Financial Performance - Sales increased by $13.7 million to $69.4 million for the year ended December 31, 2024, compared to $55.7 million in 2023, primarily due to acquisitions[87] - The net loss for the year ended December 31, 2024, was $4.5 million, an improvement of $5.4 million compared to a net loss of $9.9 million in 2023[86] - The company reported a net loss of $4,506,466 for 2024, compared to a net loss of $9,932,620 in 2023, indicating an improvement in financial performance[114] - Adjusted EBITDA for 2024 was $(201,021), a significant improvement from $(2,988,254) in 2023, reflecting enhanced operational efficiency[114] Operating Expenses - Cost of goods sold rose by $5.4 million to $42.3 million in 2024, driven by full-year operations of acquired entities[88] - Total operating expenses decreased by $2.0 million from $30.9 million in 2023 to $28.8 million in 2024, with a significant reduction in goodwill impairment charges[89] - The company did not record any impairment of goodwill in 2024, compared to an impairment of $6,104,000 in 2023, suggesting improved asset valuation[114] - Depreciation and amortization expenses increased to $1,576,457 in 2024 from $1,431,815 in 2023, reflecting higher asset utilization[114] - The company recognized interest expense of $848,651 in 2024, up from $199,681 in 2023, indicating increased borrowing costs[114] - Other net expenses decreased slightly to $(8,552) in 2024 from $(16,230) in 2023, showing a reduction in miscellaneous costs[114] Cash Flow and Liquidity - Net cash used in operating activities was $3.1 million for 2024, compared to $2.5 million in 2023, reflecting ongoing operational challenges[93] - The company had cash of $2.1 million and negative working capital of $2.2 million as of December 31, 2024, indicating liquidity challenges[98] - The net cash used in investing activities was $5.0 million in 2024, primarily for the acquisition of GreenAcres Market[94] - Financing activities provided $8.7 million in cash for 2024, including proceeds from a loan agreement and an initial public offering[95] - The company plans to raise capital from outside investors to fund operating losses and further acquisitions[98] Business Operations - The company does not consider its business to be seasonal, indicating stable revenue expectations throughout the year[100] - The company applies ASC Topic 805 for business combinations, recognizing identifiable assets and liabilities at fair value on acquisition date[108] - Goodwill impairment reviews are conducted annually on September 30, or more frequently if necessary, to assess asset value[107] - Non-GAAP financial measures, such as Adjusted EBITDA, are used by management for planning and evaluating financial performance, but should not be viewed as substitutes for GAAP measures[110] Strategic Financial Maneuvers - The loss on debt extinguishment was $1,888,889 in 2024, with no such loss recorded in 2023, indicating a strategic financial maneuver[114]
Healthy Choice Wellness Corp.(HCWC) - 2024 Q4 - Annual Report