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

 

 

 

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 September 30, 2024

 

Or

 

☐ 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 November 13, 2024, there were 481,266,632,384 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 September 30, 2024 and December 31, 2023 (Unaudited)	3
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)	4
Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited)	5
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023 (Unaudited)	7
Notes to Condensed Consolidated Financial Statements (Unaudited)	8
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

 

2

 

 

PART I - FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

		September 30, 2024				December 31, 2023
ASSETS
CURRENT ASSETS
Cash and cash equivalent		$	2,533,980			$	3,658,506
Inventories			66,585				66,671
Prepaid expenses and vendor deposits			196,846				1,493,354
Other current assets			40,530				8,714
Restricted cash			553,232				553,232
Current assets of discontinued operations			-				5,944,781
TOTAL CURRENT ASSETS			3,391,173				11,725,258
Property, plant, and equipment, net of accumulated depreciation			86,964				58,613
Intangible assets, net of accumulated amortization			167,932				198,163
Right of use asset – operating lease, net			14,479				98,440
Other assets			124,100				154,329
Other assets of discontinued operations			-				18,734,776
TOTAL ASSETS		$	3,784,648			$	30,969,579
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	2,619,248			$	3,104,253
Line of credit			453,232				453,232
Operating lease liability, current			12,363				94,005
Due to related party			106,841				-
Current liabilities of discontinued operations			-				8,579,449
TOTAL CURRENT LIABILITIES			3,191,684				12,230,939
Due to related party			-				3,753,003
Operating lease liability, net of current			2,117				4,435
Other Long-term Liabilities of Discontinued Operations			-				7,111,986
TOTAL LIABILITIES			3,193,801				23,100,363
COMMITMENTS AND CONTINGENCIES (SEE NOTE 11)
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 September 30, 2024 and December 31, 2023, respectively; aggregate liquidation preference of $1.1 million as of September 30, 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; 481,266,632,384 and 478,266,632,384 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.			48,126,663				47,826,663
Additional paid-in capital			24,212,690				21,028,274
Accumulated deficit			(72,859,606	)			(62,096,821	)
TOTAL STOCKHOLDERS’ EQUITY			(520,253	)			6,758,116
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY		$	3,784,648			$	30,969,579

 

See notes to unaudited condensed consolidated financial statements

 

3

 

 

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2024				2023				2024				2023
SALES, NET		$	52			$	-			$	345			$	39
COST OF SALES			15				-				190				653
GROSS PROFIT			37				-				155				(614	)
OPERATING EXPENSES			2,143,442				2,136,026				6,312,846				5,448,812
LOSS FROM OPERATIONS			(2,143,405	)			(2,136,026	)			(6,312,691	)			(5,449,426	)
OTHER INCOME (EXPENSE)
Loss on investment			(343	)			343				(1,336	)			(8,057	)
Other income, net			260,000				(10,932	)			260,000				(10,932	)
Interest income (expense), net			15,105				75,299				114,732				358,322
TOTAL OTHER INCOME (EXPENSE), NET			274,762				64,710				373,396				339,333
NET LOSS FROM CONTINUING OPERATIONS		$	(1,868,643	)		$	(2,071,316	)		$	(5,939,295	)		$	(5,110,093	)
NET LOSS FROM DISCONTINUED OPERATIONS			(2,478,388	)			(919,673	)			(3,775,559	)			(2,440,952	)
NET LOSS		$	(4,347,031	)		$	(2,990,989	)		$	(9,714,854	)		$	(7,551,045	)
INDUCED CONVERSIONS OF PREFERRED STOCK			-				-				-				(152,500	)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS FROM CONTINUING OPERATIONS			(1,868,643	)			(2,071,316	)			(5,939,295	)			(5,262,593	)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS FROM DISCONTINUED OPERATIONS			(2,478,388	)			(919,673	)			(3,775,559	)			(2,440,952	)
NET LOSS PER SHARE-BASIC AND DILUTED
Continuing Operations			-				-				-				-
Discontinued Operations			-				-				-				-
TOTAL NET LOSS PER SHARE-BASIC AND DILUTED		$	-			$	-			$	-			$	-
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED			480,092,719,341				358,187,284,558				479,168,092,238				351,298,225,790

 

See notes to unaudited condensed consolidated financial statements

 

4

 

 

HEALTHIER CHOICES MANAGEMENT CORP.

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

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

(Unaudited)

 

		Series E Convertible Preferred Stock								Common Stock								Additional Paid-In				Accumulated
		Shares				Amount				Shares				Amount				Capital				Deficit				Total
Balance – July 1, 2024			1,111			$	1,111,100				479,266,632,384			$	47,926,663			$	23,190,107			$	(67,464,646	)		$	3,652,124
Issuance of award stock			-				-				2,000,000,000				200,000				(200,000	)			-				-
HCWC Spin-Off			-				-				-				-				-				(1,047,929	)			(1,047,929	)
Stock-based compensation expense			-				-				-				-				1,222,583				-				1,222,583
Net loss			-				-				-				-				-				(4,347,031	)			(4,347,031	)
Balance – September 30, 2024			1,111			$	1,111,100				481,266,632,384			$	48,126,663			$	24,212,690			$	(72,859,606	)		$	(520,253	)

 

		Series E Redeemable Convertible Preferred Stock								Series D Convertible Preferred Stock								Common Stock								Additional Paid-In				Accumulated
		Shares				Amount				Shares				Amount				Shares				Amount				Capital				Deficit				Total
Balance – July 1, 2023			1,944			$	1,944,425				800			$	800,000				463,266,632,384			$	46,326,663			$	19,324,774			$	(48,173,997	)		$	18,277,440
Series D Convertible Preferred Stock exercised			-				-				(800	)			(800,000	)			8,000,000,000				800,000				-				-				-
Issuance of award stock			-				-				-				-				4,000,000,000				400,000				(400,000	)			-				-
Stock-based compensation expense			-				-				-				-				-				-				1,126,750				-				1,126,750
Net loss			-				-				-				-				-				-				-				(2,990,989	)			(2,990,989	)
Balance – September 30, 2023			1,944			$	1,944,425				-				-				475,266,632,384			$	47,526,663			$	20,051,524			$	(51,164,986	)		$	16,413,201

 

5

 

 

HEALTHIER CHOICES MANAGEMENT CORP.

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

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

(UNAUDITED)

 

		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
Issuance of awarded stock			-				-				3,000,000,000				300,000				(300,000	)			-				-
HCWC Spin-Off			-				-				-				-				-				(1,047,931	)			(1,047,931	)
Stock-based compensation			-				-				-				-				3,484,416				-				3,484,416
Net loss			-				-				-				-				-				(9,714,854	)			(9,714,854	)
Balance – September 30, 2024			1,111			$	1,111,100				481,266,632,384			$	48,126,663			$	24,212,690			$	(72,859,606	)		$	(520,253	)

 

		Series E Redeemable Convertible Preferred Stock								Series D 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
Series E convertible preferred stock redeemed			(11,193	)			(11,192,650	)			-				-				-				-				22,222				-				22,222
Conversion of series E convertible preferred stock			(1,585	)			(1,585,000	)			-				-				15,850,000,000				1,585,000				-				-				1,585,000
Series D Convertible Preferred Stock exercised			-				-				(800	)			(800,000	)			8,000,000,000				800,000				-				-				-
Issuance of awarded stock			-				-				-				-				111,675,000,000				11,167,500				(11,167,500	)			-				-
Induced conversions of preferred stock			-				-				-				-				-				-				(152,500	)			-				(152,500	)
Stock-based compensation			-				-				-				-				-				-				2,303,500				-				2,303,500
Net loss			-				-				-				-				-				-				-				(7,551,045	)			(7,551,045	)
Balance – September 30, 2023			1,944			$	1,944,425				-			$	-				475,266,632,384			$	47,526,663			$	20,051,524			$	(51,164,986	)		$	16,413,201

 

See notes to unaudited condensed consolidated financial statements

 

6

 

 

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

		Nine Months Ended September 30,
		2024 (a)				2023 (a)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(9,714,854	)		$	(7,551,045	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization			1,119,023				1,115,396
Loss on warrant liability extinguishment			1,888,889				-
Gain on sale of building			(205,146	)			-
Non-cash interest expense			72,250				-
Loss on notes receivable settlement			-				10,931
Loss on investment			1,336				8,057
Amortization of right-of-use asset			2,465,092				1,689,198
Write-down of obsolete and slow-moving inventory			2,032,995				1,581,043
Stock-based compensation expense			3,484,416				2,303,500
Change in contingent consideration			-				(774,900	)
Changes in operating assets and liabilities:
Accounts receivable			(253,460	)			(75,092	)
Inventories			(2,000,583	)			(1,317,793	)
Prepaid expenses and vendor deposits			1,247,815				(1,626,358	)
Other current assets			(12,632	)			825,261
Due from related party			(97,542	)			-
Other assets			(53,253	)			(34,660	)
Accounts payable and accrued expenses			513,824				555,280
Contract liabilities			(156,904	)			(53,745	)
Lease liability			(2,364,419	)			(1,594,404	)
NET CASH USED IN OPERATING ACTIVITIES			(2,033,153	)			(4,939,331	)
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for acquisition			(5,475,000	)			-
Proceeds from sale of Saugerties building			749,000				-
Collection of note receivable			-				178,294
Purchases of property and equipment			(192,865	)			(176,129	)
NET CASH USED IN INVESTING ACTIVITIES			(4,918,865	)			2,165
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for deferred offering costs			-				(264,375	)
Proceeds from acquisition loan			7,500,000				-
Proceeds from security purchase agreement			1,700,000				-
Payment of induced conversions of preferred stock			-				(152,500	)
Payment for Series E preferred stock redemption			-				(11,170,428	)
Principal payments on loan payable			(349,082	)			(399,590	)
Due to related party			204,383				-
Transfers to HCWC related to Spin-Off			(4,650,389	)			-
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES			4,404,912				(11,986,893	)
NET DECREASE IN CASH, CASH EQUIVALENT AND RESTRICTED CASH			(2,547,106	)			(16,924,059	)
CASH, CASH EQUIVALENT AND RESTRICTED CASH— BEGINNING OF PERIOD			5,634,318				24,690,124
CASH, CASH EQUIVALENT AND RESTRICTED CASH — END OF PERIOD		$	3,087,212			$	7,766,065
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest		$	492,220			$	127,533
Cash paid for income tax		$	-			$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES
Non-cash deferred offering cost		$	-			$	466,463
Issuance of common stock in connection with series E preferred stock conversion		$	-			$	1,585,000
Right-of-use assets obtained in exchange for operating lease liabilities		$	4,943,269			$	1,147,616
1% stated value reduction on preferred stock redemption		$	-			$	22,222

 

(a)

The cash flows related to discontinued operations have not been segregated. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations. See Note 2 for cash flows related to Discontinued Operations.

 

See notes to unaudited condensed consolidated financial statements

 

7

 

 

HEALTHIER CHOICES MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1. ORGANIZATION

 

Organization

 

Healthier Choices Management Corp. (the “Company” or “HCMC”) is a holding company focused on monetizing its intellectual property through royalty and licensing agreements, facilitated by its wholly owned subsidiary, HCMC Intellectual Property Holdings, LLC. HCMC’s IP portfolio includes patents related to innovative products, such as the Q-Cup and Imitine, which the company actively markets. HCMC is engaged in litigation against prominent tobacco industry players, Philip Morris and R.J. Reynolds, asserting claims of patent infringement.

 

The Company administers and intends to augment its intellectual property portfolio via its wholly owned subsidiary, HCMC Intellectual Property Holdings, LLC.

 

The Company continues to promote its patented Q-Cup™ technology directly to consumers in the vaping market. This cutting-edge design includes a small quartz cup that users can fill with cannabis or CBD concentrate. Once placed in a Q-Cup™ Tank or Globe, the cup is heated externally without direct contact with the concentrate. This innovative approach provides greater efficiency and a convenient solution for consumers who vape concentrates for both medicinal and recreational use .

 

Spin-Off

 

HCMC announced on August 22, 2022 that its Board of Directors approved the separation of the Grocery business, including wellness business, into an independent, publicly traded company (the “Spin-Off” or “Separation”). Prior to the Spin-Off, the Grocery segment was operated under the holding company Healthy Choice Wellness Corp. (“HCWC”). HCWC was a subsidiary of HCMC, and operated the Ada’s Natural Market, Paradise Health & Nutrition, Mother Earth’s Storehouse, Greens Natural Foods, Ellwood Thompson’s, and GreenAcres Market retail brands, as well as licensed wellness centers and Healthy U Wholesale.

 

On September 13, 2024 (the “Spin-Off Date”), after the New York Stock Exchange American (“NYSEAM”) market closing, the Spin-Off of the HCWC business was completed. On September 14, 2024, HCWC became an independent, publicly traded company, and on September 16, 2024, the stock commenced trading on the NYSEAM under the stock symbol “HCWC.”

 

HCWC distributed all the outstanding shares of Common Stock held by it on a pro rata basis to holders of HCMC’s common stock (the “Distribution”). For each 208,632 shares of HCMC common stock held as of 5:00 p.m., New York City time, on September 9, 2024, the record date for the Spin-Off (the “Record Date”), a HCMC stockholder was entitled to receive one share of Class A common stock and three shares of Class B common stock. The Distribution was made in book-entry form by a distribution agent as soon as practicable after the date of the Distribution.

 

As a result of the Spin-Off, the operating results for the HCWC business through the date of the Spin-Off are reported in Loss from Discontinued Operations in the Condensed Consolidated Statements of Operations for all periods presented. In addition, the related assets and liabilities are reported as Assets and Liabilities of Discontinued Operations on the Condensed Consolidated Balance Sheets for year ended December 31, 2023. Unless otherwise noted, all amounts and disclosures included in the Notes to Condensed Consolidated Financial Statements reflect only the Company’s continuing operations. For additional information, see Note 2, “Discontinued Operations.”

 

Segment Reporting

 

The Company operates as a single segment that includes all of its continuing operations, which is designed to enable customers to purchase its products through stores or digital channels. The Company previously had two reportable segments: Grocery and Vape. The Grocery segment was spun-off on September 13, 2024 and is now reported as discontinued operations for all periods through that date.

 

NOTE 2. DISCONTINUED OPERATIONS

 

On September 13, 2024, the Company completed the previously announced separation and distribution of its Grocery segment into an independent publicly traded company, HCWC. The separation was structured as a tax-free spin-off, which occurred by way of a pro rata distribution to HCMC stockholders. Each of the HCMC stockholders received one share of HCWC Class A common stock and three shares of Class B common stock for every 208,632 shares of HCMC common stock held of record as of the close of business on September 13, 2024. HCWC is now an independent public company listed under the symbol “HCWC” on the NYSEAM. The Company retained no ownership interest in HCWC following the Separation.

 

Cash of $2.2 million held by HCWC and its subsidiary were transferred to HCWC on the Distribution Date. HCMC and HCWC settled intercompany balances in the amount of $1.2 million on the Spin-Off date.

 

During the third quarter of 2024, the Company recognized a net reduction to retained earnings of $1.0 million as a result of the Separation, primarily related to the transfer of certain assets and liabilities associated with its grocery business to HCWC.

 

8

 

 

In connection with the Separation, the Company entered into several agreements with HCWC that govern the relationship of the parties following the Spin-Off. These agreements include:

 

	●	a Separation Agreement that will set forth HCMC’s and the Company’s agreements regarding the principal actions that both parties will take in connection with the Spin-Off and aspects of our relationship following the Spin-Off;
	●	a Transition Services Agreement pursuant to which HCMC and the Company will provide each other specified services on a transitional basis to help ensure an orderly transition following the Spin-Off.
	●	a Tax Matters Agreement that will govern the respective rights, responsibilities and obligations of HCMC and the Company after the Spin-Off with respect to all tax matters and will include restrictions to preserve the tax-free status of the Spin-Off; and
	●	an Employee Matters Agreement that will address employment, compensation and benefits matters, including the allocation and treatment of assets and liabilities arising out of employee compensation and benefits programs in which our employees participated prior to the Spin-Off.

 

Under the terms of the transition services agreement, HCMC will provide to HCWC, on a transitional basis, certain services or functions, including information technology, accounting, human resources, and payroll functions. Generally, these services will be provided for a period of up to one year following the Spin-Off. Consideration and costs for the transition services will be determined using several billing methodologies as described in the agreements, including customary billing and pass-through billing. Costs for transition services provided to HCWC are recorded within the Consolidated Statements of Operations based on the nature of the services. Following the Spin-Off, the Company recognized a reduction of costs of $0.1 million for services provided to HCWC in the third quarter of 2024 pursuant to the transition services agreement.

 

Financial Information of Discontinued Operations

 

Loss from Discontinued Operations in the Consolidated Statements of Operations reflects the financial results of the HCWC and includes allocation of general corporate overhead expense of the Company.

 

The following table summarizes the significant line items included in Loss from Discontinued Operations, in the Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023:

 

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
		2024				2023				2024				2023
SALES, NET		$	14,860,975			$	12,704,600			$	46,349,908			$	39,839,202
COST OF SALES			9,152,971				8,061,966				28,691,071				25,199,879
GROSS PROFIT			5,708,004				4,642,634				17,658,837				14,639,323
OPERATING EXPENSES, NET
Selling, general and administrative			6,178,849				5,897,769				19,212,987				17,743,763
Gain on sale of asset			(205,146	)			-				(205,146	)			-
TOTAL OPERATING EXPENSES, NET			5,973,703				5,897,769				19,007,841				17,743,763
LOSS FROM OPERATIONS			(265,699	)			(1,255,135	)			(1,349,004	)			(3,104,440	)
OTHER INCOME (EXPENSE)			(2,212,689	)			335,462				(2,426,555	)			663,488
NET LOSS FROM DISCONTINUED OPERATIONS		$	(2,478,388	)		$	(919,673	)		$	(3,775,559	)		$	(2,440,952	)

 

The information presented as discontinued operations on the Condensed Consolidated Balance Sheets includes certain assets and liabilities that were transferred to HCWC pursuant to the Separation agreements.

 

9

 

 

There were no assets or liabilities classified as discontinued operations as of September 30, 2024. The following table summarizes the carrying value of the significant classes of assets and liabilities classified as discontinued operations as of December 31, 2023:

 

		December 31, 2023
Cash and cash equivalents		$	1,422,580
Accounts receivable, net			128,171
Inventories			4,162,218
Prepaid expenses and vendor deposits			174,970
Other current assets			56,842
Current Assets of Discontinued Operations			5,944,781
Property and equipment, net of accumulated depreciation			2,676,639
Intangible assets, net of accumulated amortization			4,178,519
Right of use asset - operating lease			11,412,562
Other assets			467,056
Other Assets of Discontinued Operations		$	18,734,776
Accounts payable and accrued expenses		$	4,920,411
Contract Liabilities			207,513
Current portion of loan payable			702,701
Lease liability, current			2,748,824
Current Liabilities of Discontinued Operations			8,579,449
Due from related party			(3,753,003	)
Loan Payable, net of current portion			2,403,807
Lease liability, net of current			8,461,182
Other Long-term Liabilities of Discontinued Operations		$	7,111,986

 

10

 

 

The following table summarizes the significant operating cash and noncash items, capital expenditures and financing activities of discontinued operations for the nine months ended September 13, 2024 and September 30, 2023:

 

		Nine Months Ended September 13, 2024				Nine Months Ended September 30, 2023
Net loss		$	(3,775,559	)		$	(2,440,952	)
Depreciation and amortization			1,069,958				1,070,686
Loss on warrant liability extinguishment			1,888,889				-
Gain on sale of building			(205,146	)			-
Non-cash interest expense			72,250				-
Amortization of right-of-use asset			2,381,131				1,687,522
Write-down of obsolete and slow-moving inventory			2,032,995				1,581,043
Change in contingent consideration			-				(774,900	)
Accounts receivable			(253,460	)			(75,677	)
Inventories			(2,000,669	)			(1,317,816	)
Prepaid expenses and vendor deposits			(48,693	)			(41,034	)
Other current assets			20,520				48,336
Due to related party			(2,736,272	)			(542,718	)
Other assets			(83,482	)			(3,060	)
Accounts payable and accrued expenses			998,829				(119,384	)
Contract liabilities			(156,904	)			(53,745	)
Lease liability			(2,280,459	)			(1,592,729	)
NET CASH USED IN OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS			(3,076,072	)			(2,574,428	)
Payment for acquisition			(5,475,000	)			-
Proceeds from sale of Saugerties building			749,000				-
Purchases of property and equipment			(145,680	)			(173,475	)
NET CASH USED IN INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS			(4,871,680	)			(173,475	)
Proceeds from security purchase agreement			1,700,000				-
Proceeds from acquisition loan			7,500,000				-
Principal payments on loan payable			(349,082	)			(399,590	)
Due to related party			(1,819,570	)			-
Investment from parent company			1,736,412				2,068,725
NET CASH PROVIDED BY FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS			8,767,760				1,669,135
NET INCREASE (DECREASE) IN CASH		$	820,008			$	(1,078,768	)

 

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NOTE 3. 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 September 30, 2024, the Company had cash and cash equivalent of approximately $2.5 million and positive working capital of $0.2 million. The Company’s liquidity needs through September 30, 2024 have been satisfied through financing agreement with private lenders.

 

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 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.

 

The Company believes its cash on hand and its ability to draw on its $5 million line of credit will enable the Company to meet its obligations and capital requirements for at least the twelve months from the date these financial statements are issued. Accordingly, no adjustment has been made to the financial statements to account for this uncertainty.

 

NOTE 4. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Consolidation

 

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.

 

On September 13, 2024, the Company completed the previously announced separation and distribution of its grocery segment and wellness centers into an independent publicly traded company, and the historical results of the grocery segment and wellness centers have been reflected as discontinued operations in the Company’s condensed consolidated financial statements for all periods prior to the separation and distribution. Assets and liabilities associated with the grocery segment are classified as assets and liabilities of discontinued operations in the Company’s Condensed Consolidated Balance Sheets. Additional disclosures regarding the separation and distribution are provided in Note 2.

 

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, adjusted for the discontinued operations. Results of the nine months ended September 30, 2024, are not necessarily indicative of the results to be expected for the full year ending December 31, 2024.

 

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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 5. 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 $301,000 and $0 as of September 30, 2024 and December 31, 2023.

 

A summary of the financial institution that had cash, cash equivalent and restricted cash in excess of FDIC limits of $250,000 on September 30, 2024 and December 31, 2023 is presented below:

 

		September 30, 2024				December 31, 2023
Total cash and cash equivalent in excess of FDIC limits of $250,000		$	2,283,980			$	3,402,782

 

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:

 

		September 30, 2024				September 30, 2023
Cash and cash equivalent		$	2,533,980			$	6,196,030
Restricted cash			553,232				628,232
Total cash and restricted cash		$	3,087,212			$	6,824,262

 

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 6. 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 operates as a single reportable segment.

 

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NOTE 7. PROPERTY AND EQUIPMENT

 

Property and equipment consist of the following:

 

		September 30, 2024				December 31, 2023
Furniture and fixtures			90,919				90,919
Computer hardware & equipment			50,521				48,337
Other			53,056				8,056
Property and equipment, gross			194,496				147,312
Less: accumulated depreciation and amortization			(107,532	)			(88,699	)
Total property, plant, and equipment		$	86,964			$	58,613

 

The Company incurred approximately $7,000 and $5,000 of depreciation expense for the three months ended September 30, 2024 and 2023, and $19,000 and $16,000 of depreciation expense for the nine months ended September 30, 2024 and 2023, respectively.

 

NOTE 8. INTANGIBLE ASSETS

 

Intangible assets, net are as follows:

 

September 30, 2024		Useful Lives (Years)		Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
Patent		10 years		$	397,165			$	(229,233	)		$	167,932
Intangible assets, net					397,165				(229,233	)			167,932

 

December 31, 2023		Useful Lives (Years)		Gross Carrying Amount				Accumulated Amortization				Net Carrying Amount
Patents		10 years			397,165				(199,002	)			198,163
Intangible assets, net				$	397,165			$	(199,002	)		$	198,163

 

Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense was approximately $10,000 for the three months ended September 30, 2024 and 2023, and $30,000 and $29,000 for the nine months ended September 30, 2024 and 2023, respectively. Future annual estimated amortization expense is as follows:

 

Years ending December 31,
2024 (remaining three months)		$	8,893
2025			39,124
2026			38,180
2027			32,564
2028			23,333
Thereafter			25,838
Total		$	167,932

 

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NOTE 9. DEBT

 

Revolving Line of Credit

 

On November 3, 2021, the Company entered into an agreement for a new revolving line of credit of $2.0 million and a blocked/restricted deposit account (“blocked account”) with Professional Bank in Coral Gables, Florida. The agreement included a variable interest rate that it is based on a rate of 4.7% over what is earned on the collateral account. Based on the agreement with the bank, each draw request from the credit line will be 100% cash secured with moneys held from the blocked account. The outstanding balances were $453,232 as of September 30, 2024 and December 31, 2023, respectively.

 

NOTE 10. 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.

 

15

 

 

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.

 

On April 8, 2024, the Company entered into a Fifth 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 Completion Date to August 1, 2024.

 

On July 26, 2024, the Company entered into a Sixth 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 Completion Date to November 1, 2024.

 

Through September 30, 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 HCWC resulting from the 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.

 

Stock Options and Restricted Stock

 

During the three and nine months ended September 30, 2024 and 2023, no stock options of the Company were exercised into common stock.

 

On August 23, 2023, the Company granted 2,000,000,000 shares of restricted stocks to the Company’s third-party inventors with no vesting requirement.

 

On November 13, 2023, the Company granted 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.

 

The Company recognized stock-based compensation of approximately $1,223,000 and $1,127,000 during the three months ended September 30, 2024 and 2023, and approximately $3,484,000 and $2,304,000 during the nine months ended September 30, 2024 and 2023, respectively in connection with amortization of restricted stock and stock options. Stock based compensation is included as part of total operating expenses in the accompanying unaudited condensed consolidated statements of operations.

 

16

 

 

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:

 

		As of September 30,
		2024				2023
Preferred stock			11,111,000,000				19,444,000,000
Stock options			3,000,000,000				67,587,230,680
Restricted stock			54,712,500,000				1,500,000,000
Total			133,410,722,200				88,531,230,680

 

NOTE 11. 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 which was reflected in accounts payable and accrued expenses, representing management’s estimate of the probable settlement amount based on the current status of discussions. This arrangement was formalized by a signed agreement on July 1, 2024 and the Company has accrued $1.5 million at June 30, 2024. As of September 30, 2024, the Company already paid $700,000, and the remaining balance of $800,000 was in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets.

 

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 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.

 

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 November 17, 2023, RJR filed a motion to dismiss the action. HCMC opposed on December 22, 2023. To date the court has not ruled on the motion.

 

On September 18, 2024, RJR filed an inter partes review of the patent-in-suit at the United States Patent and Trademark Office (“USPTO”). A decision on institution will be made by the USPTO sometime after January 2025.

 

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 September 30, 2024. With respect to legal costs, we record such costs as incurred.

 

NOTE 12. SUBSEQUENT EVENTS

 

On November 7, 2024, the Company entered into a commitment letter with an investor that will allow the Company to draw up to $5 million from a revolving credit facility (the “Facility”) through August 31, 2025. Any advances will be used for working capital purposes. Any amounts borrowed pursuant to the Facility will be repayable in full on April 30, 2026 and the interest rate on the amounts borrowed is 12% per annum.

 

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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, HCMC Intellectual Property Holdings, LLC and The Vape Store, Inc. (“Vape Store”). All intercompany accounts and transactions have been eliminated in consolidation.

 

HCWC Spin-Off

 

On September 13, 2024, HCMC completed the Spin-off of our Grocery business into an independent publicly traded company HCWC. As a result, the operating results for the HCWC through the date of the Spin-off are reported in Loss from Discontinued Operations in the Consolidated Statements of Operations for all periods presented. In addition, the related assets and liabilities are reported as Assets and Liabilities of Discontinued Operations on the Consolidated Balance Sheets.

 

Unless otherwise noted, all amounts, percentages and discussion reflect only the results of operations and financial condition from our continuing operations.

 

Company Overview

 

Healthier Choices Management Corp. is a holding company focused on monetizing its intellectual property through royalty and licensing agreements, facilitated by its wholly owned subsidiary, HCMC Intellectual Property Holdings, LLC. HCMC’s IP portfolio includes patents related to innovative products, such as the Q-Cup and Imitine, which the company actively markets. In addition, HCMC is engaged in legal actions against major companies like Philip Morris and R.J. Reynolds for patent infringement.

 

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

 

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.

 

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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 September 30, 2024, the Company had cash and cash equivalent of approximately $2.5 million and positive working capital of $0.2 million. The Company’s liquidity needs through September 30, 2024 have been satisfied through financing agreement with private lenders.

 

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 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.

 

The Company believes its cash on hand and its ability to draw on its $5 million line of credit will enable the Company to meet its obligations and capital requirements for at least the twelve months from the date these financial statements are issued. Accordingly, no adjustment has been made to the financial statements to account for this uncertainty.

 

Factors Affecting Our Performance

 

We believe the following factors affect our performance:

 

Pending Patent: We have developed, trademarked and are preparing to commercialize additional products. We include product development expenses as part of our operating expenses. In October 2018, we announced the granting of three US patents related to our Q-Cup™ technology. In addition, we have a suite of patent applications pending in the United States. There is no assurance that we will be awarded patents for any of these pending patent applications. There is no assurance that we can monetize the patents.

 

Manufacturing: We have no manufacturing capabilities and do not intend to develop any manufacturing capabilities. Third party manufacturers make our products to meet our design specifications. We depend on third party manufacturers for our vaporizer e-liquid and accessories. Our customers associate certain characteristics of our products including the weight, feel, draw, unique flavor, packaging and other attributes of our products to the brands we market, distribute and sell. Any interruption in supply and or consistency of our products may harm our relationships and reputation with customers, and have a material adverse effect on our business, results of operations and financial condition. In order to minimize the risk of supply interruption, we currently utilize several third-party manufacturers to manufacture our products to our specifications.

 

Results of Operations

 

The following table sets forth our unaudited condensed consolidated Statements of Operations for the three months ended September 30, 2024 and 2023 that is used in the following discussions of our results of operations:

 

		Three Months Ended September 30,								2024 to 2023
		2024				2023				Change $
SALES		$	52			$	-			$	52
COST OF SALES			15				-				15
GROSS PROFIT			37				-				37
OPERATING EXPENSES			2,143,442				2,136,026				7,416
LOSS FROM OPERATIONS			(2,143,405	)			(2,136,026	)			(7,379	)
OTHER INCOME (EXPENSE)
Loss on investment			(343	)			343				(686	)
Other income (expense), net			260,000				(10,932	)			270,932
Interest income, net			15,105				75,299				(60,194	)
Total other income (expense), net			274,762				64,710				210,052
NET LOSS		$	(1,868,643	)		$	(2,071,316	)		$	202,673

 

19

 

 

Net sales and cost of sales were de minimis for the three months ended September 30, 2024 and 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 and cost of sales for the three months ended September 30, 2024 and 2023 continued to be significantly impacted by the inability to bring new products to market via distribution.

 

Total operating expenses of $2.1 million for the three months ended September 30, 2024 remained consistent with the same period in 2023.

 

Total other income (expense), net of $275,000 for the three months ended September 30, 2024 consists of net interest income of $15,000, and $260,000 reversal of accrued professional fee. Total other income (expense), net of $65,000 for the three months ended September 30, 2023 primarily consists of interest income of $75,000, and other expense of $11,000.

 

The following table sets forth our unaudited consolidated Statements of Operations for the nine months ended September 30, 2024 and 2023 that is used in the following discussions of our results of operations:

 

		Nine Months Ended September 30,								2024 to 2023
		2024				2023				Change $
SALES		$	345			$	39			$	307
COST OF SALES			190				653				(463	)
GROSS PROFIT			155				(614	)			770
OPERATING EXPENSES			6,312,846				5,448,812				864,034
LOSS FROM OPERATIONS			(6,312,691	)			(5,449,426	)			(863,264	)
OTHER INCOME (EXPENSE)
Loss on investment			(1,336	)			(8,057	)			6,721
Other income (expense), net			260,000				(10,932	)			270,932
Interest income, net			114,732				358,322				(243,590	)
Total other income (expense), net			373,396				339,333				34,063
NET LOSS FROM CONTINUING OPERATIONS		$	(5,939,295	)		$	(5,110,093	)		$	(829,201	)

 

Net sales and cost of sales were de minimis for the nine months ended September 30, 2024 and 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 nine months ended September 30, 2024 and 2023 continued to be significantly impacted by the inability to bring new products to market via distribution.

 

Total operating expenses increased $0.9 million to $6.3 million for the nine months ended September 30, 2024 compared to $5.4 million for the same period in 2023. The increase is primarily due to $1.2 million increase in stock compensation expense and $0.1 million increase in payroll and benefit expense, offset by $0.5 million decrease in legal fees.

 

20

 

 

Total other income (expense), net of $374,000 for the nine months ended September 30, 2024 consists of net interest income of $115,000 and other income of $260,000 related with professional fee accrual reversal, offset by $1,000 loss on investment. Total other income, net of $0.3 million for the nine months ended September 30, 2023 includes a loss on investment of $8,000, other expense of $11,000, and an interest income of $358,000.

 

Liquidity and Capital Resources

 

		Nine Months Ended September 30,
		2024				2023
Net cash (used in) provided by
Operating activities		$	1,042,919			$	(2,364,903	)
Investing activities			(47,185	)			175,640
Financing activities			(2,120,260	)			(13,656,029	)
		$	(1,124,526	)		$	(15,845,292	)

 

The following table sets forth our unaudited consolidated statements of cash flows on continuing basis for the nine months ended September 30, 2024 and 2023.

 

		Nine Months Ended September 30,
		2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES OF
Net loss		$	(5,939,295	)		$	(5,110,093	)
Adjustments to reconcile net loss to net cash used in operating activities:							-
Depreciation and amortization			49,065				44,710
Loss on notes receivable settlement			-				10,931
Loss on investment			1,336				8,057
Amortization of right-of-use asset			83,961				1,676
Stock-based compensation expense			3,484,416				2,303,500
Accounts receivable			-				585
Inventories			86				23
Prepaid expenses and vendor deposits			1,296,508				(1,585,324	)
Due from related party			2,638,730				542,718
Other current assets			(33,152	)			776,925
Other assets			30,229				(31,600	)
Accounts payable and accrued expenses			(485,005	)			674,664
Lease liability			(83,960	)			(1,675	)
NET CASH USED IN OPERATING ACTIVITIES OF			1,042,919				(2,364,903	)
CASH FLOWS FROM INVESTING ACTIVITIES
Collection of note receivable			-				178,294
Purchases of property and equipment			(47,185	)			(2,654	)
NET CASH USED IN INVESTING ACTIVITIES			(47,185	)			175,640
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for deferred offering costs			-				(264,375	)
Payment of induced conversions of preferred stock			-				(152,500	)
Net transfers to HCWC related to Spin-Off			(4,144,213	)			(13,239,154	)
Due from related party			2,023,953				-
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES			(2,120,260	)			(13,656,029	)
NET DECREASE IN CASH, CASH EQUIVALENT AND RESTRICTED CASH			(1,124,526	)			(15,845,292	)
CASH, CASH EQUIVALENT AND RESTRICTED CASH— BEGINNING OF PERIOD			4,211,738				22,669,553
CASH, CASH EQUIVALENT AND RESTRICTED CASH — END OF PERIOD		$	3,087,212			$	6,824,261

 

Our net cash provided by operating activities of approximately $1.0 million for the nine months ended September 30, 2024 resulted from a net loss of $5.9 million, offset by a non-cash adjustment of $3.6 million and a net cash change of $3.4 million from changes in operating assets and liabilities. Our net cash used in operating activities of approximately $2.4 million for the nine months ended September 30, 2023 resulted from a net loss of $5.1 million, offset by a non-cash adjustment of $2.4 million and a net cash change of $0.4 million from changes in operating assets and liabilities.

 

The net cash used in investing activities of $47,000 for the nine months ended September 30, 2024 resulted from purchases of property and equipment. The net cash provided by investing activities of $176,000 for the nine months ended September 30, 2023 resulted from collection on a note receivable and purchases of property and equipment.

 

The net cash used in financing activities of $2.1 million for the nine months ended September 30, 2024 is primarily due to $4.1 million net transfer to HCWC related to Spin-Off and $2.0 million cash proceeds from related party. Net cash used in financing activities of approximately $13.7 million for the nine months ended September 30, 2023 is due to Series E Preferred Stock redemption and exercise, payment for deferred offering cost related with Spin-Off, and net parent investment.

 

At September 30, 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 September 30, 2024 and December 31, 2023.

 

		September 30, 2024				December 31, 2023
Cash and cash equivalent		$	2,533,980			$	3,658,506
Total assets		$	3,784,648			$	6,290,022
Cash and cash equivalent as a percentage of total assets			67.0	%			58.2	%

 

The Company reported a net loss from continuing operation of $5.9 million for the nine months ended September 30, 2024. The Company also had positive working capital of $0.2 million. The Company expects to continue incurring losses for the foreseeable future.

 

The Company anticipates its current cash and its ability to draw from the $5 million credit line with private lender will 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 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. These estimates include useful lives and impairment of long-lived assets, deferred taxes and related valuation allowances, allocation of corporate general expenses, and the valuation of the assets and liabilities acquired in business combinations. 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.

 

21

 

 

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 except allocation of corporate general expense 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. Allocation of corporate general expenses to HCWC was a result of recently completed spin-Off of HCWC, which led to a reevaluation of how corporate general expenses were allocated. The Company adopted a proportional cost allocation method to allocate parent expense to the carve-out entity.

 

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, 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 September 30, 2024 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 September 30, 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.

 

22

 

 

●	Segregation of duties due to lack of personnel.
●	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 September 30, 2024 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.
	●	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.

 

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 September 30, 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.

 

23

 

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS.

 

There were two lawsuits in connection with alleged claimed battery defects for an electronic cigarette device. One had 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 of the Company to $1.5 million which was reflected in accounts payable and accrued expenses, representing management’s estimate of the probable settlement amount based on the current status of discussions. This arrangement was formalized by a signed agreement on July 1, 2024 and the Company has accrued $1.5 million at June 30, 2024. As of September 30, 2024, the Company already paid $700,000, and the remaining balance of $800,000 was reflected in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets.

 

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.

 

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.

 

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.

 

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 November 17, 2023, RJR filed a motion to dismiss the action. HCMC opposed on December 22, 2023. To date the court has not ruled on the motion.

 

On September 18, 2024, RJR filed an inter partes review of the patent-in-suit at the United States Patent and Trademark Office (“USPTO”). A decision on institution will be made by the USPTO sometime after January 2025.

 

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 September 30, 2024. 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.

 

Not Applicable.

 

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.”

 

24

 

 

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.

 

25

 

 

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: November 14, 2024	By:	/s/ Jeffrey Holman
		Jeffrey Holman
		Chief Executive Officer
Date: November 14, 2024	By:	/s/ John Ollet
		John Ollet
		Chief Financial Officer

 

26

 

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: November 14, 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: November 14, 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 period ending September 30, 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: November 14, 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 period ending September 30, 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: November 14, 2024

 

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

 

Cover - $ / shares	9 Months Ended
	Sep. 30, 2024	Nov. 13, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2024
Document Fiscal Period Focus	Q3
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		481,266,632,384
Entity Listing, Par Value Per Share	$ 0.0001

Condensed Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
CURRENT ASSETS
Cash and cash equivalent	$ 2,533,980	$ 3,658,506
Inventories	66,585	66,671
Prepaid expenses and vendor deposits	196,846	1,493,354
Other current assets	40,530	8,714
Restricted cash	553,232	553,232
Current assets of discontinued operations		5,944,781
TOTAL CURRENT ASSETS	3,391,173	11,725,258
Property, plant, and equipment, net of accumulated depreciation	86,964	58,613
Intangible assets, net of accumulated amortization	167,932	198,163
Right of use asset – operating lease, net	14,479	98,440
Other assets	124,100	154,329
Other assets of discontinued operations		18,734,776
TOTAL ASSETS	3,784,648	30,969,579
CURRENT LIABILITIES
Accounts payable and accrued expenses	2,619,248	3,104,253
Line of credit	453,232	453,232
Operating lease liability, current	12,363	94,005
Current liabilities of discontinued operations		8,579,449
TOTAL CURRENT LIABILITIES	3,191,684	12,230,939
Due to related party		3,753,003
Operating lease liability, net of current	2,117	4,435
Other Long-term Liabilities of Discontinued Operations		7,111,986
TOTAL LIABILITIES	3,193,801	23,100,363
COMMITMENTS AND CONTINGENCIES (SEE NOTE 11)
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 September 30, 2024 and December 31, 2023, respectively; aggregate liquidation preference of $1.1 million as of September 30, 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; 481,266,632,384 and 478,266,632,384 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively.	48,126,663	47,826,663
Additional paid-in capital	24,212,690	21,028,274
Accumulated deficit	(72,859,606)	(62,096,821)
TOTAL STOCKHOLDERS’ EQUITY	(520,253)	6,758,116
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY	3,784,648	30,969,579
Related Party [Member]
CURRENT LIABILITIES
Due to related party	$ 106,841

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions	Sep. 30, 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	481,266,632,384	478,266,632,384
Common stock, shares outstanding	481,266,632,384	478,266,632,384

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024		Sep. 30, 2023
Income Statement [Abstract]
SALES, NET	$ 52		$ 345		$ 39
COST OF SALES	15		190		653
GROSS PROFIT	37		155		(614)
OPERATING EXPENSES	2,143,442	2,136,026	6,312,846		5,448,812
LOSS FROM OPERATIONS	(2,143,405)	(2,136,026)	(6,312,691)		(5,449,426)
OTHER INCOME (EXPENSE)
Loss on investment	(343)	343	(1,336)	[1]	(8,057)	[1]
Other income, net	260,000	(10,932)	260,000		(10,932)
Interest income (expense), net	15,105	75,299	114,732		358,322
TOTAL OTHER INCOME (EXPENSE), NET	274,762	64,710	373,396		339,333
NET LOSS FROM CONTINUING OPERATIONS	(1,868,643)	(2,071,316)	(5,939,295)		(5,110,093)
NET LOSS FROM DISCONTINUED OPERATIONS	(2,478,388)	(919,673)	(3,775,559)		(2,440,952)
NET LOSS	(4,347,031)	(2,990,989)	(9,714,854)	[1]	(7,551,045)	[1]
INDUCED CONVERSIONS OF PREFERRED STOCK					(152,500)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS FROM CONTINUING OPERATIONS	(1,868,643)	(2,071,316)	(5,939,295)		(5,262,593)
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS FROM DISCONTINUED OPERATIONS	$ (2,478,388)	$ (919,673)	$ (3,775,559)		$ (2,440,952)
NET LOSS PER SHARE-BASIC AND DILUTED
Continuing Operations - Basic
Continuing Operations - Diluted
Discontinued Operations - Basic
Discontinued Operations - Diluted
TOTAL NET LOSS PER SHARE-BASIC
TOTAL NET LOSS PER SHARE-DILUTED
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC	480,092,719,341	358,187,284,558	479,168,092,238		351,298,225,790
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-DILUTED	480,092,719,341	358,187,284,558	479,168,092,238		351,298,225,790
[1] The cash flows related to discontinued operations have not been segregated. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations. See Note 2 for cash flows related to Discontinued Operations.

Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders' Equity (Unaudited) - USD ($)	Preferred Stock [Member] Series E Redeemable Convertible Preferred Stock [Member]	Preferred Stock [Member] Series D 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
Series D Convertible Preferred Stock exercised, shares		(800)	8,000,000,000
Issuance of awarded stock			$ 11,167,500	(11,167,500)
Issuance of awarded stock, shares			111,675,000,000
Stock-based compensation				2,303,500		2,303,500
Net loss					(7,551,045)	(7,551,045)	[1]
Series D Convertible Preferred Stock exercised		(800,000)	800,000
Series E convertible preferred stock redeemed				22,222		22,222
Temporary equity,Series E convertible preferred stock redeemed, shares	(11,193)
Temporary equity,Series E convertible preferred stock redeemed	$ (11,192,650)
Conversion of series E convertible preferred stock			$ 1,585,000			1,585,000
Temporary equity,Conversion of series E convertible preferred stock, shares	(1,585)
Temporary equity,Conversion of series E convertible preferred stock	$ (1,585,000)
Conversion of series E convertible preferred stock, shares			15,850,000,000
Induced conversions of preferred stock				(152,500)		(152,500)
Balance at Sep. 30, 2023			$ 47,526,663	20,051,524	(51,164,986)	16,413,201
Balance, shares at Sep. 30, 2023	1,944
Balance at Sep. 30, 2023	$ 1,944,425
Balance, shares at Sep. 30, 2023			475,266,632,384
Balance at Jun. 30, 2023		$ 800,000	$ 46,326,663	19,324,774	(48,173,997)	18,277,440
Balance, shares at Jun. 30, 2023	1,944
Balance at Jun. 30, 2023	$ 1,944,425
Balance, shares at Jun. 30, 2023		800	463,266,632,384
Series D Convertible Preferred Stock exercised, shares		(800)	8,000,000,000
Issuance of awarded stock			$ 400,000	(400,000)
Issuance of awarded stock, shares			4,000,000,000
Stock-based compensation				1,126,750		1,126,750
Net loss					(2,990,989)	(2,990,989)
Series D Convertible Preferred Stock exercised		(800,000)	800,000
Induced conversions of preferred stock
Balance at Sep. 30, 2023			$ 47,526,663	20,051,524	(51,164,986)	16,413,201
Balance, shares at Sep. 30, 2023	1,944
Balance at Sep. 30, 2023	$ 1,944,425
Balance, shares at Sep. 30, 2023			475,266,632,384
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
Issuance of awarded stock			$ 300,000	(300,000)
Issuance of awarded stock, shares			3,000,000,000
HCWC Spin-Off					(1,047,931)	(1,047,931)
Stock-based compensation				3,484,416		3,484,416
Net loss					(9,714,854)	(9,714,854)	[1]
Induced conversions of preferred stock
Balance at Sep. 30, 2024			$ 48,126,663	24,212,690	(72,859,606)	$ (520,253)
Balance, shares at Sep. 30, 2024	1,111					1,111
Balance at Sep. 30, 2024	$ 1,111,100					$ 1,111,100
Balance, shares at Sep. 30, 2024			481,266,632,384
Balance at Jun. 30, 2024			$ 47,926,663	23,190,107	(67,464,646)	3,652,124
Balance, shares at Jun. 30, 2024	1,111
Balance at Jun. 30, 2024	$ 1,111,100
Balance, shares at Jun. 30, 2024			479,266,632,384
Issuance of awarded stock			$ 200,000	(200,000)
Issuance of awarded stock, shares			2,000,000,000
HCWC Spin-Off					(1,047,929)	(1,047,929)
Stock-based compensation				1,222,583		1,222,583
Net loss					(4,347,031)	(4,347,031)
Induced conversions of preferred stock
Balance at Sep. 30, 2024			$ 48,126,663	$ 24,212,690	$ (72,859,606)	$ (520,253)
Balance, shares at Sep. 30, 2024	1,111					1,111
Balance at Sep. 30, 2024	$ 1,111,100					$ 1,111,100
Balance, shares at Sep. 30, 2024			481,266,632,384
[1] The cash flows related to discontinued operations have not been segregated. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations. See Note 2 for cash flows related to Discontinued Operations.

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)		9 Months Ended
		Sep. 30, 2024	Sep. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	[1]	$ (9,714,854)	$ (7,551,045)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	[1]	1,119,023	1,115,396
Loss on warrant liability extinguishment	[1]	1,888,889
Gain on sale of building	[1]	(205,146)
Non-cash interest expense	[1]	72,250
Loss on notes receivable settlement	[1]		10,931
Loss on investment	[1]	1,336	8,057
Amortization of right-of-use asset	[1]	2,465,092	1,689,198
Write-down of obsolete and slow-moving inventory	[1]	2,032,995	1,581,043
Stock-based compensation expense	[1]	3,484,416	2,303,500
Change in contingent consideration	[1]		(774,900)
Changes in operating assets and liabilities:
Accounts receivable	[1]	(253,460)	(75,092)
Inventories	[1]	(2,000,583)	(1,317,793)
Prepaid expenses and vendor deposits	[1]	1,247,815	(1,626,358)
Other current assets	[1]	(12,632)	825,261
Due from related party	[1]	(97,542)
Other assets	[1]	(53,253)	(34,660)
Accounts payable and accrued expenses	[1]	513,824	555,280
Contract liabilities	[1]	(156,904)	(53,745)
Lease liability	[1]	(2,364,419)	(1,594,404)
NET CASH USED IN OPERATING ACTIVITIES	[1]	(2,033,153)	(4,939,331)
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for acquisition	[1]	(5,475,000)
Proceeds from sale of Saugerties building	[1]	749,000
Collection of note receivable	[1]		178,294
Purchases of property and equipment	[1]	(192,865)	(176,129)
NET CASH USED IN INVESTING ACTIVITIES	[1]	(4,918,865)	2,165
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for deferred offering costs	[1]		(264,375)
Proceeds from acquisition loan	[1]	7,500,000
Proceeds from security purchase agreement	[1]	1,700,000
Payment of induced conversions of preferred stock	[1]		(152,500)
Payment for Series E preferred stock redemption	[1]		(11,170,428)
Principal payments on loan payable	[1]	(349,082)	(399,590)
Due to related party	[1]	204,383
Transfers to HCWC related to Spin-Off	[1]	(4,650,389)
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES	[1]	4,404,912	(11,986,893)
NET DECREASE IN CASH, CASH EQUIVALENT AND RESTRICTED CASH	[1]	(2,547,106)	(16,924,059)
CASH, CASH EQUIVALENT AND RESTRICTED CASH— BEGINNING OF PERIOD	[1]	5,634,318	24,690,124
CASH, CASH EQUIVALENT AND RESTRICTED CASH — END OF PERIOD	[1]	3,087,212	7,766,065
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	[1]	492,220	127,533
Cash paid for income tax	[1]
NON-CASH INVESTING AND FINANCING ACTIVITIES
Non-cash deferred offering cost	[1]		466,463
Issuance of common stock in connection with series E preferred stock conversion	[1]		1,585,000
Right-of-use assets obtained in exchange for operating lease liabilities	[1]	4,943,269	1,147,616
1% stated value reduction on preferred stock redemption	[1]		$ 22,222
[1] The cash flows related to discontinued operations have not been segregated. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations. See Note 2 for cash flows related to Discontinued Operations.

ORGANIZATION	9 Months Ended
	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
ORGANIZATION	NOTE 1. ORGANIZATION   Organization   Healthier Choices Management Corp. (the “Company” or “HCMC”) is a holding company focused on monetizing its intellectual property through royalty and licensing agreements, facilitated by its wholly owned subsidiary, HCMC Intellectual Property Holdings, LLC. HCMC’s IP portfolio includes patents related to innovative products, such as the Q-Cup and Imitine, which the company actively markets. HCMC is engaged in litigation against prominent tobacco industry players, Philip Morris and R.J. Reynolds, asserting claims of patent infringement.   The Company administers and intends to augment its intellectual property portfolio via its wholly owned subsidiary, HCMC Intellectual Property Holdings, LLC.   The Company continues to promote its patented Q-Cup™ technology directly to consumers in the vaping market. This cutting-edge design includes a small quartz cup that users can fill with cannabis or CBD concentrate. Once placed in a Q-Cup™ Tank or Globe, the cup is heated externally without direct contact with the concentrate. This innovative approach provides greater efficiency and a convenient solution for consumers who vape concentrates for both medicinal and recreational use .   Spin-Off   HCMC announced on August 22, 2022 that its Board of Directors approved the separation of the Grocery business, including wellness business, into an independent, publicly traded company (the “Spin-Off” or “Separation”). Prior to the Spin-Off, the Grocery segment was operated under the holding company Healthy Choice Wellness Corp. (“HCWC”). HCWC was a subsidiary of HCMC, and operated the Ada’s Natural Market, Paradise Health & Nutrition, Mother Earth’s Storehouse, Greens Natural Foods, Ellwood Thompson’s, and GreenAcres Market retail brands, as well as licensed wellness centers and Healthy U Wholesale.   On September 13, 2024 (the “Spin-Off Date”), after the New York Stock Exchange American (“NYSEAM”) market closing, the Spin-Off of the HCWC business was completed. On September 14, 2024, HCWC became an independent, publicly traded company, and on September 16, 2024, the stock commenced trading on the NYSEAM under the stock symbol “HCWC.”   HCWC distributed all the outstanding shares of Common Stock held by it on a pro rata basis to holders of HCMC’s common stock (the “Distribution”). For each 208,632 shares of HCMC common stock held as of 5:00 p.m., New York City time, on September 9, 2024, the record date for the Spin-Off (the “Record Date”), a HCMC stockholder was entitled to receive one share of Class A common stock and three shares of Class B common stock. The Distribution was made in book-entry form by a distribution agent as soon as practicable after the date of the Distribution.   As a result of the Spin-Off, the operating results for the HCWC business through the date of the Spin-Off are reported in Loss from Discontinued Operations in the Condensed Consolidated Statements of Operations for all periods presented. In addition, the related assets and liabilities are reported as Assets and Liabilities of Discontinued Operations on the Condensed Consolidated Balance Sheets for year ended December 31, 2023. Unless otherwise noted, all amounts and disclosures included in the Notes to Condensed Consolidated Financial Statements reflect only the Company’s continuing operations. For additional information, see Note 2, “Discontinued Operations.”   Segment Reporting   The Company operates as a single segment that includes all of its continuing operations, which is designed to enable customers to purchase its products through stores or digital channels. The Company previously had two reportable segments: Grocery and Vape. The Grocery segment was spun-off on September 13, 2024 and is now reported as discontinued operations for all periods through that date.

DISCONTINUED OPERATIONS	9 Months Ended
	Sep. 30, 2024
Discontinued Operations and Disposal Groups [Abstract]
DISCONTINUED OPERATIONS	NOTE 2. DISCONTINUED OPERATIONS   On September 13, 2024, the Company completed the previously announced separation and distribution of its Grocery segment into an independent publicly traded company, HCWC. The separation was structured as a tax-free spin-off, which occurred by way of a pro rata distribution to HCMC stockholders. Each of the HCMC stockholders received one share of HCWC Class A common stock and three shares of Class B common stock for every 208,632 shares of HCMC common stock held of record as of the close of business on September 13, 2024. HCWC is now an independent public company listed under the symbol “HCWC” on the NYSEAM. The Company retained no ownership interest in HCWC following the Separation.   Cash of $2.2 million held by HCWC and its subsidiary were transferred to HCWC on the Distribution Date. HCMC and HCWC settled intercompany balances in the amount of $1.2 million on the Spin-Off date.   During the third quarter of 2024, the Company recognized a net reduction to retained earnings of $1.0 million as a result of the Separation, primarily related to the transfer of certain assets and liabilities associated with its grocery business to HCWC.     In connection with the Separation, the Company entered into several agreements with HCWC that govern the relationship of the parties following the Spin-Off. These agreements include:     ● a Separation Agreement that will set forth HCMC’s and the Company’s agreements regarding the principal actions that both parties will take in connection with the Spin-Off and aspects of our relationship following the Spin-Off;   ● a Transition Services Agreement pursuant to which HCMC and the Company will provide each other specified services on a transitional basis to help ensure an orderly transition following the Spin-Off.   ● a Tax Matters Agreement that will govern the respective rights, responsibilities and obligations of HCMC and the Company after the Spin-Off with respect to all tax matters and will include restrictions to preserve the tax-free status of the Spin-Off; and   ● an Employee Matters Agreement that will address employment, compensation and benefits matters, including the allocation and treatment of assets and liabilities arising out of employee compensation and benefits programs in which our employees participated prior to the Spin-Off.   Under the terms of the transition services agreement, HCMC will provide to HCWC, on a transitional basis, certain services or functions, including information technology, accounting, human resources, and payroll functions. Generally, these services will be provided for a period of up to one year following the Spin-Off. Consideration and costs for the transition services will be determined using several billing methodologies as described in the agreements, including customary billing and pass-through billing. Costs for transition services provided to HCWC are recorded within the Consolidated Statements of Operations based on the nature of the services. Following the Spin-Off, the Company recognized a reduction of costs of $0.1 million for services provided to HCWC in the third quarter of 2024 pursuant to the transition services agreement.   Financial Information of Discontinued Operations   Loss from Discontinued Operations in the Consolidated Statements of Operations reflects the financial results of the HCWC and includes allocation of general corporate overhead expense of the Company.   The following table summarizes the significant line items included in Loss from Discontinued Operations, in the Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023:       Three Months Ended     Nine Months Ended       September 30,     September 30,       2024     2023     2024     2023   SALES, NET   $ 14,860,975     $ 12,704,600     $ 46,349,908     $ 39,839,202   COST OF SALES     9,152,971       8,061,966       28,691,071       25,199,879   GROSS PROFIT     5,708,004       4,642,634       17,658,837       14,639,323                                     OPERATING EXPENSES, NET                         Selling, general and administrative     6,178,849       5,897,769       19,212,987       17,743,763   Gain on sale of asset     (205,146 )     -       (205,146 )     -   TOTAL OPERATING EXPENSES, NET     5,973,703       5,897,769       19,007,841       17,743,763                                     LOSS FROM OPERATIONS     (265,699 )     (1,255,135 )     (1,349,004 )     (3,104,440 )                                   OTHER INCOME (EXPENSE)     (2,212,689 )     335,462       (2,426,555 )     663,488                                     NET LOSS FROM DISCONTINUED OPERATIONS   $ (2,478,388 )   $ (919,673 )   $ (3,775,559 )   $ (2,440,952 )   The information presented as discontinued operations on the Condensed Consolidated Balance Sheets includes certain assets and liabilities that were transferred to HCWC pursuant to the Separation agreements.     There were no assets or liabilities classified as discontinued operations as of September 30, 2024. The following table summarizes the carrying value of the significant classes of assets and liabilities classified as discontinued operations as of December 31, 2023:       December 31, 2023           Cash and cash equivalents   $ 1,422,580   Accounts receivable, net     128,171   Inventories     4,162,218   Prepaid expenses and vendor deposits     174,970   Other current assets     56,842   Current Assets of Discontinued Operations     5,944,781             Property and equipment, net of accumulated depreciation     2,676,639   Intangible assets, net of accumulated amortization     4,178,519   Right of use asset - operating lease     11,412,562   Other assets     467,056   Other Assets of Discontinued Operations   $ 18,734,776             Accounts payable and accrued expenses   $ 4,920,411   Contract Liabilities     207,513   Current portion of loan payable     702,701   Lease liability, current     2,748,824   Current Liabilities of Discontinued Operations     8,579,449             Due from related party     (3,753,003 ) Loan Payable, net of current portion     2,403,807   Lease liability, net of current     8,461,182   Other Long-term Liabilities of Discontinued Operations   $ 7,111,986       The following table summarizes the significant operating cash and noncash items, capital expenditures and financing activities of discontinued operations for the nine months ended September 13, 2024 and September 30, 2023:       Nine Months Ended September 13, 2024     Nine Months Ended September 30, 2023   Net loss   $ (3,775,559 )   $ (2,440,952 ) Depreciation and amortization     1,069,958       1,070,686   Loss on warrant liability extinguishment     1,888,889       -   Gain on sale of building     (205,146 )     -   Non-cash interest expense     72,250       -   Amortization of right-of-use asset     2,381,131       1,687,522   Write-down of obsolete and slow-moving inventory     2,032,995       1,581,043   Change in contingent consideration     -       (774,900 ) Accounts receivable     (253,460 )     (75,677 ) Inventories     (2,000,669 )     (1,317,816 ) Prepaid expenses and vendor deposits     (48,693 )     (41,034 ) Other current assets     20,520       48,336   Due to related party     (2,736,272 )     (542,718 ) Other assets     (83,482 )     (3,060 ) Accounts payable and accrued expenses     998,829       (119,384 ) Contract liabilities     (156,904 )     (53,745 ) Lease liability     (2,280,459 )     (1,592,729 ) NET CASH USED IN OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS     (3,076,072 )     (2,574,428 )                   Payment for acquisition     (5,475,000 )     -   Proceeds from sale of Saugerties building     749,000       -   Purchases of property and equipment     (145,680 )     (173,475 ) NET CASH USED IN INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS     (4,871,680 )     (173,475 )                   Proceeds from security purchase agreement     1,700,000       -   Proceeds from acquisition loan     7,500,000       -   Principal payments on loan payable     (349,082 )     (399,590 ) Due to related party     (1,819,570 )     -   Investment from parent company     1,736,412       2,068,725   NET CASH PROVIDED BY FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS     8,767,760       1,669,135                     NET INCREASE (DECREASE) IN CASH   $ 820,008     $ (1,078,768 )

GOING CONCERN AND MANAGEMENT’S PLANS	9 Months Ended
	Sep. 30, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
GOING CONCERN AND MANAGEMENT’S PLANS	NOTE 3. 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 September 30, 2024, the Company had cash and cash equivalent of approximately $2.5 million and positive working capital of $0.2 million. The Company’s liquidity needs through September 30, 2024 have been satisfied through financing agreement with private lenders.   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 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.   The Company believes its cash on hand and its ability to draw on its $5 million line of credit will enable the Company to meet its obligations and capital requirements for at least the twelve months from the date these financial statements are issued. Accordingly, no adjustment has been made to the financial statements to account for this uncertainty.

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
	Sep. 30, 2024
Accounting Policies [Abstract]
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES	NOTE 4. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES   Basis of Consolidation   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.   On September 13, 2024, the Company completed the previously announced separation and distribution of its grocery segment and wellness centers into an independent publicly traded company, and the historical results of the grocery segment and wellness centers have been reflected as discontinued operations in the Company’s condensed consolidated financial statements for all periods prior to the separation and distribution. Assets and liabilities associated with the grocery segment are classified as assets and liabilities of discontinued operations in the Company’s Condensed Consolidated Balance Sheets. Additional disclosures regarding the separation and distribution are provided in Note 2.   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, adjusted for the discontinued operations. Results of the nine months ended September 30, 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.

CONCENTRATIONS	9 Months Ended
	Sep. 30, 2024
Risks and Uncertainties [Abstract]
CONCENTRATIONS	NOTE 5. 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 $301,000 and $0 as of September 30, 2024 and December 31, 2023.   A summary of the financial institution that had cash, cash equivalent and restricted cash in excess of FDIC limits of $250,000 on September 30, 2024 and December 31, 2023 is presented below:       September 30, 2024     December 31, 2023   Total cash and cash equivalent in excess of FDIC limits of $250,000   $ 2,283,980     $ 3,402,782     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:       September 30, 2024     September 30, 2023   Cash and cash equivalent   $ 2,533,980     $ 6,196,030   Restricted cash     553,232       628,232   Total cash and restricted cash   $ 3,087,212     $ 6,824,262     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.

SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES	9 Months Ended
	Sep. 30, 2024
Segment Reporting [Abstract]
SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES	Note 6. 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 operates as a single reportable segment.

PROPERTY AND EQUIPMENT	9 Months Ended
	Sep. 30, 2024
Property, Plant and Equipment [Abstract]
PROPERTY AND EQUIPMENT	NOTE 7. PROPERTY AND EQUIPMENT   Property and equipment consist of the following:       September 30, 2024     December 31, 2023   Furniture and fixtures     90,919       90,919   Computer hardware & equipment     50,521       48,337   Other     53,056       8,056   Property and equipment, gross     194,496       147,312   Less: accumulated depreciation and amortization     (107,532 )     (88,699 ) Total property, plant, and equipment   $ 86,964     $ 58,613     The Company incurred approximately $7,000 and $5,000 of depreciation expense for the three months ended September 30, 2024 and 2023, and $19,000 and $16,000 of depreciation expense for the nine months ended September 30, 2024 and 2023, respectively.

INTANGIBLE ASSETS	9 Months Ended
	Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
INTANGIBLE ASSETS	NOTE 8. INTANGIBLE ASSETS   Intangible assets, net are as follows:   September 30, 2024   Useful Lives (Years)   Gross Carrying Amount     Accumulated Amortization     Net Carrying Amount   Patent   10 years   $ 397,165     $ (229,233 )   $ 167,932   Intangible assets, net         397,165       (229,233 )     167,932     December 31, 2023   Useful Lives (Years)   Gross Carrying Amount     Accumulated Amortization     Net Carrying Amount   Patents   10 years     397,165       (199,002 )     198,163   Intangible assets, net       $ 397,165     $ (199,002 )   $ 198,163     Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense was approximately $10,000 for the three months ended September 30, 2024 and 2023, and $30,000 and $29,000 for the nine months ended September 30, 2024 and 2023, respectively. Future annual estimated amortization expense is as follows:   Years ending December 31,       2024 (remaining three months)   $ 8,893   2025     39,124   2026     38,180   2027     32,564   2028     23,333   Thereafter     25,838   Total   $ 167,932

DEBT	9 Months Ended
	Sep. 30, 2024
Debt Disclosure [Abstract]
DEBT	NOTE 9. DEBT   Revolving Line of Credit   On November 3, 2021, the Company entered into an agreement for a new revolving line of credit of $2.0 million and a blocked/restricted deposit account (“blocked account”) with Professional Bank in Coral Gables, Florida. The agreement included a variable interest rate that it is based on a rate of 4.7% over what is earned on the collateral account. Based on the agreement with the bank, each draw request from the credit line will be 100% cash secured with moneys held from the blocked account. The outstanding balances were $453,232 as of September 30, 2024 and December 31, 2023, respectively.

STOCKHOLDERS’ EQUITY	9 Months Ended
	Sep. 30, 2024
Equity [Abstract]
STOCKHOLDERS’ EQUITY	NOTE 10. 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.   On April 8, 2024, the Company entered into a Fifth 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 Completion Date to August 1, 2024.   On July 26, 2024, the Company entered into a Sixth 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 Completion Date to November 1, 2024.   Through September 30, 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 HCWC resulting from the 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.   Stock Options and Restricted Stock   During the three and nine months ended September 30, 2024 and 2023, no stock options of the Company were exercised into common stock.   On August 23, 2023, the Company granted 2,000,000,000 shares of restricted stocks to the Company’s third-party inventors with no vesting requirement.   On November 13, 2023, the Company granted 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.   The Company recognized stock-based compensation of approximately $1,223,000 and $1,127,000 during the three months ended September 30, 2024 and 2023, and approximately $3,484,000 and $2,304,000 during the nine months ended September 30, 2024 and 2023, respectively in connection with amortization of restricted stock and stock options. Stock based compensation is included as part of total operating expenses 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:       As of September 30,       2024     2023   Preferred stock     11,111,000,000       19,444,000,000   Stock options     3,000,000,000       67,587,230,680   Restricted stock     54,712,500,000       1,500,000,000   Total     133,410,722,200       88,531,230,680

COMMITMENTS AND CONTINGENCIES	9 Months Ended
	Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 11. 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 which was reflected in accounts payable and accrued expenses, representing management’s estimate of the probable settlement amount based on the current status of discussions. This arrangement was formalized by a signed agreement on July 1, 2024 and the Company has accrued $1.5 million at June 30, 2024. As of September 30, 2024, the Company already paid $700,000, and the remaining balance of $800,000 was in accounts payable and accrued expenses in the accompanying condensed consolidated balance sheets.   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 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.   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 November 17, 2023, RJR filed a motion to dismiss the action. HCMC opposed on December 22, 2023. To date the court has not ruled on the motion.   On September 18, 2024, RJR filed an inter partes review of the patent-in-suit at the United States Patent and Trademark Office (“USPTO”). A decision on institution will be made by the USPTO sometime after January 2025.   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 September 30, 2024. With respect to legal costs, we record such costs as incurred.

SUBSEQUENT EVENTS	9 Months Ended
	Sep. 30, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 12. SUBSEQUENT EVENTS   On November 7, 2024, the Company entered into a commitment letter with an investor that will allow the Company to draw up to $5 million from a revolving credit facility (the “Facility”) through August 31, 2025. Any advances will be used for working capital purposes. Any amounts borrowed pursuant to the Facility will be repayable in full on April 30, 2026 and the interest rate on the amounts borrowed is 12% per annum.

DISCONTINUED OPERATIONS (Tables)	9 Months Ended
	Sep. 30, 2024
Discontinued Operations and Disposal Groups [Abstract]
SCHEDULE OF DISCONTINUED OPERATION	The following table summarizes the significant line items included in Loss from Discontinued Operations, in the Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023:       Three Months Ended     Nine Months Ended       September 30,     September 30,       2024     2023     2024     2023   SALES, NET   $ 14,860,975     $ 12,704,600     $ 46,349,908     $ 39,839,202   COST OF SALES     9,152,971       8,061,966       28,691,071       25,199,879   GROSS PROFIT     5,708,004       4,642,634       17,658,837       14,639,323                                     OPERATING EXPENSES, NET                         Selling, general and administrative     6,178,849       5,897,769       19,212,987       17,743,763   Gain on sale of asset     (205,146 )     -       (205,146 )     -   TOTAL OPERATING EXPENSES, NET     5,973,703       5,897,769       19,007,841       17,743,763                                     LOSS FROM OPERATIONS     (265,699 )     (1,255,135 )     (1,349,004 )     (3,104,440 )                                   OTHER INCOME (EXPENSE)     (2,212,689 )     335,462       (2,426,555 )     663,488                                     NET LOSS FROM DISCONTINUED OPERATIONS   $ (2,478,388 )   $ (919,673 )   $ (3,775,559 )   $ (2,440,952 )   The information presented as discontinued operations on the Condensed Consolidated Balance Sheets includes certain assets and liabilities that were transferred to HCWC pursuant to the Separation agreements.     There were no assets or liabilities classified as discontinued operations as of September 30, 2024. The following table summarizes the carrying value of the significant classes of assets and liabilities classified as discontinued operations as of December 31, 2023:       December 31, 2023           Cash and cash equivalents   $ 1,422,580   Accounts receivable, net     128,171   Inventories     4,162,218   Prepaid expenses and vendor deposits     174,970   Other current assets     56,842   Current Assets of Discontinued Operations     5,944,781             Property and equipment, net of accumulated depreciation     2,676,639   Intangible assets, net of accumulated amortization     4,178,519   Right of use asset - operating lease     11,412,562   Other assets     467,056   Other Assets of Discontinued Operations   $ 18,734,776             Accounts payable and accrued expenses   $ 4,920,411   Contract Liabilities     207,513   Current portion of loan payable     702,701   Lease liability, current     2,748,824   Current Liabilities of Discontinued Operations     8,579,449             Due from related party     (3,753,003 ) Loan Payable, net of current portion     2,403,807   Lease liability, net of current     8,461,182   Other Long-term Liabilities of Discontinued Operations   $ 7,111,986       The following table summarizes the significant operating cash and noncash items, capital expenditures and financing activities of discontinued operations for the nine months ended September 13, 2024 and September 30, 2023:       Nine Months Ended September 13, 2024     Nine Months Ended September 30, 2023   Net loss   $ (3,775,559 )   $ (2,440,952 ) Depreciation and amortization     1,069,958       1,070,686   Loss on warrant liability extinguishment     1,888,889       -   Gain on sale of building     (205,146 )     -   Non-cash interest expense     72,250       -   Amortization of right-of-use asset     2,381,131       1,687,522   Write-down of obsolete and slow-moving inventory     2,032,995       1,581,043   Change in contingent consideration     -       (774,900 ) Accounts receivable     (253,460 )     (75,677 ) Inventories     (2,000,669 )     (1,317,816 ) Prepaid expenses and vendor deposits     (48,693 )     (41,034 ) Other current assets     20,520       48,336   Due to related party     (2,736,272 )     (542,718 ) Other assets     (83,482 )     (3,060 ) Accounts payable and accrued expenses     998,829       (119,384 ) Contract liabilities     (156,904 )     (53,745 ) Lease liability     (2,280,459 )     (1,592,729 ) NET CASH USED IN OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS     (3,076,072 )     (2,574,428 )                   Payment for acquisition     (5,475,000 )     -   Proceeds from sale of Saugerties building     749,000       -   Purchases of property and equipment     (145,680 )     (173,475 ) NET CASH USED IN INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS     (4,871,680 )     (173,475 )                   Proceeds from security purchase agreement     1,700,000       -   Proceeds from acquisition loan     7,500,000       -   Principal payments on loan payable     (349,082 )     (399,590 ) Due to related party     (1,819,570 )     -   Investment from parent company     1,736,412       2,068,725   NET CASH PROVIDED BY FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS     8,767,760       1,669,135                     NET INCREASE (DECREASE) IN CASH   $ 820,008     $ (1,078,768 )

CONCENTRATIONS (Tables)	9 Months Ended
	Sep. 30, 2024
Risks and Uncertainties [Abstract]
SCHEDULE OF CASH AND CASH EQUIVALENT AND RESTRICTED CASH IN EXCESS OF FDIC LIMIT	A summary of the financial institution that had cash, cash equivalent and restricted cash in excess of FDIC limits of $250,000 on September 30, 2024 and December 31, 2023 is presented below:       September 30, 2024     December 31, 2023   Total cash and cash equivalent in excess of FDIC limits of $250,000   $ 2,283,980     $ 3,402,782
SCHEDULE OF RECONCILIATION OF CASH, CASH EQUIVALENT 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:       September 30, 2024     September 30, 2023   Cash and cash equivalent   $ 2,533,980     $ 6,196,030   Restricted cash     553,232       628,232   Total cash and restricted cash   $ 3,087,212     $ 6,824,262

PROPERTY AND EQUIPMENT (Tables)	9 Months Ended
	Sep. 30, 2024
Property, Plant and Equipment [Abstract]
SCHEDULE OF PROPERTY PLANT AND EQUIPMENT	Property and equipment consist of the following:       September 30, 2024     December 31, 2023   Furniture and fixtures     90,919       90,919   Computer hardware & equipment     50,521       48,337   Other     53,056       8,056   Property and equipment, gross     194,496       147,312   Less: accumulated depreciation and amortization     (107,532 )     (88,699 ) Total property, plant, and equipment   $ 86,964     $ 58,613

INTANGIBLE ASSETS (Tables)	9 Months Ended
	Sep. 30, 2024
Goodwill and Intangible Assets Disclosure [Abstract]
SCHEDULE OF INTANGIBLE ASSETS, NET	Intangible assets, net are as follows:   September 30, 2024   Useful Lives (Years)   Gross Carrying Amount     Accumulated Amortization     Net Carrying Amount   Patent   10 years   $ 397,165     $ (229,233 )   $ 167,932   Intangible assets, net         397,165       (229,233 )     167,932     December 31, 2023   Useful Lives (Years)   Gross Carrying Amount     Accumulated Amortization     Net Carrying Amount   Patents   10 years     397,165       (199,002 )     198,163   Intangible assets, net       $ 397,165     $ (199,002 )   $ 198,163
SCHEDULE OF FUTURE ANNUAL ESTIMATED AMORTIZATION EXPENSE	Years ending December 31,       2024 (remaining three months)   $ 8,893   2025     39,124   2026     38,180   2027     32,564   2028     23,333   Thereafter     25,838   Total   $ 167,932

STOCKHOLDERS’ EQUITY (Tables)	9 Months Ended
	Sep. 30, 2024
Equity [Abstract]
SCHEDULE OF DILUTIVE 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:       As of September 30,       2024     2023   Preferred stock     11,111,000,000       19,444,000,000   Stock options     3,000,000,000       67,587,230,680   Restricted stock     54,712,500,000       1,500,000,000   Total     133,410,722,200       88,531,230,680

ORGANIZATION (Details Narrative)		9 Months Ended
	Sep. 09, 2024 shares	Sep. 30, 2024 Segment
Number of operating segment | Segment		1
Common Stock [Member]
Stock issued during period shares spin-off | shares	208,632

SCHEDULE OF DISCONTINUED OPERATION (Details) - USD ($)		3 Months Ended		9 Months Ended
		Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Discontinued Operations and Disposal Groups [Abstract]
SALES, NET		$ 14,860,975	$ 12,704,600	$ 46,349,908	$ 39,839,202
COST OF SALES		9,152,971	8,061,966	28,691,071	25,199,879
GROSS PROFIT		5,708,004	4,642,634	17,658,837	14,639,323
Selling, general and administrative		6,178,849	5,897,769	19,212,987	17,743,763
Gain on sale of asset		(205,146)		(205,146)
TOTAL OPERATING EXPENSES, NET		5,973,703	5,897,769	19,007,841	17,743,763
LOSS FROM OPERATIONS		(265,699)	(1,255,135)	(1,349,004)	(3,104,440)
OTHER INCOME (EXPENSE)		(2,212,689)	335,462	(2,426,555)	663,488
NET LOSS FROM DISCONTINUED OPERATIONS		(2,478,388)	(919,673)	(3,775,559)	(2,440,952)
Cash and cash equivalents						$ 1,422,580
Accounts receivable, net						128,171
Inventories						4,162,218
Prepaid expenses and vendor deposits						174,970
Other current assets						56,842
Current Assets of Discontinued Operations						5,944,781
Property and equipment, net of accumulated depreciation						2,676,639
Intangible assets, net of accumulated amortization						4,178,519
Right of use asset - operating lease						11,412,562
Other assets						467,056
Other Assets of Discontinued Operations						18,734,776
Accounts payable and accrued expenses						4,920,411
Contract Liabilities						207,513
Current portion of loan payable						702,701
Lease liability, current						2,748,824
Current Liabilities of Discontinued Operations						8,579,449
Due from related party						(3,753,003)
Loan Payable, net of current portion						2,403,807
Lease liability, net of current						8,461,182
Other Long-term Liabilities of Discontinued Operations						$ 7,111,986
Net loss		$ (2,478,388)	$ (919,673)	(3,775,559)	(2,440,952)
Depreciation and amortization				1,069,958	1,070,686
Loss on warrant liability extinguishment				1,888,889
Gain on sale of building				(205,146)
Non-cash interest expense				72,250
Amortization of right-of-use asset				2,381,131	1,687,522
Write-down of obsolete and slow-moving inventory				2,032,995	1,581,043
Change in contingent consideration					(774,900)
Accounts receivable				(253,460)	(75,677)
Inventories				(2,000,669)	(1,317,816)
Prepaid expenses and vendor deposits				(48,693)	(41,034)
Other current assets				20,520	48,336
Due to related party				(2,736,272)	(542,718)
Other assets				(83,482)	(3,060)
Accounts payable and accrued expenses				998,829	(119,384)
Contract liabilities				(156,904)	(53,745)
Lease liability				(2,280,459)	(1,592,729)
NET CASH USED IN OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS				(3,076,072)	(2,574,428)
Payment for acquisition	[1]			(5,475,000)
Proceeds from sale of Saugerties building	[1]			749,000
Purchases of property and equipment				(145,680)	(173,475)
NET CASH USED IN INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS				(4,871,680)	(173,475)
Proceeds from security purchase agreement	[1]			1,700,000
Proceeds from acquisition loan	[1]			7,500,000
Principal payments on loan payable				(349,082)	(399,590)
Due to related party				(1,819,570)
Investment from parent company				1,736,412	2,068,725
NET CASH PROVIDED BY FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS				8,767,760	1,669,135
NET INCREASE (DECREASE) IN CASH				$ 820,008	$ (1,078,768)
[1] The cash flows related to discontinued operations have not been segregated. Accordingly, the Consolidated Statements of Cash Flows include the results of continuing and discontinued operations. See Note 2 for cash flows related to Discontinued Operations.

DISCONTINUED OPERATIONS (Details Narrative) - USD ($)		3 Months Ended
	Sep. 13, 2024	Sep. 30, 2024	Dec. 31, 2023	Sep. 30, 2023
Description of spin-off transaction	Each of the HCMC stockholders received one share of HCWC Class A common stock and three shares of Class B common stock for every 208,632 shares of HCMC common stock held of record as of the close of business on September 13, 2024
Transfer of cash		$ 2,533,980	$ 3,658,506	$ 6,196,030
Retained earnings		(72,859,606)	$ (62,096,821)
Reduction cost for services		100,000
Healthy Choice Wellness Corp [Member]
Transfer of cash	$ 2,200,000
Transfer of cash	$ 1,200,000
Retained earnings		$ 1,000,000.0

GOING CONCERN AND MANAGEMENT’S PLANS (Details Narrative) - USD ($)	Sep. 30, 2024	Dec. 31, 2023	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash and cash equivalent	$ 2,533,980	$ 3,658,506	$ 6,196,030
Working capital	200,000
Line of credit facity maximum borrowing capacity	$ 5,000,000

SCHEDULE OF CASH AND CASH EQUIVALENT AND RESTRICTED CASH IN EXCESS OF FDIC LIMIT (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Risks and Uncertainties [Abstract]
Total cash and cash equivalent in excess of FDIC limits of $250,000	$ 2,283,980	$ 3,402,782

SCHEDULE OF CASH AND CASH EQUIVALENTS IN EXCESS OF FDIC LIMIT (Details) (Parenthetical) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Risks and Uncertainties [Abstract]
FDIC insured amount	$ 250,000	$ 250,000

SCHEDULE OF RECONCILIATION OF CASH, CASH EQUIVALENT AND RESTRICTED CASH (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023	Sep. 30, 2023
Risks and Uncertainties [Abstract]
Cash and cash equivalent	$ 2,533,980	$ 3,658,506	$ 6,196,030
Restricted cash	553,232	$ 553,232	628,232
Total cash and restricted cash	$ 3,087,212		$ 6,824,262

CONCENTRATIONS (Details Narrative) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Risks and Uncertainties [Abstract]
Cash equivalents	$ 301,000	$ 0
FDIC insured amount	$ 250,000	$ 250,000

SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES (Details Narrative)	9 Months Ended
	Sep. 30, 2024 Segment
Segment Reporting [Abstract]
Number of operating segment	1

SCHEDULE OF PROPERTY PLANT AND EQUIPMENT (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 194,496	$ 147,312
Less: accumulated depreciation and amortization	(107,532)	(88,699)
Total property, plant, and equipment	86,964	58,613
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	90,919	90,919
Computer Hardware and Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	50,521	48,337
Other [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 53,056	$ 8,056

PROPERTY AND EQUIPMENT (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Property, Plant and Equipment [Abstract]
Depreciation	$ 7,000	$ 5,000	$ 19,000	$ 16,000

SCHEDULE OF INTANGIBLE ASSETS, NET (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	$ 397,165	$ 397,165
Accumulated amortization	(229,233)	(199,002)
Net carrying amount	167,932	198,163
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Gross carrying amount	397,165	397,165
Accumulated amortization	(229,233)	(199,002)
Net carrying amount	$ 167,932	$ 198,163
Useful lives	10 years	10 years

SCHEDULE OF FUTURE ANNUAL ESTIMATED AMORTIZATION EXPENSE (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
2024 (remaining three months)	$ 8,893
2025	39,124
2026	38,180
2027	32,564
2028	23,333
Thereafter	25,838
Total	$ 167,932	$ 198,163

INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 10,000	$ 10,000	$ 30,000	$ 29,000

DEBT (Details Narrative) - USD ($)	Nov. 03, 2021	Sep. 30, 2024	Dec. 31, 2023
Line of Credit Facility [Line Items]
Maximum borrowing capacity		$ 5,000,000
Line of credit		453,232	$ 453,232
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 2,000,000.0
Interest rate	4.70%
Percentage of cash secured	100.00%
Line of credit		$ 453,232	$ 453,232

SCHEDULE OF DILUTIVE LOSS PER SHARE (Details) - shares	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	133,410,722,200	88,531,230,680
Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	11,111,000,000	19,444,000,000
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	3,000,000,000	67,587,230,680
Restricted Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	54,712,500,000	1,500,000,000

STOCKHOLDERS’ EQUITY (Details Narrative)						3 Months Ended		9 Months Ended
	Nov. 13, 2023 shares	Oct. 30, 2023	Aug. 23, 2023 shares	May 15, 2023	Aug. 18, 2022 USD ($) $ / shares shares	Sep. 30, 2024 USD ($) shares	Sep. 30, 2023 USD ($) shares	Sep. 30, 2024 USD ($) shares	Sep. 30, 2023 USD ($) shares	Mar. 01, 2023
Class of Stock [Line Items]
Redemption value | $									$ 22,222
Stock based compensation | $						$ 1,223,000	$ 1,127,000	$ 3,484,000	$ 2,304,000
Equity Option [Member]
Class of Stock [Line Items]
Number of stock option exercised						0	0	0	0
Restricted Stock [Member] | Share Based Payment Arrangement Third Party Investors [Member]
Class of Stock [Line Items]
Number of additional shares approved for issuance			2,000,000,000
Restricted Stock [Member] | Share-Based Payment Arrangement, Employee [Member]
Class of Stock [Line Items]
Number of additional shares approved for issuance	1,000,000,000
Restricted Stock [Member] | Share-Based Payment Arrangement, Employee [Member] | Share-Based Payment Arrangement, Tranche One [Member]
Class of Stock [Line Items]
Vesting rights description	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.
Series E Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member]
Class of Stock [Line Items]
Preferred stock shares issued					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								1,585
Conversion of series E convertible preferred stock								15,850,000,000
Redemption 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	9 Months Ended
	Apr. 12, 2023 Appeal	Feb. 22, 2022 USD ($)	Mar. 31, 2023 USD ($)	Sep. 30, 2024 USD ($)	Jun. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)	Nov. 30, 2020 USD ($) User
Loss Contingencies [Line Items]
Potential exposure						$ 1,500,000
Accounts payable and accrued expenses paid				$ 700,000	$ 1,500,000
Accounts payable and accrued expenses remaining balance				$ 800,000
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] $ in Millions	Nov. 07, 2024 USD ($)
Subsequent Event [Line Items]
Revolving credit facility	$ 5
Interest rate	12.00%

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