What changed in this filing

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Item 1. Financial Statements

2024-11-06 compared with 2024-08-14 · 541 added, 530 removed, 1503 unchanged (42% of the section changed)

2 unchanged sentences

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)

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

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

Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited and restated)

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 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 JUNE 30, 2024 AND DECEMBER 31, 2023

AS OF SEPTEMBER 30, 2024 (UNAUDITED) AND DECEMBER

September 30, 2024

December 31, 2023

June 30, 2024

Current assets

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Property and equipment, net

Right of use - assets

Right of use - assets, net

Due from related party

4 unchanged sentences

Accrued interest

Right of use - liabilities

Right of use – lease liabilities

Due to director and officer

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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 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 September 30, 2024 and December 31, 2023, respectively

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 September 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

375,000 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

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

Series B Preferred Stock - 3,000,000 shares authorized, $0.001 par value, stated value of $ 4.00 , 753,929 and 2,139,478 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Series C Preferred Stock - 500 shares authorized, $0.001 par value, stated value of $ 4.00 , 43 and 123 shares issued and outstanding at September 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 September 30, 2024 and December 31, 2023, respectively

Series F-1 Preferred Stock - 50,000 shares authorized, $0.001 par value, stated value $ 4.00 , 9,500 and 35,752 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Series I Preferred Stock - 15,000,000 shares authorized, $0.001 par value, stated value $ 4.00 , 11,540,500 and 14,885,000 issued and outstanding at September 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 September 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 September 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 , 955,114 and 0 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Common Stock;

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

14,555,601 and 25,121 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2024 AND 2023

Ended June 30,

Ended September 30,

COST OF SALES

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(LOSS) INCOME FROM CONTINUING OPERATIONS

OTHER INCOME (EXPENSE)

OTHER (EXPENSE) INCOME

Other (expense) income

Gain on debt refinance and forgiveness

2 unchanged sentences

( 1,386,041 )

( 1,803,657 )

( 1,763,698 )

Amortization of debt discounts

Total other income (expense)

Total other (expense) income

( 1,392,808 )

( 1,755,694 )

( 1,905,768 )

NET (LOSS) INCOME BEFORE DISCONTINUED OPERATIONS

( 1,977,968 )

( 2,281,345 )

LOSS FROM DISCONTINUED OPERATIONS

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PREFERRED STOCK DIVIDENDS

$ ( 125,744 )

$ ( 477,808 )

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

EQUITY (DEFICIENCY)

SIX MONTHS ENDED JUNE 30, 2024 AND 2023

EQUITY (DEFICIT)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024

Three Months Ended September 30, 2024:

E, F-1, J and L

Additional Paid-In

Stockholders’ (Deficit)

Balance, December 31, 2022 (Restated)

$ 59,540,000 –

$ ( 10,004,808 )

Stockholders’

Balance, June 30, 2024

$ 50,317,632 –

$ ( 69,576,612 )

Conversion of convertible notes payable

Conversion of series B preferred

Conversion of series C preferred

Conversion of series F-1 preferred

Conversion of series I preferred

Issuance of series Y preferred stock

Common stock issued in legal settlement

Preferred stock Dividends

Issuance of preferred stock series B

Balance, June 30, 2023 (Restated)

( 1,977,968 )

September 30, 2024

$ 49,982,456 –

$ ( 71,792,589 )

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

EQUITY (DEFICIT)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024

Nine Months Ended September 30, 2024:

E, F-1, J and L

Additional Paid-In

Stockholders’ (Deficit)

Stockholders’

Balance, December 31, 2023 (Restated)

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Common stock issued in Red Rock settlement

Common stock issued in legal settlement

Preferred stock Dividends

Balance, June 30, 2024

( 2,392,657 )

Balance, September 30, 2024

$ ( 71,792,589 )

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

EQUITY (DEFICIT)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024

Three Months Ended September 30, 2023:

E, F-1, J and L

Stockholders’ (Deficit)

Balance, June 30, 2023 (Restated)

$ ( 9,802,172 )

$ ( 68,338,447 )

$ ( 1,183,885 )

Issuance of preferred stock series

Conversion of convertible notes payable

Preferred stock Dividends

September 30, 2023 (Restated)

$ ( 9,793,156 )

$ ( 65,507,891 )

Nine Months Ended September 30, 2023:

E, F-1, J and L

Stockholders’ (Deficit)

Balance, December 31,

2022 (Restated)

$ ( 10,004,808 )

$ ( 68,684,115 )

$ ( 1,744,791 )

Issuance of preferred stock series

Conversion of convertible notes payable

Preferred stock Dividends

September 30, 2023 (Restated)

$ ( 9,793,156 )

$ ( 65,507,891 )

The accompanying notes are an integral part of

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023

Six Months Ended June 30,

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss) income from continuing operations

Net (loss) income

$ ( 2,392,657 )

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

Adjustments to reconcile net (loss) income to net cash used in operating activities:

Amortization of debt discount

Change in estimate for settlement realization rate

Conversion and note issuance cost

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Repayment of SBA loans

Proceeds from convertible notes payable

Payment of convertible notes

Proceeds from line of credit

Payment of line of credit

Net proceeds from line of credit

Payment of note payable

Proceeds from note payable – related party

Payment of dividends on preferred stock

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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

NET INCREASE (DECREASE) IN CASH

CASH, BEGINNING OF PERIOD

CASH, END OF PERIOD

SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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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:

All of Cardiff’s operations are predominantly conducted through, and its income derived from, its Nova Ortho and Spine, LLC (“Nova”)

Its subsidiaries include:

Nova, which was acquired on May 31, 2021;

Edge View Properties, Inc.

1 unchanged sentence

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.

As a result, Platinum Tax is presented as a discontinued operation.

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”).

the accounts of Cardiff and its wholly owned subsidiaries, Nova, Edge View, and Platinum Tax and (collectively, the “Company”).

Subsidiaries shown as discontinued operations include Platinum Tax.

1 unchanged sentence

in consolidation.

Subsidiaries discontinued are shown as discontinued operations.

Reverse Stock Split

22 unchanged sentences

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

A letter of protection is a legally binding contract

between the patient (i.e., the Company’s customer), the patient’s law firm and the Company, as a medical provider.

as a critical legal agreement between an experienced personal injury attorney and the Company, as a medical provider, allowing an injured

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

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

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

The medical provider knows that payment will come

directly from the law firm out of the settlement.

This legally binding contract offers crucial protection when someone is hurt due to

another party’s negligence but lacks sufficient health insurance or faces denial of claim payments from insurance companies.

bills may not be paid for six months to two or more years until case resolution.

Providers must be willing to wait for payment.

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

A letter of protection enables injured clients to

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

Attorneys utilize letters of protection

to construct stronger injury claims, while medical professionals gain guaranteed payment out of settlement proceeds even if treatment

is lengthy or ongoing.

In a personal injury case, the at-fault party

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

However, insurance companies will often refuse to pay these medical

expenses until liability has been determined.

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

if they do not have health insurance.

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

case is being resolved.

An attorney sends a letter of protection to the 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.

The letter of protection is fulfilled.

If no settlement is reached with the defendant’s insurance

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

on its letter of protection and its receivable will not be collected.

In the case of a partial settlement or award at trial, the Company

might only be able to collect a portion of its receivable.

The Company has a 99% collection rate based on

net settlements recorded to its accounts receivable and revenue.

The Company’s accounts receivable balance each reporting period

does not include accounts receivables that were factored (sold).

Further, accounts receivable and revenue are recorded at what the Company

anticipates will ultimately be collected, which historically is 99% of the net recognized upon billing to its patients of gross amounts

for services.

In the past, for those receivables that were factored, the Company was advanced 46% of the accounts receivable balance and

recorded 54% to finance charge.

The Company last factored its accounts receivable in the first quarter of fiscal 2023.

Collection rates

are estimated considering the Company’s 48-month historical collections with primary emphasis to the most current prior 12-month

trailing payment and collection percentage rates.

The Company acquired Nova in May 2021.

Nova was founded in January 2019.

As of December

31, 2023, the Company based its 48-month historical collections analysis on a look back period from December 31, 2023 to 48 months, part

of which was a period of time Cardiff did not yet own Nova.

The method the Company uses to measure expected credit losses is the loss

rate method, and in addition the Company qualitatively evaluates on an ongoing basis various factors, which include market conditions

in which the Company operates, and the status of claims being settled.

The Company has established billing rates, which are not the same

as actual amounts recovered.

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

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

statements at those established billing rates.

The Company’s customers, its patients, typically pay 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 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.

Collection of that revenue

typically occurs eighteen to twenty-four months later and after the patient claim develops and settles.

Historical collection rates are

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

The Company may incur instances whereby

patient claims are not settled.

However, these instances are very rare.

For example, if a patient dies during the claim’s development

period and there is no estate to bequeath, the claim may not be settled.

Settlements that are less than what was billed to the patient

are covered in the Company’s 99% collectability rate.

The Company adopted ASU 2016-13,

“Financial Instruments – Credit Losses.” In accordance with this standard, the Company recognizes an allowance for

credit losses for its trade receivables to present the net amount expected to be collected as of the balance sheet date.

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

Accounts receivable is reported on the balance sheet at the net amounts expected to be collected by the Company.

closely monitors outstanding accounts receivable and recognized an allowance for credit losses in the amount of $ 165,052 as of June

30, 2024, and $ 122,190

as of December 31, 2023.

As of June 30, 2024 and December 31, 2023, the Company had net accounts receivable of

and $ 13,305,254 ,

respectively.

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

The Company recognizes credit losses when such

losses are expected.

These credit losses include those amounts the Company determines will not be collectible when billed.

Historically,

the Company has conducted an annual assessment of its collectability rate of its patients accounts receivables, and then recorded a provision

for changes to this collectability rate as a provision.

The Company calculates a forward-looking collectability rate which it then applies

to its gross billings.

The amount recorded in accounts receivables approximates the amount expected to actually be collected.

The allowance

for credit losses represents any adjustments deemed necessary to the collectability rate based upon an annual review of both actual collections,

as well as any changes in industry billing and collection, and/or legal practices.

During the three and six months ended

June 30, 2024, the Company recognized $ 1,242,017

of allowance for credit losses as bad debt expense.

The Company recognized $ 270,000

of allowance for credit losses as bad debt expense during the three and six months ended June 30, 2023.

As a result of the Company’s

efforts to accelerate cash collections throughout 2024, the Company has experienced lower than normal settlements of its accounts receivable.

This may continue as the Company continues to pay down the liability associated with the third-party factoring of accounts receivable

from previous years.

The Company continues to assess its collections of its accounts receivable through industry analysis and its collectability

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

Based on the Company’s

accounts receivable balances and its revenue, the Company does not believe the bad debt is a material amount.

The following table shows the allowance for credit

losses activity:

Schedule of allowance for credit

losses activity

Beginning Balance at December 31, 2023

$ ( 122,190 )

Current period provision

( 1,242,017 )

Write-off charged against the allowance

Balance at June 30, 2024

$ ( 165,052 )

Accounts receivable consists of amounts due from attorneys

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

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 date.

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.

The Company monitors outstanding cases as they develop through ongoing discussions with attorneys, doctors and third-party medical billing

company and additionally monitors settlement realization rates over time.

Additionally, the Company considers economic factors and events

or trends expected to affect future collections experience.

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.

The Company applies the loss rate method by reviewing

its zero collection history on a quarterly basis and updating its estimates of credit losses to adjust for changes in loss data.

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 September 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 nine months ended September 30, 2024

and 2023, respectively, which is included in selling, general and administrative expenses in the condensed consolidated statement of operations.

The balance of accounts receivable, net as of January 1, 2023 was $ 6,603,920 .

Property and Equipment

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10 years or lease term, if shorter

Goodwill and Other Intangible Assets

Goodwill and indefinite-lived assets are not amortized

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

The Company’s impairment testing

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

The 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.

Goodwill is not amortized but is evaluated for

impairment annually or when indicators of a potential impairment are present.

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 recoverable.

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

The annual evaluation for impairment of Goodwill, if needed, 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 nine months ended September 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

12 unchanged sentences

Revenue is recognized

at a point in time in accordance with ASC 606.

The 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:

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

The Company’s

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

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

Identification of a contract with a customer

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Recognition of revenue when performance obligations are satisfied.

The Company 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 a performance obligation and assesses whether each promised service is distinct.

The Company’s contracts for both its contract

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

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

price is allocated to this single performance obligation.

Accordingly, the Company recognizes revenues (net)

when the patient receives orthopedic care services.

The Company’s patient service contracts generally have performance obligations

which are satisfied at a point in time.

At contract inception, 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 contain a single

performance obligation (providing orthopedic services), as the promise to transfer the individual services is not separately identifiable

from other promises in the contracts and, therefore, not distinct, as a result, the entire transaction price is allocated to this single

performance obligation.

Accordingly, the Company recognizes net revenue when the patient receives

orthopedic care services.

The Company’s patient service contracts generally have performance obligations which are satisfied at

a point in time.

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

Patient service contracts

are generally fixed-price, and the transaction price is in the contract.

Revenue is recognized when obligations under the terms of the

contract with the Company’s 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.

Established billing rates are not the same as

actual amounts recovered for the Company’s healthcare subsidiary.

They generally do not reflect what the Company is ultimately

paid by the customer, insurance carriers and other payors, and therefore are not reported in the consolidated financial statements at

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 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

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

After selling patient cases to

the factor, any additional funds collected by the Company were remitted to the factor.

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 Current Procedural Terminology (“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 has been 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 vendor, which handles settlement claims and negotiations.

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

Settlement rates of 49% or higher based on gross

billed amounts are typically accepted without further negotiation.

Proposed settlement rates below 49% are negotiated when possible 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.

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)

3 unchanged sentences

Non-PIP services.

Fees are collected primarily from third party insurance providers.

These revenues are based on established insurance

billing rates, less allowances for contractual adjustments and uncollectible amounts.

These contractual adjustments vary by insurance

company and self-pay patients.

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

Completing the paperwork for each case and preparing

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

The majority of claims are then filed electronically

except for those remaining insurance carriers requiring paper filing.

An initial response is usually received within four weeks from electronic

filing and up to six weeks from paper filing.

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

The Company’s healthcare revenues are generated

from professional medical billings including facility and anesthesia services.

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 receives 49% of collections from total gross billed.

Accordingly, the Company recognized net healthcare service revenue as

49% of gross billed amounts.

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

The Company satisfies its performance obligations

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 the Company’s

patients, which are due upon final settlement of patients claims.

During the claims process, legal counsel warranties such claims 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

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

the settlement.

Historically through April 2023, the Company’s

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

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

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 eighteen to twenty-four

month collection timeframe, the Company has an accrued liability resulting from the collections of receivables sold to the third party

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

These accounts receivables sold to these third

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

part of the assessment of accounts receivable collectability.

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.

Settlement Rates

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 amounts.

During the nine months ended September 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, which is expected to continue for the foreseeable future.

This new initiative caused the Company to reassess

the average settlement rate used to recognize healthcare service revenue as a prospective change in estimate given new information available.

Accordingly, during the third quarter of 2024, the Company completed a thorough review of its third-party billing data, including reviewing

historical reports and new reporting methods as a part of its updated analysis.

Based upon this review it was determined that a 24-month

lookback period should be used in the analysis of its historical settlement realization rates.

Accordingly, its estimate of its settlement

realization rate was reduced from 49% to 44%, resulting in a $ 1,650,474 million reduction in its accounts receivable and revenue during

the third quarter of 2024 related to the change in estimate.

Additionally, as a result of this reduced settlement realization experience,

the Company recorded reductions to net revenue of $ 0 and $ 1,199,155 for the three and nine months ended September 30, 2024, respectively.

The Company will continue to evaluate its estimate

of its settlement realization rates in the future, which will include a monthly review of the Company’s trailing 24-month historical

settlement realization rate, along with estimates of current and pending settlements through ongoing discussions with attorneys, doctors

and the Company’s third-party medical billing company in order to determine its variable consideration under ASC 606 and the net

transaction price.

The Company will update its settlement realization rate estimate used in determining its accounts receivable and revenue

each quarter based on this review.

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 nine months ended September 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

1 unchanged sentence

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.

The Company recognized advertising and marketing expense of $ 84,914 and $ 71,636 for the three months ended September 30, 2024 and 2023,

respectively.

The Company recognized advertising and marketing expense of $ 263,864 and $ 243,315 for the nine months ended September 30,

2024 and 2023, respectively.

Fair Value Measurements

50 unchanged sentences

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

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.

As of September 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

19 unchanged sentences

The Company had sustained recurring operating losses since its inception

and has an accumulated deficit of $ 69,619,474 as of June 30, 2024.

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

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.

and has an accumulated deficit of $ 71,792,589 as of September 30, 2024.

These factors raise a substantial doubt about the Company’s

ability 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

43 unchanged sentences

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.

The impact of the error correction is reflected in the consolidated balance sheet as of September

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 September

30, 2023 as a $24,681 increase to mezzanine equity and offsetting decrease to the accumulated deficits.

During the preparation of the financial statements

for three months ended March 31, 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.

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

1 unchanged sentence

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.

loss as loss from discontinued operations of $3,705 and $93,005 on the consolidated statement of operations for the three and nine months

ended September 30, 2023, respectively.

The impact of the error corrections also reflected

a $136.12 increase of basic earnings per share, and a $2.30 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

for the three months ended September 30, 2023.

For the nine months ended September 30, 2023, the impact of the error correction reflected

a $167.33 increase of basic earnings per share, and an increase of $2.40 of diluted earnings per share.

The following tables summarize the impact of

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

of operations for the three and nine months ended September 30, 2023, and the condensed consolidated statement of cash flows for the

nine months ended September 30, 2023:

Schedule of restated financial information

Balance sheet

Schedule of of of restated financial information

Impact of correction of error

June 30, 2023 (Unaudited)

September 30, 2023 (Unaudited)

As previously reported

3 unchanged sentences

$ ( 299,663 )

$ ( 291,345 )

$ ( 1,208,383 )

Statement of operations

Impact of correction of error

Three months ended June 30, 2023 (Unaudited)

Three months ended September 30, 2023 (Unaudited)

As previously reported

$ ( 118,304 )

Cost of sales

6 unchanged sentences

Preferred stock dividends

$ ( 125,744 )

Net income attributable to common shareholders

2 unchanged sentences

Impact of correction of error

Six months ended June 30, 2023 (Unaudited)

Nine months ended September 30, 2023 (Unaudited)

As previously reported

17 unchanged sentences

Impact of correction of error

Six months ended June 30, 2023 (Unaudited)

Nine months ended September 30, 2023 (Unaudited)

As previously reported

6 unchanged sentences

Schedule of accounts payable and accrued expenses

June 30, 2024

September 30, 2024

December 31, 2023

1 unchanged sentence

Accrued credit cards

Accrued liability for collections of previously factored receivables

Accrued liability for settlement of previously factored receivables

Accrued income and property taxes

1 unchanged sentence

Accrued board fees

Accrued dividend

Accrued public company fees

Accrued travel expense

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 .

As of September 30, 2024 and December 31, 2023, the balance for these property taxes was $ 1,659 .

PLANT AND EQUIPMENT, NET

Property and equipment as of June 30, 2024 and

December 31, 2023 is as follows:

Property and equipment as of September 30, 2024

and December 31, 2023 is as follows:

Schedule of property and equipment

June 30, 2024

September 30, 2024

December 31, 2023

5 unchanged sentences

Property and equipment, net

For the three months ended June 30, 2024 and 2023,

depreciation expense was $ 3,366 and $ 3,365 , respectively.

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 .

For the three months ended September 30, 2024

and 2023, depreciation expense was $ 3,365 and $ 3,365 , respectively.

For the nine months ended September 30, 2024 and 2023, depreciation

expense was $ 10,096 and $ 11,365 , respectively.

As of September 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

1 unchanged sentence

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.

on July 16, 2014, the Company assumed amounts due from 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 is $ 4,979 due from the previous owners as of September 30, 2024 and December

The Company obtained short-term advances from

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

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.

As of September 30, 2024 and December 31, 2023, the Company

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

During the nine months ended September 30, 2024, the Company paid $ 120,997 to the Chairman.

What changed 10-Q

Item 1. Financial Statements