STOCKHOLDERS’ EQUITY

3 Months Ended

Mar. 31, 2026

NOTE 8. STOCKHOLDERS’ EQUITY

Series E Convertible Preferred Stock

On August 18, 2022, the Company entered into a Securities Purchase Agreement (“Series E Preferred Stock”) pursuant to which the Company sold and issued 14,722 shares of its Series E Redeemable Convertible Preferred Stock to institutional investors for $1,000 per share or an aggregate subscription of $13.25 million. The number of shares issued to each participant is based on subscription amount multiplied by conversion rate of 1.1111. The Company also incurred offering costs of approximately $410,000, which covers legal and consulting fee.

The HCMC Series E Preferred Stock shall have voting rights on as converted basis at the Company’s next stockholders’ meeting. However, as long as any shares of HCMC Series E Preferred Stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of the HCMC Series E Preferred Stock, (a) alter or change adversely the powers, preferences or rights given to the HCMC Series E Preferred Stock or alter or amend the Certificate of Designation, (b) increase the number of authorized shares of HCMC Series E Preferred Stock, or (c) enter into any agreement with respect to any of the foregoing. Each share of Series E Preferred Stock shall be convertible, at any time and from time to time at the option of the Holder thereof, into that number of shares of Common Stock (subject to the beneficial ownership limitations). The initial conversion price for the HCMC Series E Preferred Stock shall equal $0.0001.

Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary that is not a Fundamental Transaction (as defined in the Certificate of Designation), the holders of HCMC Series E Preferred Stock shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to $1,000 per share of Series E Preferred Stock.

Unless earlier converted or extended as set forth below, a holder may require the redemption of all or a portion of the stated value of the HCMC Series E Preferred Stock either (1) six months after closing or (2) the time at which the balance is due and payable upon an event of default.

On March 1, 2023, the Company entered into a First Amendment to HCMC Series E Preferred Stock with each purchaser (“Purchaser”) identified as those who participated in the HCMC Series E Preferred Stock, dated as of August 18, 2022. The parties amended the HCMC Preferred Stock related to the conversion payment whereby upon conversion of the Series E Preferred Stock prior to the record date for the Spin-Off, the Company will pay the Purchaser ten percent (10%) of the stated value of the Series E Preferred Stock converted. The record date is May 1, 2023.

On May 15, 2023, the Company and the Purchaser entered into the Second Amendment to the Securities Purchase Agreement, pursuant to which the Company agreed to extend the time period for the Conversion Payment eligibility to December 1, 2023. The Company filed an amendment to the Certificate of Designation to make the redemption price of the Preferred Stock (the “Redemption Price”) equal the Stated Value regardless of the date on which it is redeemed. Prior to this amendment, the Redemption Price was discounted by 1% for each month after the seven-month anniversary of the Issue Date that the Purchaser elected not to redeem.

On October 30, 2023, the Company entered into a Third Amendment to the Securities Purchase Agreement with its Series E Redeemable Convertible Preferred Stock purchasers. The parties agreed to: (1) set the initial conversion price for the Series E Preferred Stock to be the 5-day volume weighted average price measured using the 5 trading days preceding the purchase of the Series E Preferred Stock, (2) on the 40th calendar day (the “Reset Date”) after the sale of the Series E Preferred Stock, reset the conversion price in the event the closing price of the Class A common stock on such date is less than the initial conversion, (3) have the reset conversion price equal a 10% discount to the 5-day volume weighted average price measured using the 5 trading days preceding the Reset Date; provided, however, in no instance will the conversion price be reset below 30% of the initial conversion price, and (4) amend the Completion Date to March 1, 2024.

On February 20, 2024, the Company entered into a Fourth Amendment to the Securities Purchase Agreement with its Series E Redeemable Convertible Preferred Stock purchasers, pursuant to which the Company and such parties agreed to amend the Completion Date to June 1, 2024.

On April 8, 2024, the Company entered into a Fifth Amendment to the Securities Purchase Agreement with its Series E Redeemable Convertible Preferred Stock purchasers, pursuant to which the Company and such parties agreed to amend the Completion Date to August 1, 2024.

On July 26, 2024, the Company entered into a Sixth Amendment to the Securities Purchase Agreement with its Series E Redeemable Convertible Preferred Stock purchasers, pursuant to which the Company and such parties agreed to amend the Completion Date to November 1, 2024.

On November 27, 2024, the Company entered into a Seventh Amendment to the Securities Purchase Agreement with its Series E Redeemable Convertible Preferred Stock purchasers, pursuant to which the Company and such parties agreed to amend the Completion Date to May 31, 2025.

On April 11, 2025, the Company entered into an Eighth Amendment to the Securities Purchase Agreement with its Series E Redeemable Convertible Preferred Stock purchasers, pursuant to which the Company and such parties agreed to amend the Completion Date to October 31, 2025.

On October 30, 2025, the Company entered into a Ninth Amendment to the Securities Purchase Agreement with its Series E Redeemable Convertible Preferred Stock purchasers, pursuant to which the Company and such parties agreed to amend the Completion Date to April 1, 2027.

Through March 31, 2026, 1,585 shares of Series E preferred stock have been cumulatively converted into 15,850,000,000 shares of common stock as a result of the Series E preferred stock conversion, and 12,026 shares of Series E preferred stock have been cumulatively redeemed, and approximately $12,004,000 has been paid for redemption. As of March 31, 2026, 1,111 shares of Series E preferred stock remained outstanding.

Stock Options and Restricted Stock

During the three months ended March 31, 2026 and 2025, no stock options of the Company were exercised into common stock.

All stock-based awards were fully amortized as of December 31, 2025. Accordingly, the Company recognized no stock-based compensation during the three months ended March 31, 2026, compared to $1,123,000 for the same period in 2025. Stock based compensation is included as part of total operating expenses in the accompanying unaudited condensed consolidated statements of operations.

Debt Settlement through Issuance of Common Stock

On December 31, 2025, the Company entered into a Stock Purchase and Satisfaction of Debt Agreement with Healthy Choice Wellness Corp. (“HCWC”), a related party. Pursuant to this agreement, the Company issued 43,889,786,222 shares of its common stock to HCWC at a contractual price of $0.00009 per share, in full and final settlement of a related party payable, which had a carrying value of $3,950,080 as of the settlement date. In accordance with the Company’s accounting policy for related party transactions, the payable was extinguished at its carrying amount, and no gain or loss was recognized.

On February 1, 2026, the Company entered into a settlement agreement with a vendor to resolve approximately $1.3 million in outstanding accounts payable for past services. Under the terms of the agreement, the total obligation was reduced to $875,000, and the Company issued a non-interest bearing promissory note in that amount to the vendor. The remaining balance of the original obligation was satisfied through a combination of (i) the issuance of 2,000,000,000 shares of the Company’s common stock valued at $0.0001 per share, totaling $200,000, and (ii) the recharacterization of a portion of the obligation as part of a contingent fee arrangement related to ongoing patent litigation.

Earnings Per Share

Basic earnings per share is computed using the weighted average number of common shares outstanding during the periods presented. Diluted earnings per share is computed using the weighted average number of common shares outstanding adjusted to include the potentially dilutive effect of stock awards. For the three months ended March 31, 2026 and 2025, diluted EPS is the same as basic EPS because all potentially dilutive securities are anti-dilutive due to the net loss. Under GAAP, diluted EPS must be disclosed even when equal to basic EPS. All potentially dilutive securities were excluded from the diluted EPS calculation because their inclusion would have been anti-dilutive (i.e., reduce the loss per share), which is not permitted under GAAP.

The following table summarizes the Company’s securities, in common share equivalents, which have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive:

SCHEDULE OF DILUTIVE LOSS PER SHARE


	As of March 31,
	2026		2025
Preferred stock		11,111,000,000		11,111,000,000
Stock options		67,587,222,200		67,587,222,200
Restricted stock		-		26,543,750,000
Total		78,698,222,200		105,241,972,200

The following table sets forth the computation of basic and diluted earnings per share attributable to the Company’s stockholders.


	Three Months Ended March 31,
	2026			2025

NET LOSS	$	(786,795	)	$	(2,183,676	)

BASIC AND DILUTED WEIGHTED AVERAGE COMMON SHARES		526,423,085,273			481,266,632,384

BASIC AND DILUTED NET LOSS PER SHARE	$	-		$	-

- Definition

The entire disclosure for equity.

+ References

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+ Details

Healthier Choices Management Corp. 10-Q