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Item 1. Financial Statements

2025-08-19 compared with 2025-08-19 · 676 added, 524 removed, 1399 unchanged (46% of the section changed)

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 2024

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2025 (Unaudited) and 2024 (Unaudited and Restated)

Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2025 (Unaudited) and 2024 (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 (Unaudited) and 2023 (Unaudited and restated)

Condensed Consolidated Statements

of Cash Flows for the Three Months Ended March 31, 2025 (Unaudited and Restated) and 2024 (Unaudited and Restated)

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)

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CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2025 (UNAUDITED) AND DECEMBER

March 31, 2025

AS OF SEPTEMBER 30, 2024 (UNAUDITED) AND DECEMBER

September 30, 2024

December 31, 2023

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Right of use – lease liabilities

Due to director and officer

Notes payable – current portion

Line of credit

Convertible notes payable

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

Net liabilities of discontinued operations

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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 , 948,907 and 921,636 shares issued and outstanding at March 31, 2025 and December 31, 2024, 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;

407,184 and 397,464 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

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 , 1,267,467 and 1,279,867 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Series C Preferred Stock - 500 shares authorized, $0.001 par value, stated value of $ 4.00 , 74 shares issued and outstanding at March 31, 2025 and December 31, 2024

Series E Preferred Stock - 1,000,000 shares authorized, $0.001 par value, stated value $ 4.00 , 175,375 shares issued and outstanding at March 31, 2025 and December 31, 2024

Series F-1 Preferred Stock - 50,000 shares authorized, $0.001 par value, stated value $ 4.00 , 3,875 shares issued and outstanding at March 31, 2025 and December 31, 2024

Series I Preferred Stock - 15,000,000 shares authorized, $0.001 par value, stated value $ 4.00 , 10,466,592 and 10,469,092 issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Series L Preferred Stock - 400,000 shares authorized, $0.001 par value, stated value $ 4.00 , 319,493 shares issued and outstanding at March 31, 2025 and December 31, 2024

Series Y Senior Convertible Preferred Stock - 1,250,000 shares authorized, $0.001 par value, stated value of $ 4.00 , 990,900 and 979,125 shares issued and outstanding at March 31, 2025 and December 31, 2024, 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;

15,330,275 and 15,300,475 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

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

Additional paid-in capital

( 7,581,212 )

Accumulated deficit

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND

Ended March 31,

FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER

30, 2024 AND 2023

Ended September 30,

COST OF SALES

1 unchanged sentence

Depreciation expense

Loss on disposal of fixed assets

Share based compensation

1 unchanged sentence

Total operating expenses

INCOME FROM OPERATIONS

(LOSS) INCOME FROM CONTINUING OPERATIONS

OTHER (EXPENSE) INCOME

Other expense

Other (expense) income

Gain on debt refinance and forgiveness

Penalties and fees

Interest expense

( 1,386,041 )

( 1,803,657 )

( 1,763,698 )

Amortization of debt discounts

Total other expense

LOSS FROM CONTINUING OPERATIONS

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

NET LOSS FOR THE PERIOD

NET (LOSS) INCOME FOR THE PERIOD

$ ( 1,977,968 )

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PREFERRED STOCK DIVIDENDS

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS

$ ( 2,215,977 )

$ ( 3,108,474 )

BASIC AND DILUTED LOSS PER SHARE

BASIC (LOSS) INCOME PER SHARE

CONTINUING OPERATIONS

DISCONTINUED OPERATIONS

WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC AND DILUTED

DILUTED (LOSS) INCOME PER SHARE

CONTINUING OPERATIONS

DISCONTINUED OPERATIONS

WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC

WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED

The accompanying notes are an integral part of

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’

THREE MONTHS ENDED MARCH 31, 2025 AND 2024

Preferred Stock Series

B, E, F-1, and L

Preferred Stock Series C

Additional Paid-In

EQUITY (DEFICIT)

THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024

Three Months Ended September 30, 2024:

E, F-1, J and L

Stockholders’

Balance, December 31, 2024

$ 45,792,868 –

Balance, June 30, 2024

$ 50,317,632 –

$ ( 69,576,612 )

Conversion of series B preferred stock

Conversion of series I preferred stock

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

Balance, March 31, 2025

( 1,977,968 )

September 30, 2024

$ 49,982,456 –

Preferred Stock Series

$ ( 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

Preferred Stock

Additional Paid-In

Stockholders’

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( 1,385,549 )

( 5,542,196 )

Conversion of series C preferred stock

Conversion of series E preferred stock

Conversion of series F-1 preferred stock

Conversion of series I preferred stock

5 unchanged sentences

Issuance of series I preferred stock to officers

Issuance of series Y preferred stock

Cancellation of series C preferred stock

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Common stock issued in Red Rock settlement

Common stock issued in legal settlement

Preferred stock Dividends

Balance, March 31, 2024

( 2,392,657 )

The accompanying notes are an integral part

of these condensed consolidated financial statements

( 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

these condensed consolidated financial statements

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND

Three Months Ended March 31,

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

$ ( 450,777 )

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

Provision for credit losses

Change in estimate for settlement realization rate

Conversion and note issuance cost

Loss on disposal of assets

Interest included in line of credit

Share issuance for compensation to directors and officers

Share issuance for compensations to directors and officers

Share issuance for service rendered

Fair value settled upon conversion

Gain on settlement or forgiveness of debt

(Increase) decrease in:

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Accounts payable and accrued expense

Due to related party

Accrued officers compensation

3 unchanged sentences

( 2,043,238 )

Net cash provided by discontinued operations – operating

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

FINANCING ACTIVITIES

Payments to director

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

Payment of dividends on preferred stock

Net cash provided by financing activities

NET (DECREASE) INCREASE IN CASH

Net cash provided by Discontinued Operations – Financing

NET INCREASE (DECREASE) IN CASH

CASH, BEGINNING OF PERIOD

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Common stock issued upon conversion of preferred stock

Dividends on preferred stock, including accrued dividends on preferred stock

*For the three months ended March 31, 2025, a lease modification recorded

during the first quarter of 2025 increased right of use assets and right of use liabilities by $83,669.

For the three months ended

March 31, 2024, a lease modification recorded during the first quarter of 2024 increased right of use assets and right of use liabilities

Series Y preferred stock issued in exchange of convertible notes payable

Promissory note payable issued in settlement agreement

Right of use assets acquired

The accompanying notes are an integral part of

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2025 AND

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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

All significant

intercompany accounts and transactions are eliminated in consolidation.

The loss from discontinued operations presented in the condensed

consolidated statement of operations is a part of the execution of a settlement during the three months ended March 31, 2024 that was

previously reached in July 2022 with six previous owners of Red Rock Travel Group, LLC (“Red Rock”), an entity that was discontinued

by the Company in May 2019.

Net liabilities from discontinued operations on the condensed consolidated balance sheets as of March 31,

2025 and December 31, 2024 include the residual liabilities related to the sale of Platinum Tax Defenders (“Platinum Tax”),

a business previously owned by the Company, which was sold in November 2023.

Please refer to Note 11.

Discontinued Operations for

further detail.

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.

All significant intercompany accounts and transactions are eliminated

in consolidation.

Reclassifications

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Reverse Stock Split

On January 9, 2024, the Company effected a 1-for-75,000

reverse split of its outstanding common stock.

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

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

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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 less than 1.0% of its outstanding accounts receivable, thereby

resulting in a collection rate of 99%.

The Company does not have a significant exposure

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

accounts receivable.

Although possible, claims resulting in zero collection upon settlement are rare based on the Company’s historical

experience and has historically been 0.5% to 1.0% of its outstanding accounts receivable, thereby resulting in a collection rate of 99%.

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

applies the loss rate method by reviewing its zero collection history on a quarterly 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

As of March 31, 2025 and December 31, 2024, the Company’s allowance for credit losses was $ 249,799

and $ 255,215 ,

respectively.

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

for each period, respectively.

The Company recognized $ 112,727

of credit loss expense during the three months ended March 31, 2025 and 2024, 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, 2024 was $ 13,305,254 .

The following table shows the allowance for credit

losses activity:

Schedule of allowance for credit

losses activity

Balance at January 1

$ ( 255,215 )

$ ( 122,190 )

Current period provision

Write off charged against the allowance

Balance at March 31

$ ( 249,799 )

$ ( 122,190 )

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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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 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 three months ended March 31, 2025 and 2024, the Company did no t recognize any goodwill impairment and noted there

were no such triggering events.

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

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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.

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.

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.

In determining net revenue to record under ASC

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These services primarily include slip and falls as well as smaller nominal

Non Personal Injury Protection (“PIP”) services.

As described above, these revenues are based on established insurance billing

rates, less allowances for contractual adjustments and uncollectible amounts.

These contractual adjustments vary by insurance company

and self-pay patients.

The Company computes these contractual and other adjustments based on its historical settlement realization experience.

Completing the paperwork for each case and preparing it for billing takes approximately ten business days after a procedure is performed.

The majority of claims are then filed electronically except for those remaining insurance carriers requiring paper filing.

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.

Non-PIP services.

As described above, these revenues are based on established insurance billing rates, less allowances for contractual

adjustments and uncollectible amounts.

These contractual adjustments vary by insurance company and self-pay patients.

The Company computes

these contractual and other adjustments based on its historical settlement realization experience.

Completing the paperwork for each case

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

The majority of claims are then filed

electronically except for those remaining insurance carriers requiring paper filing.

An initial response is usually received within four

weeks from electronic filing and up to six weeks from paper filing.

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

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

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

are considered part of one integrated performance obligation.

The Company satisfies performance obligations

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Settlement Rates

Prior to fiscal year 2024, the Company historically

realized a 49% settlement rate from total gross billed charges.

Accordingly, the Company had historically recognized net healthcare service

revenue as 49% of gross billed amounts.

During the three months ended March 31, 2024, the Company underwent efforts to accelerate cash

settlement of its accounts receivable to generate cash flow for operations.

The Company did this by shortening its settlement negotiations

with insurance companies and accepting lower settlement amounts.

Additionally, during 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.

upon this review, it was determined that a 24-month lookback period should be used in the analysis of the Company’s historical settlement

realization rates.

As a result of the new efforts to accelerate cash settlement during the three months ended March 31, 2024, the Company

realized a 42.9% 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.

Accordingly, the Company recorded reductions to net revenue of $ 339,834 for the three

months ended March 31, 2024.

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.

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 PIP related procedures, typically car accidents, and are settled on a contingency basis.

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 the Company 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.

The Company ceased factoring of accounts receivable in the first

quarter of 2023.

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 $ 90,169 and $ 82,051 for the for the three months ended March 31, 2025 and

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

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The expense resulting from share-based payments

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

is recorded in the consolidated statements of operations.

Income taxes are determined in accordance with

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

As of March 31, 2025 and 2024, 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

6 unchanged sentences

outstanding if the potentially dilutive securities had been issued.

Income available to common stockholders consists of net (loss) income

less any preferred stock dividends.

Potentially dilutive securities include outstanding stock options, warrants, and debts convertible

into common stock.

The dilutive effect of stock options and warrants are reflected in diluted earnings per common share by application

of the treasury stock method.

Under the treasury stock method, an increase in the fair market value of the Company’s common stock

can result in a greater dilutive effect from potentially dilutive securities.

The diluted effect of debt convertibles is reflected utilizing

the if converted method.

Potentially dilutive securities include outstanding stock options,

warrants, and debts convertible into common stock.

The dilutive effect of stock options and warrants are reflected in diluted earnings

per common share by application of the treasury stock method.

Under the treasury stock method, an increase in the fair market value of

the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities.

The diluted effect of debt

convertibles is reflected utilizing the if converted method.

Going Concern

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The Company had sustained recurring operating losses since its inception

and has an accumulated deficit of $ 73,645,307 as of March 31, 2025.

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

These factors raise a substantial doubt about the Company’s

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Should the Company not be able to raise sufficient funds, it may cause cessation of operations.

Recently Adopted Accounting Standards

Recently Issued Accounting Standards

The FASB issued Accounting Standards Update (“ASU”)

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The purpose of the amendments is to enable “investors

to better understand an entity’s overall performance” and assess “potential future cash flows.” There were no

material impacts on the consolidated financial statements at adoption.

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

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

the financial statements.

Recently Adopted Accounting Standards

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

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

There was no impact to the consolidated financial statements at adoption.

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

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 three months ended March 31, 2025 and 2024.

These were reclassified to correct the presentation of $ 1,137,308 and

$ 152,795 of non-cash interest accrual adjustments related to the Company’s line of credit as of March 31, 2025 and 2024, respectively.

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

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.

The following tables summarize the impact of the correction

on the Company’s condensed consolidated statement of cash flows for the periods ending March 31, 2025 and 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 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.

Restatement of financial statements

Impact of correction of error

Three months ended March 31, 2025 (Unaudited)

Nine months ended September 30, 2024 (Unaudited)

As previously reported

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$ ( 1,953,667 )

During the preparation of the financial statements

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

R convertible preferred stock and the related dividend accrual.

Pursuant to ASC 250, Accounting changes and error corrections issued

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

impact of the error was immaterial.

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

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

The Company presented in prior periods operating

loss as loss from discontinued operations of $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 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

Impact of correction of error

Three months ended March 31, 2024 (Unaudited)

September 30, 2023 (Unaudited)

As previously reported

Net cash used in operating activities of continuing operations

$ ( 1,187,816 )

$ ( 1,035,021 )

Net cash provided by financing activities of continuing operations

Total liabilities

Mezzanine equity

Total stockholders' equity

$ ( 299,663 )

Statement of operations

Impact of correction of error

Three months ended September 30, 2023 (Unaudited)

As previously reported

Three months ended March 31, 2025 (unaudited)

Net cash used in operating activities of continuing operations

Cost of sales

Operating expense

Income from operations

Other income (expense), net

Net income before discontinued operations

Loss from discontinued operations

Net income for the period

Preferred stock dividends

Net income attributable to common shareholders

Basic earnings per share for continuing operations

Diluted earnings per share for continuing operations

Impact of correction of error

Nine months ended September 30, 2023 (Unaudited)

As previously reported

$ ( 304,967 )

Net cash provided by financing activities of continuing operations

Cost of sales

Operating expense

Income from operations

Other income (expense), net

( 1,908,110 )

The Company restated its financial statements

for the three months ended March 31, 2024 as a result of a change in classification of credit loss expense to net revenue.

to the preparation of the financial statements for the three months ended March 31, 2024, the Company identified and corrected its accounting

for its credit loss expense of $ 339,834 , which was reclassified to net revenue as variable consideration accounted for under ASC 606.

The following table summarizes the impact of

the correction on the Company’s condensed consolidated statement of operations for the three months ended March 31, 2024.

adjustment had no effect on the Company’s condensed consolidated balance sheet, reported loss from operations, net loss, or cash

used in operating activities for the period adjusted.

Schedule of restated financial information

( 1,905,768 )

Net income before discontinued operations

Loss from discontinued operations

Net income for the period

Preferred stock dividends

$ ( 605,384 )

Net income attributable to common shareholders

Basic earnings per share for continuing operations

Diluted earnings per share for continuing operations

Statement of Cash Flows

Impact of correction of error

Nine months ended September 30, 2023 (Unaudited)

As previously reported

For the three months ended March 31, 2024 (unaudited)

Net cash used in operating activities of continuing operations

$ ( 603,392 )

Selling, general and administrative

$ ( 557,542 )

Net cash provided by financing activities of continuing operations

$ ( 131,262 )

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Schedule of accounts payable and accrued expenses

March 31, 2025

September 30, 2024

December 31, 2023

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Accrued credit cards

Accrued liability for settlements of previously factored receivables

Accrued liability for settlement of previously factored receivables

Accrued income and property taxes

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Accrued board fees

Accrued expense – dividend payable

Accrued dividend

Accrued public company fees

Accrued payroll and bonuses

Accrued expense – medical procedures

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 .

PLANT AND EQUIPMENT, NET

Property and equipment as of March 31, 2025 and

December 31, 2024 is as follows:

Property and equipment as of September 30, 2024

and December 31, 2023 is as follows:

Schedule of property and equipment

March 31, 2025

September 30, 2024

December 31, 2023

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Property and equipment, net

For the three months ended March 31, 2025 and

2024, depreciation expense was $ 3,365 .

At March 31, 2025, the Company identified assets that were no longer functional in its medical

As such, the Company has recorded a reduction in medical equipment and the related depreciation which resulted in a loss from

the disposal of $ 12,593 in the condensed consolidated statement of operations for the three months ended March 31, 2025.

As of March 31, 2025 and December 31, 2024, 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

4 unchanged sentences

demand and do not bear interest.

The balance of these amounts is $ 4,979 due from the previous owners as of March 31, 2025 and December

On August 25, 2023, the Company issued a twelve-month

convertible promissory note in the principal amount of $ 5,000 to the Company’s CEO for the Company’s operating expenses.

rate of interest is 10 % per annum.

In August of 2024, the remaining outstanding principal and interest of $ 5,501 was paid in full.

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 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/A

Item 1. Financial Statements