Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Jul. 21, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Document Transition Report | false | |
Entity File Number | 001-36469 | |
Entity Registrant Name | HEALTHIER CHOICES MANAGEMENT CORP. | |
Entity Central Index Key | 0000844856 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-1070932 | |
Entity Address, Address Line One | 3800 North 28Th Way | |
Entity Address, City or Town | Hollywood | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33020 | |
City Area Code | 305 | |
Local Phone Number | 600-5004 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | HCMC | |
Security Exchange Name | NONE | |
Entity Common Stock, Shares Outstanding | 463,266,632,384 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
CURRENT ASSETS | ||
Cash | $ 8,481,915 | $ 22,911,892 |
Accounts receivable, net | 92,649 | 55,815 |
Notes receivable | 156,297 | 189,225 |
Inventories | 3,765,070 | 3,817,192 |
Prepaid expenses and vendor deposits | 826,611 | 322,182 |
Investment | 1,371 | 9,771 |
Other current assets | 1,004,809 | 1,224,171 |
Restricted cash | 628,232 | 1,778,232 |
TOTAL CURRENT ASSETS | 14,956,954 | 30,308,480 |
Property, plant, and equipment, net of accumulated depreciation | 2,974,629 | 3,112,908 |
Intangible assets, net of accumulated amortization | 4,544,332 | 5,005,511 |
Goodwill | 5,747,000 | 5,747,000 |
Right of use asset - operating lease, net | 10,634,634 | 10,604,935 |
Other assets | 481,426 | 476,196 |
TOTAL ASSETS | 39,338,975 | 55,255,030 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 5,133,314 | 5,715,234 |
Contingent consideration | 372,000 | 774,900 |
Contract liabilities | 147,469 | 198,606 |
Line of credit | 453,232 | 453,232 |
Current portion of loan payment | 552,001 | 536,542 |
Operating lease liability, current | 1,965,888 | 2,228,852 |
TOTAL CURRENT LIABILITIES | 8,623,904 | 9,907,366 |
Loan payable, net of current portion | 2,097,932 | 2,378,061 |
Operating lease liability, net of current | 8,395,274 | 8,041,504 |
TOTAL LIABILITIES | 19,117,110 | 20,326,931 |
COMMITMENTS AND CONTINGENCIES (SEE NOTE 13) | ||
CONVERTIBLE PREFERRED STOCK | ||
Series E redeemable convertible preferred stock, $1,000 par value per share, 14,722 shares authorized, 1,944 shares and 14,722 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively; aggregate liquidation preference of $1.9 million and $14.7 million as of June 30, 2023 and December 31, 2022, respectively | 1,944,425 | 14,722,075 |
STOCKHOLDERS' EQUITY | ||
Series D convertible preferred stock, $1,000 par value per share, 5,000 shares authorized; 800 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively; aggregate liquidation preference of $0.8 million | 800,000 | 800,000 |
Common Stock, $0.0001 par value per share, 750,000,000,000 shares authorized; 463,266,632,384 and 339,741,632,384 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 46,326,663 | 33,974,163 |
Additional paid-in capital | 19,324,774 | 29,045,802 |
Accumulated deficit | (48,173,997) | (43,613,941) |
TOTAL STOCKHOLDERS' EQUITY | 18,277,440 | 20,206,024 |
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | $ 39,338,975 | $ 55,255,030 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2023 | Dec. 31, 2022 |
CONVERTIBLE PREFERRED STOCK | ||
Series E convertible preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 |
Series E convertible preferred stock, authorized (in shares) | 14,722 | 14,722 |
Series E convertible preferred stock, issued (in shares) | 1,944 | 14,722 |
Series E convertible preferred stock, outstanding (in shares) | 1,944 | 14,722 |
Series E convertible preferred stock, aggregate liquidation preference | $ 1.9 | $ 14.7 |
STOCKHOLDERS' EQUITY | ||
Series D convertible preferred stock, par value (in dollars per share) | $ 1,000 | $ 1,000 |
Series D convertible preferred stock, authorized (in shares) | 5,000 | 5,000 |
Series D convertible preferred stock, issued (in shares) | 800 | 800 |
Series D convertible preferred stock, outstanding (in shares) | 800 | 800 |
Series D convertible preferred stock, aggregate liquidation preference | $ 0.8 | $ 0.8 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 750,000,000,000 | 750,000,000,000 |
Common stock, shares issued (in shares) | 463,266,632,384 | 339,741,632,384 |
Common stock, shares outstanding (in shares) | 463,266,632,384 | 339,741,632,384 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
SALES | ||||
SALES, NET | $ 13,574,896 | $ 6,132,060 | $ 27,134,640 | $ 11,180,613 |
GROSS PROFIT | 5,081,683 | 2,330,873 | 9,996,074 | 4,303,387 |
OPERATING EXPENSES | 8,261,343 | 3,699,273 | 15,158,780 | 7,026,693 |
LOSS FROM OPERATIONS | (3,179,660) | (1,368,400) | (5,162,706) | (2,723,306) |
OTHER INCOME (EXPENSE) | ||||
(Loss) gain on investment | (3,943) | 1,800 | (8,400) | 5,314 |
Change in contingent consideration | 425,000 | 0 | 402,900 | 0 |
Other income, net | 4,600 | 6,175 | 9,250 | 23,049 |
Interest income, net | 101,248 | 14,910 | 198,900 | 31,513 |
Total other income (expense), net | 526,905 | 22,885 | 602,650 | 59,876 |
Net loss | (2,652,755) | (1,345,515) | (4,560,056) | (2,663,430) |
Induced conversions of Preferred Stock | (91,500) | 0 | (152,500) | 0 |
Net loss attributable to common stockholders | $ (2,744,255) | $ 0 | $ (4,712,556) | $ 0 |
NET LOSS PER SHARE-BASIC (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
NET LOSS PER SHARE-DILUTED (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC (in shares) | 353,854,819,196 | 339,741,632,384 | 347,796,604,758 | 339,741,632,384 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-DILUTED (in shares) | 353,854,819,196 | 339,741,632,384 | 347,796,604,758 | 339,741,632,384 |
Vapor [Member] | ||||
SALES | ||||
SALES, NET | $ 0 | $ 5,997 | $ 38 | $ 255,560 |
Cost of sales | 0 | 562 | 653 | 112,246 |
Grocery [Member] | ||||
SALES | ||||
SALES, NET | 13,574,896 | 6,126,063 | 27,134,602 | 10,925,053 |
Cost of sales | $ 8,493,213 | $ 3,800,625 | $ 17,137,913 | $ 6,764,980 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock [Member] | Preferred Stock [Member] Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total | Series E Convertible Preferred Stock [Member] |
Balance at Dec. 31, 2021 | $ 0 | ||||||
Balance (in shares) at Dec. 31, 2021 | 0 | ||||||
Balance at Jun. 30, 2022 | $ 0 | ||||||
Balance (in shares) at Jun. 30, 2022 | 0 | ||||||
Balance at Dec. 31, 2021 | $ 800,000 | $ 33,974,163 | $ 30,855,824 | $ (36,396,330) | $ 29,233,657 | ||
Balance (in shares) at Dec. 31, 2021 | 800 | 339,741,632,384 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock options exercised (in shares) | 0 | ||||||
Induced conversions of Preferred Stock | $ 0 | ||||||
Net loss | $ 0 | $ 0 | 0 | (2,663,430) | (2,663,430) | ||
Balance at Jun. 30, 2022 | $ 800,000 | $ 33,974,163 | 30,855,824 | (39,059,760) | 26,570,227 | ||
Balance (in shares) at Jun. 30, 2022 | 800 | 339,741,632,384 | |||||
Balance at Mar. 31, 2022 | $ 0 | ||||||
Balance (in shares) at Mar. 31, 2022 | 0 | ||||||
Balance at Jun. 30, 2022 | $ 0 | ||||||
Balance (in shares) at Jun. 30, 2022 | 0 | ||||||
Balance at Mar. 31, 2022 | $ 800,000 | $ 33,974,163 | 30,855,824 | (37,714,245) | $ 27,915,742 | ||
Balance (in shares) at Mar. 31, 2022 | 800 | 339,741,632,384 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock options exercised (in shares) | 0 | ||||||
Induced conversions of Preferred Stock | $ 0 | ||||||
Net loss | 0 | $ 0 | 0 | (1,345,515) | (1,345,515) | ||
Balance at Jun. 30, 2022 | $ 800,000 | $ 33,974,163 | 30,855,824 | (39,059,760) | 26,570,227 | ||
Balance (in shares) at Jun. 30, 2022 | 800 | 339,741,632,384 | |||||
Balance at Dec. 31, 2022 | $ 14,722,075 | ||||||
Balance (in shares) at Dec. 31, 2022 | 14,722 | ||||||
Increase (Decrease) in Convertible Preferred Stock [Roll Forward] | |||||||
Series E convertible preferred stock redeemed | $ (11,192,650) | ||||||
Series E convertible preferred stock redeemed (in shares) | (11,193) | ||||||
Conversion of series E convertible preferred stock | $ (1,585,000) | ||||||
Conversion of series E convertible preferred stock (in shares) | (1,585) | ||||||
Balance at Jun. 30, 2023 | $ 1,944,425 | ||||||
Balance (in shares) at Jun. 30, 2023 | 1,944 | ||||||
Balance at Dec. 31, 2022 | $ 800,000 | $ 33,974,163 | 29,045,802 | (43,613,941) | $ 20,206,024 | ||
Balance (in shares) at Dec. 31, 2022 | 800 | 339,741,632,384 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Series E convertible preferred stock redeemed | $ 0 | $ 0 | 22,222 | 0 | $ 22,222 | ||
Series E convertible preferred stock redeemed (in shares) | 0 | 0 | |||||
Stock options exercised (in shares) | 0 | ||||||
Conversion of series E convertible preferred stock | $ 0 | $ 1,585,000 | 0 | 0 | $ 1,585,000 | ||
Conversion of series E convertible preferred stock (in shares) | 0 | 15,850,000,000 | 15,850,000,000 | ||||
Issuance of award stock | $ 0 | $ 10,767,500 | (10,767,500) | 0 | 0 | ||
Issuance of award stock (in shares) | 0 | 107,675,000,000 | |||||
Induced conversions of Preferred Stock | $ 0 | $ 0 | (152,500) | 0 | (152,500) | ||
Stock-based compensation expense | 0 | 0 | 1,176,750 | 0 | 1,176,750 | ||
Net loss | 0 | 0 | 0 | (4,560,056) | (4,560,056) | ||
Balance at Jun. 30, 2023 | $ 800,000 | $ 46,326,663 | 19,324,774 | (48,173,997) | 18,277,440 | ||
Balance (in shares) at Jun. 30, 2023 | 800 | 463,266,632,384 | |||||
Balance at Mar. 31, 2023 | $ 13,496,525 | ||||||
Balance (in shares) at Mar. 31, 2023 | 13,496 | ||||||
Increase (Decrease) in Convertible Preferred Stock [Roll Forward] | |||||||
Series E convertible preferred stock redeemed | $ (10,637,100) | ||||||
Series E convertible preferred stock redeemed (in shares) | (10,637) | ||||||
Conversion of series E convertible preferred stock | $ (915,000) | ||||||
Conversion of series E convertible preferred stock (in shares) | (915) | ||||||
Balance at Jun. 30, 2023 | $ 1,944,425 | ||||||
Balance (in shares) at Jun. 30, 2023 | 1,944 | ||||||
Balance at Mar. 31, 2023 | $ 800,000 | $ 34,644,163 | 29,034,802 | (45,521,242) | $ 18,957,723 | ||
Balance (in shares) at Mar. 31, 2023 | 800 | 346,441,632,384 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Series E convertible preferred stock redeemed | $ 0 | $ 0 | 22,222 | 0 | $ 22,222 | ||
Series E convertible preferred stock redeemed (in shares) | 0 | 0 | |||||
Stock options exercised (in shares) | 0 | ||||||
Conversion of series E convertible preferred stock | $ 0 | $ 915,000 | 0 | 0 | $ 915,000 | ||
Conversion of series E convertible preferred stock (in shares) | 0 | 9,150,000,000 | 9,150,000,000 | ||||
Issuance of award stock | $ 0 | $ 10,767,500 | (10,767,500) | 0 | 0 | ||
Issuance of award stock (in shares) | 0 | 107,675,000,000 | |||||
Induced conversions of Preferred Stock | $ 0 | $ 0 | (91,500) | 0 | (91,500) | ||
Stock-based compensation expense | 0 | 0 | 1,126,750 | 0 | 1,126,750 | ||
Net loss | $ 0 | 0 | 0 | (2,652,755) | (2,652,755) | ||
Balance at Jun. 30, 2023 | $ 800,000 | $ 46,326,663 | $ 19,324,774 | $ (48,173,997) | $ 18,277,440 | ||
Balance (in shares) at Jun. 30, 2023 | 800 | 463,266,632,384 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
OPERATING ACTIVITIES | ||
Net loss | $ (4,560,056) | $ (2,663,430) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 747,485 | 422,078 |
Loss (gain) on investment | 8,400 | (5,314) |
Amortization of right-of-use asset | 1,063,591 | 377,216 |
Write-down of obsolete and slow-moving inventory | 951,373 | 73,640 |
Stock-based compensation expense | 1,176,750 | 0 |
Change in contingent consideration | (402,900) | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (36,834) | (2,157) |
Inventories | (899,251) | (189,138) |
Prepaid expenses and vendor deposits | (670,178) | 212,226 |
Other current assets | 219,362 | 0 |
Other assets | (5,230) | (33,941) |
Accounts payable and accrued expenses | (197,306) | 528,247 |
Contract liabilities | (51,137) | (249,700) |
Lease liability | (1,002,484) | (340,611) |
NET CASH USED IN OPERATING ACTIVITIES | (3,658,415) | (1,870,884) |
INVESTING ACTIVITIES | ||
Acquisition of Mother Earth's Storehouse | 0 | (5,150,000) |
Collection of note receivable | 32,928 | 27,122 |
Purchases of property and equipment | (148,027) | (213,133) |
NET CASH USED IN INVESTING ACTIVITIES | (115,099) | (5,336,011) |
FINANCING ACTIVITIES | ||
Proceeds from line of credit | 0 | 35,196 |
Principal payments on loan payable | (264,670) | (1,285) |
Payment of induced conversions of preferred stock | (152,500) | 0 |
Payments for deferred offering costs | (218,865) | 0 |
Payment for series E preferred stock redemption | (11,170,428) | 0 |
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES | (11,806,463) | 33,911 |
NET DECREASE IN CASH AND RESTRICTED CASH | (15,579,977) | (7,172,984) |
CASH AND RESTRICTED CASH - BEGINNING OF PERIOD | 24,690,124 | 26,496,404 |
CASH AND RESTRICTED CASH - END OF PERIOD | 9,110,147 | 19,323,420 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | 87,008 | 2,910 |
Cash paid for income tax | 0 | 0 |
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Issuance of common stock in connection with series E preferred stock conversion | 1,585,000 | 0 |
Right-of-use assets obtained in exchange for operating lease liabilities | 1,093,290 | 1,797,667 |
1% stated value reduction on preferred stock redemption | 22,222 | 0 |
Non-cash deferred offering cost | $ 384,614 | $ 0 |
ORGANIZATION
ORGANIZATION | 6 Months Ended |
Jun. 30, 2023 | |
ORGANIZATION [Abstract] | |
ORGANIZATION | Note 1. ORGANIZATION Organization Healthier Choices Management Corp. (the “Company”) 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: • 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. • 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. • Mother Earth’s Storehouse, a two-store organic and health food and vitamin chain in New York’s Hudson Valley, a business that has been in existence for over 40 years. • 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 Through its wholly owned subsidiary, Healthy Choice Wellness, LLC, the Company operates: • Licensing agreements for Healthy Choice Wellness Centers located at the Casbah Spa and Salon in Fort Lauderdale, FL, Boston Direct Health in Boston, MA and Green Care Medical Services in Chicago, IL. These centers offer multiple vitamin drip mixes and intramuscular shots 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 IV vitamin mixes and shots for health, beauty, and re-hydration. Through its wholly owned subsidiary, Healthy U Wholesale, Inc, 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 the Q-Cup™ technology under the vape segment; this patented technology is based on a small, quartz cup called the Q-Cup™, which a customer partially fills with either cannabis or CBD concentrate (approximately 50mg) purchased from a third party. The Q-Cup™ is then inserted into the Q-Cup™ Tank or Globe, that heats the cup from the outside without coming in direct contact with the solid concentrate. This Q-Cup™ technology provides significantly more efficiency and an “on the go” solution for consumers who prefer to vape concentrates either medicinally or recreationally. Spin-Off The Company has commenced steps to spin off (“Spin-Off”) its grocery segment and wellness business into a new publicly traded company (hereinafter referred to as “NewCo”). NewCo will continue the path of growth in the wellness verticals started by HCMC and explore other growth opportunities that comport with HCMC’s healthier lifestyle mission. Following the Spin-Off, HCMC will retain its entire patent suite, the Q-Cup® brand, and continue to develop its patent suite through R&D as well as continuing its path of enforcing its patent rights against infringers and attempting to monetize said patents through licensing deals. At the time of the Spin-Off, HCMC will distribute all the outstanding shares of Common Stock held by it on a pro rata basis to holders of HCMC’s common stock. Shares of HCMC’s common stock outstanding as of the record date for the Spin-Off (the “Record Date”), will entitle the holder thereof to receive a certain number of shares of Common Stock in NewCo. The distribution will be made in book-entry form by a distribution agent. Fractional shares of Common Stock will not be distributed in the Spin-Off and any fractional amounts will be rounded down. Please see more disclosure in Note 12 Stockholder Equity. |
LIQUIDITY
LIQUIDITY | 6 Months Ended |
Jun. 30, 2023 | |
LIQUIDITY [Abstract] | |
LIQUIDITY | Note 2. 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 currently and historically has reported net losses and cash outflows from operations. $ million we have no commitments to obtain such additional financing, and |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2023 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | Note 3. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Regulation S-X and do not include all the information and disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). The Company has made estimates and judgments affecting the amounts reported in the Company’s unaudited condensed consolidated financial statements and the accompanying notes. The actual results experienced by the Company may differ materially from the Company’s estimates. The condensed consolidated financial information is unaudited but reflects all normal adjustments that are, in the opinion of management, necessary to provide a fair statement of results for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2023. The condensed consolidated balance sheet as of December 31, 2022 was derived from the Company’s audited 2022 financial statements contained in the above referenced Form 10-K. Results of the six months ended June 30, 2023, are not necessarily indicative of the results to be expected for the full year ending December 31, 2023. Significant Accounting Policies There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2022 Annual Report. 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). $150,000 inventory shrink was originally presented in the statement of cash flow under change in operating assets inventory in cash used in operating activities for six months ended June 30, 2022, it was reclassified to write-down of obsolete and slow-moving inventory under cash used in operating activities in the statement of cash flow. The was presented under Other (expense) income, net in the statement of operations for three months ended March 31, 2023. For the three months ended June 30, 2023, the Company presented the change in fair value remeasurement as a separate line in the statement of operations. |
CONCENTRATIONS
CONCENTRATIONS | 6 Months Ended |
Jun. 30, 2023 | |
CONCENTRATIONS [Abstract] | |
CONCENTRATIONS | Note 4. CONCENTRATIONS Cash and Restricted Cash The Company considers all highly liquid instruments with an original maturity of three months or less, when purchased, to be cash and cash equivalents. The majority of the Company’s cash is concentrated in one large financial institution, which is in excess of Federal Deposit Insurance Corporation (FDIC) coverage. The Company did not have any cash equivalent as of June 30, 2023, and December 31, 2022. A summary of the financial institution that had cash in excess of FDIC limits of $250,000 on June 30, 2023 and December 31, 2022 is presented below: June 30, 2023 December 31, 2022 Total cash in excess of FDIC limits of $ $ 7,458,162 $ 21,682,144 The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests, as deposits are held in excess of federally insured limits. The Company has not experienced any losses in such accounts. The following table provides a reconciliation of cash and restricted cash to amounts shown in unaudited c : June 30, 2023 June 30, 2022 Cash $ 8,481,915 $ 19,323,420 Restricted cash 628,232 - Total cash and restricted cash $ 9,110,147 $ 19,323,420 Restricted Cash The Company’s restricted cash consisted of cash balances which were restricted as to withdrawal or usage under the August 18, 2022 securities purchase agreement for the purpose of funding any amounts due under the Series E Certificate of Designation upon the redemption of the Series E Preferred Stock. The balance also included cash held in the collateral account to cover the cash draw from the line of credit. |
SEGMENT INFORMATION AND DISAGGR
SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES | 6 Months Ended |
Jun. 30, 2023 | |
SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES [Abstract] | |
SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES | Note 5. SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES In accordance with FASB ASC 280, "Disclosures about Segment of an enterprise and related information", the Company determined it has two reportable segments: grocery and vapor. There are no inter-segment revenues. The Company's general and administrative costs are not segment specific. As a result, all operating expenses are not managed on segment basis. The tables below present information about reportable segments for the three months and six months ended June 30, 2023, and 2022: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Vapor $ - $ 5,997 $ 38 $ 255,560 Grocery 13,574,896 6,126,063 27,134,602 10,925,053 Total revenue $ 13,574,896 $ 6,132,060 $ 27,134,640 $ 11,180,613 Retail Vapor $ - $ 5,997 $ - $ 255,560 Retail Grocery 12,017,526 5,478,523 24,067,596 9,756,535 Food service/restaurant 1,555,372 643,760 3,062,948 1,158,846 Online/eCommerce 1,998 3,780 4,096 9,672 Total revenue $ 13,574,896 $ 6,132,060 $ 27,134,640 $ 11,180,613 Loss from operations-Vapor (10,724 ) (15,495 ) (17,397 ) (34,462 ) (Loss) income from operations-Grocery (185,923 ) 146,114 (462,763 ) 310,049 Corporate items (2,983,013 ) (1,499,019 ) (4,682,546 ) (2,998,893 ) Total loss from operations $ (3,179,660 ) $ (1,368,400 ) $ (5,162,706 ) $ (2,723,306 ) |
NOTES RECEIVABLE AND OTHER INCO
NOTES RECEIVABLE AND OTHER INCOME | 6 Months Ended |
Jun. 30, 2023 | |
NOTES RECEIVABLE AND OTHER INCOME [Abstract] | |
NOTES RECEIVABLE AND OTHER INCOME | Note 6. NOTES RECEIVABLE AND OTHER INCOME On September 6, 2018, the Company entered into a secured, -month promissory note with VPR Brands L.P. for $ . The Note bears an interest rate of , which payments thereunder are $ weekly. The Company records all proceeds related to the interest of the Note as interest income as proceeds are received. On August 31, 2022, the Company amended and restated the Note (the "Amended Note") with VPR Brands L.P. to extend the he outstanding balance for the Amended Note is $ . The Amended Note bears an interest rate of , which payments thereunder are $ weekly, with such payments commencing as of September 3, 2022. The Amended Note has a balloon payment of $ for all remaining accrued interest and principal balance due in the final week of the -year extension of the Amended Note. A summary of the Amended Note as of June 30, 2023 and December 31, 2022 is presented below: Description June 30, 2023 December 31, 2022 Promissory Note $ 156,297 $ 189,225 |
ACQUISITION
ACQUISITION | 6 Months Ended |
Jun. 30, 2023 | |
ACQUISITION [Abstract] | |
ACQUISITION | Note 7. ACQUISITION On October 14, 2022, the Company through its wholly owned subsidiary, Healthy Choice Markets IV, LLC, entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Dean’s Natural Food Market of Shrewsbury, Inc., a New Jersey corporation, Green’s Natural Foods, Inc., a Delaware corporation, Dean’s Natural Food Market of Chester, LLC, a New Jersey limited liability company, Dean’s Natural Food Market of Basking Ridge, LLC, a New Jersey limited liability company, and Dean’s Natural Food Market, Inc., a New Jersey corporation (collectively, the “Sellers”), and shareholders of the Sellers. Pursuant to the Purchase Agreement, the Company acquired certain assets and assumed certain liabilities of an organic and natural health food and vitamin chain with eight store locations in New York and northern and central New Jersey (the “Stores”). The cash purchase price under the Asset Purchase Agreement was $ , with $ seller financing in the form of promissory note. The Company recorded $1,108,000 of contingent consideration based on the estimated financial performance for the one year following closing. The contingent consideration was discounted at an interest rate of 3.8%, which represents the Company's weighted average discount rate. Contingent consideration related to the acquisition is recorded at fair value (level 3) with changes in fair value recorded in other expense (income), net. The following table summarizes the change in fair value of contingent consideration from acquisition date to June 30, 2023: Fair Market Value - Level 3 Balance as of October 14, 2022 $ 1,108,000 Remeasurement (333,100 ) Balance as of December 31, 2022 774,900 Remeasurement (402,900 ) Balance as of June 30, 2023 $ 372,000 The following table summarizes the change in fair value of contingent consideration for the three months ended June 30, 2023: Fair Market Value - Level 3 Balance as of March 31, 2023 $ 797,000 Remeasurement (425,000 ) Balance as of June 30, 2023 $ 372,000 The following table summarizes the purchase price allocation based on fair values of the net assets acquired at the acquisition date: October 14, 2022 Purchase Consideration Cash consideration paid $ 5,142,000 Promissory note 3,000,000 Contingent consideration issued to Green's Natural seller 1,108,000 Total Purchase Consideration $ 9,250,000 Purchase price allocation Inventory $ 1,642,000 Property and equipment 1,478,000 Intangible assets 3,251,000 Right of use asset - Operating lease 6,427,000 Other liabilities (211,000 ) Operating lease liability (6,427,000 ) Goodwill 3,090,000 Net assets acquired $ 9,250,000 Finite-lived intangible assets Trade Names ( 8 $ 1,133,000 Customer Relationships ( 6 1,103,000 Non-Compete Agreement ( 5 1,015,000 Total intangible assets $ 3,251,000 The acquisition is structured as asset purchase in a business combination, and goodwill is tax-deductible, and amortizable over 15 years for tax purpose. Revenue and Earnings The following table represents the combined pro forma revenue and net loss for the three and six months ended June 30, 2022: For Three Months Ended June 30, 2022 For Six Months Ended June 30, 2022 Sales $ 13,875,928 $ 27,032,375 Net loss $ (1,769,171 ) $ (3,354,452 ) The combined proforma revenue and net loss for the three and six months period ended June 30, 2022 were prepared as though acquisition occurred as of January 1, 2022. |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2023 | |
PROPERTY, PLANT, AND EQUIPMENT [Abstract] | |
PROPERTY, PLANT, AND EQUIPMENT | Note 8. PROPERTY, PLANT, AND EQUIPMENT Property, plant, and equipment consist of the following: June 30, 2023 December 31, 2022 Displays $ 312,146 $ 312,146 Building 575,000 575,000 Furniture and fixtures 580,668 560,256 Leasehold improvements 1,910,719 1,910,719 Computer hardware & equipment 186,654 160,210 Other 688,773 587,602 4,253,960 4,105,933 Less: accumulated depreciation and amortization (1,279,331 ) (993,025 ) Total property, plant, and equipment, net $ 2,974,629 $ 3,112,908 The Company incurred approximately $ and $ of depreciation expense for the and , and $ and $ of depreciation expense for the six months ended June 30, 2023 and 2022, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2023 | |
INTANGIBLE ASSETS [Abstract] | |
INTANGIBLE ASSETS | Note 9. INTANGIBLE ASSETS Intangible assets, net are as follows: June 30, 2023 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade names 8-10 years $ 2,569,000 $ (876,036) $ 1,692,964 Customer relationships 4-6 years 2,669,000 (1,182,139) 1,486,861 Patents 10 years 384,665 (178,891) 205,774 Non-compete 4-5 years 1,602,000 (443,267) 1,158,733 Intangible assets, net $ 7,224,665 $ (2,680,333) $ 4,544,332 December 31, 2022 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade names 8-10 years $ 2,569,000 (725,723) $ 1,843,277 Customer relationships 4-6 years 2,669,000 (1,033,306) 1,635,694 Patents 10 years 384,665 (159,658) 225,007 Non-compete 4-5 years 1,602,000 (300,467) 1,301,533 Intangible assets, net $ 7,224,665 $ (2,219,154) $ 5,005,511 Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense was approximately $230,277 and $165,100 for the three months ended June 30, 2023 and 2022, and $461,179 and $308,486 for the six months ended June 30, 2023 and 2022, respectively. Future annual estimated amortization expense is as follows: Years ending December 31, 2023 (remaining six months) $ 461,179 2024 922,358 2025 916,858 2026 838,877 2027 694,457 Thereafter 710,603 Total $ 4,544,332 |
CONTRACT LIABILITIES
CONTRACT LIABILITIES | 6 Months Ended |
Jun. 30, 2023 | |
CONTRACT LIABILITIES [Abstract] | |
CONTRACT LIABILITIES | Note 10. CONTRACT LIABILITIES A summary of the contract liabilities activity at June 30, 2023 and December 31, 2022 is presented below: June 30, 2023 December 31, 2022 Beginning balance as January 1, $ 198,606 $ 23,178 Issued 638,501 859,383 Redeemed (635,391 ) (628,012 ) Breakage recognized (54,247 ) (55,943 ) Ending balance $ 147,469 $ 198,606 |
DEBT
DEBT | 6 Months Ended |
Jun. 30, 2023 | |
DEBT [Abstract] | |
DEBT | Note 11. DEBT The following table provides a breakdown of the Company's debt as of June 30, 2023 and December 31, 2022 is presented below: _ June 30, 2023 December 31, 2022 Promissory note $ 2,649,933 $ 2,913,788 Other debt - 815 Total debt $ 2,649,933 $ 2,914,603 Current portion of long-term debt (552,001 ) (536,542 ) Long-term debt $ 2,097,932 $ 2,378,061 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2023 | |
STOCKHOLDERS' EQUITY [Abstract] | |
STOCKHOLDERS' EQUITY | Note 12. STOCKHOLDERS’ EQUITY Series E Convertible Preferred Stock On August 18, 2022, the Company entered into a Securities Purchase Agreement ("Series E Preferred Stock") The HCMC Series E Preferred Stock has voting rights on as converted basis at the Company’s next stockholders’ meeting. However, as long as any shares of HCMC Series E Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the HCMC Series E Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the HCMC Series E Preferred Stock or alter or amend the Certificate of Designation, (b) increase the number of authorized shares of HCMC Series E Preferred Stock, or (c) enter into any agreement with respect to any of the foregoing. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary that is not a Fundamental Transaction (as defined in the Certificate of Designation), the holders of HCMC Series E Preferred Stock shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to $1,000 per share of Series E Preferred Stock. Unless earlier converted or extended as set forth below, a holder may require the redemption of all or a portion of the stated value of the HCMC Series E Preferred Stock either (1) six months after closing or (2) the time at which the balance is due and payable upon an event of default. On March 1, 2023, the Company entered into a First Amendment to HCMC Series E Preferred Stock with each purchaser ("Purchaser") identified as those who participated in the HCMC Series E Preferred Stock, dated as of August 18, 2022. The parties amended the HCMC Preferred Stock related to the conversion payment whereby upon conversion of the Series E Preferred Stock prior to the record date for the Spin-Off, the Company will pay the Purchaser ten percent (10%) of the stated value of the Series E Preferred Stock converted. The record date was May 1, 2023. On May 15 th , the Company and the Purchaser entered into the Second Amendment to the Securities Purchase Agreement, pursuant to which the Company agreed to extend the time period for the Conversion Payment eligibility to December 1, 2023. The Company filed an amendment to the Certificate of Designation to make the redemption price of the Preferred Stock (the “Redemption Price”) equal the Stated Value regardless of the date on which it is redeemed. Prior to this amendment, the Redemption Price was discounted by for each month after the anniversary of the Issue Date that the Purchaser elected not to redeem. For the three months ended June 30, 2023, 9,150,000,000 shares of common stock were issued as a result of the Series E preferred stock conversion. 10,637 shares of Series E preferred stock were redeemed and approximately $10,615,000 was paid for the redemptions. As of June 30, 2023, 15,850,000,000 shares of common stock were issued as a result of the Series E preferred stock conversion. 11,193 shares of Series E preferred stock was redeemed and approximately $11,170,000 was paid for redemption. Pursuant to the Securities Purchase Agreement, purchasers of the Series E Convertible Preferred Stock will also be required to purchase Series A Convertible Preferred Stock of Healthy Choice Wellness Corp. ("HCWC") in the same subscription amounts that the Purchasers paid for the HCMC Series E Preferred Stock. HCWC is the HCMC subsidiary that will be spun off to HCMC’s stockholders in connection with the spin off of HCMC’s grocery and wellness businesses. Stock Options and Restricted Stock During the six months ended June 30, 2023 and 2022, no stock options of the Company were exercised into common stock. On April 23, 2023, the Board of Directors (the “Board”) of HCMC approved the Second Amendment to the 2015 Equity Incentive Plan (the “Amended Plan”). The Amended Plan increased the number of shares of HCMC common stock authorized for issuance under the Amended Plan to shares. On April 23, 2023, HCMC’s board of directors has approved the issuance of approximately an additional shares of restricted common stock to the employees and executive officers of HCMC. Each grant of restricted common stock will commence vesting of of the award on February 1, 2024 and will vest in increments on the last day of each calendar quarter thereafter through September 30, 2025. During the three months ended and , the Company recognized stock-based compensation of approximately $ and $ , respectively in connection with amortization of restricted stock and stock options. During the six months ended and , the Company recognized stock-based compensation of approximately $ ,000 and $ , respectively. Stock based compensation is included as part of selling, general and administrative expense in the accompanying consolidated statements of operations. Income (Loss) Per Share The following table summarizes the Company’s securities, in common share equivalents, which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive: As of June 30, 2023 2022 Preferred stock 20,694,000,000 1,250,000,000 Stock options 67,587,000,000 67,587,000,000 Restricted stock 5,500,000,000 - Total 93,781,000,000 68,837,000,000 The difference between our common shares outstanding as of June 30, 2023 of 463,266,632,384, and the weighted average number of common shares outstanding in our basic and diluted net loss per share is the exclusion of 107,675,000,000 shares of restricted common stock outstanding which are unvested as of June 30, 2023. There are no other reconciling items except for differences resulting from computing share issuances on a weighted average basis. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2023 | |
COMMITMENTS AND CONTINGENCIES [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Note 13. COMMITMENTS AND CONTINGENCIES 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 million of medical costs). The initial complaints were filed between January 2019 and April 2019. We responded to the complaints in 2019 and we exchanged additional support information with the plaintiff for one of the lawsuits in 2021. 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. On November 30, 2020, the Company filed a patent infringement lawsuit against Philip Morris USA, Inc. and Philip Morris Products S.A. in the U.S. District Court for the Northern District of Georgia. The lawsuit alleges infringement on HCMC-owned patent(s) by the Philip Morris product known and marketed as “IQOS®”. Philip Morris claims that it is currently approaching 14 million users of its IQOS® product and has reportedly invested over $3 billion in their smokeless tobacco products. On December 3, 2021, the District Court for the Northern District of Georgia effectively dismissed HCMC’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. On December 14, 2021, the Company filed a notice of appeal of the District Court for the Northern District of Georgia’s dismissal of the Company’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. The appeal brief was filed on February 28, 2022. On December 3, 2021, the District Court for the Northern District of Georgia effectively dismissed HCMC’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. In connection with such dismissal, the defendants sought to recover attorney’s fees from the Plaintiff. On February 22, 2022, the District Court for the Northern District of Georgia granted the defendant’s an award of approximately $ in attorneys’ fees to be paid by the Company. HCMC appealed this ruling on June 22, 2022. On April 12, 2023, the U.S. Court of Appeals for the Federal Circuit ruled in favor of HCMC on two separate appeals it had filed in its patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. pending in the district court for the Northern District of Georgia. In the first appeal, HCMC appealed the ruling of the District Court dismissing HCMC’s patent infringement action and denying HCMC’s motion to amend its pleading. In the second appeal, HCMC appealed the District Court’s award of attorneys’ fees to Philip Morris. In its decisions, the Federal Circuit ruled for HCMC by reversing both of those decisions and remanded the case back to the District Court for further proceedings. As a result of the ruling, the Company reversed the $575,000 which was previously fully provisioned during the three months ended March 31, 2023. From time to time the Company is involved in legal proceedings arising in the ordinary course of our business. We believe that there is 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 . With respect to legal costs, we record such costs as incurred. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2023 | |
SUBSEQUENT EVENTS [Abstract] | |
SUBSEQUENT EVENTS | Note SUBSEQUENT EVENTS On July 7, 2023, the Company entered into a patent licensing agreement for of its patents in the vape segment. The Company as the licensor, grants |
ORGANIZATION (Policies)
ORGANIZATION (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
ORGANIZATION [Abstract] | |
Spin-Off | Spin-Off The Company has commenced steps to spin off (“Spin-Off”) its grocery segment and wellness business into a new publicly traded company (hereinafter referred to as “NewCo”). NewCo will continue the path of growth in the wellness verticals started by HCMC and explore other growth opportunities that comport with HCMC’s healthier lifestyle mission. Following the Spin-Off, HCMC will retain its entire patent suite, the Q-Cup® brand, and continue to develop its patent suite through R&D as well as continuing its path of enforcing its patent rights against infringers and attempting to monetize said patents through licensing deals. At the time of the Spin-Off, HCMC will distribute all the outstanding shares of Common Stock held by it on a pro rata basis to holders of HCMC’s common stock. Shares of HCMC’s common stock outstanding as of the record date for the Spin-Off (the “Record Date”), will entitle the holder thereof to receive a certain number of shares of Common Stock in NewCo. The distribution will be made in book-entry form by a distribution agent. Fractional shares of Common Stock will not be distributed in the Spin-Off and any fractional amounts will be rounded down. Please see more disclosure in Note 12 Stockholder Equity. |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract] | |
Reclassification | 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). $150,000 inventory shrink was originally presented in the statement of cash flow under change in operating assets inventory in cash used in operating activities for six months ended June 30, 2022, it was reclassified to write-down of obsolete and slow-moving inventory under cash used in operating activities in the statement of cash flow. The was presented under Other (expense) income, net in the statement of operations for three months ended March 31, 2023. For the three months ended June 30, 2023, the Company presented the change in fair value remeasurement as a separate line in the statement of operations. |
CONCENTRATIONS (Tables)
CONCENTRATIONS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
CONCENTRATIONS [Abstract] | |
Cash and Cash Equivalents in Excess of FDIC Limit | A summary of the financial institution that had cash in excess of FDIC limits of $250,000 on June 30, 2023 and December 31, 2022 is presented below: June 30, 2023 December 31, 2022 Total cash in excess of FDIC limits of $ $ 7,458,162 $ 21,682,144 |
Cash and Restricted Cash | The following table provides a reconciliation of cash and restricted cash to amounts shown in unaudited c : June 30, 2023 June 30, 2022 Cash $ 8,481,915 $ 19,323,420 Restricted cash 628,232 - Total cash and restricted cash $ 9,110,147 $ 19,323,420 |
SEGMENT INFORMATION AND DISAG_2
SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES [Abstract] | |
Disaggregated Revenue | The tables below present information about reportable segments for the three months and six months ended June 30, 2023, and 2022: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Vapor $ - $ 5,997 $ 38 $ 255,560 Grocery 13,574,896 6,126,063 27,134,602 10,925,053 Total revenue $ 13,574,896 $ 6,132,060 $ 27,134,640 $ 11,180,613 Retail Vapor $ - $ 5,997 $ - $ 255,560 Retail Grocery 12,017,526 5,478,523 24,067,596 9,756,535 Food service/restaurant 1,555,372 643,760 3,062,948 1,158,846 Online/eCommerce 1,998 3,780 4,096 9,672 Total revenue $ 13,574,896 $ 6,132,060 $ 27,134,640 $ 11,180,613 Loss from operations-Vapor (10,724 ) (15,495 ) (17,397 ) (34,462 ) (Loss) income from operations-Grocery (185,923 ) 146,114 (462,763 ) 310,049 Corporate items (2,983,013 ) (1,499,019 ) (4,682,546 ) (2,998,893 ) Total loss from operations $ (3,179,660 ) $ (1,368,400 ) $ (5,162,706 ) $ (2,723,306 ) |
NOTES RECEIVABLE AND OTHER IN_2
NOTES RECEIVABLE AND OTHER INCOME (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
NOTES RECEIVABLE AND OTHER INCOME [Abstract] | |
Summary of Amended Notes | A summary of the Amended Note as of June 30, 2023 and December 31, 2022 is presented below: Description June 30, 2023 December 31, 2022 Promissory Note $ 156,297 $ 189,225 |
ACQUISITION (Tables)
ACQUISITION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
ACQUISITION [Abstract] | |
Change in Fair Value of Contingent Consideration | The following table summarizes the change in fair value of contingent consideration from acquisition date to June 30, 2023: Fair Market Value - Level 3 Balance as of October 14, 2022 $ 1,108,000 Remeasurement (333,100 ) Balance as of December 31, 2022 774,900 Remeasurement (402,900 ) Balance as of June 30, 2023 $ 372,000 The following table summarizes the change in fair value of contingent consideration for the three months ended June 30, 2023: Fair Market Value - Level 3 Balance as of March 31, 2023 $ 797,000 Remeasurement (425,000 ) Balance as of June 30, 2023 $ 372,000 |
Purchase Price Allocation for Mother Earth's Storehouse, Inc. | The following table summarizes the purchase price allocation based on fair values of the net assets acquired at the acquisition date: October 14, 2022 Purchase Consideration Cash consideration paid $ 5,142,000 Promissory note 3,000,000 Contingent consideration issued to Green's Natural seller 1,108,000 Total Purchase Consideration $ 9,250,000 Purchase price allocation Inventory $ 1,642,000 Property and equipment 1,478,000 Intangible assets 3,251,000 Right of use asset - Operating lease 6,427,000 Other liabilities (211,000 ) Operating lease liability (6,427,000 ) Goodwill 3,090,000 Net assets acquired $ 9,250,000 Finite-lived intangible assets Trade Names ( 8 $ 1,133,000 Customer Relationships ( 6 1,103,000 Non-Compete Agreement ( 5 1,015,000 Total intangible assets $ 3,251,000 |
Supplemental Pro Forma Information | The following table represents the combined pro forma revenue and net loss for the three and six months ended June 30, 2022: For Three Months Ended June 30, 2022 For Six Months Ended June 30, 2022 Sales $ 13,875,928 $ 27,032,375 Net loss $ (1,769,171 ) $ (3,354,452 ) |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
PROPERTY, PLANT, AND EQUIPMENT [Abstract] | |
Property, plant, and equipment | Property, plant, and equipment consist of the following: June 30, 2023 December 31, 2022 Displays $ 312,146 $ 312,146 Building 575,000 575,000 Furniture and fixtures 580,668 560,256 Leasehold improvements 1,910,719 1,910,719 Computer hardware & equipment 186,654 160,210 Other 688,773 587,602 4,253,960 4,105,933 Less: accumulated depreciation and amortization (1,279,331 ) (993,025 ) Total property, plant, and equipment, net $ 2,974,629 $ 3,112,908 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
INTANGIBLE ASSETS [Abstract] | |
Intangible Assets, Net | Intangible assets, net are as follows: June 30, 2023 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade names 8-10 years $ 2,569,000 $ (876,036) $ 1,692,964 Customer relationships 4-6 years 2,669,000 (1,182,139) 1,486,861 Patents 10 years 384,665 (178,891) 205,774 Non-compete 4-5 years 1,602,000 (443,267) 1,158,733 Intangible assets, net $ 7,224,665 $ (2,680,333) $ 4,544,332 December 31, 2022 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade names 8-10 years $ 2,569,000 (725,723) $ 1,843,277 Customer relationships 4-6 years 2,669,000 (1,033,306) 1,635,694 Patents 10 years 384,665 (159,658) 225,007 Non-compete 4-5 years 1,602,000 (300,467) 1,301,533 Intangible assets, net $ 7,224,665 $ (2,219,154) $ 5,005,511 |
Future Annual Estimated Amortization Expense | Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense was approximately $230,277 and $165,100 for the three months ended June 30, 2023 and 2022, and $461,179 and $308,486 for the six months ended June 30, 2023 and 2022, respectively. Future annual estimated amortization expense is as follows: Years ending December 31, 2023 (remaining six months) $ 461,179 2024 922,358 2025 916,858 2026 838,877 2027 694,457 Thereafter 710,603 Total $ 4,544,332 |
CONTRACT LIABILITIES (Tables)
CONTRACT LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
CONTRACT LIABILITIES [Abstract] | |
Summary of Net Changes in Contract Liabilities | A summary of the contract liabilities activity at June 30, 2023 and December 31, 2022 is presented below: June 30, 2023 December 31, 2022 Beginning balance as January 1, $ 198,606 $ 23,178 Issued 638,501 859,383 Redeemed (635,391 ) (628,012 ) Breakage recognized (54,247 ) (55,943 ) Ending balance $ 147,469 $ 198,606 |
DEBT (Tables)
DEBT (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
DEBT [Abstract] | |
Breakdown of Debt | The following table provides a breakdown of the Company's debt as of June 30, 2023 and December 31, 2022 is presented below: _ June 30, 2023 December 31, 2022 Promissory note $ 2,649,933 $ 2,913,788 Other debt - 815 Total debt $ 2,649,933 $ 2,914,603 Current portion of long-term debt (552,001 ) (536,542 ) Long-term debt $ 2,097,932 $ 2,378,061 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
STOCKHOLDERS' EQUITY [Abstract] | |
Common Share Equivalent Excluded from Calculation of Dilutive Loss Per Share | The following table summarizes the Company’s securities, in common share equivalents, which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive: As of June 30, 2023 2022 Preferred stock 20,694,000,000 1,250,000,000 Stock options 67,587,000,000 67,587,000,000 Restricted stock 5,500,000,000 - Total 93,781,000,000 68,837,000,000 |
ORGANIZATION (Details)
ORGANIZATION (Details) | 6 Months Ended |
Jun. 30, 2023 Store | |
Paradise Health & Nutrition's [Member] | |
Company Organization [Abstract] | |
Number of stores | 3 |
Mother Earth's Storehouse [Member] | |
Company Organization [Abstract] | |
Number of stores | 2 |
Number of years the company has been operating | 40 years |
Greens Natural Foods' [Member] | |
Company Organization [Abstract] | |
Number of stores | 8 |
LIQUIDITY (Details)
LIQUIDITY (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 |
LIQUIDITY [Abstract] | |||
Cash and cash equivalents | $ 8,481,915 | $ 22,911,892 | $ 19,323,420 |
Working capital | $ 6,300,000 |
BASIS OF PRESENTATION AND SIG_3
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Reclassification [Abstract] | ||
Write-down of obsolete and slow-moving inventory | $ 951,373 | $ 73,640 |
Changes in operating assets, inventories | $ 899,251 | 189,138 |
Reclassification, Adjustment [Member] | ||
Reclassification [Abstract] | ||
Write-down of obsolete and slow-moving inventory | 150,000 | |
Changes in operating assets, inventories | $ (150,000) |
CONCENTRATIONS (Details)
CONCENTRATIONS (Details) | 6 Months Ended | |||
Jun. 30, 2023 USD ($) FinancialInstitution | Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Cash and Cash Equivalents in Excess of FDIC Limits [Abstract] | ||||
Number of financial institution | FinancialInstitution | 1 | |||
FDIC insured amount | $ 250,000 | |||
Total Cash in excess of FDIC limits of $250,000 | 7,458,162 | $ 21,682,144 | ||
Cash and Restricted Cash [Abstract] | ||||
Cash | 8,481,915 | 22,911,892 | $ 19,323,420 | |
Restricted cash | 628,232 | 1,778,232 | 0 | |
Total cash and restricted cash | $ 9,110,147 | $ 24,690,124 | $ 19,323,420 | $ 26,496,404 |
SEGMENT INFORMATION AND DISAG_3
SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) Segment | Jun. 30, 2022 USD ($) | |
SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES [Abstract] | ||||
Number of operating segments | Segment | 2 | |||
Segment Information [Abstract] | ||||
Revenue | $ 13,574,896 | $ 6,132,060 | $ 27,134,640 | $ 11,180,613 |
Total loss | (3,179,660) | (1,368,400) | (5,162,706) | (2,723,306) |
Retail Vapor [Member] | ||||
Segment Information [Abstract] | ||||
Revenue | 0 | 5,997 | 0 | 255,560 |
Retail Grocery [Member] | ||||
Segment Information [Abstract] | ||||
Revenue | 12,017,526 | 5,478,523 | 24,067,596 | 9,756,535 |
Food Service/Restaurant [Member] | ||||
Segment Information [Abstract] | ||||
Revenue | 1,555,372 | 643,760 | 3,062,948 | 1,158,846 |
Online/e-Commerce [Member] | ||||
Segment Information [Abstract] | ||||
Revenue | 1,998 | 3,780 | 4,096 | 9,672 |
Operating Segments [Member] | Vapor [Member] | ||||
Segment Information [Abstract] | ||||
Revenue | 0 | 5,997 | 38 | 255,560 |
Total loss | (10,724) | (15,495) | (17,397) | (34,462) |
Operating Segments [Member] | Grocery [Member] | ||||
Segment Information [Abstract] | ||||
Revenue | 13,574,896 | 6,126,063 | 27,134,602 | 10,925,053 |
Total loss | (185,923) | 146,114 | (462,763) | 310,049 |
Corporate [Member] | ||||
Segment Information [Abstract] | ||||
Total loss | $ (2,983,013) | $ (1,499,019) | $ (4,682,546) | $ (2,998,893) |
NOTES RECEIVABLE AND OTHER IN_3
NOTES RECEIVABLE AND OTHER INCOME (Details) - USD ($) | 6 Months Ended | ||||
Aug. 31, 2021 | Sep. 06, 2018 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Receivables with Imputed Interest [Abstract] | |||||
Proceeds | $ 32,928 | $ 27,122 | |||
Promissory Note [Member] | |||||
Receivables with Imputed Interest [Abstract] | |||||
Payment term | 36 months | ||||
Loan amount | $ 211,355 | $ 582,260 | |||
Interest rate | 7% | 7% | |||
Proceeds | $ 1,500 | $ 4,141 | |||
Balloon payment | $ 145,931 | ||||
Extension term | 1 year | ||||
Remaining balance | $ 156,297 | $ 189,225 |
ACQUISITION (Details)
ACQUISITION (Details) | 3 Months Ended | 6 Months Ended | ||||
Oct. 14, 2022 USD ($) | Jun. 30, 2023 USD ($) Store | Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) Store | Jun. 30, 2022 USD ($) | |
Acquisitions [Abstract] | ||||||
Cash purchase price | $ 0 | $ 5,150,000 | ||||
Change in Fair Value of Contingent Consideration [Abstract] | ||||||
Beginning balance | 774,900 | |||||
Remeasurement | $ (425,000) | $ 0 | (402,900) | 0 | ||
Ending balance | 372,000 | $ 774,900 | 372,000 | |||
Purchase Price Allocation [Abstract] | ||||||
Goodwill | $ 5,747,000 | 5,747,000 | $ 5,747,000 | |||
Mother Earth's Storehouse [Member] | ||||||
Acquisitions [Abstract] | ||||||
Number of stores | Store | 2 | 2 | ||||
Green's Natural Foods [Member] | ||||||
Acquisitions [Abstract] | ||||||
Cash purchase price | $ 5,142,000 | |||||
Promissory note | $ 3,000,000 | |||||
Number of stores | Store | 8 | 8 | ||||
Interest rate | 3.80% | |||||
Cash Consideration paid | $ 9,250,000 | |||||
Purchase Price Allocation [Abstract] | ||||||
Inventory | 1,642,000 | |||||
Property and equipment | 1,478,000 | |||||
Right of use asset - operating lease | 6,427,000 | |||||
Other liabilities | (211,000) | |||||
Operating lease liability | (6,427,000) | |||||
Goodwill | 3,090,000 | |||||
Net assets acquired | 9,250,000 | |||||
Finite-Lived Intangible Assets [Abstract] | ||||||
Intangible assets | 3,251,000 | |||||
Amortization period for goodwill for tax purposes | 15 years | |||||
Pro Forma Information [Abstract] | ||||||
Sales | 13,875,928 | 27,032,375 | ||||
Net loss | $ (1,769,171) | $ (3,354,452) | ||||
Green's Natural Foods [Member] | Fair Market Value - Level 3 [Member] | ||||||
Change in Fair Value of Contingent Consideration [Abstract] | ||||||
Beginning balance | $ 797,000 | 1,108,000 | $ 774,900 | |||
Remeasurement | (425,000) | (333,100) | (402,900) | |||
Ending balance | 1,108,000 | $ 372,000 | $ 774,900 | $ 372,000 | ||
Green's Natural Foods [Member] | Trademarks [Member] | ||||||
Finite-Lived Intangible Assets [Abstract] | ||||||
Intangible assets | 1,133,000 | |||||
Amortization period | 8 years | 8 years | ||||
Green's Natural Foods [Member] | Customer Relationships [Member] | ||||||
Finite-Lived Intangible Assets [Abstract] | ||||||
Intangible assets | 1,103,000 | |||||
Amortization period | 6 years | 6 years | ||||
Green's Natural Foods [Member] | Non-Compete Agreement [Member] | ||||||
Finite-Lived Intangible Assets [Abstract] | ||||||
Intangible assets | 1,015,000 | |||||
Amortization period | 5 years | 5 years | ||||
Sellers [Member] | ||||||
Acquisitions [Abstract] | ||||||
Cash Consideration paid | $ 1,108,000 |
PROPERTY, PLANT, AND EQUIPMEN_2
PROPERTY, PLANT, AND EQUIPMENT (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Property and Equipment [Abstract] | |||||
Property and equipment, gross | $ 4,253,960 | $ 4,253,960 | $ 4,105,933 | ||
Less: accumulated depreciation and amortization | (1,279,331) | (1,279,331) | (993,025) | ||
Total property, plant, and equipment | 2,974,629 | 2,974,629 | 3,112,908 | ||
Depreciation expense | 143,746 | $ 63,656 | 286,306 | $ 113,592 | |
Displays [Member] | |||||
Property and Equipment [Abstract] | |||||
Property and equipment, gross | 312,146 | 312,146 | 312,146 | ||
Building [Member] | |||||
Property and Equipment [Abstract] | |||||
Property and equipment, gross | 575,000 | 575,000 | 575,000 | ||
Furniture and Fixtures [Member] | |||||
Property and Equipment [Abstract] | |||||
Property and equipment, gross | 580,668 | 580,668 | 560,256 | ||
Leasehold Improvements [Member] | |||||
Property and Equipment [Abstract] | |||||
Property and equipment, gross | 1,910,719 | 1,910,719 | 1,910,719 | ||
Computer Hardware & Equipment [Member] | |||||
Property and Equipment [Abstract] | |||||
Property and equipment, gross | 186,654 | 186,654 | 160,210 | ||
Other [Member] | |||||
Property and Equipment [Abstract] | |||||
Property and equipment, gross | $ 688,773 | $ 688,773 | $ 587,602 |
INTANGIBLE ASSETS, Intangible A
INTANGIBLE ASSETS, Intangible Assets, Net (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Intangible Assets, Net [Abstract] | ||
Gross carrying amount | $ 7,224,665 | $ 7,224,665 |
Accumulated amortization | (2,680,333) | (2,219,154) |
Net carrying amount | 4,544,332 | 5,005,511 |
Trade Names [Member] | ||
Intangible Assets, Net [Abstract] | ||
Gross carrying amount | 2,569,000 | 2,569,000 |
Accumulated amortization | (876,036) | (725,723) |
Net carrying amount | $ 1,692,964 | $ 1,843,277 |
Trade Names [Member] | Minimum [Member] | ||
Intangible Assets, Net [Abstract] | ||
Useful lives | 8 years | 8 years |
Trade Names [Member] | Maximum [Member] | ||
Intangible Assets, Net [Abstract] | ||
Useful lives | 10 years | 10 years |
Customer Relationships [Member] | ||
Intangible Assets, Net [Abstract] | ||
Gross carrying amount | $ 2,669,000 | $ 2,669,000 |
Accumulated amortization | (1,182,139) | (1,033,306) |
Net carrying amount | $ 1,486,861 | $ 1,635,694 |
Customer Relationships [Member] | Minimum [Member] | ||
Intangible Assets, Net [Abstract] | ||
Useful lives | 4 years | 4 years |
Customer Relationships [Member] | Maximum [Member] | ||
Intangible Assets, Net [Abstract] | ||
Useful lives | 6 years | 6 years |
Patents [Member] | ||
Intangible Assets, Net [Abstract] | ||
Useful lives | 10 years | 10 years |
Gross carrying amount | $ 384,665 | $ 384,665 |
Accumulated amortization | (178,891) | (159,658) |
Net carrying amount | 205,774 | 225,007 |
Non-Compete [Member] | ||
Intangible Assets, Net [Abstract] | ||
Gross carrying amount | 1,602,000 | 1,602,000 |
Accumulated amortization | (443,267) | (300,467) |
Net carrying amount | $ 1,158,733 | $ 1,301,533 |
Non-Compete [Member] | Minimum [Member] | ||
Intangible Assets, Net [Abstract] | ||
Useful lives | 4 years | 4 years |
Non-Compete [Member] | Maximum [Member] | ||
Intangible Assets, Net [Abstract] | ||
Useful lives | 5 years | 5 years |
INTANGIBLE ASSETS, Future Annua
INTANGIBLE ASSETS, Future Annual Estimated Amortization Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
INTANGIBLE ASSETS [Abstract] | |||||
Amortization expense | $ 230,277 | $ 165,100 | $ 461,179 | $ 308,486 | |
Future Annual Estimated Amortization Expense [Abstract] | |||||
2023 (remaining six months) | 461,179 | 461,179 | |||
2024 | 922,358 | 922,358 | |||
2025 | 916,858 | 916,858 | |||
2026 | 838,877 | 838,877 | |||
2027 | 694,457 | 694,457 | |||
Thereafter | 710,603 | 710,603 | |||
Net carrying amount | $ 4,544,332 | $ 4,544,332 | $ 5,005,511 |
CONTRACT LIABILITIES (Details)
CONTRACT LIABILITIES (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Changes in Contract Liabilities Activity [Roll Forward] | ||
Beginning balance | $ 198,606 | $ 23,178 |
Issued | 638,501 | 859,383 |
Redeemed | (635,391) | (628,012) |
Breakage recognized | (54,247) | (55,943) |
Ending balance | $ 147,469 | $ 198,606 |
DEBT (Details)
DEBT (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Debt [Abstract] | ||
Debt | $ 2,649,933 | $ 2,914,603 |
Current portion of long-term debt | (552,001) | (536,542) |
Long-term debt | 2,097,932 | 2,378,061 |
Promissory Note [Member] | ||
Debt [Abstract] | ||
Debt | 2,649,933 | 2,913,788 |
Other Debt [Member] | ||
Debt [Abstract] | ||
Debt | $ 0 | $ 815 |
STOCKHOLDERS' EQUITY, Series E
STOCKHOLDERS' EQUITY, Series E Convertible Preferred Stock (Details) | 3 Months Ended | 6 Months Ended | |||
Aug. 18, 2022 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) $ / shares shares | Mar. 21, 2023 | Dec. 31, 2022 $ / shares shares | |
Series E Convertible Preferred Stock [Abstract] | |||||
Number of preferred shares sold and issued (in shares) | shares | 800 | 800 | 800 | ||
Preferred stock, stated value (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | $ 1,000 | ||
Percentage of stated value of preferred stock will be paid to purchaser upon conversion | 10% | ||||
Series E Convertible Preferred Stock [Member] | |||||
Series E Convertible Preferred Stock [Abstract] | |||||
Number of preferred shares sold and issued (in shares) | shares | 14,722 | ||||
Preferred stock, stated value (in dollars per share) | $ / shares | $ 1,000 | ||||
Aggregate subscription price | $ | $ 13,250,000 | ||||
Conversion rate | 1.1111 | ||||
Offering costs | $ | $ 410,000 | ||||
Conversion price (in dollars per share) | $ / shares | $ 0.0001 | ||||
Liquidation preference (in dollars per share) | $ / shares | $ 1,000 | ||||
Redemption period | 6 months | ||||
Discount percentage on redemption price | 1% | ||||
Waiting period before monthly discount of redemption price | 7 months | ||||
Issuance of common stock (in shares) | shares | 9,150,000,000 | 15,850,000,000 | |||
Stock redeemed (in shares) | shares | 10,637,000 | 11,193,000 | |||
Stock redeemed | $ | $ 10,615,000 | $ 11,170,000 |
STOCKHOLDERS' EQUITY, Stock Opt
STOCKHOLDERS' EQUITY, Stock Options and Restricted Stock (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Apr. 23, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Compensation Expense Recognized [Abstract] | |||||
Stock options exercised (in shares) | 0 | 0 | 0 | 0 | |
Stock-based compensation | $ 1,127,000 | $ 0 | $ 1,176,750 | $ 0 | |
2015 Equity Incentive Plan [Member] | |||||
Compensation Expense Recognized [Abstract] | |||||
Common stock available for grant (in shares) | 225,000,000,000 | ||||
2015 Equity Incentive Plan [Member] | Vesting on February 1, 2024 [Member] | |||||
Compensation Expense Recognized [Abstract] | |||||
Stock vesting percentage | 12.50% | ||||
2015 Equity Incentive Plan [Member] | Last Day of Each Calendar Quarter Thereafter Through September 30, 2025 [Member] | |||||
Compensation Expense Recognized [Abstract] | |||||
Stock vesting percentage | 12.50% | ||||
2015 Equity Incentive Plan [Member] | Restricted Stock [Member] | Employees and Executive Officers [Member] | |||||
Compensation Expense Recognized [Abstract] | |||||
Granted (in shares) | 107,675,000,000 |
STOCKHOLDERS' EQUITY, Income (L
STOCKHOLDERS' EQUITY, Income (Loss) Per Share (Details) - shares | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Common Share Equivalents Excluded from Calculation of Dilutive Loss Per Share [Abstract] | |||
Antidilutive securities excluded from computation of diluted loss per share (in shares) | 93,781,000,000 | 68,837,000,000 | |
Common stock, shares outstanding (in shares) | 463,266,632,384 | 339,741,632,384 | |
Preferred Stock [Member] | |||
Common Share Equivalents Excluded from Calculation of Dilutive Loss Per Share [Abstract] | |||
Antidilutive securities excluded from computation of diluted loss per share (in shares) | 20,694,000,000 | 1,250,000,000 | |
Stock Options [Member] | |||
Common Share Equivalents Excluded from Calculation of Dilutive Loss Per Share [Abstract] | |||
Antidilutive securities excluded from computation of diluted loss per share (in shares) | 67,587,000,000 | 67,587,000,000 | |
Restricted Stock [Member] | |||
Common Share Equivalents Excluded from Calculation of Dilutive Loss Per Share [Abstract] | |||
Antidilutive securities excluded from computation of diluted loss per share (in shares) | 5,500,000,000 | 0 | |
Shares unvested (in shares) | 107,675,000,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) User in Millions | 3 Months Ended | 6 Months Ended | |||
Apr. 12, 2023 Appeal | Feb. 22, 2022 USD ($) | Jun. 30, 2023 USD ($) Lawsuit | Jun. 30, 2023 USD ($) Lawsuit | Nov. 30, 2020 USD ($) User | |
Alleged Claimed Battery Defects For Electronic Cigarette Device [Member] | |||||
Legal Proceedings [Abstract] | |||||
Number of lawsuits | Lawsuit | 2 | 2 | |||
Philip Morris [Member] | |||||
Legal Proceedings [Abstract] | |||||
Number of users approached | User | 14 | ||||
Invested amount | $ 3,000,000,000 | ||||
Philip Morris [Member] | Patent Infringement Litigation [Member] | |||||
Legal Proceedings [Abstract] | |||||
Attorney fees paid | $ 575,000 | ||||
Number of appeals filed in patent infringement | Appeal | 2 | ||||
Reversal of litigation provision | $ 575,000 | ||||
Medical Costs [Member] | Alleged Claimed Battery Defects For Electronic Cigarette Device [Member] | |||||
Legal Proceedings [Abstract] | |||||
Damages sought | $ 400,000 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent Event [Member] | Jul. 07, 2023 Patent |
Subsequent Event [Abstract] | |
Number of patents | 1 |
Written notice period to cancel agreement | 60 days |