SEC Filing Document

Company: Synergy CHC Corp.
Ticker: SNYR
CIK: 1562733
Filing Type: S-1/A
Document Type: S-1/A
Date Filed: 2024-08-28
Accession Number: 0001213900-24-073419
Exchange: Nasdaq
SIC Code: 2833
SIC Description: Medicinal Chemicals & Botanical Products
URL: https://www.sec.gov/Archives/edgar/data/1562733/000121390024073419/ea0208324-06.htm

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) (27,305,973 ) Total Liabilities and Stockholders’ Deficit $ 11,223,698 $ 12,239,516 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements Table of Contents Synergy CHC Corp. Unaudited Condensed Consolidated Statements of Income and Other Comprehensive Income For the six months ended June 30, 2024 June 30, 2023 Revenue $ 17,436,703 $ 18,753,705 Cost of sales 5,086,029 5,323,622 Gross profit 12,350,674 13,430,083 Operating expenses Selling and marketing 6,639,863 6,231,183 General and administrative 2,252,223 2,967,770 Depreciation and amortization 66,667 — Total operating expenses 8,958,753 9,198,953 Income from operations 3,391,921 4,231,130 Other (income) expenses Interest expense, net 1,854,747 1,719,772 Remeasurement (gain) loss on translation of foreign subsidiary (5,113 ) (4,161 ) Total other expenses 1,849,634 1,715,611 Net income before income taxes 1,542,287 2,515,519 Income tax expense 306,571 52,262 Net income after tax $ 1,235,716 2,463,257 Net income per share – basic and diluted $ 0.01 $ 0.03

Weighted average common shares outstanding

Basic and Diluted 89,889,074 89,889,074

Comprehensive income:

Net income 1,235,716 2,463,257

Foreign currency translation adjustment 187,373 (109,655	)

Comprehensive income $	1,423,089 $	2,353,602

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Table of Contents

Synergy CHC Corp.
Unaudited Condensed Consolidated Statement of Stockholders’ Deficit

Common stock Additional Paid in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Deficit

Shares Amount

Balance as of December 31, 2022 89,889,074 $	899 $	19,147,884 $	22,389 $	(52,691,039	) $	(33,519,867	)

Foreign currency translation loss (109,655	) — (109,655	)

Net income 2,463,257 2,463,257

Balance as of June 30, 2023 89,889,074 $	899 $	19,147,884 $	(87,266	) $	(50,227,782	) $	(31,166,264	)

Common stock Additional Paid in Capital Accumulated Other Comprehensive Income (Loss) Accumulated Deficit Total Stockholders’ Deficit

Shares Amount

Balance as of December 31, 2023 89,889,074 $	899 $	19,147,884 $	(102,467	) $	(46,352,289	) $	(27,305,973	)

Fair value of vested stock options 4,611 4,611

Foreign currency translation gain 187,373 187,373

Net income 1,235,716 1,235,716

Balance as of June 30, 2024 89,889,074 $	899 $	19,152,495 $	84,906 $	(45,116,573	) $	(25,878,273	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Table of Contents

Synergy CHC Corp.
Unaudited Condensed Consolidated Statements of Cash Flows

For the six months ended June 30, 2024 For the six months ended June 30, 2023

Cash Flows from Operating Activities

Net income $	1,235,716 $	2,463,257

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization 66,667 —

Stock based compensation expense 4,611 —

Foreign currency transaction loss 23,345 (90,237	)

Remeasurement loss on translation of foreign subsidiary (5,113	) (4,161	)

Non cash implied interest 4,799 14,854

Changes in operating assets and liabilities:

Accounts receivable (1,161,992	) (1,430,158	)

Loan receivable, related party 35,449 276,367

Inventory 1,805,950 3,194,220

Prepaid expenses (276,818	) (926,388	)

Prepaid expense, related party (326,682	) (68,056	)

Income taxes receivable — 14,339

Income taxes payable 262,374 37,480

Contract liabilities (2,949	) (195	)

Accounts payable and accrued liabilities (2,804,381	) (5,196,328	)

Accounts payable, related party (980	) (91,707	)

Net cash used in operating activities (1,140,005	) (1,806,712	)

Cash Flows from Investing Activities

Cash Flows from Financing Activities

Advances from related party 1,509,226 —

Repayment of notes payable, related party (84,500	) (12,500	)

Proceeds from notes payable 600,000 200,000

Repayment of notes payable (1,617,335	) (568,851	)

Net cash provided by (used in) financing activities 407,391 (381,351	)

Effect of exchange rate on cash, cash equivalents and restricted cash 187,373 (109,013	)

Net decrease in cash, cash equivalents and restricted cash (545,241	) (2,297,076	)

Cash, Cash Equivalents and restricted cash, beginning of year 732,534 2,526,443

Cash, Cash Equivalents and restricted cash, end of period $	187,293 $	229,367

Supplemental Disclosure of Cash Flow Information:

Cash paid during the period for:

Interest $	1,850,896 $	1,705,784

Income taxes $	44,197 $	—

Supplemental Disclosure of Noncash Investing and Financing Activities:

Accounts payable converted to loan payable upon settlement $	3,770,824 $	—

Reduction of short term related party note payable by reduction of prepaid balance $	328,003 $	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Table of Contents

SYNERGY CHC CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Nature of the Business

Synergy CHC Corp. (“Synergy”, “we”, “us”, “our” or the “Company”) (formerly Synergy Strips Corp.) was incorporated on December 29, 2010 in Nevada under the name “Oro Capital Corporation.” On April 21, 2014, the Company changed its fiscal year end from July 31 to December 31. On April 28, 2014, the Company changed its name to “Synergy Strips Corp.”. On August 5, 2015, the Company changed its name to “Synergy CHC Corp.”

The Company is a consumer health care company that is in the process of building a portfolio of best-in-class consumer product brands. Synergy’s strategy is to grow its portfolio both organically and by further acquisition.

Effective January 1, 2019 the Company has merged its U.S. subsidiaries (Neuragen Corp., Breakthrough Products, Inc., Sneaky Vaunt Corp., and The Queen Pegasus Corp.) into the parent company.

Synergy is the sole owner of two subsidiaries: NomadChoice Pty Ltd., and Synergy CHC Inc. and the results have been consolidated in these statements.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements as of June 30, 2024 and December 31, 2023 and for the six months ended June 30, 2024 and 2023 are unaudited. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2023 and footnotes thereto.

All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Significant estimates included are assumptions about collection of accounts receivable, current income taxes, deferred income taxes valuation allowance, useful life of intangible assets, impairment analysis of intangible assets, estimates used in the fair value calculation of stock based compensation, assumptions used in Black-Scholes-Merton, or BSM, valuation methods, such as expected volatility, risk-free interest rate and expected dividend rate, accrual of sales returns, and accrual of legal expense. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period that they are determined to be necessary.

Cash and Cash Equivalents

The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. As of June 30, 2024 and December 31, 2023, the Company had no cash equivalents. The Company

Table of Contents

SYNERGY CHC CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summary of Significant Accounting Policies (cont.)

maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation (FDIC) in accounts that at times may be in excess of the federally insured limit of $250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. At June 30, 2024 and December 31, 2023, the uninsured balances amounted to $50,667 and $441,711, respectively.

Restricted Cash

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows.

June 30, 2024 December 31, 2023

Cash and cash equivalents $	87,293 $	632,534

Restricted cash 100,000 100,000

Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $	187,293 $	732,534

Amounts included in restricted cash represent amounts held for credit card collateral.

Intangible Assets