HEALTHY CHOICE WELLNESS CORP. Material Event Summary

Healthy Choice Wellness Corp. (HCWC) has announced a major pivot in its business strategy. The company has signed a deal to acquire Host Digital Infrastructure LLC, effectively exiting the wellness sector to transition into the data center and artificial intelligence (AI) infrastructure market.

1. What is the deal?

HCWC has signed a merger agreement to acquire Host Digital Infrastructure LLC. Once the deal closes, Host Digital will become a subsidiary of HCWC. The combined company will shift its entire focus to building and operating data centers designed for high-performance computing and AI.

2. Why is this happening?

This is a "reverse merger" that allows Host Digital to become a public company. As part of the agreement, Host Digital owners will receive new HCWC stock. Once the transaction is complete, the original Host Digital owners will hold approximately 96% of the company’s total shares, while current HCWC shareholders will retain about 4%.

3. What does this mean for current investors?

• Significant Dilution: Because of the large number of new shares being issued to Host Digital owners, the ownership percentage of current HCWC shareholders will be reduced significantly.
• Lock-up Periods: To help maintain stock price stability, current HCWC directors and executives are prohibited from selling or transferring their shares for at least six months following the deal's closing.
• Break-up Fee: If the deal is terminated because HCWC accepts a superior offer or changes its board recommendation, HCWC may be required to pay Host Digital a $2 million termination fee.

4. Who supports the merger?

The HCWC Board of Directors has unanimously approved the deal. Additionally, directors and executives—who currently control about 24.45% of the voting power—have signed an agreement to vote in favor of the merger.

5. What are the next steps?

The merger is subject to several conditions, including:

• Shareholder Approval: HCWC must file a Proxy Statement with the SEC, and shareholders must vote to approve the merger.
• Regulatory Compliance: The deal must meet all government regulations and satisfy NYSE American listing standards.
• Rebranding: Following the closing, the company intends to change its name to better reflect its new focus on digital infrastructure and AI.

6. Key Risks and Considerations

Moving from the wellness sector to the data center industry is a major shift. This new business model requires significant capital expenditure, faces intense competition for power and physical space, and involves rapidly evolving technology that can become obsolete quickly.

7. How to prepare for your decision

The company has not yet provided full, detailed financial projections for the post-merger entity, but these will be included in the upcoming Proxy Statement.

Before you make any decisions:

• Review the Filings: The Proxy Statement will contain essential financial details, pro-forma statements, and a comprehensive list of risks associated with the new business.
• Check the SEC Website: You can find all official documents at sec.gov. Reading the full filing is the best way to understand the company’s new valuation and future business plan before you decide how to vote or manage your investment.