MediXall Group, Inc. - Annual Report: 2022 (Form 10-K)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2022

or

☐ 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)

954-440-4678

(Registrant’s telephone number, including area code)

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

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

None

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☒ No ☐

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). No Yes ☒ No ☐

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.

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. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter (June 30, 2022) based upon the closing sale price of the registrant’s common stock on the OTCPK that day was $40,630,822 as computed by reference to the price at which the common equity was last sold, which was $0.40 on that date

As of August 2, 2023, there were 130,487,491 shares of the registrant’s common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

NONE

TABLE OF CONTENTS

MediXall Group, Inc.

ANNUAL REPORT ON FORM 10-K

FOR THE YEAR ENDED DECEMBER 31, 2022

OTHER PERTINENT INFORMATION

We maintain our web site at www.gethealthkarma.com. Information on this web site is not a part of this Annual Report on Form 10-K and is not incorporated herein by reference.

Unless specifically set forth to the contrary, when used in this Annual Report on Form 10-K the terms “MediXall", the "Company," "we", "us", "our" and similar terms refer to MediXall Group, Inc., a Nevada corporation, and its subsidiaries. The Company has the following wholly-owned subsidiaries: (1) IHL of Florida, Inc., which is dormant, (2) Medixall Financial Group, which is dormant, (3) Medixaid, Inc., and (4) MediXall.com, Inc., which were established to carry out the development and operation of our healthcare marketplace platform, and (5) Health Karma, Inc. which was established in 2020 to increase functionality of the MediXall platform.

Forward-Looking Statements

This Annual Report on Form 10-K 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:

This information may involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from the future results, performance, or achievements expressed or implied by any forward-looking statements. These statements may be found at various places throughout this Annual Report on Form 10-K including, but not limited to the discussions under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and "Business." Actual events or results may differ materially from those discussed in forward-looking statements as a result of various factors, including, without limitation, the matters described in this Annual Report on Form 10-K generally.

Although forward-looking statements in this Annual Report on Form 10-K reflect the good faith judgment of our management, forward-looking statements are inherently subject to known and unknown risks, business, economic and other risks and factors that may cause actual results to be materially different from those discussed in these forward-looking statements. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. Accordingly, you are urged not to place undue reliance on these forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K.

We assume no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this Annual Report on Form 10-K, other than as may be required by applicable law or regulation.

PART I

ITEM 1. BUSINESS.

Overview

MediXall Group, Inc. (OTCPK:MDXL) is an innovation-driven technology company designed to deliver health and well-being services which address gaps in access to care, spiraling healthcare costs, and the pain points faced by both consumers and businesses. MediXall is structured to provide solutions that are proactive and preventive versus the current reactive system, structured primarily on treating the sick, which is inherently costly.

We started Health Karma in response to the design and delivery flaws we saw in the American health care system. We believe that these flaws made healthcare too expensive, reactionary, and inconvenient for far too many Americans to obtain quality health care and maintain their health. Since inception, we have been focused on changing the way individuals access, interact with, and consume healthcare. Our mission is simple: we want to provide easy access to health and wellbeing solutions to consumers and businesses, while reducing what consumers and businesses pay for it.

As the U.S. healthcare market remains opaque and highly fragmented for consumers, even simple healthcare transactions, such as finding a doctor, scheduling routine procedures or filling a prescription at an affordable price, can be difficultAs a result, Americans are often neglected by the health care system, whether or not by choice, and those who would otherwise be more proactive fail to access care due to the health care system’s inherent complexity.

Recognizing that these trends are not sustainable, Health Karma is focused on addressing these problems by providing solutions that shift healthcare from a one-size-fits all model to a more personalized experience built around each individual and each company - reducing and even removing layers of complexity that healthcare system brings. We believe that a new healthcare model, one that places the consumer at the center of the healthcare ecosystem, can help to improve their health care access while reducing what they pay for it.

To accomplish this, we developed Health Karma as a robust digital healthcare platform providing a single place for healthcare consumers and organizations to turn for personalized information, programs, and resources needed to understand, access, and manage their health and well-being. Focusing on the individual, Health Karma gives people information they need to access the right level of care from the start, when and where they need it, and provide ongoing support, thereby saving money for companies and their employees, while also improving care.

MediXall Group is reimagining how Americans access and afford care to give people a more consumer-centric way to manage their health & wellbeing: immediate, seamless, affordable, and tailored to their unique needs:

We have engineered the Health Karma Platform to be scalable and to grow beyond its current offerings. The flexibility of the Platform enables us to seamlessly integrate and quickly launch new services, expand service offerings or enter new verticals in a cost- effective manner. This has enabled us to acquire and integrate synergistic offerings, such as Responders 1^st Call™, Workers 1^st Call & Report™, and Student 1^st Call™ which help us better serve both our members and employer/organization clients.

MediXall Group is currently comprised of the following five solutions:

Health Karma – With Health Karma, we have created a unique membership model that provides consumers with convenient and affordable access to best-in-class care, whenever and wherever, while driving down overall healthcare costs. We provide our members access to licensed healthcare providers across a wide and growing spectrum of care through $0 copay virtual primary, urgent, behavioral, and pet care, as well as significant discounts to prescriptions, dental care, eye care, and hearing. For employers, our Health Karma membership offers a comprehensive way for them to offer supplemental health benefits to all of their employees, including part-time and gig workers, which include independent contractors, on-demand platform workers (ie Uber, Lyft, etc.), freelancer, and other temporary workers, who typically are not eligible for benefits. The Health Karma membership is also targeted for the small companies who cannot afford to provide health insurance to their employees as well as an adjunct for high-deductible health insurance plans.

Health Karma Behavioral Health – The behavioral health market has traditionally been underserved for a number of reasons, including as a result of inadequate access, a limited universe of qualified providers, high cost and social stigma. That is why we created Health Karma Behavioral to focus on providing mental health care exactly when and how is needed, instead of waiting six weeks for an appointment to see a psychiatrist. We believe this specialized offering for behavioral health can help to removes or reduces these burdens associated with traditional face-to-face mental health services by improving convenience through 24/7 access to our platform, providing more accessible entry level price points, and reducing associated stigmas by promoting easier access and preserving privacy. Health Karma Behavioral provides our members both the ability to speak to a therapist in-the moment they need it or schedule a call or video chat with a therapist within 24 hours.

Workers 1^st Call & Report™ - Workers 1st Call & Report is a 24/7/365 pre-claim, preemptive solution to reduce work comp claims, costs, fraud and unnecessary and over-utilized case management. The program combines behavioral health consultations to mitigate the primary reasons injuries happen in the workplace which is distracted employees along with Registered Nurse triage to mitigate minor injuries from becoming a work comp claim integrated into an easy-to-access, plug-and-play program.

Responders 1^st Call™ - Responders 1st Call is a confidential, anonymous in-the-moment 24/7/365 solution for First Responders to destress and digest traumatic situations which could lead to a work comp claim, disability, or suicide. This program provides in-the-moment consultations to the First Responder and their family to address work-related or personal, emotional, or behavioral health issues, or other issues interfering with responsibilities at work or home.

Student 1^st Call™ - Student 1^st Call is a solution for in the moment confidential access to master-level clinicians targeted for college age student population to help with depression, stress, sleep, addiction, relationship problems, anxiety, grief, and more. Our evidenced-based assessment and clinician-led consultation sets the student on a clear path for emotional support.

By bringing the Workers 1st Call, Responders 1st Call and Student 1^st Call programs into the Health Karma ecosystem, we believe we are better positioned to meet the growing industry needs by allowing us to collectively build out our employer client base with more coverage options, enhance our distribution footprint, and strengthen our operational capacity to meet growing customer demands. With the addition of the 1st Call products, Health Karma is uniquely equipped to meet the growing needs of the Small to Medium Businesses, as well as individuals and families across the nation.

We believe the addition of these new programs will help to further enrich our membership model by creating a comprehensive and interconnected offering that delivers a virtuous circle of value for consumers, employers and partners.

We generate revenue from the membership payments of companies, organization memberships, and consumer subscription fees, which are typically a 12-month commitment in nature, providing significant revenue visibility. Through our per-membership-per-month (“PMPM”) subscription model, we enter into contracts with our employer customers that pay a fixed monthly rate based on the total number of Memberships. In most cases, Employees and their Dependents have unlimited access to our Platform and do not pay extra fees for increased utilization, unless they wish to access services outside the scope of those covered by the subscription.

We see exciting growth potential as we continue to attract new members through our existing offerings, launch new offerings to address more of the healthcare needs of consumers & employers, and improve Americans’ access to health while reducing what they pay for it. As we extend our platform, we believe that we can create multiple monetization opportunities at different stages of the consumer healthcare journey, enabling us to drive higher expected consumer lifetime value without significant additional consumer acquisition costs.

Focusing on the Underserved Small Employer and Individual Market

The primary reason the landscape of healthcare offerings has not evolved to solve this problem until recently is due to many companies solely focusing on creating solutions and businesses models targeting large self-insured employers and payors, leaving the small-to-midsize employer and individual market completely underserved.

Over the last 10 years, multiple generations of healthcare technology companies struggled to get lift-off and scale, not because their products and services weren’t transformative for this market, but because they failed to find an executable path for sustainable distribution and value capture. We believe the lack of maturity of the underlying distribution — has been arguably the most significant bottleneck in the adoption and growth of healthcare solutions for this market.

We believe there are three reasons why existing providers haven’t focused on this market. First, small and midsize businesses (SMBs), and individuals are fragmented and hard to reach. Relative to the value they bring in, the cost of reaching and serving them has traditionally been too high to warrant the effort unless you can sell multiple products to them. Second, there is significant signup friction for benefits and healthcare products. Lastly, benefits products can be costly for SMBs to offer to employees, which results in many just forgoing benefits altogether. The lack of access to simple, low-cost healthcare and benefits solutions has had a significant impact on the recruitment and retention efforts of SMBs and the well-being of their employees.

But we believe where there is a gap, there is an opportunity. This is why we have put tremendous focus into building out a unique distribution engine that capitalizes on the current infrastructure of health insurance distribution and merges it with proven strategies from B2C and B2B2C from other industries.

Our Unique Distribution Engine

Our Distribution is currently made up of five pillars:

Employer Groups

Providing health benefits to employees is costly, complicated, and time-consuming for SMBs. While larger organizations are starting to realize the cost of traditional group health insurance is becoming unsustainable, the annual rate hikes and increasing premium prices are even more of a concern for SMBs with smaller budgets to dedicate to their employees’ healthcare.

With fewer employees, SMBs also have a much harder time meeting a group health insurance plan’s minimum participation requirement. Whether they have a lot of employees still on their parents’ insurance, older employees who qualify for Medicare, or others who simply don’t want to participate in a group health plan, SMBs need a more flexible health benefits solution. The reliance on part-time employees and 1099 employees by SMBs also precludes those type of workers being eligible for health insurance. With Health Karma, we saw an opportunity to provide a comprehensive solution for SMBs brings many of the benefits, resources, tools, and advantages big companies have historically had. With Health Karma, we wanted SMB owners to be able to afford solutions that can make their employees healthier and happier.

With fewer tiers in the organization’s hierarchy and less people involved in the decision-making process, one of the benefits to working with SMBs is they generally have a much quicker buying process than larger employers. Health Karma is focused on 3 types of employers

Health Insurance Brokers & General Agencies

Most employers do not manage benefits selection alone—thousands of licensed and trained insurance brokers serve as trusted advisors to small and large businesses, helping employers and their employees navigate the complexity of benefits. According to MetLife’s 15^th Annual U.S. Employee Benefits Trend Study, over 80% of small and midsize businesses work with insurance brokers to manage their benefits. These insurance brokers serve as a key intermediary between insurance carriers seeking to access a widely dispersed SMB population, which often lacks dedicated personnel and technology budgets to fully self-direct critical benefit decisions. They play a crucial role in educating SMBs about their health benefit options. Health insurance brokers and agents are experts in helping their clients select the right set of products.

When it comes to the selling, education and distribution of health benefits (can include health, dental, life and other types of insurance) to small employers, mid-size employers, individuals, associations and some large employers it is that insurance broker who is providing that key role. The broker is talking to the business owner and the human resources team to sell or renew policies and adjust and make changes according to the needs. Often a relationship has been built over many years and that company relies on their broker for advice each year on their benefit package. In addition, there are brokers attempting to expand their business and they are looking for unique benefits to help them get access to a new client. Many employers won’t add an additional health benefit without discussing it first with their broker.

This is why health insurance brokers are a key pillar to our distribution, as they provide an immense expansion of our sales efforts with our Health Karma and our Workers 1^st and Responders 1^st call solutions. To accelerate the expansion of our health insurance broker relationships, we also look to partner with General Agencies. These organizations provide brokers the administrative support, product education and home base to build up their business. By partnering with the organization, we are able to access 100s and sometimes 1000s of brokers without having to onboard and train each one individually.

We believe we have built a robust and extensive partnership network in the health insurance industry with distribution agreements with many leading insurance agencies in their respective states, such as BHC Insurance, the third largest independent insurance agency in Arkansas, and Gem State Financial, a leading Idaho-based General Agency. We have been able to increase the reach of our partnership network through an Affinity Marketing Partnership agreement with the National Association of Health Underwriters, a professional association representing more than 100,000 health insurance agents, benefits professionals, consultants, and brokers, from both small and large health insurance companies throughout the United States. The Partnership enables NAHU brokers to market the Health Membership in combination with various insurance products or self-insured plans. This expands NAHU members’ ability to work with organizations to provide additional benefits for employees with customized membership options to enhance existing benefits packages or to open the door to benefits for non-traditional, gig and part-time workers.

Associations, Chambers, Other membership organizations

Associations, Chambers of Commerce and other types of organizations are a large driver of our distribution engine, as it enables us to drive significant reach to very targeted member populations. These organizations look to drive revenue in two ways, through member dues and “non due” revenue. Health Karma can help increase both. Associations and other membership organizations will enter into agreements with us to offer Health Karma to their own end-user customers or members as a benefit, a reward or a component of a loyalty program. In addition to helping increase member dues, Health Karma also becomes a new source of non-due revenue through a revenue share on new membership driven through the organization.

Municipalities and Public Service Departments

According to the National League of Cities data, there are 36,000 municipalities and local governments in the United States, of which 18,700 are municipalities of less than 50,000 lives, 16,360 are town and townships, and 4,031 are county governments. These smaller municipalities and governments are dealing with the same issues and pain points as with smaller companies; namely many 1099, part-timers and other employees with limited health benefits, issues in dealing with workplace injuries and work comp claims, fraud, and reporting requirements. Our Health Karma and Workers 1^st Call solutions address these issues and pain points.

When you look at Public Service Departments and the First Responder market, according to the National Law Enforcement Officers Memorial Fund, there are over 800,000 law enforcement officers in the US; according to the US National Fire Department registry there are 1.2 million fire fighters of which 795,00 are volunteer; according to the National Association of State EMS Officials, there are 219,000 EMS professionals, and according to the US Bureau of Labor Statistics, there are approximately 400,000 correction officers in the US; represented by 75,000 departments or organizations. This represents the market opportunity for Responders 1^st Call to mitigate trauma, PTSD, disability and suicide ideations for our First Responders. And this does not include the 800,000 ER nurses and doctors according to Zippia Emergency Room Statistics and the NIH, plus the 2 million active and reserve military according to Defense Department personnel data and over 2 million retired military according to Statista 2023 . who can benefit from the virtual technology embedded in our Responders 1^st Call product which is an effective treatment for trauma and PTSD.

Colleges and Universities

According to the National Center for Education Statistics (NCES), there are approximately 6,000 colleges and universities in the US of which 4,000 are degree-granting institutions. According to the National Student Clearinghouse Research Center, undergrad enrollments in 2021 were 17.5 million representing a decline of almost 10% after the pandemic. Further almost 600 institutions have closed over the last 3 years. With the effects of the pandemic retention and recruitment is a critical issue for higher education along with the increasing concern on how to support the mental and emotional well-being of their student population.

Our Market Opportunity

Since inception, we have been focused on changing the way consumers access, interact with and consume healthcare. In the United States, healthcare spending grew to $4.1 trillion in 2020 and is expected to reach $6.2 trillion by 2028, according to the Centers for Medicare & Medicaid Services. However, it is not always clear what the employer group or individual consumer receives in return for this massive spending. We believe that a new healthcare model, one that places the consumer at the center of the healthcare ecosystem, can help to improve their health care access while reducing what they pay for it.

Evolving Attitudes Among Consumers and Employers Towards Virtual Medicine 

Supported by increasing deregulation and broad societal shifts, demand for and provision of virtual medical and behavioral health services is surging. Telehealth enables more efficient allocation and utilization of existing clinical resources that could otherwise go unused. With an aging population requiring more complex care and a younger generation that is accustomed to digital technology, telehealth offers an efficient way to leverage finite resources. In the coming years, the telehealth market is positioned for significant growth. The demand for telehealth services is clear among younger generations. According to a survey by Harmony Healthcare IT, three out of four millennials would rather search for medical advice online versus seeing a doctor in-person. These younger generations represent the future of the healthcare system, and telehealth can be at the center of their care experience.

Healthcare is a Top Priority for Employers

To attract and retain staff, employers are looking to make significant investments in health benefits; yet, as commercial insurance costs have reached record highs, employers and employees remain frustrated. Barriers to accessing timely care during the day and after business hours cause employees to miss work and lose productivity. As a result, many employees self-direct themselves to higher cost settings such as emergency rooms. Efficient healthcare needs to be available 24/7/365 from anywhere that employee happens to be.

Rising health care costs are causing many employers to question whether they can afford to offer health benefits to their employees. According to the Kaiser Family Foundation’s 2021 Employer Health Benefits Survey, it costs up to $21,804 each year for employer-sponsored family health coverage for covered workers in small firms.

As costs continue to rise, a common way to offset them is to adjust benefits, such as increasing deductibles or copays, lowering coinsurance and increasing out-of-pocket limits. At a certain point, when the benefits become too lean, employees’ perception of their benefits deteriorates.

Health Insurance is Tailored to Large Enterprises not Small Businesses

In November 2021, Americans quit jobs at a record pace with about 4.5 million workers quitting their jobs, the most since the Bureau of Labor Statistics started publishing the data in 2000. In the "Great Resignation," small businesses face an uphill battle for labor. Some employees are leaving for better pay and benefits, while some are leaving the workforce and relying on government programs.

Small business owners are still managing the reality that the number of job openings exceeds the number of unemployed workers, producing a tight labor market. In the January 2022 Jobs Report survey from the National Federation of Independent Business (NFIB), 47% of independent businesses said they had job openings they struggled to fill, which far exceeds the 48-year historical average of 23%. Moreover, 50% of small business owners reported raising compensation in part to stay competitive as employers and attract applicants to their open position, which is another 48-year record high reading.

Small businesses — defined as 500 employees or less by the US Small Business Administration (SBA) — are a key part of economic growth and job creation in the United States. The US Small Business Administration said in 2019 that they accounted for two-thirds of net new jobs. According to the SBA 2021 Small Business Profile, there are over 32 million small business in the US, making up 99.9% of all US businesses and providing employment for 61.2 million Americans. More jobs are also traditionally created by small businesses and new company formation than by large corporations, with small companies creating 1.5 million jobs annually which accounts for 64% of new jobs, according to the Small Business Administration.

Small businesses, like their larger counterparts, have not been shielded from the increasing cost of health care. Without advantages such as a larger pool of insured employees, more bargaining power with health insurance companies, and the benefit of full-time human resources personnel, small-business owners are often left with little recourse and few options when a health insurance carrier hikes costs. In addition, many small employers have been hanging on during the pandemic and are just starting to rebound. They may not be able to afford full insurance, but they need their employees to stay, as turnover is costly.

The Rise of the Independent Worker, Freelancer, and 1099 (Changing Workforce)

With the slow transition away from traditional employment and rise of independent labor over the past decade, the U.S. economy has experienced a significant shift in how employees choose to work. The pandemic has served as a catalyst for deeper change with respect to Americans’ embrace of the gig economy. The gig economy is characterized by short-term, flexible jobs that businesses offer to freelancers and independent contractors instead of traditional, full-time employees. What seemed like a gradual uptick in interest for freelance and gig work up until 2019 has now exploded into the mainstream.

While approximately 156 million Americans, about half the U.S. population, gets health insurance through an employer, now more than one-third of the workforce works in the gig economy full- or part-time, according to Upwork’s study of the U.S. independent workforce, “Freelance Forward:2020.” Covid-19 only accelerated this trend towards the gig economy with Upwork’s data showing that 12% of workers started freelancing during the pandemic. And there may be no turning back; 60% of people who had taken up freelancing reported that no amount of money would convince them to take a traditional job again.

The pandemic also magnified the fundamental problems in the traditional employer benefit system for Americans. People who lost their jobs and took up independent work were forced to find their own benefits or go without coverage during the pandemic. Today, nearly 70 million Americans, representing more than one-third of the total U.S. workforce earn income as freelancers and that figure is expected to swell to 90 million to by 2028, according to Statistica. Despite the trend however, this group of people are underserved compared to W2 full-time employees. The challenge of accessing benefits isn’t just limited to independent workers either. Many employees, particularly part-time employees, do not have access to benefits through their employers. As of January 2022, the Bureau of Labor Statics reported over 25 million part-time workers are in the US. With this changing workforce, the needs of independent and part-time workers will only become more central in the U.S.

We believe that favorable macro-economic trends, in combination with the expansion of our capabilities, present significant opportunities for on-demand and consumer driven healthcare to address the most pressing, universal healthcare challenges through solutions, such as the Health Karma’s. At the same time, the emergence of technology platforms solving massive structural challenges in other industries has highlighted the need for similar solutions in healthcare. We believe there is a significant opportunity to solve these challenges through affordable easy-to access online solutions to health and wellcare, such as ours, that matches consumer demand, offering health plans and employers an attractive, cost-effective healthcare alternative for their beneficiaries, and addressing pain points such as work comp claims and costs. We believe that MediXall Group provides solutions to address these challenges.

Health Karma Platform

At MediXall Group, we empower consumers—both individual consumers and SMBs—to make smarter healthcare decisions with confidence via our digital platform. Technology has changed the way consumers manage their healthcare, making them more comfortable with comparing and accessing healthcare services online. This change has accelerated with the dramatic growth in companies offering innovative healthcare products and services. At Health Karma, we are leveraging this transformation to improve peoples’ access to health care while reducing what they pay for it—ultimately helping to improve the well-being of consumers and the healthcare industry as a whole. As the healthcare industry becomes more fragmented and complex, our value proposition as a trusted, independent platform for consumers increases.

Powered by our own proprietary full stack technology platform, we have built a suite of services that enable us to earn our members’ trust, leverage the power of personalized data, and help our members access quality care they can afford.

The Health Karma Platform was purpose-built to seamlessly connect our existing and future health and wellness programs into one Platform to help drive real member and customer outcomes. We have built our Platform from the ground up to solve the unique challenges of individual consumers as well as organizations and their members.

We believe that the Health Karma Platform helps solve many of the common pain points for both Consumers and Employers when launching, administering, and maintaining health and wellness-related programs. By seamlessly integrating best-in-class providers into one Platform, users get the same, consistent user experience, without fumbling for passwords across multiple programs or struggling to remember where to access each benefit. Built as a modular solution Health Karma can scale up depending on the unique needs of each member or employer customer by adding programs over time.

As we continue to bring the Health Karma experience to new members, new employers, and new markets, our goal will remain the same: to build engagement, earn trust, and help our members stay healthy and well.

Complete Solution to Manage the Consumer Healthcare Journey

Health Karma offers a simple and intuitive consumer experience that enables our users to take control of their health care decisions.

That experience begins with trust and engagement, which we earn by providing our users with features that help them navigate the many disconnected elements of the healthcare ecosystem. When our users adopt these tools, we not only streamline their day-to-day interactions with the healthcare system and improve user satisfaction, but we also obtain valuable data that enables a better understanding of their unique health care needs. Trust, engagement, and personalized data allow us to guide our users to the providers that can give them the right care, including virtual care, at the right time and right cost. Our technology stack will also permit us to offer personalized insights and benefits. Our ability to deliver a high-value product, in turn, creates more trust, engagement, and in time, enhances our ability to provide personalized, data-driven insights.

An important aspect of our approach to building trust and engaging members is to engage with them through whatever channel is most comfortable for them. Whether it is a secure in-app message to answer coverage and benefit questions, a consultation with a licensed medical provider in the middle of the night through our telehealth offering, talking immediately with a licensed, behavioral health clinician 24/7/365 to address common emotional well-being and behavioral health concerns, we are there for our users when they need us most. In this way, we are building a consumer-centric experience more similar to what consumers experience from a best-in-class technology or consumer products company than from a traditional health care organization.

Our management and team have shared values in bringing our brand to life through materials, communications, content and interactions. From the first touch point our members feel our commitment to delivering a service that focuses on their needs. In addition to employing A/B testing to increase engagement and utilization, we simplify the often-complex language used in health care and insurance so that our users feel confident and comfortable with the choices they make.

Our MediXall Group Solutions:

Health Karma

Whether a member is insured or uninsured, their Health Karma membership makes it easy for them to access healthcare services through a convenient, virtual platform. For an affordable monthly cost, members get access to the following programs:

$0 Co-Pay services:

Virtual Primary Care Physician (PCP) – - Our Primary Care team will manage our members’ health in many of the same ways as a traditional primary care physician – just over the phone or through video chat, and without any charges outside of the monthly membership fee. With Virtual Primary Care members can:

Urgent Medical Care – When care can’t wait, members can request Virtual consultations with a licensed Medical Doctor 24/7/365 for non-emergency incidents which require care within 24 hours, like colds, flu, stomach ailments, UTIs, and more. Health Karma members can use Urgent Care when they have minor illnesses or injuries that can't wait to be treated or that can be fully addressed in one or two visits.

Emotional Well-Being and Behavioral Health - Getting help with emotional health can be difficult. Health Karma provides on-demand, in-the-moment support wherever members call from by connecting them and their immediate family with a master’s level therapist. The therapist can help our members with concerns like anxiety, stress, depression, addiction, and any other life/work balance or emotional health issue. Consultations are available 24/7 for immediate, in-the-moment help — no need for a call-back or to schedule a consultation. Consultations are confidential and are generally up to 30 minutes in length. In addition, when appropriate, the therapist may provide our members guided solutions materials via email. The clinician may also suggest additional steps and referrals to other resources and professional care. Health Karma’s Virtual Behavioral Health Solution includes:

Health Karma Pets - 24/7/365 virtual consultations with licensed veterinarians to discuss pet health, wellness, behavioral, and training issues. Includes a Pet Drug Card with prescription savings up to 75% at pharmacies nationwide.

Message Medical Specialists with 24-hour response - Ask medical questions to our board-certified physicians, psychologists, pharmacists, dentists, dietitians, and fitness trainers.

$0 Copay Medications - access to 37 commonly prescribed medications ranging from antibiotics to pain management, and more, at no charge.

Psychology – Scheduled access to a licensed Psychologist available M-F 8:00 am - 5:00 pm central standard time. Each up to 45-minute session fee is $100.

Psychiatry – Consult with a US- based board-certified Psychiatrist who can diagnose, treat, and prescribe medication with no referral required. The initial scheduled consultation fee is $215 with follow up consultation fees being $100 per visit

HealthCare Advocate – Access to dedicated subject-matter experts who provide professional support regarding healthcare costs, benefits coverage, in-network providers, second opinions, help with medical bills, insurance plans, etc.

Discount Programs

Health Karma Rx – With Health Karma Rx, our members have access to prescription savings with discounted pricing of approximately 60% on average, available through 65,000 pharmacies across the U.S.

Lab Services – Up to 50% discount at participating Quest Diagnostics lab facilities. Lab services include tests for wellness, women's health, sexual health, and other common tests.

Dental Services - As part of the Health Karma membership, members have access to discount saving program offered by an industry leader in dental care Careington International Corporation. With one of the largest dental networks in the nation and its member-transparent pricing, Careington International Corporation is one of the most recognized professional dental networks in the nation. With our dental program Health Karma members can save 20% to 50% on most dental procedures including routine oral exams, unlimited cleanings, and major work such as dentures, root canals, and crowns.

Vision Services – Our discount vision program offers Health Karma members savings on eye care and eyewear the VSP Vision Savings Pass. Special prices on eye care and eyewear through trusted, private-practice Vision Saving Pass (VSP) network of doctors with15-20% savings on eye exams and special pricing on glasses and sunglasses.

Hearing Services – Health Karma members have access to hearing aid discounts from 30% to 60% at over 5,500 network providers nationwide through EPIC Hearing. Additional no charge services include routine hearing test, one-year supply of batteries, extended manufacturer’s warranty, and follow-up visits for one year.

Vitamins and Supplements – Health Karma members save 25% off Swanson Brand products and 5% - 15% off most other products on Swanson website; plus free shipping on orders over $50; and 100% money-back guarantee.

Workers 1^st Call & Report Solution

Work comp cost and claims are a major issue for all businesses but especially for SMBs.

Seventy percent of physical workplace injuries are minor and do not require sending the injured worker to Urgent Care or the ER. Overextension, slip, trip, falls, contact with equipment account for 86% of injuries according to the NCCI. Further “presenteeism” meaning being at work but distracted are one of the primary causes of workplace injuries. According to Workers Compensation.com, 75% of employees struggle with an issue which affects their mental health.

Workers 1^st Call & Report is a pre-claim, preemptive, 24/7/365 solution for both physical and mental injuries and incidences addressing all these issues by providing the following solutions:

Responders 1^st Call Solution

Our First Responders need support to address the stress, anxiety, depression and suicide ideation on them and their immediate family. With traumatic incidents impacting First Responders and medical personnel and the cost of mental health claims and suicides in those populations, Responders 1^st Call was created to help First Responders and their families through emotional and behavioral health concerns. The Responders 1^st Call offering includes:

Student 1^st Call Solution

The students at our colleges and universities are dealing with emotional health. Returning to campus, regenerating friendships, lack of trust, loss of hope are a few reasons why students need a dedicated confidential, anonymous “in-the-moment” emotional health support program. Student 1^st Call was created for universities and school districts to delivers this to their student base. Student 1^st Call provides:

Our Growth Opportunities

Expand clients and B2B offering. We expect to meaningfully expand our B2B channel through both the addition of new employer and group clients, as well as a focus on driving deeper penetration rates within our existing clients. We plan to add new B2B clients by contracting with additional regional and national general insurance agencies, accelerating our outbound marketing efforts, leveraging our broker and consultant relationships and continuing to penetrate the massively underserved part-time, independent, and the smaller employer worker market. Additionally, we are focused on further developing our dedicated internal B2B sales team solely focused on expanding our B2B client base across our different verticals as well as driving penetration within existing contracts by cross-sales with our various MediXall Group solutions –an effort we expect to drive significant traction within the near-term. Within our existing employer base, we plan to drive penetration and engagement with an invested focus on client success. Additionally, because of our embedded position serving the B2B customer base, we believe we are well-positioned to innovate and lay the groundwork for additional services that drive value for their members such as navigation across the ever-changing health and wellness landscape.

Continue expanding B2C user base through Associations and increase engagement. Through our expanding client base of associations and performance marketing initiatives drive penetration with these associations, we will continue to focus on growing consumer member acquisition and activation. We expect this strategy to be further complemented by sustained investment in our platform capabilities, as well as through continuing to leverage our growing brand awareness. We believe our growth opportunity in both health and wellness to be substantial. In addition, as a result of the end-to-end nature of our platform, we believe we are well-positioned to create care continuity for our members across a broader range of health and wellness verticals. We plan to drive further engagement of our existing member base by expanding our offerings beyond our current programs to include capabilities such as enhanced behavioral and emotional well-being offerings, wearable (i.e. Apple Watch, FitBit) integration, Wellness challenges and rewards, and medical records transfer in order to drive higher member lifetime engagement and value. We use a strategic and disciplined approach to scaling our marketing budget, as we believe we are able to achieve efficient spend levels on a per-customer basis by leveraging the Health Karma brand, the breadth of our MediXall Group solutions, and strong relationships with outbound and inbound marketing channels.

Opportunistic M&A and Product Development. We are well positioned to further expand our solution set through opportunistic acquisitions or product development responsive to the evolving and expanding needs of our client base. Our technology platform is built to easily integrate with non-native technologies and to offer a single cohesive platform. We plan to use a disciplined approach to strategically acquire complementary capabilities and service lines. These may include, but are not limited to, healthcare FinTech platforms, Third-party data providers, wellness and coaching platforms, workers comp solutions, and other virtual behavioral and care coordination platforms.

MediXall Group Technology

The underlying technology for MediXall Group is a highly scalable, integrated, application program interface or API-driven technology platform. This enables the platform to accommodate the seamless and quick introduction of new services, technologies and functionality that we have introduced through strategic partnerships.

Our platform is built on a modern cloud-based technology stack, employing Agile development cycles and a DevOps approach to infrastructure. This approach allows us to evolve and improve our platform at a faster pace than using a traditional software development and infrastructure management process. Our technology platform is updated frequently, without long upgrade cycles. Our modular, service-oriented architecture utilizes API standards for ease of implementing new functionalities and integrating with external systems. By designing our product as a platform, we have created an overarching infrastructure where consumer data, preferences, and third-party partners can all interact through Health Karma’s API. Data is the heart of our technology so because of this we have the potential to integrate machine learning and natural language processing to automate recommendations and workflows, uncovering insights that we can incorporate back into the design platform.

This enables our platform to act as a sales channel for other companies. We can deliver other’s state-of-the-art technology and applications through our platform. Similar to other two-sided marketplaces, the platform can bring innovative new products to consumers and employers, while at the same time opening up distribution and revenue opportunities for other health companies. Furthermore, we believe that this will generate a virtuous cycle, leveraging our growing customer base to attract the best healthcare partners (and vice versa)-increasing value for all stakeholders.

Our proprietary technology platform powers all aspects of our company: engaging members, supporting partners, and advancing business objectives. Our technology is grounded in human-centered design thinking and leverages insights from behavioral interaction. Our product designers and engineers collaborate closely with our operational team members, as well as healthcare advisors and partners in the Health Karma Network to observe and then optimize workflows. We employ user testing and experiment-driven design (such as A/B testing) to enhance our member and partner experiences.

With the opportunities and growth trajectory in front of the company, we believe our skilled internal development team is uniquely positioned to make critical real-time product development decisions, enabling us to be responsive and stay ahead of the competition.

Sales & Marketing

MediXall Group focuses on member growth through the distribution channel partners previously described. We use marketing and sales strategies tailored for each distribution and market channel to reach consumers, employees, as well as employee benefits leaders. Employer marketing and sales strategies also include account-based marketing, business development initiatives, and client service teams focused on customer acquisition, employee enrollment, and member engagement. We derive employer sales through a direct sales force, focused on large enterprises, and channel partners primarily for small and medium businesses and organizations, which enables us to distribute all our MediXall Group solutions to the market efficiently.

Employer Sales & Marketing

With the roll out of MediXall Group solutions to employers, we are developing and expanding our in-house employer sales force to be comprised of sales professionals who will be organized by each of the unique MediXall Group solution, geography, customer size, and industry. We support our sales force in several ways, including through account-based marketing resources and the deployment of a business development team to educate employer decision makers on the benefits of offering Health Karma to their employees. We also leverage sales analytics to further support lead generation. Additionally, our account management and client success team actively manages our customer accounts, provides in-depth support, and cross-sells the client to other MediXall Group solutions which address their pain points.

Also, we work with channel partners such as associations, chambers, payroll and professional employer organizations to reach small and medium businesses and organizations. Additionally, we partner with select regional and national benefits brokers and consultants to educate and sell potential customers on our offerings.

Consumer Sales & Marketing

When we market and sell directly to individuals, we initially plan to focus on increasing brand awareness, followed by performance marketing targeted toward user acquisition, activation and engagement.

Our marketing strategy in new markets is primarily centered on increasing overall brand awareness, familiarity, consideration and ultimately enrollment. We have carefully developed a robust marketing plan to achieve these objectives:

As brand awareness increases in more established markets, we shift our efforts to performance marketing focused on both customer acquisition and engagement. Our performance marketing initiatives include customized task-based in-app messages and email communications to drive engagement among members, in addition to more targeted advertisements through direct mail, Google Search, YouTube and social media for member acquisition.

Customer and Client Services and Support

We believe that because our clients and employer customers bear an enormous responsibility to successfully run their businesses day in and day out, they welcome our support to provide end-to-end customer support, including full profile data conversion and import, live onboarding and technical support via telephone, email, and screen sharing; in-software self-service tools; advanced professional services; and educational events. Our dedicated support team is focused on seeking to ensure that every MediXall Group member has the best possible experience.

Customer & Client Onboarding. We onboard new customers and partners with live training sessions delivered via telephone and web conference. These trainings are supplemented by self- service setup checklists, online help materials and webinars.

Customer & Client Success. To identify opportunities for greater adoption of our products and services and to further help our customers be more successful on our platform, we engage with them to better understand their business goals, objectives, and pain points; provide targeted education about relevant features, products and services as well as business best practices; and develop a recommended success plan with periodic outreach to check in on their progress.

Ongoing Customer Support. Inclusive with being a member of the Health Karma Partner Program, we offer customer service and support via phone, chat, emails and self-help knowledge centers. All customer service and support is provided by our in-house personnel who are invested in MediXall Group’s core values and are closely connected to our Product, Technology and Experience team.

Competition

While we believe there are currently no direct competitors that offer the full suite of solutions as we do, there are several companies that offer components of telehealth or address conditions that compete with our solutions. These include companies whose primary business is providing and marketing telehealth and health and wellness management, such as the delivery of on-demand access to healthcare and wellness services. We compete with other providers that are larger in scale and generally provide telehealth on behalf of self-insured employers and insurance plans. Within parts of the behavioral health market, we also compete with public and private organizations with similar product offerings for consumers. Competition focuses on, among other factors, technology, breadth and depth of functionality, range of associated services, operational experience, customer support, extent of customer base, and reputation.

Regulatory Environment

Participants in the health care industry are required to comply with extensive and complex laws and regulations in the United States at the federal and state levels as well as applicable international laws. Although many regulatory and governmental requirements do not directly apply to our business, our customers are required to comply with a variety of laws, and we may be affected by these laws as a result of our contractual obligations. Similarly, there are a number of legislative proposals in the Unites States, both at the federal and state level, which could impose new obligations in areas affecting our business. We have attempted to structure our operations to comply with applicable legal requirements, but there can be no assurance that our operations will not be challenged or impacted by enforcement initiatives.

Healthcare Reform

Our business could be affected by changes in health care laws, including without limitation, the Patient Protection and Affordable Care Act (the “ACA”), which was enacted in March 2010. The ACA has changed how health care services are covered, delivered and reimbursed through expanded coverage of individuals, changes in Medicare program spending and insurance market reforms. Ongoing government and legislative initiatives may bring about other changes.

While most of the provisions of the ACA and other health care reform legislation will not be directly applicable to us, they may affect the business of many of our customers, which may in turn affect our business. Although we are unable to predict with any reasonable certainty or otherwise quantify the likely impact of the ACA, any amendment or repeal of the ACA, or other health care reform on our business model, financial condition, or results of operations, negative changes in the business of our customers and the number of individuals they insure may negatively impact our business.

Requirements Regarding the Privacy and Security of Personal Information

U.S.- HIPAA and Other Privacy and Security Requirements. There are many U.S. federal and state laws and regulations related to the privacy and security of personal health information. Additionally, regulations promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996 and its implementing regulations (collectively, “HIPAA”), establishes privacy and security standards that limit the use and disclosure of protected health information and require the implementation of administrative, physical and technical safeguards to ensure the confidentiality, integrity and availability of individually identifiable health information in electronic form. Any health plan customers, as well as health care clearinghouses and certain providers with which we may have or may establish business relationships, are covered entities that are regulated under HIPAA. The Health Information Technology for Economic and Clinical Health Act (“HITECH”), which became effective on February 17, 2010, significantly expanded HIPAA’s privacy and security requirements. Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates,” who are independent contractors or agents of covered entities that create, receive, maintain, or transmit protected health information in connection with providing a service for or on behalf of a covered entity. Under HIPAA and our contractual agreements with our customers, we are considered a “business associate” to our customers and thus are directly subject to HIPAA’s privacy and security standards. In order to provide our covered entity customers with services that involve the use or disclosure of protected health information, HIPAA requires our customers to enter into business associate agreements with it. Such agreements must, among other things, require us to:

In addition to HIPAA regulations, we may be subject to other state and federal privacy laws, including laws that prohibit unfair or deceptive practices and laws that place specific requirements on use of data. Such state laws can be similar to or even more protective than HIPAA, in which case we must comply with the more stringent law. As a result, it may be necessary to modify our planned operations in order to ensure we are in compliance with the stricter state laws.

Data Protection and Breaches. In recent years, there have been a number of well-publicized data breaches involving the improper use and disclosure of individuals’ personal information. Many states have responded to these incidents by enacting laws requiring holders of personal information to maintain safeguards and to take certain actions in response to a data breach, such as providing prompt notification of the breach to affected individuals and state officials. In addition, under HIPAA, we must report breaches of unsecured protected health information to our contractual partners within 60 days of discovery of the breach. Notification must also be made to HHS and, in certain circumstances involving large breaches, to the media. Under the GDPR, the data controller is required to report personal data breaches to the supervisory authority within 72 hours of discovery of the breach.

We have implemented and maintained physical, technical and administrative safeguards intended to protect all personal data and have processes in place to assist it in complying with all applicable laws, regulations and contractual requirements regarding the protection of these data and properly responding to any security breaches or incidents. However, we cannot be sure that these safeguards are adequate to protect all personal data or to assist us in complying with all applicable laws and regulations regarding the privacy and security of personal data and responding to any security breaches or incidents. Furthermore, in many cases, applicable state laws, including breach notification requirements, are not preempted by the HIPAA privacy and security standards and are subject to interpretation by various courts and other governmental authorities, thereby complicating our compliance efforts. Additionally, state and federal laws regarding deceptive practices may apply to public assurances we give to individuals about the security of services we provide on behalf of our contractual customers.

Other Healthcare Regulations

In addition to data privacy laws, our operations and arrangements with healthcare professionals, clients, and third-party payors may subject us to various federal and state healthcare laws and regulations, including without limitation fraud and abuse laws, such as the federal Anti-Kickback Statute; civil and criminal false claims laws; physician transparency laws; and state laws regarding the corporate practice of medicine and fee-splitting prohibitions. These laws may impact, among other things, our sales and marketing operations, and our interactions with healthcare professionals. We continually monitor legislative, regulatory and judicial developments related to licensure and engagement arrangements with professionals; however, new agency interpretations, federal or state legislation or regulations, or judicial decisions could require us to change how we operate, may increase our costs of services and could have a material adverse impact on our business, results of operations or financial condition.

Other Requirements. In addition to HIPAA, numerous other U.S. state and federal laws govern the collection, dissemination, use, access to and confidentiality of individually identifiable health information and health care provider information. Some states also are considering new laws and regulations that further protect the confidentiality, privacy and security of medical records or other types of medical information. In many cases, these state laws are not preempted by the HIPAA privacy standards and may be subject to interpretation by various courts and other governmental authorities. Further, Congress and a number of states have considered or are considering prohibitions or limitations on the disclosure of medical or other information to individuals or entities located outside of the United States.

In addition to HIPAA regulations, we may be subject to other state and federal privacy laws, including laws that prohibit unfair or deceptive practices and laws that place specific requirements on use of data. Such state laws can be similar to or even more protective than HIPAA, in which case we must comply with the more stringent law. As a result, it may be necessary to modify our planned operations in order to ensure we are in compliance with the stricter state laws.

Corporate History

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

Employees

As of December 31, 2022, we had 17 full-time employees. We believe that we maintain a satisfactory working relationship with our employees and we have not experienced nor do we currently have any labor disputes. As of August 2, 2023 we have outsourced the functions of 10 full-time employees and currently have 7 full-time employees.

We believe that a diverse workforce is important to our success. As we grow our business, we will focus on the hiring, retention and advancement of women and underrepresented populations, and to cultivate an inclusive and diverse corporate culture. In the future, we intend to evaluate our use of human capital measures or objectives in managing our business such as the factors we employ or seek to employ in the development, attraction and retention of personnel and maintenance of diversity in our workforce.

The success of our business is fundamentally connected to the well-being of our people. Accordingly, we are committed to the health, safety and wellness of our employees. We provide our employees and their families with access to a variety of innovative, flexible and convenient health and wellness programs, including benefits that provide protection and security so they can have peace of mind concerning events that may require time away from work or that impact their financial well-being; that support their physical and mental health by providing tools and resources to help them improve or maintain their health status and encourage engagement in healthy behaviors; and that offer choice where possible so they can customize their benefits to meet their needs and the needs of their families.

We also provide robust compensation and benefits programs to help meet the needs of our employees.

Web Site

We maintain a website at gethealthkarma.com. This website is not incorporated in this Annual Report on Form 10-K.

ITEM 1A. RISK FACTORS.

Before you invest in our securities, you should be aware that there are various risks. You should consider carefully these risk factors, together with all of the other information included in this Annual Report on Form 10-k before you decide to purchase our securities. If any of the following risks and uncertainties develop into actual events, our business, financial condition or results of operations could be materially adversely affected.

RISKS RELATED TO OUR BUSINESS

The Company has limited operating history and has a new business model in an emerging and rapidly evolving market.

MediXall is an early-stage development enterprise and lacks any operating history to evaluate in assessing our future prospects. Our business and prospects in light of the risks and difficulties MediXall will encounter as a development stage company in a new and rapidly evolving market must be seriously considered. We may not be able to successfully address these risks and difficulties, which could materially harm our business and operating results. In addition, we do not know if our business model will operate effectively during the next economic downturn. Furthermore, we are unable to predict the likely duration and severity of any potential adverse economic conditions in the U.S. and other countries, but the longer the duration the greater risks we face in operating our business. There can be no assurance, therefore, that current economic conditions or worsening economic conditions, or a prolonged or recurring recession, will not have a significant adverse impact on our operating and financial results.

Limited Control of Our Business Model and Dependance on third parties .

We do not directly offer the services we sell directly to our customers but use third parties. As such, we are very dependent on the relationships with multiple parties as to their ability to provide the services to our customers, their financial variability, pricing, and the quality of the services they provide, including professional malpractice. We could be materially harmed if these third parties are not able to provide such services at a price we can afford. We could be materially harmed if they provide poor service to our customers that could risk cancelation of the service agreements we have. We could also face vicarious legal, reputational, and financial risk if such services provided by our third-party relationships could place us in adverse conditions.

Our auditors have indicated that there is a substantial doubt about our ability to continue as a going concern.

To date, we have not been profitable and have incurred significant losses and cash flow deficits. For the fiscal years ended December 31, 2022 and 2021, we generated operating revenues of $59,268 and $14,995, respectively, and reported net losses of $6,830,415 and $6,200,574, respectively, and negative cash flow from operating activities of $3,561,083 and $4,685,270, respectively. As noted in our consolidated financial statements, as of December 31, 2022, we had an accumulated deficit of $32,612,805. We anticipate that we will continue to report losses and negative cash flow. Our auditors have raised substantial doubt regarding our ability to continue as a going concern as a result of our historical recurring losses and negative cash flows from operations as well as our dependence on private equity and financings.

Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. These adjustments would likely include substantial impairment of the carrying amount of our assets and potential contingent liabilities that may arise if we are unable to fulfill various operational commitments. In addition, the value of our securities, including common stock issued in this offering, would be greatly impaired. Our ability to continue as a going concern is dependent upon generating sufficient cash flow from operations and obtaining additional capital and financing, including funds to be raised in this offering. If our ability to generate cash flow from operations is delayed or reduced and we are unable to raise additional funding from other sources, we may be unable to continue in business even if this offering is successful. For further discussion about our ability to continue as a going concern and our plan for future liquidity, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Ability to Continue as a Going Concern.”

We cannot assure you that MediXall will be able to develop the infrastructure necessary to achieve the potential sales growth.

Achieving revenue will require that MediXall develop a functional platform and build the necessary infrastructure to support sales, technical and client support functions. We cannot assure you that we can develop this infrastructure or will have the capital to do so and no commitments for needed capital are in place. MediXall will continue to design plans to establish growth, adding sales and sales support resources as capital permits, but at this time these plans are untested. If MediXall is unable to use any of its anticipated marketing initiatives or the cost of such initiatives were to significantly increase or such initiatives or its efforts to satisfy existing clients are not successful, MediXall may not be able to attract clients or retain existing clients on a cost-effective basis and, as a result, our revenue and results of operations would be affected adversely.

The markets that MediXall is targeting for revenue opportunities are emerging within a well-established healthcare industry, are rapidly developing and may change before we can access them.

The markets for traditional internet and mobile web products and services that MediXall is targeting for revenue opportunities are changing rapidly; and the barriers to entry into the niche identified by MediXall are high and require unique experience and qualification. We cannot provide assurance that MediXall will be able to realize these revenue opportunities before they change or before other companies enter or even dominate the market. Furthermore, MediXall has based certain of its revenue opportunities on statistics provided by third party industry sources. Such statistics are based on ever-changing customer preferences due to our rapidly changing industry. With the introduction of new technologies and the influx of new entrants to the market, we expect competition to emerge and intensify in the future, which could adversely affect our ability to increase sales, limit client attrition and maintain our prices.

Our business depends on the development and maintenance of the internet infrastructure.

The success of our services will depend largely on the development and maintenance of the internet infrastructure. This includes maintenance of a reliable network backbone with the necessary speed, data capacity and security, as well as timely development of complementary products, for providing reliable internet access and services. The Internet has experienced, and is likely to continue to experience, significant growth in the number of users and amount of traffic. The internet infrastructure may be unable to support such demands. In addition, increasing numbers of users, increasing bandwidth requirements or problems caused by viruses, worms, malware and similar programs may harm the performance of the internet. The backbone computers of the internet have been the targets of such programs. The internet has experienced a variety of outages and other delays as a result of damage to portions of its infrastructure, and it could face outages and delays in the future. These outages and delays could reduce the level of internet usage generally as well as the level of usage of our services, which could adversely impact on our business.

The nature of the MediXall platform requires sophisticated encryption technology to defend against hacking due to the personal information as well as the financial transaction data that will be utilized by a consumer/patient.

The art of hacking databases for the purposes of obtaining personal information as well as financial information on individuals is increasing substantially. MediXall is aware of these risks and will invest substantially in the development of its platform in accordance with the very latest data encryption/protection technologies; however, there is a real risk that the MediXall platform could be compromised at some point in time exposing the company to lawsuits and unfavorable attention that would adversely impact our business and affect our ability to add clients, consumer/patients or manage attrition on the platform.

Our ability to offer MediXall products and services may be affected by a variety of U.S. and foreign laws.

The laws relating to the liability of providers of online and mobile marketing services for activities of their users are in their infancy and currently unsettled both within the U.S. and abroad.  Future regulations could affect our ability to provide current or future programming.

We will depend on the services of our executives.

We depend on the services of our executive officers, director and outside contractors. To date we have not entered into any employment agreements with our executives. The loss of the services of any of our executives could materially harm our business. In addition, we do not presently maintain a key-man life insurance policy on any of our officers or directors.

Our future depends, in part, on our ability to attract and retain key personnel. Our future also depends on the continued contributions of other key technical and marketing personnel. The loss of key personnel and the process to replace any of our key personnel would involve significant time and expense, may take longer than anticipated and may significantly delay or prevent the achievement of our business objectives.

Failure to properly maintain effective and secure management information systems, update or expand processing capability or develop new capabilities to meet our business needs could result in operational disruptions and possible loss of data critical to our operations.

Our business will depend significantly on effective and secure information systems and the successful application of these continuously emerging technologies. In the future, these systems could support online customer service functions, provider and member administrative functions and support tracking and extensive analyses of medical expenses and outcome data.

These information systems and applications will require continual investment for maintenance, upgrades and enhancement to meet our operational needs and to handle our expansion and growth. Any inability or failure to properly maintain management information systems, successfully update or expand processing capability or develop new capabilities to meet our business needs in a timely manner could result in operational disruptions, loss of existing customers, difficulty in attracting new customers, impairment of the implementation of our growth strategies, delays in settling disputes with customers and providers, regulatory problems, increases in administrative expenses, loss of our ability to produce timely and accurate reports and other adverse consequences. To the extent a failure in maintaining effective information systems occurs, we may need to contract for these services with third-party management companies, which may be on less favorable terms to us and significantly disrupt our operations and information flow. Furthermore, our business requires the secure transmission of confidential information over public networks.  Because of the confidential information we store and transmit, security breaches could expose us to a risk of regulatory action, litigation, possible liability and loss. Our security measures may prove inadequate to prevent security breaches and our business operations and profitability would be adversely affected by cancellation of contracts, loss of members and potential criminal and civil sanctions if security breaches occur.

General economic conditions, industry cycles, financial, business and other factors affecting our operations, many of which are beyond our control, may affect our future performance.

General economic conditions, industry cycles, financial, business and other factors may affect our operations. If we cannot generate sufficient cash flow from operations in the future, we may, among other things, be required to take one or more of the following actions:

In addition, any financing, refinancing or sale of assets might not be available on economically favorable terms, which may prevent us from future expansion and growth in new markets and, thus, negatively affect our business and financial condition.

Risks Related to Our Intellectual Property

If we are unable to prevent unauthorized use or disclosure of our proprietary trade secrets and unpatented know-how, our ability to compete will be harmed.

Proprietary trade secrets, copyrights, trademarks and unpatented know-how are also very important to our business. We will rely on a combination of patents, trade secrets, copyrights, trademarks, confidentiality agreements, and other contractual provisions and technical security measures to protect certain aspects of our intellectual property, especially where we do not believe that patent protection is appropriate or obtainable. We will require our employees and consultants to execute confidentiality agreements in connection with their employment or consulting relationships with us. We also will require our employees and consultants to disclose and assign to us all inventions conceived during the term of their employment or engagement while using our property or which relate to our business; however, these measures may not be adequate to safeguard our proprietary intellectual property and conflicts may, nonetheless, arise regarding ownership of inventions. Such conflicts may lead to the loss or impairment of our intellectual property or to expensive litigation to defend our rights against competitors who may be better funded and have superior resources. Our employees, consultants, contractors and other advisors may unintentionally or willfully disclose our confidential information to competitors. In addition, confidentiality agreements may be unenforceable or may not provide an adequate remedy in the event of unauthorized disclosure. Enforcing a claim that a third party illegally obtained and is using our trade secrets is expensive and time consuming, and the outcome is unpredictable. Moreover, our competitors may independently develop equivalent knowledge, methods and know-how. Unauthorized parties may also attempt to copy or reverse-engineer certain aspects of the MediXall platform that we consider proprietary. As a result, third parties attempt to use our proprietary technology or information, and our ability to compete in the market would be adversely affected.

RISKS RELATED TO OUR COMMON STOCK

Trading on the OTC Markets is volatile and sporadic, which could depress the market price of our common stock and make it difficult for our stockholders to resell their common stock.

Our common stock is quoted on the OTCPK tier of the OTC Markets Group, Inc. (“OTC Markets”). Trading in securities quoted on the OTC Markets is often thin and characterized by wide fluctuations in trading prices, due to many factors, some of which may have little to do with our operations or business prospects. This volatility could depress the market price of our common stock for reasons unrelated to operating performance. Moreover, the OTC Markets is not a stock exchange, and trading of securities on the OTC Markets is often more sporadic than the trading of securities listed on a quotation system like Nasdaq Capital Market or a stock exchange like the NYSE American. These factors may result in investors having difficulty reselling any shares of our common stock.

Our stock price is likely to be highly volatile because of several factors, including a limited public float.

The market price of our common stock has been volatile in the past and the market price of our common stock is likely to be highly volatile in the future. You may not be able to resell shares of our common stock following periods of volatility because of the market’s adverse reaction to volatility.

Other factors that could cause such volatility may include, among other things:

Any of these factors could have a significant and adverse impact on the market price of our common stock. In addition, the stock market in general has at times experienced extreme volatility and rapid decline that has often been unrelated or disproportionate to the operating performance of particular companies. These broad market fluctuations may adversely affect the trading price of our common stock, regardless of our actual operating performance.

Our common stock is a “penny stock” under SEC rules, and our warrants may be subject to the “penny stock” rules. It may be more difficult to resell securities classified as “penny stock.”

Our common stock is deemed to be a “penny stock” under applicable SEC rules (generally defined as non-exchange traded stock with a per-share price below $5.00). Unless we successfully list our common stock on a national stock exchange, or maintain a per-share price above $5.00, these rules impose additional sales practice requirements on broker-dealers that recommend the purchase or sale of penny stocks to persons other than those who qualify as “established customers” or “accredited investors.” For example, broker-dealers must determine the appropriateness for non-qualifying persons of investments in penny stocks. Broker-dealers must also provide, prior to a transaction in a penny stock not otherwise exempt from the rules, a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, disclose the compensation of the broker-dealer and its salesperson in the transaction, furnish monthly account statements showing the market value of each penny stock held in the customer’s account, provide a special written determination that the penny stock is a suitable investment for the purchaser, and receive the purchaser’s written agreement to the transaction.

Legal remedies available to an investor in “penny stocks” may include the following:

However, investors who have signed arbitration agreements may have to pursue their claims through arbitration.

These requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a security that becomes subject to the penny stock rules. The additional burdens imposed upon broker-dealers by such requirements may discourage broker-dealers from effecting transactions in our securities, which could severely limit the market price and liquidity of our securities. These requirements may restrict the ability of broker-dealers to sell our common stock and may affect your ability to resell our common stock.

Many brokerage firms will discourage or refrain from recommending investments in penny stocks. Most institutional investors will not invest in penny stocks. In addition, many individual investors will not invest in penny stocks due, among other reasons, to the increased financial risk generally associated with these investments.

For these reasons, penny stocks may have a limited market and, consequently, limited liquidity. We can give no assurance at what time, if ever, our common stock will not be classified as a “penny stock” in the future.

A sale of a substantial number of shares of our common stock may cause the price of the common stock to decline.

If our stockholders sell substantial amounts of our common stock in the public market, the market price of our common stock could fall. These sales also may make it more difficult for us to sell our equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate. This risk is significant because of concentrated positions of our common stock held by a small group of investors.

We have not paid dividends on our common stock in the past and do not expect to pay dividends on our common stock in the future. Any return on investment in our common stock may be limited to the value of our common stock.

We have never paid cash dividends on our common stock and do not anticipate paying cash dividends on our common stock in the foreseeable future. The payment of dividends on our common stock would depend on earnings, financial condition, and other business and economic factors affecting us at such time as our board of directors may consider relevant. If we do not pay dividends on our common stock, our common stock may be less valuable because a return on your investment will only occur if its stock price appreciates.

Changes in accounting principles and guidance, or their interpretation, could result in unfavorable accounting charges or effects, including changes to our previously filed financial statements, which could cause our stock price to decline.

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States (“GAAP”). These principles are subject to interpretation by the Securities and Exchange Commission (the “SEC”) and various bodies formed to interpret and create appropriate accounting principles and guidance. A change in these principles or guidance, or in their interpretations, may have a significant effect on our reported results and retroactively affect previously reported results.

Being a public company results in additional expenses, diverts management’s attention and could also adversely affect our ability to attract and retain qualified directors.

As a public reporting company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These requirements generate significant accounting, legal and financial compliance costs and make some activities more difficult, time-consuming or costly and may place significant strain on our personnel and resources. The Exchange Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to establish the requisite disclosure controls and procedures and internal control over financial reporting, significant resources and management oversight are required.

As a result, management’s attention may be diverted from other business concerns, which could have an adverse and even material effect on our business, financial condition and results of operations. These rules and regulations may also make it more difficult and expensive for us to obtain director and officer liability insurance. If we are unable to obtain appropriate director and officer insurance, our ability to recruit and retain qualified officers and directors, especially those directors who may be deemed independent, could be adversely impacted.

Failure to establish and maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act could have a material adverse effect on our business and stock price.

We are required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting.

To comply with the requirements of being a public company, we have undertaken various actions, and may need to take additional actions, such as implementing new internal controls and procedures and hiring additional accounting or internal audit staff. Testing and maintaining internal control can divert our management’s attention from other matters that are important to the operation of our business. Additionally, when evaluating our internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. If we identify any material weaknesses in our internal control over financial reporting or are unable to comply with the requirements of Section 404 in a timely manner or assert that our internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected, and any investigations by the Financial Industry Regulatory Agency, the SEC or other regulatory authorities, could require additional financial and management resources.

RISKS RELATED TO HEALTHCARE INDUSTRY

The healthcare regulatory and political framework is uncertain and evolving, and we cannot predict the effect that further healthcare reform and other changes in government programs may have on our business, financial condition or results of operations.

Healthcare laws and regulations are rapidly evolving and may change significantly in the future, which could adversely affect our financial condition and results of operations. For example, the ACA, which includes a variety of healthcare reform provisions and requirements that may become effective at varying times through 2022, substantially changes the way healthcare is financed by both governmental and private insurers and may significantly impact our industry. Further changes to the ACA and related healthcare regulation remain under consideration. In addition, current proposals to implement a single payer or “Medicare for all” system in the U.S., if adopted would likely have a material adverse effect on our business. The full impact of recent healthcare reform and other changes in the healthcare industry and in healthcare spending is unknown, and we are unable to predict accurately what effect the ACA or other healthcare reform measures that may be adopted in the future will have on our business.

The healthcare industry is rapidly evolving and the market for technology-enabled services that empower healthcare consumers is relatively immature and unproven. If we are not successful in promoting and improving the benefits of our platform, our growth may be limited, and our business may be adversely affected.

The market for our products and services is subject to rapid and significant change and competition. The market for technology-enabled services that empower healthcare consumers is characterized by rapid technological change, new product and service introductions, evolving industry standards, changing customer needs, existing competition and the entrance of non-traditional competitors. In addition, there may be a limited-time opportunity to achieve and maintain a significant share of this market due in part to the rapidly evolving nature of the healthcare and technology industries and the substantial resources available to our existing and potential competitors. The market for technology-enabled services that empower healthcare consumers is relatively new and unproven, and it is uncertain whether this market will achieve and sustain high levels of demand and market adoption.

Our success depends to a substantial extent on the willingness of consumers to increase their use of technology platforms to manage their healthcare options, the ability of our platform to increase consumer engagement, and our ability to demonstrate the value of our platform to our potential customers. If customers do not recognize or acknowledge the benefits of our platform or our platform does not drive consumer engagement, then the market for our products and services might develop more slowly than we expect, which could adversely affect our operating results. In addition, we have limited insight into trends that might develop and affect our business. We might make errors in predicting and reacting to relevant business, legal and regulatory trends, which could harm our business. If any of these events occur, it could materially adversely affect our business, financial condition or results of operations.

Finally, our competitors may have the ability to devote more financial and operational resources than we can to developing new technologies and services, including services that provide improved operating functionality, and adding features to their existing service offerings. If successful, their development efforts could render our services less desirable, resulting in the loss of our existing customers or a reduction in the fees we earn from our products and services.

Failure to comply with extensive and complex healthcare laws and regulations may have a material adverse effect on our business.

Healthcare is an extremely complex and regulated industry in the U.S. There are many laws and regulations that could have a material effect on our business, including but not limited to, the HIPAA, and federal and state regulations controlling patient, provider and intermediary relationships. We have taken, and will continue to take, precautions to ensure compliance with applicable statutes and regulations; however there is no guarantee we will be success in our efforts, and even an unintentional violation of law could have a material adverse effect on our operations and business.

We are subject to privacy regulations regarding the access, use and disclosure of personally identifiable information. If we or any of our third-party vendors experience a breach of personally identifiable information, it could result in substantial financial and reputational harm, including possible criminal and civil penalties.

State and federal laws and regulations govern the collection, dissemination, access and use of personally identifiable information, including HIPAA and HITECH, which govern the treatment of protected health information, and the Gramm-Leach Bliley Act, which governs the treatment of nonpublic personal information. Privacy regulation has become a priority issue in many states, including California, which in 2018 enacted the California Consumer Privacy Act broadly regulating the sale of California residents’ personal information and providing California residents with various rights to access and delete data. In the provision of services to our customers, we and our third-party vendors may collect, access, use, maintain and transmit personally identifiable information in ways that are subject to many of these laws and regulations. Although we have implemented measures to comply with privacy laws, rules and regulations, we may experience data privacy incidents. Any unauthorized disclosure of personally identifiable information experienced by us, or our third-party vendors could result in substantial financial and reputational harm, including possible criminal and civil penalties. In many cases, we are subject to HIPAA and other privacy regulations because we are a business associate providing services to covered entities; as a result, the covered entities direct HIPAA compliance matters in the event of a security breach, which complicates our ability to address harm caused by the breach. Additionally, we may be required to report breaches to partners, regulators, state attorney generals, and impacted individuals depending on the severity of the breach, our role, legal requirements and contractual obligations. Continued compliance with current and potential new privacy laws, rules and regulations and meeting consumer expectations with respect to the control of personal data in a rapidly changing technology environment could result in higher compliance and technology costs for us.

Although we do not provide medical care, we could be a party to medical malpractice claims, which could have a material adverse effect on our business.

We do not provide medical care. Rather, we help connect consumers and employers to providers of medical care, products and services. However, we could be a party to lawsuits related to the service we provide, and that could include risk of medical malpractice claims which could increase our insurance premiums, expose us to legal defense cost, and/or impact the brand of the Company, which could lead to a reduction in the number of customers we have and could have a material adverse effect on our revenues and profits.

ITEM 1B. UNRESOLVED STAFF COMMENTS.

Not applicable.

ITEM 2. PROPERTIES.

We do not own any real property. We leased office space at 2929 East Commercial Blvd., Suite Ph-D, Fort Lauderdale, Florida 33308, pursuant to the terms of a commercial office lease. We paid $6,565 per month pursuant to this commercial office lease. As of June 14, 2023 the Company relocated and now has a short-term lease with Regus at 2598 E, Sunrise Blvd, Suite 2104, Fort Lauderdale Florida 33304 for which we pay $931 per month. This lease which runs through June 30, 2024 allows the Company to expand facilities in the future as needed.

ITEM 3. LEGAL PROCEEDINGS.

Various legal claims arise from time to time in the normal course of business which, in the opinion of management, will not have a material effect on the Company's consolidated financial statements. There are no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or which our business or intellectual 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 4. MINE SAFETY DISCLOSURES.

Not applicable to our Company.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

Our common stock is quoted on the OTCPK under the symbol “MDXL”. Trading in OTCPK stocks can be volatile, sporadic and risky, as thinly traded stocks tend to move more rapidly in price than more liquid securities. Such trading may also depress the market price of our common stock and make it difficult for our stockholders to resell their common stock.

Holders

As of August 2, 2023, 130,487,491 shares of common stock are issued and outstanding held by approximately 923 stockholders of record (this number does not include stockholders who hold their stock through brokers, banks and other nominees).

Transfer Agent

The transfer agent and registrar for our common stock is Clear Trust LLC. Their address is 16540 Point Village Dr., Suite 205, Lutz, FL 33558 and their telephone number at that location is 813-235-4490.

Dividend Policy

We have not paid any dividends on our common stock and our Board of Directors presently intends to continue a policy of retaining earnings, if any, for use in our operations. The declaration and payment of dividends in the future, of which there can be no assurance, will be determined by the Board in light of conditions then existing, including earnings, financial condition, capital requirements and other factors. The Nevada Revised Statutes prohibit us from declaring dividends where, if after giving effect to the distribution of the dividend:

Except as set forth above, there are no restrictions that currently materially limit our ability to pay dividends or which we reasonably believe are likely to limit materially the future payment of dividends on common stock.

Recent Sales of Unregistered Securities

During the year ended December 31, 2022, we entered into the following securities transactions;

During the year ended December 31, 2021, we entered into the following securities transactions;

All funds received from the sale of the above shares were used for working capital purposes. The above shares were issued in reliance upon an exemption from registration pursuant to, among others, Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Regulations D and S as promulgated under the Securities Act. Each investor took his or her securities for investment purposes without a view to distribution and had access to information concerning us and our business prospects, as required by the Securities Act. In addition, there was no general solicitation or advertising for the purchase of our shares. Our securities were sold only to an accredited investor and a limited number of sophisticated investors, as defined in the Securities Act with whom we had a direct personal preexisting relationship, and after a thorough discussion. Finally, our stock transfer agent has been instructed not to transfer any of such shares, unless such shares are registered for resale or there is an exemption with respect to their transfer. All of the above shares bear a legend restricting their disposition.

Each purchaser was provided with access to our filings with the SEC, including the following:

Purchases of equity securities by the issuer and affiliated purchasers

None.

ITEM 6. RESERVED

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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

Our discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these 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

MediXall Group, Inc. (OTCPK:MDXL) is an innovation-driven technology company purposefully designed and structured around delivering products and services to help consumers learn, decide, and pay for healthcare in ways that complement relationships with trusted doctors. The mission of MediXall Group is to revolutionize the medical industry--improve communication, provide better technology and support services, and provide more efficient, cost-effective healthcare for the consumer.

Going Concern

We have incurred net losses of $32.6 million since inception through December 31, 2022. 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 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

Year Ended December 31, 2022 Compared to the Year Ended December 31, 2021

Revenue

We generated $59,268 in revenues from the operations of the Health Karma Platform during 2022 and $14,995 during 2021. During 2021, the Company generated $165,719 from the forgiveness of the Paycheck Protection loans.

Operating Expenses

A summary of our operating expense for the years ended December 31, 2022 and 2021 follows:

Operating expenses increased $508,395 or 7.97% to $6,889,683 in 2022 compared to $6,381,288 in 2021. The increase in total operating expenses is primarily due to:

Liquidity and Capital Resources

We have an accumulated deficit of $32,612,805 at December 31, 2022. As of December 31, 2022, we had working capital of $(4,330,422). Additionally, due to the “start-up” nature of our business, we expect to incur losses as we continue development of our business plan.

These conditions raise substantial doubt about our ability to continue as a going concern. Management recognizes that in order for us to meet our capital requirements, and continue to operate, additional financing will be necessary. We expect to raise additional funds through private or public equity investment in order to maintain and/or expand the range and scope of our business operations; however, there is no assurance that such additional funds will be available for us on acceptable terms, if at all. If we are unable to raise additional capital when needed or generate positive cash flow, it is unlikely that we will be able to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Net cash used in operating activities was $3,561,083 for the year ended December 31, 2022, compared to $4,685,270 for the year ended December 31, 2021.

Net cash used in investing activities was $1,379 for the year ended December 31, 2022, compared to $12,840 used in investing activities for the year ended December 31, 2021.

Net cash provided by financing activities was $3,502,460 during the year ended December 31, 2022 compared to $4,115,766 for the year ended December 31, 2021.

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

Our discussion and analysis of our financial condition and results of operations are based upon our audited and unaudited consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We continually evaluate our estimates, including those related to income taxes, and the valuation of equity transactions. We base our estimates on historical experience and on various other assumptions that we 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. Any future changes to these estimates and assumptions could cause a material change to our reported amounts of revenues, expenses, assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of the unaudited consolidated financial statements.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The accounting and reporting practices of the Company conform to GAAP.  The following summarizes the more significant of these policies and practices.

Use of Estimates

In preparing consolidated financial statements in conformity with GAAP, management is required 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting year.

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 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 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.  

Fair Value Measurement

The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

Fair Value of Financial Instruments

The carrying value of cash, accounts payable and accrued expenses and accounts payable and accrued expenses – related party, approximates its fair value because of the short-term nature of these instruments and their liquidity. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

Senior Convertible Debentures: The fair value of the debentures is estimated using a discounted cash flow analysis based on the current rate of similar debt. The estimated fair value of the debentures is $2,473,728 as of December 31, 2022, and was determined using level 3 inputs.

Income Taxes

The Company accounts for income taxes using the liability method prescribed by 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.

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 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 December 31, 2022. Accordingly, a valuation allowance was recorded against the net deferred tax asset.

Revenue Recognition

The Company accounts for revenue under Accounting Standards Updated ("ASU") ASU 2014-09 Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, "ASC 606"). The Company had minimal revenues in 2022 and in 2021. The Company recognizes revenue in accordance with ASC 606, 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.

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 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 fair value of the Company's stock as of the date of issuance.

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 a 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. Based on impairment tests performed there was no write-down of long-lived assets required during 2022 and 2021, excess intellectual property acquired. There can be no assurances that future impairment tests will not result in further charge to operations.

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. During the years ended December 31, 2022 and 2021, the Company’s costs related to the development of the Health Karma website platform had met the capitalization requirements. The Company engaged an appraiser to perform an impairment analysis of the capitalized website and development costs as of December 31, 2022 and 2021. The impairment analysis was performed based upon a cost approach, specifically the cost to recreate or reproduce the asset using actual historical cost incurred, adjusted by consumer price index and taxes. The analysis resulted in no impairment loss for the years ended December 31, 2022 and 2021, respectively.

Allowance for Uncollectible Accounts Receivable

An allowance for uncollectible accounts receivable is recorded when management believes the uncollectability of the accounts receivable is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance is determined based on management’s review of the debtor’s ability to repay and repayment history, aging history, and estimated value of collateral, if any.

Recently Issued Accounting Pronouncements

See Note 3 to our consolidated financial statements for more information regarding recent accounting pronouncements and their impact to our consolidated results of operations and financial position.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not applicable to a smaller reporting company.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The consolidated financial statements of our Company as of December 31, 2022 and 2021 and for the years then ended are set forth in the Form 10-K beginning at page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We maintain a system of disclosure controls and procedures (as defined in Exchange Act Rule 15d-15(e)) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods required under the SEC's rules and forms and that the information is gathered and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Principal Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

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 Interim Chief Executive Officer and Principal Financial Officer, of the effectiveness of our financial disclosures, controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2022.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.

Based upon that evaluation, our Interim Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were not effective as of December 31, 2022, based on the following deficiencies:

The Company has determined that the above internal control weaknesses and deficiencies could result in a reasonable possibility for the 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 in the accounting department is below requirements for the operation. The Company is anticipating correcting deficiencies as funds become available.

Management’s Annual Report on Internal Control Over Financial Reporting

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Such internal controls over financial reporting were designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the consolidated financial statements for external purposes in accordance with generally accepted accounting principles.

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2022. In making this assessment, the Company used the criteria set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based upon its evaluation under the framework in Internal Control-Integrated Framework, the Company’s management concluded that its internal control over financial reporting was not effective as of December 31, 2022.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to consolidated financial statement preparation and presentation.

This annual report does not include an attestation report of the company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the company's registered public accounting firm pursuant to rules of the SEC to provide only management's report in this annual report.

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.

ITEM 9B. OTHER INFORMATION

None.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth the names and ages of all of our directors and executive officers. We have a Board comprised of three members. Each director holds office until a successor is duly elected or appointed. Executive officers serve at the discretion of the Board and are appointed by the Board. Also provided herein are brief descriptions of the business experience of each of the directors and officers during the past five years, and an indication of directorships held by each director in other companies subject to the reporting requirements under the Federal securities law.

Set forth below is a brief description of the background and business experience of our directors and executive officers.

Travis Jackson. Mr. Jackson has served as our Chief Executive Officer since August 30, 2022 and member of our board of directors since June 14, 2022. Prior to this, Mr.Jackson served as Chief Executive Officer of our wholly owned subsidiary, Health Karma since August 16, 2021. Mr. Jackson brings a wealth of experience across virtually every dimension of healthcare. Previously, he served as VP of Strategy & Business Development for Beacon Health Options, the largest independently held behavioral health organization in the country. Beacon serves more than 40 million individuals across all 50 states, including nearly 3 million individuals under comprehensive risk-based behavioral programs. Mr. Jackson was responsible for sales, strategy and business development for the company in the Western US. Sales efforts directed towards commercial health insurance plans, state and county Medicaid plans and large TPA’s. While at Beacon, the Company was acquired by Anthem in 2020 and resided as a wholly owned subsidiary in Anthem’s Diversified Business Group.

Prior to Beacon, Mr. Jackson was Executive VP of Sales for Linkwell Health, where he was responsible for national sales and marketing activities for the company, with these efforts directed towards health insurance plans, hospital systems and health services companies. Mr. Jackson also has had success in his career building new businesses. He was a founder of Ascendant Behavioral Health, a series of outpatient behavioral health clinics. Mr. Jackson was responsible for clinic set up including locations, billing, hiring and staffing, IT set up and clinic processes.

Prior to that, Mr. Jackson was Founding Partner & Executive Vice President of Sales of MY ePHT, where he created a multimillion-dollar company from an initial idea, through fundraising, production, active sales and service and renewal phases. During his time, he participated in the Executive Leadership Board of the company creating, reviewing and approving all strategy and operations, and was one of the key decision makers in the sale of the company. At time of sale, MY ePHT had achieved 22.7 million paid members.

Noel J. Guillama. Mr. Guillama is a nationally recognized expert and lecturer on healthcare management/operations and the use of technology in healthcare. Since 1984, he has been Chairman of Guillama, Inc., a strategic operations management consulting company in healthcare, technology, and a wide range of projects including medical facilities, commercial complexes and infrastructure facilities. He holds several patents and is creator of over a dozen patents currently before the USPTO in a variety of areas. Since 2004, Mr. Guillama has been President of The Quantum Group, Inc (“Quantum”), a private healthcare technology and innovation company that has in the past operated through subsidiary healthcare delivery networks, contracted with over 2,000 providers and contracted with managed care companies. Quantum currently controls various intellectual properties, including an electronic healthcare records (EHR) platform it designed and built, and it controls a number of issued and pending patents in the U.S. Quantum is a greater than 5% shareholder of the Company.

        From 1996 to 2000, Mr. Guillama was the Founder, Chairman, President and Chief Executive Officer of Metropolitan Health Networks, Inc. (AMEX:MDF), a management services organization. Mr. Guillama left Metropolitan to develop Quantum Innovations, Inc. and its parent company, Quantum. Mr. Guillama has served as Quantum’s Chief Executive Officer and President since its inception. Mr. Guillama was VP of Development for MedPartners, Inc., a Birmingham, Alabama-based physician practice management company. Prior to MedPartners, he served as Director and Vice President of Operations for Quality Care Networks, Inc., a South Florida-based comprehensive group practice.

Mr. Guillama is the immediate Past Chair (Currently Director) of the Florida International University Foundation, Inc., a direct support organization of Florida International University, managing a $230 million endowment. Prior to this Chair position, he served FIU as Chair of Finance, Investments, and Academics Committees. He is currently director and Past-Chair of the Palm Beach State College Foundation. Mr. Guillama is currently a Member of the Executive Leadership Council of the Dr. Kiran C. Patel College of Allopathic Medicine and Nova Southeastern University in Broward County, Florida, and was a past trustee of Palms West Hospital (2005 to 2011). Mr. Guillama served on the executive committee of the Patient-Centered Primary Care Collaborative (PCPCC) and is a past member of the American College of Health Care Executives, the Healthcare and Information Management Systems Society (HIMSS), the Medical Group Management Association (MGMA), and the American College of Medical Practice Executives (ACMPE). Mr. Guillama is a graduate of executive and leadership programs at Massachusetts Institute of Technology, University of Georgia and Florida International University.

John Marino. Mr. Marino has served as the Chairman of the Board of Directors since September 2022. Mr. Marino's previous experience includes serving as the Director of Real Estate and Legislative Affairs at Patriot Rail Corp., a company based in Boca Raton, Florida that operates short line and regional railroads in the United States. During his time at Patriot Rail Corp., Mr. Marino was responsible for managing and developing railroad real estate, including industrial development, as well as managing all easements and encroachments related to rights-of-way. Prior to joining Patriot Rail Corp., Mr. Marino served as the President of Transportation Management Services, Inc. (TMS). He holds a Bachelor of Science in International Business from American University in Washington D.C.

Legal Proceedings

None of our directors or officers are involved in any legal proceedings as described in Regulation S-K (§229.401(f)).

Corporate Governance

Board of directors

The board of directors oversees our business affairs and monitors the performance of management. Directors are elected for a one-year term and hold office until their successors have been elected and duly qualified unless the director resigns or by reason of death or other cause is unable to serve in the capacity of director. If any director resigns, dies or is otherwise unable to serve out his or her term, or if the Board increases the number of directors, the Board may fill any vacancy by a vote of a majority of the directors then in office, although less than a quorum exists. A director elected to fill a vacancy shall serve for the unexpired term of his or her predecessor. Vacancies occurring by reason of the removal of directors without cause may only be filled by vote of the shareholders.

We do not have a policy regarding the consideration of any director candidates, which may be recommended by our stockholders, including the minimum qualifications for director candidates, nor has our board of directors established a process for identifying and evaluating director nominees. Further, when identifying nominees to serve as a director, while we do not have a policy regarding the consideration of diversity in selecting directors, we seek to create a board of directors that is strong in its collective knowledge and has a diversity of skills and experience with respect to accounting and finance, management and leadership, vision and strategy, business operations, business judgment, industry knowledge and corporate governance. We have not adopted a policy regarding the handling of any potential recommendation of director candidates by our stockholders, including the procedures to be followed. Our Board has not considered or adopted any of these policies as we have never received a recommendation from any stockholder for any candidate to serve on our board of directors. Given our relative size, we do not anticipate that any of our stockholders will make such a recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a proposal is made, all members of our Board will participate in the consideration of director nominees. In considering a director nominee, it is likely that our Board will consider the professional and/or educational background of any nominee with a view towards how this person might bring a different viewpoint or experience to our Board.

We have not established any committees, including an Audit Committee, a Compensation Committee or a Nominating Committee, or any committee performing a similar function. The functions of those committees are being undertaken by the board of directors as a whole.

Mr. Guillama is considered an “audit committee financial expert” within the meaning of Item 407(d) of Regulation S-K. Because Mr. Guillama is an officer, director and significant stockholder of the Company, he is not independent of management. In general, an “audit committee financial expert” is an individual member of the audit committee or board of directors who:

Our securities are not quoted on an exchange that has requirements that a majority of our Board members be independent and we are not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our board of directors include “independent” directors, nor are we required to establish or maintain an Audit Committee or other committee of our board of directors.

Board leadership structure and the Board’s role in risk oversight

Our Board believes our current structure provides independence and oversight and facilitates the communication between senior management and the full board of directors regarding risk oversight, which the Board believes strengthens its risk oversight activities.

Risk is inherent with every business, and how well a business manages risk can ultimately determine its success. We face a number of risks, including liquidity risk, operational risk, strategic risk and reputation risk. Management is responsible for the day-to-day management of the risks we face, while the Board has responsibility for the oversight of risk management. In its risk oversight role, the board of directors has the responsibility to satisfy itself that the risk management processes designed and implemented by management are adequate and functioning as designed. To do this, the members of our board of directors meet regularly with management to discuss strategy and risks we face. Our Chief Financial Officer is also a member of the Board and is available to address any questions or concerns raised by the Board on risk management and any other matters.

Director independence

We have three directors, one of which (Mr. Marino) is independent.

Director qualifications

Travis Jackson – Mr. Jackson brings a wealth of experience across multiple dimensions of healthcare. Throughout his numerous roles, Mr. Jackson has been responsible for national sales directed toward health insurance plans, providing access to state and county Medicaid plans, and even setting up outpatient behavioral health clinics. Mr. Jackson also has had success in his career building new businesses. He was a founder of both Ascendant Behavioral Health and Highland Springs Specialty Clinics, a series of outpatient behavioral health clinics. In addition, Mr. Jackson was a founder in a healthcare technology startup where he created a multimillion-dollar company from an initial idea, through fundraising, production, active sales and service and renewal phases. Accordingly, the Board determined that Mr. Jackson is qualified to serve as a member of our board of directors.

Noel Guillama – Mr. Guillama is a nationally recognized expert in healthcare management and operations. He has served, past and present, as Chairman and Director of multiple healthcare technology companies and health-related executive committees, both private and publicly listed on NASDAQ and NYSE-Amex. His experience in the healthcare industry and his development of patented healthcare technologies are at the core of the Company’s new business plan. These factors were considered by the board in reaching their conclusion regarding Mr. Guillama’s qualification to serve as a director.

John Marino – Mr. Marino is a seasoned executive of public and private companies, bringing significant experience driving revenue growth, operating efficiently at scale in highly regulated industries, and delivering value to shareholders Accordingly, the Board determined that Mr. Marino is qualified to serve as a member of our board of directors.

In addition to the each of the individual skills and background described above, the board also concluded that each of these individuals will continue to provide knowledgeable advice to our other directors and to senior management on numerous issues facing our company and on the development and execution of our strategy.

Director Compensation

We did not compensate our directors for their services on the Board during 2022 and 2021.

Code of Business Conduct and Ethics

We have adopted a Code of Business Conduct and Ethics that applies to our President and Chief Executive Officer, Chief Operating Officer, Chief Financial Officer or Controller and any other persons performing similar functions. This code provides written standards that we believe are reasonably designed to deter wrongdoing and promote honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships, and full, fair, accurate, timely and understandable disclosure in reports we file with the Securities and Exchange Commission. A copy of this Code is available without charge upon written request to our Corporate Secretary at our principal executive offices.

ITEM 11. EXECUTIVE COMPENSATION.

SUMMARY COMPENSATION TABLE

The table below summarizes all compensation recorded by us in the past two years for our principal executive officer and principal financial officer and each other executive officer serving as such whose annual compensation exceeded $100,000, and up to two additional individuals for whom disclosure would have been made in this table but for the fact that the individual was not serving as an executive officer of our company at December 31, 2022.

———————

Outstanding Equity Awards at Fiscal Year-End Table

The Company had no outstanding equity awards as of December 31, 2022. 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

The following table sets forth certain information as of December 31, 2022 by (i) all persons who are known by us to beneficially own more than 5% of our outstanding shares of common stock, (ii) each director and Named Executive Officer; and (iii) all executive officers and directors as a group:

Securities authorized for issuance under equity compensation plans

We have not adopted any equity compensation or similar plans.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

We do not have a formal written policy for the review and approval of transactions with related parties; however, our Code of Business Conduct and Ethics require actual or potential conflict of interest to be reported to the Board. Our employees are expected to disclose personal interests that may conflict with ours and they may not engage in personal activities that conflict with their responsibilities and obligations to us. Periodically, we inquire as to whether or not any of our Directors have entered into any transactions, arrangements or relationships that constitute related party transactions. If any actual or potential conflict of interest is reported, our entire Board and outside legal counsel will review the transaction and relationship disclosed and the Board makes a formal determination regarding each Director's independence. If the transaction is deemed to present a conflict of interest, the Board will determine the appropriate action to be taken. 

Transactions with Related Persons

The board is responsible for review, approval, or ratification of related party transactions entered into between us and related persons. Under SEC rules, a related person is a director, officer, nominee for director, or 5% stockholder of our outstanding shares of common stock, and their affiliates and immediate family members.

The board has determined that, barring additional facts or circumstances, a related person does not have a direct or indirect material interest in the following categories of transactions:

The board reviews transactions involving related persons who are not included in one of the above categories and makes a determination whether the related person has a material interest in a transaction and may approve, ratify, rescind, or take other action with respect to the transaction in its discretion. The board reviews all material facts related to the transaction and takes into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances; the extent of the related person’s interest in the transaction; and, if applicable, the availability of other sources of comparable products or services.

The following are related party transactions for the fiscal years ended December 31, 2022 and 2021:

Pursuant to an agreement dated June 2013 and amended in July 2021, TBG Holdings Corp. (“TBG”), was engaged to provide business advisory services, manage and direct our public relations, provide recruiting services, develop and maintain material for market makers and investment bankers, provide general administrative services, and respond to incoming investor relations calls. TBG is owned in part by Neil Swartz, the Company’s former Interim Chief Executive Officer and director, and a significant stockholder of the Company, and Timothy Hart, the Company’s former Chief Financial Officer and director, and a significant stockholder of the Company. Effective on June 14, 2022, Neil Swartz voluntarily resigned as CEO of MediXall Group, Inc. and the Company appointed Noel J. Guillama-Alvarez as his successor. On August 30, 2022, Noel J. Guillama- Alvarez voluntarily resigned as CEO and the Company appointed Travis Jackson as his successor. On September 15, 2022, Timothy Hart voluntarily resigned as CFO of Medixall Group, Inc. and the Company appointed Noel J. Guillama-Alvarez as his successor.

Under this agreement, the Company paid TBG a monthly fee of $40,000. In April 2021, we entered into an additional agreement with TBG to provide management services specifically to our Health Karma subsidiary. Under this new agreement, the Company paid TBG an additional monthly fee of $40,000. During the years ended December 31, 2022 and 2021, the Company expensed $720,000 and $840,000, respectively, of related party management fees related to these agreements. These agreements have been terminated effective September 30, 2022.

 R3 Accounting LLC (“R3”), owned by Mr. Hart, provides accounting, tax and bookkeeping services to the Company. During the years ended December 31, 2022 and 2021, the Company expensed $242,600 and $220,538, respectively, related to R3 services.

The Company received short term cash advances during 2021 from Turnkey. There were no advances received during 2022. The advances are due on demand, unsecured, and do not bear any interest.

Prepaid expenses (accounts payable and accrued expenses) to related parties are as follows:

Review, Approval or Ratification of Transactions with Related Persons

Our unwritten policy with regard to transactions with related persons is that all material transactions are to be reviewed by the entire Board for any possible conflicts of interest. In the event of a potential conflict of interest, the Board will generally evaluate the transaction in terms of the following standards: (i) the benefits to us; (ii) the impact on a director’s independence in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer; (iii) the availability of other sources for comparable products or services; (iv) the terms and conditions of the transaction; and (v) the terms available to unrelated parties or the employees generally. The Board will then document its findings and conclusion in written minutes.

Director Independence

Please refer to “Director Independence” under the section titled “CORPORATE GOVERNANCE” in “ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.”

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

Hacker, Johnson & Smith, P.A. (“HJS”) currently serves as our independent registered public accounting firm to audit our consolidated financial statements for the fiscal years ended December 31, 2022 and 2021. To the knowledge of management, neither such firm nor any of its members has any direct or material indirect financial interest in us or any connection with us in any capacity otherwise than as independent accountants.

The Board has considered the audit fees, audit-related fees, tax fees and other fees paid to HJS, as disclosed below, and has determined that the payment of such fees is compatible with maintaining the independence of the accountants.

Audit Fees — This category includes the audit of our annual consolidated financial statements, review of condensed consolidated financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the independent registered public accounting firm in connection with engagements for those fiscal years. This category also includes advice on audit and accounting matters that arose during, or as a result of, the audit or the review of interim financial statements.

Audit-Related Fees — This category consists of assurance and related services by the independent registered public accounting firm that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported above under “Audit Fees.” The services for the fees disclosed under this category include consultation regarding our correspondence with the Securities and Exchange Commission and other accounting consulting.

Tax Fees — This category consists of professional services rendered by our independent registered public accounting firm for tax compliance and tax advice. The services for the fees disclosed under this category include tax return preparation and technical tax advice.

All Other Fees — This category consists of fees for other miscellaneous items.

Our board of directors has adopted a procedure for pre-approval of all fees charged by our independent registered public accounting firm. Under the procedure, the Board approves the engagement letter with respect to audit, tax and review services. Other fees are subject to pre-approval by the Board, or, in the period between meetings, by a designated member of the Board. Any such approval by the designated member is disclosed to the entire Board at the next meeting. The audit and tax fees paid to the auditors with respect to 2022 and 2021 were pre-approved by the entire board of directors. 

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

(a) The following documents are filed as a part of this Annual Report on Form 10-K:

1. Consolidated Financial Statements

The following consolidated financial statements are included in Part II, Item 8 of this Form 10-K:

2. Financial Statement Schedules

Financial statement schedules are omitted because they are not required or are not applicable, or the required information is provided in the financial statements or notes described in Item 15(a)(1) above.

3. Exhibits

The exhibits listed below are filed as part of this Annual Report on Form 10-K or incorporated by reference.

———————

* Filed herewith.

Item 16. Form 10-K Summary

None.

SIGNATURES

Pursuant to the requirements of Sections 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Act of 1933, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

INDEX TO FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors

MediXall Group, Inc.

Fort Lauderdale, Florida:

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of MediXall Group, Inc. and Subsidiaries (the "Company"), as of December 31, 2022 and 2021 and the related consolidated statements of operations, changes in stockholders' equity (deficit) and cash flows for the years then ended and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2022 and 2021, and the consolidated results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a significant accumulated deficit that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 3. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

To the Shareholders and the Board of Directors

MediXall Group, Inc.

Page Two

Emphasis of Matter – Significant Related Party Transactions

As discussed in Note 7 to the consolidated financial statements, the Company engages in significant related party transactions with entities which the Company’s former Interim Chief Executive Officer and the Company’s former Chief Financial Officer have significant management responsibilities and controlling equity ownership. Our opinion is not modified with respect to this matter.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the Board of Directors and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluating Website and Development Costs for Impairment

The Company’s website and development costs (W&DC’s) amounted to $412,582 as of December 31, 2022. As discussed in Note 4 to the consolidated financial statements, these costs were incurred during the application and development stage of the project. W&DC’s are reviewed annually for impairment, or more frequently if indicators of impairment exist. The Company performed an impairment test for the W&DC’s and concluded that there was no impairment as of December 31, 2022. The evaluation of impairment involves comparing the current fair value of W&DC’s to its carrying value. Management uses the assistance of an independent specialist to determine the estimated fair value of W&DC’s. Fair value is estimated using a cost-based approach model, specifically the cost to recreate or reproduce the asset using actual historical cost incurred. The model contains several quantitative adjustments. The determination of fair value using this technique requires the use of significant inputs, estimates and assumptions.

The principal consideration for our determination that performing procedures relating to the impairment assessments of the W&DC’s is a critical audit matter is the significant and inherent judgment required in developing the fair value measurement of the asset. In turn, this led to a high degree of auditor judgment, effort and subjectivity in performing procedures and evaluating audit evidence related to these inputs, estimates, and significant assumptions for the impairment analysis. In addition, the audit effort involved the use of an independent impairment analysis provided by a management specialist with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included the following, among others:

/s/ HACKER, JOHNSON & SMITH PA

HACKER, JOHNSON & SMITH PA

We have served as the Company's auditor since 2018.

Fort Lauderdale, Florida

August 9, 2023

MEDIXALL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

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

MEDIXALL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

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

MEDIXALL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

Years Ended December 31, 2022 and 2021

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

MEDIXALL GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

MEDIXALL GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2022 AND 2021

Note 1 – Organization and Nature of Operations

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. (OTCPK:MDXL) is an innovation-driven technology company purposefully designed and structured around delivering products and services to help consumers learn, decide, and pay for healthcare in ways that complement relationships with trusted doctors. The mission of MediXall Group is to revolutionize the medical industry--improve communication, provide better technology and support services, and provide more efficient, cost-effective healthcare for the consumer. The Company generated minimal revenue in 2022 and 2021 as its online healthcare platform is still in the application and development stage. Further discussion on our operations, mission, and initiatives can be found in the Management’s Discussion and Analysis section of this report.

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

Note 2 – Asset Acquisition

On January 17, 2022, the Company entered in agreement to acquire the right to use the intellectual property of 24 Hr Virtual Clinic, LLC (“Virtual Clinic”). In connection with the transaction, the Company issued 500,000 shares of common stock of MediXall. Pursuant to the agreement, the Company had the right to purchase these intellectual properties and buyout the existing members of the Virtual Clinic for additional shares of MediXall common stock. On December 29, 2022, the Company acquired 100% of Virtual Clinic Intellectual Properties and bought out the existing members of the Virtual Clinic. In connection with this transaction, the Company issued an additional 600,000 shares of common stock of MediXall.

In accordance with Accounting Standards Codification (“ASC”) 805, the value of the stock issued was measured based on the value of the Company’s common stock, which was considered to be the more clearly determinable measure of fair value. The fair values of these transactions were determined to be $235,000 and $240,000, respectively. In connection with the acquisition, the Company also acquired Virtual Clinic’s net assets with a fair value of $47,965. The value of intellectual property represented approximately 95% of the net assets, and as such, management determined the transaction to be an asset acquisition. At December 31, 2022 the Company performed an impairment analysis and noted that fair value of intellectual property was $156,000 which resulted in an impairment of $238,319.

Note 3 – Going Concern

The Company had an accumulated deficit of $32,612,805 at December 31, 2022, and does not have sufficient operating cash flows. The accompanying 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, related party loans, 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 December 31, 2022, the Company issued $684,833 of convertible debentures, under the same terms as those described in Note 8.

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 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 consolidated financial statements. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 4 – Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The accounting and reporting practices of the Company conform to GAAP. The following summarizes the more significant of these policies and practices.

Reclassifications

Certain amounts in these consolidated financial statements have been reclassified to allow for consistent presentation for the years presented.

Subsequent Events

The Company has evaluated subsequent events through the filing of this Form 10-K and determined that no events require disclosure in these consolidated financial statements, except as noted in the following. During 2023, Company’s former chief financial officer and director converted 88,298 shares of Series A Convertible Preferred Stock into 8,300,000 shares of common stock.

Use of Estimates

In preparing consolidated financial statements in conformity with GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting year. Actual results could differ from those estimates. A material estimate that is particularly susceptible to significant change in the near-term relates to the determination of the impairment of website and development cost and impairment of intellectual property. The Company uses various assumptions and actual cost 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 adjustments are reflected in 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.

Cash

Cash is limited to interest and noninterest-bearing accounts in multiple financial institutions. Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash deposits in excess of the Federal Deposit Insurance Corporation ("FDIC"). The cash accounts are spread among several financial institutions to ensure they are fully insured by the FDIC.

Furniture and Equipment, Net

Furniture and equipment are carried at cost, less accumulated depreciation. Major improvements are capitalized, while repair and maintenance are expensed when incurred. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in operations.

Depreciation is computed on a straight-line basis over estimated useful lives of the related assets. The estimated useful lives of depreciable assets are:

Leases

We determine if a contract contains a lease at inception and recognize operating lease right-of-use assets and operating lease liabilities based on the present value of the future minimum lease payments at the lease commencement date. As our leases do not provide implicit rates, we use our incremental borrowing rate commensurate with the underlying lease terms. Lease agreements that have lease and non-lease components, are accounted for as a single lease component. Lease expense is recognized on a straight-line basis over the lease term.

Fair Value Measurement

The Company measures fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The Company utilizes a three-tier hierarchy which prioritizes the inputs used in the valuation methodologies in measuring fair value as follows:

Level 1. Valuations based on quoted prices (unadjusted) in active markets for identical assets or liabilities that an entity has the ability to access. The Company has no assets or liabilities valued with Level 1 inputs.

Level 2. Valuations based on quoted prices for similar assets or liabilities, quoted prices for identical assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. The Company has no assets or liabilities valued with Level 2 inputs.

Level 3. Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s impairment of website and development costs and intellectual property rights are the only assets or liabilities valued with Level 3 inputs.

Fair Value of Financial Instruments

The carrying value of cash, accounts payable and accrued expenses, and accounts payable and accrued expenses – related party and senior convertible debentures approximates their fair value because of the short-term nature of these instruments and their liquidity. Management is of the opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

Senior Convertible Debentures: The fair value of the debentures is estimated using a discounted cash flow analysis based on the current rate of similar debt. The estimated fair value of the debentures is $2,473,728 as of December 31, 2022, and was determined using level 3 inputs.

Income Taxes

The Company accounts for income taxes using the liability method prescribed by 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.

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 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 December 31, 2022. Accordingly, a valuation allowance was recorded against the net deferred tax asset.

Revenue Recognition

The Company accounts for revenue in accordance with ASU 2014-09 Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, "ASC 606"). The Company had minimal revenues in 2022 and in 2021. In accordance with ASC 606, 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.

In 2022 and 2021, the Company generated revenues from selling bundle medical and wellness services to individuals, employer groups, or third-party administrators from the Company’s Health Karma platform. The Company primarily generates revenue from employer customers and consumer subscription fees, which are typically a 12-month commitment in nature. Through our per-Member-per-month (“PMPM”) subscription model, we enter into contracts with our employer customers that pay a fixed monthly rate based on the total number of members. In most cases, members and their dependents have unlimited access to our platform and do not pay extra fees for increased utilization, unless they wish to access services outside the scope of those covered by the subscription. Our performance obligations are satisfied overtime as we provide access to the Health Karma portal and associated benefits. We recognize revenue monthly as the services are rendered and performance obligations are satisfied.

Senior Convertible Debentures and Warrants

The senior convertible debentures (Convertible Debt) is 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.

Warrants issued with the Convertible Debt are accounted for under the fair value and relative fair value method. The warrant is first analyzed per its terms as to whether it has derivative features or not. The warrant was determined to not have derivative features and was recorded into equity at its fair value using the Black Scholes option model, however, 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 Convertible Debt. The warrants relative fair values is 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. These 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.

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 years, 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 years.

Following is the computation of basic and diluted LPS:

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):

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.

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. Based on impairment tests performed there was no write-down of long-lived assets required during 2022 and 2021, except intellectual property acquired. There can be no assurances that future impairment tests will not result in charges to operations.

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. During the years ended December 31, 2022 and 2021, the Company’s costs related to the development of the Health Karma website platform had met the capitalization requirements. The Company engaged an appraiser to perform an impairment analysis of the capitalized website and development costs as of December 31, 2022 and 2021. The impairment analysis was performed based upon a cost approach, specifically the cost to recreate or reproduce the asset using actual historical cost incurred, adjusted by consumer price index and taxes. The analysis did not result in any impairment loss for 2022 and 2021.

Allowance for Uncollectible Accounts Receivable

An allowance for uncollectible accounts receivable is recorded when management believes the uncollectability of the accounts receivable is confirmed. Subsequent recoveries, if any, are credited to the allowance. The allowance is determined based on management’s review of the debtor’s ability to repay and repayment history, aging history, and estimated value of collateral, if any.

Note 5 - Right-to-use Intellectual Property

Right-to-use Intellectual Property consists of the following:

Estimated amortization expense for the right-to-use intellectual property for each of the future years ending December 31, is as follows:

Note 6 – Preferred Stock

The 264,894 outstanding Series A preferred shares are convertible into 24,900,000 common shares. The preferred shares do not pay dividends. The number of votes for the preferred shares shall be the same as the amount 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.

(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. At December 31, 2022, cumulative unpaid dividends on the Series B Preferred Stock amounted to $604,951. No common stock has been issued as of December 31, 2022 in satisfaction of the preferred stock dividend.

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 7 – Related Party Transactions

Pursuant to an agreement dated June 2013 and amended in July 2021, TBG Holdings Corp. (“TBG”), was engaged to provide business advisory services, manage and direct our public relations, provide recruiting services, develop and maintain material for market makers and investment bankers, provide general administrative services, and respond to incoming investor relations calls. TBG is owned in part by Neil Swartz, the Company’s former Interim Chief Executive Officer and director, and a significant stockholder of the Company, and Timothy Hart, the Company’s former Chief Financial Officer and director, and a significant stockholder of the Company. Effective on June 14, 2022, Neil Swartz voluntarily resigned as CEO of MediXall Group, Inc. and the Company appointed Travis Jackson as his successor. On September 15, 2022, Timothy Hart voluntarily resigned as CFO of Medixall Group, Inc. and the Company appointment Noel J. Guillama Alvarez as his successor.

Under this agreement, the Company paid TBG a monthly fee of $40,000. In April 2021, we entered into an additional agreement with TBG to provide management services specifically to our Health Karma subsidiary. Under this new agreement, the Company paid TBG an additional monthly fee of $40,000. During the years ended December 31, 2022 and 2021, the Company expensed $720,000 and $840,000, respectively, of related party management fees related to these agreements. These agreements have been terminated effective September 30, 2022.

 R3 Accounting LLC (“R3”), owned by Mr. Hart, provides accounting, tax and bookkeeping services to the Company. During the years ended December 31, 2022 and 2021, the Company expensed $242,600 and $220,538, respectively, related to R3 services.

The Company received short term cash advances during 2021 from Turnkey. There were no advances received during 2022. The advances are due on demand, unsecured, and do not bear any interest.

Prepaid expenses (accounts payable and accrued expenses) to related parties are as follows:

Note 8 – Senior Convertible Debentures and Warrants

In March 2022, the Company entered into a securities purchase agreement in which the Company’s 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 $2,721,960. Debentures totaling $295,000 were issued without warrants. 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 is 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. At December 31, 2022, total accrued interest payable of $156,476 was unpaid. The outstanding debentures are convertible into shares of common stock at a price range from $1.00 to $2.00 per share. The debentures and warrants may be converted at the option of the holder at any time after the issuance date until the debentures are paid off.

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.

The Company issued warrants to acquire up to an aggregate 849,800 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 year ended December 31, 2022 was estimated on the date of issuance using the Black-Scholes option-pricing model with the following assumptions:

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 280,808 and was recorded as debt discount. During 2022, the Company amortized $114,641, of the debt discount to interest expense.

The following summarized the senior convertible debentures during the year ended December 31, 2022:

Note 9 –Legal Contingencies

Various legal claims arise from time to time in the normal course of business which, in the opinion of management, will not have a material effect on the Company's consolidated financial statements. There are no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or which our business or intellectual 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.

Note 10 – Lease

The Company’s operating lease obligation is for the Company’s office facility. Our lease has a remaining lease term of approximately 3.33 years and does not offer an option to extend the lease. The components of lease expense and other lease information as of and during the years ended December 31, 2022 and 2021 are as follows:

Future minimum lease payments under non-cancellable leases, reconciled to our discounted operating lease liability is as follows: