SEC Filing Document

Company: Synergy CHC Corp.
Ticker: SNYR
CIK: 1562733
Filing Type: S-1/A
Document Type: S-1/A
Date Filed: 2024-07-29
Accession Number: 0001013762-24-002165
Exchange: Nasdaq
SIC Code: 2833
SIC Description: Medicinal Chemicals & Botanical Products
URL: https://www.sec.gov/Archives/edgar/data/1562733/000101376224002165/ea0208324-02.htm

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revenue increased 17% year-over-year, to $37.2 million, due to increased distribution. As our flagship brand, FOCUSfactor accounted for 88% of our net revenue in the three months ended March 31, 2024, compared with 81% in the three months ended March 31, 2023, 85% in the year ended December 31, 2023 and 83% in the year ended December 31, 2022. Flat Tummy. We employ a primarily online and social media driven strategy for our Flat Tummy brand. The brand is focused primarily on women. We employ campaigns to reach our core target segments through a mix of traditional online advertising as well as influencer-based marketing. In the three months ended March 31, 2024, Flat Tummy accounted for 15% of our net revenue, compared with 20% in the three months ended March 31, 2023, 13% in the year ended December 31, 2023 and 17% in the year ended December 31, 2022. Competition

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. 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.

Relationships with Knight Therapeutics

The lender under our Amended and Restated Loan Agreement, as amended by the Sixth Amendment dated June 6, 2024, is Knight Therapeutics (Barbados) Inc. (“Knight”). The total consolidated amount outstanding under such loan was $12,335,452 as of March 31, 2024, and the loan bears interest at a rate of 12% per year. An affiliate of Knight is also the beneficial owner of approximately 19.6% of our outstanding common stock. In addition, we have entered into several distribution agreements with Knight Therapeutics, Inc., an affiliate of Knight, for the distribution of our products. See “Certain Relationships and Related Party Transactions” for additional information.

Summary Risk Factors

An investment in our common stock involves a high degree of risk. You should carefully consider the risks summarized below. These risks are discussed more fully in the section titled “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;

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•        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-            Reverse Stock Split

Prior to the effective date of the registration statement of which this prospectus is a part, we will effect a 1-for-            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 shares.

Common stock to be outstanding after this offering shares (or             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          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 $            million, or approximately $            million if the underwriters exercise their over -allotment option in full, assuming a public offering price of $          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 11 for a discussion of factors to consider carefully before deciding to invest in shares of our common stock.

Proposed Nasdaq Capital Market symbol SNYR

Insider Participation Certain of our officers, directors and stockholders, including            , and certain of their respective affiliates, have indicated an interest in participating in this offering at the public offering price. We anticipate that such persons will purchase in the aggregate approximately            shares of common stock offered hereby. However, because indications of interest are not binding agreements or commitments to purchase, the underwriters could determine to sell fewer shares to them than they indicated an interest in purchasing or sell no shares to them, and they could determine to purchase fewer shares than they indicated an interest in purchasing or purchase no shares in this offering.

As of June 18, 2024, 89,889,074 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;