LEASES

6 Months Ended

Jun. 30, 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 and finance leases as of June 30, 2026.

Payments due by period	Operating Leases			Finance Leases
2026 (remaining six months)	$	1,996,235		$	18,583
2027		3,341,806			37,165
2028		2,578,187			37,165
2029		1,956,813			37,165
2030		741,048			27,874
Thereafter		796,582			-
Total undiscounted lease payments	$	11,410,671		$	157,952
Less: Imputed interest		(1,200,020	)		(21,547	)
Present value of lease liabilities	$	10,210,651		$	136,405

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 and finance leases:

Balance Sheet Classification	June 30, 2026		December 31, 2025
Operating lease right-of-use assets	$	10,085,408	$	10,503,441
Finance lease right-of-use assets		132,958		148,600
Total right-of-use assets	$	10,218,366	$	10,652,041

Operating lease liability, current	$	3,341,179	$	3,472,897
Finance lease liability, current		28,433		27,423
Operating lease liability, net of current		6,869,472		7,111,534
Finance lease liability, net of current		107,972		122,445
Total lease liabilities	$	10,347,056	$	10,734,299

The amortization of the right-of-use assets of approximately $1,925,000 and $1,846,000 for the six months ended June 30, 2026 and 2025, respectively, were included in operating cash flows.

The following table provides a summary of other information related to the leases at June 30, 2026 and December 31, 2025:

SCHEDULE OF LEASE TERM

Other Information	June 30, 2026			December 31, 2025
Weighted-average remaining lease term for operating leases		3.7 years			4 years
Weighted-average discount rate for operating leases		6.04	%		5.30	%
Weighted-average remaining lease term for finance leases		4.25 years			5 years
Weighted-average discount rate for finance leases		7.25	%		7.25	%

Rent expense for the three months ended June 30, 2026 and 2025 was approximately $972,000 and $974,000, respectively. Rent expense for the six months ended June 30, 2026 and 2025 was approximately $1,948,000 and $1,951,000, respectively. 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 and six months ended June 30, 2026 and 2025 were as follows:

SCHEDULE OF COMPONENTS OF LEASE EXPENSE

	2026			2025		2026			2025
	Three Months Ended June 30,					Six Months Ended June 30,
	2026			2025		2026			2025
Operating lease cost	$	806,558		$	864,402	$	1,603,279		$	1,719,038
Variable lease cost		3,539			46,163		22,599			104,950
Short-term lease cost		161,642			63,758		321,730			126,736
Finance lease cost		7,821			-		15,642			-
Total lease expense	$	979,560		$	974,323	$	1,963,250		$	1,950,724
Sublease income		(6,295	)		-		(6,295	)		-
Total lease expense, net	$	973,265		$	974,323	$	1,956,955		$	1,950,724

The aggregate cash payments under the leasing arrangement were approximately $1,881,000 and $1,767,000 for the six months ended June 30, 2026 and 2025, respectively, included in operating cash flows.