HEALTHIER CHOICES MANAGEMENT CORP. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF CONDENSED CONSOLIDATED OPERATIONS (form 10-Q)

The following discussion and analysis should be read in conjunction with our
unaudited interim condensed consolidated financial statements and related notes
appearing elsewhere in this report on Form 10-Q. In addition to historical
information, this discussion and analysis contains forward-looking statements
that involve risks, uncertainties, and assumptions. Our actual results may
differ materially from those anticipated in these forward-looking statements.
The terms "we," "us," "our," and the "Company" refer to Healthier Choices
Management Corp. and its wholly-owned subsidiaries, Healthy Choice Markets,
Inc., Healthy Choice Markets 2, LLC ("Paradise Health and Nutrition"), Healthy
Choice Markets 3, LLC ("Mother Earth's Storehouse"), Healthy Choices Markets 3
Real Estate LLC, Healthy Choice Markets IV, LLC ("Green's Natural Foods"), HCMC
Intellectual Property Holdings, LLC, Healthy Choice Wellness, LLC, The Vitamin
Store, LLC, Healthy U Wholesale, Inc., and The Vape Store, Inc. ("Vape Store").
All intercompany accounts and transactions have been eliminated in
consolidation.

Company Overview

Healthier Choices Management Corp. is a holding company focused on providing
consumers with healthier daily choices with respect to nutrition and other
lifestyle alternatives.

Through its wholly owned subsidiary HCMC Intellectual Property Holdings, LLC,
the Company manages and intends to expand on its intellectual property
portfolio.

Through its wholly owned subsidiaries, Healthy Choice Markets, Inc., Healthy
Choice Markets 2, LLC, and Healthy Choice Markets 3, LLC, respectively, the
Company operates:

• Ada’s Natural Market, a natural and organic grocery store offering fresh

produce, bulk foods, vitamins and supplements, packaged groceries, meat and

seafood, deli, baked goods, dairy products, frozen foods, health & beauty

products and natural household items.

• Paradise Health & Nutrition’s three stores that likewise offer fresh produce,

bulk foods, vitamins and supplements, packaged groceries, meat and seafood,

deli, baked goods, dairy products, frozen foods, health & beauty products and

natural household items.

• Mother Earth’s Storehouse, a two store organic and health food and vitamin

chain in New York’s Hudson Valley, which has been in existence for over 40

years.

Through its wholly owned subsidiaries, Healthy Choice Markets IV, LLC, the
Company acquired Green's Natural Foods on October 14, 2022, a chain of premier
natural foods stores in New York and New Jersey area, offering a selection of
100% organic produce and all-natural, non-GMO groceries & bulk foods; a wide
selection of local products; an organic juice and smoothie bar; a fresh foods
department, which offers fresh and healthy "grab & go" foods; a full selection
of vitamins & supplements; as well as health and beauty products. .

Through its wholly owned subsidiary, Healthy Choice Wellness, LLC, the Company
has licensing agreements for Healthy Choice Wellness Centers at the Casbah Spa
and Salon in Fort Lauderdale, FL, and Boston Direct Health in Boston, MA. These
centers offer multiple IV drip "cocktails" for clients to choose from that are
designed to help boost immunity, fight fatigue and stress, reduce inflammation,
enhance weight loss, and efficiently deliver antioxidants and anti-aging mixes.
Additionally, there are cocktails for health, beauty, and re-hydration.
(www.HealthyChoiceWellness.com)


Through its wholly owned subsidiary, Healthy U Wholesale Inc., the Company sells
vitamins and supplements, as well as health, beauty and personal care products
on its website www.TheVitaminStore.com.

Additionally, the Company markets its patented Q-Unit™ and Q-Cup® technology.
Information on these products and the technology is available on the Company's
website at www.theQcup.com.


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Liquidity

The unaudited condensed consolidated financial statements included elsewhere in
this Form 10-Q have been prepared in conformity with GAAP, which contemplate
continuation of the Company as a going concern and realization of assets and
satisfaction of liabilities in the normal course of business and do not include
any adjustments that might result from the outcome of any uncertainties related
to our going concern assessment. The carrying amounts of assets and liabilities
presented in the financial statements do not necessarily purport to represent
realizable or settlement values. The unaudited consolidated financial statements
do not include any adjustments that might result from the outcome of these
uncertainties.

The Company incurred a loss from operations of approximately $4.8 million for
the nine months ended September 30, 2022. As of September 30, 2022, cash and
cash equivalents totaled approximately $30.0 million. The Company expects to
continue incurring losses for the foreseeable future but we anticipate that our
current cash and cash equivalents and additional cash to be generated from
operations will be sufficient to cover our projected operating expenses for the
foreseeable future. Management does not believe there are any substantial doubts
about the Company's ability to continue as a going concern within a year and a
day from the issuance of these unaudited consolidated financial statements.

Factors Affecting Our Performance

We believe the following factors affect our performance:

Retail: We believe the operating performance of our retail stores will affect
our revenue and financial performance. The Company has four natural and organic
groceries and dietary supplement stores located in Florida, as well as two
located in New York. As of April 2022, the Company assigned the lease of its
remaining retail vape store due to adverse industry trends and increasing
federal and state regulations that, if implemented, may negatively impact future
retail revenues. All of the Company's other vape stores had been either closed
or had its assets sold from December 2021 to April 2022. This will allow the
Company to focus on developing wholesale business and sales through online
platform.

Increased Competition: Food retail is a large and competitive industry. Our
competition varies and includes national, regional, and local conventional
supermarkets, national superstores, alternative food retailers, natural foods
stores, smaller specialty stores, and farmers' markets. In addition, we compete
with restaurants and other dining options in the food-at-home and
food-away-from-home markets. The opening and closing of competitive stores, as
well as restaurants and other dining options, in regions where we operate will
affect our results. In addition, changing consumer preferences with respect to
food choices and to dining out or at home can impact us. We also expect
increased product supply and downward pressure on prices to continue and impact
our operating results in the future.

Our Response to the COVID-19 Pandemic: We are proud to provide our guests with
high quality, fresh foods and restaurant quality meals, delivered with
impeccable service in an exceptionally clean and well-stocked store. With the
ongoing COVID-19 pandemic, we continue to carefully monitor and adjust our
safety protocols while following public health guideline and local ordinances.
We have maintained many of the protocols established at the beginning of the
pandemic to keep our team members and guests safe. The COVID-19 pandemic has
presented many risks and challenges that we must manage. While we have
experienced many challenges, including but not limited to, product shortages,
staffing difficulties, and evolving customer shopping behaviors, our focus
remains on both offering our customers a high quality service experience and
supporting our essential front-line team members. Though we have successfully
managed these challenges to date, our operations and financial condition could
still be negatively affected by the COVID-19 pandemic and future developments,
which are highly uncertain and cannot be predicted.

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Results of Operations

The following table sets forth our unaudited condensed consolidated Statements
of Operations for the three months ended September 30, 2022 and 2021 that is
used in the following discussions of our results of operations:

                                                       Three Months Ended September 30,        2022 to 2021
                                                           2022                  2021            Change $
SALES
Vapor sales, net                                     $           1,187       $     466,181     $    (464,994 )
Grocery sales, net                                           5,775,543           2,803,327         2,972,216
TOTAL SALES, NET                                             5,776,730           3,269,508         2,507,222

Cost of sales vapor                                                364             186,522          (186,158 )
Cost of sales grocery                                        3,909,190           1,706,597         2,202,593
GROSS PROFIT                                                 1,867,176           1,376,389           490,787

OPERATING EXPENSES
Selling, general and administrative                          3,985,377           2,427,256         1,558,121
LOSS FROM OPERATIONS                                        (2,118,201 )    

(1,050,867 ) (1,067,334 )

OTHER INCOME (EXPENSE)
Loss on investment                                             (11,314 )              (557 )         (10,757 )
Other income                                                     4,327                   -             4,327
Interest income                                                 50,202               1,543            48,659
Total other income (expense), net                               43,215                 986            42,229

NET LOSS                                             $      (2,074,986 )     $  (1,049,881 )   $  (1,025,105 )



Net vapor sales decreased approximately $0.5 million to $1.2 thousand for the
three months ended September 30, 2022 as compared to $0.5 million for the same
period in 2021. The decrease in sales is primarily due to the impact of  store
closings during the second quarter of 2022.

Net grocery sales increased $3.0 million to $5.8 million for the three months
ended September 30, 2022 as compared to $2.8 million for the same period in
2021. The increase in sales is primarily due to an increase in the number of
stores as a result of the acquisition of Mother Earth's Storehouse in February
2022.

Vapor cost of goods sold for the three months ended September 30, 2022 and 2021
were $- thousand and $0.2 million, respectively, a decrease of $0.2 million. The
decrease is primarily due to the closing the remaining retail vape stores during
three months ended September 30, 2022 as compared to the same period in 2021.
Gross profit was $0.8 thousand and $0.3 million for three months ended September
30, 2022 and 2021, respectively. Closing retail vape stores will allow the
Company focus on developing wholesale business and online platform.

Grocery cost of goods sold for the three months ended September 30, 2022 and
2021 were $3.9 million and $1.7 million, respectively, an increase of $2.2
million. The increase is primarily due to an increase in the number of stores
from the acquisition of Mother Earth's Storehouse on February 14, 2022. Gross
profit was $1.9 million and $1.1 million for the three months ended September
30, 2022 and 2021, respectively. Gross margin as a percentage of sales decreased
approximately 10% as compared to the same period in prior year as a result of
lost sales in in our Florida stores, and write off of damaged inventory as a
result of Hurricane Ian.

Total operating expenses increased $1.6 million to $4.0 million for the three
months ended September 30, 2022 compared to $2.4 million for the same period in
2021. The increase is primarily attributable to increases in professional fees
of $0.6 million, payroll and employee related cost of $0.7 million, depreciation
and amortization expense of $0.2 million and occupancy costs of $0.1 million.

Total net other income increased $42,000 to $43,000 for the three months ended
September 30, 2022 compared to $1,000 for the same period in 2021. The increase
in net other income is mainly attributable to increase in interest income as a
result of an increase in interest rates.

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The following table sets forth our unaudited consolidated Statements of
Operations for the nine months ended September 30, 2022 and 2021 that is used in
the following discussions of our results of operations:

                                                       Nine Months Ended September 30,        2022 to 2021
                                                           2022                 2021            Change $
SALES
Vapor sales, net                                     $        256,747       $   1,671,098     $  (1,414,351 )
Grocery sales, net                                         16,700,596           8,450,055         8,250,541
TOTAL SALES, NET                                           16,957,343       

10,121,153 6,836,190

Cost of sales vapor                                           112,610             657,171          (544,561 )
Cost of sales grocery                                      10,674,170           5,133,228         5,540,942
GROSS PROFIT                                                6,170,563           4,330,754         1,839,809

OPERATING EXPENSES
Selling, general and administrative                        11,012,070           6,599,224         4,412,846
LOSS FROM OPERATIONS                                       (4,841,507 )     

(2,268,470 ) (2,573,037 )

OTHER INCOME (EXPENSE)
Gain (loss) on investment                                      (6,000 )            10,954           (16,954 )
Other income                                                   27,376                   -            27,376
Interest income (expense), net                                 81,715             (76,888 )         158,603
Gain on extinguishment of debt, net                                 -             767,930          (767,930 )
Total other income (expense), net                             103,091             701,996          (598,905 )

NET LOSS                                             $     (4,738,416 )     $  (1,566,474 )   $  (3,171,942 )



Net Vapor sales decreased $1.4 million to $0.3 million for the nine months
ended September 30, 2022 as compared to $1.7 million for the same period in
2021. The decrease in sales is primarily due to closing the remaining retail
vape stores during the nine months ended September 30, 2022 as compared to the
same period in 2021.

Net Grocery sales increased $8.3 million to $16.7 million for the nine months
ended September 30, 2022 as compared to $8.5 million for the same period in
2021. The increase in sales is primarily due to acquisition of Mother Earth's
Storehouse in February 2022.

Vapor cost of goods sold for the nine months ended September 30, 2022 and 2021
were $0.1 million and $0.7 million, respectively, a decrease of $0.5 million.
The decrease is primarily due to closing retail stores. Gross profit was $0.1
million and $1.0 million for the nine months ended September 30, 2022 and 2021,
respectively. Closing retail vape stores will allow the Company focus on
developing wholesale business and online platform.

Grocery cost of goods sold for the nine months ended September 30, 2022 and 2021
were $10.7 million and $5.1 million, respectively, an increase of $5.5 million.
The increase is primarily due to the acquisition of Mother Earth's Storehouse in
February 2022. Gross profit was $6.0 million and $3.3 million for the nine
months ended September 30, 2022 and 2021, respectively.

Total operating expenses increased $4.4 million to $11.0 million for the nine
months ended September 30, 2022 compared to $6.6 million for the same period in
2021. Out of the $4.4 million operating expense increase, $2.5 million increase
is due to Mother Earth's Storehouse acquisition. The increase is primarily
attributable to increases in the professional fees of $1.5 million, office and
store expenses of $0.2 million, payroll and employee related cost of $1.9
million, depreciation and amortization expenses of $273,000, meals, travel and
entertainment of $45,000, insurance of $34,000, and occupancy of $248,000,
offset by a decrease in stock compensation of $34,000.

Net other income of $0.1 million for the nine months ended September 30, 2022
includes a loss on investment of $6,000, other income of $27,000,  and an
interest income of $82,000. Net other income of $0.7 million for the nine months
ended September 30, 2021 includes a gain on debt settlement of $768,000, a gain
on investment of $11,000, and interest expense of $77,000.

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Liquidity and Capital Resources

                                   Nine Months Ended September 30,
                                       2022                 2021

Net cash provided by (used in)

 Operating activities            $     (2,676,131 )     $  (2,044,147 )
 Investing activities                  (5,359,187 )           (25,106 )
Financing activities                   12,873,087          27,316,225
                                 $      4,837,769       $  25,246,972



Our net cash used in operating activities of approximately $2.7 million for the
nine months ended September 30, 2022 resulted from a net loss of $4.7 million,
offset by a non-cash adjustment of $1.7 million and a net cash provided of $0.3
million from changes in operating assets and liabilities. Our net cash used in
operating activities of $2.0 million for the nine months ended September 30,
2021 resulted from a net loss of $1.6 million and a net cash usage of $0.8
million from changes in operating assets and liabilities, offset by a non-cash
adjustment of $0.4 million.

The net cash used in investing activities of $5.4 million for the nine months
ended September 30, 2022 resulted from the acquisition of Mother Earth's
Storehouse, collection on a note receivable, and purchases of property and
equipment. The net cash used in investing activities of $25,000 for the nine
months ended September 30, 2021 resulted from the collection of a note
receivable, and purchases of property and equipment.

The net cash provided by financing activities of $12,873,000 for the nine months
ended September 30, 2022 is due to proceeds received from the Series E Preferred
Stock sales and from proceeds received from line of credit. The net cash
provided by financing activities of $27.3 million for the nine months
ended September 30, 2021 is due to proceeds received from the stock rights
offering of $24.3 million and a Securities Purchase Agreement of $5.0 million,
partially offset by a principal payment of $2.0 million on the line of credit
and loan payment of $0.3 million.

At September 30, 2022 and December 31, 2021, we did not have any material
financial guarantees or other contractual commitments with vendors that are
reasonably likely to have an adverse effect on liquidity.

Our cash balances are kept liquid to support our growing acquisition and
infrastructure needs for operational expansion. Most of our cash and cash
equivalents are concentrated in one financial institution and are generally in
excess of the FDIC insurance limit. The Company has not experienced any losses
on its cash and cash equivalents. The following table presents the Company's
cash position as of September 30, 2022 and December 31, 2021.

                               September 30, 2022       December 31, 2021
Cash                         $         30,009,173     $        26,496,404
Total assets                 $         45,470,486     $        34,443,487
Percentage of total assets                  66.00 %                 76.93 %



The Company reported a net loss of $4.7 million for the nine months
ended September 30, 2022. The Company also had positive working capital of $30.1
million. The Company expects to continue incurring losses for the foreseeable
future but we do not believe there are any substantial doubts about the
Company's ability to continue as a going concern. The Company's current cash and
cash generated from operations will be sufficient to meet the projected
operating expenses for the foreseeable future through at least the next twelve
months from the issuance of these unaudited condensed consolidated financial
statements.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

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Critical Accounting Policies and Estimates

Our management's discussion and analysis of financial condition and results of
operations is based on our unaudited condensed consolidated financial
statements, which have been prepared in accordance with accounting principles
generally accepted in the United States, or U.S. GAAP. The preparation of these
condensed consolidated financial statements requires us to exercise considerable
judgment with respect to establishing sound accounting policies and in making
estimates and assumptions that affect the reported amounts of our assets and
liabilities, our recognition of revenues and expenses, and disclosure of
commitments and contingencies at the date of the condensed consolidated
financial statements.

We base our estimates on our historical experience, knowledge of our business
and industry, current and expected economic conditions, the attributes of our
products, the regulatory environment, and in certain cases, the results of
outside appraisals. We periodically re-evaluate our estimates and assumptions
with respect to these judgments and modify our approach when circumstances
indicate that modifications are necessary. These estimates and assumptions form
the basis for making judgments about the carrying values of assets and
liabilities that are not readily apparent from other sources.

While we believe that the factors we evaluate provide us with a meaningful basis
for establishing and applying sound accounting policies, we cannot guarantee
that the results will always be accurate. Since the determination of these
estimates requires the exercise of judgment, actual results could differ from
such estimates.

There have been no material changes to the Company's critical accounting
policies and estimates as compared to the critical accounting policies and
estimates described in the 2021 Annual Report, which we believe are the most
critical to our business and the understanding of our results of operations and
affect the more significant judgments and estimates that we use in the
preparation of our condensed consolidated financial statements.

Seasonality

We do not consider our business to be seasonal.

Cautionary Note Regarding Forward-Looking Statements

This report includes forward-looking statements including statements regarding
retail expansion, the future demand for our products, the transition to
vaporizer and other products, competition, the adequacy of our cash resources
and our authorized Common Stock, and our continued ability to raise capital.

The words "believe," "may," "estimate," "continue," "anticipate," "intend,"
"should," "plan," "could," "target," "potential," "is likely," "will," "expect"
and similar expressions, as they relate to us, are intended to identify
forward-looking statements. We have based these forward-looking statements
largely on our current expectations and projections about future events and
financial trends that we believe may affect our financial condition, results of
operations, business strategy and financial needs.

The results anticipated by any or all of these forward-looking statements might
not occur. Important factors that could cause actual results to differ from
those in the forward-looking statements include our future common stock price,
the timing of future Series D preferred stock exercises and stock sales,
customer acceptance of our products, and proposed federal and state regulation.
We undertake no obligation to publicly update or revise any forward-looking
statements, whether as the result of new information, future events or
otherwise.


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