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Healthy Choice Wellness Corp. (NYSE American:HCWC), a grocery retailer based in Hollywood, Florida, has entered into a Securities Purchase Agreement (SPA) on Monday, May 12, 2025, to sell its Series A Convertible Preferred Stock to two investors. The agreement involves the sale of 3,250 shares of preferred stock at a price of $1,000 per share, totaling an aggregate subscription price of $3,250,000. The company’s stock, currently trading at $0.46, has experienced significant volatility, with InvestingPro data showing a 92% decline over the past year. According to InvestingPro’s Fair Value analysis, the stock appears overvalued at current levels.
The preferred stock is convertible into 2,339,252 shares of the company’s Class A Common Stock at a conversion price of $1.38 per share. This conversion price is subject to adjustments as detailed in the Certificate of Designation. The proceeds from this offering are intended for general working capital purposes and potential acquisitions. Financial metrics from InvestingPro indicate the company’s need for capital, with a current ratio of 0.82 and short-term obligations exceeding liquid assets. Despite challenges, the company has achieved 27% revenue growth in the last twelve months.
The shares will be held in escrow until the closing price of HCWC’s Class A common stock on the NYSE American exchange reaches or exceeds $1.50 per share for five consecutive trading days. Once this price target is met, the investors are obligated to pay the remaining purchase price, and the shares will be released from escrow.
Healthy Choice Wellness Corp. has also committed to registering the shares of Class A Common Stock that are issuable upon conversion of the preferred stock. The issuance of these securities is exempt from registration under Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D.
Furthermore, the company filed a Certificate of Designation with the Secretary of State of Delaware, establishing the rights and preferences of the Series A Convertible Preferred Stock. The preferred stockholders will have voting rights on an as-converted basis and will be entitled to receive $1,000 per share upon any liquidation, dissolution, or winding-up of the company that is not a Fundamental Transaction (JO:NTUJ).
This news is based on a press release statement and has been summarized to provide key information regarding Healthy Choice Wellness Corp.’s recent financial activities. Investors should note that the company’s next earnings report is scheduled for May 23, 2025. InvestingPro subscribers have access to 8 additional ProTips and comprehensive financial analysis tools to better evaluate this investment opportunity.
In other recent news, Healthy Choice Wellness Corp. has engaged in significant financial maneuvers to manage its debt obligations. The company has finalized agreements to convert portions of its outstanding debt into equity, a strategic move aimed at optimizing its capital structure. On April 30, 2025, Healthy Choice Wellness Corp. converted $362,727 of principal debt into 863,636 shares of Class A common stock, with each share priced at $0.42. Similarly, on April 2, 2025, the company agreed to exchange $500,000 of outstanding principal for 1,136,364 shares of Class A common stock, priced at $0.44 per share. These transactions are part of broader efforts to reduce the company’s debt burden, with $6,145,452 and $6,508,179 of unpaid principal remaining under the Credit Agreement after each respective exchange. Both exchanges were conducted under Section 3(a)(9) of the Securities Act of 1933, allowing for private placements without registration. This financial strategy is detailed in the company’s recent 8-K filings with the SEC.
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