Synergy CHC Corp. 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Disclosure controls and procedures are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer, concluded that as of the end of the period covered by this Annual Report, (i) the Company’s disclosure controls and procedures were not effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and (ii) the Company’s controls and procedures have not been designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act, is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management’s Report on Internal Controls Over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of management including our Chief Executive Officer and our Chief Financial Officer, the Company conducted an evaluation of the effectiveness of its internal control over financial reporting based on the framework established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO 2013. Based on the foregoing evaluation, management concluded that the Company’s internal controls over financial reporting were not effective because of the material weaknesses discussed below. This Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting because the attestation report requirement has been removed for “smaller reporting companies” under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. 39 The Company has identified material weaknesses in its internal control over financial reporting. A material weakness is a deficiency, or combination of deficiencies, in a company’s internal control over financial reporting such that there is a reasonable possibility that a material misstatement of its annual or interim financial statements will not be prevented or detected on a timely basis. The Company identified material weaknesses in its internal controls in the following areas: implementation of segregation of duties as part of our control activities and establishment of clearly defined roles within our finance and accounting functions. Management’s Remediation Measures As part of our plan to remediate this material weaknesses, we are performing a full review of our internal control procedures. We have implemented, and plan to continue to implement, new controls and new procedures and clearly define roles and responsibilities among the finance and accounting functions while continuing to segregate duties. The Company will continue to review and improve its internal controls over financial reporting to address the underlying causes of the material weakness and control deficiencies. Such material weaknesses and control deficiencies will not be remediated until the Company’s remediation plan has been fully implemented, and it has concluded that its internal controls are operating effectively for a sufficient period of time. Changes in Internal Control over Financial Reporting Except for the material weaknesses and the remediation efforts described above, no other change in our internal control over financial reporting (as defined by Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the year ended December 31, 2025, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. Item 9B. Other Information (a) None. (b) During the quarter ended December 31, 2025, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading agreement” or a “non-Rule 10b5-1 trading agreement” (in each case defined in Item 408 of Regulation S-K). Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 40 PART III Item 10. Directors, Executive Officers and Corporate Governance Information Regarding Directors and Executive Officers . The information required by this Item 10 relating to officers and directors and nominees for election to the Board of Directors is incorporated by reference to the Proxy Statement. Compliance with Section 16(a) of the Exchange Act . If applicable, the information required by this Item 10 with respect to compliance with Section 16(a) of the Exchange Act contained under the caption “Delinquent Section 16(a) Reports” in the Proxy Statement is incorporated by reference to the Proxy Statement. Code of Business Ethics and Conduct . In accordance with the information required by this Item 10 relating to the code of ethics required by Item 406 of Regulation S-K, the Company has a Code of Business Ethics and Conduct (the “Code”), which applies to its directors, officers, and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions (collectively, the “Covered Persons” and each a “Covered Person”). The full text of the Code is available on the investor relations section of our website, which is located at www.synergychc.com . The Company will provide a copy of the Code to any person without charge, upon request. Such requests should be made in writing to the following address: c/o Synergy CHC Corp., 770 Roosevelt Trail STE 8 #1016, N. Windham, Maine 04062. The Company intends to satisfy the SEC’s requirements regarding amendments to, or waivers from, the Code by posting such information on its website or by filing a Current Report on Form 8-K to disclose such information. Procedures for Stockholders to Recommend Director Nominees . There have been no material changes to the procedures by which security holders may recommend nominees to our Board. Audit Committee Information. The information required by this Item 10 relating to the Company’s audit committee financial experts and identification of the Company’s audit committee is incorporated by reference to the Proxy Statement. Insider Trading Policy The Company has an Insider Trading Policy which prohibits Covered Persons from buying or selling the Company’s securities while the Covered Person is aware of material nonpublic information about the Company. The Company believes that its Insider Trading Policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and any applicable listing standards. A copy of the Insider Trading Policy is filed as Exhibit 19.1 to this Annual Report. Item 11. Executive Compensation Information regarding executive compensation, compensation committee interlocks and insider participation is incorporated herein by reference to the Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Securities Authorized for Issuance under Share-Based Compensation Plans Information required by this item is incorporated herein by reference to the Proxy Statement. Security Ownership of Certain Beneficial Owners and Management Information required by this item is incorporated herein by reference to the Proxy Statement. Item 13. Certain Relationships and Related Transactions, and Director Independence The information relating to certain relationships and related transactions and director independence is incorporated herein by reference to the Proxy Statement. Item 14. Principal Accountant Fees and Services The information relating to the principal accounting fees and expenses is incorporated herein by reference to the Proxy Statement. 41 PART IV Item 15. Exhibits and Financial Statement Schedules (a) Documents filed as part of this Annual Report (1) All financial statements Report of Independent Registered Public Accounting Firm* F-2 Consolidated Balance Sheets as of December 31, 2025 and 2024 F-3 Consolidated Statements of Operations and Other Comprehensive (Loss) Income for the Years Ended December 31, 2025, and 2024 F-4 Consolidated Statements of Stockholders' Deficit for the Years Ended December 31, 2025 and 2024 F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024 F-6 Notes to Consolidated Financial Statements F-7 * RBSM LLP, PCAOB Firm ID No. 587 (2) Financial Statement Schedules All financial statement schedules are omitted because they are either inapplicable or not required, or because the required information is included in the Consolidated Financial Statements or notes thereto contained in this Annual Report (3) Exhibits required by Item 601 of Regulation S-K The following documents are filed as exhibits to this Annual Report: Exhibit No. Description 3.1 Articles of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on September 16, 2024). 3.2 Certificate of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K, filed by Synergy CHC Corp. with the SEC on June 18, 2025) 3.3 Amended and Restated Bylaws (incorporated by reference to Exhibit 3.4 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 4.1* Description of Securities 10.1# Sales and Marketing Consultant and Distribution Agreement, dated April 2, 2014, between Synergy Strips Corp. and Kenek Brands Inc. (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.2 Distribution, License and Supply Agreement, dated January 22, 2015, by and between Synergy Strips Corp. and Knight Therapeutics (Barbados) Inc. (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.3# Synergy Strips Corp. 2014 Stock Incentive Plan (incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.4# Synergy CHC Corp. 2024 Equity Incentive Plan and amendment thereto. (incorporated by reference to Exhibit 10.5 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.5# Amendment to Synergy CHC Corp. 2024 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by Synergy CHC Corp. with the SEC on June 18, 2025). 10.6 Amendment and Confirmation Agreement, dated December 3, 2015, by and among Knight Therapeutics (Barbados) Inc., Nomad Choice Pty Ltd., Synergy CHC Corp. and Breakthrough Products, Inc. (incorporated by reference to Exhibit 10.12 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.7 FOCUSfactor Distribution Agreement (Canada), dated December 23, 2016, between Knight Therapeutics Inc. and Synergy CHC Corp. (incorporated by reference to Exhibit 10.15 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.8 Distribution Agreement (Canada), dated February 15, 2016, between Knight Therapeutics Inc. and Nomad Choice Pty Ltd. (incorporated by reference to Exhibit 10.24 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.9 Distribution Agreement (Remaining Territories), dated February 15, 2016, between Knight Therapeutics (Barbados) Inc. and Nomad Choice Pty Ltd. (incorporated by reference to Exhibit 10.25 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.10 Distribution Agreement (Canada), dated January 1, 2017, between Knight Therapeutics Inc. and Sneaky Vaunt Corp. (incorporated by reference to Exhibit 10.26 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.11 Distribution Agreement (Remaining Territories), dated January 1, 2017, between Knight Therapeutics (Barbados) Inc. and Sneaky Vaunt Corp. (incorporated by reference to Exhibit 10.27 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.12+ Costco Wholesale Basic Vendor Agreement, dated October 9, 2009, between Factor Nutrition Labs LLC and Costco Wholesale Corporation (incorporated by reference to Exhibit 10.28 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 42 10.13+ Supplier Agreement by and among Factor Nutrition Labs LLC and Wal-Mart Stores, Inc., Wal-Mart Stores East, LP, Wal-Mart Stores East, Inc., Wal-Mart Stores Texas, LP, Sam’s West, Inc., and Sam’s East, Inc. (incorporated by reference to Exhibit 10.29 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.14 Master Vendor Agreement, dated July 26, 2022, between iHerb, LLC and Synergy CHC Corp. (incorporated by reference to Exhibit 10.30 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.15 Merchant Loan Agreement, dated January 29, 2024, between WebBank and Synergy CHC Corp. (incorporated by reference to Exhibit 10.31 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.16 Merchant Loan Agreement, dated May 1, 2024, between WebBank and Synergy CHC Corp. (incorporated by reference to Exhibit 10.32 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.17 Promissory Note, dated February 10, 2022, by Synergy CHC Corp. in favor of Don Sanders (incorporated by reference to Exhibit 10.33 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.18 Form of Securities Purchase Agreement, dated March 8, 2022, by and between Synergy CHC Corp. and the purchasers identified on the signature pages thereto (incorporated by reference to Exhibit 10.34 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.19 Modification Agreement, dated June 14, 2023, by and among Sanders Morris Harris, LLC, Mr. Don A. Sanders and Synergy CHC Corp. (incorporated by reference to Exhibit 10.36 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.20 Modification Agreement, dated March 31, 2024, by and among Sanders Morris Harris, LLC, Don A. Sanders and Synergy CHC Corp. (incorporated by reference to Exhibit 10.37 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.21 Form of Indemnification Agreement (incorporated by reference to Exhibit 10.38 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 10.22 Amended and Restated Promissory Note, dated August 28, 2024, by Boombod Ltd in favor of Synergy CHC Corp. (incorporated by reference to Exhibit 10.39 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on August 28, 2024). 10.23 Credit Agreement, dated as of May 30, 2025, by and among Synergy CHC Corp. as Borrower, each subsidiary of the Borrower listed as a Guarantor therein, the lenders from time-to-time party thereto as Lenders and ACP Agency, LLC, as Collateral Agent and Administrative Agent (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K, filed by Synergy CHC Corp. on June 4, 2025). 10.24 Form of Representative Warrant, dated August 27, 2025 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, filed by Synergy CHC Corp. on August 27, 2025). 14.1 Code of Business Ethics and Conduct (incorporated by reference to Exhibit 14.1 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 19.1 Insider Trading Policy (incorporated by reference to Exhibit 19.1 to the Annual Report on Form 10-K, filed by Synergy CHC Corp. on March 31, 2025). 21.1* List of subsidiaries of the Registrant 23.1* Consent of RBSM LLP 31.1* Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification of Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1* Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 32.2* Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002 97.1 Clawback Policy (incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-1, filed by Synergy CHC Corp. on June 28, 2024). 101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 104* Cover page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) # Denotes a management contract or compensatory plan or arrangement. + Certain confidential information contained in this agreement has been omitted because it is not material and would be competitively harmful if publicly disclosed. * Filed or furnished herewith. ¥ Certain schedules and exhibits to this agreement have been omitted in accordance with Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished to the SEC on request. Item 16. Form 10-K Summary None. 43 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (RBSM LLP, PCAOB Firm ID No. 587) F-2 Consolidated Financial Statements C onsolidated Balance Sheets as of December 31, 2025 and 2024 F-3 C onsolidated Statements of Operations and Other Comprehensive (Loss) Income for the Years Ended December 31, 2025 and 2024 F-4 C onsolidated Statements of Stockholders’ Deficit for the Years Ended December 31, 2025 and 2024 F-5 Consolidated Statements of Cash Flows for the Years Ended December 31, 2025 and 2024 F-6 Notes to Consolidated Financial Statements F-7 F- 1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Synergy CHC Corp. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Synergy CHC Corp. (the Company) as of December 31, 2025 and 2024, and the related statements of operations and other comprehensive (loss) income, stockholders’ deficit, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. /s/ RBSM LLP We have served as the Company’s auditor since 2014. PCAOB ID 587 Houston, Texas March 31, 2026 F- 2 Synergy CHC Corp. Consolidated Balance Sheets December 31, 2025 December 31, 2024 Assets Current Assets Cash and cash equivalents $ 2,622,313 $ 687,920 Restricted cash 100,000 100,000 Accounts receivable, net 3,203,505 5,321,037 Other receivables, net - 1,999,637 Loan receivable (related party), net - 4,375,059 Prepaid expenses (including related party amount of $ 110,803 and $ 312,966 , respectively) 351,049 1,859,563 Inventory, net 3,737,509 1,716,552 Total Current Assets 10,014,376 16,059,768 Intangible assets, net 150,000 283,333 Total Assets $ 10,164,376 $ 16,343,101 Liabilities and Stockholders’ Deficit Current Liabilities: Accounts payable and accrued liabilities (including payable to shareholder of $ 196,934 and $ 88,644 , respectively) $ 6,388,219 $ 5,191,868 Income taxes payable 88,108 242,977 Contract liabilities 1,526 24,252 Short term loans payable, net of debt discount, related party 100,000 - Short term loans payable, net of debt discount - 7,725,272 Current portion of notes payable, net of debt discount 1,658,215 - Current portion of long-term notes payable, net of debt discount and debt issuance cost, shareholder - 4,000,000 Total Current Liabilities 8,236,068 17,184,369 Long-term Liabilities: Notes payable, net of debt discount, shareholder - 8,333,053 Notes payable, net of debt discount 25,056,446 7,457,022 Total long-term liabilities 25,056,446 15,790,075 Total Liabilities 33,292,514 32,974,444 Commitments and contingencies (Note 13) Stockholders’ Deficit: Common stock, $ 0.00001 par value; 300,000,000 shares authorized; 11,483,926 and 8,721,818 , shares issued, respectively; 11,303,853 and 8,541,745 outstanding, respectively 114 87 Additional paid in capital 33,594,550 27,643,660 Accumulated other comprehensive loss ( 154,281 ) ( 47,777 ) Accumulated deficit ( 56,441,021 ) ( 44,099,813 ) Less: Treasury stock ( 180,073 shares) at cost ( 127,500 ) ( 127,500 ) Total stockholders’ deficit ( 23,128,138 ) ( 16,631,343 ) Total Liabilities and Stockholders’ Deficit $ 10,164,376 $ 16,343,101 The accompanying notes are an integral part of these consolidated financial statements. F- 3 Synergy CHC Corp. Consolidated Statements of Operations and Other Comprehensive (Loss) Income For the year ended For the year ended December 31, 2025 December 31, 2024 Revenue $ 30,380,809 $ 34,834,243 Cost of sales 10,077,992 11,191,224 Gross Profit 20,302,817 23,643,019 Operating expenses Selling and marketing 13,137,779 12,991,431 General and administrative 8,829,803 4,717,006 Reserve for bad debts 6,660,650 - Depreciation and amortization 133,334 133,334 Total operating expenses 28,761,566 17,841,771 (Loss) Income from operations ( 8,458,749 ) 5,801,248 Other (income) expenses Other income - ( 510,534 ) Interest income ( 15,065 ) ( 1,523 ) Interest expense 5,919,742 4,105,198 Gain on settlement of notes payable ( 2,154,522 ) - Remeasurement loss (gain) on translation of foreign subsidiary 14,833 ( 18,954 ) Total other expenses 3,764,988 3,574,187 Net (loss) income before income taxes ( 12,223,737 ) 2,227,061 Income tax expense 117,471 102,085 Net (loss) income after tax $ ( 12,341,208 ) $ 2,124,976 Net (loss) income per share – basic $ ( 1.27 ) $ 0.28 Net (loss) income per share - diluted $ ( 1.27 ) $ 0.28 Weighted average common shares outstanding Basic 9,722,552 7,588,095 Diluted 9,722,552 7,630,501 Comprehensive (loss) income: Net (loss) income $ ( 12,341,208 ) $ 2,124,976 Foreign currency translation adjustment ( 106,504 ) 54,690 Comprehensive (loss) income $ ( 12,447,712 ) $ 2,179,666 The accompanying notes are an integral part of these consolidated financial statements. F- 4 Synergy CHC Corp. Consolidated Statements of Stockholders’ Deficit Common stock Additional Paid in Accumulated Other Comprehensive Treasury Accumulated Total Stockholders’ Shares Amount Capital Income (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 income 54,690 54,690 Issuance of common stock at IPO, net of issuance cost 1,150,000 11 8,397,033 8,397,044 Fair value of underwriters warrants issued at IPO 490,443 490,443 Offering costs related to fair value of underwriting warrants ( 490,443 ) ( 490,443 ) Issuance of common stock for loan financing 18,000 97,920 97,920 Net income 2,124,976 2,124,976 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 ( 106,504 ) ( 106,504 ) Issuance of common stock for loan financing 82,360 1 220,867 220,868 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 Fair value of vested stock options 136,248 136,248 Fair value of underwriters warrants issued at IPO 51,465 51,465 Offering costs related to fair value of underwriting warrants ( 51,465 ) ( 51,465 ) Issuance of common stock at IPO, net of issuance cost 1,750,000 17 3,719,529 3,719,546 Stock issued for services 60,000 1 127,199 127,200 Net loss ( 12,341,208 ) ( 12,341,208 ) Balance as of December 31, 2025 11,483,926 $ 114 $ 33,594,550 $ ( 154,281 ) $ ( 127,500 ) $ ( 56,441,021 ) $ ( 23,128,138 ) The accompanying notes are an integral part of these consolidated financial statements. F- 5 Synergy CHC Corp. Consolidated Statements of Cash Flows For the year ended For the year ended December 31, 2025 December 31, 2024 Cash Flows from Operating Activities Net (loss) income $ ( 12,341,208 ) $ 2,124,976 Adjustments to reconcile net (loss) income to net cash used in operating activities: Amortization of debt discount and debt issuance cost 1,633,776 56,796 Depreciation and amortization 133,334 133,334 Stock based compensation 136,247 - Stock issued for modification of notes payable 847,062 - Stock issued for services 127,200 - Foreign currency transaction (gain) loss 5,531 54,321 Remeasurement gain on translation of foreign subsidiary 14,833 ( 18,954 ) Non cash implied interest - 4,799 Bad debts 2,256,846 - Bad debt, related party 4,403,804 - Gain on settlement of debt ( 2,154,522 ) - Write-off of inventory 894,341 125,364 Stock issued for loan financing - 97,920 Income from employee retention credits - ( 252,405 ) Income from insurance on stolen goods - ( 258,129 ) Changes in operating assets and liabilities: Accounts receivable 1,514,935 ( 3,214,943 ) Other receivables 345,388 ( 1,489,103 ) Loan receivable, related party - 84,937 Inventory ( 2,915,298 ) 1,884,324 Prepaid expenses 1,306,351 ( 1,250,023 ) Prepaid expense, related party 202,163 ( 145,092 ) Income taxes payable ( 84,271 ) 57,312 Contract liabilities ( 22,726 ) 10,050 Accounts payable and accrued liabilities 622,099 ( 2,870,633 ) Accounts payable, related party 489,093 61,759 Net cash used in operating activities ( 2,585,022 ) ( 4,803,390 ) Cash Flows from Investing Activities - - Cash Flows from Financing Activities Proceeds from issuance of common stock at IPO - 8,397,044 Proceeds from issuing common stock 3,719,547 - Advances from related party 235,000 3,528,003 Repayments of advances to related party ( 135,000 ) ( 3,200,000 ) Repayment of notes payable, shareholder ( 10,000,000 ) ( 84,500 ) Proceeds from notes payable 20,996,250 1,360,000 Payment of loan financing fees ( 2,024,287 ) - Repayment of notes payable ( 8,136,846 ) ( 5,196,461 ) Net cash provided by financing activities 4,654,664 4,804,086 Effect of exchange rate on cash, cash equivalents and restricted cash ( 135,249 ) 54,690 Net increase in cash, cash equivalents and restricted cash 1,934,393 55,386 Cash, Cash Equivalents and restricted cash, beginning of year 787,920 732,534 Cash, Cash Equivalents and restricted cash, end of year $ 2,722,313 $ 787,920 Supplemental Disclosure of Cash Flow Information: Cash paid during the period for: Interest $ 2,953,878 $ 3,906,001 Income taxes $ 147,377 $ - Supplemental Disclosure of Non-cash 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 $ 220,869 $ - 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 consolidated financial statements. F- 6 SYNERGY CHC CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 – Nature of the Business Synergy CHC Corp. (“Synergy”, “we”, “us”, “our” or the “Company”) (formerly Synergy Strips Corp.) was incorporated on December 29, 2010 in Nevada under the name “Oro Capital Corporation.” On April 21, 2014, the Company changed its fiscal year end from July 31 to December 31. On April 28, 2014, the Company changed its name to “Synergy Strips Corp.”. On August 5, 2015, the Company changed its name to “Synergy CHC Corp.” The Company is a consumer health care company that is in the process of building a portfolio of best-in-class consumer product brands. Synergy’s strategy is to grow its portfolio both organically and by further acquisition. Effective January 1, 2019 the Company has merged the U.S. Subsidiaries (Neuragen Corp., Breakthrough Products Inc., Sneaky Vaunt Corp., and The Queen Pegasus Corp.) into the 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 consolidated financial 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 consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”). 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 intercompany balances and transactions have been eliminated in consolidation. Reverse Stock Split On 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 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. F- 7 Use of Estimates The preparation of the consolidated financial statements in conformity with US 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 consolidated financial statements in the period in which the changes become evident. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the period that they are determined to be necessary. Cash and Cash Equivalents The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents. As of December 31, 2025, and 2024, the Company had no cash equivalents. The Company maintains its cash and cash equivalents in banks insured by the Federal Deposit Insurance Corporation (FDIC) in accounts that at times may be in excess of the federally insured limit of $ 250,000 per bank. The Company minimizes this risk by placing its cash deposits with major financial institutions. At December 31, 2025 and 2024, the uninsured balances amounted to $ 2,450,399 and $ 503,215 , respectively. Restricted Cash The 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. December 31, 2025 December 31, 2024 Cash and cash equivalents $ 2,622,313 $ 687,920 Restricted cash 100,000 100,000 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 2,722,313 $ 787,920 Amounts included in restricted cash represent the amount held for credit card collateral. Intangible Assets We evaluate the recoverability of intangible assets periodically consider 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. Long-lived Assets Long-lived assets include intangible assets. 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. Indicators of impairment include significant underperformance relative to historical or projected future operating results, significant changes in our use of the assets or in our 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, we assess 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. F- 8 The 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 in selling and marketing expense. 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 our 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 consolidated balance sheet are from contracts with customers. Contract Costs Costs incurred to obtain a contract are capitalized if the Company expects to recover those costs. 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 December 31, 2025 or 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. December 31, 2025 December 31, 2024 Beginning balance $ 24,252 $ 14,202 Additions 1,526 24,252 Recognized as revenue ( 24,252 ) ( 14,202 ) Ending balance $ 1,526 $ 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 December 31, 2025 and 2024, the allowance for doubtful accounts was $377,579 and $0 , respectively. 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 income and other comprehensive income. 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. F- 9 Income Taxes The Company utilizes 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, is a wholly-owned subsidiary, and is subject to income taxes in Australia, the jurisdiction in which it operates. Significant judgment is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The company recognizes liabilities for anticipated tax audit issues based on the Company’s current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made. Synergy CHC Inc. is a wholly-owned foreign subsidiary, and is subject to income taxes in Canada, the jurisdiction 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 Mexico is a wholly-owned foreign subsidiary, and is subject to income taxes in Mexico, the jurisdiction 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) (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 December 31, 2025, and 2024, options to purchase 1,200,000 and 252,102 , respectively, shares of common stock were outstanding. As of December 31, 2025 and 2024, warrants to purchase 156,000 and 103,500 shares of common stock, respectively, were outstanding. The following is a reconciliation of the number of shares used in the calculation of basic and diluted (loss) earnings per share for the years ending December 31, 2025, and 2024: For the year ending December 31, 2025 December 31, 2024 Net (loss) income after tax $ ( 12,341,208 ) $ 2,124,976 Weighted average common shares outstanding 9,722,552 7,588,095 Incremental shares from the assumed exercise of dilutive stock options - 42,406 Dilutive potential common shares 9,722,552 7,630,501 Net (loss) earnings per share: Basic $ ( 1.27 ) $ 0.28 Diluted $ ( 1.27 ) $ 0.28 F- 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 year ending December 31, 2025 December 31, 2024 Options to purchase common stock 1,200,000 168,068 Warrants to purchase common stock 156,000 103,500 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 Financial Instruments 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 we have access at the measurement date. Level 2 - Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3 - Unobservable inputs for the asset or liability. The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement. As of both December 31, 2025 and 2024, the Company has determined that there were no assets or liabilities measured at fair value. The carrying amounts of the Company’s financial assets and liabilities, including accounts receivable, prepaid expenses, accounts payable, accrued expenses, other current liabilities and notes/loans payable, approximate their fair values because of the short-term nature of these instruments. 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 – “AUD”). All monetary assets and liabilities of the foreign subsidiary were translated into U.S. Dollars at period 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. F- 11 The functional currency of one of the Company’s foreign subsidiary (Synergy CHC Inc.) is the Canadian Dollar (CAD). The Company’s foreign subsidiary maintains its records using local currency (CAD). All assets and liabilities of the foreign subsidiary were translated into U.S. Dollars at period end exchange rates and stockholders’ equity is translated at the historical rates. Income and expense items were translated using average exchange rate for the period. The resulting translation adjustments, net of income taxes, are reported as other comprehensive income and accumulated other comprehensive income in the stockholder’s equity in accordance with ASC 220 – Comprehensive Income. The functional currency of the Company’s other foreign subsidiary (Synergy CHC Mexico) is the Mexican Peso (MXN). The Company’s foreign subsidiary maintains its records using local currency (MXN). All assets and liabilities of the foreign subsidiary were translated into U.S. Dollars at period end exchange rates and stockholders’ equity is translated at the historical rates. Income and expense items were translated using average exchange rate for the period. The resulting translation adjustments, net of income taxes, are reported as other comprehensive income and accumulated other comprehensive income in the stockholder’s equity in accordance with ASC 220 – Comprehensive Income. The exchange rates used to translate amounts in AUD, CAD and MXN into USD for the purposes of preparing the consolidated financial statements were as follows: Balance sheet: December 31, December 31, 2025 2024 Period-end AUD: USD exchange rate $ 0.6696 $ 0.6183 Period-end CAD: USD exchange rate $ 0.7296 $ 0.6950 Period-end MXN: USD exchange rate $ 0.0555 $ - Income statement: December 31, December 31, 2025 2024 Average Yearly AUD: USD exchange rate $ 0.6447 $ 0.6599 Average Yearly CAD: USD exchange rate $ 0.7157 $ 0.7301 Average Period MXN: USD exchange rate $ 0.0555 $ - 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, Canadian Dollars or Mexican Pesos, 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 was not required. Accordingly, the Company performed credit evaluations of its customers and maintained 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 existed 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 costs and the hosting of our online Application. Debt Issuance Costs Debt issuance costs consist primarily of arrangement fees, professional fees and legal fees. These costs were 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. F- 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. 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 and reportable 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 not have any intra-entity sales or transfers. The Company’s CODM does not review operating results on a disaggregated basis; rather, the chief operating decision maker reviews operating results on an aggregated basis. Presentation of Financial Statements – Going Concern Going Concern Evaluation In connection with preparing consolidated financial statements for the year ended December 31, 2025, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to continue as a going concern within one year from the date that the consolidated financial statements are issued. The Company considered the following: ● At December 31, 2025, the Company had an accumulated deficit of $ 56,441,021 . ● At December 31, 2025, the Company had a decrease in net revenue of $ 4,453,434 . ● At December 31, 2025, the Company had a decrease in net income of $ 14,466,184 . ● During the year ended December 31, 2025, the Company used $ 2,585,022 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 consolidated financial statements are issued by considering the following: ● At December 31, 2025, the Company had a working capital surplus of $ 1,778,308 . ● During 2025, the Company raised additional capital of $ 3.7 million through sale of its common stock. ● The Company has restructured its debt agreements in 2025 which extends the terms into 2029. ● The Company entered into a second amendment with its current lender during 2026 which adjusts various covenants and payment terms. ● The Company has laid off 13 employees in order to right size its overhead expenses. ● The Company has established an at-the-market (“ATM”) equity offering program pursuant to which we may issue and sell shares of our common stock from time to time, subject to market conditions and other factors. F- 13 Management concluded that the 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. Recent Accounting Pronouncements In December 2023, the 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. While the adoption of ASU 2023-09 has not affected the Company’s consolidated financial statements, it has resulted in additional disclosures. 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. In July 2025, the FASB issued ASU No. 2025-05, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets” (“ASU 2025-05”). ASU 2025-05 provides a practical expedient to assume that conditions as of the balance sheet date remain unchanged over the life of the asset when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. The amendments are effective for the fiscal years beginning after December 15, 2025 and interim periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact this update will have on its consolidated financial statements. 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 table below summarizes the differences between the U.S. statutory federal rate and the Company’s estimated effective tax rate for the years ended December 31, 2025 and 2024: December 31, 2025 ($) December 31, 2025 December 31, 2024 ($) December 31, 2024 U.S. Statutory Rate $ ( 2,566,985 ) ( 21 )% $ 467,881 ( 21 )% AU/CA/MXN rates in excess of the US rate ( 238,926 ) ( 2 )% ( 81,761 ) 4 % Increase (decrease) in valuation allowance 4,052,466 33 % ( 284,035 ) 14 % Permanent differences 316,339 3 % - - % Prior period true up ( 1,445,423 ) ( 12 )% - - % Total provision for income taxes $ 117,471 1 % $ 102,085 ( 4 )% F- 14 The Company has deferred tax assets, which have been fully reserved, as follows as of December 31, 2025 and 2024: December 31, 2025 December 31, 2024 Net operating Losses $ 11,993,073 $ 10,663,939 Obsolete inventory 26,326 26,326 Nonstatutory stock options 515,319 515,319 Other 43,313 - Impairment of intangible asset 220,150 220,150 Amortization - 106,400 Bad debt reserve - - Other 2,815,819 29,401 Deferred tax asset 15,614,000 11,561,535 Valuation allowance for deferred tax assets ( 15,614,000 ) ( 11,561,535 ) Net deferred tax assets $ - $ - Tax expense was $ 117,471 and $ 102,085 for 2025 and 2024, respectively. Income tax provision (benefit) consists of the following for the years ended December 31, 2025 and 2024: For the Years Ended December 31, Income tax provision (benefit): 2025 2024 Current Federal 9,404 97,644 State 104,442 Foreign 3,625 4,441 Total Current 117,471 102,085 Deferred Federal - - State - - Foreign - - Total Deferred - - Total income tax provision (benefit) $ 117,471 $ 102,085 The table below summarizes the (loss) income before taxes for domestic and foreign jurisdictions: December 31, 2025 December 31, 2024 Domestic (U.S.) $ ( 9,765,518 ) $ 3,135,519 Foreign ( 2,458,219 ) ( 908,458 ) Total $ ( 12,223,737 ) $ 2,227,061 The table below summarizes the income tax expense for 2025 and 2024: December 31, 2025 December 31, 2024 Federal $ 9,404 $ 97,644 State 104,442 - Foreign 3,625 4,441 Total $ 117,471 $ 102,085 The Company also has net operating loss carryforwards of approximately $ 57,000,00 and approximately $ 46,600,000 (United States and Canada) included in the deferred tax asset table above for 2025 and 2024, respectively, the majority attributable to the acquisition of Breakthrough Products, Inc. However, due to limitations of carryover attributes and separate return limitation year rules, it is unlikely the company will benefit from the NOL’s and thus Management has determined a 100 % valuation reserved is required. Further, the Company has not completed an evaluation of the NOL’s attributable to Breakthrough Products, Inc. at the date of this report. F- 15 The Company has adopted the provisions of ASC 740-10-25, which provides recognition criteria and a related measurement model for uncertain tax positions taken or expected to be taken in income tax returns. ASC 740-10-25 requires that a position taken or expected to be taken in a tax return be recognized in the financial statements when it is more likely than not that the position would be sustained upon examination by tax authorities. Tax positions that meet the more likely than not threshold is then measured using a probability weighted approach recognizing the largest amount of tax benefit that is greater than 50 % likely of being realized upon ultimate settlement. The Company had no tax positions relating to open income tax returns that were considered to be uncertain. The Company files income tax returns in the U.S. federal jurisdiction, state jurisdiction (California) and foreign jurisdictions (Canada and Australia). With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examination by tax authorities for years before 2021. The Internal Revenue Service has not recently informed the Company of any pending examinations. Note 4 – Accounts and Other Receivable Accounts receivable, net of allowances for doubtful accounts, consisted of the following: December 31, 2025 December 31, 2024 Trade accounts receivable $ 3,581,084 $ 5,321,037 Other receivables - 1,999,637 Less allowances ( 377,579 ) - Total accounts and other receivable, net $ 3,203,505 $ 7,320,674 During the years ended December 31, 2025 and 2024, the Company charged $ 2,256,846 and $ 0 , respectively, to bad debt expense. The $ 2,256,846 is comprised of the remaining balance in other receivables of $ 1,654,249 , a write off of uncollectible accounts receivable of $ 225,018 and recognizing an allowance for doubtful accounts of $ 377,579 . During the year ended December 31, 2024, the Company had other receivables related to $ 252,405 for Employee Retention Credits, $ 258,129 related to an insurance claim for stolen goods and $ 1,489,103 related to disputed accounts receivables. Note 5 – Prepaid Expenses At December 31, 2025 and 2024, prepaid expenses consisted of the following: December 31, 2025 December 31, 2024 Advances for inventory $ 168,174 $ 605,913 Insurance 17,081 2,879 Deposits - 14,000 Contract employee, related party 110,803 296,981 Rent, related party - 15,985 Advertising and promotions* - 869,920 Conferences 11,333 15,000 Professional fees - 13,000 IT expenses 43,132 25,404 Miscellaneous 526 481 Total $ 351,049 $ 1,859,563 * During the year ended December 31, 2024, the Company bartered inventory worth $ 859,920 for media credits to be used at the Company’s discretion. During the year ended December 31, 2025, the Company charged these media credits to general and administrative expense as they were not utilized. 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 December 31, 2025 and 2024, the uninsured balance amounted to $ 2,450,399 and $ 503,215 , respectively. Accounts receivable As of December 31, 2025 and 2024, one customer accounted for 71 % and 74 %, respectively, of the Company’s accounts receivable. F- 16 Major customers For the years ended December 31, 2025 and 2024, two customers accounted for approximately 79 % and 73 %, respectively, of the Company’s revenue. Substantially all of the Company’s business is with companies in the United States. Accounts payable As of December 31, 2025 and 2024, two and four vendors accounted for 64 % and 69 %, respectively, of the Company’s accounts payable. Major suppliers For the year ended December 31, 2025, two suppliers accounted for approximately 46 % of the Company’s purchases. For the year ended December 31, 2024, three suppliers accounted for approximately 42 % 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: December 31, 2025 December 31, 2024 Finished goods $ 3,325,093 $ 1,578,561 Components 412,416 92,991 Raw materials - 45,000 Total inventory $ 3,737,509 $ 1,716,552 During the years ended December 31, 2025 and 2024, $ 894,341 and $ 125,364 , respectively, of expiring and slow-moving inventory was written off to cost of sales and $ 150,000 has been accrued for to dispose of these expired goods. Note 8 – Intangible Assets December 31, 2025 December 31, 2024 License Fee $ 450,000 $ 450,000 Less accumulated amortization ( 300,000 ) ( 166,667 ) Intangible assets, net $ 150,000 $ 283,333 Amortization expense for the years ended December 31, 2025 and 2024 was $ 133,334 and $ 133,334 , respectively. The estimated aggregate amortization expense over each of the next five years is as follows: 2026 $ 133,333 2027 16,667 Note 9 – Related Party Transactions The Company paid consulting fees through December 31, 2025 to a company owned by Mr. Jack Ross, Chief Executive Officer (CEO) of the Company. The Company expensed $ 995,000 and $ 1,321 during the years ended December 31, 2025 and 2024, respectively, as consulting fees. The Company advanced $ 396,683 in the manner of a prepaid consulting fees during the year ended December 31, 2024 and applied $ 328,003 of that advance to a short-term loan. The prepaid balance as of December 31, 2025 and 2024 was $ 110,803 and $ 296,891 , respectively. During 2025, the Company was advanced $ 235,000 and during 2024, the Company was advanced $ 3,175,000 US Dollars and $ 514,500 Canadian Dollars (US Dollars $ 342,201 ), respectively in the form of a short-term note. The balance owed as of December 31, 2025 and 2024 is $ 100,000 and $ 0 , respectively. During 2025, the Company paid $ 52,500 for a vehicle allowance and $ 31,062 for insurance reimbursement. During 2025, the Company paid $ 57,720 as rent for 2025 for office and meeting space in the United States. F- 17 The Company paid rent through December 31, 2025 to a company owned by the CEO of the Company. The Company expensed $ 261,724 Canadian Dollars ($ 187,389 US Dollars). 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 December 31, 2024 the Company was owed $ 4,375,059 . The related party is out of business and does not have the ability to repay this loan. The Company evaluated the collectability of this loan as of December 31, 2025. This loan was deemed uncollectable due to lack of ability to repay and $ 4,403,804 was fully expensed to bad debt. 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 $ 1,545,675 during the years ended December 31, 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 Inc. for the distribution rights of FOCUSfactor in Canada. In conjunction with this agreement, the Company is required to pay Knight a distribution fee equal to 30 % of gross sales for sales achieved through a direct sales channel and 5 % of gross sales for sales achieved through retail sales. The minimum due to Knight under this agreement is $ 100,000 Canadian dollars. During the year ended December 31, 2025, the Company expensed $ 146,336 Canadian dollars (US Dollars $ 104,730 ) and is included in selling and marketing. During the year ended December 31, 2024, the Company expensed $ 123,584 Canadian dollars (US Dollars $ 90,229 ) and is included in selling and marketing. As of December 31, 2025 and 2024, the total outstanding balance was $ 269,920 and $ 123,584 Canadian dollars, respectively. In US Dollars, the total outstanding balance was $ 196,934 and $ 85,891 as of December 31, 2025 and 2024, respectively. The Company expensed royalty of $ 11,869 and $ 51,428 for the years ended December 31, 2025 and 2024, respectively. At December 31, 2025 and 2024, the Company owed Knight Therapeutics Inc. $ 578 and $ 2,753 , respectively, in connection with a royalty distribution agreement, and is in accounts payable. Note 10 – Accounts Payable and Accrued Liabilities As of December 31, 2025 and 2024, accounts payable and accrued liabilities consisted of the following: December 31, 2025 December 31, 2024 Accrued payroll $ 316,580 $ 76,399 Legal fees 233,199 13,722 Commissions 297,831 450,208 Manufacturers 1,664,299 409,744 Promotions 1,126,523 2,570,126 Accounting Fees 53,683 210,386 Freight 274,735 149,549 Royalties, shareholder 197,512 88,644 Warehousing 894,161 261,046 Sales taxes 106,909 67,488 Payroll taxes 446,521 700,797 Professional Fees - 26,200 Interest 300,397 - Lender fees 325,000 - Insurance - 12,118 Others 150,867 155,441 Total $ 6,388,219 $ 5,191,868 The Company has estimated and accrued for its sales tax liability at $ 355 and $ 3,703 as of December 31, 2025 and 2024, respectively. During 2024, the Company recognized a gain on forgiveness of accounts payable of $ 389,169 . This gain was included as a reduction of selling and marketing expenses. F- 18 Note 11 – Notes Payable The Company’s notes payable at December 31, 2025 and 2024 are as follows: December 31, 2025 December 31, 2024 $ 10,000,000 August 9, 2017 Loan $ - $ 12,333,052 $ 2,000,000 and $ 6,000,000 Notes 9,595,223 9,794,165 $ 5,450,000 December 28, 2023 Loan - 2,802,445 $ 3,020,824 March 27, 2024 Loan - 2,302,824 Other - 317,292 $ 3,024,000 November 12, 2025 Advance 2,436,000 - $ 17,500,000 May 2025 Loan 17,500,000 - 29,531,223 27,549,778 Unamortized debt issuance cost and debt discount ( 2,816,562 ) ( 34,432 ) Total 26,714,661 27,515,346 Current portion, shareholder - ( 4,000,000 ) Current portion, other ( 1,658,215 ) ( 7,725,272 ) Long-term portion, shareholder - 8,333,053 Long-term portion, other $ 25,056,446 $ 7,457,022 $950,000 June 26, 2015 Security Agreement: 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 to Knight Therapeutics Inc. (Knight). 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 U.S. 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. 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 , respectively in relation to this agreement. The Company recorded interest expense of $ 4,799 for the year ended December 31, 2024. The Company made payments of $ 12,500 during 2024. During June 2024, this Security Agreement was consolidated with the other outstanding loans to Knight. $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 $ 623,355 and $ 1,545,674 during the years ended December 31, 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 the amount outstanding as of that date of $ 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 December 31, 2025 and 2024 the total consolidated amount outstanding on these loans, including accrued interest and royalties was, $ 0 and $ 12,333,052 , respectively. F- 19 $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. On March 31, 2024, we 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. We are required to make principal payments of $ 1,000,000 each quarter starting from March 31, 2025 until 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. 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. Subsequently and pursuant to the modification agreement entered into on June 14, 2023, effective September 9, 2022, the promissory loan would bear all the same characteristics as the additional $ 6,000,000 March 8, 2022 loan noted below. $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 $ 1,500,000 on cash payment in lieu of the exercise of warrants. Pursuant to ASC 480, warrants were classified as liability and we accrued the warrant liability of $ 1,500,000 on March 8, 2022, the date of the issuance. On September 8, 2022, the date of the exercise of the warrants, we offset this warrant liability and added the $ 1,500,000 balance to the Senior Subordinated Debentures. 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 $ 8 million loan, whereby this loan becomes subordinated debt to the senior lender ( $ 17,500,000 May 2025 Loan – see below) . 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 consolidated loan, and bears interest at 12 % per annum. “Interest Payment Conditions” means with respect to any payment of interest on this loan, 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; F- 20 (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 CEO from this obligation. The Company recognized total interest expense of $ 1,958,384 during the year ended December 31, 2025, which includes shares valued at $ 847,062 and $ 1,260,187 during the year ended December 31, 2024. The Company repaid $ 198,943 on this loan during the year ended December 31, 2025. The outstanding loan balance at December 31, 2025 and 2024 was $ 9,595,223 and $ 9,794,166 , 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 loan 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 the years ended December 31, 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 $ 180,244 . The outstanding loan balance at December 31, 2025 and 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 the years ended December 31, 2025 and 2024, the Company made payments of $ 2,160,412 and $ 700,000 toward this loan, respectively. 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 December 31, 2025 and 2024 was $ 0 and $ 2,320,824 , respectively. $418,100 May 1, 2024 Loan: On May 1, 2024, the Company entered into a loan agreement of $ 418,100 with Shopify Capital Inc. for an advancement of working capital from its online processing account. The Company received $ 370,000 from Shopify Capital Inc. and $ 48,100 was an original issue discount. The loan bears a repayment rate of 25 % of daily sales. The payment of such amounts is secured by a security interest in certain assets, undertakings and property pursuant to the Security Agreement, which will be released upon receipt of total payments of $ 418,100 . The Company recognized amortization of original issue discount of $ 32,297 and $ 13,067 , which is included in interest expense in the statement of operations and comprehensive (loss) income during the years ended December 31, 2025 and 2024, respectively. The outstanding loan balance at December 31, 2025 and 2024 was $ 0 and $ 269,488 , 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 . F- 21 The Company recognized amortization of original issue discount of $ 2,135 and $ 11,515 , which is included in interest expense in the statement of operations and comprehensive (loss) income during the years ended December 31, 2025 and 2024, respectively. The outstanding loan balance at December 31, 2025 and 2024 was $ 0 and $ 16,425 , respectively. $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 due to the Company prepaying the remaining balance. $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 $ 889,398 and during the year ended December 31, 2025. The outstanding loan balance at December 31, 2025 was $ 0 . $17,500,000 May 2025 Loan: On May 30, 2025, 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 were used to repay existing indebtedness of the Company, pay related fees and transaction costs, and provided working capital to the Company. The proceeds of the Delayed Draw Facility were used to pay off 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. Of the Term Loan, $ 175,000 is subject to repayment on each of January 1, 2026, July 1, 2026 and October 1, 2026, $ 525,000 on January 1, 2027 and the remaining balance is to be repaid in the amount of $ 350,000 beginning April 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 of the Term Loan in May 2025 and $ 2,500,000 under the Delayed Draw Facility in June 2025. These proceeds were used to pay out existing debt. The Company recorded $ 2,385,954 as original debt discount. The Company recognized $ 360,511 as amortization during the year ended December 31, 2025. The unamortized balance amounts to $ 2,025,443 at December 31, 2025. On March 24, 2026, the Company entered into a second amendment (the “Second Amendment”) to its term loan credit agreement, dated May 30, 2025 (as previously amended, the “Credit Agreement”, and as amended by the Second Amendment, the “Amended Credit Agreement”), with ACP Agency, LLC (“ACP”), as administrative agent and collateral agent, and the lenders party thereto. The Second Amendment amends certain provisions of the Credit Agreement, including provisions relating to the amortization schedule for the term loan, interest payment mechanics, pricing, the application of equity issuance proceeds, limitations on the Company’s ability to elect Term SOFR-based interest, certain covenants, certain financial covenant levels and/or testing periods, and certain fee and expense provisions, as well as related Events of Default provisions. All capitalized terms used but not defined herein have the meanings assigned in the Amended Credit Agreement. The Amended Credit Agreement provides for scheduled principal payments of $ 175,000 on each of July 1, 2026 and October 1, 2026, followed by a scheduled principal payment of $ 525,000 on January 1, 2027, and scheduled principal payments of $ 350,000 beginning April 1, 2027 and on the first day of each quarter thereafter. F- 22 The Amended Credit Agreement adds an Applicable Margin step-up pursuant to which, if the Company fails on or before September 30, 2026 to raise at least $ 10,000,000 of Net Cash Proceeds from Equity Issuances made on or after the Second Amendment Effective Date (and apply such proceeds as required under the Credit Agreement), then commencing October 1, 2026 the Applicable Margin will increase by 2.00 % per annum for the applicable Loans until the Company satisfies that $ 10,000,000 equity raise condition and applies such proceeds as required. In addition, the Second Amendment modifies interest payment mechanics by requiring that the interest payment due on March 2, 2026 be paid in kind by capitalizing such interest and adding it to the then-outstanding principal amount of the Term Loan and permitting the Company, at its election and subject to providing the required notice, to pay all or a portion of the interest payment due on April 1, 2026 in kind through similar capitalization. The Second Amendment also adds a Minimum Consolidated Adjusted EBITDA covenant with stated dollar thresholds, including a minimum Consolidated Adjusted EBITDA requirement of $ 500,000 for the fiscal quarter ended June 30, 2026 and $ 1,000,000 for the fiscal quarter ended September 30, 2026. The Second Amendment also revises the consolidated senior net leverage ratio testing levels and related testing periods (including a specified maximum ratio of 20.00:1.00 for the fiscal quarter ended December 31, 2025 and a revised step-down schedule thereafter). The Second Amendment further revises certain mandatory prepayment provisions relating to equity issuance proceeds. As amended, Net Cash Proceeds from Equity Issuances received on or after the Second Amendment Effective Date (other than Excluded Equity Issuances) are to be applied such that the first $ 6,000,000 may be retained for general corporate purposes, the next $ 4,000,000 must be applied to prepay the outstanding principal amount of the Term Loan, and Net Cash Proceeds received in excess of $ 10,000,000 are subject to additional mandatory prepayment requirements, including a requirement to prepay 50 % of such excess proceeds if the Company’s Consolidated Senior Net Leverage Ratio as of the end of the most recent fiscal quarter ended on or before the date of receipt of such proceeds is equal to or greater than 2.50 to 1.00 and 0 % of such excess proceeds if such ratio is less than 2.50 to 1.00. The Second Amendment also limits the Company’s ability to elect Term SOFR-based interest by providing that, effective February 1, 2026, all outstanding Term SOFR Rate Loans are automatically converted to Reference Rate Loans and the Company may not elect the Term SOFR rate option for any Loans until it has made principal reduction payments from and after the Second Amendment Effective Date in an aggregate amount of not less than $ 4,000,000 . The Second Amendment also revises the “Change of Control” definition to include, among other circumstances, the acquisition of beneficial ownership of more than 40% (increased from 30 %) of the aggregate outstanding voting or economic power of the Company’s equity interests by any person or group (other than Jack Ross). The Second Amendment also amends the Credit Agreement to include installment payment mechanics for certain legal expenses of ACP, amends the conditions under which the Company may make interest and principal payments on other indebtedness, and amends the prepayment provisions related to certain specified asset dispositions In connection with the Second Amendment, on March 24, 2026 the Company issued a common stock purchase warrant (the “Lender Warrant”) to Acme Credit Partners Fund I, LP (the “Holder”), a lender under the Credit Agreement. The Lender Warrant provides the Holder the right to purchase 3,000,000 shares of the Company’s common stock at an exercise price of $ 0.00001 per share. The Lender Warrant has a ten-year term and becomes exercisable upon the occurrence of a “Qualified Event of Default,” defined as the occurrence of any event of default under Section 8.1(a) of the Credit Agreement; the Lender Warrant terminates upon the indefeasible payment in full of all secured obligations under the Credit Agreement and related loan documents. The Lender Warrant contains an issuance limitation providing that, until stockholder approval is obtained, the Company may not issue shares upon exercise if, after giving effect to such issuance, the Holder and its affiliates would beneficially own more than 19.9% of the Company’s outstanding common stock (the “Beneficial Ownership Limitation”). The Company has covenanted to seek stockholder approval for issuances in excess of the Beneficial Ownership Limitation at the Company’s next annual meeting of stockholders, to be held no later than June 30, 2026, and to use reasonable best efforts to solicit such approval and to cause the Company’s board of directors to recommend approval. The Lender Warrant also provides for a cashless (net) exercise feature following a Qualified Event of Default. The Term Loan bears interest at the greatest of 6.0 % per annum, the Federal Funds Rate plus 0.50 % per annum, Term SOFR rate plus 1.00 % and the rate last quoted by The Wall Street Journal as the “Prime Rate” in the United States, plus 7.5 %, 12.5 % per annum at December 31, 2025, and matures on May 30, 2029 . The Company recognized interest expense of $ 1,326,732 during the year ended December 31, 2025 with an average interest rate of 12.7 %. The Company is required to make future payments as follows: 2026 $ 525,000 2027 $ 1,575,000 2028 $ 1,400,000 2029 $ 14,000,000 $3,024,000 November 2025 Advance: On November 12, 2025, the Company entered into a cash advance agreement of $ 3,024,000 with Cedar Advance LLC for an advancement of working capital through the sale of receivables. The Company received $ 2,000,000 and recorded $ 1,024,000 as original issue discount. The loan bears a repayment rate of $ 84,000 per week with a total payment of $ 3,024,000 . In conjunction with the advance, the Company issued 52,000 shares of common stock to the consultant who facilitated the facility and thus recognized $ 103,220 as financing cost. The Company recognized total interest expense of $ 349,435 and during the year ended December 31, 2025. The outstanding loan balance at December 31, 2025 was $ 2,436,000 , with unamortized debt discount of $ 777,785 resulting in a net carrying amount of $ 1,658,215 . As of December 31, 2025 and as of the date of filing this Annual Report, the Company was in compliance with all applicable covenants under its debt agreements. F- 23 Note 12 – Stockholders’ Equity The total number of shares of all classes of capital stock which the Company is authorized to issue is 300,000,000 shares of common stock with $ 0.00001 par value. On October 22, 2024, our registration statement on Form S-1 (File No. 333-282780), as amended (the “Registration Statement”) was declared effective by the SEC for our underwritten initial public offering in which we sold a total of 1,150,000 shares of our common stock, par value $ 0.00001 per share, at price to the public of $ 9.00 per share, for gross proceeds of $ 10,350,000 . Roth Capital Partners, LLC acted as representative of the underwriters for the offering. The offering closed on October 24, 2024 (the “initial public offering” or “IPO”). Following the sale of all the shares upon the closing of the initial public offering and the expiration of the over-allotment option, the offering terminated. We received net proceeds of approximately $ 8,397,044 after deducting underwriting discounts and commissions and the estimated offering expenses. No payments for such expenses were made directly or indirectly to (i) any of our officers or directors or their associates, (ii) any persons owning 10 % or more of any class of our equity securities, or (iii) any of our affiliates. There has been no material change in the planned use of proceeds from our initial public offering as described in the Prospectus. The Company issued warrants on October 24, 2024 (the “Issuance Date”) to purchase 103,500 shares to the underwriter as part of the IPO with an expiration date of (i) the third (3rd) anniversary of the Exercisability Date, defined as the Issuance Date, for Twenty Five Percent ( 25 %) of the Warrant, (ii) the fourth anniversary of the Exercisability Date for Twenty Five Percent ( 25 %) of the Warrant and (iii) the fifth (5th) anniversary of the Exercisability Date for Fifty Percent ( 50 %) of the Warrant. The Company determined the fair value of the warrants of $ 490,443 during the year ended December 31, 2024 using the Black-Scholes fair value option-pricing model with the following weighted average assumptions: estimated fair value of the Company’s common stock of $ 9.01 , risk-free interest rates of 4.02 %- 4.03 %, volatility of 69 %- 76 %, expected term of 3 - 5 years and dividend yield of 0 %. Because the warrants were issued in connection with the IPO, the fair value of the warrants was recorded as an offering cost and reflected as a reduction of additional paid-in capital. During 2025 and 2024 the Company issued 82,360 and 18,000 shares, respectively, to a consultant who facilitated advances (see Note 11). During 2025, the Company issued 428,570 pre-funded warrants to Knight as a partial settlement of debt. These warrants were fully exercised during the year ended December 31, 2025 (see Note 11). 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). During 2025, the Company issued 60,000 shares valued at $ 127,200 to a consultant. On August 27, 2025 the Company sold an aggregate of 1,750,000 shares at a price to the public of $ 2.50 per share, pursuant to that certain Underwriting Agreement, dated August 25, 2025, between the Company and Bancroft Capital, LLC, as representative of the several underwriters named in the Underwriting Agreement (the “Representative”). In addition, pursuant to the Underwriting Agreement, the Company granted the Representative a 45-day option to purchase up to 262,500 additional shares of Common Stock to cover over-allotments in connection with the Offering at the public offering price, less underwriting discounts and commissions. Gross proceeds of the offering were $ 4,375,000 , before deducting underwriting discounts and commissions of seven percent ( 7 %) of the gross proceeds and estimated offering expenses. The Company used the net proceeds from the Offering for working capital and other general corporate purposes. Net proceeds from the offering were $ 3,719,546 . Pursuant to the Underwriting Agreement, the Company also issued to the Representative and its designees warrants to purchase 52,500 shares to the underwriter as part of an equity raise with an expiration date of (i) the third anniversary of the exercisability date (February 21, 2026) for twenty five percent ( 25 %) of the warrant, (ii) the fourth anniversary of the exercisability date for twenty five percent ( 25 %) of the warrant and (iii) the fifth anniversary of the exercisability date for fifty percent ( 50 %) of the warrant. The Company determined the fair value of the warrants of $ 51,465 during the year ended December 31, 2025 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 $ 2.09 , risk-free interest rates of 3.59 - 3.69 %, volatility of 60 - 70 %, expected term of 3 - 5 years and dividend yield of 0 %. Because the warrants were issued in connection with the IPO, the fair value of the warrants was recorded as an offering cost and reflected as a reduction of additional paid-in capital. During 2025, the Company granted options to purchase 750,000 shares to a company owned by Mr. Jack Ross, the Chief Executive Officer of the Company, and options to purchase 150,000 shares each to three employees of the Company. The options have a five-year term. One-third (1/3) of the total number of shares of Common Stock (including fractional shares, as applicable) subject to these Options shall vest on the one (1) year anniversary of the Vesting Commencement Date and the remaining two-thirds (2/3) of the total number of shares of Common Stock (including fractional shares, as applicable) subject to this Option shall vest in equal monthly installments over the following twenty-four (24) months; provided, that the Optionholder remains actively providing services to the Company or any of its Affiliates as of each such date. The Company determined the fair value of the options of $ 1,395,685 during the year ended December 31, 2025 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 $ 2.38 , risk-free interest rate of 3.59 %, volatility of 65 %, expected term of 3.5 years and dividend yield of 0 %. As of December 31, 2025, and 2024, there were 11,483,926 and 8,721,818 shares issued, respectively, and 11,303,853 and 8,541,745 shares outstanding, respectively. F- 24 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, results of operations or cash flows. License Revenue: During 2025 the Company entered into a license agreement with a company to license its IP to territories in the United Arab Emirates and Turkey. The Company recognized $ 1,500,000 as licensing revenue in conjunction with this agreement during March 2025, $ 500,000 during May 2025 and $ 900,000 during June 2025. Due to the instability in the countries, the licensee terminated the agreement in February 2026 with the Company, resulting in a reversal of the $ 2,900,000 license fee revenue during December 2025. Despite the termination, the Company is still pursuing the registration of the IP in those countries. Note 14 – Stock Options and Warrants The following table summarizes the changes in options outstanding and the related prices for the shares of the Company’s common stock issued to employees and consultants under a stock option plan at December 31, 2025: Options Outstanding Options Exercisable Exercise Price ($) Number Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price ($) Number Exercisable Weighted Average Exercise Price ($) $ 2.38 1,200,000 4.71 $ 2.38 - $ - The stock option activity for the year ended December 31, 2025 and 2024 is as follows: Options Outstanding Weighted Average Exercise Price Outstanding at December 31, 2023 252,102 $ 6.15 Granted 84,034 10.71 Exercised - - Expired or canceled ( 84,034 ) ( 10.71 ) Outstanding at December 31, 2024 252,102 6.15 Granted 1,200,000 2.38 Exercised - - Expired or canceled ( 252,102 ) ( 6.15 ) Outstanding at December 31, 2025 1,200,000 $ 2.38 Exercisable at December 31, 2025 - $ - Stock-based compensation expense related to options was $ 136,248 and $ 0 during the years ended December 31, 2025 and 2024, respectively, and is recognized using the straight-line method. Stock options outstanding as of December 31, 2025 and 2024, as disclosed in the above table, have an intrinsic value of $ 0 and $ 119,748 , respectively. As of December 31, 2025, unamortized stock-based compensation costs related to options was $ 1,259,437 and will be recognized over a period of 2.75 years. The following table summarizes the changes in warrants at December 31, 2025: Warrants Outstanding Warrants Exercisable Exercise Price ($) Number Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price ($) Number Exercisable Weighted Average Exercise Price ($) $ 2.75 - 11.70 156,000 3.35 $ 8.69 103,500 $ 11.70 F- 25 The warrant activity for the year ended December 31, 2025 is as follows: Warrants Outstanding Weighted Average Exercise Price Outstanding at December 31, 2023 - $ - Granted 103,500 11.70 Exercised - - Expired or canceled - - Outstanding at December 31, 2024 103,500 11.70 Granted 481,070 0.30 Exercised ( 428,570 ) ( 0.00001 ) Expired or canceled - - Outstanding at December 31, 2025 156,000 $ 8.69 Exercisable at December 31, 2025 103,500 $ 11.70 Stock warrants outstanding as of both December 31, 2025 and 2024, 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 and reportable 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 not 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. Revenue attributed to customers in the United States and foreign countries for the years ended December 31, 2025 and 2024 were as follows: December 31, 2025 December 31, 2024 United States $ 27,318,377 $ 30,831,188 Canada 2,418,056 3,926,370 Mexico 623,660 3,638 Other 20,716 73,047 $ 30,380,809 $ 34,834,243 The Company’s revenue by product group for the years ended December 31, 2025 and 2024 were as follows: December 31, 2025 December 31, 2024 Nutraceuticals $ 29,731,664 $ 33,392,094 Beverages 631,332 1,425,239 Consumer Goods 17,987 16,910 $ 30,380,809 $ 34,834,243 F- 26 The Company’s revenue by major sales channel for the years ended December 31, 2025 and 2024 were as follows: December 31, 2025 December 31, 2024 Online $ 8,131,385 $ 8,360,297 Retail 22,249,424 26,473,946 $ 30,380,809 $ 34,834,243 The Company’s significant expenses for the years ended December 31, 2025 and 2024 were as follows: December 31, 2025 December 31, 2024 Retailer promotions $ 5,145,915 $ 6,337,344 Freight and fulfillment 2,401,984 2,026,259 Online marketing 3,391,220 2,884,752 Salaries and benefits, marketing 1,350,751 1,342,419 Royalties and commissions 770,312 342,141 Media credits 859,920 - TV advertising 103,480 - Other selling and marketing 199,821 447,686 Gain on payables - ( 389,169 ) IT expenses 648,610 557,686 Salaries and benefits, non-marketing 3,316,213 2,239,736 Professional fees 1,623,331 372,305 Other general and administrative expenses 1,592,577 1,547,278 Stock based compensation 438,448 - Board of Directors compensation 125,000 - Reserve for bad debts 6,660,650 - Amortization 133,334 133,334 $ 28,761,566 $ 17,841,771 Long-lived assets (net) attributable to operations in the United States and foreign countries as of December 31, 2025 and 2024 were as follows: December 31, 2025 December 31, 2024 United States $ 150,000 $ 283,333 Foreign countries - - $ 150,000 $ 283,333 Note 16 – Subsequent Events The Company evaluated its December 31, 2025 consolidated financial statements for subsequent events through the date the consolidated financial statements were issued and concluded that except as noted below, no subsequent events have occurred that would require adjustment or disclosure into the consolidated financial statements. During January 2026, the Company repaid a short-term loan from a related party in the amount of $ 100,000 along with interest of $ 15,000 . Subsequent to December 31, 2025, the Company has repaid $ 175,000 of existing $ 17,500,000 May 2025 Loan. During January 2026, the Company paid a bonus to a company owned by the CEO of $ 400,000 for 2026. On March 10, 2026, the Company entered into an agreement with Cedar Advance LLC for a cash advance in the amount of $ 2,800,000 with a repayment amount of $ 3,500,000 if paid in 30 days. The Company received $ 980,000 after deducting $ 140,000 in fees and paying off prior advance of $ 1,680,000 . The Company is required to make weekly payments of $ 100,800 . In conjunction with the advance, the Company agreed to issue 118,000 shares of common stock to the consultant who facilitated the facility and thus recognized $ 153,400 as financing cost. During March 2026, the Company entered into a confidential settlement agreement and mutual general release with a vendor. The Company has made payment of $ 420,000 toward this agreement and the outstanding balance is $ 280,000 . During March 2026, the Company laid off 13 employees in order to right size its overhead expenses. During March 2026, the Company was notified by a major customer, Costco, that due to an over-stock of FOCUSfactor inventory, driven by the declining sales of 22 %, they are in a position where they will not be ordering the majority of the product for their promotional endcaps for the remainder of the year. During March 2026, the Company was notified by its subordinated lender, Sanders Morris Harris, LLC., that they believe their loan has a maturity date of March 31, 2026, and they do not intend to grant an extension on the maturity date, although the loan is fully subordinated to the senior lender. F- 27 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. SYNERGY CHC CORP. Date: March 31, 2026 By: /s/ Jack Ross Name: Jack Ross Title: Chief Executive Officer and Chairman (Principal Executive Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date / s / Jack Ross Chief Executive Officer and Chairman March 31, 2026 Jack Ross (Principal Executive Officer) / s / Jaime Fickett Chief Financial Officer March 31, 2026 Jaime Fickett (Principal Financial and Accounting Officer) / s / Alfred Baumeler Director March 31, 2026 Alfred Baumeler / s / J. Paul SoRelle Director March 31, 2026 J. Paul SoRelle / s / Nitin Kaushal Director March 31, 2026 Nitin Kaushal / s / Teresa Thompson Director March 31, 2026 Teresa Thompson 44