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In a strategic financial move, Healthy Choice Wellness Corp. (NYSE American:HCWC), a retail grocery company, has entered into a significant agreement to exchange a portion of its debt for equity. On April 2, 2025, the Florida-based corporation reached an Exchange Agreement with certain debt holders to convert $500,000 of outstanding principal from its notes into 1,136,364 shares of Class A common stock. The transaction valued the shares at $0.44 each, equivalent to the closing bid price on April 1, 2025. The company, currently valued at $8.57 million in market capitalization, has been facing significant financial challenges, with InvestingPro data showing a concerning debt-to-equity ratio of 10.72.
This exchange is part of the company’s broader efforts to manage its debt obligations more effectively. The notes were initially issued under a Loan and Security Agreement dated July 18, 2024. Following this equity for debt swap, Healthy Choice Wellness Corp. will have $6,508,179 remaining in unpaid principal under the Credit Agreement. According to InvestingPro analysis, the company’s financial health score stands at a weak 1.56 out of 5, with current ratio at 0.81 indicating potential liquidity concerns. InvestingPro subscribers have access to 10+ additional financial health indicators that could provide crucial insights into the company’s debt management strategy.
The company utilized Section 3(a)(9) of the Securities Act of 1933 for this private placement, which allows for exchanges with existing security holders without the need for registration. This section is typically employed when transactions do not involve any public offering or compensation for soliciting the exchange.
This transaction reflects the company’s ongoing financial strategy to optimize its capital structure and reduce its debt burden. It is important to note that this information is based on a press release statement and the full details of the Exchange Agreement have been included as an exhibit in the company’s latest 8-K filing with the SEC.
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