CARDIFF LEXINGTON CORP, 10-Q/A filed on 10/17/2024
Amended Quarterly Report
v3.24.3
Cover - shares
 6 Months Ended
Jun. 30, 2024
Aug. 13, 2024
Cover [Abstract]    
Document Type 10-Q/A  
Amendment Flag true  
Amendment Description restated financials  
Document Quarterly Report true  
Document Transition Report false  
Document Period End Date Jun. 30, 2024  
Document Fiscal Period Focus Q2  
Document Fiscal Year Focus 2024  
Current Fiscal Year End Date --12-31  
Entity File Number 000-49709  
Entity Registrant Name CARDIFF LEXINGTON CORPORATION  
Entity Central Index Key 0000811222  
Entity Tax Identification Number 84-1044583  
Entity Incorporation, State or Country Code NV  
Entity Address, Address Line One 3753 Howard Hughes Parkway  
Entity Address, Address Line Two Suite 200  
Entity Address, City or Town Las Vegas  
Entity Address, State or Province NV  
Entity Address, Postal Zip Code 89169  
City Area Code 844  
Local Phone Number 628-2100  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   14,076,376
v3.24.3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Current assets    
Cash $ 3,196,795 $ 866,943
Accounts receivable-net 14,861,139 13,305,254
Prepaid and other current assets 5,000 5,000
Total current assets 18,062,934 14,177,197
Property and equipment, net 27,929 34,661
Land 540,000 540,000
Goodwill 5,666,608 5,666,608
Right of use - assets 348,702 289,062
Due from related party 4,979 4,979
Other assets 50,730 33,304
Total assets 24,701,882 20,745,811
Current liabilities    
Accounts payable and accrued expense 1,679,731 2,047,131
Accrued expenses - related parties 4,353,056 4,733,057
Accrued interest 103,345 620,963
Right of use – liabilities 173,985 157,669
Due to director and officer 0 120,997
Notes payable – current portion 550,900 15,977
Line of credit 6,675,746 2,120,100
Convertible notes payable, net of debt discounts of $0 and $24,820, respectively 110,000 3,807,030
Net liabilities of discontinued operations 237,643 237,643
Total current liabilities 13,884,406 13,860,567
Notes payable 142,391 144,666
Operating lease liability – long term 169,811 119,056
Total liabilities 14,196,608 14,124,289
Mezzanine equity    
Total Mezzanine Equity 4,625,000 5,890,104
Stockholders' equity    
Common Stock; 300,000,000 shares authorized, $0.001 par value; 13,626,376 and 25,121 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively 13,626 25
Additional paid-in capital 19,522,200 (7,581,212)
Accumulated deficit (69,576,612) (68,684,115)
Total stockholders’ equity 5,880,274 731,418
Total liabilities, mezzanine equity and stockholders’ equity 24,701,882 20,745,811
Redeemable Series N Senior Convertible Preferred Stock [Member]    
Mezzanine equity    
Preferred stock value 3,125,000 3,891,439
Redeemable Series R Senior Convertible Preferred Stock [Member]    
Mezzanine equity    
Preferred stock value 0 307,980
Redeemable Series X Senior Convertible Preferred Stock [Member]    
Mezzanine equity    
Preferred stock value 1,500,000 1,690,685
Series B Preferred Stock [Member]    
Stockholders' equity    
Preferred stock value 3,920,716 8,557,912
Series C Preferred Stock [Member]    
Stockholders' equity    
Preferred stock value 240 492
Series E Preferred Stock [Member]    
Stockholders' equity    
Preferred stock value 301,500 623,000
Series F-1 Preferred Stock [Member]    
Stockholders' equity    
Preferred stock value 103,000 143,008
Series I Preferred Stock [Member]    
Stockholders' equity    
Preferred stock value 46,562,000 59,540,000
Series J Preferred Stock [Member]    
Stockholders' equity    
Preferred stock value 0 6,854,336
Series L Preferred Stock [Member]    
Stockholders' equity    
Preferred stock value 1,277,972 1,277,972
Series Y Senior Convertible Preferred Stock [Member]    
Stockholders' equity    
Preferred stock value $ 3,755,632 $ 0
v3.24.3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Debt discount $ 0 $ 24,820
Common stock, shares authorized 300,000,000 300,000,000
Common stock, par value $ 0.001 $ 0.001
Common stock, shares issued 13,626,376 25,121
Common stock, shares outstanding 13,626,376 25,121
Redeemable Series N Senior Convertible Preferred Stock [Member]    
Preferred stock, shares authorized 3,000,000 3,000,000
Preferred stock, stated value $ 4.00 $ 4.00
Preferred stock, shares issued 868,056 868,056
Preferred stock, shares outstanding 868,056 868,056
Redeemable Series R Senior Convertible Preferred Stock [Member]    
Preferred stock, shares authorized 5,000 5,000
Preferred stock, stated value $ 1,200 $ 1,200
Preferred stock, shares issued 0 165
Preferred stock, shares outstanding 0 165
Redeemable Series X Senior Convertible Preferred Stock [Member]    
Preferred stock, shares authorized 5,000,000 5,000,000
Preferred stock, stated value $ 4.00 $ 4.00
Preferred stock, shares issued 375,000 375,000
Preferred stock, shares outstanding 375,000 375,000
Series B Preferred Stock [Member]    
Preferred stock, shares authorized 3,000,000 3,000,000
Preferred stock, stated value $ 4.00 $ 4.00
Preferred stock, shares issued 980,179 2,139,478
Preferred stock, shares outstanding 980,179 2,139,478
Series C Preferred Stock [Member]    
Preferred stock, shares authorized 500 500
Preferred stock, stated value $ 4.00 $ 4.00
Preferred stock, shares issued 60 123
Preferred stock, shares outstanding 60 123
Series E Preferred Stock [Member]    
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, stated value $ 4.00 $ 4.00
Preferred stock, shares issued 75,375 155,750
Preferred stock, shares outstanding 75,375 155,750
Series F-1 Preferred Stock [Member]    
Preferred stock, shares authorized 50,000 50,000
Preferred stock, stated value $ 4.00 $ 4.00
Preferred stock, shares issued 25,750 35,752
Preferred stock, shares outstanding 25,750 35,752
Series I Preferred Stock [Member]    
Preferred stock, shares authorized 15,000,000 15,000,000
Preferred stock, stated value $ 4.00 $ 4.00
Preferred stock, shares issued 11,640,500 14,885,000
Preferred stock, shares outstanding 11,640,500 14,885,000
Series J Preferred Stock [Member]    
Preferred stock, shares authorized 2,000,000 2,000,000
Preferred stock, stated value $ 4.00 $ 4.00
Preferred stock, shares issued 0 1,713,584
Preferred stock, shares outstanding 0 1,713,584
Series L Preferred Stock [Member]    
Preferred stock, shares authorized 400,000 400,000
Preferred stock, stated value $ 4.00 $ 4.00
Preferred stock, shares issued 319,493 319,493
Preferred stock, shares outstanding 319,493 319,493
Series Y Senior Convertible Preferred Stock [Member]    
Preferred stock, shares authorized 1,000,000 1,000,000
Preferred stock, stated value $ 4.00 $ 4.00
Preferred stock, shares issued 938,908 0
Preferred stock, shares outstanding 938,908 0
Convertible Notes Payable [Member]    
Debt discount $ 0 $ 24,820
v3.24.3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Income Statement [Abstract]        
REVENUE $ 1,471,643 $ 3,364,506 $ 3,793,775 $ 6,070,905
COST OF SALES 793,010 1,081,689 1,741,164 2,037,984
GROSS PROFIT 678,633 2,282,817 2,052,611 4,032,921
OPERATING EXPENSES        
Depreciation expense 3,366 3,365 6,731 8,000
Share based compensation 0 0 300,225 0
Selling, general and administrative 834,750 530,013 1,686,146 1,517,933
Total operating expenses 838,116 533,378 1,993,102 1,525,933
(LOSS) INCOME FROM CONTINUING OPERATIONS (159,483) 1,749,439 59,509 2,506,988
OTHER INCOME (EXPENSE)        
Other income 2,047 0 2,047 204
Gain on debt refinance and forgiveness 78,834 0 78,834 390
Penalties and fees (330) (15,000) (1,330) (32,000)
Interest expense (41,347) (843,918) (417,616) (1,537,579)
Amortization of debt discounts (11,306) (30,633) (24,821) (48,616)
Total other income (expense) 27,898 (889,551) (362,886) (1,617,601)
NET (LOSS) INCOME BEFORE DISCONTINUED OPERATIONS (131,585) 859,888 (303,377) 889,387
LOSS FROM DISCONTINUED OPERATIONS 0 (43,810) (111,312) (89,300)
NET (LOSS) INCOME FOR THE PERIOD (131,585) 816,078 (414,689) 800,087
PREFERRED STOCK DIVIDENDS (326,174) (125,744) (477,808) (454,419)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ (457,759) $ 690,334 $ (892,497) $ 345,668
BASIC (LOSS) INCOME PER SHARE        
CONTINUING OPERATIONS $ (0.04) $ 55.66 $ (0.11) $ 28.75
DISCONTINUED OPERATIONS 0.00 (3.53) (0.01) (7.43)
DILUTED (LOSS) INCOME PER SHARE        
CONTINUING OPERATIONS (0.04) 3.59 (0.11) 1.45
DISCONTINUED OPERATIONS $ 0.00 $ (3.53) $ (0.01) $ (7.43)
WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC 12,792,767 12,403 8,305,493 12,024
WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED 12,792,767 192,477 8,305,493 237,814
v3.24.3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY) (UNAUDITED) - USD ($)
Preferred Stock Series AI [Member]
Preferred Stock Series AIY [Member]
Preferred Stock Series BEF1J And L [Member]
Preferred Stock Series C [Member]
Common Stock [Member]
Additional Paid-in Capital [Member]
Retained Earnings [Member]
Total
Balance, December 31, 2023 (Restated) at Dec. 31, 2022 $ 59,540,000 $ 17,403,628 $ 492 $ 12 $ (10,004,808) $ (68,684,115) $ (1,744,791)
Beginning balance, shares at Dec. 31, 2022 14,885,001   4,350,907 123 12,053      
Conversion of convertible notes payable   $ 2 190,236 190,238
Conversion of convertible notes payable, shares         1,583      
Preferred stock Dividends   (344,947) (344,947)
Issuance of preferred stock series B   $ 12,600 12,400 25,000
Issuance of preferred stock series B, shares     3,150          
Net income (Restated) 800,087 800,087
Balance, June 30, 2024 (Restated) at Jun. 30, 2023 $ 59,540,000 $ 17,416,228 $ 492 $ 14 (9,802,172) (68,228,975) (1,074,413)
Ending balance, shares at Jun. 30, 2023 14,885,001   4,354,057 123 13,636      
Balance, December 31, 2023 (Restated) at Dec. 31, 2022 $ 59,540,000 $ 17,403,628 $ 492 $ 12 (10,004,808) (68,684,115) (1,744,791)
Beginning balance, shares at Dec. 31, 2022 14,885,001   4,350,907 123 12,053      
Balance, June 30, 2024 (Restated) at Dec. 31, 2023   $ 59,540,000 $ 17,456,228 $ 492 $ 25 (7,581,212) (68,684,115) 731,418
Ending balance, shares at Dec. 31, 2023   14,885,002 4,364,057 123 25,121      
Conversion of convertible notes payable   $ 1 1,679 1,680
Conversion of convertible notes payable, shares         1,222      
Conversion of series B preferred stock   $ (4,637,196) $ 2,318 4,634,878
Conversion of series B preferred stock, shares     (1,159,299)   2,318,598      
Conversion of series C preferred stock   $ (244) $ 610 (366)
Conversion of series C preferred stock, shares       (61) 610,000      
Conversion of series E preferred stock   $ (321,500) $ 161 321,339
Conversion of series E preferred stock, shares     (80,375)   160,750      
Conversion of series F-1 preferred stock   $ (40,008) $ 20 39,988
Conversion of series F-1 preferred stock, shares     (10,002)   20,004      
Conversion of series I preferred stock   $ (13,508,000) $ 6,754 13,501,246
Conversion of series I preferred stock, shares   (3,377,000)     6,754,000      
Conversion of series J preferred stock   $ (6,854,336) $ 3,427 6,850,909
Conversion of series J preferred stock, shares     (1,713,584)   3,427,168      
Issuance of series I preferred stock to officers   $ 530,000 63,600 593,600
Issuance of series I preferred stock to officers, shares   132,500            
Issuance of series Y preferred stock   $ 3,755,632 3,755,632
Issuance of series Y preferred stock, shares   938,908            
Cancellation of series C preferred stock   $ (8) 8
Cancellation of series C preferred stock, shares       (2)        
Common stock issued for services   $ 8 11,617 11,625
Common stock issued for services, shares         7,500      
Common stock issued to board members   $ 30 194,970 195,000
Common stock issued to board members, shares         30,000      
Common stock issued in Red Rock settlement   $ 37 111,275 111,312
Common stock issued in Red Rock settlement, shares         37,104      
Preferred stock Dividends   $ 235 1,372,269 (477,808) (894,696)
Net income (Restated)   (414,689) (414,689)
Preferred stock Dividends, shares         234,909      
Balance, June 30, 2024 (Restated) at Jun. 30, 2024   $ 50,317,632 $ 5,603,188 $ 240 $ 13,626 $ 19,522,200 $ (69,576,612) $ 5,880,274
Ending balance, shares at Jun. 30, 2024   12,579,410 1,400,797 60 13,626,376      
v3.24.3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES    
Net (loss) income from continuing operations $ (414,689) $ 800,087
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation 6,731 8,000
Amortization of debt discount 24,820 48,616
Bad debt 0 270,000
Conversion and note issuance cost 1,000 7,000
Share issuance for compensations to directors and officers 788,600 0
Share issuance for service rendered 11,625 25,000
Fair value settled upon conversion 0 123,566
Gain on settlement or forgiveness of debt (78,834) (390)
(Increase) decrease in:    
Accounts receivable (1,555,885) (2,859,607)
Right of use – assets (59,640) 64,993
Prepaids and other current assets (17,425) 0
Increase (decrease) in:    
Accounts payable and accrued expense (367,400) 738,353
Accrued officers compensation (380,001) 334,000
Accrued interest (6,700) 248,137
Right of use – liabilities 67,071 (68,221)
Net cash used in operating activities (1,980,727) (260,466)
Net cash provided by (used in) Discontinued Operations – Operating 111,312 (38,809)
FINANCING ACTIVITIES    
Payments to director (120,997) 355,500
Repayment of SBA loans (2,352) 0
Payment of convertible notes (100,079) 0
Proceeds from line of credit 4,522,695 35,131
Payment of line of credit 0 (30,161)
Payment of dividends on preferred stock (100,000)  
Net cash provided by financing activities 4,199,267 360,470
Net cash provided by Discontinued Operations – Financing 0 128,109
NET INCREASE IN CASH AND CASH EQUIVALENTS 2,329,852 189,304
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 866,943 219,085
CASH AND CASH EQUIVALENTS, END OF PERIOD 3,196,795 408,389
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION    
Cash paid during the year for Interest 122,279 2,044
NON-CASH INVESTING AND FINANCING ACTIVITIES:    
Common stock issued upon conversion of notes payable 1,680 66,673
Common stock issued upon conversion of preferred stock 13,290 0
Series Y preferred stock issued in exchange of convertible notes payable 3,755,632 0
Promissory note payable issued in settlement agreement 535,000 0
Right of use assets acquired $ 186,638 $ 0
v3.24.3
Pay vs Performance Disclosure - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Pay vs Performance Disclosure [Table]        
Net Income (Loss) $ (131,585) $ 816,078 $ (414,689) $ 800,087
v3.24.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization and Nature of Operations

 

Cardiff Lexington Corporation (“Cardiff”) was originally incorporated on September 3, 1986 in Colorado as Cardiff International Inc. On November 10, 2005, Cardiff merged with Legacy Card Company, LLC and changed its name to Cardiff Lexington Corporation. On August 27, 2014, Cardiff redomiciled and became a corporation under the laws of Florida. On April 13, 2021, Cardiff redomiciled and became a corporation under the laws of Nevada.

 

Cardiff is an acquisition holding company focused on locating undervalued and undercapitalized companies, primarily in the healthcare industry, and providing them capitalization and leadership to maximize the value and potential of their private enterprises while also providing diversification and risk mitigation for stockholders. All of Cardiff’s operations are conducted through, and its income derived from, its various subsidiaries, which includes:

 

  · Edge View Properties, Inc. (“Edge View”), which was acquired on July 16, 2014;
     
  · Platinum Tax Defenders (“Platinum Tax”), which was acquired on July 31, 2018 and sold on November 10, 2023; and
     
  · Nova Ortho and Spine, LLC (“Nova”), which was acquired on May 31, 2021.

 

Principles of Consolidation

 

The consolidated financial statements include the accounts of Cardiff and its wholly owned subsidiaries, Edge View, Platinum Tax and Nova (collectively, the “Company”). Subsidiaries shown as discontinued operations include Platinum Tax. All significant intercompany accounts and transactions are eliminated in consolidation. Subsidiaries discontinued are shown as discontinued operations.

 

Reverse Stock Split

 

On January 9, 2024, the Company effected a 1-for-75,000 reverse split of its outstanding common stock. All outstanding shares of common stock and warrant to purchase common stock were adjusted to reflect the 1-for-75,000 reverse split, with respective exercise prices of the warrants proportionately increased. The conversion prices of the outstanding convertible notes and certain series of preferred stock were adjusted to reflect a proportional decrease in the number of shares of common stock to be issued upon conversion.

 

All share and per share data throughout these consolidated financial statements have been retroactively adjusted to reflect the reverse stock split. The total number of authorized shares of common stock did not change. As a result of the reverse stock split, an amount equal to the decreased value of the common stock was reclassified from “common stock” to “additional paid-in capital.”

 

Use of Estimates

 

The preparation of financial statements in conformity with United States generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Management uses its historical records and knowledge of its business in making estimates. Accordingly, actual results could differ from those estimates.

 

Accounts Receivable

 

In the normal course of business, the Company is in the lien based medical industry providing orthopedic healthcare servicing an uninsured market insulated by a letter of protection which insulates the Company and insures payment in full from insurance settlements. Accounts receivable consists of amounts due from attorneys and insurance providers for services provided to patients under the letter of protection. The accounts receivable are recorded at the expected settlement realization amount, which is less contractual adjustments and an allowance for credit losses. The Company recognizes an allowance for credit losses for its accounts receivable to present the net amount expected to be collected as of the balance sheet 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. Additionally, the Company considers economic factors and events or trends expected to affect future collections experience. The no collection history of the Company’s customers is considered in future assessments of collectability as these patterns are established over a longer period. The Company uses the term collection and collection rate in its disclosures to describe the historical less than 1% occurrence of not collecting under a contract, which aligns with the Company’s credit loss accounting under ASC 326.

 

The Company does not have a significant exposure to credit losses as it has historically had a less than 1.0% loss rate where the Company received no settlement amount for its outstanding accounts receivable. Although possible, claims resulting in zero collection upon settlement are rare based on the Company’s historical experience and has historically been 0.5% to 1.0% of its outstanding accounts receivable, thereby resulting in a collection rate of 99%. The Company uses the loss rate method to record its allowance for credit losses. The Company applies the loss rate method by reviewing its zero collection history on a 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

 

Property and equipment are carried at cost. Expenditures for renewals and betterments that extend the useful lives of property, equipment or leasehold improvements are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is calculated using the straight-line method for financial reporting purposes based on the following estimated useful lives: 

 
Classification Useful Life
Equipment, furniture, and fixtures 5 - 7 years
Medical equipment 10 years
Leasehold improvements 10 years or lease term, if shorter

 

Goodwill and Other Intangible Assets

 

Goodwill and indefinite-lived assets are not amortized but are evaluated for impairment annually or when indicators of a potential impairment are present. The Company’s impairment testing of goodwill is performed separately from its impairment testing of indefinite-lived intangibles. The Company reviews goodwill for impairment on a reporting unit basis annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. 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 not recognize any goodwill impairment. The Company based this decision on impairment testing of the underlying assets, expected cash flows, decreased asset value and other factors.

 

Valuation of Long-lived Assets

 

In accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 360-10-5, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as plant and equipment and construction in progress held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of assets to estimated cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.

 

Revenue Recognition

 

The Company’s primary source of revenue is its healthcare subsidiary, which records revenues from providing licensed and/or certified orthopedic procedures. Revenue is recognized at a point in time in accordance with ASC 606 and at an estimated net settlement realization rate based on gross billed charges. The Company’s healthcare subsidiary does not have contract liabilities or deferred revenue as there are no amounts prepaid for services. The Company applies the following five-step ASC 606 model to determine revenue recognition:

 

  · Identification of a contract with a customer
     
  · Identification of the performance obligations in the contact
     
  · Determination of the transaction price
     
  · Allocation of the transaction price to the separate performance obligations
     
  · Recognition of revenue when performance obligations are satisfied.

 

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; generally, at the time of patient care.

 

In determining net revenue to record under ASC 606, the Company must estimate the transaction price, including estimates of variable consideration in the contract at inception. In order to estimate variable consideration, the Company uses established billings rates (also described as “gross charges”) for the procedures being performed, however, the billing rates are not the same as actual amounts recovered for the Company’s healthcare subsidiary. They generally do not reflect what the Company is ultimately paid by the customer, insurance carriers and other payors, and therefore are not reported in the consolidated financial statements at that rate. The Company is typically paid amounts based on established charges per procedure with guidance from the annually updated CPT guidelines that designates relative value units and a suggested range of charges for each procedure which is then assigned a CPT code. This gross charge is discounted to reflect the percentage paid to the Company “using a modifier” recognized by each insurance carrier for services, less deductible, co-pay, and contractual adjustments which are deducted from the calculated fee. These adjustments are considered variable consideration under ASC 606 and are deducted from the calculated fee to arrive at the net transaction price. The Company also estimates changes in the contract price as a result of price concessions, changes to deductibles, co-pays and other contractual adjustments to determine the eventual settlement amount the Company expects to receive. The Company uses the term settlement realization in its disclosures to describe the amount of cash the company expects to receive based on its estimate of the transaction price under the expected value method of ASC 606.

 

Where appropriate, the Company utilizes the expected value method to determine the appropriate amount for estimates of variable consideration, which is based on a historical 12-month lookback of its actual settlement realization rates. The estimates of reserves established for variable consideration reflect current contractual requirements, the Company’s historical experience, specific known market events and trends, industry data and forecasted patient data and settlement patterns. Settlement realization patterns are assessed based on actual settlements and based on expected settlement realization trends obtained from discussions with attorneys, doctors and our third party medical billing company. Settlement amounts are negotiated and prolonged settlement negotiations are not indicative of a greater likelihood of reduced settlement realization or zero settlement.

 

The Company may accept a lower settlement realization rate in order to receive faster payment. The Company obtains information about expected settlement realization trends from discussions with doctors and attorneys and its third party medical billing company, which handles settlement claims and negotiations. Settlement amounts are presented to the Company’s third party medical billing company. Settlement rates of 49% or higher based on gross billed amounts are typically accepted without further negotiation. Proposed settlement rates below 49% are negotiated and longer negotiations typically result in higher settlement rates. If the Company accepts a lower settlement realization rate in order to receive payments more quickly, the Company considers that a price concession and estimates these concessions at contract inception. The various forms of variable consideration described above included in the transaction price may be constrained and are included in net revenue only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. The Company has not constrained any of its estimates of variable consideration for any of the periods presented.

  

Service Fees – Net (PIP)

 

The Company generates services fees from performing various procedures on the date the services are performed. These services primarily include slip and falls as well as smaller nominal Non-PIP services. As described above, these revenues are based on established insurance billing rates, less allowances for contractual adjustments and uncollectible amounts. These contractual adjustments vary by insurance company and self-pay patients. The Company computes these contractual and other adjustments based on its historical settlement realization experience. Completing the paperwork for each case and preparing it for billing takes approximately ten business days after a procedure is performed. The majority of claims are then filed electronically except for those remaining insurance carriers requiring paper filing. An initial response is usually received within four weeks from electronic filing and up to six weeks from paper filing. Responses may be a payment, a denial, or a request for additional information. The Company’s healthcare revenues are generated from professional medical billings including facility and anesthesia services. With respect to facility and anesthesia services, the Company is the primary obligor as the facility and anesthesia services are considered part of one integrated performance obligation.

 

The Company satisfies performance obligations as services are performed and then billed to the patient. Payment in most cases is made by an attorney for such services to our patients which are due upon final settlement of patients claims. During the claims process, legal counsel warranties such claim through the letter of protection, which is sent to the Company, as a medical provider, on behalf of the client patient. This letter states that the attorney is responsible for paying the client’s medical bills when the case is fully developed and settles. The medical professional agrees to provide treatment to the injured person and refrain from attempting to collect payment as it is developing and until the case is resolved. Once the personal injury case is finalized with the insurance company, the attorney pays the outstanding medical bills from the settlement.

 

Prior to its fiscal year 2024, the Company has historically had a 49% settlement realization rate from its total gross billed charges. Accordingly, the Company has historically recognized net healthcare service revenue as 49% of gross billed charges. However, during the six months ended June 30, 2024, the Company underwent efforts to accelerate cash settlements by accepting lower settlement realization rates in order to settle outstanding accounts receivable more quickly. As a result of the new effort, during the six months ended June 30, 2024 the Company realized a 42.3% average settlement rate of its gross billed charges during this time frame, which were historically recorded in accounts receivable and revenue at 49% of gross billings. As a result of this reduced settlement realization percentage, the Company recorded a reduction to net revenue of $859,321 and $1,199,155 for the three and six months ended June 30, 2024, respectively.

 

The Company will continue to reassess its settlement realization rate in the future and incorporate changes in settlement realization in its estimate of variable consideration due under its contracts. See additional disclosure in Note 17. Subsequent Events regarding the Company’s review of its settlement realization percentage subsequent to the quarter ended June 30, 2024.

 

Contract Fees (Non-PIP)

 

The Company has contract fees for amounts earned from its Non-Personal Injury Protection (“PIP”) related procedures, typically car accidents, and are settled on a contingency 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 us were remitted to the factor. The Company evaluated the factored adjustments considering the actual factored amounts per patient on a quarterly interval, and the reductions from accounts receivable that were factored were recorded in finance charges as other expenses on the consolidated statement of operations. As a result of the Company’s eighteen to twenty-four month settlement realization timeframe, the Company has an accrued liability resulting from the settlement of receivables sold to the third party factors which fluctuates as settlements are made and remitted to those third party factors. These accounts receivables sold to these third party factors are not included in the Company’s financial statements accounts receivable balance once sold and therefore are not part of the assessment of the net realizable value of accounts receivable. For the six months ended June 30, 2023, the Company factored a total of $544,196 of its accounts receivable in exchange for cash of $253,750. The Company ceased factoring of accounts receivable in the first quarter of 2023.

 

Advertising Costs

 

Advertising costs are expensed as incurred. Advertising costs are included as a component of cost of sales in the consolidated statements of operations and changes in stockholders’ equity. The Company recognized advertising and marketing expense of $96,899 and $133,326 for the three months ended June 30, 2024 and 2023, respectively. The Company recognized advertising and marketing expense of $171,950 and $171,679 for the six months ended June 30, 2024 and 2023, respectively.

 

Fair Value Measurements

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs), and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

  Level 1 Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
     
  Level 2 Inputs, other than quoted prices included in Level 1, which are observable for the asset or liability through corroboration with market data at the measurement date.
     
  Level 3 Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

  

Distinguishing Liabilities from Equity

 

The Company accounts for its series N senior convertible preferred stock, series R convertible preferred stock, and series X senior convertible preferred stock subject to possible redemption in accordance with ASC 480, “Distinguishing Liabilities from Equity”. Conditionally redeemable preferred shares are classified as temporary equity within the Company’s consolidated balance sheet.

 

Stock-Based Compensation

 

The Company accounts for its stock-based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the Financial Accounting Standards Board (“FASB”) ASC. Pursuant to paragraph 718-10-30-6 of the FASB ASC, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

 

The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.

 

Generally, all forms of share-based payments, including stock option grants, warrants and restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on estimated number of awards that are ultimately expected to vest.

 

The expense resulting from share-based payments is recorded in the consolidated statements of operations.

 

Income Taxes

 

Income taxes are determined in accordance with ASC Topic 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

 

As of June 30, 2024 and 2023, the Company did not have any interest and penalties associated with tax positions and did not have any significant unrecognized uncertain tax positions.

 

Income (Loss) per Share

 

FASB ASC Subtopic 260, “Earnings Per Share,” provides for the calculation of “Basic” and “Diluted” earnings per share. Basic earnings per common share is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding stock options, warrants, and debts convertible into common stock. The dilutive effect of stock options and warrants are reflected in diluted earnings per common share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities. The diluted effect of debt convertibles is reflected utilizing the if converted method.

 

Going Concern

 

The accompanying consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The Company had sustained recurring operating losses since its inception and has an accumulated deficit of $69,576,612 as of June 30, 2024. These factors raise a substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result if the Company is unable to continue as a going concern.

 

The ability of the Company to continue as a going concern and the appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusions. Management is in continuous discussions with prospective investors and believes the raising of capital will allow the Company to fund its cash flow shortfalls and pursue new acquisitions. There can be no assurance that the Company will be able to obtain sufficient capital from debt or equity transactions or from operations in the necessary time frame or on terms acceptable to it. Should the Company be unable to raise sufficient funds, it may be required to curtail its operating plans. In addition, if overall Company expenses increase, the Company may need to implement cost reductions. No assurance can be given that the Company will be able to operate profitably on a consistent basis, or at all, in the future. Should the Company not be able to raise sufficient funds, it may cause cessation of operations.

 

Recently Issued Accounting Standards

 

The FASB issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting: Improvements to Reportable Segment Disclosures” (“Topic 280”) in November 2023. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Topic 280 improves “reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.” In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable “investors to better understand an entity’s overall performance” and assess “potential future cash flows.” Management is evaluating the impact of ASU 2023-07 on the consolidated financial statements and does not expect there to be any changes or impact to the financial statements.

 

Recently Adopted Accounting Standards

 

The FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 81540).” The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within that period. The FASB also specified that an entity must adopt the guidance as of the beginning of its annual fiscal year and is not permitted to adopt the guidance in an interim period, other than the first interim period of their fiscal year. ASU 2020-06 reduces the number of accounting models for convertible debt and convertible preferred stock instruments and makes certain disclosure amendments to improve the information provided to users. There were no material impacts on the consolidated financial statements at adoption.

 
v3.24.3
RESTATEMENT OF FINANCIAL STATEMENTS
 6 Months Ended
Jun. 30, 2024
Accounting Changes and Error Corrections [Abstract]  
RESTATEMENT OF FINANCIAL STATEMENTS

 

2. RESTATEMENT OF FINANCIAL STATEMENTS

 

The Company restated its financial statements for the six months ended June 30, 2024 as a result of a change in classification of credit loss expense to net revenue and a related adjustment to its allowance for credit losses. During the preparation of the financial statements for the six months ended June 30, 2024, the Company identified and corrected its accounting for its allowance for credit losses and its credit loss expense. The Company’s allowance for credit losses of $122,190 did not require adjustment during the six months ended June 30, 2024 and as a result, the Company reversed its credit loss expense associated with this adjustment. The remaining $1,199,155 of credit loss expense for the six months ended June 30, 2024 was reclassified to net revenue as variable consideration accounted for under ASC 606.

Schedule of restatements

Balance sheet

                   
    Impact of correction of error  
June 30, 2024 (Unaudited)   As previously reported     Adjustments     As restated  
                   
Total assets   $ 24,659,020     $ 42,862     $ 24,701,882  
                         
Total stockholders' equity   $ 5,837,412     $ 42,862     $ 5,880,274  

 

Statement of operations

 

    Impact of correction of error  
Three months ended June 30, 2024 (Unaudited)   As previously reported     Adjustments     As restated  
                   
Revenue   $ 2,330,964     $ (859,321 )   $ 1,471,643  
Cost of sales     793,010       –       793,010  
Gross profit     1,537,954       (859,321 )     678,633  
Operating expense     1,740,299       (902,183 )     838,116  
Loss from operations   $ (202,345 )    $ 42,862     $ (159,483 ) 
Other income, net     27,898       –       27,898  
Net loss before discontinued operations     (174,447 )      42,862       (131,585 ) 
Loss from discontinued operations     –       –       –  
Net loss for the period   $ (174,447 )    $ 42,862     $ (131,585 ) 
Preferred stock dividends   $ (326,174 )   $ –     $ (326,174 )
Net loss attributable to common shareholders   $ (500,621 )    $ 42,862     $ (457,759 ) 

 

 

    Impact of correction of error  
Six months ended June 30, 2024 (Unaudited)   As previously reported     Adjustments     As restated  
                   
Revenue   $ 4,992,930     $ (1,199,155 )   $ 3,793,775  
Cost of sales     1,741,164       –       1,741,164  
Gross profit     3,251,766       (1,199,155 )     2,052,611  
Operating expense     3,235,119       (1,242,017 )     1,993,102  
Income from operations   $ 16,647     $ 42,862     $ 59,509  
Other expense, net     (362,886 )     –       (362,886 )
Net loss before discontinued operations     (346,239 )      42,862       (303,377 ) 
Loss from discontinued operations     (111,312 )      –       (111,312 ) 
Net loss for the period   $ (457,551 )    $ 42,862     $ (414,689 ) 
Preferred stock dividends   $ (477,808 )   $ –     $ (477,808 )
Net loss attributable to common shareholders   $ (935,359 )    $ 42,862     $ (892,497 ) 

 

 

During the preparation of the financial statements for the year ended December 31, 2023, the Company identified and corrected its classification and accounting treatment for its series R convertible preferred stock and the related dividend accrual. Pursuant to ASC 250, Accounting changes and error corrections issued by FASB and Staff Accounting Bulletin 99 Materiality, issued by Securities and Exchange Commission, the Company determined the impact of the error was immaterial. The impact of the error correction is reflected in the consolidated balance sheet as of June 30, 2023 as a $274,982 increase to the mezzanine equity and offsetting decrease to the series R convertible preferred stock and subject to possible redemption mezzanine equity line item. In addition, the impact of the unpaid dividend accrual was reflected as of June 30, 2023 as a $16,363 increase to mezzanine equity and offsetting decrease to the accumulated deficits.

 

During the preparation of the financial statements for three and six months ended June 30, 2024, the Company identified and corrected its classification for all its outstanding common stock amount per par value of $0.001 with additional paid-in-capital related with a 1-for-75,000 reverse split executed on January 9, 2024. The impact of this adjustment decreased $1,804,774 to common stock and offsetting increase to additional paid-in-capital as of December 31, 2023.

 

On November 10, 2023, the Company sold Platinum Tax, which was a full-service tax resolution firm located in Los Angeles, California. The Company presented in prior periods operating loss as loss from discontinued operations of $43,810 and $89,300 on the consolidated statement of operations for the three and six months ended June 30, 2023, respectively.

 

The impact of the error corrections also reflected a $55.66 increase of basic earnings per share, and a $3.59 increase of diluted earnings per share on the consolidated statement of operations for the three months ended June 30, 2023. For the six months ended June 30, 2023, the impact of the error correction reflected a $28.75 increase of basic earnings per share, and an increase of $1.45 of diluted earnings per share.

 

The following tables summarize the impact of the corrections on the Company’s condensed consolidated balance sheet as of June 30, 2023, the condensed consolidated statement of operations for the three and six months ended June 30, 2023, and the condensed consolidated statement of cash flows for the six months ended June 30, 2023:

 

Balance sheet

            
   Impact of correction of error 
June 30, 2023 (Unaudited)  As previously reported   Adjustments   As restated 
             
Total assets  $16,053,519   $(2,818)  $16,050,700 
                
Total liabilities   11,672,952    (243,242)   11,429,710 
                
Mezzanine equity   5,297,605    291,345    5,588,949 
                
Total stockholders' equity  $(917,038)  $(291,345)  $(1,208,383)

 

Statement of operations

 

   Impact of correction of error 
Three months ended June 30, 2023 (Unaudited)  As previously reported   Adjustments   As restated 
             
Revenue  $3,482,810   $(118,304)  $3,364,506 
Cost of sales   1,102,986    (21,297)   1,081,689 
Gross profit   2,379,824    (97,007)   2,282,817 
Operating expense   673,654    (140,276)   533,378 
Income from operations  $1,706,170   $43,269   $1,749,439 
Other income (expense), net   (890,092)   (541)   (889,551)
Net income before discontinued operations   816,078    43,810    859,888 
Loss from discontinued operations   –    (43,810)   (43,810)
Net income for the period  $816,078   $–   $816,078 
Preferred stock dividends  $(125,744)  $0.00   $(125,744)
Net income attributable to common shareholders  $690,334   $0.00   $690,334 
Basic earnings per share for continuing operations  $0.00   $55.66   $55.66 
Diluted earnings per share for continuing operations  $0.00   $3.59   $3.59 

 

   Impact of correction of error 
Six months ended June 30, 2023 (Unaudited)  As previously reported   Adjustments   As restated 
             
Revenue  $6,343,608   $(272,703)  $6,070,905 
Cost of sales   2,086,109    (48,125)   2,037,984 
Gross profit   4,257,499    (224,578)   4,032,921 
Operating expense   1,837,768    (311,835)   1,525,933 
Income from operations  $2,419,731   $87,257   $2,506,988 
Other income (expense), net   (1,619,644)   2,043    (1,617,601)
Net income before discontinued operations   800,087    89,300    889,387 
Loss from discontinued operations   –    (89,300)   (89,300)
Net income for the period  $800,087   $–   $800,087 
Preferred stock dividends  $(462,555)  $(8,136)  $(454,419)
Net income attributable to common shareholders  $337,532   $8,136   $345,668 
Basic earnings per share for continuing operations  $0.00   $28.75   $28.75 
Diluted earnings per share for continuing operations  $0.00   $1.45   $1.45 

 

Statement of Cash Flows

 

   Impact of correction of error 
Six months ended June 30, 2023 (Unaudited)  As previously reported   Adjustments   As restated 
             
Net cash used in operating activities of continuing operations  $(304,173)  $43,707   $(260,466)
Net cash provided by financing activities of continuing operations  $488,580   $(128,110)  $360,470 

 
v3.24.3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
 6 Months Ended
Jun. 30, 2024
Payables and Accruals [Abstract]  
ACCOUNTS PAYABLE AND ACCRUED EXPENSES

 

3. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

          
  June 30, 2024   December 31, 2023 
Accounts payable  $543,866   $720,774 
Accrued credit cards   15,613    26,645 
Accrued liability for settlement of previously factored receivables   990,824    1,247,772 
Accrued income and property taxes   5,346    5,346 
Accrued professional fees   82,418    29,122 
Accrued board fees   15,000    – 
Accrued public company fees   9,100    – 
Accrued payroll   17,564    17,472 
Total  $1,679,731   $2,047,131 

 

The Company is delinquent paying certain property taxes. As of June 30, 2024 and December 31, 2023, the balance for these property taxes was $1,649.

 

 

 

 
v3.24.3
PLANT AND EQUIPMENT, NET
 6 Months Ended
Jun. 30, 2024
Property, Plant and Equipment [Abstract]  
PLANT AND EQUIPMENT, NET

 

4. PLANT AND EQUIPMENT, NET

 

Property and equipment as of June 30, 2024 and December 31, 2023 is as follows: 

        
   June 30, 2024   December 31, 2023 
Medical equipment  $96,532   $96,532 
Computer Equipment   9,189    9,189 
Furniture, fixtures and equipment   15,079    15,079 
Leasehold Improvement   15,950    15,950 
Total   136,750    136,750 
Less: accumulated depreciation   (108,821)   (102,089)
Property and equipment, net  $27,929   $34,661 

 

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.

 
v3.24.3
LAND
 6 Months Ended
Jun. 30, 2024
Real Estate [Abstract]  
LAND

 

5. LAND

 

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 community.

 
v3.24.3
RELATED PARTY TRANSACTIONS
 6 Months Ended
Jun. 30, 2024
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS

 

6. RELATED PARTY TRANSACTIONS

 

In connection with the acquisition of Edge View on July 16, 2014, the Company assumed amounts due to previous owners who are current managers of Edge View. These amounts are due on demand and do not bear interest. The balance of these amounts are $4,979 due from the previous owners as of June 30, 2024 and December 31, 2023.

 

The Company obtained short-term advances from the Chairman of the Board that are non-interest bearing and due on demand. As of June 30, 2024 and December 31, 2023, the Company owed the Chairman $0 and $120,997, respectively. During the six months ended June 30, 2024, the Company paid $120,997 to the Chairman.

 

See also Note 8. Convertible Notes Payable and the disclosure regarding Note payable 41.

 

See also Note 13. Commitments and Contingencies for compensation paid to employees of the Company.

 

 

 

 
v3.24.3
NOTES AND LOANS PAYABLE
 6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
NOTES AND LOANS PAYABLE

 

7. NOTES AND LOANS PAYABLE

 

Notes payable at June 30, 2024 and December 31, 2023 are summarized as follows: 

Schedule of notes payable        
   June 30, 2024   December 31, 2023 
Notes and loans payable  $7,369,037   $2,280,743 
Less current portion   (7,226,646)   (2,136,077)
Long-term portion  $142,391   $144,666 

 

Long-term debt matures as follows: 

    
   Amount 
2024 (remainder of year)  $7,226,646 
2025   4,910 
2026   4,910 
2027   4,910 
2028   4,910 
Thereafter   122,751 
Total  $7,369,037 

 

Promissory Note – Settlement Agreement

 

On June 11, 2024, the Company entered into a settlement agreement and release of claims with the holder of 165 shares of series R convertible preferred stock and certain convertible promissory notes (see Notes 29-2, 37-1, 37-2, and 37-3 referenced in Note 8. Convertible Notes Payable). Pursuant to the settlement agreement and release of claims, the holder agreed to cancel its shares of series R convertible preferred stock and convertible promissory notes in exchange for a new fixed amount settlement promissory note in the principal amount of $535,000.

 

The note does not bear interest and requires fixed payments as follows: (i) if the Company raises at least $5 million but less than $6 million in its planned underwritten public offering (the “Offering”), then it must pay $250,000 on the closing date of the Offering, with payments of $125,000, $125,000 and $35,000 to follow on the 90th, 180th, and 240th days following the closing of the Offering, respectively; (ii) if the Company raises at least $6 million but less than $7 million in the Offering, then it must pay $390,000 on the closing date of the Offering and $145,000 on the 90th day following the closing of the Offering; and (iii) if the Company raises at least $7 million in the Offering, then it must repay the entire principal amount on the closing date of the Offering. If the Offering is not completed by August 15, 2024, then the Company is required to pay $25,000 on such date and to continue making payments of $25,000 on each monthly anniversary thereof until the entire principal amount is repaid in full. If the Offering is completed after August 15, 2024, then the Company is required to make payments as described in the schedule above. Notwithstanding the foregoing, if the Company abandons the Offering and conducts a new public offering thereafter, then the Company is required to make a payment of $100,000 on the closing date of such other public offering, a second payment of $100,000 on the 90th day following the closing of such offering and $35,000 each month thereafter until the entire principal amount is repaid in full. If any portion of the principal amount remains unpaid on the second (2nd) anniversary of the date of the note, it shall become immediately due and payable on such date. The Company may prepay the entire principal amount at any time without penalty. The note is unsecured and contains customary events of default for a loan of this type. Upon an event of default, interest would automatically begin to accrue at a simple interest rate of ten percent per annum. This transaction was accounted for as a debt extinguishment and a gain on settlement of $78,834 was recorded to the unaudited, consolidated statement of operations for the quarter ended June 30, 2024, in accordance with FASB Topic 470 Borrower’s Accounting for Debt Modifications.

 

 

 

 

Loans and Notes Payable – Unrelated Party

 

On March 12, 2009, the Company issued a debenture in the principal amount of $20,000. The debenture bore interest at 12% per year and matured on September 12, 2009. The balance of the debenture was $10,989 at June 30, 2024 and December 31, 2023. The accrued interest of the debenture was $8,205 and $7,547 at June 30, 2024 and December 31, 2023, respectively. The Company assigned all of its receivables from consumer activations of the rewards program as collateral on this debenture.

 

Small Business Administration (“SBA”) Loans

 

On June 2, 2020, the Company obtained an SBA loan in the principal amount of $150,000 with an interest rate of 3.75% and a maturity date of June 2, 2050. The principal balance and accrued interest at June 30, 2024 was $147,301 and $0, respectively, and principal and accrued interest at December 31, 2023 was $149,655 and $956, respectively.

 

Line of Credit

 

On September 29, 2023, the Company and Nova entered into a two-year revolving purchase and security agreement with DML HC Series, LLC (“DML”) to sell, with recourse, Nova’s accounts receivables for a revolving financing up to a maximum advance amount of $4.5 million. A review is performed on a quarterly basis to assess the adequacy of the maximum amount. If mutually agreed upon by the Company and DML, the maximum amount may be increased. On April 24, 2024, the Company and Nova entered into amendment No. 1 with DML which increased the maximum advance amount to $8,000,000 and defined the discount fee equal to 2.25% per purchase and claims balance forward on new purchases with a minimum fee to now be $10,000. On June 11, 2024, the Company and Nova entered into amendment No. 2 with DML which further increased the maximum advance amount to $11,000,000. As of June 30, 2024, and December 31, 2023, the Company had $6,675,746 and $2,120,100, respectively, outstanding balance against the revolving receivable line of credit. The revolving purchase and security agreement includes discounts recorded as interest expense on each funding and matures on September 29, 2025.

 
v3.24.3
CONVERTIBLE NOTES PAYABLE
 6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
CONVERTIBLE NOTES PAYABLE

 

8. CONVERTIBLE NOTES PAYABLE

 

As of June 30, 2024 and December 31, 2023, the Company had convertible debt outstanding net of amortized debt discount of $110,000 and $3,807,030, respectively. During the six months ended June 30, 2024, the Company made $100,080 in principal payments to the holder of Notes 9 and 10-1 and paid the total outstanding accrued interest on these notes in the amount of $22,279. The Company also paid $100,000 of accrued interest to convertible noteholder related to note 40-1. On June 11, 2024, the Company entered into a settlement agreement and release of claims with the holder of Notes 29-2, 37-1, 37-2 and 37-3 (see below and also Note 7. Notes and Loans Payable for further details). Pursuant to the settlement agreement and release of claims, the holder agreed to cancel these notes in exchange for a new fixed amount settlement promissory note in the principal amount of $535,000. Additionally, during the six months ended June 30, 2024, the Company exchanged Notes 40-1, 40-2, 40-3, 40-4, 40-5, 40-6, 40-7, 40-8, 40-9 and 40-10 for the issuance of 938,908 shares of series Y senior convertible preferred stock to the noteholder. See also Note 9. Capital Stock.

 

During the six months ended June 30, 2023, the Company received net proceeds of $355,500 from convertible notes. There were debt discounts associated with the convertible debt of $0 and $24,820 at June 30, 2024 and December 31, 2023, respectively. For the three months ended June 30, 2024 and 2023, the Company recorded amortization of debt discounts of $11,306 and $30,633, respectively. For the six months ended June 30, 2024 and 2023, the Company recorded amortization of debt discounts of $24,821and $48,616, respectively.

 

During the six months ended June 30, 2024, the Company converted $680 in accrued interest and $1,000 in conversion cost into 1,222 shares of common stock. The Company recognized $1,679 of additional paid-in capital to adjust fair value for the debt settlement during the six months ended June 30, 2024. During the six months ended June 30, 2023, the Company converted $58,800 of convertible debt, $5,873 in accrued interest and $2,000 in penalties and fees into 1,582 shares of the Company’s common stock. The Company recognized $123,566 of interest expense and additional paid-in capital to adjust fair value for the debt settlement during the six months ended June 30, 2023.

 

Convertible notes as of June 30, 2024 and December 31, 2023 are summarized as follows: 

        
   June 30, 2024   December 31, 2023 
Convertible notes payable  $110,000   $3,831,850 
Discounts on convertible notes payable   –    (24,820)
Total convertible debt less debt discount   110,000    3,807,030 
Current portion   110,000    3,807,030 
Long-term portion  $–   $– 

 

The following is a schedule of convertible notes payable as of and for the six months ended June 30, 2024. 

                                          
Note #  Issuance  Maturity  Principal Balance 12/31/23   Settlements and/or Principal Conversions   New Loans or (Cash Paydown)   Shares Issued Upon Conversion or Exchange   Principal Balance 06/30/24   Accrued Interest on Convertible Debt at 12/31/23   Interest On Convertible Debt For the Period Ended 06/30/24   Accrued Interest on Convertible Debt at 06/30/24   Unamortized Debt Discount At 06/30/24 
9  09/12/2016  09/12/2017  $50,080    –    (50,080)   1,222   $–   $5,581   $(5,581)   –    – 
10  01/24/2017  01/24/2018   55,000    –    –    –    55,000    80,875    5,486    86,361    – 
10-1  02/10/2023  02/10/2024   50,000    –    (50,000)   –    –    6,658    (6,658)   –    – 
10-2  03/30/2023  03/30/2024   25,000    –    –    –    25,000    2,836    2,181    5,017    – 
10-3  08/11/2023  08/11/2024   25,000    –    –    –    25,000    1,469    1,870    3,339    – 
29-2  11/08/2019  11/08/2020   36,604    (36,604)   –    –    –    10,109    (10,109)   –    – 
31  08/28/2019  08/28/2020   –    –    –    –    –    8,385    (8,385)   –    – 
37-1  09/03/2020  06/30/2021   113,667    (113,667)   –    –    –    64,929    (64,929)   –    – 
37-2  11/02/2020  08/31/2021   113,167    (113,167)   –    –    –    63,594    (63,594)   –    – 
37-3  12/29/2020  09/30/2021   113,166    (113,166)   –    –    –    62,558    (62,558)   –    – 
40-1  09/22/2022  09/22/2024   2,600,000    (2,600,000)   –    938,908(1)   –    252,665    (252,655)   –    – 
40-2  11/04/2022  09/22/2024   68,667    (68,667)   –    –    –    7,939    (7,939)   –    – 
40-3  11/28/2022  09/22/2024   68,667    (68,667)   –    –    –    7,506    (7,506)   –    – 
40-4  12/21/2022  09/22/2024   68,667    (68,667)   –    –    –    7,054    (7,054)   –    – 
40-5  01/24/2023  03/21/2024   90,166    (90,166)   –    –    –    8,284    (8,284)   –    – 
40-6  03/21/2023  09/22/2024   139,166    (139,166)   –    –    –    10,671    (10,671)   –    – 
40-7  06/05/2023  06/05/2024   139,166    (139,166)   –    –    –    7,826    (7,826)   –    – 
40-8  06/13/2023  06/13/2024   21,167    (21,167)   –    –    –    1,127    (1,127)   –    – 
40-9  07/19/2023  07/19/2024   35,500    (35,500)   –    –    –    1,605    (1,605)   –    – 
40-10  07/24/2023  07/24/2024   14,000    (14,000)   –    –    –    614    (614)   –    – 
41  08/25/2023  08/25/2024   5,000    –    –    –    5,000    175    250    425      
         $3,831,850   $(3,621,770)  $(100,080)    940,130   $110,000   $612,460   $(517,318)  $95,142   $– 

 

(1)938,908 Series Y Senior Convertible Preferred Shares issued in exchange for full value of the outstanding principal and interest on Notes 40-1, 40-2, 40-3, 40-4, 40-5, 40-6, 40-7, 40-8, 40-9 and 40-10

 

Note 9

 

On September 12, 2016, the Company issued a convertible promissory note in the principal of $80,000 for services rendered, which matured on September 12, 2017. Note 9 is currently in default and accrues at a default interest rate of 20% per annum. In May of 2024, the $58,846 total outstanding principal and interest was paid in full.

 

Note 10, 10-1, 10-2 and 10-3

 

On January 24, 2017, the Company issued a convertible promissory note in the principal amount of $80,000 for services rendered, which matured on January 24, 2018. Note 10 is currently in default and accrues interest at a default interest rate of 20% per annum. On February 10, 2023, the Company executed a second tranche under this note in the principal amount of $50,000 (Note 10-1). On March 30, 2023, the Company executed a third tranche under this note in the principal amount of $25,000 (Note 10-2). On August 11, 2023, the Company executed a fourth tranche under this note in the principal amount of $25,000 (Note 10-3). In May of 2024, the $63,513 total outstanding principal and interest on Note 10-1 was paid in full. Note 10-2 is currently in default and accrues interest at a default interest rate of 20% per annum. Note 10-3 accrues interest at a rate of 15% per annum.

 

Notes 29-2, 37-1, 37-2 and 37-3

 

On May 10, 2019, the Company issued a convertible promissory note in the principal amount of $150,000. On November 8, 2019, this note (Note 29) was purchased by and assigned to an unrelated party. The amount assigned was the existing principal amount of $150,000 and accrued interest of $5,918, which was issued as Note 29-1, plus a new convertible promissory note in the principal amount of $62,367, which was issued as Note 29-2.

 

On September 3, 2020, the Company issued a convertible promissory note in the principal amount of $200,000, with an original issue discount of $50,000, which could be drawn in several tranches. On September 3, 2020, the Company executed the first tranche in the principal amount of $67,000, less an original issue discount of $17,000, which matured on June 30, 2021 (Note 37-1). On November 2, 2020, the Company executed the second tranche in the principal amount of $66,500, less an original issue discount of $16,500, which matured on August 31, 2021 (Note 37-2). On December 29, 2020, the Company executed the third tranche in the principal amount of $66,500, less an original issue discount of $16,500, which matured on September 30, 2021 (Note 37-3).

 

On June 11, 2024, the Company entered into a settlement agreement and release of claims with the holder of Notes 29-2, 37-1, 37-2 and 37-3 (see Note 7. Notes and Loans Payable for further details). Pursuant to the settlement agreement and release of claims, the holder agreed to cancel these notes, along with the cancellation of their holding in the series R preferred stock, in exchange for a new fixed amount settlement promissory note in the principal amount of $535,000.

 

Notes 40-1, 40-2, 40-3, 40-4, 40-5, 40-6, 40-7, 40-8, 40-9 and 40-10

 

On September 22, 2022, the Company issued a convertible promissory note in the principal amount of $2,600,000 in exchange for total of $4,791,099 of defaulted promissory notes balances (Note 40-1). On November 4, 2022, the Company executed a second tranche under this note in the principal amount of $68,667, less an original issue discount and fee of $18,667 (Note 40-2). On November 28, 2022, the Company executed the third tranche under this note in the principal amount of $68,667, less an original issue discount and fee of $18,667 (Note 40-3). On December 21, 2022, the Company executed a fourth tranche under this note in the principal amount of $68,667, less an original issue discount and fee of $18,667 (Note 40-4). On January 24, 2023, the Company executed a fifth tranche under this note in the principal amount of $90,166, less an original issue discount and fee of $25,166 (Note 40-5). On March 21, 2023, the Company executed a sixth tranche under this note in the principal amount of $136,666, less an original issue discount and fee of $39,166 (Note 40-6). On June 5, 2023, the Company executed a seventh tranche under this note in the principal amount of $136,667, less original issue discount and fee of $39,167 (Note 40-7). On June 13, 2023, the Company executed an eighth tranche under this note in the principal amount of $21,167, less original issue discount and fee of $5,167 (Note 40-8). On July 19, 2023, the Company executed a ninth tranche under this note in the principal amount of $35,500, less an original issue discount and fee of $8,875 (Note 40-9). On July 24, 2023, the Company executed a tenth tranche under this note in the principal amount of $14,000, less an original issue discount and fee of $3,500 (Note 40-10). On December 1, 2023, the Company executed amendment on Notes series 40 consolidated senior secured convertible promissory note to extend the expired tranche note 40-1 through 40-5’ due date to September 20, 2024. All of the Note 40 tranches mature in one year from the note issuance date and accrue interest at a rate of 10% per annum.

 

On April 11, 2024, the Company issued 938,908 shares of series Y senior convertible preferred stock in exchange for the settlement of the principal and interest in full on Notes 40-1, 40-2, 40-3, 40-4, 40-5, 4-6, 40-7, 40-8, 40-9 and 40-10. See also Note 9. Capital Stock.

 

Note 41

 

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. The rate of interest is 10% per annum.

 
v3.24.3
CAPITAL STOCK
 6 Months Ended
Jun. 30, 2024
Equity [Abstract]  
CAPITAL STOCK

 

9. CAPITAL STOCK

 

On May 8, 2024, the Company amended its Articles of Incorporation to increase its authorized stock. The total amended authorized shares are 350,000,000 shares of capital stock, consisting of 300,000,000 shares of common stock, $0.001 par value, and 50,000,000 shares of preferred stock, $0.001 par value per share.

 

Preferred Stock

 

The Company has designated multiple series of preferred stock, including 2 shares of series A preferred stock, 3,000,000 shares of series B preferred stock, 500 shares of series C preferred stock, 1,000,000 shares of series E preferred stock, 50,000 shares of series F-1 preferred stock, 15,000,000 shares of series I preferred stock, 2,000,000 shares of series J preferred stock, 400,000 shares of series L preferred stock, 3,000,000 shares of series N senior convertible preferred stock, 5,000 shares of series R convertible preferred stock, 5,000,000 shares of series X senior convertible preferred stock and 1,000,000 shares of series Y senior convertible preferred stock.

 

The following is a description of the rights and preferences of each series of preferred stock.

 

Redeemable Preferred Stock

 

The Company recognizes the series N senior convertible preferred stock, series R convertible preferred stock and series X senior convertible preferred stock as mezzanine equity in accordance with ASC 480, “Distinguishing Liabilities from Equity”.

 

Series N Senior Convertible Preferred Stock

 

Ranking. The series N senior convertible preferred stock ranks, with respect to the payment of dividends and the distribution of assets upon liquidation, (i) senior to all common stock and each other class or series that is not expressly made senior to or on parity with the series N senior convertible preferred stock; (ii) on parity with each class or series that is not expressly subordinated or made senior to the series N senior convertible preferred stock; and (iii) junior to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company and each class or series that is expressly made senior to the series N senior convertible preferred stock.

 

Dividend Rights. Holders of series N senior convertible preferred stock are entitled to dividends at a rate per annum of 12.0% of the stated value ($4.00 per share); provided that upon an event of default (as defined in the certificate of designation for the series N senior convertible preferred stock), such rate would increase by 8% per annum. Dividends accrued from day to day, whether or not declared, and are cumulative. Dividends are payable quarterly in arrears on each dividend payment date in cash or common stock at the Company’s discretion. Dividends payable in common stock are to be calculated based on a price equal to eighty percent (80%) of the volume weighted average price for the common stock on the Company’s principal trading market (the “VWAP”) during the five (5) trading days immediately prior to the applicable dividend payment date. At June 30, 2024 and December 31, 2023, cumulative dividends earned on the series N senior convertible preferred stock were $1,106,562 and $766,437, respectively. The total balance of the cumulative accrued dividends was paid by the Company via the issuance of 197,601 shares of the Company’s common stock as of June 30, 2024.

 

Liquidation Rights. Subject to the rights of creditors and the holders of any senior securities or parity securities (in each case, as defined in the certificate of designation), upon any liquidation of the Company or its subsidiaries, before any payment or distribution of the assets of the Company (whether capital or surplus) are to be made to or set apart for the holders of junior securities (as defined in the certificate of designation), including the common stock, each holder of outstanding series N senior convertible preferred stock is entitled to receive an amount of cash equal to 115% of the stated value of $4.00 per share, plus an amount of cash equal to all accumulated accrued and unpaid dividends thereon (whether or not declared) to, but not including the date of final distribution to such holders.

 

Voting Rights. Holders of series N senior convertible preferred stock do not have any voting rights; provided that, so long as any shares of series N senior convertible preferred stock are outstanding, the affirmative vote of holders of a majority of the series N senior convertible preferred stock, which majority must include SILAC Insurance Company so long as it holds any shares of series N senior convertible preferred stock, voting as a separate class, is necessary for approving, effecting or validating any amendment, alteration or repeal of any of the provisions of the certificate of designation or prior to the Company’s (or Nova’s) creation or issuance of any parity securities or new indebtedness (as defined in the certificate of designation); provided that the foregoing does not apply to any financing transaction the use of proceeds of which would be used to redeem the series N senior convertible preferred stock and the warrants issued in connection therewith. In addition, the affirmative vote of holders of 66% of the series N senior convertible preferred stock, voting as a separate class, is required prior to the Company’s (or Nova’s) creation or issuance of any senior securities.

 

Conversion Rights. Each share of series N senior convertible preferred stock, plus all accrued and unpaid dividends thereon, are convertible, at the option of the holder thereof, at any time and from time to time, into such number of fully paid and nonassessable shares of common stock determined by dividing the stated value ($4.00 per share), plus the value of the accrued, but unpaid, dividends thereon, by a conversion price of $900 per share (subject to standard adjustments in the event of any stock splits, stock combinations, stock reclassifications, dividends paid in common stock, sales of substantially all assets, mergers, consolidations or similar transactions); provided that in no event shall the holder of any series N senior convertible preferred stock be entitled to convert any number of shares that upon conversion the sum of (i) the number of shares of common stock beneficially owned by the holder and its affiliates and (ii) the number of shares of common stock issuable upon the conversion of the series N senior convertible preferred stock with respect to which the determination of this proviso is being made, would result in beneficial ownership by the holder and its affiliates of more than 4.99% of the then outstanding common stock. This limitation can be waived (up to a maximum of 9.99%) by the holder and in its sole discretion, upon not less than sixty-one (61) days’ prior notice to the Company.

 

Redemption Rights. The Company may redeem the series N senior convertible preferred stock at any time by paying in cash therefore a sum equal to 115% of the stated value of $4.00 per share, plus the amount of accrued and unpaid dividends and any other amounts due pursuant to the terms of the certificate of designation. In addition, any holder may require the Company to redeem some or all of its shares of series N senior convertible preferred stock on the same terms after a period of twelve months from the date of issuance; provided, however, that such redemption right shall only be exercisable if the Company raises at least $5,000,000 or the common stock is trading on the Nasdaq Stock Market or the New York Stock Exchange.

 

Series R Convertible Preferred Stock

 

The series R convertible preferred stock was cancelled as part of the June 2024 promissory note and settlement agreement. See also Note 7. Notes and Loans Payable and Note 8. Convertible Notes Payable.

 

Ranking. The series R convertible preferred stock ranked, with respect to the distribution of assets upon liquidation, (i) senior to all common stock, series A preferred stock, series B preferred stock, series C preferred stock, series E preferred stock, series F-1 preferred stock, series I preferred stock, series J preferred stock, series L preferred stock and to each other class or series that is not expressly made senior to or on parity with the series R convertible preferred stock; (ii) on parity with each class or series that is not expressly subordinated or made senior to the series R convertible preferred stock; and (iii) junior to the series N senior convertible preferred stock, series X senior convertible preferred stock and to each other series of preferred stock and each class or series that is expressly made senior to the series R convertible preferred stock, as well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company. 

 

Dividend Rights. The holders of series R convertible preferred stock were entitled to receive cumulative dividends in the amount of twelve percent (12%) per annum, payable quarterly. In addition, holders of series R convertible preferred stock were entitled to receive dividends equal (on an as converted to common stock basis) to and in the same form as dividends actually paid on shares of common stock when, as and if such dividends are paid on shares of common stock. Any dividends that were not paid when due were to continue to accrue and entailed a late fee, which must be paid in cash, at the rate of 18% per annum or the lesser rate permitted by applicable law which was to accrue and compound daily from the missed payment date through and including the date of actual payment in full. At June 30, 2024 and December 31, 2023, cumulative dividends on Series R Preferred Stock were $0 and $109,980, respectively.

 

Liquidation Rights. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series R convertible preferred stock were entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the stated value ($1,200), plus any accrued and unpaid dividends thereon and any other fees or liquidated damages then due and owing, for each share of series R convertible preferred stock before any distribution or payment shall be made to the holders of any junior securities.

 

Voting Rights. The holders of series R convertible preferred stock voted together with the common stock on an as-converted basis. However, as long as any shares of series R convertible preferred stock were outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the series R convertible preferred stock, directly and/or indirectly (i) alter or change adversely the powers, preferences or rights given to the series R convertible preferred stock or alter or amend the certificate of designation, (ii) authorize or create any class of stock ranking as to redemption or distribution of assets upon a liquidation senior to, or otherwise pari passu with, the series R convertible preferred stock, or authorize or create any class of stock ranking as to dividends senior to, or otherwise pari passu with, the series R convertible preferred stock, (iii) amend its articles of incorporation or other charter documents in any manner that adversely affects any rights of the holders of the series R convertible preferred stock, (iv) increase the number of authorized shares of series R convertible preferred stock, or (v) enter into any agreement with respect to any of the foregoing.

 

Conversion Rights. Each share of series R convertible preferred stock was convertible, at the option of the holder thereof, at any time and from time to time, into such number of fully paid and nonassessable shares of common stock determined by dividing the stated value ($1,200 per share) by a conversion price equal to the lower of (i) $75.0 and (ii) the lowest daily VWAP during the twenty (20) trading days immediately prior to the applicable conversion date. Notwithstanding the foregoing, the Company shall not effect any conversion of the series R convertible preferred stock, and a holder shall not have the right to convert any portion of the series R convertible preferred stock, to the extent that, after giving effect to the conversion, such holder (together with such holder’s affiliates, and any persons acting as a group together with such holder or any of such holder’s affiliates) would beneficially own in excess of 4.99% of the then outstanding common stock. The conversion price was subject to adjustment for any stock dividend, stock split, stock combination, reclassification or similar transaction that proportionately decreases or increases the common stock, as well as for mergers, business combinations and certain other fundamental transactions. In addition, subject to certain exceptions, upon any issuance by the Company or any of its subsidiaries of common stock or common stock equivalents for cash consideration, indebtedness or a combination of units thereof (a “Subsequent Financing”), the holder could have elected, in its sole discretion, to exchange (in lieu of conversion), if applicable, all or some of the shares of series R convertible preferred stock then held for any securities or units issued in a Subsequent Financing on a $1.00 for $1.00 basis.

 

Participation Rights. Subject to certain exceptions, upon a Subsequent Financing, a holder of at least 100 shares of series R convertible preferred stock were to have the right to participate in up to an amount of the Subsequent Financing equal to 100% of the Subsequent Financing on the same terms, conditions and price provided for in the Subsequent Financing.

 

Company Redemption Rights. The Company had the right to redeem all (but not less than all), shares of the series R convertible preferred stock issued and outstanding at any time upon three (3) business days’ notice, at a redemption price per share equal to the product of (i) the Premium Rate multiplied by (ii) the sum of (x) the stated value ($1,200), (y) all accrued but unpaid dividends, and (z) all other amounts due to the holder. “Premium Rate” means (a) 1.1 if all of the series R convertible preferred stock is redeemed within ninety (90) calendar days from the issuance date thereof; (b) 1.2 if all of the series R convertible preferred stock is redeemed after ninety (90) calendar days and within one hundred twenty (120) calendar days from the issuance date thereof; (c) 1.3 if all of the series R convertible preferred stock is redeemed after one hundred twenty (120) calendar days and within one hundred eighty (180) calendar days from the issuance date thereof; and (iv) 1.0 if all of the series R convertible preferred stock is redeemed after one hundred eighty (180) calendar days.

 

Redemption Upon Triggering Events. Upon the occurrence of a Triggering Event (as defined below), each holder of series R convertible preferred stock had (in addition to all other rights it may have) the right, exercisable at the sole option of such holder, to require the Company to (A) redeem all of the series R convertible preferred stock then held by such holder for a redemption price, in cash, equal to the Triggering Redemption Amount (as defined below), or (B) at the option of each holder either (i) redeem all of the series R convertible preferred stock then held by such holder though the issuance to such holder of such number of shares of common stock equal to the quotient of (x) the Triggering Redemption Amount, divided by (y) the lowest of (1) the conversion price, and (2) 75% of the average of the 10 VWAPs immediately prior to the date of election, or (ii) increase the dividend rate on all of the outstanding series R convertible preferred stock held by such holder retroactively to the initial issuance date to 18% per annum thereafter. “Triggering Redemption Amount” means, for each share of series R convertible preferred stock, the sum of (a) the greater of (i) 130% of the stated value and (ii) the product of (y) the VWAP on the trading day immediately preceding the date of the Triggering Event, multiplied by (z) the stated value divided by the then applicable conversion price, (b) all accrued but unpaid dividends thereon and (c) all liquidated damages, late fees and other costs, expenses or amounts due in respect of the series R convertible preferred stock including, but not limited to legal fees and expenses of legal counsel to the holder in connection with, related to and/or arising out of a Triggering Event. A “Triggering Event” means any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

 

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

 

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

 

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

 

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

 

  · the Company shall redeem junior securities or pari passu securities;

 

  · the Company shall be party to a Change of Control Transaction (as defined in the certificate of designation);
  · there shall have occurred a Bankruptcy Event (as defined in the certificate of designation);

 

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

 

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

 

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

 

Series X Senior Convertible Preferred Stock

 

Ranking. The series X senior convertible preferred stock ranks, with respect to the payment of dividends and the distribution of assets upon liquidation, (i) senior to all common stock and each other class or series that is not expressly made senior to or on parity with the series X senior convertible preferred stock; (ii) on parity with each class or series that is not expressly subordinated or made senior to the series X senior convertible preferred stock; and (iii) junior to the series N senior convertible preferred stock, all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company and each class or series that is expressly made senior to the series X senior convertible preferred stock.

 

Dividend Rights. Holders of series X senior convertible preferred stock are entitled to dividends at a rate per annum of 10.0% of the stated value ($4.00 per share); provided that upon an event of default (as defined in the certificate of designation for the series X senior convertible preferred stock), such rate was to increase by 5% per annum. Dividends accrue from day to day, whether or not declared, and are cumulative. Dividends are payable quarterly in arrears on each dividend payment date. At June 30, 2024 and December 31, 2023, cumulative dividends earned on the series X senior convertible preferred stock were $183,210 and $190,685, respectively. The total balance of the cumulative accrued dividends was paid by the Company via the issuance of 25,173 shares of the Company’s common stock as of June 30, 2024.

 

Liquidation Rights. Subject to the rights of creditors and the holders of any senior securities, including the series N senior convertible preferred stock, or parity securities (in each case, as defined in the certificate of designation), upon any liquidation of the Company or its subsidiaries, before any payment or distribution of the assets of the Company (whether capital or surplus) are to be made to or set apart for the holders of junior securities (as defined in the certificate of designation), including the common stock, each holder of outstanding series N senior convertible preferred stock is entitled to receive an amount of cash equal to 100% of the stated value of $4.00 per share, plus an amount of cash equal to all accumulated accrued and unpaid dividends thereon (whether or not declared) to, but not including the date of final distribution to such holders.

 

Voting Rights. Holders of series X senior convertible preferred stock do not have any voting rights; provided that, so long as any shares of series X senior convertible preferred stock are outstanding, the affirmative vote of holders of a majority of the series X senior convertible preferred stock, which majority must include Leonite Capital LLC so long as it holds any shares of series X senior convertible preferred stock, voting as a separate class, is necessary for approving, effecting or validating any amendment, alteration or repeal of any of the provisions of the certificate of designation or prior to the creation or issuance of any parity securities or new indebtedness (as defined in the certificate of designation); provided that the foregoing does not apply to any financing transaction the use of proceeds of which were to be used to redeem the series X senior convertible preferred stock and the warrants issued in connection therewith. In addition, the affirmative vote of holders of 66% of the series X senior convertible preferred stock, voting as a separate class, is required prior to the creation or issuance of any senior securities.

 

Conversion Rights. Each share of series X senior convertible preferred stock, plus all accrued and unpaid dividends thereon, are convertible, at the option of the holder thereof, at any time and from time to time, into such number of fully paid and nonassessable shares of common stock determined by dividing the stated value ($4.00 per share), plus the value of the accrued, but unpaid, dividends thereon, by a conversion price equal to the lower of (i) the lowest VWAP during the five (5) trading days immediately prior to the applicable conversion date and (ii) the price per share paid in any subsequent financing (the “Fixed Price”). The Fixed Price is subject to standard adjustments in the event of any stock splits, stock combinations, stock reclassifications, dividends paid in common stock, sales of substantially all assets, mergers, consolidations or similar transactions, as well as a price based antidilution adjustment, pursuant to which, subject to certain exceptions, if the Company issues common stock at a price lower than the Fixed Price, the Fixed Price shall decrease to such lower price. Notwithstanding the foregoing, in no event shall the holder of any series X senior convertible preferred stock be entitled to convert any number of shares that upon conversion the sum of (i) the number of shares of common stock beneficially owned by the holder and its affiliates and (ii) the number of shares of common stock issuable upon the conversion of the series X senior convertible preferred stock with respect to which the determination of this proviso is being made, would result in beneficial ownership by the holder and its affiliates of more than 4.99% of the then outstanding common stock. This limitation may be waived (up to a maximum of 9.99%) by the holder and in its sole discretion, upon not less than sixty-one (61) days’ prior notice to the Company.

 

Redemption Rights. Commencing on September 22, 2023, any holder may require the Company to redeem its shares by the payment in cash therefore of a sum equal to 100% of the stated value of $4.00 per share, plus the amount of accrued and unpaid dividends and any other amounts due pursuant to the terms of the certificate of designation; provided however, that in the event that the Company completes a public offering prior to the redemption date, then any holder may only cause the Company to redeem any outstanding series X senior convertible preferred stock by paying such redemption price in twelve (12) equal monthly installments with the first such payment due on the date that is six (6) months following the date that the Company completes such public offering.

 

Non-redeemable Preferred Stock

 

Series A Preferred Stock

 

Ranking. The series A preferred stock ranks, with respect to the distribution of assets upon liquidation, (i) senior to all common stock and each other class or series that is not expressly made senior to or on parity with the series A preferred stock; (ii) on parity with each class or series that is not expressly subordinated or made senior to the series A preferred stock; and (iii) junior to the series B preferred stock, series C preferred stock, series E preferred stock, series F-1 preferred stock, series I preferred stock, series J preferred stock, series L preferred stock, series N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred stock and each other series of preferred stock and each class or series that is expressly made senior to the series A preferred stock, as well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company.

 

Dividend Rights. The series A preferred stock is not entitled to participate in any distributions or payments to the holders of common stock or any other class of stock and shall have no economic interest in the Company.

 

Liquidation Rights. In the event of any liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, a merger or consolidation of the Company wherein the Company is not the surviving entity, or a sale of all or substantially all of the assets of the Company, the holders of each share of series A preferred stock shall be entitled to receive from any distribution of any of the assets or surplus funds of the Company, before and in preference of any holder of shares of common stock, an amount equal to the stated value of $250. Once the holders receive the foregoing from any such liquidation, dissolution or winding up, the holders shall not participate with the common stock or any other class of stock.

 

Voting Rights. Each share of series A preferred stock shall have a number of votes at any time equal to (i) 25% of the number of votes then held or entitled to be made by all other equity securities of the Company, including, without limitation, the common stock, plus (ii) one (1). The series A preferred stock shall vote on any matter submitted to the holders of the common stock, or any other class of voting securities, for a vote, and shall vote together with the common stock, or any class of voting securities, as applicable, on such matter for as long as the shares of series A preferred stock are issued and outstanding. Notwithstanding the foregoing, the series A preferred stock shall not have the right to vote on any matter as to which solely another series of preferred stock is entitled to vote pursuant to the Company’s amended and restated articles of incorporation or a certificate of designation of such other series of preferred stock.

 

Transfer. Upon transfer of any share of series A preferred stock, except for a transfer by the holder to an affiliate, whether such transfer is voluntary or involuntary, such share of series A preferred stock shall automatically, and without any action being required by the Company or the holder, be converted into one (1) share of common stock.

 

Other Rights. Holders of series A preferred stock do not have any conversion (except as set forth above) or redemption rights.

 

Series B Preferred Stock

 

Ranking. The series B preferred stock ranks, with respect to the distribution of assets upon liquidation, (i) senior to all common stock, series A preferred stock and to each other class or series that is not expressly made senior to or on parity with the series B preferred stock; (ii) on parity with the series C preferred stock, series E preferred stock, series F-1 preferred stock, series J preferred stock, series L preferred stock and each other class or series that is not expressly subordinated or made senior to the series B preferred stock; and (iii) junior to the series I preferred stock, series N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred stock and to each other series of preferred stock and each class or series that is expressly made senior to the series B preferred stock, as well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company.

 

Dividend Rights. The holders of series B preferred stock are entitled to receive dividends equal (on an as converted to common stock basis) to and in the same form as dividends actually paid on shares of common stock when, as and if such dividends are paid on shares of common stock. No other dividends shall be paid on shares of series B preferred stock.

 

Liquidation Rights. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series B preferred stock shall be entitled to receive out of the assets of the Company the same amount that a holder of common stock would receive if the shares of series B preferred stock were fully converted to common stock immediately prior to such liquidation, which amount shall be paid to the holders of series B preferred stock pari passu with all holders of parity securities and in preference to the holders of junior securities.

 

Voting Rights. On any matter presented to stockholders for their action or consideration, each holder of series B preferred stock shall be entitled to cast one (1) vote per share of series B preferred stock held. Except as provided by law, the holders of series B preferred stock shall vote together with the holders of shares of common stock as a single class. However, as long as any shares of series B preferred stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of outstanding series B preferred stock, (a) alter or change adversely the powers, preferences or rights given to the series B preferred stock or alter or amend the certificate of designation for the series B preferred stock, or (b) amend the Company’s amended and restated articles of incorporation or other charter documents in any manner that adversely affects any rights of the holders of series B preferred stock.

 

Conversion Rights. Each share of series B preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into such number of shares of common stock as is determined as follows: (i) if the closing market price of the common stock on the principal trading market on which the common stock is then traded or quoted is less than $4.00 per share, then each share of series B preferred stock shall be convertible into a number of shares of common stock equal to two (2) times the stated value ($4.00 per share), divided by such closing market price on the date of conversion; or (ii) if such closing market price is equal to or greater than $4.00 per share, then each share of series B preferred stock shall be convertible into two (2) shares of common stock. In addition, upon the earlier to occur of: (a) the closing of the sale of shares of common stock to the public at a price of at least $3.00 per share in a public offering pursuant to an effective registration statement or offering statement under the Securities Act resulting in at least $3,000,000 of gross proceeds to the Company, (b) the date on which the shares of common stock of the Company are listed on a national stock exchange, including without limitation the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (any tier), or (c) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of at least 67% of the then outstanding shares of series B preferred stock, voting together as a single class, each share of series B preferred stock shall be automatically converted into such number of shares of common stock as is determined in accordance with the provisions above. Such conversion price is subject to standard adjustments in the event of any stock dividends, stock reclassifications and similar events (but not for reverse stock splits).

 

Redemption Rights. Holders of series B preferred stock do not have any redemption rights.

 

Series C Preferred Stock

 

Ranking. The series C preferred stock ranks, with respect to the distribution of assets upon liquidation, (i) senior to all common stock, series A preferred stock and to each other class or series that is not expressly made senior to or on parity with the series C preferred stock; (ii) on parity with the series B preferred stock, series E preferred stock, series F-1 preferred stock, series J preferred stock, series L preferred stock and each other class or series that is not expressly subordinated or made senior to the series C preferred stock; and (iii) junior to the series I preferred stock, series N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred stock and to each other series of preferred stock and each class or series that is expressly made senior to the series C preferred stock, as well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company.

 

Dividend Rights. The holders of series C preferred stock are entitled to receive dividends equal (on an as converted to common stock basis) to and in the same form as dividends actually paid on shares of common stock when, as and if such dividends are paid on shares of common stock. No other dividends shall be paid on shares of series C preferred stock.

 

Liquidation Rights. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series C preferred stock shall be entitled to receive out of the assets of the Company the same amount that a holder of common stock would receive if the shares of series C preferred stock were fully converted to common stock immediately prior to such liquidation, which amount shall be paid to the holders of series C preferred stock pari passu with all holders of parity securities and in preference to the holders of junior securities.

 

Voting Rights. On any matter presented to stockholders for their action or consideration, each holder of series C preferred stock shall be entitled to cast one (1) vote per share of series C preferred stock held. Except as provided by law, the holders of series C preferred stock shall vote together with the holders of shares of common stock as a single class. However, as long as any shares of series C preferred stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of outstanding series C preferred stock, (a) alter or change adversely the powers, preferences or rights given to the series C preferred stock or alter or amend the certificate of designation for the series C preferred stock, or (b) amend the Company’s amended and restated articles of incorporation or other charter documents in any manner that adversely affects any rights of the holders of series C preferred stock.

 

Conversion Rights. Each share of series C preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into such number of shares of common stock as is determined by dividing the stated value ($4.00 per share) by a conversion price of $0.00004. In addition, on the date on which the shares of common stock are listed on a national stock exchange, including without limitation the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (any tier) (a “Listing Event”), all outstanding shares of series C preferred stock shall be automatically converted into such number of shares of common stock as is determined by dividing $50,000 by the highest traded or closing price on such date, which such shares of common stock shall be issued pro rata among the holders of the outstanding series C preferred stock. Finally, upon the earlier to occur of: (a) the closing of the sale of shares of common stock to the public at a price of at least $3.00 per share (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the common stock) in a public offering pursuant to an effective registration statement or offering statement under the Securities Act resulting in at least $3,000,000 of gross proceeds to the Company or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of at least 67% of the then outstanding shares of series C preferred stock, voting together as a single class, each share of series C preferred stock shall be automatically converted into such number of shares of common stock as is determined by dividing the stated value ($4.00 per share) by a conversion price of $0.00004. Such conversion price is subject to standard adjustments in the event of any stock dividends, stock reclassifications and similar events (but not for reverse stock splits).

 

Redemption Rights. If there is a Listing Event, the Company shall have the right (but not the obligation) to redeem shares of series C preferred stock at a price per share of $50,000.

 

Series E Preferred Stock

 

Ranking. The series E preferred stock ranks, with respect to the distribution of assets upon liquidation, (i) senior to all common stock, series A preferred stock and to each other class or series that is not expressly made senior to or on parity with the series E preferred stock; (ii) on parity with the series B preferred stock, series C preferred stock, series F-1 preferred stock, series J preferred stock, series L preferred stock and each other class or series that is not expressly subordinated or made senior to the series E preferred stock; and (iii) junior to the series I preferred stock, series N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred stock and to each other series of preferred stock and each class or series that is expressly made senior to the series E preferred stock, as well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company.

 

Dividend Rights. The holders of series E preferred stock are entitled to receive dividends equal (on an as converted to common stock basis) to and in the same form as dividends actually paid on shares of common stock when, as and if such dividends are paid on shares of common stock. No other dividends shall be paid on shares of series E preferred stock.

 

Liquidation Rights. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series E preferred stock shall be entitled to receive out of the assets of the Company the same amount that a holder of common stock would receive if the shares of series E preferred stock were fully converted to common stock immediately prior to such liquidation, which amount shall be paid to the holders of series E preferred stock pari passu with all holders of parity securities and in preference to the holders of junior securities.

 

Voting Rights. On any matter presented to stockholders for their action or consideration, each holder of series E preferred stock shall be entitled to cast one (1) vote per share of series E preferred stock held. Except as provided by law, the holders of series E preferred stock shall vote together with the holders of shares of common stock as a single class. However, as long as any shares of series E preferred stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of outstanding series E preferred stock, (a) alter or change adversely the powers, preferences or rights given to the series E preferred stock or alter or amend the certificate of designation for the series E preferred stock, or (b) amend the Company’s amended and restated articles of incorporation or other charter documents in any manner that adversely affects any rights of the holders of series E preferred stock.

 

Conversion Rights. Each share of series E preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into such number of shares of common stock as is determined as follows: (i) if the closing market price of the common stock on the principal trading market on which the common stock is then traded or quoted is less than $4.00 per share, then each share of series E preferred stock shall be convertible into a number of shares of common stock equal to two (2) times the stated value ($4.00 per share), divided by such closing market price on the date of conversion; or (ii) if such closing market price is equal to or greater than $4.00 per share, then each share of series E preferred stock shall be convertible into two (2) shares of common stock. In addition, upon the earlier to occur of: (a) the closing of the sale of shares of common stock to the public at a price of at least $3.00 per share in a public offering pursuant to an effective registration statement or offering statement under the Securities Act resulting in at least $3,000,000 of gross proceeds to the Company, (b) the date on which the shares of common stock of the Company are listed on a national stock exchange, including without limitation the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (any tier), or (c) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of at least 67% of the then outstanding shares of series E preferred stock, voting together as a single class, each share of series E preferred stock shall be automatically converted into such number of shares of common stock as is determined in accordance with the provisions above. Such conversion price is subject to standard adjustments in the event of any stock dividends, stock reclassifications and similar events (but not for reverse stock splits).

 

Series F-1 Preferred Stock

 

Ranking. The series F-1 preferred stock ranks, with respect to the distribution of assets upon liquidation, (i) senior to all common stock, series A preferred stock and to each other class or series that is not expressly made senior to or on parity with the series F-1 preferred stock; (ii) on parity with the series B preferred stock, series C preferred stock, series E preferred stock, series J preferred stock, series L preferred stock and each other class or series that is not expressly subordinated or made senior to the series F-1 preferred stock; and (iii) junior to the series I preferred stock, series N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred stock and to each other series of preferred stock and each class or series that is expressly made senior to the series F-1 preferred stock, as well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company.

 

Dividend Rights. The holders of series F-1 preferred stock are entitled to receive dividends equal (on an as converted to common stock basis) to and in the same form as dividends actually paid on shares of common stock when, as and if such dividends are paid on shares of common stock. No other dividends shall be paid on shares of series F-1 preferred stock.

 

Liquidation Rights. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series F-1 preferred stock shall be entitled to receive out of the assets of the Company the same amount that a holder of common stock would receive if the shares of series F-1 preferred stock were fully converted to common stock immediately prior to such liquidation, which amount shall be paid to the holders of series F-1 preferred stock pari passu with all holders of parity securities and in preference to the holders of junior securities.

 

Voting Rights. Except as provided by law, the holders of series F-1 preferred stock shall have no voting rights. However, as long as any shares of series F-1 preferred stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of outstanding series F-1 preferred stock, (a) alter or change adversely the powers, preferences or rights given to the series F-1 preferred stock or alter or amend the certificate of designation for the series F-1 preferred stock, or (b) amend the Company’s amended and restated articles of incorporation or other charter documents in any manner that adversely affects any rights of the holders of series F-1 preferred stock.

 

Conversion Rights. Each share of series F-1 preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into such number of shares of common stock as is determined as follows: (i) if the closing market price of the common stock on the principal trading market on which the common stock is then traded or quoted is less than $4.00 per share, then each share of series F-1 preferred stock shall be convertible into a number of shares of common stock equal to two (2) times the stated value ($4.00 per share), divided by such closing market price on the date of conversion; or (ii) if such closing market price is equal to or greater than $4.00 per share, then each share of series F-1 preferred stock shall be convertible into two (2) shares of common stock. In addition, upon the earlier to occur of: (a) the closing of the sale of shares of common stock to the public at a price of at least $3.00 per share in a public offering pursuant to an effective registration statement or offering statement under the Securities Act resulting in at least $3,000,000 of gross proceeds to the Company, (b) the date on which the shares of common stock of the Company are listed on a national stock exchange, including without limitation the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (any tier), or (c) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of at least 67% of the then outstanding shares of series F-1 preferred stock, voting together as a single class, each share of series F-1 preferred stock shall be automatically converted into such number of shares of common stock as is determined in accordance with the provisions above. Such conversion price is subject to standard adjustments in the event of any stock dividends, stock reclassifications and similar events (but not for reverse stock splits).

 

Redemption Rights. Holders of series F-1 preferred stock do not have any redemption rights. 

 

Series I Preferred Stock

 

Ranking. The series I preferred stock ranks, with respect to the distribution of assets upon liquidation, (i) senior to all common stock, series A preferred stock, series B preferred stock, series C preferred stock, series E preferred stock, series F-1 preferred stock, series J preferred stock, series L preferred stock and to each other class or series that is not expressly made senior to or on parity with the series I preferred stock; (ii) on parity with each class or series that is not expressly subordinated or made senior to the series I preferred stock; and (iii) junior to the series N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred stock and to each other series of preferred stock and each class or series that is expressly made senior to the series I preferred stock, as well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company.

 

Dividend Rights. The holders of series I preferred stock are entitled to receive dividends equal (on an as converted to common stock basis) to and in the same form as dividends actually paid on shares of common stock when, as and if such dividends are paid on shares of common stock. No other dividends shall be paid on shares of series I preferred stock.

 

Liquidation Rights. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series I preferred stock shall be entitled to receive out of the assets of the Company the same amount that a holder of common stock would receive if the shares of series I preferred stock were fully converted to common stock immediately prior to such liquidation, which amount shall be paid to the holders of series I preferred stock pari passu with all holders of parity securities and in preference to the holders of junior securities.

 

Voting Rights. On any matter presented to stockholders for their action or consideration, each holder of series I preferred stock shall be entitled to cast five (5) votes per share of series I preferred stock held. Except as provided by law, the holders of series I preferred stock shall vote together with the holders of shares of common stock as a single class. However, as long as any shares of series I preferred stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of outstanding series I preferred stock, (a) alter or change adversely the powers, preferences or rights given to the series I preferred stock or alter or amend the certificate of designation for the series I preferred stock, or (b) amend the Company’s amended and restated articles of incorporation or other charter documents in any manner that adversely affects any rights of the holders of series I preferred stock.

 

Conversion Rights. Each share of series I preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into such number of shares of common stock as is determined as follows: (i) if the closing market price of the common stock on the principal trading market on which the common stock is then traded or quoted is less than $4.00 per share, then each share of series I preferred stock shall be convertible into a number of shares of common stock equal to two (2) times the stated value ($4.00 per share), divided by such closing market price on the date of conversion; or (ii) if such closing market price is equal to or greater than $4.00 per share, then each share of series I preferred stock shall be convertible into two (2) shares of common stock. In addition, upon the earlier to occur of: (a) the closing of the sale of shares of common stock to the public at a price of at least $3.00 per share in a public offering pursuant to an effective registration statement or offering statement under the Securities Act resulting in at least $10,000,000 of gross proceeds to the Company, (b) the date on which the shares of common stock of the Company are listed on a national stock exchange, including without limitation the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (any tier), or (c) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of at least 67% of the then outstanding shares of series I preferred stock, voting together as a single class, each share of series I preferred stock shall be automatically converted into such number of shares of common stock as is determined in accordance with the provisions above. Such conversion price is subject to standard adjustments in the event of any stock dividends, stock reclassifications and similar events (but not for reverse stock splits).

 

Redemption Rights. Holders of series I preferred stock do not have any redemption rights.

 

Series J Preferred Stock

 

Ranking. The series J preferred stock ranks, with respect to the distribution of assets upon liquidation, (i) senior to all common stock, series A preferred stock and to each other class or series that is not expressly made senior to or on parity with the series J preferred stock; (ii) on parity with the series B preferred stock, series C preferred stock, series E preferred stock, series F-1 preferred stock, series L preferred stock and each other class or series that is not expressly subordinated or made senior to the series J preferred stock; and (iii) junior to the series I preferred stock, series N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred stock and to each other series of preferred stock and each class or series that is expressly made senior to the series J preferred stock, as well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company.

 

Dividend Rights. The holders of series J preferred stock are entitled to receive dividends equal (on an as converted to common stock basis) to and in the same form as dividends actually paid on shares of common stock when, as and if such dividends are paid on shares of common stock. No other dividends shall be paid on shares of series J preferred stock.

 

Liquidation Rights. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series J preferred stock shall be entitled to receive out of the assets of the Company the same amount that a holder of common stock would receive if the shares of series J preferred stock were fully converted to common stock immediately prior to such liquidation, which amount shall be paid to the holders of series J preferred stock pari passu with all holders of parity securities and in preference to the holders of junior securities.

 

Voting Rights. On any matter presented to stockholders for their action or consideration, each holder of series J preferred stock shall be entitled to cast one (1) vote per share of series J preferred stock held. Except as provided by law, the holders of series J preferred stock shall vote together with the holders of shares of common stock as a single class. However, as long as any shares of series J preferred stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of outstanding series J preferred stock, (a) alter or change adversely the powers, preferences or rights given to the series J preferred stock or alter or amend the certificate of designation for the series J preferred stock, or (b) amend the Company’s amended and restated articles of incorporation or other charter documents in any manner that adversely affects any rights of the holders of series J preferred stock.

 

Conversion Rights. Each share of series J preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into such number of shares of common stock as is determined as follows: (i) if the closing market price of the common stock on the principal trading market on which the common stock is then traded or quoted is less than $4.00 per share, then each share of series J preferred stock shall be convertible into a number of shares of common stock equal to two (2) times the stated value ($4.00 per share), divided by such closing market price on the date of conversion; or (ii) if such closing market price is equal to or greater than $4.00 per share, then each share of series J preferred stock shall be convertible into two (2) shares of common stock. In addition, upon the earlier to occur of: (a) the closing of the sale of shares of common stock to the public at a price of at least $3.00 per share in a public offering pursuant to an effective registration statement or offering statement under the Securities Act resulting in at least $3,000,000 of gross proceeds to the Company, (b) the date on which the shares of common stock of the Company are listed on a national stock exchange, including without limitation the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (any tier), or (c) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of at least 67% of the then outstanding shares of series J preferred stock, voting together as a single class, each share of series J preferred stock shall be automatically converted into such number of shares of common stock as is determined in accordance with the provisions above. Such conversion price is subject to standard adjustments in the event of any stock dividends, stock reclassifications and similar events (but not for reverse stock splits).

 

Redemption Rights. Holders of series J preferred stock do not have any redemption rights.

 

Series L Preferred Stock

 

Ranking. The series L preferred stock ranks, with respect to the distribution of assets upon liquidation, (i) senior to all common stock, series A preferred stock and to each other class or series that is not expressly made senior to or on parity with the series L preferred stock; (ii) on parity with the series B preferred stock, series C preferred stock, series E preferred stock, series F-1 preferred stock, series J preferred stock and each other class or series that is not expressly subordinated or made senior to the series L preferred stock; and (iii) junior to the series I preferred stock, series N senior convertible preferred stock, series R convertible preferred stock, series X senior convertible preferred stock and to each other series of preferred stock and each class or series that is expressly made senior to the series L preferred stock, as well as to all indebtedness and other liabilities with respect to assets available to satisfy claims against the Company.

 

Dividend Rights. The holders of series L preferred stock are entitled to receive dividends equal (on an as converted to common stock basis) to and in the same form as dividends actually paid on shares of common stock when, as and if such dividends are paid on shares of common stock. No other dividends shall be paid on shares of series L preferred stock.

 

Liquidation Rights. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series L preferred stock shall be entitled to receive out of the assets of the Company the same amount that a holder of common stock would receive if the shares of series L preferred stock were fully converted to common stock immediately prior to such liquidation, which amount shall be paid to the holders of series L preferred stock pari passu with all holders of parity securities and in preference to the holders of junior securities.

 

Voting Rights. On any matter presented to stockholders for their action or consideration, each holder of series L preferred stock shall be entitled to cast one (1) vote per share of series L preferred stock held. Except as provided by law, the holders of series L preferred stock shall vote together with the holders of shares of common stock as a single class. However, as long as any shares of series L preferred stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of outstanding series L preferred stock, (a) alter or change adversely the powers, preferences or rights given to the series J preferred stock or alter or amend the certificate of designation for the series L preferred stock, or (b) amend the Company’s amended and restated articles of incorporation or other charter documents in any manner that adversely affects any rights of the holders of series L preferred stock.

 

Conversion Rights. Each share of series L preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into such number of shares of common stock as is determined as follows: (i) if the closing market price of the common stock on the principal trading market on which the common stock is then traded or quoted is less than $4.00 per share, then each share of series L preferred stock shall be convertible into a number of shares of common stock equal to two (2) times the stated value ($4.00 per share), divided by such closing market price on the date of conversion; or (ii) if such closing market price is equal to or greater than $4.00 per share, then each share of series L preferred stock shall be convertible into two (2) shares of common stock. In addition, upon the earlier to occur of: (a) the closing of the sale of shares of common stock to the public at a price of at least $3.00 per share in a public offering pursuant to an effective registration statement or offering statement under the Securities Act resulting in at least $3,000,000 of gross proceeds to the Company, (b) the date on which the shares of common stock of the Company are listed on a national stock exchange, including without limitation the New York Stock Exchange, NYSE American or the Nasdaq Stock Market (any tier), or (c) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of at least 67% of the then outstanding shares of series L preferred stock, voting together as a single class, each share of series L preferred stock shall be automatically converted into such number of shares of common stock as is determined in accordance with the provisions above. Such conversion price is subject to standard adjustments in the event of any stock dividends, stock reclassifications and similar events (but not for reverse stock splits).

 

Redemption Rights. Holders of series L preferred stock do not have any redemption rights.

 

Series Y Senior Preferred Stock

 

On May 15, 2024, in conjunction with the exchange of certain senior secured convertible promissory notes, 938,908 shares of series Y preferred senior convertible preferred stock were issued with an aggregate value of $3,755,632. See also Note 8. Convertible Notes Payable.

 

Ranking. The series Y senior convertible preferred stock ranks, with respect to the payment of dividends and the distribution of assets upon liquidation, (i) senior to all common stock and each series of preferred stock, and to each other class or series that is not expressly made senior to or on parity with the series Y senior convertible preferred stock; (ii) on parity with each class or series that is not expressly subordinated or made senior to the series Y senior convertible preferred stock; and (iii) junior to each class or series that is expressly made senior to the series Y senior convertible preferred stock.

 

Dividend Rights. Holders of series Y senior convertible preferred stock are entitled to dividends at a rate per annum of 10.0% of the stated value ($4.00 per share); provided that upon an event of default (as defined in the certificate of designation for the series Y senior convertible preferred stock), such rate shall increase by 5% per annum. Dividends shall accrue from day to day, whether or not declared, and shall be cumulative. Dividends shall be payable quarterly in arrears on each dividend payment date and may be paid in cash or common stock at our discretion; provided that the Company may only pay dividends in common stock if such common stock is free-trading, freely transferable, and does not contain a legend (or be subject to stop transfer or similar instructions) restricting the resale or transferability thereof. Dividends payable in common stock shall be calculated based on a price equal to eighty percent (80%) of the VWAP during the five (5) trading days immediately prior to the applicable payment date. At June 30, 2024, the total cumulative dividends on series Y senior convertible preferred stock of $82,732.15 were paid via issuance of 12,135 shares of the Company’s common stock.

 

Liquidation Rights. Subject to the rights of creditors and the holders of any senior securities or parity securities (in each case, as defined in the certificate of designation), upon any liquidation event (as defined in the certificate of designation), before any payment or distribution of the assets of the Company (whether capital or surplus) shall be made to or set apart for the holders of junior securities (as defined in the certificate of designation), including the common stock, each holder of outstanding series Y senior convertible preferred stock shall be entitled to receive an amount of cash equal to the greater of (i) 100% of the stated value of $4.00 per share, plus an amount of cash equal to all accumulated accrued and unpaid dividends thereon (whether or not declared) to, but not including the date of final distribution to such holders or (ii) such amount per share as would have been payable had all shares of series Y senior convertible preferred stock been converted into common stock immediately prior to such liquidation event.

 

Voting Rights. Holders of series Y senior convertible preferred stock do not have any voting rights; provided that, so long as any shares of series Y senior convertible preferred stock are outstanding, the affirmative vote of holders of a majority of the series Y senior convertible preferred stock, which majority must include Leonite Capital LLC so long as it holds any shares of series Y senior convertible preferred stock, voting as a separate class, shall be necessary for approving, effecting or validating any amendment, alteration or repeal of any of the provisions of the certificate of designation, prior to the Company’s issuance of additional shares of series Y senior convertible preferred stock or prior to the creation or issuance of any securities that are not subordinate to the series Y senior convertible preferred stock or new indebtedness (as defined in the certificate of designation); provided that the foregoing shall not apply to any financing transaction the use of proceeds of which will be used to redeem the series Y senior convertible preferred stock in full.

 

Conversion Rights. Commencing on the first anniversary of the date on which the Company’s common stock begins trading on the Nasdaq Stock Market, each share of series Y senior convertible preferred stock, plus all accrued and unpaid dividends thereon, shall be convertible, at the option of the holder thereof, at any time and from time to time, into such number of fully paid and nonassessable shares of common stock determined by dividing the stated value ($4.00 per share), plus the value of the accrued, but unpaid, dividends thereon, by a conversion price equal to the lowest VWAP during the five (5) trading days immediately prior to the applicable conversion date. Such conversion price is subject to adjustment if the Company issues common stock at a price lower than such conversion price, subject to certain exceptions. Notwithstanding the foregoing, in no event shall the holder of any series Y senior convertible preferred stock be entitled to convert any number of shares that upon conversion the sum of (i) the number of shares of common stock beneficially owned by the holder and its affiliates and (ii) the number of shares of common stock issuable upon the conversion of the series Y senior convertible preferred stock with respect to which the determination of this proviso is being made, would result in beneficial ownership by the holder and its affiliates of more than 4.99% of the then outstanding common stock. This limitation may be waived (up to a maximum of 9.99%) by the holder and in its sole discretion, upon not less than sixty-one (61) days’ prior notice to the Company.

 

Preferred Stock Transactions

 

During the six months ended June 30, 2024, the Company executed the following transactions:

 

  · On January 19, 2024, the Company issued 62,500 shares of series I preferred stock to each of Daniel R. Thompson, the Chairman of the Board, and Alex Cunningham, the Company’s Chief Executive Officer, for $250,000 bonus compensation for the fiscal year of 2023, at the fair value of $4.48 per share.
     
  · On January 31, 2024, the Company issued 5,000 shares of series I preferred stock to Matthrew Shafer, the Company’s Chief Financial Officer, for $20,000, at the fair value of $4.48 per share.
     
  · On January 31, 2024, the Company issued 2,500 shares of series I preferred stock to Zia Choe, the Company’s Chief Accounting Officer, for $10,000, at the fair value of $4.48 per share.

 

In connection with these aforementioned shares issuances on January 19, 2024 and January 31, 2024, the Company engaged a valuation specialist to perform a business valuation monte carlo simulation for the series I preferred stock resulting in those indicated fair values.

 

  · An aggregate of 1,159,299 shares of series B preferred stock were converted into an aggregate of 2,318,598 shares of common stock.

 

  · An aggregate of 61 shares of series C preferred stock were converted into an aggregate of 610,000 shares of common stock.
     
  · An aggregate of 80,375 shares of series E preferred stock were converted into an aggregate of 160,750 shares of common stock.

 

  · An aggregate of 10,002 shares of series F-1 preferred stock were converted into an aggregate of 20,004 shares of common stock.

 

  · An aggregate of 3,377,000 shares of series I preferred stock were converted into an aggregate of 6,754,000 shares of common stock.

 

  · An aggregate of 1,713,584 shares of series J preferred stock were converted into an aggregate of 3,427,168 shares of common stock.

 

  · 2 shares of series C preferred stock were cancelled, which were issued erroneously.

 

  · 165 shares of series R preferred stock were cancelled as part of the settlement agreement described in Note 7. Notes and Loans Payable

 

  ·

On May 15, 2024, in conjunction with the exchange of certain senior secured convertible promissory notes, 938,908 shares of series Y senior convertible preferred stock were issued with an aggregate value of $3,755,632.

 

During the six months ended June 30, 2023, the Company executed the following transaction:

 

  · On May 25, 2023, the Company issued 3,150 shares of series B preferred stock to Zia Choe, Interim Chief Financial Officer for $25,000.

 

Common Stock

 

In addition to the issuance of common stock from the conversions of preferred stock noted above, during the six months ended June 30, 2024, the Company executed the following transactions:

 

  · The Company issued an aggregate of 234,909 shares of common stock in payment of various accrued dividends on the series N, series X and series Y preferred stock.

  

  · The Company issued 1,222 shares of common stock upon conversion of certain convertible notes.

 

  · On March 5, 2024, the Company issued 7,500 shares of common stock to an investor relation service provider. The Company recognized the fair value for the issuance of the 7,500 shares at $1.55 per share on the closing market price of March 5, 2024 and recorded selling, general and administrative expense of $11,617 in the consolidated statement of operations.

 

  · On March 26, 2024, the Company issued an aggregate of 30,000 shares of common stock to three board members. The Company recognized the fair value for the issuance of 30,000 shares at $6.50 per share on the closing market price of March 26, 2024 and recorded share based compensation expense of $195,000 in the consolidated statement of operations.

 

  · In February 2024, as part of the Red Rock settlement executed in July 2022, the Company issued an aggregate of 37,104 shares of common stock to six previous owners. The Company recognized the fair value for the issuance of 37,104 shares at $3 per share on the closing market price of February 4 through February 6, 2024, and recorded share loss from discontinued operations of $111,312 in the consolidated statement of operations.

 

During the six months ended June 30, 2023, the Company executed the following transaction:

 

  · During the six months ended June 30, 2023, the Company issued 1,583 shares of common stock upon conversion of certain convertible notes.

 
v3.24.3
WARRANTS
 6 Months Ended
Jun. 30, 2024
Warrants  
WARRANTS

 

10. WARRANTS

 

The table below sets forth warrant activity during the six months ended June 30, 2024 and 2023:  

        
   Number of
Warrants		   Weighted
Average
Exercise
Price		 
Balance at January 1, 2024   3,140   $0.015 
Granted   –    – 
Exercised   –    – 
Expired   –    – 
Balance at June 30, 2024   3,140    0.015 
Warrants Exercisable at June 30, 2024   3,140   $0.015 

 

   Number of
Warrants		   Weighted
Average
Exercise
Price		 
Balance at January 1, 2023   3,141   $0.015 
Granted   –    – 
Exercised   –    – 
Expired   (1)   – 
Balance at June 30, 2023   3,140    0.015 
Warrants Exercisable at June 30, 2023   3,140   $0.015 

 
v3.24.3
DISCONTINUED OPERATIONS
 6 Months Ended
Jun. 30, 2024
Discontinued Operations and Disposal Groups [Abstract]  
DISCONTINUED OPERATIONS

 

11. DISCONTINUED OPERATIONS

 

On November 10, 2023, the Company sold Platinum Tax, which was a full-service tax resolution firm located in Los Angeles, California. Through this subsidiary the Company provided fee-based tax resolution services to individuals and companies that have federal and state tax liabilities by assisting clients to settle outstanding tax debts. As part of the Asset Purchase Agreement between the Company and the purchaser, the assets that were purchased included substantially all assets, rights, interests, and licenses except for banks accounts in place prior to the sale for the purchase consideration of 15% of cash collected by the purchaser within one year following the sale date.

 

In February 2024, as part of the Red Rock settlement executed in July 2022, the Company issued an aggregate of 37,104 shares of common stock to six previous owners. The Company recognized the fair value for the issuance of 37,104 shares at $3 per share on the closing market price of February 4 through February 6, 2024, and recorded share loss from discontinued operations of $111,312 in the consolidated statement of operations. 

 

        
Net liabilities of discontinued operations  June 30, 2024   December 31, 2023 
Cash  $342   $342 
Accounts receivable   300    300 
Accounts payable and accrued expenses   238,285    238,285 
Net liabilities of discontinued operations  $(237,643)  $(237,643)

 

         
   Three Months Ended June 30, 
Gain (Loss) from discontinued operations  2024   2023 
Revenue  $–   $118,304 
Cost of sales   –    (21,297)
Selling, general and administrative expenses   –    (140,276)
Interest expense   –    (541)
Settlement loss   –    – 
Loss from discontinued operations  $–   $(43,810)

 

         
   Six Months Ended June 30, 
Gain (Loss) from discontinued operations  2024   2023 
Revenue  $–   $272,703 
Cost of sales   –    (48,125)
Selling, general and administrative expenses   –    (311,835)
Interest expense   –    (2,043)
Settlement loss   (111,312)   – 
Loss from discontinued operations  $(111,312)  $(89,300)

 
v3.24.3
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS, NET
 6 Months Ended
Jun. 30, 2024
Goodwill And Identifiable Intangible Assets Net  
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS, NET

 

12. GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS, NET

 

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. During the six months ended June 30, 2024 and 2023, the Company determined there to be no impairment.

 
v3.24.3
COMMITMENTS AND CONTINGENCIES
 6 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
COMMITMENTS AND CONTINGENCIES

 

13. COMMITMENTS AND CONTINGENCIES

 

Leases

 

ASC 842, “Leases”, requires that a lessee recognize the assets and liabilities that arise from operating leases, A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transaction, lessees and lessors are required to recognize and measure leases at either the effective date (the “effective date method”) or the beginning of the earliest period presented (the “comparative method”) using a modified retrospective approach. Under the effective date method, the Company’s comparative period reporting is unchanged. In contrast, under the comparative method, the Company’s date of initial application is the beginning of the earliest comparative period presented, and the Topic 842 transition guidance is then applied to all comparative periods presented. Further, under either transition method, the standard includes certain practical expedients intended to ease the burden of adoption. The Company adopted ASC 842, January 1, 2020, using the effective date method and elected certain practical expedients allowing the Company not to reassess:

 

  · whether expired or existing contracts contain leases under the new definition of a lease;

 

  · lease classification for expired or existing leases; and

 

  · whether previously capitalized initial direct costs would qualify for capitalization under Topic 842.

 

The Company also made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months or less.

 

The Company leases eleven medical facilities and one vehicle as operating leases as of June 30, 2024. The Company recorded operating lease expenses of $99,815 and $56,378 for the three months ended June 30, 2024 and 2023, respectively, and the Company recorded operating lease expense of $200,177 and $134,230 for the six months ended June 30, 2024 and 2023, respectively.

 

The Company has operating leases with future commitments as follows:  

    
   Amount 
2024 (remainder of year)  $87,011 
2025   168,158 
2026   80,018 
2027   8,609 
Total  $343,796 

 

The following table summarizes supplemental information about the Company’s leases: 

     
Weighted-average remaining lease term     2.12 years
Weighted-average discount rate     4.55%

 

Employees

 

The Company agreed to pay $360,000 per year and $200,000 of targeted annual incentives to the Chief Executive Officer based on his employment agreement since July 1, 2020, of which 50% was being paid in cash and 50% was being accrued through December 31, 2023. As of January 1, 2024, these are being paid in cash. The total outstanding accrued compensation as of June 30, 2024 and December 31, 2023 was $2,115,500 and $2,365,500, respectively.

 

The Company agreed to pay $360,000 per year and $200,000 of targeted annual incentives to the Chairman of the Board based on his employment agreement since July 1, 2020, of which 50% was being paid in cash and 50% was being accrued through April 30, 2024. As of May 1, 2024, these are being paid in cash. The total outstanding accrued compensation as of June 30, 2024 and December 31, 2023 was $2,220,500 and $2,350,500, respectively.

 

The Company agreed to pay $228,000 per year to the Chief Finance Officer based on his employment agreement effective as of January 2, 2024. There was no outstanding accrued compensation as of June 30, 2024.

 

The Company agreed to pay $210,000 per year to the Chief Accounting Officer based on her employment agreement effective as of January 2, 2024. As of June 30, 2024, there was $8,750 in accrued severance which will be paid out in the third quarter of 2024.

 

The Company agreed to pay $156,000 per year to the previous Chief Financial Officer based on his amended employment agreement executed on May 15, 2021. The total outstanding accrued compensation as of June 30, 2024 and December 31, 2023 was $17,057.

 

The Company entered into a management agreement effective May 31, 2021 for compensation to the principals of Nova in the form of an annual base salaries of $372,000 to one of the three doctors, $450,000 to the second, and $372,000 to the third doctor. Collectively, as a group, such principals will receive an annual cash bonus and stock equity set forth below, which will be conditioned upon the Company achieving 100% of the annual objectives of financial performance goals as set forth below.

 

         
Year  Minimum Annual Nova EBITDA  Cash Annual Bonus  Series J Preferred Stock
2021  $2.0M  $120,000  120,000 Shares
2022  $2.4M  $150,000  135,000 Shares
2023  $3.7M  $210,000  150,000 Shares
2024  $5.5M  $300,000  180,000 Shares
2025  $8.0M  $420,000  210,000 Shares

 
v3.24.3
LEGAL PROCEEDINGS
 6 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
LEGAL PROCEEDINGS

 

14. LEGAL PROCEEDINGS

 

From time to time, the Company may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm the Company’s business. Management is not currently aware of any such legal proceedings or claims that it believes will have a material adverse effect on the Company’s business, financial condition, or operating results.

 
v3.24.3
INCOME TAXES
 6 Months Ended
Jun. 30, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES

 

15. INCOME TAXES

 

At June 30, 2024, the Company had federal and state net operating loss carry forwards of approximately $24 million that expire in various years through the year 2039. Due to current period losses and carryforwards of past net operating losses, there is no provision for current federal or state income taxes for the three and six months ended June 30, 2024 and 2023.

 

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amount used for federal and state income tax purposes. The Company has a deferred tax asset that consists of net operating loss carry forwards calculated using federal and state effective tax rates. Because of the Company’s lack of past earnings history, the deferred tax asset has been fully offset by a valuation allowance.

 
v3.24.3
SEGMENT REPORTING
 6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
SEGMENT REPORTING

  

16. SEGMENT REPORTING

 

As of June 30, 2024, the Company had two reportable operating segments as determined by management using the “management approach” as defined by the authoritative guidance on Disclosures about Segments of an Enterprise and Related Information.

 

  (1) Healthcare (Nova)
  (2) Real Estate (Edge View)

 

These segments are a result of differences in the nature of the products and services sold. Corporate administration costs, which include, but are not limited to, general accounting, human resources, legal and credit and collections, are partially allocated to the three operating segments. Other revenue consists of nonrecurring items.

 

The healthcare segment provides a full range of diagnostic and surgical services for injuries and disorders of the skeletal system and associated bones, joints, tendons, muscles, ligaments, and nerves.

 

The real estate segment consists of Edge View, a real estate company that owns five (5) acres zoned medium density residential (MDR) with 12 lots already platted, six (6) acres zoned high-density residential (HDR) that can be platted in various configurations to meet current housing needs, and twelve (12) acres zoned in Lemhi County as Agriculture that is available for further annexation into the City of Salmon for development, as well as a common area for landowners to view wildlife, provide access to the Salmon River and fishing in a two (2) acre pond.

 

Management uses numerous tools and methods to evaluate and measure of its subsidiaries’ success. To help succeed, management retains the prior owners of the subsidiaries and allow them to do what they do best is run the business. Additionally, management monitors key metrics primarily revenues and net income from operations. 

        
Asset:  June 30, 2024
(Restated)		   December 31, 2023 
Healthcare  $20,188,960   $18,955,991 
Real Estate   582,620    587,456 
Others   3,930,302    1,202,364 
Consolidated assets  $24,701,882   $20,745,811 

 

   Three Months Ended June 30, 
   2024
(Restated)		  

2023

(Restated)

 
Revenues:        
Healthcare  $1,471,643   $3,364,506 
Real Estate   –    – 
Consolidated revenues  $1,471,643   $3,364,506 
           
Cost of sales:          
Healthcare  $793,010   $1,081,689 
Real Estate   –    – 
Consolidated cost of sales  $793,010   $1,081,689 
           
Income from operations from subsidiaries          
Healthcare  $449,618   $2,106,551 
Real Estate   (3,962)   (1,743)
Income from operations from subsidiaries  $445,656   $2,104,808 
           
Loss from operations from Cardiff Lexington  $(605,139)  $(355,369)
Total income from operations  $(159,483)  $1,749,439 
           
Income (loss) before taxes          
Healthcare  $449,618   $1,378,445 
Real Estate   (3,962)   (1,743)
Corporate, administration and other non-operating expenses   (577,241)   (516,814)
Consolidated income (loss) before taxes  $(131,585)  $859,888 

 

   Six Months Ended June 30, 
   2024
(Restated)		  

2023

(Restated)

 
Revenues:        
Healthcare  $3,793,775   $6,070,905 
Real Estate   –    – 
Consolidated revenues  $3,793,775   $6,070,905 
           
Cost of sales:          
Healthcare  $1,741,164   $2,037,984 
Real Estate   –    – 
Consolidated cost of sales  $1,741,164   $2,037,984 
           
Income (loss) from operations from subsidiaries          
Healthcare  $1,600,902   $3,384,790 
Real Estate   (4,836)   (1,840)
Income from operations from subsidiaries  $1,596,066   $3,382,950 
           
Loss from operations from Cardiff Lexington  $(1,536,557)  $(875,962)
Total income from operations  $59,509   $2,506,988 
           
Income (loss) before taxes          
Healthcare  $1,600,902   $2,195,542 
Real Estate   (4,836)   (1,840)
Corporate, administration and other non-operating expenses   (1,899,443)   (1,304,315)
Consolidated income (loss) before taxes  $(303,377)  $889,387 

 
v3.24.3
SUBSEQUENT EVENTS
 6 Months Ended
Jun. 30, 2024
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

 

17. SUBSEQUENT EVENTS

 

The Company has evaluated its operations subsequent to June 30, 2024 to the date these consolidated financial statements were available to be issued and determined the following subsequent events and transactions required disclosure in these consolidated financial statements.

 

Subsequent to June 30, 2024, an aggregate of 38,750 shares of series B preferred stock were converted into an aggregate of 77,500 shares of common stock.

 

Subsequent to June 30, 2024, an aggregate of 14 shares of series C preferred stock were converted into an aggregate of 140,000 shares of common stock.

 

Subsequent to June 30, 2024, an aggregate of 16,250 shares of series F-1 preferred stock were converted into an aggregate of 32,500 shares of common stock.

 

Subsequent to June 30, 2024, an aggregate of 100,000 shares of series I preferred stock were converted into an aggregate of 200,000 shares of common stock.

 

Subsequent to June 30, 2024, the Company identified a reduction in the settlement realization rate of its gross contractual billings as a result of increasing its lookback period and refreshing its data obtained from its third party billing company. 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 on the new data analysis of its historical settlement realization rates, using a 24-month lookback analysis the Company determined its estimate of its settlement realization rate was reduced from 49% to 44.2%. The Company applied this reduced settlement realization rate against its accounts receivable balance resulting in a $1.7 million reduction in its accounts receivable and revenue in the third quarter 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.

 
v3.24.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
 6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Organization and Nature of Operations

Organization and Nature of Operations

 

Cardiff Lexington Corporation (“Cardiff”) was originally incorporated on September 3, 1986 in Colorado as Cardiff International Inc. On November 10, 2005, Cardiff merged with Legacy Card Company, LLC and changed its name to Cardiff Lexington Corporation. On August 27, 2014, Cardiff redomiciled and became a corporation under the laws of Florida. On April 13, 2021, Cardiff redomiciled and became a corporation under the laws of Nevada.

 

Cardiff is an acquisition holding company focused on locating undervalued and undercapitalized companies, primarily in the healthcare industry, and providing them capitalization and leadership to maximize the value and potential of their private enterprises while also providing diversification and risk mitigation for stockholders. All of Cardiff’s operations are conducted through, and its income derived from, its various subsidiaries, which includes:

 

  · Edge View Properties, Inc. (“Edge View”), which was acquired on July 16, 2014;
     
  · Platinum Tax Defenders (“Platinum Tax”), which was acquired on July 31, 2018 and sold on November 10, 2023; and
     
  · Nova Ortho and Spine, LLC (“Nova”), which was acquired on May 31, 2021.

 
Principles of Consolidation

Principles of Consolidation

 

The consolidated financial statements include the accounts of Cardiff and its wholly owned subsidiaries, Edge View, Platinum Tax and Nova (collectively, the “Company”). Subsidiaries shown as discontinued operations include Platinum Tax. All significant intercompany accounts and transactions are eliminated in consolidation. Subsidiaries discontinued are shown as discontinued operations.

 
Reverse Stock Split

Reverse Stock Split

 

On January 9, 2024, the Company effected a 1-for-75,000 reverse split of its outstanding common stock. All outstanding shares of common stock and warrant to purchase common stock were adjusted to reflect the 1-for-75,000 reverse split, with respective exercise prices of the warrants proportionately increased. The conversion prices of the outstanding convertible notes and certain series of preferred stock were adjusted to reflect a proportional decrease in the number of shares of common stock to be issued upon conversion.

 

All share and per share data throughout these consolidated financial statements have been retroactively adjusted to reflect the reverse stock split. The total number of authorized shares of common stock did not change. As a result of the reverse stock split, an amount equal to the decreased value of the common stock was reclassified from “common stock” to “additional paid-in capital.”

 
Use of Estimates

Use of Estimates

 

The preparation of financial statements in conformity with United States generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Management uses its historical records and knowledge of its business in making estimates. Accordingly, actual results could differ from those estimates.

 
Accounts Receivable

Accounts Receivable

 

In the normal course of business, the Company is in the lien based medical industry providing orthopedic healthcare servicing an uninsured market insulated by a letter of protection which insulates the Company and insures payment in full from insurance settlements. Accounts receivable consists of amounts due from attorneys and insurance providers for services provided to patients under the letter of protection. The accounts receivable are recorded at the expected settlement realization amount, which is less contractual adjustments and an allowance for credit losses. The Company recognizes an allowance for credit losses for its accounts receivable to present the net amount expected to be collected as of the balance sheet 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. Additionally, the Company considers economic factors and events or trends expected to affect future collections experience. The no collection history of the Company’s customers is considered in future assessments of collectability as these patterns are established over a longer period. The Company uses the term collection and collection rate in its disclosures to describe the historical less than 1% occurrence of not collecting under a contract, which aligns with the Company’s credit loss accounting under ASC 326.

 

The Company does not have a significant exposure to credit losses as it has historically had a less than 1.0% loss rate where the Company received no settlement amount for its outstanding accounts receivable. Although possible, claims resulting in zero collection upon settlement are rare based on the Company’s historical experience and has historically been 0.5% to 1.0% of its outstanding accounts receivable, thereby resulting in a collection rate of 99%. The Company uses the loss rate method to record its allowance for credit losses. The Company applies the loss rate method by reviewing its zero collection history on a 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

Property and Equipment

 

Property and equipment are carried at cost. Expenditures for renewals and betterments that extend the useful lives of property, equipment or leasehold improvements are capitalized. Expenditures for maintenance and repairs are charged to expense as incurred. Depreciation is calculated using the straight-line method for financial reporting purposes based on the following estimated useful lives: 

 
Classification Useful Life
Equipment, furniture, and fixtures 5 - 7 years
Medical equipment 10 years
Leasehold improvements 10 years or lease term, if shorter

 
Goodwill and Other Intangible Assets

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 recoverable. 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 not 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

Valuation of Long-lived Assets

 

In accordance with the provisions of Accounting Standards Codification (“ASC”) Topic 360-10-5, “Impairment or Disposal of Long-Lived Assets”, all long-lived assets such as plant and equipment and construction in progress held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of assets to estimated cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets.

 
Revenue Recognition

Revenue Recognition

 

The Company’s primary source of revenue is its healthcare subsidiary, which records revenues from providing licensed and/or certified orthopedic procedures. Revenue is recognized at a point in time in accordance with ASC 606 and at an estimated net settlement realization rate based on gross billed charges. The Company’s healthcare subsidiary does not have contract liabilities or deferred revenue as there are no amounts prepaid for services. The Company applies the following five-step ASC 606 model to determine revenue recognition:

 

  · Identification of a contract with a customer
     
  · Identification of the performance obligations in the contact
     
  · Determination of the transaction price
     
  · Allocation of the transaction price to the separate performance obligations
     
  · Recognition of revenue when performance obligations are satisfied.

 

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; generally, at the time of patient care.

 

In determining net revenue to record under ASC 606, the Company must estimate the transaction price, including estimates of variable consideration in the contract at inception. In order to estimate variable consideration, the Company uses established billings rates (also described as “gross charges”) for the procedures being performed, however, the billing rates are not the same as actual amounts recovered for the Company’s healthcare subsidiary. They generally do not reflect what the Company is ultimately paid by the customer, insurance carriers and other payors, and therefore are not reported in the consolidated financial statements at that rate. The Company is typically paid amounts based on established charges per procedure with guidance from the annually updated CPT guidelines that designates relative value units and a suggested range of charges for each procedure which is then assigned a CPT code. This gross charge is discounted to reflect the percentage paid to the Company “using a modifier” recognized by each insurance carrier for services, less deductible, co-pay, and contractual adjustments which are deducted from the calculated fee. These adjustments are considered variable consideration under ASC 606 and are deducted from the calculated fee to arrive at the net transaction price. The Company also estimates changes in the contract price as a result of price concessions, changes to deductibles, co-pays and other contractual adjustments to determine the eventual settlement amount the Company expects to receive. The Company uses the term settlement realization in its disclosures to describe the amount of cash the company expects to receive based on its estimate of the transaction price under the expected value method of ASC 606.

 

Where appropriate, the Company utilizes the expected value method to determine the appropriate amount for estimates of variable consideration, which is based on a historical 12-month lookback of its actual settlement realization rates. The estimates of reserves established for variable consideration reflect current contractual requirements, the Company’s historical experience, specific known market events and trends, industry data and forecasted patient data and settlement patterns. Settlement realization patterns are assessed based on actual settlements and based on expected settlement realization trends obtained from discussions with attorneys, doctors and our third party medical billing company. Settlement amounts are negotiated and prolonged settlement negotiations are not indicative of a greater likelihood of reduced settlement realization or zero settlement.

 

The Company may accept a lower settlement realization rate in order to receive faster payment. The Company obtains information about expected settlement realization trends from discussions with doctors and attorneys and its third party medical billing company, which handles settlement claims and negotiations. Settlement amounts are presented to the Company’s third party medical billing company. Settlement rates of 49% or higher based on gross billed amounts are typically accepted without further negotiation. Proposed settlement rates below 49% are negotiated and longer negotiations typically result in higher settlement rates. If the Company accepts a lower settlement realization rate in order to receive payments more quickly, the Company considers that a price concession and estimates these concessions at contract inception. The various forms of variable consideration described above included in the transaction price may be constrained and are included in net revenue only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. The Company has not constrained any of its estimates of variable consideration for any of the periods presented.

  

Service Fees – Net (PIP)

 

The Company generates services fees from performing various procedures on the date the services are performed. These services primarily include slip and falls as well as smaller nominal Non-PIP services. As described above, these revenues are based on established insurance billing rates, less allowances for contractual adjustments and uncollectible amounts. These contractual adjustments vary by insurance company and self-pay patients. The Company computes these contractual and other adjustments based on its historical settlement realization experience. Completing the paperwork for each case and preparing it for billing takes approximately ten business days after a procedure is performed. The majority of claims are then filed electronically except for those remaining insurance carriers requiring paper filing. An initial response is usually received within four weeks from electronic filing and up to six weeks from paper filing. Responses may be a payment, a denial, or a request for additional information. The Company’s healthcare revenues are generated from professional medical billings including facility and anesthesia services. With respect to facility and anesthesia services, the Company is the primary obligor as the facility and anesthesia services are considered part of one integrated performance obligation.

 

The Company satisfies performance obligations as services are performed and then billed to the patient. Payment in most cases is made by an attorney for such services to our patients which are due upon final settlement of patients claims. During the claims process, legal counsel warranties such claim through the letter of protection, which is sent to the Company, as a medical provider, on behalf of the client patient. This letter states that the attorney is responsible for paying the client’s medical bills when the case is fully developed and settles. The medical professional agrees to provide treatment to the injured person and refrain from attempting to collect payment as it is developing and until the case is resolved. Once the personal injury case is finalized with the insurance company, the attorney pays the outstanding medical bills from the settlement.

 

Prior to its fiscal year 2024, the Company has historically had a 49% settlement realization rate from its total gross billed charges. Accordingly, the Company has historically recognized net healthcare service revenue as 49% of gross billed charges. However, during the six months ended June 30, 2024, the Company underwent efforts to accelerate cash settlements by accepting lower settlement realization rates in order to settle outstanding accounts receivable more quickly. As a result of the new effort, during the six months ended June 30, 2024 the Company realized a 42.3% average settlement rate of its gross billed charges during this time frame, which were historically recorded in accounts receivable and revenue at 49% of gross billings. As a result of this reduced settlement realization percentage, the Company recorded a reduction to net revenue of $859,321 and $1,199,155 for the three and six months ended June 30, 2024, respectively.

 

The Company will continue to reassess its settlement realization rate in the future and incorporate changes in settlement realization in its estimate of variable consideration due under its contracts. See additional disclosure in Note 17. Subsequent Events regarding the Company’s review of its settlement realization percentage subsequent to the quarter ended June 30, 2024.

 

Contract Fees (Non-PIP)

 

The Company has contract fees for amounts earned from its Non-Personal Injury Protection (“PIP”) related procedures, typically car accidents, and are settled on a contingency 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 us were remitted to the factor. The Company evaluated the factored adjustments considering the actual factored amounts per patient on a quarterly interval, and the reductions from accounts receivable that were factored were recorded in finance charges as other expenses on the consolidated statement of operations. As a result of the Company’s eighteen to twenty-four month settlement realization timeframe, the Company has an accrued liability resulting from the settlement of receivables sold to the third party factors which fluctuates as settlements are made and remitted to those third party factors. These accounts receivables sold to these third party factors are not included in the Company’s financial statements accounts receivable balance once sold and therefore are not part of the assessment of the net realizable value of accounts receivable. For the six months ended June 30, 2023, the Company factored a total of $544,196 of its accounts receivable in exchange for cash of $253,750. The Company ceased factoring of accounts receivable in the first quarter of 2023.

 
Advertising Costs

Advertising Costs

 

Advertising costs are expensed as incurred. Advertising costs are included as a component of cost of sales in the consolidated statements of operations and changes in stockholders’ equity. The Company recognized advertising and marketing expense of $96,899 and $133,326 for the three months ended June 30, 2024 and 2023, respectively. The Company recognized advertising and marketing expense of $171,950 and $171,679 for the six months ended June 30, 2024 and 2023, respectively.

 
Fair Value Measurements

Fair Value Measurements

 

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value in the consolidated balance sheets are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The fair value hierarchy distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs), and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

 

  Level 1 Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
     
  Level 2 Inputs, other than quoted prices included in Level 1, which are observable for the asset or liability through corroboration with market data at the measurement date.
     
  Level 3 Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.

  
Distinguishing Liabilities from Equity

Distinguishing Liabilities from Equity

 

The Company accounts for its series N senior convertible preferred stock, series R convertible preferred stock, and series X senior convertible preferred stock subject to possible redemption in accordance with ASC 480, “Distinguishing Liabilities from Equity”. Conditionally redeemable preferred shares are classified as temporary equity within the Company’s consolidated balance sheet.

 
Stock-Based Compensation

Stock-Based Compensation

 

The Company accounts for its stock-based compensation in which the Company obtains employee services in share-based payment transactions under the recognition and measurement principles of the fair value recognition provisions of section 718-10-30 of the Financial Accounting Standards Board (“FASB”) ASC. Pursuant to paragraph 718-10-30-6 of the FASB ASC, all transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

 

The measurement date used to determine the fair value of the equity instrument issued is the earlier of the date on which the performance is complete or the date on which it is probable that performance will occur.

 

Generally, all forms of share-based payments, including stock option grants, warrants and restricted stock grants and stock appreciation rights are measured at their fair value on the awards’ grant date, based on estimated number of awards that are ultimately expected to vest.

 

The expense resulting from share-based payments is recorded in the consolidated statements of operations.

 
Income Taxes

Income Taxes

 

Income taxes are determined in accordance with ASC Topic 740, “Income Taxes”. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

 

ASC 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

 

As of June 30, 2024 and 2023, the Company did not have any interest and penalties associated with tax positions and did not have any significant unrecognized uncertain tax positions.

 
Income (Loss) per Share

Income (Loss) per Share

 

FASB ASC Subtopic 260, “Earnings Per Share,” provides for the calculation of “Basic” and “Diluted” earnings per share. Basic earnings per common share is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed by dividing income available to common stockholders by the weighted-average number of shares of common stock outstanding during the period increased to include the number of additional shares of common stock that would have been outstanding if the potentially dilutive securities had been issued. Potentially dilutive securities include outstanding stock options, warrants, and debts convertible into common stock. The dilutive effect of stock options and warrants are reflected in diluted earnings per common share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities. The diluted effect of debt convertibles is reflected utilizing the if converted method.

 
Going Concern

Going Concern

 

The accompanying consolidated financial statements have been prepared using the going concern basis of accounting, which contemplates continuity of operations, realization of assets and liabilities and commitments in the normal course of business. The Company had sustained recurring operating losses since its inception and has an accumulated deficit of $69,576,612 as of June 30, 2024. These factors raise a substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not reflect any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classifications of liabilities that might result if the Company is unable to continue as a going concern.

 

The ability of the Company to continue as a going concern and the appropriateness of using the going concern basis is dependent upon, among other things, additional cash infusions. Management is in continuous discussions with prospective investors and believes the raising of capital will allow the Company to fund its cash flow shortfalls and pursue new acquisitions. There can be no assurance that the Company will be able to obtain sufficient capital from debt or equity transactions or from operations in the necessary time frame or on terms acceptable to it. Should the Company be unable to raise sufficient funds, it may be required to curtail its operating plans. In addition, if overall Company expenses increase, the Company may need to implement cost reductions. No assurance can be given that the Company will be able to operate profitably on a consistent basis, or at all, in the future. Should the Company not be able to raise sufficient funds, it may cause cessation of operations.

 
Recently Issued Accounting Standards

Recently Issued Accounting Standards

 

The FASB issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting: Improvements to Reportable Segment Disclosures” (“Topic 280”) in November 2023. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. Topic 280 improves “reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.” In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, provide new segment disclosure requirements for entities with a single reportable segment, and contain other disclosure requirements. The purpose of the amendments is to enable “investors to better understand an entity’s overall performance” and assess “potential future cash flows.” Management is evaluating the impact of ASU 2023-07 on the consolidated financial statements and does not expect there to be any changes or impact to the financial statements.

 
Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

 

The FASB issued ASU 2020-06, “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 81540).” The ASU simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within that period. The FASB also specified that an entity must adopt the guidance as of the beginning of its annual fiscal year and is not permitted to adopt the guidance in an interim period, other than the first interim period of their fiscal year. ASU 2020-06 reduces the number of accounting models for convertible debt and convertible preferred stock instruments and makes certain disclosure amendments to improve the information provided to users. There were no material impacts on the consolidated financial statements at adoption.

 
v3.24.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
 6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
Schedule of estimated useful lives
 
Classification Useful Life
Equipment, furniture, and fixtures 5 - 7 years
Medical equipment 10 years
Leasehold improvements 10 years or lease term, if shorter
v3.24.3
RESTATEMENT OF FINANCIAL STATEMENTS (Tables)
 6 Months Ended
Jun. 30, 2024
Accounting Changes and Error Corrections [Abstract]  
Schedule of of of restated financial information

Schedule of restatements

Balance sheet

                   
    Impact of correction of error  
June 30, 2024 (Unaudited)   As previously reported     Adjustments     As restated  
                   
Total assets   $ 24,659,020     $ 42,862     $ 24,701,882  
                         
Total stockholders' equity   $ 5,837,412     $ 42,862     $ 5,880,274  

 

Statement of operations

 

    Impact of correction of error  
Three months ended June 30, 2024 (Unaudited)   As previously reported     Adjustments     As restated  
                   
Revenue   $ 2,330,964     $ (859,321 )   $ 1,471,643  
Cost of sales     793,010       –       793,010  
Gross profit     1,537,954       (859,321 )     678,633  
Operating expense     1,740,299       (902,183 )     838,116  
Loss from operations   $ (202,345 )    $ 42,862     $ (159,483 ) 
Other income, net     27,898       –       27,898  
Net loss before discontinued operations     (174,447 )      42,862       (131,585 ) 
Loss from discontinued operations     –       –       –  
Net loss for the period   $ (174,447 )    $ 42,862     $ (131,585 ) 
Preferred stock dividends   $ (326,174 )   $ –     $ (326,174 )
Net loss attributable to common shareholders   $ (500,621 )    $ 42,862     $ (457,759 ) 

 

 

    Impact of correction of error  
Six months ended June 30, 2024 (Unaudited)   As previously reported     Adjustments     As restated  
                   
Revenue   $ 4,992,930     $ (1,199,155 )   $ 3,793,775  
Cost of sales     1,741,164       –       1,741,164  
Gross profit     3,251,766       (1,199,155 )     2,052,611  
Operating expense     3,235,119       (1,242,017 )     1,993,102  
Income from operations   $ 16,647     $ 42,862     $ 59,509  
Other expense, net     (362,886 )     –       (362,886 )
Net loss before discontinued operations     (346,239 )      42,862       (303,377 ) 
Loss from discontinued operations     (111,312 )      –       (111,312 ) 
Net loss for the period   $ (457,551 )    $ 42,862     $ (414,689 ) 
Preferred stock dividends   $ (477,808 )   $ –     $ (477,808 )
Net loss attributable to common shareholders   $ (935,359 )    $ 42,862     $ (892,497 ) 

 

 

During the preparation of the financial statements for the year ended December 31, 2023, the Company identified and corrected its classification and accounting treatment for its series R convertible preferred stock and the related dividend accrual. Pursuant to ASC 250, Accounting changes and error corrections issued by FASB and Staff Accounting Bulletin 99 Materiality, issued by Securities and Exchange Commission, the Company determined the impact of the error was immaterial. The impact of the error correction is reflected in the consolidated balance sheet as of June 30, 2023 as a $274,982 increase to the mezzanine equity and offsetting decrease to the series R convertible preferred stock and subject to possible redemption mezzanine equity line item. In addition, the impact of the unpaid dividend accrual was reflected as of June 30, 2023 as a $16,363 increase to mezzanine equity and offsetting decrease to the accumulated deficits.

 

During the preparation of the financial statements for three and six months ended June 30, 2024, the Company identified and corrected its classification for all its outstanding common stock amount per par value of $0.001 with additional paid-in-capital related with a 1-for-75,000 reverse split executed on January 9, 2024. The impact of this adjustment decreased $1,804,774 to common stock and offsetting increase to additional paid-in-capital as of December 31, 2023.

 

On November 10, 2023, the Company sold Platinum Tax, which was a full-service tax resolution firm located in Los Angeles, California. The Company presented in prior periods operating loss as loss from discontinued operations of $43,810 and $89,300 on the consolidated statement of operations for the three and six months ended June 30, 2023, respectively.

 

The impact of the error corrections also reflected a $55.66 increase of basic earnings per share, and a $3.59 increase of diluted earnings per share on the consolidated statement of operations for the three months ended June 30, 2023. For the six months ended June 30, 2023, the impact of the error correction reflected a $28.75 increase of basic earnings per share, and an increase of $1.45 of diluted earnings per share.

 

The following tables summarize the impact of the corrections on the Company’s condensed consolidated balance sheet as of June 30, 2023, the condensed consolidated statement of operations for the three and six months ended June 30, 2023, and the condensed consolidated statement of cash flows for the six months ended June 30, 2023:

 

Balance sheet

            
   Impact of correction of error 
June 30, 2023 (Unaudited)  As previously reported   Adjustments   As restated 
             
Total assets  $16,053,519   $(2,818)  $16,050,700 
                
Total liabilities   11,672,952    (243,242)   11,429,710 
                
Mezzanine equity   5,297,605    291,345    5,588,949 
                
Total stockholders' equity  $(917,038)  $(291,345)  $(1,208,383)

 

Statement of operations

 

   Impact of correction of error 
Three months ended June 30, 2023 (Unaudited)  As previously reported   Adjustments   As restated 
             
Revenue  $3,482,810   $(118,304)  $3,364,506 
Cost of sales   1,102,986    (21,297)   1,081,689 
Gross profit   2,379,824    (97,007)   2,282,817 
Operating expense   673,654    (140,276)   533,378 
Income from operations  $1,706,170   $43,269   $1,749,439 
Other income (expense), net   (890,092)   (541)   (889,551)
Net income before discontinued operations   816,078    43,810    859,888 
Loss from discontinued operations   –    (43,810)   (43,810)
Net income for the period  $816,078   $–   $816,078 
Preferred stock dividends  $(125,744)  $0.00   $(125,744)
Net income attributable to common shareholders  $690,334   $0.00   $690,334 
Basic earnings per share for continuing operations  $0.00   $55.66   $55.66 
Diluted earnings per share for continuing operations  $0.00   $3.59   $3.59 

 

   Impact of correction of error 
Six months ended June 30, 2023 (Unaudited)  As previously reported   Adjustments   As restated 
             
Revenue  $6,343,608   $(272,703)  $6,070,905 
Cost of sales   2,086,109    (48,125)   2,037,984 
Gross profit   4,257,499    (224,578)   4,032,921 
Operating expense   1,837,768    (311,835)   1,525,933 
Income from operations  $2,419,731   $87,257   $2,506,988 
Other income (expense), net   (1,619,644)   2,043    (1,617,601)
Net income before discontinued operations   800,087    89,300    889,387 
Loss from discontinued operations   –    (89,300)   (89,300)
Net income for the period  $800,087   $–   $800,087 
Preferred stock dividends  $(462,555)  $(8,136)  $(454,419)
Net income attributable to common shareholders  $337,532   $8,136   $345,668 
Basic earnings per share for continuing operations  $0.00   $28.75   $28.75 
Diluted earnings per share for continuing operations  $0.00   $1.45   $1.45 

 

Statement of Cash Flows

 

   Impact of correction of error 
Six months ended June 30, 2023 (Unaudited)  As previously reported   Adjustments   As restated 
             
Net cash used in operating activities of continuing operations  $(304,173)  $43,707   $(260,466)
Net cash provided by financing activities of continuing operations  $488,580   $(128,110)  $360,470 
Schedule of of of restated financial information
            
   Impact of correction of error 
June 30, 2023 (Unaudited)  As previously reported   Adjustments   As restated 
             
Total assets  $16,053,519   $(2,818)  $16,050,700 
                
Total liabilities   11,672,952    (243,242)   11,429,710 
                
Mezzanine equity   5,297,605    291,345    5,588,949 
                
Total stockholders' equity  $(917,038)  $(291,345)  $(1,208,383)

 

Statement of operations

 

   Impact of correction of error 
Three months ended June 30, 2023 (Unaudited)  As previously reported   Adjustments   As restated 
             
Revenue  $3,482,810   $(118,304)  $3,364,506 
Cost of sales   1,102,986    (21,297)   1,081,689 
Gross profit   2,379,824    (97,007)   2,282,817 
Operating expense   673,654    (140,276)   533,378 
Income from operations  $1,706,170   $43,269   $1,749,439 
Other income (expense), net   (890,092)   (541)   (889,551)
Net income before discontinued operations   816,078    43,810    859,888 
Loss from discontinued operations   –    (43,810)   (43,810)
Net income for the period  $816,078   $–   $816,078 
Preferred stock dividends  $(125,744)  $0.00   $(125,744)
Net income attributable to common shareholders  $690,334   $0.00   $690,334 
Basic earnings per share for continuing operations  $0.00   $55.66   $55.66 
Diluted earnings per share for continuing operations  $0.00   $3.59   $3.59 

 

   Impact of correction of error 
Six months ended June 30, 2023 (Unaudited)  As previously reported   Adjustments   As restated 
             
Revenue  $6,343,608   $(272,703)  $6,070,905 
Cost of sales   2,086,109    (48,125)   2,037,984 
Gross profit   4,257,499    (224,578)   4,032,921 
Operating expense   1,837,768    (311,835)   1,525,933 
Income from operations  $2,419,731   $87,257   $2,506,988 
Other income (expense), net   (1,619,644)   2,043    (1,617,601)
Net income before discontinued operations   800,087    89,300    889,387 
Loss from discontinued operations   –    (89,300)   (89,300)
Net income for the period  $800,087   $–   $800,087 
Preferred stock dividends  $(462,555)  $(8,136)  $(454,419)
Net income attributable to common shareholders  $337,532   $8,136   $345,668 
Basic earnings per share for continuing operations  $0.00   $28.75   $28.75 
Diluted earnings per share for continuing operations  $0.00   $1.45   $1.45 

 

Statement of Cash Flows

 

   Impact of correction of error 
Six months ended June 30, 2023 (Unaudited)  As previously reported   Adjustments   As restated 
             
Net cash used in operating activities of continuing operations  $(304,173)  $43,707   $(260,466)
Net cash provided by financing activities of continuing operations  $488,580   $(128,110)  $360,470 
v3.24.3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)
 6 Months Ended
Jun. 30, 2024
Payables and Accruals [Abstract]  
Schedule of accounts payable and accrued expenses
          
  June 30, 2024   December 31, 2023 
Accounts payable  $543,866   $720,774 
Accrued credit cards   15,613    26,645 
Accrued liability for settlement of previously factored receivables   990,824    1,247,772 
Accrued income and property taxes   5,346    5,346 
Accrued professional fees   82,418    29,122 
Accrued board fees   15,000    – 
Accrued public company fees   9,100    – 
Accrued payroll   17,564    17,472 
Total  $1,679,731   $2,047,131 
v3.24.3
PLANT AND EQUIPMENT, NET (Tables)
 6 Months Ended
Jun. 30, 2024
Property, Plant and Equipment [Abstract]  
Schedule of property and equipment
        
   June 30, 2024   December 31, 2023 
Medical equipment  $96,532   $96,532 
Computer Equipment   9,189    9,189 
Furniture, fixtures and equipment   15,079    15,079 
Leasehold Improvement   15,950    15,950 
Total   136,750    136,750 
Less: accumulated depreciation   (108,821)   (102,089)
Property and equipment, net  $27,929   $34,661 
v3.24.3
NOTES AND LOANS PAYABLE (Tables)
 6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
Schedule of notes payable
Schedule of notes payable        
   June 30, 2024   December 31, 2023 
Notes and loans payable  $7,369,037   $2,280,743 
Less current portion   (7,226,646)   (2,136,077)
Long-term portion  $142,391   $144,666 
Schedule of maturities of long-term debt
    
   Amount 
2024 (remainder of year)  $7,226,646 
2025   4,910 
2026   4,910 
2027   4,910 
2028   4,910 
Thereafter   122,751 
Total  $7,369,037 
v3.24.3
CONVERTIBLE NOTES PAYABLE (Tables)
 6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
Schedule of convertible notes
        
   June 30, 2024   December 31, 2023 
Convertible notes payable  $110,000   $3,831,850 
Discounts on convertible notes payable   –    (24,820)
Total convertible debt less debt discount   110,000    3,807,030 
Current portion   110,000    3,807,030 
Long-term portion  $–   $– 
Schedule of convertible notes payable
                                          
Note #  Issuance  Maturity  Principal Balance 12/31/23   Settlements and/or Principal Conversions   New Loans or (Cash Paydown)   Shares Issued Upon Conversion or Exchange   Principal Balance 06/30/24   Accrued Interest on Convertible Debt at 12/31/23   Interest On Convertible Debt For the Period Ended 06/30/24   Accrued Interest on Convertible Debt at 06/30/24   Unamortized Debt Discount At 06/30/24 
9  09/12/2016  09/12/2017  $50,080    –    (50,080)   1,222   $–   $5,581   $(5,581)   –    – 
10  01/24/2017  01/24/2018   55,000    –    –    –    55,000    80,875    5,486    86,361    – 
10-1  02/10/2023  02/10/2024   50,000    –    (50,000)   –    –    6,658    (6,658)   –    – 
10-2  03/30/2023  03/30/2024   25,000    –    –    –    25,000    2,836    2,181    5,017    – 
10-3  08/11/2023  08/11/2024   25,000    –    –    –    25,000    1,469    1,870    3,339    – 
29-2  11/08/2019  11/08/2020   36,604    (36,604)   –    –    –    10,109    (10,109)   –    – 
31  08/28/2019  08/28/2020   –    –    –    –    –    8,385    (8,385)   –    – 
37-1  09/03/2020  06/30/2021   113,667    (113,667)   –    –    –    64,929    (64,929)   –    – 
37-2  11/02/2020  08/31/2021   113,167    (113,167)   –    –    –    63,594    (63,594)   –    – 
37-3  12/29/2020  09/30/2021   113,166    (113,166)   –    –    –    62,558    (62,558)   –    – 
40-1  09/22/2022  09/22/2024   2,600,000    (2,600,000)   –    938,908(1)   –    252,665    (252,655)   –    – 
40-2  11/04/2022  09/22/2024   68,667    (68,667)   –    –    –    7,939    (7,939)   –    – 
40-3  11/28/2022  09/22/2024   68,667    (68,667)   –    –    –    7,506    (7,506)   –    – 
40-4  12/21/2022  09/22/2024   68,667    (68,667)   –    –    –    7,054    (7,054)   –    – 
40-5  01/24/2023  03/21/2024   90,166    (90,166)   –    –    –    8,284    (8,284)   –    – 
40-6  03/21/2023  09/22/2024   139,166    (139,166)   –    –    –    10,671    (10,671)   –    – 
40-7  06/05/2023  06/05/2024   139,166    (139,166)   –    –    –    7,826    (7,826)   –    – 
40-8  06/13/2023  06/13/2024   21,167    (21,167)   –    –    –    1,127    (1,127)   –    – 
40-9  07/19/2023  07/19/2024   35,500    (35,500)   –    –    –    1,605    (1,605)   –    – 
40-10  07/24/2023  07/24/2024   14,000    (14,000)   –    –    –    614    (614)   –    – 
41  08/25/2023  08/25/2024   5,000    –    –    –    5,000    175    250    425      
         $3,831,850   $(3,621,770)  $(100,080)    940,130   $110,000   $612,460   $(517,318)  $95,142   $– 

 

(1)938,908 Series Y Senior Convertible Preferred Shares issued in exchange for full value of the outstanding principal and interest on Notes 40-1, 40-2, 40-3, 40-4, 40-5, 40-6, 40-7, 40-8, 40-9 and 40-10
v3.24.3
WARRANTS (Tables)
 6 Months Ended
Jun. 30, 2024
Warrants  
Schedule of warrant activity
        
   Number of
Warrants		   Weighted
Average
Exercise
Price		 
Balance at January 1, 2024   3,140   $0.015 
Granted   –    – 
Exercised   –    – 
Expired   –    – 
Balance at June 30, 2024   3,140    0.015 
Warrants Exercisable at June 30, 2024   3,140   $0.015 

 

   Number of
Warrants		   Weighted
Average
Exercise
Price		 
Balance at January 1, 2023   3,141   $0.015 
Granted   –    – 
Exercised   –    – 
Expired   (1)   – 
Balance at June 30, 2023   3,140    0.015 
Warrants Exercisable at June 30, 2023   3,140   $0.015 

 
v3.24.3
DISCONTINUED OPERATIONS (Tables)
 6 Months Ended
Jun. 30, 2024
Discontinued Operations and Disposal Groups [Abstract]  
Schedule of discontinued operations
        
Net liabilities of discontinued operations  June 30, 2024   December 31, 2023 
Cash  $342   $342 
Accounts receivable   300    300 
Accounts payable and accrued expenses   238,285    238,285 
Net liabilities of discontinued operations  $(237,643)  $(237,643)

 

         
   Three Months Ended June 30, 
Gain (Loss) from discontinued operations  2024   2023 
Revenue  $–   $118,304 
Cost of sales   –    (21,297)
Selling, general and administrative expenses   –    (140,276)
Interest expense   –    (541)
Settlement loss   –    – 
Loss from discontinued operations  $–   $(43,810)

 

         
   Six Months Ended June 30, 
Gain (Loss) from discontinued operations  2024   2023 
Revenue  $–   $272,703 
Cost of sales   –    (48,125)
Selling, general and administrative expenses   –    (311,835)
Interest expense   –    (2,043)
Settlement loss   (111,312)   – 
Loss from discontinued operations  $(111,312)  $(89,300)
v3.24.3
COMMITMENTS AND CONTINGENCIES (Tables)
 6 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Schedule of operating leases with future commitments
    
   Amount 
2024 (remainder of year)  $87,011 
2025   168,158 
2026   80,018 
2027   8,609 
Total  $343,796 
Schedule of supplemental information about the Company’s leases
     
Weighted-average remaining lease term     2.12 years
Weighted-average discount rate     4.55%
Schedule of annual objectives of financial performance goals
         
Year  Minimum Annual Nova EBITDA  Cash Annual Bonus  Series J Preferred Stock
2021  $2.0M  $120,000  120,000 Shares
2022  $2.4M  $150,000  135,000 Shares
2023  $3.7M  $210,000  150,000 Shares
2024  $5.5M  $300,000  180,000 Shares
2025  $8.0M  $420,000  210,000 Shares
v3.24.3
SEGMENT REPORTING (Tables)
 6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
Schedule of revenues and net income from operations
        
Asset:  June 30, 2024
(Restated)		   December 31, 2023 
Healthcare  $20,188,960   $18,955,991 
Real Estate   582,620    587,456 
Others   3,930,302    1,202,364 
Consolidated assets  $24,701,882   $20,745,811 

 

   Three Months Ended June 30, 
   2024
(Restated)		  

2023

(Restated)

 
Revenues:        
Healthcare  $1,471,643   $3,364,506 
Real Estate   –    – 
Consolidated revenues  $1,471,643   $3,364,506 
           
Cost of sales:          
Healthcare  $793,010   $1,081,689 
Real Estate   –    – 
Consolidated cost of sales  $793,010   $1,081,689 
           
Income from operations from subsidiaries          
Healthcare  $449,618   $2,106,551 
Real Estate   (3,962)   (1,743)
Income from operations from subsidiaries  $445,656   $2,104,808 
           
Loss from operations from Cardiff Lexington  $(605,139)  $(355,369)
Total income from operations  $(159,483)  $1,749,439 
           
Income (loss) before taxes          
Healthcare  $449,618   $1,378,445 
Real Estate   (3,962)   (1,743)
Corporate, administration and other non-operating expenses   (577,241)   (516,814)
Consolidated income (loss) before taxes  $(131,585)  $859,888 

 

   Six Months Ended June 30, 
   2024
(Restated)		  

2023

(Restated)

 
Revenues:        
Healthcare  $3,793,775   $6,070,905 
Real Estate   –    – 
Consolidated revenues  $3,793,775   $6,070,905 
           
Cost of sales:          
Healthcare  $1,741,164   $2,037,984 
Real Estate   –    – 
Consolidated cost of sales  $1,741,164   $2,037,984 
           
Income (loss) from operations from subsidiaries          
Healthcare  $1,600,902   $3,384,790 
Real Estate   (4,836)   (1,840)
Income from operations from subsidiaries  $1,596,066   $3,382,950 
           
Loss from operations from Cardiff Lexington  $(1,536,557)  $(875,962)
Total income from operations  $59,509   $2,506,988 
           
Income (loss) before taxes          
Healthcare  $1,600,902   $2,195,542 
Real Estate   (4,836)   (1,840)
Corporate, administration and other non-operating expenses   (1,899,443)   (1,304,315)
Consolidated income (loss) before taxes  $(303,377)  $889,387 
v3.24.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Estimated useful lives)
 6 Months Ended
Jun. 30, 2024
Equipment [Member]  
Property, Plant and Equipment [Line Items]  
Property and equipment, estimated useful lives 5 - 7 years
Medical Equipment [Member]  
Property, Plant and Equipment [Line Items]  
Property and equipment, estimated useful lives 10 years
Leasehold Improvements [Member]  
Property, Plant and Equipment [Line Items]  
Property and equipment, estimated useful lives 10 years or lease term, if shorter
v3.24.3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)
 3 Months Ended 6 Months Ended
Jan. 09, 2024
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Product Information [Line Items]            
Reverse stock split 1-for-75,000 reverse split          
Allowance for credit losses   $ 122,190   $ 122,190   $ 122,190
Provision for credit losses       0 $ 270,000  
Goodwill impairment amount       0 0  
Advertising and marketing expense   96,899 $ 133,326 171,950 171,679  
Uncertain tax positions   0   0   0
Accumulated deficit   69,576,612   69,576,612   $ 68,684,115
Service Fees [Member]            
Product Information [Line Items]            
Increase (decrease) in revenue [1]   $ 859,321   $ 1,199,155    
Contract Fees [Member]            
Product Information [Line Items]            
Accounts receivable factored         544,196  
Cash received from accounts receivable factored         $ 253,750  
[1] 938,908 Series Y Senior Convertible Preferred Shares issued in exchange for full value of the outstanding principal and interest on Notes 40-1, 40-2, 40-3, 40-4, 40-5, 40-6, 40-7, 40-8, 40-9 and 40-10
v3.24.3
Schedule of of of restated financial information (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Dec. 31, 2022
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Total assets $ 24,701,882   $ 24,701,882   $ 20,745,811  
Total shareholders' equity 5,880,274 $ (1,074,413) 5,880,274 $ (1,074,413) $ 731,418 $ (1,744,791)
Revenue 1,471,643 3,364,506 3,793,775 6,070,905    
Cost of sales 793,010 1,081,689 1,741,164 2,037,984    
Gross margin 678,633 2,282,817 2,052,611 4,032,921    
Operating expense 838,116 533,378 1,993,102 1,525,933    
Income (loss) from operations (159,483) 1,749,439 59,509 2,506,988    
Other income (expense), net 27,898 (889,551) (362,886) (1,617,601)    
Net loss before discontinued operations (131,585) 859,888 (303,377) 889,387    
Loss from discontinued operations 0   (111,312)      
Net loss for the period (131,585) 816,078 (414,689) 800,087    
Preferred stock dividends (326,174)   (894,696) (344,947)    
Net loss attributable to common shareholders (457,759) 690,334 (892,497) 345,668    
Preferred stock dividends     (477,808)      
Previously Reported [Member]            
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Total assets 24,659,020 16,053,519 24,659,020 16,053,519    
Total shareholders' equity 5,837,412 (917,038) 5,837,412 (917,038)    
Revenue 2,330,964 3,482,810 4,992,930 6,343,608    
Cost of sales 793,010 1,102,986 1,741,164 2,086,109    
Gross margin 1,537,954 2,379,824 3,251,766 4,257,499    
Operating expense 1,740,299 673,654 3,235,119 1,837,768    
Income (loss) from operations (202,345) 1,706,170 16,647 2,419,731    
Other income (expense), net 27,898 (890,092) (362,886) (1,619,644)    
Net loss before discontinued operations (174,447) 816,078 (346,239) 800,087    
Loss from discontinued operations 0 0 (111,312) 0    
Net loss for the period (174,447) 816,078 (457,551) 800,087    
Preferred stock dividends (326,174) (125,744)   (462,555)    
Net loss attributable to common shareholders (500,621) 690,334 (935,359) 337,532    
Preferred stock dividends     (477,808)      
Revision of Prior Period, Adjustment [Member]            
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Total assets 42,862 (2,818) 42,862 (2,818)    
Total shareholders' equity 42,862 (291,345) 42,862 (291,345)    
Revenue (859,321) (118,304) (1,199,155) (272,703)    
Cost of sales 0 (21,297) 0 (48,125)    
Gross margin (859,321) (97,007) (1,199,155) (224,578)    
Operating expense (902,183) (140,276) (1,242,017) (311,835)    
Income (loss) from operations 42,862 43,269 42,862 87,257    
Other income (expense), net 0 (541) 0 2,043    
Net loss before discontinued operations 42,862 43,810 42,862 89,300    
Loss from discontinued operations 0 (43,810) 0 (89,300)    
Net loss for the period 42,862 0 42,862 0    
Preferred stock dividends 0 0.00   (8,136)    
Net loss attributable to common shareholders $ 42,862 $ 0.00 42,862 $ 8,136    
Preferred stock dividends     $ 0      
v3.24.3
RESTATEMENT OF FINANCIAL STATEMENTS (Details - Financical Statements) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Dec. 31, 2022
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Total assets $ 24,701,882   $ 24,701,882   $ 20,745,811  
Total Liabilities 14,196,608   14,196,608   14,124,289  
Total stockholders' equity 5,880,274 $ (1,074,413) 5,880,274 $ (1,074,413) $ 731,418 $ (1,744,791)
Revenue 1,471,643 3,364,506 3,793,775 6,070,905    
Cost of sales 793,010 1,081,689 1,741,164 2,037,984    
Gross profit 678,633 2,282,817 2,052,611 4,032,921    
Operating expense 838,116 533,378 1,993,102 1,525,933    
Income from operations (159,483) 1,749,439 59,509 2,506,988    
Other income (expense), net 27,898 (889,551) (362,886) (1,617,601)    
Net income before discontinued operations (131,585) 859,888 (303,377) 889,387    
Loss from discontinued operations 0   (111,312)      
Net income (Restated) (131,585) 816,078 (414,689) 800,087    
Preferred stock dividends (326,174)   (894,696) (344,947)    
Net income attributable to common shareholders (457,759) 690,334 (892,497) 345,668    
Net Cash Provided by (Used in) Operating Activities, Continuing Operations     (1,980,727) (260,466)    
Net Cash Provided by (Used in) Financing Activities, Continuing Operations     4,199,267 360,470    
Previously Reported [Member]            
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Total assets 24,659,020 16,053,519 24,659,020 16,053,519    
Total Liabilities   11,672,952   11,672,952    
Mezzanine equity   5,297,605   5,297,605    
Total stockholders' equity 5,837,412 (917,038) 5,837,412 (917,038)    
Revenue 2,330,964 3,482,810 4,992,930 6,343,608    
Cost of sales 793,010 1,102,986 1,741,164 2,086,109    
Gross profit 1,537,954 2,379,824 3,251,766 4,257,499    
Operating expense 1,740,299 673,654 3,235,119 1,837,768    
Income from operations (202,345) 1,706,170 16,647 2,419,731    
Other income (expense), net 27,898 (890,092) (362,886) (1,619,644)    
Net income before discontinued operations (174,447) 816,078 (346,239) 800,087    
Loss from discontinued operations 0 0 (111,312) 0    
Net income (Restated) (174,447) 816,078 (457,551) 800,087    
Preferred stock dividends (326,174) (125,744)   (462,555)    
Net income attributable to common shareholders (500,621) $ 690,334 (935,359) $ 337,532    
Basic earnings per share for continuing operations   $ 0.00   $ 0.00    
Diluted earnings per share for continuing operations   $ 0.00   $ 0.00    
Net Cash Provided by (Used in) Operating Activities, Continuing Operations       $ (304,173)    
Net Cash Provided by (Used in) Financing Activities, Continuing Operations       488,580    
Revision of Prior Period, Adjustment [Member]            
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Total assets 42,862 $ (2,818) 42,862 (2,818)    
Total Liabilities   (243,242)   (243,242)    
Mezzanine equity   291,345   291,345    
Total stockholders' equity 42,862 (291,345) 42,862 (291,345)    
Revenue (859,321) (118,304) (1,199,155) (272,703)    
Cost of sales 0 (21,297) 0 (48,125)    
Gross profit (859,321) (97,007) (1,199,155) (224,578)    
Operating expense (902,183) (140,276) (1,242,017) (311,835)    
Income from operations 42,862 43,269 42,862 87,257    
Other income (expense), net 0 (541) 0 2,043    
Net income before discontinued operations 42,862 43,810 42,862 89,300    
Loss from discontinued operations 0 (43,810) 0 (89,300)    
Net income (Restated) 42,862 0 42,862 0    
Preferred stock dividends 0 0.00   (8,136)    
Net income attributable to common shareholders $ 42,862 $ 0.00 $ 42,862 $ 8,136    
Basic earnings per share for continuing operations   $ 55.66   $ 28.75    
Diluted earnings per share for continuing operations   $ 3.59   $ 1.45    
Net Cash Provided by (Used in) Operating Activities, Continuing Operations       $ 43,707    
Net Cash Provided by (Used in) Financing Activities, Continuing Operations       (128,110)    
Restated [Member]            
New Accounting Pronouncements or Change in Accounting Principle [Line Items]            
Total assets   $ 16,050,700   16,050,700    
Total Liabilities   11,429,710   11,429,710    
Mezzanine equity   5,588,949   5,588,949    
Total stockholders' equity   (1,208,383)   (1,208,383)    
Revenue   3,364,506   6,070,905    
Cost of sales   1,081,689   2,037,984    
Gross profit   2,282,817   4,032,921    
Operating expense   533,378   1,525,933    
Income from operations   1,749,439   2,506,988    
Other income (expense), net   (889,551)   (1,617,601)    
Net income before discontinued operations   859,888   889,387    
Loss from discontinued operations   (43,810)   (89,300)    
Net income (Restated)   816,078   800,087    
Preferred stock dividends   (125,744)   (454,419)    
Net income attributable to common shareholders   $ 690,334   $ 345,668    
Basic earnings per share for continuing operations   $ 55.66   $ 28.75    
Diluted earnings per share for continuing operations   $ 3.59   $ 1.45    
v3.24.3
RESTATEMENT OF FINANCIAL STATEMENTS (Details Narrative) - USD ($)
 3 Months Ended 6 Months Ended 12 Months Ended
Jan. 09, 2024
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Reclassification adjustment         $ 16,363  
Common stock, par value   $ 0.001   $ 0.001    
Reverse stock split 1-for-75,000 reverse split          
Decrease in common stock value           $ 1,804,774
Increase in APIC           $ 1,804,774
Loss from discontinued operations   $ 0   $ 111,312    
Platinum Tax [Member]            
Loss from discontinued operations     $ 43,810   $ 89,300  
v3.24.3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Payables and Accruals [Abstract]    
Accounts payable $ 543,866 $ 720,774
Accrued credit cards 15,613 26,645
Accrued liability for settlement of previously factored receivables 990,824 1,247,772
Accrued income and property taxes 5,346 5,346
Accrued professional fees 82,418 29,122
Accrued board fees 15,000 0
Accrued public company fees 9,100 0
Accrued payroll 17,564 17,472
Total $ 1,679,731 $ 2,047,131
v3.24.3
ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details Narrative) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Payables and Accruals [Abstract]    
Accrued taxes, penalties and interest $ 1,649 $ 1,649
v3.24.3
PLANT AND EQUIPMENT, NET (Details) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Property, Plant and Equipment [Abstract]    
Medical equipment $ 96,532 $ 96,532
Computer Equipment 9,189 9,189
Furniture, fixtures and equipment 15,079 15,079
Leasehold Improvement 15,950 15,950
Total 136,750 136,750
Less: accumulated depreciation (108,821) (102,089)
Property and equipment, net $ 27,929 $ 34,661
v3.24.3
PLANT AND EQUIPMENT, NET (Details Narrative) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Property, Plant and Equipment [Abstract]        
Depreciation $ 3,366 $ 3,365 $ 6,731 $ 8,000
v3.24.3
LAND (Details Narrative) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Real Estate [Abstract]    
Land value $ 540,000 $ 540,000
v3.24.3
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)
 6 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Previous Owners Of Edge View [Member]    
Related Party Transaction [Line Items]    
Due from related party $ 4,979 $ 4,979
Chairman [Member]    
Related Party Transaction [Line Items]    
Short-term advances 0 $ 120,997
Payment made to chairman $ 120,997  
v3.24.3
NOTES AND LOANS PAYABLE (Details - Notes payable) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Debt Disclosure [Abstract]    
Notes and loans payable $ 7,369,037 $ 2,280,743
Less current portion (7,226,646) (2,136,077)
Long-term portion $ 142,391 $ 144,666
v3.24.3
NOTES AND LOANS PAYABLE (Details - Long term debt matures)
Jun. 30, 2024
USD ($)
Debt Disclosure [Abstract]  
2024 (remainder of year) $ 7,226,646
2025 4,910
2026 4,910
2027 4,910
2028 4,910
Thereafter 122,751
Total $ 7,369,037
v3.24.3
NOTES AND LOANS PAYABLE (Details Narrative) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 11, 2024
Sep. 29, 2023
Jun. 02, 2020
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Apr. 24, 2024
Dec. 31, 2023
Debt Instrument [Line Items]                  
Promissory notes, description           (i) if the Company raises at least $5 million but less than $6 million in its planned underwritten public offering (the “Offering”), then it must pay $250,000 on the closing date of the Offering, with payments of $125,000, $125,000 and $35,000 to follow on the 90th, 180th, and 240th days following the closing of the Offering, respectively; (ii) if the Company raises at least $6 million but less than $7 million in the Offering, then it must pay $390,000 on the closing date of the Offering and $145,000 on the 90th day following the closing of the Offering; and (iii) if the Company raises at least $7 million in the Offering, then it must repay the entire principal amount on the closing date of the Offering. If the Offering is not completed by August 15, 2024, then the Company is required to pay $25,000 on such date and to continue making payments of $25,000 on each monthly anniversary thereof until the entire principal amount is repaid in full. If the Offering is completed after August 15, 2024, then the Company is required to make payments as described in the schedule above. Notwithstanding the foregoing, if the Company abandons the Offering and conducts a new public offering thereafter, then the Company is required to make a payment of $100,000 on the closing date of such other public offering, a second payment of $100,000 on the 90th day following the closing of such offering and $35,000 each month thereafter until the entire principal amount is repaid in full.      
Debt extinguishment and a gain on settlement       $ 78,834 $ 0 $ 78,834 $ 390    
Notes payable outstanding       7,369,037   7,369,037     $ 2,280,743
Line of credit maximum borrowing capacity $ 11,000,000 $ 4,500,000           $ 8,000,000  
Discount fee               2.25%  
Claims balance on new purchases with minimum fee               $ 10,000  
Line of credit outstanding balance       6,675,746   6,675,746     2,120,100
Line of credit maturity date   Sep. 29, 2025              
Loans And Notes Payable [Member]                  
Debt Instrument [Line Items]                  
Notes payable outstanding       10,989   10,989     10,989
Accrued interest       8,205   8,205     7,547
SBA Loan [Member]                  
Debt Instrument [Line Items]                  
Accrued interest       0   0     956
Proceeds from loans     $ 150,000            
Interest rate     3.75%            
Principal balance       $ 147,301   $ 147,301     $ 149,655
Series R Preferred Stock [Member]                  
Debt Instrument [Line Items]                  
Conversion of Stock, Shares Converted 165                
Conversion of Stock, Amount Converted $ 535,000                
v3.24.3
CONVERTIBLE NOTES PAYABLE (Details - Convertible notes) - USD ($)
Jun. 30, 2024
Dec. 31, 2023
Debt Disclosure [Abstract]    
Convertible notes payable $ 110,000 $ 3,831,850
Discounts on convertible notes payable 0 (24,820)
Total convertible debt less debt discount 110,000 3,807,030
Current portion 110,000 3,807,030
Long-term portion $ 0 $ 0
v3.24.3
CONVERTIBLE NOTES PAYABLE (Details- Convertible debt instruments) - USD ($)
 6 Months Ended
Jun. 30, 2024
Dec. 31, 2023
Debt Instrument [Line Items]    
Principal Balance $ 110,000 $ 3,831,850
Settlements and/or Principal Conversions (3,621,770)  
New Loans or (Cash Paydown) $ (100,080)  
Shares Issued Upon Conversion or Exchange 940,130  
Accrued Interest on Convertible Debt $ 95,142 612,460
Interest Expense On Convertible Debt (517,318)  
Unamortized Debt Discount $ 0 24,820
Convertible Note 9 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Sep. 12, 2016  
Debt Maturity date Sep. 12, 2017  
Principal Balance $ 0 50,080
Settlements and/or Principal Conversions 0  
New Loans or (Cash Paydown) $ (50,080)  
Shares Issued Upon Conversion or Exchange 1,222  
Accrued Interest on Convertible Debt $ 0 5,581
Interest Expense On Convertible Debt (5,581)  
Unamortized Debt Discount $ 0  
Convertible Note 10 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Jan. 24, 2017  
Debt Maturity date Jan. 24, 2018  
Principal Balance $ 55,000 55,000
Settlements and/or Principal Conversions 0  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 86,361 80,875
Interest Expense On Convertible Debt 5,486  
Unamortized Debt Discount $ 0  
Convertible Note 10-1 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Feb. 10, 2023  
Debt Maturity date Feb. 10, 2024  
Principal Balance $ 0 50,000
Settlements and/or Principal Conversions 0  
New Loans or (Cash Paydown) $ (50,000)  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 0 6,658
Interest Expense On Convertible Debt (6,658)  
Unamortized Debt Discount $ 0  
Convertible Note 10-2 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Mar. 30, 2023  
Debt Maturity date Mar. 30, 2024  
Principal Balance $ 25,000 25,000
Settlements and/or Principal Conversions 0  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 5,017 2,836
Interest Expense On Convertible Debt 2,181  
Unamortized Debt Discount $ 0  
Convertible Note 10-3 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Aug. 11, 2023  
Debt Maturity date Aug. 11, 2024  
Principal Balance $ 25,000 25,000
Settlements and/or Principal Conversions 0  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 3,339 1,469
Interest Expense On Convertible Debt 1,870  
Unamortized Debt Discount $ 0  
Convertible Note 29-2 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Nov. 08, 2019  
Debt Maturity date Nov. 08, 2020  
Principal Balance $ 0 36,604
Settlements and/or Principal Conversions (36,604)  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 0 10,109
Interest Expense On Convertible Debt (10,109)  
Unamortized Debt Discount $ 0  
Convertible Note 31 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Aug. 28, 2019  
Debt Maturity date Aug. 28, 2020  
Principal Balance $ 0 0
Settlements and/or Principal Conversions 0  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 0 8,385
Interest Expense On Convertible Debt (8,385)  
Unamortized Debt Discount $ 0  
Convertible Note 37-1 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Sep. 03, 2020  
Debt Maturity date Jun. 30, 2021  
Principal Balance $ 0 113,667
Settlements and/or Principal Conversions (113,667)  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 0 64,929
Interest Expense On Convertible Debt (64,929)  
Unamortized Debt Discount $ 0  
Convertible Note 37-2 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Nov. 02, 2020  
Debt Maturity date Aug. 31, 2021  
Principal Balance $ 0 113,167
Settlements and/or Principal Conversions (113,167)  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 0 63,594
Interest Expense On Convertible Debt (63,594)  
Unamortized Debt Discount $ 0  
Convertible Note 37-3 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Dec. 29, 2020  
Debt Maturity date Sep. 30, 2021  
Principal Balance $ 0 113,166
Settlements and/or Principal Conversions (113,166)  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 0 62,558
Interest Expense On Convertible Debt (62,558)  
Unamortized Debt Discount $ 0  
Convertible Note 40-1 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Sep. 22, 2022  
Debt Maturity date Sep. 22, 2024  
Principal Balance $ 0 2,600,000
Settlements and/or Principal Conversions (2,600,000)  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange [1] 938,908  
Accrued Interest on Convertible Debt $ 0 252,665
Interest Expense On Convertible Debt (252,655)  
Unamortized Debt Discount $ 0  
Convertible Note 40-2 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Nov. 04, 2022  
Debt Maturity date Sep. 22, 2024  
Principal Balance $ 0 68,667
Settlements and/or Principal Conversions (68,667)  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 0 7,939
Interest Expense On Convertible Debt (7,939)  
Unamortized Debt Discount $ 0  
Convertible Note 40-3 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Nov. 28, 2022  
Debt Maturity date Sep. 22, 2024  
Principal Balance $ 0 68,667
Settlements and/or Principal Conversions (68,667)  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 0 7,506
Interest Expense On Convertible Debt (7,506)  
Unamortized Debt Discount $ 0  
Convertible Note 40-4 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Dec. 21, 2022  
Debt Maturity date Sep. 22, 2024  
Principal Balance $ 0 68,667
Settlements and/or Principal Conversions (68,667)  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 0 7,054
Interest Expense On Convertible Debt (7,054)  
Unamortized Debt Discount $ 0  
Convertible Note 40-5 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Jan. 24, 2023  
Debt Maturity date Mar. 21, 2024  
Principal Balance $ 0 90,166
Settlements and/or Principal Conversions (90,166)  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 0 8,284
Interest Expense On Convertible Debt (8,284)  
Unamortized Debt Discount $ 0  
Convertible Note 40-6 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Mar. 21, 2023  
Debt Maturity date Sep. 22, 2024  
Principal Balance $ 0 139,166
Settlements and/or Principal Conversions (139,166)  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 0 10,671
Interest Expense On Convertible Debt (10,671)  
Unamortized Debt Discount $ 0  
Convertible Note 40-7 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Jun. 05, 2023  
Debt Maturity date Jun. 05, 2024  
Principal Balance $ 0 139,166
Settlements and/or Principal Conversions (139,166)  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 0 7,826
Interest Expense On Convertible Debt (7,826)  
Unamortized Debt Discount $ 0  
Convertible Note 40-8 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Jun. 13, 2023  
Debt Maturity date Jun. 13, 2024  
Principal Balance $ 0 21,167
Settlements and/or Principal Conversions (21,167)  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 0 1,127
Interest Expense On Convertible Debt (1,127)  
Unamortized Debt Discount $ 0  
Convertible Note 40-9 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Jul. 19, 2023  
Debt Maturity date Jul. 19, 2024  
Principal Balance $ 0 35,500
Settlements and/or Principal Conversions (35,500)  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 0 1,605
Interest Expense On Convertible Debt (1,605)  
Unamortized Debt Discount $ 0  
Convertible Note 40-10 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Jul. 24, 2023  
Debt Maturity date Jul. 24, 2024  
Principal Balance $ 0 14,000
Settlements and/or Principal Conversions (14,000)  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 0 614
Interest Expense On Convertible Debt (614)  
Unamortized Debt Discount $ 0  
Convertible Note 41 [Member]    
Debt Instrument [Line Items]    
Debt Issuance date Aug. 25, 2023  
Debt Maturity date Aug. 25, 2024  
Principal Balance $ 5,000 5,000
Settlements and/or Principal Conversions 0  
New Loans or (Cash Paydown) $ 0  
Shares Issued Upon Conversion or Exchange 0  
Accrued Interest on Convertible Debt $ 425 $ 175
Interest Expense On Convertible Debt $ 250  
[1] 938,908 Series Y Senior Convertible Preferred Shares issued in exchange for full value of the outstanding principal and interest on Notes 40-1, 40-2, 40-3, 40-4, 40-5, 40-6, 40-7, 40-8, 40-9 and 40-10
v3.24.3
CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Jun. 11, 2024
May 31, 2024
May 15, 2024
Apr. 11, 2024
Dec. 31, 2023
Short-Term Debt [Line Items]                  
Convertible debt outstanding $ 110,000   $ 110,000           $ 3,807,030
Total outstanding 110,000   110,000           3,807,030
Accrued interest paid 103,345   103,345           620,963
Principal amount $ 535,000   $ 535,000            
Issuance of convertible preferred stock 940,130   940,130            
Debt discount $ 0   $ 0           24,820
Amortization of debt discount 11,306 $ 30,633 24,821 $ 48,616          
Convertible debt $ 110,000   110,000           $ 3,831,850
Note 9 [Member]                  
Short-Term Debt [Line Items]                  
Convertible debt           $ 58,846      
Note 10-1 [Member]                  
Short-Term Debt [Line Items]                  
Convertible debt           $ 63,513      
Convertible Notes Payable [Member]                  
Short-Term Debt [Line Items]                  
Proceeds from convertible debt       355,500          
[custom:DebtConversionConvertedInterestAmount1]     680 5,873          
[custom:DebtConversionConvertedCostAmount1]     $ 1,000 $ 2,000          
Debt Conversion, Converted Instrument, Shares Issued     1,222 1,582          
Adjustments to Additional Paid in Capital, Equity Component of Convertible Debt     $ 1,679 $ 123,566          
Debt Conversion, Converted Instrument, Amount       $ 58,800          
Series Y Senior Convertible Preferred Stock [Member]                  
Short-Term Debt [Line Items]                  
Issuance of convertible preferred stock 938,908   938,908       938,908    
Series R Preferred Stock [Member]                  
Short-Term Debt [Line Items]                  
Principal amount         $ 535,000        
Y Senior Convertible Preferred Stock [Member]                  
Short-Term Debt [Line Items]                  
Issuance of convertible preferred stock               938,908  
Holder Of Notes 9 And 10 [Member]                  
Short-Term Debt [Line Items]                  
Principal payments     $ 100,080            
Total outstanding $ 22,279   22,279            
Convertible Noteholder [Member]                  
Short-Term Debt [Line Items]                  
Accrued interest paid $ 100,000   $ 100,000            
v3.24.3
CAPITAL STOCK (Details Narrative) - USD ($)
 1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended
Jun. 11, 2024
May 15, 2024
Mar. 26, 2024
Mar. 05, 2024
Jan. 31, 2024
Jan. 19, 2024
May 25, 2023
Feb. 29, 2024
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
May 08, 2024
Class of Stock [Line Items]                            
Total authorized shares                           350,000,000
Common stock shares authorized                 300,000,000   300,000,000   300,000,000 300,000,000
Common stock par value                 $ 0.001   $ 0.001   $ 0.001 $ 0.001
Preferred stock, shares authorized                           50,000,000
Preferred stock par value                           $ 0.001
Dividends payment                 $ 326,174   $ 894,696 $ 344,947    
Issuance of convertible preferred stock, shares                 940,130   940,130      
Selling, general and administrative expense       $ 11,617                    
Share based compensation expense     $ 195,000                      
Loss from discontinued operations                 $ 0 $ 43,810 $ 111,312 $ 89,300    
Investor [Member]                            
Class of Stock [Line Items]                            
Stock issued new, shares       7,500                    
Fair value per share       $ 1.55                    
Convertible Notes Payable [Member]                            
Class of Stock [Line Items]                            
Stock issued for conversion of debt, shares issued                     1,222 1,583    
Common Stock [Member]                            
Class of Stock [Line Items]                            
Stock issued for conversion of debt, shares issued                     234,909      
Three Board [Member]                            
Class of Stock [Line Items]                            
Stock issued new, shares     30,000                      
Fair value per share     $ 6.50                      
Six Previous Owners [Member] | Red Rock Settlement [Member]                            
Class of Stock [Line Items]                            
Stock issued new, shares               37,104            
Fair value per share               $ 3            
Loss from discontinued operations               $ 111,312            
Series A Preferred Stock [Member]                            
Class of Stock [Line Items]                            
Preferred stock, shares authorized                 2   2      
Series B Preferred Stock [Member]                            
Class of Stock [Line Items]                            
Preferred stock, shares authorized                 3,000,000   3,000,000   3,000,000  
Preferred stock par value                 $ 4.00   $ 4.00   $ 4.00  
Conversion of stock, shares                     1,159,299      
Series B Preferred Stock [Member] | Common Stock [Member]                            
Class of Stock [Line Items]                            
Conversion of stock, shares                     2,318,598      
Series B Preferred Stock [Member] | Chief Financial Officer [Member]                            
Class of Stock [Line Items]                            
Stock issued new, shares             3,150              
Stock issued new, value             $ 25,000              
Series C Preferred Stock [Member]                            
Class of Stock [Line Items]                            
Preferred stock, shares authorized                 500   500   500  
Preferred stock par value                 $ 4.00   $ 4.00   $ 4.00  
Conversion of stock, shares                     61      
Series C preferred stock cancelled                     2      
Series C Preferred Stock [Member] | Common Stock [Member]                            
Class of Stock [Line Items]                            
Conversion of stock, shares                     610,000      
Series E Preferred Stock [Member]                            
Class of Stock [Line Items]                            
Preferred stock, shares authorized                 1,000,000   1,000,000   1,000,000  
Preferred stock par value                 $ 4.00   $ 4.00   $ 4.00  
Conversion of stock, shares                     80,375      
Series E Preferred Stock [Member] | Common Stock [Member]                            
Class of Stock [Line Items]                            
Conversion of stock, shares                     160,750      
Series F-1 Preferred Stock [Member]                            
Class of Stock [Line Items]                            
Preferred stock, shares authorized                 50,000   50,000   50,000  
Preferred stock par value                 $ 4.00   $ 4.00   $ 4.00  
Conversion of stock, shares                     10,002      
Series F-1 Preferred Stock [Member] | Common Stock [Member]                            
Class of Stock [Line Items]                            
Conversion of stock, shares                     20,004      
Series I Preferred Stock [Member]                            
Class of Stock [Line Items]                            
Preferred stock, shares authorized                 15,000,000   15,000,000   15,000,000  
Preferred stock par value                 $ 4.00   $ 4.00   $ 4.00  
Conversion of stock, shares                     3,377,000      
Series I Preferred Stock [Member] | Common Stock [Member]                            
Class of Stock [Line Items]                            
Conversion of stock, shares                     6,754,000      
Series I Preferred Stock [Member] | Board of Directors Chairman [Member]                            
Class of Stock [Line Items]                            
Stock issued for compensation, shares           62,500                
Stock issued for compensation, value           $ 250,000                
Series I Preferred Stock [Member] | Chief Executive Officer [Member]                            
Class of Stock [Line Items]                            
Stock issued for compensation, shares           62,500                
Stock issued for compensation, value           $ 250,000                
Series I Preferred Stock [Member] | Chief Financial Officer [Member]                            
Class of Stock [Line Items]                            
Stock issued new, shares         5,000                  
Stock issued new, value         $ 20,000                  
Series I Preferred Stock [Member] | Chief Accounting Officer [Member]                            
Class of Stock [Line Items]                            
Stock issued new, shares         2,500                  
Stock issued new, value         $ 10,000                  
Series J Preferred Stock [Member]                            
Class of Stock [Line Items]                            
Preferred stock, shares authorized                 2,000,000   2,000,000   2,000,000  
Preferred stock par value                 $ 4.00   $ 4.00   $ 4.00  
Conversion of stock, shares                     1,713,584      
Series J Preferred Stock [Member] | Common Stock [Member]                            
Class of Stock [Line Items]                            
Conversion of stock, shares                     3,427,168      
Series L Preferred Stock [Member]                            
Class of Stock [Line Items]                            
Preferred stock, shares authorized                 400,000   400,000   400,000  
Preferred stock par value                 $ 4.00   $ 4.00   $ 4.00  
Series N Senior Convertible Preferred Stock [Member]                            
Class of Stock [Line Items]                            
Preferred stock, shares authorized                 3,000,000   3,000,000      
Dividends payable                 $ 1,106,562   $ 1,106,562   $ 766,437  
Common stock dividends                     197,601      
Series R Convertible Preferred Stock [Member]                            
Class of Stock [Line Items]                            
Preferred stock, shares authorized                 5,000   5,000      
Series X Senior Convertible Preferred Stock [Member]                            
Class of Stock [Line Items]                            
Preferred stock, shares authorized                 5,000,000   5,000,000      
Common stock dividends                     25,173      
Dividends payment                     $ 183,210   $ 190,685  
Series Y Senior Convertible Preferred Stock [Member]                            
Class of Stock [Line Items]                            
Preferred stock, shares authorized                 1,000,000   1,000,000   1,000,000  
Preferred stock par value                 $ 4.00   $ 4.00   $ 4.00  
Common stock dividends                     12,135      
Issuance of convertible preferred stock, shares   938,908             938,908   938,908      
Issuance of convertible preferred stock, value   $ 3,755,632                        
Common stock dividends                     $ 82,732      
Series R Preferred Stock [Member]                            
Class of Stock [Line Items]                            
Dividends payment                     $ 0   $ 109,980  
Conversion of stock, shares 165                          
Series C preferred stock cancelled                     165      
v3.24.3
WARRANTS (Details - Warrant activity) - Warrant [Member] - $ / shares
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]    
Number of warrants, Beginning balance 3,140 3,141
Weighted average exercise price, Beginning balance $ 0.015 $ 0.015
Number of warrants, Granted 0 0
Weighted average exercise price, Granted $ 0 $ 0
Number of warrants, Exercised 0 0
Weighted average exercise price, Exercised $ 0 $ 0
Number of warrants, Expired 0 (1)
Weighted average exercise price, Expired $ 0 $ 0
Number of warrants, Ending balance 3,140 3,140
Weighted average exercise price, Ending balance $ 0.015 $ 0.015
Number of warrants, Exercisable 3,140 3,140
Weighted average exercise price, exercisable $ 0.015 $ 0.015
v3.24.3
DISCONTINUED OPERATIONS (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Gain (Loss) from discontinued operations        
Revenue $ 1,471,643 $ 3,364,506 $ 3,793,775 $ 6,070,905
Cost of sales (793,010) (1,081,689) (1,741,164) (2,037,984)
Selling, general and administrative expenses (834,750) (530,013) (1,686,146) (1,517,933)
Loss from discontinued operations 0   (111,312)  
Discontinued Operations [Member] | Red Rock [Member]        
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]        
Cash 342 342 342 342
Accounts receivable 300 300 300 300
Accounts payable and accrued expenses 238,285 238,285 238,285 238,285
Net liabilities of discontinued operations (237,643) (237,643) (237,643) (237,643)
Gain (Loss) from discontinued operations        
Revenue 0 118,304 0 272,703
Cost of sales 0 (21,297) 0 (48,125)
Selling, general and administrative expenses 0 (140,276) 0 (311,835)
Interest expense 0 (541) 0 (2,043)
Settlement loss 0 0 (111,312) 0
Loss from discontinued operations $ 0 $ (43,810) $ (111,312) $ (89,300)
v3.24.3
DISCONTINUED OPERATIONS (Details Narrative) - USD ($)
 1 Months Ended 3 Months Ended 6 Months Ended
Feb. 29, 2024
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Loss from discontinued operation loss   $ 0 $ 43,810 $ 111,312 $ 89,300
Six Previous Owners [Member] | Red Rock Settlement [Member]          
Stock issued during period shares 37,104        
Share Price $ 3        
Loss from discontinued operation loss $ 111,312        
v3.24.3
GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS, NET (Details Narrative) - USD ($)
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Goodwill And Identifiable Intangible Assets Net    
Goodwill impairment $ 0 $ 0
v3.24.3
COMMITMENTS AND CONTINGENCIES (Details - Lease maturities)
Jun. 30, 2024
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
2024 (remainder of year) $ 87,011
2025 168,158
2026 80,018
2027 8,609
Total $ 343,796
v3.24.3
COMMITMENTS AND CONTINGENCIES (Details - Supplemental information)
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Weighted-average remaining lease term 2 years 1 month 13 days
Weighted-average discount rate 4.55%
v3.24.3
COMMITMENTS AND CONTINGENCIES (Details - Financial performance goals)
Jun. 30, 2024
USD ($)
shares
Year End 2021 [Member]  
Effect of Fourth Quarter Events [Line Items]  
Minimum Annual Nova EBITDA $ 2,000,000
Cash Annual Bonus $ 120,000
Year End 2021 [Member] | Series J Preferred Stock [Member]  
Effect of Fourth Quarter Events [Line Items]  
Stock to be issued, shares | shares 120,000
Year End 2022 [Member]  
Effect of Fourth Quarter Events [Line Items]  
Minimum Annual Nova EBITDA $ 2,400,000
Cash Annual Bonus $ 150,000
Year End 2022 [Member] | Series J Preferred Stock [Member]  
Effect of Fourth Quarter Events [Line Items]  
Stock to be issued, shares | shares 135,000
Year End 2023 [Member]  
Effect of Fourth Quarter Events [Line Items]  
Minimum Annual Nova EBITDA $ 3,700,000
Cash Annual Bonus $ 210,000
Year End 2023 [Member] | Series J Preferred Stock [Member]  
Effect of Fourth Quarter Events [Line Items]  
Stock to be issued, shares | shares 150,000
Year End 2024 [Member]  
Effect of Fourth Quarter Events [Line Items]  
Minimum Annual Nova EBITDA $ 5,500,000
Cash Annual Bonus $ 300,000
Year End 2024 [Member] | Series J Preferred Stock [Member]  
Effect of Fourth Quarter Events [Line Items]  
Stock to be issued, shares | shares 180,000
Year End 2025 [Member]  
Effect of Fourth Quarter Events [Line Items]  
Minimum Annual Nova EBITDA $ 8,000,000
Cash Annual Bonus $ 420,000
Year End 2025 [Member] | Series J Preferred Stock [Member]  
Effect of Fourth Quarter Events [Line Items]  
Stock to be issued, shares | shares 210,000
v3.24.3
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)
 3 Months Ended 6 Months Ended
May 31, 2021
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Jan. 02, 2024
Dec. 31, 2023
May 15, 2021
Operating lease expense   $ 99,815 $ 56,378 $ 200,177 $ 134,230      
First Doctor [Member]                
Annual base salaries $ 372,000              
Second Doctor [Member]                
Annual base salaries 450,000              
Third Doctor [Member]                
Annual base salaries $ 372,000              
Chief Executive Officer [Member]                
Accrued compensation   2,115,500   2,115,500     $ 2,365,500  
Board of Directors Chairman [Member]                
Accrued compensation   2,220,500   2,220,500     2,350,500  
Chief Financial Officer [Member]                
Accrued compensation   17,057   17,057     $ 17,057 $ 156,000
Chief Financial Officer [Member] | Employment Agreement [Member]                
Accrued compensation   0   0   $ 228,000    
Chief Accounting Officer [Member]                
Accrued compensation   $ 8,750   $ 8,750   $ 210,000    
v3.24.3
INCOME TAXES (Details Narrative)
Jun. 30, 2024
USD ($)
Income Tax Disclosure [Abstract]  
Operating Loss Carryforwards $ 24,000,000
v3.24.3
SEGMENT REPORTING (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Segment Reporting Information [Line Items]        
Consolidated assets $ 24,701,882 $ 20,745,811 $ 24,701,882 $ 20,745,811
Consolidated revenues 1,471,643 3,364,506 3,793,775 6,070,905
Consolidated cost of sales 793,010 1,081,689 1,741,164 2,037,984
Income from operations from subsidiaries (159,483) 1,749,439 59,509 2,506,988
Income (Loss) before taxes (131,585) 859,888 (303,377) 889,387
Healthcare Segment [Member]        
Segment Reporting Information [Line Items]        
Consolidated assets 20,188,960 18,955,991 20,188,960 18,955,991
Consolidated revenues 1,471,643 3,364,506 3,793,775 6,070,905
Consolidated cost of sales 793,010 1,081,689 1,741,164 2,037,984
Income from operations from subsidiaries 449,618 2,106,551 1,600,902 3,384,790
Income (Loss) before taxes 449,618 1,378,445 1,600,902 2,195,542
Real Estates [Member]        
Segment Reporting Information [Line Items]        
Consolidated assets 582,620 587,456 582,620 587,456
Consolidated revenues 0 0 0 0
Consolidated cost of sales 0 0 0 0
Income from operations from subsidiaries (3,962) (1,743) (4,836) (1,840)
Income (Loss) before taxes (3,962) (1,743) (4,836) (1,840)
Others [Member]        
Segment Reporting Information [Line Items]        
Consolidated assets 3,930,302 1,202,364 3,930,302 1,202,364
Subsidiary [Member]        
Segment Reporting Information [Line Items]        
Income from operations from subsidiaries 445,656 2,104,808 1,596,066 3,382,950
Cardiff Lexington [Member]        
Segment Reporting Information [Line Items]        
Income from operations from subsidiaries (605,139) (355,369) (1,536,557) (875,962)
Corporate Segment [Member]        
Segment Reporting Information [Line Items]        
Income (Loss) before taxes $ (577,241) $ (516,814) $ (1,899,443) $ (1,304,315)