Healthy Choice Wellness Corp. (NYSE American: HCWC), a grocery retail company, announced a change in its independent accounting firm, according to an 8-K filing with the Securities and Exchange Commission. The company's Audit Committee dismissed Marcum LLP as its auditor on Monday and appointed UHY LLP as the new auditor effective Wednesday, for the fiscal quarter ending September 30, 2024, and the fiscal year ending December 31, 2024.
The dismissal of Marcum, which was effective immediately on October 14, 2024, was part of a strategic move following Healthy Choice Wellness Corp.'s spin-off from Healthier Choices Management Corp. Marcum's previous audits for fiscal years 2023 and 2022 did not contain any adverse opinion, nor were they qualified or modified, except for an emphasis of matter paragraph related to the "carve-out" basis of accounting.
During Marcum's tenure, there were no disagreements with the company on accounting principles or practices, financial statement disclosure, or auditing scope or procedures that would have warranted a mention in their reports. However, the company did identify material weaknesses in its internal control over financial reporting for the years 2023 and 2022, including issues with inventory observations, disclosure controls, segregation of duties, and vendor management controls, among others.
The company has not consulted with UHY on any accounting principles or transactions prior to their appointment, nor has there been any disagreement or reportable event as defined by SEC regulations.
This shift in auditors is part of Healthy Choice Wellness Corp.'s broader corporate restructuring following its separation from its parent company. The information is based on statements from a press release.
InvestingPro Insights
Healthy Choice Wellness Corp.'s recent auditor change comes amid challenging financial circumstances, as revealed by InvestingPro data. The company's market capitalization stands at a modest $21.1 million, with a negative P/E ratio of -4.42, indicating recent unprofitability. This aligns with an InvestingPro Tip highlighting that the company has not been profitable over the last twelve months.
Despite these challenges, HCWC has shown strong revenue growth, with a 32.78% increase in the last twelve months to $60.04 million. However, the company's financial health remains a concern. An InvestingPro Tip warns that HCWC operates with a significant debt burden and may have trouble making interest payments. This could explain the need for stringent financial oversight and the recent auditor change.
The stock's performance has been notably weak, with a 58.97% price decline over the past year. This trend is reflected in another InvestingPro Tip, which notes that the stock has fared poorly over the last month and has taken a significant hit over the last six months.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide further insight into HCWC's financial situation and market position.
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