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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“Risk Factors” following this prospectus summary. These risks include, but are not limited to, the following: • We operate in a highly competitive industry and our failure to compete effectively could materially and adversely affect our sales and growth prospects; • 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 sales growth is dependent upon maintaining our relationships with a small number of existing large customers, and the loss of any one such customer could materially adversely affect our business and financial performance; Table of Contents • If our outside suppliers and manufacturers fail to supply products in sufficient quantities and in a timely fashion, our business could suffer; • Adverse or negative publicity could cause our business to suffer;

•        We continue to explore new strategic initiatives, but we may not be able to successfully execute on, or realize the expected benefits from, the implementation of our strategic initiatives, and our pursuit of new strategic initiatives may pose significant costs and risks;

•        The nutritional supplement industry increasingly relies on intellectual property rights and although we seek to ensure that we do not infringe the intellectual property rights of others, there can be no assurance that third parties will not assert intellectual property infringement claims against us;

•        We plan to expand into additional international markets, which will expose us to significant operational risks;

•        We may experience product recalls, withdrawals or seizures, which could materially and adversely affect our business, financial condition and results of operations;

•        We and our suppliers are subject to numerous laws and regulations that apply to the manufacturing and sale of nutritional supplements, and compliance with these laws and regulations, as they currently exist or as modified in the future, may increase our costs, limit or eliminate our ability to sell certain products, subject us or our suppliers to the risk of enforcement action or litigation, or otherwise adversely affect our business, results of operations and financial condition; and

•        The other factors described in “Risk Factors.”

Our Corporate Information

We were organized as a corporation under the laws of the State of Nevada on December 29, 2010 under the name “Oro Capital Corporation.” In April 2014, Synergy Strips Corp., a Delaware corporation, became our wholly-owned subsidiary, and we changed our name from “Oro Capital Corporation” to “Synergy Strips Corp.” In August 2015, we changed our name to “Synergy CHC Corp.” In January 2019, our other U.S. subsidiaries, Neuragen Corp., Sneaky Vaunt Corp., The Queen Pegasus Corp. and Breakthrough Products Inc., merged with and into the Company. In July 2021, we acquired Hand MD Corp. as a wholly-owned subsidiary.

We were a public reporting company until July 17, 2020, the date on which we filed a Form 15 to voluntarily suspend our duty to file reports under Sections 13 and 15(d) of the Exchange Act. As a result of this offering, we will become subject again to the information and reporting requirements of the Exchange Act and we will file periodic reports, proxy statements and other information with the SEC.

The address of our principal executive offices is currently 865 Spring Street, Westbrook, Maine 04092 and our phone number is (207) 321-2350. Our website is www.synergychc.com. The information contained in, or that can be accessed through, our website is not incorporated by reference in, and is not part of, this prospectus.

1-for-11.9 Reverse Stock Split

On September 11, 2024, we effected a 1-for-11.9 reverse stock split with respect to our common stock. Unless we indicate otherwise or the context otherwise requires, all information in this prospectus gives effect to this reverse stock split.

Implications of Being a Smaller Reporting Company

We are a “smaller reporting company” as defined in the Exchange Act. We may take advantage of certain of the 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.

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THE OFFERING

Common stock offered 1,150,000 shares.

Common stock to be outstanding after this offering 8,703,726 shares (or 8,876,226 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 172,500 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 $8.4 million, or approximately $9.9 million if the underwriters exercise their over -allotment option in full.
We intend to use the net proceeds of this offering to repay a portion of outstanding amounts under certain related party promissory notes and 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.

Nasdaq Global Market symbol SNYR

Insider Participation An affiliate of Jack Ross, our Chief Executive Officer, has agreed to purchase 300,000 shares of common stock at the public offering price.

As of October 15, 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.

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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.

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

(Unaudited) (Unaudited)