HEALTHY CHOICE WELLNESS CORP.
For the period ended Dec 31, 2025. Filed Mar 16, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 16, 2026
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Item 9A. Controls and Procedures
We are required to report under Section 404(a) of Sarbanes-Oxley regarding the effectiveness of our internal control over financial reporting.
Evaluation of Disclosure Controls and Procedures. Our management, including our Principal Executive Officer and Principal Financial Officer, carried out an evaluation on internal controls during the year ended December 31, 2025 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. Based on the evaluation, our Principal Executive Officer and Principal Financial Officer concluded that the Company’s disclosure controls and procedures were ineffective.
Inherent Limitations of Internal Controls over Financial Reporting. The Company’s internal control over financial reporting is designed 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. The Company’s internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that the Company’s receipts and expenditures are being made only in accordance with authorizations of the Company’s management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Company’s financial statements.
Changes in Internal Control Over Financial Reporting. There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ending December 31, 2025 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.
Management’s Annual Report on Internal Control over Financial Reporting. The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, the Company evaluated the effectiveness of the design and operation of its internal control over financial reporting based on the framework established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s internal control over financial reporting was ineffective as of December 31, 2025 and noted the material weaknesses as follows:
| ● | Segregation of Duties and Journal Entry Review: Management does not evidence independent preparer and reviewer of journal entries to demonstrate adequate segregation of duties and the precision of the review of journal entries. |
|---|---|
| ● | Ineffective design and implementation over Information Technology General Controls (“ITGCs”): |
| (a) | Multiple individuals in the accounting software system have virtually unlimited access to the accounting application and to the inventory point of sale applications. As such, such individuals can post journal entries and change pricing, which poses a risk that duties amongst employees with incompatible roles are not adequately segregated. |
| (b) | Ineffective design, implementation and operation of controls over logical user access, physical security, change management, cyber security, and vendor management. The Company should have had controls for: |
| (i) | Periodic review of access rights for networks and applications on a defined periodic basis, at least once per year; |
| (ii) | Ensuring adequate physical safeguards and environmental controls over the Company’s servers at all Company locations, including stores; |
| (iii) | Performing a cybersecurity assessment, training all personnel, performing phishing exercises, obtaining cybersecurity insurance; and performing third party audits when appropriate; |
| (iv) | IT program and data changes affecting the Company’s financial IT applications and underlying accounting records, should be identified, tested, authorized and implemented appropriately to validate that data produced by its relevant IT system(s) were complete and accurate. |
| (v) | Obtaining and reviewing third party service provider SOC reports, and; |
| ● | Lack of Formal Related Party Transaction Policy: The Company did not maintain a formal written policy and related controls for the timely identification, evaluation, and accounting treatment of transactions with related parties. The absence of this formal framework resulted in the initial misapplication of accounting guidance for a significant related party transaction during the year. |
|---|---|
| ● | Ineffective Controls over Statement of Cash Flows Preparation: Controls over the preparation and review of the statement of cash flows were ineffective, resulting in the misclassification of cash flows related to advances made to a related party. |
Our management concluded that considering internal control deficiencies, in the aggregate, rise to the level of material weaknesses, we did not maintain effective internal control over financial reporting as of December 31, 2025 based on the criteria set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
Remediation Efforts
Following this assessment and during the twelve months ended December 31, 2025, we have undertaken an action plan to strengthen internal controls and procedures.
| ● | With respect to segregation of duties and journal entry review, the Company is implementing a formal review and approval process for all journal entries that includes requirements for independent preparer and reviewer sign-offs, with supporting documentation retained to evidence proper segregation of duties. The Company is also enhancing the precision of journal entry reviews through standardized review checklists and periodic monitoring by senior accounting personnel. |
| ● | Regarding Information Technology General Controls, the Company is developing a comprehensive IT control framework that includes policies and procedures for logical user access, including periodic access rights reviews for networks and applications on at least an annual basis. The Company is implementing enhanced physical security and environmental controls over its servers at all locations, including retail stores. Additionally, the Company is performing a formal cybersecurity assessment, which will include mandatory training for all personnel, phishing exercises, and obtaining cybersecurity insurance. The Company is also establishing controls to ensure that IT program and data changes affecting financial applications and underlying accounting records are properly identified, tested, authorized, and implemented. Procedures are being implemented to obtain and review third-party service provider SOC reports on a regular basis, and to review and enforce Service-Level Agreements for all IT service relationships across the Company. |
| ● | With respect to related party transactions, the Company is developing and implementing a formal written policy that establishes requirements for the timely identification, evaluation, approval, and accounting treatment of transactions with related parties in accordance with GAAP. |
| ● | With respect to the preparation and review of the statement of cash flows, the Company is enhancing procedures to ensure proper classification and disclosure, including specific review protocols for transactions with related parties and other non-routine items. The Company intends to engage external consultants, as needed, to assist with complex accounting matters and to provide independent review of significant transactions. |
We are currently working to improve and simplify our internal processes and implement enhanced controls, as discussed above, to address the material weaknesses in our internal control over financial reporting and to remedy the ineffectiveness of our disclosure controls and procedures. These material weaknesses will not be considered to be remediated until the applicable remediated controls are operating for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.