SEC Filing Document

Company: Synergy CHC Corp.
Ticker: SNYR
CIK: 1562733
Filing Type: S-1/A
Document Type: S-1/A
Date Filed: 2024-09-09
Accession Number: 0001213900-24-076929
Exchange: Nasdaq
SIC Code: 2833
SIC Description: Medicinal Chemicals & Botanical Products
URL: https://www.sec.gov/Archives/edgar/data/1562733/000121390024076929/ea0208324-08.htm

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our results of operations, financial condition and liquidity, and industry developments are consistent with the forward-looking statements contained in this prospectus, those results or developments may not be indicative of results or developments in subsequent periods. In light of these risks and uncertainties, we caution you not to place undue reliance on these forward-looking statements. Any forward-looking statement that we make in this prospectus speaks only as of the date of such statement, and we undertake no obligation to update any forward-looking statement or to publicly announce the results of any revision to any of those statements to reflect future events or developments, except as required by applicable law. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data. Table of Contents USE OF PROCEEDS

Assuming a public offering price of $10.00 per share, the midpoint of the range set forth on the cover page of this prospectus, we estimate that the net proceeds to us from the sale of our common stock in this offering will be $17.6 million (or $20.4 million if the underwriters exercise their over-allotment option in full), after deducting underwriting discounts and commissions and the estimated offering expenses payable by us. Each $1.00 increase (decrease) in the assumed public offering price would increase (decrease) the net proceeds to us from this offering by approximately $1.9 million (or $2.1 million if the underwriters exercise their over-allotment option in full), assuming the number of shares we sell, as set forth on the cover page of this prospectus, remains the same, after deducting underwriting discounts and commissions and the estimated offering expenses payable by us. The principal reasons for this offering are to raise capital for general corporate purposes, including working capital, and to facilitate the listing of our common stock on Nasdaq.

We do not have a specific plan for the use of the net proceeds of this offering; rather we intend to use the net proceeds (which will be approximately $17.6 million, or $20.4 million if the underwriters exercise their over-allotment option in full) for general corporate purposes.

As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon the closing of this offering or the amounts that we will actually spend on each allocation. As a result, our management will have broad discretion over how these proceeds are used.

Pending out use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities.

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MARKET FOR OUR COMMON STOCK

As a result of amendments to Exchange Act Rule 15c2-11, because we do not presently make current information publicly available, our common stock was shifted from the OTC Markets Group, Inc. Pink tier to the OTC Expert Market on September 28, 2021, which means that there are no longer publicly-available quotations of our common stock. Prior to September 28, 2021, shares of our common stock were quoted on the OTC Pink under the symbol “SNYR.” Although our shares were quoted on the OTC Pink from July 2020 to September 2021, because trading on the OTC Pink was infrequent and limited in volume, the prices at which such transactions occurred may not necessarily reflect the price that would be paid for our common stock in a more liquid market. From April 2014 to July 2020, our common stock was quoted on the OTC Markets Group, Inc. OTCQB under the symbol “SNYR.” As of September 9, 2024, there were approximately 37 record holders of our common stock.

We have applied to list our common stock on the Nasdaq Capital Market under the symbol “SNYR.” However, we 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.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of June 30, 2024:

•        on an actual basis; and

•        on an as adjusted basis to give effect to our 1-for-11.9 reverse stock split, the issuance and sale by us in this offering of 2,000,000 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.

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 17,704,293

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 1,181,222

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

Total current debt 9,068,824 9,068,824

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; 89,889,074 and 9,553,704, shares issued and outstanding, respectively 899 96

Additional paid in capital 19,152,495 36,770,298

Accumulated other comprehensive income 84,906 84,906

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

Total stockholders’ deficit (25,878,273	) (8,261,273	)

Total Capitalization $	5,580,626 23,197,626

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

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

•        excludes 336,134 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 $(0.29) 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.

After giving effect to the 1-for-11.9 reverse stock split and the receipt of the net proceeds from our sale of 2,000,000 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, our as adjusted net tangible book value as of June 30, 2024, would have been $(8.6 million), or $(0.90) per share. This represents an immediate increase in as adjusted net tangible book value of $2.57 per share to our existing stockholders and an immediate dilution of $3.96 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 $	(0.29	)

Pro forma decrease in net tangible book value per share attributable to split effect (3.18	)

Pro forma 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 $	2.57

Pro forma as adjusted net tangible book value per share as of June 30, 2024 after this offering (0.90	)