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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)
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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