What changed in this filing

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Item 1. Financial Statements

2026-08-12 compared with 2026-05-13 · 690 added, 409 removed, 1121 unchanged (50% of the section changed)

2 unchanged sentences

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Condensed Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2026 (Unaudited) and 2025 (Unaudited)

Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2026 (Unaudited) and 2025 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2026 (Unaudited) and 2025 (Unaudited and Restated)

Condensed Consolidated Balance Sheets as of June 30, 2026 (Unaudited) and December 31, 2025

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2026 (Unaudited) and 2025 (Unaudited)

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2026 (Unaudited) and 2025 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2026 (Unaudited) and 2025 (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

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CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2026 (UNAUDITED) AND DECEMBER

March 31, 2026

December 31, 2025

AS OF JUNE 30, 2026 (UNAUDITED) AND DECEMBER

Current assets

5 unchanged sentences

Due from related party

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' (DEFICIT)/EQUITY

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY/(DEFICIT)

Current liabilities

6 unchanged sentences

Line of credit

Convertible notes payable, net of debt discounts of $ 815,228 and $ 131,705 , respectively – current portion

Derivative liabilities – current portion

Convertible notes payable, net of debt discounts of $ 1,061,124 and $ 131,705 ,

respectively – current portion

Derivative liabilities

Total current liabilities

5 unchanged sentences

Mezzanine equity

Redeemable Series N Senior Convertible Preferred Stock - 3,000,000 shares authorized, $0.001 par value, stated value $ 4.00 , 0 and 1,037,311 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Redeemable Series X Senior Convertible Preferred Stock - 5,000,000 shares authorized, $0.001 par value, stated value of $ 4.00 ;

449,117 and 438,388 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

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

authorized, $ 0.001 par value, stated value $ 4.00 , 0 and 1,037,311 shares issued and outstanding at June 30, 2026 and December 31,

2025, respectively

Redeemable Series X Senior Convertible Preferred Stock

- 5,000,000 shares authorized, $ 0.001 par value, stated value of $ 4.00 ;

460,233 and 438,388 shares issued and outstanding at June

30, 2026 and December 31, 2025, respectively

Total Mezzanine Equity

Stockholders' equity/(deficit)

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, 2026 and December 31, 2025

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, 2026 and December 31, 2025

Series N Senior Convertible Preferred Stock - 3,000,000 shares authorized, $0.001 par value, stated value $ 4.00 , 1,068,004 and 0 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Series Y Senior Convertible Preferred Stock - 1,500,000 shares authorized, $0.001 par value, stated value of $ 4.00 , 1,094,354 and 1,067,878 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

Series F-1 Preferred Stock - 50,000 shares authorized, $0.001 par value,

stated value $ 4.00 , 3,875 shares issued and outstanding at June 30, 2026 and December 31, 2025

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, 2026 and December 31, 2025

Series N Senior Convertible Preferred Stock - 3,000,000 shares authorized,

$0.001 par value, stated value $ 4.00 , 1,099,957 and 0 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively

Series Y Senior Convertible Preferred Stock - 1,500,000 shares authorized,

$0.001 par value, stated value of $ 4.00 , 1,122,091 and 1,067,878 shares issued and outstanding at June 30, 2026 and December 31,

2025, respectively

Common Stock:

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

15,167,350 and 13,701,698 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

and 13,701,698 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively

Additional paid-in capital

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( 2,469,661 )

Total liabilities, mezzanine equity and stockholders’ equity/(deficit)

Total liabilities, mezzanine equity and stockholders’

equity/(deficit)

The accompanying notes are an integral part of

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND

Three Months Ended March 31,

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

2026 AND 2025

Three Months Ended June 30,

Six Months Ended June 30,

COST OF SALES

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(LOSS) / INCOME FROM OPERATIONS

( 1,055,802 )

OTHER (EXPENSE) INCOME

Other income (expense)

Derivative liability loss on issuance and changes in fair value

Derivative liability gain (loss) on issuance and changes in fair value

Interest expense

( 2,137,419 )

( 1,836,072 )

( 4,048,156 )

( 2,829,186 )

Amortization of debt discounts

3 unchanged sentences

( 4,515,178 )

( 2,830,783 )

$ ( 2,478,906 )

$ ( 1,226,395 )

$ ( 5,570,980 )

$ ( 1,677,172 )

PREFERRED STOCK DIVIDENDS

1 unchanged sentence

$ ( 254,008 )

$ ( 555,359 )

$ ( 499,453 )

NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS

1 unchanged sentence

$ ( 1,480,403 )

$ ( 6,126,339 )

$ ( 2,176,625 )

BASIC AND DILUTED LOSS PER SHARE

WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC AND DILUTED *

Shares outstanding for the three months ended March 31, 2025 have

been restated for the 1-for-3 reverse stock split effective January 12, 2026.

Summary of Significant Accounting Policies .

Shares outstanding for the three and six months ended June 30, 2025 have been

restated for the 1-for-3 reverse stock split effective January 12, 2026.

Summary of Significant Accounting

The accompanying notes are an integral part of

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EQUITY/(DEFICIT) *

THREE MONTHS ENDED MARCH 31, 2026 AND 2025

Three Months Ended March 31, 2026:

Preferred Stock Series

THREE AND SIX MONTHS ENDED JUNE 30, 2026 AND

Three and Six Months Ended June 30, 2026:

Additional Paid-In

Unearned Stock-based

Stockholders’ Equity

Stockholders’

Balance, December 31,

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$ ( 2,469,661 )

Issuance of common stock related to bridge loans

Issuance of common stock related

to bridge loans

Common stock issued for services

Cancellation of common stock for award forfeiture

Conversion of deferred compensation to common stock

Reclassification of series N preferred stock from mezzanine equity to permanent equity

Cancellation of common stock for

award forfeiture

Conversion of deferred compensation

to common stock

Reclassification of series N preferred

stock from mezzanine equity to permanent equity

Issuance of series N preferred stock

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$ ( 82,855,513 )

Three Months Ended March 31, 2025:

Preferred Stock Series

Issuance of common stock in settlement of accrued

Common stock issued for services

Cancellation of common stock for

award forfeiture

Issuance of series N preferred stock

Issuance of series Y preferred stock

Stock compensation expense

Preferred stock dividends

( 2,478,906 )

Balance, June 30, 2026

$ ( 241,066 )

$ ( 85,617,319 )

Three and Six Months Ended June 30, 2025:

B, E, F-1 and L

Preferred Stock

Additional Paid-In

Stockholders’ (Deficit)

Stockholders’

Balance, December 31,

$ ( 72,949,085 )

Conversion of series B preferred stock

Conversion of series I preferred stock

Conversion of series B preferred

Conversion of series I preferred

Issuance of series Y preferred stock

2 unchanged sentences

$ ( 73,645,307 )

Conversion of series B preferred

( 1,567,467 )

( 6,269,868 )

Conversion of series C preferred

Conversion of series E preferred

Issuance of series Y preferred stock

Issuance of B, C and E preferred

stock in exchange for series I preferred stock

( 1,566,000 )

Common stock issued for services

Common stock cancelled for legal

Preferred stock dividends

( 1,226,395 )

Balance, June 30, 2025

$ ( 75,125,710 )

*Shares outstanding have been restated for the 1-for-3 reverse stock

5 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND

Three Months Ended March 31,

2025 (Restated)

FOR THE SIX MONTHS ENDED JUNE 30, 2026 AND 2025

Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES

1 unchanged sentence

$ ( 1,677,172 )

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

Adjustments to reconcile net loss to net cash used

in operating activities:

Amortization of debt discount

1 unchanged sentence

Loss on disposal of assets

Loss on issuance / change in fair value of derivative liability

Loss on issuance / change in fair value of derivative

Interest included in line of credit

3 unchanged sentences

( 1,684,667 )

( 3,371,656 )

Right of use – assets

6 unchanged sentences

Net cash used in operating activities

FINANCING ACTIVITIES

( 1,889,003 )

CASH FLOWS FROM FINANCING ACTIVITIES

Repayment of SBA loans

5 unchanged sentences

Net cash provided by financing activities

NET INCREASE (DECREASE) IN CASH

NET DECREASE IN CASH

CASH, BEGINNING OF PERIOD

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NON-CASH INVESTING AND FINANCING ACTIVITIES*:

Common stock issued upon conversion of preferred stock

Dividends on preferred stock, including accrued dividends on preferred stock

Common stock issued upon conversion of preferred

Dividends on preferred stock, including accrued

dividends on preferred stock

Common stock issued upon conversion of accrued salaries

Promissory notes payable issued in settlement of accrued salaries

Promissory notes payable issued in settlement of

accrued salaries

Discount on convertible notes payable

Recognition of derivative liability upon issuance of convertible note

Recognition of derivative liability upon issuance

of convertible notes

Recognition of derivative liability related to commitment

Change in fair value of derivative liability

$ ( 838,720 )

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

increased right of use assets and right of use liabilities by $83,669.

*For the six months ended June 30, 2025, a lease modification recorded

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

The accompanying notes are an integral part of

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND

FOR THE THREE AND SIX MONTHS ENDED JUNE 30,

2026 AND 2025

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Reverse Stock Split

On January 12, 2026, we implemented a 1-for-3 reverse

split of our outstanding shares of common stock.

All share and per share data throughout these consolidated financial statements have

been retroactively adjusted to reflect the reverse stock split.

The total number of authorized shares of common stock did not change.

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

stock” to “additional paid-in capital.” In addition, the conversion prices of the outstanding convertible notes and

certain series of preferred stock were adjusted to reflect a proportional decrease in the number of shares of common stock to be issued

upon conversion.

On January 12, 2026, the Company implemented a

1-for-3 reverse split of our outstanding shares of common stock.

All share and per share data throughout these consolidated financial

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

The total number of authorized shares of common stock

did not change.

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

“common stock” to “additional paid-in capital.” In addition, the conversion prices of the outstanding convertible

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

be issued upon conversion.

All fractional shares were rounded up.

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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.

its third-party medical billing company and additionally monitors settlement realization rates over time.

Additionally, the Company considers

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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 less than 1.0% of its outstanding accounts receivable, thereby resulting in a collection rate of

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 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 twelve 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 March 31, 2026 and December 31, 2025, the Company’s 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 twelve 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, 2026 and December 31, 2025, the Company’s allowance for credit losses was $ 430,000

and $ 400,000 ,

respectively.

As of June 30, 2025 and December 31, 2024, the Company’s allowance for credit losses was $ 249,799

and $ 255,215 ,

respectively.

The Company recognized $ 30,000

credit loss expense during each of the three and six months ended June 30, 2026, and $ 0

and $ 112,727

of credit loss expense during the three and six months ended June 30 2025, respectively, which is included in selling, general and

administrative expenses in the consolidated statement of operations.

The balance of accounts receivable, net as of January 1, 2025

was $ 15,934,490 .

The Company recognized $ 0 and $ 112,727 of credit loss expense during the three months ended March 31, 2026 and 2025, respectively,

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

The balance of accounts

receivable, net as of January 1, 2025 was $ 15,934,490 .

The balance of the allowance for credit losses was $ 255,215 as of January 1, 2025.

The balance of the allowance for credit losses was $ 255,215

as of January 1, 2025.

The following table shows the allowance for credit

7 unchanged sentences

Write off charged against the allowance

Balance at March 31

Balance at June 30

$ ( 430,000 )

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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, 2026 and 2025, the Company did no t recognize any goodwill impairment and noted there were no such

During the six months ended June 30, 2026 and 2025, the Company did no t recognize any goodwill impairment and noted there were no such

triggering events.

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

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

Settlement amounts are

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

realization trends obtained from discussions with attorneys, doctors and the Company’s third-party medical billing company.

amounts are negotiated, and prolonged settlement negotiations are not indicative of a greater likelihood of reduced settlement realization

or zero settlement.

The Company may accept a lower settlement realization

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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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Settlement Rates

The Company periodically evaluates its estimated

settlement realization rate at which revenue is recorded in accordance with ASC 606.

This includes a monthly review of historical data

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

doctors and third-party medical billing company in order to determine the variable consideration under ASC 606 and the net transaction

For the three months ended March 31, 2026 and 2025, the Company realized a 41% and 44% average settlement rate of its gross billed

charges, respectively.

The Company periodically evaluates its

estimated settlement realization rate at which revenue is recorded in accordance with ASC 606.

This includes a monthly review of

historical data and settlement realization rates, 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 the variable

consideration under ASC 606 and the net transaction price.

For each of the three and six months ended June 30, 2026, the Company

realized a 41% average settlement rate of its gross billed charges.

For each of the three and six months ended June 30, 2025, the

Company realized a 43% average settlement rate of its gross billed charges.

Contract Fees (Non-PIP)

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The Company recognized advertising and

marketing expense of $ 62,530 and $ 90,169 for the three months ended March 31, 2026 and 2025, respectively.

marketing expense of $ 60,176 and $ 113,169 for the three months ended June 30, 2026 and 2025, respectively.

The Company recognized advertising

and marketing expense of $ 122,706 and $ 203,338 for the six months ended June 30, 2026 and 2025, respectively.

Fair Value Measurements

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

For the three months ended March 31, 2026 and

2025, the Company did no t have any interest and penalties associated with tax positions and did not have any significant unrecognized

For the three and six months ended June 30, 2026

and 2025, the Company did no t have any interest and penalties associated with tax positions and did not have any significant unrecognized

uncertain tax positions.

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assets and liabilities and commitments in the normal course of business.

The Company had sustained operating losses since its inception

and has an accumulated deficit of $ 82,855,513 and $ 79,490,980 as of March 31, 2026 and December 31, 2025, respectively.

The Company has sustained operating losses since its inception

and has an accumulated deficit of $ 85,617,319 and $ 79,490,980 as of June 30, 2026 and December 31, 2025, respectively.

The Company had

negative cash flow from operations of $ 16,730 and $ 491,420 for the three months ended March 31, 2026 and 2025, respectively.

negative cash flow from operations of $ 668,649 and $ 1,889,003 for the six months ended June 30, 2026 and 2025, respectively.

These factors

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270 disclosures but do not expect this update to have a material impact on our financial statements.

RESTATEMENT OF FINANCIAL STATEMENTS

During the second quarter of 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.

This was reclassified to correct the presentation of $ 1,137,308 of non-cash interest

accrual adjustments related to the Company’s line of credit as of March 31, 2025.

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.

The following table summarizes the impact of the

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

Schedule of restated financial information

Impact of correction of error

Three months ended March 31, 2025 (Unaudited)

As previously reported

Net cash used in operating activities of continuing operations

$ ( 1,628,728 )

$ ( 491,420 )

Net cash provided by financing activities of continuing operations

$ ( 1,137,308 )

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Schedule of accounts payable and accrued expenses

March 31, 2026

June 30, 2026

December 31, 2025

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PROPERTY AND EQUIPMENT, NET

Property and equipment as of March 31, 2026 and

Property and equipment as of June 30, 2026 and

December 31, 2025 is as follows:

Schedule of property and equipment

March 31, 2026

June 30, 2026

December 31, 2025

5 unchanged sentences

Property and equipment, net

For the three months ended March 31, 2026 and

For the three months ended June 30, 2026 and 2025,

depreciation expense was $ 253 and $ 763 , respectively.

During the first quarter of 2025, the Company identified assets that were

no longer functional in its medical facilities.

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, 2026 and December 31, 2025, the

For the six months ended June 30, 2026 and 2025, depreciation expense was $ 846 and

$ 4,128 , respectively.

During the first quarter of 2025, the Company identified assets that were no longer functional in its medical facilities.

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 six months ended June 30, 2025.

As of June 30, 2026 and December 31, 2025, the

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

2 unchanged sentences

RELATED PARTY TRANSACTIONS

On March 6, 2026, the Company entered into a lock-up

and compensation resolution agreement with Daniel Thompson, the Company’s former Chairman of the Board and a significant stockholder,

to resolve outstanding accrued compensation obligations.

Under the agreement, the Company issued an unsecured promissory note in the principal

amount of $ 116,667 bearing interest at 10% annually, payable interest-only in year one and 50% principal in each of years two and three,

with all amounts due within three years.

The agreement also required Mr.

Thompson to execute a lock-up agreement in connection

with the Company’s planned public offering.

On June 30, 2026, the Company issued an unsecured

promissory note in the principal amount of $ 233,333 to Daniel Thompson, the Company’s former Chairman of the Board and a significant

stockholder, to resolve outstanding accrued compensation obligations.

The note bears interest at 5 % annually and matures June 30, 2028 .

What changed 10-Q

Item 1. Financial Statements