Healthier Choices Management Corp. Reports Q1 2025 Financial Results with Increased Net Loss

Healthier Choices Management Corp. (HCMC) reported its financial results for the first quarter of 2025, revealing a net loss of $2.18 million, a slight increase from a net loss of $2.16 million in the same period last year. The company generated minimal revenue of $1,780, compared to $119 in the prior year, while the cost of sales was $1,478, leading to a gross profit of $302. Operating expenses decreased marginally to $2.17 million from $2.20 million year-over-year. The company continues to face challenges in generating significant sales, primarily due to the closure of its brick-and-mortar retail vape stores and a shift in focus towards wholesale and online channels.

The financial position of HCMC has seen notable changes since the end of 2024. Total assets decreased to approximately $1.67 million from $2.22 million, largely due to a reduction in cash and cash equivalents, which fell to $1.18 million from $1.19 million. Current liabilities increased significantly to $3.18 million from $2.67 million, driven by a rise in amounts due to related parties. The company reported a negative working capital of $1.8 million as of March 31, 2025, indicating ongoing liquidity challenges.

Strategically, HCMC completed the spin-off of its grocery business, Healthy Choice Wellness Corp. (HCWC), on September 13, 2024. This separation has allowed HCMC to focus on its core operations related to intellectual property and the marketing of its patented Q-Cup technology. The company is actively engaged in litigation against major tobacco companies for patent infringement, which it hopes will enhance its market position and revenue potential in the future. The spin-off has also resulted in the classification of HCWC's financial results as discontinued operations in HCMC's financial statements.

Operationally, HCMC's customer engagement metrics remain low, with the company reporting a significant decline in user statistics following the closure of its retail locations. The company has not disclosed specific customer counts or product adoption rates for the Q-Cup technology, which it continues to market. HCMC's employee headcount remains unchanged, with no new hires reported in the latest quarter. The company is currently focused on reducing costs and raising capital to support its operations, although it acknowledges the uncertainty surrounding these efforts.

Looking ahead, HCMC anticipates continued losses as it navigates its transition post-spin-off and seeks to stabilize its financial position. The company believes that its current cash reserves, along with access to a $5 million line of credit, will be sufficient to meet its obligations for at least the next twelve months. However, management has indicated that the success of its plans to reduce costs and secure additional capital is uncertain, and the company will need to address its operational challenges to improve its financial performance moving forward.