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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ 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 333-194337

MediXall Group, Inc.

(Exact name of registrant as specified in its charter)

Nevada	33-0864127
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

104 N 4^th Street Leesburg, Florida	34748
(Address of principal executive offices)	(Zip Code)

800-381-1787

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Securities registered pursuant to Section 12(g) of the Act:

Yes

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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 checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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 May 28, 2024, the issuer had 159,755,335 shares of its common stock issued and outstanding.

MEDIXALL GROUP, INC. AND SUBSIDIARIES

INDEX

		Page No.
PART I	FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS:	1
	Condensed Consolidated Balance Sheets at June 30, 2023 (unaudited) and December 31, 2022	1
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2023 and 2022 (unaudited)	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2023 and 2022 (unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30 and 2022 (unaudited)	4
	Notes to Condensed Consolidated Financial Statements (unaudited)	5
ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	16
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20
ITEM 4.	CONTROLS AND PROCEDURES	20

PART II	OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	21
ITEM 1A.	RISK FACTORS	21
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	21
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	21
ITEM 4.	MINE SAFETY DISCLOSURES	21
ITEM 5.	OTHER INFORMATION	21
ITEM 6.	EXHIBITS	22
SIGNATURES		23

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MEDIXALL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30,			December 31,
	2023			2022
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	18,573		$	3,416
Other assets		3,484			8,083
Total current assets		22,057			11,499

Furniture and equipment, net		15,981			21,755
Intellectual property		143,000			156,000
Right-of-use-operating lease asset		—			260,177
Website and development costs		310,578			412,582
Total assets		491,616			862,013

LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses	$	1,361,251		$	1,100,147
Accounts payable and accrued expenses - related party		610,290			610,290
Operating lease liability		—			75,691
Senior Convertible Debentures, net of discount of $141,254 and $166,167		3,358,192			2,555,793
Total current liabilities		5,329,733			4,341,921

Operating lease liability, net of current portion		—			189,457

Total liabilities		5,329,733			4,531,378

STOCKHOLDERS' DEFICIT:
Convertible Preferred Series A stock, $0.001 par value, 1,000,000 authorized; 176,596 and 264,894 issued and outstanding	$	177		$	265
Convertible Preferred Series B stock, $0.001 par value, 4,000,000 authorized 3,909,360 issued and outstanding		3,909			3,909
Common Stock, $0.001 par value 750,000,000 shares authorized; 130,487,491 and 122,187,491 shares issued and outstanding		130,487			122,182
Additional paid-in capital		29,840,988			28,817,084
Accumulated deficit		(34,813,678	)		(32,612,805	)
Total stockholders' deficit		(4,838,117	)		(3,669,365	)

Total liabilities and stockholders' deficit		491,616			862,013

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

MEDIXALL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022

Revenue	$	71,524		$	10,352		$	149,390		$	18,259

Cost of Services		35,585			—			124,986			—
Gross Margin		35,939			10,352			24,404			18,259

Operating Expenses
Professional fees		544,750			267,956			1,111,107			596,613
Professional fees - related party		—			57,500			—			177,500
Management fees - related party		—			240,000			—			480,000
Personnel related expenses		211,869			783,961			487,248			2,313,915
Other selling, general and administrative		225,754			214,929			492,087			414,327
Interest Expense		32,944			—			134,835			—
Total Operating Expenses		1,015,317			1,564,346			2,225,277			3,982,355

Loss before income taxes		(979,378	)		(1,553,994	)		(2,200,873	)		(3,964,096	)

Income taxes		—			—			—			—

Net Loss		(979,378	)		(1,553,994	)		(2,200,873	)		(3,964,096	)

Less preferred stock dividends		78,136			73,649			155,414			146,488

Net Loss to common shareholders	$	(1,057,514	)	$	(1,627,643	)	$	(2,356,287	)	$	(4,110,584	)

Net loss per common share
Basic	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.04	)
Diluted	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.04	)

Weighted average number of common shares outstanding during the periods
Basic and Diluted		127,453,656			116,151,261			124,686,990			115,392,749

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

MEDIXALL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT


	Series A Voting Preferred Stock				Series B Voting Preferred Stock				Common Stock
	$0.001 Par Value				$0.001 Par Value				$0.001 Par Value				Additional Paid-in		Accumulated			Total Stockholder
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			Deficit
Balance, December 31, 2021		264,894	$	265		3,909,360	$	3,909		110,864,595		110,864	$	25,327,230		(25,782,390	)	$	(340,122	)

Proceeds received pursuant to Private (Unaudited)		—		—		—		—		—		—		—		—			—
Placement Memorandum, net of $0 offering costs (Unaudited)		—		—		—		—		1,800,000		1,800		718,200		—			720,000
Common stock issued for services (Unaudited)		—		—		—		—		2,737,325		2,737		1,092,192		—			1,094,929
Common stock issued in exchange for right-to-use intellectual property (Unaudited)		—		—		—		—		500,000		500		235,500		—			236,000
Fair Value of warrants Issued with Convertible Debentures (Unaudited)		—		—		—		—		—		—		23,800		—			23,800
Net loss (Unaudited)		—		—		—		—		—		—		—		(2,410,102	)		(2,410,102	)
Balance, March 31, 2022 (Unaudited)		264,894	$	265		3,909,360	$	3,909		115,901,920		115,901	$	27,396,922		(28,192,492	)	$	(675,495	)

Placement Memorandum, net of $0 offering costs (Unaudited)		—		—		—		—		101,250		102		40,398		—			40,500
Common stock issued for services (Unaudited)		—		—		—		—		1,231,869		1,232		364,166		—			365,398
Fair Value of warrants Issued with Convertible Debentures (Unaudited)		—		—		—		—		—		—		59,146		—			59,146
Net loss (Unaudited)		—		—		—		—		—		—		—		(1,553,994	)		(1,553,994	)
Balance, June 30, 2022 (Unaudited)		264,894	$	265		3,909,360	$	3,909		117,235,039		117,235	$	27,860,632		(29,746,486	)	$	(1,764,445	)

Balance, December 31, 2022		264,894	$	265		3,909,360	$	3,909		122,182,860		122,182	$	28,817,084		(32,612,805	)	$	(3,669,365	)

Common stock expense for services (Unaudited)		—		—		—		—		—		—		467,980		—			467,980
Proceeds from the sale of common stock (Unaudited)		—		—		—		—		4,631		5		1,848		—			1,853
Fair value of Warrants issued with Convertible Debentures (Unaudited)		—		—		—		—		—		—		48,525		—			48,525
Net Loss (Unaudited)		—		—		—		—		—		—		—		(1,221,495	)		(1,221,495	)
Balance, March 31, 2023		264,894	$	265		3,909,360	$	3,909		122,187,491		122,187	$	29,335,437		(33,834,300	)	$	(4,372,502	)

Conversion of shares from preferred stock to common stock (Unaudited)		(88,298)		(88)		—		—		8,300,000		8,300		(8,212)		—			—
Common stock expense for services (Unaudited)		—		—		—		—		—		—		467,982		—			467,982
Fair Value of warrants Issued with Convertible Debentures (Unaudited)		—		—		—		—		—		—		45,781		—			45,781
Net loss (Unaudited)		—		—		—		—		—		—		—		(979,378	)		(979,378	)
Balance, June 30, 2023 (Unaudited)		176,596	$	177		3,909,360	$	3,909		130,487,491		130,487	$	29,840,988		(34,813,678	)	$	(4,838,117	)

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

MEDIXALL GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)


	Six Months Ended
	June 30,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(2,200,873	)	$	(3,964,096	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation & amortization		5,774			3,680
Common stock issued as compensation for services		935,962			1,460,327
Amortization of debenture discounts		119,219			5,925
Changes in operating assets and liabilities:
Other assets		4,599			(13,600	)
Prepaid expenses- related party		—			276,043
Accounts payable and accrued expenses		261,104			57,814
Accounts payable and accrued expenses - related party		—			90,035
Net change in right-of-use operating lease asset and liability		(4,971	)		2,131
Amortization of intellectual property		13,000			16,858
Amortization of website and development		102,004			—
Net cash used in operating activities		(764,182	)		(2,064,883	)

CASH FLOWS FROM INVESTING ACTIVITY:
Website development costs		—			(1,680	)
Net cash used in investing activity		—			(1,680	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the sale of common stock, net of offering costs		1,853			760,500
Proceeds from issuance of convertible debentures		777,486			1,416,490
Net cash provided by financing activities		779,339			2,176,990

Net increase in cash		15,157			110,427

Cash at beginning of period		3,416			63,418

Cash at end of period		18,573			173,845

Supplemental disclosures of non-cash information
Issuance of Common Stock in exchange for the Intellectual Property		—			236,000
Discount issued with Convertible Debentures		94,306			82,946
Cash paid during the period for interest		—			—

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

MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1 - Organization and Nature of Operation

MediXall Group, Inc. (the "Company “or “MediXall”) was incorporated on December 21, 1998 under the laws of the State of Nevada under the name of IP Gate, Inc. The Company had various name changes since, to reflect changes in the Company’s operating strategies.

MediXall Group, Inc. (OTCQB: MDXL) is an innovation-driven healthcare solutions company exemplifying robust and purpose-driven solutions. Our company is meticulously crafted to deliver practical, value-based healthcare solutions tailored to enhance the physical health, mental well-being, and overall productivity of individuals, employers, and organizations. By providing customized, forward-thinking services, we empower our clients to control costs while prioritizing comprehensive care. Through an AI-driven engagement platform, our unique solutions are readily accessible, ensuring timely and high-quality care for individuals, employees, and members alike. Health Karma Inc., our operational subsidiary, embodies our mission of combining 'health' and 'karma' to elevate the well-being of our valued clients and members.

The Company saw minimal revenue for the six months ended June 30, 2022 due to the developmental stage of its online healthcare platform along with a restructuring of its product offerings and targeted markets. During 2023, the Company has undergone substantial transformation in both the Board of Directors and management. This shift has led to significant financial growth, with revenue of $71,524 in the second quarter of 2023 surpassing that of the same period in 2022 of $10,352 by nearly 7 times. Additionally, the six-month revenue for 2023 was $149,390 as compared to $18,259 for the same period in 2022 representing an increase of over 8 times.

Moreover, the Company successfully reduced its net loss in the first six months of 2023 by approximately $1.8 million from the same period in 2022. The net loss for the six months ended June 30, 2023 was $2,200,873 versus $3,964,096 for the same period in 2022. For a comprehensive overview of our operations, mission, and strategic initiatives, please refer to the Management’s Discussion and Analysis section in this report.

The Company has the following wholly-owned subsidiaries: (1) Health Karma, Inc. which was established in 2020 to carry out the operations of MediXall Group Inc., (2) Medixaid, Inc., (3) MediXall.com, Inc., (4) IHL of Florida, Inc., which is dormant, and (5) Medixall Financial Group, which is dormant.

NOTE 2 – Going Concern

The Company had an accumulated deficit of $34,813,678 at June 30, 2023, and does not have sufficient operating cash flows. The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles in the United States of America (“GAAP”), which contemplates continuation of the Company as a going concern, which is dependent upon the Company’s ability to establish itself as a profitable business.

Since the Company has generated minimal revenues from its planned operations, its ability to continue as a going concern is wholly dependent upon its ability to obtain additional financing. Since inception, the Company has funded operations through short-term borrowings, and the proceeds from equity sales in order to meet its strategic objectives. The Company's future operations are dependent upon its ability to generate revenues along with additional external funding as needed. However, there can be no assurance that the Company will be able to obtain sufficient funds to continue the development of its business plan. Subsequent to June 30, 2023, and as of the date of this filing, the Company issued $926,500 of convertible debentures.

In view of these conditions, the ability of the Company to continue as a going concern is in substantial doubt and dependent upon achieving a profitable level of operations and on the ability of the Company to obtain necessary financing to fund ongoing operations. These condensed consolidated financial statements do not give effect to any adjustments which will be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying condensed consolidated financial statements. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited, condensed consolidated financial statements of the Company have been prepared in accordance with GAAP for interim financial information, and the Securities and Exchange Commission (“SEC”) rules for interim financial reporting. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been omitted pursuant to such rules and regulations. However, in the opinion of management, the accompanying interim unaudited condensed consolidated financial statements reflect all normal recurring adjustments necessary to present fairly the Company’s condensed consolidated financial position as of June 30, 2023 and the condensed consolidated results of operations and cash flows for the periods presented. The condensed consolidated results of operations for interim periods are not necessarily indicative of the results of operations to be expected for any subsequent interim period. The accompanying unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2022 included in the Company’s Annual Report on Form 10-K, which was filed with the SEC on August 9, 2023.

Principles of Consolidation

These unaudited condensed consolidated financial statements presented are those of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated.

Use of Estimates

The preparation of the unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the condensed consolidated financial statements, which management considered in formulating its estimate could change in the near term due to one or more future non-conforming events. Accordingly, the actual results could differ significantly from estimates.

A material estimate that is particularly susceptible to significant change in the near-term relate to the determination of the impairment of website and development cost. The Company uses various assumptions it believes to be reasonable under the circumstances to make this estimate. Although considerable variability is likely to be inherent in this estimate, management believes that the amount provided is reasonable. This estimate is continually reviewed and adjusted if necessary. Such adjustments are reflected in current operations.

Risks and Uncertainties

The Company's operations are subject to significant risks and uncertainties including financial, operational, and regulatory risks, including the potential risk of business failure.

Income Taxes

The Company accounts for income taxes using the liability method prescribed by the Financial Accounting Standards Board’s (the “FASB”) Accounting Standards Codification (“ASC”) 740, "Income Taxes". Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets and liabilities using enacted tax rates that will be in effect in the year in which the differences are expected to reverse. The Company records a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely- than-not that some portion, or all, of the deferred tax assets will not be realized. The effect on deferred taxes of a change in tax rates is recognized as income or loss in the year that includes the enactment date.

MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3 - Summary of Significant Accounting Policies (continued)

Pursuant to accounting standards related to the accounting for uncertainty in income taxes, the evaluation of a tax position is a two-step process. The first step is to determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation based on the technical merits of that position. The second step is to measure a tax position that meets the more- likely-than-not threshold to determine the amount of benefit to be recognized in the consolidated financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likelihood of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than -not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de- recognized in the first subsequent financial reporting period in which the threshold is no longer met. The accounting standard also provides guidance on de- recognition, classification, interest and penalties, accounting in interim periods, disclosures, and transition.

The Company assessed its earnings history, trends, and estimates of future earnings, and determined that the deferred tax asset could not be realized as of June 30, 2023. Accordingly, a valuation allowance was recorded against the net deferred tax asset.

Revenue Recognition

In accordance with GAAP, the core principle of which is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to receive in exchange for those goods or services. To achieve this core principle, five basic criteria must be met before revenue can be recognized: (1) identify the contract with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to performance obligations in the contract; and (5) recognize revenue when or as the Company satisfies a performance obligation.

For the six months ended June 30, 2023 and 2022, the Company generated revenues from selling bundled healthcare and well-being services to individuals, employer groups, organizations, associations, resellers, and third-party administrators. Our product offerings operate on a monthly subscription model with agreements and contracts typically spanning a 12-month commitment. We derive significant revenue stability and visibility from this structure. Under our per-membership-per-month (“PMPM”) subscription model, our client customers pay a monthly fee based on the total number of active memberships for that month times the contracted PMPM fee. This revenue generation model enables strong revenue stability as we establish long-term commitments with our clients, fostering a mutually beneficial partnership. The predictable monthly fee structure and the long-term nature of the contracts contribute to increased revenue visibility and forecasting accuracy. It also allows us to align our resources efficiently to meet the needs of our clients, ensuring high-quality service delivery throughout the contracted period. We recognize revenue monthly as the services are rendered and performance obligations are satisfied.

Senior Convertible Debentures and Warrants

At issuance, the senior convertible debentures (Convertible Debt) are recorded at its fair value, limited to a relative fair value based upon the percentage of its fair value to the total fair value including the fair value of the warrant establishing the cost basis.

Warrants issued with the Convertible Debt are accounted for under the fair value and relative fair value method. The warrants are first analyzed per its terms as to whether it has derivative features or not. The warrants were determined to not have derivative features and were recorded into equity at their fair value using the Black Scholes option model, however, limited to a relative fair value based upon the percentage of their fair value to the total fair value including the fair value of the Convertible Debt. The warrants relative fair values are recorded as a discount to the Convertible Debt and as additional paid-in-capital. Discount on the Convertible Debt is amortized to interest expense over the life of the debt.

Share-Based Payment Arrangements

The Company applies the fair value method in accounting for its stock-based compensation. This standard states that compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. The Company values the stock-based compensation at the market price for the Company's stock as of the date of issuance.

MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3 - Summary of Significant Accounting Policies (continued)

Loss Per Share

The computation of basic loss per share (“LPS”) is based on the weighted average number of shares that were outstanding during the periods, including shares of common stock that are issuable at the end of the reporting period. The computation of diluted LPS is based on the number of basic weighted-average shares outstanding. The computation of diluted LPS does not assume conversion, exercise or contingent issuance of securities that would have an antidilutive effect on LPS. Therefore, when calculating LPS, there is no inclusion of dilutive securities as their inclusion in the LPS calculation is antidilutive due to net loss for the periods.

Following is the computation of basic and diluted loss per share for the three and six months periods ended June 30, 2023 and 2022:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Basic and Diluted LPS Computation
Numerator:
Net loss	$	(979,378	)	$	(1,553,994	)	$	(2,200,873	)	$	(3,964,096	)
Series B Preferred Stock Dividends		78,136			73,649			155,414			146,488

Loss available to common stockholders	$	(1,057,514	)	$	(1,627,643	)	$	(2,356,287	)	$	(4,110,584	)

Denominator:
Basic and diluted LPS	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	(0.04	)

Weighted average number of common shares outstanding		127,453,656			116,151,261			124,686,990			115,392,749

Potentially dilutive securities not included in the calculation of diluted LPS attributable to common stockholders because to do so would be anti-dilutive are as follows (in common stock equivalent shares):

Schedule of anti-dilutive
	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Series A Preferred stock (convertible)		16,600,000		24,900,000		16,600,000		24,900,000
Series B Preferred stock (convertible)		15,637,490		15,637,490		15,637,490		15,637,490
Senior Convertible Debentures and Warrants		4,036,506		1,233,625		4,036,506		1,616,125

Recoverability of Long-Lived Assets

The Company assesses the recoverability of long-lived assets annually or whenever events or changes in circumstances indicate that expected future undiscounted cash flows might not be sufficient to support the carrying amount of an asset. The Company deems an asset to be impaired if the forecast of undiscounted future operating cash flows is less than the carrying amount. If an asset is determined to be impaired, the loss is measured as the amount by which the carrying value of the asset exceeds its fair value. There was no impairment of long-lived assets pertaining to the three- and six- month periods ended June 30, 2023 and 2022. However, there can be no assurances that future impairment tests will not result in a charge to operations.

Intellectual Property

The intellectual property (“Intellectual Property”) is an intangible asset arising from the Company’s right to use the proprietary technology and programs of the 24hr Virtual Clinic. The Intellectual Property was initially measured at fair value and will be amortized on a straight line basis over its estimated useful life as the economic benefits are consumed or otherwise realized. Management has determined the estimated useful life to be seven years.

MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3 - Summary of Significant Accounting Policies (continued)

Website and Development Costs

Internal and external costs incurred to develop the internal-use computer software during the application and development stage shall be capitalized subsequent to the preliminary project stage and when it is probable that the project will be completed. As of June 30, 2023 and December 31, 2022, the Company has met the capitalization requirements and then began to amortize the assets. Amortization is calculated using the straight line method over the estimated useful life of the assets, which management determined to be five years.

Recent Accounting Pronouncements

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements.

NOTE 4 - Intellectual Property

Intellectual Property consists of the following:

Schedule of intellectual property
Balances, June 30, 2023
Gross	$	156,000
Accumulated amortization		(13,000	)
Net carrying amount	$	143,000

Estimated amortization expense for the intellectual property for each of the future years ending December 31 is as follows:


2023 (six months)		13,000
2024		26,000
2025		26,000
2026		26,000
2027		26,000
Thereafter		26,000
Total	$	143,000

NOTE 5 – Preferred Stock

The 176,596 outstanding Series A preferred shares are convertible into 16,600,000 common shares based on a conversion factor of 1:94. The preferred shares do not pay dividends. The number of votes for the preferred shares shall be the same as the number of shares of common shares that would be issued upon conversion.

On June 24, 2020, the Company filed with the Secretary of State of the State of Nevada (the “Secretary of State”) a certificate of designation (the “Certificate of Designation”) of Series B Convertible Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”). The Certificate of Designation was effective upon filing with the Secretary of State and designated a new series of preferred stock of the Company as Series B Convertible Preferred Stock with 4,000,000 shares authorized for issuance.

Upon the occurrence of the events as set forth in paragraph (a) or (b) below, each share of Series B Preferred Stock shall be converted into four (the “Conversion Ratio”) fully paid and non-assessable shares of common stock or any shares of capital stock or other securities of the Company into which such common stock shall hereafter be changed or reclassified (the “Conversion Shares”) as set forth in the Certificate of Designation.

MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 5 – Preferred Stock (continued)

(a)

Automatic Conversion

Immediately upon the listing of the common stock for trading on the New York Stock Exchange or the Nasdaq Stock Market, all of the issued and outstanding shares of Series B Preferred Stock shall automatically be converted into Conversion Shares without any further action of any holder of Series B Preferred Stock (each, a “Series B Holder” and collectively, “Series B Holders”).

(b)

Optional Conversion

A Series B Holder shall have the right at any time during the period beginning on the date which is six months following the date that the Series B Preferred Stock is initially issued and prior to any automatic conversion as provided in the Certificate of Designation, to convert all or any part of the outstanding Series B Preferred Stock held by such Series B Holder into Conversion Shares at the Conversion Ratio as provided in the Certificate of Designation, subject to limitations set forth in the Certificate of Designation.

Dividends

Series B Holders will be entitled to receive a quarterly dividend, until the conversion of the Series B Preferred Stock, at the rate of 8% per annum (the “Series B Dividend”). The Series B Dividend will be cumulative, shall accrue quarterly, and be paid via the issuance of a number of shares of common stock of the Company equal to (1) the dollar amount of the Series B Dividend being paid, divided by (2) $0.25 (the “Stock Dividend”). The Stock Dividend shall be paid via the issuance to the applicable Series B Holder of the applicable shares of common stock via book entry in the books and records of the Company. No common stock has been issued as of June 30, 2023 in satisfaction of the preferred stock dividend. At June 30, 2023 the cumulative undeclared stock dividends were 760,365.

Voting Rights

Each share of Series B Preferred Stock shall have a number of votes on any matter submitted to the holders of the Company’s common stock, or any class thereof, for a vote, equal to the number of Conversion Shares into which the Series B Preferred Stock is then convertible, and shall vote together with the common stock, or any class thereof, as applicable, as one class on such matter for as long as the share of Series B Preferred Stock is issued and outstanding.

NOTE 6 – Related Party Transactions

During the three and six months ended June 30, 2023, there were no related party transactions.

NOTE 7 – Subsequent Events

The Company has evaluated all subsequent events through the filing date of this Form 10-Q with the SEC, to ensure that this filing includes appropriate disclosure of events both recognized in the condensed consolidated financial statements as of June 30, 2023, and events which occurred subsequently but were not recognized in the condensed consolidated financial statements.

Subsequent to June 30, 2023, the Company has signed a new 2-year lease agreement as of March 1, 2024. Therefore, changes have been made to the articles of incorporation to reflect the new Company address.

(1)

(a) TIDS COMMERICAL LEASE AGREEMENT (“Lease”) made this day of February 2, 2024, and an Effective Date as of March 1, 2024 or completion of the unit’s readiness for occupancy by Tenant or Tenant’s occupancy, whichever occurs first, by and between TGRJR, LLC, a Florida limited liability company, whose address is 5650 Marion County Road, Lady Lake, Florida 32159 (hereinafter referred to as “Landlord”), and HEALTH KARMA, INC., a Florida CORPORATION, whose principal address is 2598 E. Sunrise Blvd., 2104, Fort Lauderdale, Florida 33304, (hereinafter referred to as “Tenant”).

(b) WHEREAS, Landlord is the fee simple owner of certain commercial property in Lake County, Florida, located at 104 N. 4th Street, Leesburg, Florida 34748.

(c) TERM. Landlord agrees to lease the Property to Tenant for a period of two (2) years, commencing on March 1st, 2024 (or as described above), and ending on February 28, 2026.

MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 7 – Subsequent Events (continued)

Subsequent to June 30, 2023, and as of the date of this filing, the Company issued $926,500 of convertible debentures.

(a) All the Convertible Debentures listed below have these identical terms: The Convertible Debentures bear interest at a rate of 8.0% per annum compounded quarterly, of which 4.0% is in kind and 4.0% is in monies, and will mature on March 31, 2024, unless earlier converted or redeemed. The Convertible Debentures are issued at a discounted rate of $0.32 per share.

(b) On July 3, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Kevin Maloney (“Kevin”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $100,000 (the “Convertible Debentures”).

(c) On July 21, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Kevin Maloney (“Kevin”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $50,000 (the “Convertible Debentures”).

(d) On August 6, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Kirk & Sandy Farris (“Kirk & Sandy”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $50,000 (the “Convertible Debentures”).

(e) On August 11, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Donald Mathern (“Donald”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $2,500 (the “Convertible Debentures”).

(f) On August 13, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Clay Hartmann (“Clay”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $2,500 (the “Convertible Debentures”).

(g) On August 21, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Kevin Maloney (“Kevin”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $25,000 (the “Convertible Debentures”).

(h) On August 25, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Antrim Properties (“Antrim Properties”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $20,000 (the “Convertible Debentures”).

(i) On October 6, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Winston Marshall (“Winston”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $50,000 (the “Convertible Debentures”).

(j) On October 19, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Kevin Maloney (“Kevin”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $40,000 (the “Convertible Debentures”).

(k) On November 7, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Susan Poniatowksi Revocable Trust (“Susan”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $12,500 (the “Convertible Debentures”).

(l) On November 8, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Kevin Maloney (“Kevin”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $25,000 (the “Convertible Debentures”).

MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 7 – Subsequent Events (continued)

(m) On November 10, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Scott Powell (“Scott”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $25,000 (the “Convertible Debentures”).

(n) On November 14, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Brad Britton (“Brad”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $10,000 (the “Convertible Debentures”).

(o) On December 7, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Christopher Fish (“Christopher”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $2,500 (the “Convertible Debentures”).

(p) On December 7, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Jeffrey Bryant (“Jeffrey”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $5,000 (the “Convertible Debentures”).

(q) On December 7, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Leslie McCloud (“Leslie”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $5,000 (the “Convertible Debentures”).

(r) On December 13, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Susan Poniatowksi Revocable Trust (“Susan”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $12,500 (the “Convertible Debentures”).

(s) On December 15, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Antrim Properties (“Antrim Properties”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $10,000 (the “Convertible Debentures”).

(t) On December 20, 2023 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with James Paschall (“James”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $5,000 (the “Convertible Debentures”).

(u) On January 5, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Sydney & Suelan Brown (“Sydney & Suelan”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $12,500 (the “Convertible Debentures”).

(v) On January 8, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Ransom Leppink (“Ransom”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $5,000 (the “Convertible Debentures”).

(w) On January 8, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Kenneth Best (“Kenneth”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $5,000 (the “Convertible Debentures”).

(x) On January 10, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Kirk & Sandy Farris (“Kirk & Sandy”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $50,000 (the “Convertible Debentures”).

MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 7 – Subsequent Events (continued)

(y) On January 10, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Scott Powell (“Scott”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $25,000 (the “Convertible Debentures”).

(z) On January 10, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with John Keller (“John”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $2,500 (the “Convertible Debentures”).

(aa) On January 12, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Michael Shedlock Roth IRA (“Michael”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $17,500 (the “Convertible Debentures”).

(bb) On January 23, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Jeffrey Bryant (“Jeffrey”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $5,000 (the “Convertible Debentures”).

(cc) On February 5, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Terry Fangrad (“Terry”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $3,750 (the “Convertible Debentures”).

(dd) On February 5, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Oksana Batig (“Oksana”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $625 (the “Convertible Debentures”).

(ee) On February 5, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Megan Stewart (“Megan”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $625 (the “Convertible Debentures”).

(ff) On February 5, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Stan Weiland (“Stan”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $1,250 (the “Convertible Debentures”).

(gg) On February 13, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with In Trust of Maria Conti Barth (“Maria”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $1,250 (the “Convertible Debentures”).

(hh) On February 22, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Kevin Maloney (“Kevin”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $20,500 (the “Convertible Debentures”).

(ii) On February 28, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with William J. Knapp (“William”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $2,500 (the “Convertible Debentures”).

(jj) On February 29, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Antrim Properties (“Antrim Properties”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $5,000 (the “Convertible Debentures”).

MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 7 – Subsequent Events (continued)

(kk) On March 5, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Joseph Barth Jr (“Joseph”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $2,500 (the “Convertible Debentures”).

(ll) On March 13, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Provident Trust Group LLC FBO Ransom Leppink Roth (“Provident Trust Group”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $6,000 (the “Convertible Debentures”).

(mm) On March 14, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Winston Marshall (“Winston”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $100,000 (the “Convertible Debentures”).

(nn) On March 27, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Kirk & Sandy Farris (“Kirk & Sandy”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $70,000 (the “Convertible Debentures”).

(oo) On April 8, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Kevin Maloney (“Kevin”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $25,000 (the “Convertible Debentures”).

(pp) On April 18, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Byron Cook (“Byron”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $25,000 (the “Convertible Debentures”).

(qq) On April 23, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Kevin Maloney (“Kevin”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $20,000 (the “Convertible Debentures”).

(rr) On May 9, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Susan Poniatowski Revocable Trust (“Susan”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $25,000 (the “Convertible Debentures”).

(ss) On May 10, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Scott Powell (“Scott”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $25,000 (the “Convertible Debentures”).

(tt) On May 24, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with James Paschall (“James”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $7,500 (the “Convertible Debentures”).

(uu) On May 31, 2024 (the “Agreement Date”), Medixall Group Inc., a Nevada corporation (the “Company”), entered into a securities purchase agreement (the “Purchase Agreement”) with Brad Britton (“Brad”), in connection with the issuance and sale by the Company of convertible debentures in an aggregate principal amount of $10,000 (the “Convertible Debentures”).

MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 8 – Senior Convertible Debentures and Warrants

In March 2022, the Company entered into a securities purchase agreement in which the Company maximum offering amount is $5,000,000. For every $1,000 invested in the offering, the Investors will receive a Debenture with a face amount of $1,000 and Warrants to purchase 350 Common Shares at an exercise price that ranges from $0.75 to $1.50 per share expiring on April 30, 2027. Pursuant to this agreement, the Company has received proceeds from convertible debentures totaling $3,499,446. The interest rate is 8% and the maturity date is September 30, 2023. Interest is due quarterly on January 1, April 1, July 1, and October 1 of each year during which the debentures are outstanding. Interest was payable in shares of the Company’s common stock until December 1, 2022. Thereafter, the interest will be paid 50% in cash and 50% in the Company’s common stock. The outstanding debentures are convertible into shares of common stock at a price range from $1.00 to $2.00 per share. The debentures may be converted at any time after the issuance date until the debentures are paid off.

As of June 30, 2023, the Company’s common stock underlying the convertible debentures and warrants is subject to a registration rights agreement. The Company is required to use its reasonable best efforts to comply with the provisions of the registration rights agreement.

At June 30, 2023, the Company issued warrants to acquire up to an aggregate 1,187,187 shares of the Company’s common stock at an exercise price ranging from $0.75 to $1.50 per share. Each Warrant is exercisable by the Investor beginning on the effective date through the fifth-year anniversary thereof.

The fair value of each warrant issued during the six months ended June 30, 2023 was estimated on the date of issuance using the Black-Scholes option pricing model with the following assumptions:


Stock price	0.11-.68
Exercise price	$	0.75
Risk-free interest rate		3.54-4.15	%
Expected dividend yield		0.00	%
Expected stock volatility		320.03-333.92	%
Expected life in years		5.00

The expected life was based on the average life of the warrants. Expected volatility is based on historical volatility of Company's common stock. The risk-free rate for periods within the contractual life of the warrants is based on the U.S. Treasury yield curve in effect at the time of issuance. The dividend yield assumption is based on the Company's expectation of dividend payments.

The relative fair value of the warrants was $94,306 and was recorded as debt discount. During the three and six months ended June 30, 2023, the Company amortized $60,383 and $119,219, respectively, of the debt discount to interest expense.

The following summarized the senior convertible debentures during the six-month period ended June 30, 2023:


Senior Convertible Debentures at December 31, 2022	$	2,555,793
Debentures Issued		777,486
Relative fair value of warrants issued as discount		(94,306	)
Accretion of warrants issued as discount		119,219
Senior Convertible Debentures at June 30, 2023	$	3,358,192

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements. Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements contained in this report speak only as of the date of this report, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance, or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. Such forward-looking statements include statements regarding, among other things, matters associated with:

our ability to continue as a going concern,

our history of losses which we expect to continue,

the significant amount of liabilities due to related parties,

our ability to raise sufficient capital to fund our company,

our ability to integrate acquisitions and the operations of acquired companies,

the limited experience of our management in the operations of a public company,

potential weaknesses in our internal control over financial reporting,

increased costs associated with reporting obligations as a public company,

a limited market for our common stock and limitations resulting from our common stock being designated as a penny stock,

the ability of our board of directors to issue preferred stock without the consent of our stockholders,

our management controls the voting of our outstanding securities,

the conversion of shares of Series A and B preferred stock will be very dilutive to our existing common stockholders,

risks associated with and unique to health care, and

risks associated with stability of the internet, data security, exposure to data breach.

You should read thoroughly this report and the documents that we refer to herein with the understanding that our actual future results may be materially different from and/or worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements, including those made in this report, in Part I. Item 1A. Risk Factors appearing in our Annual Report on Form 10-K for the year ended December 31, 2022 and our other filings with the Securities and Exchange Commission. Other sections of this report include additional factors which could adversely impact our business and financial performance. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events. These forward-looking statements speak only as of the date of this report, and you should not rely on these statements without also considering the risks and uncertainties associated with these statements and our business.

OTHER PERTINENT INFORMATION

Unless specifically set forth to the contrary, when used in this report the terms “MediXall Group”, the “Company,” “we”, “us”, “our” and similar terms refer to MediXall Group, Inc., a Nevada corporation, and its wholly owned subsidiaries.

GENERAL

The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand the Company’s results of operations and financial condition. The MD&A is provided as a supplement to, and should be read in conjunction with the unaudited condensed consolidated financial statements and the accompanying notes included in this Quarterly Report on Form 10-Q.

The MD&A is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

OVERVIEW

The Company’s business model is purposefully designed and structured around delivering practical, value-based, customized solutions to individual members, employers, and organizations which will enhance their overall physical health, mental health, and well-being, to help control the cost of care of the individual, the employer, or membership-based organization as well as to increase productivity. Our unique, customized, proactive solutions are available anytime, anywhere, through an AI-driven engagement platform delivering timely, quality care to individuals, employees, and members. Our operating subsidiary is Health Karma Inc. Our name merges “health” with “karma” as our mission is to enhance the physical and mental health and well-being of our clients and members.

At the heart of our branding strategy lies the revolutionary concept of 1st Moment™ Solutions (“1^st Moment”). We understand that the pivotal 'first moment' in any scenario significantly shapes its overall outcome and cost implications. Acknowledging the paramount importance of an immediate and effective response at this critical juncture, we are pioneering top-of-the-funnel upstream solutions in healthcare. By optimizing the initial response, we are not only enhancing mental, physical, and social well-being but also setting the stage for downstream improvements and cost efficiencies. Our 1^st Moment™ brand emphasizes the fact that the majority of our solutions deliver immediate in-the-moment access to our provider network of medical doctors, master’s level behavioral health clinicians, registered triage nurses and even veterinarians.

Our 1st Moment solutions extend their transformative reach, delivering profound benefits to a wide spectrum of stakeholders that includes corporations, first responders, public safety agencies, healthcare providers, educational institutions (comprising students, faculty, and staff), as well as various associations, organizations and resellers. Through our strategic offerings, we aim to greatly enhance outcomes and bring significant value to these diverse groups. Drawing on our expertise, wealth of experience, expansive provider network, and cutting-edge methodologies, we empower individuals and entities to establish a robust framework for mental, physical, and social well-being. This empowerment enables our clients to proactively manage risks, enhance productivity, and cultivate healthier environments. As we persist in our journey of evolution and innovation, we maintain an unwavering dedication to refining the 'first moment' response, ensuring sustained improvements in overall outcomes and enduring advantages for our esteemed clientele.

Client examples are: Third Party Administrators (TPA’s) such as Free Market Administrators and Invicta Benefits Group which have embedded our solutions into their product offerings to their partners which include some of the top-rated carriers, benefits providers, and insurance agencies in the country; individual organizations such as Michigan Chamber of Commerce, Provident Insurance Solutions, Cosmo Cabinets, Goddard Schools, The Museum of Contemporary Art Cleveland, Tri-County Jobs for Ohio’s Graduates; as well as benefit providers/resellers who have bundled our unique solutions into their product offerings: Aloha Elements, National Consumer Benefits Association, Foundation Mental Wellness, and Pinnacle Training Systems.

During 2023, the Company underwent a nearly complete change in the Board of Directors and management resulting in a substantial transformation of the Company’s focus, product offerings, and channel emphasis. This shift has led to remarkable financial growth, with revenue in the second quarter of 2023 of $71,524 surpassing $10,352 for the same period in 2022 by nearly 7 times. Additionally, the six-month revenue for 2023 was $149,390 versus $18,259 for the same period in 2022, an increase of over 8 times.

Moreover, the Company successfully reduced its Net Loss in the first six months of 2023 by approximately $1.8 million to $2,200,873 in 2023 versus $3,964,096 for the same period in 2022. This is the result of the new management taking decisive steps to reduce costs by downsizing its corporate office, continuing the remote work strategy started under pandemic conditions, dramatically reducing the number of employees by procuring out-sourced marketing expertise, its AI-driven User Experience/User Interface (UX/UI) platform, as well as its IT development and maintenance.

Going Concern

We have incurred net losses of approximately $34.8 million since inception through June 30, 2023. The report of our independent registered public accounting firm on our consolidated financial statements for the year ended December 31, 2022 contains an explanatory paragraph regarding our ability to continue as a going concern based upon the fact that we are dependent upon our ability to increase revenues along with raising additional external capital as needed. These factors, among others, raise substantial doubt about our ability to continue as a going concern. Our condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. There are no assurances we will be successful in our efforts to generate revenues or report profitable operations or to continue as a going concern, in which event investors would lose their entire investment in our company.

Results of Operations

Three-Month Period Ended June 30, 2023 Compared to the Three-Month Period Ended June 30, 2022

Revenue

Revenue for the three months ended June 30, 2023 was $71,524 surpassing that of the same period in 2022 of $10,352 by nearly 7 times.

Moreover, the Company successfully reduced its Net Loss in the three months ended June 30, 2023 by almost $575,000 from the same period in 2022. The Net Loss for the three months ended June 30, 2023 was $979,378 versus $1,553,994 for the same period in 2022.

Operating Expenses

A summary of our operating expense for the three-month periods ended June 30, 2023 and 2022 follows:

	Three Months Ended June 30,				Increase /
	2023		2022		(Decrease)
Operating expense
Professional fees	$	544,750	$	267,956	$	276,794
Professional fees – related party		—		57,500		(57,500	)
Management fee – related party		—		240,000		(240,000	)
Personnel related expenses		211,869		783,961		(572,092	)
Other selling, general, and administrative		225,754		214,929		10,825
Interest expense		32,944		—		32,944
Total operating expense		1,015,317		1,564,346		(549,029	)

Operating expenses decreased $549,029, or 35.1%, to $1,015,317 during the three months ended June 30, 2023 compared to $1,546,346 during the same period in 2022. The decrease in total operating expenses is primarily due to:

The decrease in personnel related expenses of $572,092 is primarily resulted from the termination of employees during the three-month period ended June 30, 2023 compared to the three-month period ended June 30, 2022.

The decrease in related party fees of a combined $297,500 is due to the elimination of related party transactions and relationships during the three-month period ended June 30, 2023 compared to the three-month period ended June 30, 2022.

Six-Month Period Ended June 30, 2023 Compared to the Six-Month Period Ended June 30, 2022

Revenue

Revenue for the six-month period ended June 30, 2023 was $149,390 as compared to $18,259 for the same period in 2022 representing an increase of over 8 times compared to 2022.

Operating Expenses

A summary of our operating expense for the six-month periods ended June 30, 2023 and 2022 follows:

	Six Months Ended June 30,				Increase /
	2023		2022		(Decrease)
Operating expense
Professional fees	$	1,111,107	$	596,613	$	514,494
Professional fees – related party		—		177,500		(177,500	)
Management fee – related party		—		480,000		(480,000	)
Personnel related expenses		487,248		2,313,915		(1,826,667	)
Other selling, general, and administrative		492,087		414,327		77,760
Interest expense		134,835		—		134,835
Total operating expense		2,225,277		3,982,355		(1,757,078	)

Operating expenses decreased $1,757,078, or 44.1%, to $2,225,277 during the six months ended June 30, 2023 compared to $3,982,355 during the same period in 2022. The decrease in total operating expenses is primarily due to:

The decrease in personnel related expenses of $1,826,667 is primarily resulted from the termination of employees during the six-month period ended June 30, 2023 compared to the six-month period ended June 30, 2022.

The decrease in related party fees of a combined $657,500 is due to the elimination of related party transactions and relationships during the six-month period ended June 30, 2023 compared to the six-month period ended June 30, 2022.

We expect expenses to decrease as we move forward as the Company continues its remote work strategy started under pandemic conditions, and dramatically reduced the number of employees by procuring out-sourced marketing expertise along with its AI-driven User Experience/User Interface (UX/UI) platform as well as its IT development and maintenance.

Liquidity and capital resources

Liquidity is the ability of a company to generate sufficient cash to satisfy its needs. At June 30, 2023, we had $18,573 in cash and a net working capital deficit of $5,307,676.

For the six-month period ended June 30, 2023, we raised $1,853 and $777,486 from sales of our restricted common stock and issuance of convertible debt, respectively.

Net cash used in operating activities for the six-month period ended June 30, 2023 was $764,182, as compared to $2,064,883 for the same six-month period ended June 30, 2022. This change primarily results from our lower net loss, offset by fluctuations in accounts payable and accrued expenses, reduction in operating lease liability and an elimination in any transactions between related entities.

Our primary source of capital and liquidity to develop and implement our business plan has been from sales of preferred stock and proceeds from convertible debentures.

Other Contractual Obligations

None.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term "off-balance sheet arrangement" generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with us is a party, under which we have any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

Critical Accounting Policies

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

A material estimate that is particularly susceptible to significant change in the near-term relate to the determination of the impairment of website and development cost and intellectual property. The Company uses various assumptions and actuarial data it believes to be reasonable under the circumstances to make this estimate. Although considerable variability is likely to be inherent in this estimate, management believes that the amount provided is reasonable. This estimate is continually reviewed and adjusted if necessary. Such adjustment is reflected in current operations.

Risks and Uncertainties

The Company's operations are subject to significant risks and uncertainties including financial, operational, and regulatory risks, including the potential risk of business failure.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES.

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We carried out an evaluation as required by paragraph (b) of Rule 13a-15 and 15d-15 of the Exchange Act, under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of June 30, 2023.

A material weakness can be defined as an insufficiency of internal controls that may result in a more than remote likelihood that a material misstatement will not be prevented, detected, or corrected in a company’s condensed consolidated financial statements.

Based upon that evaluation, our Chief Executive Officer and Principal Financial Officer concluded that as of June 30, 2023, our disclosure controls and procedures were not effective, based on the following deficiencies:

Weaknesses in accounting and finance personnel: We have outsourced our accounting function, and we do not have the robust employee resources and expertise needed to meet complex and intricate GAAP and SEC reporting requirements of a U.S. public company. Additionally, numerous adjustments and proposed adjustments have been noted by our auditors. This is deemed by management to be a material weakness in preparing condensed consolidated financial statements.

We have written accounting policies and control procedures, but we do not have sufficient staff to implement the related controls. Management had determined that this lack of the implantation of segregation of duties, as required by our written procedures, represents a material weakness in our internal controls.

Internal control has as its core a basic tenant of segregation of duties. Due to our limited size and economic constraints, the Company is not able to segregate for control purposes various asset control and recording duties and functions to different employees. This lack of segregation of duties had been evaluated by management and has been deemed to be a material control deficiency.

The Company has determined that the above internal control weaknesses and deficiencies could result in a reasonable possibility for the condensed consolidated financial statements that a material misstatement will not be prevented or detected on a timely basis by the Company’s internal controls.

Management is currently evaluating what steps can be taken in order to address these material weaknesses. As a growing small business, the Company continuously devotes resources to the improvement of our internal control over financial reporting. Due to budget constraints, the staffing size, proficiency, and specific expertise is below requirements for the operation. The Company is anticipating correcting deficiencies as funds become available.

Changes in Internal Control Over Financial Reporting

There were no changes during our last fiscal quarter that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Except as set forth herein, as of the date of this Quarterly Report on Form 10-Q, there are no material pending legal proceedings to which we are a party or which our property is the subject. In addition, none of our officers, directors, affiliates or 5% stockholders (or any associates thereof) is a party adverse to us, or has a material interest adverse to us, in any material proceeding.

ITEM 1A. RISK FACTORS.

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None during the three-month period ended June 30, 2023

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable to our Company.

ITEM 5. OTHER INFORMATION.

During the quarter ended June 30, 2023, no director or officer of the Company adopted or terminated a contract, instruction or written plan for the purchase or sale of securities of the Company intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) and/or a non-Rule 10b5-1 trading arrangement.

ITEM 6. EXHIBITS.

Exhibit No.		Description
31.1		Rule 13a-14(a)/ 15d-14(a) Certification of Chief Executive Officer *
31.2		Rule 13a-14(a)/ 15d-14(a) Certification of Chief Financial Officer *
32.1		Section 1350 Certification of Chief Executive Officer *
32.2		Section 1350 Certification of Chief Financial Officer *
101.INS		Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL 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.

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.

	MediXall Group, Inc.

Dated: June 6, 2024	By:	/s/ Shane Glavin
		Shane Glavin
		Principal Financial Officer


Dated: June 6, 2024	By:	/s/ Travis Jackson
		Travis Jackson
		Chief Executive Officer (Principal Executive Officer)

MediXall Group, Inc. 10-Q