Financial Performance - Net sales increased by $5.5 million to $18.2 million for the three months ended September 30, 2024, compared to $12.7 million for the same period in 2023, primarily due to acquisitions [152]. - For the nine months ended September 30, 2024, net sales increased by $9.9 million to $49.7 million compared to $39.8 million in 2023, with grocery sales increasing by $11.7 million due to acquisitions [156]. - Gross profit for the three months ended September 30, 2024, was $7.0 million, with a gross margin increase of approximately 1.9% compared to the same period in the prior year [153]. - Gross profit for the nine months ended September 30, 2024, was $19.0 million, with a gross margin increase of approximately 1.4% compared to the same period in the prior year [158]. Costs and Expenses - Cost of goods sold for the three months ended September 30, 2024, was $11.2 million, an increase of $3.5 million from $8.1 million in 2023, mainly due to acquisitions [153]. - Cost of goods sold for the nine months ended September 30, 2024, was $30.8 million, an increase of $7.2 million from $25.2 million in 2023 [158]. - Total operating expenses for the three months ended September 30, 2024, were $7.4 million, an increase of $1.9 million from $5.9 million in 2023, driven by acquisitions [154]. - Total operating expenses for the nine months ended September 30, 2024, were $20.4 million, an increase of $2.7 million from $17.7 million in 2023, primarily due to acquisitions [159]. Net Loss - Net loss for the three months ended September 30, 2024, was $2.7 million, compared to a net loss of $919,673 in 2023, reflecting a deterioration of $1.7 million [151]. - Net loss for the nine months ended September 30, 2024, was $3.96 million, compared to a net loss of $2.44 million in 2023, reflecting an increase in losses of $1.5 million [156]. - The company reported a net loss of approximately $4.0 million for the nine months ended September 30, 2024, compared to a net loss of $2.4 million for the same period in 2023 [166]. Cash Flow and Financing - Net cash used in operating activities was approximately $4.0 million for the nine months ended September 30, 2024, compared to $2.6 million for the same period in 2023 [161]. - The net cash used in investing activities was $4.9 million for the nine months ended September 30, 2024, primarily due to a $5.5 million payment for the GreenAcres Market acquisition [162]. - The net cash provided by financing activities was $9.2 million for the nine months ended September 30, 2024, which included $7.5 million from a Loan and Security Agreement [163]. - Cash balances increased to $1,786,707 as of September 30, 2024, from $1,422,580 as of December 31, 2023, representing 5.4% of total assets [166]. Future Outlook - The company expects to continue incurring losses for the foreseeable future [166]. - The company has not experienced any losses on its cash, which is kept liquid to support acquisition and infrastructure needs [165]. Accounting Policies - There have been no material changes to the company's critical accounting policies and estimates compared to the previous year [177]. Working Capital - The company had negative working capital of $1.3 million as of September 30, 2024 [166]. - Adjusted EBITDA for the nine months ended September 30, 2024, was $(512,716), an improvement from $(2,033,754) in the same period of 2023 [175].
Healthy Choice Wellness Corp.(HCWC) - 2024 Q3 - Quarterly Report