Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2024 | May 08, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2024 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2024 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-36469 | |
Entity Registrant Name | HEALTHIER CHOICES MANAGEMENT CORP. | |
Entity Central Index Key | 0000844856 | |
Entity Tax Identification Number | 84-1070932 | |
Entity Incorporation, State or Country Code | DE | |
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 | |
Title of 12(b) Security | Common Stock, par value $0.0001 per share | |
Trading Symbol | HCMC | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 479,266,632,384 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
CURRENT ASSETS | ||
Cash and cash equivalent | $ 3,904,801 | $ 5,081,086 |
Accounts receivable, net | 166,273 | 128,171 |
Inventories | 4,177,069 | 4,228,889 |
Prepaid expenses and vendor deposits | 1,990,323 | 1,668,324 |
Assets held for sale | 543,854 | |
Other current assets | 86,257 | 65,556 |
Restricted cash | 553,232 | 553,232 |
TOTAL CURRENT ASSETS | 11,421,809 | 11,725,258 |
Property, plant, and equipment, net of accumulated depreciation | 2,173,600 | 2,735,252 |
Intangible assets, net of accumulated amortization | 4,136,338 | 4,376,682 |
Right of use asset – operating lease, net | 10,767,755 | 11,511,002 |
Other assets | 632,024 | 621,385 |
TOTAL ASSETS | 29,131,526 | 30,969,579 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 7,108,075 | 8,024,664 |
Contract liabilities | 179,916 | 207,513 |
Line of credit | 453,232 | 453,232 |
Current portion of loan payment | 2,432,135 | 702,701 |
Operating lease liability, current | 2,774,469 | 2,842,829 |
TOTAL CURRENT LIABILITIES | 12,947,827 | 12,230,939 |
Loan payable, net of current portion | 2,221,462 | 2,403,807 |
Operating lease liability, net of current | 7,827,417 | 8,465,617 |
TOTAL LIABILITIES | 22,996,706 | 23,100,363 |
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, 1,111 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively: aggregate liquidation preference of $1.1 million as of March 31, 2024 and December 31, 2023, respectively | 1,111,100 | 1,111,100 |
STOCKHOLDERS’ EQUITY | ||
Common Stock, $0.0001 par value per share, 750,000,000,000 shares authorized; 478,266,632,384 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | 47,826,663 | 47,826,663 |
Additional paid-in capital | 22,155,025 | 21,028,274 |
Accumulated deficit | (64,957,968) | (62,096,821) |
TOTAL STOCKHOLDERS’ EQUITY | 5,023,720 | 6,758,116 |
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY | $ 29,131,526 | $ 30,969,579 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2024 | Dec. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Series E convertible preferred stock, par value | $ 1,000 | $ 1,000 |
Series E convertible preferred stock, authorized | 14,722 | 14,722 |
Series E convertible preferred stock, issued | 1,111 | 1,111 |
Series E convertible preferred stock, outstanding | 1,111 | 1,111 |
Series E convertible preferred stock, aggregate liquidation preference | $ 1.1 | $ 1.1 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 750,000,000,000 | 750,000,000,000 |
Common stock, shares issued | 478,266,632,384 | 478,266,632,384 |
Common stock, shares outstanding | 478,266,632,384 | 478,266,632,384 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
SALES | ||
TOTAL SALES, NET | $ 15,894,477 | $ 13,559,744 |
Cost of sales vapor | 132 | 653 |
Cost of sales grocery | 9,839,981 | 8,644,700 |
GROSS PROFIT | 6,054,364 | 4,914,391 |
OPERATING EXPENSES | 8,859,017 | 6,897,438 |
LOSS FROM OPERATIONS | (2,804,653) | (1,983,047) |
OTHER INCOME (EXPENSE) | ||
Loss on investment | (857) | (4,457) |
Other income (expense), net | 3,355 | (17,450) |
Interest (expense) income, net | (58,992) | 97,653 |
Total other income (expense), net | (56,494) | 75,746 |
Net loss | (2,861,147) | (1,907,301) |
Induced conversions of Preferred Stock | (61,000) | |
Net loss attributable to common stockholders | $ (2,861,147) | $ (1,968,301) |
NET LOSS PER SHARE-BASIC | $ 0 | $ 0 |
NET LOSS PER SHARE-DILUTED | $ 0 | $ 0 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC | 478,266,632,384 | 341,671,076,830 |
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-DILUTED | 478,266,632,384 | 341,671,076,830 |
Vapor [Member] | ||
SALES | ||
TOTAL SALES, NET | $ 119 | $ 38 |
Grocery [Member] | ||
SALES | ||
TOTAL SALES, NET | $ 15,894,358 | $ 13,559,706 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders' Equity (Unaudited) - USD ($) | Preferred Stock [Member] Convertible Preferred Stock [Member] | Preferred Stock [Member] Series E Redeemable Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total |
Balance at Dec. 31, 2022 | $ 800,000 | $ 33,974,163 | $ 29,045,802 | $ (43,613,941) | $ 20,206,024 | |
Balance, shares at Dec. 31, 2022 | 14,722 | |||||
Balance at Dec. 31, 2022 | $ 14,722,075 | |||||
Balance, shares at Dec. 31, 2022 | 800 | 339,741,632,384 | ||||
Stock-based compensation expense | 50,000 | 50,000 | ||||
Net loss | (1,907,301) | (1,907,301) | ||||
Series E convertible preferred stock redeemed | ||||||
Temporary equity,Series E convertible preferred stock redeemed, shares | (556) | |||||
Temporary equity,Series E convertible preferred stock redeemed | (555,550) | |||||
Conversion of series E convertible preferred stock | $ 670,000 | 670,000 | ||||
Temporary equity,Conversion of series E convertible preferred stock, shares | (670) | |||||
Temporary equity,Conversion of series E convertible preferred stock | (670,000) | |||||
Conversion of series E convertible preferred stock, shares | 6,700,000,000 | |||||
Induced conversions of preferred stock | (61,000) | (61,000) | ||||
Balance at Mar. 31, 2023 | $ 800,000 | $ 34,644,163 | 29,034,802 | (45,521,242) | 18,957,723 | |
Balance, shares at Mar. 31, 2023 | 13,497 | |||||
Balance at Mar. 31, 2023 | $ 13,496,525 | |||||
Balance, shares at Mar. 31, 2023 | 800 | 346,441,632,384 | ||||
Balance at Dec. 31, 2023 | $ 47,826,663 | 21,028,274 | (62,096,821) | $ 6,758,116 | ||
Balance, shares at Dec. 31, 2023 | 1,111 | 1,111 | ||||
Balance at Dec. 31, 2023 | $ 1,111,100 | $ 1,111,100 | ||||
Balance, shares at Dec. 31, 2023 | 478,266,632,384 | |||||
Stock-based compensation expense | 1,126,751 | 1,126,751 | ||||
Net loss | (2,861,147) | (2,861,147) | ||||
Induced conversions of preferred stock | ||||||
Balance at Mar. 31, 2024 | $ 47,826,663 | $ 22,155,025 | $ (64,957,968) | $ 5,023,720 | ||
Balance, shares at Mar. 31, 2024 | 1,111 | 1,111 | ||||
Balance at Mar. 31, 2024 | $ 1,111,100 | $ 1,111,100 | ||||
Balance, shares at Mar. 31, 2024 | 478,266,632,384 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
OPERATING ACTIVITIES | ||
Net loss | $ (2,861,147) | $ (1,907,301) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 379,547 | 373,462 |
Amortization of debt discount | 18,841 | |
Loss on investment | 857 | 4,457 |
Amortization of right-of-use asset | 743,247 | 695,192 |
Write-down of obsolete and slow-moving inventory | 743,419 | 523,087 |
Stock-based compensation expense | 1,126,751 | 50,000 |
Change in contingent consideration | 22,100 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (38,102) | (44,818) |
Inventories | (691,599) | (673,392) |
Prepaid expenses and vendor deposits | 362,117 | (255,387) |
Other current assets | (20,701) | 279,701 |
Other assets | (11,496) | 771 |
Accounts payable and accrued expenses | (1,391,690) | (744,145) |
Contract liabilities | (27,597) | 1,766 |
Lease liability | (706,560) | (669,803) |
NET CASH USED IN OPERATING ACTIVITIES | (2,374,113) | (2,344,310) |
INVESTING ACTIVITIES | ||
Collection of note receivable | 16,320 | |
Purchases of property and equipment | (121,405) | (126,251) |
NET CASH USED IN INVESTING ACTIVITIES | (121,405) | (109,931) |
FINANCING ACTIVITIES | ||
Payments for deferred offering costs | (209,015) | |
Proceeds from security purchase agreement | 1,700,000 | |
Principal payments on loan payable | (171,752) | (131,614) |
Payment of induced conversions of preferred stock | (55,000) | |
Payment for series E preferred stock redemption | (555,550) | |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 1,319,233 | (742,164) |
NET DECREASE IN CASH, CASH EQUIVALENT AND RESTRICTED CASH | (1,176,285) | (3,196,405) |
CASH, CASH EQUIVALENT AND RESTRICTED CASH— BEGINNING OF PERIOD | 5,634,318 | 24,690,124 |
CASH, CASH EQUIVALENT AND RESTRICTED CASH — END OF PERIOD | 4,458,033 | 21,493,719 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | 104,505 | 44,478 |
Cash paid for income tax | ||
NON-CASH INVESTING AND FINANCING ACTIVITIES | ||
Non-cash deferred offering cost | 475,101 | |
Issuance of common stock in connection with series E preferred stock conversion | 670,000 | |
Right-of-use assets obtained in exchange for operating lease liabilities | 1,093,290 | |
Accrued payment of induced conversions of preferred stock | $ 6,000 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [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 subsidiary Healthy Choice Wellness Corp. (“HCWC”), 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 ● Mother Earth’s Storehouse, a two ● Greens Natural Foods’ eight ● Ellwood Thompson’s, an organic and natural health food and vitamin store located in Richmond, Virginia. Through its wholly owned subsidiary, Healthy Choice Wellness, LLC, the Company operates a Healthy Choice Wellness Center in Kingston, NY and has a licensing agreement for a Healthy Choice Wellness Center located at the Casbah Spa and Salon in Fort Lauderdale, FL. 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 Choice Wellness II, LLC, the Company entered into a joint venture with an established healthcare provider, and the joint venture is in the process of creating a structure whereby it will engage in telemedicine evaluations of patients for semaglutide therapy. The operation will encompass, generally: medical evaluations of patients; treatment of patients with semaglutide; coordination with providers and patients. There was no activity for the quarter ended March 31, 2024. Through its wholly owned subsidiary, Healthy U Wholesale, the Company sells vitamins and supplements, as well as health, beauty, and personal care products on its website www.TheVitaminStore.com Additionally, the Company markets its patented 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 intends to 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 health verticals started by HCMC and explore other growth opportunities that comport with HCMC’s healthier lifestyle mission. 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 would distribute all the outstanding shares of Common Stock held by it on a pro rata basis to holders of HCMC’s common stock. Each share 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 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. |
GOING CONCERN AND MANAGEMENT_S
GOING CONCERN AND MANAGEMENT’S PLANS | 3 Months Ended |
Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN AND MANAGEMENT’S PLANS | Note 2. GOING CONCERN AND MANAGEMENT’S PLANS The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of any uncertainties related to our going concern assessment. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The Company currently and historically has reported net losses and cash outflows from operations. As of March 31, 2024, the Company had cash and cash equivalent of approximately $ 3.9 1.5 The Company contracted a third-party consultant, whose expertise is streamlining operations, to identify areas of improvement and cost savings. The Company will enact the consultant’s recommendation in anticipation of realizing savings and achieving profitability. The Company plans on evaluating non-performing stores and continuing to expand via acquisition which will help achieve profitability. Also, the Company is formulating plans to raise capital from outside investors, as it has done in the past, to fund operating losses and also provide capital for further business acquisitions. The result of the capital raise is to improve the Company’s operating and financial performance. The success of these plans is dependent upon various factors, foremost being the ability to reduce outside consulting expenses and the ability to secure additional capital from outside investors. There can be no assurance that such plans will be successful. |
BASIS OF PRESENTATION AND SIGNI
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2024 | |
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 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, 2023, filed with the Securities and Exchange Commission (the “SEC”) on March 27, 2024. The condensed consolidated balance sheet as of December 31, 2023 was derived from the Company’s audited 2023 financial statements contained in the above referenced Form 10-K. Results of the three months ended March 31, 2024, are not necessarily indicative of the results to be expected for the full year ending December 31, 2024. Significant Accounting Policies There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2023 Annual Report. |
CONCENTRATIONS
CONCENTRATIONS | 3 Months Ended |
Mar. 31, 2024 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATIONS | Note 4. CONCENTRATIONS Cash, Cash Equivalent and Restricted Cash The Company considers all highly liquid instruments with an original maturity of three months or less, when purchased, to be cash and cash equivalent. The majority of the Company’s cash and cash equivalent are concentrated in one large financial institution, which is in excess of Federal Deposit Insurance Corporation (FDIC) coverage. The balance of cash equivalent was approximately $ 503,000 0 A summary of the financial institution that had cash and cash equivalent in excess of FDIC limits of $ 250,000 SCHEDULE OF CASH AND CASH EQUIVALENTS IN EXCESS OF FDIC LIMIT March 31, 2024 December 31, 2023 Total cash and cash equivalent in excess of FDIC limits of $ 250,000 $ 2,516,118 $ 3,814,426 The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests, as deposits are held in excess of federally insured limits. The Company has not experienced any losses in such accounts. The following table provides a reconciliation of cash, cash equivalent and restricted cash to amounts shown in unaudited condensed consolidated statements of cash flow: SCHEDULE OF CASH AND RESTRICTED CASH March 31, 2024 March 31, 2023 Cash and cash equivalent $ 3,904,801 $ 19,765,487 Restricted cash 553,232 1,728,232 Total cash and restricted cash $ 4,458,033 $ 21,493,719 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 | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [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 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. SCHEDULE OF INFORMATION ABOUT REPORTABLE SEGMENTS 2023 2023 Three Months Ended March 31, 2024 2023 Vapor $ 119 $ 38 Grocery 15,894,358 13,559,706 Total revenue $ 15,894,477 $ 13,559,744 Wholesale/Online Vapor $ 119 $ 38 Retail Grocery 13,478,803 11,613,730 Food service/restaurant 2,414,994 1,943,914 Online/eCommerce 561 2,062 Total revenue $ 15,894,477 $ 13,559,744 Loss from operations - Vapor (5,862 ) (6,672 ) Income (loss) from operations - Grocery 93,461 (276,842 ) Corporate items (2,892,252 ) (1,699,533 ) Total loss from operations $ (2,804,653 ) $ (1,983,047 ) |
ACQUISITION
ACQUISITION | 3 Months Ended |
Mar. 31, 2024 | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
ACQUISITION | Note 6. ACQUISITION Ellwood Thompson’s On October 1, 2023, the Company through its wholly owned subsidiary, Healthy Choice Markets V, LLC, entered into an Asset Purchase Agreement with (i) ET Holding, Inc., d/b/a Ellwood Thompson’s Local Market, a Virginia corporation, (ii) Ellwood Thompson’s Natural Market, L.C., a Virginia limited liability company, and (iii) Richard T. Hood, an individual resident of the Commonwealth of Virginia. Pursuant to the Purchase Agreement, the Company acquired certain assets and assumed certain liabilities related to Ellwood Thompson’s grocery stores in Richmond, Virginia. The Company intends to continue to operate the grocery stores under their existing name. The cash purchase price under the Asset Purchase Agreement was $ 750,000 750,000 718,00 32,000 The following table summarizes the purchase price allocation based on fair values of the net assets acquired at the acquisition date: SUMMARY OF PURCHASE PRICE ALLOCATION BASED ON FAIR VALUES OF THE NET ASSETS ACQUIRED October 1, 2023 Purchase Consideration Cash consideration paid $ 750,000 Promissory note 718,000 Total Purchase Consideration $ 1,468,000 Purchase price allocation Inventory $ 851,000 Intangible assets 291,000 Right of use asset - Operating lease 1,325,000 Other liabilities (31,000 ) Operating lease liability (1,325,000 ) Goodwill 357,000 Net assets acquired $ 1,468,000 Finite-lived intangible assets Trade Names (8 years) $ 291,000 Total intangible assets $ 291,000 The acquisition is structured as asset purchase in a business combination, and goodwill is tax-deductible, and amortizable over 15 Revenue and Earnings The following unaudited pro forma summary presents consolidated information of the Company, including Ellwood Thompson’s, as if the business combinations had occurred on January 1, 2023, the earliest period presented herein: SCHEDULE OF SUPPLEMENTAL PRO FORMA INFORMATION For Three Months Ended March 31, 2023 Sales $ 16,533,127 Net loss $ (1,918,800 ) The pro forma financial information includes adjustments that are directly attributable to the business combinations and are factually supportable. The pro forma adjustments include incremental amortization of intangible. The proforma data gives effects to actual operating results prior to the acquisition. These proforma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisitions occurred as of the beginning of each period presented or that may be obtained in future periods. |
ASSETS HELD FOR SALE
ASSETS HELD FOR SALE | 3 Months Ended |
Mar. 31, 2024 | |
Assets Held For Sale | |
ASSETS HELD FOR SALE | Note 7. ASSETS HELD FOR SALE On February 7, 2024, the Company closed the operation of the Saugerties store. The decision was based on management’s plan to maximize the profitability of the grocery segment. The Company transferred all operating assets and liabilities to other neighboring stores. The building, which is owned by the Company, has a net carrying value of approximately $ 544,000 |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT, AND EQUIPMENT | Note 8. PROPERTY, PLANT, AND EQUIPMENT Property, plant, and equipment consist of the following: SCHEDULE OF PROPERTY PLANT AND EQUIPMENT March 31, 2024 December 31, 2023 Displays $ 312,146 $ 312,146 Building - 575,000 Furniture and fixtures 597,709 596,355 Leasehold improvements 1,956,051 1,925,385 Computer hardware & equipment 234,404 190,019 Other 733,774 688,774 Property and equipment, gross 3,834,084 4,287,679 Less: accumulated depreciation and amortization (1,660,484 ) (1,552,427 ) Total property, plant, and equipment $ 2,173,600 $ 2,735,252 The Company incurred approximately $ 139,000 143,000 |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | Note 9. INTANGIBLE ASSETS Intangible assets, net are as follows: SCHEDULE OF INTANGIBLE ASSETS, NET March 31, 2024 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade names 8 10 $ 2,860,000 $ (1,119,301 ) $ 1,740,699 Customer relationships 4 6 2,669,000 (1,405,389 ) 1,263,611 Patents 10 397,165 (209,671 ) 187,494 Non-compete 4 5 1,602,000 (657,466 ) 944,534 Intangible assets, net $ 7,528,165 $ (3,391,827 ) $ 4,136,338 December 31, 2023 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade names 8 10 $ 2,860,000 $ (1,035,443 ) $ 1,843,277 Customer relationships 4 6 2,669,000 (1,330,972 ) 1,338,028 Patents 10 397,165 (199,001 ) 198,164 Non-compete 4 5 1,602,000 (586,067 ) 1,015,933 Intangible assets, net $ 7,528,165 $ (3,151,483 ) $ 4,376,682 Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense was approximately $ 240,000 231,000 SCHEDULE OF FUTURE ANNUAL ESTIMATED AMORTIZATION EXPENSE Years ending December 31, 2024 (remaining nine months) $ 719,046 2025 953,891 2026 875,910 2027 731,489 2028 412,819 Thereafter 443,183 Total $ 4,136,338 |
CONTRACT LIABILITIES
CONTRACT LIABILITIES | 3 Months Ended |
Mar. 31, 2024 | |
Contract Liabilities | |
CONTRACT LIABILITIES | Note 10. CONTRACT LIABILITIES A summary of the net changes in contract liabilities activity at March 31, 2024 and December 31, 2023 is presented below: SUMMARY OF CONTRACT LIABILITIES ACTIVITY March 31, 2024 December 31, 2023 Beginning balance as January 1, $ 207,513 $ 198,606 Issued 706,971 891,060 Redeemed (671,786 ) (812,694 ) Breakage recognized (62,782 ) (69,459 ) Ending balance $ 179,916 $ 207,513 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
DEBT | Note 11. DEBT A breakdown of the Company’s debt as of March 31, 2024 and December 31, 2023 is presented below: SCHEDULE OF BREAKDOWN OF DEBT March 31, 2024 December 31, 2023 Promissory notes $ 4,823,645 $ 3,106,508 Debt discount (170,048 ) - Line of credit 453,232 453,232 Total debt, net of debt discount $ 5,106,829 $ 3,559,740 Current portion of long-term debt (2,885,367 ) (1,155,933 ) Long-term debt $ 2,221,462 $ 2,403,807 Promissory Notes In connection with the Green’s Natural Foods acquisition, on October 14, 2022, the Company issued a secured promissory note (the “Greens Note”) in the principal amount of $ 3,000,000 five-year 6.0 2,239,000 2,378,000 35,000 43,000 In connection with the Ellwood Thompson’s acquisition, on October 1, 2023, the Company issued a secured promissory note (the “Ellwood Note”) in the principal amount of $ 750,000 718,000 five-year 6.0 696,000 728,000 39,000 11,000 0 On January 18, 2024, HCWC entered into a Securities Purchase Agreement (the “Bridge Financing”) with institutional investors whereby (a) HCWC issued a total of approximately $ 1,889,000 1,889,000 1,700,000 10 10 23,500 189,000 57,000 1,889,000 15,000 170,000 The Company may, at its option, at any time or from time to time prepay the outstanding principal amount or any accrued but unpaid interest, in each case in whole or in part, without penalty or premium, provided that any such prepayment of any outstanding amount of principal shall be accompanied by the payment of all accrued but unpaid interest on the amount of principal being prepaid, plus any costs and fees incurred. The following table summarizes the 5-year repayment schedule: SCHEDULE OF MATURITIES OF LONG TERM DEBT - For the years ending December 31, 2024 (remaining nine months) $ 530,949 2025 2,634,931 2026 792,056 2027 724,333 2028 141,376 Total $ 4,823,645 |
STOCKHOLDERS_ EQUITY
STOCKHOLDERS’ EQUITY | 3 Months Ended |
Mar. 31, 2024 | |
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”) pursuant to which the Company sold and issued 14,722 1,000 13.25 1.1111 410,000 The HCMC Series E Preferred Stock shall have voting rights on as converted basis at the Company’s next stockholders’ meeting. However, as long as any shares of HCMC Series E Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the HCMC Series E Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the HCMC Series E Preferred Stock or alter or amend the Certificate of Designation, (b) increase the number of authorized shares of HCMC Series E Preferred Stock, or (c) enter into any agreement with respect to any of the foregoing. Each share of Series E Preferred Stock shall be convertible, at any time and from time to time at the option of the Holder thereof, into that number of shares of Common Stock (subject to the beneficial ownership limitations). The initial conversion price for the HCMC Series E Preferred Stock shall equal $ 0.0001 Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary that is not a Fundamental Transaction (as defined in the Certificate of Designation), the holders of HCMC Series E Preferred Stock shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to $ 1,000 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 On May 15, 2023, the Company and the Purchaser entered into the Second Amendment to the Securities Purchase Agreement, pursuant to which the Company agreed to extend the time period for the Conversion Payment eligibility to December 1, 2023. The Company filed an amendment to the Certificate of Designation to make the redemption price of the Preferred Stock (the “Redemption Price”) equal the Stated Value regardless of the date on which it is redeemed. Prior to this amendment, the Redemption Price was discounted by 1% for each month after the seven-month anniversary of the Issue Date that the Purchaser elected not to redeem On October 30, 2023, the Company entered into a Third Amendment to the Securities Purchase Agreement with its Series E Redeemable Convertible Preferred Stock purchasers. The parties agreed to: (1) set the initial conversion price for the Series A Preferred Stock to be the 5-day volume weighted average price measured using the 5 trading days preceding the purchase of the Series A Preferred Stock, (2) on the 40th calendar day (the “Reset Date”) after the sale of the Series A Preferred Stock, reset the conversion price in the event the closing price of the Class A common stock on such date is less than the initial conversion, (3) have the reset conversion price equal a 10% discount to the 5-day volume weighted average price measured using the 5 trading days preceding the Reset Date; provided, however, in no instance will the conversion price be reset below 30% of the initial conversion price, and (4) amend the date on which the obligation to acquire the Series A Preferred Stock ceases to March 1, 2024 On February 20, 2024, the Company entered into a Fourth Amendment to the Securities Purchase Agreement with its Series E Redeemable Convertible Preferred Stock purchasers, pursuant to which the Company and such parties agreed to amend the date on which the obligation to acquire the Series A Preferred Stock ceases to June 1, 2024. Through March 31, 2024, 1,585 15,850,000,000 12,026 12,004,000 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 NewCo resulting from spin off of HCMC’s grocery and wellness businesses in the same subscription amounts that the Purchasers paid for the HCMC Series E Preferred Stock. Spin-Off The Company is planning to 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 health verticals started by HCMC and explore other growth opportunities that comport with HCMC’s healthier lifestyle mission. 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. Each share of HCMC’s common stock outstanding as the record date for the Spin-Off (the “Record Date”), will entitle the holder thereof to receive 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. 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 (“NewCo Series A Stock”) of a newly created NewCo resulting from spin off of HCMC’s grocery and wellness businesses in the same subscription amounts that the Purchasers paid for the HCMC Preferred Stock. On October 27, 2023, the Company filed a new registration statement on Form S-1 (the “Spin-off S-1”) in connection with the spin-off of all of the existing HCWC common stock by Healthier Choices Management Corp. with the Securities and Exchange Commission (the “Commission”). On October 30, 2023, the Company filed Amendment No. 1 to its registration statement on Form S-1 (the “IPO S-1”) with the Commission. On December 20, 2023, the Company filed Amendment No. 1 to its Spin-off S-1 with the Commission. On December 21, 2023, the Company filed Amendment No. 2 to its IPO S-1 with the Commission. On February 13, 2024, the Company filed Amendment No. 2 to its Spin-off S-1 with the Commission with respect to the Spin-Off. On February 13, 2024, the Company filed Amendment No. 3 to its IPO S-1 with the Commission with respect to the IPO. Stock Options During the three months ended March 31, 2024 and 2023, the Company recognized stock-based compensation of approximately $ 1,127,000 50,000 Income (Loss) Per Share The following table summarizes the Company’s securities, in common share equivalents, which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive: SCHEDULE OF DILUTIVE LOSS PER SHARE 2024 2023 As of March 31, 2024 2023 Preferred stock 11,111,000,000 136,215,000,000 Stock options 67,587,222,200 67,587,000,000 Restricted stock 95,590,625,000 5,500,000,000 Total 174,288,847,200 209,302,000,000 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | Note 13. COMMITMENTS AND CONTINGENCIES Legal Proceedings There were two lawsuits in connection with alleged claimed battery defects for an electronic cigarette device. One has been dismissed by the court wherein the plaintiff settled with the Company’s insurance carrier with no economic impact to the Company. In the second lawsuit, as of December 31, 2023, the Company had reached an arrangement with the plaintiff to resolve the matter, limiting potential exposure to $ 1.5 1.5 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 3 On December 31, 2021, the District Court for the Northern District of Georgia effectively dismissed HCMC’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. In connection with such dismissal, the defendants sought to recover attorney’s fees from the Plaintiff. On February 22, 2022, the District Court for the Northern District of Georgia granted the defendant’s an award of approximately $ 575,000 On April 12, 2023, the U.S. Court of Appeals for the Federal Circuit ruled in favor of HCMC on two 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 On September 26, 2023, HCMC filed a patent infringement lawsuit against R.J. Reynolds Vapor Company (“RJR”) in the U.S. District Court for the Middle District of North Carolina in connection with HCMC’s assertions that RJR’s Vuse electronic cigarette infringes one of HCMC’s patents. On July 7, 2023, the Company entered into a patent licensing agreement for one of its patents in the vape segment. The Company as the licensor, grants to licensee during the term a non-exclusive right and license under the Licensed Patents to make, use, offer to sell, sell, and import licensed products in the territory of the United States of America. The licensee will pay to the licensor a royalty based on net sales of all licensed products in the territory during the term of the agreement. Either party can cancel the agreement with 60-days written notice. The Company is still in the process of building this operation, and no product sales or no royalties earned as of the date of this filing. From time to time the Company is involved in legal proceedings arising in the ordinary course of our business. We believe that there is no other litigation pending that is likely to have, individually or in the aggregate, a material adverse effect on our financial condition or results of operations as of March 31, 2024. With respect to legal costs, we record such costs as incurred. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | Note 14. SUBSEQUENT EVENTS On April 8, 2024, the parties to the SPA entered into a Fifth Amendment to the August 18, 2022 Securities Purchase Agreement, pursuant to which the Company and such parties agreed to amend the Completion Date to August 1, 2024. On April 11, 2024, the Company filed Amendment No. 1 on Form 8-K/A to the Form 8-K filed on January 23, 2024, which terminated the existing obligation for institutional investors to purchase HCWC’s Class A common stock in the IPO and replaced the Bridge Shares with Bridge Warrants. The Bridge Warrants will entitle the holders thereof to purchase 188,889 $ 0.01 On April 12, 2024, the Company granted and issued 1,000,000,000 12.5 12.5 |
BASIS OF PRESENTATION AND SIG_2
BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2023 Annual Report. |
CONCENTRATIONS (Tables)
CONCENTRATIONS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Risks and Uncertainties [Abstract] | |
SCHEDULE OF CASH AND CASH EQUIVALENTS IN EXCESS OF FDIC LIMIT | SCHEDULE OF CASH AND CASH EQUIVALENTS IN EXCESS OF FDIC LIMIT March 31, 2024 December 31, 2023 Total cash and cash equivalent in excess of FDIC limits of $ 250,000 $ 2,516,118 $ 3,814,426 |
SCHEDULE OF CASH AND RESTRICTED CASH | The following table provides a reconciliation of cash, cash equivalent and restricted cash to amounts shown in unaudited condensed consolidated statements of cash flow: SCHEDULE OF CASH AND RESTRICTED CASH March 31, 2024 March 31, 2023 Cash and cash equivalent $ 3,904,801 $ 19,765,487 Restricted cash 553,232 1,728,232 Total cash and restricted cash $ 4,458,033 $ 21,493,719 |
SEGMENT INFORMATION AND DISAG_2
SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Segment Reporting [Abstract] | |
SCHEDULE OF INFORMATION ABOUT REPORTABLE SEGMENTS | SCHEDULE OF INFORMATION ABOUT REPORTABLE SEGMENTS 2023 2023 Three Months Ended March 31, 2024 2023 Vapor $ 119 $ 38 Grocery 15,894,358 13,559,706 Total revenue $ 15,894,477 $ 13,559,744 Wholesale/Online Vapor $ 119 $ 38 Retail Grocery 13,478,803 11,613,730 Food service/restaurant 2,414,994 1,943,914 Online/eCommerce 561 2,062 Total revenue $ 15,894,477 $ 13,559,744 Loss from operations - Vapor (5,862 ) (6,672 ) Income (loss) from operations - Grocery 93,461 (276,842 ) Corporate items (2,892,252 ) (1,699,533 ) Total loss from operations $ (2,804,653 ) $ (1,983,047 ) |
ACQUISITION (Tables)
ACQUISITION (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Business Acquisition [Line Items] | |
SCHEDULE OF SUPPLEMENTAL PRO FORMA INFORMATION | SCHEDULE OF SUPPLEMENTAL PRO FORMA INFORMATION For Three Months Ended March 31, 2023 Sales $ 16,533,127 Net loss $ (1,918,800 ) |
Ellwood Thompsons [Member] | |
Business Acquisition [Line Items] | |
SUMMARY OF PURCHASE PRICE ALLOCATION BASED ON FAIR VALUES OF THE NET ASSETS ACQUIRED | The following table summarizes the purchase price allocation based on fair values of the net assets acquired at the acquisition date: SUMMARY OF PURCHASE PRICE ALLOCATION BASED ON FAIR VALUES OF THE NET ASSETS ACQUIRED October 1, 2023 Purchase Consideration Cash consideration paid $ 750,000 Promissory note 718,000 Total Purchase Consideration $ 1,468,000 Purchase price allocation Inventory $ 851,000 Intangible assets 291,000 Right of use asset - Operating lease 1,325,000 Other liabilities (31,000 ) Operating lease liability (1,325,000 ) Goodwill 357,000 Net assets acquired $ 1,468,000 Finite-lived intangible assets Trade Names (8 years) $ 291,000 Total intangible assets $ 291,000 |
PROPERTY, PLANT, AND EQUIPMENT
PROPERTY, PLANT, AND EQUIPMENT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY PLANT AND EQUIPMENT | Property, plant, and equipment consist of the following: SCHEDULE OF PROPERTY PLANT AND EQUIPMENT March 31, 2024 December 31, 2023 Displays $ 312,146 $ 312,146 Building - 575,000 Furniture and fixtures 597,709 596,355 Leasehold improvements 1,956,051 1,925,385 Computer hardware & equipment 234,404 190,019 Other 733,774 688,774 Property and equipment, gross 3,834,084 4,287,679 Less: accumulated depreciation and amortization (1,660,484 ) (1,552,427 ) Total property, plant, and equipment $ 2,173,600 $ 2,735,252 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
SCHEDULE OF INTANGIBLE ASSETS, NET | Intangible assets, net are as follows: SCHEDULE OF INTANGIBLE ASSETS, NET March 31, 2024 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade names 8 10 $ 2,860,000 $ (1,119,301 ) $ 1,740,699 Customer relationships 4 6 2,669,000 (1,405,389 ) 1,263,611 Patents 10 397,165 (209,671 ) 187,494 Non-compete 4 5 1,602,000 (657,466 ) 944,534 Intangible assets, net $ 7,528,165 $ (3,391,827 ) $ 4,136,338 December 31, 2023 Useful Lives (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Trade names 8 10 $ 2,860,000 $ (1,035,443 ) $ 1,843,277 Customer relationships 4 6 2,669,000 (1,330,972 ) 1,338,028 Patents 10 397,165 (199,001 ) 198,164 Non-compete 4 5 1,602,000 (586,067 ) 1,015,933 Intangible assets, net $ 7,528,165 $ (3,151,483 ) $ 4,376,682 |
SCHEDULE OF FUTURE ANNUAL ESTIMATED AMORTIZATION EXPENSE | SCHEDULE OF FUTURE ANNUAL ESTIMATED AMORTIZATION EXPENSE Years ending December 31, 2024 (remaining nine months) $ 719,046 2025 953,891 2026 875,910 2027 731,489 2028 412,819 Thereafter 443,183 Total $ 4,136,338 |
CONTRACT LIABILITIES (Tables)
CONTRACT LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Contract Liabilities | |
SUMMARY OF CONTRACT LIABILITIES ACTIVITY | A summary of the net changes in contract liabilities activity at March 31, 2024 and December 31, 2023 is presented below: SUMMARY OF CONTRACT LIABILITIES ACTIVITY March 31, 2024 December 31, 2023 Beginning balance as January 1, $ 207,513 $ 198,606 Issued 706,971 891,060 Redeemed (671,786 ) (812,694 ) Breakage recognized (62,782 ) (69,459 ) Ending balance $ 179,916 $ 207,513 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
SCHEDULE OF BREAKDOWN OF DEBT | A breakdown of the Company’s debt as of March 31, 2024 and December 31, 2023 is presented below: SCHEDULE OF BREAKDOWN OF DEBT March 31, 2024 December 31, 2023 Promissory notes $ 4,823,645 $ 3,106,508 Debt discount (170,048 ) - Line of credit 453,232 453,232 Total debt, net of debt discount $ 5,106,829 $ 3,559,740 Current portion of long-term debt (2,885,367 ) (1,155,933 ) Long-term debt $ 2,221,462 $ 2,403,807 |
SCHEDULE OF MATURITIES OF LONG TERM DEBT | The following table summarizes the 5-year repayment schedule: SCHEDULE OF MATURITIES OF LONG TERM DEBT - For the years ending December 31, 2024 (remaining nine months) $ 530,949 2025 2,634,931 2026 792,056 2027 724,333 2028 141,376 Total $ 4,823,645 |
STOCKHOLDERS_ EQUITY (Tables)
STOCKHOLDERS’ EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Equity [Abstract] | |
SCHEDULE 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: SCHEDULE OF DILUTIVE LOSS PER SHARE 2024 2023 As of March 31, 2024 2023 Preferred stock 11,111,000,000 136,215,000,000 Stock options 67,587,222,200 67,587,000,000 Restricted stock 95,590,625,000 5,500,000,000 Total 174,288,847,200 209,302,000,000 |
ORGANIZATION (Details Narrative
ORGANIZATION (Details Narrative) | Mar. 31, 2024 Store |
Restructuring Cost and Reserve [Line Items] | |
Number of stores | 3 |
Mother Earths Store house [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Number of stores | 2 |
Green's Natural Foods [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Number of stores | 8 |
GOING CONCERN AND MANAGEMENT__2
GOING CONCERN AND MANAGEMENT’S PLANS (Details Narrative) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Cash | $ 3,904,801 | $ 5,081,086 | $ 19,765,487 |
Working capital | $ 1,500,000 |
SCHEDULE OF CASH AND CASH EQUIV
SCHEDULE OF CASH AND CASH EQUIVALENTS IN EXCESS OF FDIC LIMIT (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Risks and Uncertainties [Abstract] | ||
Total cash and cash equivalent in excess of FDIC limits of $250,000 | $ 2,516,118 | $ 3,814,426 |
SCHEDULE OF CASH AND CASH EQU_2
SCHEDULE OF CASH AND CASH EQUIVALENTS IN EXCESS OF FDIC LIMIT (Details) (Parenthetical) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Risks and Uncertainties [Abstract] | ||
FDIC insured amount | $ 250,000 | $ 250,000 |
SCHEDULE OF CASH AND RESTRICTED
SCHEDULE OF CASH AND RESTRICTED CASH (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 | Dec. 31, 2022 |
Risks and Uncertainties [Abstract] | ||||
Cash and cash equivalent | $ 3,904,801 | $ 5,081,086 | $ 19,765,487 | |
Restricted cash | 553,232 | 553,232 | 1,728,232 | |
Total cash and restricted cash | $ 4,458,033 | $ 5,634,318 | $ 21,493,719 | $ 24,690,124 |
CONCENTRATIONS (Details Narrati
CONCENTRATIONS (Details Narrative) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Risks and Uncertainties [Abstract] | ||
Cash equivalents | $ 503,000 | $ 0 |
FDIC insured amount | $ 250,000 | $ 250,000 |
SCHEDULE OF INFORMATION ABOUT R
SCHEDULE OF INFORMATION ABOUT REPORTABLE SEGMENTS (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Segment Reporting Information [Line Items] | ||
Total revenue | $ 15,894,477 | $ 13,559,744 |
Total loss from operations | (2,804,653) | (1,983,047) |
Wholesale Online Vapor [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 119 | 38 |
Retail Grocery [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 13,478,803 | 11,613,730 |
Food Service and Restaurant [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 2,414,994 | 1,943,914 |
Online and ECommerce [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 561 | 2,062 |
Operating Segments [Member] | Vapor [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 119 | 38 |
Total loss from operations | (5,862) | (6,672) |
Operating Segments [Member] | Grocery [Member] | ||
Segment Reporting Information [Line Items] | ||
Total revenue | 15,894,358 | 13,559,706 |
Total loss from operations | 93,461 | (276,842) |
Segment Reporting, Reconciling Item, Corporate Nonsegment [Member] | ||
Segment Reporting Information [Line Items] | ||
Total loss from operations | $ (2,892,252) | $ (1,699,533) |
SUMMARY OF PURCHASE PRICE ALLOC
SUMMARY OF PURCHASE PRICE ALLOCATION BASED ON FAIR VALUES OF THE NET ASSETS ACQUIRED (Details) - Ellwood Thompsons [Member] | Oct. 01, 2023 USD ($) |
Business Acquisition [Line Items] | |
Cash consideration paid | $ 750,000 |
Promissory note | 718,000 |
Total Purchase Consideration | 1,468,000 |
Inventory | 851,000 |
Total intangible assets | 291,000 |
Right of use asset - Operating lease | 1,325,000 |
Other liabilities | (31,000) |
Operating lease liability | (1,325,000) |
Goodwill | 357,000 |
Net assets acquired | 1,468,000 |
Total intangible assets | 291,000 |
Trademarks and Trade Names [Member] | |
Business Acquisition [Line Items] | |
Total intangible assets | $ 291,000 |
SCHEDULE OF SUPPLEMENTAL PRO FO
SCHEDULE OF SUPPLEMENTAL PRO FORMA INFORMATION (Details) | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] | |
Sales | $ 16,533,127 |
Net loss | $ (1,918,800) |
ACQUISITION (Details Narrative)
ACQUISITION (Details Narrative) - Ellwood Thompsons [Member] - USD ($) | 3 Months Ended | 12 Months Ended | ||
Oct. 01, 2023 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Business Acquisition [Line Items] | ||||
Amortization period for goodwill for tax purposes | 15 years | |||
Promissory Notes [Member] | ||||
Business Acquisition [Line Items] | ||||
Principal amount | $ 750,000 | |||
Debt fair value | $ 718 | |||
Interest expense | $ 11,000 | $ 0 | $ 32,000 |
ASSETS HELD FOR SALE (Details N
ASSETS HELD FOR SALE (Details Narrative) | Feb. 07, 2024 USD ($) |
Building [Member] | |
Property, Plant and Equipment [Line Items] | |
Net carring value | $ 544,000 |
SCHEDULE OF PROPERTY PLANT AND
SCHEDULE OF PROPERTY PLANT AND EQUIPMENT (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 3,834,084 | $ 4,287,679 |
Less: accumulated depreciation and amortization | (1,660,484) | (1,552,427) |
Total property, plant, and equipment | 2,173,600 | 2,735,252 |
Displays [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 312,146 | 312,146 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 575,000 | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 597,709 | 596,355 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,956,051 | 1,925,385 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 234,404 | 190,019 |
Other Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 733,774 | $ 688,774 |
PROPERTY, PLANT, AND EQUIPMEN_2
PROPERTY, PLANT, AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 139,000 | $ 143,000 |
SCHEDULE OF INTANGIBLE ASSETS,
SCHEDULE OF INTANGIBLE ASSETS, NET (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 7,528,165 | $ 7,528,165 |
Accumulated amortization | (3,391,827) | (3,151,483) |
Net carrying amount | 4,136,338 | 4,376,682 |
Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 2,860,000 | 2,860,000 |
Accumulated amortization | (1,119,301) | (1,035,443) |
Net carrying amount | $ 1,740,699 | $ 1,843,277 |
Trade Names [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives | 8 years | 8 years |
Trade Names [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives | 10 years | 10 years |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 2,669,000 | $ 2,669,000 |
Accumulated amortization | (1,405,389) | (1,330,972) |
Net carrying amount | $ 1,263,611 | $ 1,338,028 |
Customer Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives | 4 years | 4 years |
Customer Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives | 6 years | 6 years |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 397,165 | $ 397,165 |
Accumulated amortization | (209,671) | (199,001) |
Net carrying amount | $ 187,494 | $ 198,164 |
Useful lives | 10 years | 10 years |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 1,602,000 | $ 1,602,000 |
Accumulated amortization | (657,466) | (586,067) |
Net carrying amount | $ 944,534 | $ 1,015,933 |
Noncompete Agreements [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives | 4 years | 4 years |
Noncompete Agreements [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives | 5 years | 5 years |
SCHEDULE OF FUTURE ANNUAL ESTIM
SCHEDULE OF FUTURE ANNUAL ESTIMATED AMORTIZATION EXPENSE (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 (remaining nine months) | $ 719,046 | |
2025 | 953,891 | |
2026 | 875,910 | |
2027 | 731,489 | |
2028 | 412,819 | |
Thereafter | 443,183 | |
Total | $ 4,136,338 | $ 4,376,682 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 240,000 | $ 231,000 |
SUMMARY OF CONTRACT LIABILITIES
SUMMARY OF CONTRACT LIABILITIES ACTIVITY (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2024 | Dec. 31, 2023 | |
Contract Liabilities | ||
Beginning balance as January 1, | $ 207,513 | $ 198,606 |
Issued | 706,971 | 891,060 |
Redeemed | (671,786) | (812,694) |
Breakage recognized | (62,782) | (69,459) |
Ending balance | $ 179,916 | $ 207,513 |
SCHEDULE OF BREAKDOWN OF DEBT (
SCHEDULE OF BREAKDOWN OF DEBT (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Debt Disclosure [Abstract] | ||
Promissory notes | $ 4,823,645 | $ 3,106,508 |
Debt discount | (170,048) | |
Line of credit | 453,232 | 453,232 |
Total debt, net of debt discount | 5,106,829 | 3,559,740 |
Current portion of long-term debt | (2,885,367) | (1,155,933) |
Long-term debt | $ 2,221,462 | $ 2,403,807 |
SCHEDULE OF MATURITIES OF LONG
SCHEDULE OF MATURITIES OF LONG TERM DEBT (Details) - USD ($) | Mar. 31, 2024 | Dec. 31, 2023 |
Short-Term Debt [Line Items] | ||
Total | $ 5,106,829 | $ 3,559,740 |
Promissory Notes [Member] | ||
Short-Term Debt [Line Items] | ||
2024 (remaining nine months) | 530,949 | |
2025 | 2,634,931 | |
2026 | 792,056 | |
2027 | 724,333 | |
2028 | 141,376 | |
Total | $ 4,823,645 |
DEBT (Details Narrative)
DEBT (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | ||||
Jan. 18, 2024 | Oct. 01, 2023 | Oct. 14, 2022 | Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Short-Term Debt [Line Items] | ||||||
Notes payable | $ 4,823,645 | $ 3,106,508 | ||||
Debt discount | 170,048 | |||||
Promissory Notes [Member] | Green's Natural Foods [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Principal amount | $ 3,000,000 | |||||
Loan term | 5 years | |||||
Original issued rate | 6% | |||||
Notes payable | 2,239,000 | 2,378,000 | ||||
Interest expense | 35,000 | $ 43,000 | ||||
Promissory Notes [Member] | Ellwood Thompsons [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Principal amount | $ 750,000 | |||||
Loan term | 5 years | |||||
Original issued rate | 6% | |||||
Interest expense | 11,000 | $ 0 | 32,000 | |||
Debt outstanding | $ 718,000 | 696,000 | 728,000 | |||
Debt discount | $ 39,000 | |||||
Unsecured Promissory Notes [Member] | Securities Purchase Agreement [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Interest expense | 57,000 | |||||
Debt outstanding | 1,889,000 | |||||
Debt discount | 170,000 | |||||
Debt issued | $ 1,889,000 | |||||
Gross proceeds | $ 1,700,000 | |||||
Original issue discount rate | 10% | |||||
interest rate | 10% | |||||
Debt issuance costs | 23,500 | |||||
Debt discount and amortized | 189,000 | |||||
Interest payable | $ 15,000 | |||||
Unsecured Promissory Notes [Member] | Securities Purchase Agreement [Member] | Common Stock [Member] | ||||||
Short-Term Debt [Line Items] | ||||||
Debt issued | $ 1,889,000 |
SCHEDULE OF DILUTIVE LOSS PER S
SCHEDULE OF DILUTIVE LOSS PER SHARE (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 174,288,847,200 | 209,302,000,000 |
Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 11,111,000,000 | 136,215,000,000 |
Share-Based Payment Arrangement, Option [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 67,587,222,200 | 67,587,000,000 |
Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 95,590,625,000 | 5,500,000,000 |
STOCKHOLDERS_ EQUITY (Details N
STOCKHOLDERS’ EQUITY (Details Narrative) | 3 Months Ended | |||||
Oct. 30, 2023 | May 15, 2023 | Aug. 18, 2022 USD ($) $ / shares shares | Mar. 31, 2024 USD ($) shares | Mar. 31, 2023 USD ($) | Mar. 01, 2023 | |
Class of Stock [Line Items] | ||||||
Redemption value | ||||||
Stock based compensation | $ 1,127,000 | $ 50,000 | ||||
Series E Convertible Preferred Stock [Member] | Securities Purchase Agreement [Member] | ||||||
Class of Stock [Line Items] | ||||||
Preferred stock shares issued | shares | 14,722 | |||||
Preferred stock price per share | $ / shares | $ 1,000 | |||||
Aggregate subscription price | $ 13,250,000 | |||||
Conversion rate | 1.1111 | |||||
Offering Costs | $ 410,000 | |||||
Series E Preferred Stock [Member] | ||||||
Class of Stock [Line Items] | ||||||
Convertible preferred stock, shares | shares | 1,585 | |||||
Conversion of series E convertible preferred stock | shares | 15,850,000,000 | |||||
Redemption shares | shares | 12,026 | |||||
Redemption value | $ 12,004,000 | |||||
Series E Preferred Stock [Member] | Securities Purchase Agreement [Member] | ||||||
Class of Stock [Line Items] | ||||||
Conversion price (in dollars per share) | $ / shares | $ 0.0001 | |||||
Preferred stock price per share | $ / shares | $ 1,000 | |||||
Series E Preferred Stock [Member] | First Amendment To Securities Purchase Agreement [Member] | ||||||
Class of Stock [Line Items] | ||||||
Percentage of stated value of preferred stock will be paid to purchaser upon conversion | 10% | |||||
Series E Preferred Stock [Member] | Second Amendment To Securities Purchase Agreement [Member] | ||||||
Class of Stock [Line Items] | ||||||
Description of Preferred stock redemption terms | Prior to this amendment, the Redemption Price was discounted by 1% for each month after the seven-month anniversary of the Issue Date that the Purchaser elected not to redeem | |||||
Series E Preferred Stock [Member] | Third Amendment to Securities Purchase Agreement [Member] | ||||||
Class of Stock [Line Items] | ||||||
Convertible preferred stock | (1) set the initial conversion price for the Series A Preferred Stock to be the 5-day volume weighted average price measured using the 5 trading days preceding the purchase of the Series A Preferred Stock, (2) on the 40th calendar day (the “Reset Date”) after the sale of the Series A Preferred Stock, reset the conversion price in the event the closing price of the Class A common stock on such date is less than the initial conversion, (3) have the reset conversion price equal a 10% discount to the 5-day volume weighted average price measured using the 5 trading days preceding the Reset Date; provided, however, in no instance will the conversion price be reset below 30% of the initial conversion price, and (4) amend the date on which the obligation to acquire the Series A Preferred Stock ceases to March 1, 2024 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) User in Millions | 3 Months Ended | ||||
Apr. 12, 2023 Appeal | Feb. 22, 2022 USD ($) | Mar. 31, 2024 USD ($) | Dec. 31, 2023 USD ($) | Nov. 30, 2020 USD ($) User | |
Loss Contingencies [Line Items] | |||||
Potential exposure | $ 1,500,000 | ||||
Accrued liabilities, current | $ 1,500,000 | ||||
Philip Morris [Member] | |||||
Loss Contingencies [Line Items] | |||||
Number of users approached | User | 14 | ||||
Investment amount | $ 3,000,000,000 | ||||
Philip Morris [Member] | Patent Infringement Litigation [Member] | |||||
Loss Contingencies [Line Items] | |||||
Litigation settlement, Amount awarded to other party | $ 575,000 | ||||
Number of appeals filed in patent infringement | Appeal | 2 | ||||
Gain (loss) related to litigation settlement | $ 575,000 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - Subsequent Event [Member] - $ / shares | Apr. 12, 2024 | Apr. 11, 2024 |
Subsequent Event [Line Items] | ||
Number of shares of stock option to an employee, granted and issued | 1,000,000,000 | |
Vesting percent | 12.50% | |
Bridge Warrant Shares [Member] | Common Class A [Member] | ||
Subsequent Event [Line Items] | ||
Warrant purchase | 188,889 | |
Exercise price | $ 0.01 |