What changed in this filing

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Item 1. Financial Statements

2024-12-06 compared with 2020-06-29 · 1181 added, 986 removed, 161 unchanged (93% of the section changed)

Financial Statements.

Interim Financial Statements

the Nine Months Ended September 30, 2024 and 2023

RESPONSIBILITY FOR FINANCIAL REPORTING CONDENSED INTERIM FINANCIAL REPORTING

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.

Consolidated Balance Sheets

September 30,

Current Assets:

and cash equivalents

Restricted cash

Accounts receivable,

net (including related party receivable of $470,984 and $277,432, respectively)

Prepaid expenses

Income taxes receivable

Current Assets

Fixed assets, net

Intangible assets,

and Stockholders’

Current Liabilities:

Accounts payable

and accrued liabilities (including related party payable of $839,124 and $956,438, respectively)

Deferred revenue

Income taxes payable

portion of long-term debt, net of debt discount and debt issuance cost, related party

Accounts receivable, net

Loan receivable (related party)

Prepaid expenses (including related party amount of $ 570,000 and $ 501,321 , respectively)

Inventory, net

Total Current Assets

Intangible assets, net

Liabilities and Stockholders’ Deficit

Current Liabilities:

Long-term Liabilities:

payable, net of debt discount and debt issuance cost, related party

Accounts payable and accrued liabilities (including related party payable of $ 129,091 and $ 26,885 , respectively)

Income taxes payable, net

Contract liabilities

Short term loans payable, related party

Current portion of long-term debt, net of debt discount and debt issuance cost, related party

Current portion of long-term debt, net of debt discount and debt issuance cost

Total Current Liabilities

Long-term Liabilities:

Note payable, net of debt discount and debt issuance cost, related party

Notes payable

Total Long-term Liabilities

Total Liabilities

Commitments and contingencies

Stockholders’

Common stock, $0.00001

Stockholders’ Deficit:

Common stock, $ 0.00001 par value;

300,000,000 shares authorized;

7,553,818 shares issued and outstanding

Additional paid

Accumulated other

comprehensive income

Additional paid in capital

Accumulated other comprehensive income (loss)

Accumulated deficit

( 44,332,980 )

( 46,352,289 )

stockholders ’

Liabilities and Stockholders’

Total stockholders ’ deficit

( 25,169,092 )

( 27,305,973 )

Total Liabilities and Stockholders’ Deficit

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

Condensed Consolidated Statements of Operations and Comprehensive Income

the three months ended

Condensed Consolidated Statements of Income and Comprehensive Income

For the three months ended

For the nine months ended

September 30,

Cost of sales

(including related party purchases of $124,008 and $819,633, respectively)

Operating expenses

1 unchanged sentence

General and administrative

and amortization

Total operating

Depreciation and amortization

Total operating expenses

Income from operations

Other (income) expenses

Interest income

Interest expense

Remeasurement loss

(gain) on translation of foreign subsidiary

of debt issuance cost

Interest expense, net

Remeasurement (gain) loss on translation of foreign subsidiary

Total other expenses

Net income before income taxes

Income tax expense

Net income after

Net income per share –

Income tax benefit (expense)

Net income after tax

Net income per share – basic

Net income per share – diluted

Weighted average common shares outstanding

Comprehensive income :

currency translation adjustment

Comprehensive

Foreign currency translation adjustment

Comprehensive income

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

Condensed Consolidated Statement of Stockholders’

Equity (Deficit)

Other Comprehensive

Stockholders’

Condensed Consolidated Statement of Stockholders’ Deficit

Comprehensive

Stockholders’

Income (Loss)

Balance as of December 31, 2022

$ ( 52,691,039 )

Fair value of vested stock options

$ ( 33,519,867 )

Foreign currency translation loss

Common stock issued for Per-fekt settlement

Balance as of

March 31, 2019

Balance as of March 31, 2023

$ ( 52,362,611 )

Other Comprehensive

Stockholders’

$ ( 33,195,882 )

Foreign currency translation loss

Balance as of June 30, 2023

$ ( 50,227,782 )

$ ( 31,166,264 )

Foreign currency translation loss

Balance as of September 30, 2023

$ ( 48,943,595 )

$ ( 29,776,680 )

Comprehensive

Stockholders’

Income (Loss)

Balance as of December 31, 2023

1 unchanged sentence

$ ( 46,352,289 )

$ ( 27,305,973 )

Foreign currency translation gain

Balance as of March 31, 2024

$ ( 45,771,759 )

$ ( 26,593,806 )

Fair value of vested stock options

Foreign currency translation gain

Balance as of

March 31, 2020

Balance as of June 30, 2024

$ ( 45,116,573 )

$ ( 25,878,273 )

Fair value of vested stock options

Foreign currency translation gain

Balance as of September 30, 2024

$ ( 44,332,980 )

$ ( 25,169,092 )

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

Condensed Consolidated Statements of Cash Flows

For the three months ended

March 31, 2020

March 31, 2019

For the nine months

September 30, 2024

September 30, 2023

Cash Flows from Operating Activities

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Depreciation and amortization

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

Amortization of debt issuance cost

Depreciation and amortization

Stock based compensation expense

Remeasurement loss (gain) on translation of foreign subsidiary

Foreign currency transaction loss

Remeasurement loss on translation of foreign subsidiary

Non cash implied interest

Reversal of allowance for doubtful accounts

Gain on write-off of payables

Changes in operating assets and liabilities:

Accounts receivable

Accounts receivable, related party

Prepaid expense

( 1,965,936 )

Loan receivable, related party

Prepaid expenses

( 1,029,858 )

Prepaid expense, related party

Income taxes receivable

Income tax payable

Income taxes payable

Contract liabilities

Accounts payable and accrued liabilities

( 3,011,384 )

( 9,335,734 )

Accounts payable, related party

Deferred revenue

Net cash (used in) provided by operating activities

Net cash used in operating activities

( 1,377,479 )

( 2,737,849 )

Cash Flows from Investing Activities

1 unchanged sentence

Advances from related party

Repayment of advances from related party

Repayment of notes payable, related party

Proceeds from notes payable

Repayment of notes payable

Net cash provided by (used in) financing activities

( 2,857,690 )

Net cash provided by financing activities

Effect of exchange rate on cash, cash equivalents and restricted cash

Net (decrease) increase in cash, cash equivalents and restricted cash

Cash, Cash Equivalents and restricted cash, beginning of period

Cash, Cash Equivalents and restricted cash, end of period

Net decrease in cash, cash equivalents and restricted cash

( 2,188,616 )

Cash and restricted cash, beginning of year

Cash and restricted cash, end of period

Supplemental Disclosure of Cash Flow Information:

Cash paid during the period for:

Supplemental Disclosure of Non-cash Investing and Financing Activities

Supplemental Disclosure of Noncash Investing and Financing Activities:

Accounts payable converted to loan payable upon settlement

Reduction of short term related party note payable by reduction of prepaid balance

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

1 unchanged sentence

1 – Nature of the Business

(“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.”

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.”

(“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.”

Company is a consumer health care company that is in the process of building a portfolio of best-in-class consumer product brands.

Synergy’s strategy is to grow its portfolio both organically and by further acquisition.

strategy is to grow its portfolio both organically and by further acquisitions.

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.

subsidiaries (Neuragen Corp., Breakthrough Products, Inc., Sneaky Vaunt Corp., and The

Queen Pegasus Corp.) into the parent company.

is the sole owner of two subsidiaries:

NomadChoice Pty Ltd., and Synergy CHC Inc.

and the results have been consolidated in these

and the results have been consolidated in these statements.

2 – Summary of Significant Accounting Policies

accompanying condensed consolidated financial statements as of March 31, 2020 and December 31, 2019 and for the three months ended

March 31, 2020 and 2019 are unaudited.

These unaudited condensed consolidated financial statements have been prepared in accordance

with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and

are presented in accordance with the requirements of Rule S-X of the Securities and Exchange Commission (the “SEC”)

and with the instructions to Form 10-Q.

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, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31,

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, 2019 and footnotes thereto included in the Company’s Annual Report

on Form 10-K filed with the SEC on April 29, 2020.

of Presentation

unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

significant intercompany balances and transactions have been eliminated in consolidation.

accompanying condensed consolidated financial statements as of September 30, 2024 and for the three and nine months ended September 30,

2024 and 2023 are unaudited.

The accompanying consolidated financial statements have been prepared in conformity with accounting principles

generally accepted in the United States of America (“US GAAP”).

Accordingly, they do not include all the information and

footnotes required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments

(consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

Operating results for the

three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the fiscal year

ending December 31, 2024.

The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated

financial statements as of and for the year ended December 31, 2023 and footnotes thereto.

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

2 unchanged sentences

balances and transactions have been eliminated in consolidation.

September 11, 2024, we effected a 1-for-11.9 reverse stock split with respect to our 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.

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.

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 are assumptions about collection of accounts receivable, current income taxes, deferred income taxes valuation

allowance, useful life of fixed and intangible assets, and assumptions used in Black-Scholes-Merton, or BSM, valuation methods,

such as expected volatility, risk-free interest rate, and expected dividend rate.

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.

Reclassification

amounts in prior periods have been reclassified to conform to current period presentation.

These reclassifications had no effect

on the previously reported net loss.

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.

and Cash Equivalents

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.

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 September 30, 2024 and December

31, 2023, the Company had no cash equivalents.

The Company maintains its cash and cash equivalents in banks insured by the Federal

Deposit Insurance Corporation (FDIC) in accounts that at times may be in excess of the federally insured limit of $250,000 per

The Company minimizes this risk by placing its cash deposits with major financial institutions.

At March 31, 2020, the uninsured

balance amounted to $94,869.

following table provides a reconciliation of cash, cash equivalents, 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.

Cash and cash equivalents

Total cash, cash equivalents, and restricted

cash shown in the statement of cash flows

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 September 30, 2024 and December 31, 2023, the uninsured balances amounted

to $ 98,254 and $ 441,711 , respectively.

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.

September 30,

Restricted cash

Total cash and restricted cash shown in the statement of cash flows

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

Capitalization

of Fixed Assets

Company capitalizes expenditures related to property and equipment, subject to a minimum rule, that have a useful life greater

than one year for:

(1) assets purchased;

(2) existing assets that are replaced, improved or the useful lives have been extended;

or (3) all land, regardless of cost.

Acquisitions of new assets, additions, replacements and improvements (other than land) costing

less than the minimum rule in addition to maintenance and repair costs, including any planned major maintenance activities, are

expensed as incurred.

evaluate the recoverability of intangible assets periodically and take into account events or circumstances that warrant revised

estimates of useful lives or that indicate that impairment exists.

All of our intangible assets are subject to amortization except

intellectual property of $1,450,000 acquired as part of an Asset Purchase Agreement entered into with Factor Nutrition Labs LLC

on January 22, 2015, $10,000 acquired as part of an Asset Purchase Agreement entered into with Perfekt Beauty Holdings LLC and

CDG Holdings, LLC (“Perfekt”) on June 21, 2017 and $50,000 acquired as an Asset Purchase entered into with Cocowhite

on May 22, 2018.

Intangible assets are amortized on a straight line basis over the useful lives.

During the year ended December

31, 2018, the Company fully impaired intangible assets related to Perfekt and Cocowhite and charged to operations impairment loss

During the year ended December 31, 2019, the Company fully impaired intellectual property related to Focus Factor

and charged to operations impairment loss of $1,450,000.

evaluate the recoverability of intangible assets periodically and take into account events or circumstances that warrant revised estimates

of useful lives or that indicate that impairment exists.

All of our intangible assets are subject to amortization.

Intangible assets

are amortized on a straight line basis over the useful lives.

assets include equipment and intangible assets other than those with indefinite lives.

We assess the carrying value of our long-lived

asset groups when indicators of impairment exist and recognize 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.

asset groups when indicators of impairment exist and recognize 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.

of impairment include significant underperformance relative to historical or projected future operating results, significant changes

6 unchanged sentences

a discounted cash flow analysis, and an impairment charge is recorded for the excess of carrying value over fair value.

as of December 31, 2018 our review of intangible assets related to two of our subsidiaries did indicate that the carrying amount

of the asset may not be recoverable.

During the year ended December 31, 2018, the Company fully impaired related intangible assets

and charged to operations impairment loss of $864,067.

During the year ended December 31, 2019, the Company fully impaired intangible

assets and charged to operations impairment loss of $471,897.

asset purchase is accounted for under the purchase method of accounting.

Under that method, assets and liabilities of the business

acquired are recorded at their estimated fair values as of the date of the acquisition, with any excess of the cost of the acquisition

over the estimated fair value of the net tangible and intangible assets acquired recorded as goodwill.

As of December 31, 2019

our qualitative analysis of goodwill indicated potential impairment, thus the Company chose to fully impair goodwill and charged

to operations impairment loss of $7,793,240.

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”).

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.

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;

(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.

(iii) determination of the transaction price;

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.

Company recognizes revenue upon shipment from its fulfillment centers.

Certain of our distributors may also perform a separate

function as a co-packer on our behalf.

In such cases, ownership of and title to our products that are co-packed on our behalf

by those co-packers who are also distributors, passes to such distributors when we are notified by them that they have taken transfer

or possession of the relevant portion of our 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.

Certain of our distributors may also perform a separate function

as a co-packer on our behalf.

In such cases, ownership of and title to our products that are co-packed on our behalf by those co-packers

who are also distributors, passes to such distributors when we are notified by them that they have taken transfer or possession of the

relevant portion of our 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.

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.

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,

Liabilities - Deferred Revenue

Company’s contract liabilities consist of advance customer payments and deferred revenue.

Deferred revenue 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 deferred revenues are recognized.

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 September 30, 2024

and December 31, 2023.

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.

September 30,

Beginning balance

Recognized as revenue

Ending balance

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 March 31, 2020 and December 31, 2019, allowance for doubtful accounts was $113,662

and $283,972, respectively.

During the three months ended March 31, 2020, the Company re versed

allowance for doubtful accounts of $170,309.

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 September 30, 2024 and December 31, 2023, allowance for doubtful accounts was $0 and $ 149,446 , respectively.

Company expenses marketing, promotions and advertising costs as incurred.

Such costs are included in selling expense in the accompanying

unaudited condensed consolidated statements of income.

Such costs are included in selling and marketing expense in

the accompanying consolidated statements of operations.

and Development

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

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.

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.

Company utilizes FASBASC 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.

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.

Pty Ltd, the Company’s 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.

is a wholly-owned foreign subsidiary, is subject to income taxes in the jurisdictions in which it operates.

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.

Pty Ltd, the Company’s wholly-owned subsidiary is subject to income taxes in the jurisdictions in which it operates.

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.

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 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

Earnings (Loss) Per Common Share

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 loss per share is anti-dilutive.

As of March 31, 2020, and 2019, options to purchase 5,666,667 and 7,166,667 shares of common stock, respectively, were outstanding.

following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings

per share for the three months ended March 31, 2020, and 2019:

the three months ended

income after tax

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 September 30, 2024 and 2023,

options to purchase 336,134 and 252,102 shares of common stock, respectively, were outstanding.

following is a reconciliation of the number of shares used in the calculation of basic and diluted earnings per share for the three and

nine months ended September 30, 2024, and 2023:

For the three months ended

For the nine months ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

Net income after tax

Weighted average common shares outstanding

Incremental shares from the assumed

exercise of dilutive stock options

Incremental shares from the assumed exercise of dilutive stock options

Dilutive potential common shares

Net earnings (loss) per share:

Net earnings per share:

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

Options to purchase common

Options to purchase common stock

Value Measurements

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.

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:

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.

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:

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

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to the fair value measurement.

of March 31, 2020, the Company has determined that there were no assets or liabilities measured at fair value.

of both September 30, 2024 and December 31, 2023, the Company has determined that there were no assets or liabilities measured at fair

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.

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.

718, “Compensation –

Stock Compensation,”

prescribes accounting and reporting standards for all share-based

payment transactions in which employee services are acquired.

Transactions include incurring liabilities, or issuing or offering

to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights.

payments to employees, including grants of employee stock options, are recognized as compensation expense in the financial statements

based on their fair values.

That expense is recognized over the period during which an employee is required to provide services

in exchange for the award, known as the requisite service period (usually the vesting period).

Currency Translation

functional currency of one of the Company’s foreign subsidiaries (Nomadchoice Pty Ltd.) is the U.S.

The Company’s

functional currency of one of the Company’s foreign subsidiaries (Nomadchoice Pty Ltd.) is the U.S.

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.

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.

functional currency of the Company’s other foreign subsidiary (Synergy CHC Inc.) is the Canadian Dollar (CAD).

The Company’s

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 resulting translation adjustments, net of income taxes, were recorded in statements of operations as Remeasurement gain

or loss on translation of foreign subsidiary.

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 –

All assets and liabilities of the foreign subsidiary were translated

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.

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were as follows:

September 30,

Period-end AUD:

USD exchange rate

Period-end CAD:

USD exchange rate

Average Quarterly AUD:

September 30,

Average nine months AUD:

USD exchange rate

Average Quarterly CAD:

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.

Average nine months CAD:

USD exchange rate

Average three months AUD:

USD exchange rate

Average three months CAD:

USD exchange rate

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

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however, collateral is not required.

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.

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.

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.

Any additional costs

relating to assembly or special pack-outs of the Company’s products are charged to cost of sales.

display costs

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.

of sales includes the purchase cost of products sold and all costs associated with getting the products into the retail stores

including buying and transportation costs.

This also includes all costs for display

execution and setup and retail services are charged to cost of sales and expensed as incurred.

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 our online Application.

Issuance Costs

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.

These costs are netted off with the related loan

and are being amortized to interest expense over the term of the related debt facilities.

and handling costs billed to customers are recorded in sales.

Shipping costs incurred by the company are recorded in selling and

marketing expenses.

are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control,

Shipping costs incurred by the company are recorded in selling and marketing

Offering Costs

offering costs consist of fees and expenses incurred in connection with the sale of the Company’s common stock in the IPO, including

legal, accounting, printing and other offering related costs.

Upon completion of the IPO, these deferred costs are to be reclassified

from current assets to stockholders’ equity and recorded against the net proceeds from the offering.

As of September 30, 2024 and

2023, deferred offering costs amounted to $ 92,372 and $ 0 , respectively.

Subsequently on October 24, 2024, the whole amount of deferred

offering costs was charged to additional paid in capital upon the completion of the initial public offering as disclosed in Note 16,

Subsequent events.

is limited U.S.

GAAP accounting guidance for for-profit entities that receive government assistance that is not in the form of a loan,

an income tax credit or revenue from a contract with a client.

We are permitted to utilize other accounting standards, and have elected

to analogize to International Financial Reporting Standards (“IFRS”), specifically International Accounting Standards (“IAS”)

20, Accounting for Government Grants and Disclosures of Government Assistance.

Following IAS 20, we recognize government assistance

on a systematic basis over the periods in which we recognize the related costs for which the grant is intended to compensate, but only

when there is reasonable assurance we will comply with all conditions attached to the grant and there is reasonable assurance the assistance

will be received.

We have interpreted “reasonable assurance” to mean “probable” as defined in loss contingencies

guidance in U.S.

March 27, 2020, the U.S.

government enacted the Coronavirus Aid, Relieve and Economic Security Act (“CARES Act”), which among

other things, provided payroll tax credits to eligible employers to address the negative economic impacts of the coronavirus pandemic

(“COVID-19”) outbreak.

Based on the reasonable assurance criteria, during the three and nine months ended September 30, 2024,

we have recognized $ 252,405 as other income and as a receivable.

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.

identification and selection is consistent with the management structure used by the Company’s chief operating decision

maker 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’s chief operating decision maker does not review operating results on a disaggregated

rather, the chief operating decision maker reviews operating results on an aggregate basis.

of Financial Statements –

Going Concern

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).

identification and selection is consistent with the management structure used by the Company’s chief operating decision maker 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’s chief operating decision maker does not review operating results on a disaggregated basis;

rather, the chief operating

decision maker reviews operating results on an aggregated basis.

of Financial Statements – Going Concern

Concern Evaluation

connection with preparing unaudited condensed consolidated financial statements for the three months ended March 31, 2020, 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 financial statements are issued.

connection with preparing unaudited condensed consolidated financial statements for the nine months ended September 30, 2024, 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

Company considered the following:

At March 31, 2020, the Company had an accumulated deficit of $23,972,266.

At March 31, 2020, the Company had working capital deficit of $4,444,249.

Revenue decline in 2020 as compared to 2019 of $3,351,669.

During the three months ended March 31, 2020, the Company used cash

in operating activities of $1,302,062.

The Company was required to make repayment of loans payable of $500,000 and accrued interest during the three months ended

March 31, 2020.

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.

September 30, 2024, the Company had an accumulated deficit of $ 44,332,980 .

September 30, 2024, the Company had working capital deficit of $ 6,395,684 .

the nine months ended September 30, 2024, the Company had $ 1,377,479 of net cash used in operating activities.

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.

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:

The Company raised $10.0 million via debt financing during the year ended December 31, 2017.

● Subsequent to March 31,

2020, the Company raised $2.5 million via debt financing.

the three months ended March 31, 2020, the Company repaid $12,500 of loans.

Subsequent to March 31, 2020, the

Company repaid $500,000 of loans.

The Company generated net income of $262,303 for the three months ended March 31, 2020.

Working capital deficit of $4,444,249 at March 31, 2020, includes loans payables to related party of $5,486,377, payables to related

party of $839,124 and deferred revenue of $17,137.

The Company has line of credit facility of $20 million available from its current lender for future mergers and acquisition.

Subsequent to March 31, 2020, the Company has secured distribution of a new hand sanitizer product under its Hand MD brand in

concluded that above factors alleviates 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.

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 acquisition, which may be impacted

by the recent outbreak of COVID-19.

Implement additional restructuring and cost reductions.

Raise additional capital through a private placement, which may be impacted by the recent outbreak of COVID-19.

of June 29, 2020 and March 31, 2020, the Company had $2,098,237 and $414,933, respectively, in cash and cash equivalents.

the nine months ended September 30, 2024, the Company repaid $ 3.1 million of loans and received $ 4.0 million through loans from related

party and others.

the nine months ended September 30, 2024, the Company had a net income of $ 2,019,309 .

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

Company raised additional capital through Initial Public Offering (IPO) during October 2024 – See Note 16.

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

Company has restructured its debt agreements in 2024 which extends the terms into 2026.

concluded that above factors alleviates 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.

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:

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

restructuring and cost reductions.

additional capital through a private placement.

additional capital through Initial Public Offering (IPO).

Accounting Pronouncements

June 2016, the FASB issued ASU No.

2016-13, Financial Instruments –

Credit Losses (Topic 326):

Measurement of Credit Losses

on Financial Instruments and subsequent amendment to the initial guidance:

ASU 2018-19 (collectively, Topic 326).

amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit

losses on certain types of financial instruments, including trade receivables.

ASU 2016-13 is effective for fiscal years beginning

after December 15, 2019, with early adoption permitted.

Adoption of this new standard did not have any impact on the Company’s

unaudited condensed consolidated financial statements.

February 2016, the FASB issued ASU 201602, “Leases”

(“ASU 201602”).

This guidance, as amended by subsequent

ASU’s on the topic, improves transparency and comparability among companies by recognizing right of use (ROU) assets and

lease liabilities on the balance sheet and by disclosing key information about leasing arrangements.

2016-02 is effective

for public business entities for annual periods, including interim periods within those annual periods, beginning after December

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.

We adopted ASU No.

in our fiscal year beginning January 1, 2019 and used the optional transition method provided by the FASB in ASU No.

“Codification Improvements to Topic 842, Leases”

2018-11, “Leases (Topic 842):

Targeted Improvements”,

with no restatement of comparative periods.

The Company notes there was no impact on adoption as the leases entered into by the

Company were for less than 12 month terms.

new standard provides optional practical expedients in transition.

We will only elect the package of practical expedients where,

under the new standard, prior conclusions about lease identification, lease classification and initial direct costs do not need

to be reassessed.

The new standard also provides practical expedients for ongoing accounting where we elected the practical expedients

on adoption and did not record any ROU asset with terms of less than 12 months.

were various updates recently issued, most of which represented technical corrections to the accounting literature or application

to specific industries and are not expected to a have a material impact on the Company’s financial position, results of

operations or cash flows.

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.

carrying value of inventory consisted of the following:

Finished goods

Inventory in transit

Raw materials

January 22, 2015, inventory was pledged to Knight Therapeutics under the Loan Agreement (see note 10).

The Company is currently evaluating the impact this update will have on its Consolidated Financial

November 2023, the FASB issued ASU No.

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures”

(“ASU 2023-07”).

ASU 2023-07 expands segment disclosure requirements through enhanced disclosures related to significant

segment expenses that are regularly provided to the chief operating decision maker (“CODM”), a description of other segment

items by reportable segment, and any additional measures of a segment’s profit or loss used by the CODM when deciding how to allocate

All disclosure requirements under ASU 2023- 07 are also required for public entities with a single reportable segment.

amendments are effective for the fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after

December 15, 2024.

The Company is currently evaluating the impact this update will have on its Consolidated Financial Statements.

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.

3 – Income Taxes

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.

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.

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).

Company has not filed its State & Local Income/Franchise tax returns in states it is required to file, as such returns and liability

The Company does not expect this to be a significant liability.

Company had tax expense of $ 114,272 and $ 38,896 for the nine months ended September 30, 2024 and 2023, respectively.

The Company had

tax benefit of $ 192,299 and $ 13,366 for the three months ended September 30, 2024 and 2023, respectively.

The Company’s provision

for tax expense amount, computed by applying the statutory federal income tax rate of 21 % in 2024 and 2023 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.

Company also has net operating loss carryforwards of approximately $ 51,800,000 and approximately $ 52,800,000 (United States and Canada)

included in the deferred tax assets for September 30, 2024 and December 31, 2023, 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.

Company has not completed an evaluation of the NOL’s attributable to Breakthrough Products, Inc.

at the date of this report.

4 – Accounts Receivable

receivable, net of allowances for sales returns and doubtful accounts, consisted of the following:

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

September 30,

Trade accounts receivable

(including related party receivable of $470,984 and $277,432, respectively –

Less allowances

accounts receivable, net

the year ended December 31, 2019, the Company charged $283,972 to bad debt expense.

During the three months ended March 31,

2020, the Company reversed allowance for doubtful accounts of $170,309.

Total accounts receivable, net

the nine months ended September 30, 2024 and 2023, the Company charged $ 0 to bad debt expense.

5 – Prepaid Expenses

expenses consisted of the following:

September 30, 2024 and December 31, 2023, prepaid expenses consisted of the following:

September 30,

Advances for inventory

Promotion - Bloggers

Software subscriptions

Contract employee, related party

Deferred offering costs

Miscellaneous

1 unchanged sentence

and cash equivalents

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, 2020 and December 31, 2019, the uninsured balances amounted

to $94,869 and $947,312, respectively.

of March 31, 2020, five customers accounted for 83% of the Company’s accounts receivable.

As of December 31,

2019, two customers accounted for 52% of the Company’s accounts receivable.

the three months ended March 31, 2020, three customers accounted for approximately 60% of the Company’s net revenue.

For the three months ended March 31, 2019, two customers accounted for approximately 40% of the Company’s net revenue.

the year ended December 31, 2019, two customers accounted for approximately 51% of the Company’s net revenues.

Substantially

all of the Company’s business is with companies in the United States.

of March 31, 2020 and December 31, 2019, two vendors accounted for 72% and 73%, respectively, of the Company’s accounts

This includes a related party vendor.

the three months ended March 31, 2020, one supplier accounted for approximately 33% of the Company’s purchases.

For the three months ended March 31, 2019, two suppliers accounted for approximately 41% of the Company’s purchases.

the year ended December 31, 2019, two suppliers accounted for approximately 40% of the Company’s purchases.

Substantially

all of the Company’s business is with suppliers in the United States.

This includes purchases from a related party supplier.

Fixed Assets and Intangible Assets

of March 31, 2020, and December 31, 2019, fixed assets and intangible assets consisted of the following:

Property and equipment

Less accumulated

expense for the three months ended March 31, 2020 and 2019 was $26,152 and $38,060, respectively.

FOCUSfactor intellectual

Perfekt intellectual property

Cocowhite intellectual property

Intangible assets subject to amortization

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 September 30, 2024 and December 31, 2023, the uninsured balance amounted to $ 98,254 and $ 441,711 ,

respectively.

of September 30, 2024 and December 31, 2023, four and two customers accounted for 62 % and 68 %, respectively, of the Company’s accounts

the nine months ended September 30, 2024, two customers accounted for approximately 69 % of the Company’s net revenue.

months ended September 30, 2023, three customers accounted for approximately 75 % of the Company’s net revenue.

For the three months

ended September 30, 2024, three customers accounted for approximately 78 % of the Company’s net revenue.

For the three months ended

September 30, 2023, three customers accounted for approximately 81 % of the Company’s net revenue.

Substantially all of the Company’s

business is with companies in the United States.

of both September 30, 2024 and December 31, 2023, two vendors accounted for 41 % and 64 %, respectively, of the Company’s accounts

the nine months ended September 30, 2024, three suppliers accounted for approximately 34 % of the Company’s purchases.

months ended September 30, 2023, three suppliers accounted for approximately 17 % of the Company’s purchases.

For the three months

ended September 30, 2024, two suppliers accounted for approximately 41 % of the Company’s purchases.

For the three months ended

September 30, 2023, two suppliers accounted for approximately 19 % of the Company’s purchases.

Substantially all of the Company’s

business is with suppliers in the United States.

7 – 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.

carrying value of inventory consisted of the following:

September 30,

Finished goods

Inventory in transit

Raw materials

Total inventory

of January 22, 2015, inventory was pledged to Knight under the Loan Agreement (see note 12).

As of September 30, 2024 and December 31,

2023, $0 and $ 2,948 , respectively, of the Company’s inventory was in transit.

During the nine months ended September 30, 2024 and

2023, the Company had no inventory write-offs.

8 – Intangible Assets

September 30,

Less accumulated amortization

Less accumulated

expense for the three months ended March 31, 2020 and 2019 was $694 and $268,215, respectively.

Related Party Transactions

Company accrued and paid consulting fees of $82,917 per month to a company owned by Mr.

Jack Ross, Chief Executive Officer of

The Company expensed $258,750 during the three months ended March 31, 2020.

As of March 31, 2020, the total outstanding

balance was $82,917 for consulting fees and reimbursements.

June 26, 2015, the Company entered into a Security Agreement with Knight Therapeutics, Inc., (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, 2020 and December 31, 2019, the Company owed Knight $462,500 and $475,000 in relation to this agreement.

recorded present value of future payments of $257,259 as of March 31, 2020 (see Note 10).

August 18, 2015, the Company entered into a Consulting Agreement with Kara Harshbarger, the co-founder of Hand MD, LLC, pursuant

to which she will provide marketing and sales related service.

The Company pays Ms.

Harshbarger $10,000 a month for one year unless

the Consulting Agreement is terminated earlier by either party.

The Company has extended this agreement on a month to month basis.

Hand MD, LLC is a 50% owner in Hand MD Corp.

The Company expensed $30,000 through payroll for the three months ended March 31,

As of March 31, 2020, the total outstanding balance was $0.

August 9, 2017, the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc., a related party, for a working

Intangible assets, net

expense for the nine months ended September 30, 2024 and 2023 was $ 100,000 and $ 0 , respectively.

Amortization for the three months ended

September 30, 2024 and 2023 was $ 33,333 and $ 0 , respectively.

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

2024 (remaining)

Note 9 – Related Party Transactions

The Company paid consulting fees through September

2024 to a company owned by Mr.

Jack Ross, Chief Executive Officer of the Company.

The Company expensed $ 0 during the three and nine months

ended September 30, 2024 as consulting fees.

The Company expensed $ 0 and $ 388,360 during the three and nine months ended September 30,

The Company advanced $ 396,683 in the manner of a prepaid consulting fees during the nine months ended September 30, 2024 and applied

$ 328,003 of that advance to a short term loan.

The prepaid balance as of September 30, 2024 and December 31, 2023 was $ 570,000 and $ 501,321 ,

respectively.

During 2024, the Company was advanced $ 3,020,000 and $ 514,500 Canadian Dollars (US Dollars $ 375,587 ) in the form of a short

The balance owed as of September 30, 2024 and December 31, 2023 is $ 2,915,692 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 in relation to this agreement (see Note 11).

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 September 30, 2024 and December 31, 2023 the Company was owed $ 4,438,727 and $ 4,459,996 , respectively.

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.

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 March 31, 2020, the Company owed Knight $5,472,325 on this loan, net of debt issuance cost (see Note 10).

December 23, 2016, we entered into an agreement with Knight Therapeutics for the distribution rights of FOCUSFactor in Canada.

In conjunction with this agreement, we are 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.

As of March 31, 2020, the total outstanding balance was $100,000 Canadian dollars.

In US Dollars, the total outstanding balance was $70,295 as of March 31, 2020.

December 23, 2016, we entered into an agreement with Knight Therapeutics for the distribution rights of Hand MD into Canada.

conjunction with this agreement, we are 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.

minimum due to Knight under this agreement is $25,000 Canadian dollars.

As of March 31, 2020 the total outstanding balance was

$25,000 Canadian dollars.

In US Dollars, the total outstanding balance was $17,574.

Company expensed royalty of $35,821 during the three months ended March 31, 2020.

At March 31, 2020 NomadChoice Pty

Ltd., a subsidiary of the Company, owed Knight Therapeutics $35,821 in connection with a royalty distribution agreement.

Company expensed royalty of $410 during the three months ended March 31, 2020.

At March 31, 2020 the Company owed

Knight Therapeutics $410 in connection with a royalty distribution agreement for Sneaky Vaunt.

Company paid $934 during the three months ended March 31, 2020 to Hand MD, Corp, related to a royalty agreement.

2020, the Company owed Hand MD Corp.

$0 in minimum future royalties.

member of the Company’s Board of Directors is an executive officer of a supplier to the Company.

During the three months

ended March 31, 2020 the Company acquired $124,008 of products from the supplier and included in cost of sales.

The Company owed

the supplier $559,584 at March 31, 2020.

Company entered into transactions with a related party controlled by the CEO during the three months ended March 31, 2020.

transactions were a pass through of expenses and reimbursements.

During the three months ended March 31, 2020, the Company

received advances of $70,490 ($100,000 Canadian Dollars).

As of March 31, 2020, there were $70,490 payable and $30,640

Company entered into transactions with a related party controlled by the CEO during the three months ended March 31, 2020.

transactions were a pass through and allocation of expenses and reimbursements.

As of March 31, 2020 the Company was owed $440,343.

Accounts Payable and Accrued Liabilities

of March 31, 2020, and December 31, 2019, accounts payable and accrued liabilities consisted of the following:

Accrued payroll (included

related party payable of $82,916 and $0, respectively)

Manufacturers (including related

parties of $559,584 and $956,438, respectively)

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

At both March 31, 2024 and December 31, 2023, the Company owed Knight $ 1,000,000 on the loan success fee (see Note 11).

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 (see Note 11).

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

At both March 31, 2024 and December 31, 2023, the Company owed Knight $ 2,000,000 on this loan (see Note 11).

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 (see Note 11).

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 $ 1,488,475

and $ 1,279,646 during the nine month periods ended September 30, 2024 and 2023, respectively.

The Company recognized interest expense

of $ 378,214 and $ 446,619 during the three month periods ended September 30, 2024 and 2023, respectively.

Accrued interest was $ 123,331

as of September 30, 2024.

Accrued interest was $ 1,760,076 as of both March 31, 2024 and December 31, 2023 and 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 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.

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.

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

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.

During June 2024, these distribution fees have been

consolidated into one loan under the sixth amendment.

The Company expensed royalty of $ 47,038 and $ 65,657

for the nine months ended September 30, 2024 and 2023, respectively.

The Company expensed royalty of $ 5,761 and $ 20,165 for the three

months ended September 30, 2024 and 2023, respectively.

At September 30, 2024 and December 31, 2023, the Company owed Knight Therapeutics

$ 5,760 and $ 19,324 , 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 September 30, 2024 and December 31, 2023,

accounts payable and accrued liabilities consisted of the following:

September 30,

Accrued payroll

Manufacturers

Accounting Fees

Royalties, related party

party loan and reimbursements

the three months ended March 31, 2020, the Company recorded a gain on write-off of payables of $180,000.

Company has not filed its State & Local Income/Franchise tax returns in States it is required to file for the last few years,

so such returns and liability remain open.

The Company has estimated and accrued for its sales tax liability at $245,717 for the

parent entity as of March 31, 2020.

Notes Payable

Company’s loans payable at March 31, 2020 and December 31, 2019 are as follows:

Loans payable

Unamortized debt

issuance cost

Long-term portion

Payroll taxes

Professional Fees

Interest, related party

Related party advance

The Company has estimated and accrued for its

sales tax liability at $ 2,888 and $ 6,098 for the parent entity as of September 30, 2024 and December 31, 2023, respectively.

Note 11 – Notes Payable

The Company’s notes payable at September

30, 2024 and December 31, 2023 are as follows:

September 30,

Kenek, related party

Total notes payable

Unamortized debt issuance cost

Total notes payable, net

Short term loan payable, related party

( 2,915,692 )

Current portion, related party

( 3,000,000 )

Current portion, other

( 6,994,766 )

( 2,094,525 )

Long-term portion, related party

Long-term portion, other

$950,000 June 26, 2015 Security Agreement:

June 26, 2015, the Company issued a 0% promissory note in a principal amount of $950,000 in connection with an Asset Purchase

The note requires $250,000 to be paid on or before June 30, 2016, and $700,000 to be paid in quarterly installments

(beginning with the quarter ended September 30, 2015) equal to the greater of $12,500 or 5% of U.S.

net sales, and 2% of U.S.

On June 26, 2015, the Company, through its wholly

owned subsidiary, Neuragen Corp.

(“Neuragen”), issued a 0 % promissory note in a principal amount of $ 950,000 in connection

with an Asset Purchase Agreement.

The note requires $ 250,000 to be paid on or before June 30, 2016, and $ 700,000 to be paid in quarterly

installments (beginning with the quarter ending September 30, 2015) equal to the greater of $ 12,500 or 5 % of U.S.

net sales, and 2 % of

net sales of Neuragen for 60 months thereafter.

The payment of such amounts is secured by a security interest in certain assets,

undertakings and property (“Collateral”) pursuant to the Security Agreement, which will be released upon receipt of

total payments of $1.2 million.

Company recorded present value of future payments of $257,259 and $260,461 as of March 31, 2020 and December 31, 2019, respectively.

The Company recorded imputed interest expense of $9,299 for the three months ended March 31, 2020.

the three months ended March 31, 2020, the Company made a payment of $12,500 in connection with this Security Agreement.

undertakings and property (“Collateral”) pursuant to the Security Agreement, which will be released upon receipt of total

payments of $ 1.2 million.

The Company recorded present value of future payments

of $ 199,640 and $ 204,941 as of March 31, 2024 and December 31, 2023, respectively.

At March 31, 2024 and December 31, 2023 the Company

owed Knight $ 275,000 and $ 287,500 in relation to this agreement.

The Company recorded interest expense of $ 7,199 and $ 7,520 for the three

months March 31, 2024 and 2023, respectively.

The Company made payments of $ 12,500 and $ 12,500 during the three months ended March 31,

2024 and 2023, respectively.

During June 2024, this Security Agreement was

consolidated with the other outstanding loans to Knight.

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

August 9, 2017, we entered into a Second Amendment to Loan Agreement (“Second Amendment”) with Knight, pursuant to

which Knight agreed to loan us an additional $10 million, and an ongoing credit facility of up to $20 million, and which amount

was borrowed at closing (the “Financing”) for working capital purposes.

At closing, we paid Knight an origination

fee of $200,000 and a work fee of $100,000 and also paid $100,000 of Knight’s expenses associated with the Loan.

Tranches under the Loan Agreement are available to the Company until August 9, 2022 provided that no event of default exists.

Each Additional Tranche must be for a minimum amount of $1.0 million, may only be used to finance qualified acquisitions (as defined

in the Loan Agreement), and can be denied in Knight’s absolute discretion.

If an Additional Tranche is denied, the Company

can effect a qualified acquisition through a special purpose entity with such special purpose entity being entitled to obtain

financing from third parties so long as such financing does not adversely affect Knight or Knight’s rights under the Loan

Upon the closing of any Additional Tranche, the Company will pay Knight an origination fee equal to 2% of the Additional

Tranche, a work fee equal to 1% of the amount of the Additional Tranche, and reimburse Knight for its expenses incurred in connection

with its consideration of any Additional Tranche (whether or not advanced).

Loan bears interest at 10.5% per annum.

The amended Loan Agreement matures on August 8, 2020 and (b) the date that Knight, in

its discretion, accelerates the Company’s obligations due to an event of default.

the Maturity Date of the Third Tranche and every Additional Tranche (or upon the acceleration of each such loan), the Company

must pay Knight a success fee (the “Success Fee”) of that number of Company common shares equal to 10% of the loan,

divided by the lesser of (a) $1.50, (b) the lowest price at which any common shares were issued by the Company in any offering

or equity financing or other transaction between the Closing Date and the date the Success Fee is due, and (c) the current market

price on the date the Success Fee is due.

The Company may also pay the Success Fee in cash pursuant to the terms of the Loan Agreement.

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%.

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.

have met all the covenants except for the TTM EBITDA of $5 million during the period ending March 31, 2018.

Default Interest rate

of 5% (from 10.5% to 15.5%) applies in accordance to our current agreement and will be in effect starting April 1, 2018 and will

be in effect until the $5 million TTM EDITDA covenant is achieved.

We entered into Loan Amendment Agreement on May 14, 2018, the

interest rate was reduced to 13% due to reducing payroll expenses.

Also, Synergy will maintain Focus Factor Net Sales as measured

on a year-end basis of at least USD $15 million for each fiscal year starting with December 31, 2017.

have amended our covenants under our loan agreement on March 27, 2019.

The new covenants are as follows:

we will maintain a minimum

EBITDA of $1,900,000 for the twelve months ending on December 31, 2018, $2,500,000 for the twelve months ending March 31, 2019,

$3,500,000 for the twelve months ending June 30, 2019 and $5,000,000 for the twelve months period ending on last day of each fiscal

quarters thereafter.

We shall maintain a net debt to TTM EBITDA ratio of no more than 8:1 for the twelve month period ending on

December 31, 2018 until March 31, 2019 and shall maintain a net debt to TTM EBITDA ratio of no more than 6:1 thereafter.

maintain at all times a positive cash balance of $575,000 for the three month period ending December 31, 2018, $750,000 for the

three month period ending March 31, 2019 and $1,000,000 thereafter.

The default interest rate of 2.5% applies (from 13% to 15.5%)

in accordance to our current agreement and will be in effect as of October 1, 2018 to June 30, 2019.

Effective June 30, 2019 the

interest rate referred back to 10.5%.

(See note 16)

Company also recorded deferred financing costs of $452,869 with respect to the above loan.

The Company recognized amortization

of deferred financing costs of $20,756 during the three months ended March 31, 2020.

Unamortized debt issuance cost as of March

31, 2020 amounted to $27,675.

Company recognized interest expense of $138,542 and paid $138,542 during the three months ended March 31, 2020.

Accrued interest

was $0 as of March 31, 2020.

The loan balance at March 31, 2020 was $5,500,000.

Stockholders’

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.

the three months ended March 31, 2019, the Company issued 26,391 shares of its common stock valued at $39,586 in full and final

settlement on the Per-fekt transaction.

of both March 31, 2020 and December 31, 2019, there were 89,889,074 shares of the Company’s common stock issued and

Commitments & Contingencies

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.

Company and Mr.

McCullough entered into an employment agreement on October 17, 2017 (the “Employment Agreement”) with

an initial term of 3 years.

In exchange for his service as President, Mr.

McCullough will receive an annual base salary of $340,000.

He received a cash signing bonus of $37,500 paid on January 1, 2018, and an additional cash signing bonus of $37,500 paid on July

McCullough will be eligible for an annual bonus of up to twenty-five percent (25%) of his base salary.

bonus will be determined at the discretion of our Board or compensation committee based upon the achievement of financial goals

established by the Company’s Chief Executive Officer.

McCullough will also be eligible for additional bonus compensation

based on the Company’s achievement of certain annual earnings and retail sales goals established each year by the Company’s

Chief Executive Officer.

Subject to the Company’s achievement of an annual overall earnings goal and certain adjustments

in the event of future acquisitions by the Company, Mr.

McCullough will be eligible to receive five percent (5%) of all retail

sales by the Company in excess of the annual retail sales goal set by the Chief Executive Officer.

Company granted Mr.

McCullough an option to purchase 1,000,000 shares of the Company’s common stock, subject to the approval

of the Company’s Board of Directors (the “Option Grant”).

The Option Grant vests in three (3) equal annual installments

on the first three anniversaries of Mr.

McCullough’s start date with the Company, provided that Mr.

McCullough remains employed

by the Company on each such date.

The Option Grant will be granted under the Company’s 2014 Stock Incentive Plan pursuant

to a stock grant agreement between the Company and Mr.

(See note 16)

Stock Options

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, 2020:

stock option activity for the three months ended March 31, 2020 is as follows:

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, and an ongoing credit facility of up to $ 20 million, and which amount was borrowed at closing (the “Financing”)

for working capital purposes.

At closing, the Company paid Knight an origination fee of $ 200,000 and a work fee of $ 100,000 and also paid

$ 100,000 of Knight’s expenses associated with the Loan.

Additional Tranches under the Loan Agreement are

available to the Company until August 9, 2022 provided that no event of default exists.

Each Additional Tranche must be for a minimum

amount of $ 1.0 million, may only be used to finance qualified acquisitions (as defined in the Loan Agreement), and can be denied in Knight’s

absolute discretion.

If an Additional Tranche is denied, the Company can effect a qualified acquisition through a special purpose entity

with such special purpose entity being entitled to obtain financing from third parties so long as such financing does not adversely affect

Knight or Knight’s rights under the Loan Agreement.

Upon the closing of any Additional Tranche, the Company will pay Knight an origination

fee equal to 2 % of the Additional Tranche, a work fee equal to 1 % of the amount of the Additional Tranche, and reimburse Knight for its

expenses incurred in connection with its consideration of any Additional Tranche (whether or not advanced).

The Loan bears interest at 10.5 % per annum.

amended Loan Agreement matures on August 8, 2020 and (b) the date that Knight, in its discretion, accelerates the Company’s obligations

due to an event of default.

On the Maturity Date of the Third Tranche and

every Additional Tranche (or upon the acceleration of each such loan), the Company must pay Knight a success fee (the “Success Fee”)

of that number of Company common shares equal to 10 % of the loan, divided by the lesser of (a) $ 1.50 , (b) the lowest price at which any

common shares were issued by the Company in any offering or equity financing or other transaction between the Closing Date and the date

the Success Fee is due, and (c) the current market price on the date the Success Fee is due.

The Company may also pay the Success Fee

in cash pursuant to the terms of the Loan Agreement.

The Success Fees have been added to the outstanding loan balance.

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 May 8, 2020, the Company entered into a Third

Amendment Agreement (the “Third 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 $ 2.5

million (the “Additional Loan”).

That same day (the “Closing”), the Company paid Knight a work fee of $ 36,000 ,

and $ 25,000 for Knight’s legal costs and expenses incurred in connection with the Third Amendment.

The Third Amendment amends the

original loan agreement that the Company and Knight entered into in January 2015 and subsequently amended (as amended, the “Original

Loan Agreement”).

The Additional Loan matures on May 8, 2021 (the “TA Maturity Date”) and bears interest at 12.5 % per

annum compounding quarterly.

On the TA Maturity Date, the Company will pay Knight a success fee (the “Success Fee”) of $ 83,250 .

The Success Fee is payable in cash or stock as set forth in the Loan Agreement.

The Third Amendment includes customary representations,

warranties, and affirmative and restrictive covenants, including covenants to attain and maintain certain financial metrics, including

an undertaking to maintain at all times a cash balance of $ 600,000 and EBITDA of $ 3,000,000 for the twelve months ended June 30, 2020

and $ 4,000,000 for the twelve month period ending on the last day of each fiscal quarter thereafter.

Terms of the $ 10,000,000 August 9, 2017 loan (Third

Tranche) (see note 9) were modified in the Third amendment.

Third tranche shall bear interest from May 8, 2020 at a rate equal to 12.5 %

per annum compounded quarterly.

The Company shall pay success fee in the amount of $ 1,000,000 with respect to the Third Tranche, which

shall be fully earned on May 8, 2020 and payable no later than August 31, 2022.

Third Tranche success fee shall bear interest at 12.5 %

per annum compounding quarterly.

The loan has been extended to a maturity date of December 31, 2021 .

Because these amendments were considered

not substantive changes, the Company accounted for the modifications as modification of debt.

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”).

The Fourth Amendment amends the original loan agreement that the Company and Knight

entered into in January 2015 and subsequently amended (as amended, the “Original Loan Agreement”).

The Second Additional Loan

matures on the earlier of October 31, 2022 and the date that is ninety days after the date, if any, on which Knight delivers a Second

Additional Loan Repayment Notice to the Company.

The Company will pay Knight a success fee of $ 40,000 and an amendment fee of $ 30,000

which is fully earned and payable as of the Fourth Amendment Date.

The loan bears interest at the greater of 14 % or the prime rate plus

8 % per annum, compounded quarterly.

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.

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

These have been accrued for during the year ended December 31, 2022 since this was earned upon renegotiation of the loan during

The Company has also paid Knight an extension fee of $136,000 per month from October 2023 through February 2024.

We have amended our financial covenants in the

Fifth Amendment to as follows:

We 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.

We shall at all times maintain Focus Factors net sales on a trailing twelve month basis of

at least $ 30,000,000 .

The Company recognized interest expense of $ 1,448,475

and $ 1,279,646 during the nine months ended September 30, 2024 and 2023, respectively.

The Company recognized interest expense of $ 378,214

and $ 446,619 during the three months ended September 30, 2024 and 2023, respectively.

Accrued interest was $ 123,331 as of September 30,

Accrued interest was $ 1,760,076 as of both March 31, 2024 and December 31, 2023.

Accrued interest was capitalized and included in

the loan balance as of March 31, 2024 and December 31, 2023.

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 March

31, 2024 and December 31, 2023 was $ 450,000 .

During 2023, the Company accrued $ 83,250 as added

to Notes Payable in the form of a loan success fee as earned.

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

will begin in the first quarter of 2025 with $ 1,000,000 due quarterly until March 31, 2026 when the loan becomes due in full.

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

(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.

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 One Million eight hundred thousand Dollar ($ 1,800,000 ) bonus success

fee (“Bonus Success Fee”).

The 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, partial or complete sale of any asset of Synergy.

The obligation of Synergy to KTI under

the 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 herein Bonus success fee, If Synergy or any of its brands does 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.

The following covenants shall

be 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

(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.

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.

purchase of the Additional Shares is at Knight’s option and Jack Ross and KTI shall execute a Share Purchase Agreement prior to

April 30th, 2024.

The value of the contingent guaranty is nominal as the probability of non-payment is remote.

As of June 30, 2024 and December 31, 2023 the

total consolidated amount outstanding on these loans, including accrued interest and royalties is $ 12,333,052 and $ 12,426,997 , respectively.

The Company is required to make future payments

$1,700,000 July 13, 2021 Loan:

On July 13, 2021, the Company entered into a loan agreement of $ 1,700,000

with Hand MD, LLC for transfer of ownership to in Hand MD Corp.

to the Company.

Payments are due as follows:

$ 500,000 within 10 business days of execution, $ 400,000 on or before the six month anniversary of the agreement,

$ 400,000 on or before the twelve month anniversary of the agreement and $ 400,000 on or before the eighteen month anniversary of the agreement.

During the three months ended March 31, 2023 the Company paid remaining $ 400,000 toward the loan.

This has been fully repaid during 2023.

$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.

This interest rate on the promissory note was

modified effective June 30, 2022 to 15.5 % per annum compounded quarterly.

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 in that, interest would be accrued to December 31, 2022 and added to the outstanding principal loan balance.

Interest payments to commence January 31, 2023 on unpaid principal and accrued and unpaid interest through December 31, 2022.

shall repay all principal and interest on the earlier of a merger, sale of the Company or Focus Factor or the assets of the Company or

September 30, 2023.

The Company will pay a closing fee of $ 500,000 and $ 50,000 as reimbursement for legal fees incurred in connection

with the loan renegotiation of both the $ 2,000,000 February 10, 2022 Loan and the $ 6,000,000 March 8, 2022 Loan.

To the extent that this

Note and $ 6 million March 8, 2022 Loan is not repaid on the terms, Jack Ross shall personally grant:

Warrants struck at $ 0.01 penny per

share, covering 10 % of his stock in the event that Synergy does not make its principal repayment outlined above, in full.

issuance shall be made to the holders of this Note and the $ 6 million March 8, 2022 Loan (ratably).

This promissory note was modified effective September

30, 2023 in conjunction with the Senior Subordinated Debentures.

Interest payments to commence January 31, 2023 on unpaid principal and

accrued and unpaid interest through December 31, 2022.

Interest expensed and paid during 2023 has amounted to $ 332,769 .

Principal and

interest payments shall begin effective October 31, 2023 and continue through March 31, 2024 on the earlier of a merger, sale of the Company

or Focus Factor or the assets of the Company or March 31, 2024.

To the extent that this Note and $ 6 million March 8, 2022 Loan is not

repaid on the terms, Jack Ross shall personally grant:

Warrants struck at $ 0.01 penny per share, covering 10 % of his stock in the event

that Synergy does not make its principal repayment outlined above, in full.

The warrant issuance shall be made to the holders of this

Note and the $ 6 million March 8, 2022 Loan (ratably).

The value of the contingent guaranty is nominal as the probability of non-payment

The pro-rata closing fee of $ 125,000 originally due on September 30 th 2023 was also extended to March 31, 2024.

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 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.

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

$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.

The modification included the exercise of $ 1.5 million on cash payment in lieu of the exercise of warrants.

Pursuant to ASC 480 warrants were liability classified and the Company accrued the warrant liability of $ 1.5 million on March 8, 2022,

the date of issuance.

Upon September 8, 2022, the date of exercise of the warrants, the Company offset this warrant liability and added

the $ 1.5 million balance to the Senior Subordinated Debentures, for a combined outstanding balance of $ 7.5 million.

The terms of the warrants

were, at the sole option of the holder, to covert the warrant at a 25 % discount in the event the Company consummated an IPO, a cash option

whereby the holder could convert the warrants at a cash value of $ 1.5 million or convert the warrants into the private entity valued by

an independent third party appraiser.

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 Focus Factor’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.

The debentures required payments of interest at

8 % per annum for the first 90 days the debentures were funded and outstanding, 9.5 % interest per annum for the next 90 days the debentures

were funded and outstanding at which time all interest and principal would be due.

These debentures were modified effective September

30, 2023 to the following terms:

Interest rate adjusted to 15.5 % compounded quarterly, effective September 9, 2022.

Interest payments

to commence January 31, 2023 on unpaid principal and accrued and unpaid interest through December 31, 2022.

Interest accrued and unpaid

during 2022 was $ 672,574 and was subsequently added to the principal balance of the loan outstanding.

Interest expensed and paid during

2023 has amounted to $ 1,257,014 .

Nominal principal payments were negotiated in lieu of additional extension fees which began effective

October 31, 2023 and continue through March 31, 2024 when the balance is due.

Loan renegotiation fee of $ 500,000 is due March 31, 2024.

This was accrued for during the year ended December 31, 2022, since this was earned upon renegotiation of the loan during 2022.

outstanding loan balance at March 31, 2024 and December 31, 2023 was $ 6,900,000 and $ 7,125,000 , respectively, which includes original

principal amount net off repayment and warrants conversion to loan of $ 1,500,000 .

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.

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.

$180,800 July 12, 2023 Loan:

On July 12, 2023, the Company entered into a loan

agreement of $ 180,800 with Shopify Capital Inc.

for an advancement of working capital from its online processing account.

received $ 160,000 from Shopify Capital Inc.

and $ 20,800 was an original issue discount.

The loan bears a repayment rate of 17 % of daily

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 $ 180,800 .

The Company recognized amortization original issue

discount of $ 8,512 , which is included in interest expense in the statement of income during the year ended December 31, 2023 and $ 12,288

during the nine months ended September 30, 2024.

The outstanding loan balance at September 30, 2024 and December 31, 2023 was $ 0 and $ 94,525 ,

respectively.

$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 both 2024 and 2023, the Company made payments

of $ 1,000,000 each toward this loan.

The outstanding loan balances at September 30, 2024 and December 31, 2023 were $ 3,802,445 and $ 4,802,445 ,

respectively, including interest of $ 352,445 .

The Company is required to make future payments

$141,250 January 29, 2024 Loan:

On January 21, 2024, the Company entered into

a loan agreement of $ 141,250 with Shopify Capital Inc.

for an advancement of working capital from its online processing account.

received $ 125,000 from Shopify Capital Inc.

and $ 16,250 was an original issue discount.

The loan bears a repayment rate of 17 % of daily

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 $ 141,250 .

The Company recognized amortization original issue

discount of $ 16,250 , which is included in interest expense in the statement of income during the three months ended March 31, 2024.

outstanding loan balance at September 30, 2024 was $ 0 .

$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 2024, the Company made payments of $ 200,000

toward this loan.

The outstanding loan balance at September 30, 2024 was $ 2,820,824 .

The Company is required to make future payments

$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.

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

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 $ 11,991 , which is included in interest expense in the statement of income during the nine months ended September 30,

The outstanding loan balance at September 30, 2024 was $ 277,763 .

$118,650 May 22, 2024 Loan:

On May 22, 2024, the Company entered into a loan

agreement of $ 118,650 with Shopify Capital Inc.

for an advancement of working capital from its online processing account.

received $ 105,000 from Shopify Capital Inc.

and $ 13,650 was an original issue discount.

The loan bears a repayment rate of 25 % of daily

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 $ 118,650 .

The Company recognized amortization of original

issue discount of $ 6,293 , which is included in interest expense in the statement of income during the nine months ended September 30,

The outstanding loan balance at September 30, 2024 was $ 56,591 .

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.

As of both September 30, 2024 and December 31,

2023, there were 7,553,818 shares of the Company’s common stock issued and outstanding.

Note 13 – Commitments & Contingencies

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

The contract manufacturer brought counterclaims demanding payment in full for its manufacture of these products.

was moved to federal court and remains pending in the United States District Court for the District of Maine, Synergy CHC Corp.

HVL, LLC d/b/a Atrium Innovations, Case No.

2:22-cv-00301-JAW (D.

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).

Synergy CHC Corp.

, 4:23-cv-691;

United States District Court for the Eastern District of Texas, Sherman

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 L.O.D.C Group, Ltd.

Note 14 – Stock Options

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 September 30, 2024:

Options Outstanding Options Exercisable

Exercise Prices ($) Number

Outstanding Weighted

(Years) Weighted

Price ($) Number

Exercisable Weighted

$ 2.98 - 10.71 336,136 3.34 $ 7.29 252,102 $ 6.15

The stock option activity for the nine months

ended September 30, 2024 is as follows:

Weighted Average

Exercise Price

1 unchanged sentence

Expired or canceled

Outstanding at March 31, 2020

compensation expense related to vested options was $38,679 during the three months ended March 31, 2020, which is a component

of general and administrative expense in the statement of operations.

The Company determined the value of share-based compensation

for options vesting during the period using the Black-Scholes fair value option-pricing model with the following weighted average

estimated fair value of Company’s common stock of $0.48-0.50, risk-free interest rate of 1.95-1.99%, volatility

of 116-117%, expected lives of 10 years, and dividend yield of 0%.

Stock options outstanding as of March 31, 2020, as disclosed

in the above table, have an intrinsic value of $0.

As of March 31, 2020, unamortized stock-based compensation costs related to

options was $90,251, and will be recognized over a period of 0.5 years.

identification and selection is consistent with the management structure used by the Company’s chief operating decision

maker 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’s chief operating decision maker does not review operating results on a disaggregated

rather, the chief operating decision maker reviews operating results on an aggregate basis.

sales attributed to customers in the United States and foreign countries for the three months ended March 31, 2020 and 2019 were

Outstanding at September 30, 2024

Stock-based compensation expense related to vested

options was $ 4,613 and $ 9,224 during the three and nine months ended September 30, 2024, respectively.

The Company determined the value

of share-based compensation for options vesting during the nine months ended September 30, 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 $ 1.90 , risk-free interest

rate of 4.33 %, volatility of 73 %, expected term of 6 years, and dividend yield of 0 %.

Stock options outstanding as of September 30, 2024,

as disclosed in the above table, have an intrinsic value of $ 0 .

As of September 30, 2024, unamortized stock-based compensation costs related

to options was $ 46,118 , and will be recognized over a period of thirty months .

Note 15 – Segments

Segment identification and selection is consistent

with the management structure used by the Company’s chief operating decision maker 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’s chief operating decision maker

does not review operating results on a disaggregated basis;

rather, the chief operating decision maker reviews operating results on an

aggregated basis.

Net sales attributed to customers in the United

States and foreign countries for the three months ended September 30, 2024 and 2023 were as follows:

September 30,

United States

Foreign countries

countries primarily consist of Australia and Canada.

Company’s net sales by product group for the three months ended March 31, 2020 and 2019 were as follows:

Foreign country sales primarily consist of sales

The Company’s net sales by product group

for the three months ended September 30, 2024 and 2023 were as follows:

September 30,

Nutraceuticals

Over the Counter (OTC)

Consumer Goods

Cosmeceuticals

Net sales for any other product group of similar products are less than 10% of consolidated net sales.

Company’s net sales by major sales channel for the three months ended March 31, 2020 and 2019 were as follows:

assets (net) attributable to operations in the United States and foreign countries as

of March 31, 2020 and December 31, 2019 were as follows:

The Company’s net sales by major sales channel

for the three months ended September 30, 2024 and 2023 were as follows:

September 30,

Net sales attributed to customers in the United

States and foreign countries for the nine months ended September 30, 2024 and 2023 were as follows:

September 30,

United States

tax expense (benefit) was $285,540 for the three months ended March 31, 2020, compared to $(5,908) for the same periods

The current provision is attributable to Australian operations and the current tax rate in effect in that country.

response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed

into law on March 27, 2020.

The CARES Act, among other things, includes tax provisions relating to refundable payroll tax credits,

deferment of employer’s social security payments, net operating loss utilization and carryback periods and modifications

to the net interest deduction limitations.

At this time, the Company does not believe that the CARES Act will have a material

impact on its income tax provision for 2020.

The Company will continue to evaluate the impact of the CARES Act on its financial

position, results of operations and cash flows.

total deferred tax asset is calculated by multiplying a domestic federal (US) 21% marginal tax rate by the cumulative net operating

loss carryforwards (“NOL”).

The domestic marginal tax rate does not include any state & local marginal tax rate

attributable to the Company.

The Company currently has estimated NOLs, which expire through 2035.

Management has determined based

on all the available information that a 100% valuation reserve is required.

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).

Company has not filed its State & Local Income/Franchise tax returns in States it is required to file for the last few years,

so such returns and liability remain open.

Subsequent Events

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.

May 8, 2020, the Company entered into a Third Amendment Agreement (the “Third 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 $2.5 million (the “Additional Loan”).

That same day (the “Closing”),

the Company paid Knight a work fee of $36,000, and $25,000 for Knight’s legal costs and expenses incurred in connection

with the Third Amendment.

The Third Amendment amends the original loan agreement that the Company and Knight entered into in January

2015 and subsequently amended (as amended, the “Original Loan Agreement”).

The Additional Loan matures on May 8, 2021

(the “TA Maturity Date”) and bears interest at 12.5% per annum compounding quarterly.

On the TA Maturity Date, the

Company will pay Knight a success fee (the “Success Fee”) of $83,250.

The Success Fee is payable in cash or stock

as set forth in the Loan Agreement.

The Third Amendment includes customary representations, warranties, and affirmative and restrictive

covenants, including covenants to attain and maintain certain financial metrics, including an undertaking to maintain at all times

a cash balance of $600,000 and EBITDA of $3,000,000.

of the $10,000,000 August 9, 2017 loan (Third Tranche) (see note 10) was modified in the Third amendment.

Third tranche shall

bear interest from May 8, 2020 at a rate equal to 12.5% per annum compounded quarterly.

The Company shall pay success fee in the

amount of $1,000,000 with respect to the Third Tranche, which shall be fully earned on May 8, 2020 and payable no later than August

Third Tranche success fee shall bear interest at 12.5% per annum compounding quarterly.

McCullough, and the Company are in a contractual services relationship till November 2020.

On May 5, 2020, Patrick McCullough

and the Company mutually agreed that Mr.

McCullough would step down as President but remain a consultant under such contract with

This mutual decision was not due to any disagreement on any matter relating to the Company’s operations, policies

or practices.

thereafter, the Company’s Chief Executive Officer, assumed the role as President of the Company.

to March 31, 2020 the Company has secured distribution of a new hand sanitizer product under its Hand MD brand in Canada.

recent outbreak of COVID-19, which has been declared by the World Health Organization to be a pandemic, has spread across the

globe and is impacting worldwide economic activity.

A pandemic, including COVID-19, or other public health epidemic poses the

risk that the Company or its employees, suppliers, and other partners may be prevented from conducting business activities at

full capacity for an indefinite period of time, including due to spread of the disease within these groups or due to shutdowns

that may be requested or mandated by governmental authorities.

While it is not possible at this time to estimate the impact that

COVID-19 could have on the Company’s business, the continued spread of COVID-19 and the measures taken by the governments

of countries affected and in which the Company operates could disrupt the operation of the Company’s business.

outbreak and mitigation measures may also have an adverse impact on global economic conditions, which could have an adverse effect

on the Company’s business and financial condition, including on its potential to conduct financings on terms acceptable

to the Company, if at all.

In addition, the Company may take temporary precautionary measures intended to help minimize the risk

of the virus to its employees, including temporarily requiring all employees to work remotely, and discouraging employee attendance

at in-person work-related meetings, which could negatively affect the Company’s business.

The extent to which the COVID-19

outbreak impacts the Company’s results will depend on future developments that are highly uncertain and cannot be predicted,

including new information that may emerge concerning the severity of the virus and the actions to contain its impact.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

following discussion and analysis of the results of operations and financial condition of Synergy for the three months ended March

31, 2020 and 2019, should be read in conjunction with the unaudited condensed consolidated financial statements of Synergy, and

the notes to those unaudited condensed consolidated financial statements that are included elsewhere in this Form 10-Q.

Our discussion

includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our plans, objectives,

expectations and intentions.

Actual results and the timing of events could differ materially from those anticipated in these forward-looking

statements as a result of a number of factors, including those set forth under the caption, “Cautionary Note Regarding Forward-Looking

Statements”

and the “Business”

section in our Form 10-K filed on April 29, 2020.

We use words such as “anticipate,”

“estimate,”

“plan,”

“project,”

“continuing,”

“ongoing,”

“expect,”

“believe,”

“intend,”

“may,”

“will,”

“should,”

“could,”

and similar expressions to identify forward-looking statements.

Company is in the business of marketing and distributing consumer branded products through various distribution channels primarily

in the health and wellness industry.

The Company’s strategy is to grow both organically and by future acquisition.

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 condensed consolidated financial statements.

Key factors affecting

our results of operations include revenues, cost of revenues, operating expenses and income and taxation.

Financial Measures

currently focus on Adjusted EBITDA to evaluate our business relationships and our resulting operating performance and financial

Adjusted EBITDA is defined as EBITDA (net income plus interest expense, income tax expense, depreciation and amortization),

further adjusted to exclude certain non-cash expenses and other adjustments as set forth below.

We present Adjusted EBITDA because

we consider it an important measure of our performance and it is a meaningful financial metric in assessing our operating performance

from period to period by excluding certain items that we believe are not representative of our core business, such as certain

non-cash items and other adjustments.

believe that Adjusted 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.

March 31, 2020

income after tax

Interest income

Interest expense

One Time Expenses –

Bad debts recovery

Accounts payable write off

on foreign currency translation and transaction

Adjusted EBITDA

and Adjusted EBITDA are considered non-GAAP financial measures.

EBITDA represents earnings before interest, taxes, depreciation

and amortization.

Adjusted EBITDA represents EBITDA, further adjusted to exclude the impact of higher-than-normal revenue change

other activity and certain expenses and transactions that we believe are not representative of our core operating results, including

stock-based compensation;

one-time expenses/incomes;

and the gain/loss on foreign currency translation and transaction.

The Company’s definitions of EBITDA and adjusted EBITDA might not be comparable to similarly titled measures reported by

other companies.

of Operations for the Three months Ended March 31, 2020 and 2019

For the three months

ended March 31, 2020, we had revenue of $6,117,286 from sales of our products, as compared to revenue of $9,468,955 for the same

period in 2019.

We had a decrease in Nutraceuticals in 2020 as compared to 2019 due to lower online sales due to the shift

from online to retail and 2019 being the launch year of some new products.

We had an increase in Over the Counter in 2020

as compared to 2019 due to regular business fluctuations.

We had an increase in Consumer Goods in 2020 as compared to 2019

due to a shift in business focus.

We had a decrease in Cosmeceuticals in 2020 as compared to 2019 due to a shift in business focus.

The revenue is comprised of the following categories:

Nutraceuticals

Over the Counter (OTC)

Consumer Goods

Cosmeceuticals

the three months ended March 31, 2020, our cost of revenue was $1,497,779.

Our cost of revenue for the three months ended March

31, 2019, was $2,540,450.

We had a decrease in Nutraceuticals in 2020 as compared to 2019 due to lower sales and a different mix

of products being sold.

We had an increase in Consumer Goods in 2020 as compared to 2019 due to an increase in revenue.

a decrease in Cosmeceuticals in 2020 as compared to 2019 due to a shift in business focus.

The cost of revenue is comprised of

the following categories:

Foreign countries

Foreign country sales primarily consist of sales

The Company’s net sales by product group

for the nine months ended September 30, 2024 and 2023 were as follows:

September 30,

Nutraceuticals

Over the Counter (OTC)

Consumer Goods

Cosmeceuticals

profit was $4,619,507, or 76% for the three months ended March 31, 2020, as compared to gross profit of $6,928,505, or 73% for

the same period in 2019, a decrease of $2,308,998, or 33%.

The decrease in gross profit margin is directly related to the mix

of products being sold.

and Marketing Expenses

the three months ended March 31, 2020, our selling and marketing expenses were $2,253,956 as compared to $3,311,867 for the same

period in 2019, which is primarily due to decreased personnel in our advertising and marketing departments.

and Administrative Expenses

the three months ended March 31, 2020, our general and administrative expenses were $1,333,524.

For the three months ended March

31, 2019, our general and administrative expenses were $1,487,107.

The decrease is primarily due to better management of operating

and Amortization Expenses

the three months ended March 31, 2020, our depreciation and amortization expenses were $26,845 as compared to $306,275 for the

same period in 2019.

The decrease is due to impairment of intangible assets in 2019.

Income and Expenses

the three months ended March 31, 2020 and 2019 we had other (income) and expense items of the following:

March 31, 2020

March 31, 2019

Interest income

Interest expense

Remeasurement

loss (gain) on translation of foreign subsidiary

of debt issuance cost

the three months ended March 31, 2020, we had interest expense of $158,522 as compared to $340,128 for the same period in 2019.

The decrease was due to decrease in the interest rate of Loan 3 from 15.5% to 13% and decrease in the outstanding principal

the three months ended March 31, 2020, our net income was $262,303 as compared to a net income of $1,467,287 for the same period

and Capital Resources

of March 31, 2020, we had $314,933 cash on hand and a $4,444,249 working capital deficit.

In addition, we also had restricted

cash of $100,000 which is held for credit card collateral.

of Financial Statements –

Going Concern

Concern Evaluation

connection with preparing unaudited condensed consolidated financial statements for the three months ended March 31, 2020, 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 financial statements are issued.

Company considered the following:

At March 31, 2020, the Company had an accumulated deficit of $23,972,266.

At March 31, 2020, the Company had working capital deficit of $4,444,249.

Revenue decline in 2020 as compared to 2019 of $3,351,669.

During the three months ended March 31, 2020, the Company used cash in operating activities of $1,302,062.

● The Company is required to make

repayment of loans payable of $500,000 and accrued interest during the three months ended March 31, 2020.

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.

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:

● The Company raised $10.0 million

via debt financing during the year ended December 31, 2017.

● Subsequent to March 31, 2020, the

Company raised $2.5 million via debt financing.

● During the three months ended March

31, 2020, the Company repaid $12,500 of loans.

Subsequent to March 31, 2020, the Company repaid $500,000 of loans.

● The Company generated net income

of $262,303 for the three months ended March 31, 2020.

● Working capital deficit of $4,444,249

at March 31, 2020, includes loans payables to related party of $5,486,377, payables to related party of $839,124 and

deferred revenue of $17,137.

● The Company has line of credit

facility of $20 million available from its current lender for future mergers and acquisition.

● Subsequent to March 31, 2020, the

Company has secured distribution of a new hand sanitizer product under its Hand MD brand in Canada.

concluded that above factors alleviates 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.

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 acquisition, which may be impacted

by the recent outbreak of COVID-19.

Implement additional restructuring and cost reductions.

Raise additional capital through a private placement, which may be impacted by the recent outbreak of COVID-19.

of June 29 , 2020 and March 31, 2020, the Company had $2,098,237 and $414,933, respectively, in cash and cash equivalents.

months ended March 31, 2020 and 2019

Cash Used in Operating Activities

cash used in operating activities for the three months ended March 31, 2020 was $(1,302,062), compared to net cash provided by

operating activities of $813,711 for the same period in 2019.

This decrease in net cash provided by operating activities for the

three months ended March 31, 2020 was primarily attributable to an increase in accounts receivable and decrease in accounts payable

and accrued expenses.

$(1,302,062) consists of our net income of $262,303 adjusted by:

Amortization of debt issuance cost

Depreciation and amortization

Stock based compensation

Non cash implied interest

Remeasurement loss on translation of foreign subsidiary

Foreign currency transaction loss

Reversal of allowance for doubtful accounts

Gain on write-off of payables

Increase in accounts receivable

Increase in accounts receivable, related party

Decrease in inventory

Decrease in prepaid expenses

Decrease in income tax receivable

Increase in income tax payable

Decrease in accounts payable and accrued liabilities

Decrease in accounts payable and accrued liabilities, related party

Increase in deferred revenue

Cash Used in Investing Activities

cash used in investing activities for the three months ended March 31, 2020 was $0, compared to net cash used of $0 for the same

period in 2019.

Cash Used in Financing Activities

Net cash provided by

financing activities for the three months ended March 31, 2020 was $57,990, compared to net cash used of $512,500

for the same period in 2019.

Repayment of notes payable

Advances from related party

2020 Initiatives

2020, we have plans for organic growth within our current product lines by developing and launching new products.

marketing campaigns in process and intend to expand our online presence for each product.

While we intend to grow further through

additional acquisitions, we feel it is important to also develop our existing products.