Healthy Choice Wellness exchanges $1 million in debt for shares at $0.40 each

Healthy Choice Wellness Corp. (NYSE American:HCWC), a retail-grocery company with $73.74 million in annual revenue and currently trading at $0.39, entered into an agreement Tuesday with certain holders of its outstanding debt to exchange $1,000,000 in principal amount of notes for 2,500,000 shares of its Class A common stock at $0.40 per share, which was the closing bid price on Monday. According to InvestingPro data, the company’s shares have declined over 92% in the past year.

The notes involved in the exchange were originally issued under a loan and security agreement dated July 18, 2024. Following this transaction, $5,375,000 in principal remains outstanding under that agreement. InvestingPro analysis reveals concerning debt metrics, with a debt-to-equity ratio of 11.27 and a current ratio of 0.82, indicating potential liquidity challenges.

According to the company’s statement in the SEC filing, the exchange was conducted through private placement and the shares issued were not registered under the Securities Act of 1933. Healthy Choice Wellness Corp. claimed an exemption from registration under Section 3(a)(9) of the Securities Act and/or Regulation D, as the exchange involved only existing security holders. No commissions or other remuneration were paid or given to solicit the exchange.

The company is incorporated in Delaware and operates in the retail-grocery sector. Its Class A common stock is listed on the NYSE American under the symbol HCWC.

All information is based on a press release statement included in the company’s Form 8-K filed with the Securities and Exchange Commission.

In other recent news, Healthy Choice Wellness Corp. has made significant financial moves. The company announced a Securities Purchase Agreement to sell 3,250 shares of its Series A Convertible Preferred Stock at $1,000 per share, totaling $3,250,000. This preferred stock can be converted into 2,339,252 shares of Class A Common Stock, with the proceeds intended for general working capital and potential acquisitions. Additionally, Healthy Choice Wellness Corp. has reached an agreement to convert $362,727 of principal debt into 863,636 shares of Class A common stock at $0.42 per share. This exchange is part of the company’s strategy to manage its debt obligations, leaving $6,145,452 of unpaid principal under their Credit Agreement. The company has committed to registering the shares issuable upon conversion of the preferred stock, enhancing shareholder rights. These developments highlight Healthy Choice Wellness Corp.’s efforts to strengthen its financial position and manage its debt effectively.

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