Host Digital Inc.
For the period ended Mar 31, 2025. Filed May 9, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 9, 2025
HOST$1.88-2.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-11-13.
0001493152-24-045161
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-09.
0001641172-25-009509
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 50 previous paragraphs and 49 current paragraphs.
33 unchanged; 12 reworded; 4 added; 4 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 6 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
Lease Commitments, Known Trends and Uncertainties
Current report
As of March 31, 2025, the Company has operating lease obligations totaling $13.3 million. The weighted-average remaining lease term is 4 years, with a weighted-average discount rate of 5.21%. Rent expense for the three months ended March 31, 2025 was $976,000, compared to $923,000 for the same period in 2024. This increase reflects 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 5.21% from 5.19% in 2024, a sustained rate hike environment may elevate borrowing costs for future lease liabilities.
Current report
Cybersecurity
Current report
We recognize that cybersecurity is of critical importance to our success. We are committed to maintaining robust cybersecurity and data protection and continuously evaluating the impact of cybersecurity threats, considering both immediate and potential long-term effects of these threats on our business strategy, operations, and financial condition. Our board oversees cybersecurity risks through quarterly updates from the Chief Operating Officer.
Removed paragraphs (4)
Previous report
Net sales increased $9.9 million to $49.7 million for the nine months ended September 30, 2024 as compared to $39.8 million for the same period in 2023. The increase in grocery sales of $11.7 million was primarily due to the acquisitions of Ellwood Thompson’s acquired in October 2023 and GreenAcres Market in July 2024, offset by a decrease in same-store sales of $1.8 million. The decrease in same-store sales was primarily attributable to the closing of the non-performing Saugerties store and the outsourced prepared food service in Ada’s Natural Food store, which was an underperforming department.
Previous report
Cost of goods sold for the nine months ended September 30, 2024 and 2023 were $30.8 million and $25.2 million, respectively. The increase of $7.2 million is primarily due to the acquisitions of Ellwood Thompson’s and GreenAcres Market, offset by a decrease in same-store cost of goods sold of $1.7 million. Gross profit was $19.0 million and $14.6 million for the nine months ended September 30, 2024 and 2023, respectively. Gross margin as a percentage of sales increased approximately 1.4% as compared to the same period in prior year because of the closing of the non-performing Saugerties store and the outsourced prepared food service in Ada’s Natural Food store which was an underperforming department.
Previous report
Total operating expenses increased $2.7 million to $20.4 million for the nine months ended September 30, 2024 compared to $17.7 million for the same period in 2023. The increase is primarily due to the acquisition of Ellwood Thompson’s on October 1, 2023 and acquisition of GreenAcres Market on July 18, 2024, which accounted for $3.6 million, $0.4 million increase in occupancy, bank service fee, tax and other selling and general administration expense, offset by $0.2 million gain on sale of Saugerties building, and $1.1 million savings in payroll and benefits expense and advertising expense.
Previous report
Total other (expenses) income, 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 $618,000, offset by $7,000 other miscellaneous income. Total other income (expenses), net of $0.7 million for the nine months ended September 30, 2023 includes change in contingent consideration of $775,000, other income of $12,000, and an interest expense of $123,000.
Reworded paragraphs (12)
Previous wording
Through its wholly owned subsidiaries, Healthy Choice Markets, Inc., Healthy Choice Markets 2, LLC, and Healthy Choice Markets 3, LLC, Healthy Choice Markets IV, LLC, Healthy Choice Markets V, LLC and Healthy Choice Markets VI, LLC respectively, the Company operates:
Current wording
Through its wholly owned subsidiaries, Healthy Choice Markets, Inc., Healthy Choice Markets 2, LLC, Healthy Choice Markets 3, LLC, Healthy Choice Markets IV, LLC, Healthy Choice Markets V, LLC and Healthy Choice Markets VI, LLC respectively, the Company operates:
Previous wording
The unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern and realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of any uncertainties related to our going concern assessment. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The unaudited consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Current wording
The unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern and realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of any uncertainties related to our going concern assessment. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.
Previous wording
The Company currently and historically has reported net losses and cash outflows from operations. As of September 30, 2024, the Company had cash of approximately $1.8 million and negative working capital of $1.3 million.
Current wording
The Company currently and historically has reported net losses and cash outflows from operations. As of March 31, 2025, the Company had cash of approximately $1.8 million and negative working capital of $2.4 million.
Previous wording
Net sales increased $5.5 million to $18.2 million for the three months ended September 30, 2024 as compared to $12.7 million for the same period in 2023. The increase in grocery sales of $5.8 million was primarily due to the acquisitions of Ellwood Thompson’s acquired in Oct 2023 and GreenAcres Market acquired in July 2024, offset by a decrease in same-store sales of $0.3 million. The decrease in same-store sales was mainly attributable to the closing of the non-performing Saugerties store and the outsourced prepared food service in Ada’s Natural Food store, which was an underperforming department.
Current wording
Net sales increased $4.4 million to $20.3 million for the three months ended March 31, 2025 as compared to $15.9 million for the same period in 2024. The increase in grocery sales of $3.7 million was primarily due to the acquisition of GreenAcres Market acquired in July 2024, and increase in same-store sales of $0.7 million. The increase in same-store sales was mainly attributable to the success of our new customer loyalty program
Previous wording
Cost of goods sold for the three months ended September 30, 2024 and 2023 were $11.2 million and $8.1 million, respectively. The increase of $3.5 million is primarily due to the acquisitions of Ellwood Thompson’s and GreenAcres Market, offset by a decrease in same-store cost of goods sold of $0.4 million. Gross profit was $7.0 million and $4.6 million for the three months ended September 30, 2024 and 2023, respectively. Gross margin as a percentage of sales increased approximately 1.9% as compared to the same period in prior year because of the closing of the non-performing Saugerties store and the outsourced prepared food service in Ada’s Natural Food store which was an underperforming department.
Current wording
Cost of goods sold for the three months ended March 31, 2025 and 2024 were $12.4 million and $9.8 million, respectively. The increase of $2.3 million is primarily due to the acquisition of GreenAcres Market, and in increase in same-store cost of goods sold of $0.3 million. Gross profit was $7.9 million and $6.1 million for the three months ended March 31, 2025 and 2024, respectively. Gross margin as a percentage of sales increased approximately 0.7% as compared to the same period in prior year.
Previous wording
Total operating expenses for the three months ended September 30, 2024 and 2023 were $7.4 million and $5.9 million, respectively. The increase of $1.9 million from the acquisitions of Ellwood Thompson’s and GreenAcres Market offset by $0.2 million gain on sale of Saugerties building, and $0.2 million savings in advertising expense, professional fees and payroll and benefits expense.
Current wording
Total operating expenses for the three months ended March 31, 2025 and 2024 were $8.3 million and $6.7 million, respectively. The increase of $1.6 million is due to $1.3 million from the acquisition of GreenAcres Market and $0.5 million increase in professional fees, and offset by $0.2 million decrease in same-store insurance expense and payroll and benefits expense.
Previous wording
Total other (expenses) income, 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 $397,000. Total other income (expense), net of $335,000 for the three months ended September 30, 2023 primarily consists of change in contingent consideration of $372,000 and other miscellaneous income of $3,000, offset by interest expense of $39,000.
Current wording
Total other (expenses) income, net of $0.3 million for the three months ended March 31, 2025 consists of net interest expense of $0.3 million, other miscellaneous expense of approximately $2,000, offset by $8,000 loss on debt extinguishment. Total other income (expense), net of $0.1 million for the three months ended March 31, 2024 primarily consists of interest expense of $103,000 and other miscellaneous income of $3,000.
Previous wording
Our net cash used in operating activities of approximately $4.0 million for the nine months ended September 30, 2024 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. Our net cash used in operating activities of approximately $2.6 million for the nine months ended September 30, 2023 resulted from a net loss of $2.4 million, offset by a non-cash adjustment of $3.6 million and a net cash usage of $3.7 million from changes in operating assets and liabilities.
Current wording
Our net cash provided by operating activities of approximately $1.1 million for the three months ended March 31, 2025 resulted from a net loss of $0.7 million, offset by a non-cash adjustment of $2.0 million and a net cash usage of $0.2 million from changes in operating assets and liabilities. Our net cash used in operating activities of approximately $2.5 million for the three months ended March 31, 2024 resulted from a net loss of $0.7 million, offset by a non-cash adjustment of $1.8 million and a net cash usage of $3.6 million from changes in operating assets and liabilities.
Previous wording
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. The net cash used in investing activities of $0.2 million for the nine months ended September 30, 2023 resulted from purchases of property and equipment.
Current wording
The net cash used in investing activities of $0.1 million for the three months ended March 31, 2025 and 2024 is due to purchases of property and equipment.
Previous wording
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 proceed from warrant exercise, offset by principal payment on loan payable of $2.3 million and $2.0 million payment to related party. The net cash provided by financing activities of approximately $1.7 million for the nine months ended September 30, 2023 consists of $2.1 million of net parent investment from HCMC, and $0.4 million principal payment on loan payable.
Current wording
The net cash used in financing activities of $1.2 million for the three months ended March 31, 2025 consists of principal payment on loan payable of $0.3 million and $0.9 million payment to related party. The net cash provided by financing activities of approximately $2.2 million for the three months ended March 31, 2024 consists of cash proceeds of $1.7 million from Security Purchase Agreement (“SPA”) signed on January 18, 2024, $0.7 million of net parent investment from HCMC, and $0.2 million principal payment on loan payable.
Previous wording
The Company reported a net loss of $4.0 million for the nine months ended September 30, 2024. The Company also had negative 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 $0.7 million for the three months ended March 31, 2025. The Company also had negative working capital of $2.4 million. The Company expects to continue incurring losses for the foreseeable future.
Previous wording
Our management’s discussion and analysis of financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to exercise considerable judgment with respect to establishing sound accounting policies and in making estimates and assumptions that affect the reported amounts of our assets and liabilities, our recognition of revenues and expenses, and disclosure of commitments and contingencies at the date of the condensed consolidated financial statements.
Current wording
Our management’s discussion and analysis of financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these unaudited condensed consolidated financial statements requires us to exercise considerable judgment with respect to establishing sound accounting policies and in making estimates and assumptions that affect the reported amounts of our assets and liabilities, our recognition of revenues and expenses, and disclosure of commitments and contingencies at the date of the condensed consolidated financial statements.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The following table sets forth our unaudited consolidated Statements of Operations for the nine months ended September 30, 2024 and 2023 that is used in the following discussions of our results of operations: