NOTE 17. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

On July 31, 2024, one of the Company’s subsidiaries, Healthy Choice Markets IV, LLC, was served with a lawsuit filed by a former employee alleging violations of state and federal wage and hour laws. The Company successfully resolved the complaint for a $5,000 settlement fee in September 2025. The Company recognized $5,000 in litigation settlement expense in the Condensed Consolidated Statements of Operations.

From time to time the Company is involved in legal proceedings arising in the ordinary course of our business. We believe that there is no other litigation pending that is likely to have, individually or in the aggregate, a material adverse effect on our financial condition or results of operations as of June 30, 2026. With respect to legal costs, we record such costs as incurred.

Merger Agreement

On May 26, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Host Digital Infrastructure LLC (“Host Digital”) and its wholly owned subsidiary, Healthy Choice Wellness II Corp., pursuant to which Healthy Choice Wellness II Corp. will merge with and into Host Digital, with Host Digital surviving as a wholly owned subsidiary of the Company (the “Merger”). The Merger is subject to the satisfaction or waiver of customary closing conditions, including approval by the Company’s stockholders. As of the date of these financial statements, the Merger had not yet been completed. See Note 18 – Subsequent Events for additional information.