UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020March 31, 2021

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number: 001-36469

HEALTHIER CHOICES MANAGEMENT CORP.
(Exact name of Registrant as specified in its charter)

Delaware 84-1070932
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
   
3800 North 28Th Way
  
Hollywood, FL 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 18, 2020,May 10, 2021, there were 105,110,848,017307,926,082,074 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.


TABLE OF CONTENTS

PAGE
  
PART I FINANCIAL INFORMATION
1
  
ITEM 1. Financial Statements (Unaudited)
1
  
Condensed Consolidated Balance Sheets as of September 30, 2020March 31, 2021 and December 31, 20192020
1
  
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30,March 31, 2021 and 2020 and 2019
2
  
Condensed Consolidated Shareholders’Stockholders’ Equity Statements for the Three and Nine Months Ended September 30,March 31, 2021 and 2020 and 2019
3
  
Condensed Consolidated Statements of Cash Flows for the NineThree Months Ended September 30,March 31, 2021 and 2020 and 2019
5
4
  
Notes to Condensed Consolidated Financial Statements
6
5
  
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
13
11
  
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk
18
15
  
ITEM 4. Controls and Procedures
18
15
  
PART II OTHER INFORMATION
19
16
  
ITEM 1. Legal Proceedings
19
16
  
ITEM 1A. Risk Factors
19
16
  
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds
19
16
  
ITEM 3. Defaults Upon Senior Securities
19
16
  
ITEM 4. Mine Safety Disclosures
19
16
  
ITEM 5. Other Information
19
16
  
ITEM 6. Exhibits
20
17
  
Signatures
21
18
  
Exhibit 31.1
 
  
Exhibit 31.2
 
  
Exhibit 32.1
 
  
Exhibit 32.2
 


PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

HEALTHIER CHOICES MANAGEMENT CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)

September 30,
2020
 
December 31,
2019
March 31,
2021
 
December 31,
2020
ASSETS          
CURRENT ASSETS          
Cash and cash equivalents$602,318 $1,525,415$5,316,169 $925,475
Accounts receivable, net 85,527  65,401 56,754  23,675
Inventories 1,785,959  1,757,012 1,700,784  1,749,246
Prepaid expenses and vendor deposits 328,008  269,833 237,831  286,065
Investment 10,286  24,000 48,857  22,731
TOTAL CURRENT ASSETS 2,812,098  3,641,661 7,360,395  3,007,192
          
Restricted cash 4,386,081  2,000,000 -  2,000,000
Property and equipment, net of accumulated depreciation 258,774  332,290 222,999  230,719
Intangible assets, net of accumulated amortization 1,346,374  1,923,447 1,150,329  1,248,352
Goodwill 916,000  956,000 916,000  916,000
Note receivable 319,620  343,387 291,333  304,511
Right of use asset – operating lease, net 4,234,280  4,663,019 3,955,886  4,078,621
Other assets 89,595  146,865 88,595  89,598
          
TOTAL ASSETS$14,362,822 $14,006,669$13,985,537 $11,874,993
          
LIABILITIES AND STOCKHOLDERS’ EQUITY          
CURRENT LIABILITIES          
Accounts payable and accrued expenses$1,090,831 $825,860$813,870 $1,085,663
Contract liabilities 19,400  26,823 18,170  21,262
Current portion of line of credit 2,000,000  2,000,000 -  2,000,000
Current portion of loan payment 3,392,466  282,344 842,228  2,072,484
Operating lease liability, current 502,289  555,959 483,482  474,686
TOTAL CURRENT LIABILITIES 7,004,986  3,690,986 2,157,750  5,654,095
          
Loan payable, net of current portion 965,675  869,223 778,411  849,009
Operating lease liability, net of current 3,225,215  3,544,729 3,001,335  3,114,521
TOTAL LIABILITIES 11,195,876  8,104,938 5,937,496  9,617,625
          
COMMITMENTS AND CONTINGENCIES (SEE NOTE 8)     
COMMITMENTS AND CONTINGENCIES (SEE NOTE 10)     
          
STOCKHOLDERS’ EQUITY          
Series B convertible preferred stock, $1,000 par value per share, 30,000 shares authorized; 20,150 shares issued and outstanding as of September 30, 2020 and December 31, 2019; aggregate liquidation preference of $20.2 million
 20,150,116  20,150,116
Common Stock, $0.0001 par value per share, 750,000,000,000 shares authorized; approximately 105.1 and 67.7 billion shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively
 10,511,085  6,769,849
Series C convertible preferred stock, $1,000 par value per share, 30,000 shares authorized; 0 and 16,277 shares issued and outstanding as of March 31, 2021 and December 31, 2020; aggregate liquidation preference of $- million -  16,277,116
Series D convertible preferred stock, $1,000 par value per share, 5,000 shares authorized; 5,000 shares issued and outstanding as of March 31, 2021; aggregate liquidation preference of $5.0 million 5,000,000  -
Common Stock, $0.0001 par value per share, 750,000,000,000 shares authorized; approximately 307.7 and 143.8 billion shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively 30,772,608  14,384,084
Additional paid-in capital 3,953,163  7,618,245 5,330,562  3,955,039
Accumulated deficit (31,447,418)  (28,636,479) (33,055,129)  (32,358,871)
TOTAL STOCKHOLDERS’ EQUITY 3,166,946  5,901,731 8,048,041  2,257,368
          
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$14,362,822 $14,006,669$13,985,537 $11,874,993

See notes to unaudited condensed consolidated financial statements

1

HEALTHIER CHOICES MANAGEMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

Three Months Ended Nine Months Ended
September 30,
 
September 30,
Three Months Ended March 31,
2020 2019 2020 20192021 2020
SALES             
Vapor sales, net$594,145 $898,229 $1,888,480 $3,207,530$613,936 $773,458
Grocery sales, net 2,753,648  2,520,101  8,804,397  8,407,919 2,851,817  3,262,714
TOTAL SALES, NET 3,347,793  3,418,330  10,692,877  11,615,449 3,465,753  4,036,172
             
Cost of sales vapor 256,461 385,208 787,998 1,337,555 233,315  319,080
Cost of sales grocery 1,729,213  1,629,980  5,461,574  5,309,567 1,741,728  2,009,200
GROSS PROFIT 1,362,119  1,403,142  4,443,305  4,968,327 1,490,710  1,707,892
             
Selling, general and administrative 2,195,275 2,532,505 6,735,815 8,057,452
Impairment of intangible assets 380,646  -  380,646  -
OPERATING EXPENSES 2,575,921  2,532,505  7,116,461  8,057,452 2,022,883  2,372,381
             
LOSS FROM OPERATIONS (1,213,802)  (1,129,363)  (2,673,156)  (3,089,125) (532,173)  (664,489)
             
OTHER (EXPENSE) INCOME             
Gain (loss) on investment (2,571) (12,514) (13,714) (57,514) 26,126  (9,857)
Other expense, net - (146) (100) (838) -  (76)
Interest income (expense), net (84,592)  (8,280)  (123,969)  (19,669)
Total other (expense) income, net (87,163)  (20,940)  (137,783)  (78,021)
Interest expense, net (72,915)  (16,872)
Loss on extinguishment of debt (117,296)  -
Total other expense, net (164,085)  (26,805)
             
NET LOSS$(1,300,965) $(1,150,303) $(2,810,939) $(3,167,146)$(696,258) $(691,294)
             
NET LOSS PER SHARE-BASIC AND DILUTED$0.00 $0.00 $0.00 $0.00$0.00 $0.00
             
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED 102,108,302,961  66,929,136,282  84,476,736,667  66,734,751,470 244,246,983,178  69,716,324,179

See notes to unaudited condensed consolidated financial statements

2


HEALTHIER CHOICES MANAGEMENT CORP.
CONDENSED CONSOLIDATED STOCKHOLDERS’ EQUITY STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2020MARCH 31, 2021
(UNAUDITED)

 
Convertible
Preferred Stock
 Common Stock 
Additional
Paid-In
 Accumulated  
 Shares Amount Shares Amount Capital Deficit Total
Balance – July 1, 2020
 20,150 $20,150,116  87,558,296,598 $8,755,829 $5,706,544 $(30,146,453) $4,466,036
Issuance of common stock in connection with cashless exercise of Series A warrants -  -  17,552,551,418  1,755,255  (1,755,255)  -  -
Stock-based compensation expense -  -  -  -  1,875  -  1,875
Net loss -  -  -  -  -  (1,300,965)  (1,300,965)
Balance – September 30, 2020
 20,150 $20,150,116  105,110,848,016 $10,511,084 $3,953,164 $(31,447,418) $3,166,946
 
Convertible
Preferred Stock
 Common Stock 
Additional
Paid-In
 Accumulated  
 Shares Amount Shares Amount Capital Deficit Total
Balance – January 1, 2021 16,277 $16,277,116  143,840,848,017 $14,384,084 $3,955,039 $(32,358,871) $2,257,368
Series C Convertible Preferred Stock exercised (16,277)  (16,277,116)  162,771,153,001  16,277,116  -  -  -
Stock options exercised -  -  775,000,000  77,500  -  -  77,500
Issuance of Series D Preferred stock in connection with the Securities Purchase Agreement 5,000  5,000,000  -  -  -  -  5,000,000
Issuance of common stock -  -  1,182,831,056  118,283  1,289,273  -  1,407,556
Issuance of awarded stock for officers -  -  2,200,000,000  220,000  (220,000)  -  -
Issuance of awarded stock for board member -  -  50,000,000  5,000  (5,000)  -  -
Cancellation of awarded stock for officers -  -  (3,025,000,000)  (302,500)  302,500  -  -
Cancellation of awarded stock for board member -  -  (68,750,000)  (6,875)  6,875  -  -
Stock-based compensation expense -  -  -  -  1,875  -  1,875
Net loss -  -  -  -  -  (696,258)  (696,258)
Balance – March 31, 2021 5,000 $5,000,000  307,726,082,074 $30,772,608 $5,330,562 $(33,055,129) $8,048,041


HEALTHIER CHOICES MANAGEMENT CORP.
CONDENSED CONSOLIDATED STOCKHOLDERS’ EQUITY STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019MARCH 31, 2020
(UNAUDITED)

Convertible
Preferred Stock
 Common Stock 
Additional
Paid-In
 Accumulated  
Convertible
Preferred Stock
 Common Stock 
Additional
Paid-In
 Accumulated  
Shares Amount Shares Amount Capital Deficit TotalShares Amount Shares Amount Capital Deficit Total
Balance – July 1, 2019
 20,150 $20,150,116  66,645,257,694 $6,664,526 $7,543,370 $(27,853,946) $6,504,066
Balance – January 1, 2020 20,150 $20,150,116  67,698,494,244 $6,769,849 $7,618,245 $(28,636,479) $5,901,731
Issuance of common stock in connection with cashless exercise of Series A warrants -  -  53,236,547  5,323  (3,112)  -  2,211 -  -  4,798,932,767  479,894  (479,894)  -  -
Issuance of awarded stock for board members
 -  -  1,000,000,000  100,000  (100,000)  -  -
Stock-based compensation expense -  -  -  -  147,570  -  147,570 -  -  -  -  81,944  -  81,944
Net loss                (1,150,303)  (1,150,303) -  -  -  -  -  (691,294)  (691,294)
Balance – September 30, 2019
 20,150 $20,150,116  67,698,494,241 $6,769,849 $7,587,828 $(29,004,249) $5,503,544
Balance – March 31, 2020 20,150 $20,150,116  72,497,427,011��$7,249,743 $7,220,295 $(29,327,773) $5,292,381



See notes to unaudited condensed consolidated financial statements

3

HEALTHIER CHOICES MANAGEMENT CORP.
CONDENSED CONSOLIDATED STOCKHOLDERS’ EQUITY STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020 OF CASH FLOWS
(UNAUDITED)

 
Convertible
Preferred Stock
 Common Stock 
Additional
Paid-In
 Accumulated  
 Shares Amount Shares Amount Capital Deficit Total
Balance – January 1, 2020
 20,150 $20,150,116  67,698,494,244 $6,769,849 $7,618,245 $(28,636,479) $5,901,731
Issuance of common stock in connection with cashless exercise of Series A warrants -  -  37,412,353,772  3,741,235  (3,741,235)  -  -
Stock-based compensation expense -  -  -  -  76,154  -  76,154
Net loss -  -  -  -  -  (2,810,939)  (2,810,939)
Balance – September 30, 2020
 20,150 $20,150,116  105,110,848,016 $10,511,084 $3,953,164 $(31,447,418) $3,166,946


HEALTHIER CHOICES MANAGEMENT CORP.
CONDENSED CONSOLIDATED STOCKHOLDERS’ EQUITY STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019
(UNAUDITED)

 
Convertible
Preferred Stock
 Common Stock 
Additional
Paid-In
 Accumulated  
 Shares Amount Shares Amount Capital Deficit Total
Balance – January 1, 2019
 20,150 $20,150,116  66,623,514,522 $6,662,351 $7,348,390 $(25,734,088) $8,426,769
Issuance of common stock in connection with cashless exercise of Series A warrants -  -  74,979,719  7,498  (4,386)  -  3,112
Cumulative Effect on adoption of ASC 842 -  -  1,000,000,000  100,000  (100,000)  -  -
Cumulative Effect on adoption of ASC 842 -  -  -  -  -  (103,015)  (103,015)
Stock-based compensation expense -  -  -  -  343,824  -  343,824
Net loss                (3,167,146)  (3,167,146)
Balance – September 30, 2019
 20,150 $20,150,116  67,698,494,241 $6,769,849 $7,587,828 $(29,004,249) $5,503,544
 Three Months Ended March 31,
 2021 2020
OPERATING ACTIVITIES     
Net loss$(696,258) $(691,294)
Adjustments to reconcile net loss to net cash used in operating activities:     
Depreciation and amortization 136,597  147,834
Loss on extinguishment of debt 117,296  -
Loss (Gain) on investment (26,126)  9,857
Amortization of right-of-use asset 122,735  158,724
Stock-based compensation expense 1,875  81,944
      
Changes in operating assets and liabilities:     
Accounts receivable (33,079)  (1,081)
Inventories 48,462  40,036
Prepaid expenses and vendor deposits 48,234  21,171
Other assets 1,003  3,958
Accounts payable (146,862)  126,569
Accrued expenses (122,765)  47,124
Contract liabilities (3,092)  (3,756)
Lease liability (104,390)  (140,374)
NET CASH USED IN OPERATING ACTIVITIES (656,370)  (199,288)
      
INVESTING ACTIVITIES     
Collection of note receivable 13,178  7,362
Purchases of property and equipment (30,855)  (10,805)
Purchases of patent -  (89,415)
NET CASH USED IN INVESTING ACTIVITIES (17,677)  (92,858)
      
FINANCING ACTIVITIES     
Principal payments on loan payable (12,759)  (70,574)
Principal payment on the line of credit (2,000,000)  -
Proceeds from security purchase agreement 5,000,000  -
Proceeds from exercise of stock options 77,500  -
NET CASH PROVIDED BY FINANCING ACTIVITIES 3,064,741  (70,574)
      
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENT AND RESTRICTED CASH 2,390,694  (362,720)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH— BEGINNING OF PERIOD 2,925,475  3,525,415
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — END OF PERIOD$5,316,169 $3,162,695
      
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION     
Cash paid for interest$81,313 $35,256
      
NON-CASH INVESTING AND FINANCING ACTIVITIES     
Issuance of common stock$1,407,556 $-

See notes to unaudited condensed consolidated financial statements

4

HEALTHIER CHOICES MANAGEMENT CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

 Nine Months Ended September 30,
 2020 2019
OPERATING ACTIVITIES     
Net loss$(2,810,939) $(3,167,146)
Adjustments to reconcile net loss to net cash used in operating activities:     
Bad debt expense -  (3,002)
Depreciation and amortization 424,020  449,071
Loss on disposal of assets -  25,427
Loss on investment 13,714  57,514
Amortization of right-of-use asset 428,740  459,760
Stock-based compensation expense 76,154  343,824
   Impairment of intangible assets 380,646  -
      
Changes in operating assets and liabilities:     
Accounts receivable (20,126)  12,582
Inventories (28,947)  (16,606)
Prepaid expenses and vendor deposits (58,175)  94,110
Contract assets -  14,400
Other assets 57,270  (3,423)
Accounts payable 267,220  (155,910)
Accrued expenses (2,249)  (294,211)
Contract liabilities (7,423)  (268,302)
Lease liability (373,184)  (402,857)
NET CASH USED IN OPERATING ACTIVITIES (1,653,279)  (2,854,769)
      
INVESTING ACTIVITIES     
Collection of note receivable 23,767  137,250
Purchases of property and equipment (24,663)  (12,967)
Purchases of patent (89,415)  (25,000)
NET CASH USED IN INVESTING ACTIVITIES (90,311)  99,283
      
FINANCING ACTIVITIES     
Proceeds from line of credit -  131,540
Principal payments on loan payable (209,941)  (188,323)
Proceeds from paycheck protection program 876,515  -
Proceeds from loan and security agreement 2,540,000  -
NET CASH USED IN FINANCING ACTIVITIES 3,206,574  (56,783)
      
NET DECREASE IN CASH, CASH EQUIVALENT AND RESTRICTED CASH 1,462,984  (2,812,269)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH— BEGINNING OF PERIOD 3,525,415  7,061,253
CASH, CASH EQUIVALENTS AND RESTRICTED CASH — END OF PERIOD$4,988,399 $4,248,984
      
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION     
Cash paid for interest$161,876 $107,646

See notes to unaudited condensed consolidated financial statements

5

HEALTHIER CHOICES MANAGEMENT CORP.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Note 1. ORGANIZATION

Organization

Healthier Choices Management Corp. (collectively, the(the “Company”, “we”, “us” and “our”)) is a holding company focused on providing consumers with healthier daily choices with respect to nutrition and other lifestyle alternatives. The Company currently operates nineeight retail vape stores in the Southeast region of the United States, through which it offers e-liquids, vaporizers and related products. The Company also operates Ada’s Natural Market, a natural and organic grocery store, through its wholly owned subsidiary Healthy Choice Markets, IncInc. Ada’s Natural Market and Paradise Health and Nutrition stores that offeroffers 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 through its wholly owned subsidiary Healthy Choice Markets 2, LLC.items. The Company also sells vitamins and supplements on the Amazon.com marketplace through its wholly owned subsidiary Healthy U Wholesale, Inc. The Company also operates HCMC Intellectual Property Holdings, LLC, a new wholly owned subsidiary formed to hold, market and expand on its current intellectual property assets. The Company markets 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 50 mg)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.

COVID-19 Management Update

In March 2020, the outbreak of COVID-19 (coronavirus) caused by a novel strain of the coronavirus has recently been recognized as a pandemic by the World Health Organization, and the outbreak has become increasingly widespread in the United States, including in the markets in which the Company operates.  The COVID-19 outbreak has had a notable impact on general economic conditions, including but not limited to the temporary closures of many businesses, “shelter in place” and other governmental regulations, reduced consumer spending due to both job losses and other effects attributable to the COVID-19, and there are many unknowns. The Company has adjusted certain aspects of the operations to protect their employees and customers while still meeting customers’ needs. While to date the Company has not been required to close any of its stores, the Company is currently operating under regular hours and we are expecting COVID-19 to have a long-term beneficial impact to the future financial results of the grocery segment. The Company continues to monitor the impact of the COVID-19 outbreak closely.  The extent to which the COVID-19 outbreak will impact our operations is manageable, and there is no imminent risk on business continuity and future operation.

Basis of Presentation and Principles of Consolidation

The Company’s unaudited condensed consolidated financial statements are prepared in accordance with GAAP. The unaudited condensed consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of the financial statement date.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Healthy Choice Markets, Inc., Healthy Choice Markets 2, LLC (“Paradise Health and Nutrition”), HCMC Intellectual Property Holdings, LLC, The Vitamin Store, LLC, Healthy U Wholesale, Inc., The Vape Store, Inc. (“Vape Store”), Vaporin, Inc. (“Vaporin”), Smoke Anywhere U.S.A., Inc. (“Smoke”), Emagine the Vape Store, LLC (“Emagine”), IVGI Acquisition, Inc., Vapormax Franchising LLC, Vaporin LLC, and Vaporin Florida, Inc. All intercompany accounts and transactions have been eliminated in consolidation.


Note 2. GOING CONCERN AND LIQUIDITY

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 incurred a loss from operations of approximately $2.7 million for the nine months endedSeptember 30, 2020. As of September 30, 2020, cashcurrently and historically has reported net losses and cash equivalents totaled approximatelyoutflows from operations. $0.6The Company million. equivalents to beanticipates that its current cash, cash equivalent and cash generated from operations will not be sufficient to cover ourmeet the projected operating expenses for the foreseeable future. Management believes these conditions raises substantial doubt about the Company's ability to continue as a going concern withinfuture through a year and a day from the issuance of these unaudited condensed consolidated financial statements. The ability of the Company to continue as a going concern is dependent on the Company's ability to generate significant revenue and raise additional funds (either through equity or debt financings, collaborative agreements or from other sources). There are no assurances that the Company will be successful in its efforts to generate significant revenues, maintain a sufficient cash balance or report profitable operations to continue as a going concern.
5


6

Note 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Reclassification

Certain amounts in the condensed consolidated financial statements and related notes have been reclassified to conform to the current year presentation. Such reclassifications do not impact the Company's previously reported financial position or net income (loss).

Use of Estimates in the Preparation of the Financial Statements

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of net revenue and expenses during the reporting periods. Actual results could differ from those estimates. These estimates and assumptions include allowances, reserves and write-downs of receivables and inventory, valuing equity securities and hybrid instruments, share-based payment arrangements, deferred taxes and related valuation allowances, and the valuation of the assets and liabilities acquired in business combinations. Certain of management’s estimates could be affected by external conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors could have an effect on our estimates that could cause actual results to differ from our estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and records adjustments when necessary.

Basis of Presentation and Principles of Consolidation

The Company’s unaudited condensed consolidated financial statements are prepared in accordance with GAAP. The unaudited condensed consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of the financial statement date.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Healthy Choice Markets, Inc., Healthy Choice Markets 2, LLC (“Paradise Health and Nutrition”), The Vitamin Store, LLC, Healthy U Wholesale, Inc., The Vape Store, Inc. (“Vape Store”), Vaporin, Inc. (“Vaporin”), Smoke Anywhere U.S.A., Inc. (“Smoke”), Emagine the Vape Store, LLC (“Emagine”), IVGI Acquisition, Inc., Vapormax Franchising LLC, Vaporin LLC, and Vaporin Florida, Inc. All intercompany accounts and transactions have been eliminated in consolidation.

Recently Adopted Accounting Pronouncements

The Company adopted Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). The amendment requires that the statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The Company adopted ASU 2016-18 in the second quarter of 2020 using the retrospective transition method to each period presented. The adoption primarily resulted in the inclusion of the restricted cash balances within the overall cash balances and a reconciliation of cash, cash equivalents and restricted cash reported on the condensed consolidated balance sheet. The adoption of this standard did not have a material impact on the condensed consolidated financial statements and is not expected to have a material impact for the foreseeable future. See “Cash and Cash Equivalents and Restricted Cash” above for further discussion of the effects of the adoption of ASU 2016-18 on the Company’s significant accounting policies.

Unaudited Interim Financial Information

The unaudited condensed consolidated financial statements have been prepared by the Company and reflect all normal, recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the interim financial information. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the year ending December 31, 2020.2021. Certain information and footnotes normally included in financial statements prepared in accordance with GAAP have been omitted under the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). These unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the audited consolidated financial statements and related notes thereto as of and for the year ended December 31, 20192020 included in the Company’s Annual Report on Form 10-K for such year as filed with the SEC on May 13, 2020.March 8, 2021.
7


Note 4. CONCENTRATIONS

Cash and Cash Equivalents and Restricted Cash 

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the statement of cash flows: 
 September 30, 2020  December 31, 2019 March 31, 2021  December 31, 2020 
Cash and Cash Equivalent
 
$
602,318
  
$
1,525,415
 
$
5,316,169
  
$
925,475
 
Restricted cash, non-current portion
 
 
4,386,081
 
 
 
2,000,000
  
-
   
2,000,000
 
Total cash, cash equivalents and restricted cash
 
$
4,988,399
 
 
$
3,525,415
 
$
5,316,169
  
$
2,925,475
 

Restricted Cash
 
The Company's restricted cash consistsconsisted of cash balances which arewere restricted as to withdrawal or usage under the August 2020 Loan and Security agreement and cash balances obligated to maintainbe maintained in a money market account as per the April 2018 revolving credit line agreement. See Note 8 for further discussions.
6

Note 5. DISAGGREGATION OF REVENUES

The Company reports the following segments in accordance with management guidance: Vapor and Grocery. When the Company prepares its internal management reporting to evaluate business performance, we disaggregate revenue into the following categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

Three Months Ended September 30, Nine Months Ended September 30, Three Months Ended March 31, 
2020 2019 2020 2019 2021  2020 
Vapor$594,145 $898,229 $1,888,480 $3,207,530 $613,936  $773,458 
Grocery 2,753,648  2,520,101  8,804,397  8,407,919  2,851,817   3,262,714 
Total revenue$3,347,793 $3,418,330 $10,692,877 $11,615,449 $3,465,753  $4,036,172 
                   
Retail Vapor$594,145 $898,216 $1,888,480 $3,207,120 $613,894  $773,458 
Retail Grocery 2,369,942  2,168,645  7,707,101  7,302,378  2,542,360   2,830,365 
Food service/restaurant 248,757  291,435  823,724  949,211  287,722   329,139 
Online/eCommerce 75,009  45,927  261,158  127,129  13,717   103,210 
Wholesale Grocery 59,940  14,094  12,414  29,201  8,018   - 
Wholesale Vapor -  13  -  410  42   - 
Total revenue$3,347,793 $3,418,330 $10,692,877 $11,615,449 $3,465,753  $4,036,172 


Note 6. INTANGIBLE ASSETS

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the asset’s carrying amount may not be recoverable. The Company conducts its long-lived asset impairment analyses in accordance with ASC 360-10-35-23, “Impairment or Disposal of Long-Lived Assets.” ASC 360-10-35-23 requires that a company recognize an impairment loss if, and only if, the carrying amount of a long-lived asset (asset group) is not recoverable from the sum of the undiscounted cash flows expected to result from the use and eventual disposal of the asset (the “Recoverable Amount”) and if the carrying amount exceeds the asset’s fair value.

As part of management's qualitative analysis at September 30, 2020 to determine whether any triggering events have occurred since the last impairment test in December 30, 2019, which would indicate an impairment. Management determined that triggering events had occurred through the nine month ended September 30, 2020 and recorded an impairment to intangible assets.

The Company determined that the carrying value of intangible assets for the Vitamin Store are not recoverable based on the monthly average sales for the nine months ended September 30, 2020. The Company concluded that the intangible assets was impaired and recorded an impairment charges of $0.4 million for the nine months ended September 30, 2020.  The Company did not have an impairment charge for the same period in 2019.


8
Intangible assets, net are as follows:

September 30, 2020 Useful Lives (Years) 
Gross
Carrying Amount
 
Accumulated
Amortization
 
Net
Carrying Amount
March 31, 2021 Useful Lives (Years) 
Gross
Carrying Amount
 
Accumulated
Amortization
 
Net
Carrying Amount
Trade names  
8-10 years
 $923,000 $(418,068) $504,932  8-10 years $923,000 $(465,505) $457,495
Customer relationships  
4-10 years
  883,000 (420,635)  462,365  4-10 years  883,000 (529,510)  353,490
Patents  
10 years
  359,665 (76,650)  283,015  10 years  359,665 (94,633)  265,032
Non-compete  
4 years
  174,000  (77,938)  96,062  4 years  174,000  (99,688)  74,312
Intangible assets, net    $2,339,665 $(993,291) $1,346,374    $2,339,665 $(1,189,336) $1,150,329

December 31, 2019 Useful Lives (Years) 
Gross
Carrying Amount
 
Accumulated
Amortization
 
Net
Carrying Amount
December 31, 2020 Useful Lives (Years) 
Gross
Carrying Amount
 
Accumulated
Amortization
 
Net
Carrying Amount
Trade names  
8-10 years
  $993,000  (354,203)  $638,797  8-10 years  $923,000  (441,786)  $481,214
Customer relationships  
4-10 years
  1,228,000  (293,260)  934,740  4-10 years  883,000  (475,073)  407,927
Patents  
10 years
  270,250  (49,027)  221,223  10 years  359,665  (85,641)  274,024
Non-compete  
4 years
  174,000  (45,313)  128,687  4 years  174,000  (88,813)  85,187
Intangible assets, net    $2,665,250 $(741,803) $1,923,447    $2,339,665 $(1,091,313) $1,248,352

Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense amounted towas approximately $0.3$0.1 million and $0.3$0.1 million for the ninethree months ended September 30,March 31, 2021 and 2020, and 2019, respectively. Future annual estimated amortization expense is as follows:

Years ending December 31,     
2020 (remaining three months)$98,023
2021 385,091
2021 (remaining nine months) $287,069 
2022 369,706  369,706 
2023 130,841  130,841 
2024 130,841  130,841 
2025  125,341 
Thereafter 231,872  106,531 
Total$1,346,374 $1,150,329 
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Note 7. CONTRACT LIABILITIES

The Company’s contract liabilities consists of gift cards and loyalty rewards, for which the Company has a performance obligation to deliver products when customers redeem balances or terms expire through breakage. Our breakage policy is twenty four-monthfour months for gift cards, twelve months for Grocery loyalty rewards, and six months for Vapor loyalty rewards. As such, all contract liabilities are expected to be recognized within a twenty four-monthfour month period. Revenue is recognized when gift card and loyalty points are redeemed.

A summary of the net changes in contract liabilities activity for the ninethree months ended September 30,March 31, 2021 and 2020 and 2019 is presented below:

As of September 30, As of March 31, 
2020 2019 2021  2020 
Beginning balance as January 1,$26,823 $442,630 $21,262  $26,823 
Issued 33,221  50,778  46,627   60,309 
Redeemed (39,405)  (57,319)  (49,585)  (63,509)
Breakage recognized (341)  (1,563)  (134)  (556)
Fulfillment of contract (898)  (260,198)
Ending balance as of September 30,
$19,400 $174,328
Ending balance as of March 31, $18,170  $23,067 
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Note 8. DEBT

The following table provides a breakdown of the Company's debt as of September 30, 2020March 31, 2021 and is presented below:

  Principal  Debt Discount  Net Amount
Line of Credit $2,000,000 $- $2,000,000
_ Due Date Interest Rate  March 31, 2021  December 31, 2020
Term Loan Credit Agreement  870,925  -  870,925 December 2023 7.00% $730,924 $800,924
Paycheck Protection Program  880,051  -  880,051 May 2022 1%  884,431  882,264
Line of Credit July 2021 2.2%  -  2,000,000
Loan and Security Agreement ("PPE Loan")  2,667,000  (66,322)  2,600,678 March 2021 5%  -  1,232,414
Other debt  6,487  -  6,487 April 2023 5.3%  5,284  5,891
Total debt $6,424,463 $(66,322) $6,358,141     $1,620,639  4,921,493

Line of Credit

On April 13, 2018, the Company agreed to a new revolving credit line of $2$2 million and a money market account of $2$2 million (“blocked account”) with Professional Bank in Coral Gables, Florida. On September 30, 2020,, the Company reached agreement with Professional Bank to renew the credit line for one more year, and the next annual review will occur on or before July 15, 2021. The new agreement included a variable interest rate that it is based on a rate of 1.5% over what is earned on the collateral amount. The collateral amount established in the arrangement with the bank is $2$2 million. As of September 30, 2020,March 31, 2021, the Company had $2 milliona zero balance in the blocked account which is recordedas of a result of a $2 million payment to the line of credit. The company recoded the balance in the blocked account as restricted cash included in non-current assets.

Term Loan Credit Agreement

On December 31, 2018, the Company entered into a Term Loan Credit Agreement (the “Credit Agreement”) with Professional Bank, a Florida banking corporation (the “Bank”), pursuant to which the Company issued a Term Note (the “Term Note”) in the principal amount of $1,400,000 in favor of the Bank. The Term Note bears interest at a rate equal to 1.5 percentage points in excess of that rate shown in the Wall Street Journal as the prime rate, adjusted annually (which was 5.50% as of December 31, 2019). The proceeds of the Term Note were used for acquisitions and for general working capital requirements.

The Credit Agreement contains a customary financial covenant for a minimum debt service coverage ratio of 1.25 to 1.0. The Credit Agreement matures on December 31, 2023. In addition, the Credit Agreement provides for monthly principle payments of $22,333 commencing in January 2019 plus applicable interest, and mandatory prepayments with a portion of excess cash flow.

The obligations under the Credit Agreement and the Term Note are guaranteed by the Company and its wholly owned subsidiary, Healthy U Wholesale, Inc.

Paycheck Protection Program

On May 15, 2020, the Company was granted a loan (the “Loan”) from Customers Bank, in the aggregate amount of $876,515, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020.

The Loan, which was in the form of a Note dated May 6, 2020 issued by the Company, matures on May 6, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on November 6, 2020. The Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred after May 6, 2020. The Company intends to use the entire Loan amount for these qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act.

Loan and Security Agreement

On August 18, 2020, the Company agreed to a loan and security agreement (the “Loan”) in the aggregate of $2.7 million with Sabby Healthcare Master Fund, LTD and Sabby Volatility Warrant Master Fund, LTD (“collectively, the Lender”). The loan has a non-refundable discount of 5% to the face amount of the loan and it matures on November 16, 2020. The debt obligations from the loan are secured by the assets of the Company.  The proceeds received from the Loan were record as restricted cash included in non-current assets. The proceeds will be used solely for the purchase of personal protective equipment (“PPE”) and any related expenses from the transactions. The Lender is entitled to 20% of all Net profits received from the sales of the PPE goods through the maturity date.
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Note 9. STOCKHOLDERS’ EQUITY

Series A Warrants

In the nine months ended September 30, 2020, the Company issued 37.4 billion shares in connection with the cashless exercise of the Series A warrants.Exchange Agreement

On July 27,March 29, 2021, the Company entered into exchange agreements with the holders of the $2.7 million Loan and Security Agreement (the "Credit Agreement"). The agreement with the holders of the Company’s indebtedness (the “Notes”) in an aggregate amount of  $1.3 million to exchange the Notes for 1,172,964,218 shares at a conversion price of $0.0011. The Notes were issued pursuant to the Credit Agreement dated as of August 18, 2020, among The Vape Store, Inc., the remaining Company, Series A Warrants expiredHealthy Choice Markets, Inc., Sabby Healthcare Master Fund, Ltd., and Sabby Volatility Warrant Master Fund, Ltd.  In connection with the Exchange, the Credit Agreement and all related loan documents will be terminated and the balanceHolder’s on the assets of outstanding warrants not exercisedthe Company and its subsidiaries will be cancelled.  The Company recognized a loss on debt extinguishment of $0.1 million.

Restricted Stock
On January 14, 2021, the Compensation Committee of the Board of Directors of the Company approved an issuance of restricted stock to the Officers and a Director of the Company, in consideration for agreeing to a new vesting schedule for the existing awarded restricted stock. Each individual was granted a 10%355,661 increase from the original award agreement for a total of warrants.2.3 billion shares of restricted common stock, which will vest quarterly and equal amounts until December 31, 2022, provided that the grantee remains an employee of the Company through the vesting date.

On March 30, 2021, the Company and the Officers and a Director of the Company agreed to forfeit all their restricted shares that were due to vest on March 31, 2021. Each individual forfeited 12.50% from their current amended award agreement for a total of 3.09 billion shares of restricted common stock.

The Company applied ASC 718 “Stock Compensation” to evaluate the award modification and cancellation. Based on this guidance, no gain or loss was recognize.

8
Series C Convertible Preferred Stock

On September 25,November 17, 2020,, the Company entered into agreements with certain holders of its Series B Convertible Preferred Stock (the "Series B Stock") to exchange all the Series B Stock for 20,150.115320,150 shares of Series C Stock.Stock (the "Series C Stock"). Each share of Series C Stock has a stated value equal to $1,000$1,000 and is convertible into Common Stock on a fixed basis at a conversion price of $0.0001$0.0001 per share. As of the end of the third quarterthree month ended March 31, 2021, the Series C Stock have been 100% been converted into 201.5 billion shares of 2020,Company common stock.

Series D Convertible Preferred Stock

On February 7, 2021, the closingCompany entered into a Securities Purchase Agreement, pursuant to which the Company sold and issued 5,000 shares of its Series D Convertible Preferred Stock (the “Preferred Stock”) to a single institutional, accredited investor for $1,000 per share or an aggregate subscription of $5.0 million. The Preferred Stock is currently convertible into 2,083,333,333 shares of the stock exchange had not occurred.Company’s Common Stock at a conversion price of $0.0024 per share, with such conversion price subject to adjustment as set forth below and described in the Certificate of Designation.

Stock Options

In the three months ended March 31, 2021, 775,000,000 stock options of the Company have been exercised into common stock.

A summaryDuring the three months ended March 31, 2021 and 2020, the Company recognized a stock-based compensation of $1,875 and $81,944, respectively, in connection with the amortization of stock options, net of recovery of stock-based charges for forfeited unvested stock options. Stock-based compensation expense recognized is presented below:included as part of selling, general and administrative expense in the accompanying consolidated statements of operations.

 Three Months Ended September 30, Nine Months Ended September 30,
 2020 2019 2020 2019
Stock-based compensation$1,875 $147,570 $76,154 $343,824

Income (Loss) Per Share

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

 As of September 30,  As of March 31, 
 2020  2019  2021  2020 
Preferred stock  201,501,000,000   201,501,000,000   2,083,000,000   201,501,000,000 
Stock options  68,062,000,000   91,062,000,000   69,087,000,000   68,062,000,000 
Warrants  -   41,420,000,000   -   36,460,000,000 
Total  269,563,000,000   333,983,000,000   71,170,000,000   306,023,000,000 

Note 10. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Loss Contingencies

Two lawsuits were filed against the Company and its subsidiaries in connection with alleged claimed battery defects for an electronic cigarette device. Plaintiffs claim these batteries were sold by a store of the Company’s subsidiary and have sued for an undetermined amount of damages (other than a total of $0.4$0.4 million of medical costs). The initial complaints were filed between January 2019 and April 2019. We responded to the complaints on April 2019 and May 2019, respectively. Given the lack of information presented by the plaintiffs to date, the Company is unable to predict the outcome of these matters and, at this time, cannot reasonably estimate the possible loss or range of loss with respect to these legal proceedings.

As of
September9
Gain Contingencies

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 not accrued for a potential loss for these actions. Given the information receivedreportedly invested over $3 billion in their smokeless tobacco products.

From time to date,time the Company intends to vigorously contest these lawsuits as they areis involved in legal proceedings arising in the early stages and progressed minimallyordinary 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, 20212020. With respect to legal costs, we record such costs as incurred.
11
Employment Agreement

On February 26, 2021, the Company entered into an amended and restated employment agreement (the “Employment Agreement Amendment”) with the Company’s President and Chief Operating Officer, Christopher Santi. Pursuant to the Employment Agreement Amendment, Mr. Santi will continue to be employed as the Company’s President and Chief Operating Officer through January 30, 2024.  Mr. Santi will receive a base salary of $363,000 for 2021 and his salary will increase 10% in each subsequent year.


Note 11. SUBSEQUENTSUBSEQUEBT EVENTS

The Company has evaluated its subsequent events from March 31, 2021 throughNovember 18, 2020, the date on which the September 30, 2020 unauditedthese condensed consolidated financial statements were originally issued. Thereissued, and has determined that other below there are no significantadditional subsequent events that require disclosure in these financial statements, except as follows:required to be disclosed.

Series C Stock

On November 17, 2020From April 1, 2021 to May 10, 2021, 200 ,million stock options of the Company finalized the closing of the stock exchange with certain holders of its Series B Convertible Preferred Stock to exchange all the Series B Stock for 20,150.1153 shares of Series C Stock. Each share of Series C Stock has a stated value equal to $1,000 and is convertiblehave been exercised into Common Stock on a fixed basis at a conversion price of $0.0001 per share.

Term Loan and Security Agreement Extension

On November 10, 2020, the Company received a written notice from Sabby Healthcare Master Fund, LTD and Sabby Volatility Warrant Master Fund, LTD (“collectively, the Lender”) agreeing to the requested extension for the term loan and security agreement (the “Loan”) that matures on November 16, 2020. The loan extension matures on January 16, 2021 and it bears interest at a rate of 5% per annum, payable monthly commencing on the first day of the first month following the acceptance date of the extension.common stock.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF CONDENSED CONSOLDIATED 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, Healthy Choice Markets, Inc., Healthy Choice Markets 2, LLC (“Paradise Health and Nutrition”), HCMC Intellectual Property Holdings, LLC, The Vitamin Store, LLC, Healthy U Wholesale, Inc., The Vape Store, Inc. (“Vape Store”), Vaporin, Inc. (“Vaporin”), Smoke Anywhere U.S.A., Inc. (“Smoke”), Emagine the Vape Store, LLC (“Emagine”), IVGI Acquisition, Inc., Vapormax Franchising LLC, Vaporin LLC, and Vaporin Florida, Inc. . All intercompany accounts and transactions have been eliminated in consolidation.

Company Overview

Healthier Choices Management Corp. (collectively, the “Company”, “we”, “us” and “our”) is a holding company focused on providing consumers with healthier daily choices with respect to nutrition and other lifestyle alternatives. The Company currently operates nine retail vape stores in the Southeast region of the United States, through which it offers e-liquids, vaporizers and related products. The Company markets its Q-Cup™ technology under the vape segment. 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. In October 2019, the Company announced the launch of the Q-Unit, a U.S. patented device made specifically for vaping concentrates.  The Q-Unit, which boasts a mechanism that prevents the concentrates from coming in direct contact with the heating element, allows consumers to vape uncut pure extract from a pure quartz cup. The Company also operates Ada’s Natural Market, a natural and organic grocery store, through its wholly owned subsidiary Healthy Choice Markets, Inc. and Paradise Health and Nutrition, stores that 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 through its wholly owned subsidiary Healthy Choice Markets 2, LLC.

Going Concern and 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 incurred a loss from operations of approximately $2.8$0.7 million for the ninethree months endedSeptember 30, 2020. March 31, 2021. As of September 30, 2020,March 31, 2021, cash and cash equivalents totaled approximately $0.6$5.3 million. The Company expects to continue incurring losses for the foreseeable future and we anticipate that our current cash and cash equivalents to be generated from operations will not be sufficient to cover our projected operating expenses for the foreseeable future. Management believes these conditions raisesdo not believe there are any substantial doubtdoubts about the Company'sCompany’s ability to continue as a going concern within a year and a day from the issuance of these unaudited consolidated financial statements. Should we require additional funds (either through equity or debt financing, collaborative agreements or from other sources) we have no commitments

Rights Offering

On April 20, 2021, the Company filed a registration statement on Form S-1 with the Securities and Exchange Commission (the “SEC”) for a Rights Offering to obtain such additional financing, and we may not be able to obtain any such additional financing on terms favorable to us, or at all.its stockholders. The inabilitypurpose of this Rights Offering is to raise equity capital in a cost-effective and potentially non-dilutive manner that provides all of our existing shareholders the opportunity to participate, purchase, and own up to approximately an additional financing may have a material adverse effect on the future performance25% of the Company.Company’s common stock. If fully subscribed, the Company will raise up to $100,000,000 in gross proceeds. The net proceeds will be used for general working capital purposes, including the protection of our intellectual property rights through litigation and other methods, funding future research and development for both our intellectual property suite and product offerings, and funding growth initiatives and expansion for our health food, vitamin and supplements, and vape segments, both online and in brick and mortar stores.

Factors Affecting Our Performance

We believe the following factors affect our performance:

Vapor Retail: We believe the operating performance of our vapor retail stores will affect our revenue and financial performance. The Company has a total of nineeight retail vape stores, which are located in Florida, Georgia and Tennessee.


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Inventory Management: Our vapor segment revenue trends are affected by an evolving product acceptance and consumer demand. We are creating and offering new products to our retail vapor customers. Evolving product development and technology impacts our licensing and intellectual properties spending. We expect the transition to vaporizer and advanced technology and enhanced performance products to continue and will impact our overall operating results in the future.

Increased Competition: The launch by national competitors in both of our business reporting segments have made it more difficult to compete on prices and to secure business. We expect increased product supply and downward pressure on prices to continue and impact our operating results in the future. We also expect the continued expansion of national grocery chains, which leads to greater competition, to impact our operating results in the future.
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Results of Operations

The following table sets forth our unaudited condensed consolidated Statements of Operations for the three months ended September 30,March 31, 2021 and 2020 and 2019 that is used in the following discussions of our results of operations:

Three Months Ended September 30, 
2020 to 2019
Three Months Ended March 31, 2020 to 2021
2020 2019 Change $2021 2020 Change $
SALES                
Vapor sales, net$594,145 $898,229 $(304,084)$613,936 $773,458 $(159,522)
Grocery sales, net 2,753,648  2,520,101  233,547 2,851,817  3,262,714  (410,897)
TOTAL SALES, NET 3,347,793  3,418,330  (70,537) 3,465,753  4,036,172  (570,419)
                
Cost of sales vapor 256,461  385,208  (128,747) 233,315  319,080  (85,765)
Cost of sales grocery 1,729,213  1,629,980  99,233 1,741,728  2,009,200  (267,472)
GROSS PROFIT 1,362,119  1,403,142  (41,023) 1,490,710  1,707,892  (217,182)
                
OPERATING EXPENSES         2,022,883  2,372,381  (349,498)
Selling, general and administrative 2,195,275  2,532,505  (337,230)
Impairment of intangible assets 380,646  -  380,646
Total operating expenses 2,575,921  2,532,505  43,416
        
LOSS FROM OPERATIONS (1,213,802)  (1,129,363)  (84,439) (532,173)  (664,489)  132,316
                
OTHER INCOME (EXPENSE)                
Gain (loss) on investment (2,571)  (12,514)  9,943 26,126  (9,857)  35,983
Other Income (expense) -  (146)  146
Interest income (expense) (84,592)  (8,280)  (76,312)
Total other income (expense), net (87,163)  (20,940)  (66,223)
Other expense, net -  (76)  76
Interest expense, net (72,915)  (16,872)  (56,043)
Loss on extinguishment of debt (117,296)  -  (117,296)
Total other expense, net (164,085)  (26,805)  (137,280)
                
NET LOSS$(1,300,965) $(1,150,303) $(150,662)$(696,258) $(691,294) $(4,964)

Net Vapor sales decreased $0.3$0.2 million to $0.6$0.6 million for the three months ended September 30, 2020March 31, 2021 as compared to $0.9$0.8 million for the same period in 2019.2020. The decrease in sales is primarily due to a majorconsistent decreased in foot traffic or temporaryand the closure of some stores a result of the Coronavirus (COVID-19) pandemicone store during the three months ended September 30, 2020March 31, 2021 as compared to the same period in 2019.2020.

Net Grocery sales increased$0.2decreased $0.4 million to $2.8$2.9 million for the three months endedSeptember 30, 2020 March 31, 2021 as compared to $2.5$3.3 million for the same period in 2019.2020. The increasedecrease in sales is primarily due to COVID-19 pandemic and a decrease in the company new strategycustomer count compared to offer its customer the option to delivery or curb side pickup their orders.same period in 2020.

Vapor cost of goods sold for the three months ended September 30,March 31, 2021 and 2020 and 2019 were $0.3$0.2 million and $0.4$0.3 million, respectively, a decreased of $0.1$0.1 million. The decrease is primarily due to decreases in sales and product costs during three months ended September 30, 2020March 31, 2021 as compared to the same period in 2019.2020. Gross profit was $0.3$0.4 million and $0.5$0.5 million for three months ended September 30,March 31, 2021 and 2020, and 2019, respectively.

Grocery cost of goods sold for the three months ended September 30,March 31, 2021 and 2020 and 2019 were $1.7$1.7 million and $1.6$2.0 million respectively, an increaseddecreased of $99,000.$0.3 million. The increasedecrease is primarily due to increases in sales and cost of goods sold fromduring the COVID-19 pandemic. Gross profit was $1.0 million and $0.9 million for the three months ended September 30, 2020 and 2019, respectively.

Total operating expenses increased $43,000 to $2.6 million for the three months ended September 30, 2020 compared to $2.5 million for the same period in 2019. The increase is primarily attributable to an impairment of intangible assets of $0.4 million, offset by ,decreases in payroll and employee related cost of $0.1 million, stock compensation of $0.1 million, insurance of $43,000, meals, meals, travel and entertainment of $30,000, and occupancy of $9,000.

Net other expense of $87,000 for the three months endedSeptember 30, 2020 includes interest expense of $85,000, and loss on investment of $3,000. Net other expense of $21,000 for the three months endedSeptember 30, 2019 includes a loss on investment of $13,000, partially offset by interest income of $8,000.


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The following table sets forth our unaudited consolidated Statements of Operations for the nine months ended September 30, 2020 and 2019 that is used in the following discussions of our results of operations:

 
Nine Months Ended September 30,
 
2020 to 2019
 2020 2019 Change $
SALES        
Vapor sales, net$1,888,480 $3,207,530 $(1,319,050)
Grocery sales, net 8,804,397  8,407,919  396,478
TOTAL SALES, NET 10,692,877  11,615,449  (922,572)
         
Cost of sales vapor 787,998  1,337,555  (549,557)
Cost of sales grocery 5,461,574  5,309,567  152,007
GROSS PROFIT 4,443,305  4,968,327  (525,022)
         
OPERATING EXPENSES        
Selling, general and administrative 6,735,815  8,057,452  (1,321,637)
Impairment of intangible assets 380,646  -  380,646
Total operating expenses 7,116,461  8,057,452  (940,991)
LOSS FROM OPERATIONS (2,673,156)  (3,089,125)  415,969
         
OTHER INCOME (EXPENSE)        
Gain (loss) on investment (13,714)  (57,514)  43,800
Other income (expense) (100)  (838)  738
Interest income (expense) (123,969)  (19,669)  (104,300)
Total other income (expense), net (137,783)  (78,021)  (59,762)
         
NET LOSS$(2,810,939) $(3,167,146) $356,207

Net Vapor sales decreased $1.3 million to $1.9 million for the nine months ended September 30, 2020 as compared to $3.2 million for the same period in 2019. The decrease in sales is primarily due to a major decreased in foot traffic or temporary closure of some stores a result of the Coronavirus (COVID-19) pandemic and a decrease in the number of stores open during the nine months ended September 30, 2020March 31, 2021 as compared to the same period in 2019.

Net Grocery sales increased$0.42020. Gross profit was $1.1 million to $8.8and $1.3 million for the ninethree months endedSeptember 30, March 31, 2021 and 2020, as respectively.

Total operating expenses decreased $0.3 million to $2.0 million for the three months ended March 31, 2021 compared to $8.4$2.4 million for the same period in 2019.2020. The increase in sales is primarily due to COVID-19 pandemic and the company new strategy to offer its customer the option to delivery or curb side pickup their orders.

Vapor cost of goods sold for the nine months ended September 30, 2020 and 2019 were $0.8 million and $1.3 million, respectively, a decrease of $0.6 million. The decrease is primarily due to a decreased in sales and product cost. Gross profit was $1.1 million and $1.9 million for the nine months ended September 30, 2020 and 2019, respectively.

Grocery cost of goods sold for the nine months ended September 30, 2020 and 2019 were $5.5 million and $5.3 million, respectively, an increase of $0.2 million. The increase is primarily due to increases in sales and cost of goods sold from the COVID-19 pandemic. Gross profit was $3.3 million and $3.1 million for the nine months ended September 30, 2019 and 2019, respectively.

Total operating expenses decreased $0.9 million to $7.1 million for the nine months ended September 30, 2020 compared to $8.1 million for the same period in 2019. The decrease is primarily attributable to decreases in office and stores expenses of $0.2 million, payroll and employee related cost of $0.6$0.1 million, stock-basedand stock compensation of $0.3$0.1 million, partially offset by an increase in professional fees of $0.1 million, taxes, licenses & permits of $0.1 million, insurance of $0.1 million, and occupancy of $42,000, offset by an impairment of intangible assets of $0.4$0.1 million.


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Net other expense of $0.1 million$164,000 for the ninethree months endedSeptember 30, 2020 was primarily due to an March 31, 2021 includes a loss on extinguishment of debt of $117,000 and interest expense of $0.1 million, and$73,000, partially offset by a lossgain on investment of $14,000.$26,000. Net other expense of $0.1 million$27,000 for the ninethree months endedSeptember 30, 2019 March 31, 2020 includes an interest expense of $17,000 and a loss on investment of $10,00058,000., and interest expense of $20,000.
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Liquidity and Capital Resources

 Nine Months Ended September 30,
 2020 2019
Net cash used in operating activities$(1,653,279) $(2,854,769)
Net cash provided by (used in) investing activities (90,311)  99,283
Net cash provided by financing activities 3,206,574  (56,783)
 $1,462,984 $(2,812,269)
 Three Months Ended March 31,
 2021 2020
Net cash provided by (used in)     
 Operating activities$(656,370) $(199,288)
 Investing activities (17,677)  (92,858)
Financing activities 3,064,741  (70,574)
 $2,390,694 $(362,720)

Our net cash used in operating activities of $1.7$0.7 million for the ninethree months endedSeptember 30, 2020 March 31, 2021 resulted from a net loss of $2.8$0.7 million, and a net cash usage of $0.2$0.3 million from changes in operating assets and liabilities, offset by a non-cash adjustment of $0.9$0.4 million. Our net cash used in operating activities of $2.9$0.2 million for the ninethree months endedSeptember 30, 2019 March 31, 2020 resulted from a net loss of $3.2$0.7 million and a net cash usage of $1.0$0.1 million from changes in operating assets and liabilities, offset by a non-cash adjustment of $1.3$0.4 million.

The net cash used in investing activities of $0.1 million$18,000 for the ninethree months endedSeptember 30, 2020 March 31, 2021 resulted from the issuance and collection of a note receivable, and purchases of a patent and property and equipment. The net cash provided byused in investing activities of $99,000$0.1 million for the ninethree months endedSeptember 30, 2019 March 31, 2020 resulted from payments received on the VPR Brands L.P. Note.collection of a note receivable, and purchases of property and equipment.

The net cash provided by financing activities of $3.2$3.1 million for the ninethree months endedSeptember 30, 2020 March 31, 2021 is due to is due to proceeds received from the Term LoanSecurities Purchase Agreement of $2.5$5.0 million and loanan exercised of paymentsstock options of $(0.2)$0.1 million, partially offset by a principal payment of $2 million on the loan payable.line of credit. The net cash provided byused in financing activities of $0.1$0.1 million for the ninethree months ended March 31, 2020 September 30, 2019is due to payments on the loan payable.

At September 30, 2020March 31, 2021 and December 31, 2019,2020, we did not have any material financial guarantees or other contractual commitments with vendors that are reasonably likely to have an adverse effect on liquidity.

Our cash balances are kept liquid to support our growing acquisition and infrastructure needs for operational expansion. The majority of our cash and cash equivalents are concentrated in threeone financial institutionsinstitution and are generally in excess of the FDIC insurance limit. The Company has not experienced any losses on its cash and cash equivalents. The following table presents the Company’s cash position as of September 30, 2020March 31, 2021 and December 31, 2019.2020.

September 30, 2020
 
December 31, 2019
March 31, 2021 December 31, 2020
Cash$602,318 $1,525,415$5,316,169 $925,475
Total assets$14,362,822 $14,006,669$13,985,537 $11,874,993
Percentage of total assets 4.19%  10.89% 38.01%  7.79%

The Company reported a net loss of $2.8$0.7 million for the ninethree months ended September 30, 2020.March 31, 2021. The Company also had negativepositive working capital of $4.2$5.2 million. The Company expects to continue incurring losses for the foreseeable future and may need to raise additional capital to satisfy warrantbusiness obligations, and to continue as a going concern.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Critical Accounting Policies and 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.


13
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. 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.
16

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 as compared to the critical accounting policies and estimates described in the 20192020 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.

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, the timing of future warrantSeries D preferred stock exercises and stock sales, having the authorized capital to issue stock to exercising Series A Warrant holders, 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.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, including our Principal Executive Officer and Principal Financial Officer, did not carry out an evaluation on internal controls as of September 30, 2020March 31, 2021 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.

In planning and performing its audit of our financial statements for the year ended December 31, 20192020 in accordance with standards of the Public Company Accounting Oversight Board, our independent registered public accounting firm noted material weaknesses in internal control over financial reporting. A list of our material weaknesses are 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

●Weakness around our purchase orders and inventory write-off procedures

●Segregation of duties due to lack of personnel

During the second quarter of 2020, the Company's independent auditors identified a material weakness in our internal controls and procedures over the adoption of Accounting Standard Codification ("ASC") 230, Restricted cash. The material weakness in internal control over financial reporting resulted in a reclassification to the presentation of the Company's prior period financial statements. These reclassifications were done to conform to the presentation of the current financial statement and they had no effect on the previously reported net loss.

Our management concluded that considering internal control deficiencies that, in the aggregate, rise to the level of material weaknesses, we did not maintain effective internal control over financial reporting as of September 30, 2020March 31, 2021 based on the criteria set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Changes in Internal Control over Financial Reporting

Following this assessment and during the ninethree months ended September 30, 2020,March 31, 2021, we have undertaken an action plan to
strengthen internal controls and procedures:

●
We continueManagement continues to improvedevote significant efforts toward improvement of effectiveness of control over financial reporting. This includes analyzing non-routine transactions before booking journal entries; Implemented a monthly variance fluctuation analysis across all segments. Variance analysis are communicated to operations and executives to make sure the process around inventory controls and throughout the current year, weresults are planning to perform a blind-counts for 100% of our overall inventory value with the purpose of validating our inventory records and increasing the staff knowledge around the importance of the new inventory procedures implemented. In addition, we are transitioning the independent third-party counts to a new company with the purposes of improving the accuracy of the quarterly and yearly counts perform for all retail stores. Due to the Coronavirus pandemic ("COVID-19") that started in early March 2020, the company was not able to conduct any independent third-party counts for the nine months endedSeptember 30, 2020.
accurate.

●Our management has increased its focus on the Company’s purchase order process in order to better manage inventory thereby improving cash management and ultimately leading to more reliable and precise financial reporting.

●Vendor payments and cash disbursement are reviewed on weekly basis by management and accounting team to ensure timely payment. Cash balance are communicated to management on weekly basis to improve cash management.

Our management continues to review ways in which we can make improvements in internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Two lawsuits were filed against the Company and its subsidiaries in connection with alleged claimed battery defects for an electronic cigarette device. Plaintiffs claim these batteries were sold by a store of the Company’s subsidiary and have sued for an undetermined amount of damages (other than a total of $0.4$0.4 million of medical costs). The initial complaints were filed between January 2019 and April 2019. We responded to the complaints on April 2019 and May 2019, respectively. Given the lack of information presented by the plaintiffs to date, the Company is unable to predict the outcome of these matters and, at this time, cannot reasonably estimate the possible loss or range of loss with respect to these legal proceedings.

As of September
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 not accrued for a potential loss for these actions. Given the information receivedreportedly invested over $3 billion in their smokeless tobacco products.

From time to date,time the Company intends to vigorously contest these lawsuits as they areis involved in legal proceedings arising in the early stages and progressed minimallyordinary course of our business. We believe that there is no other litigation pending that is likely to have, individually or in 2020the aggregate, a material adverse effect on our financial condition or results of operations as of .March 31, 2021. With respect to legal costs, we record such costs as incurred.

ITEM 1A. RISK FACTORS.

Not Applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

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.”

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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 XBRL Instance Document       Filed
101.SCH XBRL Taxonomy Extension Schema Document       Filed
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document       Filed
101.DEF XBRL Taxonomy Extension Definition Linkbase Document       Filed
101.LAB XBRL Taxonomy Extension Label Linkbase Document       Filed
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document       Filed

*This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

2017

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 17, 2020May 10, 2021By:/s/ Jeffrey Holman
  Jeffrey Holman
  Chief Executive Officer
   
Date: November 17, 2020May 10, 2021By:/s/ John Ollet
  John Ollet
  Chief Financial Officer

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