SEC Filing Document

Company: Synergy CHC Corp.
Ticker: SNYR
CIK: 1562733
Filing Type: 424B4
Document Type: 424B4
Date Filed: 2024-10-23
Accession Number: 0001213900-24-089987
Exchange: Nasdaq
SIC Code: 2833
SIC Description: Medicinal Chemicals & Botanical Products
URL: https://www.sec.gov/Archives/edgar/data/1562733/000121390024089987/ea0208324-14.htm

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2021, respectively. This agreement was consolidated into the Amended and Restated Loan Agreement with Knight in June 2024. Pursuant to our Amended and Restated Loan Agreement with Knight, as amended by the Sixth Amendment dated June 6, 2024, amounts owing under the loan bear interest at a rate of 12% per year. At December 31, 2023, 2022 and 2021, we owed Knight $12,335,452, $12,426,997 and $6,743,723, respectively, on this loan, net of debt issuance cost. Since January 1, 2021, the highest aggregate principal amount outstanding under this loan was $12,335,452 during the year ended December 31, 2023. During the years ended December 31, 2023, 2022 and 2021, $145,500, $62,500 and $37,500 of principal was paid, respectively. During the years ended December 31, 2023, 2022 and 2021, $1,693,642, $1,319,295 and $1,365,534 of interest was expensed, respectively. During 2024, through June 30, 2024, $84,500 of principal and $1,110,261 of interest was paid.

On December 23, 2016, we entered into an agreement with Knight Therapeutics, Inc. for the distribution rights of FOCUSfactor in Canada. In conjunction with this agreement, we are required to pay Knight Therapeutics a distribution fee equal to 30% of gross sales for sales achieved through a direct sales channel and 5% of gross sales for sales achieved through retail sales. The minimum due to Knight under this agreement is $100,000 Canadian dollars. On and after February 15, 2021, the agreement automatically renews for additional one-year terms unless either party gives notice of nonrenewal at least 180 days prior to the end of the then-current term. During the year ended December 31, 2023, we expensed $133,502 Canadian dollars ($98,939 U.S. Dollars). During the year ended December 31, 2022, we expensed $114,363 Canadian dollars (US Dollars $87,920). During the year ended December 31, 2021, we expensed $123,023 Canadian dollars (US Dollars $98,174). As of December 31, 2023, 2022 and 2021, the total outstanding balance was $549,229, $415,728 and $301,364 Canadian dollars, respectively. In U.S. Dollars, the total outstanding balance was $415,272, $306,932 and $237,716 as of December 31, 2023, 2022 and 2021, respectively. As of June 30, 2024, the total outstanding balance was $549,229 Canadian dollars ($403,936 U.S. Dollars). The outstanding distribution fees have been added to the related party notes payable.

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On December 23, 2016, we entered into an agreement with Knight Therapeutics, Inc. for the distribution rights of Hand MD in Canada. In conjunction with this agreement, we are required to pay Knight Therapeutics a distribution fee equal to 60% of gross sales for sales achieved through a direct sales channel until the sales in the calendar year equal the threshold amount and then 40% of all such gross sales in such calendar year in excess of the threshold amount and 5% of gross sales for sales achieved through retail sales. The minimum due to Knight Therapeutics under this agreement is $25,000 Canadian dollars. On and after February 15, 2021, the agreement automatically renews for additional one-year terms unless either party gives notice of nonrenewal at least 180 days prior to the end of the then-current term. During the year ended December 31, 2023, the Company expensed was $25,000 Canadian dollars (US Dollars $18,531). During the year ended December 31, 2021, we expensed $25,000 Canadian dollars ($19,950 U.S. Dollars). As of December 31, 2023, 2022 and 2021, the total outstanding balance was $160,637, $135,637 and $135,637 Canadian dollars, respectively. In U.S. Dollars, the total outstanding balance was $121,458, $100,141 and $106,990 as of December 31, 2023, 2022 and 2021, respectively. As of June 30, 2024, the total outstanding balance was $160,637 Canadian dollars ($118,550 U.S. Dollars). The outstanding distribution fees have been added to the related party notes payable.

On January 1, 2017, we entered into agreements with Knight Therapeutics, Inc. for the distribution rights of Sneaky Vaunt in Canada, and with Knight Therapeutics International S.A. (formerly Knight Therapeutics (Barbados) Inc.) for the distribution rights of Sneaky Vaunt in Israel, Romania, Russia and Sub-Saharan Africa. In conjunction with these agreements, for sales in Canada, we are required to pay Knight Therapeutics a distribution fee equal to 60% of gross sales until the sales in the calendar year equal the threshold amount and then 40% of gross sales in such calendar year in excess of the threshold amount. For sales in Israel, Romania, Russia and Sub-Saharan Africa, we are required to pay Knight Therapeutics International S.A. a distribution fee equal to 60% of gross sales. On and after February 15, 2021, the agreements automatically renew for additional one-year terms unless either party gives notice of nonrenewal at least 180 days prior to the end of the then-current term. We expensed royalties under the agreements of $0, $849 and $1,459 for the years ended December 31, 2023, 2022 and 2021, respectively, related to Sneaky Vaunt. At December 31, 2023, 2022 and 2021, we owed $0, $41 and $0, respectively, in connection with the royalty distribution agreements. We expensed royalties under the agreements of $0 during the six months ended June 30, 2024. At June 30, 2024, we owed $0 in connection with the royalty distribution agreements.

On February 15, 2016, Nomad Choice Pty Ltd entered into agreements with Knight Therapeutics, Inc. for the distribution rights of Flat Tummy in Canada and with Knight Therapeutics International S.A. (formerly Knight Therapeutics (Barbados) Inc.) for the distribution rights of Flat Tummy in Israel, Romania, Russia and Sub-Saharan Africa. In conjunction with these agreements, for sales in Canada, we are required to pay Knight Therapeutics a distribution fee equal to 60% of gross sales. For sales in Israel, Romania, Russia and Sub-Saharan Africa, we are required to pay Knight Therapeutics International S.A. a distribution fee equal to 60% of gross sales. On and after February 15, 2021, the agreements automatically renew for additional one-year terms unless either party gives notice of nonrenewal at least 180 days prior to the end of the then-current term. We expensed royalties under the agreements of $82,810, $74,088 and $124,836 for the years ended December 31, 2023, 2022 and 2021, respectively, related to Flat Tummy. At December 31, 2023, 2022 and 2021, we owed $19,324, $11,084 and $3,853, respectively, in connection with the royalty distribution agreements. We expensed royalties under the agreements of $41,277 during the six months ended June 30, 2024. At June 30, 2024, we owed $25,905 in connection with the royalty distribution agreements.

We entered into transactions with BoomBod Ltd., a related party 100% indirectly owned by Jack Ross, our Chief Executive Officer, during the six months ended June 30, 2024 and years ended December 31, 2023, 2022 and 2021. We paid for inventory and marketing expenses on BoomBod’s behalf, and charged BoomBod for reimbursement of the same. As of June 30, 2024, December 31, 2023 and December 31, 2022 and December 31, 2021 we were owed $4,424,547, $4,459,996, $4,408,751 and $4,016,215, respectively. Pursuant to a non-interest-bearing promissory note from BoomBod, BoomBod is obligated to repay to us the outstanding amount of $4,424,547 by December 31, 2024; however, the note does not contain any security interest, personal guarantee, or special default terms or rights or remedies in the event of BoomBod’s failure to repay other than our normal right to pursue collection through the legal process and BoomBod’s agreement to pay for costs and expenses of enforcement.

We entered into transactions with Gowan Properties Inc., a related party 100% indirectly owned by Jack Ross, our Chief Executive Officer. The transactions are related to rent expense of $25,000 Canadian Dollars per month for our Fall River office. During the year ended December 31, 2021, we expensed $300,000 Canadian Dollars ($239,405 US Dollars) for rent expense. During the year ended December 31, 2022, the related party waived rent payments. During the years ended December 31, 2023 and 2022, the related party waived the expense.

On October 1, 2023 (effective date), we entered into second amendment to the Distribution Agreement with Knight with an initial term ending on February 25, 2026 with an automatic renewal of one year for a payment of $450,000 by us within 180 days from the effective date. We have recorded this payable in terms of a Note Payable to Knight in relation to a license fee of an intangible asset. The balance outstanding at both June 30, 2024 and December 31, 2023 was $450,000. At June 30, 2024 this Distribution Agreement was consolidated into one loan under the sixth amendment.

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PRINCIPAL STOCKHOLDERS

Our only outstanding class of voting securities is our common stock. The following table sets forth information known to us about the beneficial ownership of our common stock on October 15, 2024 by (i) each current director and director nominee; (ii) each named executive officer; and (iii) all of our executive officers and directors as a group. Other than as set forth below, no person known to us beneficially owns 5% or more of the outstanding common stock as of October 15, 2024.