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~~March 3031, ~~2024~~2025

☐ 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~~May 13, ~~2024~~2025, 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~~March 3031, ~~2024~~2025 (Unaudited) and December 31, ~~2023~~2024 ~~(Unaudited)~~ 3 Condensed Consolidated Statements of Operations for the Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 (Unaudited) 4 Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity for the Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 (Unaudited) 5 Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Three Months Ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 (Unaudited) 76 Notes to Condensed Consolidated Financial Statements (Unaudited) 87 ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 1816 ITEM 3. Quantitative and Qualitative Disclosures about Market Risk 2219 ITEM 4. Controls and Procedures 2219 PART II OTHER INFORMATION 2421 ITEM 1. Legal Proceedings 2421 ITEM 1A. Risk Factors 2421 ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds 2421 ITEM 3. Defaults Upon Senior Securities 2421 ITEM 4. Mine Safety Disclosures 2421 ITEM 5. Other Information 2421 ITEM 6. Exhibits 2421 Signatures 2623 Exhibit 31.1 Exhibit 31.2 Exhibit 32.1 Exhibit 32.2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	March 31, 2025 (Unaudited)			December 31, 2024

ASSETS
CURRENT ASSETS
Cash and cash equivalent	$	1,175,540		$	1,193,567
Inventories		39,092			40,460
Prepaid expenses and vendor deposits		120,063			161,563
Other current assets		3,085			-
Restricted cash		100,000			553,232
TOTAL CURRENT ASSETS		1,437,780			1,948,822

Property, plant, and equipment, net of accumulated depreciation		14,158			80,541
Intangible assets, net of accumulated amortization		188,495			158,151
Right of use asset – operating lease, net		3,669			4,435
Other assets		28,500			28,500
TOTAL ASSETS	$	1,672,602		$	2,220,449

LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	2,020,832		$	2,022,572
Line of credit		-			453,232
Operating lease liability, current		3,135			3,105
Due to related party		1,159,251			190,268
TOTAL CURRENT LIABILITIES		3,183,218			2,669,177

Operating lease liability, net of current		534			1,330
TOTAL LIABILITIES		3,183,752			2,670,507

COMMITMENTS AND CONTINGENCIES (SEE NOTE 10)		-			-

CONVERTIBLE PREFERRED STOCK
Series E redeemable convertible preferred stock, $1,000 par value per share, 14,722 shares authorized, 1,111 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively; aggregate liquidation preference of $1.1 million as of March 31, 2025 and December 31, 2024, 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 March 31, 2025 and December 31, 2024, respectively.		48,126,663			48,126,663
Additional paid-in capital		26,470,358			25,347,774
Accumulated deficit		(77,219,271	)		(75,035,595	)
TOTAL STOCKHOLDERS’ EQUITY		(2,622,250	)		(1,561,158	)

TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY	$	1,672,602		$	2,220,449

	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

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(~~Unaudited~~UNAUDITED)

	2024			2023			2024			2023
	Three Months Ended March 31,
	Three Months Ended						Nine Months Ended
	2025			2024
	September 30,						September 30,
SALES, NET	$	1,780		$	119
	2024			2023			2024			2023
COST OF SALES		1,478			132
SALES, NET	$	52		$	-		$	345		$	39
GROSS PROFIT		302			(13	)
COST OF SALES		15			-			190			653
OPERATING EXPENSES		2,169,715			2,202,894
GROSS PROFIT		37			-			155			(614	)
LOSS FROM OPERATIONS		(2,169,413	)		(2,202,907	)
OPERATING EXPENSES		2,143,442			2,136,026			6,312,846			5,448,812
OTHER INCOME (EXPENSE)
LOSS FROM OPERATIONS		(2,143,405	)		(2,136,026	)		(6,312,691	)		(5,449,426	)
Loss on investment		-			(857	)
OTHER INCOME (EXPENSE)
Other income, net		(22,809	)		-
Loss on investment		(343	)		343			(1,336	)		(8,057	)
Interest income (expense), net		8,546			44,080
Other income, net		260,000			(10,932	)		260,000			(10,932	)
TOTAL OTHER INCOME (EXPENSE), NET		(14,263	)		43,223
Interest income (expense), net		15,105			75,299			114,732			358,322
NET LOSS FROM CONTINUING OPERATIONS	$	(2,183,676	)	$	(2,159,684	)
TOTAL OTHER INCOME (EXPENSE), NET		274,762			64,710			373,396			339,333
NET LOSS FROM DISCONTINUED OPERATIONS		-			(701,463	)
NET LOSS FROM CONTINUING OPERATIONS	$	(1,868,643	)	$	(2,071,316	)	$	(5,939,295	)	$	(5,110,093	)
NET LOSS	$	(2,183,676	)	$	(2,861,147	)
NET LOSS FROM DISCONTINUED OPERATIONS		(2,478,388	)		(919,673	)		(3,775,559	)		(2,440,952	)
NET LOSS PER SHARE-BASIC AND DILUTED
NET LOSS	$	(4,347,031	)	$	(2,990,989	)	$	(9,714,854	)	$	(7,551,045	)
Continuing Operations		-			-
INDUCED CONVERSIONS OF PREFERRED STOCK		-			-			-			(152,500	)
Discontinued Operations		-			-
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS FROM CONTINUING OPERATIONS		(1,868,643	)		(2,071,316	)		(5,939,295	)		(5,262,593	)
TOTAL NET LOSS PER SHARE-BASIC AND DILUTED	$	-		$	-
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS FROM DISCONTINUED OPERATIONS		(2,478,388	)		(919,673	)		(3,775,559	)		(2,440,952	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED		481,266,632,384			429,919,440,601
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

HEALTHIER CHOICES MANAGEMENT CORP.

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

FOR THE THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2024~~2025 AND ~~2023~~2024

(~~Unaudited~~UNAUDITED)

		Shares		Amount			Shares		Amount		Capital			Deficit			Total
		Series E Convertible Preferred Stock					Common Stock				Additional Paid-In			Accumulated
		Shares		Amount			Shares		Amount		Capital			Deficit			Total
Balance – July 1, 2024	-		1,111	$	1,111,100	-		479,266,632,384	$	47,926,663	$	23,190,107		$	(67,464,646	)	$	3,652,124
Balance – January 1, 2025	-		1,111	$	1,111,100			481,266,632,384	$	48,126,663	$	25,347,774		$	(75,035,595	)	$	(1,561,158	)
Issuance of award stock			-		-	-		2,000,000,000		200,000		(200,000	)		-			-
Stock-based compensation expense	-		-		-			-		-		1,122,584			-			1,122,584
HCWC Spin-Off			-		-	-		-		-		-			(1,047,929	)		(1,047,929	)
Net loss	-		-		-			-		-		-			(2,183,676	)		(2,183,676	)
Stock-based compensation expense			-		-	-		-		-		1,222,583			-			1,222,583
Balance – March 31, 2025	-		1,111	$	1,111,100			481,266,632,384	$	48,126,663	$	26,470,358			(77,219,271	)	$	(2,622,250	)
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	)

		Shares		Amount		Shares			Amount			Shares		Amount			Capital			Deficit			Total
		Series E Convertible Preferred Stock				Common Stock						Additional Paid-In		Accumulated
		Series E Redeemable Convertible Preferred Stock				Series D Convertible Preferred Stock						Common Stock					Additional Paid-In			Accumulated
		Shares		Amount		Shares			Amount			Capital		Deficit			Total
		Shares		Amount		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
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
Balance	-		1,111	$	1,111,100		478,266,632,384		$	47,826,663		$	21,028,274	$	(62,096,821	)	$	6,758,116
Series D Convertible Preferred Stock exercised			-		-		(800	)		(800,000	)		8,000,000,000		800,000			-			-			-
Stock-based compensation expense	-		-		-		-			-			1,126,751		-			1,126,751
Issuance of award stock			-		-		-			-			4,000,000,000		400,000			(400,000	)		-			-
Net loss	-		-		-		-			-			-		(2,861,147	)		(2,861,147	)
Stock-based compensation expense			-		-		-			-			-		-			1,126,750			-			1,126,750
Balance – March 31, 2024	-		1,111	$	1,111,100		478,266,632,384		$	47,826,663		$	22,155,025	$	(64,957,968	)	$	5,023,720
Net loss			-		-		-			-			-		-			-			(2,990,989	)		(2,990,989	)
Balance	-		1,111	$	1,111,100		478,266,632,384		$	47,826,663		$	22,155,025	$	(64,957,968	)	$	5,023,720
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

HEALTHIER CHOICES MANAGEMENT CORP.

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

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

(UNAUDITED)

	Shares			Amount				Shares		Amount		Capital			Deficit			Total
	Three Months Ended March 31,
	Series E Convertible Preferred Stock							Common Stock				Additional Paid-In			Accumulated
	2025			2024
	Shares			Amount				Shares		Amount		Capital			Deficit			Total
CASH FLOWS FROM OPERATING ACTIVITIES
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
Net loss from continuing operations	$	(2,183,676	)	$	(2,159,684	)
Issuance of awarded stock		-			-				3,000,000,000		300,000		(300,000	)		-			-
Adjustments to reconcile net loss to net cash used in operating activities:
HCWC Spin-Off		-			-				-		-		-			(1,047,931	)		(1,047,931	)
Depreciation and amortization		13,230			16,406
Stock-based compensation		-			-				-		-		3,484,416			-			3,484,416
Loss on asset disposal		22,809			-
Net loss		-			-		-		-		-		-			(9,714,854	)		(9,714,854	)
Loss on investment		-			857
Balance – September 30, 2024		1,111		$	1,111,100		-		481,266,632,384	$	48,126,663	$	24,212,690		$	(72,859,606	)	$	(520,253	)
Amortization of right-of-use asset		766			27,614
Stock-based compensation expense		1,122,583			1,126,751
Changes in operating assets and liabilities:
Inventories		1,369			29
Prepaid expenses and vendor deposits		41,500			359,820
Other current assets		(3,085	)		8,285
Due from related party		2,399			948,083
Other assets		-			(4,076	)
Accounts payable and accrued expenses		(1,740	)		(122,015	)
Lease liability		(766	)		(27,614	)
Cash used in operating activities, discontinued operations		-			(2,548,569	)
NET CASH USED IN OPERATING ACTIVITIES		(984,611	)		(2,374,113	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		-			(47,185	)
Cash used in investing activities, discontinued operations		-			(74,220	)
NET CASH USED IN INVESTING ACTIVITIES		-			(121,405	)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments for deferred offering costs		-			(209,015	)
Payment on line of credit		(453,232	)		-
Investment to HCWC		-			(695,207	)
Due to related party		966,584			-
Cash provided by financing activities, discontinued operations		-			2,223,455
NET CASH PROVIDED BY FINANCING ACTIVITIES		513,352			1,319,233
NET DECREASE IN CASH, CASH EQUIVALENT AND RESTRICTED CASH		(471,259	)		(1,176,285	)
CASH, CASH EQUIVALENT AND RESTRICTED CASH— BEGINNING OF PERIOD		1,746,799			5,634,318
CASH, CASH EQUIVALENT AND RESTRICTED CASH — END OF PERIOD	$	1,275,540		$	4,458,033
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	$	582		$	104,505
Cash paid for income tax	$	-		$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES
Non-cash deferred offering cost	$	-		$	475,101

	Shares			Amount			Shares			Amount			Shares		Amount		Capital			Deficit			Total
	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
Balance		14,722		$	14,722,075			800		$	800,000			339,741,632,384	$	33,974,163	$	29,045,802		$	(43,613,941	)	$	20,206,024
Series E convertible preferred stock redeemed		(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
Balance		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.

See notes to unaudited condensed consolidated financial statements

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	2024 (a)			2023 (a)
	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

HEALTHIER CHOICES MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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~~Eastern ~~City~~Daylight ~~time~~Time (EDT), 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 Net Loss from ~~Discontinued~~ 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 of the condensed consolidated financial statements.”

Segment Reporting

~~The~~Operating ~~Company~~segments ~~operates~~are identified as acomponents ~~single segment that includes all~~ of ~~its~~an ~~continuing~~enterprise ~~operations,~~about which isseparate ~~designed~~discrete tofinancial ~~enable~~information ~~customers~~is toavailable ~~purchase~~for evaluation ~~its~~by ~~products~~the ~~through~~operating ~~stores~~decision makers, or ~~digital~~decision-making ~~channels.~~group, ~~The~~in ~~Company~~making ~~previously~~decisions ~~had~~on ~~two~~how ~~reportable~~to ~~segments:~~allocate ~~Grocery~~resources and ~~Vape.~~assess performance. The ~~Grocery~~Company operates as a single1 reportable segment ~~was~~, ~~spun-off~~as onthe ~~September~~chief 13operating decision maker (“CODM”, ~~2024~~the ~~and~~Company’s isChief Executive ~~now~~Officer, ~~reported~~Jeffrey asHolman) ~~discontinued~~reviews ~~operations~~financial ~~for~~performance ~~all~~and ~~periods~~makes ~~through~~decisions ~~that~~on ~~date~~a consolidated basis.

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.~~7

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~~HCWC’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~~HCWC 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~~HCWC 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~~ 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~~Net Loss from Discontinued Operations in the Condensed 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 Net Loss from Discontinued Operations, in the Consolidated Statements of of Operations for the three ~~and nine~~ months ended ~~September~~March 3031, 2024 ~~and 2023~~:

SCHEDULE OF DISCONTINUED OPERATION

	2024			2023			2024			2023
	Three Months Ended March 31, 2024
	Three Months Ended						Nine Months Ended
SALES, NET	$	15,894,358
	September 30,						September 30,
COST OF SALES		9,839,981
	2024			2023			2024			2023
GROSS PROFIT		6,054,377
SALES, NET	$	14,860,975		$	12,704,600		$	46,349,908		$	39,839,202
TOTAL OPERATING EXPENSES, NET		6,656,123
COST OF SALES		9,152,971			8,061,966			28,691,071			25,199,879
LOSS FROM OPERATIONS		(601,746	)
GROSS PROFIT		5,708,004			4,642,634			17,658,837			14,639,323
OTHER INCOME (EXPENSE)		(99,717	)
OPERATING EXPENSES, NET
NET LOSS FROM DISCONTINUED OPERATIONS	$	(701,463	)
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.

	March 31, 2024

Cash and cash equivalents	$	1,023,246
Accounts receivable, net		166,273
Inventories		4,110,427
Prepaid expenses and vendor deposits		172,673
Other current assets		85,828
Assets held for sale		543,854
Current Assets of Discontinued Operations		6,102,301

Property and equipment, net of accumulated depreciation		2,073,540
Goodwill		-
Intangible assets, net of accumulated amortization		3,948,844
Right of use asset - operating lease		10,696,929
Due from related party		4,701,086
Other assets		474,476
Other Assets of Discontinued Operations	$	27,997,176

Accounts payable and accrued expenses	$	3,650,737
Contract Liabilities		179,916
Current portion of loan payable		2,432,135
Lease liability, current		2,707,312
Current Liabilities of Discontinued Operations		8,970,100

Due from related party		-
Loan payable, net of current portion		2,221,462
Lease liability, net of current		7,823,748
Other Long-term Liabilities of Discontinued Operations	$	19,015,310

There were no assets or liabilities classified as discontinued operations as of March 31, 2025 and December 31, 2024.

The following table summarizes the significant operating cash and noncash items, capital expenditures and financing activities of discontinued operations for the three months ended March 31, 2024:

	Three Months Ended March 31, 2024
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(701,463	)
Depreciation and amortization		363,141
Amortization of debt discount		18,841
Amortization of right-of-use asset		715,633
Write-down of obsolete and slow-moving inventory		743,419
Accounts receivable		(38,102	)
Inventories		(691,628	)
Prepaid expenses and vendor deposits		2,297
Other current assets		(28,986	)
Due to related party		(948,083	)
Other assets		(7,420	)
Accounts payable and accrued expenses		(1,269,675	)
Contract liabilities		(27,597	)
Lease liability		(678,946	)
NET CASH USED IN OPERATING ACTIVITIES OF DISCONTINUED OPERATIONS		(2,548,569	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(74,220	)
NET CASH USED IN INVESTING ACTIVITIES OF DISCONTINUED OPERATIONS		(74,220	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from security purchase agreement		1,700,000
Principal payments on loan payable		(171,752	)
Investment from parent company		695,207
NET CASH PROVIDED BY FINANCING ACTIVITIES OF DISCONTINUED OPERATIONS		2,223,455

NET DECREASE IN CASH FROM DISCONTINUED OPERATIONS	$	(399,334	)

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	)

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~~March 3031, ~~2024~~2025, the Company had ~~cash~~ cash and cash equivalent of approximately $21.52 million and ~~positive~~negative working capital of $01.28 million. The Company’s liquidity needs through March ~~September 30~~31, ~~2024~~2025 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~~ 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. Unless otherwise indicated, the information in the notes to the Condensed Consolidated Financial Statements refer only to HCMC’s continuing operations.

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~~2024, filed with the Securities and Exchange Commission (the “SEC”) on ~~March~~April 2714, ~~2024~~2025. The condensed consolidated balance sheet as of December 31, ~~2023~~2024 was derived from the Company’s audited ~~2023~~ 2024 financial statements contained in the above referenced Form 10-K, adjusted for the discontinued operations. Results of the ~~nine~~three months ~~ended~~ ~~September~~ended 30March 31, ~~2024~~2025, are not necessarily indicative of the results to be expected for the full year ending December 31, ~~2024~~ 2025.

1210

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the ~~2023~~2024 Annual Report.

Reclassification

Certain amounts in the condensed consolidated financial statements and related notes have been reclassified to conform to the current year presentation. During the three months ended March 31, 2025, the Company reclassified internal-use software costs totaling $45,000 from Property, Plant, and Equipment to Intangible Assets to comply with ASC 350-40, Internal-Use Software. This reclassification reflects the Company’s determination that costs incurred during the application development stage of internal-use software meet the criteria for capitalization as intangible assets. The Company amortizes internal-use software on a straight-line basis over its estimated useful life of ten years. As of March 31, 2025, the net carrying amount of the reclassified software is $40,125. This reclassification does not impact the Company’s previously reported net loss, earnings per share, or consolidated financial position.

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~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024 is presented below:

	September 30, 2024		December 31, 2023
	March 31, 2025		December 31, 2024
Total cash and cash equivalent in excess of FDIC limits of $250,000	$	2925,~~283,980~~540	$	3943,~~402,782~~567

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
	March 31, 2025		March 31, 2024
Cash and cash equivalent	$	21,~~533~~175,~~980~~540	$	61,~~196~~193,~~030~~567
Restricted cash		~~553~~100,~~232~~000		~~628~~553,232
Total cash and restricted cash	$	31,~~087~~275,~~212~~540	$	61,~~824~~746,~~262~~799

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 March 31, 2024 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~~11

InNOTE ~~accordance~~6. ~~with~~PROPERTY ~~FASB~~AND ~~ASC 280, “Disclosures about Segment of an enterprise and related information”, the Company determined it operates as a single reportable segment.~~EQUIPMENT

NOTE 7. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

	September 30, 2024			December 31, 2023
	March 31, 2025			December 31, 2024
Furniture and fixtures		9033,~~919~~895			90,919
Computer hardware & equipment		50,~~521~~522			4850,~~337~~522
Other		538,056			853,056
Property and equipment, gross		~~194~~92,~~496~~473			~~147~~194,~~312~~497
Less: accumulated depreciation and amortization		(~~107~~78,~~532~~315	)		(88113,~~699~~956	)
Total property, plant, and equipment	$	8614,~~964~~158		$	5880,~~613~~541

~~The~~During the three months ended March 31, 2025, the Company ~~incurred~~reclassified ~~approximately~~ $745,000 of internal-use software costs from the Other category within Property and Equipment to Intangible Assets $5to comply with ASC 350-40,~~000~~ ofInternal-Use Software. This reclassification reflects the Company’s determination that costs incurred ~~depreciation~~during ~~expense~~the ~~for~~application development stage of internal-use software meet the ~~three~~criteria ~~months~~for ~~ended~~capitalization ~~September~~as ~~30,~~intangible ~~2024~~assets. ~~and~~The ~~2023,~~reclassification reduced ~~and~~the Other balance by $1945,000 , and accumulated depreciation by $164,~~000 of~~875. ~~depreciation~~The ~~expense~~net ~~for~~carrying amount of the ~~nine~~reclassified ~~months~~software ~~ended~~as ~~September~~of 30March 31, ~~2024~~2025, ~~and~~is ~~2023~~$40,125, ~~respectively~~which is now included in Intangible Assets (Note 7).

~~NOTE~~The 8.Company ~~INTANGIBLE~~incurred ~~ASSETS~~approximately $2,000 and $6,000 of depreciation expense for the three months ended March 31, 2025 and 2024, respectively.

~~Intangible~~NOTE ~~assets,~~7. ~~net~~INTANGIBLE ~~are as follows:~~ASSETS

~~SCHEDULE~~The Company’s OFintangible ~~INTANGIBLE~~assets ~~ASSETS~~consist of patents and capitalized legal fees related to the patents. Intangible assets, ~~NET~~ 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
March 31, 2025	Useful Lives (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Patents	10 years		397,165		(199,002	)		198,163
Patent	10 years	$	397,165	$	(248,795	)	$	148,370
Intangible assets, net		$	397,165	$	(199,002	)	$	198,163
Internal-use software	10 years		45,000		(4,875	)		40,125
Intangible assets, net		$	442,165		(253,670	)		188,495

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:

December 31, 2024	Useful Lives (Years)	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Patent	10 years		397,165		(239,014	)		158,151
Intangible assets, net		$	397,165	$	(239,014	)	$	158,151

During the three months ended March 31, 2025, the Company reclassified $45,000 of internal-use software costs from Property and Equipment (Note 6) to Intangible Assets to comply with ASC 350-40, Internal-Use Software. Please refer to Note 6 Property and Equipment.

Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense was approximately $11,000 for the three months ended March 31, 2025 and 2024, respectively. Future annual estimated amortization expense is as follows:

Years ending December 31,
2024 (remaining three months)	$	8,893
2025 (remaining nine months)	$	32,718
2025		39,124
2026		42,680
2026		38,180
2027		37,064
2027		32,564
2028		27,833
2028		23,333
2029		16,975
Thereafter		2531,~~838~~225
Total	$	~~167~~188,~~932~~495

1412

NOTE 98. 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 line of credit expired in December 2024, and the Company paid off the credit line balance in full on January 3, 2025. The outstanding balances for the line of credit were $0.00 and $453,232 as of ~~September~~ 30March 31, ~~2024~~2025 and December 31, ~~2023~~2024, respectively.

NOTE 109. 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~~On ~~September~~November 3027, 2024, ~~1,585~~the ~~shares~~Company ofentered ~~Series E preferred stock have been cumulatively converted~~ into ~~15,850,000,000~~a ~~shares~~Seventh ofAmendment ~~common~~to ~~stock as~~the aSecurities ~~result~~Purchase ofAgreement ~~the~~with its Series E ~~preferred~~Redeemable ~~stock~~Convertible Preferred ~~conversion,~~Stock ~~and 12~~purchasers,~~026~~ ~~shares~~pursuant ofto ~~Series~~which Ethe ~~preferred~~Company ~~stock~~and ~~have~~such ~~been~~parties ~~cumulatively~~agreed ~~redeemed, and~~to ~~approximately~~amend ~~$12,004,000~~the ~~has~~Completion ~~been~~Date ~~paid~~to ~~for~~May ~~redemption~~31, 2025.

Through March 31, 2025, 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. As of March 31, 2025, 1,111 shares of Series E preferred stock remained outstanding.

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~~March 3031, ~~2024~~2025 and ~~2023~~2024, no stock options of the Company were exercised into common stock.

OnThe ~~August~~Company ~~23,~~recognized ~~2023,~~stock-based ~~the~~compensation ~~Company~~of ~~granted~~approximately 2$1,~~000~~123,000 and $1,127,000 ~~shares~~during the three months ended March 31, 2025 and 2024, respectively in connection with amortization of restricted ~~stocks~~stock toand ~~the~~stock ~~Company’s~~options. ~~third-party~~Stock ~~inventors~~based ~~with~~compensation nois ~~vesting~~included as part ~~requirement~~of total operating expenses in the accompanying unaudited condensed consolidated statements of operations.

~~On November~~Earnings ~~13,~~Per 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.Share

~~The Company~~Basic ~~recognized~~earnings ~~stock-based~~per ~~compensation~~share ofis ~~approximately~~computed ~~$1,223,000~~using ~~and~~the ~~$1,127,000~~weighted average number of common shares outstanding during the ~~three~~periods ~~months~~presented. ~~ended~~Diluted ~~September~~earnings ~~30,~~per ~~2024~~share is computed using the weighted average ~~and~~number ~~2023,~~of ~~and~~common ~~approximately~~shares ~~$3,484,000~~outstanding ~~and~~adjusted ~~$2,304,000~~to ~~during~~include the ~~nine~~potentially dilutive effect of stock awards. For the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024, ~~respectively~~diluted inEPS ~~connection~~is the ~~with~~same ~~amortization~~as ofbasic ~~restricted~~EPS ~~stock~~because ~~and~~all ~~stock~~potentially ~~options~~dilutive securities are anti-dilutive due to the net loss. ~~Stock~~Under ~~based~~GAAP, ~~compensation~~diluted isEPS ~~included~~must asbe ~~part~~disclosed even ofwhen ~~total~~equal ~~operating~~to ~~expenses~~basic inEPS. All potentially dilutive securities were excluded from the ~~accompanying~~diluted ~~unaudited~~EPS ~~condensed~~calculation ~~consolidated~~because ~~statements~~their ofinclusion ~~operations~~would have been anti-dilutive (i.e., reduce the loss per share), which is not permitted under GAAP.

Income (Loss) Per Share

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

SCHEDULE OF DILUTIVE LOSS PER SHARE

	2024		2023
	As of March 31,
	As of September 30,
	2025		2024
	2024		2023
Preferred stock		11,111,000,000		11,111,000,000
Preferred stock		11,111,000,000		19,444,000,000
Stock options		67,587,222,200		67,587,222,200
Stock options		3,000,000,000		67,587,230,680
Restricted stock		26,543,750,000		95,590,625,000
Restricted stock		54,712,500,000		1,500,000,000
Total		105,241,972,200		174,288,847,200
Total		133,410,722,200		88,531,230,680

~~NOTE~~The following table sets forth the computation of ~~11.~~basic ~~COMMITMENTS~~and ~~AND~~diluted ~~CONTINGENCIES~~earnings per share attributable to the Company’s stockholders.

	2025			2024
	Three Months Ended March 31,
	2025			2024

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(2,183,676	)	$	(2,159,684	)

BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES		481,266,632,384			429,919,440,601

BASIC AND DILUTED NET LOSS PER SHARE	$	-		$	-

NOTE 10. 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~~March 3031, ~~2024~~2025, the Company already paid $~~700~~1.3 million,~~000,~~ and the remaining balance of $~~800,000~~0.2 million 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~~On ~~time~~November to22, ~~time~~2024, HCMC received a ruling from the ~~Company~~U.S. isCourt ~~involved~~of inAppeals ~~legal~~for ~~proceedings~~the ~~arising~~Federal inCircuit (the ~~ordinary~~“Federal ~~course~~Circuit”) denying an appeal of ~~our~~HCMC ~~business.~~of Wea ~~believe~~decision ~~that~~of ~~there~~the isUnited ~~no other~~States ~~litigation~~Patent ~~pending~~and ~~that~~Trademark isOffice ~~likely~~Patent toTrial ~~have,~~and ~~individually~~Appeal orBoard in(the “Board”) relating to the ~~aggregate,~~inter apartes ~~material~~review ~~adverse~~of ~~effect~~an onHCMC ~~our~~patent. ~~financial~~The ~~condition or~~Board ~~results~~had ofruled ~~operations~~that the previously granted HCMC patent that served as the basis of ~~September~~HCMC’s 30patent infringement action against Philip Morris USA, ~~2024~~Inc. ~~With~~and ~~respect~~Philip Morris Products S.A. was not patentable and denied of HCMC’s request to ~~legal~~amend ~~costs,~~the weclaims ~~record~~if ~~such~~invalidity ~~costs~~of asthe ~~incurred~~patent was affirmed.

On December 31, 2024, HCMC voluntarily dismissed the action in the Northern District of Georgia without prejudice and the case was terminated.

From time to time the Company is involved in legal proceedings arising in the ordinary course of our business. We believe that there is no other litigation pending that is likely to have, individually or in the aggregate, a material adverse effect on our financial condition or results of operations as of March 31, 2025. With respect to legal costs, we record such costs as incurred.

NOTE 11. RELATED PARTY TRANSACTIONS

Prior to the Spin-Off, HCWC was a subsidiary of HCMC. After Spin-Off, HCWC operated as a separate, stand-alone company, accordingly has had various relationships with HCMC whereby HCMC provided services to HCWC as noted below. Related party transactions prior to the Spin-Off include allocation of general corporate expenses and cash advances between HCMC and HCWC.

Allocation of General Corporate Expenses

The Company provided human resources, accounting, payroll processing, legal and other managerial services to HCWC prior to the Spin-Off. The accompanying condensed consolidated financial statements for three months ended March 31, 2024 include allocations of these expenses. Following the Spin-Off, HCWC and HCMC entered into a TSA, under which both companies agreed to provide certain transitional services to one another to ensure smooth separation. These services are provided on a transitional basis and will continue for a period of up to one year following the Spin-Off.

Management adopted a proportional cost allocation method to allocate the shared expenses to HCWC. The allocation method calculates the appropriate share of overhead costs to HCWC based on management’s estimate that the sum of management time and resources spent managing HCWC is approximately equal to the amount of time and resources spent managing HCMC and its subsidiaries. As a result, 50% of HCMC overhead on a weighted average basis was allocated to HCWC based on the fact that management spent an equal amount of time managing both companies. The Company believes the allocation methodology used is reasonable and has been consistently applied, and results in an appropriate allocation of costs incurred. However, these allocations may not be indicative of the cost had HCWC been a stand-alone entity or of future services. For the three months ended March 31, 2025, HCWC established its independent payroll system but continues to share certain staff with HCMC. HCMC and HCWC continue providing human resources, accounting, payroll processing, and other managerial services to each other based on the TSA. Management continued using 50% proportional cost allocation method to split the shared cost. HCWC directly funds its 50% share and records its 50% share as Operating Expenses in its financial statements.

Investment in Subsidiary

For the three months ended March 31, 2024, the net operating expenses of $0.7 million incurred by HCMC on behalf of HCWC were included in the Investment in Subsidiary. Upon Spin-Off, the Company wrote off the net investment in subsidiary balance to retained earnings.

Due to Related Party

Prior to the Spin-Off, there was no intercompany agreement between the Company and HCWC. Management has determined those intercompany receivables and payables will be settled within twelve months after the balance sheet date. As a result, the Company’s intercompany balances are reflected as “due to” or “due from” accounts in the consolidated balance sheets. At the time of Spin-ff, the Company had a net receivable balance from HCWC in the amount of $1.2 million, and HCWC paid the balance in full to settle on the Spin-Off date of September 13, 2024. The Company had a net Due to Related Party balance of $1.2 million and $0.2 million as of March 31, 2025 and December 31, 2024, respectively. The increased Due to Related Party balance was a result of continued funding from HCWC to HCMC to support HCMC’s operations during the transition period, as compliant with the agreements with HCWC. HCWC’s cash advances to HCMC are transitional, short-term, and repayable within 12 months.

Agreements with HCWC

The Company entered into several agreements with HCWC that, among other things, effect the separation and govern the relationship of the parties following the Spin-Off. These agreements include:

	●	a Separation Agreement that will set forth HCMC’s and HCWC’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 HCWC will provide each other specified services on a transitional basis to help ensure an orderly transition following the Spin-Off.
	●	a Tax Matters Agreement (“TMA”) that will govern the respective rights, responsibilities and obligations of HCMC and HCWC 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 (“EMA”) 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, the 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 by the former parent are recorded within the Consolidated Statements of Operations based on the nature of the services.

NOTE 12. SUBSEQUENT EVENTS

~~On November 7, 2024, the~~ The Company ~~entered~~evaluated ~~into~~subsequent ~~a commitment~~events ~~letter~~and ~~with~~transactions ~~an investor~~ that ~~will~~occurred ~~allow~~after the ~~Company~~balance tosheet ~~draw~~date up to ~~$5 million~~the ~~from~~date athat ~~revolving credit facility (~~the ~~“Facility”)~~condensed consolidated ~~through~~financial ~~August~~statements ~~31,~~were ~~2025.~~available ~~Any~~to ~~advances will~~ be ~~used for working capital purposes~~issued. ~~Any~~Based ~~amounts~~upon ~~borrowed~~this ~~pursuant~~review, to the ~~Facility~~Company ~~will~~identified bethe ~~repayable~~following subsequent inevent ~~full~~that onwould ~~April~~have ~~30,~~required ~~2026~~disclosure ~~and~~in the ~~interest~~consolidated ~~rate~~financial ~~on the amounts borrowed is 12% per annum~~statements.

17On April 11, 2025, the Company entered into an Eighth 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 October 31, 2025.

On April 11, 2025, the Company entered into an amendment to the line of credit agreement executed on November 7, 2024 with private lender, pursuant to which the Company and the private lender agreed to amend the Maturity Date from April 30, 2026 to December 31, 2026.

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 Net 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.

1816

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~~March 3031, ~~2024~~2025, the Company had ~~cash~~ cash and cash equivalent of approximately $21.52 million and ~~positive~~negative working capital of $01.27 million. The Company’s liquidity needs through March ~~September 30~~31, ~~2024~~2025 have been satisfied through financing agreement with private lenders.

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~~March 3031, ~~2024~~ 2025 and 2024 ~~2023~~ that is used in the following discussions of our results of operations:

	Three Months Ended September 30,						2024 to 2023
	Three Months Ended March 31,						2025 to 2024
	2024			2023			Change $
	2025			2024			Change $
SALES	$	52		$	-		$	52
SALES, NET	$	1,780		$	119		$	1,661
COST OF SALES		151,478			-132			151,346
GROSS PROFIT		37302			-(13	)		37315
OPERATING EXPENSES		2,~~143~~169,~~442~~715			2,~~136~~202,~~026~~894			7(33,~~416~~179	)
LOSS FROM OPERATIONS		(2,~~143~~169,~~405~~413	)		(2,~~136~~202,~~026~~907	)		(733,~~379~~494	)
OTHER INCOME (EXPENSE)
Loss on investment		~~(343~~-	)		~~343~~(857	)		~~(686~~857	)
Other income (expense), net		260,000			(10,932	)		270,932
Loss on Disposal of Asset		(22,809	)		-			(22,809	)
Interest income, net		158,~~105~~546			7544,~~299~~080			(6035,~~194~~534	)
Total other income (expense), net		274,762			64,710			210,052
TOTAL OTHER INCOME (EXPENSE), NET		(14,263	)		43,223
NET LOSS	$	(12,~~868~~183,~~643~~676	)	$	(2,~~071~~159,~~316~~684	)	$	~~202~~(23,~~673~~992	)

19Net sales and cost of sales were de minimis for the three months ended March 31, 2025 and 2024. 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 March 31, 2025 and 2024 continued to be significantly impacted by the inability to bring new products to market via distribution.

~~Net~~Total ~~sales~~operating ~~and~~expenses ~~cost~~ of ~~sales were de minimis for the three months ended September 30, 2024 and 2023~~$2.2 ~~The~~million ~~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~~March 3031, ~~2024~~2025 ~~and~~remained ~~2023~~consistent ~~continued~~with ~~to be significantly impacted by~~ the ~~inability~~same toperiod ~~bring~~in ~~new products to market via distribution~~2024.

Total ~~operating~~other ~~expenses~~income (expense), net of $214,000 for the three months ended March 31, 2025 consists of $23,000 loss on asset disposal offset by net interest income of $9,000.1 ~~million~~Total other income (expense), net of $43,000 for the three months ended ~~September~~March 3031, 2024 ~~remained~~primarily ~~consistent~~consists of ~~with~~interest ~~the~~income ~~same~~of ~~period~~$44,000, inand ~~2023~~loss on investment of $1,000.

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 $11,000.17

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.

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 and the discussion present the Company’s cash activities on continuing basis for three months ended March 31, 2025 and 2024:

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.

	Three Months Ended March 31,
	2025			2024
Net cash (used in) provided by:
Operating activities	$	(984,611	)	$	174,456
Investing activities		-			(47,185	)
Financing activities		513,352			(904,222	)
Net decrease in cash from continuing operations	$	(471,259	)	$	(776,951	)
Net decrease in cash from discontinued operations		-			(399,334	)
Total net decrease in cash	$	(471,259	)	$	(1,176,285	)

	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 used in operating activities of approximately $1.0 million for the three months ended March 31, 2025 resulted from a net loss of $2.2 million, offset by a non-cash adjustment of $1.2 million and a net cash change of $40,000 from changes in operating assets and liabilities. Our net cash provided by operating activities of approximately $0.2 million for the three months ended March 31, 2024 resulted from a net loss of $2.2 million, offset by a non-cash adjustment of $1.2 million and a net cash change of $1.2 million from changes in operating assets and liabilities.

~~Our~~There ~~net~~was no cash ~~provided~~used byin ~~operating~~investing activities ~~of approximately $1.0 million~~ for the ~~nine~~three months ended ~~September~~March 3031, ~~2024 resulted from a net loss of $5~~2025.9 ~~million,~~The ~~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~~investing activities of ~~approximately~~ $~~2.4 million~~ 47,000 for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~ 2024 resulted from apurchases ~~net loss~~ of ~~$5.1~~property ~~million, offset by a non-cash adjustment of $2.4 million~~ and ~~a net cash change of $0~~equipment.~~4 million from changes in operating assets and liabilities.~~

The net cash ~~used~~provided inby ~~investing~~financing activities of $~~47,000~~0.5 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 ~~resulted~~is ~~from~~primarily ~~purchases~~due ofto ~~property~~$1.0 ~~and~~million ~~equipment~~net transfer from HCWC and $0.5 ~~The~~million ~~net~~cash payment of the credit line. Net cash ~~provided~~used byin ~~investing~~financing activities of approximately $~~176,000~~0.9 million for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 ~~resulted~~is ~~from~~due ~~collection on~~to a$0.7 ~~note~~million ~~receivable~~investment in HCWC and ~~purchases~~$0.2 ofmillion ~~property~~payment ~~and~~for ~~equipment~~deferred offering cost related with Spin-Off.

~~The~~At ~~net~~March ~~cash~~31, ~~used~~2025 inand ~~financing~~December ~~activities of $2.1 million for the nine months ended September 30~~31, 2024, iswe ~~primarily~~did ~~due~~not tohave ~~$4.1~~any ~~million net~~material ~~transfer~~financial toguarantees ~~HCWC~~or ~~related~~other tocontractual ~~Spin-Off~~commitments ~~and~~with ~~$2.0 million cash proceeds from related party. Net cash used in financing activities of~~vendors ~~approximately~~that ~~$13.7~~are ~~million~~reasonably ~~for~~likely ~~the nine months ended September 30, 2023 is due~~ to ~~Series~~have Ean ~~Preferred~~adverse ~~Stock~~effect ~~redemption~~on ~~and exercise, payment for deferred offering cost related with Spin-Off, and net parent investment~~liquidity.

AtOur ~~September~~cash ~~30,~~balances ~~2024~~are kept liquid to support our growing acquisition and ~~December~~infrastructure ~~31,~~needs ~~2023,~~for weoperational ~~did~~expansion. ~~not~~Most ~~have~~of ~~any~~our ~~material~~cash and cash equivalent are concentrated in one financial ~~guarantees~~institution orand ~~other~~is ~~contractual~~generally ~~commitments~~in ~~with~~excess ~~vendors that~~of ~~are~~the ~~reasonably~~FDIC ~~likely~~insurance tolimit. ~~have~~The anCompany has ~~adverse~~not ~~effect~~experienced any losses on ~~liquidity~~its cash. The following table presents the Company’s cash position as of March 31, 2025 and December 31, 2024.

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.

	March 31, 2025			December 31, 2024
Cash and cash equivalent	$	1,175,540		$	1,193,567
Total assets	$	1,672,602		$	2,220,449
Cash and cash equivalent as a percentage of total assets		70.3	%		53.8	%

	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 $2.2 million for the three months ended March 31, 2025. The Company also had negative working capital of $1.8 million. The Company expects to continue incurring losses for the foreseeable future.

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.

2118

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~~2024 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 in year 2024 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. There was no expense allocation for the three months ended March 31, 2025.

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~~March 3031, ~~2024~~2025 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~~March 3031, ~~2024~~2025 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.

2219

	●	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~~March 3031, ~~2024~~2025 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~~March 3031, ~~2024~~2025, 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.

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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~~March 3031, ~~2024~~2025, the Company already paid $~~700~~1,300,000, and the remaining balance of $~~800~~200,000 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 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 December 31, 2024, HCMC voluntarily dismissed the action in the Northern District of Georgia without prejudice and the case was terminated.

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.”

2421

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.

2522

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
Date: May 13, 2025	By:	/s/ Jeffrey Holman
		Jeffrey Holman
		Chief Executive Officer
Date: November 14, 2024	By:	/s/ John Ollet
Date: May 13, 2025	By:	/s/ John Ollet
		John Ollet
		Chief Financial Officer

2623

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