Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission File Number: 000-49709

CARDIFF LEXINGTON CORPORATION

(Exact name of registrant as specified in its charter)

Nevada		84-1044583
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3753 Howard Hughes Parkway, Suite 200, Las Vegas, NV		89169
(Address of principal executive offices)		(Zip Code)

844-628-2100

(Registrant’s telephone number, including area code)

3200 Bel Air Drive, Las Vegas, NV 89109

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for comply with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of June 30, 2023, there were 943,475,613 shares of common stock of the registrant issued and outstanding.

CARDIFF LEXINGTON CORPORATION

Quarterly Report on Form 10-Q

Period Ended June 30, 2023

TABLE OF CONTENTS

PART I

FINANCIAL INFORMATION

Item 1.	Financial Statements	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	39
Item 4.	Controls and Procedures	39

PART II

OTHER INFORMATION

Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 3.	Defaults Upon Senior Securities	41
Item 4.	Mine Safety Disclosures	41
Item 5.	Other Information	41
Item 6.	Exhibits	41

PART I

FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

		Page
Condensed Consolidated Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022 (Audited)		3
Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 (Unaudited) and 2022 (Unaudited and restated)		4
Condensed Consolidated Statements of Stockholders’ Equity (Deficiency) for the Six Months Ended June 30, 2023 (Unaudited) and 2022 (Unaudited and restated)		5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 (Unaudited) and 2022 (Unaudited and restated)		6
Notes to Condensed Consolidated Financial Statements (Unaudited)		7

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2023 AND DECEMBER 31, 2022

(UNAUDITED)


	June 30, 2023			December 31, 2022

ASSETS
Current assets
Cash	$	411,209		$	226,802
Accounts receivable-net		9,193,529			6,604,780
Prepaid and other current assets		5,000			5,000
Total current assets		9,609,738			6,836,582

Property and equipment, net		47,438			55,439
Land		540,000			540,000
Goodwill		5,666,608			5,666,608
Right of use - assets		153,933			218,926
Due from related party		4,979			4,979
Other assets		30,823			30,823
Total assets	$	16,053,519		$	13,353,357

LIABILITIES, MEZZANINE EQUITY AND DEFICIENCY IN STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expense	$	2,522,332		$	2,038,595
Accrued expenses - related parties		4,084,557			3,750,557
Accrued interest		590,144			350,267
Right of use - liability		126,752			142,307
Due to director & officer		123,192			123,192
Notes payable		24,724			15,809
Notes payable - related party		156,384			37,024
Convertible notes payable, net of debt discounts of $100,347 and $46,797, respectively		3,868,068			3,515,752
Total current liabilities		11,496,153			9,973,503

Other liabilities
Notes payable		144,594			139,789
Operating lease liability – long term		32,205			84,871
Total liabilities		11,672,952			10,198,163

Mezzanine equity
Redeemable Series N Senior Convertible Preferred Stock - 3,000,000 shares authorized, $0.001 par value, stated value $4.00, 868,058shares issued and outstanding at June 30, 2023 and December 31, 2022		3,682,537			3,125,002
Redeemable Series X Senior Convertible Preferred Stock - 5,000,000 shares authorized, $0.001 par value, stated value $4.00, 375,000 shares issued and outstanding at June 30, 2023 and December 31, 2022		1,615,068			1,500,000
Total Mezzanine Equity		5,297,605			4,625,002

Stockholders' equity (deficit)
Series B Preferred Stock - 3,000,000 shares authorized, $0.001 par value, stated value $4.00, 2,134,478 and 2,131,328 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		8,537,912			8,525,313
Series C Preferred Stock - 500 shares authorized, $0.001 par value, stated value $4.00, 122 shares issued and outstanding at June 30, 2023 and December 31, 2022		488			488
Series E Preferred Stock - 1,000,000 shares authorized, $0.001 par value, stated value $4.00, 150,750 shares issued and outstanding at June 30, 2023 and December 31, 2022		603,000			603,000
Series F-1 Preferred Stock - 800,000 shares authorized, $0.001 par value, stated value $4.00, 35,752 shares issued and outstanding at June 30, 2023 and December 31, 2022		143,008			143,008
Series I Preferred Stock - 500,000,000 shares authorized, $0.001 par value, 14,885,000 shares issued and outstanding at June 30, 2023 and December 31, 2022		59,540,000			59,540,000
Series J Preferred Stock - 10,000,000 shares authorized, $0.001 par value, stated value $4.00, 1,713,584 shares issued and outstanding at June 30, 2023 and December 31, 2022		6,854,336			6,854,336
Series L Preferred Stock - 100,000,000 shares authorized, $0.001 par value, stated value $4.00, 319,493 shares issued and outstanding at June 30, 2023 and December 31, 2022		1,277,972			1,277,972
Series R Preferred Stock - 5,000 shares authorized, $0.001 par value, stated value of $1,200, 165 shares issued and outstanding at June 30, 2023 and December 31, 2022		198,000			198,000
Common Stock - 7,500,000,000 shares authorized, $0.001 par value; 943,475,613 and 789,796,735 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		943,475			824,793
Additional paid-in capital		(8,497,309	)		(8,581,265	)
Accumulated deficit		(70,517,920	)		(70,855,453	)
Total stockholders' equity (deficit)		(917,038	)		(1,469,808	)
Total liabilities, mezzanine equity and stockholders' equity	$	16,053,519		$	13,353,357

The accompanying notes are an integral part of these condensed consolidated financial statements

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)


	THREE MONTHS ENDED JUNE 30,						SIX MONTHS ENDED JUNE 30,
	2023			2022 (Restated)			2023			2022 (Restated)
REVENUE
Financial Services	$	118,304		$	472,014		$	272,703		$	936,857
Healthcare		3,364,506			2,619,218			6,070,905			5,051,525
Total revenue		3,482,810			3,091,232			6,343,608			5,988,382

COST OF SALES
Financial Services		21,297			112,776			48,126			325,222
Healthcare		1,081,689			983,842			2,037,983			1,887,624
Total cost of sales		1,102,986			1,096,618			2,086,109			2,212,846

GROSS PROFIT		2,379,824			1,994,614			4,257,499			3,775,536

OPERATING EXPENSES
Depreciation expense		3,365			5,783			8,000			11,566
Selling, general and administrative		670,289			866,213			1,829,768			1,940,477
Total operating expenses		673,654			871,996			1,837,768			1,952,043

INCOME FROM OPERATIONS		1,706,170			1,122,618			2,419,731			1,823,493

OTHER INCOME (EXPENSE)
Other income		–			8			205			8
Gain on forgiveness of debt		–			–			390			–
Interest expense and finance charge		(844,459	)		(1,035,811	)		(1,539,623	)		(3,255,987	)
Conversion cost penalty and reimbursement		–			–			(2,000	)		–
Penalties and fees		(15,000	)		–			(30,000	)		–
Amortization of debt discounts		(30,633	)		(111,706	)		(48,616	)		(156,252	)
Total other income (expenses)		(890,092	)		(1,147,509	)		(1,619,644	)		(3,412,231	)

NET INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS		816,078			(24,891	)		800,087			(1,588,738	)

LOSS FROM DISCONTINUED OPERATIONS		–			(36,935	)		–			(35,542	)

NET INCOME (LOSS) FOR THE PERIOD	$	816,078		$	(61,826	)	$	800,087		$	(1,624,280	)
DEEMED DIVIDENDS ON PREFERRED STOCK		(125,744	)		–			(462,555	)		–
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	690,334		$	(61,826	)	$	337,532		$	(1,624,280	)

BASIC INCOME (LOSS) PER SHARE
Continuing operations	$	0.00			(0.00	)		0.00			(0.01	)
Discontinued operations	$	0.00			(0.00	)		0.00			(0.00	)

DILUTED INCOME (LOSS) PER SHARE
Continuing operations	$	0.00			(0.00	)		0.00			(0.00	)
Discontinued operations	$	0.00			(0.00	)		0.00			(0.00	)

BASIC WEIGHTED AVERAGE NUMBER OF COMMON SHARES – CONTINUED AND DISCONTINUED OPERATIONS		930,254,713			166,130,069			901,781,592			166,130,069
DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES – CONTINUED AND DISCONTINUED OPERATIONS		14,435,802,103			166,130,069			17,836,079,282			166,130,069

The accompanying notes are an integral part of these condensed consolidated financial statements

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)


	Preferred Stock Series A, K and I				Preferred Stock Series B, D, E, F, F-1, G, H, L				Preferred Stock Series C and R				Treasury Stock
	Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount
Balance December 31, 2021 (Restated)		23,085,563	$	59,548,201		3,595,952	$	14,383,808		287	$	198,488		(619,345	)	$	(4,967,686	)
Distribution of dividend		–		–		–		–		–							–
Net loss		–		–		–		–		–		–		–			–
Balance, June 30, 2022 (Restated)		23,085,563	$	59,548,201		3,595,952	$	14,383,808		287	$	198,488		(619,345	)	$	(4,967,686	)



Balance December 31, 2022		14,885,001	$	59,540,000		4,350,907	$	17,403,628		287	$	198,488		–			–
Conversion of convertible notes payable		–		–		–		–		–		–		–			–
Distribution of dividend		–		–		–		–		–		–		–			–
Issuance of preferred stock series B		–		–		3,150		12,600		–		–		–			–
Net income		–		–		–		–		–		–		–			–
Balance, June 30, 2023		14,885,001	$	59,540,000		4,354,057	$	17,416,228		287	$	198,488		–		$	–


	Common Stock				Additional Paid-in			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Deficit			Deficit
Balance December 31, 2021 (Restated)		166,130,069	$	167,421	$	(3,479,126	)	$	(65,118,744	)	$	732,361
Distribution of dividend		–		–		–			(100,476	)		(100,476	)
Net loss		–		–		–			(1,624,280	)		(1,624,280	)
Balance, June 30, 2022 (Restated)		166,130,069	$	167,421	$	(3,479,126	)	$	(66,843,500	)	$	(992,395	)



Balance December 31, 2022		824,793,235	$	824,793	$	(8,581,264	)	$	(70,855,453	)	$	(1,469,808	)
Conversion of convertible notes payable		118,682,378		118,682		71,555			–			190,237
Accrued dividend		–		–		–			(462,554	)		(462,554	)
Issuance of preferred stock series B		–		–		12,400			–			25,000
Net income		–		–		–			800,087			800,087
Balance, June 30, 2023		943,475,613	$	943,475	$	(8,497,308	)	$	(70,517,920	)	$	(917,038	)

The accompanying notes are an integral part of these condensed consolidated financial statements

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)


	Six Months Ended June 30,
	2023			2022 (Restated)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) for the period	$	800,087		$	(1,624,280	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		8,000			21,628
Amortization of loan discount		48,616			156,252
Gain on forgiveness of debt		(390	)		–
Other noncash items, net		–			(28,271	)
Bad debt		270,000			–
Fair value settled upon conversion		123,566			–
Conversion and note issuance cost		7,000			–
Share issuance for service rendered		25,000			–
Increase (decrease) in:
Accounts receivable		(2,858,749	)		(192,425	)
Right of use – assets		64,993			(38,823	)
Prepaid expenses and other current assets		–			8,000
Increase (decrease) in:
Accounts payable and accrued expense		693,788			699,107
Accrued officer’s compensation		334,000			240,000
Due from related parties		–			3,988
Accrued interest		248,137			252,634
Right of use – liabilities		(68,221	)		29,015	)
Net cash used in operating activities - continuing operations		(304,173	)		(473,175	)

Net cash provided by operating activities - discontinued operations		–			35,542

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible notes payable		355,500			555,730
Repayment of convertible notes payable		–			(5,908	)
Payment of SBA loan		–			(1,520	)
Dividend on preferred stock		–			(100,477	)
Proceeds from line of credit		43,880			–
Repayment of line of credit		(30,160	)		–
Payment of notes payable related party		(5,336	)		(5,065	)
Proceeds from notes payable related party		124,696			7,948
Net cash provided by financing activities		488,580			450,708

NET INCREASE IN CASH		184,407			13,075
CASH, BEGINNING OF PERIOD		226,802			595,987
CASH, END OF PERIOD	$	411,209		$	609,062

SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest	$	2,044		$	46,098

NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued upon conversion of notes payable and accrued interest	$	66,673		$	–
Proceeds from related party	$	–		$	3,987

The accompanying notes are an integral part of these condensed consolidated financial statements

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

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:

We Three, LLC dba Affordable Housing Initiative (“AHI”), which was acquired on May 15, 2014 and sold on October 31, 2022;

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

Nova Ortho and Spine, PLLC (“Nova”), which was acquired on May 31, 2021.

Princsiples of Consolidation

The condensed consolidated financial statements include the accounts of Cardiff and its wholly owned subsidiaries AHI, Edge View, Platinum Tax and Nova (collectively, the “Company”). AHI is included in discontinued operations. All significant intercompany accounts and transactions are eliminated in consolidation. Certain prior period amounts may have been reclassified for consistency with the current period presentation. These reclassifications would have no material effect on the reported condensed consolidated financial results.

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 is reported on the balance sheet at the net amounts expected to be collected by the Company. Management closely monitors outstanding accounts receivable and charges off to expense any balances that are determined to be uncollectible, which was $270,000 and $0 as of June 30, 2023 and December 31, 2022, respectively. As of June 30, 2023 and December 31, 2022, the Company had net accounts receivable of $9,193,529 and $6,604,780, respectively. Accounts receivables are primarily generated from subsidiaries in their normal course of business.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

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:

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

Goodwill and Other Intangible Assets

Goodwill and indefinite-lived brands 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 annual evaluation for impairment of goodwill and indefinite-lived intangibles 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, 2023 and 2022, 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 discounted net 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 applies the following five-step 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 allocation
	·	Recognition of revenue when performance obligations are satisfied.

The Company only applies the five-step model when it is probable that the Company will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception and once the contract is determined to be within the scope of ASC 606, the Company assesses services promised within each contract and determines those that are performance obligations and assesses whether each promised service is distinct.

The Company’s financial services sector reports revenues as services are performed and its healthcare sector reports revenues at the time control of the services transfer to the customer and from providing licensed and/or certified orthopedic procedures. The Company’s healthcare subsidiary does not have contract liabilities or deferred revenue as there are no amounts prepaid for services.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

Healthcare Income

Established billing rates are not the same as actual amounts recovered for the Company’s healthcare subsidiary. They generally do not reflect what the Company is ultimately paid and therefore are not reported in the condensed consolidated financial statements. The Company is typically paid amounts based on established charges per procedure with guidance from the annually updated Current Procedural Terminology (“CPT”) guidelines (a code set maintained by the American Medical Association through the CPT Editorial Panel), that designates relative value units (“RVU's”) and a suggested range of charges for each procedure which is then assigned a CPT code.

This fee is discounted to reflect the percentage paid to the Company “using a modifier” recognized by each insurance carrier for services, less deductible, co-pay, and contractual adjustments which are deducted from the calculated fee. The net revenue is recorded at the time the services are rendered.

Contract Fees (Non-PIP)

The Company has contract fees for amounts earned from its Non-Personal Injury Protection (“PIP”) related procedures, typically car accidents, and are collected on a contingency basis. These cases are sold to a factor, who bears the risk of economic benefit or loss. After selling patient cases to the factor, any additional funds collected by the Company are remitted to the factor.

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. Fees are collected primarily from third party insurance providers. These revenues are based on established insurance billing rates less allowances for contractual adjustments and uncollectible amounts. These contractual adjustments vary by insurance company and self-pay patients. The Company computes these contractual adjustments and collection allowances based on its historical collection 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. Historically the Company receives 49.9% of collections from total gross billed. Accordingly, the Company recognized net healthcare service revenue as 49.9% of gross billed amounts. Historical collection rates are estimated using the most current prior 12-month historical payment and collection percentages.

The Company’s healthcare subsidiary has contractual medical receivable sales and purchase agreements with third party factors which result in approximately 51% to 56% reduction from the accounts receivables amounts when a receivable is sold to the factors. The Company evaluated the factored adjustments considering the actual factored amounts per patient quarterly, and the reductions from accounts receivable that are factored were recorded in finance charges as other expenses on the consolidated statement of operations.

The Company’s contracts for both its contract and service fees each contain a single performance obligation (providing orthopedic services), as the promise to transfer the individual services is not separately identifiable from other promises in the contracts and, therefore, not distinct, as a result, the entire transaction price is allocated to this single performance obligation.

Accordingly, the Company recognizes revenues (net) when the patient receives orthopedic care services. The Company’s patient service contracts generally have performance obligations which are satisfied at a point in time. 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 our patients are satisfied; generally, at the time of patient care.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

Financial Services Income

The Company generates revenue from providing tax resolution services to individuals and business owners that have federal and state tax liabilities by assisting its clients to settle outstanding tax debts. Additionally, services include back taxes, offer in compromise, audit representation, amending tax returns, tax preparation, wage garnishment relief, removal of bank levies and liens, and other financial challenges. The Company recognizes revenues for these services as services are performed.

Advertising Costs

Advertising costs are expensed as incurred. Advertising costs are included as a component of cost of sales in the condensed consolidated statements of operations and changes in stockholders’ equity. The Company recognized advertising and marketing expense of $133,326 and $82,269 for the three months ended June 30, 2023 and 2022, respectively. The Company recognized advertising and marketing expense of $171,679 and $210,054 for the six months ended June 30, 2023 and 2022, 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 condensed 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 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 condensed 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 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.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

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 general and administrative expense in the condensed consolidated statements of operations.

Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services

FASB ASU No 2018-07 prescribes equity instruments issued to parties other than employees.

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, 2023 and December 31, 2022, 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 condensed 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 has negative working capital and an accumulated deficit. These factors raise substantial doubts about the Company’s ability to continue as a going concern. As of June 30, 2023, the Company has an accumulated working capital deficit of approximately $1.9 million. The accompanying condensed 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.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

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 has 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, increases in expenses may require 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.

Recent Accounting Standards

Changes to accounting principles are established by the FASB in the form of Accounting Standards Update (“ASU”) to the FASB's Codification. The Company considers the applicability and impact of all ASU's on its financial position, results of operations, stockholders’ deficit, cash flows, or presentation thereof.

In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments, which supersedes current guidance by requiring recognition of credit losses when it is probable that a loss has been incurred. The new standard requires the establishment of an allowance for estimated credit losses on financial assets including trade and other receivables at each reporting date. The new standard will result in earlier recognition of allowances for losses on trade and other receivables and other contractual rights to receive cash. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments -- Credit Losses (Topic 326), Derivatives and hedging (Topic 815) and Leases (Topic 842), which extends the effective date of Topic 326 for certain companies until fiscal years beginning after December 15, 2022. The Company has adopted this standard effective January 1, 2023, and it resulted in the Company recognizing an allowance for doubtful accounts of $270,000 during the six months ended June 30, 2023.

Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying consolidated financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

2.	RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

Subsequent to the initial issuance of the Company's 2021 financial statements on June 30, 2022, management reconsidered the methodology previously applied in its valuation of goodwill and redeemable preferred stocks.

The Company agreed to issue 818,750 additional shares of series J Preferred Stock with an aggregate stated value equal to $3,275,000 if, as of May 31, 2022, Nova’s trailing twelve months minimum pre-tax net income exceeded $1,979,320 (the “Milestone”). The Company finalized its purchase price accounting and allocation in 2022 and recorded purchase consideration of $6,100,000 associated with the cash consideration, the fair value of the series J preferred stock and the fair value of the contingent consideration. The impact of the correction is reflected in $3,275,000 increase to goodwill and contingent consideration liability on the consolidated balance sheet.

In December 2022, the Company identified an error in its classification for its series N senior convertible preferred stock for the acquisition of NOVA as presented in its audited balance sheet as of December 31, 2021. Pursuant to ASC 250, “Accounting changes and error corrections” issued by FASB and SAB 99 “Materiality” issued by SEC, the Company determined the impact of the error was immaterial. The impact of the error correction is reflected in $3,125,002 increase to the mezzanine equity and offsetting decrease to the Series N Preferred Stock in subject to possible redemption mezzanine equity line item.

The Company and We3 managers entered into a resignation, release and buyback agreement and addendum, effective October 31, 2022. The Company presented in prior periods operating loss as loss from discontinued operations in the amount of $1,920 on the consolidated statement of operations for the six months ended June 30, 2022.

The Company identified that NOVA’s accounts receivable as presented in its balance sheet as of December 31, 2021, was understated due to an error in the collection utilized to estimate NOVA’s accounts receivable. The impact of this correction on the accounting estimates is reflected in $1,076,000 decrease to accounts receivable as of June 30, 2022 and $1,076,000 increase in finance charges for the six months ended June 30, 2022.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

The following table summarizes the impacts of the error corrections on the Company's financial statements for each of the periods presented below:

i. Balance sheet


	Impact of correction of error
June 30, 2022 (Unaudited)	As previously reported		Adjustments			As restated

Total assets	$	12,464,017	$	3,275,000		$	15,739,017

Total liabilities		10,331,410		3,275,000			13,606,410

Mezzanine equity		–		3,125,002			3,125,002

Total shareholders' equity	$	2,132,607	$	(3,125,002	)	$	(992,395	)

ii. Statement of operations

	Impact of correction of error
Three months ended June 30, 2022 (Unaudited)	As previously reported			Adjustments			As restated

Revenue	$	3,130,744		$	(39,512	)	$	3,091,232
Cost of sales		1,115,232			(18,614	)		1,096,618
Gross margin		2,015,512			(20,898	)		1,994,614
Operating expense		912,829			(40,833	)		871,996
Income from operations	$	1,102,683		$	19,935		$	1,122,618
Other income (expense), net		(1,147,509	)		–			(1,147,509	)
Net loss before discontinued operations		(44,826	)		19,935			(24,891	)
Loss from discontinued operations		(17,000	)		(19,935	)		(36,935	)
Net loss	$	(61,826	)	$	–		$	(61,826	)
Basic Loss per Share
Continued Operations		(0.00	)					(0.00	)
Discontinued Operations		(0.00	)					(0.00	)
Weighted Average Shares Outstanding - Basic Earnings Loss per Share
Continued Operations		166,130,069						166,130,069
Discontinued Operations		166,130,069						166,130,069

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

	Impact of correction of error
Six months ended June 30, 2022 (Unaudited)	As previously reported			Adjustments			As restated

Revenue	$	6,071,738		$	(83,356	)	$	5,988,382
Cost of sales		2,250,934			(38,088	)		2,212,846
Gross margin		3,820,804			(45,268	)		3,775,536
Operating expense		1,994,757			(42,714	)		1,952,043
Income from operations	$	1,826,047		$	(2,554	)	$	1,823,493
Other income (expense), net		(2,340,705	)		(1,071,526	)		(3,412,231	)
Net loss before discontinued operations		(514,658	)		(1,074,080	)		(1,588,738	)
Loss from discontinued operations		(33,622	)		(1,920	)		(35,542	)
Net loss	$	(548,280	)	$	(1,076,000	)	$	(1,624,280	)
Basic Loss per Share
Continued Operations		(0.00	)					(0.01	)
Discontinued Operations		(0.00	)					(0.01	)
Weighted Average Shares Outstanding - Basic Earnings Loss per Share
Continued Operations		166,130,069						166,130,069
Discontinued Operations		166,130,069						166,130,069

REVISION OF FINANCIAL STATEMENTS

During the preparation of the financial statements for the six months ended June 30, 2023, the Company found that the results of the settlement agreement with Red Rock Travel Group (“Red Rock”) were incorrectly reflected on the consolidated statement of stockholders’ equity(deficiency) as of December 31, 2022. The Company determined that these errors were immaterial to the previously issued consolidated financial statements, and as such no restatement was necessary. The revisions discussed below were made to the December 31, 2022 balance sheet and statement of stockholders’ equity (deficiency).

As a result of the settlement agreement with Red Rock on July 29, 2022, the Company reduced 35,000,000 shares of common shares on the consolidated financial statements as of December 31, 2022. The certificate of the common stock for 35,000,000 shares which were originally issued on February 24, 2020 was returned as part of the 2022 agreement with Red Rock and 3,500 common shares were cancelled which were equivalent to 35,000,000 shares before the 10,000:1 reverse split on May 12, 2020. Consequently, the December 31, 2022 financial statements as originally reported were understated by 34,996,500 common shares. The impact of the correction is reflected in the $35,097 increase to common stock and decrease the same amount to additional paid-in-capital on the consolidated statement of shareholders’ equity. The adjustment had no impact on earnings per share for any 2022 period.

On July 31, 2018, the Company issued 8,200,562 shares of series K preferred stock to the prior owners of Red Rock for the consideration of the acquisition of Red Rock. The acquisition was not completed, and Red Rock returned the 8,200,562 shares of series K preferred shares during the year ended December 31, 2018. A total of 8,200,562 shares of series K Preferred Share were cancelled The impact of the correction is reflected in the $8,201 decrease to series K Preferred Stock and increase the same amount to additional paid-in-capital on the consolidated statement of shareholders’ equity (deficiency).

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

ACCOUNTS PAYABLE AND ACCRUED EXPENSES


	June 30, 2023		December 31, 2022
Accounts payable	$	437,718	$	342,330
Accrued credit cards		15,358		45,722
Accrued expense – previously factored liability		1,291,691		776,414
Accrued income taxes, and other taxes		5,346		6,732
Accrued professional fees		694,140		573,040
Accrued advertising		69,656		69,656
Accrued payroll		8,423		14,292
Accrue expense - other		–		363
Accrued expense - dividend payable		–		210,046
Total	$	2,522,332	$	2,038,595

The Company is delinquent paying certain income and property taxes. As of June 30, 2023 and December 31, 2022, the balance for these taxes, penalties and interest is $5,346 and $6,732, respectively.

PLANT AND EQUIPMENT, NET

Property and equipment as of June 30, 2023 and December 31, 2022 is as follows:

Schedule of property and equipment
	June 30, 2023			December 31, 2022
Medical equipment	$	96,532		$	96,532
Computer Equipment		9,189			9,189
Furniture, fixtures and equipment		30,841			35,974
Leasehold Improvement		15,950			15,950
Total		152,512			157,645
Less: accumulated depreciation		(105,074	)		(102,206	)
Property and equipment, net	$	47,438		$	55,439

For the three and six months ended June 30, 2023, total depreciation expense was $3,365 and $8,000, respectively. For the three and six months ended June 30, 2022, total depreciation expense was $10,814 and $21,628, respectively. Depreciation expense recorded as cost of sales for the three and six months ended June 30, 2022 was $5,031 and $10,062, respectively.

LAND

As of June 30, 2023 and December 31, 2022, the Company had 27 acres of land valued at approximately $540,000. The land is currently vacant and is expected to be developed into a residential community.

LINE OF CREDIT

At June 30, 2023 and December 31, 2022, the Company had a revolving line of credit with a financial institution for $92,500 which was personally guaranteed by the manager of Platinum Tax. The loan accrues interest at 11.70% at June 30, 2023 and 10.95% at December 31, 2022. As of June 30, 2023 and December 31, 2022, the Company had $8,749 and $0, respectively, of outstanding balance against the line of credit.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

RELATED PARTY TRANSACTIONS

From time to time, the previous owner who is currently the manager of Platinum Tax loaned funds to Platinum Tax to cover short term operating needs. Amounts owed as of June 30, 2023 and December 31, 2022 were $156,384 and $37,024, respectively.

In connection with the acquisition of Edge View on July 16, 2014, the Company assumed amounts due to previous owners who are current managers Edge View. These amounts are due on demand and do not bear interest. The balance of these amounts are $4,979 as of June 30, 2023 and December 31, 2022.

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, 2023 and December 31, 2022, the Company owed the Chairman $123,192 and $123,192, respectively.

See also Note 14 for compensation paid to employees of the Company.

NOTES AND LOANS PAYABLE

Notes payable at June 30, 2023 and December 31, 2022, respectively, are summarized as follows:

Schedule of notes payable
	June 30, 2023			December 31, 2022
Notes and loans payable	$	169,318		$	155,598
Less current portion		(24,724	)		(15,809	)
Long-term portion	$	144,594		$	139,789

Long-term debt matures as follows:


	Amount
2024	$	24,724
2025		4,986
2026		4,986
2027		4,986
2028		4,986
Thereafter		124,650
Total	$	169,318

Loans and Notes Payable – Unrelated Party

On March 12, 2009, the Company issued a debenture in the principal amount of $20,000. The debenture bears interest at 12% per annum and matured on September 12, 2009. The balance of the debenture was $10,989 at June 30, 2023 and December 31, 2022 and the accrued interest was $6,882 and $6,229 at June 30, 2023 and December 31, 2022, 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 Company reclassified $5,723 of accrued interest to the principal amounts for the six months ended June 30, 2023. The principal balance and accrued interest at June 30, 2023 was $149,580 and $0, respectively, and principal and accrued interest at December 31, 2022 was $144,609 and $5,723, respectively.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

10.

CONVERTIBLE NOTES PAYABLE

As of June 30, 2023 and December 31, 2022, the Company had convertible debt outstanding net of amortized debt discount of $3,868,068 and $3,515,752, respectively. During the six months ended June 30, 2023, the Company received net proceeds of $355,500 from convertible notes. During the six months ended June 30, 2022, the Company had proceeds of $752,260 from convertible notes and repaid $5,908 to convertible noteholders. There are debt discounts associated with the convertible debt of $100,347 and $46,798 at June 30, 2023 and December 31, 2022, respectively. For the six months ending June 30, 2023 and 2022, the Company recorded amortization of debt discounts of $ 48,616 and $156,252, respectively. For the three months ending June 30, 2023 and 2022, the Company recorded amortization of debt discounts of $30,633 and $111,706, respectively. 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 118,682,378 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. The Company had no convertible debt conversions during the six months ended June 30, 2022.

On September 22, 2022, the Company entered into a security exchange and purchase agreement with its largest lender to consolidate all promissory notes held by it and related accrued interest in exchange for (1) one consolidated senior secured convertible promissory note in the amount of $2,600,000 and (2) 375,000 shares of series X senior convertible preferred stock totaling $1,500,000 with a par value of $0.001, stated value of $4.00, convertible into common shares at a 1:1 conversion rate, non-dilutive and non-voting shares. Prior to conversion, all promissory notes with this lender totaled to $4,791,099 consisting of principal of $3,840,448 and accrued interest of $950,651 resulting in a gain on debt consolidation of $1,397,271.

Convertible notes as of June 30, 2023 and December 31, 2022 are summarized as follows:

Schedule of convertible notes summary
	June 30, 2023			December 31, 2022
Convertible notes payable	$	3,968,415		$	3,562,550
Discounts on convertible notes payable		(100,347	)		(46,798	)
Total convertible debt less debt discount		3,868,068			3,515,752
Current portion		3,868,068			3,515,752
Long-term portion	$	–		$	–

The following is a schedule of convertible notes payable as of and for the six months ended June 30, 2023.


Note #	Issuance	Maturity	Principal Balance 12/31/22		New Loan		Principal Conversions			Shares Issued Upon Conversion		Principal Balance 6/30/23		Accrued Interest on Convertible Debt at 12/31/22		Interest Expense On Convertible Debt For the Period Ended 6/30/23		Accrued Interest on Convertible Debt at 6/30/23		Unamortized Debt Discount At 6/30/23
7-1	10/28/2016	10/28/2017		10,000	$	–	$	(10,000	)		23,405,455	$	–	$	2,263	$	–	$	–	$	–
9	9/12/2016	9/12/2017		50,080		–		–			–		50,080		14,157		4,967		19,124		–
10	1/24/2017	1/24/2018		55,000		–		–			–		55,000		69,876		5,455		75,331		–
10-1	2/10/2023	2/10/2024		–		50,000		–			–		50,000		–		2,877		2,877		–
10-2	3/30/2023	3/30/2024		–		25,000		–			–		25,000		–		945		945		–
29-2	11/8/2019	11/8/2020		36,604		–		–			–		36,604		20,160		4,356		24,516		–
31	8/28/2019	8/28/2020		–		–		–			–		–		8,385		–		8,385		–
37-1	9/3/2020	6/30/2021		113,667		–		–			–		113,667		28,756		10,146		48,902		–
37-2	11/2/2020	8/31/2021		113,167		–		–			–		113,167		27,510		10,101		47,611		–
37-3	12/29/2020	9/30/2021		113,166		–		–			–		113,166		26,474		10,101		46,575		–
38	2/9/2021	2/9/2022		96,000		–		(48,800	)		85,276,923		47,200		27,939		5,910		33,849		–
39	4/26/2021	4/26/2022		168,866		–		–			–		168,866		39,684		18,423		58,106		–
40-1	9/22/2022	9/22/23		2,600,000		–		–			10,000,000		2,600,000		71,233		128,932		196,164		–
40-2	11/4/2022	11/4/2023		68,666		–		–			–		68,666		1,072		3,405		4,477		5,973
40-3	11/28/2022	11/28/2023		68,667		–		–			–		68,667		620		3,405		4,025		7,102
40-4	12/21/2022	12/21/2023		68,667		–		–			–		68,667		187		3,405		3,592		8,184
40-5	1/24/2023	1/24/2024		–		90,166		–			–		90,166		–		3,878		3,878		13,486
40-6	3/21/2023	3/21/2024		–		139,166		–			–		139,166		–		3,851		3,851		26,520
40-7	6/5/2023	6/5/2024		–		139,166		–			–		139,166		–		953		953		34,155
40-8	6/13/2023	6/13/2024		–		21,167		–			–		21,167		–		99		99		4,927
			$	3,562,550	$	464,665	$	(58,800	)		118,682,378	$	3,968,415	$	338,316	$	221,209	$	583,260	$	100,347

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

Note 7-1

On October 28, 2016, the Company issued a convertible promissory note in the principal amount of $50,000, which matured on October 28, 2017. Note 7-1 is currently in default and accrues interest at a default interest rate of 20% per annum.

Note 9

On September 12, 2016, the Company issued a convertible promissory note in the principal amount of $80,000 for services rendered, which matured on September 12, 2017. Note 9 is currently in default and accrues interest at a default interest rate of 20% per annum.

Notes 10, 10-1 and 10-2

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). Notes 10-1 and 10-2 accrue interest at a rate of 15% per annum.

Notes 29, 29-1 and 29-2

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. Note 29-2 is currently in default and accrues interest at a default interest rate of 24% per annum.

Note 31

On August 28, 2019, the Company issued a convertible promissory note in the principal amount of $120,000, which matured on August 28, 2020. Note 31 is currently in default and accrues interest at a default interest rate of 24% per annum.

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

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). Notes 37-1, 37-2 and 27-3 are currently in default and accrue interest at a default interest rate of 18% per annum.

Note 38

On February 9, 2021, the Company issued a convertible promissory note in the principal amount $103,500, which matured on February 9, 2022. Note 38 is currently in default and accrues interest at a default interest rate of 22% per annum.

Note 39

On April 26, 2021, the Company issued a convertible promissory note in the principal amount $153,500, which matured on May 10, 2022. Note 39 is currently in default and accrues interest at a default interest rate of 22% per annum.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

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

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 November 28, 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 a eighth tranche under this note in the principal amount of $21,167, less original issue discount and fee of $5,167 (Note 40-8). 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.

11.

CAPITAL STOCK

Preferred Stock

The Company has designated multiple series of preferred stock, including 4 shares of series A preferred stock, 3,000,000 shares of series B preferred stock, 500 shares of series C preferred stock, 800,000 shares of series D preferred stock, 1,000,000 shares of series E preferred stock, 800,000 shares of series F preferred stock, 800,000 shares of series F-1 preferred stock, 500,000,000 shares of series I preferred stock, 10,000,000 shares of series J preferred stock, 10,937,500 shares of series K preferred stock, 100,000,000 shares of series L preferred stock, 3,000,000 shares of series N senior convertible preferred stock, 5,000 shares of series R preferred stock and 5,000,000 shares of series X 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 recognized the series N senior convertible preferred stock and series X senior convertible preferred stock as mezzanine equity since the redeemable preferred stock may be redeemed at the option of the holder, but is not mandatorily redeemable.

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 shall increase by 8% 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 in cash or common stock at the Company’s discretion. Dividends payable in common stock shall 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, 2023, cumulative dividends on Series N Preferred Stock were $557,535.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

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) 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 N senior convertible preferred stock shall be 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, shall be 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 shall not apply to any financing transaction the use of proceeds of which will 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 shares of series N 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 of $0.012 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 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. 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 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.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

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 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. At June 30, 2023, cumulative dividends on Series X Preferred Stock were $115,068.

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) 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 N senior convertible preferred stock shall be 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, shall be 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 shall not apply to any financing transaction the use of proceeds of which will 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 shares of series X 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 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.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

Non-redeemable Preferred Stock

Series A Preferred Stock

Each share of series A preferred stock is entitled to a number of votes and converts to a number of shares equal to the sum of all shares of common stock and series B preferred stock issued and outstanding, divided by the number shares of series A preferred stock held. Holders of series A preferred stock do not have any dividend, liquidation or redemption rights.

Series B Preferred Stock

Each share of series B preferred stock is entitled to one (1) vote on all matters submitted to a vote of stockholders. Each share of series B preferred stock is convertible into two (2) shares of common stock (subject to adjustment for forward stock splits but not reverse stock splits). Holders of series B preferred stock do not have any dividend, liquidation or redemption rights.

Series C Preferred Stock

Each share of series C preferred stock is entitled to one (1) vote on all matters submitted to a vote of stockholders. Each share of series C preferred stock is convertible into 100,000 shares of common stock (subject to adjustment for forward stock splits but not reverse stock splits). If the Company lists on an exchange, it has the right to repurchase these shares at a purchase price of $50,000 per share. Holders of series C preferred stock do not have any dividend, liquidation or redemption rights.

Series D Preferred Stock

Each share of series D preferred stock is entitled to one (1) vote on all matters submitted to a vote of stockholders. Each share of series D preferred stock is convertible into two (2) shares of common stock. Holders of series D preferred stock do not have any dividend, liquidation or redemption rights.

Series E Preferred Stock

Each share of series E preferred stock is entitled to one (1) vote on all matters submitted to a vote of stockholders. Each share of series E preferred stock is convertible into two (2) shares of common stock. Holders of series E preferred stock do not have any dividend, liquidation or redemption rights.

Series F Preferred Stock

Each share of series F preferred stock is entitled to one (1) vote on all matters submitted to a vote of stockholders. Each share of series F preferred stock is convertible into two (2) shares of common stock. Holders of series F preferred stock do not have any dividend, liquidation or redemption rights.

Series F-1 Preferred Stock

Each share of series F-1 preferred stock is convertible into two (2) shares of common stock. Holders of series F-1 preferred stock do not have any voting, dividend, liquidation or redemption rights.

Series I Preferred Stock

Each share of series I preferred stock is entitled to five (5) votes on all matters submitted to a vote of stockholders. Each share of series I preferred stock is convertible into two (2) shares of common stock. Holders of series I preferred stock do not have any dividend, liquidation or redemption rights.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

Series J Preferred Stock

Each share of series J preferred stock is entitled to one (1) vote on all matters submitted to a vote of stockholders. Each share of series J preferred stock is convertible into two (2) shares of common stock. Holders of series J preferred stock do not have any dividend, liquidation or redemption rights.

Series L Preferred Stock

Each share of series L preferred stock is entitled to one (1) vote on all matters submitted to a vote of stockholders. Each share of series L preferred stock is convertible into two (2) shares of common stock. Holders of series L preferred stock do not have any dividend, liquidation or redemption rights.

Series R Preferred Stock

Each share of series R preferred stock is entitled to one (1) vote on all matters submitted to a vote of stockholders. Each share of series B preferred stock is convertible into one (1) shares of common stock (subject to adjustment for forward stock splits but not reverse stock splits). Holders of series R preferred stock do not have any dividend, liquidation or redemption rights.

Preferred Stock Transactions

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

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.

During the six months ended June 30, 2022, the Company executed the following transactions:

In the second quarter of 2022, 37,500 shares of series D preferred stock were cancelled and exchanged for 37,500 shares of series B preferred stock and 37,500 shares of series H preferred stock were cancelled and exchanged for 37,500 shares of series B preferred stock.

Common Stock

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

The Company issued 118,682,378 shares of common stock upon conversion of certain convertible notes.

12.

WARRANTS

The table below sets forth warrant activity for the six months ended June 30, 2023 and 2022:

Schedule of warrant activity
	Number of Warrants			Weighted Average Exercise Price
Balance at January 1, 2023		235,557,856		$	0.015
Granted		–			–
Exercised		–			–
Forfeited		(25,000	)		–
Balance at June 30, 2023		235,532,856			0.015
Warrants Exercisable at June 30, 2023		235,532,856		$	0.015

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

As a result of the settlement agreement with Red Rock on July 29, 2022, the Company required the previous owners to relinquish warrants for 25,000 shares of common stock. The certificate of the 25,000 warrants were returned and cancelled during the second quarter of 2023. There was no impact on the consolidated financial statements as of December 31, 2022.

13.

DISCONTINUED OPERATIONS

The Company and the managers of AHI entered into a resignation, release and buyback agreement and addendum, effective October 31, 2022, pursuant to which the managers purchased AHI in exchange for returning 175,045 shares of series F preferred stock. There was a loss on disposal in the amount of $217,769 on October 31, 2022, which represented net assets and liabilities at the time of sale back.

The Company had no net liabilities of discontinued operations at June 30, 2023 and December 31, 2022. The Company had $0 and $36,935 of loss from discontinued operations for the three months ended June 30, 2023 and 2022, respectively. The Company had $0 and $35,542 of loss from discontinued operations for the six months ended June 30, 2023 and 2022, respectively.

Schedule of discontinued operations
	Three Months Ended June 30,
	2023		2022

Gain (Loss) from discontinued operations
Revenue of AHI subsidiary	$	–	$	39,512
Cost of sales of AHI subsidiary		–		(18,614	)
Selling, general and administrative expenses of AHI subsidiary		–		(40,833	)
Interest expense of Red Rock Investor Note		–		(17,000	)
Loss from discontinued operations	$	–	$	(36,935	)


	Six Months Ended June 30,
	2023		2022

Gain (Loss) from discontinued operations
Revenue AHI subsidiary	$	–	$	83,356
Cost of sales AHI subsidiary		–		(38,088	)
Selling, general and administrative expenses AHI subsidiary		–		(42,714	)
Interest expense of Red Rock Investor Note		–		(33,622	)
Gain no change in estimate of AHI subsidiary		–		(4,474	)
Loss from discontinued operations	$	–	$	(35,542	)

14.

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS, NET

The following table shows the Company’s goodwill balances by reportable segment. 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, 2023 and 2022, the Company had no goodwill impairment.

The following table shows goodwill balances by reportable segment:

Schedule of goodwill balances
	Healthcare		Total
Carrying value at December 31, 2022	$	5,666,608	$	5,666,608
Accumulated impairment		–		–
Carrying value at June 30, 2023	$	5,666,608	$	5,666,608

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

15.

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 recorded operating lease expense of $56,378 and $34,305 for the three months ended June 30, 2023 and 2022, respectively and the Company recorded operating lease expense of $134,230 and $170,150 for the six months ended June 30, 2023 and 2022, respectively.

The Company has operating leases with future commitments as follows:

Schedule of property leases
June 30,	Amount
2024	$	126,752
2025		32,205
Total	$	158,957

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 currently 50% is paid in cash and 50% is accrued. The total outstanding accrued compensation as of June 30, 2023 and December 31, 2022 were $2,025,500 and $1,870,500, 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 currently 50% is paid in cash and 50% is accrued. The total outstanding accrued compensation as of June 30, 2023 and December 31, 2022 were $2,042,000 and $1,863,000, respectively.

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, 2023 and December 31, 2022 was $17,057.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

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
2022	$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

16.

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.

17.

SEGMENT REPORTING

The Company has three 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)

Tax Resolution Services (Platinum Tax)

(2)

Real Estate (Edge View)

(3)

Healthcare (Nova)

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 Affordable Housing segment leases and sells mobile homes as an option for a homeowner wishing to avoid large down payments, expensive maintenance costs, large monthly mortgage payments and high property taxes and insurance which is a common trait of brick-and-mortar homes. Additionally, if bad credit is an issue preventing potential homeowners from purchasing a traditional house, the Company will provide a "lease to own" option so people secure their family home.

The Tax Resolution Services segment provides tax resolution services to individuals and companies that have federal and state tax liabilities. The Company collects fees based on efforts to negotiate and assist in the settlement of outstanding tax debts.

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.

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.

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

Schedule of segment reporting
	June 30, 2023		December 31, 2022
Assets:
Financial Services	$	2,820	$	8,577
Healthcare		15,455,454		12,692,531
Real Estate		589,331		592,557
Others		5,914		59,692
Consolidated assets	$	16,053,519	$	13,353,357

	Three Months Ended June 30,
	2023			2022
Revenues:
Financial Services	$	118,304		$	472,014
Healthcare		3,364,506			2,619,218
Consolidated revenues	$	3,482,810		$	3,091,232

Cost of Sales:
Financial Services	$	21,297		$	112,776
Healthcare		1,081,689			983,842
Consolidated cost of sales	$	1,102,986		$	1,096,618

Income (Loss) from operations from subsidiaries
Financial Services	$	(43,269	)	$	11,361
Healthcare		2,106,551			1,481,055
Real Estate		(1,743	)		(1,688	)
Income from operations from subsidiaries	$	2,061,539		$	1,490,728

Loss from operations from Cardiff Lexington	$	(355,369	)	$	(388,717	)
Total income from operations	$	1,706,170		$	1,102,011

Income (Loss) before taxes
Financial Services	$	(43,810	)	$	(45,540	)
Healthcare		1,378,445			51,136
Real Estate		(1,743	)		(2,416	)
Corporate, administration and other non-operating expenses		(516,814	)		(65,006	)
Consolidated income (loss) before taxes	$	816,078		$	(61,826	)

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

	Six Months Ended June 30,
	2023			2022
Revenues:
Financial Services	$	272,703		$	936,857
Healthcare		6,070,905			5,051,525
Consolidated revenues	$	6,343,608		$	5,988,382

Cost of Sales:
Financial Services	$	48,126		$	325,222
Healthcare		2,037,983			1,887,624
Consolidated cost of sales	$	2,086,109		$	2,212,846

Income (Loss) from operations from subsidiaries
Financial Services	$	(87,256	)	$	(90,120	)
Healthcare		3,384,790			2,784,403
Real Estate		(1,840	)		(2,513	)
Income from operations from subsidiaries	$	3,295,694		$	2,691,770

Loss from operations from Cardiff Lexington	$	(875,962	)	$	(868,276	)
Total income from operations	$	2,419,732		$	1,823,494

Income (Loss) before taxes
Financial Services	$	(89,300	)	$	(91,030	)
Healthcare		2,195,542			868,234
Real Estate		(1,840	)		(2,513	)
Corporate, administration and other non-operating expenses		(1,304,315	)		(2,398,971	)
Consolidated income (loss) before taxes	$	800,087		$	(1,624,280	)

18.

SUBSEQUENT EVENTS

The Company has evaluated its operations subsequent to June 30, 2023 to the date these condensed consolidated financial statements were issued and determined there was subsequent events or transactions the required recognition or disclosure in these consolidated financial statements.

On July 19, 2023, the Company executed a ninth tranche under Note 40 in the principal amount of $35,500, less an original issue discount and fee of $8,875 (See Note 10).

On July 24, 2023, the Company issued 5,000 shares of series E preferred stock as compensation for the property manager of Edge View in exchange for the bonus of $5,000.

On July 24, 2023, the Company executed a tenth tranche under Note 40 in the principal amount of $14,000, less an original issue discount and fee of $3,500 (See Note 10).

In July, the Company issued 156,000,000 shares of common stock upon conversion of certain convertible notes’ principal and accrued interests in the amount of $30,637 and $6,200, respectively.

On August 11, 2023, the Company executed a third tranche under Note 10 in the principal amount of $25,000 (See Note 10).

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(UNAUDITED)

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 operation expenses. The rate of interest is 10% per annum.

On September 29, 2023, the Company and its healthcare subsidiary entered into a two-year revolving purchase and security agreement with DML HC Series, LLC to sell the healthcare subsidiary’s accounts receivables for a revolving financing up to a maximum advance amount of $4.5 million. The Company received the first net cash advance in the amount of $861,071 on October 9, 2023 for the sale of accounts receivable and future claims in the amount of $1,428,571.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following management’s discussion and analysis of financial condition and results of operations provides information that management believes is relevant to an assessment and understanding of our plans and financial condition. The following financial information is derived from our financial statements and should be read in conjunction with such financial statements and notes thereto set forth elsewhere herein.

Use of Terms

Except as otherwise indicated by the context and for the purposes of this report only, references in this report to “we,” “us,” “our” and “our company” are to Cardiff Lexington Corporation, a Nevada corporation, and its consolidated subsidiaries.

Special Note Regarding Forward-Looking Statements

This report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are based on our management’s beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts are forward-looking statements. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

	·	our ability to successfully identify and acquire additional businesses;
	·	our ability to effectively integrate and operate the businesses that we acquire;
	·	our expectations around the performance of our current businesses;
	·	our ability to maintain our business model and improve our capital efficiency;
	·	our ability to effectively manage the growth of our business;
	·	our lack of operating history and ability to attain profitability;
	·	the competitive environment in which our businesses operate;
	·	trends in the industries in which our businesses operate;
	·	the regulatory environment in which our businesses operate under;
	·	changes in general economic or business conditions or economic or demographic trends in the United States, including changes in interest rates and inflation;
	·	our ability to service and comply with the terms of indebtedness;
	·	our ability to retain or replace qualified employees of our businesses;
	·	labor disputes, strikes or other employee disputes or grievances;
	·	casualties, condemnation or catastrophic failures with respect to any of our business’ facilities;
	·	costs and effects of legal and administrative proceedings, settlements, investigations and claims; and
	·	extraordinary or force majeure events affecting the business or operations of our businesses.

In some cases, you can identify forward-looking statements by terms such as “may,” “could,” “will,” “should,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Item 1A “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2022. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

The forward-looking statements made in this report relate only to events or information as of the date on which the statements are made in this report. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

Overview

We are 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 our stockholders. Specifically, we have and will continue to look at a diverse variety of acquisitions in the healthcare sector in terms of growth stages and capital structures and we intend to focus our portfolio of subsidiaries approximately as follows: 80% will be targeted to established profitable niche small to mid-sized healthcare companies and 20% will be targeted to second stage startups in healthcare and related financial services (emerging businesses with a strong organic growth plan that is materially cash generative).

All of our operations are conducted through, and our income derived from, our various subsidiaries. We operate the following businesses through our wholly owned subsidiaries.

Healthcare Business. Nova Ortho and Spine, PLLC, or Nova, which we acquired May 31, 2021, operates a group of regional primary specialty and ancillary care facilities throughout Florida that provide traumatic injury victims with primary care evaluations, interventional pain management, and specialty consultation services. We focus on plaintiff related care are and a highly efficient provider of emergency medical condition, or EMC, assessments. We provide 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. From sports injuries, to sprains, strains, and fractures, our doctors are dedicated to helping patients return to active lifestyles.

Financial Services (Tax Resolution) Business. Platinum Tax Defenders, or Platinum Tax, which we acquired on July 31, 2018, is a full-service tax resolution firm located in Los Angeles, California. Since 2011, we have been assisting all types of taxpayers resolve any and all issues with the IRS and applicable state tax agencies. We provide fee-based tax resolution services to individuals and companies that have federal and state tax liabilities by assisting clients to settle outstanding tax debts.

Real Estate Business. Edge View Properties, Inc., or Edge View, which we acquired on July 16, 2014, is 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. Salmon is known as Idaho’s premier whitewater destination as well as one of the easier accesses to the Frank Church Wilderness Area - the largest wilderness in the lower 48 states. Salmon’s airport has service to Boise, Idaho and serves as a hub to access whitewater rafting start points and wilderness landing strips. Management has invested years working to develop a new and exciting housing development in Salmon, Idaho and plans to enter into a joint venture agreement with a developer for this planned concept development.

We previously owned We Three, LLC dba Affordable Housing Initiative, or AHI, which was acquired on May 15, 2014 and sold on October 31, 2022. AHI leased and sold mobile homes and also provided a “lease to own” option.

Segments

During the three months ended June 30, 2023 and 2022, we had three 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)

Financial Services (Platinum Tax)

(2)

Healthcare (Nova)

(3)

Real Estate (Edge View)

The financial services segment provides tax resolution services to individuals and companies that have federal and state tax liabilities. It collects fees based on efforts to negotiate and assist in the settlement of outstanding tax debts.

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.

Discontinued Operations

We and the managers of AHI entered into a resignation, release and buyback agreement and addendum, effective October 31, 2022, pursuant to which the managers purchased AHI in exchange for returning 175,045 shares of series F preferred stock. There was a loss on disposal in the amount of $217,769 on October 31, 2022, which represented net assets and liabilities at the time of sale back.

We had no net liabilities of discontinued operations at June 30, 2023 and December 31, 2022. We had $0 and $35,542 of loss from discontinued operations for the six months ended June 30, 2023 and 2022, respectively.

Results of Operations

Comparison of Three Months Ended June 30, 2023 and 2022

The following table sets forth key components of our results of operations during the three months ended June 30, 2023 and 2022, both in dollars and as a percentage of our revenue.

	June 30, 2023					June 30, 2022
	Amount			% of Revenue		Amount			% of Revenue
Revenue
Financial services	$	118,304			3.40%	$	472,014			15.27%
Healthcare		3,364,506			96.60%		2,619,218			84.73%
Total revenue		3,482,810			100.00%		3,091,232			100.00%
Cost of sales
Financial services		21,297			0.61%		112,776			3.65%
Healthcare		1,081,689			31.06%		983,842			31.83%
Total cost of sales		1,102,986			31.67%		1,096,618			35.48%
Gross profit		2,379,824			68.33%		1,994,614			64.52%
Operating expenses
Depreciation expense		3,365			0.10%		5,783			0.19%
Selling, general and administrative		670,289			19.25%		866,213			28.02%
Total operating expenses		673,654			19.34%		871,996			28.21%
Income from operations		1,706,170			48.99%		1,122,618			36.32%
Other income (expense)
Other income		–			–		8			0.00%
Interest expense and finance charge		(844,459	)		(24.25)%		(1,035,811	)		(33.51)%
Penalties and fees		(15,000	)		(0.43)%		–			–
Amortization of debt discounts		(30,633	)		(0.88)%		(111,706	)		(3.61)%
Total other income (expense)		(890,092	)		(25.56)%		(1,147,509	)		(37.12)%
Net income (loss) before discontinued operations		816,078			24.43%		(24,891	)		(0.81)%
Loss from discontinued operations		–			–		(36,935	)		(1.19)%
Net income (loss)	$	816,078			24.43%	$	(61,826	)		(2.00)%

Revenue. Our total revenue increased by $391,578, or 12.67%, to $3,482,810 for the three months ended June 30, 2023 from $3,091,232 for the three months ended June 30, 2022. Such increase was primarily due to increases in revenue from the healthcare segment.

The financial services segment generates revenue through the provision of tax resolution services to individuals and business owners. Revenue from the financial services segment decreased by $353,710, or 74.94%, to $118,304 for the three months ended June 30, 2023 from $472,014 for the three months June 30, 2022. Such decrease was primarily due to the loss of sales leads from the discontinued service with Optima Tax Relief, which affected the significant revenue reduction in the tax resolution business.

The healthcare segment generates revenue through a full range of diagnostic and surgical services. Revenue from the healthcare services segment increased by $745,288, or 28.45%, to $3,364,506 for the three months ended June 30, 2023 from $2,619,218 for the three months June 30, 2022. Such increase was primarily due to increased patients and Personal Injury Protection (PIP) services.

Cost of sales. Our total cost of sales increased by $6,368 or 0.58%, to $2,379,824 for the three months ended June 30, 2023 from $1,994,614 for the three months June 30, 2022. Such increase was primarily due a decrease from the financial service segment, offset by an increase from the healthcare segment. As a percentage of revenue, our total cost of sales was 31.67% and 35.48% for the three months ended June 30, 2023 and 2022, respectively.

Cost of sales for the financial services segment consists of advertising, contract labor and merchant fees. Cost of sales for the financial services segment decreased by $91,479, or 81.12%, to $21,297 for the three months ended June 30, 2023 from $112,776 for the three months June 30, 2022. As a percentage of financial services revenue, cost of sales was 0.61% and 3.65% for the three months ended June 30, 2023 and 2022, respectively.

Cost of sales for the healthcare segment consists of surgical center fees, physician and professional fees, salaries and wages and medical supplies. Cost of sales from the healthcare services segment increased by $97,847, or 9.95%, to $1,081,689 for the three months ended June 30, 2023 from $983,842 for the three months June 30, 2022. As a percentage of healthcare revenue, cost of sales was 31.06% and 31.83% for the three months ended June 30, 2023 and 2022, respectively. This increase was due to increased surgical center fees and professional fees.

Gross profit. As a result of the foregoing, our total gross profit increased by $385,210, or 19.31%, to $2,379,824 for the three months ended June 30, 2023 from $31,994,614 for three months ended June 30, 2022. Our total gross margin (percent of revenue) was 68.33% and 64.52% for three months ended June 30, 2023 and 2022, respectively.

Gross profit for the financial services segment decreased by $262,231, or 73.00%, to $97,007 for the three months ended June 30, 2023 from $359,238 for the three months June 30, 2022. Gross margin (percent of revenue) for the financial services segment was 82.00% and 76.11% for the three months ended June 30, 2023 and 2022, respectively.

Gross profit for the healthcare services segment increased by $647,441, or 39.59%, to $2,282,817 for the three months ended June 30, 2023 from $1,635,376 for the three months ended June 30, 2022. Gross margin (percent of revenue) for the healthcare segment was 67.85% and 62.44% for the three months ended June 30, 2023 and 2022, respectively. The increased gross margin was due to the increased number of patients and provided medical services without increased overhead. The healthcare segment still had available capacity to cover the increased patients and services.

Depreciation expense. Our depreciation expense was $3,365, or 0.10% of revenue, for the three months June 30, 2023, as compared to $5,783, or 0.19% of revenue, for the three months June 30, 2022.

Selling, general and administrative expenses. Our selling, general and administrative expenses consist primarily of accounting, auditing, legal and public reporting expenses, personnel expenses, including employee salaries and bonuses plus related payroll taxes, advertising expenses, professional advisor fees, bad debts, rent expense, insurance and other expenses incurred in connection with general operations. Our selling, general and administrative expenses decreased by $195,924, or 22.62%, to $670,289 for the three months ended June 30, 2023 from $866,213 for the three months ended June 30, 2022. As a percentage of revenue, our selling, general and administrative expenses were 19.25% and 28.02% for the three months ended June 30, 2023 and 2022, respectively. Such decrease was primarily due to terminated employees in the financial services segment due to the decreased revenue and the bad debt expense for allowances for doubtful accounts relating to our healthcare services business.

Total other income (expense). We had $890,092 in total other expense, net, for the three months ended June 30, 2023, as compared to other expense, net, of $1,147,509 for the three months ended June 30, 2022. Other expenses, net, for the three months ended June 30, 2023 consisted of interest expense and finance charges of $844,459, amortization of debt discounts of $30,633, and financing penalties and fees of $15,000. Other expense, net, for the three months ended June 30, 2022 consisted of interest expense and finance charges of $1,035,811, and amortization of debt discounts of $111,706, offset by other income of $8.

Discontinued operations. For the three months ended June 30, 2023 and 2022, we recorded a loss from discontinued operations of $0 and $36,935, respectively.

Net income (loss). As a result of the cumulative effect of the factors described above, our net income was $816,078 for the three months ended June 30, 2023, as compared to net loss of $61,826 for the three months ended June 30, 2022, an increase of $754,252, or 1219.96%.

Comparison of Six Months Ended June 30, 2023 and 2022

The following table sets forth key components of our results of operations during the six months ended June 30, 2023 and 2022, both in dollars and as a percentage of our revenue.

	June 30, 2023					June 30, 2022
	Amount			% of Revenue		Amount			% of Revenue
Revenue
Financial services	$	272,703			4.30%	$	936,857			15.64%
Healthcare		6,070,905			95.70%		5,051,525			84.36%
Total revenue		6,343,608			100.00%		5,988,382			100.00%
Cost of sales
Financial services		48,126			0.76%		325,222			5.43%
Healthcare		2,037,983			32.13%		1,887,624			31.52%
Total cost of sales		2,086,109			32.89%		2,212,846			36.95%
Gross profit		4,257,499			67.11%		3,775,536			63.05%
Operating expenses
Depreciation expense		8,000			0.13%		11,566			0.19%
Selling, general and administrative		1,829,768			28.84%		1,940,477			32.40%
Total operating expenses		1,837,768			28.97%		1,952,043			32.60%
Income from operations		2,419,731			38.14%		1,823,493			30.45%
Other income (expense)
Other income		205			0.00%		8			0.00%
Gain on forgiveness of debt		390			0.00%		–			–
Interest expense & finance charge		(1,539,623	)		(24.27)%		(3,255,987	)		(54.37)%
Conversion cost penalty and reimbursement		(2,000	)		(0.00)%		–			–
Penalties and fees		(30,000	)		(0.47)%		–			–
Amortization of debt discounts		(48,616	)		(0.77)%		(156,252	)		(2.61)%
Total other income (expense)		(1,619,644	)		(25.53)%		(3,412,231	)		(56.98)%
Net income (loss) before discontinued operations		800,087			12.61%		(1,588,738	)		(26.53)%
Income (loss) from discontinued operations		–			0.00%		(35,542	)		(0.59)%
Net loss	$	800,087			12.61%	$	(1,624,280	)		(27.12)%

Revenue. Our total revenue increased by $355,226, or 5.93%, to $6,343,608 for the six months ended June 30, 2023 from $5,988,382 for the six months ended June 30, 2022. Such increase was primarily due to increases in revenue from the healthcare segment.

Revenue from the financial services segment decreased by $664,154, or 70.89%, to $272,703 for the six months ended June 30, 2023 from $936,857 for the six months ended June 30, 2022. Such decrease was primarily due to the loss of sales leads from the discontinued service with Optima Tax Relief, which affected the significant revenue reduction in the tax resolution business.

Revenue from the healthcare services segment increased by $1,019,380, or 20.18%, to $6,070,905 for the six months ended June 30, 2023 from $5,051,525 for the six months ended June 30, 2022. Such increase was primarily due to increased Personal Injury Protection (PIP) services.

Cost of sales. Our total cost of sales decreased by $126,737 or 5.73%, to $2,086,109 for the six months ended June 30, 2023 from $2,212,846 for the six months ended June 30, 2022. Such decrease was primarily due a decrease from the financial service segment, offset by an increase from the healthcare segment. As a percentage of revenue, our total cost of sales was 32.89% and 36.95% for the six months ended June 30, 2023 and 2022, respectively.

Cost of sales for the financial services segment decreased by $277,096, or 85.20%, to $48,126 for the six months ended June 30, 2023 from $325,222 for the six months ended June 30, 2022. As a percentage of financial services revenue, cost of sales was 0.76% and 5.43% for the six months ended June 30, 2023 and 2022, respectively.

Cost of sales from the healthcare services segment increased by $150,359, or 7.97%, to $2,037,983 for the six months ended June 30, 2023 from $1,887,624 for the six months ended June 30, 2022. As a percentage of healthcare revenue, cost of sales was 32.13% and 31.52% for the six months ended June 30, 2023 and 2022, respectively. This increase was generally in line with the increase in revenue from this segment.

Gross profit. As a result of the foregoing, our total gross profit increased by $481,963, or 12.77%, to $4,257,499 for the six months ended June 30, 2023 from $3,775,536 for six months ended June 30, 2022. Our total gross margin (percent of revenue) was 67.11% and 63.05% for six months ended June 30, 2023 and 2022, respectively.

Gross profit for the financial services segment decreased by $387,058, or 63.28%, to $224,577 for the six months ended June 30, 2023 from $611,635 for the six months ended June 30, 2022. Gross margin (percent of revenue) for the financial services segment was 82.35% and 65.29% for the six months ended June 30, 2023 and 2022, respectively.

Gross profit for the healthcare services segment increased by $869,021, or 27.47%, to $4,032,922 for the six months ended June 30, 2023 from $3,163,901 for the six months ended June 30, 2022. Gross margin (percent of revenue) for the healthcare segment was 66.43% and 62.63% for the six months ended June 30, 2023 and 2022, respectively. The increased gross margin was due to the increased number of patients and provided medical services without increased overhead. The healthcare segment still had available capacity to cover the increased patients and services.

Depreciation expense. Our depreciation expense was $8,000, or 0.13% of revenue, for the six months ended June 30, 2023, as compared to $11,566, or 0.19% of revenue, for the six months ended June 30, 2022.

Selling, general and administrative expenses. Our selling, general and administrative expenses decreased by $110,709, or 5.71%, to $1,829,768 for the six months ended June 30, 2023 from $1,940,477 for the six months ended June 30, 2022. As a percentage of revenue, our selling, general and administrative expenses were 28.97% and 32.40% for the six months ended June 30, 2023 and 2022, respectively. Such decrease was primarily due to terminated employees in the financial services segment due to the decreased revenue and the bad debt expense for allowances for doubtful accounts relating to our healthcare services business.

Total other income (expense). We had $1,619,644 in total other expense, net, for the six months ended June 30, 2023, as compared to other expense, net, of $3,412,231 for the six months ended June 30, 2022. Other expense, net, for the six months ended June 30, 2023 consisted of interest expense and finance charges of $1,539,623, amortization of debt discounts of $48,616, financing penalties and fees of $30,000 and conversion cost penalty and reimbursement related to convertible note of $2,000, offset by other income of $595. Other expenses, net, for the six months ended June 30, 2022 consisted of interest expense and finance charges of $3,255,987 and amortization of debt discounts of $156,252, offset by other income of $8.

Discontinued operations. For the six months ended June 30, 2023 and 2022, we recorded a loss from discontinued operations of $0 and $35,542, respectively.

Net income (loss). As a result of the cumulative effect of the factors described above, our net income was $800,087 for the six months ended June 30, 2023, as compared to net loss of $1,624,280 for the six months ended June 30, 2022, an increase of $2,424,367, or 149.26%.

Liquidity and Capital Resources

As of June 30, 2023, we had $411,209 in cash. To date, we have financed our operations primarily through revenue generated from operations, sales of securities, advances from stockholders and third-party and related party debt.

We believe, based on our operating plan, that current working capital and current and expected additional financing should be sufficient to fund operations and satisfy our obligations as they come due for at least one year from the financial statement issuance date. However, additional funds from new financing and/or future equity raises are required for continued operations and to execute our business plan and our strategy of acquiring additional businesses. The funds required to sustain operations ranges between $600,000 to $1 million and additional funds execute our business plan will depend on the size, capital structure and purchase price consideration that the seller of a target business deems acceptable in a given transaction. The amount of funds needed to execute our business plan also depends on what portion of the purchase price of a target business the seller of that business is willing to take in the form of seller notes or our equity or equity in one of our subsidiaries. Given these factors, we believe that the amount of outside additional capital necessary to execute our business plan on the low end (assuming target company sellers accept a significant portion of the purchase price in the form of seller notes or our equity or equity in one of our subsidiaries) ranges between $5 million to $7 million. If, and to the extent, that sellers are unwilling to accept a significant portion of the purchase price in seller notes and equity, then the cash required to execute our business plan could be as much as $10 million.

We intend to raise capital for additional acquisitions primarily through equity and debt financing. The sale of additional equity securities could result in dilution to our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that would restrict our operations. Financing may not be available in amounts or on terms acceptable to us, if at all. There is no guarantee that we will be able to acquire additional businesses under the terms outlined above.

Summary of Cash Flow

The following table provides detailed information about our net cash flow for the six months ended June 30, 2023 and 2022.

	Six Months Ended June 30,
	2023			2022
Net cash used in operating activities from continuing operations	$	(304,173	)	$	(473,175	)
Net cash from discontinued operations		–			35,542
Net cash provided by financing activities		488,580			450,708
Net change in cash		184,407			13,075
Cash and cash equivalents at beginning of period		226,802			595,987
Cash and cash equivalents at end of period	$	411,209		$	609,062

Our net cash used in operating activities from continuing operations was $304,173 for the six months ended June 30, 2023, as compared to $473,175 for the six months ended June 30, 2022. For the six months ended June 30, 2023, our net income of $800,087, an increase in accounts payable and accrued expenses of $693,788, an increase in accrued officer’s compensation of $334,000, an increase in accrued interest of $248,137, an increase in bad debt expense of $270,000 and fair value settled upon conversion of $123,566, offset by a decrease in accounts receivable of $2,858,749, were the primary drivers for the cash used in operations. For the six months ended June 30, 2022, our net loss of $1,624,280 and a decrease in accounts receivable of $192,425, offset by increased accounts payable and accrued expense of $699,107 an increase in accrued interest of $252,634 and an increase in accrued officers’ compensation of $240,000, were the primary drivers for the cash used in operations.

We had no investing activities for the six months ended June 30, 2023 and 2022.

Our net cash provided by financing activities was $488,580 for the six months ended June 30, 2023, as compared to $450,708 for the six months ended June 30, 2023. Net cash provided by financing activities for the six months ended June 30, 2023 consisted of proceeds from convertible notes payable of $355,500, proceeds from related party notes payable of $124,696 and proceeds from line of credit of $43,880, offset by repayments of line of credit of $30,160 and payment of related party notes payable of $5,336. Net cash provided by financing activities for the six months ended June 30, 2022 consisted of proceeds from convertible notes payable of $555,730 and proceeds from related party notes payable of $7,948, offset by preferred stock dividends of $100,477, repayment of convertible notes payable of $5,908, payment of related party notes payable of $5,065 and payment of the SBA loan described below of $1,520.

Convertible Notes

As of June 30, 2023, we had convertible debt outstanding net of amortized debt discount of $3,868,068. During the six months ended June 30, 2023, we received net proceeds of $355,500 from convertible notes and converted $58,800 of convertible debt, $5,873 in accrued interest and $2,000 in penalties and fees into 118,682,378 shares of 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. For the six months ended June 30, 2023, we recorded amortization of debt discounts of $48,616.

The following is a schedule of convertible notes payable outstanding as of June 30, 2023:

Note #		Issuance Date	Maturity Date	Principal Balance		Accrued Interest		Unamortized Debt Discount
	9	09/12/2016	09/12/2017		50,080		19,124		–
	10	01/24/2017	1/24/2018		55,000		75,331		–
	10-1	02/10/2023	02/10/2024		50,000		2,877		–
	10-2	03/30/2023	03/30/2024		25,000		945
	29-2	11/08/2019	11/08/2020		36,604		24,516		–
	31	08/28/2019	08/28/2020		–		8,385		–
	37-1	09/03/2020	06/30/2021		113,667		48,902		–
	37-2	11/02/2020	08/31/2021		113,167		47,611		–
	37-3	12/29/2020	09/30/2021		113,166		46,575		–
	38	02/09/2021	02/09/2022		47,200		33,849		–
	39	04/26/2021	04/26/2022		168,866		58,106		–
	40-1	09/22/2022	09/22/2023		2,600,000		196,164		–
	40-2	11/04/2022	11/04/2023		68,666		4,477		5,973
	40-3	11/28/2022	11/28/2023		68,667		4,025		7,102
	40-4	12/21/2022	12/21/2023		68,667		3,592		8,184
	40-5	01/24/2023	01/24/2024		90,166		3,878		13,486
	40-6	03/21/2023	03/21/2024		139,166		3,851		26,520
	40-7	6/5/2023	6/5/2024		139,166		953		34,155
	40-8	6/13/2023	6/13/2024		21,167		99		4,926
				$	3,968,415	$	583,260	$	100,347

Note 9. On September 12, 2016, we issued a convertible promissory note in the principal amount of $80,000 for services rendered, which matured on September 12, 2017. Note 9 is currently in default and accrues interest at a default interest rate of 20% per annum.

Notes 10, 10-1 and 10-2. On January 24, 2017, we 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, we executed a second tranche under this note in the principal amount of $50,000 (Note 10-1). On March 30, 2023, we executed a third tranche under this note in the principal amount of $25,000 (Note 10-2). Notes 10-1 and 10-2 accrue interest at a rate of 15% per annum.

Note 29-2. On May 10, 2019, we 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 $5,917.81, which was issued as Note 29-1, plus a new convertible promissory note in the principal amount of $62,367.12, which was issued as Note 29-2. Note 29-2 is currently in default and accrues interest at a default interest rate of 24% per annum.

Note 31. On August 28, 2019, we issued a convertible promissory note in the principal amount of $120,000, which matured on August 28, 2020. Note 31 is currently in default and accrues interest at a default interest rate of 24% per annum.

Notes 37-1, 37-2 and 37-3. On September 3, 2020, we 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, we 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, we 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, we 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). Notes 37-1, 37-2 and 27-3 are currently in default and accrue interest at a default interest rate of 18% per annum.

Note 38. On February 9, 2021, we issued a convertible promissory note in the principal amount $103,500, which matured on February 9, 2022. Note 38 is currently in default and accrues interest at a default interest rate of 22% per annum.

Note 39. On April 26, 2021, we issued a convertible promissory note in the principal amount $153,500, which matured on May 10, 2022. Note 39 is currently in default and accrues interest at a default interest rate of 22% per annum.

Note 40-1 through 40-8. On September 22, 2022, we 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, we 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, we 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 November 28, 2022, we 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, we 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, we 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, we 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, we 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). 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.

Line of Credit

In February 2018, we entered into a revolving line of credit with a financial institution for $92,500 which was personally guaranteed by the manager of Platinum Tax. The loan accrues interest at 11.70% as of June 30, 2023. As of June 30, 2023, the outstanding balance was $8,749.

Small Business Administration Loan

On June 2, 2020, we obtained a loan from the U.S. Small Business Administration, or SBA, in the principal amount of $150,000 with an interest rate of 3.75% and a maturity date of June 2, 2050. We reclassified $5,723 of accrued interest to the principal amount for the six months ended June 30, 2023. The principal balance and accrued interest at June 30, 2023 was $149,580 and $0, respectively.

Debenture

On March 12, 2009, we issued a debenture in the principal amount of $20,000. The debenture bears interest at 12% per annum and matured on September 12, 2009. The balance of the debenture was $10,989 at June 30, 2023 and the accrued interest was $6,882. We assigned all of our receivables from consumer activations of our rewards program as collateral on this debenture.

Related Party Loans

From time to time, the previous owner and current manager of Platinum Tax loaned funds to Platinum Tax to cover short term operating needs. The amount owed as of June 30, 2023 was $156,384.

In connection with the acquisition of Edge View on July 16, 2014, we 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 as of June 30, 2023.

We have obtained short-term advances from the Chairman of the Board that are non-interest bearing and due on demand. As of June 30, 2023, we owed the Chairman $123,192.

Critical Accounting Policies

The preparation of our unaudited condensed consolidated financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On a regular basis, we evaluate these estimates. These estimates are based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

For a description of the accounting policies that, in management’s opinion, involve the most significant application of judgment or involve complex estimation and which could, if different judgment or estimates were made, materially affect our reported financial position, results of operations, or cash flows, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Critical Accounting Policies” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission, or the SEC, on June 30, 2023.

Off Balance Sheet Arrangements

As of June 30, 2023, we had no off-balance sheet arrangements.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable.

ITEM 4.

CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Disclosure controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rule 13a-15(e) of the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as of June 30, 2023. Based upon, and as of the date of this evaluation, our chief executive officer and chief financial officer determined that, because of the material weaknesses described in Item 9A “Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, which we are still in the process of remediating as of June 30, 2023, our disclosure controls and procedures were not effective. Specifically, we did not design and maintain effective controls related to separation of duties as it relates to the preparation and review of financial statements and monitoring, documenting over internal control procedures and environment. Investors are directed to Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 for the description of these weaknesses.

Remediation of Material Weaknesses in Internal Control Over Financial Reporting

We have evaluated the material weakness described above and our management and board of directors are committed to the design and successful implementation of internal control over financial reporting as promptly as possible. We currently plan to evaluate our updated internal controls design and determine whether the controls have operated effectively during the year ended of 2023 in order to fully remediate the aforementioned material weakness in our internal control over financial reporting.

As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, our management has identified the steps necessary to address the material weaknesses, and in the second quarter of 2023, we continued to implement the following remedial procedures:

We plan to make necessary changes by providing training to our financial team and our other relevant personnel on the GAAP accounting guidelines applicable to financial reporting requirements.

We plan to implement proper documentation procedures for key functional areas, control objectives and our workflows.

We plan to reinforce effective compensating controls can improve the design of the current process with limited human resources.

We plan to develop a more comprehensive review process over our accounting policies and procedures to ensure that all required disclosures are included in our consolidated financial statements.

We plan to perform a review of key business process controls related to high-risk financial statement accounts, such as revenue, accounts receivables, convertible notes, and significant transactions, which resulted in addition of newly developed documented control activities, in order to mitigate material weakness and strengthen the overall control environments.

We intend to complete the remediation of the material weaknesses discussed above as soon as practicable, but we can give no assurance that we will be able to do so. Designing and implementing an effective disclosure controls and procedures is a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and to devote significant resources to maintain a financial reporting system that adequately satisfies our reporting obligations. The remedial measures that we have taken and intend to take may not fully address the material weaknesses that we have identified, and material weaknesses in our disclosure controls and procedures may be identified in the future. Should we discover such conditions, we intend to remediate them as soon as practicable. We are committed to taking appropriate steps for remediation, as needed.

Changes in Internal Control Over Financial Reporting

Other than in connection with the implementation of the remedial measures described above, there were no changes in our internal controls over financial reporting during the second quarter of 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

From time to time, we 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 our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

ITEM 1A.

RISK FACTORS.

Not applicable.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

We have not sold any equity securities during the three months ended June 30, 2023 that were not previously disclosed in a current report on Form 8-K that was filed during the quarter.

We did not repurchase any of our common shares during the three months ended June 30, 2023.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.

MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5.

OTHER INFORMATION.

None.

ITEM 6.

EXHIBITS.

Exhibit No.		Description of Exhibit
3.1		Articles of Incorporation Cardiff Lexington Corporation, as amended (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed on June 6, 2023)
3.2		Certificate of Designation of Series N Senior Convertible Preferred Stock (incorporated by reference to Exhibit 3.3 to the Annual Report on Form 10-K filed on June 6, 2023)
3.3		Amended and Restated Bylaws of Cardiff Lexington Corporation (incorporated by reference to Exhibit 3.2 to the Annual Report on Form 10-K filed on June 6, 2023)
4.1		Common Stock Purchase Warrant issued by Cardiff Lexington Corporation to SILAC Insurance Company on May 21, 2021 (incorporated by reference to Exhibit 4.2 to the Annual Report on Form 10-K filed on June 6, 2023)
31.1*		Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certifications of Principal Financial and Accounting Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certifications of Principal Executive Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certifications of Principal Financial and Accounting Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

______________

*Filed herewith

** Furnished herewith

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: October 25, 2023	CARDIFF LEXINGTON CORPORATION

	/s/ Alex Cunningham
	Name: Alex Cunningham
	Title: Chief Executive Officer
	(Principal Executive Officer)

	/s/ Zia Choe
	Name: Zia Choe
	Title: Interim Chief Financial Officer
	(Principal Financial and Accounting Officer)

Exhibit 31.1

CERTIFICATIONS

I, Alex Cunningham, certify that:

I have reviewed this quarterly report on Form 10-Q of Cardiff Lexington Corporation;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 25, 2023

/s/ Alex Cunningham

Alex Cunningham

Chief Executive Officer

(Principal Executive Officer)

Exhibit 31.2

CERTIFICATIONS

I, Zia Choe, certify that:

I have reviewed this quarterly report on Form 10-Q of Cardiff Lexington Corporation;

	b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 25, 2023

/s/ Zia Choe

Zia Choe

Interim Chief Financial Officer

(Principal Financial and Accounting Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

The undersigned Chief Executive Officer of Cardiff Lexington Corporation (the “Company”), DOES HEREBY CERTIFY that:

1. The Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 (the “Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

IN WITNESS WHEREOF, the undersigned has executed this statement on October 25, 2023.

/s/ Alex Cunningham

Alex Cunningham

Chief Executive Officer

(Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to Cardiff Lexington Corporation and will be retained by Cardiff Lexington Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

The forgoing certification is being furnished to the Securities and Exchange Commission pursuant to § 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

The undersigned Chief Financial Officer of Cardiff Lexington Corporation (the “Company”), DOES HEREBY CERTIFY that:

2. Information contained in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

IN WITNESS WHEREOF, the undersigned has executed this statement on October 25, 2023.

/s/ Zia Choe

Zia Choe

Interim Chief Financial Officer

(Principal Financial and Accounting Officer)

Cover	6 Months Ended
Cover	Jun. 30, 2023 shares
Entity Addresses [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
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, 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	943,475,613
Former Address [Member]
Entity Addresses [Line Items]
Entity Address, Address Line One	3200 Bel Air Drive
Entity Address, City or Town	Las Vegas
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89109

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Current assets
Cash	$ 411,209	$ 226,802
Accounts receivable-net	9,193,529	6,604,780
Prepaid and other current assets	5,000	5,000
Total current assets	9,609,738	6,836,582
Property and equipment, net	47,438	55,439
Land	540,000	540,000
Goodwill	5,666,608	5,666,608
Right of use - assets	153,933	218,926
Due from related party	4,979	4,979
Other assets	30,823	30,823
Total assets	16,053,519	13,353,357
Current liabilities
Accounts payable and accrued expense	2,522,332	2,038,595
Accrued expenses - related parties	4,084,557	3,750,557
Accrued interest	590,144	350,267
Right of use - liability	126,752	142,307
Due to director & officer	123,192	123,192
Notes payable	24,724	15,809
Notes payable - related party	156,384	37,024
Convertible notes payable, net of debt discounts of $100,347 and $46,797, respectively	3,868,068	3,515,752
Total current liabilities	11,496,153	9,973,503
Other liabilities
Notes payable	144,594	139,789
Operating lease liability – long term	32,205	84,871
Total liabilities	11,672,952	10,198,163
Mezzanine equity
Total Mezzanine Equity	5,297,605	4,625,002
Stockholders' equity (deficit)
Common Stock - 7,500,000,000 shares authorized, $0.001 par value; 943,475,613 and 789,796,735 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	943,475	824,793
Additional paid-in capital	(8,497,309)	(8,581,265)
Accumulated deficit	(70,517,920)	(70,855,453)
Total stockholders' equity (deficit)	(917,038)	(1,469,808)
Total liabilities, mezzanine equity and stockholders' equity	16,053,519	13,353,357
Series N Senior Convertible Preferred Stock [Member]
Mezzanine equity
Preferred Stock Value	3,682,537	3,125,002
Series X Senior Convertible Preferred Stock [Member]
Mezzanine equity
Preferred Stock Value	1,615,068	1,500,000
Series B Preferred Stock [Member]
Stockholders' equity (deficit)
Preferred Stock Value	8,537,912	8,525,313
Series C Preferred Stock [Member]
Stockholders' equity (deficit)
Preferred Stock Value	488	488
Series E Preferred Stock [Member]
Stockholders' equity (deficit)
Preferred Stock Value	603,000	603,000
Series F 1 Preferred Stock [Member]
Stockholders' equity (deficit)
Preferred Stock Value	143,008	143,008
Series I Preferred Stock [Member]
Stockholders' equity (deficit)
Preferred Stock Value	59,540,000	59,540,000
Series J Preferred Stock [Member]
Stockholders' equity (deficit)
Preferred Stock Value	6,854,336	6,854,336
Series L Preferred Stock [Member]
Stockholders' equity (deficit)
Preferred Stock Value	1,277,972	1,277,972
Series R Preferred Stock [Member]
Stockholders' equity (deficit)
Preferred Stock Value	$ 198,000	$ 198,000

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Convertible notes payable, net of debt discount	$ 100,347	$ 46,797
Common stock, shares authorized	7,500,000,000	7,500,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares issued	943,475,613	789,796,735
Common stock, shares outstanding	943,475,613	789,796,735
Series N 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	868,058	868,058
Preferred stock, shares outstanding	868,058	868,058
Series X 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	2,134,478	2,131,328
Preferred stock, shares outstanding	2,134,478	2,131,328
Series C Preferred Stock [Member]
Preferred stock, shares authorized	500	500
Preferred stock, stated value	$ 4.00	$ 4.00
Preferred stock, shares issued	122	122
Preferred stock, shares outstanding	122	122
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	150,750	150,750
Preferred stock, shares outstanding	150,750	150,750
Series F 1 Preferred Stock [Member]
Preferred stock, shares authorized	800,000	800,000
Preferred stock, stated value	$ 4.00	$ 4.00
Preferred stock, shares issued	35,752	35,752
Preferred stock, shares outstanding	35,752	35,752
Series I Preferred Stock [Member]
Preferred stock, shares authorized	500,000,000	500,000,000
Preferred stock, stated value	$ 0.001	$ 0.001
Preferred stock, shares issued	14,885,000	14,885,000
Preferred stock, shares outstanding	14,885,000	14,885,000
Series J Preferred Stock [Member]
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, stated value	$ 4.00	$ 4.00
Preferred stock, shares issued	1,713,584	1,713,584
Preferred stock, shares outstanding	1,713,584	1,713,584
Series L Preferred Stock [Member]
Preferred stock, shares authorized	100,000,000	100,000,000
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 R Preferred Stock [Member]
Preferred stock, shares authorized	5,000	5,000
Preferred stock, stated value	$ 1,200	$ 1,200
Preferred stock, shares issued	165	165
Preferred stock, shares outstanding	165	165

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
REVENUE
Total revenue	$ 3,482,810	$ 3,091,232	$ 6,343,608	$ 5,988,382
COST OF SALES
Total cost of sales	1,102,986	1,096,618	2,086,109	2,212,846
GROSS PROFIT	2,379,824	1,994,614	4,257,499	3,775,536
OPERATING EXPENSES
Depreciation expense	3,365	5,783	8,000	11,566
Selling, general and administrative	670,289	866,213	1,829,768	1,940,477
Total operating expenses	673,654	871,996	1,837,768	1,952,043
INCOME FROM OPERATIONS	1,706,170	1,122,618	2,419,731	1,823,493
OTHER INCOME (EXPENSE)
Other income	0	8	205	8
Gain on forgiveness of debt	0	0	390	0
Interest expense and finance charge	(844,459)	(1,035,811)	(1,539,623)	(3,255,987)
Conversion cost penalty and reimbursement	0	0	(2,000)	0
Penalties and fees	(15,000)	0	(30,000)	0
Amortization of debt discounts	(30,633)	(111,706)	(48,616)	(156,252)
Total other income (expenses)	(890,092)	(1,147,509)	(1,619,644)	(3,412,231)
NET INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS	816,078	(24,891)	800,087	(1,588,738)
LOSS FROM DISCONTINUED OPERATIONS	0	(36,935)	0	(35,542)
NET INCOME (LOSS) FOR THE PERIOD	816,078	(61,826)	800,087	(1,624,280)
DEEMED DIVIDENDS ON PREFERRED STOCK	(125,744)	0	(462,555)	0
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$ 690,334	$ (61,826)	$ 337,532	$ (1,624,280)
BASIC INCOME (LOSS) PER SHARE
Continuing operations	$ 0.00	$ (0.00)	$ 0.00	$ (0.01)
Discontinued operations	0.00	(0.00)	0.00	(0.00)
DILUTED INCOME (LOSS) PER SHARE
Continuing operations	0.00	(0.00)	0.00	(0.00)
Discontinued operations	$ 0.00	$ (0.00)	$ 0.00	$ (0.00)
Financial Service [Member]
REVENUE
Total revenue	$ 118,304	$ 472,014	$ 272,703	$ 936,857
COST OF SALES
Total cost of sales	21,297	112,776	48,126	325,222
Healthcare Segment [Member]
REVENUE
Total revenue	3,364,506	2,619,218	6,070,905	5,051,525
COST OF SALES
Total cost of sales	$ 1,081,689	$ 983,842	$ 2,037,983	$ 1,887,624

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (Parenthetical) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Basic weighted average number of common shares, continued operations	930,254,713	166,130,069	901,781,592	166,130,069
Basic weighted average number of common shares, discontinued operations	930,254,713	166,130,069	901,781,592	166,130,069
Diluted weighted average number of common shares, continued operations	14,435,802,103	166,130,069	17,836,079,282	166,130,069
Diluted weighted average number of common shares, discontinued operations	14,435,802,103	166,130,069	17,836,079,282	166,130,069

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY) (UNAUDITED) - USD ($)	Preferred Stock Series A I K [Member]	Preferred Stock Series B D E F F 1 G H L [Member]	Preferred Stock Series C And R [Member]	Treasury Stock, Common [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2021	$ 59,548,201	$ 14,383,808	$ 198,488	$ (4,967,686)	$ 167,421	$ (3,479,126)	$ (65,118,744)	$ 732,361
Beginning balance, shares at Dec. 31, 2021	23,085,563	3,595,952	287	(619,345)	166,130,069
Distribution of dividend							(100,476)	(100,476)
Net income							(1,624,280)	(1,624,280)
Ending balance, value at Jun. 30, 2022	$ 59,548,201	$ 14,383,808	$ 198,488	$ (4,967,686)	$ 167,421	(3,479,126)	(66,843,500)	(992,395)
Ending balance, shares at Jun. 30, 2022	23,085,563	3,595,952	287	(619,345)	166,130,069
Beginning balance, value at Dec. 31, 2022	$ 59,540,000	$ 17,403,628	$ 198,488	$ 0	$ 824,793	(8,581,264)	(70,855,453)	(1,469,808)
Beginning balance, shares at Dec. 31, 2022	14,885,001	4,350,907	287	0	824,793,235
Conversion of convertible notes payable					$ 118,682	71,555		190,237
Conversion of convertible notes payable, shares					118,682,378
Accrued dividend							(462,554)	(462,554)
Distribution of dividend
Issuance of preferred stock series B		$ 12,600				12,400		25,000
Issuance of preferred stock series B, shares		3,150
Net income							800,087	800,087
Ending balance, value at Jun. 30, 2023	$ 59,540,000	$ 17,416,228	$ 198,488	$ 0	$ 943,475	$ (8,497,308)	$ (70,517,920)	$ (917,038)
Ending balance, shares at Jun. 30, 2023	14,885,001	4,354,057	287	0	943,475,613

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) for the period	$ 800,087	$ (1,624,280)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	8,000	21,628
Amortization of loan discount	48,616	156,252
Gain on forgiveness of debt	(390)	0
Other noncash items, net	0	(28,271)
Bad debt	270,000	0
Fair value settled upon conversion	123,566	0
Conversion and note issuance cost	7,000	0
Share issuance for service rendered	25,000	0
Increase (decrease) in:
Accounts receivable	(2,858,749)	(192,425)
Right of use – assets	64,993	(38,823)
Prepaid expenses and other current assets	0	8,000
Increase (decrease) in:
Accounts payable and accrued expense	693,788	699,107
Accrued officer’s compensation	334,000	240,000
Due from related parties	0	3,988
Accrued interest	248,137	252,634
Right of use – liabilities	(68,221)	29,015
Net cash used in operating activities - continuing operations	(304,173)	(473,175)
Net cash provided by operating activities - discontinued operations	0	35,542
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from convertible notes payable	355,500	555,730
Repayment of convertible notes payable	0	(5,908)
Payment of SBA loan	0	(1,520)
Dividend on preferred stock	0	(100,477)
Proceeds from line of credit	43,880	0
Repayment of line of credit	(30,160)	0
Payment of notes payable related party	(5,336)	(5,065)
Proceeds from notes payable related party	124,696	7,948
Net cash provided by financing activities	488,580	450,708
NET INCREASE IN CASH	184,407	13,075
CASH, BEGINNING OF PERIOD	226,802	595,987
CASH, END OF PERIOD	411,209	609,062
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest	2,044	46,098
NON-CASH INVESTING AND FINANCING ACTIVITIES:
Common stock issued upon conversion of notes payable and accrued interest	66,673	0
Proceeds from related party	$ 0	$ 3,987

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Nature of Operations

We Three, LLC dba Affordable Housing Initiative (“AHI”), which was acquired on May 15, 2014 and sold on October 31, 2022;

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

Nova Ortho and Spine, PLLC (“Nova”), which was acquired on May 31, 2021.

Princsiples of Consolidation

Use of Estimates

Accounts Receivable

Property and Equipment

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

Goodwill and Other Intangible Assets

Valuation of Long-lived Assets

Revenue Recognition

The Company applies the following five-step 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 allocation
	·	Recognition of revenue when performance obligations are satisfied.

Healthcare Income

Contract Fees (Non-PIP)

Service Fees – Net (PIP)

Financial Services Income

Advertising Costs

Fair Value Measurements

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

Stock-Based Compensation

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

Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services

FASB ASU No 2018-07 prescribes equity instruments issued to parties other than employees.

Income Taxes

As of June 30, 2023 and December 31, 2022, 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

Going Concern

Recent Accounting Standards

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

6 Months Ended

Jun. 30, 2023

Accounting Changes and Error Corrections [Abstract]

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

2.	RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS

The following table summarizes the impacts of the error corrections on the Company's financial statements for each of the periods presented below:

i. Balance sheet


	Impact of correction of error
June 30, 2022 (Unaudited)	As previously reported		Adjustments			As restated

Total assets	$	12,464,017	$	3,275,000		$	15,739,017

Total liabilities		10,331,410		3,275,000			13,606,410

Mezzanine equity		–		3,125,002			3,125,002

Total shareholders' equity	$	2,132,607	$	(3,125,002	)	$	(992,395	)

ii. Statement of operations

	Impact of correction of error
Three months ended June 30, 2022 (Unaudited)	As previously reported			Adjustments			As restated

Revenue	$	3,130,744		$	(39,512	)	$	3,091,232
Cost of sales		1,115,232			(18,614	)		1,096,618
Gross margin		2,015,512			(20,898	)		1,994,614
Operating expense		912,829			(40,833	)		871,996
Income from operations	$	1,102,683		$	19,935		$	1,122,618
Other income (expense), net		(1,147,509	)		–			(1,147,509	)
Net loss before discontinued operations		(44,826	)		19,935			(24,891	)
Loss from discontinued operations		(17,000	)		(19,935	)		(36,935	)
Net loss	$	(61,826	)	$	–		$	(61,826	)
Basic Loss per Share
Continued Operations		(0.00	)					(0.00	)
Discontinued Operations		(0.00	)					(0.00	)
Weighted Average Shares Outstanding - Basic Earnings Loss per Share
Continued Operations		166,130,069						166,130,069
Discontinued Operations		166,130,069						166,130,069

	Impact of correction of error
Six months ended June 30, 2022 (Unaudited)	As previously reported			Adjustments			As restated

Revenue	$	6,071,738		$	(83,356	)	$	5,988,382
Cost of sales		2,250,934			(38,088	)		2,212,846
Gross margin		3,820,804			(45,268	)		3,775,536
Operating expense		1,994,757			(42,714	)		1,952,043
Income from operations	$	1,826,047		$	(2,554	)	$	1,823,493
Other income (expense), net		(2,340,705	)		(1,071,526	)		(3,412,231	)
Net loss before discontinued operations		(514,658	)		(1,074,080	)		(1,588,738	)
Loss from discontinued operations		(33,622	)		(1,920	)		(35,542	)
Net loss	$	(548,280	)	$	(1,076,000	)	$	(1,624,280	)
Basic Loss per Share
Continued Operations		(0.00	)					(0.01	)
Discontinued Operations		(0.00	)					(0.01	)
Weighted Average Shares Outstanding - Basic Earnings Loss per Share
Continued Operations		166,130,069						166,130,069
Discontinued Operations		166,130,069						166,130,069

REVISION OF FINANCIAL STATEMENTS

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

REVISION OF FINANCIAL STATEMENTS

REVISION OF FINANCIAL STATEMENTS

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

ACCOUNTS PAYABLE AND ACCRUED EXPENSES


	June 30, 2023		December 31, 2022
Accounts payable	$	437,718	$	342,330
Accrued credit cards		15,358		45,722
Accrued expense – previously factored liability		1,291,691		776,414
Accrued income taxes, and other taxes		5,346		6,732
Accrued professional fees		694,140		573,040
Accrued advertising		69,656		69,656
Accrued payroll		8,423		14,292
Accrue expense - other		–		363
Accrued expense - dividend payable		–		210,046
Total	$	2,522,332	$	2,038,595

The Company is delinquent paying certain income and property taxes. As of June 30, 2023 and December 31, 2022, the balance for these taxes, penalties and interest is $5,346 and $6,732, respectively.

PLANT AND EQUIPMENT, NET

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

PLANT AND EQUIPMENT, NET

PLANT AND EQUIPMENT, NET

Property and equipment as of June 30, 2023 and December 31, 2022 is as follows:

Schedule of property and equipment
	June 30, 2023			December 31, 2022
Medical equipment	$	96,532		$	96,532
Computer Equipment		9,189			9,189
Furniture, fixtures and equipment		30,841			35,974
Leasehold Improvement		15,950			15,950
Total		152,512			157,645
Less: accumulated depreciation		(105,074	)		(102,206	)
Property and equipment, net	$	47,438		$	55,439

LAND

6 Months Ended

Jun. 30, 2023

Real Estate [Abstract]

LAND

LAND

LINE OF CREDIT

6 Months Ended

Jun. 30, 2023

Line Of Credit

LINE OF CREDIT

LINE OF CREDIT

RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2023

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

See also Note 14 for compensation paid to employees of the Company.

NOTES AND LOANS PAYABLE

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

NOTES AND LOANS PAYABLE

NOTES AND LOANS PAYABLE

Notes payable at June 30, 2023 and December 31, 2022, respectively, are summarized as follows:

Schedule of notes payable
	June 30, 2023			December 31, 2022
Notes and loans payable	$	169,318		$	155,598
Less current portion		(24,724	)		(15,809	)
Long-term portion	$	144,594		$	139,789

Long-term debt matures as follows:


	Amount
2024	$	24,724
2025		4,986
2026		4,986
2027		4,986
2028		4,986
Thereafter		124,650
Total	$	169,318

Loans and Notes Payable – Unrelated Party

Small Business Administration (“SBA”) Loans

CONVERTIBLE NOTES PAYABLE

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

CONVERTIBLE NOTES PAYABLE

10.

CONVERTIBLE NOTES PAYABLE

Convertible notes as of June 30, 2023 and December 31, 2022 are summarized as follows:

Schedule of convertible notes summary
	June 30, 2023			December 31, 2022
Convertible notes payable	$	3,968,415		$	3,562,550
Discounts on convertible notes payable		(100,347	)		(46,798	)
Total convertible debt less debt discount		3,868,068			3,515,752
Current portion		3,868,068			3,515,752
Long-term portion	$	–		$	–

The following is a schedule of convertible notes payable as of and for the six months ended June 30, 2023.


Note #	Issuance	Maturity	Principal Balance 12/31/22		New Loan		Principal Conversions			Shares Issued Upon Conversion		Principal Balance 6/30/23		Accrued Interest on Convertible Debt at 12/31/22		Interest Expense On Convertible Debt For the Period Ended 6/30/23		Accrued Interest on Convertible Debt at 6/30/23		Unamortized Debt Discount At 6/30/23
7-1	10/28/2016	10/28/2017		10,000	$	–	$	(10,000	)		23,405,455	$	–	$	2,263	$	–	$	–	$	–
9	9/12/2016	9/12/2017		50,080		–		–			–		50,080		14,157		4,967		19,124		–
10	1/24/2017	1/24/2018		55,000		–		–			–		55,000		69,876		5,455		75,331		–
10-1	2/10/2023	2/10/2024		–		50,000		–			–		50,000		–		2,877		2,877		–
10-2	3/30/2023	3/30/2024		–		25,000		–			–		25,000		–		945		945		–
29-2	11/8/2019	11/8/2020		36,604		–		–			–		36,604		20,160		4,356		24,516		–
31	8/28/2019	8/28/2020		–		–		–			–		–		8,385		–		8,385		–
37-1	9/3/2020	6/30/2021		113,667		–		–			–		113,667		28,756		10,146		48,902		–
37-2	11/2/2020	8/31/2021		113,167		–		–			–		113,167		27,510		10,101		47,611		–
37-3	12/29/2020	9/30/2021		113,166		–		–			–		113,166		26,474		10,101		46,575		–
38	2/9/2021	2/9/2022		96,000		–		(48,800	)		85,276,923		47,200		27,939		5,910		33,849		–
39	4/26/2021	4/26/2022		168,866		–		–			–		168,866		39,684		18,423		58,106		–
40-1	9/22/2022	9/22/23		2,600,000		–		–			10,000,000		2,600,000		71,233		128,932		196,164		–
40-2	11/4/2022	11/4/2023		68,666		–		–			–		68,666		1,072		3,405		4,477		5,973
40-3	11/28/2022	11/28/2023		68,667		–		–			–		68,667		620		3,405		4,025		7,102
40-4	12/21/2022	12/21/2023		68,667		–		–			–		68,667		187		3,405		3,592		8,184
40-5	1/24/2023	1/24/2024		–		90,166		–			–		90,166		–		3,878		3,878		13,486
40-6	3/21/2023	3/21/2024		–		139,166		–			–		139,166		–		3,851		3,851		26,520
40-7	6/5/2023	6/5/2024		–		139,166		–			–		139,166		–		953		953		34,155
40-8	6/13/2023	6/13/2024		–		21,167		–			–		21,167		–		99		99		4,927
			$	3,562,550	$	464,665	$	(58,800	)		118,682,378	$	3,968,415	$	338,316	$	221,209	$	583,260	$	100,347

Note 7-1

Note 9

Notes 10, 10-1 and 10-2

Notes 29, 29-1 and 29-2

Note 31

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

Note 38

Note 39

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

CAPITAL STOCK

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

CAPITAL STOCK

11.

CAPITAL STOCK

Preferred Stock

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

Redeemable Preferred Stock

Series N Senior Convertible Preferred Stock

Series X Senior Convertible Preferred Stock

Non-redeemable Preferred Stock

Series A Preferred Stock

Series B Preferred Stock

Series C Preferred Stock

Series D Preferred Stock

Series E Preferred Stock

Series F Preferred Stock

Series F-1 Preferred Stock

Each share of series F-1 preferred stock is convertible into two (2) shares of common stock. Holders of series F-1 preferred stock do not have any voting, dividend, liquidation or redemption rights.

Series I Preferred Stock

Series J Preferred Stock

Series L Preferred Stock

Series R Preferred Stock

Preferred Stock Transactions

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

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.

During the six months ended June 30, 2022, the Company executed the following transactions:

Common Stock

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

The Company issued 118,682,378 shares of common stock upon conversion of certain convertible notes.

WARRANTS

6 Months Ended

Jun. 30, 2023

Warrants

WARRANTS

12.

WARRANTS

The table below sets forth warrant activity for the six months ended June 30, 2023 and 2022:

Schedule of warrant activity
	Number of Warrants			Weighted Average Exercise Price
Balance at January 1, 2023		235,557,856		$	0.015
Granted		–			–
Exercised		–			–
Forfeited		(25,000	)		–
Balance at June 30, 2023		235,532,856			0.015
Warrants Exercisable at June 30, 2023		235,532,856		$	0.015

DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

13.

DISCONTINUED OPERATIONS

Schedule of discontinued operations
	Three Months Ended June 30,
	2023		2022

Gain (Loss) from discontinued operations
Revenue of AHI subsidiary	$	–	$	39,512
Cost of sales of AHI subsidiary		–		(18,614	)
Selling, general and administrative expenses of AHI subsidiary		–		(40,833	)
Interest expense of Red Rock Investor Note		–		(17,000	)
Loss from discontinued operations	$	–	$	(36,935	)


	Six Months Ended June 30,
	2023		2022

Gain (Loss) from discontinued operations
Revenue AHI subsidiary	$	–	$	83,356
Cost of sales AHI subsidiary		–		(38,088	)
Selling, general and administrative expenses AHI subsidiary		–		(42,714	)
Interest expense of Red Rock Investor Note		–		(33,622	)
Gain no change in estimate of AHI subsidiary		–		(4,474	)
Loss from discontinued operations	$	–	$	(35,542	)

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS, NET

6 Months Ended

Jun. 30, 2023

Goodwill And Identifiable Intangible Assets Net

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS, NET

14.

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS, NET

The following table shows goodwill balances by reportable segment:

Schedule of goodwill balances
	Healthcare		Total
Carrying value at December 31, 2022	$	5,666,608	$	5,666,608
Accumulated impairment		–		–
Carrying value at June 30, 2023	$	5,666,608	$	5,666,608

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

15.

COMMITMENTS AND CONTINGENCIES

Leases

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 has operating leases with future commitments as follows:

Schedule of property leases
June 30,	Amount
2024	$	126,752
2025		32,205
Total	$	158,957

Employees


Year	Minimum Annual Nova EBITDA	Cash Annual Bonus	Series J Preferred Stock
2022	$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

LEGAL PROCEEDINGS

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

LEGAL PROCEEDINGS

16.

LEGAL PROCEEDINGS

SEGMENT REPORTING

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

SEGMENT REPORTING

17.

SEGMENT REPORTING

(1)

Tax Resolution Services (Platinum Tax)

(2)

Real Estate (Edge View)

(3)

Healthcare (Nova)

Schedule of segment reporting
	June 30, 2023		December 31, 2022
Assets:
Financial Services	$	2,820	$	8,577
Healthcare		15,455,454		12,692,531
Real Estate		589,331		592,557
Others		5,914		59,692
Consolidated assets	$	16,053,519	$	13,353,357

	Three Months Ended June 30,
	2023			2022
Revenues:
Financial Services	$	118,304		$	472,014
Healthcare		3,364,506			2,619,218
Consolidated revenues	$	3,482,810		$	3,091,232

Cost of Sales:
Financial Services	$	21,297		$	112,776
Healthcare		1,081,689			983,842
Consolidated cost of sales	$	1,102,986		$	1,096,618

Income (Loss) from operations from subsidiaries
Financial Services	$	(43,269	)	$	11,361
Healthcare		2,106,551			1,481,055
Real Estate		(1,743	)		(1,688	)
Income from operations from subsidiaries	$	2,061,539		$	1,490,728

Loss from operations from Cardiff Lexington	$	(355,369	)	$	(388,717	)
Total income from operations	$	1,706,170		$	1,102,011

Income (Loss) before taxes
Financial Services	$	(43,810	)	$	(45,540	)
Healthcare		1,378,445			51,136
Real Estate		(1,743	)		(2,416	)
Corporate, administration and other non-operating expenses		(516,814	)		(65,006	)
Consolidated income (loss) before taxes	$	816,078		$	(61,826	)

	Six Months Ended June 30,
	2023			2022
Revenues:
Financial Services	$	272,703		$	936,857
Healthcare		6,070,905			5,051,525
Consolidated revenues	$	6,343,608		$	5,988,382

Cost of Sales:
Financial Services	$	48,126		$	325,222
Healthcare		2,037,983			1,887,624
Consolidated cost of sales	$	2,086,109		$	2,212,846

Income (Loss) from operations from subsidiaries
Financial Services	$	(87,256	)	$	(90,120	)
Healthcare		3,384,790			2,784,403
Real Estate		(1,840	)		(2,513	)
Income from operations from subsidiaries	$	3,295,694		$	2,691,770

Loss from operations from Cardiff Lexington	$	(875,962	)	$	(868,276	)
Total income from operations	$	2,419,732		$	1,823,494

Income (Loss) before taxes
Financial Services	$	(89,300	)	$	(91,030	)
Healthcare		2,195,542			868,234
Real Estate		(1,840	)		(2,513	)
Corporate, administration and other non-operating expenses		(1,304,315	)		(2,398,971	)
Consolidated income (loss) before taxes	$	800,087		$	(1,624,280	)

SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

18.

SUBSEQUENT EVENTS

On July 19, 2023, the Company executed a ninth tranche under Note 40 in the principal amount of $35,500, less an original issue discount and fee of $8,875 (See Note 10).

On July 24, 2023, the Company issued 5,000 shares of series E preferred stock as compensation for the property manager of Edge View in exchange for the bonus of $5,000.

On July 24, 2023, the Company executed a tenth tranche under Note 40 in the principal amount of $14,000, less an original issue discount and fee of $3,500 (See Note 10).

In July, the Company issued 156,000,000 shares of common stock upon conversion of certain convertible notes’ principal and accrued interests in the amount of $30,637 and $6,200, respectively.

On August 11, 2023, the Company executed a third tranche under Note 10 in the principal amount of $25,000 (See Note 10).

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Organization and Nature of Operations

We Three, LLC dba Affordable Housing Initiative (“AHI”), which was acquired on May 15, 2014 and sold on October 31, 2022;

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

Nova Ortho and Spine, PLLC (“Nova”), which was acquired on May 31, 2021.

Princsiples of Consolidation

Use of Estimates

Accounts Receivable

Property and Equipment

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

Goodwill and Other Intangible Assets

Valuation of Long-lived Assets

Revenue Recognition

The Company applies the following five-step 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 allocation
	·	Recognition of revenue when performance obligations are satisfied.

Healthcare Income

Healthcare Income

Contract Fees (Non-PIP)

Contract Fees (Non-PIP)

Service Fees – Net (PIP)

Service Fees – Net (PIP)

Financial Services Income

Financial Services Income

Advertising Costs

Fair Value Measurements

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

Stock-Based Compensation

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

Equity Instruments Issued to Parties Other Than Employees for Acquiring Goods or Services

FASB ASU No 2018-07 prescribes equity instruments issued to parties other than employees.

Income Taxes

As of June 30, 2023 and December 31, 2022, 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

Going Concern

Recent Accounting Standards

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Schedule of estimated useful lives

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

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Tables)

6 Months Ended

Jun. 30, 2023

Accounting Changes and Error Corrections [Abstract]

Schedule of restated financial information


	Impact of correction of error
June 30, 2022 (Unaudited)	As previously reported		Adjustments			As restated

Total assets	$	12,464,017	$	3,275,000		$	15,739,017

Total liabilities		10,331,410		3,275,000			13,606,410

Mezzanine equity		–		3,125,002			3,125,002

Total shareholders' equity	$	2,132,607	$	(3,125,002	)	$	(992,395	)

ii. Statement of operations

	Impact of correction of error
Three months ended June 30, 2022 (Unaudited)	As previously reported			Adjustments			As restated

Revenue	$	3,130,744		$	(39,512	)	$	3,091,232
Cost of sales		1,115,232			(18,614	)		1,096,618
Gross margin		2,015,512			(20,898	)		1,994,614
Operating expense		912,829			(40,833	)		871,996
Income from operations	$	1,102,683		$	19,935		$	1,122,618
Other income (expense), net		(1,147,509	)		–			(1,147,509	)
Net loss before discontinued operations		(44,826	)		19,935			(24,891	)
Loss from discontinued operations		(17,000	)		(19,935	)		(36,935	)
Net loss	$	(61,826	)	$	–		$	(61,826	)
Basic Loss per Share
Continued Operations		(0.00	)					(0.00	)
Discontinued Operations		(0.00	)					(0.00	)
Weighted Average Shares Outstanding - Basic Earnings Loss per Share
Continued Operations		166,130,069						166,130,069
Discontinued Operations		166,130,069						166,130,069

	Impact of correction of error
Six months ended June 30, 2022 (Unaudited)	As previously reported			Adjustments			As restated

Revenue	$	6,071,738		$	(83,356	)	$	5,988,382
Cost of sales		2,250,934			(38,088	)		2,212,846
Gross margin		3,820,804			(45,268	)		3,775,536
Operating expense		1,994,757			(42,714	)		1,952,043
Income from operations	$	1,826,047		$	(2,554	)	$	1,823,493
Other income (expense), net		(2,340,705	)		(1,071,526	)		(3,412,231	)
Net loss before discontinued operations		(514,658	)		(1,074,080	)		(1,588,738	)
Loss from discontinued operations		(33,622	)		(1,920	)		(35,542	)
Net loss	$	(548,280	)	$	(1,076,000	)	$	(1,624,280	)
Basic Loss per Share
Continued Operations		(0.00	)					(0.01	)
Discontinued Operations		(0.00	)					(0.01	)
Weighted Average Shares Outstanding - Basic Earnings Loss per Share
Continued Operations		166,130,069						166,130,069
Discontinued Operations		166,130,069						166,130,069

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Schedule of account payable and accrued expenses


	June 30, 2023		December 31, 2022
Accounts payable	$	437,718	$	342,330
Accrued credit cards		15,358		45,722
Accrued expense – previously factored liability		1,291,691		776,414
Accrued income taxes, and other taxes		5,346		6,732
Accrued professional fees		694,140		573,040
Accrued advertising		69,656		69,656
Accrued payroll		8,423		14,292
Accrue expense - other		–		363
Accrued expense - dividend payable		–		210,046
Total	$	2,522,332	$	2,038,595

PLANT AND EQUIPMENT, NET (Tables)

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

Schedule of property and equipment
	June 30, 2023			December 31, 2022
Medical equipment	$	96,532		$	96,532
Computer Equipment		9,189			9,189
Furniture, fixtures and equipment		30,841			35,974
Leasehold Improvement		15,950			15,950
Total		152,512			157,645
Less: accumulated depreciation		(105,074	)		(102,206	)
Property and equipment, net	$	47,438		$	55,439

NOTES AND LOANS PAYABLE (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of notes payable

Schedule of notes payable
	June 30, 2023			December 31, 2022
Notes and loans payable	$	169,318		$	155,598
Less current portion		(24,724	)		(15,809	)
Long-term portion	$	144,594		$	139,789

Schedule of maturities of long-term debt


	Amount
2024	$	24,724
2025		4,986
2026		4,986
2027		4,986
2028		4,986
Thereafter		124,650
Total	$	169,318

CONVERTIBLE NOTES PAYABLE (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of convertible notes summary

Schedule of convertible notes summary
	June 30, 2023			December 31, 2022
Convertible notes payable	$	3,968,415		$	3,562,550
Discounts on convertible notes payable		(100,347	)		(46,798	)
Total convertible debt less debt discount		3,868,068			3,515,752
Current portion		3,868,068			3,515,752
Long-term portion	$	–		$	–

Schedule of convertible notes payable


Note #	Issuance	Maturity	Principal Balance 12/31/22		New Loan		Principal Conversions			Shares Issued Upon Conversion		Principal Balance 6/30/23		Accrued Interest on Convertible Debt at 12/31/22		Interest Expense On Convertible Debt For the Period Ended 6/30/23		Accrued Interest on Convertible Debt at 6/30/23		Unamortized Debt Discount At 6/30/23
7-1	10/28/2016	10/28/2017		10,000	$	–	$	(10,000	)		23,405,455	$	–	$	2,263	$	–	$	–	$	–
9	9/12/2016	9/12/2017		50,080		–		–			–		50,080		14,157		4,967		19,124		–
10	1/24/2017	1/24/2018		55,000		–		–			–		55,000		69,876		5,455		75,331		–
10-1	2/10/2023	2/10/2024		–		50,000		–			–		50,000		–		2,877		2,877		–
10-2	3/30/2023	3/30/2024		–		25,000		–			–		25,000		–		945		945		–
29-2	11/8/2019	11/8/2020		36,604		–		–			–		36,604		20,160		4,356		24,516		–
31	8/28/2019	8/28/2020		–		–		–			–		–		8,385		–		8,385		–
37-1	9/3/2020	6/30/2021		113,667		–		–			–		113,667		28,756		10,146		48,902		–
37-2	11/2/2020	8/31/2021		113,167		–		–			–		113,167		27,510		10,101		47,611		–
37-3	12/29/2020	9/30/2021		113,166		–		–			–		113,166		26,474		10,101		46,575		–
38	2/9/2021	2/9/2022		96,000		–		(48,800	)		85,276,923		47,200		27,939		5,910		33,849		–
39	4/26/2021	4/26/2022		168,866		–		–			–		168,866		39,684		18,423		58,106		–
40-1	9/22/2022	9/22/23		2,600,000		–		–			10,000,000		2,600,000		71,233		128,932		196,164		–
40-2	11/4/2022	11/4/2023		68,666		–		–			–		68,666		1,072		3,405		4,477		5,973
40-3	11/28/2022	11/28/2023		68,667		–		–			–		68,667		620		3,405		4,025		7,102
40-4	12/21/2022	12/21/2023		68,667		–		–			–		68,667		187		3,405		3,592		8,184
40-5	1/24/2023	1/24/2024		–		90,166		–			–		90,166		–		3,878		3,878		13,486
40-6	3/21/2023	3/21/2024		–		139,166		–			–		139,166		–		3,851		3,851		26,520
40-7	6/5/2023	6/5/2024		–		139,166		–			–		139,166		–		953		953		34,155
40-8	6/13/2023	6/13/2024		–		21,167		–			–		21,167		–		99		99		4,927
			$	3,562,550	$	464,665	$	(58,800	)		118,682,378	$	3,968,415	$	338,316	$	221,209	$	583,260	$	100,347

WARRANTS (Tables)

6 Months Ended

Jun. 30, 2023

Warrants

Schedule of warrant activity

Schedule of warrant activity
	Number of Warrants			Weighted Average Exercise Price
Balance at January 1, 2023		235,557,856		$	0.015
Granted		–			–
Exercised		–			–
Forfeited		(25,000	)		–
Balance at June 30, 2023		235,532,856			0.015
Warrants Exercisable at June 30, 2023		235,532,856		$	0.015

DISCONTINUED OPERATIONS (Tables)

6 Months Ended

Jun. 30, 2023

Discontinued Operations and Disposal Groups [Abstract]

Schedule of discontinued operations

Schedule of discontinued operations
	Three Months Ended June 30,
	2023		2022

Gain (Loss) from discontinued operations
Revenue of AHI subsidiary	$	–	$	39,512
Cost of sales of AHI subsidiary		–		(18,614	)
Selling, general and administrative expenses of AHI subsidiary		–		(40,833	)
Interest expense of Red Rock Investor Note		–		(17,000	)
Loss from discontinued operations	$	–	$	(36,935	)


	Six Months Ended June 30,
	2023		2022

Gain (Loss) from discontinued operations
Revenue AHI subsidiary	$	–	$	83,356
Cost of sales AHI subsidiary		–		(38,088	)
Selling, general and administrative expenses AHI subsidiary		–		(42,714	)
Interest expense of Red Rock Investor Note		–		(33,622	)
Gain no change in estimate of AHI subsidiary		–		(4,474	)
Loss from discontinued operations	$	–	$	(35,542	)

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS, NET (Tables)

6 Months Ended

Jun. 30, 2023

Goodwill And Identifiable Intangible Assets Net

Schedule of goodwill balances

Schedule of goodwill balances
	Healthcare		Total
Carrying value at December 31, 2022	$	5,666,608	$	5,666,608
Accumulated impairment		–		–
Carrying value at June 30, 2023	$	5,666,608	$	5,666,608

COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of property leases

Schedule of property leases
June 30,	Amount
2024	$	126,752
2025		32,205
Total	$	158,957

Schedule of annual objectives of financial performance


Year	Minimum Annual Nova EBITDA	Cash Annual Bonus	Series J Preferred Stock
2022	$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

SEGMENT REPORTING (Tables)

6 Months Ended

Jun. 30, 2023

Segment Reporting [Abstract]

Schedule of segment reporting

Schedule of segment reporting
	June 30, 2023		December 31, 2022
Assets:
Financial Services	$	2,820	$	8,577
Healthcare		15,455,454		12,692,531
Real Estate		589,331		592,557
Others		5,914		59,692
Consolidated assets	$	16,053,519	$	13,353,357

	Three Months Ended June 30,
	2023			2022
Revenues:
Financial Services	$	118,304		$	472,014
Healthcare		3,364,506			2,619,218
Consolidated revenues	$	3,482,810		$	3,091,232

Cost of Sales:
Financial Services	$	21,297		$	112,776
Healthcare		1,081,689			983,842
Consolidated cost of sales	$	1,102,986		$	1,096,618

Income (Loss) from operations from subsidiaries
Financial Services	$	(43,269	)	$	11,361
Healthcare		2,106,551			1,481,055
Real Estate		(1,743	)		(1,688	)
Income from operations from subsidiaries	$	2,061,539		$	1,490,728

Loss from operations from Cardiff Lexington	$	(355,369	)	$	(388,717	)
Total income from operations	$	1,706,170		$	1,102,011

Income (Loss) before taxes
Financial Services	$	(43,810	)	$	(45,540	)
Healthcare		1,378,445			51,136
Real Estate		(1,743	)		(2,416	)
Corporate, administration and other non-operating expenses		(516,814	)		(65,006	)
Consolidated income (loss) before taxes	$	816,078		$	(61,826	)

	Six Months Ended June 30,
	2023			2022
Revenues:
Financial Services	$	272,703		$	936,857
Healthcare		6,070,905			5,051,525
Consolidated revenues	$	6,343,608		$	5,988,382

Cost of Sales:
Financial Services	$	48,126		$	325,222
Healthcare		2,037,983			1,887,624
Consolidated cost of sales	$	2,086,109		$	2,212,846

Income (Loss) from operations from subsidiaries
Financial Services	$	(87,256	)	$	(90,120	)
Healthcare		3,384,790			2,784,403
Real Estate		(1,840	)		(2,513	)
Income from operations from subsidiaries	$	3,295,694		$	2,691,770

Loss from operations from Cardiff Lexington	$	(875,962	)	$	(868,276	)
Total income from operations	$	2,419,732		$	1,823,494

Income (Loss) before taxes
Financial Services	$	(89,300	)	$	(91,030	)
Healthcare		2,195,542			868,234
Real Estate		(1,840	)		(2,513	)
Corporate, administration and other non-operating expenses		(1,304,315	)		(2,398,971	)
Consolidated income (loss) before taxes	$	800,087		$	(1,624,280	)

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details - Estimated useful lives)	6 Months Ended
	Jun. 30, 2023
Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful live	5 - 7 years
Medical Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful live	10 years
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, useful live	10 years or lease term, if shorter

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Accounting Policies [Abstract]
Allowances for doubtful account	$ 270,000		$ 270,000		$ 0
Net accounts receivable	9,193,529		9,193,529		6,604,780
Goodwill impairment amount			0	$ 0
Advertising and marketing expense	133,326	$ 82,269	171,679	$ 210,054
Uncertain tax positions	0		0		$ 0
Working capital deficit	$ 1,900,000		$ 1,900,000

RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS (Details - Financical Statements) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total assets	$ 16,053,519		$ 16,053,519		$ 13,353,357
Total Liabilities	11,672,952		11,672,952		10,198,163
Total shareholders' equity	(917,038)	$ (992,395)	(917,038)	$ (992,395)	$ (1,469,808)	$ 732,361
Revenue	3,482,810	3,091,232	6,343,608	5,988,382
Cost of sales	1,102,986	1,096,618	2,086,109	2,212,846
Gross margin	2,379,824	1,994,614	4,257,499	3,775,536
Operating expense	673,654	871,996	1,837,768	1,952,043
Income from operations	1,706,170	1,122,618	2,419,731	1,823,493
Other income (expense), net	(890,092)	(1,147,509)	(1,619,644)	(3,412,231)
Net loss before discontinued operations	816,078	(24,891)	800,087	(1,588,738)
Loss from discontinued operations	0	36,935	0	35,542
Net loss	$ 816,078	$ (61,826)	$ 800,087	$ (1,624,280)
Basic loss per share, discontinued operations	$ 0.00	$ (0.00)	$ 0.00	$ (0.00)
Previously Reported [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total assets		$ 12,464,017		$ 12,464,017
Total Liabilities		10,331,410		10,331,410
Mezzanine equity		0		0
Total shareholders' equity		2,132,607		2,132,607
Revenue		3,130,744		6,071,738
Cost of sales		1,115,232		2,250,934
Gross margin		2,015,512		3,820,804
Operating expense		912,829		1,994,757
Income from operations		1,102,683		1,826,047
Other income (expense), net		(1,147,509)		(2,340,705)
Net loss before discontinued operations		(44,826)		(514,658)
Loss from discontinued operations		(17,000)		(33,622)
Net loss		$ (61,826)		$ (548,280)
Basic loss per share, continued operations		$ (0.00)		$ (0.00)
Basic loss per share, discontinued operations		$ (0.00)		$ (0.00)
Weighted average shares outstanding - basic, continued operations		166,130,069		166,130,069
Weighted average shares outstanding - basic, discontinued operations		166,130,069		166,130,069
Revision of Prior Period, Adjustment [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total assets		$ 3,275,000		$ 3,275,000
Total Liabilities		3,275,000		3,275,000
Mezzanine equity		3,125,002		3,125,002
Total shareholders' equity		(3,125,002)		(3,125,002)
Revenue		(39,512)		(83,356)
Cost of sales		(18,614)		(38,088)
Gross margin		(20,898)		(45,268)
Operating expense		(40,833)		(42,714)
Income from operations		19,935		(2,554)
Other income (expense), net		0		(1,071,526)
Net loss before discontinued operations		19,935		(1,074,080)
Loss from discontinued operations		(19,935)		(1,920)
Net loss		0		(1,076,000)
As Restated [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Total assets		15,739,017		15,739,017
Total Liabilities		13,606,410		13,606,410
Mezzanine equity		3,125,002		3,125,002
Total shareholders' equity		(992,395)		(992,395)
Revenue		3,091,232		5,988,382
Cost of sales		1,096,618		2,212,846
Gross margin		1,994,614		3,775,536
Operating expense		871,996		1,952,043
Income from operations		1,122,618		1,823,493
Other income (expense), net		(1,147,509)		(3,412,231)
Net loss before discontinued operations		(24,891)		(1,588,738)
Loss from discontinued operations		(36,935)		(35,542)
Net loss		$ (61,826)		$ (1,624,280)
Basic loss per share, continued operations		$ (0.00)		$ (0.01)
Basic loss per share, discontinued operations		$ (0.00)		$ (0.01)
Weighted average shares outstanding - basic, continued operations		166,130,069		166,130,069
Weighted average shares outstanding - basic, discontinued operations		166,130,069		166,130,069

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accounts payable	$ 437,718	$ 342,330
Accrued credit cards	15,358	45,722
Accrued expense – previously factored liability	1,291,691	776,414
Accrued income taxes, and other taxes	5,346	6,732
Accrued professional fees	694,140	573,040
Accrued advertising	69,656	69,656
Accrued payroll	8,423	14,292
Accrue expense - other	0	363
Accrued expense - dividend payable	0	210,046
Total	$ 2,522,332	$ 2,038,595

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details Narrative) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accrued taxes, penalties and interest	$ 5,346	$ 6,732

PLANT AND EQUIPMENT, NET (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Abstract]
Medical equipment	$ 96,532	$ 96,532
Computer Equipment	9,189	9,189
Furniture, fixtures and equipment	30,841	35,974
Leasehold Improvement	15,950	15,950
Total	152,512	157,645
Less: accumulated depreciation	(105,074)	(102,206)
Property and equipment, net	$ 47,438	$ 55,439

PLANT AND EQUIPMENT, NET (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
PLANT AND EQUIPMENT, NET (Details Narrative) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 3,365	$ 10,814	$ 8,000	$ 21,628
Cost of sales		$ 5,031		$ 10,062

LAND (Details Narrative) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Real Estate [Abstract]
Land value	$ 540,000	$ 540,000

LINE OF CREDIT (Details Narrative) - USD ($)	6 Months Ended	12 Months Ended
LINE OF CREDIT (Details Narrative) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Line Of Credit
Revolving line of credit	$ 92,500	$ 92,500
Interest rate	11.70%	10.95%
Borrowings on line of credit	$ 8,749	$ 0

RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Related Party Transaction [Line Items]
Due to related party	$ 437,718	$ 342,330
Manager Of Platinum Tax [Member]
Related Party Transaction [Line Items]
Due to related party	156,384	37,024
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 Debt	$ 123,192	$ 123,192

NOTES AND LOANS PAYABLE (Details - Notes Payable) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
Notes and loans payable	$ 169,318	$ 155,598
Less current portion	(24,724)	(15,809)
Long-term portion	$ 144,594	$ 139,789

NOTES AND LOANS PAYABLE (Details - Long term debt maturity)	Jun. 30, 2023 USD ($)
Debt Disclosure [Abstract]
2024	$ 24,724
2025	4,986
2026	4,986
2027	4,986
2028	4,986
Thereafter	124,650
Total	$ 169,318

NOTES AND LOANS PAYABLE (Details Narrative) - USD ($)		6 Months Ended
NOTES AND LOANS PAYABLE (Details Narrative) - USD ($)	Jun. 02, 2020	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Notes payable outstanding		$ 169,318	$ 155,598
Accrued interest		5,723
Loans And Notes Payable [Member]
Debt Instrument [Line Items]
Notes payable outstanding		10,989	10,989
Accrued interest		6,882	6,229
S B A Loan [Member]
Debt Instrument [Line Items]
Accrued interest		0	5,723
Proceeds from loans	$ 150,000
Interest rate	3.75%
Loan payable		$ 149,580	$ 144,609

CONVERTIBLE NOTES PAYABLE (Details - Convertible notes) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Discounts on convertible notes payable	$ (100,347)	$ (46,798)
Total convertible debt less debt discount	3,868,068	3,515,752
Current portion	3,868,068	3,515,752
Long-term portion	0	0
Convertible Notes Payables [Member]
Debt Instrument [Line Items]
Convertible notes	$ 3,968,415	$ 3,562,550

CONVERTIBLE NOTES PAYABLE (Details- Convertible debt instruments) - USD ($)	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Principal Balance	$ 3,968,415	$ 3,562,550
New Loans	464,665
Principal Conversions	$ (58,800)
Shares Issued Upon Conversion	118,682,378
Accrued Interest on Convertible Debt	$ 583,260	338,316
Interest Expense On Convertible Debt	221,209
Unamortized Debt Discount	100,347	46,798
Principal Conversions	$ 58,800
Convertible Note 71 [Member]
Debt Instrument [Line Items]
Debt issuance date	Oct. 28, 2016
Debt Maturity date	Oct. 28, 2017
Principal Balance	$ 0	10,000
New Loans	0
Principal Conversions	$ (10,000)
Shares Issued Upon Conversion	23,405,455
Accrued Interest on Convertible Debt	$ 0	2,263
Interest Expense On Convertible Debt	0
Unamortized Debt Discount	0
Principal Conversions	$ 10,000
Convertible Note 9 [Member]
Debt Instrument [Line Items]
Debt issuance date	Sep. 12, 2016
Debt Maturity date	Sep. 12, 2017
Principal Balance	$ 50,080	50,080
New Loans	0
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 19,124	14,157
Interest Expense On Convertible Debt	4,967
Unamortized Debt Discount	0
Principal Conversions	$ 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
New Loans	0
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 75,331	69,876
Interest Expense On Convertible Debt	5,455
Unamortized Debt Discount	0
Principal Conversions	$ 0
Convertible Note 101 [Member]
Debt Instrument [Line Items]
Debt issuance date	Feb. 10, 2023
Debt Maturity date	Feb. 10, 2024
Principal Balance	$ 50,000	0
New Loans	50,000
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 2,877	0
Interest Expense On Convertible Debt	2,877
Unamortized Debt Discount	0
Principal Conversions	$ 0
Convertible Note 102 [Member]
Debt Instrument [Line Items]
Debt issuance date	Mar. 30, 2023
Debt Maturity date	Mar. 30, 2024
Principal Balance	$ 25,000	0
New Loans	25,000
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 945	0
Interest Expense On Convertible Debt	945
Unamortized Debt Discount	0
Principal Conversions	$ 0
Convertible Note 292 [Member]
Debt Instrument [Line Items]
Debt issuance date	Nov. 08, 2019
Debt Maturity date	Nov. 08, 2020
Principal Balance	$ 36,604	36,604
New Loans	0
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 24,516	20,160
Interest Expense On Convertible Debt	4,356
Unamortized Debt Discount	0
Principal Conversions	$ 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
New Loans	0
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 8,385	8,385
Interest Expense On Convertible Debt	0
Unamortized Debt Discount	0
Principal Conversions	$ 0
Convertible Note 371 [Member]
Debt Instrument [Line Items]
Debt issuance date	Sep. 03, 2020
Debt Maturity date	Jun. 30, 2021
Principal Balance	$ 113,667	113,667
New Loans	0
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 48,902	28,756
Interest Expense On Convertible Debt	10,146
Unamortized Debt Discount	0
Principal Conversions	$ 0
Convertible Note 372 [Member]
Debt Instrument [Line Items]
Debt issuance date	Nov. 02, 2020
Debt Maturity date	Aug. 31, 2021
Principal Balance	$ 113,167	113,167
New Loans	0
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 47,611	27,510
Interest Expense On Convertible Debt	10,101
Unamortized Debt Discount	0
Principal Conversions	$ 0
Convertible Note 373 [Member]
Debt Instrument [Line Items]
Debt issuance date	Dec. 29, 2020
Debt Maturity date	Sep. 30, 2021
Principal Balance	$ 113,166	113,166
New Loans	0
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 46,575	26,474
Interest Expense On Convertible Debt	10,101
Unamortized Debt Discount	0
Principal Conversions	$ 0
Convertible Note 38 [Member]
Debt Instrument [Line Items]
Debt issuance date	Feb. 09, 2021
Debt Maturity date	Feb. 09, 2022
Principal Balance	$ 47,200	96,000
New Loans	0
Principal Conversions	$ (48,800)
Shares Issued Upon Conversion	85,276,923
Accrued Interest on Convertible Debt	$ 33,849	27,939
Interest Expense On Convertible Debt	5,910
Unamortized Debt Discount	0
Principal Conversions	$ 48,800
Convertible Note 39 [Member]
Debt Instrument [Line Items]
Debt issuance date	Apr. 26, 2021
Debt Maturity date	Apr. 26, 2022
Principal Balance	$ 168,866	168,866
New Loans	0
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 58,106	39,684
Interest Expense On Convertible Debt	18,423
Unamortized Debt Discount	0
Principal Conversions	$ 0
Convertible Note 401 [Member]
Debt Instrument [Line Items]
Debt issuance date	Sep. 22, 2022
Debt Maturity date	Sep. 22, 2023
Principal Balance	$ 2,600,000	2,600,000
New Loans	0
Principal Conversions	$ 0
Shares Issued Upon Conversion	10,000,000
Accrued Interest on Convertible Debt	$ 196,164	71,233
Interest Expense On Convertible Debt	128,932
Unamortized Debt Discount	0
Principal Conversions	$ 0
Convertible Note 402 [Member]
Debt Instrument [Line Items]
Debt issuance date	Nov. 04, 2022
Debt Maturity date	Nov. 04, 2023
Principal Balance	$ 68,666	68,666
New Loans	0
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 4,477	1,072
Interest Expense On Convertible Debt	3,405
Unamortized Debt Discount	5,973
Principal Conversions	$ 0
Convertible Note 403 [Member]
Debt Instrument [Line Items]
Debt issuance date	Nov. 28, 2022
Debt Maturity date	Nov. 28, 2023
Principal Balance	$ 68,667	68,667
New Loans	0
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 4,025	620
Interest Expense On Convertible Debt	3,405
Unamortized Debt Discount	7,102
Principal Conversions	$ 0
Convertible Note 404 [Member]
Debt Instrument [Line Items]
Debt issuance date	Dec. 21, 2022
Debt Maturity date	Dec. 21, 2023
Principal Balance	$ 68,667	68,667
New Loans	0
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 3,592	187
Interest Expense On Convertible Debt	3,405
Unamortized Debt Discount	8,184
Principal Conversions	$ 0
Convertible Note 405 [Member]
Debt Instrument [Line Items]
Debt issuance date	Jan. 24, 2023
Debt Maturity date	Jan. 24, 2024
Principal Balance	$ 90,166	0
New Loans	90,166
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 3,878	0
Interest Expense On Convertible Debt	3,878
Unamortized Debt Discount	13,486
Principal Conversions	$ 0
Convertible Note 406 [Member]
Debt Instrument [Line Items]
Debt issuance date	Mar. 21, 2023
Debt Maturity date	Mar. 21, 2024
Principal Balance	$ 139,166	0
New Loans	139,166
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 3,851	0
Interest Expense On Convertible Debt	3,851
Unamortized Debt Discount	26,520
Principal Conversions	$ 0
Convertible Note 407 [Member]
Debt Instrument [Line Items]
Debt issuance date	Jun. 05, 2023
Debt Maturity date	Jun. 05, 2024
Principal Balance	$ 139,166	0
New Loans	139,166
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 953	0
Interest Expense On Convertible Debt	953
Unamortized Debt Discount	34,155
Principal Conversions	$ 0
Convertible Note 408 [Member]
Debt Instrument [Line Items]
Debt issuance date	Jun. 13, 2023
Debt Maturity date	Jun. 13, 2024
Principal Balance	$ 21,167	0
New Loans	21,167
Principal Conversions	$ 0
Shares Issued Upon Conversion	0
Accrued Interest on Convertible Debt	$ 99	$ 0
Interest Expense On Convertible Debt	99
Unamortized Debt Discount	4,927
Principal Conversions	$ 0

CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($)				3 Months Ended		6 Months Ended
CONVERTIBLE NOTES PAYABLE (Details Narrative) - USD ($)	Jun. 13, 2023	Jun. 05, 2023	Sep. 22, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Short-Term Debt [Line Items]
Convertible debt outstanding				$ 3,868,068		$ 3,868,068		$ 3,515,752
Proceeds from convertible debt						464,665
Repayments of convertible debt						(0)	$ 5,908
Debt discount				100,347		100,347		$ 46,798
Amortization of debt discount				$ 30,633	$ 111,706	48,616	156,252
Stock issued for conversion of debt, amount converted						58,800	0
Debt converted, interest converted						5,873
Debt converted, penalties and fees converted						$ 2,000
Stock issued for conversion of debt, shares issued						118,682,378
Fair value for debt settlement						$ 123,566
Common stock par value				$ 0.001		$ 0.001		$ 0.001
Convertible debt				$ 3,968,415		$ 3,968,415		$ 3,562,550
Gain on debt				$ 0	$ 0	390	0
Promissory Note [Member]
Short-Term Debt [Line Items]
Convertible debt			$ 4,791,099
Principal amount			3,840,448
Accrued interest			950,651
Gain on debt			$ 1,397,271
Convertible Note 40 [Member]
Short-Term Debt [Line Items]
Principal amount	$ 21,167	$ 136,667
Original issue discount and fee	$ 5,167	$ 39,167
Interest rate	10.00%	10.00%
Series X Senior Convertible Preferred Stock [Member]
Short-Term Debt [Line Items]
Convertible shares			375,000
Conversion amount			$ 1,500,000
Common stock par value			$ 4.00
Security Exchange And Purchase Agreement [Member]
Short-Term Debt [Line Items]
Convertible amount			$ 2,600,000
Convertible Notes Payable [Member]
Short-Term Debt [Line Items]
Proceeds from convertible debt						$ 355,500	752,260
Repayments of convertible debt							$ 5,908

CAPITAL STOCK (Details Narrative) - USD ($)		3 Months Ended	6 Months Ended
CAPITAL STOCK (Details Narrative) - USD ($)	May 25, 2023	Jun. 30, 2022	Jun. 30, 2023	Dec. 31, 2022
Class of Stock [Line Items]
Stock issued for conversion of debt, shares issued			118,682,378
Convertible Notes Payable [Member]
Class of Stock [Line Items]
Stock issued for conversion of debt, shares issued			118,682,378
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock shares authorized			4
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock shares authorized			3,000,000	3,000,000
Issuance of shares	3,150
Issuance of shares value	$ 25,000
Series B preferred stock issued for cancellation of Series D preferred stock		37,500
Series B preferred stock issued for cancellation of Series H preferred stock		37,500
Series C Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock shares authorized			500	500
Number of shares issued at conversion			100,000
Purchase price per share			$ 50,000
Series D Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock shares authorized			800,000
Series D Preferred stock cancelled		37,500
Series H Preferred stock cancelled		37,500
Series E Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock shares authorized			1,000,000	1,000,000
Series F Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock shares authorized			800,000
Series F 1 Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock shares authorized			800,000	800,000
Series I Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock shares authorized			500,000,000	500,000,000
Series J Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock shares authorized			10,000,000	10,000,000
Series K Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock shares authorized			10,937,500
Series L Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock shares authorized			100,000,000	100,000,000
Series N Senior Convertible Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock shares authorized			3,000,000
Dividends payment			$ 557,535
Series R Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock shares authorized			5,000	5,000
Series X Preferred Stock [Member]
Class of Stock [Line Items]
Preferred stock shares authorized			5,000,000	5,000,000
Dividends payment			$ 115,068

WARRANTS (Details) - Warrant [Member]	6 Months Ended
WARRANTS (Details) - Warrant [Member]	Jun. 30, 2023 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of warrants outstanding, Beginning balance \| shares	235,557,856
Weighted average exercise price, Beginning balance \| $ / shares	$ 0.015
Number of warrants, Granted \| shares	0
Weighted average exercise price, Granted \| $ / shares	$ 0
Number of warrants, Exercised \| shares	0
Weighted average exercise price, Exercised \| $ / shares	$ 0
Number of warrants, Forfeited \| shares	(25,000)
Weighted average exercise price, Forfeited \| $ / shares	$ 0
Number of warrants outstanding, Ending balance \| shares	235,532,856
Weighted average exercise price, Ending balance \| $ / shares	$ 0.015
Number of warrants, Exercisable \| shares	235,532,856
Weighted average exercise price, Exercisable \| $ / shares	$ 0.015

DISCONTINUED OPERATIONS (Details) - USD ($)	3 Months Ended		6 Months Ended
DISCONTINUED OPERATIONS (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Gain (Loss) from discontinued operations
Revenue AHI subsidiary	$ 3,482,810	$ 3,091,232	$ 6,343,608	$ 5,988,382
Cost of sales AHI subsidiary	(1,102,986)	(1,096,618)	(2,086,109)	(2,212,846)
Selling, general and administrative expenses AHI subsidiary	(670,289)	(866,213)	(1,829,768)	(1,940,477)
Loss from discontinued operations	0	36,935	0	35,542
Discontinued Operations [Member]
Gain (Loss) from discontinued operations
Revenue AHI subsidiary	0	39,512	0	83,356
Cost of sales AHI subsidiary	0	(18,614)	0	(38,088)
Selling, general and administrative expenses AHI subsidiary	0	(40,833)	0	(42,714)
Interest expense of Red Rock Investor Note	0	(17,000)	0	(33,622)
Gain no change in estimate of AHI subsidiary			0	(4,474)
Loss from discontinued operations	$ 0	$ (36,935)	$ 0	$ (35,542)

DISCONTINUED OPERATIONS (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
DISCONTINUED OPERATIONS (Details Narrative) - USD ($)	Oct. 31, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Liabilities						$ 0
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest		$ 0	$ 36,935	$ 0	$ 35,542
A H I [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on disposal of amount	$ 217,769
Series F Preferred Stock [Member] \| Buy Back Agreement [Member] \| A H I [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Number of shares issued	175,045

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS, NET (Details)	6 Months Ended
	Jun. 30, 2023 USD ($)
Defined Benefit Plan Disclosure [Line Items]
Goodwill, Beginning balance	$ 5,666,608
Accumulated impairment	0
Goodwill, Ending balance	5,666,608
Health Care [Member]
Defined Benefit Plan Disclosure [Line Items]
Goodwill, Beginning balance	5,666,608
Accumulated impairment	0
Goodwill, Ending balance	$ 5,666,608

GOODWILL AND IDENTIFIABLE INTANGIBLE ASSETS, NET (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Goodwill And Identifiable Intangible Assets Net
Goodwill impairment	$ 0	$ 0

COMMITMENTS AND CONTINGENCIES (Details - Schedule of property leases)	Jun. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2024	$ 126,752
2025	32,205
Total	$ 158,957

COMMITMENTS AND CONTINGENCIES (Details - Schedule of annual objectives of financial performance) - USD ($)	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Effect of Fourth Quarter Events [Line Items]
Cash Annual Bonus	$ 411,209	$ 226,802
Year End 2022 [Member]
Effect of Fourth Quarter Events [Line Items]
Minimum Annual amount	2,000,000
Cash Annual Bonus	$ 120,000
Year End 2022 [Member] \| Series J Preferred Stock [Member]
Effect of Fourth Quarter Events [Line Items]
Number of new shares issued	120,000
Year End 2022 One [Member]
Effect of Fourth Quarter Events [Line Items]
Minimum Annual amount	$ 2,400,000
Cash Annual Bonus	$ 150,000
Year End 2022 One [Member] \| Series J Preferred Stock [Member]
Effect of Fourth Quarter Events [Line Items]
Number of new shares issued	135,000
Year End 2023 [Member]
Effect of Fourth Quarter Events [Line Items]
Minimum Annual amount	$ 3,700,000
Cash Annual Bonus	$ 210,000
Year End 2023 [Member] \| Series J Preferred Stock [Member]
Effect of Fourth Quarter Events [Line Items]
Number of new shares issued	150,000
Year End 2024 [Member]
Effect of Fourth Quarter Events [Line Items]
Minimum Annual amount	$ 5,500,000
Cash Annual Bonus	$ 300,000
Year End 2024 [Member] \| Series J Preferred Stock [Member]
Effect of Fourth Quarter Events [Line Items]
Number of new shares issued	180,000
Year End 2025 [Member]
Effect of Fourth Quarter Events [Line Items]
Minimum Annual amount	$ 8,000,000
Cash Annual Bonus	$ 420,000
Year End 2025 [Member] \| Series J Preferred Stock [Member]
Effect of Fourth Quarter Events [Line Items]
Number of new shares issued	210,000

COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
	May 31, 2021	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	May 15, 2021
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Operating Leases		$ 56,378	$ 34,305	$ 134,230	$ 170,150
Accrued compensation							$ 156,000
First Doctor [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Salary and Wage, Excluding Cost of Good and Service Sold	$ 372,000
Second Doctor [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Salary and Wage, Excluding Cost of Good and Service Sold	450,000
Third Doctor [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Salary and Wage, Excluding Cost of Good and Service Sold	$ 372,000
Chief Executive Officer [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Accrued compensation		2,025,500		2,025,500		$ 1,870,500
Board of Directors Chairman [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Accrued compensation		2,042,000		2,042,000		1,863,000
Chief Financial Officer [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Accrued compensation		$ 17,057		$ 17,057		$ 17,057

SEGMENT REPORTING (Details) - USD ($)	3 Months Ended		6 Months Ended
SEGMENT REPORTING (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Segment Reporting Information [Line Items]
Net Assets	$ 16,053,519		$ 16,053,519		$ 13,353,357
Total revenue	3,482,810	$ 3,091,232	6,343,608	$ 5,988,382
Cost of Revenue	1,102,986	1,096,618	2,086,109	2,212,846
Income (Loss) from operations from subsidiaries	1,706,170	1,102,011	2,419,732	1,823,494
Income (Loss) before taxes	816,078	(61,826)	800,087	(1,624,280)
Financial Services [Member]
Segment Reporting Information [Line Items]
Net Assets	2,820		2,820		8,577
Total revenue	118,304	472,014	272,703	936,857
Cost of Revenue	21,297	112,776	48,126	325,222
Income (Loss) from operations from subsidiaries	(43,269)	11,361	(87,256)	(90,120)
Income (Loss) before taxes	(43,810)	(45,540)	(89,300)	(91,030)
Healthcare Segment [Member]
Segment Reporting Information [Line Items]
Net Assets	15,455,454		15,455,454		12,692,531
Total revenue	3,364,506	2,619,218	6,070,905	5,051,525
Cost of Revenue	1,081,689	983,842	2,037,983	1,887,624
Income (Loss) from operations from subsidiaries	2,106,551	1,481,055	3,384,790	2,784,403
Income (Loss) before taxes	1,378,445	51,136	2,195,542	868,234
Real Estates [Member]
Segment Reporting Information [Line Items]
Net Assets	589,331		589,331		592,557
Income (Loss) from operations from subsidiaries	(1,743)	(1,688)	(1,840)	(2,513)
Income (Loss) before taxes	(1,743)	(2,416)	(1,840)	(2,513)
Others [Member]
Segment Reporting Information [Line Items]
Net Assets	5,914		5,914		$ 59,692
Subsidiary [Member]
Segment Reporting Information [Line Items]
Income (Loss) from operations from subsidiaries	2,061,539	1,490,728	3,295,694	2,691,770
Cardiff Lexington [Member]
Segment Reporting Information [Line Items]
Income (Loss) from operations from subsidiaries	(355,369)	(388,717)	(875,962)	(868,276)
Corporate Segment [Member]
Segment Reporting Information [Line Items]
Income (Loss) before taxes	$ (516,814)	$ (65,006)	$ (1,304,315)	$ (2,398,971)