Press release·10/20/2025 12:40:37

Company Overview

Healthy Choice Wellness Corp. is a holding company focused on providing consumers with healthier daily choices in nutrition and lifestyle alternatives. Through its wholly owned subsidiaries, the company operates several natural and organic grocery stores, including Ada’s Natural Market, Paradise Health & Nutrition, Mother Earth’s Storehouse, Greens Natural Foods, Ellwood Thompson’s, and GreenAcres Market. The company also operates a Healthy Choice Wellness Center and sells vitamins, supplements, and health/beauty products through its online platform, The Vitamin Store.

Liquidity

The company’s unaudited condensed consolidated financial statements have been prepared under the assumption that it will continue as a going concern. As of September 30, 2025, the company had $3.0 million in cash and cash equivalents, but a negative working capital of $0.3 million. The company has historically reported net losses and has reported cash inflows from operations this year.

Factors Affecting Performance

The key factors affecting the company’s performance include:

1. Retail Operations: The operating performance of the company’s retail stores, which include natural and organic grocery stores and dietary supplement stores across several states.

2. Increased Competition: The company faces competition from national, regional, and local supermarkets, superstores, alternative food retailers, and other dining options, which can impact sales and pricing.

3. Changing Consumer Preferences: Shifts in consumer preferences regarding food choices and dining habits can affect the company’s results.

Results of Operations

For the three months ended September 30, 2025:

• Net sales increased by $0.8 million to $19.0 million, primarily due to the acquisition of GreenAcres Market and an increase in same-store sales.
• Gross profit increased by $0.4 million to $7.4 million, with gross margin improving by 0.4%.
• Total operating expenses increased by $0.6 million to $8.0 million, mainly due to the GreenAcres Market acquisition and higher insurance, professional fees, and taxes/licenses/permits.
• Total other expenses, net, decreased by $1.7 million to $0.6 million, primarily due to a lower loss on debt extinguishment.

For the nine months ended September 30, 2025:

• Net sales increased by $9.8 million to $59.5 million, driven by the GreenAcres Market acquisition and a $2.0 million increase in same-store sales.
• Gross profit increased by $4.4 million to $23.3 million, with gross margin improving by 1.1%.
• Total operating expenses increased by $4.0 million to $24.4 million, with $3.0 million from the GreenAcres Market acquisition and $1.0 million in higher professional fees, insurance, and taxes/licenses/permits.
• Total other expenses, net, decreased by $1.3 million to $1.2 million, primarily due to a lower loss on debt extinguishment.

Lease Commitments, Known Trends and Uncertainties

As of September 30, 2025, the company has $11.5 million in operating lease obligations, with a weighted-average remaining lease term of 4 years and a weighted-average discount rate of 5.27%. The company expects rent expense to be influenced by lease expirations, new commitments at market rates, and fluctuations in variable costs like property taxes. Rising interest rates and inflation could increase the cost of future lease obligations.

Liquidity and Capital Resources

For the nine months ended September 30, 2025:

• Net cash provided by operating activities was $1.9 million, compared to $4.0 million used in the prior-year period.
• Net cash used in investing activities was $0.2 million, compared to $4.9 million in the prior-year period.
• Net cash used in financing activities was $0.7 million, compared to $9.2 million provided in the prior-year period.

As of September 30, 2025, the company had $3.0 million in cash and cash equivalents, representing 8.89% of total assets. The company expects to continue incurring losses for the foreseeable future.

Non-GAAP Financial Measures

The company uses Adjusted EBITDA, a non-GAAP financial measure, to evaluate its financial and operational performance. Adjusted EBITDA is defined as net loss adjusted for non-cash charges, non-recurring expenses, and interest income/expense.

Seasonality and Cybersecurity

The company does not consider its business to be seasonal. Regarding cybersecurity, the company recognizes its importance and is committed to maintaining robust cybersecurity and data protection measures, with oversight from the board of directors.

Cautionary Note Regarding Forward-Looking Statements

This report includes forward-looking statements related to the company’s retail expansion, product demand, competition, cash resources, and ability to raise capital. These statements are subject to risks and uncertainties, including future common stock price, customer acceptance, and regulatory changes.