COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

13. COMMITMENTS AND CONTINGENCIES

Leases

ASC 842, “Leases”, requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. The Company adopted ASC 842, January 1, 2020, using the effective date method and elected certain practical expedients allowing the Company not to reassess:

· whether expired or existing contracts contain leases under the new definition of a lease;

· lease classification for expired or existing leases; and

· whether previously capitalized initial direct costs would qualify for capitalization under Topic 842.

The Company also made the accounting policy decision not to recognize lease assets and liabilities for leases with a term of 12 months or less.

The Company leases twelve medical facilities and one vehicle as operating leases as of December 31, 2024. The Company recorded operating lease expenses of $447,402 and $291,040 for the years ended December 31, 2024 and 2023, respectively.

The Company has operating leases with future commitments as follows:

	Amount
2025	$	243,186
2026		151,360
2027		43,891
Total Future Undiscounted Lease Payments	$	438,437
Less imputed interest		(29,230	)
Total lease obligations	$	409,207

The following table summarizes supplemental information about the Company’s leases:

Weighted-average remaining lease term	2.12 years
Weighted-average discount rate	6.45%

Employees

As of December 31, 2024, the Company agreed to pay $360,000 per year and $250,000 of targeted annual incentives to the Chief Executive Officer based on his employment agreement and its related amendments since July 1, 2020, of which 75% was paid in cash and 25% was accrued. As of December 31, 2023, the Company agreed to pay $360,000 per year and $200,000 of targeted annual incentives to the Chief Executive Officer based on his employment agreement since July 1, 2020, of which 50% was paid in cash and 50% was accrued. The total outstanding accrued compensation as of December 31, 2024 and 2023 were $2,215,500 and $2,365,500, respectively.

As of December 31, 2024, the Company agreed to pay $360,000 per year and $250,000 of targeted annual incentives to the Chairman of the Board based on his employment agreement and its related amendments since July 1, 2020, of which 56% was paid in cash and 44% was accrued. As of December 31, 2023, the Company agreed to pay $360,000 per year and $200,000 of targeted annual incentives to the Chairman of the Board based on his employment agreement since July 1, 2020, of which 50% was paid in cash and 50% was accrued. The total outstanding accrued compensation as of December 31, 2024 and December 31, 2023 was $2,320,500 and $2,350,500, respectively.

The Company agreed to pay $156,000 per year to the previous Chief Financial Officer based on his amended employment agreement executed on May 15, 2021. The total outstanding accrued compensation as of December 31, 2024 and 2023 was $17,057.

The Company entered into a management agreement effective May 31, 2021 for compensation to the principals of Nova in the form of an annual base salaries of $372,000 to one of the three doctors, $450,000 to the second, and $372,000 to the third doctor. Collectively, as a group, such principals will receive an annual cash bonus and stock equity set forth below, which will be conditioned upon the Company achieving 100% of the annual objectives of financial performance goals as set forth below. For the years ended December 31, 2024 and 2023 the Company recorded $0 in annual cash bonus as financial performance objectives were not achieved. The Company did not record an accrual for the bonus for the years ended December 31, 2024 and 2023 as the financial performance objectives were not expected to be met.

Year	Minimum Annual Nova EBITDA	Cash Annual Bonus	Series J Preferred Stock
2021	$2.0M	$120,000	120,000 Shares
2022	$2.4M	$150,000	135,000 Shares
2023	$3.7M	$210,000	150,000 Shares
2024	$5.5M	$300,000	180,000 Shares
2025	$8.0M	$420,000	210,000 Shares