10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

Or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission file number: 001-36469

HEALTHIER CHOICES MANAGEMENT CORP.

(Exact name of Registrant as specified in its charter)

Delaware	84-1070932
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
3800 North 28^Th^ Way
Hollywood, FL	33020
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 305-600-5004

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	HCMC	OTC Pink Marketplace

As of July 1, 2020, there were 85,435,969,169 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

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TABLE OF CONTENTS

	PAGE
PART I FINANCIAL INFORMATION	1
ITEM 1. Financial Statements (Unaudited)	1
Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31,<br> 2019	1
Condensed Consolidated Statements of Operations for the Three Months Ended<br> March 31, 2020 and 2019	2
Condensed Consolidated Shareholders’ Equity Statements for the Three<br> Months Ended March 31, 2020 and 2019	3
Condensed Consolidated Statements of Cash Flows for the Three Months Ended<br> March 31, 2020 and 2019	4
Notes to Condensed Consolidated Financial Statements	5
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of<br> Operations	10
ITEM 3. Quantitative and Qualitative Disclosures about Market Risk	14
ITEM 4. Controls and Procedures	14
PART II OTHER INFORMATION	15
ITEM 1. Legal Proceedings	15
ITEM 1A. Risk Factors	15
ITEM 2. Unregistered Sales of Equity Securities and Use<br> of Proceeds	15
ITEM 3. Defaults Upon Senior Securities	15
ITEM 4. Mine Safety Disclosures	15
ITEM 5. Other Information	15
ITEM 6. Exhibits	16
Signatures	17
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

		December 31,<br><br> <br>2019
ASSETS
CURRENT ASSETS
Cash and cash equivalents	3,162,695	$	3,525,415
Accounts receivable, net	66,482		65,401
Inventories	1,716,976		1,757,012
Prepaid expenses and vendor deposits	248,661		269,833
Investment	14,143		24,000
TOTAL CURRENT ASSETS	5,208,957		5,641,661
Property and equipment, net of accumulated depreciation	304,307		332,290
Intangible assets, net of accumulated amortization	1,903,816		1,923,447
Goodwill	956,000		956,000
Note receivable	336,025		343,387
Right of use asset – operating lease, net	4,504,295		4,663,019
Other assets	142,908		146,865
TOTAL ASSETS	13,356,308	$	14,006,669
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	999,553	$	825,860
Contract liabilities	23,067		26,823
Current portion of line of credit	2,000,000		2,000,000
Current portion of loan payment	282,375		282,344
Operating lease liability, current	546,703		555,959
TOTAL CURRENT LIABILITIES	3,851,698		3,690,986
Loan payable, net of current portion	798,618		869,223
Operating lease liability, net of current	3,413,611		3,544,729
TOTAL LIABILITIES	8,063,927		8,104,938
COMMITMENTS AND CONTINGENCIES (SEE NOTE 8)
STOCKHOLDERS’ EQUITY
Series B convertible preferred stock, 1,000 par value per share, 30,000 shares authorized; 20,150 shares<br> issued and outstanding as of March 31, 2020 and December 31, 2019; aggregate liquidation preference of 20.2 million	20,150,116		20,150,116
Common Stock, 0.0001 par value per share, 750,000,000,000 shares authorized; approximately 72.5 and 67.7<br> billion shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively	7,249,743		6,769,849
Additional paid-in capital	7,220,295		7,618,245
Accumulated deficit	(29,327,773)		(28,636,479)
TOTAL STOCKHOLDERS’ EQUITY	5,292,381		5,901,731
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	13,356,308	$	14,006,669

All values are in US Dollars.

See notes to unaudited condensed consolidated financial statements

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HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

	Three Months Ended
	March 31,
	2020		2019
SALES
Vapor sales, net	$	773,458	$	1,224,042
Grocery sales, net		3,262,714		3,156,064
TOTAL SALES, NET		4,036,172		4,380,106
Cost of sales vapor		319,080		509,416
Cost of sales grocery		2,009,200		1,967,796
GROSS PROFIT		1,707,892		1,902,894
OPERATING EXPENSES		2,372,381		2,990,455
LOSS FROM OPERATIONS		(664,489)		(1,087,561)
OTHER (EXPENSE) INCOME
Loss on investment		(9,857)		(25,713)
Other expense, net		(76)		(693)
Interest (expense) income, net		(16,872)		1,438
Total other expense, net		(26,805)		(24,968)
NET LOSS	$	(691,294)	$	(1,112,529)
NET LOSS PER SHARE-BASIC AND DILUTED	$	0.00	$	0.00
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING-BASIC AND DILUTED		69,716,324,179		66,624,914,548

See notes to unaudited condensed consolidated financial statements

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HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED STOCKHOLDERS’ EQUITY STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2020

(UNAUDITED)

	Convertible<br><br> <br>Preferred Stock				Common Stock				Additional<br><br> <br>Paid-In		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit		Total
Balance – January 1, 2020		20,150	$	20,150,116		67,698,494,244	$	6,769,849	$	7,618,245	$	(28,636,479)	$	5,901,731
Issuance of common stock in connection with cashless exercise of Series A warrants		-		-		4,798,932,767		479,894		(479,894)		-		-
Stock-based compensation expense		-		-		-		-		81,944		-		81,944
Net loss		-		-		-		-		-		(691,294)		(691,294)
Balance – March 31, 2020		20,150	$	20,150,116		72,497,427,011	$	7,249,743	$	7,220,295	$	(29,327,773)	$	5,292,381

HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED STOCKHOLDERS’ EQUITY STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2019

(UNAUDITED)

	Convertible<br><br> <br>Preferred Stock				Common Stock				Additional<br><br> <br>Paid-In		Accumulated
	Shares		Amount		Shares		Amount		Capital		Deficit		Total
Balance – January 1, 2019		20,150	$	20,150,116		66,623,514,522	$	6,662,351	$	7,348,390	$	(25,734,088)	$	8,426,769
Issuance of common stock in connection with cashless exercise of Series A warrants		-		-		10,872,544		1,087		(637)		-		450
Cumulative Effect on adoption of ASC 842		-		-		-		-		-		(103,015)		(103,015)
Stock-based compensation expense		-		-		-		-		113,079		-		113,079
Net loss												(1,112,529)		(1,112,529)
Balance – March 31, 2019		20,150	$	20,150,116		66,634,387,066	$	6,663,438	$	7,460,832	$	(26,949,632)	$	7,324,754

See notes to unaudited condensed consolidated financial statements

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HEALTHIER CHOICES MANAGEMENT CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended March 31,
	2020		2019
OPERATING ACTIVITIES
Net loss	$	(691,294)	$	(1,112,529)
Adjustments to reconcile net loss to net cash used in operating activities:
Bad debt expense		-		(3,002)
Depreciation and amortization		147,834		152,314
Loss on disposal of assets		-		25,427
Loss on investment		9,857		25,713
Amortization of right-of-use asset		158,724		162,782
Stock-based compensation expense		81,944		113,079
Changes in operating assets and liabilities:
Accounts receivable		(1,081)		14,989
Inventories		40,036		(61,407)
Prepaid expenses and vendor deposits		21,171		(43,276)
Contract assets		-		14,400
Other assets		3,958		839
Accounts payable		126,569		247,299
Accrued expenses		47,124		(252,310)
Contract liabilities		(3,756)		(201,928)
Lease liability		(140,374)		(143,233)
NET CASH USED IN OPERATING ACTIVITIES		(199,288)		(1,060,843)
INVESTING ACTIVITIES
Collection of note receivable		7,362		41,473
Purchases of property and equipment		(10,805)		-
Purchases of patent		(89,415)		-
NET CASH USED IN INVESTING ACTIVITIES		(92,858)		41,473
FINANCING ACTIVITIES
Principal payments on loan payable		(70,574)		(47,211)
NET CASH USED IN FINANCING ACTIVITIES		(70,574)		(47,211)
DECREASE IN CASH		(362,720)		(1,066,581)
CASH AND CASH EQUIVALENTS — BEGINNING OF PERIOD		3,525,415		7,061,253
CASH AND CASH EQUIVALENTS — END OF PERIOD	$	3,162,695	$	5,994,672
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	$	35,256	$	30,052

See notes to unaudited condensed consolidated financial statements

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HEALTHIER CHOICES MANAGEMENT CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1. ORGANIZATION, GOING CONCERN, AND BASIS OF PRESENTATION

Organization

Healthier Choices Management Corp. (collectively, the “Company”, “we”, “us” and “our”)) is a holding company focused on providing consumers with healthier daily choices with respect to nutrition and other lifestyle alternatives. The Company currently operates nine retail vape stores in the Southeast region of the United States, through which it offers e-liquids, vaporizers and related products. The Company also operates Ada’s Natural Market, a natural and organic grocery store, through its wholly owned subsidiary Healthy Choice Markets, Inc and Paradise Health and Nutrition, stores that 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 through its wholly owned subsidiary Healthy Choice Markets 2, LLC. The Company also sells vitamins and supplements on the Amazon.com marketplace through its wholly owned subsidiary Healthy U Wholesale, Inc. The Company markets the Q-Cup™ technology under the vape segment; this patented technology is based on a small, quartz cup called the Q-Cup™, which a customer partially fills with either cannabis or CBD concentrate (approximately 50 mg) purchased from a third party. The Q-Cup™ is then inserted into the Q-Cup™ Tank or Globe, that heats the cup from the outside without coming in direct contact with the solid concentrate. This Q-Cup™ technology provides significantly more efficiency and an “on the go” solution for consumers who prefer to vape concentrates either medicinally or recreationally.

COVID-19 Management Update

In March 2020, the outbreak of COVID-19 (coronavirus) caused by a novel strain of the coronavirus has recently been recognized as a pandemic by the World Health Organization, and the outbreak has become increasingly widespread in the United States, including in the markets in which the Company operates.  The COVID-19 outbreak has had a notable impact on general economic conditions, including but not limited to the temporary closures of many businesses, “shelter in place” and other governmental regulations, reduced consumer spending due to both job losses and other effects attributable to the COVID-19, and there are many unknowns. The Company has adjusted certain aspects of the operations to protect their employees and customers while still meeting customers’ needs. While to date the Company has not been required to close any of its stores, the Company is currently operating under regular hours and we are expecting COVID-19 to have a long-term beneficial impact to the future financial results of the grocery segment. The Company continues to monitor the impact of the COVID-19 outbreak closely.  The extent to which the COVID-19 outbreak will impact our operations is controllable, and there is no imminent risk on business continuity and future operation.

Unaudited Interim Financial Information

The unaudited condensed consolidated financial statements have been prepared by the Company and reflect all normal, recurring adjustments that, in the opinion of management, are necessary for a fair presentation of the interim financial information. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the year ending December 31, 2020. Certain information and footnotes normally included in financial statements prepared in accordance with GAAP have been omitted under the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). These unaudited condensed consolidated financial statements and notes included herein should be read in conjunction with the audited consolidated financial statements and related notes thereto as of and for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K for such year as filed with the SEC on May 13, 2020.

Note 2. GOING CONCERN AND LIQUIDITY

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“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 Company incurred a loss from operations of approximately $0.7 million for the three months ended March 31, 2020. As of March 31, 2020, cash and cash equivalents totaled approximately 3.2 million. While we anticipate that our current cash, cash equivalents, and cash to be generated from operations will be sufficient to meet our projected operating plans for the foreseeable future through a year and a day from the issuance of these consolidated financial statements, should we require additional funds (either through equity or debt financings, collaborative agreements or from other sources), we have no commitments to obtain such additional financing and we may not be able to obtain any such additional financing on terms favorable to us, or at all.

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Note 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates in the Preparation of the Financial Statements

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of net revenue and expenses during the reporting periods. Actual results could differ from those estimates. These estimates and assumptions include allowances, reserves and write-downs of receivables and inventory, valuing equity securities and hybrid instruments, share-based payment arrangements, deferred taxes and related valuation allowances, and the valuation of the assets and liabilities acquired in business combinations. Certain of management’s estimates could be affected by external conditions, including those unique to our industry, and general economic conditions. It is possible that these external factors could have an effect on our estimates that could cause actual results to differ from our estimates. The Company re-evaluates all of its accounting estimates at least quarterly based on these conditions and records adjustments when necessary.

Basis of Presentation and Principles of Consolidation

The Company’s unaudited condensed consolidated financial statements are prepared in accordance with GAAP. The unaudited condensed consolidated financial statements include the accounts of all subsidiaries in which the Company holds a controlling financial interest as of the financial statement date.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Healthy Choice Markets, Inc., Healthy Choice Markets 2, LLC (“Paradise Health and Nutrition”), The Vitamin Store, LLC, Healthy U Wholesale, Inc., The Vape Store, Inc. (“Vape Store”), Vaporin, Inc. (“Vaporin”), Smoke Anywhere U.S.A., Inc. (“Smoke”), Emagine the Vape Store, LLC (“Emagine”), IVGI Acquisition, Inc., Vapormax Franchising LLC, Vaporin LLC, and Vaporin Florida, Inc. All intercompany accounts and transactions have been eliminated in consolidation.

Note 4. CONCENTRATIONS

Cash and Cash Equivalents

Our cash balances are kept liquid to support our growing acquisition and infrastructure needs for operational expansion. The majority of the Company’s cash and cash equivalents are concentrated in one large financial institution, which is in excess of Federal Deposit Insurance Corporation (FDIC) coverage.

A summary of the financial institutions that had a cash and cash equivalents in excess of FDIC limits of $250,000 at March 31, 2020 and December 31, 2019 is presented below:

	March 31, 2020
Total Cash and cash equivalents in excess of FDIC limits of $250,000	$	2,366,651

The Company continually monitors its positions with, and the credit quality of, the financial institutions with which it invests, as deposits are held in excess of federally insured limits. The Company has not experienced any losses in such accounts.

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Note 5. DISAGGREGATION OF REVENUES

The Company reports the following segments in accordance with management guidance: Vapor and Grocery. When the Company prepares its internal management reporting to evaluate business performance, we disaggregate revenue into the following categories that depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.

	Three Months Ended March 31,
	2020		2019
Vapor	$	773,458	$	1,224,042
Grocery		3,262,714		3,156,064
Total revenue	$	4,036,172	$	4,380,106
Retail Vapor	$	773,458	$	1,223,722
Retail Grocery		2,830,365		2,753,199
Food service/restaurant		329,139		347,651
Online/eCommerce		103,210		46,569
Wholesale Grocery		-		8,645
Wholesale Vapor		-		320
Total revenue	$	4,036,172	$	4,380,106

Note 6. INTANGIBLE ASSETS

Intangible assets, net are as follows:

March 31, 2020	Useful Lives (Years)		Gross<br><br> <br>Carrying Amount		Accumulated<br><br> <br>Amortization		Net<br><br> <br>Carrying Amount
Trade names		8-10 years	$	993,000	$	(379,671)	$	613,329
Customer relationships		4-10 years		1,228,000		(356,323)		871,677
Patents		10 years		359,665		(58,667)		300,998
Non-compete		4 years		174,000		(56,188)		117,812
Intangible assets, net			$	2,754,665	$	(850,849)	$	1,903,816
December 31, 2019	Useful Lives (Years)		Gross<br><br> <br>Carrying Amount		Accumulated<br><br> <br>Amortization		Net<br><br> <br>Carrying Amount
---	---	---	---	---	---	---	---	---
Trade names		8-10 years		993,000		(354,203)		638,797
Customer relationships		4-10 years		1,228,000		(293,260)		934,740
Patents		10 years		270,250		(49,027)		221,223
Non-compete		4 years		174,000		(45,313)		128,687
Intangible assets, net			$	2,665,250	$	(741,803)	$	1,923,447

Intangible assets are amortized on a straight-line basis over their estimated useful lives. Amortization expense amounted to approximately $0.1 million and $0.1 million for the three months ended March 31, 2020 and 2019, respectively. Future annual estimated amortization expense is as follows:

Years ending December 31,
2020 (remaining nine months)	$	325,193
2021		426,591
2022		411,206
2023		172,341
2024		172,341
Thereafter		396,144
Total	$	1,903,816

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Note 7. CONTRACT LIABILITIES

The Company’s contract liabilities consists of gift cards and loyalty rewards, for which the Company has a performance obligation to deliver products when customers redeem balances or terms expire through breakage. Our breakage policy is twenty four-month for gift cards, twelve months for Grocery loyalty rewards, and six months for Vapor loyalty rewards. As such, all contract liabilities are expected to be recognized within a twenty four-month period. Revenue is recognized when gift card and loyalty points are redeemed.

A summary of the net changes in contract liabilities activity for the three months ended March 31, 2020 and 2019 is presented below:

	March 31,<br><br> <br>2020		March 31,<br><br> <br>2019
Beginning balance as January 1,	$	26,823	$	442,630
Issued		60,309		74,894
Redeemed		(63,509)		(74,387)
Breakage recognized		(556)		(648)
Fulfillment of contract		-		(201,787)
Ending balance as of March 31,	$	23,067	$	240,702

Note 8. STOCKHOLDERS’ EQUITY

Series A Warrants

In the three months ended March 31, 2020, the Company issued 4.8 billion shares in connection with the cashless exercise of the Series A warrants.

Stock Options

A summary of Stock-based compensation expense recognized is presented below:

	Three Months Ended March 31,
	2020		2019
Stock-based compensation	$	81,944	$	113,079

Income (Loss) Per Share

The following table summarizes the Company’s securities, in common share equivalents, that have been excluded from the calculation of dilutive loss per share as their effect would be anti-dilutive:

	Three Months Ended March 31,
	2020		2019
Preferred stock		201,501,000,000		201,501,000,000
Stock options		68,062,000,000		68,012,000,000
Warrants		36,460,000,000		41,579,000,000
Total		306,023,000,000		311,092,000,000

Note 9. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Two lawsuits were filed against the Company and its subsidiaries in connection with alleged claimed battery defects for an electronic cigarette device. Plaintiffs claim these batteries were sold by a store of the Company’s subsidiary and have sued for an undetermined amount of damages (other than a total of $0.4 million of medical costs). The initial complaints were filed between January 2019 and April 2019. We responded to the complaints on April 2019 and May 2019, respectively. Given the lack of information presented by the plaintiffs to date, the Company is unable to predict the outcome of these matters and, at this time, cannot reasonably estimate the possible loss or range of loss with respect to these legal proceedings.

As of March 31, 2020, the Company has not accrued for a potential loss for these actions. Given the information received to date, the Company believes the allegations are without merit and intends to vigorously contest such actions. These lawsuits remain in the early stages and progressed minimally in 2020. With respect to legal costs, we record such costs as incurred.

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Note 10. SUBSEQUENT EVENTS

The Company evaluated subsequent events through July 1, 2020, the date on which the March 31, 2020 unaudited condensed financial statements were originally issued. There are no significant events that require disclosure in these financial statements, except as follows:

Cashless Exercises of Series A Warrants

From April 1, 2020 through July 1, 2020, there were 12 Series A Warrants exercised through the cashless exercise provision of such warrants. As a result, the Company issued 12.9 billion shares.

Renewal of Credit Line

On April 13, 2018, the Company agreed to a new revolving credit line of $2 million and a money market account of $2 million (“blocked account”) with Professional Bank in Coral Gables, Florida. On June 30, 2020, the Company reached agreement with Professional Bank to renew the credit line for one more year, and the next annual review will occur on or before July 15, 2021. The new agreement included a variable interest rate that it is based on a rate of 1.50% over what is earned on the collateral amount. The collateral amount established in the arrangement with the bank is $2 million.

Paycheck Protection Program

On May 15, 2020, Healthier Choices Management Corp.(the “Company”), was granted a loan (the “Loan”) from Customers Bank, in the aggregate amount of $876,515, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020.

The Loan, which was in the form of a Note dated May 6, 2020 issued by the Company, matures on May 6, 2022 and bears interest at a rate of 1% per annum, payable monthly commencing on November 6, 2020. The Note may be prepaid by the Borrower at any time prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred after May 6, 2020. The Company intends to use the entire Loan amount for these qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF CONDENSED CONSOLDIATED OPERATIONS

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”), The Vitamin Store, LLC, Healthy U Wholesale, Inc., The Vape Store, Inc. (“Vape Store”), Vaporin, Inc. (“Vaporin”), Smoke Anywhere U.S.A., Inc. (“Smoke”), Emagine the Vape Store, LLC (“Emagine”), IVGI Acquisition, Inc., Vapormax Franchising LLC, Vaporin LLC, and Vaporin Florida, Inc. . All intercompany accounts and transactions have been eliminated in consolidation.

Company Overview

Healthier Choices Management Corp. (collectively, the “Company”, “we”, “us” and “our”) is a holding company focused on providing consumers with healthier daily choices with respect to nutrition and other lifestyle alternatives. The Company currently operates nine retail vape stores in the Southeast region of the United States, through which it offers e-liquids, vaporizers and related products. The Company markets its Q-Cup™ technology under the vape segment. This Q-Cup™ technology provides significantly more efficiency and an “on the go” solution for consumers who prefer to vape concentrates either medicinally or recreationally. In October 2019, the Company announced the launch of the Q-Unit, a U.S. patented device made specifically for vaping concentrates.  The Q-Unit, which boasts a mechanism that prevents the concentrates from coming in direct contact with the heating element, allows consumers to vape uncut pure extract from a pure quartz cup. The Company also operates Ada’s Natural Market, a natural and organic grocery store, through its wholly owned subsidiary Healthy Choice Markets, Inc. and Paradise Health and Nutrition, stores that 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 through its wholly owned subsidiary Healthy Choice Markets 2, LLC.

Going Concern and 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 $0.7 million for the three months ended March 31, 2020. As of March 31, 2020, cash and cash equivalents totaled approximately $3.2 million. While we anticipate that our current cash, cash equivalents, and cash to be generated from operations will be sufficient to meet our projected operating plans for the foreseeable future through a year and a day from the issuance of these unaudited consolidated financial statements, should we require additional funds (either through equity or debt financings, collaborative agreements or from other sources) we have no commitments to obtain such additional financing, and we may not be able to obtain any such additional financing on terms favorable to us, or at all. If adequate financing is not available, the Company will further delay, postpone or terminate product and service expansion and curtail certain selling, general and administrative operations. The inability to raise additional financing may have a material adverse effect on the future performance of the Company.

Factors Affecting Our Performance

We believe the following factors affect our performance:

Vapor Retail: We believe the operating performance of our vapor retail stores will affect our revenue and financial performance. The Company has a total of nine retail vape stores, which are located in Florida, Georgia and Tennessee.

Inventory Management: Our vapor segment revenue trends are affected by an evolving product acceptance and consumer demand. We are creating and offering new products to our retail vapor customers. Evolving product development and technology impacts our licensing and intellectual properties spending. We expect the transition to vaporizer and advanced technology and enhanced performance products to continue and will impact our overall operating results in the future.

Increased Competition: The launch by national competitors in both of our business reporting segments have made it more difficult to compete on prices and to secure business. We expect increased product supply and downward pressure on prices to continue and impact our operating results in the future. We also expect the continued expansion of national grocery chains, which leads to greater competition, to impact our operating results in the future.

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Results of Operations

The following table sets forth our unaudited condensed consolidated Statements of Operations for the three months ended March 31, 2020 and 2019 that is used in the following discussions of our results of operations:

	Three Months Ended March 31,				2020 to 2019
	2020		2019		Change
SALES
Vapor sales, net	$	773,458	$	1,224,042
Grocery sales, net		3,262,714		3,156,064
TOTAL SALES, NET		4,036,172		4,380,106
Cost of sales vapor		319,080		509,416
Cost of sales grocery		2,009,200		1,967,796
GROSS PROFIT		1,707,892		1,902,894
OPERATING EXPENSES
Selling, general and administrative		2,372,381		2,990,455
Total operating expenses		2,372,381		2,990,455
LOSS FROM OPERATIONS		(664,489)		(1,087,561)
OTHER INCOME (EXPENSE)
Gain (loss) on investment		(9,857)		(25,713)
Other income (expense)		(76)		(693)
Interest income (expense)		(16,872)		1,438
Total other income (expense), net		(26,805)		(24,968)
NET LOSS	$	(691,294)	$	(1,112,529)

All values are in US Dollars.

Net Vapor sales decreased $0.5 million to $0.8 million for the three months ended March 31, 2020 as compared to $1.2 million for the same period in 2019. The decrease in sales is primarily due to the decreased in foot traffic or temporary closure of some stores a result of the Coronavirus (COVID-19) pandemic during the three months ended March 31, 2020 as compared to the same period in 2019.

Net Grocery sales increased $0.1 million to $3.3 million for the three months ended March 31, 2020 as compared to $3.2 million for the same period in 2019. The increase in sales is primarily due to COVID-19 pandemic and the company new strategy to offer its customer the option to delivery or curb side pickup their orders.

Vapor cost of goods sold for the three months ended March 31, 2020 and 2019 were $0.3 million and $0.5 million, respectively, a decreased of $0.2 million. The decrease is primarily due to decreases in product costs during three months ended March 31, 2020 as compared to the same period in 2019. Gross profit was $0.5 million and $0.7 million for three months ended March 31, 2020 and 2019, respectively.

Grocery cost of goods sold for the three months ended March 31, 2020 and 2019 were $2.0 million and $2.0 million respectively, an increased of $41,000. The increase is primarily due to increases in sales and cost of goods sold from the COVID-19 pandemic. Gross profit was $1.3 million and $1.2 million for the three months ended March 31, 2020 and 2019, respectively.

Selling, general and administrative expenses decreased $0.6 million to $2.4 million for the three months ended March 31, 2020 compared to $3.0 million for the same period in 2019. The decrease is primarily attributable to decreases in payroll and employee related cost of $0.4 million, professional fees of $0.1 million, taxes, licenses & permits of $39,000, and stock compensation of $31,000.

Net other expense of $27,000 for the three months ended March 31, 2020 includes loss on investment of $10,000, and interest expense of $17,000. Net other expense of $25,000 for the three months ended March 31, 2019 includes a loss on investment of $26,000, partially offset by interest income of $1,000.

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Liquidity and Capital Resources

	Three Months Ended<br><br> <br>March 31,
	2020		2019
Net cash used in operating activities	$	(199,288)	$	(1,060,843)
Net cash provided by (used in) investing activities		(92,858)		41,473
Net cash used in financing activities		(70,574)		(47,211)
	$	(362,720)	$	(1,066,581)

Our net cash used in operating activities of $0.2 million for the three months ended March 31, 2020 resulted from a non-cash adjustment of $0.4 million, and a net cash usage of $0.1 million from changes in operating assets and liabilities, offset by a net loss of $0.7 million. Our net cash used in operating activities of $1.1 million for the three months ended March 31, 2019 resulted from a non-cash adjustment of $0.5 million, offset by a net loss of $1.1 million and a net cash usage of $0.4 million from changes in operating assets and liabilities.

The net cash used in investing activities of $0.1 million for the three months ended March 31, 2020 resulted from the issuance and collection of a note receivable, and purchases of a patent and property and equipment. The net cash provided by investing activities of $41,000 for the three months ended March 31, 2019 resulted from payments received on the VPR Brands L.P. Note.

The net cash used in financing activities of $0.1 million for the three months ended March 31, 2020 is due to payments on the loan payable. The net cash provided by financing activities of $47,000 for the three months ended March 31, 2019 is due to payments on the loan payable.

At March 31, 2020 and December 31, 2019, 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. The majority of our cash and cash equivalents are concentrated in three financial institutions 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 March 31, 2020 and December 31, 2019.

	March 31,<br><br> <br>2020		December 31,<br><br> <br>2019
Cash	$	3,162,695	$	3,525,415
Total assets	$	13,356,308	$	14,006,669
Percentage of total assets		23.68%		25.17%

The Company reported a net loss of $0.7 million for the three months ended March 31, 2020. The Company also had positive working capital of $1.4 million. The Company expects to continue incurring losses for the foreseeable future and may need to raise additional capital to satisfy warrant obligations, and to continue as a going concern.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

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.

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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 2019 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 warrant exercises and stock sales, having the authorized capital to issue stock to exercising Series A Warrant holders, 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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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable to smaller reporting companies.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management, including our Principal Executive Officer and Principal Financial Officer, did not carry out an evaluation on internal controls as of March 31, 2020 in regard to the effectiveness of our disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, or the Exchange Act. As an evaluation was not carried out, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were ineffective as of the end of the period covered by this report.

In planning and performing its audit of our financial statements for the year ended December 31, 2019 in accordance with standards of the Public Company Accounting Oversight Board, our independent registered public accounting firm noted material weaknesses in internal control over financial reporting. A list of our material weaknesses are as follows:

●	Failure to have properly documented and designed disclosure controls and procedures and testing of the operating effectiveness of our internal control over financial<br> reporting
●	Weakness around our purchase orders and inventory write-off procedures
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●	Segregation of duties due to lack of personnel
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Our management concluded that considering internal control deficiencies that, in the aggregate, rise to the level of material weaknesses, we did not maintain effective internal control over financial reporting as of March 31, 2020 based on the criteria set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

Changes in Internal Control over Financial Reporting

Following this assessment and during the three months ended March 31, 2020, we have undertaken an action plan to

strengthen internal controls and procedures:

●	We continue to improve the process around inventory controls and<br> throughout the current year, we are planning to perform a blind-counts for 100% of our overall inventory value with the purpose of validating our inventory records and increasing the staff knowledge around the importance of the new<br> inventory procedures implemented. In addition, we are transitioning the independent third-party counts to a new company with the purposes of improving the accuracy of the quarterly and yearly counts perform for all retail stores. Due to the<br> Coronavirus pandemic ("COVID-19") that started in early March 2020, the company was not able to conduct any independent third-party counts for the three months ended March 31, 2020.
●	Our management has increased its focus on the Company’s purchase order process in order to better manage inventory thereby<br> improving cash management and ultimately leading to more reliable and precise financial reporting.
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Our management continues to review ways in which we can make improvements in internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Two lawsuits were filed against the Company and its subsidiaries in connection with alleged claimed battery defects for an electronic cigarette device. Plaintiffs claim these batteries were sold by a store of the Company’s subsidiary and have sued for an undetermined amount of damages (other than a total of $0.4 million of medical costs). The initial complaints were filed between January 2019 and April 2019. We responded to the complaints on April 2019 and May 2019, respectively. Given the lack of information presented by the plaintiffs to date, the Company is unable to predict the outcome of these matters and, at this time, cannot reasonably estimate the possible loss or range of loss with respect to these legal proceedings.

As of March 31, 2020, the Company has not accrued for a potential loss for these actions. Given the information received to date, the Company believes the allegations are without merit and intends to vigorously contest such actions. These lawsuits remain in the early stages and progressed minimally in 2020. With respect to legal costs, we record such costs as incurred.

ITEM 1A. RISK FACTORS.

Not Applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not Applicable.

ITEM 5. OTHER INFORMATION.

Not Applicable.

ITEM 6. EXHIBITS.

See the exhibits listed in the accompanying “Index to Exhibits.”

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INDEX TO EXHIBITS

Exhibit		Incorporated by Reference			Filed or Furnished
No.	Exhibit Description	Form	Date	Number	Herewith
31.1	Certification of Principal Executive Officer (302)				Filed
31.2	Certification of Principal Financial Officer (302)				Filed
32.1	Certification of Principal Executive Officer (906)				Furnished *
32.2	Certification of Principal Financial Officer (906)				Furnished *
101.INS	XBRL Instance Document				Filed
101.SCH	XBRL Taxonomy Extension Schema Document				Filed
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document				Filed
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document				Filed
101.LAB	XBRL Taxonomy Extension Label Linkbase Document				Filed
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document				Filed
*	This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HEALTHIER CHOICES MANAGEMENT CORP.
Date: July 1, 2020	By:	/s/ Jeffrey Holman
		Jeffrey Holman
		Chief Executive Officer
Date: July 1, 2020	By:	/s/ John Ollet
		John Ollet
		Chief Financial Officer

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Jeffrey Holman, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Healthier Choices Management Corp.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: July 1, 2020

/s/ Jeffrey Holman
Jeffrey Holman
Chief Executive Officer
(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, John Ollet, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Healthier Choices Management Corp.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Date: July 1, 2020

/s/ John Ollet
John Ollet
Chief Financial Officer
(Principal Financial Officer)

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Healthier Choices Management Corp. (the “Company”) on Form 10-Q for the quarter ending March 31, 2020, as filed with the Securities and Exchange Commission on the date hereof, I, Jeffrey Holman, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.	The quarterly report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and
2.	The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: July 1, 2020

/s/ Jeffrey Holman
Jeffrey Holman
Chief Executive Officer
(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Healthier Choices Management Corp. (the “Company”) on Form 10-Q for the quarter ending March 31, 2020, as filed with the Securities and Exchange Commission on the date hereof, I, John Ollet, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

1.	The quarterly report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934 and
2.	The information contained in the quarterly report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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Date: July 1, 2020

/s/ John Ollet
John Ollet
Chief Financial Officer
(Principal Financial Officer)