Form 10-Q - Quarterly report [Sections 13 or 15(d)]

Share Name	Share Symbol	Market	Type
Healthier Choices Management Corporation (PK)	USOTC:HCMC	OTCMarkets	Common Stock

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.00	0.00%	0.000001	0.000001	0.0001	0.0001	0.000001	0.000001	91,825,896	20:54:51

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number: 001-36469

HEALTHIER CHOICES MANAGEMENT CORP.

(Exact name of Registrant as specified in its charter)

Delaware		84-1070932
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

3800 North 28th Way
Hollywood, Florida		33020
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: 305-600-5004

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		HCMC		OTC Pink Marketplace

As of May 8, 2024, there were 479,266,632,384 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

TABLE OF CONTENTS

	PAGE

PART I FINANCIAL INFORMATION	3

ITEM 1. Financial Statements	3

Condensed Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023	3

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2024 and 2023 (Unaudited)	4

Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity for the Three Months Ended March 31, 2024 and 2023 (Unaudited)	5

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 (Unaudited)	6

Notes to Condensed Consolidated Financial Statements (Unaudited)	7

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	22

ITEM 4. Controls and Procedures	22

PART II OTHER INFORMATION	24

ITEM 1. Legal Proceedings	24

ITEM 1A. Risk Factors	24

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	24

ITEM 3. Defaults Upon Senior Securities	24

ITEM 4. Mine Safety Disclosures	24

ITEM 5. Other Information	24

ITEM 6. Exhibits	24

Signatures	26

Exhibit 31.1

Exhibit 31.2

Exhibit 32.1

Exhibit 32.2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2024			December 31, 2023
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalent	$	3,904,801		$	5,081,086
Accounts receivable, net		166,273			128,171
Inventories		4,177,069			4,228,889
Prepaid expenses and vendor deposits		1,990,323			1,668,324
Assets held for sale		543,854			-
Other current assets		86,257			65,556
Restricted cash		553,232			553,232
TOTAL CURRENT ASSETS		11,421,809			11,725,258

Property, plant, and equipment, net of accumulated depreciation		2,173,600			2,735,252
Intangible assets, net of accumulated amortization		4,136,338			4,376,682
Right of use asset – operating lease, net		10,767,755			11,511,002
Other assets		632,024			621,385
TOTAL ASSETS	$	29,131,526		$	30,969,579

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	7,108,075		$	8,024,664
Contract liabilities		179,916			207,513
Line of credit		453,232			453,232
Current portion of loan payment		2,432,135			702,701
Operating lease liability, current		2,774,469			2,842,829
TOTAL CURRENT LIABILITIES		12,947,827			12,230,939

Loan payable, net of current portion		2,221,462			2,403,807
Operating lease liability, net of current		7,827,417			8,465,617
TOTAL LIABILITIES		22,996,706			23,100,363

COMMITMENTS AND CONTINGENCIES (SEE NOTE 13)		-			-

CONVERTIBLE PREFERRED STOCK
Series E redeemable convertible preferred stock, $1,000 par value per share, 14,722 shares authorized, 1,111 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively: aggregate liquidation preference of $1.1 million as of March 31, 2024 and December 31, 2023, respectively		1,111,100			1,111,100
STOCKHOLDERS’ EQUITY
Common Stock, $0.0001 par value per share, 750,000,000,000 shares authorized; 478,266,632,384 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		47,826,663			47,826,663
Additional paid-in capital		22,155,025			21,028,274
Accumulated deficit		(64,957,968	)		(62,096,821	)
TOTAL STOCKHOLDERS’ EQUITY		5,023,720			6,758,116

TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY	$	29,131,526		$	30,969,579

See notes to unaudited condensed consolidated financial statements

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	2024			2023
	Three Months Ended March 31,
	2024			2023
SALES
Vapor sales, net	$	119		$	38
Grocery sales, net		15,894,358			13,559,706
TOTAL SALES, NET		15,894,477			13,559,744

Cost of sales vapor		132			653
Cost of sales grocery		9,839,981			8,644,700
GROSS PROFIT		6,054,364			4,914,391

OPERATING EXPENSES		8,859,017			6,897,438

LOSS FROM OPERATIONS		(2,804,653	)		(1,983,047	)

OTHER INCOME (EXPENSE)
Loss on investment		(857	)		(4,457	)
Other income (expense), net		3,355			(17,450	)
Interest (expense) income, net		(58,992	)		97,653
Total other income (expense), net		(56,494	)		75,746

Net loss	$	(2,861,147	)	$	(1,907,301	)

Induced conversions of Preferred Stock		-			(61,000	)

Net loss attributable to common stockholders	$	(2,861,147	)	$	(1,968,301	)

NET LOSS PER SHARE-BASIC AND DILUTED	$	0.00		$	0.00

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED		478,266,632,384			341,671,076,830

See notes to unaudited condensed consolidated financial statements

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2024 and 2023

(Unaudited)

	Shares		Amount			Shares		Amount		Capital		Deficit			Total
	Series E Convertible Preferred Stock					Common Stock				Additional Paid-In		Accumulated
	Shares		Amount			Shares		Amount		Capital		Deficit			Total
Balance – January 1, 2024		1,111	$	1,111,100	-		478,266,632,384	$	47,826,663	$	21,028,274	$	(62,096,821	)	$	6,758,116
Stock-based compensation expense		-		-			-		-		1,126,751		-			1,126,751
Net loss		-		-	-		-		-		-		(2,861,147	)		(2,861,147	)
Balance – March 31, 2024		1,111	$	1,111,100	-		478,266,632,384	$	47,826,663	$	22,155,025	$	(64,957,968	)	$	5,023,720

	Shares			Amount			Shares		Amount		Shares		Amount		Capital			Deficit			Total
	Series E Convertible Preferred Stock						Convertible Preferred Stock				Common Stock				Additional Paid-In			Accumulated
	Shares			Amount			Shares		Amount		Shares		Amount		Capital			Deficit			Total
Balance – January 1, 2023		14,722		$	14,722,075			800	$	800,000		339,741,632,384	$	33,974,163	$	29,045,802		$	(43,613,941	)	$	20,206,024
Balance		14,722		$	14,722,075			800	$	800,000		339,741,632,384	$	33,974,163	$	29,045,802		$	(43,613,941	)	$	20,206,024
Series E convertible preferred stock redeemed		(556	)		(555,550	)		-		-		-		-		-			-			-
Conversion of series E convertible preferred stock		(670	)		(670,000	)		-		-		6,700,000,000		670,000		-			-			670,000
Induced conversions of preferred stock		-			-			-		-		-		-		(61,000	)		-			(61,000	)
Stock-based compensation expense		-			-			-		-		-		-		50,000			-			50,000
Net loss		-			-			-		-		-		-		-			(1,907,301	)		(1,907,301	)
Balance – March 31, 2023		13,497		$	13,496,525			800	$	800,000		346,441,632,384	$	34,644,163	$	29,034,802		$	(45,521,242	)	$	18,957,723
Balance		13,497		$	13,496,525			800	$	800,000		346,441,632,384	$	34,644,163	$	29,034,802		$	(45,521,242	)	$	18,957,723

See notes to unaudited condensed consolidated financial statements

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	2024			2023
	Three Months Ended March 31,
	2024			2023
OPERATING ACTIVITIES
Net loss	$	(2,861,147	)	$	(1,907,301	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		379,547			373,462
Amortization of debt discount		18,841			-
Loss on investment		857			4,457
Amortization of right-of-use asset		743,247			695,192
Write-down of obsolete and slow-moving inventory		743,419			523,087
Stock-based compensation expense		1,126,751			50,000
Change in contingent consideration					22,100
Changes in operating assets and liabilities:
Accounts receivable		(38,102	)		(44,818	)
Inventories		(691,599	)		(673,392	)
Prepaid expenses and vendor deposits		362,117			(255,387	)
Other current assets		(20,701	)		279,701
Other assets		(11,496	)		771
Accounts payable and accrued expenses		(1,391,690	)		(744,145	)
Contract liabilities		(27,597	)		1,766
Lease liability		(706,560	)		(669,803	)
NET CASH USED IN OPERATING ACTIVITIES		(2,374,113	)		(2,344,310	)

INVESTING ACTIVITIES
Collection of note receivable		-			16,320
Purchases of property and equipment		(121,405	)		(126,251	)
NET CASH USED IN INVESTING ACTIVITIES		(121,405	)		(109,931	)

FINANCING ACTIVITIES
Payments for deferred offering costs		(209,015	)		-
Proceeds from security purchase agreement		1,700,000			-
Principal payments on loan payable		(171,752	)		(131,614	)
Payment of induced conversions of preferred stock		-			(55,000	)
Payment for series E preferred stock redemption		-			(555,550	)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		1,319,233			(742,164	)

NET DECREASE IN CASH, CASH EQUIVALENT AND RESTRICTED CASH		(1,176,285	)		(3,196,405	)
CASH, CASH EQUIVALENT AND RESTRICTED CASH— BEGINNING OF PERIOD		5,634,318			24,690,124
CASH, CASH EQUIVALENT AND RESTRICTED CASH — END OF PERIOD	$	4,458,033		$	21,493,719

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	$	104,505		$	44,478
Cash paid for income tax	$	-		$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES
Non-cash deferred offering cost	$	475,101		$	-
Issuance of common stock in connection with series E preferred stock conversion	$	-		$	670,000
Right-of-use assets obtained in exchange for operating lease liabilities	$	-		$	1,093,290
Accrued payment of induced conversions of preferred stock	$	-		$	6,000

See notes to unaudited condensed consolidated financial statements

HEALTHIER CHOICES MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. ORGANIZATION

Organization

Healthier Choices Management Corp. (the “Company”) is a holding company focused on providing consumers with healthier daily choices with respect to nutrition and other lifestyle alternatives.

Through its wholly owned subsidiary HCMC Intellectual Property Holdings, LLC, the Company manages and intends to expand on its intellectual property portfolio.

Through its wholly owned subsidiary Healthy Choice Wellness Corp. (“HCWC”), the Company operates:

●	Ada’s Natural Market, a natural and organic grocery store offering fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, health & beauty products and natural household items.

●	Paradise Health & Nutrition’s three stores that likewise offer fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, health & beauty products and natural household items.

●	Mother Earth’s Storehouse, a two-store organic and health food and vitamin chain in New York’s Hudson Valley, which has been in existence for over 40 years.

●	Greens Natural Foods’ eight stores in New York and New Jersey, offering a selection of 100% organic produce and all-natural, non-GMO groceries & bulk foods; a wide selection of local products; an organic juice and smoothie bar; a fresh foods department, which offers fresh and healthy “grab & go” foods; a full selection of vitamins & supplements; as well as health and beauty products.

●	Ellwood Thompson’s, an organic and natural health food and vitamin store located in Richmond, Virginia.

Through its wholly owned subsidiary, Healthy Choice Wellness, LLC, the Company operates a Healthy Choice Wellness Center in Kingston, NY and has a licensing agreement for a Healthy Choice Wellness Center located at the Casbah Spa and Salon in Fort Lauderdale, FL.

These centers offer multiple vitamin drip mixes and intramuscular shots for clients to choose from that are designed to help boost immunity, fight fatigue and stress, reduce inflammation, enhance weight loss, and efficiently deliver antioxidants and anti-aging mixes. Additionally, there are IV vitamin mixes and shots for health, beauty, and re-hydration.

Through its wholly owned subsidiary, Healthy Choice Wellness II, LLC, the Company entered into a joint venture with an established healthcare provider, and the joint venture is in the process of creating a structure whereby it will engage in telemedicine evaluations of patients for semaglutide therapy. The operation will encompass, generally: medical evaluations of patients; treatment of patients with semaglutide; coordination with providers and patients. There was no activity for the quarter ended March 31, 2024.

Through its wholly owned subsidiary, Healthy U Wholesale, the Company sells vitamins and supplements, as well as health, beauty, and personal care products on its website www.TheVitaminStore.com.

Additionally, the Company markets its patented the Q-Cup™ technology under the vape segment; this patented technology is based on a small, quartz cup called the Q-Cup™, which a customer partially fills with either cannabis or CBD concentrate (approximately 50mg) purchased from a third party. The Q-Cup™ is then inserted into the Q-Cup™ Tank or Globe, that heats the cup from the outside without coming in direct contact with the solid concentrate. This Q-Cup™ technology provides significantly more efficiency and an “on the go” solution for consumers who prefer to vape concentrates either medicinally or recreationally.

Spin-Off

The Company intends to spin off its grocery segment and wellness business into a new publicly traded company (hereinafter referred to as “NewCo”). NewCo will continue the path of growth in the health verticals started by HCMC and explore other growth opportunities that comport with HCMC’s healthier lifestyle mission. HCMC will retain its entire patent suite, the Q-Cup® brand, and continue to develop its patent suite through R&D as well as continuing its path of enforcing its patent rights against infringers and attempting to monetize said patents through licensing deals.

At the time of the Spin-Off, HCMC would distribute all the outstanding shares of Common Stock held by it on a pro rata basis to holders of HCMC’s common stock. Each share of HCMC’s common stock outstanding as of the record date for the Spin-Off (the “Record Date”), will entitle the holder thereof to receive shares of Common Stock in NewCo. The distribution will be made in book-entry form by a distribution agent. Fractional shares of Common Stock will not be distributed in the Spin-Off and any fractional amounts will be rounded down. Please see more disclosure in Note 12 Stockholder Equity.

Note 2. GOING CONCERN AND MANAGEMENT’S PLANS

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of any uncertainties related to our going concern assessment. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values.

The Company currently and historically has reported net losses and cash outflows from operations. As of March 31, 2024, the Company had cash and cash equivalent of approximately $3.9 million and negative working capital of $1.5 million. Management has made plans to reduce certain costs and raise needed capital, however, there can be no assurance the Company can successfully implement these plans. The Company anticipates its current cash and cash generated from operations will not be sufficient to meet projected operating expenses for the foreseeable future through at least twelve months from the issuance of the condensed consolidated financial statements.

The Company contracted a third-party consultant, whose expertise is streamlining operations, to identify areas of improvement and cost savings. The Company will enact the consultant’s recommendation in anticipation of realizing savings and achieving profitability. The Company plans on evaluating non-performing stores and continuing to expand via acquisition which will help achieve profitability. Also, the Company is formulating plans to raise capital from outside investors, as it has done in the past, to fund operating losses and also provide capital for further business acquisitions. The result of the capital raise is to improve the Company’s operating and financial performance. The success of these plans is dependent upon various factors, foremost being the ability to reduce outside consulting expenses and the ability to secure additional capital from outside investors. There can be no assurance that such plans will be successful.

Note 3. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Regulation S-X and do not include all the information and disclosures required by GAAP. The Company has made estimates and judgments affecting the amounts reported in the Company’s unaudited condensed consolidated financial statements and the accompanying notes. The actual results experienced by the Company may differ materially from the Company’s estimates. The condensed consolidated financial information is unaudited but reflects all normal adjustments that are, in the opinion of management, necessary to provide a fair statement of results for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on March 27, 2024. The condensed consolidated balance sheet as of December 31, 2023 was derived from the Company’s audited 2023 financial statements contained in the above referenced Form 10-K. Results of the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the full year ending December 31, 2024.

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2023 Annual Report.

Note 4. CONCENTRATIONS

Cash, Cash Equivalent and Restricted Cash

The Company considers all highly liquid instruments with an original maturity of three months or less, when purchased, to be cash and cash equivalent. The majority of the Company’s cash and cash equivalent are concentrated in one large financial institution, which is in excess of Federal Deposit Insurance Corporation (FDIC) coverage. The balance of cash equivalent was approximately $503,000 and $0 as of March 31, 2024 and December 31, 2023.

A summary of the financial institution that had cash and cash equivalent in excess of FDIC limits of $250,000 on March 31, 2024 and December 31, 2023 is presented below:

		March 31, 2024				December 31, 2023
Total cash and cash equivalent in excess of FDIC limits of $250,000		$	2,516,118			$	3,814,426

The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests, as deposits are held in excess of federally insured limits. The Company has not experienced any losses in such accounts.

The following table provides a reconciliation of cash, cash equivalent and restricted cash to amounts shown in unaudited condensed consolidated statements of cash flow:

SCHEDULE OF CASH AND RESTRICTED CASH

	March 31, 2024		March 31, 2023
Cash and cash equivalent	$	3,904,801	$	19,765,487
Restricted cash		553,232		1,728,232
Total cash and restricted cash	$	4,458,033	$	21,493,719

Restricted Cash

The Company’s restricted cash consisted of cash balances which were restricted as to withdrawal or usage under the August 18, 2022 securities purchase agreement for the purpose of funding any amounts due under the Series E Certificate of Designation upon the redemption of the Series E Preferred Stock. The balance also included cash held in the collateral account to cover the cash draw from the line of credit.

Note 5. SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES

In accordance with FASB ASC 280, “Disclosures about Segment of an enterprise and related information”, the Company determined it has two reportable segments: grocery and vapor. There are no inter-segment revenues.

The Company’s general and administrative costs are not segment specific. As a result, all operating expenses are not managed on segment basis.

The Company reports the following segments in accordance with management guidance: Vapor and Grocery. When the Company prepares its internal management reporting to evaluate business performance, we disaggregate revenue into the following categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

	2023			2023
	Three Months Ended March 31,
	2024			2023
Vapor	$	119		$	38
Grocery		15,894,358			13,559,706
Total revenue	$	15,894,477		$	13,559,744

Wholesale/Online Vapor	$	119		$	38
Retail Grocery		13,478,803			11,613,730
Food service/restaurant		2,414,994			1,943,914
Online/eCommerce		561			2,062
Total revenue	$	15,894,477		$	13,559,744

Loss from operations - Vapor		(5,862	)		(6,672	)
Income (loss) from operations - Grocery		93,461			(276,842	)
Corporate items		(2,892,252	)		(1,699,533	)
Total loss from operations	$	(2,804,653	)	$	(1,983,047	)

Note 6. ACQUISITION

Ellwood Thompson’s

On October 1, 2023, the Company through its wholly owned subsidiary, Healthy Choice Markets V, LLC, entered into an Asset Purchase Agreement with (i) ET Holding, Inc., d/b/a Ellwood Thompson’s Local Market, a Virginia corporation, (ii) Ellwood Thompson’s Natural Market, L.C., a Virginia limited liability company, and (iii) Richard T. Hood, an individual resident of the Commonwealth of Virginia. Pursuant to the Purchase Agreement, the Company acquired certain assets and assumed certain liabilities related to Ellwood Thompson’s grocery stores in Richmond, Virginia. The Company intends to continue to operate the grocery stores under their existing name.

The cash purchase price under the Asset Purchase Agreement was $750,000, and a promissory note provided by the seller of $750,000, with a fair value of $718,00. The Company expensed the discount associated with the promissory note and recognized interest expense of approximately $32,000 for the year ended December 31, 2023. In addition, the Company entered into a new lease agreement with the landlord and entered into an employment agreement with the store manager.

The following table summarizes the purchase price allocation based on fair values of the net assets acquired at the acquisition date:

	October 1, 2023
Purchase Consideration
Cash consideration paid	$	750,000
Promissory note		718,000
Total Purchase Consideration	$	1,468,000

Purchase price allocation
Inventory	$	851,000
Intangible assets		291,000
Right of use asset - Operating lease		1,325,000
Other liabilities		(31,000	)
Operating lease liability		(1,325,000	)
Goodwill		357,000
Net assets acquired	$	1,468,000

Finite-lived intangible assets
Trade Names (8 years)	$	291,000
Total intangible assets	$	291,000

The acquisition is structured as asset purchase in a business combination, and goodwill is tax-deductible, and amortizable over 15 years for tax purposes.

Revenue and Earnings

The following unaudited pro forma summary presents consolidated information of the Company, including Ellwood Thompson’s, as if the business combinations had occurred on January 1, 2023, the earliest period presented herein:

For Three Months Ended

March 31, 2023

Sales

16,533,127

Net loss

(1,918,800

)

The pro forma financial information includes adjustments that are directly attributable to the business combinations and are factually supportable. The pro forma adjustments include incremental amortization of intangible. The proforma data gives effects to actual operating results prior to the acquisition. These proforma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisitions occurred as of the beginning of each period presented or that may be obtained in future periods.

Note 7. ASSETS HELD FOR SALE

On February 7, 2024, the Company closed the operation of the Saugerties store. The decision was based on management’s plan to maximize the profitability of the grocery segment. The Company transferred all operating assets and liabilities to other neighboring stores. The building, which is owned by the Company, has a net carrying value of approximately $544,000 and was put up for sale in February at its fair market value. The building was put up for sale in February 2024 and the carrying amount is lower than fair market value as of March 31, 2024. The Company has not incurred any cost to sell the building to date. The Company has classified the building as held for sale in accordance with ASC 360, “Property, Plant, and Equipment.” The building was previously classified as property, plant, and equipment (PP&E) and included in long-term assets.

Note 8. PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment consist of the following:

	March 31, 2024			December 31, 2023
Displays	$	312,146		$	312,146
Building		-			575,000
Furniture and fixtures		597,709			596,355
Leasehold improvements		1,956,051			1,925,385
Computer hardware & equipment		234,404			190,019
Other		733,774			688,774
Property and equipment, gross		3,834,084			4,287,679
Less: accumulated depreciation and amortization		(1,660,484	)		(1,552,427	)
Total property, plant, and equipment	$	2,173,600		$	2,735,252

The Company incurred approximately $139,000 and $143,000 of depreciation expense for the three months ended March 31, 2024 and 2023, respectively.

Note 9. INTANGIBLE ASSETS

Intangible assets, net are as follows:

SCHEDULE OF INTANGIBLE ASSETS, NET

March 31, 2024	Useful Lives (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trade names	8-10 years	$	2,860,000	$	(1,119,301	)	$	1,740,699
Customer relationships	4-6 years		2,669,000		(1,405,389	)		1,263,611
Patents	10 years		397,165		(209,671	)		187,494
Non-compete	4-5 years		1,602,000		(657,466	)		944,534
Intangible assets, net		$	7,528,165	$	(3,391,827	)	$	4,136,338

December 31, 2023	Useful Lives (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trade names	8-10 years	$	2,860,000	$	(1,035,443	)	$	1,843,277
Customer relationships	4-6 years		2,669,000		(1,330,972	)		1,338,028
Patents	10 years		397,165		(199,001	)		198,164
Non-compete	4-5 years		1,602,000		(586,067	)		1,015,933
Intangible assets, net		$	7,528,165	$	(3,151,483	)	$	4,376,682

Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense was approximately $240,000 and $231,000 for the three months ended March 31, 2024 and 2023, respectively. Future annual estimated amortization expense is as follows:


Years ending December 31,
2024 (remaining nine months)	$	719,046
2025		953,891
2026		875,910
2027		731,489
2028		412,819
Thereafter		443,183
Total	$	4,136,338

Note 10. CONTRACT LIABILITIES

A summary of the net changes in contract liabilities activity at March 31, 2024 and December 31, 2023 is presented below:

	March 31, 2024			December 31, 2023
Beginning balance as January 1,	$	207,513		$	198,606
Issued		706,971			891,060
Redeemed		(671,786	)		(812,694	)
Breakage recognized		(62,782	)		(69,459	)
Ending balance	$	179,916		$	207,513

Note 11. DEBT

A breakdown of the Company’s debt as of March 31, 2024 and December 31, 2023 is presented below:

SCHEDULE OF BREAKDOWN OF DEBT

	March 31, 2024			December 31, 2023
Promissory notes	$	4,823,645		$	3,106,508
Debt discount		(170,048	)		-
Line of credit		453,232			453,232
Total debt, net of debt discount	$	5,106,829		$	3,559,740
Current portion of long-term debt		(2,885,367	)		(1,155,933	)
Long-term debt	$	2,221,462		$	2,403,807

Promissory Notes

In connection with the Green’s Natural Foods acquisition, on October 14, 2022, the Company issued a secured promissory note (the “Greens Note”) in the principal amount of $3,000,000 as a portion of the purchase price. The Greens Note has a five-year term, an interest rate of 6.0% per annum and is secured by the assets of the Green’s Natural Foods. The outstanding balance was approximately $2,239,000 and $2,378,000 as of March 31, 2024 and December 31, 2023, respectively. The Company incurred approximately $35,000 and $43,000 interest expense for the three months ended March 31, 2024 and 2023, respectively.

In connection with the Ellwood Thompson’s acquisition, on October 1, 2023, the Company issued a secured promissory note (the “Ellwood Note”) in the principal amount of $750,000, and discounted present value of $718,000 as a portion of the purchase price. The Ellwood Note has a five-year term, an interest rate of 6.0% per annum. The outstanding balance of the Ellwood Note was approximately $696,000 and 728,000 in principal amount as of March 31, 2024 and December 31, 2023, respectively. The Company expensed the discount on promissory note for the amount of approximately $39,000 for the year ended December 31, 2023, and recognized interest expense of approximately $11,000 and $0 for the three months ended March 31, 2024, and 2023, respectively.

On January 18, 2024, HCWC entered into a Securities Purchase Agreement (the “Bridge Financing”) with institutional investors whereby (a) HCWC issued a total of approximately $1,889,000 in unsecured promissory notes (the “Notes) and (b) on the date of the pricing of HCWC’s initial public offering (“IPO”), HCWC shall deliver shares of its common stock equal to approximately $1,889,000 divided by the IPO price (“Bridge Shares”). If HCWC does not consummate its IPO, it will have no obligation to issue Bridge Shares to the investors. The aggregate gross proceeds received from the investors in connection with the SPA was $1,700,000. The Notes were issued at a 10% original issue discount (“OID”) and accrue interest at a rate of 10% per annum beginning 60 days after issuance of the Notes. All accrued and unpaid principal and interest shall be due and payable upon the earlier of (1) the closing of the IPO, (2) January 18, 2025 or (3) upon an event of default as defined in the Notes. The Bridge Shares represent a contingent obligation that was not recognized in the Company’s unaudited consolidated financial statements as of March 31, 2024 since it was not probable that the IPO would close as of such date. HCWC incurred approximately $23,500 of debt issuance costs in connection with the issuance, which, together with the OID of approximately $189,000, was recorded as a debt discount and will be amortized over the life of the Notes using the straight-line method since such method was not materially different from the interest method. For the three months ended March 31, 2024, approximately $57,000 of interest expense was recognized. At March 31, 2024, the outstanding principal balance was approximately $1,889,000, accrued interest was approximately $15,000 and debt discount was approximately $170,000. See Note 14 for additional details.

The Company may, at its option, at any time or from time to time prepay the outstanding principal amount or any accrued but unpaid interest, in each case in whole or in part, without penalty or premium, provided that any such prepayment of any outstanding amount of principal shall be accompanied by the payment of all accrued but unpaid interest on the amount of principal being prepaid, plus any costs and fees incurred.

The following table summarizes the 5-year repayment schedule:

		-
For the years ending December 31,
2024 (remaining nine months)	$	530,949
2025		2,634,931
2026		792,056
2027		724,333
2028		141,376
Total	$	4,823,645

Note 12. STOCKHOLDERS’ EQUITY

Series E Convertible Preferred Stock

On August 18, 2022, the Company entered into a Securities Purchase Agreement (“Series E Preferred Stock”) pursuant to which the Company sold and issued 14,722 shares of its Series E Redeemable Convertible Preferred Stock to institutional investors for $1,000 per share or an aggregate subscription of $13.25 million. The number of shares issued to each participant is based on subscription amount multiplied by conversion rate of 1.1111. The Company also incurred offering costs of approximately $410,000, which covers legal and consulting fee.

The HCMC Series E Preferred Stock shall have voting rights on as converted basis at the Company’s next stockholders’ meeting. However, as long as any shares of HCMC Series E Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the HCMC Series E Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the HCMC Series E Preferred Stock or alter or amend the Certificate of Designation, (b) increase the number of authorized shares of HCMC Series E Preferred Stock, or (c) enter into any agreement with respect to any of the foregoing. Each share of Series E Preferred Stock shall be convertible, at any time and from time to time at the option of the Holder thereof, into that number of shares of Common Stock (subject to the beneficial ownership limitations). The initial conversion price for the HCMC Series E Preferred Stock shall equal $0.0001.

Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary that is not a Fundamental Transaction (as defined in the Certificate of Designation), the holders of HCMC Series E Preferred Stock shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to $1,000 per share of Series E Preferred Stock.

Unless earlier converted or extended as set forth below, a holder may require the redemption of all or a portion of the stated value of the HCMC Series E Preferred Stock either (1) six months after closing or (2) the time at which the balance is due and payable upon an event of default.

On March 1, 2023, the Company entered into a First Amendment to HCMC Series E Preferred Stock with each purchaser (“Purchaser”) identified as those who participated in the HCMC Series E Preferred Stock, dated as of August 18, 2022. The parties amended the HCMC Preferred Stock related to the conversion payment whereby upon conversion of the Series E Preferred Stock prior to the record date for the Spin-Off, the Company will pay the Purchaser ten percent (10%) of the stated value of the Series E Preferred Stock converted. The record date is May 1, 2023.

On May 15, 2023, the Company and the Purchaser entered into the Second Amendment to the Securities Purchase Agreement, pursuant to which the Company agreed to extend the time period for the Conversion Payment eligibility to December 1, 2023. The Company filed an amendment to the Certificate of Designation to make the redemption price of the Preferred Stock (the “Redemption Price”) equal the Stated Value regardless of the date on which it is redeemed. Prior to this amendment, the Redemption Price was discounted by 1% for each month after the seven-month anniversary of the Issue Date that the Purchaser elected not to redeem.

On October 30, 2023, the Company entered into a Third Amendment to the Securities Purchase Agreement with its Series E Redeemable Convertible Preferred Stock purchasers. The parties agreed to: (1) set the initial conversion price for the Series A Preferred Stock to be the 5-day volume weighted average price measured using the 5 trading days preceding the purchase of the Series A Preferred Stock, (2) on the 40th calendar day (the “Reset Date”) after the sale of the Series A Preferred Stock, reset the conversion price in the event the closing price of the Class A common stock on such date is less than the initial conversion, (3) have the reset conversion price equal a 10% discount to the 5-day volume weighted average price measured using the 5 trading days preceding the Reset Date; provided, however, in no instance will the conversion price be reset below 30% of the initial conversion price, and (4) amend the date on which the obligation to acquire the Series A Preferred Stock ceases to March 1, 2024.

On February 20, 2024, the Company entered into a Fourth Amendment to the Securities Purchase Agreement with its Series E Redeemable Convertible Preferred Stock purchasers, pursuant to which the Company and such parties agreed to amend the date on which the obligation to acquire the Series A Preferred Stock ceases to June 1, 2024.

Through March 31, 2024, 1,585 shares of Series E preferred stock have been cumulatively converted into 15,850,000,000 shares of common stock as a result of the Series E preferred stock conversion, and 12,026 shares of Series E preferred stock have been cumulatively redeemed, and approximately $12,004,000 has been paid for redemption.

Pursuant to the Securities Purchase Agreement, purchasers of the Series E Convertible Preferred Stock will also be required to purchase Series A Convertible Preferred Stock of NewCo resulting from spin off of HCMC’s grocery and wellness businesses in the same subscription amounts that the Purchasers paid for the HCMC Series E Preferred Stock.

Spin-Off

The Company is planning to spin off its grocery segment and wellness business into a new publicly traded company (hereinafter referred to as “NewCo”). NewCo will continue the path of growth in the health verticals started by HCMC and explore other growth opportunities that comport with HCMC’s healthier lifestyle mission. HCMC will retain its entire patent suite, the Q-Cup® brand, and continue to develop its patent suite through R&D as well as continuing its path of enforcing its patent rights against infringers and attempting to monetize said patents through licensing deals.

At the time of the Spin-Off, HCMC will distribute all the outstanding shares of Common Stock held by it on a pro rata basis to holders of HCMC’s common stock. Each share of HCMC’s common stock outstanding as the record date for the Spin-Off (the “Record Date”), will entitle the holder thereof to receive shares of Common Stock in NewCo. The distribution will be made in book-entry form by a distribution agent. Fractional shares of Common Stock will not be distributed in the Spin-Off and any fractional amounts will be rounded down.

Pursuant to the Securities Purchase Agreement, purchasers of the Series E Convertible Preferred Stock will also be required to purchase Series A Convertible Preferred Stock (“NewCo Series A Stock”) of a newly created NewCo resulting from spin off of HCMC’s grocery and wellness businesses in the same subscription amounts that the Purchasers paid for the HCMC Preferred Stock.

On October 27, 2023, the Company filed a new registration statement on Form S-1 (the “Spin-off S-1”) in connection with the spin-off of all of the existing HCWC common stock by Healthier Choices Management Corp. with the Securities and Exchange Commission (the “Commission”).

On October 30, 2023, the Company filed Amendment No. 1 to its registration statement on Form S-1 (the “IPO S-1”) with the Commission.

On December 20, 2023, the Company filed Amendment No. 1 to its Spin-off S-1 with the Commission.

On December 21, 2023, the Company filed Amendment No. 2 to its IPO S-1 with the Commission.

On February 13, 2024, the Company filed Amendment No. 2 to its Spin-off S-1 with the Commission with respect to the Spin-Off.

On February 13, 2024, the Company filed Amendment No. 3 to its IPO S-1 with the Commission with respect to the IPO.

Stock Options

During the three months ended March 31, 2024 and 2023, the Company recognized stock-based compensation of approximately $1,127,000 and $50,000, respectively in connection with amortization of restricted stock and stock options. Stock based compensation is included as part of selling, general and administrative expense in the accompanying unaudited condensed consolidated statements of operations.

Income (Loss) Per Share

The following table summarizes the Company’s securities, in common share equivalents, which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive:

SCHEDULE OF DILUTIVE LOSS PER SHARE

	2024		2023
	As of March 31,
	2024		2023
Preferred stock		11,111,000,000		136,215,000,000
Stock options		67,587,222,200		67,587,000,000
Restricted stock		95,590,625,000		5,500,000,000
Total		174,288,847,200		209,302,000,000

Note 13. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

There were two lawsuits in connection with alleged claimed battery defects for an electronic cigarette device. One has been dismissed by the court wherein the plaintiff settled with the Company’s insurance carrier with no economic impact to the Company. In the second lawsuit, as of December 31, 2023, the Company had reached an arrangement with the plaintiff to resolve the matter, limiting potential exposure to $1.5 million. While this arrangement is presently not formalized by a signed agreement, the Company has accrued a liability of $1.5 million at December 31, 2023, which was reflected in accounts payable and accrued expenses, to represent management’s estimate of the probable settlement amount based on the current status of discussions. The settlement remains subject to finalization, and until a definitive agreement is executed, no assurance can be given that the outcome will differ from this accrual. The case has been removed from the courts trial calendar. There have no updates in the second lawsuit as of the date of the filing of this 10Q.

On November 30, 2020, the Company filed a patent infringement lawsuit against Philip Morris USA, Inc., and Philip Morris Products S.A. in the U.S. District Court for the Northern District of Georgia. The lawsuit alleges infringement on HCMC-owned patent(s) by the Philip Morris product known and marketed as “IQOS®”. Philip Morris claims that it is currently approaching 14 million users of its IQOS® product and has reportedly invested over $3 billion in their smokeless tobacco products. On December 3, 2021, the District Court for the Northern District of Georgia effectively dismissed HCMC’s patent infringement action against Philip Morris USA, Inc., and Philip Morris Products S.A. On December 14, 2021, the Company filed an appeal of the District Court for the Northern District of Georgia’s dismissal of the Company’s patent infringement action against Philip Morris USA, Inc., and Philip Morris Products S.A.

On December 31, 2021, the District Court for the Northern District of Georgia effectively dismissed HCMC’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. In connection with such dismissal, the defendants sought to recover attorney’s fees from the Plaintiff. On February 22, 2022, the District Court for the Northern District of Georgia granted the defendant’s an award of approximately $575,000 in attorneys’ fees to be paid by the Company. The Company fully provisioned this amount as of December 31, 2021. HCMC appealed this ruling on June 22, 2022.

On April 12, 2023, the U.S. Court of Appeals for the Federal Circuit ruled in favor of HCMC on two separate appeals it had filed in its patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. pending in the district court for the Northern District of Georgia.

In the first appeal, HCMC appealed the ruling of the District Court dismissing HCMC’s patent infringement action and denying HCMC’s motion to amend its pleading. In the second appeal, HCMC appealed the District Court’s award of attorneys’ fees to Philip Morris. In its decisions, the Federal Circuit ruled for HCMC by reversing both of those decisions and remanded the case back to the District Court for further proceedings. As a result of the ruling, the Company reversed the $575,000, which was previously fully provisioned, during the three months ended March 31, 2023.

On September 26, 2023, HCMC filed a patent infringement lawsuit against R.J. Reynolds Vapor Company (“RJR”) in the U.S. District Court for the Middle District of North Carolina in connection with HCMC’s assertions that RJR’s Vuse electronic cigarette infringes one of HCMC’s patents.

On July 7, 2023, the Company entered into a patent licensing agreement for one of its patents in the vape segment. The Company as the licensor, grants to licensee during the term a non-exclusive right and license under the Licensed Patents to make, use, offer to sell, sell, and import licensed products in the territory of the United States of America. The licensee will pay to the licensor a royalty based on net sales of all licensed products in the territory during the term of the agreement. Either party can cancel the agreement with 60-days written notice. The Company is still in the process of building this operation, and no product sales or no royalties earned as of the date of this filing.

From time to time the Company is involved in legal proceedings arising in the ordinary course of our business. We believe that there is no other litigation pending that is likely to have, individually or in the aggregate, a material adverse effect on our financial condition or results of operations as of March 31, 2024. With respect to legal costs, we record such costs as incurred.

Note 14. SUBSEQUENT EVENTS

On April 8, 2024, the parties to the SPA entered into a Fifth Amendment to the August 18, 2022 Securities Purchase Agreement, pursuant to which the Company and such parties agreed to amend the Completion Date to August 1, 2024.

On April 11, 2024, the Company filed Amendment No. 1 on Form 8-K/A to the Form 8-K filed on January 23, 2024, which terminated the existing obligation for institutional investors to purchase HCWC’s Class A common stock in the IPO and replaced the Bridge Shares with Bridge Warrants. The Bridge Warrants will entitle the holders thereof to purchase 188,889 shares of HCWC’s Class A common stock (the “Bridge Warrant Shares”) at a nominal exercise price of $0.01 per share at any time on or after HCWC’s registration statement on Form S-1 for the initial registration of the Class A common stock (the “IPO”) is declared effective by the United State Securities and Exchange Commission.

On April 12, 2024, the Company granted and issued 1,000,000,000 shares of restricted stocks to an employee. The award commences vesting of 12.5% on February 1, 2024 and remainder will vest 12.5% increments on the last day of each calendar quarter thereafter through September 30, 2025.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF CONDENSED CONSOLIDATED OPERATIONS

The following discussion and analysis should be read in conjunction with our unaudited interim condensed consolidated financial statements and related notes appearing elsewhere in this report on Form 10-Q. 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 anticipated in these forward-looking statements. The terms “we,” “us,” “our,” and the “Company” refer to Healthier Choices Management Corp. and its wholly-owned subsidiaries, Healthy Choice Wellness Corp., Healthy Choice Markets, Inc., Healthy Choice Markets 2, LLC (“Paradise Health and Nutrition”), Healthy Choice Markets 3, LLC (“Mother Earth’s Storehouse”), Healthy Choices Markets 3 Real Estate LLC, Healthy Choice Markets IV, LLC (“Green’s Natural Foods”), Healthy Choice Markets V, LLC (“Ellwood Thompson’s), HCMC Intellectual Property Holdings, LLC, Healthy Choice Wellness, LLC, Healthy Choice Wellness II, LLC, The Vitamin Store, LLC, Healthy U Wholesale, Inc., and The Vape Store, Inc. (“Vape Store”). All intercompany accounts and transactions have been eliminated in consolidation.

Company Overview

Healthier Choices Management Corp. is a holding company focused on providing consumers with healthier daily choices with respect to nutrition and other lifestyle alternatives.

Through its wholly owned subsidiary HCMC Intellectual Property Holdings, LLC, the Company manages and intends to expand on its intellectual property portfolio.

Through its wholly owned subsidiaries, Healthy Choice Wellness Corp., Healthy Choice Markets, Inc., Healthy Choice Markets 2, LLC, and Healthy Choice Markets 3, LLC, Healthy Choice Markets IV, LLC and Healthy Choice Markets V, LLC respectively, the Company operates:

	●	Ada’s Natural Market, a natural and organic grocery store offering fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, health & beauty products, and natural household items (www.Adasmarket.com)
	●	Paradise Health & Nutrition’s three stores that likewise offer fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, health & beauty products and natural household items, (www.ParadiseHealthDirect.com)
	●	Mother Earth’s Storehouse, a two-store organic and health food and vitamin chain in New York’s Hudson Valley, which has been in existence for over 40 years (www.MotherEarthStorehouse.com).
	●	Greens Natural Foods’ eight stores in New York and New Jersey, offering a selection of 100% organic produce and all-natural, non-GMO groceries & bulk foods; a wide selection of local products; an organic juice and smoothie bar; a fresh foods department, which offers fresh and healthy “grab & go” foods; a full selection of vitamins & supplements; as well as health and beauty products (www.Greensnaturalfoods.com).
	●	Ellwood Thompson’s, an organic and natural health food and vitamin store located in Richmond, Virginia. (www.ellwoodthompsons.com).

Through its wholly owned subsidiary, Healthy U Wholesale Inc., the Company sells vitamins and supplements, as well as health, beauty and personal care products on its website www.TheVitaminStore.com.

Additionally, the Company markets its patented Q-Unit™ and Q-Cup® technology. Information on these products and the technology is available on the Company’s website at www.theQcup.com.

Liquidity

The unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern and realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of any uncertainties related to our going concern assessment. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The unaudited consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The Company currently and historically has reported net losses and cash outflows from operations. As of March 31, 2024, the Company had cash and cash equivalent of approximately $3.9 million and negative working capital of $1.5 million. Management has made plans to reduce certain costs and raise needed capital, however there can be no assurance the Company can successfully implement these plans. The Company anticipates its current cash and cash generated from operations will not be sufficient to meet projected operating expenses for the foreseeable future through at least twelve months from the issuance of the consolidated financial statements.

Factors Affecting Our Performance

We believe the following factors affect our performance:

Retail: We believe the operating performance of our retail stores will affect our revenue and financial performance. The Company has four natural and organic groceries and dietary supplement stores located in Florida, as well as ten located in New York and New Jersey. The Company has closed retail vape stores, as management has shifted its retail sales focus to the wholesale and online channel. The adverse industry trends and increasing federal and state regulations that, if implemented, may negatively impact future wholesale and online operations in the vapor segment.

Increased Competition: Food retail is a large and competitive industry. Our competition varies and includes national, regional, and local conventional supermarkets, national superstores, alternative food retailers, natural foods stores, smaller specialty stores, and farmers’ markets. In addition, we compete with restaurants and other dining options in the food-at-home and food-away-from-home markets. The opening and closing of competitive stores, as well as restaurants and other dining options, in regions where we operate will affect our results. In addition, changing consumer preferences with respect to food choices and to dining out or at home can impact us. We also expect increased product supply and downward pressure on prices to continue and impact our operating results in the future.

Results of Operations

The following table sets forth our unaudited condensed consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 that is used in the following discussions of our results of operations:

	Three Months Ended March 31,						2024 to 2023
	2023			2023			Change $
SALES
Vapor sales, net	$	119		$	38		$	81
Grocery sales, net		15,894,358			13,559,706			2,334,652
TOTAL SALES, NET		15,894,477			13,559,744			2,334,733

Cost of sales vapor		132			653			(521	)
Cost of sales grocery		9,839,981			8,644,700			1,195,281
GROSS PROFIT		6,054,364			4,914,391			1,139,973

OPERATING EXPENSES
Selling, general and administrative		8,859,017			6,897,438			1,961,579
LOSS FROM OPERATIONS		(2,804,653	)		(1,983,047	)		(821,606	)

OTHER INCOME (EXPENSE)
(Loss) gain on investment		(857	)		(4,457	)		3,600
Other income (expense), net		3,355			(17,450	)		20,805
Interest income		(58,992	)		97,653			(156,645	)
Total other income (expense), net		(56,494	)		75,746			(132,240	)

NET LOSS	$	(2,861,147	)	$	(1,907,301	)	$	(953,846	)

Net vapor sales remained approximately unchanged for the three months ended March 31, 2024 as compared to the same period in 2023. The Company closed all its brick-and-mortar retail vape stores, as management had shifted its retail sales focus to the wholesale and online channel. The sales for the three months ended March 31, 2024 and 2023 continued to be significantly impacted by technical issues associated with the processing of credit card payments on the Q-Cup.com website and the inability to bring new products to market via distribution.

Net grocery sales increased $2.3 million to $15.9 million for the three months ended March 31, 2024 as compared to $13.6 million for the same period in 2023. The increase in grocery sales was primarily due to the acquisition of Ellwood Thompson’s, offset by a slight decrease in same-store sales of $0.6 million; this was in large part attributable to the closing of the non-performing Saugerties store and the outsourced prepared food service in Ada’s Natural Food store which was an underperforming department.

Vapor cost of goods sold for the three months ended March 31, 2024 and 2023 remained unchanged. The Company closed all its brick-and-mortar retail vape stores, as management has shifted its retail sales focus to the wholesale and online channel. The cost of goods sold for the three months ended March 31, 2024 and 2023 continued to be significantly impacted by technical issues associated with the processing of credit card payments on the Q-Cup.com website and the inability to bring new products to market via distribution.

Grocery cost of goods sold for the three months ended March 31, 2024 and 2023 were $9.8 million and $8.6 million, respectively. The increase of $1.8 million is primarily due to the acquisition of Ellwood Thompson’s, offset by a decrease in same-store cost of goods sold of $0.6 million. Gross profit was $6.1 million and $4.9 million for the three months ended March 31, 2024 and 2023, respectively. Gross margin as a percentage of sales increased approximately 2.0% as compared to the same period in prior year because of the closing of the non-performing Saugerties store and the outsourced prepared food service in Ada’s Natural Food store which was an underperforming department.

Total operating expenses increased $2.0 million to $8.9 million for the three months ended March 31, 2024 compared to $6.9 million for the same period in 2023. The increase is primarily due to the acquisition of Ellwood Thompson’s on October 1, 2023 which accounted for $0.9 million of operating expenses as well as the increase in stock-based compensation expense of $1.1 million.

Total other (expenses) income, net of $56,000 for the three months ended March 31, 2024 consists of net interest expense of $59,000, offset by $3,000 other income. Total other (expenses) income, net of $76,000 for the three months ended March 31, 2023 consists of interest income of $98,000 and other expense of $22,000.

Liquidity and Capital Resources

	Three Months Ended March 31,
	2024			2023
Net cash (used in) provided by
Operating activities	$	(2,374,113	)	$	(2,344,310	)
Investing activities		(121,405	)		(109,931	)
Financing activities		1,319,233			(742,164	)
	$	(1,176,285	)	$	(3,196,405	)

Our net cash used in operating activities of approximately $2.4 million for the three months ended March 31, 2024 resulted from a net loss of $2.9 million, offset by a non-cash adjustment of $3.0 million and a net cash usage of $2.5 million from changes in operating assets and liabilities. Our net cash used in operating activities of approximately $2.3 million for the three months ended March 31, 2023 resulted from a net loss of $1.9 million, offset by a non-cash adjustment of $1.7 million and a net cash usage of $2.1 million from changes in operating assets and liabilities.

The net cash used in investing activities of $0.1 million for the three months ended March 31, 2024 resulted from purchases of property and equipment. The net cash used in investing activities of $0.1 million for the three months ended March 31, 2023 resulted from collection on a note receivable and purchases of property and equipment.

The net cash provided by financing activities of $1.3 million for the three months ended March 31, 2024 consists of cash proceeds of $1.7 million from Security Purchase Agreement (“SPA”) signed on January 18, 2024, principal payment on loan payable of $0.2 million, and payment for deferred offering cost of $0.2 million. The net cash used in financing activities of $0.7 million for the three months ended March 31, 2023 is due to Series E Preferred Stock redemption and exercise and principal payment on loan payable.

At March 31, 2024 and December 31, 2023, we did not have any material financial guarantees or other contractual commitments with vendors that are reasonably likely to have an adverse effect on liquidity.

Our cash balances are kept liquid to support our growing acquisition and infrastructure needs for operational expansion. Most of our cash and cash equivalent are concentrated in one financial institution and is generally in excess of the FDIC insurance limit. The Company has not experienced any losses on its cash. The following table presents the Company’s cash position as of March 31, 2024 and December 31, 2023.

	March 31, 2024			December 31, 2023
Cash and cash equivalent	$	3,904,801		$	5,081,086
Total assets	$	29,131,526		$	30,969,579
Percentage of total assets		13.40	%		16.41	%

The Company reported a net loss of $2.9 million for the three months ended March 31, 2024. The Company also had negative working capital of $1.5 million. The Company expects to continue incurring losses for the foreseeable future. Management has made plans to reduce certain costs and raise needed capital, however there can be no assurance the Company can successfully implement these plans. The Company anticipates its current cash and cash generated from operations will not be sufficient to meet projected operating expenses for the foreseeable future through at least twelve months from the issuance of the consolidated financial statements.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and Estimates

Our management’s discussion and analysis of financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to exercise considerable judgment with respect to establishing sound accounting policies and in making estimates and assumptions that affect the reported amounts of our assets and liabilities, our recognition of revenues and expenses, and disclosure of commitments and contingencies at the date of the condensed consolidated financial statements.

We base our estimates on our historical experience, knowledge of our business and industry, current and expected economic conditions, the attributes of our products, the regulatory environment, and in certain cases, the results of outside appraisals. We periodically re-evaluate our estimates and assumptions with respect to these judgments and modify our approach when circumstances indicate that modifications are necessary. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

While we believe that the factors we evaluate provide us with a meaningful basis for establishing and applying sound accounting policies, we cannot guarantee that the results will always be accurate. Since the determination of these estimates requires the exercise of judgment, actual results could differ from such estimates.

There have been no material changes to the Company’s critical accounting policies and estimates as compared to the critical accounting policies and estimates described in the 2023 Annual Report, which we believe are the most critical to our business and the understanding of our results of operations and affect the more significant judgments and estimates that we use in the preparation of our condensed consolidated financial statements.

Seasonality

We do not consider our business to be seasonal.

Cautionary Note Regarding Forward-Looking Statements

This report includes forward-looking statements including statements regarding retail expansion, the future demand for our products, the transition to vaporizer and other products, competition, the adequacy of our cash resources and our authorized Common Stock, and our continued ability to raise capital.

The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

The results anticipated by any or all of these forward-looking statements might not occur. Important factors that could cause actual results to differ from those in the forward-looking statements include our future common stock price, the timing of future Series D preferred stock exercises and stock sales, customer acceptance of our products, and proposed federal and state regulation. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

We are required to report under Section 404(a) of Sarbanes-Oxley regarding the effectiveness of our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures

Our management, including our Principal Executive Officer and Principal Financial Officer, did not carry out an evaluation on internal controls as of March 31, 2023 in regard to the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the Exchange Act. As an evaluation was not carried out, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report.

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of its internal control over financial reporting based on the framework established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s internal control over financial reporting was ineffective as of March 31, 2024 and noted the material weaknesses as follows:

	●	Failure to have properly documented and designed disclosure controls and procedures and testing of the operating effectiveness of our internal control over financial reporting.

	●	Failure to perform periodic and year-end inventory observations in a timely manner and adequate controls to sufficiently perform required rollback procedures of inventory counts to the year-end.

	●	Weakness around purchase orders and inventory procedures, inclusive of year-end physical inventory observation procedures as well as physical count procedures.

	●	Segregation of duties due to lack of personnel.

	●	Failure to follow accounts payable policies and procedures for vendor information updates.

	●	The Company had ineffective design, implementation and, operation of controls over logical access, program change management, and vendor management controls. The Company controls on IT should have included the following:

		○	Appropriate restrictions that would adequately prevent users from gaining inappropriate access to the financially relevant systems.

		○	IT program and data changes affecting the Company’s financial IT applications and underlying accounting records, should be identified, tested, authorized and implemented appropriately to validate that data produced by its relevant IT system(s) were complete and accurate.

		○	Obtaining and reviewing key third party service provider SOC reports.

Our management concluded that considering internal control deficiencies that, in the aggregate, rise to the level of material weaknesses, we did not maintain effective internal control over financial reporting as of March 31, 2023 based on the criteria set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Planned Remediation

Management continues to work to improve its controls related to our material weaknesses listed above. In order to achieve the timely implementation of the above, management has commenced the following actions and will continue to assess additional opportunities for remediation on an ongoing basis:

	●	Continuing to increase headcount across the Company, with a particular focus on hiring individuals with strong internal control backgrounds and inventory expertise.

	●	Increasing its focus on the Company’s purchase order process in order to better manage inventory thereby improving cash management and ultimately leading to more reliable and precise financial reporting.

	●	Establishing policies and procedures in the IT area to mitigate data breach, unauthorized access and address segregation of duties, as well as review key third party service provider SOC reports.

	●	Using business intelligence to combine business analytics, data tools and infrastructure to help the Company quickly identify the issues in POS system and facilitate internal control over financial reporting. Developing dashboards for operation to monitor the margin at store level, department level and sku level.

	●	Establishing procedures and enforcing quarterly perishable physical inventory count for all retail stores and analyzing the financial impacts to improve efficiency in inventory control and purchase control.

	●	Providing sufficient training to accounts payable associates and enforcing accounts payable policies and procedures.

We are currently working to improve and simplify our internal processes and implement enhanced controls, as discussed above, to address the material weaknesses in our internal control over financial reporting and to remedy the ineffectiveness of our disclosure controls and procedures. These material weaknesses will not be considered to be remediated until the applicable remediated controls are operating for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Controls over Financing Reporting

Except as detailed above, during the quarter ended March 31, 2024, there were no significant changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

On November 30, 2020, the Company filed a patent infringement lawsuit against Philip Morris USA, Inc. and Philip Morris Products S.A. in the U.S. District Court for the Northern District of Georgia. The lawsuit alleges infringement on HCMC-owned patent(s) by the Philip Morris product known and marketed as “IQOS®”. Philip Morris claims that it is currently approaching 14 million users of its IQOS® product and has reportedly invested over $3 billion in their smokeless tobacco products. On December 3, 2021, the District Court for the Northern District of Georgia effectively dismissed HCMC’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. On December 14, 2021, the Company filed a notice of appeal of the District Court for the Northern District of Georgia’s dismissal of the Company’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. The appeal brief was filed on February 28, 2022.

On December 3, 2021, the District Court for the Northern District of Georgia effectively dismissed HCMC’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. In connection with such dismissal, the defendants sought to recover attorney’s fees from the Plaintiff. On February 22, 2022, the District Court for the Northern District of Georgia granted the defendant’s an award of approximately $575,000 in attorneys’ fees to be paid by the Company. HCMC appealed this ruling on June 22, 2022.

From time to time the Company is involved in legal proceedings arising in the ordinary course of our business. We believe that there is no other litigation pending that is likely to have, individually or in the aggregate, a material adverse effect on our financial condition or results of operations as of March 31, 2023. With respect to legal costs, we record such costs as incurred.

ITEM 1A. RISK FACTORS.

Not Applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

In connection with the Bridge Financing, in addition to the Notes, HCWC issued Bridge Warrants will entitle the holders thereof to purchase 188,889 shares of HCWC’s Class A common stock (the “Bridge Warrant Shares”) at a nominal exercise price of $0.01 per share, at any time on or after HCWC’s registration statement on Form S-1 for the initial registration of the Class A common stock (the “IPO”) is declared effective by the United State Securities and Exchange Commission. HCWC has agreed to register all of the Bridge Warrant Shares in connection with the IPO. The issuance of the Notes and the Bridge Warrants are exempt from registration pursuant to the provisions Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506(b) of Regulation D, as promulgated by the Commission, on the basis that the Issuer and HCWC had a pre-existing relationship with the investor and there was no public offering. The Bridge Warrants may not be offered or sold absent their registration for resale or the availability of an exemption therefrom. HCWC expects to use the proceeds from the sale of the Securities for general working capital purposes.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5. OTHER INFORMATION.

Not Applicable.

ITEM 6. EXHIBITS.

See the exhibits listed in the accompanying “Index to Exhibits.”

INDEX TO EXHIBITS

Exhibit		Incorporated by Reference			Filed or Furnished
No.	Exhibit Description	Form	Date	Number	Herewith
31.1	Certification of Principal Executive Officer (302)				Filed
31.2	Certification of Principal Financial Officer (302)				Filed
32.1	Certification of Principal Executive Officer (906)				Furnished *
32.2	Certification of Principal Financial Officer (906)				Furnished *
101.INS	Inline XBRL Instance Document				Filed
101.SCH	Inline XBRL Taxonomy Extension Schema Document				Filed
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document				Filed
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document				Filed
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document				Filed
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document				Filed
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)				Filed

* This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HEALTHIER CHOICES MANAGEMENT CORP.

Date: May 9, 2024	By:	/s/ Jeffrey Holman
		Jeffrey Holman
		Chief Executive Officer

Date: May 9, 2024	By:	/s/ John Ollet
		John Ollet
		Chief Financial Officer

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Jeffrey Holman, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Healthier Choices Management Corp.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2024

	/s/ Jeffrey Holman
	Jeffrey Holman
	Chief Executive Officer
	(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, John Ollet, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Healthier Choices Management Corp.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 9, 2024

	/s/ John Ollet
	John Ollet
	Chief Financial Officer
	(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Healthier Choices Management Corp. (the “Company”) on Form 10-Q for the quarter ending March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof, I, Jeffrey Holman, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

	1.	The quarterly report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and

	2.	The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2024

	/s/ Jeffrey Holman
	Jeffrey Holman
	Chief Executive Officer
	(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Healthier Choices Management Corp. (the “Company”) on Form 10-Q for the quarter ending March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof, I, John Ollet, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

	1.	The quarterly report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and

	2.	The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 9, 2024

	/s/ John Ollet
	John Ollet
	Chief Financial Officer
	(Principal Financial Officer)

Cover - shares	3 Months Ended
Cover - shares	Mar. 31, 2024	May 08, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Mar. 31, 2024
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-36469
Entity Registrant Name	HEALTHIER CHOICES MANAGEMENT CORP.
Entity Central Index Key	0000844856
Entity Tax Identification Number	84-1070932
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	3800 North 28th Way
Entity Address, City or Town	Hollywood
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33020
City Area Code	305
Local Phone Number	600-5004
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	HCMC
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		479,266,632,384

Condensed Consolidated Balance Sheets - USD ($)	Mar. 31, 2024	Dec. 31, 2023
CURRENT ASSETS
Cash and cash equivalent	$ 3,904,801	$ 5,081,086
Accounts receivable, net	166,273	128,171
Inventories	4,177,069	4,228,889
Prepaid expenses and vendor deposits	1,990,323	1,668,324
Assets held for sale	543,854
Other current assets	86,257	65,556
Restricted cash	553,232	553,232
TOTAL CURRENT ASSETS	11,421,809	11,725,258
Property, plant, and equipment, net of accumulated depreciation	2,173,600	2,735,252
Intangible assets, net of accumulated amortization	4,136,338	4,376,682
Right of use asset – operating lease, net	10,767,755	11,511,002
Other assets	632,024	621,385
TOTAL ASSETS	29,131,526	30,969,579
CURRENT LIABILITIES
Accounts payable and accrued expenses	7,108,075	8,024,664
Contract liabilities	179,916	207,513
Line of credit	453,232	453,232
Current portion of loan payment	2,432,135	702,701
Operating lease liability, current	2,774,469	2,842,829
TOTAL CURRENT LIABILITIES	12,947,827	12,230,939
Loan payable, net of current portion	2,221,462	2,403,807
Operating lease liability, net of current	7,827,417	8,465,617
TOTAL LIABILITIES	22,996,706	23,100,363
COMMITMENTS AND CONTINGENCIES (SEE NOTE 13)
CONVERTIBLE PREFERRED STOCK
Series E redeemable convertible preferred stock, $1,000 par value per share, 14,722 shares authorized, 1,111 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively: aggregate liquidation preference of $1.1 million as of March 31, 2024 and December 31, 2023, respectively	1,111,100	1,111,100
STOCKHOLDERS’ EQUITY
Common Stock, $0.0001 par value per share, 750,000,000,000 shares authorized; 478,266,632,384 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	47,826,663	47,826,663
Additional paid-in capital	22,155,025	21,028,274
Accumulated deficit	(64,957,968)	(62,096,821)
TOTAL STOCKHOLDERS’ EQUITY	5,023,720	6,758,116
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY	$ 29,131,526	$ 30,969,579

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Series E convertible preferred stock, par value	$ 1,000	$ 1,000
Series E convertible preferred stock, authorized	14,722	14,722
Series E convertible preferred stock, issued	1,111	1,111
Series E convertible preferred stock, outstanding	1,111	1,111
Series E convertible preferred stock, aggregate liquidation preference	$ 1.1	$ 1.1
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	750,000,000,000	750,000,000,000
Common stock, shares issued	478,266,632,384	478,266,632,384
Common stock, shares outstanding	478,266,632,384	478,266,632,384

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
SALES
TOTAL SALES, NET	$ 15,894,477	$ 13,559,744
Cost of sales vapor	132	653
Cost of sales grocery	9,839,981	8,644,700
GROSS PROFIT	6,054,364	4,914,391
OPERATING EXPENSES	8,859,017	6,897,438
LOSS FROM OPERATIONS	(2,804,653)	(1,983,047)
OTHER INCOME (EXPENSE)
Loss on investment	(857)	(4,457)
Other income (expense), net	3,355	(17,450)
Interest (expense) income, net	(58,992)	97,653
Total other income (expense), net	(56,494)	75,746
Net loss	(2,861,147)	(1,907,301)
Induced conversions of Preferred Stock		(61,000)
Net loss attributable to common stockholders	$ (2,861,147)	$ (1,968,301)
NET LOSS PER SHARE-BASIC	$ 0.00	$ 0.00
NET LOSS PER SHARE-DILUTED	$ 0.00	$ 0.00
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC	478,266,632,384	341,671,076,830
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-DILUTED	478,266,632,384	341,671,076,830
Vapor [Member]
SALES
TOTAL SALES, NET	$ 119	$ 38
Grocery [Member]
SALES
TOTAL SALES, NET	$ 15,894,358	$ 13,559,706

Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders' Equity (Unaudited) - USD ($)	Preferred Stock [Member] Convertible Preferred Stock [Member]	Preferred Stock [Member] Series E Redeemable Convertible Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2022	$ 800,000		$ 33,974,163	$ 29,045,802	$ (43,613,941)	$ 20,206,024
Balance, shares at Dec. 31, 2022		14,722
Balance at Dec. 31, 2022		$ 14,722,075
Balance, shares at Dec. 31, 2022	800		339,741,632,384
Stock-based compensation expense				50,000		50,000
Net loss					(1,907,301)	(1,907,301)
Series E convertible preferred stock redeemed
Temporary equity,Series E convertible preferred stock redeemed, shares		(556)
Temporary equity,Series E convertible preferred stock redeemed		(555,550)
Conversion of series E convertible preferred stock			$ 670,000			670,000
Temporary equity,Conversion of series E convertible preferred stock, shares		(670)
Temporary equity,Conversion of series E convertible preferred stock		(670,000)
Conversion of series E convertible preferred stock, shares			6,700,000,000
Induced conversions of preferred stock				(61,000)		(61,000)
Balance at Mar. 31, 2023	$ 800,000		$ 34,644,163	29,034,802	(45,521,242)	18,957,723
Balance, shares at Mar. 31, 2023		13,497
Balance at Mar. 31, 2023		$ 13,496,525
Balance, shares at Mar. 31, 2023	800		346,441,632,384
Balance at Dec. 31, 2023			$ 47,826,663	21,028,274	(62,096,821)	$ 6,758,116
Balance, shares at Dec. 31, 2023		1,111				1,111
Balance at Dec. 31, 2023		$ 1,111,100				$ 1,111,100
Balance, shares at Dec. 31, 2023			478,266,632,384
Stock-based compensation expense				1,126,751		1,126,751
Net loss					(2,861,147)	(2,861,147)
Induced conversions of preferred stock
Balance at Mar. 31, 2024			$ 47,826,663	$ 22,155,025	$ (64,957,968)	$ 5,023,720
Balance, shares at Mar. 31, 2024		1,111				1,111
Balance at Mar. 31, 2024		$ 1,111,100				$ 1,111,100
Balance, shares at Mar. 31, 2024			478,266,632,384

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
OPERATING ACTIVITIES
Net loss	$ (2,861,147)	$ (1,907,301)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	379,547	373,462
Amortization of debt discount	18,841
Loss on investment	857	4,457
Amortization of right-of-use asset	743,247	695,192
Write-down of obsolete and slow-moving inventory	743,419	523,087
Stock-based compensation expense	1,126,751	50,000
Change in contingent consideration		22,100
Changes in operating assets and liabilities:
Accounts receivable	(38,102)	(44,818)
Inventories	(691,599)	(673,392)
Prepaid expenses and vendor deposits	362,117	(255,387)
Other current assets	(20,701)	279,701
Other assets	(11,496)	771
Accounts payable and accrued expenses	(1,391,690)	(744,145)
Contract liabilities	(27,597)	1,766
Lease liability	(706,560)	(669,803)
NET CASH USED IN OPERATING ACTIVITIES	(2,374,113)	(2,344,310)
INVESTING ACTIVITIES
Collection of note receivable		16,320
Purchases of property and equipment	(121,405)	(126,251)
NET CASH USED IN INVESTING ACTIVITIES	(121,405)	(109,931)
FINANCING ACTIVITIES
Payments for deferred offering costs	(209,015)
Proceeds from security purchase agreement	1,700,000
Principal payments on loan payable	(171,752)	(131,614)
Payment of induced conversions of preferred stock		(55,000)
Payment for series E preferred stock redemption		(555,550)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	1,319,233	(742,164)
NET DECREASE IN CASH, CASH EQUIVALENT AND RESTRICTED CASH	(1,176,285)	(3,196,405)
CASH, CASH EQUIVALENT AND RESTRICTED CASH— BEGINNING OF PERIOD	5,634,318	24,690,124
CASH, CASH EQUIVALENT AND RESTRICTED CASH — END OF PERIOD	4,458,033	21,493,719
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	104,505	44,478
Cash paid for income tax
NON-CASH INVESTING AND FINANCING ACTIVITIES
Non-cash deferred offering cost	475,101
Issuance of common stock in connection with series E preferred stock conversion		670,000
Right-of-use assets obtained in exchange for operating lease liabilities		1,093,290
Accrued payment of induced conversions of preferred stock		$ 6,000

ORGANIZATION

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

ORGANIZATION

Note 1. ORGANIZATION

Organization

Healthier Choices Management Corp. (the “Company”) is a holding company focused on providing consumers with healthier daily choices with respect to nutrition and other lifestyle alternatives.

Through its wholly owned subsidiary HCMC Intellectual Property Holdings, LLC, the Company manages and intends to expand on its intellectual property portfolio.

Through its wholly owned subsidiary Healthy Choice Wellness Corp. (“HCWC”), the Company operates:

●	Ada’s Natural Market, a natural and organic grocery store offering fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, health & beauty products and natural household items.

●	Paradise Health & Nutrition’s three stores that likewise offer fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, health & beauty products and natural household items.

●	Mother Earth’s Storehouse, a two-store organic and health food and vitamin chain in New York’s Hudson Valley, which has been in existence for over 40 years.

●	Greens Natural Foods’ eight stores in New York and New Jersey, offering a selection of 100% organic produce and all-natural, non-GMO groceries & bulk foods; a wide selection of local products; an organic juice and smoothie bar; a fresh foods department, which offers fresh and healthy “grab & go” foods; a full selection of vitamins & supplements; as well as health and beauty products.

●	Ellwood Thompson’s, an organic and natural health food and vitamin store located in Richmond, Virginia.

Through its wholly owned subsidiary, Healthy U Wholesale, the Company sells vitamins and supplements, as well as health, beauty, and personal care products on its website www.TheVitaminStore.com.

Spin-Off

GOING CONCERN AND MANAGEMENT’S PLANS

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

GOING CONCERN AND MANAGEMENT’S PLANS

Note 2. GOING CONCERN AND MANAGEMENT’S PLANS

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Note 3. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2023 Annual Report.

CONCENTRATIONS

3 Months Ended

Mar. 31, 2024

Risks and Uncertainties [Abstract]

CONCENTRATIONS

Note 4. CONCENTRATIONS

Cash, Cash Equivalent and Restricted Cash

A summary of the financial institution that had cash and cash equivalent in excess of FDIC limits of $250,000 on March 31, 2024 and December 31, 2023 is presented below:

		March 31, 2024				December 31, 2023
Total cash and cash equivalent in excess of FDIC limits of $250,000		$	2,516,118			$	3,814,426

The following table provides a reconciliation of cash, cash equivalent and restricted cash to amounts shown in unaudited condensed consolidated statements of cash flow:

SCHEDULE OF CASH AND RESTRICTED CASH

	March 31, 2024		March 31, 2023
Cash and cash equivalent	$	3,904,801	$	19,765,487
Restricted cash		553,232		1,728,232
Total cash and restricted cash	$	4,458,033	$	21,493,719

Restricted Cash

SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES

Note 5. SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES

The Company’s general and administrative costs are not segment specific. As a result, all operating expenses are not managed on segment basis.

	2023			2023
	Three Months Ended March 31,
	2024			2023
Vapor	$	119		$	38
Grocery		15,894,358			13,559,706
Total revenue	$	15,894,477		$	13,559,744

Wholesale/Online Vapor	$	119		$	38
Retail Grocery		13,478,803			11,613,730
Food service/restaurant		2,414,994			1,943,914
Online/eCommerce		561			2,062
Total revenue	$	15,894,477		$	13,559,744

Loss from operations - Vapor		(5,862	)		(6,672	)
Income (loss) from operations - Grocery		93,461			(276,842	)
Corporate items		(2,892,252	)		(1,699,533	)
Total loss from operations	$	(2,804,653	)	$	(1,983,047	)

ACQUISITION

3 Months Ended

Mar. 31, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

ACQUISITION

Note 6. ACQUISITION

Ellwood Thompson’s

The following table summarizes the purchase price allocation based on fair values of the net assets acquired at the acquisition date:

	October 1, 2023
Purchase Consideration
Cash consideration paid	$	750,000
Promissory note		718,000
Total Purchase Consideration	$	1,468,000

Purchase price allocation
Inventory	$	851,000
Intangible assets		291,000
Right of use asset - Operating lease		1,325,000
Other liabilities		(31,000	)
Operating lease liability		(1,325,000	)
Goodwill		357,000
Net assets acquired	$	1,468,000

Finite-lived intangible assets
Trade Names (8 years)	$	291,000
Total intangible assets	$	291,000

The acquisition is structured as asset purchase in a business combination, and goodwill is tax-deductible, and amortizable over 15 years for tax purposes.

Revenue and Earnings

For Three Months Ended

March 31, 2023

Sales

16,533,127

Net loss

(1,918,800

)

ASSETS HELD FOR SALE

3 Months Ended

Mar. 31, 2024

Assets Held For Sale

ASSETS HELD FOR SALE

Note 7. ASSETS HELD FOR SALE

PROPERTY, PLANT, AND EQUIPMENT

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT, AND EQUIPMENT

Note 8. PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment consist of the following:

	March 31, 2024			December 31, 2023
Displays	$	312,146		$	312,146
Building		-			575,000
Furniture and fixtures		597,709			596,355
Leasehold improvements		1,956,051			1,925,385
Computer hardware & equipment		234,404			190,019
Other		733,774			688,774
Property and equipment, gross		3,834,084			4,287,679
Less: accumulated depreciation and amortization		(1,660,484	)		(1,552,427	)
Total property, plant, and equipment	$	2,173,600		$	2,735,252

The Company incurred approximately $139,000 and $143,000 of depreciation expense for the three months ended March 31, 2024 and 2023, respectively.

INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

Note 9. INTANGIBLE ASSETS

Intangible assets, net are as follows:

SCHEDULE OF INTANGIBLE ASSETS, NET

March 31, 2024	Useful Lives (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trade names	8-10 years	$	2,860,000	$	(1,119,301	)	$	1,740,699
Customer relationships	4-6 years		2,669,000		(1,405,389	)		1,263,611
Patents	10 years		397,165		(209,671	)		187,494
Non-compete	4-5 years		1,602,000		(657,466	)		944,534
Intangible assets, net		$	7,528,165	$	(3,391,827	)	$	4,136,338

December 31, 2023	Useful Lives (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trade names	8-10 years	$	2,860,000	$	(1,035,443	)	$	1,843,277
Customer relationships	4-6 years		2,669,000		(1,330,972	)		1,338,028
Patents	10 years		397,165		(199,001	)		198,164
Non-compete	4-5 years		1,602,000		(586,067	)		1,015,933
Intangible assets, net		$	7,528,165	$	(3,151,483	)	$	4,376,682


Years ending December 31,
2024 (remaining nine months)	$	719,046
2025		953,891
2026		875,910
2027		731,489
2028		412,819
Thereafter		443,183
Total	$	4,136,338

CONTRACT LIABILITIES

3 Months Ended

Mar. 31, 2024

Contract Liabilities

CONTRACT LIABILITIES

Note 10. CONTRACT LIABILITIES

A summary of the net changes in contract liabilities activity at March 31, 2024 and December 31, 2023 is presented below:

	March 31, 2024			December 31, 2023
Beginning balance as January 1,	$	207,513		$	198,606
Issued		706,971			891,060
Redeemed		(671,786	)		(812,694	)
Breakage recognized		(62,782	)		(69,459	)
Ending balance	$	179,916		$	207,513

DEBT

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

DEBT

Note 11. DEBT

A breakdown of the Company’s debt as of March 31, 2024 and December 31, 2023 is presented below:

SCHEDULE OF BREAKDOWN OF DEBT

	March 31, 2024			December 31, 2023
Promissory notes	$	4,823,645		$	3,106,508
Debt discount		(170,048	)		-
Line of credit		453,232			453,232
Total debt, net of debt discount	$	5,106,829		$	3,559,740
Current portion of long-term debt		(2,885,367	)		(1,155,933	)
Long-term debt	$	2,221,462		$	2,403,807

Promissory Notes

The following table summarizes the 5-year repayment schedule:

		-
For the years ending December 31,
2024 (remaining nine months)	$	530,949
2025		2,634,931
2026		792,056
2027		724,333
2028		141,376
Total	$	4,823,645

STOCKHOLDERS’ EQUITY

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

STOCKHOLDERS’ EQUITY

Note 12. STOCKHOLDERS’ EQUITY

Series E Convertible Preferred Stock

Spin-Off

On October 30, 2023, the Company filed Amendment No. 1 to its registration statement on Form S-1 (the “IPO S-1”) with the Commission.

On December 20, 2023, the Company filed Amendment No. 1 to its Spin-off S-1 with the Commission.

On December 21, 2023, the Company filed Amendment No. 2 to its IPO S-1 with the Commission.

On February 13, 2024, the Company filed Amendment No. 2 to its Spin-off S-1 with the Commission with respect to the Spin-Off.

On February 13, 2024, the Company filed Amendment No. 3 to its IPO S-1 with the Commission with respect to the IPO.

Stock Options

Income (Loss) Per Share

SCHEDULE OF DILUTIVE LOSS PER SHARE

	2024		2023
	As of March 31,
	2024		2023
Preferred stock		11,111,000,000		136,215,000,000
Stock options		67,587,222,200		67,587,000,000
Restricted stock		95,590,625,000		5,500,000,000
Total		174,288,847,200		209,302,000,000

COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Note 13. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2024

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

Note 14. SUBSEQUENT EVENTS

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Significant Accounting Policies

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2023 Annual Report.

CONCENTRATIONS (Tables)

3 Months Ended

Mar. 31, 2024

Risks and Uncertainties [Abstract]

SCHEDULE OF CASH AND CASH EQUIVALENTS IN EXCESS OF FDIC LIMIT

		March 31, 2024				December 31, 2023
Total cash and cash equivalent in excess of FDIC limits of $250,000		$	2,516,118			$	3,814,426

SCHEDULE OF CASH AND RESTRICTED CASH

The following table provides a reconciliation of cash, cash equivalent and restricted cash to amounts shown in unaudited condensed consolidated statements of cash flow:

SCHEDULE OF CASH AND RESTRICTED CASH

	March 31, 2024		March 31, 2023
Cash and cash equivalent	$	3,904,801	$	19,765,487
Restricted cash		553,232		1,728,232
Total cash and restricted cash	$	4,458,033	$	21,493,719

SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES (Tables)

3 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

SCHEDULE OF INFORMATION ABOUT REPORTABLE SEGMENTS

	2023			2023
	Three Months Ended March 31,
	2024			2023
Vapor	$	119		$	38
Grocery		15,894,358			13,559,706
Total revenue	$	15,894,477		$	13,559,744

Wholesale/Online Vapor	$	119		$	38
Retail Grocery		13,478,803			11,613,730
Food service/restaurant		2,414,994			1,943,914
Online/eCommerce		561			2,062
Total revenue	$	15,894,477		$	13,559,744

Loss from operations - Vapor		(5,862	)		(6,672	)
Income (loss) from operations - Grocery		93,461			(276,842	)
Corporate items		(2,892,252	)		(1,699,533	)
Total loss from operations	$	(2,804,653	)	$	(1,983,047	)

ACQUISITION (Tables)

3 Months Ended

Mar. 31, 2024

Business Acquisition [Line Items]

SCHEDULE OF SUPPLEMENTAL PRO FORMA INFORMATION

For Three Months Ended

March 31, 2023

Sales

16,533,127

Net loss

(1,918,800

)

Ellwood Thompsons [Member]

Business Acquisition [Line Items]

SUMMARY OF PURCHASE PRICE ALLOCATION BASED ON FAIR VALUES OF THE NET ASSETS ACQUIRED

The following table summarizes the purchase price allocation based on fair values of the net assets acquired at the acquisition date:

	October 1, 2023
Purchase Consideration
Cash consideration paid	$	750,000
Promissory note		718,000
Total Purchase Consideration	$	1,468,000

Purchase price allocation
Inventory	$	851,000
Intangible assets		291,000
Right of use asset - Operating lease		1,325,000
Other liabilities		(31,000	)
Operating lease liability		(1,325,000	)
Goodwill		357,000
Net assets acquired	$	1,468,000

Finite-lived intangible assets
Trade Names (8 years)	$	291,000
Total intangible assets	$	291,000

PROPERTY, PLANT, AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2024

Property, Plant and Equipment [Abstract]

SCHEDULE OF PROPERTY PLANT AND EQUIPMENT

Property, plant, and equipment consist of the following:

	March 31, 2024			December 31, 2023
Displays	$	312,146		$	312,146
Building		-			575,000
Furniture and fixtures		597,709			596,355
Leasehold improvements		1,956,051			1,925,385
Computer hardware & equipment		234,404			190,019
Other		733,774			688,774
Property and equipment, gross		3,834,084			4,287,679
Less: accumulated depreciation and amortization		(1,660,484	)		(1,552,427	)
Total property, plant, and equipment	$	2,173,600		$	2,735,252

INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

SCHEDULE OF INTANGIBLE ASSETS, NET

Intangible assets, net are as follows:

SCHEDULE OF INTANGIBLE ASSETS, NET

March 31, 2024	Useful Lives (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trade names	8-10 years	$	2,860,000	$	(1,119,301	)	$	1,740,699
Customer relationships	4-6 years		2,669,000		(1,405,389	)		1,263,611
Patents	10 years		397,165		(209,671	)		187,494
Non-compete	4-5 years		1,602,000		(657,466	)		944,534
Intangible assets, net		$	7,528,165	$	(3,391,827	)	$	4,136,338

December 31, 2023	Useful Lives (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Trade names	8-10 years	$	2,860,000	$	(1,035,443	)	$	1,843,277
Customer relationships	4-6 years		2,669,000		(1,330,972	)		1,338,028
Patents	10 years		397,165		(199,001	)		198,164
Non-compete	4-5 years		1,602,000		(586,067	)		1,015,933
Intangible assets, net		$	7,528,165	$	(3,151,483	)	$	4,376,682

SCHEDULE OF FUTURE ANNUAL ESTIMATED AMORTIZATION EXPENSE


Years ending December 31,
2024 (remaining nine months)	$	719,046
2025		953,891
2026		875,910
2027		731,489
2028		412,819
Thereafter		443,183
Total	$	4,136,338

CONTRACT LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2024

Contract Liabilities

SUMMARY OF CONTRACT LIABILITIES ACTIVITY

A summary of the net changes in contract liabilities activity at March 31, 2024 and December 31, 2023 is presented below:

	March 31, 2024			December 31, 2023
Beginning balance as January 1,	$	207,513		$	198,606
Issued		706,971			891,060
Redeemed		(671,786	)		(812,694	)
Breakage recognized		(62,782	)		(69,459	)
Ending balance	$	179,916		$	207,513

DEBT (Tables)

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

SCHEDULE OF BREAKDOWN OF DEBT

A breakdown of the Company’s debt as of March 31, 2024 and December 31, 2023 is presented below:

SCHEDULE OF BREAKDOWN OF DEBT

	March 31, 2024			December 31, 2023
Promissory notes	$	4,823,645		$	3,106,508
Debt discount		(170,048	)		-
Line of credit		453,232			453,232
Total debt, net of debt discount	$	5,106,829		$	3,559,740
Current portion of long-term debt		(2,885,367	)		(1,155,933	)
Long-term debt	$	2,221,462		$	2,403,807

SCHEDULE OF MATURITIES OF LONG TERM DEBT

The following table summarizes the 5-year repayment schedule:

		-
For the years ending December 31,
2024 (remaining nine months)	$	530,949
2025		2,634,931
2026		792,056
2027		724,333
2028		141,376
Total	$	4,823,645

STOCKHOLDERS’ EQUITY (Tables)

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

SCHEDULE OF DILUTIVE LOSS PER SHARE

	2024		2023
	As of March 31,
	2024		2023
Preferred stock		11,111,000,000		136,215,000,000
Stock options		67,587,222,200		67,587,000,000
Restricted stock		95,590,625,000		5,500,000,000
Total		174,288,847,200		209,302,000,000

ORGANIZATION (Details Narrative)	Mar. 31, 2024 Store
Restructuring Cost and Reserve [Line Items]
Number of stores	3
Mother Earths Store house [Member]
Restructuring Cost and Reserve [Line Items]
Number of stores	2
Green's Natural Foods [Member]
Restructuring Cost and Reserve [Line Items]
Number of stores	8

GOING CONCERN AND MANAGEMENT’S PLANS (Details Narrative) - USD ($)	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash	$ 3,904,801	$ 5,081,086	$ 19,765,487
Working capital	$ 1,500,000

SCHEDULE OF CASH AND CASH EQUIVALENTS IN EXCESS OF FDIC LIMIT (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Risks and Uncertainties [Abstract]
Total cash and cash equivalent in excess of FDIC limits of $250,000	$ 2,516,118	$ 3,814,426

SCHEDULE OF CASH AND CASH EQUIVALENTS IN EXCESS OF FDIC LIMIT (Details) (Parenthetical) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Risks and Uncertainties [Abstract]
FDIC insured amount	$ 250,000	$ 250,000

SCHEDULE OF CASH AND RESTRICTED CASH (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023	Mar. 31, 2023	Dec. 31, 2022
Risks and Uncertainties [Abstract]
Cash and cash equivalent	$ 3,904,801	$ 5,081,086	$ 19,765,487
Restricted cash	553,232	553,232	1,728,232
Total cash and restricted cash	$ 4,458,033	$ 5,634,318	$ 21,493,719	$ 24,690,124

CONCENTRATIONS (Details Narrative) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Risks and Uncertainties [Abstract]
Cash equivalents	$ 503,000	$ 0
FDIC insured amount	$ 250,000	$ 250,000

SCHEDULE OF INFORMATION ABOUT REPORTABLE SEGMENTS (Details) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Segment Reporting Information [Line Items]
Total revenue	$ 15,894,477	$ 13,559,744
Total loss from operations	(2,804,653)	(1,983,047)
Wholesale Online Vapor [Member]
Segment Reporting Information [Line Items]
Total revenue	119	38
Retail Grocery [Member]
Segment Reporting Information [Line Items]
Total revenue	13,478,803	11,613,730
Food Service and Restaurant [Member]
Segment Reporting Information [Line Items]
Total revenue	2,414,994	1,943,914
Online and ECommerce [Member]
Segment Reporting Information [Line Items]
Total revenue	561	2,062
Operating Segments [Member] \| Vapor [Member]
Segment Reporting Information [Line Items]
Total revenue	119	38
Total loss from operations	(5,862)	(6,672)
Operating Segments [Member] \| Grocery [Member]
Segment Reporting Information [Line Items]
Total revenue	15,894,358	13,559,706
Total loss from operations	93,461	(276,842)
Segment Reporting, Reconciling Item, Corporate Nonsegment [Member]
Segment Reporting Information [Line Items]
Total loss from operations	$ (2,892,252)	$ (1,699,533)

SUMMARY OF PURCHASE PRICE ALLOCATION BASED ON FAIR VALUES OF THE NET ASSETS ACQUIRED (Details) - Ellwood Thompsons [Member]	Oct. 01, 2023 USD ($)
Business Acquisition [Line Items]
Cash consideration paid	$ 750,000
Promissory note	718,000
Total Purchase Consideration	1,468,000
Inventory	851,000
Total intangible assets	291,000
Right of use asset - Operating lease	1,325,000
Other liabilities	(31,000)
Operating lease liability	(1,325,000)
Goodwill	357,000
Net assets acquired	1,468,000
Total intangible assets	291,000
Trademarks and Trade Names [Member]
Business Acquisition [Line Items]
Total intangible assets	$ 291,000

SCHEDULE OF SUPPLEMENTAL PRO FORMA INFORMATION (Details)	3 Months Ended
	Mar. 31, 2023 USD ($)
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]
Sales	$ 16,533,127
Net loss	$ (1,918,800)

ACQUISITION (Details Narrative) - Ellwood Thompsons [Member] - USD ($)		3 Months Ended		12 Months Ended
	Oct. 01, 2023	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Business Acquisition [Line Items]
Amortization period for goodwill for tax purposes	15 years
Promissory Notes [Member]
Business Acquisition [Line Items]
Principal amount	$ 750,000
Debt fair value	$ 718.00
Interest expense		$ 11,000	$ 0	$ 32,000

ASSETS HELD FOR SALE (Details Narrative)	Feb. 07, 2024 USD ($)
Building [Member]
Property, Plant and Equipment [Line Items]
Net carring value	$ 544,000

SCHEDULE OF PROPERTY PLANT AND EQUIPMENT (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 3,834,084	$ 4,287,679
Less: accumulated depreciation and amortization	(1,660,484)	(1,552,427)
Total property, plant, and equipment	2,173,600	2,735,252
Displays [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	312,146	312,146
Building [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross		575,000
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	597,709	596,355
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,956,051	1,925,385
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	234,404	190,019
Other Machinery and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 733,774	$ 688,774

PROPERTY, PLANT, AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 139,000	$ 143,000

SCHEDULE OF INTANGIBLE ASSETS, NET (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 7,528,165	$ 7,528,165
Accumulated amortization	(3,391,827)	(3,151,483)
Net carrying amount	4,136,338	4,376,682
Trade Names [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	2,860,000	2,860,000
Accumulated amortization	(1,119,301)	(1,035,443)
Net carrying amount	$ 1,740,699	$ 1,843,277
Trade Names [Member] \| Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives	8 years	8 years
Trade Names [Member] \| Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives	10 years	10 years
Customer Relationships [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 2,669,000	$ 2,669,000
Accumulated amortization	(1,405,389)	(1,330,972)
Net carrying amount	$ 1,263,611	$ 1,338,028
Customer Relationships [Member] \| Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives	4 years	4 years
Customer Relationships [Member] \| Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives	6 years	6 years
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 397,165	$ 397,165
Accumulated amortization	(209,671)	(199,001)
Net carrying amount	$ 187,494	$ 198,164
Useful lives	10 years	10 years
Noncompete Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 1,602,000	$ 1,602,000
Accumulated amortization	(657,466)	(586,067)
Net carrying amount	$ 944,534	$ 1,015,933
Noncompete Agreements [Member] \| Minimum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives	4 years	4 years
Noncompete Agreements [Member] \| Maximum [Member]
Finite-Lived Intangible Assets [Line Items]
Useful lives	5 years	5 years

SCHEDULE OF FUTURE ANNUAL ESTIMATED AMORTIZATION EXPENSE (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
2024 (remaining nine months)	$ 719,046
2025	953,891
2026	875,910
2027	731,489
2028	412,819
Thereafter	443,183
Total	$ 4,136,338	$ 4,376,682

INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended
INTANGIBLE ASSETS (Details Narrative) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 240,000	$ 231,000

SUMMARY OF CONTRACT LIABILITIES ACTIVITY (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Contract Liabilities
Beginning balance as January 1,	$ 207,513	$ 198,606
Issued	706,971	891,060
Redeemed	(671,786)	(812,694)
Breakage recognized	(62,782)	(69,459)
Ending balance	$ 179,916	$ 207,513

SCHEDULE OF BREAKDOWN OF DEBT (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Debt Disclosure [Abstract]
Promissory notes	$ 4,823,645	$ 3,106,508
Debt discount	(170,048)
Line of credit	453,232	453,232
Total debt, net of debt discount	5,106,829	3,559,740
Current portion of long-term debt	(2,885,367)	(1,155,933)
Long-term debt	$ 2,221,462	$ 2,403,807

SCHEDULE OF MATURITIES OF LONG TERM DEBT (Details) - USD ($)	Mar. 31, 2024	Dec. 31, 2023
Short-Term Debt [Line Items]
Total	$ 5,106,829	$ 3,559,740
Promissory Notes [Member]
Short-Term Debt [Line Items]
2024 (remaining nine months)	530,949
2025	2,634,931
2026	792,056
2027	724,333
2028	141,376
Total	$ 4,823,645

DEBT (Details Narrative) - USD ($)				3 Months Ended		12 Months Ended
DEBT (Details Narrative) - USD ($)	Jan. 18, 2024	Oct. 01, 2023	Oct. 14, 2022	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Short-Term Debt [Line Items]
Notes payable				$ 4,823,645		$ 3,106,508
Debt discount				170,048
Promissory Notes [Member] \| Green's Natural Foods [Member]
Short-Term Debt [Line Items]
Principal amount			$ 3,000,000
Loan term			5 years
Original issued rate			6.00%
Notes payable				2,239,000		2,378,000
Interest expense				35,000	$ 43,000
Promissory Notes [Member] \| Ellwood Thompsons [Member]
Short-Term Debt [Line Items]
Principal amount		$ 750,000
Loan term		5 years
Original issued rate		6.00%
Interest expense				11,000	$ 0	32,000
Debt outstanding		$ 718,000		696,000		728,000
Debt discount						$ 39,000
Unsecured Promissory Notes [Member] \| Securities Purchase Agreement [Member]
Short-Term Debt [Line Items]
Interest expense				57,000
Debt outstanding				1,889,000
Debt discount				170,000
Debt issued	$ 1,889,000
Gross proceeds	$ 1,700,000
Original issue discount rate	10.00%
interest rate	10.00%
Debt issuance costs				23,500
Debt discount and amortized				189,000
Interest payable				$ 15,000
Unsecured Promissory Notes [Member] \| Securities Purchase Agreement [Member] \| Common Stock [Member]
Short-Term Debt [Line Items]
Debt issued	$ 1,889,000

SCHEDULE OF DILUTIVE LOSS PER SHARE (Details) - shares	3 Months Ended
SCHEDULE OF DILUTIVE LOSS PER SHARE (Details) - shares	Mar. 31, 2024	Mar. 31, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	174,288,847,200	209,302,000,000
Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	11,111,000,000	136,215,000,000
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	67,587,222,200	67,587,000,000
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	95,590,625,000	5,500,000,000

STOCKHOLDERS’ EQUITY (Details Narrative)				3 Months Ended
STOCKHOLDERS’ EQUITY (Details Narrative)	Oct. 30, 2023	May 15, 2023	Aug. 18, 2022 USD ($) $ / shares shares	Mar. 31, 2024 USD ($) shares	Mar. 31, 2023 USD ($)	Mar. 01, 2023
Class of Stock [Line Items]
Redemption value
Stock based compensation				$ 1,127,000	$ 50,000
Series E Convertible Preferred Stock [Member] \| Securities Purchase Agreement [Member]
Class of Stock [Line Items]
Preferred stock shares issued \| shares			14,722
Preferred stock price per share \| $ / shares			$ 1,000
Aggregate subscription price			$ 13,250,000
Conversion rate			1.1111
Offering Costs			$ 410,000
Series E Preferred Stock [Member]
Class of Stock [Line Items]
Convertible preferred stock, shares \| shares				1,585
Conversion of series E convertible preferred stock \| shares				15,850,000,000
Redemption shares \| shares				12,026
Redemption value				$ 12,004,000
Series E Preferred Stock [Member] \| Securities Purchase Agreement [Member]
Class of Stock [Line Items]
Conversion price (in dollars per share) \| $ / shares			$ 0.0001
Preferred stock price per share \| $ / shares			$ 1,000
Series E Preferred Stock [Member] \| First Amendment To Securities Purchase Agreement [Member]
Class of Stock [Line Items]
Percentage of stated value of preferred stock will be paid to purchaser upon conversion						10.00%
Series E Preferred Stock [Member] \| Second Amendment To Securities Purchase Agreement [Member]
Class of Stock [Line Items]
Description of Preferred stock redemption terms		Prior to this amendment, the Redemption Price was discounted by 1% for each month after the seven-month anniversary of the Issue Date that the Purchaser elected not to redeem
Series E Preferred Stock [Member] \| Third Amendment to Securities Purchase Agreement [Member]
Class of Stock [Line Items]
Convertible preferred stock	(1) set the initial conversion price for the Series A Preferred Stock to be the 5-day volume weighted average price measured using the 5 trading days preceding the purchase of the Series A Preferred Stock, (2) on the 40th calendar day (the “Reset Date”) after the sale of the Series A Preferred Stock, reset the conversion price in the event the closing price of the Class A common stock on such date is less than the initial conversion, (3) have the reset conversion price equal a 10% discount to the 5-day volume weighted average price measured using the 5 trading days preceding the Reset Date; provided, however, in no instance will the conversion price be reset below 30% of the initial conversion price, and (4) amend the date on which the obligation to acquire the Series A Preferred Stock ceases to March 1, 2024

COMMITMENTS AND CONTINGENCIES (Details Narrative) User in Millions			3 Months Ended
	Apr. 12, 2023 Appeal	Feb. 22, 2022 USD ($)	Mar. 31, 2024 USD ($)	Dec. 31, 2023 USD ($)	Nov. 30, 2020 USD ($) User
Loss Contingencies [Line Items]
Potential exposure				$ 1,500,000
Accrued liabilities, current				$ 1,500,000
Philip Morris [Member]
Loss Contingencies [Line Items]
Number of users approached \| User					14
Investment amount					$ 3,000,000,000
Philip Morris [Member] \| Patent Infringement Litigation [Member]
Loss Contingencies [Line Items]
Litigation settlement, Amount awarded to other party		$ 575,000
Number of appeals filed in patent infringement \| Appeal	2
Gain (loss) related to litigation settlement			$ 575,000

SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - $ / shares	Apr. 12, 2024	Apr. 11, 2024
Subsequent Event [Line Items]
Number of shares of stock option to an employee, granted and issued	1,000,000,000
Vesting percent	12.50%
Bridge Warrant Shares [Member] \| Common Class A [Member]
Subsequent Event [Line Items]
Warrant purchase		188,889
Exercise price		$ 0.01

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HCMC Healthier Choices Management Corporation (PK)