HCWCMEDIUM SIGNALFINANCIAL10-K

HCWC shows mixed financial performance with significantly improved cash flow and equity position offset by declining operating income and rising expenses.

The company achieved a dramatic turnaround in operating cash flow from -$3.1M to positive $996K, indicating improved working capital management and cash generation capabilities. However, operating losses deepened despite revenue growth, suggesting expense control challenges that investors should monitor closely.

Comparing 2026-03-16 vs 2025-03-28View on EDGAR →
FINANCIAL ANALYSIS

HCWC demonstrated strong balance sheet improvements with stockholders' equity tripling to $7.3M and total debt declining 35.6% to $7.3M, while cash position strengthened modestly. The income statement presents a mixed picture with gross profit growing 13.3% to $30.7M but operating losses widening due to a 14.1% increase in SG&A expenses to $33.1M. Most notably, the company achieved a remarkable cash flow turnaround, moving from -$3.1M to positive $996K in operating cash flow, signaling improved operational efficiency despite profitability challenges.

FINANCIAL STATEMENT CHANGES
Stockholders Equity
Balance Sheet
+206.9%
$2.4M→$7.3M

Equity base grew 206.9% — retained earnings accumulation or equity issuance strengthening the balance sheet.

Operating Cash Flow
Cash Flow
+132.5%
-$3.1M→$996K

Operating cash flow surged 132.5% — exceptional cash generation, highest quality earnings signal.

Cash & Equivalents
Balance Sheet
+43.8%
$2.1M→$3.0M

Cash position surged 43.8% — strong cash generation or capital raise providing significant financial cushion.

Operating Income
P&L
-39.8%
-$1.8M→-$2.5M

Operating income deteriorated sharply — investigate whether driven by one-time charges or structural cost issues.

Total Debt
Balance Sheet
-35.6%
$11.3M→$7.3M

Debt reduced 35.6% — deleveraging strengthens balance sheet and reduces financial risk.

Accounts Receivable
Balance Sheet
-28.6%
$510K→$364K

Receivables declined — improved collection efficiency or conservative revenue recognition.

Capital Expenditure
Cash Flow
+27.3%
$252K→$321K

Capex increased 27.3% — ongoing investment in capacity or infrastructure for future growth.

Total Liabilities
Balance Sheet
-17.5%
$31.7M→$26.2M

Liabilities reduced 17.5% — deleveraging improves balance sheet strength and financial flexibility.

SG&A Expense
P&L
+14.1%
$29.0M→$33.1M

SG&A increased modestly — likely reflects growth-related hiring or sales expansion investment.

Gross Profit
P&L
+13.3%
$27.1M→$30.7M

Gross profit expanding — improving pricing power or product mix shift toward higher-margin offerings.

LANGUAGE CHANGES
NEW — 2026-03-16
PRIOR — 2025-03-28
ADDED
Exhibits, Financial Statement Schedules 28 Exhibit Index 29 SIGNATURES 31 i PART I Item 1.
On October 30, 2025, the parties to the HCMC Series E SPA entered into a Ninth Amendment to HCMC Series E SPA, pursuant to which HCMC and such parties agreed to amend the Completion Date to April 1, 2027.
As of December 31, 2025, HCWC has received $5.25 million of the committed $13.25 million, leaving the contractually obligated $8.0 million binding commitments to be fulfilled.
The parties, which comprise of the institutional investors that participated in the Spin-off as described above, have communicated their intent to further extend the Completion Date.
For further details regarding the remaining $8.0 million commitment and its significance to the Company s liquidity, see Note 2 - Going Concern.
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REMOVED
Exhibits, Financial Statement Schedules 27 Exhibit Index 28 SIGNATURES 30 PART I Item 1.
For the years ended December 31, 2024 and 2023, approximately 25% and 41% of our total purchases were from one vendor.
Existing unredeemed loyalty points remain valid for redemption until January 31, 2025.
Our Employees As of December 31, 2024, HCWC employed approximately 450 employees across its retail, warehouse, and corporate operations.
The Company s operations are managed as one integrated business unit with similar economic characteristics and are similar in the nature of the products sold, the product acquisition process, the types of customers products are sold to, the methods used to distribute the products, and the nature of the regulatory environment.
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