UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________________to___________________________

Commission File Number: 001-42374

SYNERGY CHC CORP.

(Exact name of registrant as specified in its charter)

Nevada		99-0379440
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

865 Spring Street Westbrook, Maine		04092
(Address of principal executive offices)		(Zip Code)

(207) 321-2350

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading symbol(s)		Name of each exchange on which registered
Common stock, par value $0.00001 per share		SNYR		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 13, 2025, there were 9,194,183 shares of common stock, par value $0.00001 per share, of the registrant issued and 9,014,110 shares outstanding.

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION		1
Item 1. Financial Statements		1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		29
Item 3. Quantitative and Qualitative Disclosures About Market Risk		34
Item 4. Controls and Procedures		34

PART II—OTHER INFORMATION		35
Item 1. Legal Proceedings		35
Item 1A. Risk Factors		35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		35
Item 3. Defaults Upon Senior Securities		35
Item 4. Mine Safety Disclosures		35
Item 5. Other Information		35
Item 6. Exhibits		36

SIGNATURES		37

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Synergy CHC Corp.

Condensed Interim Financial Statements

For the Three Months Ended March 31, 2025 and 2024

Unaudited

(Expressed in U.S. Dollars)

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING CONDENSED INTERIM FINANCIAL REPORTING

The accompanying unaudited condensed interim financial statements of Synergy CHC Corp. (“the Company”) have been prepared by management in accordance with accounting principles generally accepted in the United States (GAAP). Management acknowledges responsibility for the preparation and presentation of the unaudited condensed interim financial statements, including responsibility for significant accounting estimates and the choice of accounting principles and methods that are appropriate to the Company’s circumstances.

Synergy CHC Corp.

Condensed Consolidated Balance Sheets

	March 31, 2025			December 31, 2024
	(unaudited)
Assets
Current Assets
Cash and cash equivalents	$	177,882		$	687,920
Restricted cash		100,000			100,000
Accounts receivable, net		4,380,518			5,321,037
Other receivables		1,855,000			1,999,637
Loan receivable (related party)		4,375,892			4,375,059
Prepaid expenses (including related party amount of $508,879 and $312,966, respectively)		2,170,263			1,859,563
Inventory, net		2,346,487			1,716,552
Total Current Assets		15,406,042			16,059,768

Intangible assets, net		250,000			283,333

Total Assets	$	15,656,042		$	16,343,101

Liabilities and Stockholders’ Deficit
Current Liabilities:
Accounts payable and accrued liabilities (including related party payable of $217,956 and $88,644, respectively)	$	3,098,590		$	5,191,868
Income taxes payable		77,564			242,977
Contract liabilities		36			24,252
Short term loans payable, net of debt discount		4,754,555			7,725,272
Current portion of long-term notes payable, net of debt discount and debt issuance cost, related party		135,000			4,000,000
Total Current Liabilities		8,065,745			17,184,369

Long-term Liabilities:
Notes payable, net of debt discount, related parties		12,333,053			8,333,053
Notes payable		10,896,610			7,457,022
Total long-term liabilities		23,229,663			15,790,075
Total Liabilities		31,295,408			32,974,444

Commitments and contingencies

Stockholders’ Deficit:
Common stock, $0.00001 par value; 300,000,000 shares authorized; 8,752,178 and 8,721,818, shares issued, respectively; 8,572,105 and 8,541,745 outstanding, respectively		88			87
Additional paid in capital		27,761,307			27,643,660
Accumulated other comprehensive loss		(49,712	)		(47,777	)
Accumulated deficit		(43,223,549	)		(44,099,813	)
Less: Treasury stock (180,073 shares) at cost		(127,500	)		(127,500	)
Total stockholders’ deficit		(15,639,366	)		(16,631,343	)
Total Liabilities and Stockholders’ Deficit	$	15,656,042		$	16,343,101

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

Synergy CHC Corp.

Unaudited Condensed Consolidated Statements of Income and Comprehensive Income

	For the three months ended			For the three months ended
	March 31, 2025			March 31, 2024
Revenue
Product Sales	$	6,670,534		$	9,411,863
License Revenue		1,500,000			-
Total Revenue		8,170,534			9,411,863

Cost of Sales		2,006,513			2,637,139

Gross Profit		6,164,021			6,774,724

Operating expenses
Selling and marketing		2,876,271			3,584,677
General and administrative		1,306,714			1,348,385
Depreciation and amortization		33,333			33,333
Total operating expenses		4,216,318			4,966,395

Income from operations		1,947,703			1,808,329

Other (income) expenses
Interest income		(13,882	)		(387	)
Interest expense		1,095,369			1,109,980
Remeasurement loss (gain) on translation of foreign subsidiary		1,412			(8,983	)

Total other expenses		1,082,899			1,100,610

Net income before income taxes		864,804			707,719
Income tax benefit (expense)		11,460			(127,189	)

Net income after tax	$	876,264		$	580,530

Net income per share – basic	$	0.10		$	0.08
Net income per share – diluted	$	0.10		$	0.08

Weighted average common shares outstanding
Basic		8,560,636			7,373,745
Diluted		8,577,620			7,373,745
Comprehensive income:
Net income	$	876,264		$	580,530
Foreign currency translation adjustment		(1,935	)		131,637
Comprehensive income	$	874,329		$	712,167

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

Synergy CHC Corp.

Unaudited Condensed Consolidated Statement of Stockholders’ Deficit

	Common stock				Additional Paid in		Accumulated Other Comprehensive Income			Treasury			Accumulated			Total Stockholders’
	Shares		Amount		Capital		(Loss)			stock			Deficit			Deficit
Balance as of December 31, 2023		7,553,818	$	76	$	19,148,707	$	(102,467	)	$	(127,500	)	$	(46,224,789	)	$	(27,305,973	)
Foreign currency translation loss								131,637									131,637
Net income														580,530			580,530
Balance as of March 31, 2024		7,553,818	$	76	$	19,148,707	$	29,170		$	(127,500	)	$	(45,644,259	)	$	(26,593,806	)

	Common stock				Additional Paid in		Accumulated Other Comprehensive Income			Treasury			Accumulated			Total Stockholders’
	Shares		Amount		Capital		(Loss)			stock			Deficit			Deficit
Balance as of December 31, 2024		8,721,818	$	87	$	27,643,660	$	(47,777	)	$	(127,500	)	$	(44,099,813	)	$	(16,631,343	)
Foreign currency translation loss								(1,935	)								(1,935	)
Issuance of common stock for loan financing		30,360		1		117,647											117,648
Net income														876,264			876,264
Balance as of March 31, 2025		8,752,178	$	88	$	27,761,307	$	(49,712	)	$	(127,500	)	$	(43,223,549	)	$	(15,639,366	)

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

Synergy CHC Corp.

Unaudited Condensed Consolidated Statements of Cash Flows

	For the three months ended			For the three months ended
	March 31, 2025			March 31, 2024
Cash Flows from Operating Activities
Net income	$	876,264		$	580,530
Adjustments to reconcile net income to net cash used in operating activities:
Amortization of debt discount and debt issuance cost		406,841			-
Depreciation and amortization		33,333			33,334
Foreign currency transaction loss (gain)		(3,137	)		11,178
Remeasurement gain on translation of foreign subsidiary		(1,412	)		(8,983	)
Non cash implied interest		-			7,199
Changes in operating assets and liabilities:
Accounts receivable		940,519			(318,330	)
Other receivables		144,637			-
Loan receivable, related party		(833	)		25,162
Inventory		(629,935	)		1,016,455
Prepaid expenses		(114,787	)		(202,888	)
Prepaid expense, related party		(195,913	)		(165,687	)
Income taxes payable		(165,413	)		(20,315	)
Contract liabilities		(24,216	)		12,932
Accounts payable and accrued liabilities		(2,218,041	)		(1,808,989	)
Accounts payable, related party		129,312			(19,640	)
Net cash used in operating activities		(822,781	)		(858,042	)

Cash Flows from Investing Activities		-			-

Cash Flows from Financing Activities
Advances from related party		135,000			1,400,000
Repayment of notes payable, related party		-			(84,500	)
Proceeds from notes payable		1,496,250			125,000
Repayment of notes payable		(1,316,572	)		(435,880	)
Net cash provided by financing activities		314,678			1,004,620

Effect of exchange rate on cash, cash equivalents and restricted cash		(1,935	)		131,637
Net decrease in cash, cash equivalents and restricted cash		(510,038	)		278,215

Cash and restricted cash, beginning of year		787,920			732,534
Cash and restricted cash, end of period	$	277,882		$	1,010,749

Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest	$	573,529		$	1,102,781
Income taxes	$	-		$	147,728

Supplemental Disclosure of Noncash Investing and Financing Activities:
Accounts payable converted to loan payable upon settlement	$	-		$	3,770,824
Issuance of common stock for loan financing	$	117,648		$	-

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

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 acquisitions.

Effective January 1, 2019 the Company has merged its 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 three subsidiaries: NomadChoice Pty Ltd., Hand MD Corp., 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, 2025 and for the three months ended March 31, 2025 and 2024 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, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025. 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, 2024 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.

Reverse Stock Split

On September 11, 2024, the Company effected a 1-for-11.9 reverse stock split with respect to its common stock. The reverse stock split did not change the number of authorized shares of common stock or par value. All references in these condensed consolidated financial statements to shares, share prices, exercise prices and other per share information in all periods have been adjusted, on a retroactive basis, to reflect the reverse stock split.

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, estimates used in the fair value calculation of stock based compensation, assumptions used in Black-Scholes-Merton, or BSM, valuation methods, such as expected volatility, risk-free interest rate and expected dividend rate, 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, 2025 and December 31, 2024, the Company had no cash equivalents. The Company maintains its cash 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, 2025 and December 31, 2024, the uninsured balances amounted to $28,054 and $503,215, respectively.

Restricted Cash

The following table provides a reconciliation of cash and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows.

	March 31, 2025		December 31, 2024

Cash	$	177,882	$	687,920
Restricted cash		100,000		100,000
Total cash and restricted cash shown in the statement of cash flows	$	277,882	$	787,920

Amounts included in restricted cash represent amounts held for credit card collateral.

Intangible Assets

The Company evaluates the recoverability of intangible assets periodically and takes into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. All of the intangible assets are subject to amortization. Intangible assets are amortized on a straight-line basis over the useful lives.

Long-lived Assets

Long-lived assets include equipment and intangible assets other than those with indefinite lives. The Company assesses the carrying value of its long-lived asset groups when indicators of impairment exist and recognizes an impairment loss when the carrying amount of a long-lived asset is not recoverable when compared to undiscounted cash flows expected to result from the use and eventual disposition of the asset.

Indicators of impairment include significant underperformance relative to historical or projected future operating results, significant changes in the Company’s use of the assets or in its business strategy, loss of or changes in customer relationships and significant negative industry or economic trends. When indications of impairment arise for a particular asset or group of assets, the Company assesses the future recoverability of the carrying value of the asset (or asset group) based on an undiscounted cash flow analysis. If carrying value exceeds projected, net, undiscounted cash flows, an additional analysis is performed to determine the fair value of the asset (or asset group), typically a discounted cash flow analysis, and an impairment charge is recorded for the excess of carrying value over fair value.

Revenue Recognition

The Company recognizes revenue in accordance with the Financial Accounting Standards Board’s (“FASB”), Accounting Standards Codification (“ASC”) ASC 606, Revenue from Contracts with Customers (“ASC 606”). Revenues are recognized when control is transferred to customers in amounts that reflect the consideration the Company expects to be entitled to receive in exchange for those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied.

The Company recognizes revenue upon shipment from its fulfillment centers. Certain of the Company’s distributors may also perform a separate function as a co-packer on the Company’s behalf. In such cases, ownership of and title to the Company’s products that are co-packed on the Company’s behalf by those co-packers who are also distributors, passes to such distributors when the Company is notified by them that they have taken transfer or possession of the relevant portion of the Company’s finished goods. Freight billed to customers is presented as revenues, and the related freight costs are presented as cost of goods sold. Cancelled orders are refunded if not already dispatched, refunds are only paid if stock is damaged in transit, discounts are only offered with specific promotions and orders will be refilled if lost in transit. The Company recognizes revenue for its digital products in the month the download by the customer occurs.

All product sales were initiated based upon the retailer’s purchase orders at a fixed transaction price and revenues recognized when the products were shipped to the Company’s customers.

The Company accounts for its IP license revenue, which provides the Company’s customer with rights to use the Company’s IP, in accordance with ASC 606. A license may be perpetual or time limited in its application. In accordance with ASC 606, the Company will continue to recognize revenue from IP license at the time of delivery when the customer accepts control of the IP, as the IP is functional without professional services, updates and technical support. The Company has concluded that its IP license is distinct as the customer can benefit from the functional IP on its own. Therefore, the Company has determined the right to use its IP was satisfied at a point in time (on the date the rights to the IP were granted).

Contract Assets

The Company does not have any contract assets such as work-in-process. All trade receivables on the Company’s condensed consolidated balance sheet are from contracts with customers.

Contract Costs

Costs incurred to obtain a contract are capitalized unless short term in nature. As a practical expedient, costs to obtain a contract that are short term in nature are expensed as incurred. The Company does not have any contract costs capitalized as of March 31, 2025 and December 31, 2024.

Contract Liabilities

The Company’s contract liabilities consist of advance customer payments. Contract liability results from transactions in which the Company has been paid for products by customers, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the contract liabilities are recognized.

	March 31, 2025			December 31, 2024

Beginning balance	$	24,252		$	14,202
Additions		36			24,252
Recognized as revenue		(24,252	)		(14,202	)
Ending balance	$	36		$	24,252

Accounts receivable

Accounts receivable are generally unsecured. The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management’s evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. Any future recoveries are applied against the allowance for doubtful accounts. As of both March 31, 2025 and December 31, 2024, allowance for doubtful accounts was $0.

Advertising Expense

The Company expenses marketing, promotions and advertising costs as incurred. Such costs are included in selling and marketing expense in the accompanying consolidated statements of operations.

Research and Development

Costs incurred in connection with the development of new products and processing methods are charged to general and administrative expenses as incurred.

Income Taxes

The Company utilizes FASB ASC 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized.

The Company generated a deferred tax asset through net operating loss carry-forward. However, a valuation allowance of 100% has been established due to the uncertainty of the Company’s realization of the net operating loss carry forward prior to its expiration.

NomadChoice Pty Ltd, the Company’s wholly-owned subsidiary is subject to income taxes in the jurisdictions in which it operates. Significant judgment is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The company recognizes liabilities for anticipated tax audit issues based on the Company’s current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

Synergy CHC Inc. is a wholly-owned foreign subsidiary, is subject to income taxes in the jurisdictions in which it operates. Significant judgment is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The company recognizes liabilities for anticipated tax audit issues based on the Company’s current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.

Net Earnings (Loss) Per Common Share

The Company computes earnings per share under ASC subtopic 260-10, Earnings Per Share. Basic earnings (loss) per share is computed by dividing the net income (loss) attributable to the common stockholders (the numerator) by the weighted average number of shares of common stock outstanding (the denominator) during the reporting periods. Diluted earnings per share is computed by increasing the denominator by the weighted average number of additional shares that could have been outstanding from securities convertible into common stock (using the “treasury stock” method), unless their effect on net income per share is anti-dilutive. As of both March 31, 2025 and 2024, options to purchase 252,102 shares of common stock were outstanding. As of March 31, 2025, warrants to purchase 103,500 shares of common stock were outstanding.

The following is a reconciliation of the number of shares used in the calculation of basic and diluted earnings per share for the three months ended March 31, 2025 and 2024:

	For the three months ended
	March 31, 2025		March 31, 2024

Net income after tax	$	876,264	$	580,530

Weighted average common shares outstanding		8,560,636		7,373,745
Incremental shares from the assumed exercise of dilutive stock options		16,984		-
Dilutive potential common shares		8,577,620		7,373,745

Net earnings per share:
Basic	$	0.10	$	0.08
Diluted	$	0.10	$	0.08

The following securities were not included in the computation of diluted net earnings per share as their effect would have been antidilutive:

	For the three months ended
	March 31, 2025		March 31, 2024

Options to purchase common stock		235,118		252,102
Warrants to purchase common stock		103,500		-

Fair Value Measurements

The Company measures and discloses the fair value of assets and liabilities required to be carried at fair value in accordance with ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a framework for measuring fair value, and enhances fair value measurement disclosure.

ASC 825 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825 establishes three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices for identical assets or liabilities in active markets to which the Company has access at the measurement date.

Level 2 - Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 - Unobservable inputs for the asset or liability.

The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.

As of both March 31, 2025 and December 31, 2024, the Company has determined that there were no assets or liabilities measured at fair value.

Inventory

Inventory consists of raw materials, components and finished goods. The Company’s inventory is stated at the lower of cost (FIFO cost basis) or net realizable value. Finished goods include the cost of labor to assemble the items.

Foreign Currency Translation

The functional currency of one of the Company’s foreign subsidiaries (NomadChoice Pty Ltd.) is the U.S. Dollar. The Company’s foreign subsidiary maintains its records using local currency (Australian Dollar). All monetary assets and liabilities of the foreign subsidiary were translated into U.S. Dollars at quarter end exchange rates, non-monetary assets and liabilities of the foreign subsidiary were translated into U.S. Dollars at transaction day exchange rates.

Income and expense items related to non-monetary items were translated at exchange rates prevailing during the transaction date and other incomes and expenses were translated using average exchange rate for the period. The resulting translation adjustments, net of income taxes, were recorded in statements of operations as Remeasurement gain or loss on translation of foreign subsidiary.

The functional currency of the Company’s other foreign subsidiary (Synergy CHC Inc.) is the Canadian Dollar (CAD). The Company’s foreign subsidiary maintains its records using local currency (CAD). All assets and liabilities of the foreign subsidiary were translated into U.S. Dollars at period end exchange rates and stockholders’ equity is translated at the historical rates. Income and expense items were translated using average exchange rate for the period. The resulting translation adjustments, net of income taxes, are reported as other comprehensive income and accumulated other comprehensive income in the stockholder’s equity in accordance with ASC 220 – Comprehensive Income.

The exchange rates used to translate amounts in AUD and CAD into USD for the purposes of preparing the consolidated financial statements were as follows:

Balance sheet:

	March 31, 2025		December 31, 2024
Period-end AUD: USD exchange rate	$	0.6235	$	0.6183
Period-end CAD: USD exchange rate	$	0.6956	$	0.6950

Income statement:

	March 31, 2025		March 31, 2024
Average three months AUD: USD exchange rate	$	0.6272	$	0.6580
Average three months CAD: USD exchange rate	$	0.6968	$	0.7414

Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated into either Australian Dollars or Canadian Dollars, as the case may be, at the rate on the date of the transaction and included in the results of operations as incurred.

Concentrations of Credit Risk

In the normal course of business, the Company provides credit terms to its customers; however, collateral is not required. Accordingly, the Company performs credit evaluations of its customers and maintains allowances for possible losses which, when realized, were within the range of management’s expectations. From time to time, a higher concentration of credit risk exists on outstanding accounts receivable for a select number of customers due to individual buying patterns.

Warehousing costs

Warehouse costs include all third-party warehouse rent fees and are charged to selling and marketing expenses as incurred. Any additional costs relating to assembly or special pack-outs of the Company’s products are charged to cost of sales.

Product display costs

All displays manufactured and purchased by the Company are for placement of product in retail stores. This also includes all costs for display execution and setup and retail services are charged to cost of sales and expensed as incurred.

Cost of Sales

Cost of sales includes the purchase cost of products sold, all costs associated with getting the products into the retail stores including buying and transportation costs and the hosting of the Company’s online Application.

Debt Issuance Costs

Debt issuance costs consist primarily of arrangement fees, professional fees and legal fees. These costs are netted off with the related loan and are being amortized to interest expense over the term of the related debt facilities.

Shipping Costs

Shipping and handling costs billed to customers are recorded in sales. Shipping costs incurred by the company are recorded in selling and marketing expenses.

Related parties

Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests (see Note 9).

Segment Reporting

Segment identification and selection is consistent with the management structure used by the Company’s chief executive officer who is the Chief Operating Decision Maker (CODM) to evaluate performance and make decisions regarding resource allocation, as well as the materiality of financial results consistent with that structure. Based on the Company’s management structure and method of internal reporting, the Company has one operating segment. The Company derives its revenue from the sale of nutraceuticals. The accounting policies of the segment are the same as those described in the summary of significant accounting policies. The chief operating decision maker assesses performance for the segment and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income. The measure of segment assets is reported on the balance sheet as total consolidated assets. Significant segment expenses include retailer promotions, freight and fulfillment, marketing and salaries. The Company’s CODM reviews financial information presented and decides how to allocate resources based on net income. The Company does have any intra-entity sales or transfers. The Company’s CODM does not review operating results on a disaggregated basis; rather, the chief operating decision maker reviews operating results on an aggregated basis.

Presentation of Financial Statements – Going Concern

Going Concern Evaluation

In connection with preparing unaudited condensed consolidated financial statements for the three months ended March 31, 2025, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to continue as a going concern within one year from the date that the unaudited condensed consolidated financial statements are issued.

The Company considered the following:

●

At March 31, 2025, the Company had an accumulated deficit of $43,223,549.

●

At March 31, 2025, the Company had working capital surplus of $7,340,297.

	●	During the three months ended March 31, 2025, the Company had $822,781 of net cash used in operating activities.

	●	During the three months ended March 31, 2025, there was a decrease in revenue of $1,241,329.

Ordinarily, conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern relate to the entity’s ability to meet its obligations as they become due.

The Company evaluated its ability to meet its obligations as they become due within one year from the date that the financial statements are issued by considering the following:

●

During the three months ended March 31, 2025, the Company repaid $1.3 million of loans and received $1.6 million through loans from a related party and others.

●

During the three months ended March 31, 2025, the Company had net income of $876,264.

●

The Company has the option of publicly selling its common stock to raise additional capital.

●

The Company has the option of selling any of its brands to raise additional capital.

●

The Company’s current lenders have agreed to extend the $2 million payments due March 31, 2025 as the Company is currently in negotiations with lenders to refinance its existing debt.

Management concluded that above factors alleviate doubts about the Company’s ability to generate enough cash from operations and other available sources to satisfy its obligations for the next twelve months from the issuance date.

The Company will take the following actions if it starts to trend unfavorably to its internal profitability and cash flow projections, in order to mitigate conditions or events that would raise substantial doubt about its ability to continue as a going concern:

●

Raise additional capital through line of credit and/or loans financing for future mergers and acquisitions.

●

Implement restructuring and cost reductions.

●

Raise additional capital through an additional capital raise.

Correction of Prior Period Immaterial Errors:

The Company has identified an immaterial error in the Company’s previously issued consolidated financial statements related to Treasury Shares held by its wholly owned subsidiary. The adjustment pertained to the acquisition of remaining 50% ownership interest in Hand MD Corp. during July 2021 and accordingly the shares previously issued to Hand MD Corp. required correction on the financial statement as Treasury Shares on the consolidated balance sheet. The amount of the reclassification is $127,500 and has no effect on the consolidated statement of income and other comprehensive income (except for earnings per share and weighted average shares) and statement of cash flow.

In evaluating whether the previously issued consolidated financial statements were materially misstated for the interim or annual periods prior to December 31, 2022, the Company applied the guidance of ASC 250, Accounting Changes and Error Corrections, SEC Staff Accounting Bulletin (“SAB”) Topic 1.M, Assessing Materiality and SAB Topic 1.N, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, and concluded that the effect of the errors on prior period annual financial statements was immaterial. The guidance states that prior-year misstatements which, if corrected in the current year would materially misstate the current year’s financial statements, must be corrected by adjusting prior year financial statements, even though such correction previously was and continues to be immaterial to the prior-year financial statements. Correcting prior-year financial statements for such immaterial misstatements does not require previously filed reports to be amended.

The Company’s earnings per share has been revised from the amounts previously reported to correct the error and the impact of the reclassification is shown in the below table.

Earnings Per Share for the three months ended March 31, 2024:

	As Previously
	Reported		Corrections		As Adjusted

Earnings per share	$	0.08	$	0.00	$	0.08
Weighted average common shares outstanding		7,553,818		127,500		7,373,745

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 amends the rules on income tax disclosures to require entities to disclose specific categories in the rate reconciliation, the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and income tax expense or benefit from continuing operations (separated by federal, state, and foreign). In addition, ASU 2023-09 requires entities to disclose their income tax payments to international, federal, state, and local jurisdictions, among other changes. The amendments can be applied on a prospective basis although retrospective application is permitted. The amendments are effective for the fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of ASU 2023-09 has not affected the Company’s financial statements.

In October 2023, the FASB issued ASU No. 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”). ASU 2023-06 amends U.S. GAAP to reflect updates and simplifications to certain disclosure and presentation requirements referred to FASB by the Securities and Exchange Commission (“SEC”). The targeted amendments incorporate 14 of the 27 disclosures referred by the SEC into codification. Each amendment in ASU 2023-06 is effective on either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. The Company is currently evaluating the impact this update will have on its Consolidated Financial Statements.

Note 3 – Income Taxes

Deferred income taxes arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or noncurrent depending on the periods in which the temporary differences are expected to reverse. The Company does not have any uncertain tax positions.

For U.S. purposes, the Company has not completed its evaluation of NOL utilization limitations under Internal Revenue Code, as amended (the “Code”) Section 382/383, change of ownership rules. If the Company has had a change in ownership, the NOL’s would be limited or eliminated, as to the amount that could be utilized each year, based on the Code. NOL’s attributable to Breakthrough Products, Inc., which are the majority of the Company’s domestic NOL’s are Separate Return Limitation Year (SRLY) NOL’s. Such losses may generally not be available for use (limited or eliminated).

The Company has not filed its State & Local Income/Franchise tax returns in states it is required to file, as such returns and liability remain open. The Company does not expect this to be a significant liability.

The Company had tax benefit (expense) of $11,460 and $(127,189) for the three months ended March 31, 2025 and 2024, respectively. The Company’s provision for tax expense amount, computed by applying the statutory federal income tax rate of 21% in 2025 and 2024 to income before taxes, differs from the effective tax rate, due primarily to state income taxes and permanent items (plus utilization of NOL carryforwards in 2023).

The Company also has net operating loss carryforwards of approximately $50,039,000 and approximately $50,800,000 (United States, Canada and Australia) included in the deferred tax assets for March 31, 2025 and December 31, 2024, respectively, the majority attributable to the acquisition of Breakthrough Products, Inc. However, due to limitations of carryover attributes and separate return limitation year rules, it is unlikely the company will benefit from the NOL’s and thus Management has determined a 100% valuation allowance is required. Further, the Company has not completed an evaluation of the NOL’s attributable to Breakthrough Products, Inc. at the date of this report.

Note 4 – Accounts Receivable

Accounts receivable, net of allowances for doubtful accounts, consisted of the following:

	March 31, 2025		December 31, 2024
Trade accounts receivable	$	4,380,518	$	5,321,037
Other receivables		1,855,000		1,999,637
Less allowances		-		-
Total accounts receivable, net	$	6,235,518	$	7,320,674

During the three months ended March 31, 2025 and 2024, the Company charged $0 to bad debt expense.

Note 5 – Prepaid Expenses

At March 31, 2025 and December 31, 2024, prepaid expenses consisted of the following:

	March 31, 2025		December 31, 2024
Advances for inventory	$	527,452	$	605,913
Insurance		51,573		2,879
Deposits		14,000		14,000
Contract employee, related party		476,981		296,981
Rent, related party		31,998		15,985
Advertising and promotions*		859,920		869,920
Conferences		27,998		15,000
Professional fees		12,000		13,000
IT expenses		17,873		25,404
Prepaid Financing Fees		150,000		-
Miscellaneous		468		481
Total	$	2,170,263	$	1,859,563

During the year ended December 31, 2024, the Company bartered inventory worth $859,920 for media credits to be used at the Company’s discretion.

During the three months ended March 31, 2025, the Company has entered into negotiations with lenders to refinance its debt and has paid deposits of $150,000 related to the refinancing.

Note 6 – Concentration of Credit Risk

Cash and 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, 2025 and December 31, 2024, the uninsured balances amounted to $28,054 and $503,215 respectively.

Accounts receivable

As of March 31, 2025 and December 31, 2024, three and one customers accounted for 77% and 74%, respectively, of the Company’s trade accounts receivable.

Major customers

For the three months ended March 31, 2025, three customers accounted for approximately 71% of the Company’s net revenue. For the three months ended March 31, 2024, two customers accounted for approximately 68% of the Company’s net revenue. Substantially all of the Company’s business is with companies in the United States.

Accounts payable

As of March 31, 2025 and December 31, 2024, three and four vendors accounted for 42% and 69%, respectively, of the Company’s accounts payable.

Major suppliers

For the three months ended March 31, 2025, two suppliers accounted for approximately 44% of the Company’s purchases. For the three months ended March 31, 2024, two suppliers accounted for approximately 73% of the Company’s purchases. Substantially all of the Company’s business is with suppliers in the United States.

Note 7 – Inventory

Inventory consists of finished goods, components and raw materials. The Company’s inventory is stated at the lower of cost (FIFO cost basis) or net realizable value.

The carrying value of inventory consisted of the following:

	March 31, 2025		December 31, 2024
Finished goods	$	2,213,809	$	1,578,561
Components		87,678		92,991
Raw materials		45,000		45,000
Total inventory	$	2,346,487	$	1,716,552

As of January 22, 2015, inventory was pledged to Knight under the Loan Agreement (see note 12). During the three months ended March 31, 2025 and 2024, the Company had no inventory write-offs.

Note 8 – Intangible Assets

	March 31, 2025			December 31, 2024

License Fee	$	450,000		$	450,000
Less accumulated amortization		(200,000	)		(166,667	)
Intangible assets, net	$	250,000		$	283,333

Amortization for both the three months ended March 31, 2025 and 2024 was $33,333.

The estimated aggregate amortization expense over each of the next five years is as follows:

2025 (remaining)	$	100,000
2026		133,333
2027		16,667

Note 9 – Related Party Transactions

The Company paid consulting fees through March 2025 to a company owned by Mr. Jack Ross, Chief Executive Officer of the Company. The Company expensed $0 during the three months ended March 31, 2025 and 2024 as consulting fees. The Company advanced $180,000 and $165,687 in prepaid consulting fees during the three months ended March 31, 2025 and 2024, respectively. The prepaid balance as of March 31, 2025 and December 31, 2024 was $476,981 and $296,981, respectively. During the three months ended March 31, 2025 and 2024, the Company was advanced $135,000 and $1,400,000, respectively, in the form of a short-term note. The balance owed as of March 31, 2025 and December 31, 2024 was $135,000 and $0, respectively.

On June 26, 2015, the Company entered into a Security Agreement with Knight Therapeutics, Inc., a related party (owner of greater than 10% shares of the Company), through its wholly owned subsidiary Neuragen Corp., for the purchase of Knight Therapeutics, Inc.’s assets. At March 31, 2024 and December 31, 2023, the Company owed Knight $275,000 and $287,500, respectively, in relation to this agreement. The Company recorded present value of future payments of $199,640 and $204,941 as of March 31, 2024 and December 31, 2023, respectively. During June 2024, this Security Agreement was consolidated into one loan under the sixth amendment.

The Company entered into transactions with a related party controlled by the CEO during prior years. The transactions were a pass through and allocation of expenses and reimbursements. As of March 31, 2025 and December 31, 2024 the Company was owed $4,375,892 and $4,375,059, respectively. This loan has a repayment date of December 31, 2025 and will be guaranteed by 1,500,000 shares of Company stock if the loan remains outstanding as of January 1, 2026.

The Company entered into a transaction with a related party controlled by the CEO during the year ended December 31, 2023. The transaction was in the form of a short-term loan. The Company received $10,000 Canadian dollars (US Dollars $7,561). This amount was owed to the related party as of December 31, 2023 and was repaid during February 2024.

On August 9, 2017, the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc., a related party (owner of greater than 10% shares of the Company), for a working capital loan. At both March 31, 2024 and December 31, 2023, the Company owed Knight $5,000,000 on this loan, net of debt issuance cost (see Note 11). During the year ended December 31, 2020 a loan success fee of $1,000,000 was earned by Knight payable in August 2022 (see Note 11). At both March 31, 2024 and December 31, 2023, the Company owed Knight $1,000,000 on the loan success fee (see Note 11). During June 2024, this Loan Agreement was consolidated into one loan under the sixth amendment.

On May 8, 2020, the Company entered into a Third Amendment Agreement with Knight Therapeutics (Barbados) Inc., a related party, for working capital loan. At March 31, 2024 and December 31, 2023, the Company owed Knight $320,000 and $392,000, respectively on this loan. During June 2024, this Third Amendment Agreement was consolidated into one loan under the sixth amendment.

On July 7, 2022, the Company entered into a Fourth Amendment Agreement with Knight Therapeutics (Barbados) Inc., a related party, for an additional $2,000,000 loan (the “Second Additional Loan”). At both March 31, 2024 and December 31, 2023, the Company owed Knight $2,000,000 on this loan (see Note 11). During the year ended December 31, 2023 a loan success fee of $83,250 was earned by Knight and is payable as of both March 31, 2024 and December 31, 2023. During June 2024, this Fourth Amendment Agreement was consolidated into one loan under the sixth amendment.

On September 30, 2023, the Company entered into a Fifth Amendment Agreement (the “Fifth Amendment”) to the Loan Agreement with Knight, pursuant to which Knight agreed to extend the maturity date of the loan to March 31, 2024. The Company will pay Knight a closing fee of $1,000,000 in connection with the Fifth Amendment. This has been accrued for during the year ended December 31, 2022 since this was earned upon renegotiation of the loan during 2022 (see Note 11). During June 2024, this Fifth Amendment Agreement was consolidated into one loan under the sixth amendment.

The Company recognized interest expense of $369,992 and $414,158 during the three-month periods ended March 31, 2025 and 2024, respectively. Accrued interest was $127,442 as of March 31, 2025. Accrued interest of $1,760,076 as of both March 31, 2024 and December 31, 2023 was capitalized and included in the loan balance as of March 31, 2024 and December 31, 2023. During June 2024, the accrued interest was consolidated into one loan under the sixth amendment.

During June 2024, the Company entered into Sixth Amended Agreement with Knight Therapeutics Inc., a related party, to modify prior Agreements. This modification consolidates outstanding loans and extends the maturity dates of the loans to March 31, 2026 (see Note 11).

On December 23, 2016, the Company entered into an agreement with Knight Therapeutics for the distribution rights of FOCUSfactor in Canada. In conjunction with this agreement, the Company is required to pay Knight a distribution fee equal to 30% of gross sales for sales achieved through a direct sales channel and 5% of gross sales for sales achieved through retail sales. The minimum due to Knight under this agreement is $100,000 Canadian dollars. During the year ended December 31, 2023, the Company expensed $133,502 Canadian dollars (US Dollars $98,939). As of both March 31, 2024 and December 31, 2023, the total outstanding balance was $549,229 Canadian dollars. In US Dollars, the total outstanding balance was $403,936 and $415,272 as of March 31, 2024 and December 31, 2023, respectively. During June 2024, these distribution fees have been consolidated into one loan under the sixth amendment. As of both March 31, 2025 and December 31, 2024, the total outstanding balance was $123,584 Canadian dollars. In US Dollars, the total outstanding balance was $85,965 and $85,891 as of March 31, 2025 and December 31, 2024, respectively. The outstanding distribution fees at December 31, 2023 have been added to the related party notes payable.

On December 23, 2016, the Company entered into an agreement with Knight Therapeutics for the distribution rights of Hand MD into Canada. In conjunction with this agreement, the Company is required to pay Knight a distribution fee equal to 60% of gross sales for sales achieved through a direct sales channel until the sales in the calendar year equal the threshold amount and then 40% of all such gross sales in such calendar year in excess of the threshold amount and 5% of gross sales for sales achieved through retail sales. The minimum due to Knight under this agreement is $25,000 Canadian dollars. During the year ended December 31, 2023, the Company expensed was $25,000 Canadian dollars (US Dollars $18,531). As of both March 31, 2024 and December 31, 2023, the total outstanding balance was $160,637 Canadian dollars. In US Dollars, the total outstanding balance was $118,550 and $121,428 as of March 31, 2024 and December 31, 2023, respectively. This agreement has been terminated and the outstanding distribution fees have been added to the related party notes payable.

The Company expensed royalty of $4,549 and $22,478 for the three months ended March 31, 2025 and 2024, respectively. At March 31, 2025 and December 31, 2024, the Company owed Knight Therapeutics $4,549 and $2,753, respectively, in connection with a royalty distribution agreement.

On October 1, 2023 (effective date), the Company entered into second amendment to the Distribution Agreement with Knight with an initial term ending on February 25, 2026 with an automatic renewal of one year for a payment of $450,000 by the Company within 180 days from the effective date. The Company has recorded this payable in terms of a Note Payable to Knight Therapeutics in relation to a license fee of an intangible asset. The balance outstanding at both March 31, 2024 and December 31, 2023 was $450,000. During June 2024, this Distribution Agreement was consolidated into one loan under the sixth amendment.

Note 10 – Accounts Payable and Accrued Liabilities

As of March 31, 2025 and December 31, 2024, accounts payable and accrued liabilities consisted of the following:

	March 31, 2025		December 31, 2024
Accrued payroll	$	175,814	$	76,399
Legal fees		37,241		13,722
Commissions		104,237		450,208
Manufacturers		581,880		409,744
Promotions		259,729		2,570,126
Accounting Fees		205,692		210,386
Freight		167,774		149,549
Royalties, related party		90,514		88,644
Warehousing		451,400		261,046
Sales taxes		33,662		67,488
Payroll taxes		638,663		700,797
Professional Fees		52,600		26,200
Insurance		16,050		12,118
Interest, related party		127,442		-
Others		155,892		155,441
Total	$	3,098,590	$	5,191,868

The Company has estimated and accrued for its sales tax liability at $4,790 and $3,703 for the parent entity as of March 31, 2025 and December 31, 2024, respectively.

Note 11 – Notes Payable

The Company’s notes payable at March 31, 2025 and December 31, 2024 are as follows:

	March 31, 2025			December 31, 2024


$10,000,000 August 9, 2017 Loan	$	12,333,052		$	12,333,052
$2,000,000 and $6,000,000 Notes		9,794,165			9,794,165
$5,450,000 December 28, 2023 Loan		2,802,445			2,802,445
$3,020,824 March 27, 2024 Loan		1,760,412			2,302,824
Other		326,132			317,292
$2,268,000 February 2025 Loan		1,620,000			-
		28,636,206			27,549,778
Unamortized debt issuance cost		(516,988	)		(34,432	)
Total		28,119,218			27,515,346

Current portion, related party		(135,000	)		(4,000,000	)
Current portion, other		(4,754,555	)		(7,725,272	)
Long-term portion, related party		12,333,053			8,333,053
Long-term portion, other	$	10,896,610		$	7,457,022

$10,000,000 August 9, 2017 Loan:

On August 9, 2017, the Company entered into a Second Amendment to Loan Agreement (“Second Amendment”) with Knight, pursuant to which Knight agreed to loan the Company an additional $10 million.

The Loan Agreement includes customary representations, warranties, and affirmative and restrictive covenants, including covenants to attain and maintain certain financial metrics, and to not merge or dispose of assets, acquire other businesses (except for businesses substantially similar or complementary to the Company’s business, and provided that the aggregate consideration to be paid does not exceed $100,000 and the acquired business guarantees the Company’s obligations under the Loan Agreement) or make capital expenditures in excess of $500,000. The Loan Agreement also includes customary events of default, including payment defaults, breaches of covenants, change of control and material adverse effect defaults. Upon the occurrence of an event of default and during the continuation thereof, the principal amount of all loans under the Loan Agreement will bear a default interest rate of an additional 5%.

The Company’s obligations and liabilities under the Loan Agreement are secured and unconditionally guaranteed by certain of the Company’s wholly-owned subsidiaries as provided in the Loan Agreement.

On July 7, 2022, the Company entered into a Fourth Amendment Agreement (the “Fourth Amendment”) to the Amended and Restated Loan Agreement (the “Loan Agreement”) with Knight Therapeutics (Barbados) Inc. (“Knight”), pursuant to which Knight agreed to loan the Company an additional $2.0 million (the “Second Additional Loan”). This $2.0 million Second Additional Loan (only) has a personal guarantee by a shareholder, Jack Ross.

On September 30, 2023, the Company entered into a Fifth Amendment Agreement (the “Fifth Amendment”) to the Loan Agreement with Knight, pursuant to which Knight agreed to extend the maturity date of the Loan to March 31, 2024. The loan will bear interest at 15.5% per annum compounding quarterly. The Company will pay Knight a closing fee of $1,000,000 and $150,000 as reimbursement for Knights legal fees incurred in connection with the Fifth Amendment. These have been accrued for during the year ended December 31, 2022 since this was earned upon renegotiation of the loan during 2022. The Company has also paid Knight an extension fee of $136,000 per month from October 2023 through February 2024.

The Company amended the financial covenants in the Fifth Amendment to as follows: The Company will maintain a minimum EBITDA of $1,000,000 for the three (3) month period ending on the last day of each Fiscal Quarter starting June 30, 2023. The Company shall at all times maintain FOCUSfactor’s net sales on a trailing twelve-month basis of at least $30,000,000.

The Company recognized interest expense of $369,992 and $414,158 during the three months ended March 31, 2025 and 2024, respectively. Accrued interest was $127,442 as of March 31, 2025.

During March 2024, the Company has entered into an Amended Agreement with Knight Therapeutics for its existing secured debt, which was finalized in June 2024. The consolidated loan will bear minimum interest rate at 12% per annum compounded quarterly and will be paid on the last day of each month. The principal repayment was to begin in the first quarter of 2025 with $1,000,000 due quarterly until March 31, 2026 when the loan becomes due in full. The lender agreed to postpone the payment due March 31, 2025 of $1,000,000 as the Company is in process of renegotiating this loan. As part of this agreement the outstanding royalties of $536,730 were converted to long term debt (see note 9). The loan has been extended to a maturity date of March 31, 2026. Because these amendments were considered not substantive changes, the Company accounted for the modifications as modification of debt.

Minimum interest rate is subjected to the following adjustments:

(i) Following an uncured event of default by Synergy, the Interest Rate will increase by 5%.

(ii) Synergy shall raise Five Million Dollars ($5,000,000) of equity no later than March 31, 2025. Should Synergy fail to raise equity of Five Million Dollars ($5,000,000) by March 31, 2025, then (1) Knight will earn an additional fee of One Million Dollars ($1,000,000) which will be added to the principal balance of the loan then outstanding and (2) the loan shall be considered to be in default. Any equity raise shall not dilute Knight’s ownership in Synergy below 10% of fully diluted basis.

Security: This loan shall be senior secured against all current and future assets (cash, intellectual property, real property, etc.) of Synergy, its affiliates, and subsidiaries. Synergy shall not add any other debt without paying out KTI first.

Bonus Success Fee: Upon closing of a Sale Transaction (hereinafter defined) of Synergy, KTI, shall be paid a $1,800,000 bonus success fee (“Bonus Success Fee”). A “Sale Transaction” shall include but is not limited to the acquisition of Synergy by a Third Party, the merger of Synergy with a Third Party, or the partial or complete sale of any asset of Synergy. The obligation of Synergy to KTI under the Bonus Success Fee shall survive the Maturity Date and remain in force until a Sale Transaction. As the sole exemption from the above defined Sale Transaction and Bonus Success Fee, if Synergy or any of its brands completes an IPO on a publicly listed exchange, no such Bonus Success Fee will be due nor payable by Synergy. An IPO shall be defined as Synergy raising at least $10 million of cash through the issuance of equity at a $50 million pre-money valuation.

Covenants: The following covenants were added or amended to the existing Loan with KTI:

(i) Jack Ross’s Synergy total annual compensation (salary, bonus and options) shall be capped at $500,000; until KTI’s loan is paid out or until such a time when Synergy is listed on a publicly traded stock exchange at such time the compensation committee will determine the annual compensation and approve by the Board of Directors.

(ii) Synergy shall maintain a minimum EBITDA of US$1,250,000 for the three (3) month period ending on the last day of each Fiscal Quarter starting March 31, 2024.

(iii) Synergy shall provide KTI a quarterly and annual operating budget for approval prior to implementation;

(iv) Synergy shall enter into a Shareholders Agreement with KTI, by June 30, 2024; which shall contain customary terms and conditions acceptable to all parties;

(v) This Loan becomes immediately due if Focus Factor Net Revenues fall below a trailing 12-month net sales of $30 million. Synergy shall provide KTI with monthly Net Revenues for Focus Factor;

(vi) Synergy is required to communicate to Knight within 2 working days in the event it receives a notice of default from any third party for any debt payables or obligations. If Synergy, default on any of its third-party debt obligations, then the Amended Loan will automatically enter into default.

(vii) Timely payment of royalties due to Knight.

(viii) Synergy shall repay and terminate Shopify debt no later than December 31, 2024.

Other Loan Conditions: In the event Synergy does not repay the KTI in full on March 31, 2026, Jack Ross shall sell, for $1, a total of 5,400,000 of his Synergy shares to KTI. The purchase of the Additional Shares is at Knight’s option and Jack Ross and KTI shall execute a Share Purchase Agreement prior to April 30, 2024. The value of the contingent guaranty is nominal as the probability of non-payment is remote.

As of both March 31, 2025 and December 31, 2024 the total consolidated amount outstanding on these loans, including accrued interest and royalties is $12,333,052.

The Company is required to make future payments as follows:

2025		$	-
2026		$	12,333,052

$2,000,000 February 10, 2022 Loan:

On February 10, 2022, the Company entered into a promissory note for $2,000,000 with an individual which was to be repaid with subsequent financing.

Subsequently and pursuant to the modification agreement entered into on June 14^th, 2023, effective September 9, 2022, the promissory loan would bear all the same characteristics as the additional $6,000,000 loan noted below.

On March 31, 2024, the Company entered into a Modification Agreement in relation to this loan. Effective March 31, 2024, the interest rate is 12%, compounded quarterly. Cash payments of interest shall be made monthly, on the final day of each month commencing in April 2024. The Company is required to make principal payments of $1,000,000 each quarter, starting from March 31, 2025 through December 31, 2025. The lender agreed to postpone the payment due March 31, 2025 of $1,000,000 as the Company is in process of renegotiating this loan. . The remaining principal and unpaid interest is fully due on March 31, 2026. In addition, a loan renegotiation fee of $500,000 shall be earned and payable on March 31, 2026 or at such time the loan is paid in full. Upon closing of a sale transaction, as defined in the agreement, a bonus success fee of $1,800,000 will be earned and payable. An event of default, as defined in the agreement, will trigger a default interest rate increase by 5% to 17%. An incentive fee of a maximum of $563,092 will be paid, prorated if the loan is paid off early. If the loan is not repaid by March 31, 2026, Jack Ross, majority shareholder shall grant warrants covering 10% of his stock struck at $0.01 per share. The value of the contingent guaranty is nominal as the probability of non-payment is remote. There is a cross-default clause in the agreement which states that if Knight triggers an event of default on its own loan facility, this loan will also be under default. This Agreement consolidates this $2,000,000 loan and the $6,000,000 March 8, 2022 loan as detailed below. The loan has been extended to a maturity date of March 31, 2026. Because these amendments were considered not substantive changes, the Company accounted for the modifications as modification of debt.

The Company is required to make future payments as follows:

2025		$	-
2026		$	9,794,165

$6,000,000 March 8, 2022 Loans:

On March 8, 2022, the Company entered into Securities Purchase Agreements with debenture holders for the Senior Subordinated Debentures in the amount of $6,000,000 with an original maturity date of September 8, 2022 and warrants with a term of 3 years. The Senior Subordinated Debentures were modified on June 14, 2023 in conjunction with the promissory note.

Covenants pursuant to the loan were as follows: The Company will maintain a minimum EBITDA of $1,000,000 for the three (3) month period ending on the last day of each Fiscal Quarter starting June 30, 2023. The Company shall at all times maintain FOCUSfactor’s net sales on a trailing twelve-month basis of at least $30,000,000. The Company also agreed to pay $50,000 as reimbursement for the debenture holders legal fees incurred in connection with the modification agreement.

These debentures were modified effective September 30, 2023 to the following terms: Interest rate adjusted to 15.5% compounded quarterly, effective September 9, 2022.

On March 31, 2024, the Company entered into a Modification Agreement in relation to this loan, which consolidated it with the $2,000,000 February 10, 2022 loan above. The loan has been extended to a maturity date of March 31, 2026. Because these amendments were considered not substantive changes, the Company accounted for the modifications as modification of debt.

$5,450,000 December 28, 2023 Loan:

On December 28, 2023, the Company entered into a confidential settlement agreement and mutual general release with a former supplier. The loan bears interest at 5% per annum and is payable in full with the last payment. This settlement resulted in a gain to the Company of $2,235,986 and is reflected as a reduction of cost of sales (See Note 13).

During 2024, the Company made payments of $2,000,000 each toward this loan. The outstanding loan balance at both March 31, 2025 and December 31, 2024 was $2,802,445, including interest of $352,445.

The Company is required to make future payments as follows:

2025		$	2,000,000
2026			802,445

$3,020,824 March 27, 2024 Loan:

On March 27, 2024, the Company entered into a confidential settlement agreement and mutual general release with a supplier.

During 2025 and 2024, the Company made payments of $560,412 and $700,000 toward this loan. The outstanding loan balance at March 31, 2025 and December 31, 2024 was $1,760,412 and $2,320,824, respectively.

The Company is required to make future payments as follows:

2025		$	1,460,412
2026			300,000

$418,100 May 1, 2024 Loan:

On May 1, 2024, the Company entered into a loan agreement of $418,100 with Shopify Capital Inc. for an advancement of working capital from its online processing account. The Company received $370,000 from Shopify Capital Inc. and $48,100 was an original issue discount. The loan bears a repayment rate of 25% of daily sales.

The payment of such amounts is secured by a security interest in certain assets, undertakings and property pursuant to the Security Agreement, which will be released upon receipt of total payments of $418,100.

The Company recognized amortization of original issue discount of $10,308, which is included in interest expense in the statement of income during the three months ended March 31, 2025. The outstanding loan balance at March 31, 2025 was $169,143, net of unamortized original discount of $21,989.

$800,000 December 5, 2024 Loan:

On December 5, 2024, the Company entered into a cash advance agreement of $800,000 with Cedar Advance LLC for an advancement of working capital. The Company received $760,000 and recorded $40,000 as interest expense. The loan bears a repayment rate of $41,100 per week. In conjunction with the advance, the Company issued 18,000 shares of common stock to the consultant who facilitated the facility and thus recognized $97,920 as interest expense.

The Company recognized total interest expense of $136,000 during the year ended December 31, 2024. The outstanding loan balance at December 31, 2024 was $0.

$2,268,000 February 2025 Loan:

On January 29, 2025, the Company entered into a cash advance agreement of $2,268,000 with Cedar Advance LLC for an advancement of working capital. The Company received $1,496,250 and recorded $771,750 as original issue discount. The loan bears a repayment rate of $81,000 per week with a total payment of $2,268,000. In conjunction with the advance, the Company issued 30,360 shares of common stock to the consultant who facilitated the facility and thus recognized $117,648 as financing cost.

The Company recognized total interest expense of $394,398 during the three months ended March 31, 2025. The outstanding loan balance at March 31, 2025 was $1,125,000, net of unamortized debt discount and financing costs of $495,000.

Note 12 – Stockholders’ Equity

The total number of shares of all classes of capital stock which the Company is authorized to issue is 300,000,000 shares of common stock with $0.00001 par value.

On October 22, 2024, the Company’s registration statement on Form S-1 (File No. 333-282780), as amended (the “Registration Statement”), was declared effective by the SEC for the Company’s underwritten initial public offering in which the Company sold a total of 1,150,000 shares of its common stock, par value $0.00001 per share, at price to the public of $9.00 per share, for gross proceeds of $10,350,000. Roth Capital Partners, LLC acted as representative of the underwriters for the offering.

The offering closed on October 24, 2024 (the “initial public offering”). Following the sale of all the shares upon the closing of the initial public offering and the expiration of the over-allotment option, the offering terminated. The Company received net proceeds of approximately $8.4 million after deducting underwriting discounts and commissions and offering expenses. No payments for such expenses were made directly or indirectly to (i) any of the Company’s officers or directors or their associates, (ii) any persons owning 10% or more of any class of the Company’s equity securities, or (iii) any of the Company’s affiliates. There has been no material change in the planned use of proceeds from the initial public offering as described in the Registration Statement.

The Company issued warrants to purchase 103,500 shares to the underwriter as part of the initial public offering transaction with an expiration date of (i) the third (3rd) anniversary of the Exercisability Date for 25% of the Warrant, (ii) the fourth anniversary of the Exercisability Date for 25% of the Warrant and (iii) the fifth (5th) anniversary of the Exercisability Date for 50% of the Warrant. The Company determined the fair value of the warrants of $490,443 during the year ended December 31, 2024 using the Black-Scholes fair value option-pricing model with the following weighted average assumptions: estimated fair value of the Company’s common stock of $9.01, risk-free interest rates of 4.02%-4.03%, volatility of 69%-76%, expected term of 3-5 years and dividend yield of 0%.

During 2025 and 2024 the Company issued 30,360 and 18,000 shares, respectively, to a consultant who facilitated a cash advance facility (Note 11).

As of March 31, 2025 and December 31, 2024, there were 8,752,178 and 8,721,818 shares issued, respectively, and 8,572,105 and 8,541,745 shares outstanding, respectively.

Note 13 – Commitments and Contingencies

Litigation:

From time to time the Company may become a party to litigation in the normal course of business. Management believes that there are no current legal matters that would have a material effect on the Company’s financial position or results of operations.

In August 2022, the Company filed a lawsuit in the Superior Court of Maine against one of its contract manufacturers, bringing several claims arising out of allegations that the contract manufacturer’s failure to timely produce and delivery the Company’s products in 2020 and 2021 damaged the Company’s business. The contract manufacturer brought counterclaims demanding payment in full for its manufacture of these products. This lawsuit was moved to federal court and remains pending in the United States District Court for the District of Maine, Synergy CHC Corp. v. HVL, LLC d/b/a Atrium Innovations, Case No. 2:22-cv-00301-JAW (D. Me). The case was settled during December 2023, resulting in a net gain to the company of $2,235,986, reflected as a reduction of cost of sales, and a loan payable of $5,450,000 (see Note 11).

L.O.D.C. Group, Ltd. v. Synergy CHC Corp., 4:23-cv-691; United States District Court for the Eastern District of Texas, Sherman Division. On July 28, 2023, L.O.D.C. Group (“LODC”) asserted claims of over $1,000,000 against Synergy for breach of contract arising from their alleged failure to comply with contracts related to the delivery of hand sanitizer. Synergy denies all allegations and believes Synergy is the aggrieved party in the relationship between Synergy and LODC and Synergy has filed a counterclaim. The case was settled during April 2024 by way of a confidential settlement agreement and mutual release, the settlement of the claim has been accounted for and reported as a charge to operations for the year ended December 31, 2023. During May 2024, the Company paid in full the settlement to LODC.

Note 14 – Stock Options and Warrants

The following table summarizes the options outstanding, option exercisability and the related prices for the shares of the Company’s common stock issued to employees and consultants under a stock option plan at March 31, 2025:

		Options Outstanding					Options Exercisable
Exercise Prices ($)		Number Outstanding	Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price ($)		Number Exercisable	Weighted Average Exercise Price ($)
$	2.98-7.74	252,102		0.71	$	6.15	252,102	$	6.15

The stock option activity for the three months ended March 31, 2025 is as follows:

	Options Outstanding		Weighted Average Exercise Price
Outstanding at December 31, 2024		252,102	$	6.15
Granted		-		-
Exercised		-		-
Expired or canceled		-		-
Outstanding at March 31, 2025		252,102	$	6.15

Stock-based compensation expense related to vested options was $0 during both the three months ended March 31, 2025 and 2024. Stock options outstanding as of March 31, 2025, as disclosed in the above table, have an intrinsic value of $0.

The following table summarizes the changes in warrants outstanding and the related prices for the shares of the Company’s common stock issued to the underwriter in conjunction with the initial public offering at March 31, 2025:

		Warrants Outstanding					Warrants Exercisable
Exercise Price ($)		Number Outstanding	Weighted Average Remaining Contractual Life (Years)		Weighted Average Exercise Price ($)		Number Exercisable	Weighted Average Exercise Price ($)
$	11.70	103,500		3.8	$	11.70	103,500	$	11.70

The warrant activity for the three months ended March 31, 2025 is as follows:

	Warrants Outstanding		Weighted Average Exercise Price
Outstanding at December 31, 2024		103,500	$	11.70
Granted		-		-
Exercised		-		-
Expired or canceled		-		-
Outstanding at March 31, 2025		103,500	$	11.70

Stock warrants outstanding as of March 31, 2025, as disclosed in the above table, have an intrinsic value of $0.

Note 15 – Segments

Net sales attributed to customers in the United States and foreign countries for the three months ended March 31, 2025 and 2024 were as follows:

	March 31, 2025		March 31, 2024
United States	$	7,454,724	$	8,278,606
Foreign countries		715,810		1,133,257
	$	8,170,534	$	9,411,863

Foreign country sales primarily consist of sales in Canada.

The Company’s net sales by product group for the three months ended March 31, 2025 and 2024 were as follows:

	March 31, 2025		March 31, 2024
Nutraceuticals	$	6,670,534	$	9,411,863
License Revenue		1,500,000		-
Consumer Goods		-		-
	$	8,170,534	$	9,411,863

The Company’s net sales by major sales channel for the three months ended March 31, 2025 and 2024 were as follows:

	March 31, 2025		March 31, 2024
Online	$	2,761,845	$	1,170,637
Retail		5,408,689		8,241,226
	$	8,170,534	$	9,411,863

The Company’s significant segment expenses for the three months ended March 31, 2025 and 2024 were as follows:

	March 31, 2025		March 31, 2024
Retailer promotions	$	939,453	$	1,539,636
Freight and fulfillment		497,748		596,297
Online marketing		931,827		844,238
Salaries and benefits, marketing		328,174		394,838
Other selling and marketing		179,069		209,667
IT expenses		140,576		137,864
Salaries and benefits, non-marketing		567,993		596,595
Professional fees		163,768		201,176
Travel		155,120		78,736
Other general and administrative expenses		279,257		334,015
Amortization		33,333		33,333
	$	4,216,318	$	4,966,395

Long-lived assets (net) attributable to operations in the United States and foreign countries as of March 31, 2025 and December 31, 2024 were as follows:

	March 31, 2025		December 31, 2024
United States	$	250,000	$	283,333
Foreign countries		-		-
	$	250,000	$	283,333

Note 16 – Subsequent Events

Management evaluated all activities of the Company through the issuance date of the Company’s unaudited condensed consolidated financial statements and concluded that except as noted below, no subsequent events have occurred that would require adjustment or disclosure into the unaudited condensed consolidated financial statements.

Subsequent to March 31, 2025, the Company has repaid $387,115 of principal and $222,861 of interest.

Subsequent to March 31, 2025 the Company has entered into a supplier agreement with an entity to deliver its finished goods to the Company's customers.

Subsequent to March 31, 2025 the Company has issued 442,005 shares of common stock to noteholders as part of an assignment, assumption and release agreement whereby the Company issued shares of common stock in lieu of issuing warrants to the noteholders.

On April 16, 2025, the Board of Directors met to set the 2025 Annual Meeting Date of June 18, 2025. At the Annual Meeting, we will ask stockholders to (i) elect five (5) persons to our board of directors (Proposal 1), (ii) ratify the appointment of RBSM LLP as the Company’s independent auditors for our fiscal year ending December 31, 2025 (Proposal 2), (iii) approve a proposed amendment to the Synergy CHC Corp. 2024 Equity Incentive Plan (the “2024 Plan”) to increase the aggregate number of shares of our common stock, par value $0.00001 per share (the “Common Stock”), available for issuance under the 2024 Plan to 2,252,102 shares of Common Stock (Proposal 3), (iv) approve an amendment to the Articles of Incorporation to provide authority to issue up to 1,000,000 shares of preferred stock (Proposal 4) and (v) transact such other business as may properly come before the Annual Meeting or any postponement or adjournment thereof.

On May 2, 2025, the Company has established a wholly owned subsidiary in Mexico.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

References in this report (the “Quarterly Report”) to “we,” “us” or the “Company” refer to Synergy CHC Corp. References to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and variations thereof and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of our final prospectus for our initial public offering filed with the SEC on October 23, 2024 (the “Prospectus”) and the “Risk Factors” section of this report. Our securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, we disclaim any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Overview

We are a provider of consumer health care, beauty, and lifestyle products. Our current brand portfolio consists of two core brands: FOCUSfactor, a clinically-tested brain health supplement (this study was performed independently and is not related to any FDA-approved Investigational New Drug application) that has been shown to improve memory, concentration and focus and Flat Tummy, a lifestyle brand that provides a suite of nutritional products to help women achieve their weight management goals.

Our management’s discussion and analysis of our financial condition and results of operations are only based on our current business and should be read in conjunction with our unaudited interim condensed consolidated financial statements and audited consolidated financial statements and accompanying notes thereto included elsewhere in this Quarterly Report. Key factors affecting our results of operations include revenues, cost of revenue, operating expenses and income and taxation.

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.

	Three Months Ended March 31, 2025			Three Months Ended March 31, 2024
	(Unaudited)			(Unaudited)
Net income	$	876,264		$	580,530
Interest income		(13,882	)		(387	)
Interest expense		1,095,369			1,109,980
Income taxes (benefit) expense		(11,460	)		127,189
Depreciation and amortization		33,333			33,333
EBITDA	$	1,979,624		$	1,850,645

EBITDA is considered non-GAAP financial measures. 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.

Results of Operations for the Three Months Ended March 31, 2025 and March 31, 2024

During both the three months ended March 31, 2025 and 2024, we focused on developing our currently owned brands into new markets and by product extensions. Our objective is to grow our two targeted verticals (Nutraceuticals and Ready To Drinks (RTDs)) to provide a balanced and synergistic portfolio that drives consumer demand via multiple channels. Our Nutraceuticals vertical consists of FOCUSfactor, including RTDs, and Flat Tummy consumables.

Revenue

For the three months ended March 31, 2025, we had revenue of $6,670,534 from sales of our products and $1,500,000 from a license agreement, as compared to revenue of $9,411,863 for the three months ended March 31, 2024. The revenue is comprised of the following categories:

	March 31, 2025		March 31, 2024
Nutraceuticals	$	6,670,534	$	9,411,863
License Revenue		1,500,000		-
Consumer Goods		-		-
	$	8,170,534	$	9,411,863

We had a decrease in Nutraceuticals revenue in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 due to a new product sell-in to one customer in 2024 that did not repeat in 2025.

Cost of Revenue

For the three months ended March 31, 2025, our cost of revenue was $2,006,513. Our cost of revenue for the three months ended March 31, 2024, was $2,637,139. The decrease in cost of sales was primarily due to the decrease in revenue.

Gross Profit

Gross profit was $6,164,021, or 75% of revenue, for the three months ended March 31, 2025, as compared to gross profit of $6,774,724, or 72% of revenue, for the same period in 2024, a decrease of $610,703, or 9%. The decrease in gross profit is directly related to the decrease in net sales.

Operating Expenses

Selling and Marketing Expenses

For the three months ended March 31, 2025, our selling and marketing expenses were $2,876,271 as compared to $3,584,677 for the three months ended March 31, 2024, which is primarily due to lower revenue and an improved management of promotions in 2025.

General and Administrative Expenses

For the three months ended March 31, 2025, our general and administrative expenses were $1,306,714. For the three months ended March 31, 2024, our general and administrative expenses were $1,348,385. The decrease is primarily due to improved management of operating costs.

Depreciation and Amortization Expenses

For the three months ended March 31, 2025, our depreciation and amortization expenses were $33,333 as compared to $33,333 for the three months ended March 31, 2024.

Other Income and Expenses

For the three months ended March 31, 2025 and 2024 we had other income and expense items as follows:

	Three months ended March 31, 2025			Three months ended March 31, 2024

Interest expense	$	1,095,369		$	1,109,980
Interest income		(13,882	)		(387	)
Remeasurement loss (gain) on translation of foreign subsidiary		1,412			(8,983	)
Total other expense	$	1,082,899		$	1,100,610

For the three months ended March 31, 2025, we had net interest expense of $1,095,369 as compared to $1,109,980 for the three months ended March 31, 2024. The decrease is primarily due to a reduction in the interest rate effective with the sixth amended loan agreement offset by a new loan.

Net Income

For the three months ended March 31, 2025, our net income was $876,264 as compared to a net income of $580,530 for the three months ended March 31, 2024 due to lower operating expenses.

Liquidity and Capital Resources

Overview

As of March 31, 2025, we had $177,882 cash on hand and restricted cash of $100,000 which is held for credit card collateral.

Cash Flows from Operating Activities

For the three months ended March 31, 2025, net cash used by operating activities was $822,781 compared to net cash used in operating activities of $858,042 for the three months ended March 31, 2024. This decrease in net cash used by operating activities for the three months ended March 31, 2024 was primarily attributable to an increase in inventory and a decrease in accounts payable and accrued expenses, offset by a decrease in accounts and other receivables.

For the three months ended March 31, 2025, net cash used in operating activities of $822,781 consisted of our net income of $876,264 adjusted by:

Amortization of debt issuance cost	$	406,841
Depreciation and amortization		33,333
Foreign currency transaction gain		(3,137	)
Remeasurement gain on translation of foreign subsidiary		(1,412	)
Changes in operating assets and liabilities:
Accounts receivable		940,519
Other receivables		144,637
Loan receivable, related party		(833	)
Inventory		(629,935	)
Prepaid expense		(114,787	)
Prepaid expense, related party		(195,913	)
Income taxes payable		(165,413	)
Contract liabilities		(24,216	)
Accounts payable and accrued liabilities		(2,218,041	)
Accounts payable, related party		129,312

For the three months ended March 31, 2024, net cash used in operating activities of $858,042 consisted of our net income of $580,530 adjusted by:

Depreciation and amortization	$	33,334
Foreign currency transaction loss		11,178
Remeasurement gain on translation of foreign subsidiary		(8,983	)
Non cash implied interest		7,199
Changes in operating assets and liabilities:
Accounts receivable		(318,330	)
Loan receivable, related party		25,162
Inventory		1,016,455
Prepaid expense		(202,888	)
Prepaid expense, related party		(165,687	)
Income taxes payable		(20,315	)
Contract liabilities		12,932
Accounts payable and accrued liabilities		(1,808,989	)
Accounts payable, related party		(19,640	)

Cash Flows from Investing Activities

For the three months ended March 31, 2025 and 2024, we used net cash of $0 in investing activities.

Cash Flows from Financing Activities

For the three months ended March 31, 2025, net cash provided by financing activities was $314,678 compared to net cash provided by financing activities of $1,004,620 for the three months ended March 31, 2024. The decrease was attributable to increased payoffs of loans.

Financing activities during the three months ended March 31, 2025 and 2024:

	Three months ended March 31, 2025			Three months ended March 31, 2024
Advances from related party	$	135,000		$	1,400,000
Repayment of notes payable, related party		-			(84,500	)
Proceeds from notes payable		1,496,250			125,000
Repayment of notes payable		(1,316,572	)		(435,880	)

Key Near-Term Initiatives

We intend to organically grow our current product lines by developing and launching new products and expanding into new markets. Specifically, for FOCUSfactor, we are working on increased distribution for our recently launched ready-to-drink beverage. Lastly, we intend to grow further through additional strategic acquisitions and we continue to evaluate opportunities and candidates that we believe fit well with our brand portfolio.

Off-Balance Sheet Arrangements

During the three months ended March 31, 2025, and during the year ended December 31, 2024, we had no off-balance sheet arrangements.

Inflation

The effect of inflation on our operating results was not significant in the three months ended March 31, 2025 or 2024.

Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenue and expenses during the reported periods. The more critical accounting estimates include estimates related to revenue recognition and accounts receivable allowances. We also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results, which are described in Note 2 to our unaudited condensed consolidated financial statements appearing elsewhere in this report.

Recent Accounting Pronouncements

Note 2 to our unaudited condensed consolidated financial statements appearing elsewhere in this report includes Recent Accounting Pronouncements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting company, we have elected not to provide the disclosure required by this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer, concluded that as of the end of the period covered by this Quarterly Report, (i) the Company’s disclosure controls and procedures were not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission (the “Commission”), and (ii) the Company’s controls and procedures have not been designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting, as defined in Rules 13a-15(f) of the Exchange Act, during the quarter ended March 31, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are not party to any material legal proceedings. From time to time, we may be involved in legal proceedings or subject to claims incident to the ordinary course of business. The outcome of litigation is inherently uncertain, and there can be no assurances that favorable outcomes will be obtained. In addition, regardless of the outcome, such proceedings or claims can have an adverse impact on us, which may be material because of defense and settlement costs, diversion of resources and other factors.

Item 1A. Risk Factors.

As a smaller reporting company under Rule 12b-2 of the Exchange Act, we are not required to include risk factors in this Quarterly Report. However, as of the date of this Quarterly Report, there have been no material changes with respect to those risk factors previously disclosed in the “Risk Factors” section of the Prospectus. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) None.

(b) None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

(a) None.

(b) None.

(c) During the quarter ended March 31, 2025, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report.

No.		Description of Exhibit
2.1		Agreement and Plan of Merger, dated April 7, 2014, by and among Oro Capital Corporation, Synergy Merger Sub, Inc. and Synergy Strips Corp. (incorporated by reference to Exhibit 2.1 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. with the SEC on June 28, 2024)
2.2		Asset Purchase Agreement, dated January 16, 2015, by and among Synergy Strips Corp.; Factor Nutrition Labs, LLC; Vita Partners, LLC, RPR Partners, LLC, and Thor Associates, Inc. (incorporated by reference to Exhibit 2.2 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. with the SEC on June 28, 2024)
2.3		Asset Purchase Agreement, dated June 26, 2015, by and between Neuragen Corp. and Knight Therapeutics, Inc. (incorporated by reference to Exhibit 2.3 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. with the SEC on June 28, 2024)
3.1		Articles of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. with the SEC on September 16, 2024)
3.2		Amended and Restated Bylaws (incorporated by reference to Exhibit 3.4 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. with the SEC on June 28, 2024)
31.1*		Rule 13a-14(a) Certification by Principal Executive Officer
31.2*		Rule 13a-14(a) Certification by Principal Financial and Accounting Officer
32.1**		Section 1350 Certification of Principal Executive Officer
32.2**		Section 1350 Certification of Principal Financial and Accounting Officer
101.INS*		Inline XBRL Instance Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*		Cover Page Interactive Data File (formatted in iXBRL, and included in exhibit 101)

*	Filed with this Report.
**	Furnished with this Report.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SYNERGY CHC CORP.

Date: May 15, 2025	By:	/s/ Jack Ross
	Name:	Jack Ross
	Title:	Chief Executive Officer and Chairman
		(Principal Executive Officer)

SEC Form 10-Q filed by Synergy CHC Corp.