Synergy CHC Corp. 10-Q

Item 1. Financial Statements. Synergy CHC Corp. Condensed Interim Financial Statements For the Three and Six Months Ended June 30, 2025 and 2024 Unaudited (Expressed in U.S. Dollars) 1 MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING CONDENSED INTERIM FINANCIAL REPORTING The accompanying unaudited condensed interim financial statements of Synergy CHC Corp. (“the Company”) have been prepared by management in accordance with accounting principles generally accepted in the United States (GAAP). Management acknowledges responsibility for the preparation and presentation of the unaudited condensed interim financial statements, including responsibility for significant accounting estimates and the choice of accounting principles and methods that are appropriate to the Company’s circumstances. 2 Synergy CHC Corp. Condensed Consolidated Balance Sheets June 30, 2025 December 31, 2024 (unaudited) Assets Current Assets Cash and cash equivalents $ 1,458,561 $ 687,920 Restricted cash 100,000 100,000 Accounts receivable, net 7,069,889 5,321,037 Other receivables 2,025,094 1,999,637 Loan receivable (related party) 4,427,883 4,375,059 Prepaid expenses (including related party amount of $ 801,345 and $ 312,966 , respectively) 2,064,094 1,859,563 Inventory, net 2,364,158 1,716,552 Total Current Assets 19,509,679 16,059,768 Intangible assets, net 216,667 283,333 Total Assets $ 19,726,346 $ 16,343,101 Liabilities and Stockholders’ Deficit Current Liabilities: Accounts payable and accrued liabilities (including payable to shareholder of $ 92,955 and $ 88,644 , respectively) $ 4,960,331 $ 5,191,868 Income taxes payable 266,472 242,977 Contract liabilities 4,887 24,252 Short term loans payable, net of debt discount 1,894,857 7,725,272 Current portion of long-term notes payable, net of debt discount and debt issuance cost, shareholder - 4,000,000 Total Current Liabilities 7,126,547 17,184,369 Long-term Liabilities: Notes payable, net of debt discount, shareholder - 8,333,053 Notes payable, net of debt discount 24,978,999 7,457,022 Total long-term liabilities 24,978,999 15,790,075 Total Liabilities 32,105,546 32,974,444 Commitments and contingencies Stockholders’ Deficit: Common stock, $ 0.00001 par value; 300,000,000 shares authorized; 9,621,926 and 8,721,818 , shares issued, respectively; 9,441,853 and 8,541,745 outstanding, respectively 96 87 Additional paid in capital 29,508,354 27,643,660 Accumulated other comprehensive loss ( 9,838 ) ( 47,777 ) Accumulated deficit ( 41,750,312 ) ( 44,099,813 ) Less: Treasury stock ( 180,073 shares) at cost ( 127,500 ) ( 127,500 ) Total stockholders’ deficit ( 12,379,200 ) ( 16,631,343 ) Total Liabilities and Stockholders’ Deficit $ 19,726,346 $ 16,343,101 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements 3 Synergy CHC Corp. Unaudited Condensed Consolidated Statements of Income and Comprehensive Income For the three months ended For the six months ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Revenue Product Sales $ 6,734,996 $ 8,024,840 $ 13,405,530 $ 17,436,703 License Revenue 1,400,000 - 2,900,000 - Total Revenue 8,134,996 8,024,840 16,305,530 17,436,703 Cost of sales 1,896,391 2,448,890 3,902,904 5,086,029 Gross profit 6,238,605 5,575,950 12,402,626 12,350,674 Operating expenses Selling and marketing 3,062,211 3,055,186 5,938,482 6,639,863 General and administrative 1,519,325 903,838 2,826,039 2,252,223 Depreciation and amortization 33,334 33,334 66,667 66,667 Total operating expenses 4,614,870 3,992,358 8,831,188 8,958,753 Income from operations 1,623,735 1,583,592 3,571,438 3,391,921 Other (income) expenses Other income Interest income ( 379 ) ( 374 ) ( 14,261 ) ( 761 ) Interest expense 2,107,714 745,528 3,203,083 1,855,508 Gain on settlement of notes payable ( 2,154,522 ) - ( 2,154,522 ) - Remeasurement (gain) loss on translation of foreign subsidiary 7,578 3,870 8,990 ( 5,113 ) Total other (income) expenses ( 39,609 ) 749,024 1,043,290 1,849,634 Net income before income taxes 1,663,344 834,568 2,528,148 1,542,287 Income tax benefit (expense) ( 190,107 ) ( 179,382 ) ( 178,647 ) ( 306,571 ) Net income after tax $ 1,473,237 $ 655,186 $ 2,349,501 $ 1,235,716 Net income per share – basic $ 0.17 $ 0.09 $ 0.27 $ 0.17 Net income per share – diluted $ 0.17 $ 0.09 $ 0.27 $ 0.17 Weighted average common shares outstanding Basic 8,928,548 7,373,745 8,743,639 7,373,745 Diluted 8,928,548 7,373,745 8,743,639 7,373,745 Comprehensive income: Net income 1,473,237 655,186 2,349,501 1,235,716 Foreign currency translation adjustment 39,874 55,736 37,939 187,373 Comprehensive income $ 1,513,111 $ 710,922 $ 2,387,440 $ 1,423,089 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements 4 Synergy CHC Corp. Unaudited Condensed Consolidated Statement of Stockholders’ Deficit Common stock Additional Paid in Accumulated Other Comprehensive Income Treasury Accumulated Total Stockholders’ Shares Amount Capital (Loss) stock Deficit Deficit Balance as of December 31, 2023 7,553,818 $ 76 $ 19,148,707 $ ( 102,467 ) $ ( 127,500 ) $ ( 46,224,789 ) $ ( 27,305,973 ) Foreign currency translation gain 131,637 131,637 Net income 580,530 580,530 Balance as of March 31, 2024 7,553,818 $ 76 $ 19,148,707 $ 29,170 $ ( 127,500 ) $ ( 45,644,259 ) $ ( 26,593,806 ) Fair value of vested stock options 4,611 4,611 Foreign currency translation gain 55,736 55,736 Net income 655,186 655,186 Balance as of June 30, 2024 7,553,818 $ 76 $ 19,153,318 $ 84,906 $ ( 127,500 ) $ ( 44,989,073 ) $ ( 25,878,273 ) Common stock Additional Paid in Accumulated Other Comprehensive Income Treasury Accumulated Total Stockholders’ Shares Amount Capital (Loss) stock Deficit Deficit Balance as of December 31, 2024 8,721,818 $ 87 $ 27,643,660 $ ( 47,777 ) $ ( 127,500 ) $ ( 44,099,813 ) $ ( 16,631,343 ) Foreign currency translation loss ( 1,935 ) ( 1,935 ) Issuance of common stock for loan financing 30,360 1 117,647 117,648 Net income 876,264 876,264 Balance as of March 31, 2025 8,752,178 $ 88 $ 27,761,307 $ ( 49,712 ) $ ( 127,500 ) $ ( 43,223,549 ) $ ( 15,639,366 ) Foreign currency transaction gain 39,874 39,874 Issuance of pre-funded warrants for settlement of shareholder notes payable 899,993 899,993 Issuance of common stock for exercise of pre-funded warrants 428,570 4 ( 4 ) - Issuance of common stock for modification of notes payable 441,178 4 847,058 847,062 Net income 1,473,237 1,473,237 Balance as of June 30, 2025 9,621,926 $ 96 $ 29,508,354 $ ( 9,838 ) $ ( 127,500 ) $ ( 41,750,312 ) $ ( 12,379,200 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements 5 Synergy CHC Corp. Unaudited Condensed Consolidated Statements of Cash Flows For the six months ended For the six months ended June 30, 2025 June 30, 2024 Cash Flows from Operating Activities Net income $ 2,349,501 $ 1,235,716 Adjustments to reconcile net income to net cash used in operating activities: Amortization of debt discount and debt issuance cost 892,435 - Depreciation and amortization 66,667 66,667 Stock based compensation - 4,611 Stock issued for modification of notes payable 847,062 - Foreign currency transaction loss (gain) ( 9,068 ) 23,345 Remeasurement loss (gain) on translation of foreign subsidiary 8,990 ( 5,113 ) Non cash implied interest - 4,799 Gain on settlement of debt ( 2,154,522 ) - Changes in operating assets and liabilities: Accounts receivable ( 1,748,852 ) ( 1,161,992 ) Other receivables ( 25,457 ) - Loan receivable, related party ( 52,824 ) 35,449 Inventory ( 647,606 ) 1,805,950 Prepaid expenses 283,848 ( 276,818 ) Prepaid expense, related party ( 488,379 ) ( 326,682 ) Income taxes payable 23,495 262,374 Contract liabilities ( 19,365 ) ( 2,949 ) Accounts payable and accrued liabilities ( 610,770 ) ( 2,804,381 ) Accounts payable, shareholder 385,114 ( 980 ) Net cash used in operating activities ( 899,731 ) ( 1,140,005 ) Cash Flows from Investing Activities - - Cash Flows from Financing Activities Advances from related party 135,000 1,509,226 Repayment of notes payable, related party ( 135,000 ) ( 84,500 ) Proceeds from notes payable 18,996,250 600,000 Payment of loan financing fees ( 1,980,914 ) - Repayment of notes payable, shareholder ( 10,000,000 ) - Repayment of notes payable ( 5,382,903 ) ( 1,617,335 ) Net cash provided by financing activities 1,632,433 407,391 Effect of exchange rate on cash, cash equivalents and restricted cash 37,939 187,373 Net increase (decrease) in cash, cash equivalents and restricted cash 770,641 ( 545,241 ) Cash and restricted cash, beginning of year 787,920 732,534 Cash and restricted cash, end of period $ 1,558,561 $ 187,293 Supplemental Disclosure of Cash Flow Information: Cash paid during the period for: Interest $ 896,734 $ 1,850,896 Income taxes $ - $ 44,197 Supplemental Disclosure of Noncash Investing and Financing Activities: Accounts payable converted to loan payable upon settlement $ - $ 3,770,824 Reduction of short term related party note payable by reduction of prepaid balance $ - $ 328,003 Issuance of common stock for loan financing $ 117,648 $ - Issuance of pre-funded warrants for settlement of shareholder notes payable $ 899,993 $ - Exercise of pre-funded warrants $ 4 $ - Loan fees payable to lender $ 375,000 $ - The accompanying notes are an integral part of these unaudited condensed consolidated financial statements 6 Synergy CHC Corp. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Note 1 – Nature of the Business Synergy CHC Corp. (“Synergy”, “we”, “us”, “our” or the “Company”) (formerly Synergy Strips Corp.) was incorporated on December 29, 2010 in Nevada under the name “Oro Capital Corporation.” On April 21, 2014, the Company changed its fiscal year end from July 31 to December 31. On April 28, 2014, the Company changed its name to “Synergy Strips Corp.”. On August 5, 2015, the Company changed its name to “Synergy CHC Corp.” The Company is a consumer health care company that is in the process of building a portfolio of best-in-class consumer product brands. Synergy’s strategy is to grow its portfolio both organically and by further acquisitions. Effective January 1, 2019 the Company has merged its U.S. subsidiaries (Neuragen Corp., Breakthrough Products, Inc., Sneaky Vaunt Corp., and The Queen Pegasus Corp.) into the parent company. Synergy is the sole owner of four subsidiaries: NomadChoice Pty Ltd., Hand MD Corp., Synergy CHC Inc. and Synergy CHC Mexico, and the results have been consolidated in these statements. Synergy CHC Mexico was incorporated during May 2025 for the purposes of expanding into Mexico. Note 2 – Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements as of June 30, 2025 and for the three and six months ended June 30, 2025 and 2024 are unaudited. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2024 and footnotes thereto. All amounts referred to in the notes to the consolidated financial statements are in United States Dollars ($) unless stated otherwise. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Reverse Stock Split On September 11, 2024, the Company effected a 1-for-11.9 reverse stock split with respect to its common stock. The reverse stock split did not change the number of authorized shares of common stock or par value. All references in these condensed consolidated financial statements to shares, share prices, exercise prices and other per share information in all periods have been adjusted, on a retroactive basis, to reflect the reverse stock split. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Significant estimates included are assumptions about collection of accounts receivable, current income taxes, deferred income taxes valuation allowance, useful life of intangible assets, impairment analysis of intangible assets, estimates used in the fair value calculation of stock based compensation, assumptions used in Black-Scholes-Merton, or BSM, valuation methods, such as expected volatility, risk-free interest rate and expected dividend rate, accrual of sales returns, and accrual of legal expense. The results of any changes in accounting estimates are reflected in the financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period that they are determined to be necessary. 7 Cash and Cash Equivalents The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. As of June 30, 2025 and December 31, 2024, the Company had no cash equivalents. The Company maintains its cash in banks insured by the Federal Deposit Insurance Corporation (FDIC) in accounts that at times may be in excess of the federally insured limit of $ 250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. At June 30, 2025 and December 31, 2024, the uninsured balances amounted to $ 1,286,994 and $ 503,215 , respectively. Restricted Cash The following table provides a reconciliation of cash and restricted cash reported within the statement of financial position that sum to the total of the same such amounts shown in the statement of cash flows. June 30, 2025 December 31, 2024 Cash $ 1,458,561 $ 687,920 Restricted cash 100,000 100,000 Total cash and restricted cash shown in the statement of cash flows $ 1,558,561 $ 787,920 Amounts included in restricted cash represent amounts held for credit card collateral. Intangible Assets The Company evaluates the recoverability of intangible assets periodically and takes into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. All of the intangible assets are subject to amortization. Intangible assets are amortized on a straight-line basis over the useful lives. Long-lived Assets Long-lived assets include intangible assets other than those with indefinite lives. The Company assesses the carrying value of its long-lived asset groups when indicators of impairment exist and recognizes an impairment loss when the carrying amount of a long-lived asset is not recoverable when compared to undiscounted cash flows expected to result from the use and eventual disposition of the asset. Indicators of impairment include significant underperformance relative to historical or projected future operating results, significant changes in the Company’s use of the assets or in its business strategy, loss of or changes in customer relationships and significant negative industry or economic trends. When indications of impairment arise for a particular asset or group of assets, the Company assesses the future recoverability of the carrying value of the asset (or asset group) based on an undiscounted cash flow analysis. If carrying value exceeds projected, net, undiscounted cash flows, an additional analysis is performed to determine the fair value of the asset (or asset group), typically a discounted cash flow analysis, and an impairment charge is recorded for the excess of carrying value over fair value. Revenue Recognition The Company recognizes revenue in accordance with the Financial Accounting Standards Board’s (“FASB”), Accounting Standards Codification (“ASC”) ASC 606, Revenue from Contracts with Customers (“ASC 606”). Revenues are recognized when control is transferred to customers in amounts that reflect the consideration the Company expects to be entitled to receive in exchange for those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied. 8 The Company recognizes revenue upon shipment from its fulfillment centers. Certain of the Company’s distributors may also perform a separate function as a co-packer on the Company’s behalf. In such cases, ownership of and title to the Company’s products that are co-packed on the Company’s behalf by those co-packers who are also distributors, passes to such distributors when the Company is notified by them that they have taken transfer or possession of the relevant portion of the Company’s finished goods. Freight billed to customers is presented as revenues, and the related freight costs are presented as cost of goods sold. Cancelled orders are refunded if not already dispatched, refunds are only paid if stock is damaged in transit, discounts are only offered with specific promotions and orders will be refilled if lost in transit. The Company recognizes revenue for its digital products in the month the download by the customer occurs. All product sales were initiated based upon the retailer’s purchase orders at a fixed transaction price and revenues recognized when the products were shipped to the Company’s customers. The Company accounts for its IP license revenue, which provides the Company’s customer with rights to use the Company’s IP, in accordance with ASC 606. A license may be perpetual or time limited in its application. In accordance with ASC 606, the Company will continue to recognize revenue from IP license at the time of delivery when the customer accepts control of the IP, as the IP is functional without professional services, updates and technical support. The Company has concluded that its IP license is distinct as the customer can benefit from the functional IP on its own. Therefore, the Company has determined the right to use its IP was satisfied at a point in time (on the date the rights to the IP were granted). Contract Assets The Company does not have any contract assets such as work-in-process. All trade receivables on the Company’s condensed consolidated balance sheet are from contracts with customers. Contract Costs Costs incurred to obtain a contract are capitalized unless short term in nature. As a practical expedient, costs to obtain a contract that are short term in nature are expensed as incurred. The Company does not have any contract costs capitalized as of June 30, 2025 and December 31, 2024. Contract Liabilities The Company’s contract liabilities consist of advance customer payments. Contract liability results from transactions in which the Company has been paid for products by customers, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the contract liabilities are recognized. June 30, 2025 December 31, 2024 Beginning balance $ 24,252 $ 14,202 Additions 4,887 24,252 Recognized as revenue ( 24,252 ) ( 14,202 ) Ending balance $ 4,887 $ 24,252 Accounts receivable Accounts receivable are generally unsecured. The Company establishes an allowance for doubtful accounts receivable based on the age of outstanding invoices and management’s evaluation of collectability. Accounts are written off after all reasonable collection efforts have been exhausted and management concludes that likelihood of collection is remote. Any future recoveries are applied against the allowance for doubtful accounts. As of both June 30, 2025 and December 31, 2024, allowance for doubtful accounts was $ 0 . Advertising Expense The Company expenses marketing, promotions and advertising costs as incurred. Such costs are included in selling and marketing expense in the accompanying consolidated statements of operations. Research and Development Costs incurred in connection with the development of new products and processing methods are charged to general and administrative expenses as incurred. 9 Income Taxes The Company utilizes FASB ASC 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized. The Company generated a deferred tax asset through net operating loss carry-forward. However, a valuation allowance of 100 % has been established due to the uncertainty of the Company’s realization of the net operating loss carry forward prior to its expiration. NomadChoice Pty Ltd, the Company’s wholly-owned subsidiary is subject to income taxes in the jurisdictions in which it operates. Significant judgment is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The company recognizes liabilities for anticipated tax audit issues based on the Company’s current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made. Synergy CHC Inc., a wholly-owned foreign subsidiary, is subject to income taxes in the jurisdictions in which it operates. Significant judgment is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The company recognizes liabilities for anticipated tax audit issues based on the Company’s current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made. Net Earnings (Loss) Per Common Share The Company computes earnings per share under ASC subtopic 260-10, Earnings Per Share. Basic earnings (loss) per share is computed by dividing the net income (loss) attributable to the common stockholders (the numerator) by the weighted average number of shares of common stock outstanding (the denominator) during the reporting periods. Diluted earnings per share is computed by increasing the denominator by the weighted average number of additional shares that could have been outstanding from securities convertible into common stock (using the “treasury stock” method), unless their effect on net income per share is anti-dilutive. As of June 30, 2025 and 2024, options to purchase 252,102 and 336,134 shares of common stock, respectively, were outstanding. As of June 30, 2025, warrants to purchase 103,500 shares of common stock were outstanding. The following is a reconciliation of the number of shares used in the calculation of basic and diluted earnings per share for the three and six months ended June 30, 2025 and 2024: For the three months ended For the six months ended June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Net income after tax $ 1,473,237 $ 655,186 $ 2,349,501 $ 1,235,716 Weighted average common shares outstanding 8,928,548 7,373,745 8,743,639 7,373,745 Incremental shares from the assumed exercise of dilutive stock options - - - - Dilutive potential common shares 8,928,548 7,373,745 8,743,639 7,373,745 Net earnings per share: Basic $ 0.17 $ 0.09 $ 0.27 $ 0.17 Diluted $ 0.17 $ 0.09 $ 0.27 $ 0.17 10 The following securities were not included in the computation of diluted net earnings per share as their effect would have been antidilutive: For the three and six months ended June 30, 2025 June 30, 2024 Options to purchase common stock 252,102 336,134 Warrants to purchase common stock 103,500 - Fair Value Measurements The Company measures and discloses the fair value of assets and liabilities required to be carried at fair value in accordance with ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a framework for measuring fair value, and enhances fair value measurement disclosure. ASC 825 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825 establishes three levels of inputs that may be used to measure fair value: Level 1 - Quoted prices for identical assets or liabilities in active markets to which the Company has access at the measurement date. Level 2 - Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 - Unobservable inputs for the asset or liability. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Our financial instruments consisted primarily of cash and cash equivalents, restricted cash, accounts receivable, other receivable, loan receivable, accounts payable and accrued liabilities and short term and long term loans payable. The carrying amounts of such financial instruments approximate their respective estimated fair value due to the short-term maturities and approximate market interest rates of these instruments. As of both June 30, 2025 and December 31, 2024, the Company has determined that there were no assets or liabilities measured at fair value on a recurring basis. Inventory Inventory consists of raw materials, components and finished goods. The Company’s inventory is stated at the lower of cost (FIFO cost basis) or net realizable value. Finished goods include the cost of labor to assemble the items. Foreign Currency Translation The functional currency of one of the Company’s foreign subsidiaries (NomadChoice Pty Ltd.) is the U.S. Dollar. The Company’s foreign subsidiary maintains its records using local currency (Australian Dollar). All monetary assets and liabilities of the foreign subsidiary were translated into U.S. Dollars at quarter end exchange rates, non-monetary assets and liabilities of the foreign subsidiary were translated into U.S. Dollars at transaction day exchange rates. Income and expense items related to non-monetary items were translated at exchange rates prevailing during the transaction date and other incomes and expenses were translated using average exchange rate for the period. The resulting translation adjustments, net of income taxes, were recorded in statements of operations as Remeasurement gain or loss on translation of foreign subsidiary. The functional currency of the Company’s other foreign subsidiary (Synergy CHC Inc.) is the Canadian Dollar (CAD). The Company’s foreign subsidiary maintains its records using local currency (CAD). All assets and liabilities of the foreign subsidiary were translated into U.S. Dollars at period end exchange rates and stockholders’ equity is translated at the historical rates. Income and expense items were translated using average exchange rate for the period. The resulting translation adjustments, net of income taxes, are reported as other comprehensive income and accumulated other comprehensive income in the stockholder’s equity in accordance with ASC 220 – Comprehensive Income. 11 The exchange rates used to translate amounts in AUD and CAD into USD for the purposes of preparing the consolidated financial statements were as follows: Balance sheet: June 30, 2025 December 31, 2024 Period-end AUD: USD exchange rate $ 0.6572 $ 0.6183 Period-end CAD: USD exchange rate $ 0.7330 $ 0.6950 Income statement: June 30, 2025 June 30, 2024 Average six months AUD: USD exchange rate $ 0.6338 $ 0.6585 Average six months CAD: USD exchange rate $ 0.7098 $ 0.7361 Average three months AUD: USD exchange rate $ 0.6403 $ 0.6591 Average three months CAD: USD exchange rate $ 0.7226 $ 0.7308 Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated into either Australian Dollars or Canadian Dollars, as the case may be, at the rate on the date of the transaction and included in the results of operations as incurred. Concentrations of Credit Risk In the normal course of business, the Company provides credit terms to its customers; however, collateral is not required. Accordingly, the Company performs credit evaluations of its customers and maintains allowances for possible losses which, when realized, were within the range of management’s expectations. From time to time, a higher concentration of credit risk exists on outstanding accounts receivable for a select number of customers due to individual buying patterns. Warehousing costs Warehouse costs include all third-party warehouse rent fees and are charged to selling and marketing expenses as incurred. Any additional costs relating to assembly or special pack-outs of the Company’s products are charged to cost of sales. Product display costs All displays manufactured and purchased by the Company are for placement of product in retail stores. This also includes all costs for display execution and setup and retail services are charged to cost of sales and expensed as incurred. Cost of Sales Cost of sales includes the purchase cost of products sold, all costs associated with getting the products into the retail stores including buying and transportation costs and the hosting of the Company’s online Application. Debt Issuance Costs Debt issuance costs consist primarily of arrangement fees, professional fees and legal fees. These costs are netted off with the related loan and are being amortized to interest expense over the term of the related debt facilities. Shipping Costs Shipping and handling costs billed to customers are recorded in sales. Shipping costs incurred by the company are recorded in selling and marketing expenses. 12 Related parties Parties are considered to be related to the Company if the parties that, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests (see Note 9). Segment Reporting Segment identification and selection is consistent with the management structure used by the Company’s chief executive officer who is the Chief Operating Decision Maker (CODM) to evaluate performance and make decisions regarding resource allocation, as well as the materiality of financial results consistent with that structure. Based on the Company’s management structure and method of internal reporting, the Company has one operating segment. The Company derives its revenue from the sale of nutraceuticals. The accounting policies of the segment are the same as those described in the summary of significant accounting policies. The chief operating decision maker assesses performance for the segment and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income. The measure of segment assets is reported on the balance sheet as total consolidated assets. Significant segment expenses include retailer promotions, freight and fulfillment, marketing and salaries. The Company’s CODM reviews financial information presented and decides how to allocate resources based on net income. The Company does have intra-entity sales or transfers. The Company’s CODM does not review operating results on a disaggregated basis; rather, the chief operating decision maker reviews operating results on an aggregated basis. Presentation of Financial Statements – Going Concern Going Concern Evaluation In connection with preparing unaudited condensed consolidated financial statements for the six months ended June 30, 2025, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to continue as a going concern within one year from the date that the unaudited condensed consolidated financial statements are issued. The Company considered the following: ● At June 30, 2025, the Company had an accumulated deficit of $ 41,750,312 . ● During the six months ended June 30, 2025, there was a decrease in revenue of $ 1,131,173 . ● During the six months ended June 30, 2025, the Company had $ 899,731 of net cash used in operating activities Ordinarily, conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern relate to the entity’s ability to meet its obligations as they become due. The Company evaluated its ability to meet its obligations as they become due within one year from the date that the financial statements are issued by considering the following: ● At June 30, 2025, the Company had working capital surplus of $ 12,383,132 . ● During the six months ended June 30, 2025, the Company refinanced a portion of its outstanding debts to one lender with favorable terms (see Note 11). ● During the six months ended June 30, 2025, the Company had net income of $2,349,501. ● The Company has the option of publicly selling its common stock to raise additional capital. ● The Company has the option of selling any of its brands to raise additional capital. Management concluded that above factors alleviate doubts about the Company’s ability to generate enough cash from operations and other available sources to satisfy its obligations for the next twelve months from the issuance date. 13 The Company will take the following actions if it starts to trend unfavorably to its internal profitability and cash flow projections, in order to mitigate conditions or events that would raise substantial doubt about its ability to continue as a going concern: ● Raise additional capital through line of credit and/or loans financing for future mergers and acquisitions. ● Implement restructuring and cost reductions. ● Raise additional capital through an additional capital raise. Correction of Prior Period Immaterial Errors: The Company has identified an immaterial error in the Company’s previously issued consolidated financial statements related to Treasury Shares held by its wholly owned subsidiary. The adjustment pertained to the acquisition of remaining 50 % ownership interest in Hand MD Corp. during July 2021 and accordingly the shares previously issued to Hand MD Corp. required correction on the financial statement as Treasury Shares on the consolidated balance sheet. The amount of the reclassification is $ 127,500 and has no effect on the consolidated statement of income and other comprehensive income (except for earnings per share and weighted average shares) and statement of cash flow. In evaluating whether the previously issued consolidated financial statements were materially misstated for the interim or annual periods prior to December 31, 2022, the Company applied the guidance of ASC 250, Accounting Changes and Error Corrections , SEC Staff Accounting Bulletin (“SAB”) Topic 1.M, Assessing Materiality and SAB Topic 1.N, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements , and concluded that the effect of the errors on prior period annual financial statements was immaterial. The guidance states that prior-year misstatements which, if corrected in the current year would materially misstate the current year’s financial statements, must be corrected by adjusting prior year financial statements, even though such correction previously was and continues to be immaterial to the prior-year financial statements. Correcting prior-year financial statements for such immaterial misstatements does not require previously filed reports to be amended. The Company’s earnings per share has been revised from the amounts previously reported to correct the error and the impact of the reclassification is shown in the below table. Earnings Per Share for the six months ended June 30, 2024: As Previously Reported Corrections As Adjusted Earnings per share $ 0.16 $ 0.01 $ 0.17 Weighted average common shares outstanding 7,553,818 ( 180,073 ) 7,373,745 Earnings Per Share for the three months ended June 30, 2024: As Previously Reported Corrections As Adjusted Earnings per share $ 0.08 $ 0.01 $ 0.09 Weighted average common shares outstanding 7,553,818 ( 180,073 ) 7,373,745 Recent Accounting Pronouncements In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” (“ASU 2023-09”). ASU 2023-09 amends the rules on income tax disclosures to require entities to disclose specific categories in the rate reconciliation, the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and income tax expense or benefit from continuing operations (separated by federal, state, and foreign). In addition, ASU 2023-09 requires entities to disclose their income tax payments to international, federal, state, and local jurisdictions, among other changes. The amendments can be applied on a prospective basis although retrospective application is permitted. The amendments are effective for the fiscal years beginning after December 15, 2024, with early adoption permitted. The adoption of ASU 2023-09 has not affected the Company’s financial statements. In October 2023, the FASB issued ASU No. 2023-06, “Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative” (“ASU 2023-06”). ASU 2023-06 amends U.S. GAAP to reflect updates and simplifications to certain disclosure and presentation requirements referred to FASB by the Securities and Exchange Commission (“SEC”). The targeted amendments incorporate 14 of the 27 disclosures referred by the SEC into codification. Each amendment in ASU 2023-06 is effective on either the date on which the SEC’s removal of the related disclosure requirement from Regulation S-X or Regulation S-K becomes effective, or on June 30, 2027, if the SEC has not removed the requirements by that date. The Company is currently evaluating the impact this update will have on its Consolidated Financial Statements. 14 Note 3 – Income Taxes The Company utilizes FASB ASC 740, “Income Taxes,” which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the difference between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized. Deferred income taxes arise from temporary differences resulting from income and expense items reported for financial accounting and tax purposes in different periods. Deferred taxes are classified as current or non-current, depending on the classification of assets and liabilities to which they relate. Deferred taxes arising from temporary differences that are not related to an asset or liability are classified as current or noncurrent depending on the periods in which the temporary differences are expected to reverse. The Company does not have any uncertain tax positions. For U.S. purposes, the Company has not completed its evaluation of NOL utilization limitations under Internal Revenue Code, as amended (the “Code”) Section 382/383, change of ownership rules. If the Company has had a change in ownership, the NOL’s would be limited or eliminated, as to the amount that could be utilized each year, based on the Code. NOL’s attributable to Breakthrough Products, Inc., which are the majority of the Company’s domestic NOL’s are Separate Return Limitation Year (SRLY) NOL’s. Such losses may generally not be available for use (limited or eliminated). The Company has not filed its State & Local Income/Franchise tax returns in states it is required to file, as such returns and liability remain open. The Company does not expect this to be a significant liability. The Company had tax expense of $ 178,647 and $ 306,571 for the six months ended June 30, 2025 and 2024, respectively. The Company had tax expense of $ 190,107 and $ 179,382 for the three months ended June 30, 2025 and 2024, respectively. The Company’s provision for tax expense amount, computed by applying the statutory federal income tax rate of 21 % in 2025 and 2024 to income before taxes, differs from the effective tax rate, due primarily to state income taxes and permanent items (plus utilization of NOL carryforwards in 2023). The Company also has net operating loss carryforwards of approximately $ 48,700,000 and approximately $ 50,800,000 (United States, Canada and Australia) included in the deferred tax assets for June 30, 2025 and December 31, 2024, respectively, the majority attributable to the acquisition of Breakthrough Products, Inc. However, due to limitations of carryover attributes and separate return limitation year rules, it is unlikely the company will benefit from the NOLs and thus Management has determined a 100 % valuation allowance is required. Further, the Company has not completed an evaluation of the NOLs attributable to Breakthrough Products, Inc. at the date of this report. Note 4 – Accounts Receivable Accounts receivable, net of allowances for doubtful accounts, consisted of the following: June 30, 2025 December 31, 2024 Trade accounts receivable $ 7,069,889 $ 5,321,037 Other receivables 2,025,094 1,999,637 Less allowances - - Total accounts receivable, net $ 9,094,983 $ 7,320,674 During the three and six months ended June 30, 2025 and 2024, the Company charged $ 0 to bad debt expense. 15 Note 5 – Prepaid Expenses At June 30, 2025 and December 31, 2024, prepaid expenses consisted of the following: June 30, 2025 December 31, 2024 Advances for inventory $ 260,572 $ 605,913 Insurance 36,429 2,879 Deposits 14,000 14,000 Prepaid consulting fees, related party 695,587 296,981 Rent, related party 105,757 15,985 Advertising and promotions* 859,920 869,920 Conferences 9,500 15,000 Professional fees 41,000 13,000 IT expenses 33,479 25,404 Miscellaneous 7,850 481 Total $ 2,064,094 $ 1,859,563 * During the year ended December 31, 2024, the Company bartered inventory worth $ 859,920 for media credits to be used at the Company’s discretion. Note 6 – Concentration of Credit Risk Cash and cash equivalents The Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation (FDIC) in accounts that at times may be in excess of the federally insured limit of $ 250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. At June 30, 2025 and December 31, 2024, the uninsured balances amounted to $ 1,286,994 and $ 503,215 respectively. Accounts receivable As of June 30, 2025 and December 31, 2024, two and one customers accounted for 84 % and 74 %, respectively, of the Company’s trade accounts receivable. Major customers For the six months ended June 30, 2025, three customers accounted for approximately 80 % of the Company’s net revenue. For the six months ended June 30, 2024, two customers accounted for approximately 70 % of the Company’s net revenue. For the three months ended June 30, 2025, three customers accounted for approximately 82 % of the Company’s net revenue. For the three months ended June 30, 2024, two customers accounted for approximately 72 % of the Company’s net revenue. Substantially all of the Company’s business is with companies in the United States. 16 Accounts payable As of June 30, 2025 and December 31, 2024, two and four vendors accounted for 58 % and 69 %, respectively, of the Company’s accounts payable. Major suppliers For the six months ended June 30, 2025, three suppliers accounted for approximately 47 % of the Company’s purchases. For the six months ended June 30, 2024, one supplier accounted for approximately 21 % of the Company’s purchases. For the three months ended June 30, 2025, one supplier accounted for approximately 39 % of the Company’s purchases. For the three months ended June 30, 2024, one supplier accounted for approximately 13 % of the Company’s purchases. Substantially all of the Company’s business is with suppliers in the United States. Note 7 – Inventory Inventory consists of finished goods, components and raw materials. The Company’s inventory is stated at the lower of cost (FIFO cost basis) or net realizable value. The carrying value of inventory consisted of the following: June 30, 2025 December 31, 2024 Finished goods $ 2,213,770 $ 1,578,561 Components 105,388 92,991 Raw materials 45,000 45,000 Total inventory $ 2,364,158 $ 1,716,552 During the six months ended June 30, 2025 and 2024, the Company had no inventory write-offs. Note 8 – Intangible Assets June 30, 2025 December 31, 2024 License Fee $ 450,000 $ 450,000 Less accumulated amortization ( 233,333 ) ( 166,667 ) Intangible assets, net $ 216,667 $ 283,333 Amortization for the six months ended June 30, 2025 and 2024 was $ 66,666 and $ 66,667 , respectively. The estimated aggregate amortization expense over each of the next five years is as follows: 2025 (remaining) $ 66,667 2026 133,333 2027 16,667 Note 9 – Related Party Transactions The Company paid consulting fees through June 2025 to a company owned by Mr. Jack Ross, Chief Executive Officer of the Company. The Company expensed $ 0 during the three and six months ended June 30, 2025 and 2024 as consulting fees. The Company advanced $ 398,606 and $ 326,683 in prepaid consulting fees during the six months ended June 30, 2025 and 2024, respectively. The prepaid balance as of June 30, 2025 and December 31, 2024 was $ 695,587 and $ 296,981 , respectively. During the six months ended June 30, 2025 and 2024, the Company was advanced $ 135,000 and $ 1,400,000 , respectively, in the form of a short-term note. During the six months ended June 30, 2025 the Company repaid the $ 135,000 advance. The balance owed as of both June 30, 2025 and December 31, 2024 was $ 0 . During the three months ended June 30, 2025, the Company paid $ 53,720 in the manner of prepaid rent for one year. The Company expensed $ 4,477 during the six months ended June 30, 2025, leaving a prepaid balance of $ 49,243 . The Company paid rent through June 2025 to a company owned by Mr. Jack Ross, Chief Executive Officer of the Company. The Company expensed $ 60,000 Canadian Dollars ($ 42,587 US Dollars) for the six months ended June 30, 2025, leaving a prepaid balance of $ 77,100 Canadian Dollars ($ 53,514 US Dollars). 17 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 June 30, 2025 and December 31, 2024 the Company was owed $ 4,427,883 and $ 4,375,059 , respectively. This loan has a repayment date of December 31, 2025. If the loan is not repaid by January 1, 2026, the borrower will pledge the number of shares of borrower’s stock with a market value equal to the amount outstanding on the note as security to be released upon payment of the note. The Company entered into a transaction with a related party controlled by the CEO during the year ended December 31, 2023. The transaction was in the form of a short-term loan. The Company received $ 10,000 Canadian dollars (US Dollars $ 7,561 ). This amount was owed to the related party as of December 31, 2023 and was repaid during February 2024. During June 2024, the Company entered into Sixth Amended Agreement with Knight Therapeutics Inc., a shareholder, to modify prior Agreements. This modification consolidated outstanding loans and extended the maturity dates of the loans to March 31, 2026. The Company recognized interest expense of $ 623,355 and $ 1,117,459 during the six month periods ended June 30, 2025 and 2024, respectively. The Company recognized interest expense of $ 253,363 and $ 703,301 during the three month periods ended June 30, 2025 and 2024, respectively. During May and June 2025, the Company repaid the balance on this amended agreement (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. As of both June 30, 2025 and December 31, 2024, the total outstanding balance was $ 123,584 Canadian dollars. In US Dollars, the total outstanding balance was $ 90,587 and $ 85,891 as of June 30, 2025 and December 31, 2024, respectively. The Company expensed royalty of $ 7,788 and $ 41,277 for the six months ended June 30, 2025 and 2024, respectively. The Company expensed royalty of $ 3,239 and $ 18,799 for the three months ended June 30, 2025 and 2024, respectively. At June 30, 2025 and December 31, 2024, the Company owed Knight Therapeutics $ 2,368 and $ 2,753 , respectively, in connection with a royalty distribution agreement. Note 10 – Accounts Payable and Accrued Liabilities As of June 30, 2025 and December 31, 2024, accounts payable and accrued liabilities consisted of the following: June 30, 2025 December 31, 2024 Accrued payroll $ 195,889 $ 76,399 Legal fees 214,829 13,722 Commissions - 450,208 Manufacturers 1,635,113 409,744 Promotions 823,174 2,570,126 Accounting fees 80,000 210,386 Freight 154,659 149,549 Royalties, shareholder 92,955 88,644 Warehousing 514,872 261,046 Sales taxes 2,878 67,488 Payroll taxes 542,442 700,797 Professional fees 52,600 26,200 Insurance - 12,118 Interest 186,047 - Lender fees 375,000 - Others 89,873 155,441 Total $ 4,960,331 $ 5,191,868 The Company has estimated and accrued for its sales tax liability at $ 3,424 and $ 3,703 for the parent entity as of June 30, 2025 and December 31, 2024, respectively. 18 Note 11 – Notes Payable The Company’s notes payable at June 30, 2025 and December 31, 2024 are as follows: June 30, 2025 December 31, 2024 $ 10,000,000 August 9, 2017 Loan $ - $ 12,333,052 $ 2,000,000 and $ 6,000,000 Notes 9,794,165 9,794,165 $ 5,450,000 December 28, 2023 Loan - 2,802,445 $ 3,020,824 March 27, 2024 Loan 1,400,000 2,302,824 Other - 317,292 $ 2,268,000 February 2025 Loan 567,000 - $ 17,500,000 May 2025 Loan 17,500,000 - 29,261,165 27,549,778 Unamortized debt issuance cost and debt discount ( 2,387,309 ) ( 34,432 ) Total 26,873,856 27,515,346 Current portion, shareholder - ( 4,000,000 ) Current portion, other ( 1,894,857 ) ( 7,725,272 ) Long-term portion, shareholder - 8,333,053 Long-term portion, other $ 24,978,999 $ 7,457,022 $10,000,000 August 9, 2017 Loan: On August 9, 2017, the Company entered into a Second Amendment to Loan Agreement (“Second Amendment”) with Knight, pursuant to which Knight agreed to loan the Company an additional $ 10 million. The Company recognized interest expense of $ 253,363 and $ 703,301 for the three months ended June 30, 2025 and 2024, respectively. The Company recognized interest expense of $ 623,355 and $ 1,117,459 during the six months ended June 30, 2025 and 2024, respectively. During June 2024, the Company entered into Sixth Amended Agreement with Knight Therapeutics Inc., a shareholder, to modify prior Agreements. This modification consolidated outstanding loans and extended the maturity dates of the loans to March 31, 2026. On May 29, 2025, the Company satisfied $ 12,713,858 through a combination of (i) a $ 10,000,000 cash repayment, (ii) an early payment discount of $ 1,213,858 and (iii) a conversion of $ 1,500,000 into equity (the “Equity Conversion”). On June 11, 2025 (the “Initial Exercise Date”), the Company issued a pre-funded common stock purchase warrant (the “Pre-Funded Warrant”) to purchase up to 428,570 shares of common stock (each a “Warrant Share”), to Knight, in connection with the Equity Conversion. The Pre-Funded Warrant expires upon the earlier of the date the Pre-Funded Warrant is exercised in full, and June 11, 2026. The aggregate exercise price of the Pre-Funded Warrant, except for a nominal exercise price of $ 0.00001 per Warrant Share, was pre-funded to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise price of $ 0.00001 per Warrant Share) shall be required to be paid by Knight to effect any exercise of the Pre-Funded Warrant. The Pre-Funded Warrant may be exercised, in whole or in part, by means of a “cashless exercise.” Pursuant to Section 2(f) of the Pre-Funded Warrant, the Pre-Funded Warrant will be automatically exercised via “cashless exercise” upon the earlier of (i) June 11, 2026, or (ii) the closing of the next sale of equity securities of the Company. The Company relied upon the exemption from registration provided by Section 4(a)(2) of the Securities Act for transactions by an issuer not involving a public offering to issue the Pre-Funded Warrant. The Company valued 428,570 pre-funded warrants at $ 899,993 resulting in a gain to the Company of $ 1,813,865 upon settlement of this loan. As of June 30, 2025 and December 31, 2024 the total consolidated amount outstanding on these loans, including accrued interest and royalties was $ 0 and $ 12,333,052 , respectively. $2,000,000 February 10, 2022 Loan: On February 10, 2022, the Company entered into a promissory note for $ 2,000,000 with an individual which was to be repaid with subsequent financing. Subsequently and pursuant to the modification agreement entered into on June 14 th , 2023, effective September 9, 2022, the promissory loan would bear all the same characteristics as the additional $ 6,000,000 loan noted below. 19 $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. 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. On May 30, 2025, the Company entered into a Subordination Agreement in relation to this loan, whereby this loan becomes subordinated debt to the senior lender ( $ 17,500,000 May and June 2025 Loan) . This loan may only be repaid based on certain conditions which must be met before payment can be made. There is no maturity date on this loan. “Interest Payment Conditions” means with respect to any payment of interest on any Sanders Note, the satisfaction of the following conditions: (a) as of the date of any such interest payment and immediately after giving effect thereto, no Default or Event of Default has occurred and is continuing; (b) Liquidity (prior to and after giving effect to such payment) shall not be less than $ 2,000,000 ; (c) the Fixed Charge Coverage Ratio of the Borrower and its Subsidiaries for the period of 12 fiscal months of the Borrower and its Subsidiaries most recently ended prior to such payment (and, for the avoidance of doubt, without giving effect to such payment for purposes of determining Consolidated Net Interest Expense), shall be not less than 1.20 to 1.00; and (d) the Administrative Agent shall have received a certificate of an Authorized Officer of the Borrower certifying as to compliance with the preceding clauses and demonstrating (in reasonable detail) the calculation required thereby. “Principal Payment Conditions” means with respect to any payment or prepayment of principal on any Sanders Note, the satisfaction of the following conditions: (a) as of the date of any such principal payment and immediately after giving effect thereto, no Default or Event of Default has occurred and is continuing; (b) Liquidity (prior to and after giving effect to such payment) shall not be less than $ 4,000,000 ; (c) the Fixed Charge Coverage Ratio of the Borrower and its Subsidiaries for the period of 12 fiscal months of the Borrower and its Subsidiaries most recently ended prior to such payment (and, for the avoidance of doubt, without giving effect to such payment for purposes of determining Consolidated Net Interest Expense), shall be not less than 1.20 to 1.00; (d) the Consolidated Senior Net Leverage Ratio of the Borrower and its Subsidiaries as of the end of such fiscal quarter of the Borrower ending on or most recently preceding the date of such payment or prepayment was less than 2.75 to 1.00; (e) such payment or prepayment is made using only Net Cash Proceeds of an Equity Issuance which are not required to be applied as a mandatory prepayment pursuant to Section 2.5(c)(v) in an amount not to exceed fifty percent ( 50 %) of such Net Cash Proceeds; and (f) the Administrative Agent shall have received a certificate of an Authorized Officer of the Borrower certifying as to compliance with the preceding clauses and demonstrating (in reasonable detail) the calculation required thereby. On April 28, 2025, the Company entered into Assignment, Assumption and Release Agreement with the holder to release Jack Ross (CEO of the Company) from the obligation to personally grant warrants struck at $ 0.01 penny per share, covering 10 % of his stock to the lender for non-payment of principal amount plus loan renegotiation fees by December 31, 2024. The Company issued 441,178 shares valued at $ 847,062 to the lender for releasing Jack Ross (CEO) from this obligation. 20 $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 2025 and 2024, the Company made payments of $ 2,622,201 and $ 2,000,000 , respectively toward this loan. During June 2025, the supplier agreed to a Payoff Letter re: Settlement Agreement, resulting in a lesser prepay amount resulting in a gain to the Company of $ 180,245 . The outstanding loan balance at June 30, 2025 and December 31, 2024 was $ 0 and $ 2,802,445 , respectively. $3,020,824 March 27, 2024 Loan: On March 27, 2024, the Company entered into a confidential settlement agreement and mutual general release with a supplier. During 2025 and 2024, the Company made payments of $ 760,412 and $ 700,000 toward this loan. During June 2025, the supplier agreed to a Payoff Letter re: Settlement Agreement, resulting in a lesser prepay amount, resulting in a gain to the Company of $ 160,412 . The outstanding loan balance at June 30, 2025 and December 31, 2024 was $ 1,400,000 and $ 2,320,824 , respectively. This was subsequently repaid in full. The Company is required to make future payments as follows: 2025 $ 1,400,000 $418,100 May 1, 2024 Loan: On May 1, 2024, the Company entered into a loan agreement of $ 418,100 with Shopify Capital Inc. for an advancement of working capital from its online processing account. The Company received $ 370,000 from Shopify Capital Inc. and $ 48,100 was an original issue discount. The loan bears a repayment rate of 25% of daily sales. The Company recognized amortization of original issue discount of $ 21,989 and $ 32,297 which is included in interest expense in the statement of income during the three and six months ended June 30, 2025, respectively. The outstanding loan balance at June 30, 2025 and December 31, 2024 was $ 0 and $ 280,732 , respectively. $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. The Company 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 sales. The payment of such amounts is secured by a security interest in certain assets, undertakings and property pursuant to the Security Agreement, which will be released upon receipt of total payments of $ 118,650 . The Company recognized amortization of original issue discount of $ 2,135 and $ 1,464 , which is included in interest expense in the statement of income during the six months ended June 30, 2025 and 2024, respectively. The outstanding loan balance at June 30, 2025 and December 31, 2024 was $ 0 and $ 16,425 , net of unamortized original issue discount of $ 2,135 , respectively. 21 $800,000 December 5, 2024 Loan: On December 5, 2024, the Company entered into a cash advance agreement of $ 800,000 with Cedar Advance LLC for an advancement of working capital. The Company received $ 760,000 and recorded $ 40,000 as interest expense. The loan bears a repayment rate of $ 41,100 per week. In conjunction with the advance, the Company issued 18,000 shares of common stock to the consultant who facilitated the facility and thus recognized $ 97,920 as interest expense. The Company recognized total interest expense of $ 136,000 during the year ended December 31, 2024. The outstanding loan balance at December 31, 2024 was $ 0 . $2,268,000 February 2025 Loan: On January 29, 2025, the Company entered into a cash advance agreement of $ 2,268,000 with Cedar Advance LLC for an advancement of working capital. The Company received $ 1,496,250 and recorded $ 771,750 as original issue discount. The loan bears a repayment rate of $ 81,000 per week with a total payment of $ 2,268,000 . In conjunction with the advance, the Company issued 30,360 shares of common stock to the consultant who facilitated the facility and thus recognized $ 117,648 as financing cost. The Company recognized total interest expense of $ 422,857 and $ 817,255 and during the three and six months ended June 30, 2025, respectively. The outstanding loan balance at June 30, 2025 was $ 494,857 , net of unamortized debt discount and financing costs of $ 72,143 . $17,500,000 May 2025 Loan: On May 30, 2025, Synergy CHC Corp. (the “Company”) entered into a term loan credit agreement (the “Credit Agreement”) with ACP Agency, LLC (“ACP”). The Credit Agreement consists of a $ 15.0 million term loan (the “Term Loan”), up to $ 2.5 million in a committed delayed draw facility (the “Delayed Draw Facility”), and up to $ 2.5 million in an uncommitted term loan incremental facility (the “Incremental Facility”), which facilities are secured by all of the assets of the Company and certain of its subsidiaries; including, without limitation, a pledge of the Company’s equity interests in its subsidiaries and their respective rights to intellectual property. Further, the obligations of the Company under the Credit Agreement are guaranteed by the Company and certain of its subsidiaries. The proceeds of the Term Loan are to be used to repay existing indebtedness of the Company, pay related fees and transaction costs, and provide working capital to the Company. The proceeds of the Delayed Draw Facility are to be used to pay off all indebtedness owed by the Company pursuant to certain settlement agreements. All capitalized words used but not defined herein have the meanings assigned in the Credit Agreement. The Credit Agreement has customary representations, warranties and covenants including restrictions on indebtedness, liens, restricted payments and dividends, investments, asset sales and similar covenants and contains customary events of default. The Credit Agreement also contains covenants requiring the Company and its subsidiaries to maintain a maximum (x) consolidated senior net leverage ratio of (i) 3.25:1.00 for the quarter ending September 30, 2025, (ii) 3.25:1.00 for the quarter ending December 31, 2025, (iii) 3.00:1.00 for the quarter ending March 31, 2026, (iv) 2.75:1.00 for the quarter ending June 30, 2026, (v) 2.75:1.00 for the quarter ending September 30, 2026, and (vi) 2.50:1.00 for the quarter ending December 31, 2026 and each fiscal quarter ended thereafter and (y) a fixed charge coverage ratio of 1.20 for the quarter ending September 30, 2025 and each fiscal quarter ended thereafter. 22 Of the Term Loan, $ 175,000 is subject to repayment on each of January 1, 2026, April 1, 2026, July 1, 2026 and October 1, 2026 and the remaining balance is to be repaid in the amount of $ 350,000 beginning January 1, 2027 and the first day of each quarter thereafter. The Term Loan bears interest at a rate equal to the Term SOFR rate plus 8.50%. The Delayed Draw Facility and Incremental Facility, if applicable, shall bear interest following any advance of proceed thereunder, at a rate of either (x) (i) Term SOFR rate plus (ii) 8.5%, or (y) (i) a reference rate equal to the greater of (a) 6.0% per annum, (b) the federal funds rate plus 0.50% per annum, (c) the Term SOFR rate plus 1% per annum, and (d) the rate last quoted by The Wall Street Journal as the “Prime Rate” in the United States, plus (ii) 7.50%. The Company received $ 15,000,000 in May 2025 on the initial draw and $ 2,500,000 in June 2025 on a delayed draw. The proceeds of the loan were used to pay out existing debt. The Company recorded $ 2,355,914 as original debt discount. The Company recognized $ 40,748 as amortization during the period. The unamortized balance amounts to $ 2,315,166 at June 30, 2025. The note bears interest at Term SOFR rate, plus 8.5 %, currently 12.83 % per annum, and matures on May 30, 2029 . The Company recognized interest expense of $ 186,047 during the three months ended June 30, 2025. The Company is required to make future payments as follows: 2025 $ - 2026 $ 700,000 2027 $ 1,400,000 2028 $ 1,400,000 2029 $ 14,000,000 Note 12 – Stockholders’ Deficit 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. During 2025 and 2024 the Company issued 30,360 and 18,000 shares, respectively, to a consultant who facilitated a cash advance facility (Note 11). During 2025, the Company issued 428,570 pre-funded warrants to a Knight as a partial settlement of debt. These warrants were fully exercised during the six months ended June 30, 2025. During 2025, the Company issued 441,178 shares valued at $ 847,062 in conjunction with an assignment, assumption and release agreement with a note holder (see Note 11). As of June 30, 2025 and December 31, 2024, there were 9,621,926 and 8,721,818 shares issued, respectively, and 9,441,853 and 8,541,745 shares outstanding, respectively. 23 Note 13 – Commitments and Contingencies Litigation: From time to time the Company may become a party to litigation in the normal course of business. Management believes that there are no current legal matters that would have a material effect on the Company’s financial position or results of operations. Note 14 – Stock Options and Warrants The following table summarizes the options outstanding, option exercisability and the related prices for the shares of the Company’s common stock issued to employees and consultants under a stock option plan at June 30, 2025: Options Outstanding Options Exercisable Exercise Prices ($) Number Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price ($) Number Exercisable Weighted Average Exercise Price ($) $ 2.98 - 7.74 252,102 0.46 $ 6.15 252,102 $ 6.15 The stock option activity for the six months ended June 30, 2025 is as follows: Options Outstanding Weighted Average Exercise Price Outstanding at December 31, 2024 252,102 $ 6.15 Granted - - Exercised - - Expired or canceled - - Outstanding at June 30, 2025 252,102 $ 6.15 Stock-based compensation expense related to vested options was $ 0 during both the six months ended June 30, 2025 and 2024. Stock options outstanding as of June 30, 2025, as disclosed in the above table, have an intrinsic value of $ 0 . The following table summarizes the changes in warrants outstanding and the related prices for the shares of the Company’s common stock issued at June 30, 2025: Warrants Outstanding Warrants Exercisable Exercise Price ($) Number Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price ($) Number Exercisable Weighted Average Exercise Price ($) $ 11.70 103,500 3.57 $ 11.70 103,500 $ 11.70 24 The warrant activity for the six months ended June 30, 2025 is as follows: Warrants Outstanding Weighted Average Exercise Price Outstanding at December 31, 2024 103,500 $ 11.70 Granted 428,570 0.00001 Exercised ( 428,570 ) ( 0.00001 ) Expired or canceled - - Outstanding at June 30, 2025 103,500 $ 11.70 Stock warrants outstanding as of June 30, 2025, as disclosed in the above table, have an intrinsic value of $ 0 . During June 2025, the Company issued 428,570 warrants valued at $ 899,993 to settle a loan payable to a shareholder. The Company determined the value of the warrants 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 $ 2.10 , risk-free interest rate of 4.30 %, volatility of 97 %, expected term of 0.1 years and dividend yield of 0 %. Note 15 – Segments Segment identification and selection is consistent with the management structure used by the Company’s chief executive officer who is the Chief Operating Decision Maker (CODM) to evaluate performance and make decisions regarding resource allocation, as well as the materiality of financial results consistent with that structure. Based on the Company’s management structure and method of internal reporting, the Company has one operating segment. The Company derives its revenue from the sale of nutraceuticals. The accounting policies of the segment are the same as those described in the summary of significant accounting policies. The chief operating decision maker assesses performance for the segment and decides how to allocate resources based on net income that also is reported on the income statement as consolidated net income. The measure of segment assets is reported on the balance sheet as total consolidated assets. Significant segment expenses include retailer promotions, freight and fulfillment, marketing and salaries. The Company’s CODM reviews financial information presented and decides how to allocate resources based on net income. The Company does have any intra-entity sales or transfers. The Company’s CODM does not review operating results on a disaggregated basis; rather, the chief operating decision maker reviews operating results on an aggregated basis. Net sales attributed to customers in the United States and foreign countries for the three months ended June 30, 2025 and 2024 were as follows: June 30, 2025 June 30, 2024 United States $ 7,954,326 $ 6,705,486 Foreign countries 180,670 1,319,354 $ 8,134,996 $ 8,024,840 Foreign country sales primarily consist of sales in Canada. The Company’s net sales by product group for the three months ended June 30, 2025 and 2024 were as follows: June 30, 2025 June 30, 2024 Nutraceuticals $ 6,734,996 $ 8,024,840 License Revenue 1,400,000 - $ 8,134,996 $ 8,024,840 25 The Company’s net sales by major sales channel for the three months ended June 30, 2025 and 2024 were as follows: June 30, 2025 June 30, 2024 Online $ 2,074,439 $ 979,540 Retail 6,060,557 7,045,300 $ 8,134,996 $ 8,024,840 The Company’s significant segment expenses for the three months ended June 30, 2025 and 2024 were as follows: June 30, 2025 June 30, 2024 Retailer promotions $ 1,160,615 $ 1,191,671 Freight and fulfillment 396,436 501,982 Online marketing 931,994 1,005,771 Salaries and benefits, marketing 377,785 283,631 Other selling and marketing 195,381 317,164 IT expenses 163,608 158,035 Salaries and benefits, non-marketing 591,170 440,970 Professional fees 432,866 ( 119,829 ) Travel 71,895 55,064 Other general and administrative expenses 259,786 124,565 Amortization 33,334 33,334 $ 4,614,870 $ 3,992,358 Net sales attributed to customers in the United States and foreign countries for the six months ended June 30, 2025 and 2024 were as follows: June 30, 2025 June 30, 2024 United States $ 15,409,050 $ 14,984,092 Foreign countries 896,480 2,452,611 $ 16,305,530 $ 17,436,703 Foreign country sales primarily consist of sales in Canada. The Company’s net sales by product group for the six months ended June 30, 2025 and 2024 were as follows: June 30, 2025 June 30, 2024 Nutraceuticals $ 13,405,530 $ 17,436,703 License Revenue 2,900,000 - $ 16,305,530 $ 17,436,703 26 The Company’s net sales by major sales channel for the six months ended June 30, 2025 and 2024 were as follows: June 30, 2025 June 30, 2024 Online $ 4,836,284 $ 2,150,177 Retail 11,469,246 15,286,526 $ 16,305,530 $ 17,436,703 The Company’s significant segment expenses for the six months ended June 30, 2025 and 2024 were as follows: June 30, 2025 June 30, 2024 Retailer promotions $ 2,100,068 $ 2,731,307 Freight and fulfillment 894,184 1,098,279 Online marketing 1,863,821 1,850,009 Salaries and benefits, marketing 705,959 678,469 Other selling and marketing 374,450 526,831 IT expenses 304,184 295,899 Salaries and benefits, non-marketing 1,159,163 1,037,565 Professional fees 596,634 81,347 Travel 227,015 133,800 Other general and administrative expenses 539,043 458,580 Amortization 66,667 66,667 $ 8,831,188 $ 8,958,753 Long-lived assets (net) attributable to operations in the United States and foreign countries as of June 30, 2025 and December 31, 2024 were as follows: June 30, 2025 December 31, 2024 United States $ 216,667 $ 283,333 Foreign countries - - $ 216,667 $ 283,333 Note 16 – Subsequent Events Management evaluated all activities of the Company through the issuance date of the Company’s unaudited condensed consolidated financial statements and concluded that except as noted below, no subsequent events have occurred that would require adjustment or disclosure into the unaudited condensed consolidated financial statements. Subsequent to June 30, 2025, the Company has repaid $ 1,400,000 of principal on the March 27, 2024 loan, $ 416,614 of principal and $ 69,386 of interest on the February 2025 loan, $ 92,942 of interest on the March 8, 2022 loan and $ 379,371 of interest on the May 2025 loan. 27