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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Healthier Choices Management Corporation (PK) | USOTC:HCMC | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.000001 | 0.000001 | 0.0001 | 0.0001 | 0.000001 | 0.0001 | 325,279,212 | 20:06:00 |
Delaware
|
84-1070932
|
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
|
incorporation or organization)
|
Identification No.)
|
|
3800 North 28Th Way
|
||
Hollywood, FL
|
33020
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Large accelerated filer
|
☐
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☒
|
Smaller reporting company
|
☒
|
Emerging growth company
|
☐
|
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
|
|
PAGE
|
1
|
|
1
|
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1
|
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2
|
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3
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4
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5
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10
|
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14
|
|
14
|
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15
|
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15
|
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15
|
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15
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15
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15
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15
|
|
16
|
|
17
|
|
Exhibit 31.1
|
|
Exhibit 31.2
|
|
Exhibit 32.1
|
|
Exhibit 32.2
|
Three Months Ended
|
|||||
March 31,
|
|||||
2020
|
2019
|
||||
SALES
|
|||||
Vapor sales, net
|
$
|
773,458
|
$
|
1,224,042
|
|
Grocery sales, net
|
3,262,714
|
3,156,064
|
|||
TOTAL SALES, NET
|
4,036,172
|
4,380,106
|
|||
Cost of sales vapor
|
319,080
|
509,416
|
|||
Cost of sales grocery
|
2,009,200
|
1,967,796
|
|||
GROSS PROFIT
|
1,707,892
|
1,902,894
|
|||
OPERATING EXPENSES
|
2,372,381
|
2,990,455
|
|||
LOSS FROM OPERATIONS
|
(664,489)
|
(1,087,561)
|
|||
OTHER (EXPENSE) INCOME
|
|||||
Loss on investment
|
(9,857)
|
(25,713)
|
|||
Other expense, net
|
(76)
|
(693)
|
|||
Interest (expense) income, net
|
(16,872)
|
1,438
|
|||
Total other expense, net
|
(26,805)
|
(24,968)
|
|||
NET LOSS
|
$
|
(691,294)
|
$
|
(1,112,529)
|
|
NET LOSS PER SHARE-BASIC AND DILUTED
|
$
|
0.00
|
$
|
0.00
|
|
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED
|
69,716,324,179
|
66,624,914,548
|
Convertible
Preferred Stock
|
Common Stock
|
Additional
Paid-In
|
Accumulated
|
|||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
||||||||||||||
Balance – January 1, 2020
|
20,150
|
$
|
20,150,116
|
67,698,494,244
|
$
|
6,769,849
|
$
|
7,618,245
|
$
|
(28,636,479)
|
$
|
5,901,731
|
||||||||
Issuance of common stock in connection with cashless exercise of Series A warrants
|
-
|
-
|
4,798,932,767
|
479,894
|
(479,894)
|
-
|
-
|
|||||||||||||
Stock-based compensation expense
|
-
|
-
|
-
|
-
|
81,944
|
-
|
81,944
|
|||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
-
|
(691,294)
|
(691,294)
|
|||||||||||||
Balance – March 31, 2020
|
20,150
|
$
|
20,150,116
|
72,497,427,011
|
$
|
7,249,743
|
$
|
7,220,295
|
$
|
(29,327,773)
|
$
|
5,292,381
|
Convertible
Preferred Stock
|
Common Stock
|
Additional
Paid-In
|
Accumulated
|
|||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Capital
|
Deficit
|
Total
|
||||||||||||||
Balance – January 1, 2019
|
20,150
|
$
|
20,150,116
|
66,623,514,522
|
$
|
6,662,351
|
$
|
7,348,390
|
$
|
(25,734,088)
|
$
|
8,426,769
|
||||||||
Issuance of common stock in connection with cashless exercise of Series A warrants
|
-
|
-
|
10,872,544
|
1,087
|
(637)
|
-
|
450
|
|||||||||||||
Cumulative Effect on adoption of ASC 842
|
-
|
-
|
-
|
-
|
-
|
(103,015)
|
(103,015)
|
|||||||||||||
Stock-based compensation expense
|
-
|
-
|
-
|
-
|
113,079
|
-
|
113,079
|
|||||||||||||
Net loss
|
(1,112,529)
|
(1,112,529)
|
||||||||||||||||||
Balance – March 31, 2019
|
20,150
|
$
|
20,150,116
|
66,634,387,066
|
$
|
6,663,438
|
$
|
7,460,832
|
$
|
(26,949,632)
|
$
|
7,324,754
|
Three Months Ended March 31,
|
|||||
2020
|
2019
|
||||
OPERATING ACTIVITIES
|
|||||
Net loss
|
$
|
(691,294)
|
$
|
(1,112,529)
|
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|||||
Bad debt expense
|
-
|
(3,002)
|
|||
Depreciation and amortization
|
147,834
|
152,314
|
|||
Loss on disposal of assets
|
-
|
25,427
|
|||
Loss on investment
|
9,857
|
25,713
|
|||
Amortization of right-of-use asset
|
158,724
|
162,782
|
|||
Stock-based compensation expense
|
81,944
|
113,079
|
|||
Changes in operating assets and liabilities:
|
|||||
Accounts receivable
|
(1,081)
|
14,989
|
|||
Inventories
|
40,036
|
(61,407)
|
|||
Prepaid expenses and vendor deposits
|
21,171
|
(43,276)
|
|||
Contract assets
|
-
|
14,400
|
|||
Other assets
|
3,958
|
839
|
|||
Accounts payable
|
126,569
|
247,299
|
|||
Accrued expenses
|
47,124
|
(252,310)
|
|||
Contract liabilities
|
(3,756)
|
(201,928)
|
|||
Lease liability
|
(140,374)
|
(143,233)
|
|||
NET CASH USED IN OPERATING ACTIVITIES
|
(199,288)
|
(1,060,843)
|
|||
INVESTING ACTIVITIES
|
|||||
Collection of note receivable
|
7,362
|
41,473
|
|||
Purchases of property and equipment
|
(10,805)
|
-
|
|||
Purchases of patent
|
(89,415)
|
-
|
|||
NET CASH USED IN INVESTING ACTIVITIES
|
(92,858)
|
41,473
|
|||
FINANCING ACTIVITIES
|
|||||
Principal payments on loan payable
|
(70,574)
|
(47,211)
|
|||
NET CASH USED IN FINANCING ACTIVITIES
|
(70,574)
|
(47,211)
|
|||
DECREASE IN CASH
|
(362,720)
|
(1,066,581)
|
|||
CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD
|
3,525,415
|
7,061,253
|
|||
CASH AND CASH EQUIVALENTS — END OF PERIOD
|
$
|
3,162,695
|
$
|
5,994,672
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|||||
Cash paid for interest
|
$
|
35,256
|
$
|
30,052
|
|
March 31, 2020
|
|
Total Cash and cash equivalents in excess of FDIC limits of $250,000
|
$
|
2,366,651
|
|
Three Months Ended March 31,
|
|||||||
2020
|
2019
|
|||||||
Vapor
|
$
|
773,458
|
$
|
1,224,042
|
||||
Grocery
|
3,262,714
|
3,156,064
|
||||||
Total revenue
|
$
|
4,036,172
|
$
|
4,380,106
|
||||
Retail Vapor
|
$
|
773,458
|
$
|
1,223,722
|
||||
Retail Grocery
|
2,830,365
|
2,753,199
|
||||||
Food service/restaurant
|
329,139
|
347,651
|
||||||
Online/eCommerce
|
103,210
|
46,569
|
||||||
Wholesale Grocery
|
-
|
8,645
|
||||||
Wholesale Vapor
|
-
|
320
|
||||||
Total revenue
|
$
|
4,036,172
|
$
|
4,380,106
|
March 31, 2020
|
Useful Lives (Years)
|
Gross
Carrying Amount
|
Accumulated
Amortization
|
Net
Carrying Amount
|
||||||||
Trade names
|
8-10 years
|
$
|
993,000
|
$
|
(379,671)
|
$
|
613,329
|
|||||
Customer relationships
|
4-10 years
|
1,228,000
|
(356,323)
|
871,677
|
||||||||
Patents
|
10 years
|
359,665
|
(58,667)
|
300,998
|
||||||||
Non-compete
|
4 years
|
174,000
|
(56,188)
|
117,812
|
||||||||
Intangible assets, net
|
$
|
2,754,665
|
$
|
(850,849)
|
$
|
1,903,816
|
December 31, 2019
|
Useful Lives (Years)
|
Gross
Carrying Amount
|
Accumulated
Amortization
|
Net
Carrying Amount
|
||||||||
Trade names
|
8-10 years
|
993,000
|
(354,203)
|
638,797
|
||||||||
Customer relationships
|
4-10 years
|
1,228,000
|
(293,260)
|
934,740
|
||||||||
Patents
|
10 years
|
270,250
|
(49,027)
|
221,223
|
||||||||
Non-compete
|
4 years
|
174,000
|
(45,313)
|
128,687
|
||||||||
Intangible assets, net
|
$
|
2,665,250
|
$
|
(741,803)
|
$
|
1,923,447
|
Years ending December 31,
|
||
2020 (remaining nine months)
|
$
|
325,193
|
2021
|
426,591
|
|
2022
|
411,206
|
|
2023
|
172,341
|
|
2024
|
172,341
|
|
Thereafter
|
396,144
|
|
Total
|
$
|
1,903,816
|
March 31,
2020
|
March 31,
2019
|
||||
Beginning balance as January 1,
|
$
|
26,823
|
$
|
442,630
|
|
Issued
|
60,309
|
74,894
|
|||
Redeemed
|
(63,509)
|
(74,387)
|
|||
Breakage recognized
|
(556)
|
(648)
|
|||
Fulfillment of contract
|
-
|
(201,787)
|
|||
Ending balance as of March 31,
|
$
|
23,067
|
$
|
240,702
|
Three Months Ended March 31,
|
|||||
2020
|
2019
|
||||
Stock-based compensation
|
$
|
81,944
|
$
|
113,079
|
|
Three Months Ended March 31,
|
|||||||
2020
|
2019
|
|||||||
Preferred stock
|
201,501,000,000
|
201,501,000,000
|
||||||
Stock options
|
68,062,000,000
|
68,012,000,000
|
||||||
Warrants
|
36,460,000,000
|
41,579,000,000
|
||||||
Total
|
306,023,000,000
|
311,092,000,000
|
Three Months Ended March 31,
|
2020 to 2019
|
|||||||
2020
|
2019
|
Change $
|
||||||
SALES
|
||||||||
Vapor sales, net
|
$
|
773,458
|
$
|
1,224,042
|
$
|
(450,584)
|
||
Grocery sales, net
|
3,262,714
|
3,156,064
|
106,650
|
|||||
TOTAL SALES, NET
|
4,036,172
|
4,380,106
|
(343,934)
|
|||||
Cost of sales vapor
|
319,080
|
509,416
|
(190,336)
|
|||||
Cost of sales grocery
|
2,009,200
|
1,967,796
|
41,404
|
|||||
GROSS PROFIT
|
1,707,892
|
1,902,894
|
(195,002)
|
|||||
OPERATING EXPENSES
|
||||||||
Selling, general and administrative
|
2,372,381
|
2,990,455
|
(618,074)
|
|||||
Total operating expenses
|
2,372,381
|
2,990,455
|
(618,074)
|
|||||
LOSS FROM OPERATIONS
|
(664,489)
|
(1,087,561)
|
423,072
|
|||||
OTHER INCOME (EXPENSE)
|
||||||||
Gain (loss) on investment
|
(9,857)
|
(25,713)
|
15,856
|
|||||
Other income (expense)
|
(76)
|
(693)
|
617
|
|||||
Interest income (expense)
|
(16,872)
|
1,438
|
(18,310)
|
|||||
Total other income (expense), net
|
(26,805)
|
(24,968)
|
(1,837)
|
|||||
NET LOSS
|
$
|
(691,294)
|
$
|
(1,112,529)
|
$
|
421,235
|
Three Months Ended
March 31,
|
|||||
2020
|
2019
|
||||
Net cash used in operating activities
|
$
|
(199,288)
|
$
|
(1,060,843)
|
|
Net cash provided by (used in) investing activities
|
(92,858)
|
41,473
|
|||
Net cash used in financing activities
|
(70,574)
|
(47,211)
|
|||
$
|
(362,720)
|
$
|
(1,066,581)
|
March 31,
2020
|
December 31,
2019
|
||||
Cash
|
$
|
3,162,695
|
$
|
3,525,415
|
|
Total assets
|
$
|
13,356,308
|
$
|
14,006,669
|
|
Percentage of total assets
|
23.68%
|
25.17%
|
● |
Failure to have properly documented and designed disclosure controls and procedures and testing of the operating effectiveness of our internal control over financial
reporting
|
● |
Weakness around our purchase orders and inventory write-off procedures
|
● |
Segregation of duties due to lack of personnel
|
● |
We continue to improve the process around inventory controls and
throughout the current year, we are planning to perform a blind-counts for 100% of our overall inventory value with the purpose of validating our inventory records and increasing the staff knowledge around the importance of the new
inventory procedures implemented. In addition, we are transitioning the independent third-party counts to a new company with the purposes of improving the accuracy of the quarterly and yearly counts perform for all retail stores. Due to the
Coronavirus pandemic ("COVID-19") that started in early March 2020, the company was not able to conduct any independent third-party counts for the three months ended March 31, 2020.
|
● |
Our management has increased its focus on the Company’s purchase order process in order to better manage inventory thereby
improving cash management and ultimately leading to more reliable and precise financial reporting.
|
Exhibit
|
Incorporated by Reference
|
Filed or Furnished
|
||||||||
No.
|
Exhibit Description
|
Form
|
Date
|
Number
|
Herewith
|
|||||
31.1
|
Filed
|
|||||||||
31.2
|
Filed
|
|||||||||
32.1
|
Furnished *
|
|||||||||
32.2
|
Furnished *
|
|||||||||
101.INS
|
XBRL Instance Document
|
Filed
|
||||||||
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
Filed
|
||||||||
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
Filed
|
||||||||
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
Filed
|
||||||||
101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document
|
Filed
|
||||||||
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
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.
|
HEALTHIER CHOICES MANAGEMENT CORP.
|
||
Date: July 1, 2020
|
By:
|
/s/ Jeffrey Holman
|
Jeffrey Holman
|
||
Chief Executive Officer
|
||
Date: July 1, 2020
|
By:
|
/s/ John Ollet
|
John Ollet
|
||
Chief Financial Officer
|
1 Year Healthier Choices Manage... (PK) Chart |
1 Month Healthier Choices Manage... (PK) Chart |
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