How can I turn a for-profit business into a nonprofit business?
Second, you will likely run into tax issues with the transfer of assets from the for-profit to the not-for-profit company.
Third, the governance and operation of the not-for-profit is different from running a for-profit enterprise.
Before you think about making this change, realistically evaluate the likelihood that government sources of income will flow your way--and soon. Otherwise, you could find yourself in deeper trouble for mismanaging a nonprofit.
Make sure you consult with an attorney and an accountant who are well-versed in non-profit issues.