Forward-Looking Statements





You should read the following discussion and analysis of our financial condition
and results of operations together with our financial statements and the related
notes appearing elsewhere in this report. In addition to historical information,
this discussion and analysis contains forward-looking statements that involve
risks, uncertainties and assumptions. Our actual results may differ materially
from those discussed below. Factors that could cause or contribute to such
differences include, but are not limited to, those identified below, and those
discussed in the section titled "Item 1A. Risk Factors" included elsewhere in
this Annual Report on Form 10-K. All amounts in this report are in U.S. dollars,
unless otherwise noted.



Overview



General



HealthLynked Corp. (the "Company," "we," "our," or "us") was incorporated in the
State of Nevada on August 4, 2014. We currently operate in three distinct
divisions: the Health Services Division, the Digital Healthcare Division, and
the Medical Distribution Division. Our Health Services division is comprised of
the operations of (i) Naples Women's Center ("NWC"), a multi-specialty medical
group including OB/GYN (both Obstetrics and Gynecology) and General Practice,
(ii) Naples Center for Functional Medicine ("NCFM"), a Functional Medical
Practice engaged in improving the health of its patients through individualized
and integrative health care, (iii) Bridging the Gap Physical Therapy ("BTG"), a
physical therapy practice in Bonita Springs, FL that provides hands-on
functional manual therapy techniques to speed patients' recovery and manage pain
without pain medication or surgery, and (iv) Aesthetic Enhancements Unlimited
("AEU"), a patient service facility specializing in minimally and non-invasive
cosmetic services acquired by the Company in May 2022. Our Digital Healthcare
division develops and operates an online personal medical information and record
archive system, the "HealthLynked Network," which enables patients and doctors
to keep track of medical information via the Internet in a cloud-based system.
Our Medical Distribution Division is comprised of the operations of MedOffice
Direct LLC ("MOD"), a virtual distributor of discounted medical supplies selling
to both consumers and medical practices throughout the United States we acquired
on October 19, 2020.



                                       24

Recent Development - ACO/MSO Division





During the fourth quarter of 2022, the Board approved a plan to sell our ACO/MSO
Division, which assists physician practices in providing coordinated and more
efficient care to patients via the MSSP as administered by the CMS, which
rewards providers for efficiency in patient care. On January 17, 2023, we
entered into the AHP Merger Agreement with the Buyer, PBACO Holding, LLC, an
operator of ACOs, pursuant to which the Buyer agreed to buy, and we agreed to
sell, AHP. Pursuant to the terms of the AHP Merger Agreement, we received or
will receive the following consideration: (1) $750,000 in cash paid upon signing
of the definitive agreement (received January 18, 2023); (2) up to $2,250,000
incremental cash (up to $500,000 of which will be allocated to AHP's
participating physicians and reimbursed to HealthLynked by the Buyer in 2024)
based on agreement to participate in Buyer's ACO by AHP's existing physician
practices or newly added practices, scaled based on the number of covered
patients transferred to PBACO by July 31, 2023; (3) in the event that Buyer
completes a planned IPO by August 1, 2024, shares in the public entity at the
time of the IPO with a value equal to AHP's 2021 EBITDA times the multiple of
EBITDA used to value the public entity's IPO shares, net of any cash
consideration previously paid by the Buyer and subject to vesting requirements
detailed in the AHP Merger Agreement; (4) net proceeds, including allocation for
expenses, from any MSSP Shared Savings related to AHP's plan year 2022, which,
if earned, would be determined and paid by the CMS by October 2023.



In the event Buyer goes public through means other than an IPO, the parties
agreed to modify the terms of the IPO Share Consideration to implement such
alternate structure. In the event Buyer does not go public by IPO or other means
by August 1, 2024, the Company receives no IPO Share Consideration, and the
Transaction consideration is capped at the cash consideration of up to
$3,000,000 plus the MSSP Consideration. We will allocate up to $500,000 of the
incremental $2,250,000 participation-based cash proceeds as an advance to AHP's
participating physicians to incentivize participation in PBACO. Any such
participating physician advances will be repaid to us out of AHP's 2023
performance year MSSP Shared Savings, which would be received in 2024.



Pursuant to the terms of the Merger Agreement, formal transfer of the equity
ownership of AHP from us to the Buyer will occur at the earlier of (i) Buyer's
IPO, (ii) Buyer going public by other means, or (iii) if Buyer does not go
public, on August 1, 2024. Until that time, we have the right, but not the
obligation, to reacquire AHP for a price equal to any consideration already paid
by the Buyer for AHP, plus all expenses incurred by Buyer in operating AHP

after
January 16, 2023.



We have classified the results of the ACO/MSO Division as discontinued
operations in the accompanying consolidated statement of operations for all
periods presented. Additionally, the assets and liabilities associated with the
ACO/MSO Division are classified as held for sale in our consolidated balance
sheet for all periods presented.

Critical accounting policies and significant judgments and estimates

For a discussion of our critical accounting policies, see Note 2, "Significant Accounting Policies," in the Notes to consolidated Financial Statements.





                                       25

Results of Operations: Years Ended December 31, 2022 and 2021





The following table summarizes the changes in our results of operations for the
year ended December 31, 2022 compared with the year ended December 31, 2021:



                                              Year Ended December 31,                   Change
                                               2022             2021               $               %


Patient service revenue, net               $  5,407,416     $   5,764,186     $   (356,770 )          -6 %
Subscription and event revenue                   20,835            14,883  

         5,952            40 %
Product revenue                                 429,951           718,062         (288,111 )         -40 %
Total revenue                                 5,858,202         6,497,131         (638,929 )         -10 %

Operating Expenses and Costs
Practice salaries and benefits                3,335,695         3,114,991          220,704             7 %
Other practice operating expenses             2,566,191         2,349,279          216,912             9 %
Cost of product revenue                         463,156           606,521         (143,365 )         -24 %
Selling, general and administrative
expenses                                      4,577,490         4,929,668         (352,178 )          -7 %
Depreciation and amortization                   829,481           827,696  

         1,785             0 %
Impairment loss                               2,745,563               ---        2,745,563             *
Loss from operations                         (8,659,374 )      (5,331,024 )     (3,328,350 )          62 %

Other Income (Expenses)

Gain (loss) on extinguishment of debt               ---        (4,957,168 )      4,957,168          -100 %
Change in fair value of debt                        ---           (19,246 )         19,246          -100 %
Financing cost                                 (110,000 )             ---         (110,000 )           *
Amortization of original issue discounts
on notes payable                                (55,282 )             ---          (55,282 )           *
Change in fair value of contingent
acquisition consideration                       779,999          (373,656 )      1,153,655          -309 %
Interest expense                                (22,825 )         (19,144 )         (3,681 )          19 %
Total other income (expenses)                   591,892        (5,369,214 )

5,961,106 -111 %


Loss from continuing operations              (8,067,482 )     (10,700,238 )      2,632,756           -25 %

Income (loss) from operations of
discontinued operations                        (748,262 )         287,656  

    (1,035,918 )        -360 %

Net loss                                   $ (8,815,744 )   $ (10,412,582 )   $  1,596,838           -15 %

* - Denotes line item on statement of operations for which there was no

corresponding activity in the same period of prior year.






Revenue



Patient service revenue in the year ended December 31, 2022 decreased by
$356,770, or 6% year-over-year, from $5,764,186, to $5,407,416, primarily as a
result of decreased patient service revenue at our NWC practice of $758,172 due
to the departure of two physicians and a decrease at BTG of $100,591, offset by
a year-over-year increase at our NCFM practice of $291,232 and the addition of
AEU revenue of $210,761 following its acquisition in May 2022.



Subscription and event revenue in the year ended December 31, 2022 increased by
$5,952, or 40% year-over-year, to $20,835 due to an increase in HealthLynked
Network subscriptions of $9,377, offset by a decrease in event revenue of
$3,425.



Product revenue was $429,951 in the year ended December 31, 2022, compared to
$718,062 in the year ended December 31, 2021, a decrease of $288,111, or 40%.
Product revenue was earned by the Medical Distribution Division, comprised

of
the operations of MOD.

Operating Expenses and Costs


Practice salaries and benefits increased by $220,704, or 7%, to $3,335,695 in
the year ended December 31, 2022, compared to $3,114,991 in the year ended
December 31, 2021, as a result of increased production pay and personnel costs
corresponding to increased revenue and the addition of AEU salaries and benefits
starting in May 2022 with no corresponding cost in 2021, offset by fewer
full-time equivalents at NWC and BTG.



Other practice operating costs increased by $216,912, or 9%, to $2,566,191 in
the year ended December 31, 2022, primarily as a result of the addition of AEU
operating costs starting in May 2022 with no corresponding cost in 2021,
increased practice operating costs at NCFM corresponding to increased revenue,
offset by lower costs at our NWC and BTG facilities.



                                       26






Cost of product revenue was $463,156 in the year ended December 31, 2022, a
decrease of $143,365, or 24%, compared to the same period of 2021, corresponding
to the decline in product sales for the period compared to the same period in
the prior year. During the year ended December 31, 2022, we also made two sales
with corresponding cost of product revenue of $89,395 for which we do not
believe it is probable that we will collect from the customers. As a result, the
cost of product revenue is recognized in 2022 with no corresponding revenue
recognized.



Selling, general and administrative costs decreased by $352,178, or 7%, to
$4,577,490 in the year ended December 31, 2022 compared to the year ended
December 31, 2021, primarily due to lower stock-based and cash-based consulting
fees, and legal and accounting fees in 2022 compared to 2021, offset by more
personnel, overhead, promotional and development costs in our corporate function
in connection with our continued investment in the HealthLynked Network.

Depreciation and amortization increased in the year ended December 31, 2022 by $1,785, or less than 1%, to $829,481 compared to $827,696 in the year ended December 31, 2021, primarily as a result of the addition of new depreciable medical equipment from the AEU acquisition, offset by certain fixed assets reaching the end of their depreciable lives in 2021.





During the year ended December 31, 2022, we determined that triggering events
had occurred that required impairment assessments of the MOD Website. The
triggering events included (i) a material decline in revenue during 2022, and
during fourth quarter 2022 in particular, from the reporting unit's existing
customer base, (ii) delays in realization of material increases in revenue from
new marketing channels, and (iii) an inability to achieve profitability during
2022 despite a fundamental pricing and profit margin restructuring implemented
in fourth quarter of 2022. We determined that the asset group, which included
the MOD Website and goodwill related to MOD, was not recoverable and,
accordingly, recorded an impairment charge in the amount of $2,745,563 to adjust
carrying value to its estimated fair value of $-0-. The impairment charge was
allocated $1,979,314 to the intangible Website asset and $766,249 to goodwill.



Loss from operations increased by $3,328,350, or 62%, to $8,659,374 in the year
ended December 31, 2022 compared to $5,331,024 in the year ended December 31,
2021, primarily as a result of the impairment charge related to MOD intangible
assets and goodwill recorded in fourth quarter of 2022, lower patient service
and product revenue in 2022 and an increase in practice operating costs, offset
by a decrease in selling, general and administrative costs.



Other Income (Expenses)



Loss on extinguishment of debt in the year ended December 31, 2021 was
$4,957,168 resulting from (i) a loss on debt extinguishment of $5,589,994
representing the excess of the fair value of shares and a warrant issued at
conversion of convertible notes over the carrying value of the host instruments
and accrued interest, and (ii) a debt extinguishment gain of $632,826 related to
the forgiveness of PPP loans in May and June 2021. There were no gains or losses
from the extinguishment of debt in the year ended December 31, 2022.



Losses from the change in fair value of debt was $19,246 in the year ended
December 31, 2021. Such losses resulted from certain convertible notes and notes
payable to related parties that, in previous periods, were extended and treated
as an extinguishment and reissuance for accounting purposes, requiring these
notes to be subsequently carried at fair value. The change in fair value at the
end of each reporting period was recorded as "Change in fair value of debt."
After conversion of our remaining convertible notes outstanding in January 2021,
we had no further debt carried at fair value, and therefore no change in fair
value of debt in the year ended December 31, 2022.



Financing cost in the year ended December 31, 2022 was $110,000, resulting from
cash and stock-based fees paid in connection with the July 2022 SEPA. There were
no financing costs in the year ended December 31, 2021.



Amortization of original issue and debt discounts on notes payable and
convertible notes in the year ended December 31, 2022 was $55,282, resulting
from amortization of original issue discounts on notes payable issued in the
second half of 2022. There was no corresponding amortization of original issue
and debt discounts in the year ended December 31, 2021.



Gain (loss) from the change in fair value of contingent acquisition
consideration increased by $1,153,655, or 309%, to a gain of $779,999 in the
year ended December 31, 2022, compared to a loss of $373,656 in the year ended
December 31, 2021. Because contingent acquisition consideration related to our
acquisition of MOD is payable in a fixed number of shares, changes in the fair
value of the contingent acquisition consideration fluctuates with our share
price. During the year ended December 31, 2021, our share price increased
substantially, resulting in an increase in the fair value of the contingent
acquisition consideration liability and a corresponding loss from the change in
fair value. During the year ended December 31, 2022, our share price decreased
substantially, resulting in a gain from the decrease in fair value of the
liability.

Interest expense increased by $3,681, or 19%, to $22,825 for the year ended December 31, 2022, compared to interest expense of $19,144 in the year ended December 31, 2021. Interest expense relates primarily to long-term SBA loans.





                                       27





Total other income (expenses) increased by $5,961,106, or 111%, to income of
$591,892 in the year ended December 31, 2022 compared to expense of $5,369,214
in the year ended December 31, 2021. The change was primarily a result of a
$5,589,994 loss on extinguishment of debt associated with the retirement of our
last remaining convertible notes payable in 2021, and a gain from the change in
fair value of contingent acquisition consideration recognized in the year ended
December 31, 2022, contrasted to a loss in the year ended December 31, 2021, due
principally to the fixed-share structure of the MOD contingent consideration.



Loss from continuing operations decreased by $2,632,756, or 25%, to $8,067,482
in the year ended December 31, 2022, compared to loss from continuing operations
of $10,700,238 in the year ended December 31, 2021. The decrease was due
primarily to (i) a large loss on extinguishment of debt incurred in 2021 with no
corresponding charges in 2022, (ii) a gain from the change in fair value of
contingent acquisition consideration in 2022 resulting from the fixed share
structure of the MOD contingent acquisition consideration coupled with a drop in
our stock price during 2022, and (iii) lower selling, general and administrative
costs in 2022, offset by (iv) an impairment charge related to MOD intangible
assets and goodwill recorded in fourth quarter of 2022, and (v) lower aggregate
patient service and product revenue in 2022.

Income (Loss) from Operations of Discontinued Operations





Our ACO/MSO Division was classified as discontinued operations in the
accompanying consolidated statement of operations for the years ended December
31, 2022 and 2021 due to an approved plan of sale initiated in fourth quarter of
2022 and completed in January 2023 with the signing of the AHP Merger Agreement.
Income (loss) from operations of discontinued operations decreased by 360% from
income of $287,656 in the year ended December 31, 2021 to loss of $748,262 in
the year ended December 31, 2022. The change from income to loss was due
primarily to a determination during third quarter 2022 from the CMS that AHP
narrowly missed its plan year 2021 benchmark expenditures, for which we would
have received payment in September 2022. As a result, AHP received no shared
savings revenue in 2022, in the year ended December 31, 2022, compared to shared
savings revenue of $2,419,312 received in the year ended December 31, 2021.
During September 2022, we filed a reconsideration appeal with the CMS, which was
unsuccessful. The decline resulting from shared savings revenue was offset by an
increase in consulting revenue of $58,316 and, because we did not receive shared
savings revenue in 2022, a decrease in shared savings expense for the portion of
such revenue that would have been paid to our ACO participating providers.




Net Loss



Net loss decreased by $1,596,838, or 15%, to $8,815,744 in the year ended
December 31, 2022, compared to net loss of $10,412,582 in the year ended
December 31, 2021, primarily as a result of (i) a large loss on extinguishment
of debt incurred in 2021 with no corresponding charges in 2022, (ii) a gain from
the change in fair value of contingent acquisition consideration in 2022
resulting from the fixed share structure of the MOD contingent acquisition
consideration coupled with a drop in our stock price during 2022, and (iii)
lower selling, general and administrative costs in 2022, offset by (iv) an
impairment charge related to MOD intangible assets and goodwill recorded in
fourth quarter of 2022, (v) a loss from our discontinued ACO/MSO Division in
2022 due to the determination by CMS that no shared savings revenue was earned
in 2022, and (vi) lower aggregate patient service and product revenue in 2022.



Seasonal Nature of Operations



We do not experience any material seasonality related to any of our continuing
operations. Prior to the discontinuation of our ACO/MSO Division, that
division's primary source of revenue was from payments earned under the Medicare
shared savings program for which shared savings determinations were made
annually by the CMS in the third calendar quarter of each year, resulting in
potential revenue spikes in the third quarter. With the sale of the ACO/MSO
Division in January 2023, we will no longer be subject to this type of
seasonality.



Impairment

Impairment reviews of long-lived assets


Long-lived assets (including amortizable identifiable intangible assets) or
asset groups held for use are tested for recoverability whenever events or
changes in circumstances indicate that their carrying amount may not be
recoverable. When such events occur, we compare the sum of the undiscounted cash
flows expected to result from the use and eventual disposition of the asset or
asset group to the carrying amount of a long-lived asset or asset group. The
cash flows are based on our best estimate of future cash flows derived from the
most recent business projections. If this comparison indicates that the asset is
not recoverable, we estimate the fair value of the asset group using a
discounted cash flow model. An impairment charge is then recorded for any excess
carrying value above the estimated fair value of the asset group.



Goodwill and indefinite-lived intangible assets are tested for impairment on an
annual basis and more often if circumstances indicate that an impairment may be
necessary. Goodwill impairment is recognized for any excess carrying value above
the estimated fair value of the asset group. Fair value is estimated using the
same approach as described above for long-lived asset testing.



                                       28





The significant assumptions we use in the discounted cash flow models are
revenue growth rate, gross profit margins on product sales, operating income
margin, and the discount rate used to determine the present value of the cash
flow projections. Among other inputs, revenue growth rate and operating income
margin are determined by management using historical performance trends,
projected performance from existing partnerships, industry data, relevant
changes in the reporting unit's underlying business, and other market trends
that may affect the reporting unit. The discount rate is based on the estimated
weighted average cost of capital as of the test date of market participants in
the industry in which the reporting unit operates. The assumptions used in the
DCF model are subject to significant judgment and uncertainty. Changes in
projected revenue growth rates, gross profit margins, projected operating income
margins, or estimated discount rates due to uncertain market conditions, loss of
our sole product supplier in the Medical Distribution reporting unit, losses of
key physicians in our Health Services reporting unit, changes in technology, or
other factors, could result in one or more of our reporting units with a
significant amount of identifiable intangible assets recognizing material
impairment charges, which could be material to our results of operations and
financial position. Our historical or projected revenues or cash flows may not
be indicative of actual future results.

Impairment of MOD Website and Goodwill


During the fourth quarter of 2022, we determined that triggering events had
occurred that required impairment assessments of the MOD Website. The triggering
events included (i) a material decline in revenue during 2022, and during fourth
quarter 2022 in particular, from the reporting unit's existing customer base,
(ii) delays in realization of material increases in revenue from new marketing
channels, and (iii) an inability to achieve profitability during 2022 despite a
fundamental pricing and profit margin restructuring implemented in fourth
quarter of 2022. We determined that the asset group, which included the MOD
Website and goodwill related to MOD, was not recoverable and, accordingly,
recorded an impairment charge in the amount of $2,745,563 to adjust carrying
value to its estimated fair value of $-0-. The impairment charge was allocated
$1,979,314 to the intangible Website asset and $766,249 to goodwill.



The fair value of our MOD Website and goodwill was determined using an expected
present value approach, which applies a market discount rate to a
probability-weighted stream of cash flows based on multiple scenarios, as
estimated by management. As such, the fair values of the MOD Website and
goodwill rely on significant unobservable inputs and assumptions and there is
uncertainty in the expected future cash flows used in the impairment review.



                                       29

Liquidity and Capital Resources





Liquidity Condition



During the second quarter of 2014, the FASB issued ASU No. 2014-15, Presentation
of Financial Statements - Going Concern (Subtopic 205-40): Disclosure of
Uncertainties about an Entity's Ability to Continue as a Going Concern. This
update provided U.S. GAAP guidance on management's responsibility in evaluating
whether there is substantial doubt about a company's ability to continue as a
going concern and about related footnote disclosures. Under this standard, we
are required to evaluate whether there is substantial doubt about our ability to
continue as a going concern each reporting period, including interim periods. In
evaluating our ability to continue as a going concern, management considered the
conditions and events that could raise substantial doubt about our ability to
continue as a going concern within 12 months after our financial statements

were
issued (March 31, 2024).



Management considered our current financial condition and liquidity sources,
including current funds available, forecasted future cash flows and our
obligations due before March 31, 2024 and concluded that, without additional
funding, we will not have sufficient funds to meet our obligations within one
year from the date the consolidated financial statements were issued. Without
raising additional capital, either via additional advances made pursuant to the
SEPA or from other sources, there is substantial doubt about our ability to
continue as a going concern through March 31, 2024. The accompanying
consolidated financial statements have been prepared assuming that we will
continue as a going concern. This basis of presentation contemplates the
recovery of our assets and the satisfaction of liabilities in the normal course
of business.



We are subject to a number of risks, including uncertainty related to product
development and generation of revenues and positive cash flow from our Digital
Healthcare division and a dependence on outside sources of capital. The
attainment of profitable operations is dependent on future events, including
obtaining adequate financing to fulfill our growth and operating activities and
generating a level of revenues adequate to support our cost structure.



As of December 31, 2022, we had cash balances of $61,891, a working capital
deficit of $1,330,157 and an accumulated deficit of $41,020,933. For the year
ended December 31, 2022, we had a net loss of $8,815,744, net cash used by
operating activities of $4,363,020, and $1,678,015 provided by financing
activities. We expect to continue to incur net losses and have significant cash
outflows for at least the next 12 months.

Significant Liquidity Transactions





Through December 31, 2022, we have funded our operations principally through a
combination of sales of our common stock, convertible and non-convertible
promissory notes, government issued debt, and related party debt, as described
below.



On July 5, 2022, we entered into a Standby Equity Purchase Agreement (the
"SEPA") with YA II PN, Ltd. ("Yorkville"). Pursuant to the SEPA, we shall have
the right to sell to Yorkville up to 30,000,000 shares of our common stock, par
value $0.0001 per share, at our request any time during the three-year
commitment period set forth in the SEPA. Because the purchase price per share to
be paid by Yorkville for the shares of common stock sold by us to Yorkville
pursuant to the SEPA, if any, will fluctuate based on the market prices of our
common stock during the applicable pricing period, we cannot reliably predict
the actual purchase price per share to be paid by Yorkville for those shares, or
the actual gross proceeds to be raised by us from those sales, if any. During
the year ended December 31, 2022, we made 21 advances under the SEPA, receiving
$451,202 in proceeds for the issuance of 5,683,100 shares of common stock, of
which $279,415 was applied to the balance of the Promissory Note (as defined
below).




On July 19, 2022, we issued to Yorkville a promissory note with an initial
principal amount equal to $561,000, including payment fees (the "Promissory
Note"). The Promissory Note will mature on March 15, 2023. During the year ended
December 31, 2022, we made payments of $392,700 against the Promissory Note,
including $279,415 applied from proceeds of sales of common stock under the
SEPA, leaving an unpaid principal balance as of December 31, 2022 of $168,300.
The balance of the Promissory Note was repaid in full during first quarter 2023.



During October 2022, the Board approved a plan to sell our ACO/MSO Division. On
January 17, 2023, we entered into the AHP Merger Agreement, pursuant to which
the Buyer agreed to buy, and we agreed to sell, AHP. We received $750,000 cash
payments upon signing of the AHP Merger Agreement. Pursuant to the terms of the
transaction, we may also earn (i) up to an additional $2,250,000 cash (up to
$500,000 of which will be allocated to AHP's participating physicians and
reimbursed to HealthLynked by the Buyer in 2024) by July 31, 2023 for meeting
participating physician transfer milestones outlined in the AHP Merger
Agreement, (ii) common shares of the Buyer in the event that the Buyer completes
an IPO or other public listing transaction prior to August 1, 2024, with the
value to be determined based on Buyer's valuation in such a transaction, and
(iii) net proceeds, including allocation for expenses, from any MSSP Shared
Savings related to AHP's plan year 2022, which, if earned, would be determined
and paid by the CMS by October 2023.



                                       30






During November and December 2022, we issued two separate notes payable to our
CEO, Dr. Michael Dent, with aggregate principal amount of $338,000. The notes
are repaid in weekly installments over a one-year period.



During the year ended December 31, 2022, we sold 8,998,485 shares of common
stock to eight separate investors in private placement transactions. We received
$785,000 in proceeds from the sales. In connection with the stock sales, we also
issued 6,249,244 five-year warrants to purchase shares of common stock at
exercise prices between $0.10 and $0.25 per share.



Without raising additional capital, whether via additional advances made
pursuant to the SEPA, from the sale of equity or debt instruments, from
contingent consideration related to the sale of the ACO/MSO Division, or from
other sources, there is substantial doubt about the Company's ability to
continue as a going concern through March 31, 2024. The accompanying
consolidated financial statements have been prepared assuming that the Company
will continue as a going concern. This basis of presentation contemplates the
recovery of the Company's assets and the satisfaction of liabilities in the
normal course of business.

Plan of operation and future funding requirements





Our plan of operations is to profitably operate our Health Services business and
continue to invest in our Digital Healthcare business, including our cloud-based
online personal medical information and record archiving system, the
"HealthLynked Network."



We are marketing the HealthLynked Network by targeting large health systems,
hospitals and universities. In addition, we are marketing via direct-to-patient
marketing, affiliated marketing campaigns, co-marketing with our Medical
Distribution businesses subsidiary MOD, and expanded southeast regional sales
efforts. Our initial sales strategy is utilizing Internet-based marketing to
increase penetration to targeted geographical areas. These campaigns are focused
on both physician practices and patient members. We also are leveraging MOD's
discounted medical supplies as an offering to our patient and physician members
in the HealthLynked Network. We also intend to utilize physician telesales
through the use of telesales representatives whom we will hire as access to
capital allows. If we fail to complete the development of, or successfully
market, the HealthLynked Network, our ability to realize future increases in
revenue and operating profits could be impacted, and our results of operations
and financial position would be materially adversely affected.



We plan to raise additional capital to fund our ongoing plan of operation.




Historical Cash Flows



                                                                  Year Ended December 31,
                                                                   2022             2021
Net cash (used in) provided by:
Net cash used in continuing operating activities               $ (3,673,950 )   $ (4,019,274 )
Net cash used in discontinued operating activities                 (689,070 )        249,420
Net cash used in operating activities                            (4,363,020

) (3,769,854 )


Net cash used in continuing investing activities                   (544,750 )       (341,356 )
Net cash used in discontinued investing activities                      ---              ---
Net cash used in investing activities                              (544,750

) (341,356 )


Net cash provided by continuing financing activities              1,678,015

7,240,672


Net cash provided by discontinued financing activities                  ---              ---
Net cash provided by financing activities                         1,678,015

7,240,672


Net increase (decrease) in cash from continuing operating        (2,540,685 )      2,880,042
Net increase (decrease) in cash from discontinued operating        (689,070 )        249,420
Net increase (decrease) in cash                                $ (3,229,755

)   $  3,129,462




Operating Activities - During the year ended December 31, 2022, we used cash
from operating activities of $4,363,020, as compared with $3,769,854 in the year
ended December 31, 2021. The increase in cash usage results primarily from an
increase of $938,490 in cash used in operations of our discontinued ACO/MSO
Division, due primarily to the unit not receiving MSSP shared savings revenue in
2022. Net cash used in continuing operating activities decreased by $345,324,
due primarily to decreased selling, general and administrative expenses and cash
received in the fourth quarter of 2022 for the sale of annual Medical Membership
and Concierge Services at NCFM for which revenue and a portion of the related
cost are deferred and recognized over the contract life, most of which will

be
recognized in 2023.



                                       31





Investing Activities - During the year ended December 31, 2022, we used $544,750
in investing activities, including $313,802 used to acquire AEU (net of cash
acquired), $207,384 contingent acquisition consideration payment paid to the
sellers of NCFM related to the third and final year of earn-out, and $23,564 to
acquire fixed assets. During the year ended December 31, 2021, we used $341,356
in investing activities, including $196,000 contingent acquisition consideration
payment paid the sellers of NCFM and $126,106 contingent acquisition
consideration payment paid the sellers of CHM, plus $19,250 for the acquisition
of furniture, computers and equipment. There were no investing activities
related to our discontinued operations.



Financing Activities - During the year ended December 31, 2022 and 2021, we
realized $1,678,015 and $7,240,672, respectively, in financing activities. Cash
realized in 2022 was comprised of $956,787 from the sale of common stock (net of
$279,415 received from sales of common stock under the SEPA that were applied to
the balance of the Note Payable), $943,300 from the issuance of notes payable,
and $222,072 repayments against notes payable balances (net of $279,415 received
from sales of common stock under the SEPA that were applied to the balance of
the Note Payable). Cash realized in 2021 was comprised of $5,229,360 from the
sale of common stock pursuant to private placements and puts under the
Investment Agreement, $1,719,921 net proceeds from the Registered Direct
Offering, and $350,200 proceeds from the exercise of options and warrants. We
also made cash repayments against a vendor note in the amount of $51,109,
retiring the note in full.

Exercise of Warrants and Options

During the year ended December 31, 2022, we received no proceeds from the exercise of warrants or options. We issued 1,394 shares upon cashless exercise of 12,500 employee option shares exercised using a cashless exercise feature.





During the year ended December 31, 2021, we received $333,750 upon the exercise
of 3,065,278 warrants with exercise prices between $0.09 and $0.15 and $16,450
upon the exercise of 145,500 options with exercise prices between $0.10 and
$0.252. Additionally, we issued 9,047,332 shares upon cashless exercise of
10,571,742 warrant shares exercised using a cashless exercise feature in
settlement of litigation and other disputes totaling $614,221 that had been
accrued in 2020.

Other Outstanding Obligations at December 31, 2022

As of December 31, 2022, 68,109,094 shares of our Common Stock are issuable pursuant to the exercise of warrants with exercise prices ranging from $0.04 to $1.05.

As of December 31, 2022, 5,222,982 shares of our Common Stock are issuable pursuant to the exercise of options with exercise prices ranging from $0.06 to $0.77.

As of December 31, 2022, 1,651,435 shares of our Common Stock are issuable pursuant to future vesting of stock grants.

Off Balance Sheet Arrangements

We did not have, during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under applicable Securities and Exchange Commission rules.

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