Cardiff Lexington Corporation: Cardiff Lexington Announces Second Quarter 2024 Financial Results

Significantly enhanced balance sheet positions company for long-term growth

LEXINGTON, KY / ACCESSWIRE / August 20, 2024 / Cardiff Lexington Corporation (OTC PINK:CDIX) announced today financial results for its second quarter and six months ended June 30, 2024.

Alex Cunningham, Chief Executive Officer of Cardiff Lexington, commented, "Our second quarter results were highlighted by a significantly improved balance sheet with shareholders' equity increasing to $5.8 million, 698% as compared to year end, as we strengthen our capital structure and position Cardiff Lexington for future growth.

"Among the many important initiatives underway, a major focus for our business is to continue expanding our network of healthcare locations throughout Florida and the broader southeast United States. To that end, we opened our 12^th Nova Ortho and Spine location in Orlando, Florida subsequent to the close of the quarter. This location is performing well, and further enhances our visibility and patient access while providing us with a key presence in a larger metropolitan market.

"While our second quarter revenue was impacted by the timing of certain larger surgeries, we are on track to drive strengthened revenue and earnings performance in the back half of the year and into 2025 driven by an expanded network of healthcare locations and a strong reputation as a provider of high-quality medical care in a high-volume market."

Second Quarter 2024 Financial Highlights

• Revenue of $2,330,964.

• Gross profit margin of 66%.

• Loss from continuing operations was $202,345. Included in SG&A expenses in 2Q 2024 were higher expenses associated with the anticipated growth of the business as well as charges for increased bad debt expense of $902,183 as a result of accepting lower patient claims settlement amounts due to efforts to accelerate cash collection.

• Adjusted EBITDA was a loss of $118,428.

Six Months 2024 Financial Highlights

• Revenue of $4,992,930.

• Gross profit margin of 65%.

• Income from continuing operations was $16,647. Included in operating expenses for the six months ended June 30, 2024 were increased expenses associated with the anticipated growth of the business, and increased bad debt expense of $1,242,017 as referenced above.

• Adjusted EBITDA was $403,154.

Balance Sheet Highlights (June 30, 2024 compared to December 31, 2023)

• 269% increase in cash to $3,196,795.

• 19% increase in total assets to $24,659,020.

• 698% increase in shareholders' equity to $5,837,412.

Mr. Cunningham concluded, "As one of the fastest growing sectors in U.S. healthcare, it's becoming increasingly clear that orthopedic healthcare is a very attractive long-term growth market for us. Compared to other clinical specialties, orthopedics remains highly fragmented, and over the next decade, we believe that healthcare providers will continue to experience increasing demand primarily driven by an aging patient population and a rising number of car accidents nationwide. The trajectory of this market is encouraging, and we're optimistic about our growth prospects - both organic and through acquisition - that we believe will help us to drive enhanced value for shareholders."

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About Cardiff Lexington Corporation:

Cardiff Lexington Corporation is a holding company focused on locating, acquiring, and building middle market, niche companies, primarily in the healthcare industry. Fundamental to the Cardiff Lexington strategy is the service-based partnership culture which emphasizes core values, teamwork, accountability, and performance.

A substantial majority of the Company's revenue is derived from Nova Ortho and Spine, LLC, which operates a group of regional primary specialty and ancillary care facilities throughout Florida that provide traumatic injury victims with a full range of diagnostic and surgical services, primary care evaluations, interventional pain management, and specialty consultation services.

For more information on Cardiff Lexington Corporation, you may access the company's website at https://cardifflexington.com/

FORWARD-LOOKING STATEMENT: This news release contains forward-looking statements within the meaning of the Securities Litigation Reform Act. The statements reflect the Company's current views with respect to future events that involve risks and uncertainties. These risks include the failure to meet schedule or performance requirements of the Company's business, the Company's liquidity position, the Company's ability to obtain new business, the emergence of competitors with greater financial resources, and the impact of competitive pricing. In the light of these uncertainties the forward-looking events referred to in this release might not occur.

Cardiff Lexington Investor Relations
[e-mail]
[phone] ext. 705

or

IMS Investor Relations
[e-mail]
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CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 and 2023
(UNAUDITED)

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023 (Restated)				2024				2023 (Restated)
REVENUE		$	2,330,964			$	3,364,506			$	4,992,930			$	6,070,905
COST OF SALES			793,010				1,081,689				1,741,164				2,037,984
GROSS PROFIT			1,537,954				2,282,817				3,251,766				4,032,921
OPERATING EXPENSES
Depreciation expense			3,366				3,365				6,731				8,000
Share based compensation			-				-				300,225				-
Selling, general and administrative			1,736,933				530,013				2,928,163				1,517,933
Total operating expenses			1,740,299				533,378				3,235,119				1,525,933
(LOSS) INCOME FROM CONTINUING OPERATIONS			(202,345	)			1,749,439				16,647				2,506,988
OTHER INCOME (EXPENSE)
Other income			2,047				-				2,047				204
Gain on debt refinance and forgiveness			78,834				-				78,834				390
Penalties and fees			(330	)			(15,000	)			(1,330	)			(32,000	)
Interest expense			(41,347	)			(843,918	)			(417,616	)			(1,537,579	)
Amortization of debt discounts			(11,306	)			(30,633	)			(24,821	)			(48,616	)
Total other income (expense)			27,898				(889,551	)			(362,886	)			(1,617,601	)
NET (LOSS) INCOME BEFORE DISCONTINUED OPERATIONS			(174,447	)			859,888				(346,239	)			889,387
LOSS FROM DISCONTINUED OPERATIONS			-				(43,810	)			(111,312	)			(89,300	)
NET (LOSS) INCOME FOR THE PERIOD		$	(174,447	)		$	816,078			$	(457,551	)		$	800,087
PREFERRED STOCK DIVIDENDS			(326,174	)		$	(125,744	)		$	(477,808	)			(454,419	)
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS		$	(500,621	)		$	690,334			$	(935,359	)		$	345,668
BASIC (LOSS) INCOME PER SHARE
CONTINUING OPERATIONS		$	(0.04	)		$	55.66			$	(0.11	)		$	28.75
DISCONTINUED OPERATIONS		$	0.00			$	(3.53	)		$	(0.01	)		$	(7.43	)
DILUTED (LOSS) INCOME PER SHARE
CONTINUING OPERATIONS		$	(0.04	)		$	3.59			$	(0.11	)		$	1.45
DISCONTINUED OPERATIONS		$	0.00			$	(3.53	)		$	(0.01	)		$	(7.43	)
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC			12,792,767				12,403				8,305,493				12,024
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED			12,792,767				192,477				8,305,493				237,814

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2024 AND DECEMBER 31, 2023
(UNAUDITED)

						December 31, 2023
		June 30, 2024				(Restated)
ASSETS
Current assets
Cash		$	3,196,795			$	866,943
Accounts receivable-net			14,818,277				13,305,254
Prepaid and other current assets			5,000				5,000
Total current assets			18,020,072				14,177,197
Property and equipment, net			27,929				34,661
Land			540,000				540,000
Goodwill			5,666,608				5,666,608
Right of use - assets			348,702				289,062
Due from related party			4,979				4,979
Other assets			50,730				33,304
Total assets		$	24,659,020			$	20,745,811
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expense		$	1,679,731			$	2,047,131
Accrued expenses - related parties			4,353,056				4,733,057
Accrued interest			103,345				620,963
Right of use - liabilities			173,985				157,669
Due to director and officer			-				120,997
Notes payable - current portion			550,900				15,977
Line of credit			6,675,746				2,120,100
Convertible notes payable, net of debt discounts of $0 and $24,820, respectively			110,000				3,807,030
Net liabilities of discontinued operations			237,643				237,643
Total current liabilities			13,884,406				13,860,567
Notes payable			142,391				144,666
Operating lease liability - long term			169,811				119,056
Total liabilities			14,196,608				14,124,289
Mezzanine equity
Redeemable Series N Senior Convertible Preferred Stock - 3,000,000 shares authorized, $0.001 par value, stated value $4.00, 868,056 shares issued and outstanding at June 30, 2024 and December 31, 2023			3,125,000				3,891,439
Redeemable Series R Senior Convertible Preferred Stock - 5,000 shares authorized, $0.001 par value, stated value of $1,200, 0 and 165, shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively			-				307,980
Redeemable Series X Senior Convertible Preferred Stock - 5,000,000 shares authorized, $0.001 par value, stated value of $4.00 par value; 375,000 shares issued and outstanding at June 30, 2024 and December 31, 2023			1,500,000				1,690,685
Total Mezzanine Equity			4,625,000				5,890,104
Stockholders' equity
Series B Preferred Stock - 3,000,000 shares authorized, $0.001 par value, stated value of $4.00, 980,179 and 2,139,478 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively			3,920,716				8,557,912
Series C Preferred Stock - 500 shares authorized, $0.001 par value, stated value of $4.00, 60 and 123 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively			240				492
Series E Preferred Stock - 1,000,000 shares authorized, $0.001 par value, stated value $4.00, 75,375 and 155,750 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively			301,500				623,000
Series F-1 Preferred Stock - 50,000 shares authorized, $0.001 par value, stated value $4.00, 25,750 and 35,752 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively			103,000				143,008
Series I Preferred Stock - 15,000,000 shares authorized, $0.001 par value, stated value $4.00, 11,640,500 and 14,885,000 issued and outstanding at June 30, 2024 and December 31, 2023, respectively			46,562,000				59,540,000
Series J Preferred Stock - 2,000,000 shares authorized, $0.001 par value, stated value $4.00, 0 and 1,713,584 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively			-				6,854,336
Series L Preferred Stock - 400,000 shares authorized, $0.001 par value, stated value $4.00, 319,493 shares issued and outstanding at June 30, 2024 and December 31, 2023			1,277,972				1,277,972
Series Y Senior Convertible Preferred Stock - 1,000,000 shares authorized, $0.001 par value, stated value of $4.00, 938,908 and 0 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively			3,755,632				-
Common Stock; 300,000,000 shares authorized, $0.001 par value; 13,626,376 and 25,121 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively			13,626				25
Additional paid-in capital			19,522,200				(7,581,212	)
Accumulated deficit			(69,619,474	)			(68,684,115	)
Total stockholders' equity			5,837,412				731,418
Total liabilities, mezzanine equity and stockholders' equity		$	24,659,020			$	20,745,811

CARDIFF LEXINGTON CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023
(UNAUDITED)
The following table reconciles Net income (loss) before discontinued operations (a GAAP measure) to EBITDA (a non-GAAP measure)

		Unaudited								Unaudited
		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2024				2023 (Restated)				2024					2023 (Restated)
EBITDA (1)
Net income (loss) before discontinued operations		$	(174,447	)		$	859,888			$	(346,239	)		$	889,387
Add:
Interest			41,347				843,918				417,616				1,537,579
Taxes			0				0				0				0
Depreciation			3,366				3,365				6,731				8,000
Amortization			11,306				30,633				24,821				48,616
EBITDA (1)		$	(118,428	)		$	1,737,804			$	102,929			$	2,483,582
Adjusted EBITDA (2)
EBITDA		$	(118,428	)		$	1,737,804			$	102,929			$	2,483,582
Add:
Stock compensation expense for shares issued			0				0				300,225				0
Adjusted EBITDA (2)		$	(118,428	)		$	1,737,804			$	403,154			$	2,483,582
(1) EBITDA is a non-GAAP financial measure defined as Earnings Before Interest, Income Tax, Depreciation and Amortization.
(2) Adjusted EBITDA is a non-GAAP financial measure that is the sum of EBITDA plus non-recurring and non-cash charges.

Contact Information
Walter Frank
Investor Relations
[e-mail]
2039729200

SOURCE: Cardiff Lexington Corporation

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