NYSE: HCWC

●
Healthy
Choice Markets V, LLC (DBA Ellwood Thompson’s), an organic and natural health food and vitamin store located in Richmond, Virginia.

●
Healthy
Choice Markets VI, LLC (DBA GreenAcres Market), an organic and natural health food and vitamin chain with five store locations in
Kansas and Oklahoma. GreenAcres Market offers organic and all natural products and vitamins from both top national brands as well
as locally sourced specialty brands.

Through
its wholly owned subsidiary, Healthy U Wholesale, the Company sells vitamins and supplements, as well as health, beauty, and personal
care products on its website www.TheVitaminStore.com.

SPIN-OFF

Healthier
Choices Management Corp. (“HCMC” or the “Parent”) announced on August 22, 2022 that its Board of Directors approved
the separation of the grocery business, including wellness business, into an independent, publicly traded company (the “Spin-Off”
or “Separation”). Prior to the Spin-Off, HCWC was a subsidiary under HCMC.

On
September 13, 2024 (the “Spin-Off Date”), after the NYSE American (“NYSEAM”) market closing, the Spin-Off of
the HCWC business was completed. On September 14, 2024, HCWC became an independent, publicly traded company, and on September 16, 2024,
the stock commenced trading on the NYSEAM under the stock ticker “HCWC.”

HCMC
distributed all the outstanding shares of HCMC common stock held by it on a pro rata basis to holders of HCMC’s common stock. For
each 208,632 shares of HCMC common stock held as of 5:00 p.m., New York City time, on September 9, 2024, the record date for the Spin-Off
(the “Record Date”), a HCMC stockholder was entitled to receive one (1) share of Class A common stock and three (3) shares
of Class B common stock. The Distribution was made in book-entry form by a distribution agent as soon as practicable after the date of
the Distribution.

Prior
to the Spin-Off, HCMC secured binding commitments of $13.25 million in equity financing for HCWC from the same group of investors
that invested $13.25 million in HCMC Series E Preferred Stock. Pursuant to the Securities Purchase Agreement for the HCMC Series E
Stock (“HCMC Series E SPA”), the purchasers of HCMC Series E Stock will also be required to purchase Series A
Convertible Preferred Stock of HCWC in the same subscription amounts that the Purchasers paid for the HCMC Series E Stock
(regardless of whether or not such HCMC Series E Stock has been converted into HCMC common stock). On October 30, 2025, the parties
to the HCMC Series E SPA entered into a Ninth Amendment to HCMC Series E SPA, pursuant to which HCMC and such parties agreed to
amend the Completion Date to April 1, 2027. As of December 31, 2025, HCWC has received $5.25 million of the committed $13.25
million, leaving the contractually obligated $8.0 million binding commitments to be fulfilled. The parties, which comprise of the
institutional investors that participated in the Spin-off as described above, have communicated their intent to further extend the
Completion Date. For further details regarding the remaining $8.0 million commitment and its significance to the Company’s
liquidity, see Note 2 - Going Concern.

NATURAL
AND ORGANIC GROCERIES AND DIETARY SUPPLEMENTS BUSINESS

Local.
Organic. Fresh. Three words that define Healthy Choice Markets! With Ada’s Natural Market, a full-service grocery store and Greenleaf
Grill, Ada’s flagship fast casual in-store restaurant, serving Fort Myers, FL, along with the eight Green’s Natural Foods Stores
in New Jersey and New York, three Paradise Health & Nutrition locations in the greater Melbourne, FL area, one Mother Earth’s
Storehouse location in Hudson Valley, NY, one Ellwood Thompson store located in Richmond Virginia, five GreenAcres Market stores located
in Oklahoma and Kansas, all serving their respective local communities, our stores provide all-natural and organic products in a friendly
and helpful atmosphere, with aisles of traditional grocery complete with frozen, healthy home, vitamins & supplements, health &
beauty, fresh produce, hormone and antibiotic free meats and bulk foods. Ada’s Natural Market, Green’s Natural Foods, Paradise Health
& Nutrition, Mother Earth’s Storehouse, Ellwood Thompson’s and GreenAcres Market all offer chef-prepared ready-to-go
foods and fresh-baked-daily baked goods.

1

Collectively,
we focus on providing high-quality products at affordable prices, exceptional customer service, nutrition education and community outreach.
We strive to generate long-term relationships with our customers based on quality and service by:

●
selling
only all-natural and organic groceries;

●
offering
affordable prices and a shopper-friendly retail environment; and

●
providing
dine-in options at our Greenleaf Grill, Organic Juice Bar, and our free-trade coffee bar.

Our
History and Founding Principles

We
are committed to maintaining the following founding principles, which have helped foster our growth:

●
Quality.
Every product on our shelves must go through a rigorous screening and approval process. Our mission includes providing the highest
quality groceries and supplements, Natural Grocers branded products, European and United States Department of Agriculture (USDA)
certified organic and fresh produce at the best prices in the industry.

●
Community.
The Ada’s, Paradise, Mother Earth’s Storehouse, Green’s Natural Foods, Ellwood Thompson’s and now GreenAcres
Market brands have each been serving their respective communities for approximately 40+ years.

●
Employees.
Our employees make our companies great. We work hard to ensure that our employees are able to live a healthy, balanced lifestyle.
We support them with free nutrition education programs, competitive pay and excellent benefits.

Our
Market

We
operate within the natural products retail industry, which is a subset of the United States grocery industry and the dietary supplement
business. This industry includes conventional supermarkets, natural, gourmet and specialty food markets, mass and discount retailers,
warehouse clubs, independent health food stores, dietary supplement retailers, drug stores, farmers’ markets, food co-ops, mail
order and online retailers and multi-level marketers. Industry-wide sales of natural and organic foods and dietary supplements have experienced
meaningful growth over the past several years, and we believe that growth will continue for the foreseeable future.

We
believe the growth in sales of natural and organic foods and dietary supplements continues to be driven by numerous factors, including:

●
greater
consumer focus on high-quality nutritional products;

●
an
increased awareness of the importance of good nutrition to long-term wellness;

●
aging
communities that are seeking healthy lifestyle alternatives;

●
heightened
consumer awareness about the importance of food quality and a desire to avoid pesticide residues, growth hormones, artificial ingredients
and genetically engineered ingredients in foods;

●
growing
consumer concerns over the use of harmful chemical additives in body care and household cleaning supplies;

●
well-established
natural and organic brands, which generate additional industry awareness and credibility with consumers; and

●
the
growth in the number of consumers with special dietary requirements as a result of allergies, chemical sensitivities, auto-immune
disorders and other conditions.

2

Our
Competitive Strengths

We
are well-positioned to capitalize on favorable natural and organic grocery and dietary supplement industry dynamics as a result of the
following competitive strengths:

Strict
focus on high-quality natural and organic grocery products. We offer high-quality products and brands, including an extensive selection
of widely-recognized natural and organic food, dietary supplements, body care products, pet care products and books. We offer our customers
approximately 10,000 Stock Keeping Units (SKUs) of natural and organic products. We believe our broad product offering enables our customers
to shop our stores for substantially all of their grocery and dietary supplement purchases. In our grocery departments, we primarily
sell USDA certified organic produce and do not approve for sale grocery products that are known to contain artificial colors, flavors,
preservatives or sweeteners or partially hydrogenated or hydrogenated oils. In addition, we only sell pasture-raised, humanely-raised
dairy products. Consistent with this strategy, our product selection does not include items that do not meet our strict quality guidelines.
Our store managers enhance our robust product offering by customizing their stores’ selections to address the preferences of local
customers.

Engaging
customer service experience based on education and empowerment. We strive to offer consistently exceptional customer service in a
shopper-friendly environment, which we believe creates a differentiated shopping experience, enhances customer loyalty and generates
repeat visits from our clientele. A key aspect of our customer service model is to provide free nutrition education to our customers.
We believe this focus provides an engaging retail experience while also empowering our customers to make informed decisions about their
health. We offer our science-based nutrition education through our trained employees, our newsletter and sales flyer, community out-reach
programs, one-on-one nutrition health coaching, nutrition classes and cooking demonstrations.

Our
Growth Strategies

We
expect to pursue several strategies to help return the overall business to profitable growth, including:

Expand
our store base. We intend to expand our store base through the acquisition of new stores.

Increase
sales from existing customers. In order to increase our average ticket and the number of customer transactions, we plan to continue
offering an engaging customer experience by providing science-based nutrition education and a differentiated merchandising strategy that
delivers affordable, high-quality natural and organic grocery products and dietary supplements. We also plan to continue to utilize targeted
marketing efforts to reach our existing customers, which we anticipate will drive customer transactions and convert occasional, single-category
customers into core, multi-category customers.

Create
new revenue streams. The Company has initiated the implementation of new in-house baking commissaries at the following banners: Mother
Earth’s Storehouse (serving Mother Earth’s Storehouse and all 8 Green’s Natural Foods Stores), Ada’s Natural
Market (serving Ada’s Natural Market and all 3 Paradise Stores), and GreenAcres Market Bradley Fair (serving all 5 GreenAcres Market
stores). These commissaries will generate new revenue while driving additional traffic to retail locations. Additionally, the Company
intends to launch a wholesale business to supply bread and pies to local restaurants and businesses, further establishing its commitment
to serving local communities.

Grow
our customer base. We plan to implement several measures aimed at building our brand awareness and growing our customer base, including:
(i) continuously improving the design of all our websites to enhance functionality, create a more engaging user experience and increase
its reach and effectiveness; (ii) introducing customer appreciation programs at all our stores; and (iii) developing new collateral marketing
materials. We believe offering nutrition education has historically been one of our most effective marketing strategies for reaching
new customers and increasing the demand for natural and organic groceries and dietary supplements in our markets.

Improve
operating margins. We expect to continue to improve our operating margins as we benefit from investments we have made or are making
in fixed overhead and information technology. As we add additional stores, we expect to achieve greater economies of scale through sourcing
and distribution. To achieve additional operating margin expansion, we intend to further optimize performance, maintain appropriate store
labor levels and effectively manage product selection and pricing.

3

Our
Products

Product
Selection Guidelines. We have a set of strict quality guidelines covering all products we sell. For example:

●
we
do not approve for sale food known to contain artificial colors, flavors, preservatives or sweeteners or partially hydrogenated or
hydrogenated oils or phthalates or parabens, regardless of the proportion of its natural or organic ingredients;

●
we
sell USDA certified organic produce; and

●
we
sell meats naturally raised without hormones, antibiotics or treatments and that were not fed animal by-products.

Our
product review team analyzes all new products and approves them for sale based on ingredients, price and uniqueness within the current
product set. We actively research new products in the marketplace through our product vendors, private label manufacturers, scientific
findings, customer requests and general trends in popular media. Our stores are able to fully merchandise all departments by providing
an extensive assortment of natural and organic products. We do not believe we need to sell conventional products to fill our selection,
increase our margins or attract more customers.

What
We Sell. We operate both a full-service natural and organic grocery stores and dietary supplement stores within our retail locations.
The following is a breakdown of our product mix:

●
Grocery.
We offer a broad selection of natural and organic grocery products with an emphasis on minimally processed and single ingredient
products that are not known to contain artificial colors, flavors, preservatives or sweeteners or partially hydrogenated or hydrogenated
oils. Additionally, we carry a wide variety of products associated with special diets such as gluten free, vegetarian and non-dairy.

●
Produce.
We sell USDA-certified organic produce and source from local, organic producers whenever feasible. Our selection varies based
on seasonal availability, and we offer a variety of organic produce offerings that are not typically found at conventional food retailers.

●
Bulk
Food and Private Label Products. We sell a wide selection of private label repackaged bulk and other products, including nuts,
water, pasta, canned seafood, dried fruits, grains, granolas, honey, eggs, herbs, spices and teas.

●
Dry,
Frozen and Canned Groceries. We offer a wide variety of natural and organic dry, frozen and canned groceries, including cereals,
soups, baby foods, frozen entrees and snack items. We offer a broad selection of natural chocolate bars, and energy, protein and
food bars.

●
Meats
and Seafood. We offer naturally-raised or organic meat products. The meat products we offer come from animals that have never
been treated with antibiotics or hormones or fed animal by-products. Additionally, we only buy from companies we believe employ humane
animal-raising practices. Our seafood items are generally frozen at the time of processing and sold from our freezer section, thereby
ensuring freshness and reducing food spoilage and safety issues.

●
Dairy
Products and Dairy Substitutes. We offer a broad selection of natural and organic dairy products such as milk, eggs, cheeses,
yogurts and beverages, as well as non-dairy substitutes made from almonds, coconuts, rice and soy.

●
Prepared
Foods. Our stores have a convenient selection of refrigerated prepared fresh food items, including salads, sandwiches, salsa,
hummus and wraps. The size of this offering varies by location.

●
Bread
and Baked Goods. We receive regular deliveries of a wide selection of bakery products for our bakery section, which includes
an extensive selection of gluten-free items.

●
Beverages.
We offer a wide variety of non-alcoholic and alcoholic beverages containing natural and organic ingredients.

4

●
Dietary
Supplements. We offer a wide selection of vitamins, supplements and natural remedies. Our staff is well educated and trained
on multiple aspects of natural medicine.

●
Health,
Beauty, and Personal Care. We offer a full range of cosmetics, skin care, hair care, fragrance and personal care products containing
natural and organic ingredients. Our body care offerings range from bargain-priced basics to high-end formulations.

●
Household
and General Merchandise. Our offerings include sustainable, hypo-allergenic and fragrance-free household products, including
cleaning supplies, paper products, dish and laundry soap and other common household products, including diapers.

Quality
Assurance. We endeavor to ensure the quality of the products we sell. We work with reputable suppliers we believe are compliant with
established regulatory and industry guidelines. Our purchasing department requires a complete supplier and product profile as part of
the approval process. Our dietary supplement suppliers must follow Food and Drug Administration (FDA) current good manufacturing practices
supported by quality assurance testing for both the base ingredients and the finished product. We expect our suppliers to comply with
the industry’s best practices for food safety.

Many
of our suppliers are inspected and certified under the USDA National Organic Program, voluntary industry associations, and other third-party
auditing programs with regards to additional ingredients, manufacturing and handling standards. We operate all our stores in compliance
with the National Organic Program standards, which restricts the use of certain substances for cleaning and pest control and requires
rigorous recordkeeping, among other requirements.

Our
Pricing Strategy

We
believe our pricing strategy allows our customers to shop our stores on a regular basis for their groceries and dietary supplements.

The
key elements of our pricing strategy include:

●
heavily
advertised discounts supported by manufacturer participation;

●
in-store
specials generally lasting for 30 days and not advertised outside the store;

●
managers’
specials, such as clearance, overstock, short-dated or promotional incentives; and

●
specials
on seasonally harvested produce.

As
we expand our store base, we believe there are opportunities for increased leverage in fixed costs, such as administrative expenses,
as well as increased economies of scale in sourcing products. We strive to keep our product, operating and general and administrative
costs low, which allows us to continue to offer attractive pricing for our customers.

Store
Management and Staffing. Our store staffing includes a manager and assistant manager, with department managers in each of the dietary
supplement, grocery, dairy and frozen, produce, body care and receiving departments, as well as several non-management employees. Our
regional manager is responsible for monthly store profit and loss, including labor, merchandising and inventory costs.

To
ensure a high level of service, all employees receive training and guidance on customer service skills, product attributes and nutrition
education. Employees are carefully trained and evaluated based on a requirement that they present nutrition information in an appropriate
and legally compliant educational context while interacting with customers. Additionally, store employees are cross-trained in various
functions, including cashier duties, stocking and receiving product.

5

Inventory.
We use a robust merchandise management and perpetual inventory system that values goods at the lower of cost and net realizable value
using the average cost method. We manage shelf stock based on weeks-on-hand relative to sales, resupply time and minimum economic order
quantity.

Sourcing
and Vendors. We source from approximately 1,000 suppliers and offer over 4,000 brands. These suppliers range from small independent
businesses to multi-national conglomerates. For the years ended December 31, 2025, approximately 31% of our total purchases
were from Kehe Distributors, LLC (“Kehe”), 17% of purchases were from Four Seasons Produce, and 10% of our total purchases were from UNFI. For the year ended December
31, 2024, approximately 25% of our total purchases were from UNFI, 17% from Four Seasons Produce, and 12% from Kehe. We maintain good relations with all our suppliers and believe we have adequate alternative supply methods, including
self-distribution.

We
have longstanding relationships with our suppliers, and we require disclosure from them regarding quality, freshness, potency and safety
data information. Our bulk food private label products are packaged by us in pre-packed sealed bags to help prevent contamination while
in transit and in our stores. Unlike most of our competitors, most of our private label nuts, trail mix and flour are refrigerated in
our warehouse and stores to maintain freshness.

New
Reward Program. In August 2024, the Company transitioned its customer loyalty program from a points-based system to a VIP membership
structure. Under the original loyalty program, customers earned redeemable loyalty points based on qualifying purchases, which have been
discontinued. The new VIP program provides members
with immediate discounts on qualifying purchases, replacing the accrual of future points. This modification did not require a restatement
of prior-period revenue. However, the elimination of future loyalty point accruals reduces the Company’s ongoing contract liability
obligations, as discounts under the VIP program are recognized as reductions to revenue at the time of sale.

New
Marketing Program. HCWC has established a robust COOP marketing revenue program generated through a collaborative approach that emphasizes
community engagement and shared values. The revenue in this context is driven by promoting national and locally sourced, organic, and
sustainable products, which align with the priorities of the HCWC.

Our
Employees

As
of December 31, 2025, HCWC employed approximately 430 employees across its retail, warehouse, and corporate operations. Our employees
are central to delivering our mission of providing exceptional service and products to our customers. Commitment to our employees is
one of our founding principles. Employees are eligible for health, long-term disability, vision and dental insurance coverage, as well
as Company paid short-term disability and life insurance benefits, after they meet eligibility requirements. Additionally, our employees
are offered a 401(k) retirement savings plan with discretionary contribution matching opportunities. This further offers our employees
the opportunity to become more familiar with our products, which we believe improves the customer service our employees are able to provide.
We believe these and other factors result in higher retention rates and encourage our employees to appreciate our culture, which helps
them better promote our brand.

Our
Customers

The
growth in the natural and organic grocery and dietary supplement industries and growing consumer interest in health and nutrition have
led to an increase in our core customer base. We believe the demands for affordable, nutritious food and dietary supplements are shared
attributes of our core customers, regardless of their socio-economic status. Additionally, we believe our core customers prefer a retail
store environment that offers carefully selected natural and organic products and dietary supplements. Our customers tend to be interested
in health and nutrition, and expect our store employees to be highly knowledgeable about these topics and related products.

Competition

The
grocery and dietary supplement retail business is a large, fragmented and highly competitive industry, with few barriers to entry. Our
competition varies by market and includes conventional supermarkets such as Publix and Winn-Dixie, mass or discount retailers such as
Sprout’s Farmers Market, Wal-Mart and Target, natural and gourmet markets such as Whole Foods and The Fresh Market, specialty food
retailers such as Trader Joe’s, independent health food stores, dietary supplement retailers, drug stores, farmers’ markets,
food co-ops, mail order and online retailers and multi-level marketers. These businesses compete with us for customers on the basis of
price, selection, quality, customer service, shopping experience or any combination of these or other factors. They also compete with
us for products and locations. In addition, some of our competitors are expanding to offer a greater range of natural and organic foods.
We believe our commitment to carrying only carefully vetted, affordably priced and high-quality natural and organic products and dietary
supplements, as well as our focus on providing nutritional education, differentiate us in the industry and provide a competitive advantage.

6

Online
Sales

HCWC
is your online source for the leading products in the all-natural vitamin and supplement, and health, beauty, and personal care categories
of Healthier Living.

Backed
by 30+ years of combined experience in the health and nutrition industry, we provide our customers with only the best products on the
market — Try our exclusive offering of Ada’s Naturals brand products or any of the top products from the most recognized
national natural health brands in the industry.

●
VITAMINS
& SUPPLEMENTS:

○
Product
categories include, but are not limited to: Vitamins, Minerals & Herbals, Immunity, Multivitamins, Sports Nutrition, Protein
Powders, Collagen, Stress & Anxiety, Sleep & Relax, Brain Health, Pain & Inflammation, Probiotics, Energy & Stamina,
Joint & Bone Support, Digestion, Fish Oils, Just for Men, Kids/Children/Teens, and more.

○
Product
varieties include, but are not limited to: Apple Cider Vinegar, BCAA, Biotin, Calcium, Chlorophyll, CLA, Collagen Peptides, Creatine,
Elderberry, Omega-3’s, Garlin, Glucosamine, Iron, Magnesium, Melatonin, Potassium, Prenatals, Probiotics, Protein Powders (Plant
and Whey), Ashwaghanda Turmeric, Ginseng, Vitamin B,C,D,E,K+, Zinc, and more.

○
Product
brands include, but are not limited to: Ada’s Naturals, Enzymedica, Garden of Life, Natural Vitality, New Chapter, Renew Life,
Solgar, and more.

●
HEALTH,
BEAUTY, AND PERSONAL CARE:

○
Product
categories include, but are not limited to: Oral Care, Hair Care, Body Wash, Skin & Face, Deodorant, Suncare, Soaps, Shaving,
Feminine Hygiene, Lip Balms, Ear Candles, Lotions, Hand Sanitizers, Essential Oils, and more.

○
Product
varieties include, but are not limited to: Body Wash, Deodorant, Ear Candles, Shampoos, Conditioners, Toothpaste, Mouthwashes, Shaving,
Bar Soaps, Liquid Soaps, Suncare, and more.

●
Product
brands include, but are not limited to: Ada’s Naturals, Alba Botanica, Aura Cacia, Derma-E, Desert Essence, Dr. Bronners, Every
Man Jack, Heritage Store, Himalaya Botanique, Life-Flo, Lily of the Desert, Natracare, Naturally Fresh, Oral Essentials, South of
France, Tea Tree Therapy, Thai Deodorant Stone, Thayers, and more.

Seasonality

Our
business is active throughout the calendar year and does not experience significant fluctuation caused by seasonal changes in consumer
purchasing.

Insurance
and Risk Management

We
use a combination of insurance and self-insurance to cover workers’ compensation, general liability, product liability, director
and officers’ liability, employment practices liability, associate healthcare benefits and other casualty and property risks. Changes
in legal trends and interpretations, variability in inflation rates, changes in the nature and method of claims settlement, benefit level
changes due to changes in applicable laws, insolvency of insurance carriers and changes in discount rates could all affect ultimate settlements
of claims. We evaluate our insurance requirements and providers on an ongoing basis.

Information
Technology Systems

We
have made significant investments in overhead and information technology infrastructure, including purchasing, receiving, inventory,
point of sale, accounting automation, reporting and financial systems.

7

Segment
Information

The
Company has two operating segments: Grocery and Wellness. These operating segments have been aggregated into a single reportable segment
in accordance with Accounting Standards Codification (“ASC”) 280 Segment Reporting, because they have similar economic characteristics
and are similar with respect to the nature of the products sold, the product acquisition process, the types of customers served, the
methods used to distribute products, and the nature of the regulatory environment.

The
Company’s Chief Operating Decision Maker (CODM) reviews financial results and allocates resources at the consolidated level, as
the aggregated segments operate as one integrated business unit. There were no inter-segment revenues during the period.

Going
Concern

The
accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the
United States of America (“GAAP”), which contemplate the continuation of the Company as a going concern for the next twelve
months from the issuance of this Form 10-K and realization of assets and satisfaction of liabilities in the normal course of business
and do not include any adjustments that might result from the outcome of any uncertainties related to our going concern assessment. The
carrying amounts of assets and liabilities presented in the consolidated financial statements do not necessarily purport to represent
realizable or settlement values.

The
Company currently and historically has reported net losses and cash outflows from operations. Cash and cash equivalents increased to
approximately $3.0 million as of December 31, 2025, compared to $2.1 million as of December 31, 2024, driven by increased sales and improved
sales margin. Working capital deficit increased from negative $2.2 million as of December 31, 2024, to negative $2.7 million as of December
31, 2025, primarily due to increase in trade payable and accrued liabilities. Net losses improved to $3.9 million for the year ending
December 31, 2025 from $4.5 million for the year ended December 31, 2024. Net cash provided by operating activities increased to $1.0 million
in 2025 from $3.1 million cash used in operations in 2024, respectively.

The
Company’s liquidity needs through December 31, 2025 have been satisfied through the initial public offering and financing agreement
with private lenders.

Management
has made plans to reduce certain costs and raise needed capital, however there can be no assurance the Company can successfully implement
these plans. The Company contracted a third-party consultant, whose expertise is streamlining operations, to identify areas of improvement
and cost savings. The Company enacted the consultant’s recommendations to realize savings and achieve profitability.
The Company plans on evaluating non-performing stores and continuing to expand via acquisition which will help achieve profitability.
Also, the Company is formulating plans to raise capital from outside investors and from equity offerings, as it has done in the past,
to fund operating losses and also provide capital for further business acquisitions.

On
July 18, 2024, HCWC entered into a $7.5 million loan and security agreement with a private lender to support its expansion plans and
funding of any working capital needs, of which $4.2 million was used for the July 18, 2024 purchase of GreenAcres Market. The face amount
of the loan is $7,500,000 with 12% annual interest and has a maturity date of July 17, 2027. On July 24, 2024, the Company finalized
the closing of Saugerties building sale with all parties involved and received net proceeds of $695,000.

On
August 18, 2022, HCMC entered into a Securities Purchase Agreement (“HCMC Preferred Stock”) pursuant to which HCMC sold and
issued 14,722 shares of its Series E Convertible Preferred Stock to institutional investors for $1,000 per share or an aggregate subscription
of $13.25 million. This same group of investors committed to invest $13.25 million in HCWC after the Spin-Off and IPO transactions were
completed. As such, HCWC entered into an agreement to sell shares of its Series A Convertible Preferred Stock (the “Series A Preferred
Stock”), with the gross proceeds from such offering expected to be $13.25 million. The institutional investors that acquired HCMC
Series E Preferred Stock are contractually required to purchase the Series A Preferred Stock in the same dollar amounts as they invested
in the HCMC Series E Preferred Stock (regardless of whether or not such HCMC Series E Preferred Stock has been converted into HCMC common
stock).

On
May 12, 2025, the Company entered into a Securities Purchase Agreement to issue 3,250 shares of HCWC Preferred Stock with a stated
value of $1,000 per share and par value of $0.001 per share. On June 20, 2025, HCWC entered into an Amended and Restated Securities
Purchase Agreement (the “SPA”), pursuant to which the Company sold 3,250 shares of its HCWC Preferred Stock to the same
institutional investors for an aggregate subscription price of $3,250,000. On November 11, 2025, the Company entered into a
Securities Purchase Agreement, pursuant to which the Company agreed to sell 2,000 shares of the HCWC Preferred Stock to investors
for an aggregate subscription price of $2,000,000. As of December 31, 2025, the Company has sold $5.25 million of HCWC Preferred
Stock, with binding commitments to purchase an additional $8.0 million in Preferred Stock from the same investors who purchased HCMC
Series E Preferred Stock. On October 30, 2025, HCMC and the parties who participated the HCMC Series E SPA entered into a Ninth
Amendment to HCMC Series E SPA, pursuant to which HCMC and such parties agreed to amend the Completion Date to April 1, 2027. The
Ninth Amendment to the HCMC Series E SPA extends the timeframe for these same institutional investors to fulfill their remaining
contractual commitment to purchase the additional $8.0 million of HCWC Series A Preferred Stock.

The Company believes that its cash on hand, together with the operational
initiatives described above, including cost reductions, working capital improvements, store optimization, and the committed $8.0 million
equity financing anticipated to be raised by April 1, 2027, will enable the Company to meet its obligations and capital requirements for
at least the twelve months from the date these consolidated financial statements are issued. Accordingly, no adjustment has been made
to the consolidated financial statements to account for this uncertainty.