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Saturday, July 24, 2021

Healthier Choices Management Corp. (OTCMKTS: HCMC) Major Reversal in the Works as PMI Patent Infringement Lawsuit on HCMC U.S. Patent No. 10,561,170 Gains Steam

Healthier Choices Management Corp. (OTCMKTS: HCMC) is coming back strong as the broader markets lag following the news of the spread of the “delta” variant that now accounts for 80% of new cases in the US. Triple 08 seems to be the bottom for now with significant accumulation happening at these levels. Investors are looking for a huge lift once the courts reject PMIs recent filing seeking to invalidate HCMC U.S. Patent No. 10,561,170. The Company was also just awarded a new patent that could spell big things for HCMC in the future as it eliminates the main risk of vaping by eliminating the toxic metal inhalation. Representing HCMC in its patent infringement lawsuit against Philip Morris USA, Inc. is Cozen O’Connor ranked among the top 100 law firms in the country and employing more than 775 attorneys in 29 cities across two continents. The firm’s diverse client list includes global Fortune 500 companies, middle-market firms poised for growth, high-profile individuals and HCMC who must have a seriously solid case against PMI with outstanding chances. Any reasonable settlement could would propel HCMC into a whole new stratosphere. 

As we have reported many times HCMC is among the most searched for microcap stocks currently with well over 400,000 shareholders. Microcapdaily has been reporting on HCMC since the stock was trading for a fraction of current levels and we maintain our $0.0065 price to beat point, a break over and its blue skies ahead for HCMC.  

Healthier Choices Management Corp. (OTCMKTS: HCMC) is conglomerate with a number of divisions producing growing revenues. Operating under its wholly owned subsidiaries, Healthy Choice Markets and Healthy Choice Markets 2, HCMC owns both Ada’s Natural Market, a 18,000 sq. ft. full-service grocery store serving the Fort Myers, FL, and 3 Paradise Health & Nutrition locations in the greater Melbourne, FL area. The Company operates 8 vape stores across the southeast United States offering alternatives to traditional cigarettes. Operating regionally, through its Vape Store brands, including The Vape Store, Vapor Max, Vulcan Vape, and The Grab Bag locations, HCMC Vape Stores provide a large selection of vaping hardware and e-liquids, giving consumers a way to get their nicotine without the smoke, tar, ash or carbon monoxide found in traditional cigarettes.  The Company is doing significant sales booking over $1 million USD Per month; for the three-month period ended March 31, 2021. Net sales from operations amounted to approximately $3.5 million, down 14% from the same period last year due to covid.  

The Company has a great management team behind it; CEO Jeffrey Holman is a seasoned executive and corporate lawyer who also serves as President of Jeffrey E. Holman & Associates, P.A., a South Florida Based law firm. Christopher Santi, HCMC COO and President is sales executive who served as President of Santi Management Corporation before joining the Company. John Ollet the CFO previously served as Executive Vice President-Finance for Systemax, IncNorth America Technology Division for 10 years. 

HCMC has amassed a valuable patent portfolio related to both vape technology and also manufacturing processes and procedures for an imitation nicotine product. The Company’s patented Q-Cup™ technology is based on a small, quartz cup called the Q-Cup™, which a customer can purchase already filled by a third party in some regions, or can partially fill themselves with either cannabis or CBD concentrate (approximately 50mg), also purchased from a third party.  The Q-Cup™ can then be inserted into the patented Q-Unit™, which heats the cup from the outside without coming in direct contact with the solid concentrate.  This Q-Cup™ and Q-Unit™ technology provides significantly more efficiency and an “on the go” solution for consumers who prefer to vape concentrates either medicinally or recreationally.  The Q-Cup™ can also be used in other devices as a convenient micro-dosing system. Most recently, the company formed a wholly owned subsidiary, HCMC Intellectual Property Holdings, LLC, to hold and market its intellectual property assets. This subsidiary will own all of the patents, trademarks and other intellectual property of HCMC and will be utilized in the company’s attempt to monetize its intellectual property.     

The big story on HCMC is its patent infringement lawsuit against Philip Morris USA, Inc. and Philip Morris Products S.A. in connection with their product known and marketed as “IQOS®.” The lawsuit was filed in the United States District Court for the Northern District of Georgia. The international law firm Cozen O’Connor has been engaged to represent HCMC in this matter. HCMC’s lawsuit includes claims that Phillip Morris is infringing HCMC’s patent rights in connection with IQOS®, an alternative tobacco product marketed and sold by Phillip Morris. Philip Morris claims that it is currently approaching 14 million users of its IQOS® product and has reportedly invested over $3 billion in their smokeless tobacco products. Philip Morris has been very open about their ongoing transition from traditional fully combustible cigarettes to their modified risk tobacco products, including IQOS®. The Philip Morris IQOS® product is currently the subject of two other patent infringement proceedings filed by RJ Reynolds Tobacco Company. One proceeding is before the International Trade Commission and seeks to stop the importation of the IQOS® product into the United States; the other is a patent infringement action currently pending in the Eastern District of Virginia. RJ Reynolds’ patents are unrelated and not affiliated with the patents asserted in the HCMC case.   

Last month Philip Morris Products S.A. filed a petition with the Patent Trial and Appeal Board ( “PTAB”) of the U.S. Patent and Trademark Office seeking to institute inter partes review (“IPR”) proceedings to invalidate Healthier Choices Management Corp.’s U.S. Patent No. 10,561,170. If Philip Morris’ IPR petition is accepted by the PTAB, the Company will have three months to optionally file a preliminary response. Within three months of the Company’s preliminary response or six months from acceptance of Philip Morris’ IPR petition, the PTAB will decide whether to institute or deny the IPR proceedings. If the PTAB institutes IPR proceedings, then within one year of institution the PTAB will issue a final written decision as to the validity of some or all of the claims in the Patent. HCMC management is currently reviewing Philip Morris’ IPR petitions and intends to vigorously oppose the institution of the IPR proceedings and, if the IPR proceedings are instituted, we are now fully prepared to vigorously defend the validity of the Patent.

In its patent infringement lawsuit against Philip Morris, Cozen O’Connor is representing HCMC; Cozen O’Connor is ranked among the top 100 law firms in the country and employs more than 775 attorneys in 29 cities across two continents. Cozen O’Connor is a full-service firm with nationally recognized practices in litigation, business law, and government relations, and its attorneys have experience operating in all sectors of the economy. The firm’s diverse client list includes global Fortune 500 companies, middle-market firms poised for growth, high-profile individuals and ambitious upstarts like HCMC. Cozen O’Connor has been awarded as the #1 law firm of the year several times, amongst dozens of other awards and would not take on a giant such as Philip Morris unless they knew for sure they have a very strong case and excellent chances. 

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HCMC has been busy; they recently launched their patented quartz Q-Cups® with the health center in Colorado, which The Health Center will pre-fill with their high quality NUHI brand concentrates and make available to consumers in their Colorado dispensaries. The Health center plans to distribute their high quality NUHI concentrate product in HCMC Q-Cup® technology. The Company also entered into an Exclusive Authorized Filling Agreement for its Q-Cup®technology in Canada with 6PAK Solutions Inc., the sister company and distribution arm of ATG Pharma Inc. ATG Pharma is a leading manufacturer of filling machines in both Canada and the U.S, and manufacturer of the Q-Cup® robotic filling machine. The goal of this exclusive arrangement is for 6PAK Solutions to offer access to Q-Cups® unique innovation to both its current and new licensed producer clients. 6PAK’s services provide an easy, cost effective way, for companies to launch new products and quickly scale with the growing market. 

On July 20 U.S. Patent Number 11,064,732 entitled Electronic Vaporizer Cartridge with Encased Heat Source was issued to HCMC. This patent covers novel HCMC technology directed at a vaporizer cartridge with internal components encased in a non-reactive material such as quartz, ceramic or the like. This process avoids a potentially toxic reaction between e-liquid, cannabis or CBD oils, or other substances, and the heated metal components of the cartridge. This patent grant expands HCMC’s portfolio of patent assets that promote a healthier way to vape. 

HCMC CEO Jeff Holman stated: “The issuance of this patent is significant in our attempts to make vaping safer. Essentially, this patent is technologically the reverse process of our previously issued patents for our Q-Cup® technology. Studies have shown that liquids and oils can act as solvents when they sit in direct contact with a metal coil, thereby leeching out heavy metals which can then be ingested during the vaping process. This breakthrough technology has the potential to completely eliminate this problem. Think of this patent like a light bulb. A light bulb has a metal filament inside, but you can only touch the outer glass, which gets hot from the heat of the filament. Similarly, the metal coil being encased in a quartz “bulb” prevents the liquid or oil from coming in direct contact with, or “touching” the metal coil. The metal coil heats the quartz, the substance is in contact with the heated quartz, and the vapor is produced without the substance ever touching the metal coil directly. While there have been several advances in vape cartridges through the years, most of them have focused on what I will call “bells and whistles,” like controlling device functions from an app. As a result, some of the best vaping cartridges on the market, for both e-liquid and cannabis oil, still have an antiquated exposed metal coil and wicking system at their cores. The Company is now exploring our options with regards to producing and distributing these “bulb” cartridges, or partnering with existing manufacturers that would benefit from providing a potentially groundbreaking and safer cartridge to their customers. Worth note is that we fully intend to protect this newly issued patent with the same vigor as the rest of our patent suite, through the courts and otherwise where necessary.” 

https://twitter.com/JoseMSerpa/status/1417469258267770895

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Healthier Choices Management Corp. is coming back strong as the broader markets lag following the news of the spread of the “delta” variant that now accounts for 80% of new cases in the US. Triple 08 seems to be the bottom for now with significant accumulation happening at these levels. Investors are looking for a huge lift once the courts reject PMIs recent filing seeking to invalidate HCMC U.S. Patent No. 10,561,170. The Company was also just awarded a new patent that could spell big things for HCMC in the future as it eliminates the main risk of vaping by eliminating the toxic metal inhalation. Representing HCMC in its patent infringement lawsuit against Philip Morris USA, Inc. is Cozen O’Connor ranked among the top 100 law firms in the country and employing more than 775 attorneys in 29 cities across two continents. The firm’s diverse client list includes global Fortune 500 companies, middle-market firms poised for growth, high-profile individuals and HCMC who must have a seriously solid case against PMI with outstanding chances. Any reasonable settlement could would propel HCMC into a whole new stratosphere. As we have reported many times HCMC is among the most searched for microcap stocks currently with well over 400,000 shareholders. Microcapdaily has been reporting on HCMC since the stock was trading for a fraction of current levels and we maintain our $0.0065 price to beat point, a break over and its blue skies ahead for HCMC.  We will be updating on HCMC when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with HCMC.

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Disclosure: we hold no position in HCMC either long or short and we have not been compensated for this article.

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3 COMMENTS

  1. Those people who believe in the 90 day time limit…..FORGET IT!!!!!
    The judge can take as long as he wants because this is a FEDERAL CASE in the state of Georgia.
    The state of Georgia REQUIRES A () DAY TIME LIMIT ON A JUDGE’S DECISION.
    But REMEMBER, THIS IS A FEDEARL CASE. No time limit in such cases.
    Sorry to bust anyone’s bubble but this is the TRUTH!!!!

  2. Yes you are correct. But if you have done some research into your statement. The Judges tend to “TRY” to stick to a 90day timeframe to rule. Yes they have all the time in the world, but Judges have said we tend to keep in mind 90days but will take all the time needed. And they do tend to rule around the 90day mark. So it could be anytime, ANYDAY.
    I have even tweeted about this in detail awhile ago.

  3. “So this case boils down to one question: whether HCM has adequately alleged that defendants’ electronic cigarette requires combustion. ”

    And HERE IS THE KICKER FOR HCMC: “If HCM has plausibly alleged that some – even partial – combustion is required, (CAPS mine) THEN THE COURT WILL DENY THE MOTION TO DISMISS”.

    And here is the kicker for PM: “If, on the other hand HCM’s averments that the IQOS device requires a combustion reaction are implausible, (CAPS mine) THEN DEFENDANTS MOTION TO DISMISS WILL BE GRANTED”.

    It has been PROVEN by many people COMBUSTION IS REQUIRED, because it happens above 350 degrees.

    I am not a lawyer but, IMO, this will go in HCMC’s favor.

    Make a note of it.

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