Item 2.02 Results of Operations and Financial Condition
Healthier Choices Management Corp. (the "Company") is furnishing
this information under Item 2.02 of Form 8-K.
The information in this Current Report, including Exhibit 99.1, is
being furnished and shall not be deemed “filed” for the purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), or otherwise subject to the liabilities of that
section. The information in this Current Report, including
Exhibit 99.1, shall not be incorporated by reference into any
registration statement or other document filed pursuant to the
Securities Act of 1933, as amended, or the Exchange Act.
On October 24, 2022, the Company issued a press release announcing
its financial results for the nine months ended September 30,
2022. A copy of the press release is attached as Exhibit
99.1.
Item 7.01 Regulation FD Disclosure.
On October 25, 2022, the chief executive officer of the Company
will make a presentation to potential investors using slides
containing the information attached to this Current Report on Form
8-K as Exhibit 99.2 (the “Investor Presentation”) and incorporated
herein by reference.
The information contained in the Investor Presentation is summary
information that is intended to be considered in the context of the
Company's Securities and Exchange Commission (“SEC”) filings and
other public announcements that the Company may make, by press
release or otherwise, from time to time. The Company
undertakes no duty or obligation to publicly update or revise the
information contained in this report, although it may do so from
time to time as its management believes is warranted. Any
such updating may be made through the filing of other reports or
documents with the SEC, through press releases or through other
public disclosure.
The Investor Presentation includes financial information not
prepared in accordance with generally accepted accounting
principles (“Non-GAAP Financial Measures”). By filing this
Current Report on Form 8-K and furnishing the information contained
herein, the Company makes no admission as to the materiality of any
information in this report that is required to be disclosed solely
by reason of Regulation FD.
The information presented in Item 7.01 of this Current Report on
Form 8-K and Exhibit 99.2 shall not be deemed to be “filed” for
purposes of Section 18 of the Exchange Act, or otherwise subject to
the liabilities of that section, unless the Company specifically
states that the information is to be considered “filed” under the
Exchange Act or specifically incorporates it by reference into a
filing under the Securities Act of 1933, as amended, or the
Exchange Act.
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 hereunto duly authorized.
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Healthier Choices Management Corp.
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Date: October 25, 2022
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By:
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/s/ Jeffrey E. Holman
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Jeffrey E. Holman
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Chief Executive Officer
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Healthier Choices Management Corp. Reports Third Quarter 2022
Financial Results
Record Sales of $5.8 million for the Third Quarter; 77%
Year-Over-Year
Growth
Record Gross Margin of $1.9 million for the Quarter; 36%
Year-Over-Year Growth
HOLLYWOOD, FL, Oct 24, 2022 -- Healthier
Choices Management Corp. (OTC Pink: HCMC) today announced
its financial results for the third quarter ended September 30,
2022.
Third Quarter 2022
Results and Recent Highlights:
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Net sales from operations for the three-month period ended
September 30, 2022, amounted to $5.8 million, compared to $3.3
million, an approximately $2.5 million and 76.7% increase versus
the same period in 2021.
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Gross margin from operations increased by approximately $0.5
million for the three-month period ended September 30, 2022,
amounting to $1.9 million, compared to $1.4 million for the same
period in 2021, a 35.7% year-over-year increase.
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Loss from operations for the three-month period ended September 30,
2022, amounted to approximately $2.1 million versus a $1.0 million
loss for the same period last year. It should be noted that over
$0.9 million in non-recurring expenses were incurred during the
three-month period ended September 30, 2022. The balance of the
prior year variance is primarily attributable to the closure of the
retail stores in the vapor segment.
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Nine Months 2022 Results and Recent Highlights
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Net sales from operations for the nine-month period ended September
30, 2022, amounted to a record $17 million, compared to $10
million, an approximately $7 million increase and a record 67.5%
increase versus the same period in 2021.
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Gross margin from operations increased by approximately $1.8
million for the nine-month period ended September 30, 2022,
amounting to a record $6.2 million, compared to $4.3 million for
the same period in 2021, a 42.5% year-over-year increase.
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Jeffrey Holman, Chief Executive Officer of HCMC, said, “We had our
second consecutive record-breaking quarter and are once again
extremely pleased with our sales and margin performance for the
business. Given a very challenging economic environment coupled
with the impact hurricane Ian had on our operations, this is a
testament to our team’s ability to continue delivering
results.”
Mr. Holman concluded, “We continue investing strategically in our
natural foods grocery business, as evidenced by our latest
acquisition of Green’s Natural Foods which was completed this
month. We remain disciplined in our cost management, and our team
has stayed focused on achieving profitability for the business. We
believe we are well positioned for the future to enhance
shareholder value."
Results of Operations
The following table sets forth our Condensed Consolidated
Statements of Operations for the three and nine-months ended
September 30, 2022, and 2021:
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2022
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2021
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2022
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2021
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Total sales, net
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$
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5,776,730
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$
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3,269,508
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$
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16,957,343
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$
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10,121,153
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Total cost of sales
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3,909,606
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1,893,119
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10,786,780
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5,790,399
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GROSS PROFIT
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1,867,124
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1,376,389
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6,170,564
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4,330,754
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Total operating expenses
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3,985,377
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2,427,256
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11,012,070
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6,599,224
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LOSS FROM OPERATIONS
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(2,118,253
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(1,050,867
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(4,841,506
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(2,268,470
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Total other income (expense), net
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43,216
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986
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103,091
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701,996
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NET LOSS FROM CONTINUING OPERATIONS
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$
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(2,075,037
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$
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(1,049,881
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$
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(4,738,415
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$
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(1,566,474
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See non-GAAP financial measure discussion
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Three Months Ended
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Nine Months Ended
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September 30,
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September 30,
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2022
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2021
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2022
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2021
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Adjusted EBITDA
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Loss from operations
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$
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(2,118,253
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$
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(1,050,867
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$
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(4,841,506
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$
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(2,268,470
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Impairment loss
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-
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-
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-
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-
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Depreciation and amortization
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230,085
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117,966
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652,162
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379,536
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Stock compensation
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-
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-
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-
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34,375
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Adjusted EBITDA
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$
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(1,888,168
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$
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(932,901
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$
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(4,189,344
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$
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(1,854,559
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Consolidated Balance Sheets:
The following table sets forth our condensed consolidated balance
sheets for the periods ended September 30, 2022, and December 31,
2021:
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September 30, 2022
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December 31, 2021
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(UNAUDITED)
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ASSETS
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CURRENT ASSETS
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Cash and cash equivalents
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$
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30,009,173
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$
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26,496,404
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Other current assets
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4,093,308
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2,029,220
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TOTAL CURRENT ASSETS
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34,102,481
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28,525,624
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Other assets
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11,368,005
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5,917,863
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TOTAL ASSETS
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$
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45,470,486
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$
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34,443,487
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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CURRENT LIABILITIES
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Other current liabilities
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$
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4,249,869
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$
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2,523,994
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TOTAL CURRENT LIABILITIES
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4,249,869
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2,523,994
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Other liabilities
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3,885,543
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2,685,836
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TOTAL LIABILITIES
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8,135,412
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5,209,830
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TOTAL STOCKHOLDERS’ EQUITY
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37,335,074
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29,233,657
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
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$
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45,470,486
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$
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34,443,487
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Non-GAAP – Financial Measure
The following discussion and analysis contain a non-GAAP financial
measure. A non-GAAP financial measure is a numerical measure of a
company’s performance, financial position, or cash flows that
either excludes or includes amounts that are not normally included
or excluded in the most directly comparable measure calculated and
presented in accordance with generally accepted accounting
principles (GAAP). Non-GAAP financial measures should be viewed as
supplemental to, and should not be considered as alternative to,
net income, operating income, and cash flow from operating
activities, liquidity, or any other financial measures. Non-GAAP
financial measures may not be indicative of the historical
operating results of the Company nor are they intended to be
predictive of potential future financial results. Investors should
not consider non-GAAP financial measures in isolation or as
substitutes for performance measures calculated in accordance with
GAAP.
Management believes stockholders benefit from referring to the
Adjusted EBITDA in planning, forecasting, and analyzing future
periods. Management uses this non-GAAP financial measure in
evaluating its financial and operational decision making and as a
means of evaluating period to period comparison.
We define Adjusted EBITDA as net loss from operations adjusted for
non-cash charges from depreciation and amortization and stock
compensation. Management believes Adjusted EBITDA is an important
measure of our operating performance because it allows management,
investor, and analysts to evaluate and assess our core operating
results from period to period after removing the impact of
significant non-cash charges that effect comparability between
reporting periods. Our management recognizes that Adjusted EBITDA
has inherent limitations because of the excluded items.
We have included a reconciliation of our non-GAAP financial measure
to loss from operations as calculated in accordance with GAAP. We
believe that providing the non-GAAP financial measure, together
with the reconciliation to GAAP, helps investors make comparisons
between the Company and other companies. In making any comparisons
to other companies, investors need to be aware that companies use
different non-GAAP measures to evaluate their financial
performance. Investors should pay close attention to specific
definition being used and to the reconciliation between such
measures and the corresponding GAAP measure provided by each
company under applicable rules of the Securities and Exchange
Commission.
About Healthier Choices Management Corp.
Healthier Choices Management Corp. (www.healthiercmc.com)
is a holding company focused on providing consumers with healthier
daily choices with respect to nutrition and other lifestyle
alternatives.
Through its wholly owned subsidiary HCMC Intellectual Property
Holdings, LLC, the Company manages and intends to expand on its
intellectual property portfolio.
Through its wholly owned subsidiaries, the
Company operates:
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Ada’s Natural Market, a natural and organic grocery store offering
fresh produce, bulk foods, vitamins and supplements, packaged
groceries, meat and seafood, deli, baked goods, dairy products,
frozen foods, health & beauty products and natural household
items (www.AdasMarket.com)
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Paradise Health & Nutrition’s three stores that likewise offer
fresh produce, bulk foods, vitamins and supplements, packaged
groceries, meat and seafood, deli, baked goods, dairy products,
frozen foods, health & beauty products and natural household
items (www.ParadiseHealthDirect.com)
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Mother Earth’s Storehouse, a two-store organic and health food and
vitamin chain in New York’s Hudson Valley, which has been in
existence for over 40 years. (www.MotherEarthStorehouse.com)
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Greens
Natural Foods’ eight stores in New York and New Jersey, offering a
selection of 100% organic produce and all-natural, non-GMO
groceries & bulk foods; a wide selection of local products; an
organic juice and smoothie bar; a fresh foods department, which
offers fresh and healthy “grab & go” foods; a full selection of
vitamins & supplements; as well as health and beauty products
(www.GreensNaturalFoods.com)
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Through its wholly owned subsidiary, Healthy Choice Wellness, LLC,
the Company has licensing agreements for Healthy Choice Wellness
Centers at the Casbah Spa and Salon in Fort Lauderdale, FL, and
Boston Direct Health in Boston, MA. These centers offer multiple IV
drip “cocktails” for clients to choose from that are designed to
help boost immunity, fight fatigue and stress, reduce inflammation,
enhance weight loss, and efficiently deliver antioxidants and
anti-aging mixes. Additionally, there are cocktails for health,
beauty, and re-hydration.
(www.HealthyChoiceWellness.com)
Through its wholly owned subsidiary, Healthy U Wholesale, the
Company sells vitamins and supplements, as well as health,
beauty, and personal care products on its website www.TheVitaminStore.com.
Additionally, the Company markets its patented Q-Unit™ and
Q-Cup® technology. Information on these products and the
technology is available on the Company’s website at www.theQcup.com.
Forward Looking Statements.
This press release contains forward looking statements within the
meaning of that term in the Private Securities Litigation Reform
Act of 1995 (Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934). Additional written or
oral forward-looking statements may be made by the Company from
time to time in filings with the Securities and Exchange Commission
(SEC) or otherwise. Statements contained in this press release that
are not historical facts are forward looking statements made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, and are based on management’s
estimates, assumptions and projections and are not guarantees of
future performance. The Company assumes no obligation to update
these statements. Forward looking statements may include, but are
not limited to, projections or estimates of revenue, income, or
loss, exit costs, cash flow needs and capital expenditures,
statements regarding future operations, expansion or restructuring
plans, including our recent exit from, and winding down of our
wholesale distribution operations. In addition, when used in this
release, the words “anticipates,” “believes,” “estimates,”
“expects,” “intends,” and “plans” and variations thereof and
similar expressions are intended to identify forward looking
statements.
Factors that may affect our future results of operations and
financial condition include, but are not limited to, fluctuations
in demand for our products, the introduction of new products, our
ability to maintain customer and strategic business relationships,
the impact of competitive products and pricing, growth in targeted
markets, the adequacy of our liquidity and financial strength to
support its growth, and other information that may be detailed from
time-to-time in our filings with the SEC.
Contact Information:
Healthier Choices Management Corp.
3800 North 28TH Way, #1 Hollywood, FL 33020
305-600-5004
Email:
ir@hcmc1.com