Synergy CHC Corp. 10-K

ITEM 9A. CONTROLS AND PROCEDURES. Evaluation of Disclosure Controls and Procedures Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. As required by paragraph (b) of Rules 13a-15 or 15d-15 under the Exchange Act, our management, with the participation of our president (our principal executive officer) and our chief financial officer (our principal financial officer and principal accounting officer) evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this annual report, being December 31, 2016. Based on this evaluation, these officers concluded that, as of December 31, 2016, these disclosure controls and procedures were not effective to ensure that the information required to be disclosed by our company in reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. The conclusion that our disclosure controls and procedures were not effective was due to the presence of material weaknesses in internal control over financial reporting as identified below under the heading “Management’s Report on Internal Control over Financial Reporting.” Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within our company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, an issuer’s principal executive and principal financial officers, or persons performing similar functions, and effected by the issuer’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer’s assets that could have a material effect on the financial statements. Under the supervision of our president and chief executive officer (our principal executive officer), who is also our chief financial officer (our principal financial officer and principal accounting officer), we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2016 using the criteria established in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). This evaluation included review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls and a conclusion on this evaluation. Based on this evaluation, our management concluded our internal control over financial reporting was not effective as at December 31, 2016. 16 A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our company’s annual or interim financial statements will not be prevented or detected on a timely basis. In its assessment of the effectiveness of our internal control over financial reporting as of December 31, 2016, we determined that there were control deficiencies that constituted material weaknesses which are indicative of many small companies with small staff, such as: (1) inadequate segregation of duties and effective risk assessment; and (2) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both generally accepted accounting principles in the United States and guidelines of the Securities and Exchange Commission. These control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements could not have been prevented or detected on a timely basis. As a result of the material weaknesses described above, we concluded that we did not maintain effective internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control Integrated Framework issued by COSO. Our management is currently evaluating remediation plans for the above deficiencies. During the period covered by this annual report on Form 10-K, we have not been able to remediate the remaining weaknesses described above. However, we plan to take steps to enhance and improve the design of our internal control over financial reporting. Changes in Internal Control There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during our year ended December 31, 2016 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. As a “smaller reporting company,” as defined by Item 10 of the Regulation S-K, we are not required to include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. ITEM 9B. OTHER INFORMATION. None. 17 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. Directors and Executive Officers The following table sets forth the names of the members of our Board of Directors, nominees for our Board of Directors, executive officers, and the position with the Company held by each. Name Age Title Tenure Jack Ross 51 President, CEO, CFO and Director Since October 2014 Stephen Fryer 78 Director Since December 2014 Paul SoRelle 60 Director Since December 2014 Each director is elected to hold office until the next annual meeting of shareholders and until his/her successor has been qualified and elected. Our President, Chief Executive Officer and Chief Executive Officer, our sole executive officer, serves at the discretion of our Board of Directors. There are no understandings between any of our directors or executive officer or any other person pursuant to which any executive officer or director was or is to be selected as an executive officer or director. Furthermore, there are no family relationships between any director, executive officer, or person nominated or chosen by us to become a director or executive officer. Background of Executive Officer and Board of Directors The following is a brief account of the business experience of each director, director nominee and executive officer of the Company. Jack Ross - President, Chief Executive Officer, Chief Financial Officer and Director Mr. Ross is currently the sole officer and director of Pure Sports Inc., positions he has held since February 2009, the sole officer and director of Gowan Capital Inc., positions he has held since May 2011, the sole officer and director of Synergy Energy Strips World Wide Inc., positions he has held since August 2011, the sole officer and director of Rio e Cigs Inc., positions he has held since December 2011, and the sole officer and director of Kenek Brands Inc., positions he has held since May 2014. From January 2012 to April 2014, Mr. Ross served as the sole officer and director of Synergy Strips Corp., which was acquired by and became a wholly owned subsidiary of the Company in April 2014 (the “Subsidiary”) in connection with the Merger. Other than the Subsidiary, none of these companies are related to or affiliated with the Company. Mr. Ross’s significant leadership experience at various private and public companies led to the conclusion that he should serve as a member of our Board of Directors, in light of our business and structure. Mr. Stephen Fryer - Director Since April 2003, Mr. Fryer has been the Chief Executive Officer and Managing Partner of SC Capital Partners, Inc., a private micro-market investment banking and private equity intermediary. Prior to joining SC Capital Partners, Inc., Mr. Fryer was a consulting investment banker with Grant Bettingen, Inc., a broker-dealer based in California, from January 2001 to March 2003. From May 1989 to August 1997, Mr. Fryer was the Principal and Managing Director of Ventana International, Ltd., a venture capital and private investment banking firm with operations and investors in the United States, Latin America, Europe and Asia. Mr. Fryer earned a B.S. in Mechanical Engineering, with a minor in Economics, from the University of Southern California. Mr. Fryer’s substantial experience in the investment banking industry, and his demonstrated skill in corporate finance, led to the conclusion that he should serve as a member of our Board of Directors, in light of our business and structure. Mr. Paul SoRelle - Director Since November 1999, Mr. SoRelle has been the Chief Executive Officer and Managing Partner of Pioneer Press of Greeley, Inc., a commercial offset printing company. Prior to joining Pioneer Press, Mr. SoRelle worked in the gaming business as well as the retail gasoline and convenience store business. Mr. SoRelle’s significant leadership experience at Pioneer Press of Greeley, Inc. led to the conclusion that he should serve as a member of our Board of Directors, in light of our business and structure. Legal Proceedings No director, director nominee, executive officer, or control person of the Company has been involved in any legal proceeding listed in Item 401(f) of Regulation S-K in the past 10 years. 18 CORPORATE GOVERNANCE Director Independence As of March 15, 2017, we have three directors. Each director is elected to hold office for a one year period or until the next Annual Meeting of Shareholders and until his/her successor has been qualified and elected following the one year of service. Our common stock is not listed on any exchange. Consequently, no exchange rules regarding director independence are applicable to us. However, we have applied the director independence test of The NASDAQ Capital Market and Mr. Fryer and Mr. SoRelle are independent directors. Officers serve at the discretion of the Company’s directors. There are no understandings between the director of the Company or any other person pursuant to which any officer or director was or is to be selected as an officer or director. Code of Ethics The Company does not have a code of ethics for our principal executive or principal financial officers, due to our size and current stage of development. The Company’s management intends to promote honest and ethical conduct, full and fair disclosure in our reports to the SEC, and compliance with applicable governmental laws and regulations. Committees The Company does not have any standing committees and the Board of Directors performs the duties of an audit committee, nominating committee and compensation committee. Since the Company has no standing committees, the Company does not have any written charters governing such committees’ conduct. Nominating Committee We do not have a nominating committee, as we believe the Company is too small to warrant a separate standing nominating committee. Director Jack Ross is responsible for selecting individuals to stand for election as members of our Board of Directors. The Company does not have a policy with regards to the consideration of any director candidates recommended by our stockholders. Our Board of Directors has determined that it is in the best position to evaluate our Company’s requirements as well as the qualifications of each candidate when it considers a nominee for a position on our Board of Directors. If stockholders wish to recommend candidates directly to our Board of Directors, they may do so by communicating directly with Jack Ross, our President, Chief Executive Officer, Chief Financial Officer and the Chairman of our Board of Directors by mail, at Synergy CHC Corp., Attn: President, 865 Spring Street, Westbrook, ME 04092, or by telephone at (615) 939-9004. Audit Committee We do not have an audit committee currently serving and, as a result, our Board of Directors performs the duties of an audit committee. We also do not have an “audit committee financial expert,” as such term is defined in Item 407(d)(5)(ii) of Regulation S-K, however we feel that our directors’ backgrounds and financial sophistication is sufficient to fulfill the duties of the audit committee. Compensation Committee We do not have a compensation committee, as we believe the Company is too small to warrant a separate standing compensation committee. As a result, our Board of Directors performs the duties of a compensation committee. While the Company believes that its current size does not warrant a separate standing compensation committee, it will reassess that need if and when additional directors are appointed and/or elected. Shareholder Communications Shareholders may send written communications on the Company’s web site: www.synergychc.com 19 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE Section 16(a) of the Exchange Act requires the Company’s executive officers, directors, and persons who beneficially own more than 10% of a registered class of the Company’s equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of the Company’s common stock and other equity securities. These executive officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms filed by such reporting persons. Based solely upon the Company’s review of such forms furnished to it, the Company believes that during the fiscal year ended 2016 and through to March 15, 2017, all of its executive officers, directors, and every person who is directly or indirectly the beneficial owner of more than 10% of any class of the Company’s securities, complied with the filing requirements of Section 16(a) of the Exchange Act except for the following: (a) Jack Ross, our President, Chief Executive Officer, Chief Financial Officer and a member of our Board of Directors filed a Form 3 on February 9, 2015, to report the shares of our common stock beneficially owned by Mr. Ross as of October 27, 2014, the date upon which Mr. Ross became our President, Chief Executive Officer, Chief Financial Officer and a member of our Board of Directors; (b) Stephen J. Fryer, a member of our Board of Directors, filed a Form 3 on February 9, 2015, to report that he beneficially owns no shares of our common stock as of December 8, 2014, the date upon which Mr. Fryer became a member of our Board of Directors; (c) James P. SoRelle, a member of our Board of Directors, filed a Form 3 on February 10, 2015, to report that he beneficially owns no shares of our common stock as of December 8, 2014, the date upon which Mr. SoRelle became a member of our Board of Directors; and (d) Jack Ross filed a Form 4 on April 27, 2015 to report the acquisition of shares of common stock on April 19, 2015 by Gowan Private Equity, Inc., which report was due on April 21, 2015; (e) Jack Ross filed a Form 3/A on October 18, 2016 to amend his reported shares owned as of December 8, 2014. ITEM 11. EXECUTIVE COMPENSATION. The following table sets forth certain information about compensation paid, earned or accrued for services for each executive officer for the past two fiscal years. Summary Compensation Table Year Salary Bonus Stock Awards Option Awards All Other Compensation Total Jack Ross 2016 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 Chairman, President, Chief Executive Officer and Chief Financial Officer 2015 0 0 0 0 0 0 We have not made provisions for paying cash or non-cash compensation to our officers and directors. No salaries or fees are being paid at the present time to our officers and directors and none have been paid or owed from inception to date. We have no employment agreement with our sole officer. As of December 31, 2016 and 2015, we had no pension plans or compensatory plans or other arrangements that provide compensation in the event of a termination of employment or a change of control of our Company. Equity Compensation Plans On July 30, 2014, the Company’s board of directors approved the Company’s 2014 Equity Incentive Plan and the reservation of 15,525,000 shares of common stock for issuance under such plan. Such plan was approved by the Company’s shareholders and became effective on August 5, 2015. On April 2, 2014, the Company granted 1,000,000 options with an exercise price of $0.25 per share to the Company owned by Mr. Jack Ross, Chief Executive Officer of the Company. 20 On December 14, 2015, the Company granted 1,000,000 options each with an exercise price of $0.25 per share to two Board Members of the Company. On December 14, 2015, the Company granted 1,000,000 options each with an exercise price of $0.65 per share to two employees of the Company. On December 14, 2015, the Company granted 1,000,000 options with an exercise price of $0.25 per share to a Board Observer of the Company. During 2016, these options were cancelled in conjunction with the issuance of 7,500,000 shares and the cancellation of all outstanding options and warrants. On February 18, 2016, the Company granted 300,000 options with an exercise price of $0.70 per share to an employee of the Company. On April 18, 2016, the Company granted 500,000 options with an exercise price of $0.70 per share to an employee of the Company. On July 4, 2016, the Company granted 500,000 options with an exercise price of $0.70 per share to an employee of the Company. The following table summarizes the changes in options outstanding and the related prices for the shares of the Company’s common stock issued to employees and consultants under a stock option plan at December 31, 2016: Options Outstanding Options Exercisable Exercise Prices ($) Number Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price ($) Number Exercisable Weighted Average Exercise Price ($) $ 0.25 - $0.70 6,300,000 6.5 $ 0.47 3,408,333 $ 0.38 The stock option activity for the year ended December 31, 2016 is as follows: Options Outstanding Weighted Average Exercise Price Outstanding at December 31, 2014 1,000,000 $ 0.25 Granted 4,000,000 0.45 Exercised - - Expired or canceled - - Outstanding at December 31, 2015 5,000,000 $ 0.41 Granted 2,300,000 0.50 Exercised - - Expired or canceled (1,000,000 ) (0.25 ) Outstanding at December 31, 2016 6,300,000 $ 0.47 Stock-based compensation expense related to vested options was $2,200,160 and $523,714 during the years ended December 31, 2016 and 2015, respectively. The Company determined the value of share-based compensation for options vesting during the year ended December 31, 2015 using the Black-Scholes fair value option-pricing model with the following weighted average assumptions: estimated fair value of Company’s common stock of $0.74, risk-free interest rate of 2.23%, volatility of 154%, expected lives of 10 years, and dividend yield of 0%. The Company determined the value of share-based compensation for options vesting during the year ended December 31, 2016 using the Black-Scholes fair value option-pricing model with the following weighted average assumptions: estimated fair value of Company’s common stock of $0.40-0.61, risk-free interest rate of 0.90-1.24%, volatility of 135-160%, expected lives of 3-6 years, and dividend yield of 0%. Stock options outstanding as of December 31, 2016, as disclosed in the above table, have an intrinsic value of $780,000. Outstanding Equity Awards at Fiscal Year-End The following table contains certain information concerning unexercised options for our sole executive officer as of December 31, 2016. Option awards Stock awards Name Number of securities underlying unexercised options exercisable Number of securities underlying unexercised options unexercisable Equity incentive plan awards: Number of securities underlying unexercised unearned options Option exercise price Option expiration date Number of shares or units of stock that have not vested Market value of shares of units of stock that have not vested Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested Jack Ross - - - - - - - - - 21 Director Compensation The following table provides information regarding all compensation paid to non-employee directors during the fiscal year ended December 31, 2016. Name Fees earned or paid in cash Stock awards Option awards (1) Non-equity incentive plan compensation Nonqualified deferred compensation earnings All other compensation Total Jack Ross $ - - - - - - $ - Stephen Fryer $ 20,000 - - - - - $ 20,000 Paul SoRelle $ 20,000 - - - - - $ 20,000 (1) This column reflects the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board, or “FASB”, issued Accounting Standards Update, or “ASC”, Topic 718. 22 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. The following table sets forth certain information regarding our common stock beneficially owned as of the date of this report, for (i) each stockholder known to be the beneficial owner of 5% or more of our outstanding common stock, (ii) each executive officer and director, and (iii) all executive officers and directors as a group. To the best of our knowledge, subject to community and marital property laws, all persons named have sole voting and investment power with respect to such shares, except as otherwise noted. Common Stock Beneficially Owned Number of shares beneficially owned Percentage of shares beneficially owned Executive officers and directors: (1) Jack Ross (4) (5) 48,389,399 50.90 % Stephen Fryer (5) 1,000,000 1.05 % Paul SoRelle (5) 2,296,658 2.42 % All directors and executive officers as a group (3 persons) 51,686,057 54.37 % 5% Stockholders: (2) Gowan Private Equity Inc (4) 43,780,750 46.05 % Knight Therapeutics (Barbados) Inc.(3) 17,645,812 18.56 % (1) Unless otherwise noted, the address for each of the named beneficial owners is: 865 Spring Street, Westbrook, ME 04092. (2) Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding. (3) As disclosed pursuant to a Schedule 13G filed with the SEC on February 2, 2015. This stockholder’s address is Chancery House, High Street, Bridgetown, Barbados. (4) This stockholder’s address is: 275 Canterbury Lane, Fall River NS B2T 1A4, Canada. Jack Ross is the Chief Executive Officer of Kenek Brands, Inc., Dunhill Distribution Group, Inc. Gowan Capital Inc. and Gowan Private Equity Inc. Kenek Brands Inc. owns options to purchase 1,000,000 shares of common stock. Gowan Private Equity owns 43,780,750. Gowan Capital Inc. owns 400,000 shares. Dunhill Distribution Group owns 3,208,649. (5) Consists of 1,000,000 options to purchase shares of common stock. 23 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. TRANSACTIONS WITH RELATED PERSONS The information required by Item 407(a) of Regulation S-K is included in this Annual Report on Form 10-K under the heading Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE – Director Independence. Since January 1, 2014, the Company has not been a party to any transaction in which the amount involved exceeded or will exceed the lesser of $120,000 or 1% of the average of its total assets at year end for the last two fiscal years, and in which any of its directors, named executive officers or beneficial owners of more than 5% of the Company’s capital stock, or an affiliate or immediate family member thereof, had or will have a direct or indirect material interest, other than described below: On April 7, 2014, an Agreement and Plan of Merger (the “Merger Agreement”) was entered into by and among the Company, Synergy Merger Sub, Inc., a Delaware corporation and the wholly owned subsidiary of the Company formed for the purpose of the transactions under the Merger Agreement (“Merger Sub”), and Synergy Strips Corp., a Delaware corporation incorporated on January 24, 2012 (“SSC”). The Merger Agreement provided for the merger of Merger Sub with and into SSC (the “Merger”), with SSC surviving the merger as the wholly owned subsidiary of the Company. The Merger was consummated on April 21, 2014. In connection with the Merger, Dunhill Distribution Group, Inc. acquired 3,208,649 shares of the Company’s Common Stock. Jack Ross, the Company’s President, CEO, CFO and a director, is the Chief Executive Officer of Dunhill Distribution Group, Inc. On April 2, 2014, the Company granted 1,000,000 options valued at approximately $282,000 to a company owned by Mr. Jack Ross, Chief Executive Officer of the Company (see note 15). On October 31, 2014, the Company borrowed $100,000 through a promissory note bearing interest at 10% with a maturity date of October 31, 2015 from a company owned by Mr. Ross, the Company’s chief executive officer. During the year ended December 31, 2015, the note was converted into 400,000 shares of the Company’s common stock. The Company accrued and paid consulting fees of $25,000 and $15,000 per month in 2016 and 2015, respectively, to a company owned by Mr. Jack Ross, Chief Executive Officer of the Company. The Company expensed $481,215 and $180,000, respectively during 2016 and 2015 as consulting fees and bonuses, and made payments totaling $481,215 and $486,958 towards services to an entity owned and controlled by an officer and shareholder of the Company for the year ended December 31, 2016 and 2015. As of December 31, 2016 and 2015, the total outstanding balance was $0. On January 22, 2015, the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc. a related party, for the purchase of the Focus Factor assets. At December 31, 2016 and 2015, the Company owed Knight $2,752,639 and $4,267,268, respectively, on this loan, net of discount (see Note 12). On June 26, 2015, the Company entered into a Security Agreement with Knight Therapeutics, Inc., through its wholly owned subsidiary Neuragen Corp. for the purchase of Knight Therapeutics, Inc.’s assets. At December 31, 2016 and 2015, the Company owed Knight $625,000 and $925,000 on this agreement (see Note 12). On August 18, 2015, the Company entered into a Consulting Agreement with Kara Harshbarger, the co-founder of Hand MD, LLC, pursuant to which she will provide marketing and sales related service. The Company will pay Ms. Harshbarger $10,000 a month for one year unless the Consulting Agreement is terminated earlier by either party. Hand MD, LLC is a 50% owner in Hand MD Corp. The Company expensed $120,000 and $40,000 through payroll for the years ended December 31, 2016 and 2015, respectively. As of December 31, 2016 and 2015, the total outstanding balance was $0. On November 12, 2015, the Company entered into a Loan Agreement with Knight for the purchase of NomadChoice Pty Limited and Breakthrough Products, Inc. At December 31, 2016 and 2015, the Company owed Knight $3,680,162 and $3,571,314, respectively, on this loan, net of discount (see Note 12). On December 22, 2016, we issued to Knight Therapeutics (Barbados) Inc., or Knight, 7,500,000 shares of our common stock in exchange for the cancellation of warrants to purchase an aggregate of 8,132,002 shares of our common stock held by Knight, with per share purchase prices of $0.34 and $0.49, and the cancellation of an option to purchase 1,000,000 shares of our common stock held by Knight, with an exercise price of $0.25 per share. As additional consideration, Knight has agreed to purchase up to $2.0 million worth of our common stock if and when we undertake a common stock equity financing, subject to certain terms and conditions. At December 31, 2016 and 2015, a NomadChoice Pty Ltd. (subsidiary) of the Company owed Knight Therapeutics $87,678 and $71,573, respectively, in connection with a royalty distribution agreement (see Note 12). 24 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES. Audit Committee’s Pre-Approval Practice Prior to our engagement of our independent auditor, such engagement was approved by our board of directors. The services provided under this engagement may include audit services, audit-related services, tax services and other services. Pre-approval is generally provided for up to one year and any pre-approval is detailed as to the particular service or category of services and is generally subject to a specific budget. Pursuant our requirements, the independent auditors and management are required to report to our board of directors at least quarterly regarding the extent of services provided by the independent auditors in accordance with this pre-approval, and the fees for the services performed to date. Our board of directors may also pre-approve particular services on a case-by-case basis. All audit-related fees, tax fees and other fees incurred by us for the year ended December 31, 2016 and 2015, were approved by our board of directors. RBSM LLP serves as our independent registered public accounting firm. Independent Registered Public Accounting Firm Fees and Services The following table sets forth the aggregate fees including expenses billed to us for the years ended December 31, 2016 and 2015 by our auditors. Year Ended Year Ended December 31, 2016 December 31, 2015 Audit Fees (1) $ 137,863 $ 125,500 Audit-Related Fees (2) - - Tax Fees (3) 3,500 - All Other Fees (4) - 1,663 Total $ 141,363 $ 127,163 (1) Audit Fees - This category includes the audit of the Company’s annual financial statements, review of financial statements included in its Quarterly Reports on Form 10-Q, and services that are normally provided by independent auditors in connection with the engagement for fiscal years. (2) Audit-Related Fees - This category consists of fees reasonably related to the performance of the audit or review of the Company’s financial statements that are not reported as “Audit Fees.” (3) Tax Fees - This category consists of tax compliance, tax advice, and tax planning work. (4) All Other Fees - This category consists of fees for other miscellaneous items. 25 PART IV ITEM 15. EXHIBITS FINANCIAL STATEMENT SCHEDULES. The following documents are filed as part of this report: 1. Consolidated Financial Statements INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Financial Statements Reports of Independent Registered Public Accounting Firm F-1 Consolidated Balance Sheets F-2 Consolidated Statements of Operations and Comprehensive Loss F-3 Consolidated Statements of Shareholders’ Equity (Deficit) F-4 Consolidated Statements of Cash Flows F-5 – F-6 Notes to Consolidated Financial Statements F-7 2. Consolidated Financial Statement Schedules None. 3. Exhibits Incorporated by Reference Exhibit (Unless Otherwise Indicated) Number Exhibit Title Form File Exhibit Filing Date 2.1 Agreement and Plan of Merger, dated April 7, 2014, by and among Oro Capital Corporation, Synergy Merger Sub, Inc. and Synergy Strips Corp. 8-K 000-55098 2.1 4/9/2014 2.2 Agreement and Plan of Merger dated April 21, 2014 (incorporated by reference to the Registrant’s Current Report on Form 8-K filed on April 9, 2014). 8-K 000-55098 2.1 5/7/2014 2.3 Asset Purchase Agreement, dated January 22, 2015, by and among Synergy Strips Corp.; Factor Nutrition Labs, LLC; Vita Partners, LLC, RPR Partners, LLC, and Thor Associates, Inc. 10-K 000-55098 2.3 3/31/2015 2.4 Asset Purchase Agreement, dated June 26, 2015, by and between Neuragen Corp. and Knight Therapeutics, Inc. 8-K 000-55098 2.4 7/2/2015 3.1 Articles of Incorporation S-1 333-185103 3.1 11/21/2012 3.2 Amendment to Articles of Incorporation 8-K 000-55098 3.1(b) 5/7/2014 3.3 Certificate of Amendment to Articles of Incorporation 8-K 000-55098 3.4 8/6/2015 3.4 By-Laws S-1 333-185103 3.2 11/21/2012 3.5 Amendment to By-Laws 8-K 000-55098 3.2 6/26/2015 4.1 Form of Subscription Agreement S-1/A 333-185103 4.1 2/19/2013 26 4.2 Synergy Strips Corp. Common Stock Purchase Warrant, dated January 22, 2015. 10-K 000-55098 4.2 3/31/2015 4.3 Synergy Strips Corp. Common Stock Purchase Warrant (10-Year Warrant), dated January 22, 2015. 10-K 000-55098 4.3 3/31/2015 4.4 Synergy CHC Corp. Common Stock Purchase Warrant, dated November 12, 2015. 8-K 000-55098 4.4 11/18/2015 4.5 Synergy CHC Corp. Common Stock Purchase Warrant (10-Year Warrant), dated November 12, 2015. 8-K 000-55098 4.5 11/18/2015 4.6 Synergy CHC Corp. Common Stock Warrant dated December 17, 2015. 8-K 000-55098 4.6 12/22/2015 10.1 Mineral Claim Agreement for the Shipman Diamond Project, dated September 1, 2011. S-1 333-185103 10.1 11/21/2012 10.2 Transfer of Mineral Dispositions with Danny Aaron, dated February 21, 2012. S-1 333-185103 10.2 11/21/2012 10.3 Form of Sales and Marketing Consultant and Distribution Agreement, dated April 2, 2014. 8-K 000-55098 10.1 5/7/2014 10.4 Sales and Marketing Consultant and Distribution Agreement, dated April 2, 2014, between Synergy Strips Corp. and Kenek Brands Inc. 8-K 000-55098 10.1 5/7/2014 10.5 Loan Agreement, dated January 22, 2015, between Knight Therapeutics (Barbados) Inc. and Synergy Strips Corp. 10-K 000-55098 10.5 3/31/2015 10.6 Product Distribution Option Agreement, dated January 22, 2015, between Knight Therapeutics (Barbados) Inc. and Synergy Strips Corp. 10-K 000-55098 10.6 3/31/2015 10.7 Distribution, License and Supply Agreement, dated January 22, 2015, by and between Synergy Strips Corp. and Knight Therapeutics (Barbados) Inc. 10-K 000-55098 - 3/31/2015 10.8 Synergy Strips Corp. 2014 Equity Incentive Plan 8-K 000-55098 10.8 8/6/2015 10.9 Contribution Agreement, dated August 18, 2015, between Synergy CHC Corp. and Hand MD Corp. 8-K 000-55098 10.9 8/21/2015 10.10 Contribution Agreement, dated August 18, 2015, among Hand MD, LLC, Principal Owners as listed therein, Synergy CHC Corp. and Hand MD. Corp. 8-K 000-55098 10.10 8/21/2015 10.11 Intellectual Property License Agreement, dated August 18, 2015, by and between Synergy CHC Corp. and Hand MD. Corp. 8-K 000-55098 10.11 8/21/2015 10.12 Consulting Agreement, dated August 18, 2015, by and between Synergy CHC Corp. And Kara Harshbarger. 8-K 000-55098 10.12 8/21/2015 10.13 Stock Purchase Agreement, dated November 12, 2015, by and among Breakthrough Products, Inc., URX ACQUISITION TRUST, Jordan Eisenberg, other shareholders as listed therein and Synergy CHC Corp. 8-K 000-55098 10.13 11/18/2015 10.14 Share Purchase Agreement, dated November 15, 2015, between TPR Investments Pty Ltd CAN 128 396 654 as trustee for Polmear Family Trust, Timothy Polmear and Rebecca Polmear, NomadChoice Pty Limited ACN 160 729 939 trading as Flat Tummy Tea and Synergy CHC Corp. 8-K 000-55098 10.14 11/18/2015 27 10.15 First Amendment to Loan Agreement, dated November 12, 2015, between Knight Therapeutics (Barbados) Inc. and Synergy CHC Corp. 8-K 000-55098 10.15 11/18/2015 10.16 Amendment to First Amendment Agreement, dated December 3, 2015, between Knight Therapeutics (Barbados) Inc. and Synergy CHC Corp. 8-K 000-55098 10.16 12/9/2015 10.17 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. 8-K 000-55098 10.17 12/9/2015 10.18 Settlement and Release Agreement, dated December 17, 2015, by and between Synergy CHC Corp., the former shareholders of Breakthrough Products, Inc. and URX ACQUISITION TRUST and as representative of certain shareholders. 8-K 000-55098 10.18 12/22/2015 16.1 Letter from M&K CPAS, PLLC to the Securities and Exchange Commission dated June 11, 2014. 8-K/A 000-55098 16.1 6/12/2014 21.1 Subsidiaries of the Registration - - - Filed herewith 23.1 Promissory Note to Danny Aaron, dated May 17, 2013. S-1/A 333-185103 23.2 5/17/2013 23.2 Promissory Note and Future Advances Note to Danny Aaron , dated May 28, 2013. S-1/A 333-185103 23.2 5/28/2013 31.1 Certification of Principal Executive Officer pursuant to Rule 13a-14(a) - - - Filed herewith 31.2 Certification of Principal Financial Officer pursuant to Rule 13a-14(a) - - - Filed herewith 32.1 Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 - - - Filed herewith 32.2 Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 - - - Filed herewith 101.INS XBRL Instance Document. - - - Furnished herewith 101.SCH XBRL Taxonomy Extension Schema Document. - - - Furnished herewith 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. - - - Furnished herewith 101.DEF XBRL Taxonomy Extension Definition Linkbase Document. - - - Furnished herewith 101.LAB XBRL Taxonomy Extension Label Linkbase Document. - - - Furnished herewith 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. - - - Furnished herewith 28 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SYNERGY CHC CORP. Date: March 24, 2017 By: /s/ Jack Ross President, Chief Executive Officer Pursuant to the requirements of the Exchange Act, 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 President, Chief Executive Officer March 24, 2017 Jack Ross (principal executive officer) Chief Financial Officer, Chief Accounting Officer, (principal financial officer), Director /s/ Stephen Fryer Director March 24, 2017 Stephen Fryer /s/ Paul SoRelle Director March 24, 2017 Paul SoRelle 29