SEC Filing Document

Company: Synergy CHC Corp.
Ticker: SNYR
CIK: 1562733
Filing Type: S-1/A
Document Type: S-1/A
Date Filed: 2024-09-16
Accession Number: 0001213900-24-079034
Exchange: Nasdaq
SIC Code: 2833
SIC Description: Medicinal Chemicals & Botanical Products
URL: https://www.sec.gov/Archives/edgar/data/1562733/000121390024079034/ea0208324-09.htm

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scaled disclosures available to smaller reporting companies so long as the market value of our voting and non-voting common stock held by non-affiliates is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our common stock held by non-affiliates is less than $700.0 million measured on the last business day of our second fiscal quarter. Table of Contents THE OFFERING Common stock offered 2,000,000 shares. Common stock to be outstanding after this offering 9,553,726 shares (or 9,853,726 shares if the underwriters exercise their over -allotment option in full). Over-allotment option We have granted the underwriters a 30 -day option to purchase up to an additional 300,000 shares of our common stock at the public offering price to cover over -allotments , if any.

Use of proceeds We estimate that the net proceeds to us from this offering will be approximately $17.4 million, or approximately $20.2 million if the underwriters exercise their over -allotment option in full, assuming a public offering price of $10.00 per share, the midpoint of the price range set forth on the cover page of this prospectus.
We intend to use the net proceeds of this offering for general corporate purposes. See “Use of Proceeds.”

Risk factors You should read the “Risk Factors” section of this prospectus beginning on page 12 for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.

Proposed Nasdaq Global Market symbol SNYR

As of September 16, 2024, 7,553,726 shares of our common stock were outstanding. Unless we indicate otherwise or the context otherwise requires, all information in this prospectus:

•        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;

•        gives effect to a 1-for-11.9 reverse stock split with respect to our common stock, which was effected on September 11, 2024; and

•        excludes 1,220,588 shares of common stock reserved for future issuance pursuant to our 2024 Equity Incentive Plan.

Table of Contents

SUMMARY HISTORICAL CONSOLIDATED FINANCIAL AND OTHER DATA

The following tables set forth our summary historical consolidated financial data as of, and for the periods ended on, the dates indicated.

The summary consolidated statements of operations data for the years ended December 31, 2023 and 2022 are derived from our audited consolidated financial statements and notes that are included elsewhere in this prospectus.

The summary condensed consolidated statements of operations data for the six months ended June 30, 2024 and 2023 and the summary consolidated balance sheet data as of June 30, 2024 are derived from our unaudited interim condensed consolidated financial statements and notes that are included elsewhere in this prospectus. We have prepared the unaudited condensed consolidated financial statements in accordance with generally accepted accounting principles (GAAP) and on the same basis as the audited consolidated financial statements. Our historical results are not necessarily indicative of our results in any future period and results from our interim period may not necessarily be indicative of the results of the entire year.

Per share data in the table below gives effect to a 1-for-11.9 reverse stock split of our common stock, which was effected on September 11, 2024.

For the six months ended June 30, 2024 For the six months ended June 30, 2023 For the year ended December 31, 2023 For the year ended December 31, 2022

(Unaudited) (Unaudited)

Statement of operations data:

Revenue $	17,436,703 $	18,753,705 $	42,777,633 $	38,410,674

Cost of sales 5,086,029 5,323,622 10,697,323 25,112,988

Gross profit 12,350,674 13,430,083 32,080,310 13,297,686

Total operating expenses 8,958,753 9,198,953 21,273,564 39,468,116

Income (loss) from operations 3,391,921 4,231,130 10,806,746 (26,170,430	)

Total other expenses 1,849,634 1,715,611 4,233,016 6,428,686

Net income (loss) before income taxes 1,542,287 2,515,519 6,573,730 (32,599,116	)

Income tax expense (benefit) 306,571 52,262 234,980 32,172

Net income (loss) after tax $	1,235,716 $	2,463,257 $	6,338,750 $	(32,631,288	)

Net income (loss) per share – basic and diluted $	0.16 $	0.33 $	0.84 $	(4.32	)

Weighted average common shares outstanding, basic and diluted 7,553,726 7,553,726 7,553,726 7,553,726

EBITDA $	3,463,701 $	4,235,291 $	10,841,596 $	(25,809,320	)

Non-GAAP Financial Measures

We currently focus on EBITDA to evaluate our business relationships and our resulting operating performance and financial position. EBITDA is defined as net income plus interest expense, income tax expense, depreciation and amortization. We believe that EBITDA, viewed in addition to, and not in lieu of, our reported results in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), provides useful information to investors.

Table of Contents

Six Months Ended June 30, 2024 Six Months Ended June 30, 2023 Year Ended December 31, 2023 Year Ended December 31, 2022

(Unaudited) (Unaudited)

Net income (loss) $	1,235,716 $	2,463,257 $	6,338,750 $	(32,631,288	)

Interest income (761	) (789	) (1,616	) (569	)

Interest expense 1,855,508 1,720,561 4,236,149 6,450,365

Taxes 306,571 52,262 234,980 32,172

Depreciation and amortization 66,667 — 33,333 340,000

EBITDA $	3,463,701 $	4,235,291 $	10,841,596 $	(25,809,320	)

EBITDA is considered a non-GAAP financial measure. EBITDA represents earnings before interest, taxes, depreciation and amortization. Our definition of EBITDA might not be comparable to similarly titled measures reported by other companies.

June 30, 2024 December 31, 2023 December 31, 2022

(Unaudited)

Balance sheet data:

Current assets $	10,873,698 $	11,822,849 $	18,541,733

Total assets 11,223,698 12,239,516 18,541,733

Current liabilities 14,711,896 14,021,882 30,262,522

Total liabilities 37,101,971 39,545,489 52,061,600

Total stockholders’ deficit (25,878,273	) (27,305,973	) (33,519,867	)

Total liabilities and stockholders’ deficit $	11,223,698 $	12,239,516 $	18,541,733

Table of Contents

RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the following risks and all of the other information contained in this prospectus before deciding whether to invest in our common stock. If any of the following risks are realized, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our common stock could decline and you could lose all or part of your investment in our common stock. Additional risks of which we are not presently aware or that we currently believe are immaterial may also harm our business and results of operations. Some statements in this prospectus, including such statements in the following risk factors, constitute forward-looking statements. See the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

Risks Related to Our Business, Strategy and Industry

We operate in a highly competitive industry and our failure to compete effectively could materially and adversely affect our sales and growth prospects.

The U.S. nutritional supplements retail industry is a large and highly fragmented industry with few barriers to entry. We compete against other domestic and international manufacturers, specialty retailers, mass merchants, multi-level marketing organizations, mail-order and direct-to-consumer companies, and e-commerce companies. This market is highly sensitive to the introduction of new products, which may rapidly capture a significant share of the market. As certain products become more mainstream, with broader distribution, we may experience increased competition for those products. Increased competition from companies that distribute through retail, e-commerce or wholesale channels could have a material adverse effect on our financial condition and results of operations. Certain of our competitors may have significantly greater financial, technical and marketing resources than we do, and may be able to adapt to changes in consumer preferences more quickly, devote greater resources to the marketing and sale of their products, or generate greater brand recognition. In addition, our competitors may be more effective and efficient in introducing new products. Furthermore, if we fail to maximize the efficiency of our ship direct to customers strategies, or fail to provide our customers with an attractive omni-channel experience, our business and results of operations could be materially and adversely affected. We may not be able to compete effectively, and any of the factors listed above may cause price reductions, reduced margins and losses of our market share.

Our failure to appropriately respond to changing consumer preferences and demand for new products or product enhancements could significantly harm our relationship with customers and our product sales, as well as our financial condition and operating results.

Our business is subject to changing consumer trends and preferences, including rapid and frequent changes in demand for products, new product introductions and enhancements. Our failure to accurately predict these trends could negatively impact consumer opinion of our products, which in turn could harm our customer relationships and cause the loss of sales. The success of our new product offerings and enhancements depends upon a number of factors, including our ability to:

•        accurately anticipate consumer needs;

•        innovate and develop new products or product enhancements that meet these needs;

•        successfully commercialize new products or product enhancements in a timely manner;

•        price our products competitively;