LEASES

3 Months Ended

Mar. 31, 2026

NOTE 14. LEASES

The Company has various lease agreements with terms of up to 20 years, including operating leases of retail stores, headquarters, and a finance lease for data center equipment.

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of March 31, 2026

Maturity of Lease Liabilities by Fiscal Year	Operating Leases			Finance Leases
2026 (remaining nine months)	$	2,934,329		$	27,874
2027		3,042,198			37,165
2028		2,369,654			37,165
2029		1,710,855			37,165
2030		456,864			27,874
Thereafter		464,490			-
Total undiscounted operating lease payments	$	10,978,390		$	167,243
Less: Imputed interest		(980,515	)		(24,045	)
Present value of lease liabilities	$	9,997,875		$	143,198

In January 2026, the Company, through its wholly-owned subsidiary Healthy Choice Markets 2, LLC, renewed the lease for its store located in West Melbourne, Florida for a five-year term commencing January 1, 2026 through December 31, 2030. All other material terms of the original lease, including the Company’s obligation to pay its pro-rata share of real estate taxes, common area maintenance, insurance, and other operating expenses, remain in effect. The renewal was accounted for as a remeasurement of the existing lease liability and right-of-use asset as of January 1, 2026 using the Company’s incremental borrowing rate at that date.

The following table summarizes the Company’s operating leases:

SCHEDULE OF COMPANY’S LEASES

Balance Sheet Classification	March 31, 2026		December 31, 2025
Operating lease right-of-use assets	$	9,894,464	$	10,503,441
Finance lease right-of-use assets		140,779		148,600
Total right-of-use assets	$	10,035,243	$	10,652,041

Operating lease liability, current	$	3,332,565	$	3,472,897
Finance lease liability, current		27,924		27,423
Operating lease liability, net of current		6,665,310		7,111,534
Finance lease liability, net of current		115,274		122,445
Total lease liabilities	$	10,141,073	$	10,734,299

The amortization of the right-of-use assets of approximately $957,000 and $918,000 for the three months ended March 31, 2026 and 2025, respectively, were included in operating cash flows.

The following table provides a summary of other information related to the leases at March 31, 2026 and December 31, 2025:

SCHEDULE OF LEASE TERM

Other Information	March 31, 2026			December 31, 2025
Weighted-average remaining lease term for operating leases		3 years			4 years
Weighted-average discount rate for operating leases		5.52	%		5.30	%
Weighted-average remaining lease term for finance leases		5 years			5 years
Weighted-average discount rate for finance leases		7.25	%		7.25

Rent expense for the three months ended March 31, 2026 and 2025 was approximately $976,000 for each period. It is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of operations.

The components of lease expenses for the three months ended March 31, 2026 and 2025 were as follows:

SCHEDULE OF COMPONENTS OF LEASE EXPENSE

	2026		2025
	Three Months Ended March 31,
	2026		2025
Operating lease cost	$	718,877	$	900,913
Finance lease cost		7,821		-
Variable lease cost		19,060		58,787
Short-term lease cost		237,933		16,701
Total lease expense	$	983,691	$	976,401

The aggregate cash payments under the leasing arrangements were approximately $934,000 and $878,000 for the three months ended March 31, 2026 and 2025, respectively, were included in operating cash flows.