VARIABLE INTEREST ENTITY

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

VARIABLE INTEREST ENTITY

NOTE 3 — VARIABLE INTEREST ENTITY

A VIE is defined as a legal entity whose equity owners do not have sufficient equity at risk, or, as a group, the holders of the equity investment at risk lack any of the following three characteristics: decision-making rights, the obligation to absorb losses, or the right to receive the expected residual returns of the entity. The primary beneficiary is identified as the variable interest holder that has both the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and the obligation to absorb expected losses or the right to receive benefits from the entity that could potentially be significant to the VIE.

The Company followed ASC Topic 810, “Consolidation”, utilizing a qualitative approach, and determined that it is the primary beneficiary of its VIE, Aikawa Medical Management, Inc. (“AMM”) and consolidated the result of operations, financial conditions, and cash flows of AMM in the consolidated financial statements.

The following amounts and balances of AMM were included in the Company’s unaudited consolidated financial statements as of September 30, 2024 and December 31, 2023 and for the three and nine months ended September 30, 2024 and 2023:

	September 30, 2024		December 31, 2023
ASSETS
Current assets
Cash and cash equivalents	$	44,974	$	28,934
Accounts receivable		26,768		26,916
Prepaid expenses and other current assets		—		11,074
Total Current Assets		71,742		66,924
Property and equipment, net		1,799,372		1,799,372
Loans receivables from subsidiaries of the Company		3,101,764		3,060,581
Other assets		2,275		2,275
Total Non-current Assets		4,903,411		4,862,228
Total Assets	$	4,975,153	$	4,929,152
LIABILITIES
Current Liabilities
Accounts payable	$	18,856	$	17,942
Accrued liabilities and other current liabilities		17,824		17,824
Due to related party		2,810,803		2,875,408
Total Current Liabilities		2,847,483		2,911,174
Loan payable to a subsidiary of the Company		8,897,215		9,157,660
Total Non-current Liabilities		8,897,215		9,157,660
Total Liabilities	$	11,744,698	$	12,068,834

SBC MEDICAL GROUP HOLDINGS INCORPORATED

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 — VARIABLE INTEREST ENTITY (cont.)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2024			2023			2024			2023
Revenues	$	40,470		$	41,736		$	229,330		$	122,676
Cost of revenues	$	—		$	15,412		$	56,510		$	46,235
Total operating expenses	$	118,009		$	28,228		$	373,729		$	45,281
Net income (loss)	$	17,461		$	(1,904	)	$	(105,909	)	$	31,160
Net cash provided by (used in) operating activities	$	(18,640	)	$	28,772		$	(120,365	)	$	161,677
Net cash provided by (used in) investing activities	$	45,000		$	(10,000	)	$	95,000		$	(90,000	)
Net cash used in financing activities	$	(15,181	)	$	(31,462	)	$	(64,605	)	$	(114,688	)