XML 30 R19.htm IDEA: XBRL DOCUMENT v3.25.3
SUMMARY OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (Policies)
 9 Months Ended
Sep. 30, 2025
Accounting Policies [Abstract]  
Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

 

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of recurring accruals) necessary for a fair presentation have been included. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto, set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “Form 10-K”), as the same may be amended from time to time. Capitalized terms not defined in this Quarterly Report on Form 10-Q refer to capitalized terms as defined in the Form 10-K. Certain prior period accounts and balances in these unaudited condensed consolidated financial statements and notes thereto may have been reclassified to conform to the current period’s presentation.

 

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation.

 
Liquidity

Liquidity

 

As of September 30, 2025, the Company’s reported cash and restricted cash aggregated balance was approximately $3,503,417, current assets were approximately $5,017,000 and current liabilities were approximately $3,422,000. As of September 30, 2025, the Company had working capital of approximately $1,595,000 and stockholders’ equity of approximately $6,744,000. For the nine months ended September 30, 2025, the Company had a loss from operations of approximately $7,693,000, and net loss of approximately $5,604,000.

 

Although there can be no assurance that debt or equity financing will be available on acceptable terms, or at all, the Company believes its financial position and its ability to raise capital to be reasonable and sufficient. Based on our assessment, we do not believe there are conditions or events that, in the aggregate, raise substantial doubt about the Company’s ability to continue as a going concern within one year of filing these unaudited financial statements with the Securities and Exchange Commission (“SEC”).

 
Use of Estimates

Use of Estimates

 

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures in the financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.
Cash and Restricted Cash

Cash and Restricted Cash

 

Cash and restricted cash (restricted for debt service coverage) reported on our condensed consolidated balance sheets are reconciled to the total shown on our unaudited condensed consolidated statements of cash flows as follows:

 

   September 30, 2025   September 30, 2024 
Cash  $2,581,219   $925,270 
Restricted cash   922,198    1,428,422 
Total cash and restricted cash  $3,503,417   $2,353,692 

 
Revenue Recognition

Revenue Recognition

 

The following table disaggregates the Company’s revenue by line of business, showing commissions earned:

 SCHEDULE OF DISAGGREGATION REVENUE 

Period Ended September 30, 2024  Medical   Life  

Property

and

Casualty

   Total 
                 
Three months ended September 30, 2025  $1,774,019   $30,590   $

691,366

   $

2,495,975

 
Three months ended September 30, 2024  $2,422,523   $46,808   $972,127   $3,441,458 
Nine months ended September 30, 2025  $7,248,223   $95,320   $

2,475,329

   $

9,818,872

 
Nine months ended September 30, 2024  $8,095,631   $141,811   $2,519,145   $10,757,238 

 

The following are customers representing 10% or more of total revenue:

 

   Three Months Ended September 30, 
Insurance Carrier  2025   2024 
Priority Health   29%   29%
BlueCross BlueShield   25%   17%

 

   Nine Months Ended September 30, 
Insurance Carrier  2025   2024 
Priority Health   31%   33%
BlueCross BlueShield   17%   13%

 

No other single customer accounted for more than 10% of the Company’s commission revenues during the three and nine months ended September 30, 2025 and 2024. The loss of any significant customer could have a material adverse effect on the Company.

 
Income Taxes

Income Taxes

 

The Company recorded no income tax expense for the three and nine months ended September 30, 2025 and 2024 because the estimated annual effective tax rate was zero. In determining the estimated annual effective income tax rate, the Company analyses various factors, including projections of the Company’s annual earnings and taxing jurisdictions in which the earnings will be generated, the impact of state and local income taxes, the ability to use tax credits and net operating loss carry forwards, and available tax planning alternatives.

 

As of September 30, 2025 and December 31, 2024, the Company provided a full valuation allowance of $(16,237,582) against its net deferred tax assets of $16,237,582, and $(14,721,458) against its net deferred tax assets of $14,721,458, respectively, since the Company believes it is more likely than not that its deferred tax assets will not be realized.

 

 
Dividends

Dividends

 

Cash dividends are recorded as a liability on the date they are declared by the Board of Directors, which is the date the Company becomes legally obligated to pay the dividend. Dividends declared but unpaid at a reporting date are included in dividends payable within current liabilities and charged against retained earnings when the Company has positive retained earnings, or against additional paid in capital when the Company has a retained deficit, in accordance with ASC 505-20, Equity — Dividends. When a dividend is declared to shareholders of record as of a specified future date, any additional shares issued prior to that record date participate in the dividend, and the dividend payable is adjusted at the record date to reflect the total number of shares entitled to receive payment.

 
Digital Assets

Digital Assets

 

During the quarter ended September 30, 2025, the Board of Directors approved the adoption of a digital asset treasury strategy and a digital asset treasury policy. Under this strategy and policy, the Company may allocate a portion of its treasury funds to acquire cryptocurrencies, including leading digital assets such as Bitcoin, Ethereum and Solana, and may evaluate opportunities to tokenize insurance-linked assets. In connection with the policy, the Board approved the formation of a Crypto Advisory Board (the “CAB”) to manage, oversee and advise management and the Board on the ongoing development of the Company’s digital-asset treasury strategy and related initiatives.

 

As of September 30, 2025, the Company purchased digital assets consisting of Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), and XRP for investment and treasury diversification purposes. All digital assets are held with a qualified third-party custodian, are not subject to any contractual sale restrictions, and the Company does not engage in staking, lending, or mining activities.

 

The Company accounts and presents its digital assets in accordance with ASU 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60), with initial measurement at cost plus transaction fees directly attributable to each acquisition, and the Company continues to track cost basis using the specific-identification method. At each reporting date, the Company remeasures its digital assets at fair value, determined under ASC 820, Fair Value Measurement, based on quoted (unadjusted) prices on the Coinbase exchange, the active exchange that the Company has determined is its principal market for its digital assets (Level 1 inputs), with changes recognized in unrealized gains (losses) on digital assets, net, in the condensed consolidated statements of operations.

 
Recently Issued Accounting Pronouncements

Recently Issued Accounting Pronouncements

 

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-08, Intangibles — Goodwill and Other — Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. The ASU requires entities to measure certain digital assets at fair value each reporting period, with changes in fair value recognized in net income, and to provide specific quantitative and qualitative disclosures regarding such holdings. The Company adopted ASU 2023-08 effective July 1, 2025, using the modified retrospective transition method. Since the Company did not hold any digital assets prior to adoption, there were no cumulative-effect adjustments to retained earnings and no retrospective impacts.

 

We do not expect any other recently issued accounting pronouncements to have a material effect on our financial statements not already disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024.