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Cardiff Lexington Corporation

3753 Howard Hughes Parkway, Suite 200

Las Vegas, NV 89169

October 11, 2024

U.S. Securities and Exchange Commission

100 F Street, N.E.

Washington, DC. 20549

Attn: Tracey Houser

 Re: Cardiff Lexington Corp

    Form 10-Q for Fiscal Quarter Ended June 30, 2024

    Filed August 14, 2024

    Response Letters Dated September 13, 2024 and September
16, 2024

    File No. 000-49709

Ladies and Gentlemen:

We hereby submit the responses of Cardiff Lexington
Corporation (the “Company”) to the comments of the staff (the “Staff”) of the U.S. Securities and
Exchange Commission (the “Commission”) set forth in the Staff’s letter, dated September 27, 2024, providing the
Staff’s comments with respect to the Quarterly Report on Form 10-Q for the quarter ended June 30, 2024 (the “Q2 10-Q”).
Attached hereto as Annex A is a draft copy of the of an amendment to the Quarterly Report on Form 10-Q for the quarter ended March 31,
2024 (the “Q1 10-Q”) with our proposed changes to address the Staff’s comments as described below. Attached hereto
as Annex B is a draft copy of the Q2 10-Q with our proposed changes to address the Staff’s comments as described below. Additionally,
we are attaching hereto in PDF format comparisons against our last drafts of the Q1 10-Q and Q2 10-Q. Attached hereto as Annex C is a
comparison of the draft Q1 10-Q submitted herewith against the draft Q1 10-Q submitted with our letter on September 13, 2024 and attached
hereto as Annex D is a comparison of the draft Q2 10-Q submitted herewith against the draft Q2 10-Q submitted with our letter on September
13, 2024.

For the convenience of the Staff, each
of the Staff’s comments is included and is followed by the corresponding response of the Company.  Unless the context
indicates otherwise, references in this letter to “we,” “us” and “our” refer to the Company on a consolidated
basis.

Response Letters Dated September
13, 2024 and September 16, 2024

Annexes A and B

 1. Please expand your draft disclosures to explain how you assessed that your collection
rate is 99% given that an aging of your accounts receivable is not available for your specific circumstances. As part of this disclosure,
provide a discussion of how management is monitoring the outstanding settlement/trial cases underlying the accounts receivable to assess
when the settlements or trial awards have been finalized, when only partial settlements or trial awards occur, or when no settlement occurs,
a trial results in a loss and the case is abandoned. Finally, please provide an investor with sufficient information to understand the
length of time that the accounts receivable balance has been outstanding (e.g., $X outstanding for 1 year, $X outstanding for 2 years,
$X amount outstanding for 3 years). Refer to ASC 326-20-55-37 through 55-40.

Response:

We have expanded
our disclosure as shown below to discuss our less than 1% credit loss rate and related 99% collection rate and address that an aging of
our accounts receivable is not impactful to our analysis under the loss rate method of ASC 326. Additionally, the Company has concluded
that its historical credit losses and allowance for credit losses are not material to the financial statements. Given the immaterial nature
of the Company’s credit loss exposure along with system limitations we have disclosed previously, we have omitted certain tables
and breakouts of aging categories in our disclosure but disclosed the average age of our outstanding accounts receivable are between 18
– 24 months aged.

‘The Company
does not have a significant exposure to credit losses as it has historically had a less than 1.0% loss rate where the Company received
no settlement amount for its outstanding accounts receivable. Although possible, claims resulting in zero collection upon settlement are
rare based on the Company’s historical experience and has historically been 0.5% to 1.0% of its outstanding accounts receivable,
thereby resulting in a collection rate of 99%. The Company uses the loss rate method to record its allowance for credit losses. The Company
applies the loss rate method by reviewing its zero collection history on a regular basis and updating its estimates of credit losses to
adjust for changes in loss data. The Company typically collects on its accounts receivable between eighteen and twenty-four months after
recording. The Company does not record an allowance for credit losses based on an aging of its accounts receivable as the aging of the
Company’s receivables do not influence the credit loss rate due to the nature of its business and the letter of protection.’

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We have included additional disclosure
within our revenue recognition summary of significant accounting policies (SOSAP) as shown below. While this disclosure is related to
our accounts receivable, we are including it in our revenue recognition disclosure as it relates to the realization of our accounts receivable
and our net revenue recorded under ASC 606.

‘…Settlement realization
patterns are assessed based on actual settlements and based on expected settlement realization trends obtained from discussions with attorneys
and insurance providers. Settlement amounts are negotiated and prolonged settlement negotiations are not indicative of a greater likelihood
of reduced settlement realization or zero settlement.

The Company may accept a lower settlement
realization rate in order to receive faster payment. The Company obtains information about expected settlement realization trends from
discussions with doctors and attorneys and its third party medical billing company, which handles settlement claims and negotiations.
Settlement amounts are presented to the Company’s third party medical billing company. Settlement rates of 49% or higher based on
gross billed amounts are typically accepted without further negotiation. Proposed settlement rates below 49% are negotiated and longer
negotiations typically result in higher settlement rates. If the Company accepts a lower settlement realization rate in order to receive
payments more quickly, the Company considers that a price concession and estimates these concessions at contract inception…’

Lastly, we have disclosed that our
average accounts receivable is outstanding between 18-24 months, which we believe informs an investor with sufficient information to understand
the length of time that the accounts receivable balance has been outstanding. This is a range as we historically have not maintained a
systematic processes and resources to support the aging of our accounts receivables, which are further complicated by the settlement process
and continuing patient care which can skew aging. However, this does not impact our ability to estimate our allowance for credit losses
as the aging of our receivables do not impact the credit loss rate applied to those receivables. As such, we do not believe it is relevant
to disclose our outstanding accounts receivable by year aged, but rather continue to provide an estimate of the average aging of our accounts
receivable.

 2. We note that you originally recognized bad debt expense of $1,242,017. We further
note that you reassessed that $1,199,155 of the original bad debt expense should have been recognized as variable consideration with a
reduction to revenue. Please expand your draft disclosures to provide a detailed explanation of why you reversed the remaining $42,862
of bad debt expense, resulting in an increase to income from operations of $16,647 to $59,509 for the six-months June 30, 2024.

Response:

We recorded $42,862
of additional allowance for credit losses in the second quarter 2024. Based on our updated analysis of allowance for credit losses completed
in connection with our response to comment letter 4, our allowance for credit losses of $122,190 as of December 31, 2023 was sufficient
as of June 30, 2024 and did not require adjustment. As such, we reduced our allowance for credit losses recorded during the second quarter
2024, which resulted in an increase in accounts receivable and net income.

We will revise
our draft disclosure as follows:

‘The Company
restated its financial statements for the six months ended June 30, 2024 as a result of a change in classification of credit loss expense
to net revenue and a related adjustment to its allowance for credit losses. During the preparation of the financial statements for the
six months ended June 30, 2024, the Company identified and corrected its accounting for its allowance for credit losses and its credit
loss expense. The Company’s allowance for credit losses of $122,190 did not require adjustment during the six months ended June
30, 2024 and as a result, the Company reversed its credit loss expense associated with this adjustment. The remaining $1,199,155 of credit
loss expense for the six months ended June 30, 2024 was reclassified to net revenue as variable consideration accounted for under ASC
606.’

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 3. We note your draft disclosures for the estimation of variable consideration
and service fees – net (PIP) which indicate that these revenues are based on a 49% collection history and allowances for contractual
adjustments and uncollectible amounts. Please revise your reference to "collections", "historical collection rates"
and "net collection percentage" in the context of your revenue recognition policy to better distinguish between how you consider
variable consideration in the context of estimating the transaction price for revenue recognition purposes under ASC 606 versus estimating
the collectability of accounts receivable within the scope of ASC 326. Refer to ASC 606-10-25-1.e. for identifying the contract and to
ASC 606-10-32-5 through 32-14 for identifying various forms of variable consideration and estimating variable consideration within the
context of determining the transaction price of a contract for purposes of recognizing revenue. Refer to ASC 326-20-30-1 through 30-10
regarding estimating expected credit losses to recognize the net amount expected to be collected. Please also address this comment with
your additional subsequent events disclosure.

Response:

We have revised
our disclosures which change the reference from “collections” to “settlement realization” to better align the
terminology within the context of our accounting under ASC 606. We have also added disclosure describing how we intend on using the terms
within the financial statements. As an example, below are our revised disclosures.

Accounts Receivable

‘The Company
uses the term collection and collection rate in its disclosures to describe the historical less than 1% occurrence of not collecting under
a contract, which aligns with the Company’s credit loss accounting under ASC 326.’

Revenue Recognition

The Company
uses the term settlement realization in its disclosures to describe the amount of cash the company expects to receive based on its estimate
of the transaction price under the expected value method of ASC 606.

Service Fees – Net (PIP)

‘Prior to
its fiscal year 2024, the Company has historically had a 49% settlement realization rate from its total gross billed charges. Accordingly,
the Company has historically recognized net healthcare service revenue as 49% of gross billed charges. However, during the six months
ended June 30, 2024, the Company underwent efforts to accelerate cash settlements by accepting lower settlement realization rates in order
to settle outstanding accounts receivable more quickly. As a result of the new effort, during the six months ended June 30, 2024 the Company
realized a 42.3% average settlement rate of its gross billed charges during this time frame, which were historically recorded in accounts
receivable and revenue at 49% of gross billings. As a result of this reduced settlement realization percentage, the Company recorded a
reduction to net revenue of $859,321 and $1,199,155 for the three and six months ended June 30, 2024, respectively.’

Subsequent
events

‘Subsequent
to June 30, 2024, the Company identified a reduction in the settlement realization rate of its gross contractual billings as a result
of increasing its lookback period and refreshing its data obtained from its third party billing company. The Company completed a thorough
review of its third party billing data, including reviewing historical reports and new reporting methods as a part of its updated analysis.
Based on the new data analysis of its historical settlement realization rates, using a 24-month lookback analysis the Company determined
its estimate of its settlement realization rate was reduced from 49% to 44.2%. The Company applied this reduced settlement realization
rate against its accounts receivable balance resulting in a $1.7 million reduction in its accounts receivable and revenue in the third
quarter 2024. The Company will continue to evaluate its estimate of its settlement realization rates in the future, which will include
a monthly review of the Company’s trailing 24-month historical settlement realization rate, along with estimates of current and
pending settlements through ongoing discussions with attorneys, doctors and the Company’s third party medical billing company in
order to determine its variable consideration under ASC 606 and the net transaction price.

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 4. Please expand your draft disclosures for variable consideration to disclose
each type of variable consideration you estimate to determine the amount of the transaction price for each contract and how each type
of variable consideration is estimated in accordance with ASC 606-10-50-17 and 50-20. To the extent that any portion of your variable
consideration is constrained, please disclose as such including an explanation of the facts and circumstances resulting in the amount
being constrained, your policy for reassessing these factors, and what needs to occur for the amount to be recognized. Refer to ASC 606-10-32-5
through 32-9 and ASC 606-10-32-11 through 32-14 for guidance.

Response:

We have revised
our disclosures, partially included below, to better described forms of variable consideration, including their estimation, which are
included in our transaction price. We have not constrained any of our variable consideration as once we estimate our net revenue under
the expected value method we believe it’s not probable that a significant reversal in the amount of the cumulative revenue recognized
would occur in a future period. Subsequent to the quarter ended June 30, 2024, we revised our estimation method for determining the net
transaction price under the expected value method. As a result of this revision, we determined the rate we used to estimate variable consideration
under the expected value method required adjustment.

Revenue Recognition

‘The Company
is typically paid amounts based on established charges per procedure with guidance from the annually updated CPT guidelines that designates
relative value units and a suggested range of charges for each procedure which is then assigned a CPT code. This gross charge is discounted
to reflect the percentage paid to the Company “using a modifier” recognized by each insurance carrier for services, less deductible,
co-pay, and contractual adjustments which are deducted from the calculated fee. These adjustments are considered variable consideration
under ASC 606 and are deducted from the calculated fee to arrive at the net transaction price. The Company also estimates changes in the
contract price as a result of price concessions, changes to deductibles, co-pays and other contractual adjustments to determine the eventual
settlement amount the Company expects to receive. The Company uses the term settlement realization in its disclosures to describe the
amount of cash the company expects to receive based on its estimate of the transaction price under the expected value method of ASC 606.

Where appropri