What changed in this filing

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Item 1. Financial Statements

2019-05-03 compared with 2018-11-13 · 450 added, 600 removed, 704 unchanged (60% of the section changed)

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Consolidated Balance Sheets

September 30, 2018

March 31, 2019

December 31, 2018

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Prepaid expenses

Income taxes receivable

Inventory, net

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Deferred revenue

Provision for income taxes payable

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

Current portion of royalty payable

Total Current Liabilities

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Additional paid in capital

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income

Accumulated deficit

(13,559,835 )

(15,027,122 )

Total stockholders ’

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

Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income

Condensed Consolidated Statements of Operations and Comprehensive Income

For the three months ended

For the nine months ended

September 30, 2018

September 30, 2017

September 30, 2018

September 30, 2017

March 31, 2019

March 31, 2018

Cost of sales

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Interest expense

Remeasurement loss (gain) on translation of foreign subsidiary

Loss on sale of assets

Remeasurement (gain) loss on translation of foreign subsidiary

Amortization of debt issuance cost

Total other expenses

Net income (loss) before income taxes

Net income before income taxes

Income tax (benefit) expense

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Weighted average common shares outstanding

Comprehensive (loss) income:

Comprehensive income:

Net income (loss)

Foreign currency translation adjustment

Comprehensive income (loss)

Comprehensive income

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

Condensed Consolidated Statement of Stockholders’

Accumulated Other

Comprehensive

Stockholders’

as of December 31, 2017

$ (8,866,432 )

Fair value of vested

stock options

Foreign currency translation

Balance as of March

$ (8,921,928 )

Accumulated Other

Comprehensive

Stockholders’

as of December 31, 2018

$ (15,027,122 )

Fair value of vested

stock options

Foreign currency

translation loss

Common stock issued

for Per-fekt settlement

Balance as of March

$ (13,559,835 )

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

Condensed Consolidated Statements of Cash Flows

For the nine months ended

September 30, 2018

September 30, 2017

For the three months ended

March 31, 2019

March 31, 2018

Cash Flows from Operating Activities

Net (loss) income

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

Net income (loss)

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

Depreciation and amortization

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Stock based compensation expense

Remeasurement loss (gain) on translation of foreign subsidiary

Foreign currency transaction (gain) loss

Remeasurement (gain) loss on translation of foreign subsidiary

Foreign currency transaction loss

Non cash implied interest

Loss on sale of fixed assets

Changes in operating assets and liabilities:

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Payment for acquisition of domain name

Proceeds from sale of assets

Payment of development fee

Purchase of intangible assets

Net cash used in investing activities

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Repayment of notes payable

Proceeds from notes payable

Payment of debt issuance costs

Net cash (used in) provided by financing activities

Net cash used in financing activities

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

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

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

Cash, Cash Equivalents and restricted cash, beginning of period

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Supplemental Disclosure of Non-cash Investing and Financing Activities

Common stock issued for the acquisition of assets of Per-fekt

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

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

is the sole owner of six subsidiaries:

Neuragen Corp., Breakthrough Products, Inc., NomadChoice Pty Ltd., Synergy CHC Inc., Sneaky

and The Queen Pegasus Corp.

and the results have been consolidated in these statements.

January 1, 2019 the Company has merged its U.S.

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

and The Queen Pegasus Corp.) into the parent company.

is the sole owner of two subsidiaries:

NomadChoice Pty Ltd., and Synergy CHC Inc.

and the results have been consolidated in these

Summary of Significant Accounting Policies

accompanying condensed consolidated financial statements as of September 30, 2018 and December 31, 2017 and for the three and

nine months ended September 30, 2018 and 2017 are unaudited.

These unaudited condensed consolidated financial statements have

been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim

financial information and are presented in accordance with the requirements of Rule S-X of the Securities and Exchange Commission

(the “SEC”) and with the instructions to Form 10-Q.

Accordingly, they do not include all the information and footnotes

required by generally accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments

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

Operating results for

the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the

fiscal year ending December 31, 2018.

The unaudited condensed consolidated financial statements should be read in conjunction

with the audited consolidated financial statements as of and for the year ended December 31, 2017 and footnotes thereto included

in the Company’s Annual Report on Form 10-K filed with the SEC on April 2, 2018.

accompanying condensed consolidated financial statements as of March 31, 2019 and December 31, 2018 and for the three months ended

March 31, 2019 and 2018 are unaudited.

These unaudited condensed consolidated financial statements have been prepared in accordance

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

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

and with the instructions to Form 10-Q.

Accordingly, they do not include all the information and footnotes required by generally

accepted accounting principles for complete financial statements.

In the opinion of management, all adjustments (consisting of

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

Operating results for the three months

ended March 31, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31,

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

statements as of and for the year ended December 31, 2018 and footnotes thereto included in the Company’s Annual Report

on Form 10-K filed with the SEC on March 29, 2019.

of Presentation

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highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

As of September

31, 2019, the Company had no cash equivalents.

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

At September 30, 2018, the

uninsured balance amounted to $1,040,864.

At March 31, 2019, the uninsured

balance amounted to $313,910.

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.

September 30, 2018

March 31, 2019

December 31, 2018

September 30, 2017

March 31, 2018

Cash and cash equivalents

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

CDG Holdings, LLC on June 21, 2017 and $50,000 acquired as an Asset Purchase entered into with Cocowhite on May 22, 2018.

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

As of September 30, 2018, our qualitative analysis of intangible

assets with indefinite lives did not indicate any impairment.

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

on May 22, 2018.

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

During the year ended December

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

As of March 31, 2019, our qualitative analysis of intangible assets with indefinite lives did not indicate any impairment.

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

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

September 30, 2018, our qualitative analysis of long-lived assets did not indicate any impairment.

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

of the asset may not be recoverable.

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

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

As of March 31, 2019, our qualitative analysis of long-lived assets did

not indicate any impairment.

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

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

As of September 30, 2018,

our qualitative analysis of goodwill did not indicate any impairment.

of ASU 2014-09, Revenue from Contracts with Customers

January 1, 2018, the Company adopted Financial Accounting Standards Board (FASB) Accounting Standards Codification Topic 606,

Revenue from Contracts with Customers (ASC 606) using the modified retrospective (cumulative effect) transition method.

this transition method, results for reporting periods beginning January 1, 2018 or later are presented under ASC 606, while prior

period results continue to be reported in accordance with previous guidance.

The cumulative effect of the initial application

of ASC 606 was immaterial, no adjustment was recorded to the opening balance of retained earnings.

The timing of revenue recognition

for our various revenue streams was not materially impacted by the adoption of this standard.

The Company believes its business

processes, systems, and controls are appropriate to support recognition and disclosure under ASC 606.

In addition, the adoption

has led to increased footnote disclosures.

Overall, the adoption of ASC 606 did not have a material impact on the Company’s

condensed consolidated balance sheet, statement of operations and comprehensive income and statement of cash flows for the nine

months ended September 30, 2018.

ASC 606 also requires additional disclosures about the nature, amount, timing and uncertainty

of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets

recognized from costs incurred to fulfill a contract.

As described below, the analysis of contracts under ASC 606 supports the

recognition of revenue at a point in time, resulting in revenue recognition timing that is materially consistent with the Company’s

historical practice of recognizing product revenue when title and risk of loss pass to the customer.

As of March 31, 2019, our

qualitative analysis of goodwill did not indicate any impairment.

Company recognizes revenue in accordance with the Financial Accounting Standards Board’s (“FASB”), Accounting

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that are short term in nature are expensed as incurred.

The Company does not have any contract costs capitalized as of September

The Company does not have any contract costs capitalized as of March 31,

Liabilities - Deferred Revenue

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against the allowance for doubtful accounts.

As of both March 31, 2019 and December 31, 2018, allowance for doubtful accounts

Company expenses marketing, promotions and advertising costs as incurred.

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method), unless their effect on net loss per share is anti-dilutive.

As of September 30, 2018, and 2017, options to purchase 7,166,667 and 6,300,000 shares of common stock, respectively, were outstanding.

As of both September 30, 2018 and 2017, warrants to purchase 1,000,000 shares of common stock were outstanding.

As of March 31, 2019, and 2018, options to purchase 7,166,667 and 8,666,667 shares of common stock, respectively, were outstanding.

As of March 31, 2018, warrants to purchase 1,000,000 shares of common stock were outstanding.

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

per share for the three and nine months ended September 30, 2018, and 2017:

the three months ended

the nine months ended

per share for the three months ended March 31, 2019, and 2018:

For the three months ended

March 31, 2019

March 31, 2018

Net income (loss) after tax

Weighted average common shares outstanding

Common stock to be issued

Incremental shares from the assumed exercise of dilutive stock

Incremental shares from the assumed exercise

of dilutive stock warrants

Incremental shares from the assumed exercise of dilutive stock options

Incremental shares from the assumed exercise of dilutive stock warrants

Dilutive potential common shares

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to the fair value measurement.

of September 30, 2018, the Company has determined that there were no assets or liabilities measured at fair value.

of March 31, 2019, the Company has determined that there were no assets or liabilities measured at fair value.

consists of raw materials, components and finished goods.

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Comprehensive Income.

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

were as follows:

March 31, 2019

December 31, 2018

Period-end AUD:

USD exchange rate

Period-end CAD:

USD exchange rate

March 31, 2019

March 31, 2018

Average Quarterly AUD:

USD exchange rate

Average Quarterly CAD:

USD exchange rate

gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional

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

of Financial Statements –

Going Concern

Concern Evaluation

connection with preparing unaudited condensed consolidated financial statements for the three months ended March 31, 2019, management

evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s

ability to continue as a going concern within one year from the date that the financial statements are issued.

Company considered the following:

At March 31, 2019, the Company had an accumulated deficit

of $13,559,835.

At March 31, 2019, the Company had working capital deficit of $155,476.

Revenue decline in 2019 as compared to 2018 of $231,906.

conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern relate to the

entity’s ability to meet its obligations as they become due.

Company evaluated its ability to meet its obligations as they become due within one year from the date that the financial statements

are issued by considering the following:

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

In 2019, the Company repaid $512,500 of loans.

● The Company generated net income

of $1,467,286 for the three months ended March 31, 2019.

In 2019, the Company generated $813,711 of cash from operating activities.

Working capital deficit of $155,476 at March 31, 2019, includes loans payables to related party of $1,971,873, royalty payable

to related party of $270,818 and deferred revenue of $84,373.

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

concluded that above factors alleviates doubts about the Company’s ability to generate enough cash from operations and other

available sources to satisfy its obligations for the next twelve months from the issuance date.

Company will take the following actions if it starts to trend unfavorably to its internal profitability and cash flow projections,

in order to mitigate conditions or events that would raise substantial doubt about its ability to continue as a going concern:

Raise additional capital through line of credit and/or

loans financing for future mergers and acquisition.

Implement additional restructuring and cost reductions.

Raise additional capital through a private placement.

of April 30 , 2019 and March 31, 2019, the Company had $1,041,947

and $688,836, respectively, in cash and cash equivalents.

Accounting Pronouncements

August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820):

Disclosure Framework –

Changes in Disclosure

Requirements for Fair Value Measurement, which removes, modifies and adds certain disclosure requirements in Topic 820 “Fair

Value Measurement”.

ASU 2018-13 is effective for fiscal years beginning after December 15, 2019, including interim periods

within those fiscal years.

Early adoption is permitted.

The adoption of ASU 2018-13 is not expected to have any impact on the

Company’s unaudited condensed consolidated financial statements.

June 2018, the FASB issued ASU 2018-07, Compensation –

Stock Compensation (Topic 718):

Improvements to Nonemployee Share-Based

Payment Accounting, which simplifies the accounting for share-based payments to nonemployees by aligning it with the accounting

for share-based payments to employees, with certain exceptions.

ASU 2018-07 is effective for fiscal years beginning after December

15, 2018, including interim periods within those fiscal years.

Early adoption is permitted.

The adoption of ASU 2018-07 did not

have any impact on the Company’s unaudited condensed consolidated financial statements.

Accounting Standards Update adds SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No.

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We are currently evaluating the impact of adopting ASU 2018-05

on our consolidated financial statements.

on our unaudited condensed consolidated financial statements.

December 22, 2017, the U.S.

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Comprehensive Income (Topic 220), which has been deleted.

We are currently evaluating the impact of adopting ASU 2017-13 on our

consolidated financial statements.

amendments in this Update provide an optional transition practical expedient to not evaluate under Topic 842 existing or expired

land easements that were not previously accounted for as leases under Topic 840, Leases.

An entity that elects this practical

expedient should evaluate new or modified land easements under Topic 842 beginning at the date that the entity adopts Topic 842.

An entity that does not elect this practical expedient should evaluate all existing or expired land easements in connection with

the adoption of the new lease requirements in Topic 842 to assess whether they meet the definition of a lease.

We are currently

evaluating the impact of adopting ASU 2017-13 on our consolidated financial statements.

The adoption of ASU 2018-02 did not have any impact on the Company’s

unaudited condensed consolidated financial statements.

The amendments in this Update provide an optional

transition practical expedient to not evaluate under Topic 842 existing or expired land easements that were not previously accounted

for as leases under Topic 840, Leases.

An entity that elects this practical expedient should evaluate new or modified land easements

under Topic 842 beginning at the date that the entity adopts Topic 842.

An entity that does not elect this practical expedient

should evaluate all existing or expired land easements in connection with the adoption of the new lease requirements in Topic

842 to assess whether they meet the definition of a lease.

The effective date and transition requirements for the amendments

are the same as the effective date and transition requirements in Update 2016-02.

The adoption of ASU 2018-01 did not have any

impact on the Company’s unaudited condensed consolidated financial statements.

September 2017, the FASB issued Accounting Standard Update (ASU) 2017-13, Revenue Recognition (Topic 605), Revenue from Contracts

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We have adopted ASC 606 as disclosed above.

We are currently evaluating the impact of adopting

Leases Topic 840 ASU 2017-13 on our consolidated financial statements.

The adoption of ASU 2017-13 did not have any impact

on the Company’s unaudited condensed consolidated financial statements.

Board is issuing this Update to provide clarity and reduce both (1) diversity in practice and (2) cost and complexity when applying

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Adoption of this new

standard did not have any impact on the Company’s consolidated financial statements.

standard did not have any impact on the Company’s unaudited condensed consolidated

financial statements.

January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350), which simplifies the goodwill impairment

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We are currently evaluating the

impact of adopting ASU 2017-04 on our consolidated financial statements.

January 2017, the FASB issued ASU No.

2017-01, Business Combinations (Topic 805):

Clarifying the Definition of a Business.

new standard clarifies the definition of a business and provides a screen to determine when an integrated set of assets and activities

is not a business.

The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed

of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business.

new standard will be effective for the Company on January 1, 2018;

however, early adoption is permitted with prospective application

to any business development transaction.

We are currently evaluating the impact of adopting ASU 2017-04 on our consolidated financial

impact of adopting ASU 2017-04 on our unaudited condensed consolidated financial statements.

November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230), which requires that restricted cash and restricted

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The period ended

September 30, 2017 has been reclassified to reflect this change.

March 31, 2018 has been reclassified to reflect this change.

August 2016, the FASB issued AS 2016-15, Classification of Certain Cash Receipts and Cash Payments, which clarifies how certain

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Early adoption is permitted.

We are currently evaluating the impact of adopting ASU 2016-18 on our consolidated financial statements.

March 2016, the FASB issued ASU No.

2016-09, Compensation –

Stock Compensation, or ASU No.

The areas for simplification

in this Update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences,

classification of awards as either equity or liabilities, and classification on the statement of cash flows.

For public entities,

the amendments in this Update are effective for annual periods beginning after December 15, 2016, and interim periods within those

annual periods.

Early adoption is permitted in any interim or annual period.

If an entity early adopts the amendments in an interim

period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period.

that elects early adoption must adopt all of the amendments in the same period.

Amendments related to the timing of when excess

tax benefits are recognized, minimum statutory withholding requirements, forfeitures, and intrinsic value should be applied using

a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the period

in which the guidance is adopted.

Amendments related to the presentation of employee taxes paid on the statement of cash flows

when an employer withholds shares to meet the minimum statutory withholding requirement should be applied retrospectively.

requiring recognition of excess tax benefits and tax deficiencies in the income statement and the practical expedient for estimating

expected term should be applied prospectively.

An entity may elect to apply the amendments related to the presentation of excess

tax benefits on the statement of cash flows using either a prospective transition method or a retrospective transition method.

We are currently evaluating the impact of adopting ASU No.

2016-09 on our consolidated financial statements.

January 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)

2016-01, which amends the guidance in U.S.

GAAP on the classification and measurement of financial instruments.

Changes to the

current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and

the presentation and disclosure requirements for financial instruments.

In addition, the ASU clarifies guidance related to the

valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt

The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption,

an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the

first reporting period in which the guidance is effective.

Early adoption is not permitted except for the provision to record

fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other

comprehensive income.

The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements.

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

Company’s unaudited condensed consolidated financial statements.

February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and subsequent amendments to the initial guidance:

ASU 2018-10, ASU 2018-11, ASU 2018-20 and ASU 2019-01 (collectively Topic 842) to increase transparency and comparability of lease

recognition and disclosure.

The update requires lessees to recognize lease contracts with a term greater than one year on the

balance sheet, while recognizing expenses on the income statement in a manner similar to current guidance.

For lessors, the update

makes targeted changes to the classification criteria and the lessor accounting model to align the guidance with the new lessee

model and revenue guidance.

ASU 2016-02, ASU 2017-13, ASU 2018-10, ASU 2018-11 and ASU 2018-20 are effective for annual reporting

periods beginning after December 15, 2018, and interim periods within those annual periods, with early adoption permitted.

of this new standard did not have any impact on the Company’s consolidated financial statements as the Company did

not have long-term lease.

ASU 2019-01 is effective for annual reporting periods beginning after December 15, 2019.

is currently assessing the potential impact of ASU 2019-01 on its consolidated financial statements.

consists of finished goods, components and raw materials.

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carrying value of inventory consisted of the following:

September 30, 2018

March 31, 2019

December 31, 2018

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

September 30, 2018

March 31, 2019

December 31, 2018

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Less allowances

Total accounts receivable,

Total accounts receivable, net

Prepaid Expenses

expenses consisted of the following:

September 30, 2018

March 31, 2019

December 31, 2018

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Media production

Promotion - Bloggers

License agreement

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its cash deposits with major financial institutions.

At September 30, 2018 and December 31, 2017, the uninsured balances amounted

At March 31, 2019 and December 31, 2018, the uninsured balances amounted

to $313,910 and $162,729, respectively.

of September 30, 2018, four customers accounted for 78% of the Company’s accounts receivable.

of March 31, 2019, three customers accounted for 72% of the Company’s accounts receivable.

As of December 31, 2018, three

customers accounted for 83% of the Company’s accounts receivable.

the nine months ended September 30, 2018, three customers accounted for approximately 50% of the Company’s net revenue.

For the three months ended September 30, 2018, two customers accounted for approximately 58% of the Company’s net revenue.

For the nine months ended September 30, 2017, two customers accounted for approximately 34% of the Company’s net revenue.

For the three months ended September 30, 2017, two customers accounted for approximately 50% of the Company’s net revenue.

For the year ended December 31, 2017, two customers accounted for approximately 42% of the Company’s net revenues.

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

three months ended March 31, 2018, three customers accounted for approximately 41% of the Company’s net revenue.

year ended December 31, 2018, two customers accounted for approximately 41% of the Company’s net revenues.

Substantially

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

the three and nine months ended September 30, 2018 and the year ended December 31, 2017, our products were made by the following

Innovations - Pittsburgh, PA

Nutrition, Inc.

Tea Company, LLC - Highland, NY

LLC - Linthicum Heights, MD

Nutrition - Ogden, UT

HealthSpecialty

- Santa Fe Springs, CA

Jingrui –

Queen Pegasus

Actives –

Beautiful Daily Cosmetics –

Zhejiang, China

is the opinion of management that the products can be produced by other manufacturers and the choice to utilize these suppliers

is not a significant concentration.

of March 31, 2019 and December 31, 2018, two vendors accounted for 78% and 77%, respectively, of the Company’s accounts

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

three months ended March 31, 2018, three suppliers accounted for approximately 53% of the Company’s purchases.

Substantially

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

Fixed Assets and Intangible Assets

of September 30, 2018, and December 31, 2017, fixed assets and intangible assets consisted of the following:

September 30, 2018

of March 31, 2019, and December 31, 2018, fixed assets and intangible assets consisted of the following:

March 31, 2019

December 31, 2018

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Fixed assets, net

expense for the three months ended September 30, 2018 and 2017 was $38,299 and $27,134, respectively.

Depreciation expense for

the nine months ended September 30, 2018 and 2017 was $114,461 and $77,445, respectively.

September 30, 2018

expense for the three months ended March 31, 2019 and 2018 was $38,060 and $36,408, respectively.

March 31, 2019

December 31, 2018

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Less accumulated amortization

Less accumulated impairment

Intangible assets, net

expense for the three months ended September 30, 2018 and 2017 was $417,280 and $369,722, respectively.

Amortization expense for

the nine months ended September 30, 2018 and 2017 was $1,248,555 and $968,841, respectively.

These intangible assets were acquired

through an Asset Purchase Agreement and Stock Purchase Agreements.

expense for the three months ended March 31, 2019 and 2018 was $268,215 and $415,078, respectively.

These intangible assets were

acquired through an Asset Purchase Agreement and Stock Purchase Agreements.

Related Party Transactions

Company accrued and paid consulting fees of $57,917 for seven months to a company owned by Mr.

Jack Ross, Chief Executive Officer

of the Company.

The Company expensed $173,750 during the three months ended September 30, 2018 and $403,583 during the nine months

ended September 30, 2018.

As of September 30, 2018, the total outstanding balance was $0 for consulting fees and reimbursements.

January 22, 2015, the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc.

(“Knight”), a

related party, for the purchase of the Focus Factor assets.

At September 30, 2018, the Company owed Knight $0 on this loan, net

of debt issuance cost (see Note 10).

Company accrued and paid consulting fees of $57,917 per month and a one-time management fee of $65,411 to a company owned by Mr.

Jack Ross, Chief Executive Officer of the Company.

The Company expensed $238,961 during the three months ended March 31, 2019.

As of March 31, 2019, the total outstanding balance was $0 for consulting fees and reimbursements.

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 September 30, 2018, the Company owed Knight $274,814

At March 31, 2019, the Company owed Knight $512,500

in relation to this agreement (see Note 10).

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

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

30, 2018 and $90,000 for the nine months ended September 30, 2018.

As of September 30, 2018, the total outstanding balance was

November 12, 2015, the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc., a related party, for the

purchase of NomadChoice Pty Limited and Breakthrough Products, Inc.

At September 30, 2018, the Company owed Knight $0 on this

loan, net of debt issuance cost (see Note 10).

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

As of March 31, 2019, the total outstanding balance was $0.

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

capital loan.

At September 30, 2018, the Company owed Knight $8,053,411 on this loan, net of debt issuance cost (see Note 10).

At March 31, 2019, the Company owed Knight $6,859,107 on this loan, net of debt issuance cost (see Note 10).

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

3 unchanged sentences

this agreement is $100,000 Canadian dollars.

As of September 30, 2018, the total outstanding balance was $100,000 Canadian dollars.

Company expensed royalty of $62,306 during the three months ended September 30, 2018 and $342,315 during the nine months ended

September 30, 2018.

At September 30, 2018 NomadChoice Pty Ltd., a subsidiary of the Company, owed Knight Therapeutics $50,310

in connection with a royalty distribution agreement.

Company expensed royalty of $4,663 during the three months ended September 30, 2018 and $14,279 during the nine months ended September

At September 30, 2018 Sneaky Vaunt Corp., a subsidiary of the Company, owed Knight Therapeutics $3,948 in connection

with a royalty distribution agreement.

Company expensed commissions of $10,898 during the three months ended September 30, 2018 and $38,529 during the nine months ended

September 30, 2018.

At September 30, 2018, Sneaky Vaunt Corp., a subsidiary of the Company, owed Founded Ventures, owned by a

shareholder in the Company, $5,734 in connection with a commission agreement.

Company expensed royalty of $386 during the three months ended September 30, 2018 and $2,297 during the nine months ended September

At September 30, 2018 The Queen Pegasus, a subsidiary of the Company, owed Knight Therapeutics $129 in connection with

a royalty distribution agreement.

Company expensed commissions of $1,228 during the three months ended September 30, 2018 and $7,118 during the nine months ended

September 30, 2018.

At September 30, 2018, The Queen Pegasus, a subsidiary of the Company, owed Founded Ventures $649 in connection

with a commission agreement.

Company paid $62,500 and $187,500 during the three and nine months ended September 30, 2018 to Hand MD, Corp, related to a royalty

At September 30, 2018, the Company owed Hand MD Corp.

As of March 31, 2019, the total outstanding balance was $200,000 Canadian dollars.

In US Dollars, the total outstanding balance was $152,834 as of March 31, 2019.

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

conjunction with this agreement, we are required to pay Knight a distribution fee equal to 60% of gross sales for sales achieved

through a direct sales channel until the sales in the calendar year equal the threshold amount and then 40% of all such gross

sales in such calendar year in excess of the threshold amount and 5% of gross sales for sales achieved through retail sales.

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

As of March 31, 2019 the total outstanding balance was

$25,000 Canadian dollars.

In US Dollars, the total outstanding balance was $18,325.

Company expensed royalty of $88,864 during the three months ended March 31, 2019.

At March 31, 2019 NomadChoice Pty Ltd., a subsidiary

of the Company, owed Knight Therapeutics $88,864 in connection with a royalty distribution agreement.

Company expensed royalty of $1,085 during the three months ended March 31, 2019.

At March 31, 2019 the Company owed Knight Therapeutics

$1,085 in connection with a royalty distribution agreement for Sneaky Vaunt.

Company expensed commissions of $4,178 during the three months ended March 31, 2019.

At March 31, 2019, the Company, owed Founded

Ventures, owned by a shareholder in the Company, $4,178 in connection with a commission agreement for Sneaky Vaunt.

Company expensed commissions of $385 during the three months ended March 31, 2019.

At March 31, 2019, the Company owed Founded

Ventures $385 in connection with a commission agreement for The Queen Pegasus.

Company paid $2,794 during the three months ended March 31, 2019 to Hand MD, Corp, related to a royalty agreement.

2019, the Company owed Hand MD Corp.

$0 in minimum future royalties.

Accounts Payable and Accrued Liabilities

of September 30, 2018, and December 31, 2017, accounts payable and accrued liabilities consisted of the following:

September 30, 2018

of March 31, 2019, and December 31, 2018, accounts payable and accrued liabilities consisted of the following:

March 31, 2019

December 31, 2018

Accrued payroll

Accrued legal fees

Accounting fees

Manufacturers

Professional Fees

Returns allowance

Accounting fees

Royalties, related party

Severance Accrual

Related Party Reimbursements

Notes Payable

Company’s loans payable at September 30, 2018 and December 31, 2017 are as follows:

September 30, 2018

Company’s loans payable at March 31, 2019 and December 31, 2018 are as follows:

March 31, 2019

December 31, 2018

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Long-term portion

January 22, 2015 Loan:

January 22, 2015, the Company entered into a Loan and Security Agreement (“Loan Agreement”) with Knight Therapeutics

(Barbados) Inc.

(“Knight”), pursuant to which Knight agreed to loan the Company $6.0 million (the “Loan”),

and which amount was borrowed at closing (the “Financing”) for the purpose of acquiring the Focus Factor Business

(defined below).

At closing, the Company paid Knight an origination fee of $120,000 and a work fee of $60,000 and also paid $40,000

of Knight’s expenses associated with the Loan.

The Loan bears interest at a rate of 15% per year;

provided, however, that

upon the occurrence of an equity or convertible equity offering by the Company of at least $1.0 million, the interest rate will

drop to 13% per year.

Interest accrues quarterly and is payable in arrears on March 31, June 30, September 30 and December 31

in each year, beginning on March 31, 2015.

outstanding principal and accrued and unpaid interest is due on the earliest to occur of either January 20, 2017 (the “Maturity

Date”), or the date that Knight, in its discretion, accelerates the Company’s obligations due to an event of default.

The Company may extend the Maturity Date for two successive additional 12-month periods if at March 31, 2016 and March 31, 2017,

respectively, the Company’s revenues exceed $13.0 million and its EBITDA exceeds $2.0 million for the respective 12-month

period then ending.

These covenants were achieved, therefore the Company chose to extend the loan for the first 12-month period

to January 20, 2018.

Principal payments under the Loan Agreement commenced on June 30, 2015 and continue quarterly as set forth

on the Repayment Schedule to the Loan Agreement.

This Loan was repaid in full on January 20, 2018.

The Company recognized and

paid interest expense of $0 and $4,611, respectively during the three and nine months ended September 30, 2018.

Accrued interest

expense was $0 as of September 30, 2018.

to certain restrictions, the Company may prepay the outstanding principal of the Loan (in whole but not in part) at any time if

the Company pays a concurrent prepayment fee equal to the greater of (i) the total unpaid annual interest that would have been

payable during the year in which the prepayment is made if the prepayment is made prior to the first anniversary of the closing,

and (ii) $300,000.

The Company’s obligations under the Loan Agreement are secured by a first priority security interest

in all present and future assets of the Company.

The Company also agreed to not pledge or otherwise encumber its intellectual

property assets, subject to certain customary exceptions.

Loan Agreement includes customary representations, warranties, and affirmative and restrictive covenants, including covenants

to attain and maintain certain financial metrics, and to not merge or dispose of assets, acquire other businesses (except for

businesses substantially similar or complementary to the Company’s business and the aggregate consideration to be paid does

not exceed $100,000) or make capital expenditures in excess of $100,000 over the Company’s annual business plan in any year.

The Loan Agreement also includes customary events of default, including payment defaults, breaches of covenants, change of control

and material adverse effect default.

Upon the occurrence of an event of default and during the continuation thereof, the principal

amount of the Loan will bear a default interest rate of an additional 5%.

connection with the Loan Agreement, the Company issued to Knight a warrant that entitled Knight to purchase 4,595,187 shares of

common stock of the Company (“Common Stock”) on or prior to close of business on January 30, 2015 (the “ST Warrant”).

The aggregate exercise price of the Common Stock under the ST Warrant is $1.00.

Knight exercised the ST Warrant on January 22,

Also in connection with the Loan Agreement, the Company issued to Knight a warrant to purchase 3,584,759 shares of Common

Stock on or prior to the close of business of January 22, 2025 (the “LT Warrant”).

The exercise price per share of

the Common Stock under the LT Warrant is $0.34.

The LT Warrant provides for cashless exercise.

The LT Warrant also provides that

in the event the closing price of the Common Stock remains above $1.00 for six consecutive months, Knight will forfeit the difference

between the number of shares acquired under the LT Warrant prior to 90 days after such six-month period, and 25% of the shares

purchasable under the LT Warrant.

beneficial conversion feature of the warrants issued to Knight amounted to $1,952,953 (ST warrants) and $1,462,560 (LT warrants),

respectively, and was recorded as debt discount of the corresponding debt.

2016, this debt discount was fully expensed in conjunction with the cancellation of all warrants and options held by Knight.

Company also recorded deferred financing costs of $289,045 with respect to the above loan.

The Company recognized amortization

of deferred financing costs of $0 and $3,257 during the three and nine months ended September 30, 2018, respectively.

debt issuance cost as of September 30, 2018 amounted to $0.

June 26, 2015 Security Agreement:

June 26, 2015, the Company, through its wholly owned subsidiary, Neuragen Corp.

(“Neuragen”), issued a 0% promissory

note in a principal amount of $950,000 in connection with an Asset Purchase Agreement.

The note requires $250,000 to be paid on

or before June 30, 2016, and $700,000 to be paid in quarterly installments (beginning with the quarter ended September 30, 2015)

equal to the greater of $12,500 or 5% of U.S.

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

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

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

net sales, and 2% of U.S.

net sales of Neuragen for 60 months thereafter.

of such amounts is secured by a security interest in certain assets, undertakings and property (“Collateral”) pursuant

to the Security Agreement, which will be released upon receipt of total payments of $1.2 million.

Company also recorded deferred financing costs of $10,486 with respect to the above agreement.

The Company recognized amortization

of deferred financing costs of $0 during the three and nine months ended September 30, 2018.

Unamortized debt issuance cost as

of September 30, 2018 amounted to $0.

The Company recorded present value of future payments of $274,814 and $282,240 as of September

30, 2018 and December 31, 2017, respectively.

The Company recorded imputed interest expense of $9,933 and $30,074 for the three

and nine months ended September 30, 2018, respectively.

the three and nine months ended September 30, 2018, the Company made payments of $12,500 and $37,500, respectively, in connection

with this Security Agreement.

November 12, 2015 Loan:

November 12, 2015, we entered into a First Amendment to Loan Agreement (“First Amendment”) with Knight, pursuant to

which Knight agreed to loan us an additional $5.5 million, and which amount was borrowed at closing (the “Financing”)

for the purpose of acquiring Breakthrough Products, Inc.

and NomadChoice Pty Limited through Stock Purchase Agreements.

we paid Knight an origination fee of $110,000 and a work fee of $55,000 and also paid $24,000 of Knight’s expenses associated

with the Loan.

The Loan bears interest at a rate of 15% per year.

The interest rate will decrease to 13% if we meet certain equity-fundraising

The amended Loan Agreement matured on November 11, 2017 and was fully paid.

connection with the First Amendment, we issued Knight a warrant that entitles Knight to purchase 5,550,625 shares of our common

stock (“Knight Warrant Shares”) representing approximately 6.5% of our fully diluted capital, which Knight exercised

in full on November 12, 2015.

Knight also received a 10-year warrant entitling Knight to purchase up to 4,547,243 shares of our

common stock at $0.49 per share (“Knight Warrants”).

beneficial conversion feature of the warrants issued to Knight amounted to $2,553,287 (5,550,625 warrants) and $2,067,258 (4,547,243

warrants), respectively, and was recorded as debt discount of the corresponding debt in 2015.

2016, this debt discount was fully expensed in conjunction with the cancellation of all warrants and options held by Knight.

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

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

total payments of $1.2 million.

Company recorded present value of future payments of $269,387 and $272,151 as of March 31, 2019 and December 31, 2018, respectively.

The Company recorded imputed interest expense of $9,737 for the three months ended March 31, 2019.

the three months ended March 31, 2019, the Company made payments of $12,500 in connection with this Security Agreement.

August 9, 2017 Loan:

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

bears interest at 10.5% per annum.

The amended Loan Agreement matures on August 8, 2020.

We have met all the covenants except

for the TTM EBITDA of $5 million during the period ending March 31, 2018.

Default Interest rate of 5% (from 10.5% to 15.5%) applies

in accordance to our current agreement and will be in effect starting April 1, 2018 and will be in effect until the $5 million

TTM EDITDA covenant is achieved.

During the period ending June 30, 2018 the interest rate was reduced to 13% due to reducing payroll

Also, Synergy will maintain Focus Factor Net Sales as measured on a year-end basis of at least USD $15 million for each

fiscal year starting with December 31, 2017.

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

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

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

If an Additional Tranche is denied, the Company

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

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

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

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

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

Loan bears interest at 10.5% per annum.

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

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

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

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

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

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

price on the date the Success Fee is due.

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

Loan Agreement includes customary representations, warranties, and affirmative and restrictive covenants, including covenants

to attain and maintain certain financial metrics, and to not merge or dispose of assets, acquire other businesses (except for

businesses substantially similar or complementary to the Company’s business, and provided that the aggregate consideration

to be paid does not exceed $100,000 and the acquired business guarantees the Company’s obligations under the Loan Agreement)

or make capital expenditures in excess of $500,000.

The Loan Agreement also includes customary events of default, including payment

defaults, breaches of covenants, change of control and material adverse effect defaults.

Upon the occurrence of an event of default

and during the continuation thereof, the principal amount of all loans under the Loan Agreement will bear a default interest rate

of an additional 5%.

Company’s obligations and liabilities under the Loan Agreement are secured and unconditionally guaranteed by certain of

the Company’s wholly owned subsidiaries as provided in the Loan Agreement.

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

Default Interest rate

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

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

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

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

Also, Synergy will maintain Focus Factor Net Sales as measured

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

have amended our covenants under our loan agreement on March 27, 2019 and are currently in compliance with all covenants.

new covenants are as follows:

we will maintain a minimum EBITDA of $1,900,000 for the twelve months ending on December 31, 2018,

$2,500,000 for the twelve months ending March 31, 2019, $3,500,000 for the twelve months ending June 30, 2019 and $5,000,000 for

the twelve months period ending on last day of each fiscal quarters thereafter.

We shall maintain a net debt to TTM EBITDA ratio

of no more than 8:1 for the twelve month period ending on December 31, 2018 until March 31, 2019 and shall maintain a net debt

to TTM EBITDA ratio of no more than 6:1 thereafter.

We shall maintain at all times a positive cash balance of $575,000 for the

three month period ending December 31, 2018, $750,000 for the three month period ending March 31, 2019 and $1,000,000 thereafter.

The default interest rate of 2.5% applies (from 13% to 15.5%) in accordance to our current agreement and will be in effect as

of October 1, 2018.

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

The Company recognized amortization

of deferred financing costs of $93,090 and $168,568 during the three and nine months ended September 30, 2018, respectively.

debt issuance cost as of September 30, 2018 amounted to $221,403.

Company recognized and paid interest expense of $273,000 and $801,444 during the three and nine months ended September 30, 2018,

respectively.

Accrued interest was $0 as of September 30, 2018.

The loan balance at September 30, 2018 was $8,000,000.

of deferred financing costs of $38,368 during the three months ended March 31, 2019.

Unamortized debt issuance cost as of March

31, 2019 amounted to $140,893.

Company recognized interest expense of $329,167 and paid $279,861 during the three months ended March 31, 2019.

Accrued interest

was $49,306 as of March 31, 2019.

The loan balance at March 31, 2019 was $7,000,000.

Stockholders’

1 unchanged sentence

stock with $0.00001 par value.

of both September 30, 2018 and December 31, 2017, there were 89,862,683 shares of the Company’s common stock issued and

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

settlement on the Per-fekt transaction.

of March 31, 2019 and December 31, 2018, there were 89,889,074 and 89,862,683, respectively, shares of the Company’s common

stock issued and outstanding.

Commitments & Contingencies

7 unchanged sentences

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

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

be paid on July 1, 2018, provided that he is employed by the Company through such dates.

McCullough will be eligible for an

annual bonus of up to twenty-five percent (25%) of his base salary.

The annual bonus will be determined at the discretion of our

Board or compensation committee based upon the achievement of financial goals established by the Company’s Chief Executive

McCullough will also be eligible for additional bonus compensation based on the Company’s achievement of certain

annual earnings and retail sales goals established each year by the Company’s Chief Executive Officer.

Subject to the Company’s

achievement of an annual overall earnings goal and certain adjustments in the event of future acquisitions by the Company, Mr.

McCullough will be eligible to receive five percent (5%) of all retail sales by the Company in excess of the annual retail sales

goal set by the Chief Executive Officer.

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

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

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

established by the Company’s Chief Executive Officer.

McCullough will also be eligible for additional bonus compensation

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

Chief Executive Officer.

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

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

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

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

Company granted Mr.

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to a stock grant agreement between the Company and Mr.

August 16, 2017, the Company entered into a sublease for office space, effective October 1, 2017 through May 2021.

under this lease will be $19,500 per month, and increasing annually on June 1.

following is a schedule by years of future minimum rental payments required under operating leases that have initial or remaining

non-cancelable lease terms in excess of one year as of September 30, 2018:

Year ending December 31:

remaining three months

the three months ended March 31, 2019 the Company received a 60 day Proposition 65 letter that one of its products did not have

California’s prop 65 label.

The Company is taking action to correct the oversight.

Stock Options

July 4, 2016, the Company granted 500,000 options with an exercise price of $0.70 per share to an employee of the Company.

2017, 333,333 unvested options were cancelled due to termination of employee.

October 10, 2017, the Company granted 1,000,000 options with an exercise price of $0.70 per share to an employee of the Company.

October 16, 2017, the Company granted 1,500,000 options with an exercise price of $0.55 per share to an employee of the Company.

During August 2018, 1,500,000 unvested options were cancelled due to termination of employee.

October 18, 2017, the Company granted 200,000 options with an exercise price of $0.70 per share to an employee of the Company.

following table summarizes the options outstanding, option exercisability and the related prices for the shares of the Company’s

common stock issued to employees and consultants under the Plan at September 30, 2018:

stock option activity for the nine months ended September 30, 2018 is as follows:

Exercise Price

Outstanding at December 31, 2017

Expired or canceled

Outstanding at September 30, 2018

compensation expense related to vested options was ($90,396) and $148,990 during the three and nine months ended September 30,

2018, respectively, which is a component of general and administrative expense in the statement of income.

The Company determined

the value of share-based compensation for options vesting during the period using the Black-Scholes fair value option-pricing

model with the following weighted average assumptions:

estimated fair value of Company’s common stock of $0.40-0.74, risk-free

interest rate of 0.90-2.23%, volatility of 135-160%, expected lives of 3-10 years, and dividend yield of 0%.

Stock options outstanding

as of September 30, 2018, as disclosed in the above table, have an intrinsic value of $30,000.

As of September 30, 2018, unamortized

stock-based compensation costs related to options was $353,065, and will be recognized over a period of 2 years.

Stock Warrants

following table summarizes the warrants outstanding, warrant exercisability and the related prices for the shares of the Company’s

common stock at September 30, 2018:

warrant activity for the nine months ended September 30, 2018 is as follows:

common stock issued to employees and consultants under a stock option plan at March 31, 2019:

Options Outstanding

Options Exercisable

$ 0.25 - $0.70

stock option activity for the three months ended March 31, 2019 is as follows:

Exercise Price

1 unchanged sentence

Expired or canceled

Outstanding at September 30, 2018

outstanding as of September 30, 2018, as disclosed in the above table, have an intrinsic value of $0.

Outstanding at March 31, 2019

compensation expense related to vested options was $45,533 during the three months ended March 31, 2019, which is a component

of general and administrative expense in the statement of operations.

The Company determined the value of share-based compensation

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

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

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

Stock options outstanding as of March 31, 2019, as disclosed

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

As of March 31, 2019, unamortized stock-based compensation costs related to

options was $244,966, and will be recognized over a period of 1.7 years.

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

5 unchanged sentences

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

sales attributed to customers in the United States and foreign countries for the three months ended September 30, 2018 and 2017

were as follows:

September 30, 2018

September 30, 2017

sales attributed to customers in the United States and foreign countries for the three months ended March 31, 2019 and 2018 were

March 31, 2019

March 31, 2018

United States

1 unchanged sentence

countries primarily consist of Australia and Canada.

Company’s net sales by product group for the three months ended September 30, 2018 and 2017 were as follows:

September 30, 2018

September 30, 2017

Nutraceuticals

Over the Counter (OTC)

Consumer Goods

Cosmeceuticals

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

Company’s net sales by major sales channel for the three months ended September 30, 2018 and 2017 were as follows:

September 30, 2018

September 30, 2017

sales attributed to customers in the United States and foreign countries for the nine months ended September 30, 2018 and 2017

were as follows:

September 30, 2018

September 30, 2017

United States

Foreign countries

Company’s net sales by product group for the nine months ended September 30, 2018 and 2017 were as follows:

September 30, 2018

September 30, 2017

Company’s net sales by product group for the three months ended March 31, 2019 and 2018 were as follows:

March 31, 2019

March 31, 2018

Nutraceuticals

3 unchanged sentences

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

Company’s net sales by major sales channel for the nine months ended September 30, 2018 and 2017 were as follows:

September 30, 2018

September 30, 2017

assets (net) attributable to operations in the United States and foreign countries as of September 30, 2018 and December 31, 2017

Company’s net sales by major sales channel for the three months ended March 31, 2019 and 2018 were as follows:

March 31, 2019

March 31, 2018

assets (net) attributable to operations in the United States and foreign countries as of March 31, 2019 and December 31, 2018

were as follows:

September 30, 2018

March 31, 2019

December 31, 2018

1 unchanged sentence

Foreign countries

tax (benefit) expense was ($126,190) and $256,812 for the three and nine months ended September 30, 2018, respectively, compared

to $97,713 and $221,424, respectively, for the same periods in 2017.

The current provision is attributable to Australian operations

and the current tax rate in effect in that country.

tax (benefit) expense was $(5,908) for the three months ended March 31, 2019, compared to $160,613 for the same periods in 2018.

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

December 22, 2017, the Tax Cuts and Jobs Act (the TCJA), which significantly modified U.S.

15 unchanged sentences

of the TCJA and guidance currently available as of this filing.

But is reviewing the TCJA’s potential ramifications, as

the Company acts to bring tax compliance up to date.

But is reviewing the TCJA’s potential ramifications.

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

15 unchanged sentences

so such returns and liability remain open.

Such liability, if any, has not yet been quantified by the Company, as of the reporting

The Company is currently assessing the requirements to file these returns in states to determine any potential liability,

which the Company believes is immaterial.

The Company has estimated and accrued for its sales tax liability at $238,209 and $180,222

as of March 31, 2019 and December 31, 2018, respectively.

Subsequent Events

evaluated all activities of the Company through the issuance date of the Company’s unaudited condensed consolidated financial

statements and concluded that no subsequent events except as disclosed below have occurred that would require adjustments or disclosure

statements and concluded that no subsequent events have occurred that would require adjustments or disclosure

into the unaudited condensed consolidated financial statements.

to September 30, 2018, the Company made an additional $500,000 payment on $10,000,000 loan.

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

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

ended September 30, 2018 and 2017, should be read in conjunction with the unaudited condensed consolidated financial statements

of Synergy, and the notes to those unaudited condensed consolidated financial statements that are included elsewhere in this Form

Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties,

such as our plans, objectives, expectations and intentions.

Actual results and the timing of events could differ materially from

those anticipated in these forward-looking statements as a result of a number of factors, including those set forth under the

caption, “Cautionary Notice Regarding Forward-Looking Statements”

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

31, 2019 and 2018, should be read in conjunction with the unaudited condensed consolidated financial statements of Synergy, and

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

Our discussion

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

expectations and intentions.

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

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

Forward-Looking Statements”

and the “Business”

section in our Form

10-K filed on April 2, 2018.

We use words such as “anticipate,”

section in our Form 10-K filed on March 29, 2019.

such as “anticipate,”

“estimate,”

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management’s discussion and analysis of our financial condition and results of operations are only based on our current

business and should be read in conjunction with our condensed consolidated financial statements.

Key factors affecting our results

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

business and should be read in conjunction with our unaudited condensed consolidated financial statements.

Key factors affecting

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

Financial Measures

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For the three

September 30, 2018

March 31, 2019

Net income after tax

2 unchanged sentences

Stock-based compensation

One-time expenses

Loss on foreign currency translation and

Adjusted EBITDA

September 30, 2018

Net loss after taxes

Interest income

Interest expense

Stock-based compensation

One-time expenses

Loss on foreign currency translation and

Loss on foreign currency translation and transaction

Adjusted EBITDA

10 unchanged sentences

to similarly titled measures reported by other companies.

of Operations for the Three months Ended September 30, 2018 and 2017

the three months ended September 30, 2018, we had revenue of $9,190,377 from sales of our products, as compared to revenue of

$9,175,673 for the same period in 2017.

We had an increase in Nutraceuticals in 2018 as compared to 2017 due to new customers.

We had a decrease in Over the Counter in 2018 as compared to 2017 as 2017 was high due to a sell in to a new customer.

a decrease in Consumer Goods in 2018 as compared to 2017 as 2017 was the launch of a new product.

We had a decrease in Cosmeceuticals

in 2018 as compared to 2017 due to a promotion in 2017 that did not reoccur in 2018.

The revenue is comprised of the following

September 30, 2018

September 30, 2017

Nutraceuticals

Over the Counter (OTC)

Consumer Goods

Cosmeceuticals

the three months ended September 30, 2018, our cost of revenue was $2,945,389.

Our cost of revenue for the three months ended

September 30, 2017, was $2,657,623.

We had an increase in Nutraceuticals in 2018 as compared to 2017 due to higher sales and a

different mix of products being sold.

We had an increase in Over the Counter in 2018 as compared to 2017 due to a different mix

of product being sold.

We had a decrease in Consumer Goods in 2018 as compared to 2017 due to a decrease in revenue.

increase in Cosmeceuticals in 2018 as compared to 2017 due to promotions being run.

The cost of revenue is comprised of the following

September 30, 2018

September 30, 2017

Nutraceuticals

Over the Counter (OTC)

Consumer Goods

Cosmeceuticals

profit was $6,244,988, or 68% for the three months ended September 30, 2018, as compared to gross profit of $6,518,050, or 71%

for the same period in 2017, a decrease of $273,062, or 4%.

The decrease in gross profit margin is directly related to increase

in sales and selling products with a higher unit cost, thus reducing our margin.

and Marketing Expenses

the three months ended September 30, 2018, our selling and marketing expenses were $3,960,131 as compared to $3,685,313 for the

same period in 2017, which is primarily due to increased personnel in our advertising and marketing departments.

and Administrative Expenses

the three months ended September 30, 2018, our general and administrative expenses were $1,189,681.

For the three months ended

September 30, 2017, our general and administrative expenses were $1,990,743.

The decrease is primarily due to better management

of operating costs.

and Amortization Expenses

the three months ended September 30, 2018, our depreciation and amortization expenses were $455,579 as compared to $396,857 for

the same period in 2017.

The increase is due to more assets owned in 2018.

Income and Expenses

the three months ended September 30, 2018 and 2017 we had other (income) and expense items of the following:

September 30, 2018

September 30, 2017

Interest income

Interest expense

Remeasurement loss (gain) on translation of foreign subsidiary

Amortization of debt issuance cost

Total other expense

the three months ended September 30, 2018, we had interest expense of $288,479 as compared to $272,318 for the same period in

The increase was due to increase in the interest rate of Loan 3 from 10% to 13% offset by repayment of Loan 1 and Loan 2.

the three months ended September 30, 2018, our net income was $345,590 as compared to a net income of $127,486 for the same period

of Operations for the Nine months Ended September 30, 2018 and 2017

the nine months ended September 30, 2018, we had revenue of $28,619,950 from sales of our products, as compared to revenue of

of Operations for the Three months Ended March 31, 2019 and 2018

the three months ended March 31, 2019, we had revenue of $9,468,955 from sales of our products, as compared to revenue of $9,700,861

for the same period in 2018.

We had an increase in Nutraceuticals in 2018 as compared to 2017 due to new customers.

We had a decrease in Over the Counter in 2018 as compared to 2017 as 2017 was high due to a sell in to new customers.

decrease in Consumer Goods in 2018 as compared to 2017 as 2017 was the launch of a new product.

We had an increase in Cosmeceuticals

in 2018 as compared to 2017 due to new customers and new products.

The decrease is comprised of the following categories:

September 30, 2018

September 30, 2017

We had an increase in Nutraceuticals in 2019 as compared to 2018 due to regular business.

a decrease in Over the Counter in 2019 as compared to 2018 due to an out of stock product.

We had a decrease in Consumer Goods

in 2019 as compared to 2018 due to a shift in business focus.

We had a decrease in Cosmeceuticals in 2019 as compared to 2018

due to regular business.

The revenue is comprised of the following categories:

March 31, 2019

March 31, 2018

Nutraceuticals

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Cosmeceuticals

the nine months ended September 30, 2018, our cost of revenue was $8,500,057.

Our cost of revenue for the nine months ended September

the three months ended March 31, 2019, our cost of revenue was $2,540,450.

Our cost of revenue for the three months ended March

31, 2018, was $2,809,908.

We had an increase in Nutraceuticals in 2018 as compared to 2017 due to higher sales and a different

We had a decrease in Nutraceuticals in 2019 as compared to 2018 due to higher sales and a different

mix of products being sold.

We had an increase in Over the Counter in 2018 as compared to 2017 due to a different mix of product

We had an decrease in Over the Counter in 2019 as compared to 2018 due to an out of stock product.

We had a decrease in Consumer Goods in 2019 as compared to 2018 due to a decrease in revenue.

We had an increase in

Cosmeceuticals in 2018 as compared to 2017 due to an increase in revenue.

We had an increase in Cosmeceuticals

in 2019 as compared to 2018 due to a different mix of product being sold.

The cost of revenue is comprised of the following categories:

September 30, 2018

September 30, 2017

March 31, 2019

March 31, 2018

Nutraceuticals

2 unchanged sentences

Cosmeceuticals

profit was $20,119,893, or 70% for the nine months ended September 30, 2018, as compared to gross profit of $21,660,333, or 74%

for the same period in 2017, a decrease of $1,540,440, or 7%.

The decrease in gross profit margin is directly related to a different

mix of products being sold, with higher costs which reduces profit margin.

profit was $6,928,505, or 73% for the three months ended March 31, 2019, as compared to gross profit of $6,890,953, or 71% for

the same period in 2018, an increase of $37,552, or 1%.

The increase in gross profit margin is directly related to the mix of

products being sold.

and Marketing Expenses

the nine months ended September 30, 2018, our selling and marketing expenses were $13,361,490 as compared to $10,806,422 for the

same period in 2017, which is primarily due to increased personnel in our advertising and marketing departments.

the three months ended March 31, 2019, our selling and marketing expenses were $3,311,867 as compared to $4,252,703 for the same

period in 2018, which is primarily due to decreased personnel in our advertising and marketing departments.

and Administrative Expenses

the nine months ended September 30, 2018, our general and administrative expenses were $4,425,826.

For the nine months ended September

the three months ended March 31, 2019, our general and administrative expenses were $1,487,107.

For the three months ended March

31, 2018, our general and administrative expenses were $1,760,856.

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and Amortization Expenses

the nine months ended September 30, 2018, our depreciation and amortization expenses were $1,363,016 as compared to $1,046,286

for the same period in 2017.

The increase is due to more assets owned in 2018.

the three months ended March 31, 2019, our depreciation and amortization expenses were $306,275 as compared to $451,486 for the

same period in 2018.

The decrease is due to impairment of intangible assets in 2018.

Income and Expenses

the nine months ended September 30, 2018 and 2017 we had other (income) and expense items of the following:

September 30, 2018

September 30, 2017

the three months ended March 31, 2019 and 2018 we had other (income) and expense items of the following:

March 31, 2019

March 31, 2018

Interest income

1 unchanged sentence

Remeasurement (gain) loss on translation of foreign subsidiary

Loss on sale of assets

Amortization of debt issuance cost

Total other expense

the nine months ended September 30, 2018, we had interest expense of $864,342 as compared to $706,759 for the same period in 2017.

The increase was due to increase in the interest rate of Loan 3 from 10% to 13% offset by repayment of Loan 1 and Loan 2.

(Loss) Income

the nine months ended September 30, 2018, our net loss was $493,296 as compared to a net income of $2,635,959 for the same period

the three months ended March 31, 2019, we had interest expense of $340,128 as compared to $270,176 for the same period in 2018.

The increase was due to increase in the interest rate of Loan 3 from 13% to 15.5%.

Income (Loss)

the three months ended March 31, 2019, our net income was $1,467,287 as compared to a net loss of $(55,493) for the same period

and Capital Resources

of September 30, 2018, we had $1,605,381 cash on hand and a $2,822,351 working capital surplus.

In addition, we also had restricted

cash of $137,096 which is held for credit card collateral.

months ended September 30, 2018 and 2017

of March 31, 2019, we had $688,836 cash on hand and a $155,476 working capital deficit.

In addition, we also had restricted cash

of $137,351 which is held for credit card collateral.

months ended March 31, 2019 and 2018

Cash Provided by Operating Activities

cash provided by operating activities for the nine months ended September 30, 2018 was $2,043,765, compared to $969,227 for the

same period in 2017.

This increase in net cash provided by operating activities for the nine months ended September 30, 2018 was

primarily attributable to a decrease in accounts receivable.

$2,043,765 consists of our net loss of $493,296 adjusted by:

cash provided by operating activities for the three months ended March 31, 2019 was $813,711, compared to $944,647 for the same

period in 2018.

This decrease in net cash provided by operating activities for the three months ended March 31, 2019 was primarily

attributable to a decrease in accounts payable and accrued expenses.

$813,711 consists of our net income of $1,467,287 adjusted by:

Amortization of debt issuance cost

2 unchanged sentences

Non cash implied interest

Remeasurement loss on translation of foreign subsidiary

Foreign currency transaction gain

Remeasurement gain on translation of foreign subsidiary

Foreign currency transaction loss

Decrease in accounts receivable

Increase in inventory

Decrease in inventory

Decrease in prepaid expenses

2 unchanged sentences

Cash Used in Investing Activities

cash used in investing activities for the nine months ended September 30, 2018 was $194,300, compared to net cash used of $1,860,116

for the same period in 2017.

The decrease in cash used in investing activities during 2018 is attributable to the payout of a

development fee in 2017.

Payments for acquisition of fixed assets

Payment for acquisition of domain name

Purchase of intangible assets

Cash (Used in) Provided by Financing Activities

cash used in financing activities for the nine months ended September 30, 2018 was $2,287,500, compared to net cash provided of

cash used in investing activities for the three months ended March 31, 2019 was $0, compared to net cash used of $136,725 for

the same period in 2018.

The decrease in cash used in investing activities during 2019 is attributable to the purchase of assets

Cash Used in Financing Activities

cash used in financing activities for the three months ended March 31, 2019 was $512,500, compared to net cash used of $1,137,500

for the same period in 2018.

This is attributable to proceeds from a new loan in 2017 and the repayment of notes in

This is attributable to the payoff of a loan in 2018.

Repayment of notes payable

$ (2,287,500 )

2019 Initiatives

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements