Financial Performance - Sales increased by $8.8 million to $78.2 million for the year ended December 31, 2025, compared to $69.4 million in 2024, primarily due to the GreenAcres Market acquisition contributing approximately $7.8 million [91]. - The net loss improved to $3.9 million in 2025 from $4.5 million in 2024, reflecting a year-over-year improvement [90]. - The company reported a net loss of $3,935,802 for 2025, compared to a net loss of $4,506,466 in 2024 [130]. - Adjusted EBITDA for 2025 was $(669,155), an improvement from $(201,021) in 2024 [130]. Expenses and Costs - Cost of goods sold rose to $47.5 million in 2025 from $42.3 million in 2024, an increase of $4.8 million attributed to the full year of operations from the GreenAcres Market acquisition [92]. - Total operating expenses increased by $4.3 million from $28.8 million in 2024 to $33.1 million in 2025, driven by the GreenAcres Market acquisition and increased professional fees [93]. Cash Flow and Capital - Net cash provided by operating activities was $1.0 million for the year ended December 31, 2025, compared to a net cash usage of $3.1 million in 2024 [97]. - Cash and cash equivalents increased to $3.0 million as of December 31, 2025, from $2.1 million in 2024, representing 9.0% of total assets [103]. - The company incurred a net cash used in investing activities of $4.1 million in 2025, primarily due to payments to related parties and property purchases [98]. - Financing activities provided $4.1 million in net cash for 2025, including proceeds from a preferred stock offering [99]. - The company has negative working capital of $2.7 million as of December 31, 2025, but plans to raise capital to fund operating losses and future acquisitions [103]. Accounting and Financial Reporting - The company recognized revenue based on the transfer of goods or services to customers, with revenue recorded when products are delivered and title passes [110]. - The company applies the expected value method for estimating variable considerations related to trade incentives and promotions [111]. - Goodwill is evaluated for impairment annually, with the last review conducted on September 30 [116]. - The company uses the acquisition method of accounting for business combinations, recognizing identifiable assets and liabilities at their fair values [117]. - Deferred tax assets are reduced by a valuation allowance if it is more likely than not that they will not be realized [118]. - The company’s financial instruments include cash and cash equivalents, accounts receivable, and borrowings, with carrying values believed to represent fair values [120]. - The company evaluates equity method investments for impairment whenever events indicate a decline in value may have occurred [124]. - Adjusted EBITDA is defined as net loss adjusted for non-cash charges and non-recurring expenses, providing insight into core operating performance [128]. Internal Controls - The company is addressing material weaknesses in internal controls identified during the year [89].
Healthy Choice Wellness Corp.(HCWC) - 2025 Q4 - Annual Report