASC

606, the Company must estimate the transaction price, including estimates of variable consideration in the contract at inception.

to estimate variable consideration, the Company uses established billings rates (also described as “gross charges”) for the

procedures being performed, however, the billing rates are not the same as actual amounts recovered for the Company’s healthcare

They generally do not reflect what the Company is ultimately paid by the customer, insurance carriers and other payors,

and therefore are not reported in the consolidated financial statements at that rate.

The Company is typically paid 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 gross charge 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.

These adjustments are considered variable consideration under ASC 606 and are deducted from

the calculated fee to arrive at the net transaction price.

The Company also estimates changes in the contract price as a result of price

concessions, changes to deductibles, co-pays and other contractual adjustments to determine the eventual settlement amount the Company

expects to receive.

The Company uses the term settlement realization in its disclosures to describe the amount of cash the company expects

to receive based on its estimate of the transaction price under the expected value method of ASC 606.

Where appropriate, the Company utilizes the expected

value method to determine the appropriate amount for estimates of variable consideration, which is based on a historical 12-month lookback

of its actual settlement realization rates.

The estimates of reserves established for variable consideration reflect current contractual

requirements, the Company’s historical experience, specific known market events and trends, industry data and forecasted patient

data and settlement patterns.

Settlement realization patterns are assessed based on actual settlements and based on expected settlement

realization trends obtained from discussions with attorneys, doctors and our third party medical billing company.

Settlement amounts are

negotiated and prolonged settlement negotiations are not indicative of a greater likelihood of reduced settlement realization or zero

The Company may accept a lower settlement realization

rate in order to receive faster payment.

The Company obtains information about expected settlement realization trends from discussions

with doctors and attorneys and its third party medical billing company, which handles settlement claims and negotiations.

Settlement amounts

are presented to the Company’s third party medical billing company.

Settlement rates of 49% or higher based on gross billed amounts

are typically accepted without further negotiation.

Proposed settlement rates below 49% are negotiated and longer negotiations typically

result in higher settlement rates.

If the Company accepts a lower settlement realization rate in order to receive payments more quickly,

the Company considers that a price concession and estimates these concessions at contract inception.

The various forms of variable consideration

described above included in the transaction price may be constrained and are included in net revenue only to the extent that it is probable

that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period.

The Company has not

constrained any of its estimates of variable consideration for any of the periods presented.

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.

As described above, 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 and other adjustments based on its historical settlement realization 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

The Company’s healthcare revenues are generated from professional medical billings including facility and anesthesia

With respect to facility and anesthesia services, the Company is the primary obligor as the facility and anesthesia services

are considered part of one integrated performance obligation.

The Company satisfies 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 the Company, 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.

Prior to its fiscal year 2024, the Company

has historically had a 49% settlement realization rate from its total gross billed charges.

Accordingly, the Company has historically

recognized net healthcare service revenue as 49% of gross billed charges.

However, during the six months ended June 30, 2024, the Company

underwent efforts to accelerate cash settlements by accepting lower settlement realization rates in order to settle outstanding accounts

receivable more quickly.

As a result of the new effort, during the six months ended June 30, 2024 the Company realized a 42.3% average

settlement rate of its gross billed charges during this time frame, which were historically recorded in accounts receivable and revenue

at 49% of gross billings.

As a result of this reduced settlement realization percentage, the Company recorded a reduction to net revenue

of $ 859,321 and $ 1,199,155 for the three and six months ended June 30, 2024, respectively.

The Company will continue to reassess

its settlement realization rate in the future and incorporate changes in settlement realization in its estimate of variable consideration

due under its contracts.

See additional disclosure in Note 17.

Subsequent Events regarding the Company’s review of its settlement

realization percentage subsequent to the quarter ended June 30, 2024.

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 settled on a contingency

Prior to April 2023, these cases were sold to a factor who bears the risk of economic benefit or loss.

Generally, the sale of these

cases to a third party factor resulted in an approximate 54% reduction from the accounts receivables amounts.

After selling patient cases

to the factor, any additional funds settled by us were remitted to the factor.

The Company 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.

As a result of the Company’s eighteen to twenty-four

month settlement realization timeframe, the Company has an accrued liability resulting from the settlement of receivables sold to the

third party factors which fluctuates as settlements are made and remitted to those third party factors.

These accounts receivables sold

to these third party factors are not included in the Company’s financial statements accounts receivable balance once sold and therefore

are not part of the assessment of the net realizable value of accounts receivable.

For the six months ended June 30, 2023, the Company

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

The Company ceased factoring of accounts receivable

in the first quarter of 2023.

Advertising Costs

Advertising costs are expensed as incurred.

costs are included as a component of cost of sales in the condensed consolidated statements of operations and changes in members’

The Company recognized advertising and marketing expense of $ 93,905 and $ 221,690 for the three and nine months ended September

30, 2022, respectively.

The Company recognized advertising and marketing expense of $ 317,899 and $ 881,591 for the three and nine months

ended September 30, 2021, respectively.

Valuation of Derivative Instruments

Financial Accounting Standards Board (“FASB”)

Accounting Standards Codification (“ASC”) 815-10, Derivatives and Hedging (“ASC 815-10”) , requires that

embedded derivative instruments be bifurcated and assessed, along with freestanding derivative instruments such as convertible promissory

notes, on their issuance date to determine whether they would be considered a derivative liability and measured at their fair value for

accounting purposes.

The Company evaluates all of it financial instruments, including stock purchase warrants, to determine if such instruments

are derivatives or contain features that qualify as embedded derivatives.

For derivative financial instruments that are accounted for

as liabilities, the derivative instrument is initially recorded at its fair value and is then revalued at each reporting date, with changes

in the fair value reported as charges or credits to income.

For option based simple derivative financial instruments,

the Company uses the Black-Scholes option pricing model to value the derivative instruments at inception and subsequent valuation dates.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed

at the end of each reporting period.

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 $ 96,899 and $ 133,326 for the three months ended June 30, 2024 and 2023, respectively.

The Company recognized advertising and marketing expense of $ 171,950 and $ 171,679 for the six months ended June 30, 2024 and 2023, respectively.

Fair Value Measurements

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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 condensed 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).

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:

Level Input Definition

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.

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

Distinguishing Liabilities from Equity

The Company accounts for its 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 the Company’s consolidated balance sheet.

Stock-Based Compensation

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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

the fair value recognition provisions of section 718-10-30 of the Financial Accounting Standards Board (“FASB”) ASC.

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

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The expense resulting from share-based payments

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

Equity Instruments Issued to Parties Other Than Employees for Acquiring

Goods or Services

The Company early adopted ASU No 2018-07 for equity

instruments issued to parties other than employees.

is recorded in the consolidated statements of operations.

Income taxes are determined in accordance with

ASC Topic 740, “ Income Taxes ” (“ASC 740”).

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 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

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

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

For the periods ended September 30, 2022 and September

30, 2021, the Company did no t have any interest and penalties associated with tax positions and did not have any significant unrecognized

uncertain tax positions.

Loss per Share

As of June 30, 2024 and 2023, the Company did

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

Income (Loss) per Share

FASB ASC Subtopic 260, “Earnings Per Share,”

(“ASC 260”), provides for the calculation of "Basic" and "Diluted" earnings per share.

Basic earnings

per common share is computed by dividing income available to common shareholders 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 shareholders 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 shares.

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.

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 stock options and warrants are 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.

The diluted effect of debt

convertibles is reflected utilizing the if converted method.

Going Concern

The accompanying condensed 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

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 had sustained recurring operating losses since its inception

and has an accumulated deficit of $ 69,576,612 as of June 30, 2024.

These factors raise a substantial doubt about the Company’s ability

to continue as a going concern.

As of September 30, 2022, the Company has sustained recurring losses and has an accumulated deficit of

$67.3 million and a working capital deficit of approximately $ 3.1 million .

The accompanying condensed 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 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.

is seeking additional capital 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, the Company may be required to make 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.

We consider the applicability and

impact of all ASU's on our financial position, results of operations, shareholders’ deficit.

cash flows, or presentation thereof.

2021, the FASB issued ASU No.

2021-06 (“ASU 2021-06”) “ Debt—Debt with Conversion and Other Options (Subtopic

470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40) .” ASU 2021-06 reduces the

number of accounting models for convertible debt instruments by eliminating the cash conversion and beneficial conversion accounting models.

As a result, the Company’s convertible debt instruments will be accounted for as a single liability measured at its amortized cost

as long as no other features require bifurcation and recognition as derivatives.

For contracts in an entity’s own equity, the type

of contracts primarily affected by this update are freestanding and embedded features that are accounted for as derivatives under the

current guidance due to a failure to meet the settlement conditions of the derivative scope exception.

Upon adoption of ASU 2020-06, we

classified the previously identified beneficial conversion features to the associated debt.

We also determined, that in accordance with

ASU 2017-11, such beneficial conversion features are not considered a liability classified derivative.

In June 2016, the Financial Accounting Standards

Board ("FASB") issued Accounting Standards Update ("ASU") No.

2016-13, 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 ASU No.

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.

Management 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.

Nova Ortho and Spine, LLC

On May 31, 2021 the Company completed the acquisition

of Nova Ortho and Spine LLC.

Sellers received a cash payment in the amount of $ 2,500,000 and were issued 894,834 shares of Series J Preferred

Stock of the Company with a par value of $0.001 and a stated value of $4.00 with an aggregate stated value equal to $ 3,579,334 for a total

transaction of $ 6,079,334 .

The Preferred J stock rights and privileges include voting rights, a conversion ratio of 1:2:00.

The Preferred

J shares have a lock-up/leak-out limiting the sale of stock for 6 months after which conversions and sales are limited to 20% of their

portfolio per year, pursuant to the terms of the Stock Purchase Agreement.

The parties further agreed to performance based contingent

supplement payment to Sellers in 2022 should one year from the closing date the Company’s trailing twelve months minimum Pre-Tax

Net Income exceed $1,979,320, the “Milestone”, which in that event would cause the issuance to Sellers of 818,750

additional shares of Preferred J Stock, with an aggregate stated value equal to $3,275,000.

On August 25, 2022 under the terms of the Stock

Purchase Agreement entered on May 31, 2021 between the Company and the former owners of its Nova Ortho and Spine subsidiary and an addendum

to that agreement regarding the acquisition supplemental payment the parties recognized unanticipated series of events which 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 the subsidiary

during its initial year the Company agreed to issue the supplemental payment of 818,750 additional shares of Preferred Series J Stock,

with an aggregate stated value equal to $ 3,275,000 .

The preliminary purchase price allocation of the

net assets acquired is as follows:

Schedule of preliminary purchase price allocation

Nova Ortho and Spine, PLLC

Accounts receivable

Property and equipment

PROPERTY AND EQUIPMENT, NET

Property and equipment as of September 30, 2022

and December 31, 2021 is as follows:

is in continuous discussions with 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, if overall Company expenses increase, the Company may

need to implement 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.

Recently Issued Accounting Standards

The FASB issued Accounting Standards Update (“ASU”)

2023-07, “Segment Reporting:

Improvements to Reportable Segment Disclosures” (“Topic 280”) in November 2023.

amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December

15, 2024, with early adoption permitted.

Topic 280 improves “reportable segment disclosure requirements, primarily through enhanced

disclosures about significant segment expenses.” In addition, the amendments enhance interim disclosure requirements, clarify circumstances

in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities

with a single reportable segment, and contain other disclosure requirements.

The purpose of the amendments is to enable “investors

to better understand an entity’s overall performance” and assess “potential future cash flows.” Management is

evaluating the impact of ASU 2023-07 on the consolidated financial statements and does not expect there to be any changes or impact to

the financial statements.

Recently Adopted Accounting Standards

The FASB issued ASU 2020-06, “Debt—Debt

with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic

81540).” The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity.

amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within that period.

The FASB also specified

that an entity must adopt the guidance as of the beginning of its annual fiscal year and is not permitted to adopt the guidance in an

interim period, other than the first interim period of their fiscal year.

ASU 2020-06 reduces the number of accounting models for convertible

debt and convertible preferred stock instruments and makes certain disclosure amendments to improve the information provided to users.

There were no material impacts on the consolidated financial statements at adoption.

RESTATEMENT OF FINANCIAL STATEMENTS

The Company restated its financial statements

for the six months ended June 30, 2024 as a result of a change in classification of credit loss expense to net revenue and a related adjustment

to its allowance for credit losses.

During the preparation of the financial statements for the six months ended June 30, 2024, the Company

identified and corrected its accounting for its allowance for credit losses and its credit loss expense.

The Company’s allowance

for credit losses of $122,190 did not require adjustment during the six months ended June 30, 2024 and as a result, the Company reversed

its credit loss expense associated with this adjustment.

The remaining $1,199,155 of credit loss expense for the six months ended June

30, 2024 was reclassified to net revenue as variable consideration accounted for under ASC 606.

of restatements

Balance sheet

Impact of correction of error

June 30, 2024 (Unaudited)

As previously reported

Total stockholders' equity

Statement of operations

Impact of correction of error

Three months ended June 30, 2024 (Unaudited)

As previously reported

Cost of sales

Operating expense

Loss from operations

Other income, net

Net loss before discontinued operations

Loss from discontinued operations

Net loss for the period

Preferred stock dividends

Net loss attributable to common shareholders

Impact of correction of error

Six months ended June 30, 2024 (Unaudited)

As previously reported

Cost of sales

Operating expense

Income from operations

Other expense, net

Net loss before discontinued operations

Loss from discontinued operations

Net loss for the period

Preferred stock dividends

Net loss attributable to common shareholders

During the preparation of the financial statements

for the year ended December 31, 2023, the Company identified and corrected its classification and accounting treatment for its series

R convertible preferred stock and the related dividend accrual.

Pursuant to ASC 250, Accounting changes and error corrections issued

by FASB and Staff Accounting Bulletin 99 Materiality , issued by Securities and Exchange Commission, the Company determined the

impact of the error was immaterial.

The impact of the error correction is reflected in the consolidated balance sheet as of June 30, 2023

as a $274,982 increase to the mezzanine equity and offsetting decrease to the series R convertible preferred stock and subject to possible

redemption mezzanine equity line item.

In addition, the impact of the unpaid dividend accrual was reflected as of June 30, 2023 as a $ 16,363

increase to mezzanine equity and offsetting decrease to the accumulated deficits.

During the preparation of the financial

statements for three and six months ended June 30, 2024, the Company identified and corrected its classification for all its

outstanding common stock amount per par value of $ 0.001

with additional paid-in-capital related with a 1-for-75,000 reverse split

executed on January 9, 2024.

The impact of this adjustment decreased $ 1,804,774

to common stock and offsetting increase to additional paid-in-capital as of December 31, 2023.

On November 10, 2023, the Company sold Platinum

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

The Company presented in prior periods operating

loss as loss from discontinued operations of $ 43,810 and $ 89,300 on the consolidated statement of operations for the three and six months

ended June 30, 2023, respectively.

The impact of the error corrections also reflected

a $55.66 increase of basic earnings per share, and a $3.59 increase of diluted earnings per share on the consolidated statement of operations

for the three months ended June 30, 2023.

For the six months ended June 30, 2023, the impact of the error correction reflected a $28.75

increase of basic earnings per share, and an increase of $1.45 of diluted earnings per share.

The following tables summarize the impact of the

corrections on the Company’s condensed consolidated balance sheet as of June 30, 2023, the condensed consolidated statement of operations

for the three and six months ended June 30, 2023, and the condensed consolidated statement of cash flows for the six months ended June

Balance sheet

Schedule of of of restated financial information

Impact of correction of error

June 30, 2023 (Unaudited)

As previously reported

Total liabilities

Mezzanine equity

Total stockholders' equity

$ ( 917,038 )

$ ( 291,345 )

$ ( 1,208,383 )

Statement of operations

Impact of correction of error

Three months ended June 30, 2023 (Unaudited)

As previously reported

$ ( 118,304 )

Cost of sales

Operating expense

Income from operations

Other income (expense), net

Net income before discontinued operations

Loss from discontinued operations

Net income for the period

Preferred stock dividends

$ ( 125,744 )

Net income attributable to common shareholders

Basic earnings per share for continuing operations

Diluted earnings per share for continuing operations

Impact of correction of error

Six months ended June 30, 2023 (Unaudited)

As previously reported

$ ( 272,703 )

Cost of sales

Operating expense

Income from operations

Other income (expense), net

( 1,619,644 )

( 1,617,601 )

Net income before discontinued operations

Loss from discontinued operations

Net income for the period

Preferred stock dividends

$ ( 462,555 )

$ ( 454,419 )

Net income attributable to common shareholders

Basic earnings per share for continuing operations

Diluted earnings per share for continuing operations

Statement of Cash Flows

Impact of correction of error

Six months ended June 30, 2023 (Unaudited)

As previously reported

Net cash used in operating activities of continuing operations

$ ( 304,173 )

$ ( 260,466 )

Net cash provided by financing activities of continuing operations

$ ( 128,110 )

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Schedule of accounts payable and accrued expenses

June 30, 2024

December 31, 2023

Accounts payable

Accrued credit cards

Accrued liability for settlement of previously factored receivables

Accrued income and property taxes

Accrued professional fees

Accrued board fees

Accrued public company fees

Accrued payroll

The Company is delinquent paying certain property

As of June 30, 2024 and December 31, 2023, the balance for these property taxes was $ 1,649 .

PLANT AND EQUIPMENT, NET

Property and equipment as of June 30, 2024 and

December 31, 2023 is as follows:

Schedule of property and equipment

September 30,

Residential housing

June 30, 2024

December 31, 2023

Medical equipment

Computer Equipment

Furniture, fixture and equipment

Furniture, fixtures and equipment

Leasehold Improvement

1 unchanged sentence

Property and equipment, net

For the three and nine months ended September

30, 2022, total depreciation expense was $ 10,814 and $ 32,442 , respectively.

Depreciation expense recorded as cost of sales for the three

and nine months ended September 30, 2022 was $ 5,031 and $ 15,093 , respectively, and depreciation expense recorded as cost of sales for

the year ended December 31, 2021 was $ 12,448 .

In the quarter ended September 30,2021, the Company

sold 3 lots for $ 152,000 .

At September 30, 2022, the Company had 27 acres of land of approximately $ 540,000 .

As of December 31, 2021,

the Company had 30 acres of land of approximately $ 603,000 located in Salmon, Idaho, which was in connection with the acquisition of Edge

View Properties, Inc.

in July 2014.

The Company issued 241,199 shares of Series E Preferred Stock as consideration for this acquisition.

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

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Schedule of accrued expenses

September 30,

Accounts payable

Accrued finance cost

Accrued dividends payable

Accrued credit cards

Accrued advertising

Accrued payroll wages

Accrued professional fees

Accrued expenses other

The Company is delinquent paying certain income

and property taxes.

As of September 30, 2022 and December 31, 2021 the balance for these taxes, penalties and interest is $ 6,732 and $ 7,553 ,

RELATED PARTY TRANSACTIONS

11, 2021, the Chairman of the Board and the CEO 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.

From time to time, the previous owner which is

currently the manager of Platinum Tax Defenders loans funds to the Company to cover short term operating needs.

Amounts owed as of September

30, 2022 and December 31, 2021 were $ 4,025 and $ 36 respectively.

The Company assumed amounts due to previous owners

who are current managers of Edge View Properties Inc.

related to the acquisition on July 16, 2014.

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 September 30, 2022 and December 31, 2021,

respectively.

On August 6, 2021, a Board Resolution was executed to terminate one of the two employees of Edge View Properties for fraud,

deceit, larceny, and thievery for selling property belonging to the Company and personally taking the $ 162,598 in proceeds.

hired counsel to terminate the employee and handle all legal matters for return of monies and criminal prosecution.

The Company agreed to pay $360,000 per year and

a $200,000 of target annual incentive granted in 2021 to the Chief Executive Officer.

Based on his employment

agreement since January1, 2022 currently 29% is paid in cash and 71% is accrued.

The Company previously paid the Chief Executive Officer

$360,000 per year.

The total outstanding accrued compensation as of September 30, 2022 and December 31, 2021 were $ 1,605,000 and $ 1,415,000 ,

For the three months ended June 30, 2024 and

2023, depreciation expense was $ 3,366 and $ 3,365 ,

respectively.

The Company agreed to pay $360,000 per year and

a $200,000 of target annual incentive to the Chairman of the Board.

Based on his employment agreement since

January 1, 2022 of which currently 29% is paid in cash and 71% is accrued.

The Company previously paid the Chairman of the Board $300,000

The total outstanding accrued compensation as of September 30, 2022 and December 31, 2021 were $ 1,590,000 and $ 1,400,000 , respectively.

The Company agreed to pay $120,000 per year to

the Chief Operating Officer based on his amended employment agreement executed on May 15, 2019.

In the third quarter of 2021, the Chief

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

The total outstanding

accrued compensation as of September 30, 2022 and December 31, 2021 was $ 249,000 and $ 159,000 , respectively.

The Company agreed to pay $156,000 per year to

the Chief Financial Officer based on his amended employment agreement executed on May 15, 2021.

The total outstanding accrued compensation

as of September 30, 2022 and December 31, 2021 was $ 17,057 .

The Company entered into

a Management Agreement effective May 31, 2021 for compensation to the Principals of the Company’s Nova Ortho and Spine subsidiary

in the form of an annual base salaries of $ 372,000 to one of the 3 doctors, $ 450,000 to the second, and $ 372,000 to the third doctor.

Collectively, as a group,

Principals will receive an annual cash bonus and stock equity set forth below (the “Annual Bonus”).

The Annual Bonus will

be conditioned upon the Company achieving 100% of the annual objectives of financial performance goals as set forth below.

Schedule of annual objectives of financial performance

Minimum Annual Nova EBITDA

Cash Annual Bonus

Series J Preferred Stock

120,000 Shares

135,000 Shares

150,000 Shares

180,000 Shares

210,000 Shares

For the six months ended June 30, 2024 and 2023, depreciation expense was $ 6,731

and $ 8,000 , respectively.

As of June 30, 2024 and December 31, 2023, the

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

The land is currently vacant and is expected to be developed into a residential

RELATED PARTY TRANSACTIONS

In connection with the acquisition of Edge View

on July 16, 2014, the Company 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 due from the previous owners as of June 30, 2024 and December 31, 2023.

The Company obtained short-term advances from

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

As of September 30, 2022 and December 31, 2021, the Company

owed the Chairman $ 123,882 and $ 126,765 , respectively.

As of June 30, 2024 and December 31, 2023, the Company owed

the Chairman $ 0 and $ 120,997 , respectively.

During the six months ended June 30, 2024, the Company paid $ 120,997 to the Chairman.

See also Note 7.

Notes and Loans Payable and Note 8.

Notes Payable .

The series R convertible preferred

stock ranked, with respect to the distribution of assets upon liquidation, (i) senior to all common stock, series A preferred stock, series

B preferred stock, series C preferred stock, series E preferred stock, series F-1 preferred stock, series I preferred stock, series J

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

series R convertible preferred stock;

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

series R convertible preferred stock;

and (iii) junior to the series N senior convertible preferred stock, series X senior convertible

preferred stock and to each other series of preferred stock and each class or series that is expressly made senior to the series R convertible

preferred stock, as well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company.

Dividend Rights.

The holders of series

R convertible preferred stock were entitled to receive cumulative dividends in the amount of twelve percent (12%) per annum, payable quarterly.

In addition, holders of series R convertible preferred stock were entitled to receive dividends equal (on an as converted to common stock

basis) to and in the same form as dividends actually paid on shares of common stock when, as and if such dividends are paid on shares

of common stock.

Any dividends that were not paid when due were to continue to accrue and entailed a late fee, which must be paid in cash,

at the rate of 18% per annum or the lesser rate permitted by applicable law which was to accrue and compound daily from the missed payment

date through and including the date of actual payment in full.

At June 30, 2024 and December 31, 2023, cumulative dividends on Series

R Preferred Stock were $ 0 and $ 109,980 , respectively.

Liquidation Rights .

Upon any liquidation,

dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series R convertible preferred stock were entitled

to receive out of the assets, whether capital or surplus, of the Company an amount equal to the stated value ($1,200), plus any accrued

and unpaid dividends thereon and any other fees or liquidated damages then due and owing, for each share of series R convertible preferred

stock before any distribution or payment shall be made to the holders of any junior securities.

Voting Rights .

The holders of series R

convertible preferred stock voted together with the common stock on an as-converted basis.

However, as long as any shares of series R

convertible preferred stock were outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the

then outstanding shares of the series R convertible preferred stock, directly and/or indirectly (i) alter or change adversely the powers,

preferences or rights given to the series R convertible preferred stock or alter or amend the certificate of designation, (ii) authorize

or create any class of stock ranking as to redemption or distribution of assets upon a liquidation senior to, or otherwise pari passu

with, the series R convertible preferred stock, or authorize or create any class of stock ranking as to dividends senior to, or otherwise

pari passu with, the series R convertible preferred stock, (iii) amend its articles of incorporation or other charter documents

in any manner that adversely affects any rights of the holders of the series R convertible preferred stock, (iv) increase the number of

authorized shares of series R convertible preferred stock, or (v) enter into any agreement with respect to any of the foregoing.

Conversion Rights .

Each share of series

R convertible preferred stock was 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 ($1,200 per share) by a conversion price

equal to the lower of (i) $75.0 and (ii) the lowest daily VWAP during the twenty (20) trading days immediately prior to the applicable

conversion date.

Notwithstanding the foregoing, the Company shall not effect any conversion of the series R convertible preferred stock,

and a holder shall not have the right to convert any portion of the series R convertible preferred stock, to the extent that, after giving

effect to the conversion, such holder (together with such holder’s affiliates, and any persons acting as a group together with such

holder or any of such holder’s affiliates) would beneficially own in excess of 4.99% of the then outstanding common stock.

The conversion

price was subject to adjustment for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately

decreases or increases the common stock, as well as for mergers, business combinations and certain other fundamental transactions.

addition, subject to certain exceptions, upon any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents

for cash consideration, indebtedness or a combination of units thereof (a “Subsequent Financing”), the holder could have elected,

in its sole discretion, to exchange (in lieu of conversion), if applicable, all or some of the shares of series R convertible preferred

stock then held for any securities or units issued in a Subsequent Financing on a $1.00 for $1.00 basis.

Participation Rights .

Subject to certain

exceptions, upon a Subsequent Financing, a holder of at least 100 shares of series R convertible preferred stock were to have the right

to participate in up to an amount of the Subsequent Financing equal to 100% of the Subsequent Financing on the same terms, conditions

and price provided for in the Subsequent Financing.

Company Redemption Rights .

had the right to redeem all (but not less than all), shares of the series R convertible preferred stock issued and outstanding at any

time upon three (3) business days’ notice, at a redemption price per share equal to the product of (i) the Premium Rate multiplied

by (ii) the sum of (x) the stated value ($1,200), (y) all accrued but unpaid dividends, and (z) all other amounts due to the holder.

Rate” means (a) 1.1 if all of the series R convertible preferred stock is redeemed within ninety (90) calendar days from the issuance

date thereof;

(b) 1.2 if all of the series R convertible preferred stock is redeemed after ninety (90) calendar days and within one hundred

twenty (120) calendar days from the issuance date thereof;

one hundred twenty (120) calendar days and within one hundred eighty (180) calendar days from the issuance date thereof;

if all of the series R convertible preferred stock is redeemed after one hundred eighty (180) calendar days.

Redemption Upon Triggering Events .

the occurrence of a Triggering Event (as defined below), each holder of series R convertible preferred stock had (in addition to all other

rights it may have) the right, exercisable at the sole option of such holder, to require the Company to (A) redeem all of the series R

convertible preferred stock then held by such holder for a redemption price, in cash, equal to the Triggering Redemption Amount (as defined

below), or (B) at the option of each holder either (i) redeem all of the series R convertible preferred stock then held by such holder

though the issuance to such holder of such number of shares of common stock equal to the quotient of (x) the Triggering Redemption Amount,

divided by (y) the lowest of (1) the conversion price, and (2) 75% of the average of the 10 VWAPs immediately prior to the date of election,

or (ii) increase the dividend rate on all of the outstanding series R convertible preferred stock held by such holder retroactively to

the initial issuance date to 18% per annum thereafter.

“Triggering Redemption Amount” means, for each share of series R convertible

preferred stock, the sum of (a) the greater of (i) 130% of the stated value and (ii) the product of (y) the VWAP on the trading day immediately

preceding the date of the Triggering Event, multiplied by (z) the stated value divided by the then applicable conversion price, (b) all

accrued but unpaid dividends thereon and (c) all liquidated damages, late fees and other costs, expenses or amounts due in respect of

the series R convertible preferred stock including, but not limited to legal fees and expenses of legal counsel to the holder in connection

with, related to and/or arising out of a Triggering Event.

A “Triggering Event” means any of the following events (whatever

the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any

judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

the Company shall fail to deliver the shares of common stock issuable upon a conversion prior to the fifth (5 th ) trading day after such shares are required to be delivered, or the Company shall provide written notice to any holder, including by way of public announcement, at any time, of its intention not to comply with requests for conversion of any shares of series R convertible preferred stock in accordance with the terms of the certificate of designation;

the Company shall fail for any reason to pay in full the amount of cash due pursuant to a Buy-In (as defined in the certificate of designation) within five (5) trading days after notice therefor is delivered;

the Company shall fail to have available a sufficient number of authorized and unreserved shares of common stock to issue to such holder upon a conversion;

unless specifically addressed elsewhere in the certificate of designation as a Triggering Event, the Company shall fail to observe or perform any other covenant, agreement or warranty contained in, or otherwise commit any breach of the Transaction Documents (as defined in the certificate of designation), and such failure or breach shall not, if subject to the possibility of a cure by the Company, have been cured within five (5) calendar days after the date on which written notice of such failure or breach shall have been delivered;

the Company shall redeem junior securities or pari passu securities;

the Company shall be party to a Change of Control Transaction (as defined in the certificate of designation);

there shall have occurred a Bankruptcy Event (as defined in the certificate of designation);

any monetary judgment, writ or similar final process shall be entered or filed against the Company, any subsidiary or any of their respective property or other assets for more than $50,000 (provided that amounts covered by the Company’s insurance policies are not counted toward this $50,000 threshold), and such judgment, writ or similar final process shall remain unvacated, unbonded or unstayed for a period of thirty (30) trading days;

the electronic transfer by the Company of shares of common stock through the Depository Trust Company or another established clearing corporation once established subsequent to the date of the certificate of designation is no longer available or is subject to a ‘freeze” and/or “chill;” or

any “Event of Default,” as defined in the Purchase Agreement (as defined in the certificate of designation).

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

was to increase by 5% per annum.

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

Dividends are payable

quarterly in arrears on each dividend payment date.

At June 30, 2024 and December 31, 2023, cumulative dividends earned on the series

X senior convertible preferred stock were $ 183,210 and $ 190,685 , respectively.

The total balance of the cumulative accrued dividends was

paid by the Company via the issuance of 25,173 shares of the Company’s common stock as of June 30, 2024.

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) are to 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 is 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

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,

is 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 does not apply to any financing transaction the use of proceeds of which were to 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 share of series

X senior convertible preferred stock, plus all accrued and unpaid dividends thereon, are 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, any 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

The series A preferred stock ranks,

with respect to 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 A preferred stock;

(ii) on parity with each class or series that is not expressly

subordinated or made senior to the series A preferred stock;

and (iii) junior to the series B preferred stock, series C preferred stock,

series E preferred stock, series F-1 preferred stock, series I preferred stock, series J preferred stock, series L preferred stock, series

N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred stock and each other

series of preferred stock and each class or series that is expressly made senior to the series A preferred stock, as well as to all indebtedness

and other liabilities with respect to assets available to satisfy claims against the Company.

Dividend Rights.

The series A preferred

stock is not entitled to participate in any distributions or payments to the holders of common stock or any other class of stock and shall

have no economic interest in the Company.

Liquidation Rights .

In the event of any

liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, a merger or consolidation of the Company wherein

the Company is not the surviving entity, or a sale of all or substantially all of the assets of the Company, the holders of each share

of series A preferred stock shall be entitled to receive from any distribution of any of the assets or surplus funds of the Company, before

and in preference of any holder of shares of common stock, an amount equal to the stated value of $250.

Once the holders receive the foregoing

from any such liquidation, dissolution or winding up, the holders shall not participate with the common stock or any other class of stock.

Voting Rights .

Each share of series A preferred

stock shall have a number of votes at any time equal to (i) 25% of the number of votes then held or entitled to be made by all other equity

securities of the Company, including, without limitation, the common stock, plus (ii) one (1).

The series A preferred stock shall vote

on any matter submitted to the holders of the common stock, or any other class of voting securities, for a vote, and shall vote together

with the common stock, or any class of voting securities, as applicable, on such matter for as long as the shares of series A preferred

stock are issued and outstanding.

Notwithstanding the foregoing, the series A preferred stock shall not have the right to vote on any

matter as to which solely another series of preferred stock is entitled to vote pursuant to the Company’s amended and restated articles

of incorporation or a certificate of designation of such other series of preferred stock.

Upon transfer of any share of

series A preferred stock, except for a transfer by the holder to an affiliate, whether such transfer is voluntary or involuntary, such

share of series A preferred stock shall automatically, and without any action being required by the Company or the holder, be converted

into one (1) share of common stock.

Other Rights .

Holders of series A preferred

stock do not have any conversion (except as set forth above) or redemption rights.

Series B Preferred Stock

The series B preferred stock ranks,

with respect to the distribution of assets upon liquidation, (i) senior to all common stock, series A preferred stock and to each other

class or series that is not expressly made senior to or on parity with the series B preferred stock;

(ii) on parity with the series C

preferred stock, series E preferred stock, series F-1 preferred stock, series J preferred stock, series L preferred stock and each other

class or series that is not expressly subordinated or made senior to the series B preferred stock;

and (iii) junior to the series I preferred

stock, series N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred stock

and to each other series of preferred stock and each class or series that is expressly made senior to the series B preferred stock, as

well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company.

Dividend Rights.

The holders of series

B preferred stock are entitled to receive dividends equal (on an as converted to common stock basis) to and in the same form as dividends

actually paid on shares of common stock when, as and if such dividends are paid on shares of common stock.

No other dividends shall be

paid on shares of series B preferred stock.

Liquidation Rights .

Upon any liquidation,

dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series B preferred stock shall be entitled

to receive out of the assets of the Company the same amount that a holder of common stock would receive if the shares of series B preferred

stock were fully converted to common stock immediately prior to such liquidation, which amount shall be paid to the holders of series

B preferred stock pari passu with all holders of parity securities and in preference to the holders of junior securities.

Voting Rights .

On any matter presented

to stockholders for their action or consideration, each holder of series B preferred stock shall be entitled to cast one (1) vote per

share of series B preferred stock held.

Except as provided by law, the holders of series B preferred stock shall vote together with the

holders of shares of common stock as a single class.

However, as long as any shares of series B preferred stock are outstanding, the Company

shall not, without the affirmative vote of the holders of a majority of outstanding series B preferred stock, (a) alter or change adversely

the powers, preferences or rights given to the series B preferred stock or alter or amend the certificate of designation for the series

B preferred stock, or (b) amend the Company’s amended and restated articles of incorporation or other charter documents in any manner

that adversely affects any rights of the holders of series B preferred stock.

Conversion Rights .

Each share of series

B preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into such number of shares of

common stock as is determined as follows:

(i) if the closing market price of the common stock on the principal trading market on which

the common stock is then traded or quoted is less than $4.00 per share, then each share of series B preferred stock shall be convertible

into a number of shares of common stock equal to two (2) times the stated value ($4.00 per share), divided by such closing market price

on the date of conversion;

or (ii) if such closing market price is equal to or greater than $4.00 per share, then each share of series

B preferred stock shall be convertible into two (2) shares of common stock.

In addition, upon the earlier to occur of:

(a) the closing

of the sale of shares of common stock to the public at a price of at least $3.00 per share in a public offering pursuant to an effective

registration statement or offering statement under the Securities Act resulting in at least $3,000,000 of gross proceeds to the Company,

(b) the date on which the shares of common stock of the Company are listed on a national stock exchange, including without limitation

the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (any tier), or (c) the date and time, or the occurrence of an event,

specified by vote or written consent of the holders of at least 67% of the then outstanding shares of series B preferred stock, voting

together as a single class, each share of series B preferred stock shall be automatically converted into such number of shares of common

stock as is determined in accordance with the provisions above.

Such conversion price is subject to standard adjustments in the event

of any stock dividends, stock reclassifications and similar events (but not for reverse stock splits).

Redemption Rights .

Holders of series B

preferred stock do not have any redemption rights.

Series C Preferred Stock

The series C preferred stock ranks,

with respect to the distribution of assets upon liquidation, (i) senior to all common stock, series A preferred stock and to each other

class or series that is not expressly made senior to or on parity with the series C preferred stock;

(ii) on parity with the series B

preferred stock, series E preferred stock, series F-1 preferred stock, series J preferred stock, series L preferred stock and each other

class or series that is not expressly subordinated or made senior to the series C preferred stock;

and (iii) junior to the series I preferred

stock, series N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred stock

and to each other series of preferred stock and each class or series that is expressly made senior to the series C preferred stock, as

well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company.

Dividend Rights.

The holders of series

C preferred stock are entitled to receive dividends equal (on an as converted to common stock basis) to and in the same form as dividends

actually paid on shares of common stock when, as and if such dividends are paid on shares of common stock.

No other dividends shall be

paid on shares of series C preferred stock.

Liquidation Rights .

Upon any liquidation,

dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series C preferred stock shall be entitled

to receive out of the assets of the Company the same amount that a holder of common stock would receive if the shares of series C preferred

stock were fully converted to common stock immediately prior to such liquidation, which amount shall be paid to the holders of series

C preferred stock pari passu with all holders of parity securities and in preference to the holders of junior securities.

Voting Rights .

On any matter presented

to stockholders for their action or consideration, each holder of series C preferred stock shall be entitled to cast one (1) vote per

share of series C preferred stock held.

Except as provided by law, the holders of series C preferred stock shall vote together with the

holders of shares of common stock as a single class.

However, as long as any shares of series C preferred stock are outstanding, the Company

shall not, without the affirmative vote of the holders of a majority of outstanding series C preferred stock, (a) alter or change adversely

the powers, preferences or rights given to the series C preferred stock or alter or amend the certificate of designation for the series

C preferred stock, or (b) amend the Company’s amended and restated articles of incorporation or other charter documents in any manner

that adversely affects any rights of the holders of series C preferred stock.

Conversion Rights .

Each share of series

C preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into such number of shares of

common stock as is determined by dividing the stated value ($4.00 per share) by a conversion price of $0.00004.

In addition, on the date

on which the shares of common stock are listed on a national stock exchange, including without limitation the New York Stock Exchange,

NYSE American or the Nasdaq Stock Market (any tier) (a “Listing Event”), all outstanding shares of series C preferred stock

shall be automatically converted into such number of shares of common stock as is determined by dividing $50,000 by the highest traded

or closing price on such date, which such shares of common stock shall be issued pro rata among the holders of the outstanding series

C preferred stock.

Finally, upon the earlier to occur of:

(a) the closing of the sale of shares of common stock to the public at a price

of at least $3.00 per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar

recapitalization with respect to the common stock) in a public offering pursuant to an effective registration statement or offering statement

under the Securities Act resulting in at least $3,000,000 of gross proceeds to the Company or (b) the date and time, or the occurrence

of an event, specified by vote or written consent of the holders of at least 67% of the then outstanding shares of series C preferred

stock, voting together as a single class, each share of series C preferred stock shall be automatically converted into such number of

shares of common stock as is determined by dividing the stated value ($4.00 per share) by a conversion price of $0.00004.

Such conversion

price is subject to standard adjustments in the event of any stock dividends, stock reclassifications and similar events (but not for

reverse stock splits).

Redemption Rights .

If there is a Listing

Event, the Company shall have the right (but not the obligation) to redeem shares of series C preferred stock at a price per share of

Series E Preferred Stock

The series E preferred stock ranks,

with respect to the distribution of assets upon liquidation, (i) senior to all common stock, series A preferred stock and to each other

class or series that is not expressly made senior to or on parity with the series E preferred stock;

(ii) on parity with the series B

preferred stock, series C preferred stock, series F-1 preferred stock, series J preferred stock, series L preferred stock and each other

class or series that is not expressly subordinated or made senior to the series E preferred stock;

and (iii) junior to the series I preferred

stock, series N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred stock

and to each other series of preferred stock and each class or series that is expressly made senior to the series E preferred stock, as

well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company.

Dividend Rights.

The holders of series

E preferred stock are entitled to receive dividends equal (on an as converted to common stock basis) to and in the same form as dividends

actually paid on shares of common stock when, as and if such dividends are paid on shares of common stock.

No other dividends shall be

paid on shares of series E preferred stock.

Liquidation Rights .

Upon any liquidation,

dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series E preferred stock shall be entitled

to receive out of the assets of the Company the same amount that a holder of common stock would receive if the shares of series E preferred

stock were fully converted to common stock immediately prior to such liquidation, which amount shall be paid to the holders of series

E preferred stock pari passu with all holders of parity securities and in preference to the holders of junior securities.

Voting Rights .

On any matter presented

to stockholders for their action or consideration, each holder of series E preferred stock shall be entitled to cast one (1) vote per

share of series E preferred stock held.

Except as provided by law, the holders of series E preferred stock shall vote together with the

holders of shares of common stock as a single class.

However, as long as any shares of series E preferred stock are outstanding, the Company

shall not, without the affirmative vote of the holders of a majority of outstanding series E preferred stock, (a) alter or change adversely

the powers, preferences or rights given to the series E preferred stock or alter or amend the certificate of designation for the series

E preferred stock, or (b) amend the Company’s amended and restated articles of incorporation or other charter documents in any manner

that adversely affects any rights of the holders of series E preferred stock.

Conversion Rights .

Each share of series

E preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into such number of shares of

common stock as is determined as follows:

(i) if the closing market price of the common stock on the principal trading market on which

the common stock is then traded or quoted is less than $4.00 per share, then each share of series E preferred stock shall be convertible

into a number of shares of common stock equal to two (2) times the stated value ($4.00 per share), divided by such closing market price

on the date of conversion;

or (ii) if such closing market price is equal to or greater than $4.00 per share, then each share of series

E preferred stock shall be convertible into two (2) shares of common stock.

In addition, upon the earlier to occur of:

(a) the closing

of the sale of shares of common stock to the public at a price of at least $3.00 per share in a public offering pursuant to an effective

registration statement or offering statement under the Securities Act resulting in at least $3,000,000 of gross proceeds to the Company,

(b) the date on which the shares of common stock of the Company are listed on a national stock exchange, including without limitation

the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (any tier), or (c) the date and time, or the occurrence of an event,

specified by vote or written consent of the holders of at least 67% of the then outstanding shares of series E preferred stock, voting

together as a single class, each share of series E preferred stock shall be automatically converted into such number of shares of common

stock as is determined in accordance with the provisions above.

Such conversion price is subject to standard adjustments in the event

of any stock dividends, stock reclassifications and similar events (but not for reverse stock splits).

Series F-1 Preferred Stock

The series F-1 preferred stock

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

other class or series that is not expressly made senior to or on parity with the series F-1 preferred stock;

(ii) on parity with the series

B preferred stock, series C preferred stock, series E preferred stock, series J preferred stock, series L preferred stock and each other

class or series that is not expressly subordinated or made senior to the series F-1 preferred stock;

and (iii) junior to the series I

preferred stock, series N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred

stock and to each other series of preferred stock and each class or series that is expressly made senior to the series F-1 preferred stock,

as well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company.

Dividend Rights.

The holders of series

F-1 preferred stock are entitled to receive dividends equal (on an as converted to common stock basis) to and in the same form as dividends

actually paid on shares of common stock when, as and if such dividends are paid on shares of common stock.

No other dividends shall be

paid on shares of series F-1 preferred stock.

Liquidation Rights .

Upon any liquidation,

dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series F-1 preferred stock shall be entitled

to receive out of the assets of the Company the same amount that a holder of common stock would receive if the shares of series F-1 preferred

stock were fully converted to common stock immediately prior to such liquidation, which amount shall be paid to the holders of series

F-1 preferred stock pari passu with all holders of parity securities and in preference to the holders of junior securities.

Voting Rights .

Except as provided by law,

the holders of series F-1 preferred stock shall have no voting rights.

However, as long as any shares of series F-1 preferred stock are

outstanding, the Company shall not, without the affirmative vote of the holders of a majority of outstanding series F-1 preferred stock,

(a) alter or change adversely the powers, preferences or rights given to the series F-1 preferred stock or alter or amend the certificate

of designation for the series F-1 preferred stock, or (b) amend the Company’s amended and restated articles of incorporation or

other charter documents in any manner that adversely affects any rights of the holders of series F-1 preferred stock.

Conversion Rights .

Each share of series

F-1 preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into such number of shares

of common stock as is determined as follows:

(i) if the closing market price of the common stock on the principal trading market on which

the common stock is then traded or quoted is less than $4.00 per share, then each share of series F-1 preferred stock shall be convertible

into a number of shares of common stock equal to two (2) times the stated value ($4.00 per share), divided by such closing market price

on the date of conversion;

or (ii) if such closing market price is equal to or greater than $4.00 per share, then each share of series

F-1 preferred stock shall be convertible into two (2) shares of common stock.

In addition, upon the earlier to occur of:

(a) the closing

of the sale of shares of common stock to the public at a price of at least $3.00 per share in a public offering pursuant to an effective

registration statement or offering statement under the Securities Act resulting in at least $3,000,000 of gross proceeds to the Company,

(b) the date on which the shares of common stock of the Company are listed on a national stock exchange, including without limitation

the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (any tier), or (c) the date and time, or the occurrence of an event,

specified by vote or written consent of the holders of at least 67% of the then outstanding shares of series F-1 preferred stock, voting

together as a single class, each share of series F-1 preferred stock shall be automatically converted into such number of shares of common

stock as is determined in accordance with the provisions above.

Such conversion price is subject to standard adjustments in the event

of any stock dividends, stock reclassifications and similar events (but not for reverse stock splits).

Redemption Rights .

Holders of series F-1

preferred stock do not have any redemption rights.

Series I Preferred Stock

The series I preferred stock ranks,

with respect to the distribution of assets upon liquidation, (i) senior to all common stock, series A preferred stock, series B preferred

stock, series C preferred stock, series E preferred stock, series F-1 preferred stock, series J preferred stock, series L preferred stock

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

(ii) on parity

with each class or series that is not expressly subordinated or made senior to the series I preferred stock;

and (iii) junior to the series

N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred stock and to each other

series of preferred stock and each class or series that is expressly made senior to the series I preferred stock, as well as to all indebtedness

and other liabilities with respect to assets available to satisfy claims against the Company.

Dividend Rights.

The holders of series

I preferred stock are entitled to receive dividends equal (on an as converted to common stock basis) to and in the same form as dividends

actually paid on shares of common stock when, as and if such dividends are paid on shares of common stock.

No other dividends shall be

paid on shares of series I preferred stock.

Liquidation Rights .

Upon any liquidation,

dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series I preferred stock shall be entitled

to receive out of the assets of the Company the same amount that a holder of common stock would receive if the shares of series I preferred

stock were fully converted to common stock immediately prior to such liquidation, which amount shall be paid to the holders of series

I preferred stock pari passu with all holders of parity securities and in preference to the holders of junior securities.

Voting Rights .

On any matter presented

to stockholders for their action or consideration, each holder of series I preferred stock shall be entitled to cast five (5) votes per

share of series I preferred stock held.

Except as provided by law, the holders of series I preferred stock shall vote together with the

holders of shares of common stock as a single class.

However, as long as any shares of series I preferred stock are outstanding, the Company

shall not, without the affirmative vote of the holders of a majority of outstanding series I preferred stock, (a) alter or change adversely

the powers, preferences or rights given to the series I preferred stock or alter or amend the certificate of designation for the series

I preferred stock, or (b) amend the Company’s amended and restated articles of incorporation or other charter documents in any manner

that adversely affects any rights of the holders of series I preferred stock.

Conversion Rights .

Each share of series

I preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into such number of shares of

common stock as is determined as follows:

(i) if the closing market price of the common stock on the principal trading market on which

the common stock is then traded or quoted is less than $4.00 per share, then each share of series I preferred stock shall be convertible

into a number of shares of common stock equal to two (2) times the stated value ($4.00 per share), divided by such closing market price

on the date of conversion;

or (ii) if such closing market price is equal to or greater than $4.00 per share, then each share of series

I preferred stock shall be convertible into two (2) shares of common stock.

In addition, upon the earlier to occur of:

(a) the closing

of the sale of shares of common stock to the public at a price of at least $3.00 per share in a public offering pursuant to an effective

registration statement or offering statement under the Securities Act resulting in at least $10,000,000 of gross proceeds to the Company,

(b) the date on which the shares of common stock of the Company are listed on a national stock exchange, including without limitation

the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (any tier), or (c) the date and time, or the occurrence of an event,

specified by vote or written consent of the holders of at least 67% of the then outstanding shares of series I preferred stock, voting

together as a single class, each share of series I preferred stock shall be automatically converted into such number of shares of common

stock as is determined in accordance with the provisions above.

Such conversion price is subject to standard adjustments in the event

of any stock dividends, stock reclassifications and similar events (but not for reverse stock splits).

Redemption Rights .

Holders of series I

preferred stock do not have any redemption rights.

Series J Preferred Stock

The series J preferred stock ranks,

with respect to the distribution of assets upon liquidation, (i) senior to all common stock, series A preferred stock and to each other

class or series that is not expressly made senior to or on parity with the series J preferred stock;

(ii) on parity with the series B

preferred stock, series C preferred stock, series E preferred stock, series F-1 preferred stock, series L preferred stock and each other

class or series that is not expressly subordinated or made senior to the series J preferred stock;

and (iii) junior to the series I preferred

stock, series N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred stock

and to each other series of preferred stock and each class or series that is expressly made senior to the series J preferred stock, as

well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company.

Dividend Rights.

The holders of series

J preferred stock are entitled to receive dividends equal (on an as converted to common stock basis) to and in the same form as dividends

actually paid on shares of common stock when, as and if such dividends are paid on shares of common stock.

No other dividends shall be

paid on shares of series J preferred stock.

Liquidation Rights .

Upon any liquidation,

dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series J preferred stock shall be entitled

to receive out of the assets of the Company the same amount that a holder of common stock would receive if the shares of series J preferred

stock were fully converted to common stock immediately prior to such liquidation, which amount shall be paid to the holders of series

J preferred stock pari passu with all holders of parity securities and in preference to the holders of junior securities.

Voting Rights .

On any matter presented

to stockholders for their action or consideration, each holder of series J preferred stock shall be entitled to cast one (1) vote per

share of series J preferred stock held.

Except as provided by law, the holders of series J preferred stock shall vote together with the

holders of shares of common stock as a single class.

However, as long as any shares of series J preferred stock are outstanding, the Company

shall not, without the affirmative vote of the holders of a majority of outstanding series J preferred stock, (a) alter or change adversely

the powers, preferences or rights given to the series J preferred stock or alter or amend the certificate of designation for the series

J preferred stock, or (b) amend the Company’s amended and restated articles of incorporation or other charter documents in any manner

that adversely affects any rights of the holders of series J preferred stock.

Conversion Rights .

Each share of series

J preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into such number of shares of

common stock as is determined as follows:

(i) if the closing market price of the common stock on the principal trading market on which

the common stock is then traded or quoted is less than $4.00 per share, then each share of series J preferred stock shall be convertible

into a number of shares of common stock equal to two (2) times the stated value ($4.00 per share), divided by such closing market price

on the date of conversion;

or (ii) if such closing market price is equal to or greater than $4.00 per share, then each share of series

J preferred stock shall be convertible into two (2) shares of common stock.

In addition, upon the earlier to occur of:

(a) the closing

of the sale of shares of common stock to the public at a price of at least $3.00 per share in a public offering pursuant to an effective

registration statement or offering statement under the Securities Act resulting in at least $3,000,000 of gross proceeds to the Company,

(b) the date on which the shares of common stock of the Company are listed on a national stock exchange, including without limitation

the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (any tier), or (c) the date and time, or the occurrence of an event,

specified by vote or written consent of the holders of at least 67% of the then outstanding shares of series J preferred stock, voting

together as a single class, each share of series J preferred stock shall be automatically converted into such number of shares of common

stock as is determined in accordance with the provisions above.

Such conversion price is subject to standard adjustments in the event

of any stock dividends, stock reclassifications and similar events (but not for reverse stock splits).

Redemption Rights .

Holders of series J

preferred stock do not have any redemption rights.

Series L Preferred Stock

The series L preferred stock ranks,

with respect to the distribution of assets upon liquidation, (i) senior to all common stock, series A preferred stock and to each other

class or series that is not expressly made senior to or on parity with the series L preferred stock;

(ii) on parity with the series B

preferred stock, series C preferred stock, series E preferred stock, series F-1 preferred stock, series J preferred stock and each other

class or series that is not expressly subordinated or made senior to the series L preferred stock;

and (iii) junior to the series I preferred

stock, series N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred stock

and to each other series of preferred stock and each class or series that is expressly made senior to the series L preferred stock, as

well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company.

Dividend Rights.

The holders of series

L preferred stock are entitled to receive dividends equal (on an as converted to common stock basis) to and in the same form as dividends

actually paid on shares of common stock when, as and if such dividends are paid on shares of common stock.

No other dividends shall be

paid on shares of series L preferred stock.

Liquidation Rights .

Upon any liquidation,

dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series L preferred stock shall be entitled

to receive out of the assets of the Company the same amount that a holder of common stock would receive if the shares of series L preferred

stock were fully converted to common stock immediately prior to such liquidation, which amount shall be paid to the holders of series

L preferred stock pari passu with all holders of parity securities and in preference to the holders of junior securities.

Voting Rights .

On any matter presented

to stockholders for their action or consideration, each holder of series L preferred stock shall be entitled to cast one (1) vote per

share of series L preferred stock held.

Except as provided by law, the holders of series L preferred stock shall vote together with the

holders of shares of common stock as a single class.

However, as long as any shares of series L preferred stock are outstanding, the Company

shall not, without the affirmative vote of the holders of a majority of outstanding series L preferred stock, (a) alter or change adversely

the powers, preferences or rights given to the series J preferred stock or alter or amend the certificate of designation for the series

L preferred stock, or (b) amend the Company’s amended and restated articles of incorporation or other charter documents in any manner

that adversely affects any rights of the holders of series L preferred stock.

Conversion Rights .

Each share of series

L preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into such number of shares of

common stock as is determined as follows:

(i) if the closing market price of the common stock on the principal trading market on which

the common stock is then traded or quoted is less than $4.00 per share, then each share of series L preferred stock shall be convertible

into a number of shares of common stock equal to two (2) times the stated value ($4.00 per share), divided by such closing market price

on the date of conversion;

or (ii) if such closing market price is equal to or greater than $4.00 per share, then each share of series

L preferred stock shall be convertible into two (2) shares of common stock.

In addition, upon the earlier to occur of:

(a) the closing

of the sale of shares of common stock to the public at a price of at least $3.00 per share in a public offering pursuant to an effective

registration statement or offering statement under the Securities Act resulting in at least $3,000,000 of gross proceeds to the Company,

(b) the date on which the shares of common stock of the Company are listed on a national stock exchange, including without limitation

the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (any tier), or (c) the date and time, or the occurrence of an event,

specified by vote or written consent of the holders of at least 67% of the then outstanding shares of series L preferred stock, voting

together as a single class, each share of series L preferred stock shall be automatically converted into such number of shares of common

stock as is determined in accordance with the provisions above.

Such conversion price is subject to standard adjustments in the event

of any stock dividends, stock reclassifications and similar events (but not for reverse stock splits).

Redemption Rights .

Holders of series L

preferred stock do not have any redemption rights.

Series Y Senior Preferred Stock

On May 15, 2024, in conjunction with the exchange

of certain senior secured convertible promissory notes, 938,908 shares of series Y preferred senior convertible preferred stock were issued

with an aggregate value of $ 3,755,632 .

What changed 10-Q/A

Item 1. Financial Statements