10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended March 31, 2023

Or

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

For the transition period from _____ to _____

Commission file number: 001-36469

HEALTHIER CHOICES MANAGEMENT CORP.

(Exact name of Registrant as specified in its charter)

Delaware	84-1070932
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
3800 North 28Th Way
Hollywood, Florida	33020
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 305-600-5004

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	HCMC	OTC Pink Marketplace

As of May 4, 2023, there were 463,266,632,384 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

TABLE OF CONTENTS

	PAGE
PART I FINANCIAL INFORMATION	1
ITEM 1. Financial Statements	1
Condensed Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022	1
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	2
Condensed Consolidated Statements of Changes in Convertible Preferred Stock and Stockholders’ Equity for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	3
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022 (Unaudited)	4
Notes to Condensed Consolidated Financial Statements (Unaudited)	5
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	21
ITEM 4. Controls and Procedures	21
PART II OTHER INFORMATION	23
ITEM 1. Legal Proceedings	23
ITEM 1A. Risk Factors	24
ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds	24
ITEM 3. Defaults Upon Senior Securities	24
ITEM 4. Mine Safety Disclosures	24
ITEM 5. Other Information	24
ITEM 6. Exhibits	24
Signatures	26
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2023 (Unaudited)		December 31, 2022
ASSETS
CURRENT ASSETS
Cash	$	19,765,487	$	22,911,892
Accounts receivable, net		100,633		55,815
Notes receivable		172,905		189,225
Inventories		3,967,497		3,817,192
Prepaid expenses and vendor deposits		577,569		322,182
Investment		5,314		9,771
Other current assets		944,470		1,224,171
Restricted cash		1,728,232		1,778,232
TOTAL CURRENT ASSETS		27,262,107		30,308,480
Property, plant, and equipment, net of accumulated depreciation		3,096,599		3,112,908
Intangible assets, net of accumulated amortization		4,774,609		5,005,511
Goodwill		5,747,000		5,747,000
Right of use asset – operating lease, net		11,003,033		10,604,935
Other assets		475,425		476,196
TOTAL ASSETS	$	52,358,773	$	55,255,030
LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	4,977,089	$	5,715,234
Contingent consideration		797,000		774,900
Contract liabilities		200,372		198,606
Line of credit		453,232		453,232
Current portion of loan payment		543,945		536,542
Operating lease liability, current		2,036,415		2,228,852
TOTAL CURRENT LIABILITIES		9,008,053		9,907,366
Loan payable, net of current portion		2,239,044		2,378,061
Operating lease liability, net of current		8,657,428		8,041,504
TOTAL LIABILITIES		19,904,525		20,326,931
COMMITMENTS AND CONTINGENCIES (SEE NOTE 13)
CONVERTIBLE PREFERRED STOCK
Series E redeemable convertible preferred stock, $1,000 par value per share, 14,722 shares authorized, 13,497 shares and 14,722 shares issued and outstanding as of  March 31, 2023 and December 31, 2022, respectively; aggregate liquidation preference of $13.5 million and $14.7 million as of March 31, 2023 and December 31, 2022, respectively		13,496,525		14,722,075
STOCKHOLDERS’ EQUITY
Series D convertible preferred stock, $1,000 par value per share, 5,000 shares authorized; 800 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively; aggregate liquidation preference of $0.8 million		800,000		800,000
Common Stock, $0.0001 par value per share, 750,000,000,000 shares authorized; 346,441,632,384 and 339,741,632,384 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively		34,644,163		33,974,163
Additional paid-in capital		29,034,802		29,045,802
Accumulated deficit		(45,521,242)		(43,613,941)
TOTAL STOCKHOLDERS’ EQUITY		18,957,723		20,206,024
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY	$	52,358,773	$	55,255,030

See notes to unaudited condensed consolidated financial statements

1

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,
	2023		2022
SALES
Vapor sales, net	$	38	$	249,563
Grocery sales, net		13,559,706		4,798,990
TOTAL SALES, NET		13,559,744		5,048,553
Cost of sales vapor		653		111,684
Cost of sales grocery		8,644,700		2,964,355
GROSS PROFIT		4,914,391		1,972,514
OPERATING EXPENSES		6,897,438		3,327,420
LOSS FROM OPERATIONS		(1,983,047)		(1,354,906)
OTHER INCOME (EXPENSE)
(Loss) gain on investment		(4,457)		3,514
Other (expense) income, net		(17,450)		16,874
Interest income, net		97,653		16,603
Total other income (expense), net		75,746		36,991
Net loss	$	(1,907,301)	$	(1,317,915)
Induced conversions of Preferred Stock		(61,000)		-
Net loss attributable to common stockholders	$	(1,968,301)	$	-
NET LOSS PER SHARE-BASIC AND DILUTED	$	0.00	$	0.00
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED		341,671,076,830		339,741,632,384

See notes to unaudited condensed consolidated financial statements

2

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2023 and 2022

(Unaudited)

	Series E Convertible Preferred Stock						Convertible Preferred Stock				Common Stock				Additional Paid-In			Accumulated
	Shares			Amount			Shares		Amount		Shares		Amount		Capital			Deficit			Total
Balance – January 1, 2023		14,722		$	14,722,075			800	$	800,000		339,741,632,384	$	33,974,163	$	29,045,802		$	(43,613,941	)	$	20,206,024
Series E convertible preferred stock redeemed		(556	)		(555,550	)		-		-		-		-		-			-			-
Conversion of series E convertible preferred stock		(670	)		(670,000	)		-		-		6,700,000,000		670,000		-			-			670,000
Induced conversions of preferred stock		-			-			-		-		-		-		(61,000	)		-			(61,000	)
Stock-based compensation expense		-			-			-		-		-		-		50,000			-			50,000
Net loss		-			-			-		-		-		-		-			(1,907,301	)		(1,907,301	)
Balance – March 31, 2023		13,497		$	13,496,525			800	$	800,000		346,441,632,384	$	34,644,163	$	29,034,802		$	(45,521,242	)	$	18,957,723

	Series E Convertible Preferred Stock				Convertible Preferred Stock					Common Stock					Additional Paid-In			Accumulated
	Shares		Amount		Shares		Amount			Shares		Amount			Capital			Deficit				Total
Balance – January 1, 2022		-		-		800		$	800,000		339,741,632,384		$	33,974,163		$	30,855,824		$	(36,396,330	)		$	29,233,657
Net loss		-		-		-			-		-			-			-			(1,317,915	)			(1,317,915	)
Balance – March 31, 2022		-		-		800		$	800,000		339,741,632,384		$	33,974,163		$	30,855,824		$	(37,714,245	)		$	27,915,742

See notes to unaudited condensed consolidated financial statements

3

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
	2023		2022
OPERATING ACTIVITIES
Net loss	$	(1,907,301)	$	(1,317,915)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		373,462		193,322
Loss (gain) on investment		4,457		(3,514)
Amortization of right-of-use asset		695,192		177,643
Write-down of obsolete and slow-moving inventory		523,087		115,842
Stock-based compensation expense		50,000		-
Change in contingent consideration		22,100		-
Changes in operating assets and liabilities:
Accounts receivable		(44,818)		(9,031)
Inventories		(673,392)		(160,312)
Prepaid expenses and vendor deposits		(255,387)		157,641
Other current assets		279,701		-
Other assets		771		(27,446)
Accounts payable and accrued expenses		(744,145)		415,957
Contract liabilities		1,766		(61,965)
Lease liability		(669,803)		(159,851)
NET CASH USED IN OPERATING ACTIVITIES		(2,344,310)		(679,629)
INVESTING ACTIVITIES
Acquisition of Mother Earth's Storehouse		-		(5,150,000)
Collection of note receivable		16,320		13,772
Purchases of property and equipment		(126,251)		(127,275)
NET CASH USED IN INVESTING ACTIVITIES		(109,931)		(5,263,503)
FINANCING ACTIVITIES
Proceeds from line of credit		-		35,196
Principal payments on loan payable		(131,614)		(638)
Payment of induced conversions of preferred stock		(55,000)		-
Payment for series E preferred stock redemption		(555,550)		-
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES		(742,164)		34,558
NET DECREASE IN CASH AND RESTRICTED CASH		(3,196,405)		(5,908,574)
CASH AND RESTRICTED CASH— BEGINNING OF PERIOD		24,690,124		26,496,404
CASH AND RESTRICTED CASH — END OF PERIOD	$	21,493,719	$	20,587,830
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	$	44,478	$	1,428
Cash paid for income tax	$	-	$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES
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	$	1,797,667
Accrued payment of induced conversions of preferred stock	$	6,000	$	-

See notes to unaudited condensed consolidated financial statements

4

HEALTHIER CHOICES MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1. ORGANIZATION

Organization

Healthier Choices Management Corp. (the “Company”) is a holding company focused on providing consumers with healthier daily choices with respect to nutrition and other lifestyle alternatives.

Through its wholly owned subsidiary HCMC Intellectual Property Holdings, LLC, the Company manages and intends to expand on its intellectual property portfolio. 

Through its wholly owned subsidiaries, the Company operates:

• Ada’s Natural Market, a natural and organic grocery store offering fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, health & beauty products and natural household items.

• Paradise Health & Nutrition’s three stores that likewise offer fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, health & beauty products and natural household items.

• Mother Earth’s Storehouse, a two-store organic and health food and vitamin chain in New York’s Hudson Valley, a business that has been in existence for over 40 years.

• Greens Natural Foods’ eight stores in New York and New Jersey, offering a selection of 100% organic produce and all-natural, non-GMO groceries & bulk foods; a wide selection of local products; an organic juice and smoothie bar; a fresh foods department, which offers fresh and healthy “grab & go” foods; a full selection of vitamins & supplements; as well as health and beauty products

Through its wholly owned subsidiary, Healthy Choice Wellness, LLC, the Company operates:

• Licensing agreements for Healthy Choice Wellness Centers located at the Casbah Spa and Salon in Fort Lauderdale, FL, Boston Direct Health in Boston, MA and Green Care Medical Services in Chicago, IL.

These centers offer multiple vitamin drip mixes and intramuscular shots for clients to choose from that are designed to help boost immunity, fight fatigue and stress, reduce inflammation, enhance weight loss, and efficiently deliver antioxidants and anti-aging mixes. Additionally, there are IV vitamin mixes and shots for health, beauty, and re-hydration.

Through its wholly owned subsidiary, Healthy U Wholesale, Inc, the Company sells vitamins and supplements, as well as health, beauty, and personal care products on its website www.TheVitaminStore.com.

Additionally, the Company markets its patented the Q-Cup™ technology under the vape segment; this patented technology is based on a small, quartz cup called the Q-Cup™, which a customer partially fills with either cannabis or CBD concentrate (approximately 50mg) purchased from a third party. The Q-Cup™ is then inserted into the Q-Cup™ Tank or Globe, that heats the cup from the outside without coming in direct contact with the solid concentrate. This Q-Cup™ technology provides significantly more efficiency and an “on the go” solution for consumers who prefer to vape concentrates either medicinally or recreationally.

Spin-Off

The Company has commenced steps to spin off ("Spin-Off") its grocery segment and wellness business into a new publicly traded company (hereinafter referred to as “NewCo”). NewCo will continue the path of growth in the wellness verticals started by HCMC and explore other growth opportunities that comport with HCMC’s healthier lifestyle mission. Following the Spin-Off, HCMC will retain its entire patent suite, the Q-Cup® brand, and continue to develop its patent suite through R&D as well as continuing its path of enforcing its patent rights against infringers and attempting to monetize said patents through licensing deals.

At the time of the Spin-Off, HCMC will distribute all the outstanding shares of Common Stock held by it on a pro rata basis to holders of HCMC’s common stock. Shares of HCMC’s common stock outstanding as of the record date for the Spin-Off (the “Record Date”), will entitle the holder thereof to receive a certain number of shares of Common Stock in NewCo. The distribution will be made in book-entry form by a distribution agent. Fractional shares of Common Stock will not be distributed in the Spin-Off and any fractional amounts will be rounded down. Please see more disclosure in Note 12 Stockholder Equity.

5

Note 2. LIQUIDITY

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of any uncertainties related to our going concern assessment. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values.

The Company currently and historically has reported net losses and cash outflows from operations. As of March 31, 2023, the Company had cash of approximately $19.8 million and working capital of $18.3 million. In the past, the Company financed its operations primarily through issuances of common stock and convertible preferred stock. The Company believes current cash on hand is sufficient to meet its obligations and capital requirements for at least the next twelve months from the date of filing.

Note 3. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Regulation S-X and do not include all the information and disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). The Company has made estimates and judgments affecting the amounts reported in the Company’s unaudited condensed consolidated financial statements and the accompanying notes. The actual results experienced by the Company may differ materially from the Company’s estimates. The condensed consolidated financial information is unaudited but reflects all normal adjustments that are, in the opinion of management, necessary to provide a fair statement of results for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2023. The condensed consolidated balance sheet as of December 31, 2022 was derived from the Company’s audited 2022 financial statements contained in the above referenced Form 10-K. Results of the three months ended March 31, 2023, are not necessarily indicative of the results to be expected for the full year ending December 31, 2023.

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2022 Annual Report.

Reclassification

Certain amounts in the condensed consolidated financial statements and related notes have been reclassified to conform to the current year presentation. Such reclassifications do not impact the Company's previously reported financial position or net income (loss). $75,000 inventory shrink was originally presented in the statement of cash flow under change in operating assets inventory in cash used in operating activities for three months ended March 31, 2022, it was reclassified to write-down of obsolete and slow-moving inventory under cash used in operating activities in the statement of cash flow.

6

Note 4. CONCENTRATIONS

Cash and Restricted Cash

The Company considers all highly liquid instruments with an original maturity of three months or less, when purchased, to be cash and cash equivalents. The majority of the Company’s cash is concentrated in one large financial institution, which is in excess of Federal Deposit Insurance Corporation (FDIC) coverage. The Company did not have any cash equivalent as of March 31, 2023, and  December 31, 2022.

A summary of the financial institution that had cash in excess of FDIC limits of $250,000 on March 31, 2023 and December 31, 2022 is presented below:

	March 31, 2023			December 31, 2022
Total cash in excess of FDIC limits of $250,000		$	18,646,360		$	21,682,144

The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests, as deposits are held in excess of federally insured limits. The Company has not experienced any losses in such accounts.

The following table provides a reconciliation of cash and restricted cash to amounts shown in unaudited condensed consolidated statements of cash flow: 

	March 31, 2023		March 31, 2022
Cash	$	19,765,487	$	20,587,830
Restricted cash		1,728,232		-
Total cash and restricted cash	$	21,493,719	$	20,587,830

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.

7

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.

	Three Months Ended March 31,
	2023			2022
Vapor	$	38		$	249,563
Grocery		13,559,706			4,798,990
Total revenue	$	13,559,744		$	5,048,553
Retail Vapor	$	38		$	249,563
Retail Grocery		11,613,730			4,283,288
Food service/restaurant		1,943,914			509,810
Online/eCommerce		2,062			5,892
Total revenue	$	13,559,744		$	5,048,553
Loss from operations - Vapor		(6,672	)		(18,967	)
(Loss) income from operations - Grocery		(276,842	)		163,936
Corporate items		(1,699,533	)		(1,499,875	)
Total loss from operations	$	(1,983,047	)	$	(1,354,906	)

Note 6. NOTES RECEIVABLE AND OTHER INCOME

On September 6, 2018, the Company entered into a secured, 36-month promissory note (the “Note”) with VPR Brands L.P. for $582,260. The Note bears an interest rate of 7.00%, which payments thereunder are $4,141 weekly. The Company records all proceeds related to the interest of the Note as interest income as proceeds are received.

On August 31, 2022, the Company amended and restated the Note (the "Amended Note") with VPR Brands L.P. to extend the maturity date for one year. The outstanding balance for the Amended Note is $211,355. The Amended Note bears an interest rate of 7.00%, which payments thereunder are $1,500 weekly, with such payments commencing as of September 3, 2022. The Amended Note has a balloon payment of $145,931 for all remaining accrued interest and principal balance due in the final week of the 1-year extension of the Amended Note.

A summary of the Amended Note as of March 31, 2023 and December 31, 2022 is presented below:

Description	March 31, 2023		December 31, 2022
Promissory Note	$	172,905	$	189,225

8

Note 7. ACQUISITION

On October 14, 2022, the Company through its wholly owned subsidiary, Healthy Choice Markets IV, LLC, entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Dean’s Natural Food Market of Shrewsbury, Inc., a New Jersey corporation, Green’s Natural Foods, Inc., a Delaware corporation, Dean’s Natural Food Market of Chester, LLC, a New Jersey limited liability company, Dean’s Natural Food Market of Basking Ridge, LLC, a New Jersey limited liability company, and Dean’s Natural Food Market, Inc., a New Jersey corporation (collectively, the “Sellers”), and shareholders of the Sellers. Pursuant to the Purchase Agreement, the Company acquired certain assets and assumed certain liabilities of an organic and natural health food and vitamin chain with eight store locations in New York and northern and central New Jersey (the “Stores”).

The cash purchase price under the Asset Purchase Agreement was $5,142,000, with $3,000,000 seller financing in the form of promissory note. In addition, the seller is entitled to a contingent earn-out based on a certain revenue threshold within the one-year period of the closing.

The Company recorded $1,108,000 of contingent consideration based on the estimated financial performance for the one year following closing.  The contingent consideration was discounted at an interest rate of 3.8%, which represents the Company's weighted average discount rate.  Contingent consideration related to the acquisition is recorded at fair value (level 3) with changes in fair value recorded in other expense (income), net.

The following table summarizes the change in fair value of contingent consideration from acquisition date to March 31, 2023:

	Fair Market Value - Level 3
Balance as of October 14, 2022	$	1,108,000
Remeasurement		(333,100	)
Balance as of December 31, 2022	$	774,900
Remeasurement		22,100
Balance as of March 31, 2023	$	797,000

The following table summarizes the purchase price allocation based on fair values of the net assets acquired at the acquisition date:

	October 14, 2022
Purchase Consideration
Cash consideration paid	$	5,142,000
Promissory note		3,000,000
Contingent consideration issued to Green's Natural seller		1,108,000
Total Purchase Consideration	$	9,250,000
Purchase price allocation
Inventory	$	1,642,000
Property and equipment		1,478,000
Intangible assets		3,251,000
Right of use asset - Operating lease		6,427,000
Other liabilities		(211,000	)
Operating lease liability		(6,427,000	)
Goodwill		3,090,000
Net assets acquired	$	9,250,000
Finite-lived intangible assets
Trade Names (8 years)	$	1,133,000
Customer Relationships (6 years)		1,103,000
Non-Compete Agreement (5 years)		1,015,000
Total intangible assets	$	3,251,000

9

The acquisition is structured as asset purchase in a business combination, and goodwill is tax-deductible, and amortizable over 15 years for tax purpose.

Revenue and Earnings

The following table represents the combined pro forma revenue and net loss for the three months ended March 31, 2022:

	For Three Months Ended  March 31, 2022
Sales	$	13,156,447
Net loss	$	(1,585,281)

The combined proforma revenue and net loss for the three month period ended March 31, 2022 were prepared as though acquisition occurred as of January 1, 2022.

Note 8. PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment consist of the following:

	March 31, 2023		December 31, 2022
Displays	$	312,146	$	312,146
Building		575,000		575,000
Furniture and fixtures		572,224		560,256
Leasehold improvements		1,910,719		1,910,719
Computer hardware & equipment		177,652		160,210
Other		684,443		587,602
		4,232,184		4,105,933
Less: accumulated depreciation and amortization		(1,135,585)		(993,025)
Total property, plant, and equipment	$	3,096,599	$	3,112,908

The Company incurred approximately $142,560 and $49,936 of depreciation expense for the three months ended March 31, 2023 and 2022, respectively.

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Note 9. INTANGIBLE ASSETS

Intangible assets, net are as follows:

March 31, 2023	Useful Lives (Years)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trade names		8-10 years	$	2,569,000	$	(800,880)	$	1,768,120
Customer relationships		4-6 years		2,669,000		(1,107,722)		1,561,278
Patents		10 years		384,665		(169,587)		215,078
Non-compete		4-5 years		1,602,000		(371,867)		1,230,133
Intangible assets, net			$	7,224,665	$	(2,450,056)	$	4,774,609

December 31, 2022	Useful Lives (Years)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trade names		8-10 years	$	2,569,000		(725,723)	$	1,843,277
Customer relationships		4-6 years		2,669,000		(1,033,306)		1,635,694
Patents		10 years		384,665		(159,658)		225,007
Non-compete		4-5 years		1,602,000		(300,467)		1,301,533
Intangible assets, net			$	7,224,665	$	(2,219,154)	$	5,005,511

Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense was approximately  $230,902 and $143,386 for the three months ended March 31, 2023 and 2022, respectively. Future annual estimated amortization expense is as follows:

Years ending December 31,
2023 (remaining nine months)	$	692,706
2024		923,608
2025		918,108
2026		840,127
2027		695,498
Thereafter		704,562
Total	$	4,774,609

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Note 10. CONTRACT LIABILITIES

A summary of the contract liabilities activity at March 31, 2023 and December 31, 2022 is presented below:

	March 31, 2023			December 31, 2022
Beginning balance as January 1,	$	198,606		$	23,178
Issued		695,438			859,383
Redeemed		(640,160	)		(628,012	)
Breakage recognized		(53,512	)		(55,943	)
Ending balance	$	200,372		$	198,606

Note 11. DEBT

The following table provides a breakdown of the Company's debt as of March 31, 2023 and December 31, 2022 is presented below:

_	March 31, 2023			December 31, 2022
Promissory note	$	2,782,847		$	2,913,788
Other debt		142			815
Total debt	$	2,782,989		$	2,914,603
Current portion of long-term debt		(543,945	)		(536,542	)
Long-term debt	$	2,239,044		$	2,378,061

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 shares of its Series E Redeemable Convertible Preferred Stock to institutional investors for $1,000 per share or an aggregate subscription of $13.25 million. The number of shares issued to each participant is based on subscription amount multiplied by conversion rate of 1.1111. The Company also incurred offering costs of approximately $410,000, which covers legal and consulting fee.

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 per share of Series E Preferred Stock.

Unless earlier converted or extended as set forth below, a holder may require the redemption of all or a portion of the stated value of the HCMC Series E Preferred Stock either (1) six months after closing or (2) the time at which the balance is due and payable upon an event of default.

On March 1, 2023, the Company entered into a First Amendment to HCMC Series E Preferred Stock with each purchaser ("Purchaser") identified as those who participated in the HCMC Series E Preferred Stock, dated as of August 18, 2022.  The parties amended the HCMC Preferred Stock related to the conversion payment whereby upon conversion of the Series E Preferred Stock prior to the record date for the Spin-Off, the Company will pay the Purchaser ten percent (10%) of the stated value of the Series E Preferred Stock converted. The record date is May 1, 2023.

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As of March 31, 2023, 6,700,000,000 shares of common stock were issued as a result of the Series E preferred stock conversion. 556 shares of Series E preferred stock was redeemed and approximately $556,000 was paid for redemption.

Pursuant to the Securities Purchase Agreement, purchasers of the Series E Convertible Preferred Stock will also be required to purchase Series A Convertible Preferred Stock of 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.

Stock Options

During the three months ended March 31, 2023 and 2022, no stock options of the Company were exercised into common stock.

During the three months ended March 31, 2023 and 2022, the Company recognized stock-based compensation of approximately $50,000 and $0, respectively in connection with amortization of restricted stock and stock options. Stock based compensation is included as part of selling, general and administrative expense in the accompanying unaudited condensed consolidated statements of operations.

Income (Loss) Per Share

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

	As of March 31,
	2023		2022
Preferred stock		136,215,000,000		1,250,000,000
Stock options		67,587,000,000		67,587,000,000
Restricted stock		5,500,000,000		-
Total		209,302,000,000		68,837,000,000

Note 13. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Two lawsuits were filed against the Company and its subsidiaries in connection with alleged claimed battery defects for an electronic cigarette device. Plaintiffs claim these batteries were sold by a store of the Company’s subsidiary and have sued for an undetermined amount of damages (other than a total of $0.4 million of medical costs). The initial complaints were filed between January 2019 and April 2019. We responded to the complaints in 2019 and we exchanged additional support information with the plaintiff for one of the lawsuits in 2021. Given the lack of information presented by the plaintiffs to date, the Company is unable to predict the outcome of these matters and, at this time, cannot reasonably estimate the possible loss or range of loss with respect to these legal proceedings.

On November 30, 2020, the Company filed a patent infringement lawsuit against Philip Morris USA, Inc. and Philip Morris Products S.A. in the U.S. District Court for the Northern District of Georgia.  The lawsuit alleges infringement on HCMC-owned patent(s) by the Philip Morris product known and marketed as “IQOS®”.  Philip Morris claims that it is currently approaching 14 million users of its IQOS® product and has reportedly invested over $3 billion in their smokeless tobacco products. On December 3, 2021, the District Court for the Northern District of Georgia effectively dismissed HCMC’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A.  On December 14, 2021, the Company filed a notice of appeal of the District Court for the Northern District of Georgia’s dismissal of the Company’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. The appeal brief was filed on February 28, 2022.

On December 3, 2021, the District Court for the Northern District of Georgia effectively dismissed HCMC’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. In connection with such dismissal, the defendants sought to recover attorney’s fees from the Plaintiff. On February 22, 2022, the District Court for the Northern District of Georgia granted the defendant’s an award of approximately $575,000 in attorneys’ fees to be paid by the Company. The Company has fully provisioned this amount as of December 31, 2022. HCMC appealed this ruling on June 22, 2022. Refer to Note 14 Subsequent Event.

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, 2023. With respect to legal costs, we record such costs as incurred.

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Note 14. SUBSEQUENT EVENTS

On April 12, 2023, the U.S. Court of Appeals for the Federal Circuit ruled in favor of HCMC on two separate appeals it had filed in its patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. pending in the district court for the Northern District of Georgia.

In the first appeal, HCMC appealed the ruling of the District Court dismissing HCMC’s patent infringement action and denying HCMC’s motion to amend its pleading. In the second appeal, HCMC appealed the District Court’s award of attorneys’ fees to Philip Morris. In its decisions, the Federal Circuit ruled for HCMC by reversing both of those decisions and remanded the case back to the District Court for further proceedings.

As of the date of filing, 9,150,000,000 shares of common stock were subsequently issued since March 31, 2023 as a result of HCMC Series E Preferred Stock conversions.

On April 23, 2023, the Board of Directors of HCMC approved the Second Amendment to the 2015 Equity Incentive Plan which increased the number of shares of HCMC common stock authorized for issuance under the Amended Plan to 225,000,000,000 shares. The board of directors also approved the issuance of an additional 107,675,000,000 shares of restricted common stock to the employees and executive officers of HCMC. The grants of restricted common stock will commence vesting at 12.5% of the award on February 1, 2024 and will vest in 2.5% increments on the last day of each calendar quarter thereafter through September 30, 2025.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF CONDENSED CONSOLIDATED OPERATIONS

The following discussion and analysis should be read in conjunction with our unaudited interim condensed consolidated financial statements and related notes appearing elsewhere in this report on Form 10-Q. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements. The terms “we,” “us,” “our,” and the “Company” refer to Healthier Choices Management Corp. and its wholly-owned subsidiaries, Healthy Choice Markets, Inc., Healthy Choice Markets 2, LLC (“Paradise Health and Nutrition”), Healthy Choice Markets 3, LLC (“Mother Earth’s Storehouse”), Healthy Choices Markets 3 Real Estate LLC, Healthy Choice Markets IV, LLC (“Green's Natural Foods”), HCMC Intellectual Property Holdings, LLC, Healthy Choice Wellness, LLC, The Vitamin Store, LLC, Healthy U Wholesale, Inc., and The Vape Store, Inc. (“Vape Store”). All intercompany accounts and transactions have been eliminated in consolidation.

Company Overview

Healthier Choices Management Corp. is a holding company focused on providing consumers with healthier daily choices with respect to nutrition and other lifestyle alternatives.

Through its wholly owned subsidiary HCMC Intellectual Property Holdings, LLC, the Company manages and intends to expand on its intellectual property portfolio.

Through its wholly owned subsidiaries, Healthy Choice Markets, Inc., Healthy Choice Markets 2, LLC, and Healthy Choice Markets 3, LLC, and Healthy Choice Markets IV, LLC respectively, the Company operates:

• Ada’s Natural Market, a natural and organic grocery store offering fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, health & beauty products and natural household items.

• Paradise Health & Nutrition’s three stores that likewise offer fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, health & beauty products and natural household items.

• Mother Earth’s Storehouse, a two store organic and health food and vitamin chain in New York’s Hudson Valley, which has been in existence for over 40 years.

• Green's Natural Foods’ eight stores in New York and New Jersey, offering a selection of 100% organic produce and all-natural, non-GMO groceries & bulk foods; a wide selection of local products; an organic juice and smoothie bar; a fresh foods department, which offers fresh and healthy “grab & go” foods; a full selection of vitamins & supplements; as well as health and beauty products (www.Greensnaturalfoods.com).

Through its wholly owned subsidiary, Healthy Choice Wellness, LLC, the Company has licensing agreements for Healthy Choice Wellness Centers at the Casbah Spa and Salon in Fort Lauderdale, FL, and Boston Direct Health in Boston, MA. These centers offer multiple IV drip “cocktails” 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 cocktails for health, beauty, and re-hydration. (www.HealthyChoiceWellness.com).

Through its wholly owned subsidiary, Healthy U Wholesale Inc., the Company sells vitamins and supplements, as well as health, beauty and personal care products on its website www.TheVitaminStore.com.

Additionally, the Company markets its patented Q-Unit™ and Q-Cup® technology. Information on these products and the technology is available on the Company’s website at www.theQcup.com.

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Liquidity

The unaudited condensed consolidated financial statements included elsewhere in this Form 10-Q have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern and realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of any uncertainties related to our going concern assessment. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The unaudited consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

The Company incurred a loss from operations of approximately $2.0 million for the three months ended March 31, 2023. As of March 31, 2023, cash totaled approximately $19.8 million. The Company expects to continue incurring losses for the foreseeable future but we anticipate that our current cash and additional cash to be generated from operations will be sufficient to cover our projected operating expenses for the foreseeable future. Management does not believe there are any substantial doubts about the Company’s ability to continue as a going concern within a year and a day from the issuance of these unaudited consolidated financial statements.

Factors Affecting Our Performance

We believe the following factors affect our performance:

Retail: We believe the operating performance of our retail stores will affect our revenue and financial performance. The Company has four natural and organic groceries and dietary supplement stores located in Florida, as well as ten located in New York and New Jersey. The Company has closed retail vape stores, as management has shifted its retail sales focus to the wholesale and online channel. The adverse industry trends and increasing federal and state regulations that, if implemented, may negatively impact future wholesale and online operations in vapor segment.

Increased Competition: Food retail is a large and competitive industry. Our competition varies and includes national, regional, and local conventional supermarkets, national superstores, alternative food retailers, natural foods stores, smaller specialty stores, and farmers’ markets. In addition, we compete with restaurants and other dining options in the food-at-home and food-away-from-home markets. The opening and closing of competitive stores, as well as restaurants and other dining options, in regions where we operate will affect our results. In addition, changing consumer preferences with respect to food choices and to dining out or at home can impact us. We also expect increased product supply and downward pressure on prices to continue and impact our operating results in the future.

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Results of Operations

The following table sets forth our unaudited condensed consolidated Statements of Operations for the three months ended March 31, 2023 and 2022 that is used in the following discussions of our results of operations:

	Three Months Ended March 31,				2023 to 2022
	2023		2022		Change $
SALES
Vapor sales, net	$	38	$	249,563	$	(249,525)
Grocery sales, net		13,559,706		4,798,990		8,760,716
TOTAL SALES, NET		13,559,744		5,048,553		8,511,191
Cost of sales vapor		653		111,684		(111,031)
Cost of sales grocery		8,644,700		2,964,355		5,680,345
GROSS PROFIT		4,914,391		1,972,514		2,941,877
OPERATING EXPENSES
Selling, general and administrative		6,897,438		3,327,420		3,570,018
LOSS FROM OPERATIONS		(1,983,047)		(1,354,906)		(628,141)
OTHER INCOME (EXPENSE)
(Loss) gain on investment		(4,457)		3,514		(7,971)
Other (expense) income, net		(17,450)		16,874		(34,324)
Interest income		97,653		16,603		81,050
Total other income (expense), net		75,746		36,991		38,755
NET LOSS	$	(1,907,301)	$	(1,317,915)	$	(589,386)

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Net vapor sales decreased approximately $0.2 million to $0.0 thousand for the three months ended March 31, 2023 as compared to $0.2 million for the same period in 2022. The decrease in sales is primarily due to closing all retail vape store, as management has shifted its retail sales focus to the wholesale and online channel. The sales for the three months ended March 31, 2023, were significantly impacted by technical issues associated with the processing of credit card payments. Management is continuing to work with the third-party provider to address the matter.

Net grocery sales increased $8.8 million to $13.6 million for the three months ended March 31, 2023 as compared to $4.8 million for the same period in 2022. The $8.8 million increase in grocery sales was primarily due to the acquisition of Mother Earth's Storehouse and Green's Natural Foods.

Vapor cost of goods sold for the three months ended March 31, 2023 and 2022 were $1.0 thousand and $0.1 million, respectively, a decrease of $0.1 million. The decrease is primarily due to closing retail vape stores, as management has shifted its retail sales focus to the wholesale and online channel. Gross (loss) profit was $(0.6) thousand and $0.1 million for three months ended March 31, 2023 and 2022, respectively.

Grocery cost of goods sold for the three months ended March 31, 2023 and 2022 were $8.6 million and $3.0 million, respectively. The increase of $5.6 million is primarily due to the acquisition of Mother Earth's Storehouse and Green's Natural Foods stores. Gross profit was $4.9 million and $1.8 million for the three months ended March 31, 2023 and 2022, respectively. Gross margin as a percentage of sales decreased approximately 2.0% as compared to the same period in prior year as a result of increased inventory shrink and inventory reserve.

Total operating expenses increased $3.6 million to $6.9 million for the three months ended March 31, 2023 compared to $3.3 million for the same period in 2022. The increase is due to the acquisition of Mother Earth's Storehouse and Green's Natural Foods stores, and increases in professional fees of $0.1 million, and stock compensation expense  of $0.05 million.

Total net other income increased $39,000 to $76,000 for the three months ended March 31, 2023 compared to $37,000 for the same period in 2022. The increase in net other income is mainly attributable to increase in interest income as a result of an increase in interest rates, offset by increase in remeasurement on contingent liability.

Liquidity and Capital Resources

	Three Months Ended March 31,
	2023		2022
Net cash (used in) provided by
Operating activities	$	(2,344,310)	$	(679,629)
Investing activities		(109,931)		(5,263,503)
Financing activities		(742,164)		34,558
	$	(3,196,405)	$	(5,908,574)

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Our net cash used in operating activities of approximately $2.3 million for the three months ended March 31, 2023 resulted from a net loss of $1.9 million, offset by a non-cash adjustment of $1.7 million and a net cash usage of $2.1 million from changes in operating assets and liabilities. Our net cash used in operating activities of $0.7 million for the three months ended March 31, 2022 resulted from a net loss of $1.3 million and a net cash provided by operation of $0.2 million from changes in operating assets and liabilities, offset by a non-cash adjustment of $0.5 million.

The net cash used in investing activities of $0.1 million for the three months ended March 31, 2023 resulted from collection on a note receivable and purchases of property and equipment. The net cash used in investing activities of $5,264,000 for the three months ended March 31, 2022 resulted from the acquisition of Mother Earth's Storehouse, collection of a note receivable, and purchases of property and equipment.

The net cash used in financing activities of $742,000 for the three months ended March 31, 2023 is due to Series E Preferred Stock redemption and exercise and principle payment on loan payable. The net cash provided by financing activities of $35,000 for the three months ended March 31, 2022 is due to proceeds received from the line of credit.

At March 31, 2023 and December 31, 2022, we did not have any material financial guarantees or other contractual commitments with vendors that are reasonably likely to have an adverse effect on liquidity.

Our cash balances are kept liquid to support our growing acquisition and infrastructure needs for operational expansion. Most of our cash is concentrated in several financial institutions 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 March 31, 2023 and December 31, 2022.

	March 31, 2023		December 31, 2022
Cash	$	19,765,487	$	22,911,892
Total assets	$	52,358,773	$	55,255,030
Percentage of total assets		37.75%		41.47%

The Company reported a net loss of $1.9 million for the three months ended March 31, 2023. The Company also had positive working capital of $18.3 million. The Company expects to continue incurring losses for the foreseeable future, but we do not believe there are any substantial doubts about the Company’s ability to continue as a going concern. The Company's current cash and cash generated from operations will be sufficient to meet the projected operating expenses for the foreseeable future through at least the next twelve months from the issuance of these unaudited condensed consolidated financial statements.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

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Critical Accounting Policies and Estimates

Our management’s discussion and analysis of financial condition and results of operations is based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP. The preparation of these condensed consolidated financial statements requires us to exercise considerable judgment with respect to establishing sound accounting policies and in making estimates and assumptions that affect the reported amounts of our assets and liabilities, our recognition of revenues and expenses, and disclosure of commitments and contingencies at the date of the condensed consolidated financial statements.

We base our estimates on our historical experience, knowledge of our business and industry, current and expected economic conditions, the attributes of our products, the regulatory environment, and in certain cases, the results of outside appraisals. We periodically re-evaluate our estimates and assumptions with respect to these judgments and modify our approach when circumstances indicate that modifications are necessary. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

While we believe that the factors we evaluate provide us with a meaningful basis for establishing and applying sound accounting policies, we cannot guarantee that the results will always be accurate. Since the determination of these estimates requires the exercise of judgment, actual results could differ from such estimates.

There have been no material changes to the Company’s critical accounting policies and estimates as compared to the critical accounting policies and estimates described in the 2022 Annual Report, which we believe are the most critical to our business and the understanding of our results of operations and affect the more significant judgments and estimates that we use in the preparation of our condensed consolidated financial statements.

Seasonality

We do not consider our business to be seasonal.

Cautionary Note Regarding Forward-Looking Statements

This report includes forward-looking statements including statements regarding retail expansion, the future demand for our products, the transition to vaporizer and other products, competition, the adequacy of our cash resources and our authorized Common Stock, and our continued ability to raise capital.

The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs.

The results anticipated by any or all of these forward-looking statements might not occur. Important factors that could cause actual results to differ from those in the forward-looking statements include our future common stock price, the timing of future Series D preferred stock exercises and stock sales, customer acceptance of our products, and proposed federal and state regulation. We undertake no obligation to publicly update or revise any forward-looking statements, whether as the result of new information, future events or otherwise.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

We are required to report under Section 404(a) of Sarbanes-Oxley regarding the effectiveness of our internal control over financial reporting.

Evaluation of Disclosure Controls and Procedures

Our management, including our Principal Executive Officer and Principal Financial Officer, did not carry out an evaluation on internal controls as of March 31, 2023 in regard to the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the Exchange Act. As an evaluation was not carried out, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report.

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of its internal control over financial reporting based on the framework established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).  Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s internal control over financial reporting was ineffective as of March 31, 2023 and noted the material weaknesses as follows:

● Failure to have properly documented and designed disclosure controls and procedures and testing of the operating effectiveness of our internal control over financial reporting.

● Failure to perform periodic and year-end inventory observations in a timely manner and adequate controls to sufficiently perform required rollback procedures of inventory counts to the year-end.

● Weakness around our purchase orders and inventory procedures, inclusive of year-end physical inventory observation procedures as well as physical count procedures.

● Segregation of duties due to lack of personnel.

● Information technology general controls (ITGCs) were not designed effectively to ensure that appropriate access security controls, change management and data center and network operations ITGCs were in place.

Our management concluded that considering internal control deficiencies that, in the aggregate, rise to the level of material weaknesses, we did not maintain effective internal control over financial reporting as of March 31, 2023 based on the criteria set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

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Planned Remediation

Management continues to work to improve its controls related to our material weaknesses listed above. In order to achieve the timely implementation of the above, management has commenced the following actions and will continue to assess additional opportunities for remediation on an ongoing basis:

● Continuing to increase headcount across the Company, with a particular focus on hiring individuals with strong internal control backgrounds and inventory expertise.

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

● Establishing policies and procedures in the IT area to mitigate data breach, unauthorized access, and address segregation of duties.

We are currently working to improve and simplify our internal processes and implement enhanced controls, as discussed above, to address the material weaknesses in our internal control over financial reporting and to remedy the ineffectiveness of our disclosure controls and procedures. These material weaknesses will not be considered to be remediated until the applicable remediated controls are operating for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

Changes in Internal Controls over Financing Reporting

Except as detailed above, during the quarter ended March 31, 2023, there were no significant changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Two lawsuits were filed against the Company and its subsidiaries in connection with alleged claimed battery defects for an electronic cigarette device. Plaintiffs claim these batteries were sold by a store of the Company’s subsidiary and have sued for an undetermined amount of damages (other than a total of $0.4 million of medical costs). The initial complaints were filed between January 2019 and April 2019. We responded to the complaints in 2019 and we exchanged additional support information with the plaintiff for one of the lawsuits in 2021. Given the lack of information presented by the plaintiffs to date, the Company is unable to predict the outcome of these matters and, at this time, cannot reasonably estimate the possible loss or range of loss with respect to these legal proceedings.

On November 30, 2020, the Company filed a patent infringement lawsuit against Philip Morris USA, Inc. and Philip Morris Products S.A. in the U.S. District Court for the Northern District of Georgia. The lawsuit alleges infringement on HCMC-owned patent(s) by the Philip Morris product known and marketed as “IQOS®”.  Philip Morris claims that it is currently approaching 14 million users of its IQOS® product and has reportedly invested over $3 billion in their smokeless tobacco products. On December 3, 2021, the District Court for the Northern District of Georgia effectively dismissed HCMC’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A.  On December 14, 2021, the Company filed a notice of appeal of the District Court for the Northern District of Georgia’s dismissal of the Company’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. The appeal brief was filed on February 28, 2022.

On December 3, 2021, the District Court for the Northern District of Georgia effectively dismissed HCMC’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. In connection with such dismissal, the defendants sought to recover attorney’s fees from the Plaintiff. On February 22, 2022, the District Court for the Northern District of Georgia granted the defendant’s an award of approximately $575,000 in attorneys’ fees to be paid by the Company. HCMC appealed this ruling on June 22, 2022.

On April 12, 2023, the U.S. Court of Appeals for the Federal Circuit ruled in favor of HCMC on two separate appeals it had filed in its patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. pending in the district court for the Northern District of Georgia.

In the first appeal, HCMC appealed the ruling of the District Court dismissing HCMC’s patent infringement action and denying HCMC’s motion to amend its pleading. In the second appeal, HCMC appealed the District Court’s award of attorneys’ fees to Philip Morris. In its decisions, the Federal Circuit ruled for HCMC by reversing both of those decisions and remanded the case back to the District Court for further proceedings.

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, 2023. With respect to legal costs, we record such costs as incurred.

23

ITEM 1A. RISK FACTORS.

Not Applicable.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5. OTHER INFORMATION.

Not Applicable.

ITEM 6. EXHIBITS.

See the exhibits listed in the accompanying “Index to Exhibits.”

24

INDEX TO EXHIBITS

Exhibit		Incorporated by Reference			Filed or Furnished
No.	Exhibit Description	Form	Date	Number	Herewith
31.1	Certification of Principal Executive Officer (302)				Filed
31.2	Certification of Principal Financial Officer (302)				Filed
32.1	Certification of Principal Executive Officer (906)				Furnished *
32.2	Certification of Principal Financial Officer (906)				Furnished *
101.INS	XBRL Instance Document				Filed
101.SCH	XBRL Taxonomy Extension Schema Document				Filed
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document				Filed
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document				Filed
101.LAB	XBRL Taxonomy Extension Label Linkbase Document				Filed
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document				Filed
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)				Filed

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

25

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HEALTHIER CHOICES MANAGEMENT CORP.
Date: May 5, 2023	By:	/s/ Jeffrey Holman
		Jeffrey Holman
		Chief Executive Officer
Date: May 5, 2023	By:	/s/ John Ollet
		John Ollet
		Chief Financial Officer

26

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Jeffrey Holman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Healthier Choices Management Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 5, 2023

/s/ Jeffrey Holman

Jeffrey Holman

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, John Ollet, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Healthier Choices Management Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 5, 2023

/s/ John Ollet

John Ollet

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Healthier Choices Management Corp. (the “Company”) on Form 10-Q for the quarter ending March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof, I, Jeffrey Holman, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The quarterly report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and

2. The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 5, 2023

/s/ Jeffrey Holman

Jeffrey Holman

Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Healthier Choices Management Corp. (the “Company”) on Form 10-Q for the quarter ending March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof, I, John Ollet, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1. The quarterly report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and

2. The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 5, 2023

/s/ John Ollet

John Ollet

Chief Financial Officer

(Principal Financial Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2023	May 05, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Document Transition Report	false
Entity File Number	001-36469
Entity Registrant Name	HEALTHIER CHOICES MANAGEMENT CORP.
Entity Central Index Key	0000844856
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	84-1070932
Entity Address, Address Line One	3800 North 28Th Way
Entity Address, City or Town	Hollywood
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33020
City Area Code	305
Local Phone Number	600-5004
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	HCMC
Security Exchange Name	NONE
Entity Common Stock, Shares Outstanding		463,266,632,384

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2023	Dec. 31, 2022
CURRENT ASSETS
Cash	$ 19,765,487	$ 22,911,892
Accounts receivable, net	100,633	55,815
Notes receivable	172,905	189,225
Inventories	3,967,497	3,817,192
Prepaid expenses and vendor deposits	577,569	322,182
Investment	5,314	9,771
Other current assets	944,470	1,224,171
Restricted cash	1,728,232	1,778,232
TOTAL CURRENT ASSETS	27,262,107	30,308,480
Property, plant, and equipment, net of accumulated depreciation	3,096,599	3,112,908
Intangible assets, net of accumulated amortization	4,774,609	5,005,511
Goodwill	5,747,000	5,747,000
Right of use asset - operating lease, net	11,003,033	10,604,935
Other assets	475,425	476,196
TOTAL ASSETS	52,358,773	55,255,030
CURRENT LIABILITIES
Accounts payable and accrued expenses	4,977,089	5,715,234
Contingent consideration	797,000	774,900
Contract liabilities	200,372	198,606
Line of credit	453,232	453,232
Current portion of loan payment	543,945	536,542
Operating lease liability, current	2,036,415	2,228,852
TOTAL CURRENT LIABILITIES	9,008,053	9,907,366
Loan payable, net of current portion	2,239,044	2,378,061
Operating lease liability, net of current	8,657,428	8,041,504
TOTAL LIABILITIES	19,904,525	20,326,931
COMMITMENTS AND CONTINGENCIES (SEE NOTE 12)
CONVERTIBLE PREFERRED STOCK
Series E redeemable convertible preferred stock, $1,000 par value per share, 14,722 shares authorized, 13,497 shares and 14,722 share issued and outstanding as of March 31, 2023 and December 31, 2022; aggregate liquidation preference of $13.5 million and $14.7 million as of March 31, 2023 and December 31, 2022, respectively	13,496,525	14,722,075
STOCKHOLDERS' EQUITY
Series D convertible preferred stock, $1,000 par value per share, 5,000 shares authorized; 800 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively; aggregate liquidation preference of $0.8 million	800,000	800,000
Common Stock, $0.0001 par value per share, 750,000,000,000 shares authorized; 346,441,632,384 and 339,741,632,384 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively	34,644,163	33,974,163
Additional paid-in capital	29,034,802	29,045,802
Accumulated deficit	(45,521,242)	(43,613,941)
TOTAL STOCKHOLDERS' EQUITY	18,957,723	20,206,024
TOTAL LIABILITIES, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY	$ 52,358,773	$ 55,255,030

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
CONVERTIBLE PREFERRED STOCK
Series E convertible preferred stock, par value (in dollars per share)	$ 1,000	$ 1,000
Series E convertible preferred stock, authorized (in shares)	14,722	14,722
Series E convertible preferred stock, issued (in shares)	13,497	14,722
Series E convertible preferred stock, outstanding (in shares)	13,497	14,722
Series E convertible preferred stock, aggregate liquidation preference	$ 13.5	$ 14.7
STOCKHOLDERS' EQUITY
Series D convertible preferred stock, par value (in dollars per share)	$ 1,000	$ 1,000
Series D convertible preferred stock, authorized (in shares)	5,000	5,000
Series D convertible preferred stock, issued (in shares)	800	800
Series D convertible preferred stock, outstanding (in shares)	800	800
Series D convertible preferred stock, aggregate liquidation preference	$ 0.8	$ 0.8
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	750,000,000,000	750,000,000,000
Common stock, shares issued (in shares)	346,441,632,384	339,741,632,384
Common stock, shares outstanding (in shares)	346,441,632,384	339,741,632,384

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
SALES
SALES, NET	$ 13,559,744	$ 5,048,553
GROSS PROFIT	4,914,391	1,972,514
OPERATING EXPENSES	6,897,438	3,327,420
LOSS FROM OPERATIONS	(1,983,047)	(1,354,906)
OTHER INCOME (EXPENSE)
(Loss) gain on investment	(4,457)	3,514
Other (expense) income, net	(17,450)	16,874
Interest income, net	97,653	16,603
Total other income (expense), net	75,746	36,991
Net loss	(1,907,301)	(1,317,915)
Induced conversions of Preferred Stock	(61,000)	0
Net loss attributable to common stockholders	$ (1,968,301)	$ 0
NET LOSS PER SHARE-BASIC (in dollars per share)	$ 0	$ 0
NET LOSS PER SHARE-DILUTED (in dollars per share)	$ 0	$ 0
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC (in shares)	341,671,076,830	339,741,632,384
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-DILUTED (in shares)	341,671,076,830	339,741,632,384
Vapor [Member]
SALES
SALES, NET	$ 38	$ 249,563
Cost of sales	653	111,684
Grocery [Member]
SALES
SALES, NET	13,559,706	4,798,990
Cost of sales	$ 8,644,700	$ 2,964,355

XML

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - USD ($)	Preferred Stock [Member]	Preferred Stock [Member] Convertible Preferred Stock [Member]	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Deficit [Member]	Total	Series E Convertible Preferred Stock [Member]
Balance at Dec. 31, 2021						$ 0
Balance (in shares) at Dec. 31, 2021						0
Balance at Mar. 31, 2022						$ 0
Balance (in shares) at Mar. 31, 2022						0
Balance at Dec. 31, 2021		$ 800,000	$ 33,974,163	$ 30,855,824	$ (36,396,330)	$ 29,233,657
Balance (in shares) at Dec. 31, 2021		800	339,741,632,384
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock options exercised (in shares)						0
Induced conversions of Preferred Stock						$ 0
Net loss	$ 0		$ 0	0	(1,317,915)	(1,317,915)
Balance at Mar. 31, 2022		$ 800,000	$ 33,974,163	30,855,824	(37,714,245)	27,915,742
Balance (in shares) at Mar. 31, 2022		800	339,741,632,384
Balance at Dec. 31, 2022						$ 14,722,075
Balance (in shares) at Dec. 31, 2022						14,722
Increase (Decrease) in Convertible Preferred Stock [Roll Forward]
Series E convertible preferred stock redeemed						$ (555,550)
Series E convertible preferred stock redeemed (in shares)						(556)
Conversion of series E convertible preferred stock						$ (670,000)
Conversion of series E convertible preferred stock (in shares)						(670)
Balance at Mar. 31, 2023						$ 13,496,525
Balance (in shares) at Mar. 31, 2023						13,497
Balance at Dec. 31, 2022		$ 800,000	$ 33,974,163	29,045,802	(43,613,941)	$ 20,206,024
Balance (in shares) at Dec. 31, 2022		800	339,741,632,384
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Series E convertible preferred stock redeemed	$ 0		$ 0	0	0	$ 0
Series E convertible preferred stock redeemed (in shares)	0		0
Stock options exercised (in shares)						0
Conversion of series E convertible preferred stock	$ 0		$ 670,000	0	0	$ 670,000
Conversion of series E convertible preferred stock (in shares)	0		6,700,000,000				6,700,000,000
Induced conversions of Preferred Stock	$ 0		$ 0	(61,000)	0	(61,000)
Stock-based compensation expense	0		0	50,000	0	50,000
Net loss	$ 0		0	0	(1,907,301)	(1,907,301)
Balance at Mar. 31, 2023		$ 800,000	$ 34,644,163	$ 29,034,802	$ (45,521,242)	$ 18,957,723
Balance (in shares) at Mar. 31, 2023		800	346,441,632,384

XML

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
OPERATING ACTIVITIES
Net loss	$ (1,907,301)	$ (1,317,915)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	373,462	193,322
Loss (gain) on investment	4,457	(3,514)
Amortization of right-of-use asset	695,192	177,643
Write-down of obsolete and slow-moving inventory	523,087	115,842
Stock-based compensation expense	50,000	0
Change in contingent consideration	22,100	0
Changes in operating assets and liabilities:
Accounts receivable	(44,818)	(9,031)
Inventories	(673,392)	(160,312)
Prepaid expenses and vendor deposits	(255,387)	157,641
Other current assets	279,701	0
Other assets	771	(27,446)
Accounts payable and accrued expenses	(744,145)	415,957
Contract liabilities	1,766	(61,965)
Lease liability	(669,803)	(159,851)
NET CASH USED IN OPERATING ACTIVITIES	(2,344,310)	(679,629)
INVESTING ACTIVITIES
Acquisition of Mother Earth's Storehouse	0	(5,150,000)
Collection of note receivable	16,320	13,772
Purchases of property and equipment	(126,251)	(127,275)
NET CASH USED IN INVESTING ACTIVITIES	(109,931)	(5,263,503)
FINANCING ACTIVITIES
Proceeds from line of credit	0	35,196
Principal payments on loan payable	(131,614)	(638)
Payment of induced conversions of preferred stock	(55,000)	0
Payment for series E preferred stock redemption	(555,550)	0
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES	(742,164)	34,558
Payment of induced conversions of Preferred Stock	55,000	0
NET DECREASE IN CASH AND RESTRICTED CASH	(3,196,405)	(5,908,574)
CASH AND RESTRICTED CASH - BEGINNING OF PERIOD	24,690,124	26,496,404
CASH AND RESTRICTED CASH - END OF PERIOD	21,493,719	20,587,830
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	44,478	1,428
Cash paid for income tax	0	0
NON-CASH INVESTING AND FINANCING ACTIVITIES
Issuance of common stock in connection with series E preferred stock conversion	670,000	0
Right-of-use assets obtained in exchange for operating lease liabilities	1,093,290	1,797,667
Accrued payment of induced conversions of Preferred Stock	$ 6,000	$ 0

XML

ORGANIZATION

3 Months Ended

Mar. 31, 2023

ORGANIZATION [Abstract]

ORGANIZATION

Note 1. ORGANIZATION

Organization

Healthier Choices Management Corp. (the “Company”) is a holding company focused on providing consumers with healthier daily choices with respect to nutrition and other lifestyle alternatives.

Through its wholly owned subsidiary HCMC Intellectual Property Holdings, LLC, the Company manages and intends to expand on its intellectual property portfolio. 

Through its wholly owned subsidiaries, the Company operates:

• Ada’s Natural Market, a natural and organic grocery store offering fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, health & beauty products and natural household items.

• Paradise Health & Nutrition’s three stores that likewise offer fresh produce, bulk foods, vitamins and supplements, packaged groceries, meat and seafood, deli, baked goods, dairy products, frozen foods, health & beauty products and natural household items.

• Mother Earth’s Storehouse, a two-store organic and health food and vitamin chain in New York’s Hudson Valley, a business that has been in existence for over 40 years.

• Greens Natural Foods’ eight stores in New York and New Jersey, offering a selection of 100% organic produce and all-natural, non-GMO groceries & bulk foods; a wide selection of local products; an organic juice and smoothie bar; a fresh foods department, which offers fresh and healthy “grab & go” foods; a full selection of vitamins & supplements; as well as health and beauty products

Through its wholly owned subsidiary, Healthy Choice Wellness, LLC, the Company operates:

• Licensing agreements for Healthy Choice Wellness Centers located at the Casbah Spa and Salon in Fort Lauderdale, FL, Boston Direct Health in Boston, MA and Green Care Medical Services in Chicago, IL.

These centers offer multiple vitamin drip mixes and intramuscular shots for clients to choose from that are designed to help boost immunity, fight fatigue and stress, reduce inflammation, enhance weight loss, and efficiently deliver antioxidants and anti-aging mixes. Additionally, there are IV vitamin mixes and shots for health, beauty, and re-hydration.

Through its wholly owned subsidiary, Healthy U Wholesale, Inc, the Company sells vitamins and supplements, as well as health, beauty, and personal care products on its website www.TheVitaminStore.com.

Additionally, the Company markets its patented the Q-Cup™ technology under the vape segment; this patented technology is based on a small, quartz cup called the Q-Cup™, which a customer partially fills with either cannabis or CBD concentrate (approximately 50mg) purchased from a third party. The Q-Cup™ is then inserted into the Q-Cup™ Tank or Globe, that heats the cup from the outside without coming in direct contact with the solid concentrate. This Q-Cup™ technology provides significantly more efficiency and an “on the go” solution for consumers who prefer to vape concentrates either medicinally or recreationally.

Spin-Off

The Company has commenced steps to spin off ("Spin-Off") its grocery segment and wellness business into a new publicly traded company (hereinafter referred to as “NewCo”). NewCo will continue the path of growth in the wellness verticals started by HCMC and explore other growth opportunities that comport with HCMC’s healthier lifestyle mission. Following the Spin-Off, HCMC will retain its entire patent suite, the Q-Cup® brand, and continue to develop its patent suite through R&D as well as continuing its path of enforcing its patent rights against infringers and attempting to monetize said patents through licensing deals.

At the time of the Spin-Off, HCMC will distribute all the outstanding shares of Common Stock held by it on a pro rata basis to holders of HCMC’s common stock. Shares of HCMC’s common stock outstanding as of the record date for the Spin-Off (the “Record Date”), will entitle the holder thereof to receive a certain number of shares of Common Stock in NewCo. The distribution will be made in book-entry form by a distribution agent. Fractional shares of Common Stock will not be distributed in the Spin-Off and any fractional amounts will be rounded down. Please see more disclosure in Note 12 Stockholder Equity.

XML

LIQUIDITY

3 Months Ended

Mar. 31, 2023

LIQUIDITY [Abstract]

LIQUIDITY

Note 2. LIQUIDITY

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which contemplate continuation of the Company as a going concern and realization of assets and satisfaction of liabilities in the normal course of business and do not include any adjustments that might result from the outcome of any uncertainties related to our going concern assessment. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values.

The Company currently and historically has reported net losses and cash outflows from operations. As of March 31, 2023, the Company had cash of approximately $19.8 million and working capital of $18.3 million. In the past, the Company financed its operations primarily through issuances of common stock and convertible preferred stock. The Company believes current cash on hand is sufficient to meet its obligations and capital requirements for at least the next twelve months from the date of filing.

XML

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2023

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Note 3. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Regulation S-X and do not include all the information and disclosures required by generally accepted accounting principles in the United States of America (“GAAP”). The Company has made estimates and judgments affecting the amounts reported in the Company’s unaudited condensed consolidated financial statements and the accompanying notes. The actual results experienced by the Company may differ materially from the Company’s estimates. The condensed consolidated financial information is unaudited but reflects all normal adjustments that are, in the opinion of management, necessary to provide a fair statement of results for the interim periods presented. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2023. The condensed consolidated balance sheet as of December 31, 2022 was derived from the Company’s audited 2022 financial statements contained in the above referenced Form 10-K. Results of the three months ended March 31, 2023, are not necessarily indicative of the results to be expected for the full year ending December 31, 2023.

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2022 Annual Report.

Reclassification

Certain amounts in the condensed consolidated financial statements and related notes have been reclassified to conform to the current year presentation. Such reclassifications do not impact the Company's previously reported financial position or net income (loss). $75,000 inventory shrink was originally presented in the statement of cash flow under change in operating assets inventory in cash used in operating activities for three months ended March 31, 2022, it was reclassified to write-down of obsolete and slow-moving inventory under cash used in operating activities in the statement of cash flow.

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CONCENTRATIONS

3 Months Ended

Mar. 31, 2023

CONCENTRATIONS [Abstract]

CONCENTRATIONS

Note 4. CONCENTRATIONS

Cash and Restricted Cash

The Company considers all highly liquid instruments with an original maturity of three months or less, when purchased, to be cash and cash equivalents. The majority of the Company’s cash is concentrated in one large financial institution, which is in excess of Federal Deposit Insurance Corporation (FDIC) coverage. The Company did not have any cash equivalent as of March 31, 2023, and  December 31, 2022.

A summary of the financial institution that had cash in excess of FDIC limits of $250,000 on March 31, 2023 and December 31, 2022 is presented below:

	March 31, 2023			December 31, 2022
Total cash in excess of FDIC limits of $250,000		$	18,646,360		$	21,682,144

The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests, as deposits are held in excess of federally insured limits. The Company has not experienced any losses in such accounts.

The following table provides a reconciliation of cash and restricted cash to amounts shown in unaudited condensed consolidated statements of cash flow: 

	March 31, 2023		March 31, 2022
Cash	$	19,765,487	$	20,587,830
Restricted cash		1,728,232		-
Total cash and restricted cash	$	21,493,719	$	20,587,830

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.

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SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES

3 Months Ended

Mar. 31, 2023

DISAGGREGATION OF REVENUES [Abstract]

SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES

Note 5. SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES

In accordance with FASB ASC 280, "Disclosures about Segment of an enterprise and related information", the Company determined it has two reportable segments: grocery and vapor. There are no inter-segment revenues.

The Company's general and administrative costs are not segment specific. As a result, all operating expenses are not managed on segment basis.

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

	Three Months Ended March 31,
	2023			2022
Vapor	$	38		$	249,563
Grocery		13,559,706			4,798,990
Total revenue	$	13,559,744		$	5,048,553
Retail Vapor	$	38		$	249,563
Retail Grocery		11,613,730			4,283,288
Food service/restaurant		1,943,914			509,810
Online/eCommerce		2,062			5,892
Total revenue	$	13,559,744		$	5,048,553
Loss from operations - Vapor		(6,672	)		(18,967	)
(Loss) income from operations - Grocery		(276,842	)		163,936
Corporate items		(1,699,533	)		(1,499,875	)
Total loss from operations	$	(1,983,047	)	$	(1,354,906	)

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NOTES RECEIVABLE AND OTHER INCOME

3 Months Ended

Mar. 31, 2023

NOTES RECEIVABLE AND OTHER INCOME [Abstract]

NOTES RECEIVABLE AND OTHER INCOME

Note 6. NOTES RECEIVABLE AND OTHER INCOME

On September 6, 2018, the Company entered into a secured, 36-month promissory note (the “Note”) with VPR Brands L.P. for $582,260. The Note bears an interest rate of 7.00%, which payments thereunder are $4,141 weekly. The Company records all proceeds related to the interest of the Note as interest income as proceeds are received.

On August 31, 2022, the Company amended and restated the Note (the "Amended Note") with VPR Brands L.P. to extend the maturity date for one year. The outstanding balance for the Amended Note is $211,355. The Amended Note bears an interest rate of 7.00%, which payments thereunder are $1,500 weekly, with such payments commencing as of September 3, 2022. The Amended Note has a balloon payment of $145,931 for all remaining accrued interest and principal balance due in the final week of the 1-year extension of the Amended Note.

A summary of the Amended Note as of March 31, 2023 and December 31, 2022 is presented below:

Description	March 31, 2023		December 31, 2022
Promissory Note	$	172,905	$	189,225

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ACQUISITION

3 Months Ended

Mar. 31, 2023

ACQUISITIONS [Abstract]

ACQUISITION

Note 7. ACQUISITION

On October 14, 2022, the Company through its wholly owned subsidiary, Healthy Choice Markets IV, LLC, entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Dean’s Natural Food Market of Shrewsbury, Inc., a New Jersey corporation, Green’s Natural Foods, Inc., a Delaware corporation, Dean’s Natural Food Market of Chester, LLC, a New Jersey limited liability company, Dean’s Natural Food Market of Basking Ridge, LLC, a New Jersey limited liability company, and Dean’s Natural Food Market, Inc., a New Jersey corporation (collectively, the “Sellers”), and shareholders of the Sellers. Pursuant to the Purchase Agreement, the Company acquired certain assets and assumed certain liabilities of an organic and natural health food and vitamin chain with eight store locations in New York and northern and central New Jersey (the “Stores”).

The cash purchase price under the Asset Purchase Agreement was $5,142,000, with $3,000,000 seller financing in the form of promissory note. In addition, the seller is entitled to a contingent earn-out based on a certain revenue threshold within the one-year period of the closing.

The Company recorded $1,108,000 of contingent consideration based on the estimated financial performance for the one year following closing.  The contingent consideration was discounted at an interest rate of 3.8%, which represents the Company's weighted average discount rate.  Contingent consideration related to the acquisition is recorded at fair value (level 3) with changes in fair value recorded in other expense (income), net.

The following table summarizes the change in fair value of contingent consideration from acquisition date to March 31, 2023:

	Fair Market Value - Level 3
Balance as of October 14, 2022	$	1,108,000
Remeasurement		(333,100	)
Balance as of December 31, 2022	$	774,900
Remeasurement		22,100
Balance as of March 31, 2023	$	797,000

The following table summarizes the purchase price allocation based on fair values of the net assets acquired at the acquisition date:

	October 14, 2022
Purchase Consideration
Cash consideration paid	$	5,142,000
Promissory note		3,000,000
Contingent consideration issued to Green's Natural seller		1,108,000
Total Purchase Consideration	$	9,250,000
Purchase price allocation
Inventory	$	1,642,000
Property and equipment		1,478,000
Intangible assets		3,251,000
Right of use asset - Operating lease		6,427,000
Other liabilities		(211,000	)
Operating lease liability		(6,427,000	)
Goodwill		3,090,000
Net assets acquired	$	9,250,000
Finite-lived intangible assets
Trade Names (8 years)	$	1,133,000
Customer Relationships (6 years)		1,103,000
Non-Compete Agreement (5 years)		1,015,000
Total intangible assets	$	3,251,000

The acquisition is structured as asset purchase in a business combination, and goodwill is tax-deductible, and amortizable over 15 years for tax purpose.

Revenue and Earnings

The following table represents the combined pro forma revenue and net loss for the three months ended March 31, 2022:

	For Three Months Ended  March 31, 2022
Sales	$	13,156,447
Net loss	$	(1,585,281)

The combined proforma revenue and net loss for the three month period ended March 31, 2022 were prepared as though acquisition occurred as of January 1, 2022.

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PROPERTY, PLANT, AND EQUIPMENT

3 Months Ended

Mar. 31, 2023

PROPERTY, PLANT, AND EQUIPMENT [Abstract]

PROPERTY, PLANT, AND EQUIPMENT

Note 8. PROPERTY, PLANT, AND EQUIPMENT

Property, plant, and equipment consist of the following:

	March 31, 2023		December 31, 2022
Displays	$	312,146	$	312,146
Building		575,000		575,000
Furniture and fixtures		572,224		560,256
Leasehold improvements		1,910,719		1,910,719
Computer hardware & equipment		177,652		160,210
Other		684,443		587,602
		4,232,184		4,105,933
Less: accumulated depreciation and amortization		(1,135,585)		(993,025)
Total property, plant, and equipment	$	3,096,599	$	3,112,908

The Company incurred approximately $142,560 and $49,936 of depreciation expense for the three months ended March 31, 2023 and 2022, respectively.

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INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2023

INTANGIBLE ASSETS [Abstract]

INTANGIBLE ASSETS

Note 9. INTANGIBLE ASSETS

Intangible assets, net are as follows:

March 31, 2023	Useful Lives (Years)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trade names		8-10 years	$	2,569,000	$	(800,880)	$	1,768,120
Customer relationships		4-6 years		2,669,000		(1,107,722)		1,561,278
Patents		10 years		384,665		(169,587)		215,078
Non-compete		4-5 years		1,602,000		(371,867)		1,230,133
Intangible assets, net			$	7,224,665	$	(2,450,056)	$	4,774,609

December 31, 2022	Useful Lives (Years)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trade names		8-10 years	$	2,569,000		(725,723)	$	1,843,277
Customer relationships		4-6 years		2,669,000		(1,033,306)		1,635,694
Patents		10 years		384,665		(159,658)		225,007
Non-compete		4-5 years		1,602,000		(300,467)		1,301,533
Intangible assets, net			$	7,224,665	$	(2,219,154)	$	5,005,511

Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense was approximately  $230,902 and $143,386 for the three months ended March 31, 2023 and 2022, respectively. Future annual estimated amortization expense is as follows:

Years ending December 31,
2023 (remaining nine months)	$	692,706
2024		923,608
2025		918,108
2026		840,127
2027		695,498
Thereafter		704,562
Total	$	4,774,609

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CONTRACT LIABILITIES

3 Months Ended

Mar. 31, 2023

CONTRACT LIABILITIES [Abstract]

CONTRACT LIABILITIES

Note 10. CONTRACT LIABILITIES

A summary of the contract liabilities activity at March 31, 2023 and December 31, 2022 is presented below:

	March 31, 2023			December 31, 2022
Beginning balance as January 1,	$	198,606		$	23,178
Issued		695,438			859,383
Redeemed		(640,160	)		(628,012	)
Breakage recognized		(53,512	)		(55,943	)
Ending balance	$	200,372		$	198,606

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DEBT

3 Months Ended

Mar. 31, 2023

DEBT [Abstract]

DEBT

Note 11. DEBT

The following table provides a breakdown of the Company's debt as of March 31, 2023 and December 31, 2022 is presented below:

_	March 31, 2023			December 31, 2022
Promissory note	$	2,782,847		$	2,913,788
Other debt		142			815
Total debt	$	2,782,989		$	2,914,603
Current portion of long-term debt		(543,945	)		(536,542	)
Long-term debt	$	2,239,044		$	2,378,061

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STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2023

STOCKHOLDERS' EQUITY [Abstract]

STOCKHOLDERS' EQUITY

Note 12. STOCKHOLDERS’ EQUITY

Series E Convertible Preferred Stock

On August 18, 2022, the Company entered into a Securities Purchase Agreement ("Series E Preferred Stock") pursuant to which the Company sold and issued 14,722 shares of its Series E Redeemable Convertible Preferred Stock to institutional investors for $1,000 per share or an aggregate subscription of $13.25 million. The number of shares issued to each participant is based on subscription amount multiplied by conversion rate of 1.1111. The Company also incurred offering costs of approximately $410,000, which covers legal and consulting fee.

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 per share of Series E Preferred Stock.

Unless earlier converted or extended as set forth below, a holder may require the redemption of all or a portion of the stated value of the HCMC Series E Preferred Stock either (1) six months after closing or (2) the time at which the balance is due and payable upon an event of default.

On March 1, 2023, the Company entered into a First Amendment to HCMC Series E Preferred Stock with each purchaser ("Purchaser") identified as those who participated in the HCMC Series E Preferred Stock, dated as of August 18, 2022.  The parties amended the HCMC Preferred Stock related to the conversion payment whereby upon conversion of the Series E Preferred Stock prior to the record date for the Spin-Off, the Company will pay the Purchaser ten percent (10%) of the stated value of the Series E Preferred Stock converted. The record date is May 1, 2023.

As of March 31, 2023, 6,700,000,000 shares of common stock were issued as a result of the Series E preferred stock conversion. 556 shares of Series E preferred stock was redeemed and approximately $556,000 was paid for redemption.

Pursuant to the Securities Purchase Agreement, purchasers of the Series E Convertible Preferred Stock will also be required to purchase Series A Convertible Preferred Stock of 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.

Stock Options

During the three months ended March 31, 2023 and 2022, no stock options of the Company were exercised into common stock.

During the three months ended March 31, 2023 and 2022, the Company recognized stock-based compensation of approximately $50,000 and $0, respectively in connection with amortization of restricted stock and stock options. Stock based compensation is included as part of selling, general and administrative expense in the accompanying unaudited condensed consolidated statements of operations.

Income (Loss) Per Share

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

	As of March 31,
	2023		2022
Preferred stock		136,215,000,000		1,250,000,000
Stock options		67,587,000,000		67,587,000,000
Restricted stock		5,500,000,000		-
Total		209,302,000,000		68,837,000,000

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2023

COMMITMENTS AND CONTINGENCIES [Abstract]

COMMITMENTS AND CONTINGENCIES

Note 13. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Two lawsuits were filed against the Company and its subsidiaries in connection with alleged claimed battery defects for an electronic cigarette device. Plaintiffs claim these batteries were sold by a store of the Company’s subsidiary and have sued for an undetermined amount of damages (other than a total of $0.4 million of medical costs). The initial complaints were filed between January 2019 and April 2019. We responded to the complaints in 2019 and we exchanged additional support information with the plaintiff for one of the lawsuits in 2021. Given the lack of information presented by the plaintiffs to date, the Company is unable to predict the outcome of these matters and, at this time, cannot reasonably estimate the possible loss or range of loss with respect to these legal proceedings.

On November 30, 2020, the Company filed a patent infringement lawsuit against Philip Morris USA, Inc. and Philip Morris Products S.A. in the U.S. District Court for the Northern District of Georgia.  The lawsuit alleges infringement on HCMC-owned patent(s) by the Philip Morris product known and marketed as “IQOS®”.  Philip Morris claims that it is currently approaching 14 million users of its IQOS® product and has reportedly invested over $3 billion in their smokeless tobacco products. On December 3, 2021, the District Court for the Northern District of Georgia effectively dismissed HCMC’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A.  On December 14, 2021, the Company filed a notice of appeal of the District Court for the Northern District of Georgia’s dismissal of the Company’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. The appeal brief was filed on February 28, 2022.

On December 3, 2021, the District Court for the Northern District of Georgia effectively dismissed HCMC’s patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. In connection with such dismissal, the defendants sought to recover attorney’s fees from the Plaintiff. On February 22, 2022, the District Court for the Northern District of Georgia granted the defendant’s an award of approximately $575,000 in attorneys’ fees to be paid by the Company. The Company has fully provisioned this amount as of December 31, 2022. HCMC appealed this ruling on June 22, 2022. Refer to Note 14 Subsequent Event.

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, 2023. With respect to legal costs, we record such costs as incurred.

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SUBSEQUENT EVENTS

3 Months Ended

Mar. 31, 2023

SUBSEQUENT EVENTS [Abstract]

SUBSEQUENT EVENTS

Note 14. SUBSEQUENT EVENTS

On April 12, 2023, the U.S. Court of Appeals for the Federal Circuit ruled in favor of HCMC on two separate appeals it had filed in its patent infringement action against Philip Morris USA, Inc. and Philip Morris Products S.A. pending in the district court for the Northern District of Georgia.

In the first appeal, HCMC appealed the ruling of the District Court dismissing HCMC’s patent infringement action and denying HCMC’s motion to amend its pleading. In the second appeal, HCMC appealed the District Court’s award of attorneys’ fees to Philip Morris. In its decisions, the Federal Circuit ruled for HCMC by reversing both of those decisions and remanded the case back to the District Court for further proceedings.

As of the date of filing, 9,150,000,000 shares of common stock were subsequently issued since March 31, 2023 as a result of HCMC Series E Preferred Stock conversions.

On April 23, 2023, the Board of Directors of HCMC approved the Second Amendment to the 2015 Equity Incentive Plan which increased the number of shares of HCMC common stock authorized for issuance under the Amended Plan to 225,000,000,000 shares. The board of directors also approved the issuance of an additional 107,675,000,000 shares of restricted common stock to the employees and executive officers of HCMC. The grants of restricted common stock will commence vesting at 12.5% of the award on February 1, 2024 and will vest in 2.5% increments on the last day of each calendar quarter thereafter through September 30, 2025.

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ORGANIZATION (Policies)

3 Months Ended

Mar. 31, 2023

ORGANIZATION [Abstract]

Spin-Off

Spin-Off

The Company has commenced steps to spin off ("Spin-Off") its grocery segment and wellness business into a new publicly traded company (hereinafter referred to as “NewCo”). NewCo will continue the path of growth in the wellness verticals started by HCMC and explore other growth opportunities that comport with HCMC’s healthier lifestyle mission. Following the Spin-Off, HCMC will retain its entire patent suite, the Q-Cup® brand, and continue to develop its patent suite through R&D as well as continuing its path of enforcing its patent rights against infringers and attempting to monetize said patents through licensing deals.

At the time of the Spin-Off, HCMC will distribute all the outstanding shares of Common Stock held by it on a pro rata basis to holders of HCMC’s common stock. Shares of HCMC’s common stock outstanding as of the record date for the Spin-Off (the “Record Date”), will entitle the holder thereof to receive a certain number of shares of Common Stock in NewCo. The distribution will be made in book-entry form by a distribution agent. Fractional shares of Common Stock will not be distributed in the Spin-Off and any fractional amounts will be rounded down. Please see more disclosure in Note 12 Stockholder Equity.

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2023

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES [Abstract]

Reclassification

Reclassification

Certain amounts in the condensed consolidated financial statements and related notes have been reclassified to conform to the current year presentation. Such reclassifications do not impact the Company's previously reported financial position or net income (loss). $75,000 inventory shrink was originally presented in the statement of cash flow under change in operating assets inventory in cash used in operating activities for three months ended March 31, 2022, it was reclassified to write-down of obsolete and slow-moving inventory under cash used in operating activities in the statement of cash flow.

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CONCENTRATIONS (Tables)

3 Months Ended

Mar. 31, 2023

CONCENTRATIONS [Abstract]

Cash and Cash Equivalents in Excess of FDIC Limit

A summary of the financial institution that had cash in excess of FDIC limits of $250,000 on March 31, 2023 and December 31, 2022 is presented below:

	March 31, 2023			December 31, 2022
Total cash in excess of FDIC limits of $250,000		$	18,646,360		$	21,682,144

Cash and Restricted Cash

The following table provides a reconciliation of cash and restricted cash to amounts shown in unaudited condensed consolidated statements of cash flow: 

	March 31, 2023		March 31, 2022
Cash	$	19,765,487	$	20,587,830
Restricted cash		1,728,232		-
Total cash and restricted cash	$	21,493,719	$	20,587,830

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SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES (Tables)

3 Months Ended

Mar. 31, 2023

DISAGGREGATION OF REVENUES [Abstract]

Disaggregated Revenue

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

	Three Months Ended March 31,
	2023			2022
Vapor	$	38		$	249,563
Grocery		13,559,706			4,798,990
Total revenue	$	13,559,744		$	5,048,553
Retail Vapor	$	38		$	249,563
Retail Grocery		11,613,730			4,283,288
Food service/restaurant		1,943,914			509,810
Online/eCommerce		2,062			5,892
Total revenue	$	13,559,744		$	5,048,553
Loss from operations - Vapor		(6,672	)		(18,967	)
(Loss) income from operations - Grocery		(276,842	)		163,936
Corporate items		(1,699,533	)		(1,499,875	)
Total loss from operations	$	(1,983,047	)	$	(1,354,906	)

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NOTES RECEIVABLE AND OTHER INCOME (Tables)

3 Months Ended

Mar. 31, 2023

NOTES RECEIVABLE AND OTHER INCOME [Abstract]

Summary of Amended Notes

A summary of the Amended Note as of March 31, 2023 and December 31, 2022 is presented below:

Description	March 31, 2023		December 31, 2022
Promissory Note	$	172,905	$	189,225

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ACQUISITION (Tables)

3 Months Ended

Mar. 31, 2023

ACQUISITIONS [Abstract]

Change in Fair Value of Contingent Consideration

The following table summarizes the change in fair value of contingent consideration from acquisition date to March 31, 2023:

	Fair Market Value - Level 3
Balance as of October 14, 2022	$	1,108,000
Remeasurement		(333,100	)
Balance as of December 31, 2022	$	774,900
Remeasurement		22,100
Balance as of March 31, 2023	$	797,000

Purchase Price Allocation for Mother Earth's Storehouse, Inc.

The following table summarizes the purchase price allocation based on fair values of the net assets acquired at the acquisition date:

	October 14, 2022
Purchase Consideration
Cash consideration paid	$	5,142,000
Promissory note		3,000,000
Contingent consideration issued to Green's Natural seller		1,108,000
Total Purchase Consideration	$	9,250,000
Purchase price allocation
Inventory	$	1,642,000
Property and equipment		1,478,000
Intangible assets		3,251,000
Right of use asset - Operating lease		6,427,000
Other liabilities		(211,000	)
Operating lease liability		(6,427,000	)
Goodwill		3,090,000
Net assets acquired	$	9,250,000
Finite-lived intangible assets
Trade Names (8 years)	$	1,133,000
Customer Relationships (6 years)		1,103,000
Non-Compete Agreement (5 years)		1,015,000
Total intangible assets	$	3,251,000

Supplemental Pro Forma Information

The following table represents the combined pro forma revenue and net loss for the three months ended March 31, 2022:

	For Three Months Ended  March 31, 2022
Sales	$	13,156,447
Net loss	$	(1,585,281)

The combined proforma revenue and net loss for the three month period ended March 31, 2022 were prepared as though acquisition occurred as of January 1, 2022.

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PROPERTY, PLANT, AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2023

PROPERTY, PLANT, AND EQUIPMENT [Abstract]

Property, plant, and equipment

Property, plant, and equipment consist of the following:

	March 31, 2023		December 31, 2022
Displays	$	312,146	$	312,146
Building		575,000		575,000
Furniture and fixtures		572,224		560,256
Leasehold improvements		1,910,719		1,910,719
Computer hardware & equipment		177,652		160,210
Other		684,443		587,602
		4,232,184		4,105,933
Less: accumulated depreciation and amortization		(1,135,585)		(993,025)
Total property, plant, and equipment	$	3,096,599	$	3,112,908

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INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2023

INTANGIBLE ASSETS [Abstract]

Intangible Assets, Net

Intangible assets, net are as follows:

March 31, 2023	Useful Lives (Years)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trade names		8-10 years	$	2,569,000	$	(800,880)	$	1,768,120
Customer relationships		4-6 years		2,669,000		(1,107,722)		1,561,278
Patents		10 years		384,665		(169,587)		215,078
Non-compete		4-5 years		1,602,000		(371,867)		1,230,133
Intangible assets, net			$	7,224,665	$	(2,450,056)	$	4,774,609

December 31, 2022	Useful Lives (Years)		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Trade names		8-10 years	$	2,569,000		(725,723)	$	1,843,277
Customer relationships		4-6 years		2,669,000		(1,033,306)		1,635,694
Patents		10 years		384,665		(159,658)		225,007
Non-compete		4-5 years		1,602,000		(300,467)		1,301,533
Intangible assets, net			$	7,224,665	$	(2,219,154)	$	5,005,511

Future Annual Estimated Amortization Expense

Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense was approximately  $230,902 and $143,386 for the three months ended March 31, 2023 and 2022, respectively. Future annual estimated amortization expense is as follows:

Years ending December 31,
2023 (remaining nine months)	$	692,706
2024		923,608
2025		918,108
2026		840,127
2027		695,498
Thereafter		704,562
Total	$	4,774,609

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CONTRACT LIABILITIES (Tables)

3 Months Ended

Mar. 31, 2023

CONTRACT LIABILITIES [Abstract]

Summary of Net Changes in Contract Liabilities

A summary of the contract liabilities activity at March 31, 2023 and December 31, 2022 is presented below:

	March 31, 2023			December 31, 2022
Beginning balance as January 1,	$	198,606		$	23,178
Issued		695,438			859,383
Redeemed		(640,160	)		(628,012	)
Breakage recognized		(53,512	)		(55,943	)
Ending balance	$	200,372		$	198,606

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DEBT (Tables)

3 Months Ended

Mar. 31, 2023

DEBT [Abstract]

Breakdown of Debt

The following table provides a breakdown of the Company's debt as of March 31, 2023 and December 31, 2022 is presented below:

_	March 31, 2023			December 31, 2022
Promissory note	$	2,782,847		$	2,913,788
Other debt		142			815
Total debt	$	2,782,989		$	2,914,603
Current portion of long-term debt		(543,945	)		(536,542	)
Long-term debt	$	2,239,044		$	2,378,061

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STOCKHOLDERS' EQUITY (Tables)

3 Months Ended

Mar. 31, 2023

STOCKHOLDERS' EQUITY [Abstract]

Common Share Equivalent Excluded from Calculation of Dilutive Loss Per Share

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

	As of March 31,
	2023		2022
Preferred stock		136,215,000,000		1,250,000,000
Stock options		67,587,000,000		67,587,000,000
Restricted stock		5,500,000,000		-
Total		209,302,000,000		68,837,000,000

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ORGANIZATION (Details)	3 Months Ended
	Mar. 31, 2023 Store
Mother Earth's Storehouse [Member]
Company Organization [Abstract]
Number of stores	2
Number of years the company has been operating	40 years
Paradise Health & Nutrition's [Member]
Company Organization [Abstract]
Number of stores	3
Greens Natural Foods' [Member]
Company Organization [Abstract]
Number of stores	8

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LIQUIDITY (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022	Mar. 31, 2022
LIQUIDITY [Abstract]
Cash and cash equivalents	$ 19,765,487	$ 22,911,892	$ 20,587,830
Working capital	$ 18,300,000

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Reclassification [Abstract]
Write-down of obsolete and slow-moving inventory	$ 523,087	$ 115,842
Changes in operating assets, inventories	$ 673,392	160,312
Reclassification, Adjustment [Member]
Reclassification [Abstract]
Write-down of obsolete and slow-moving inventory		75,000
Changes in operating assets, inventories		$ (75,000)

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CONCENTRATIONS (Details)	3 Months Ended
	Mar. 31, 2023 USD ($) FinancialInstitution	Dec. 31, 2022 USD ($)	Mar. 31, 2022 USD ($)	Dec. 31, 2021 USD ($)
Cash and Cash Equivalents in Excess of FDIC Limits [Abstract]
Number of financial institution | FinancialInstitution	1
FDIC insured amount	$ 250,000
Total Cash in excess of FDIC limits of $250,000	18,646,360	$ 21,682,144
Cash and Restricted Cash [Abstract]
Cash	19,765,487	22,911,892	$ 20,587,830
Restricted cash	1,728,232	1,778,232	0
Total cash and restricted cash	$ 21,493,719	$ 24,690,124	$ 20,587,830	$ 26,496,404

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SEGMENT INFORMATION AND DISAGGREGATION OF REVENUES (Details)	3 Months Ended
	Mar. 31, 2023 USD ($) Segment	Mar. 31, 2022 USD ($)
DISAGGREGATION OF REVENUES [Abstract]
Number of operating segments | Segment	2
Segment Information [Abstract]
Revenue	$ 13,559,744	$ 5,048,553
Total loss	(1,983,047)	(1,354,906)
Retail Vapor [Member]
Segment Information [Abstract]
Revenue	38	249,563
Retail Grocery [Member]
Segment Information [Abstract]
Revenue	11,613,730	4,283,288
Food Service/Restaurant [Member]
Segment Information [Abstract]
Revenue	1,943,914	509,810
Online/e-Commerce [Member]
Segment Information [Abstract]
Revenue	2,062	5,892
Operating Segments [Member] | Vapor [Member]
Segment Information [Abstract]
Revenue	38	249,563
Total loss	(6,672)	(18,967)
Operating Segments [Member] | Grocery [Member]
Segment Information [Abstract]
Revenue	13,559,706	4,798,990
Total loss	(276,842)	163,936
Corporate [Member]
Segment Information [Abstract]
Total loss	$ (1,699,533)	$ (1,499,875)

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NOTES RECEIVABLE AND OTHER INCOME (Details) - USD ($)			3 Months Ended
	Aug. 31, 2021	Sep. 06, 2018	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Receivables with Imputed Interest [Abstract]
Proceeds			$ 16,320	$ 13,772
Promissory Note [Member]
Receivables with Imputed Interest [Abstract]
Payment term			36 months
Loan amount	$ 211,355	$ 582,260
Interest rate	7.00%	7.00%
Proceeds	$ 1,500	$ 4,141
Balloon payment	$ 145,931
Extension term			1 year
Remaining balance			$ 172,905		$ 189,225

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ACQUISITION (Details)		3 Months Ended
	Oct. 14, 2022 USD ($)	Mar. 31, 2023 USD ($) Store	Dec. 31, 2022 USD ($)	Mar. 31, 2022 USD ($)
Acquisitions [Abstract]
Cash purchase price		$ 0		$ 5,150,000
Change in Fair Value of Contingent Consideration [Abstract]
Beginning balance		774,900
Remeasurement		22,100		0
Ending balance		797,000	$ 774,900
Purchase Price Allocation [Abstract]
Goodwill		$ 5,747,000	5,747,000
Mother Earth's Storehouse [Member]
Acquisitions [Abstract]
Number of stores | Store		2
Green's Natural Foods [Member]
Acquisitions [Abstract]
Cash purchase price	$ 5,142,000
Promissory note	$ 3,000,000
Number of stores | Store		8
Interest rate	3.80%
Cash Consideration paid	$ 9,250,000
Purchase Price Allocation [Abstract]
Inventory	1,642,000
Property and equipment	1,478,000
Right of use asset - operating lease	6,427,000
Other liabilities	(211,000)
Operating lease liability	(6,427,000)
Goodwill	3,090,000
Net assets acquired	9,250,000
Finite-Lived Intangible Assets [Abstract]
Intangible assets	3,251,000
Amortization period for goodwill for tax purposes		15 years
Pro Forma Information [Abstract]
Sales				13,156,447
Net loss				$ (1,585,281)
Green's Natural Foods [Member] | Fair Market Value - Level 3 [Member]
Change in Fair Value of Contingent Consideration [Abstract]
Beginning balance		$ 774,900	1,108,000
Remeasurement		22,100	(333,100)
Ending balance	1,108,000	$ 797,000	$ 774,900
Green's Natural Foods [Member] | Trademarks [Member]
Finite-Lived Intangible Assets [Abstract]
Intangible assets	1,133,000
Amortization period		8 years
Green's Natural Foods [Member] | Customer Relationships [Member]
Finite-Lived Intangible Assets [Abstract]
Intangible assets	1,103,000
Amortization period		6 years
Green's Natural Foods [Member] | Non-Compete Agreement [Member]
Finite-Lived Intangible Assets [Abstract]
Intangible assets	1,015,000
Amortization period		5 years
Sellers [Member]
Acquisitions [Abstract]
Cash Consideration paid	$ 1,108,000

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PROPERTY, PLANT, AND EQUIPMENT (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Property and Equipment [Abstract]
Property and equipment, gross	$ 4,232,184		$ 4,105,933
Less: accumulated depreciation and amortization	(1,135,585)		(993,025)
Total property, plant, and equipment	3,096,599		3,112,908
Depreciation expense	142,560	$ 49,936
Displays [Member]
Property and Equipment [Abstract]
Property and equipment, gross	312,146		312,146
Building [Member]
Property and Equipment [Abstract]
Property and equipment, gross	575,000		575,000
Furniture and Fixtures [Member]
Property and Equipment [Abstract]
Property and equipment, gross	572,224		560,256
Leasehold Improvements [Member]
Property and Equipment [Abstract]
Property and equipment, gross	1,910,719		1,910,719
Computer Hardware & Equipment [Member]
Property and Equipment [Abstract]
Property and equipment, gross	177,652		160,210
Other [Member]
Property and Equipment [Abstract]
Property and equipment, gross	$ 684,443		$ 587,602

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INTANGIBLE ASSETS, Intangible Assets, Net (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Intangible Assets, Net [Abstract]
Gross carrying amount	$ 7,224,665	$ 7,224,665
Accumulated amortization	(2,450,056)	(2,219,154)
Net carrying amount	4,774,609	5,005,511
Trademarks [Member]
Intangible Assets, Net [Abstract]
Gross carrying amount	2,569,000	2,569,000
Accumulated amortization	(800,880)	(725,723)
Net carrying amount	$ 1,768,120	$ 1,843,277
Trademarks [Member] | Minimum [Member]
Intangible Assets, Net [Abstract]
Useful lives	8 years	8 years
Trademarks [Member] | Maximum [Member]
Intangible Assets, Net [Abstract]
Useful lives	10 years	10 years
Customer Relationships [Member]
Intangible Assets, Net [Abstract]
Gross carrying amount	$ 2,669,000	$ 2,669,000
Accumulated amortization	(1,107,722)	(1,033,306)
Net carrying amount	$ 1,561,278	$ 1,635,694
Customer Relationships [Member] | Minimum [Member]
Intangible Assets, Net [Abstract]
Useful lives	4 years	4 years
Customer Relationships [Member] | Maximum [Member]
Intangible Assets, Net [Abstract]
Useful lives	6 years	6 years
Patents [Member]
Intangible Assets, Net [Abstract]
Useful lives	10 years	10 years
Gross carrying amount	$ 384,665	$ 384,665
Accumulated amortization	(169,587)	(159,658)
Net carrying amount	215,078	225,007
Non-Compete [Member]
Intangible Assets, Net [Abstract]
Gross carrying amount	1,602,000	1,602,000
Accumulated amortization	(371,867)	(300,467)
Net carrying amount	$ 1,230,133	$ 1,301,533
Non-Compete [Member] | Minimum [Member]
Intangible Assets, Net [Abstract]
Useful lives	4 years	4 years
Non-Compete [Member] | Maximum [Member]
Intangible Assets, Net [Abstract]
Useful lives	5 years	5 years

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INTANGIBLE ASSETS, Future Annual Estimated Amortization Expense (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
INTANGIBLE ASSETS [Abstract]
Amortization expense	$ 230,902	$ 143,386
Future Annual Estimated Amortization Expense [Abstract]
2023 (remaining nine months)	692,706
2024	923,608
2025	918,108
2026	840,127
2027	695,498
Thereafter	704,562
Net carrying amount	$ 4,774,609		$ 5,005,511

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CONTRACT LIABILITIES (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Changes in Contract Liabilities Activity [Roll Forward]
Beginning balance	$ 198,606	$ 23,178
Issued	695,438	859,383
Redeemed	(640,160)	(628,012)
Breakage recognized	(53,512)	(55,943)
Ending balance as of March 31,	$ 200,372	$ 198,606

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DEBT (Details) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
Debt [Abstract]
Debt	$ 2,782,989	$ 2,914,603
Current portion of long-term debt	(543,945)	(536,542)
Long-term debt	2,239,044	2,378,061
Promissory Note [Member]
Debt [Abstract]
Debt	2,782,847	2,913,788
Other Debt [Member]
Debt [Abstract]
Debt	$ 142	$ 815

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STOCKHOLDERS' EQUITY, Series E Convertible Preferred Stock (Details)		3 Months Ended
	Aug. 18, 2022 USD ($) $ / shares shares	Mar. 31, 2023 USD ($) $ / shares shares	Mar. 21, 2023	Dec. 31, 2022 $ / shares shares
Series E Convertible Preferred Stock [Abstract]
Number of preferred shares sold and issued (in shares) | shares		800		800
Preferred stock, stated value (in dollars per share) | $ / shares		$ 1,000		$ 1,000
Percentage of stated value of preferred stock will be paid to purchaser upon conversion			10.00%
Series E Convertible Preferred Stock [Member]
Series E Convertible Preferred Stock [Abstract]
Number of preferred shares sold and issued (in shares) | shares	14,722
Preferred stock, stated value (in dollars per share) | $ / shares	$ 1,000
Aggregate subscription price | $	$ 13,250,000
Conversion rate	1.1111
Offering costs | $	$ 410,000
Conversion price (in dollars per share) | $ / shares	$ 0.0001
Liquidation preference (in dollars per share) | $ / shares	$ 1,000
Redemption period		6 months
Issuance of common stock (in shares) | shares		6,700,000,000
Stock redeemed (in shares) | shares		556,000
Stock redeemed | $		$ 556,000

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STOCKHOLDERS' EQUITY, Stock Options (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Compensation Expense Recognized [Abstract]
Stock options exercised (in shares)	0	0
Stock-based compensation	$ 50,000	$ 0

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STOCKHOLDERS' EQUITY, Income (Loss) Per Share (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Common Share Equivalents Excluded from Calculation of Dilutive Loss Per Share [Abstract]
Antidilutive securities excluded from computation of diluted loss per share (in shares)	209,302,000,000	68,837,000,000
Preferred Stock [Member]
Common Share Equivalents Excluded from Calculation of Dilutive Loss Per Share [Abstract]
Antidilutive securities excluded from computation of diluted loss per share (in shares)	136,215,000,000	1,250,000,000
Stock Options [Member]
Common Share Equivalents Excluded from Calculation of Dilutive Loss Per Share [Abstract]
Antidilutive securities excluded from computation of diluted loss per share (in shares)	67,587,000,000	67,587,000,000
Restricted Stock [Member]
Common Share Equivalents Excluded from Calculation of Dilutive Loss Per Share [Abstract]
Antidilutive securities excluded from computation of diluted loss per share (in shares)	5,500,000,000	0

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COMMITMENTS AND CONTINGENCIES (Details) User in Millions		3 Months Ended
	Feb. 22, 2022 USD ($)	Mar. 31, 2023 USD ($) Lawsuit	Nov. 30, 2020 USD ($) User
Alleged Claimed Battery Defects For Electronic Cigarette Device [Member]
Legal Proceedings [Abstract]
Number of lawsuits | Lawsuit		2
Philip Morris [Member]
Legal Proceedings [Abstract]
Number of users approached | User			14
Invested amount			$ 3,000,000,000
Philip Morris [Member] | Patent Infringement Litigation [Member]
Legal Proceedings [Abstract]
Attorney fees paid	$ 575,000
Medical Costs [Member] | Alleged Claimed Battery Defects For Electronic Cigarette Device [Member]
Legal Proceedings [Abstract]
Damages sought		$ 400,000

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SUBSEQUENT EVENTS (Details)					3 Months Ended
	May 05, 2023 shares	Apr. 23, 2023 shares	Apr. 12, 2023 Appeal	Oct. 14, 2022 USD ($)	Mar. 31, 2023 shares
Sellers [Member]
Subsequent Event [Abstract]
Purchase price | $				$ 1,108,000
Series E Convertible Preferred Stock [Member]
Subsequent Event [Abstract]
Issuance of common stock (in shares)					6,700,000,000
Subsequent Event [Member]
Subsequent Event [Abstract]
Number of appeals filed in patent infringement | Appeal			2
Subsequent Event [Member] | Series E Convertible Preferred Stock [Member]
Subsequent Event [Abstract]
Issuance of common stock (in shares)	9,150,000,000
Subsequent Event [Member] | 2015 Equity Incentive Plan [Member]
Subsequent Event [Abstract]
Common stock available for grant (in shares)		225,000,000,000
Subsequent Event [Member] | 2015 Equity Incentive Plan [Member] | Vesting on February 1, 2024 [Member]
Subsequent Event [Abstract]
Stock vesting percentage		12.50%
Subsequent Event [Member] | 2015 Equity Incentive Plan [Member] | Last Day of Each Calendar Quarter Thereafter Through September 30, 2025 [Member]
Subsequent Event [Abstract]
Stock vesting percentage		2.50%
Subsequent Event [Member] | 2015 Equity Incentive Plan [Member] | Restricted Stock [Member] | Employees and Executive Officers [Member]
Subsequent Event [Abstract]
Granted (in shares)		107,675,000,000