HEALTHY CHOICE WELLNESS CORP.

Previous wording

The Company currently and historically has reported net losses and cash outflows from operations. As of June 30, 2025, the Company had cash of approximately $4.7 million and positive working capital of $1.3 million.

Current wording

The Company currently and historically has reported net losses and has reported cash inflows from operations this year. As of September 30, 2025, the Company had cash and cash equivalents of approximately $3.0 million and negative working capital of $0.3 million.

Previous wording

Net sales increased $4.6 million to $20.2 million for the three months ended June 30, 2025 as compared to $15.6 million for the same period in 2024. The increase in grocery sales of $3.5 million was primarily due to the acquisition of GreenAcres Market acquired in July 2024, and increase in same-store sales of $1.1 million. The increase in same-store sales was mainly attributable to the success of our new customer loyalty program and CO-OP program.

Current wording

Net sales increased $0.8 million to $19.0 million for the three months ended September 30, 2025 as compared to $18.2 million for the same period in 2024. The increase in grocery sales of $0.6 million was primarily due to the acquisition of GreenAcres Market acquired in July 2024, and increase in same-store sales of $0.2 million. The increase in same-store sales was mainly attributable to the success of our new customer loyalty program and CO-OP program.

Previous wording

Cost of goods sold for the three months ended June 30, 2025 and 2024 were $12.1 million and $9.7 million, respectively. The increase of $2.2 million is primarily due to the acquisition of GreenAcres Market, and in increase in same-store cost of goods sold of $0.2 million. Gross profit was $8.1 million and $5.9 million for the three months ended June 30, 2025 and 2024, respectively. Gross margin as a percentage of sales increased approximately 2.3% as compared to the same period in prior year.

Current wording

Cost of goods sold for the three months ended September 30, 2025 and 2024 were $11.6 million and $11.2 million, respectively. The increase of $0.4 million is primarily due to the acquisition of GreenAcres Market. Gross profit was $7.4 million and $7.0 million for the three months ended September 30, 2025 and 2024, respectively. Gross margin as a percentage of sales increased approximately 0.4% as compared to the same period in prior year.

Previous wording

Total operating expenses for the three months ended June 30, 2025 and 2024 were $8.1 million and $6.4 million, respectively. The total increase of $1.7 million consists of $1.4 million increase from the acquisition of GreenAcres Market and $0.3 million same-store increase in insurance expense and taxes, license and permit expenses.

Current wording

Total operating expenses for the three months ended September 30, 2025 and 2024 were $8.0 million and $7.4 million, respectively. The total increase of $0.6 million consists of $0.3 million increase from the acquisition of GreenAcres Market and $0.3 million same-store increase in insurance expense, professional fee, and taxes, license and permit expenses.

Previous wording

Total other expenses, net of $0.3 million for the three months ended June 30, 2025 consists of net interest expense of approximately $269,000, other miscellaneous expense of approximately $4,000, and $27,000 loss on debt extinguishment. Total other expense, net of $0.1 million for the three months ended June 30, 2024 primarily consists of interest expense of $118,000 and other miscellaneous income of $4,000.

Current wording

Total other expenses, net of $0.6 million for the three months ended September 30, 2025 consists of net interest expense of approximately $0.2 million, other miscellaneous income of approximately $2,000, and $0.4 million loss on debt extinguishment. Total other expense, net of $2.3 million for the three months ended September 30, 2024 consists of $1.9 million loss on warrant settlement, and net interest expense of $0.4 million.

Previous wording

The following table sets forth our unaudited condensed consolidated Statements of Operations for the six months ended June 30, 2025 and 2024 that is used in the following discussions of our results of operations:

Current wording

The following table sets forth our unaudited condensed consolidated Statements of Operations for the nine months ended September 30, 2025 and 2024 that is used in the following discussions of our results of operations:

Previous wording

Net sales increased $9.0 million to $40.5 million for the six months ended June 30, 2025 as compared to $31.5 million for the same period in 2024. The increase in grocery sales of $7.2 million was primarily due to the acquisition of GreenAcres Market acquired in July 2024, and increase in same-store sales of $1.8 million. The increase in same-store sales was mainly attributable to the success of our new customer loyalty program and CO-OP program.

Current wording

Net sales increased $9.8 million to $59.5 million for the nine months ended September 30, 2025 as compared to $49.7 million for the same period in 2024. The increase in grocery sales of $7.8 million was primarily due to the acquisition of GreenAcres Market acquired in July 2024, and increase in same-store sales of $2.0 million. The increase in same-store sales was mainly attributable to the success of our new customer loyalty program and CO-OP program.

Previous wording

Cost of goods sold for the six months ended June 30, 2025 and 2024 were $24.5 million and $19.5 million, respectively. The increase of $4.4 million is primarily due to the acquisition of GreenAcres Market, and an increase in same-store cost of goods sold of $0.6 million. Gross profit was $15.9 million and $12.0 million for the six months ended June 30, 2025 and 2024, respectively. Gross margin as a percentage of sales increased approximately 1.5% as compared to the same period in prior year.

Current wording

Cost of goods sold for the nine months ended September 30, 2025 and 2024 were $36.2 million and $30.8 million, respectively. The increase of $4.8 million is primarily due to the acquisition of GreenAcres Market, and an increase in same-store cost of goods sold of $0.6 million. Gross profit was $23.3 million and $19.0 million for the nine months ended September 30, 2025 and 2024, respectively. Gross margin as a percentage of sales increased approximately 1.1% as compared to the same period in prior year.

Previous wording

Total operating expenses for the six months ended June 30, 2025 and 2024 were $16.4 million and $13.0 million, respectively. The increase of $3.4 million is due to $2.7 million from the acquisition of GreenAcres Market and $0.7 million increase in professional fees and tax, license and permit expenses.

Current wording

Total operating expenses for the nine months ended September 30, 2025 and 2024 were $24.4 million and $20.4 million, respectively. The increase of $4.0 million consist of $3.0 million from the acquisition of GreenAcres Market and $1.0 million increase in professional fees, insurance, and tax, license and permit expenses.

Previous wording

Total other expenses, net of $0.6 million for the six months ended June 30, 2025 consists of net interest expense of $567,000, other miscellaneous expense of approximately $1,000, and $35,000 loss on debt extinguishment. Total other expense, net of $0.2 million for the six months ended June 30, 2024 primarily consists of interest expense of $221,000 and other miscellaneous income of $7,000.

Current wording

Total other expenses, net of $1.2 million for the nine months ended September 30, 2025 consists of net interest expense of $0.8 million, other miscellaneous income of approximately $1,000, and $0.4 million loss on debt extinguishment. Total other expenses, net of $2.5 million for the nine months ended September 30, 2024 consists of $1.9 million loss on warrant settlement, and net interest expense of $0.6 million, offset by $7,000 other miscellaneous income.

Previous wording

As of June 30, 2025, the Company has operating lease obligations totaling $12.4 million. The weighted-average remaining lease term is 4 years, with a weighted-average discount rate of 5.24%. Rent expense for the three months ended June 30, 2025 was $974,000, compared to $940,000 for the same period in 2024. Rent expense for the six months ended June 30, 2025 was $1,951,000, compared to $1,864,000 for the same period in 2024. These increases reflect new leases and variable payments expensed as incurred. We expect rent expense to rise incrementally over the next two years as additional leases reset to higher rates. Rising interest rates and inflation could increase the cost of future lease obligations. While the weighted-average discount rate increased marginally to 5.24% from 5.19% in 2024, a sustained rate hike environment may elevate borrowing costs for future lease liabilities.

Current wording

As of September 30, 2025, the Company has operating lease obligations totaling $11.5 million. The weighted-average remaining lease term is 4 years, with a weighted-average discount rate of 5.27%. Rent expense for the three months ended September 30, 2025 was $1.0 million, compared to $1.2 million for the same period in 2024. Rent expense for the nine months ended September 30, 2025 was $2.9 million, compared to $3.0 million for the same period in 2024. The overall decrease is primarily attributable to a significant reduction in variable lease costs, which are primarily based on property taxes and are expensed as incurred. Looking forward, we expect overall rent expense to be influenced by two key factors: the expiration of certain leases and potential new commitments at market rates, and fluctuations in variable costs, primarily property taxes, which are inherently uncertain but have trended lower in the current year. Rising interest rates and inflation could increase the cost of future lease obligations. While the weighted-average discount rate increased marginally to 5.27% from 5.19% in 2024, a sustained rate hike environment may elevate borrowing costs for future lease liabilities.

Previous wording

Our net cash provided by operating activities of approximately $2.2 million for the six months ended June 30, 2025 resulted from a net loss of $1.1 million, offset by a non-cash adjustment of $4.1 million and a net cash usage of $0.8 million from changes in operating assets and liabilities. Our net cash used in operating activities of approximately $3.0 million for the six months ended June 30, 2024 resulted from a net loss of $1.3 million, offset by a non-cash adjustment of $3.7 million and a net cash usage of $5.4 million from changes in operating assets and liabilities.

Current wording

Our net cash provided by operating activities of approximately $1.9 million for the nine months ended September 30, 2025 resulted from a net loss of $2.3 million, offset by a non-cash adjustment of $6.8 million and a net cash usage of $2.6 million from changes in operating assets and liabilities. Our net cash used in operating activities of approximately $4.0 million for the nine months ended September 30, 2024 resulted from resulted from a net loss of $4.0 million, offset by a non-cash adjustment of $7.5 million and a net cash usage of $7.5 million from changes in operating assets and liabilities.

Previous wording

The net cash used in investing activities of $0.2 million for the six months ended June 30, 2025 and net cash used in investing activities of $0.1 million for the six months ended June 30, 2024 were due to purchases of property and equipment.

Current wording

The net cash used in investing activities of $0.2 million for the nine months ended September 30, 2025 was due to purchases of property and equipment. The net cash used in investing activities of $4.9 million for the nine months ended September 30, 2024 consists of $5.5 million payment for GreenAcres Market acquisition, $0.1 million purchases of property and equipment, offset by $0.7 million proceeds from sale of Saugerties building.

Previous wording

The net cash provided by financing activities of $0.7 million for the six months ended June 30, 2025 consists of net proceeds of $3.1 million from HCWC Preferred Stock offering, principal payment on loan payable of $0.5 million and $1.9 million payment to related party. The net cash provided by financing activities of approximately $2.7 million for the six months ended June 30, 2024 consists of cash proceeds of $1.7 million from Securities Purchase Agreement (“SPA”) signed on January 18, 2024, $1.3 million of net parent investment from HCMC, and $0.3 million principal payment on loan payable.

Current wording

The net cash used in financing activities of $0.7 million for the nine months ended September 30, 2025 consists of net proceeds of $3.1 million from HCWC Preferred Stock offering, principal payment on loan payable of $0.8 million and $3.0 million cash advance to related party. The net cash provided by financing activities of $9.2 million for the nine months ended September 30, 2024 consists of cash proceeds of $1.7 million from Security Purchase Agreement (“SPA”) signed on January 18, 2024, $7.5 million cash proceeds from Loan and Security Agreement signed on July 18, 2024, $2.6 million cash proceed from initial public offering, $1.7 million net parent investment from HCMC, $2,000 cash proceeds from warrant exercise, offset by principal payment on loan payable of $2.3 million and $2.0 million payment to related party.

Previous wording

Our cash balances are kept liquid to support our growing acquisition and infrastructure needs for operational expansion. Most of our cash and cash equivalents are concentrated in one financial institution and is generally in excess of the FDIC insurance limit. The Company has not experienced any losses on its cash. The following table presents the Company’s cash position as of June 30, 2025 and December 31, 2024.

Current wording

Our cash and cash equivalents balances are kept liquid to support our growing acquisition and infrastructure needs for operational expansion. Most of our cash and cash equivalents are concentrated in two financial institutions. The portion of our balance held as cash deposits in these institutions is generally in excess of the FDIC insurance limit.

Previous wording

The Company reported a net loss of $1.1 million for the six months ended June 30, 2025. The Company also had positive working capital of $1.3 million. The Company expects to continue incurring losses for the foreseeable future.

Current wording

The Company reported a net loss of $2.3 million for the nine months ended September 30, 2025. The Company also had negative working capital of $0.3 million. The Company expects to continue incurring losses for the foreseeable future.