SEC Filing Document

Company: Synergy CHC Corp.
Ticker: SNYR
CIK: 1562733
Filing Type: S-1/A
Document Type: S-1/A
Date Filed: 2024-10-15
Accession Number: 0001213900-24-087398
Exchange: Nasdaq
SIC Code: 2833
SIC Description: Medicinal Chemicals & Botanical Products
URL: https://www.sec.gov/Archives/edgar/data/1562733/000121390024087398/ea0208324-12.htm

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cannot assure you that a liquid trading market for our common stock will develop or be sustained after this offering. You may not be able to sell your shares quickly or at the market price if trading in our common stock is not active. See “Underwriting” for more information regarding our arrangements with the underwriters and the factors considered in setting the public offering price. DIVIDEND POLICY Since our inception, we have not paid any dividends on our common stock, and we currently expect that, for the foreseeable future, all earnings, if any, will be retained for use in the development and operation of our business. In the future, our Board may decide, at its discretion, whether dividends may be declared and paid to holders of our common stock. Table of Contents CAPITALIZATION The following table sets forth our cash and cash equivalents and capitalization as of June 30, 2024:

•        on an actual basis, giving effect to the 1-for-11.9 reverse stock split that was effected on September 11, 2024; and

•        on an as adjusted basis to give effect to the issuance and sale by us in this offering of 1,000,000 shares of our common stock at an assumed public offering price of $10.00 per share (the midpoint of the range set forth on the cover page of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses that we expect to pay, and giving effect to the application of proceeds from this offering for the repayment of certain indebtedness as described in “Use of Proceeds.”

This table should be read in conjunction with, and is qualified in its entirety by reference to, “Use of Proceeds,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and related notes appearing elsewhere in this prospectus.

As of June 30, 2024

Actual As Adjusted

Cash and cash equivalents $	87,293 7,003,071

Capitalization:

Current debt:

Current portion of long-term notes payable, net of debt discount and debt issuance cost, related party $	2,000,000 2,000,000

Short term loans payable, related party, net of debt discount 1,181,222 —

Current portion of long term debt 5,887,602 5,887,602

Total current debt 9,068,824 7,887,602

Long-term debt:

Note payable, net of debt discount, related party 10,333,053 10,333,053

Loans payable 12,057,022 12,057,022

Total long-term debt 22,390,075 22,390,075

Stockholders’ deficit:

Common stock, $0.00001 par value; 300,000,000 shares authorized; 7,553,726 shares issued and outstanding, actual; and 8,553,726 shares issued and outstanding, as adjusted 76 86

Additional paid in capital 19,153,318 27,250,298

Accumulated other comprehensive income 84,906 84,906

Accumulated deficit (45,116,573	) (45,116,573	)

Total stockholders’ deficit (25,878,273	) (17,781,283	)

Total Capitalization $	5,580,626 12,496,394

Unless we indicate otherwise, all information in this Capitalization section:

•        assumes no exercise by the underwriters of their over-allotment option;

•        excludes 336,136 shares of common stock issuable upon the exercise of outstanding options at a weighted exercise price of $7.29 per share; and

•        excludes 1,220,588 shares of common stock reserved for future issuance pursuant to our 2014 Equity Incentive Plan.

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DILUTION

If you invest in our common stock in this offering, your interest will be diluted to the extent of the difference between the public offering price per share of our common stock and the as adjusted net tangible book value per share of our common stock immediately after the closing of this offering.

Our historic net tangible book value of our common stock as of June 30, 2024 was approximately $(26.2 million), or $(3.47) per share, based on the number of shares of our common stock outstanding as of June 30, 2024. Historic net tangible book value per share represents our total tangible assets less our total liabilities, divided by the number of outstanding shares of common stock. The per share data gives effect to the 1-for-11.9 reverse stock split of our common stock, which was effected on September 11, 2024.

After giving effect to the receipt of the net proceeds from our sale of 1,000,000 shares of common stock in this offering at an assumed public offering price of $10.00 per share (the midpoint of the range set forth on the cover page of this prospectus), after deducting underwriting discounts and commissions and estimated offering expenses payable by us, and giving effect to the application of proceeds from this offering for the repayment of certain indebtedness as described in “Use of Proceeds,” our as adjusted net tangible book value as of June 30, 2024 would have been $(18.1 million), or $(2.12) per share. This represents an immediate increase in as adjusted net tangible book value of $1.35 per share to our existing stockholders and an immediate dilution of $12.12 per share to investors purchasing common stock in this offering.

We calculate dilution per share to new investors by subtracting the historic net tangible book value per share from the public offering price paid by the new investor. The following table illustrates the dilution to new investors on a per share basis:

Assumed public offering price per share $	10.00

Historic net tangible book value (deficit) per share as of June 30, 2024 $	(3.47	)

Increase in net tangible book value per share attributable to new investors in this offering $	1.35

As adjusted net tangible book value per share as of June 30, 2024 after this offering (2.12	)

Dilution in net tangible book value per share to new investors in this offering $	12.12

Each $1.00 increase (decrease) in the assumed public offering price of $10.00 per share would increase (decrease) our as adjusted net tangible book value per share after this offering by $0.11 per share and the dilution to new investors by $0.89 per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters’ option to purchase additional shares to cover over-allotments is exercised in full, the as adjusted net tangible book value per share after giving effect to this offering would be $(1.92) per share, representing an immediate increase to existing stockholders of $1.55 per share, and immediate dilution to new investors in this offering of $11.92 per share.

The following table summarizes, as of June 30, 2024, on the as adjusted basis described above:

•        the total consideration paid to us by our existing stockholders and by new investors purchasing common stock in this offering, assuming a public offering price of $10.00 per share (the midpoint of the range set forth on the cover page of this prospectus), before deducting underwriting discounts and commissions and estimated offering expenses payable by us in connection with this offering; and

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•        the average price per share paid by existing stockholders and by new investors purchasing shares in this offering.

Shares Purchased Total Consideration Average Price Per Share

Number Percent Amount Percent

Existing stockholders 7,553,726 88% $	19,153,394 66% $	2.54

New investors 1,000,000 12% 10,000,000 34% $	10.00

Total 8,553,726 100.0% $	29,153,394 100.0% $	3.41

A $1.00 increase (decrease) in the assumed public offering price of $10.00 per share would increase (decrease) total consideration paid by new investors by $0.9 million and increase (decrease) the total consideration paid to us by new investors by 11%, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

If the underwriters’ option to purchase additional shares to cover over-allotments is exercised in full, the number of shares held and the percentage of total consideration paid by the existing stockholders after this offering would be reduced to 87% and 62%, respectively, and the number of shares held and the percentage of total consideration paid by new investors would increase to 13% and 38%, respectively.

The foregoing calculations exclude:

•        336,136 shares of common stock issuable upon the exercise of outstanding options at a weighted exercise price of $7.29 per share; and

•        1,220,588 shares of common stock reserved for future issuance pursuant to our 2014 Equity Incentive Plan.

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MANAGEMENT’S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our results of operations and financial condition should be read together with “Summary Historical Consolidated Financial and Other Data” and the financial statements and related notes included elsewhere in this prospectus. Such discussion and analysis reflects our historical results of operations and financial position and does not give effect to the completion of this offering. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” and elsewhere in this prospectus.

Overview