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Item 1. Financial Statements

2025-08-19 compared with 2025-08-19 · 495 added, 490 removed, 1585 unchanged (38% of the section changed)

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 (Unaudited) and 2023 (Unaudited and restated)

Condensed Consolidated Statements

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

Condensed Consolidated Statements

of Cash Flows for the Nine Months Ended September 30, 2024 (Unaudited and restated) and 2023 (Unaudited and

Notes to Condensed Consolidated Financial Statements (Unaudited and restated)

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 (Unaudited and restated) 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, 2024 (UNAUDITED) AND DECEMBER

September 30, 2024

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

June 30, 2024

December 31, 2023

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Property and equipment, net

Right of use - assets, net

Right of use - assets

Due from related party

4 unchanged sentences

Accrued interest

Right of use – lease liabilities

Right of use – 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 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 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 September 30, 2024 and December 31, 2023, respectively

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 , 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

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;

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

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

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

Additional paid-in capital

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

2024 AND 2023

Ended September 30,

Ended June 30,

COST OF SALES

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(LOSS) INCOME FROM CONTINUING OPERATIONS

OTHER (EXPENSE) INCOME

Other (expense) income

OTHER INCOME (EXPENSE)

Gain on debt refinance and forgiveness

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( 1,537,579 )

( 1,803,657 )

( 1,763,698 )

Amortization of debt discounts

Total other (expense) income

( 1,392,808 )

( 1,755,694 )

Total other income (expense)

( 1,617,601 )

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 (DEFICIT)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024

Three Months Ended September 30, 2024:

EQUITY (DEFICIENCY)

SIX MONTHS ENDED JUNE 30, 2024 AND 2023

E, F-1, J and L

Stockholders’

Balance, June 30, 2024

Additional Paid-In

Stockholders’ (Deficit)

Balance, December 31, 2022 (Restated)

$ 59,540,000 –

$ ( 10,004,808 )

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

$ ( 68,684,115 )

$ ( 1,744,791 )

Conversion of convertible notes payable

Preferred stock Dividends

Issuance of preferred stock series B

Balance, June 30, 2023 (Restated)

$ 59,540,000 –

$ ( 9,802,172 )

September 30, 2024

$ ( 68,228,975 )

$ ( 1,074,413 )

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

Stockholders’

Additional Paid-In

Stockholders’ (Deficit)

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

( 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)

Net income (Restated)

Balance, June 30, 2024 (Restated)

$ ( 69,576,612 )

$ ( 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 NINE MONTHS ENDED SEPTEMBER 30, 2024

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) income

Net (loss) income from continuing operations

$ ( 414,689 )

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

Adjustments to reconcile net loss 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

Net proceeds from line of credit

Payment of note payable

Proceeds from note payable – related party

Proceeds from line of credit

Payment of line of credit

Payment of dividends on preferred stock

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Net cash provided by Discontinued Operations – Financing

NET INCREASE (DECREASE) IN CASH

CASH, BEGINNING OF PERIOD

CASH, END OF PERIOD

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

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

FOR THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023

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 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;

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

Edge View Properties, Inc.

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

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

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

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.

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in consolidation.

Subsidiaries discontinued are shown as discontinued operations.

Reclassifications

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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 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.

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 .

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

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10 years or lease term, if shorter

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.

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.

Valuation of Long-lived Assets

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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:

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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Recognition of revenue when performance obligations are satisfied.

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 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

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 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.

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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.

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 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.

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

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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.

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)

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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

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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

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, 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.

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)

15 unchanged sentences

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

For the nine months ended September 30, 2023, the Company

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 .

4 unchanged sentences

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 $ 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.

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

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.

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

19 unchanged sentences

The Company had sustained recurring operating losses since its inception

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.

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.

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

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RESTATEMENT OF FINANCIAL STATEMENTS

During the three months ended June 30, 2025,

as part of the Company’s ongoing enhancements to internal controls over financial reporting, a detailed review of its interest

expense-related cash flow classification was performed.

As a result, the Company restated certain amounts within the condensed consolidated

statement of cash flows for the nine months ended September 30, 2024.

This reclassification corrects the presentation of $ 1,953,667 of

non-cash interest accrual adjustments related to the Company’s line of credit as of September 30, 2024.

These amounts, previously

presented within net proceeds from the line of credit in financing activities, are now presented within operating activities.

in presentation has no impact on the Company’s condensed consolidated balance sheets, condensed consolidated statements of operations,

or total cash flows for any related period.

Additionally, there was no impact on the condensed consolidated statement of cash flows for

the nine months ended September 30, 2023.

The following table summarizes the impact

of the correction on the Company’s condensed consolidated statement of cash flows for the period ending September 30, 2024.

During the three months ended June 30, 2025, as

part of the Company’s ongoing enhancements to internal controls over financial reporting, a detailed review of its interest expense-related

cash flow classification was performed.

As a result, the Company restated certain amounts within the condensed consolidated statement

of cash flows for the six months ended June 30, 2024.

This was reclassified to correct the presentation of $ 845,427 of non-cash interest

accrual adjustments related to the Company’s line of credit as of June 30, 2024.

These amounts, previously presented within net

proceeds from the line of credit in financing activities, are now presented within operating activities.

This change in presentation

has no impact on the Company’s condensed consolidated balance sheets, condensed consolidated statements of operations, or total

cash flows for any related period.

Additionally, there was no impact on the condensed consolidated statement of cash flows for the six

months ended June 30, 2023.

The following table summarizes the impact of the

correction on the Company’s condensed consolidated statement of cash flows for the period ending June 30, 2024.

Restatement of financial statements

Impact of correction of error

Nine months ended September 30, 2024 (Unaudited)

Six months ended June 30, 2024 (Unaudited)

As previously reported

4 unchanged sentences

$ ( 845,427 )

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.

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

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impact of the error was immaterial.

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.

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

1 unchanged sentence

The Company presented in prior periods operating

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.

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 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

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

September 30, 2023 (Unaudited)

June 30, 2023 (Unaudited)

As previously reported

3 unchanged sentences

$ ( 917,038 )

$ ( 291,345 )

$ ( 1,208,383 )

Statement of operations

Impact of correction of error

Three months ended September 30, 2023 (Unaudited)

Three months ended June 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

Nine months ended September 30, 2023 (Unaudited)

Six months ended June 30, 2023 (Unaudited)

As previously reported

17 unchanged sentences

Impact of correction of error

Nine months ended September 30, 2023 (Unaudited)

Six months ended June 30, 2023 (Unaudited)

As previously reported

6 unchanged sentences

Schedule of accounts payable and accrued expenses

September 30, 2024

June 30, 2024

December 31, 2023

5 unchanged sentences

Accrued board fees

Accrued dividend

Accrued public company fees

Accrued travel expense

Accrued payroll

The Company is delinquent paying certain property

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

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 September 30, 2024

and December 31, 2023 is as follows:

Property and equipment as of June 30, 2024 and

December 31, 2023 is as follows:

Schedule of property and equipment

September 30, 2024

June 30, 2024

December 31, 2023

5 unchanged sentences

Property and equipment, net

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 .

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 .

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 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

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, 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.

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.

What changed 10-Q/A

Item 1. Financial Statements