Healthier Choices Management Corp. Reports $8.1 Million Net Loss for Fiscal Year 2024

Healthier Choices Management Corp. (HCMC) reported a net loss of $8.1 million for the fiscal year ending December 31, 2024, a slight improvement from the $8.6 million loss recorded in the previous year. The company's revenue for the year was $501,000, down from $617,000 in 2023, reflecting a significant decline in sales as HCMC closed all its brick-and-mortar retail vape stores to focus on wholesale and online channels. The cost of sales also decreased to $66,806 from $787,000, resulting in a gross profit loss of $66.3 million, compared to a loss of $170,000 in the prior year. The increase in operating expenses to $8.4 million from $7.5 million was primarily attributed to higher stock compensation costs.

In a strategic move, HCMC completed the spin-off of its grocery business, Healthy Choice Wellness Corp. (HCWC), on September 13, 2024. This separation allowed HCMC to concentrate on its core vaporizer business and intellectual property management through its subsidiary, HCMC Intellectual Property Holdings, LLC. The spin-off has been reported as discontinued operations in the financial statements, with the operating results of HCWC included up to the date of separation. The company aims to enhance its intellectual property portfolio, which includes patents for its Q-Cup and Imitine products, and is actively pursuing licensing agreements to monetize these assets.

Operationally, HCMC has shifted its focus to online sales and wholesale distribution, which has resulted in a significant write-off of approximately $66,600 in obsolete inventory due to the closure of retail locations. The company has also reported a decrease in cash reserves, with $1.2 million available as of December 31, 2024, down from $3.7 million the previous year. HCMC's negative working capital of $0.7 million indicates ongoing liquidity challenges, although the company has secured a revolving credit facility of up to $5 million to support its working capital needs through August 2025.

Looking ahead, HCMC anticipates continued losses as it navigates the transition following the spin-off and focuses on expanding its market presence through innovative product development and strategic partnerships. The company is committed to enhancing its patent portfolio and exploring international markets to broaden its monetization opportunities. However, the competitive landscape remains challenging, particularly against larger tobacco companies with more resources and established distribution channels. HCMC's management has outlined plans to reduce costs and improve operational efficiency, but the success of these initiatives remains uncertain.