v3.25.2
ACQUISITIONS
 3 Months Ended 12 Months Ended
Mar. 31, 2025
Dec. 31, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]    
ACQUISITIONS

NOTE 8. ACQUISITIONS

 

The Company applies the provisions of ASC Topic 805, Business Combinations and Topic 820, Fair Value Measurement in the accounting for acquisitions of businesses.

 

GreenAcres Market

 

On July 18, 2024, the Company through its wholly owned subsidiary, Healthy Choice Markets VI, LLC, entered into an Asset Purchase Agreement with (i) GreenAcres Markets of Oklahoma, LLC, an Oklahoma limited liability company, (ii) GACorp, Inc., a Kansas corporation; and (iii) the group of equity holders owning the majority interests of the Sellers. Pursuant to the Purchase Agreement, the Company acquired certain assets and assumed certain liabilities related to five GreenAcres Market’s grocery stores in Kansas and Oklahoma. The Company continued to operate the grocery stores under their existing name.

 

The cash purchase price under the Asset Purchase Agreement was $5,475,000, and a promissory note provided to the seller of $1,825,000. In addition, the Company entered into five new lease agreements with the landlords of the grocery stores.

 

 

The following table summarizes the purchase price allocation based on fair values of the net assets acquired at the acquisition date:

   July 18, 2024 
Purchase Consideration     
Cash consideration paid  $5,475,000 
Promissory note   1,568,000 
Total Purchase Consideration  $7,043,000 
      
Purchase price allocation     
Inventory  $2,400,000 
Property, plant, and equipment   127,000 
Intangible assets   2,304,000 
Goodwill   2,212,000 
Net assets acquired  $7,043,000 
      
Finite-lived intangible assets     
Trade Names (13 years)  $1,584,000 
Non-Compete Agreement (5 years)   720,000 
Total intangible assets  $2,304,000 

 

Revenue and Earnings

 

The following unaudited pro forma summary presents consolidated information of the Company, including GreenAcres Market, as if the business combinations had occurred on January 1, 2024, the earliest period presented herein:

SCHEDULE OF UNAUDITED PROFORMA INFORMATION 

      
   Three Months Ended March 31, 2024 
Sales  $19,842,795 
Net loss  $(724,174)

 

The pro forma financial information includes adjustments that are directly attributable to the business combinations and are factually supportable. The pro forma adjustments include incremental amortization of intangible, fixed assets depreciation and lease amortization. The proforma data gives effects to actual operating results prior to the acquisition. These proforma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisitions occurred as of the beginning of each period presented or that may be obtained in future periods.

 

NOTE 8. ACQUISITIONS

 

The purchase method of accounting in accordance with ASC 805 was applied for the Ellwood Thompson’s acquisition and GreenAcres Market acquisition. This requires the total cost of an acquisition to be allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values at the date of acquisition with the excess cost accounted for as goodwill. Goodwill arising from the acquisition is attributable to expected operational synergies from combining the operations of the acquired business with those of the Company. Acquisition costs are expensed as incurred and recorded in selling, general and administrative expenses in the consolidated statements of operations.

 

Ellwood Thompson’s

 

On October 1, 2023, the Company through its wholly owned subsidiary, Healthy Choice Markets V, LLC, entered into an Asset Purchase Agreement with (i) ET Holding, Inc., d/b/a Ellwood Thompson’s Local Market, a Virginia corporation, (ii) Ellwood Thompson’s Natural Market, L.C., a Virginia limited liability company, and (iii) Richard T. Hood, an individual resident of the Commonwealth of Virginia. Pursuant to the Purchase Agreement, the Company acquired certain assets and assumed certain liabilities related to Ellwood Thompson’s grocery stores in Richmond, Virginia. The Company intends to continue to operate the grocery stores under their existing name.

 

The cash purchase price under the Asset Purchase Agreement was $750,000, and a promissory note provided to the seller of $750,000, with a fair value of $718,000. For twelve months ended on December 31, 2024, the Company recognized approximately $40,000 interest expense. In addition, the Company entered into a new lease agreement with the landlord and entered into an employment agreement with the store manager.

 

The following table summarizes the purchase price allocation based on fair values of the net assets acquired at the acquisition date:

  

October 1,

2023

 
Purchase Consideration     
Cash consideration paid  $750,000 
Promissory note   718,000 
Total Purchase Consideration  $1,468,000 
      
Purchase price allocation     
Inventory  $851,000 
Intangible assets   291,000 
Right of use asset - Operating lease   1,325,000 
Other liabilities   (31,000)
Operating lease liability   (1,325,000)
Goodwill   357,000 
Net assets acquired  $1,468,000 
      
Finite-lived intangible assets     
Trade Names (8 years)  $291,000 
Total intangible assets  $291,000 

 

 

The acquisition is structured as asset purchase in a business combination, and goodwill is tax-deductible, and amortizable over 15 years for tax purposes.

 

GreenAcres Market

 

On July 18, 2024, the Company through its wholly owned subsidiary, Healthy Choice Markets VI, LLC, entered into an Asset Purchase Agreement with (i) GreenAcres Markets of Oklahoma, LLC, an Oklahoma limited liability company, (ii) GACorp, Inc., a Kansas corporation; and (iii) the group of equity holders owning the majority interests of the Sellers. Pursuant to the Purchase Agreement, the Company acquired certain assets and assumed certain liabilities related to five GreenAcres Market’s grocery stores in Kansas and Oklahoma. The Company continued to operate the grocery stores under their existing name.

 

The cash purchase price under the Asset Purchase Agreement was $5,475,000, and a promissory note provided to the seller of $1,825,000. In addition, the Company entered into five new lease agreements with the landlords of the grocery stores.

 

The following table summarizes the purchase price allocation based on fair values of the net assets acquired at the acquisition date:

 

  

July 18,

2024

 
Purchase Consideration     
Cash consideration paid  $5,475,000 
Promissory note   1,568,000 
Total Purchase Consideration  $7,043,000 
      
Purchase price allocation     
Inventory  $2,400,000 
Property, plant, and equipment   127,000 
Intangible assets   2,304,000 
Goodwill   2,212,000 
Net assets acquired  $7,043,000 
      
Finite-lived intangible assets     
Trade Names (13 years)  $1,584,000 
Non-Compete Agreement (5 years)   720,000 
Total intangible assets  $2,304,000 

 

Revenue and Earnings

 

The following unaudited pro forma summary presents consolidated information of the Company, including Ellwood Thompson’s and GreenAcres Market, as if the business combinations had occurred on January 1, 2023, the earliest period presented herein:

SCHEDULE OF UNAUDITED PROFORMA INFORMATION 

         
   December 31, 
   2024   2023 
Sales  $77,762,430   $80,173,326 
Net loss   (4,791,021)   (11,401,315)

 

The pro forma financial information includes adjustments that are directly attributable to the business combinations and are factually supportable. The pro forma adjustments include incremental amortization of intangible, fixed assets depreciation and lease amortization. The proforma data gives effects to actual operating results prior to the acquisition. These proforma amounts do not purport to be indicative of the results that would have actually been obtained if the acquisitions occurred as of the beginning of each period presented or that may be obtained in future periods.