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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and $26,885, respectively) $ 6,144,476 $ 11,727,490 Income taxes payable 165,350 185,665 Contract liabilities 27,134 14,202 Short term loans payable, related party, net of debt discount 1,400,000 — Current portion of long-term notes payable, net of debt discount and debt issuance cost 4,094,057 2,094,525 Total Current Liabilities 11,831,017 14,021,882 Long-term Liabilities: Notes payable, net of debt discount, related parties 12,335,452 12,426,997 Notes payable 14,557,022 13,096,610 Total long-term liabilities 26,892,474 25,523,607 Total Liabilities 38,723,491 39,545,489 Commitments and contingencies Stockholders’ Deficit: Common stock, $0.00001 par value; 300,000,000 shares authorized; 89,889,074 and 89,889,074, shares issued and outstanding, respectively 899 899 Additional paid in capital 19,147,884 19,147,884 Accumulated other comprehensive income (loss) 29,170 (102,467 ) Accumulated deficit (45,771,759 ) (46,352,289 ) Total stockholders’ deficit (26,593,806 ) (27,305,973 ) Total Liabilities and Stockholders’ Deficit $ 12,129,685 $ 12,239,516 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements Table of Contents

Synergy CHC Corp.
Unaudited Condensed Consolidated Statements of Income and Other Comprehensive Income

For the three  months ended March 31, 2024 For the three months ended March 31, 2023

Revenue $	9,411,863 $	7,962,166

Cost of Sales 2,637,139 2,084,964

Gross Profit 6,774,724 5,877,202

Operating expenses

Selling and marketing 3,584,677 3,071,601

General and administrative 1,348,385 1,656,897

Depreciation and amortization 33,333

Total operating expenses 4,966,395 4,728,498

Income from operations 1,808,329 1,148,704

Other (income) expenses

Interest income (387	) (382	)

Interest expense 1,109,980 836,412

Remeasurement gain on translation of foreign subsidiary (8,983	) (4,836	)

Total other expenses 1,100,610 831,194

Net income before income taxes 707,719 317,510

Income tax expense (benefit) 127,189 (10,918	)

Net income after tax $	580,530 $	328,428

Net income per share – basic and diluted $	0.01 $	0.00

Weighted average common shares outstanding

Basic and Diluted 89,889,074 89,889,074

Comprehensive income:

Net income $	580,530 $	328,428

Foreign currency translation adjustment 131,637 (4,443	)

Comprehensive income $	712,167 $	323,985

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Table of Contents

Synergy CHC Corp.
Unaudited Condensed Consolidated Statement of Stockholders’ Deficit

Common stock Additional Paid in Capital Accumulated Other Comprehensive Income Accumulated Deficit Total Stockholders’ Deficit

Shares Amount

Balance as of December 31, 2022 89,889,074 $	899 $	19,147,884 $	22,389 $	(52,691,039	) $	(33,519,867	)

Foreign currency translation loss (4,443	) (4,443	)

Net income 328,428 328,428

Balance as of March 31, 2023 89,889,074 $	899 $	19,147,884 $	17,946 $	(52,362,611	) $	(33,195,885	)

Common stock Additional Paid in Capital Accumulated Other Comprehensive Income Accumulated Deficit Total Stockholders’ Deficit

Shares Amount

Balance as of December 31, 2023 89,889,074 $	899 $	19,147,884 $	(102,467	) $	(46,352,289	) $	(27,305,973	)

Foreign currency translation gain 131,637 131,637

Net income 580,530 580,530

Balance as of March 31, 2024 89,889,074 $	899 $	19,147,884 $	29,170 $	(45,771,759	) $	(26,593,806	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Table of Contents

Synergy CHC Corp.
Unaudited Condensed Consolidated Statements of Cash Flows

For the three months ended March 31, 2024 For the three months ended March 31, 2023

Cash Flows from Operating Activities

Net income $	580,530 $	328,428

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation and amortization 33,334 —

Foreign currency transaction loss 11,178 (86,520	)

Remeasurement loss on translation of foreign subsidiary (8,983	) (4,836	)

Non cash implied interest 7,199 7,520

Changes in operating assets and liabilities:

Accounts receivable (318,330	) 1,173,554

Loan receivable, related party 25,162 (834	)

Inventory 1,016,455 1,329,333

Prepaid expenses (202,888	) (99,176	)

Prepaid expense, related party (165,687	) 32,045

Income taxes receivable — (10,468	)

Income taxes payable (20,315	) —

Contract liabilities 12,932 5,366

Accounts payable and accrued liabilities (1,808,989	) (4,043,396	)

Accounts payable, related party (19,640	) (107,422	)

Net cash used in operating activities (858,042	) (1,476,405	)

Cash Flows from Investing Activities

Cash Flows from Financing Activities

Advances from related party 1,400,000 —

Repayment of notes payable, related party (84,500	) (12,500	)

Proceeds from notes payable 125,000 —

Repayment of notes payable (435,880	) (502,096	)

Net cash provided by (used in) financing activities 1,004,620 (514,596	)

Effect of exchange rate on cash, cash equivalents and restricted cash 131,637 (4,4443	)

Net increase (decrease) in cash, cash equivalents and restricted cash 278,215 (1,995,444	)

Cash, Cash Equivalents and restricted cash, beginning of year 732,534 2,526,443

Cash, Cash Equivalents and restricted cash, end of period $	1,010,749 $	530,999

Supplemental Disclosure of Cash Flow Information:

Cash paid during the period for:

Interest $	1,102,781 $	828,967

Income taxes $	147,728 $	—

Supplemental Disclosure of Noncash Investing and Financing Activities:

Accounts payable converted to loan payable upon settlement $	3,770,824 $	—

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Table of Contents

SYNERGY CHC CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Nature of the Business

Synergy CHC Corp. (“Synergy”, “we”, “us”, “our” or the “Company”) (formerly Synergy Strips Corp.) was incorporated on December 29, 2010 in Nevada under the name “Oro Capital Corporation.” On April 21, 2014, the Company changed its fiscal year end from July 31 to December 31. On April 28, 2014, the Company changed its name to “Synergy Strips Corp.”. On August 5, 2015, the Company changed its name to “Synergy CHC Corp.”

The Company is a consumer health care company that is in the process of building a portfolio of best-in-class consumer product brands. Synergy’s strategy is to grow its portfolio both organically and by further acquisition.

Effective January 1, 2019 the Company has merged the U.S. Subsidiaries (Neuragen Corp., Breakthrough Products Inc., Sneaky Vaunt Corp., and The Queen Pegasus Corp.) into the parent company.

Synergy is the sole owner of two subsidiaries: NomadChoice Pty Ltd. and Synergy CHC Inc. and the results have been consolidated in these statements.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The accompanying condensed consolidated financial statements as of March 31, 2024 and December 31, 2023 and for the three months ended March 31, 2024 and 2023 are unaudited. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2023 and footnotes thereto

All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Significant estimates included are assumptions about collection of accounts receivable, current income taxes, deferred income taxes valuation allowance, useful life of intangible assets, impairment analysis of intangible assets, accrual of sales returns, and accrual of legal expense. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period that they are determined to be necessary.

Cash and Cash Equivalents

The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. As of March 31, 2024 and December 31, 2023, the Company had no cash equivalents. The Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation (FDIC) in accounts that at times may be in excess of the federally insured limit of $250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. At March 31, 2024 and December 31, 2023, the uninsured balances amounted to $748,391 and $441,711, respectively.

Table of Contents

SYNERGY CHC CORP.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2 — Summary of Significant Accounting Policies (cont.)

Restricted Cash