What changed in this filing

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Item 9A. Controls and Procedures

2020-04-29 compared with 2019-03-29 · 137 added, 142 removed, 479 unchanged (37% of the section changed)

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Gale Bensussen - Director

On October 12, 2017, our

Board of Directors appointed Gale Bensussen as an independent member of the Board of Directors.

Since October 2017, Mr.

has served as a director of Kingdomway U.S.A.

Corp, a wholly-owned subsidiary of Kingdomway Group Companies publicly traded on

the Shenzen stock exchange.

October 12, 2017, our Board of Directors appointed Gale Bensussen as an independent member of the Board of Directors.

Since October

Bensussen has served as a director of Kingdomway U.S.A.

Corp, a wholly-owned subsidiary of Kingdomway Group Companies

publicly traded on the Shenzen stock exchange.

Since January 2017, Mr.

Bensussen has served as Chairman of Vit-Best, and from September 2017 to January

2017 he served as President and CEO.

Bensussen has served as President and CEO, and Chairman of Doctor’s Best since

November 2013 and May 2016, respectively.

Bensussen has served as Chairman of Vit-Best, and from

September 2017 to January 2017 he served as President and CEO.

Bensussen has served as President and CEO, and Chairman of

Doctor’s Best since November 2013 and May 2016, respectively.

Since January 2012, Mr.

Bensussen has served as Advisor to North Castle Partners, LLC.

Bensussen holds a Bachelor’s degree from the University of Southern California and a Juris Doctor degree from Southwestern

University School of Law.

There are no related party transactions between Mr.

Bensussen and us nor are there any family relationships

Bensussen and any of our directors or officers.

Bensussen’s considerable experience in one of our main industries

led to the conclusion that he should serve as a member of our Board of Directors.

Bensussen has served as Advisor to

North Castle Partners, LLC.

Bensussen holds a Bachelor’s degree from the University of Southern California and a Juris

Doctor degree from Southwestern University School of Law.

Bensussen’s considerable

experience in one of our main industries led to the conclusion that he should serve as a member of our Board of Directors.

McCullough - President

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in Item 401(f) of Regulation S-K in the past 10 years.

of March 30, 2019, we have four 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.

stock is not listed on any exchange.

Consequently, no exchange rules regarding director independence are applicable to us.

we have applied the director independence test of The NASDAQ Capital Market and Mr.

SoRelle and Mr.

Bensussen are independent

of April 7, 2020, we have four 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.

common stock is not listed on any exchange.

Consequently, no exchange rules regarding director independence are applicable to

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.

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.

Company does not have a code of ethics for our principal executive or principal financial officers, due to our size and current

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Compensation Plans

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 2018 these 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 changes in options outstanding and the related prices for the shares of the Company’s common

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at December 31, 2019

compensation expense related to vested options was $440,999 and $1,458,850 during the years ended December 31, 2018 and 2017,

respectively.

The Company determined the value of share-based compensation for options vesting during the year ended December

31, 2017 using the Black-Scholes fair value option-pricing model with the following weighted average assumptions:

estimated fair

value of Company’s common stock of $0.48-0.50, 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 December 31, 2018, as disclosed in the above table, have

an intrinsic value of $0.

compensation expense related to vested options was $161,570 and $440,999 during the years ended December 31, 2019 and 2018, respectively.

The Company determined the value of share-based compensation for options vesting during the year ended December 31, 2017 using

the Black-Scholes fair value option-pricing model with the following weighted average assumptions:

estimated fair value of Company’s

common stock of $0.48-0.50, risk-free interest rate of 1.95-1.99%, volatility of 116-117%, expected lives of 10 years, and dividend

Stock options outstanding as of December 31, 2019, as disclosed in the above table, have an intrinsic value of $0.

Equity Awards at Fiscal Year-End

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

following table sets forth certain information regarding our common stock beneficially owned as of March 27, 2019, 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

following table sets forth certain information regarding our common stock beneficially owned as of April 7, 2020, 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.

Stock Beneficially Owned

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actual ownership or voting power with respect to the number of shares of common stock actually outstanding.

on 89,889,074 shares outstanding on March 27, 2019.

on 89,889,074 shares outstanding on April 7, 2020.

stockholder’s address is:

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and Gowan Private Equity Inc.

Kenek Brands Inc.

owns an option to

purchase 1,000,000 shares of common stock.

Gowan Private Equity owns 43,780,750 shares.

Dunhill Distribution Group owns 3,208,649

shares and Gowan Capital Inc.

Gowan Private Equity owns 43,780,750

Dunhill Distribution Group owns 3,208,649 shares and Gowan Capital Inc.

owns 1,625,034 shares.

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thereof, had or will have a direct or indirect material interest, other than described below:

Company accrued and paid consulting fees of $41,250 per month through April 2017 and $57,917 per month through December 2018

to a company owned by Mr.

Jack Ross, Chief Executive Officer of the Company.

The Company also paid three months of a vehicle

allowance of $1,500 per month.

The Company expensed $648,944 and $796,336, respectively during 2018 and 2017 as consulting

fees, and made payments totaling $648,944 and $796,336 towards services to an entity owned and controlled by an officer

and shareholder of the Company for the year ended December 31, 2018 and 2017.

The Company also paid out a bonus of $525,000 during

As of December 31, 2018 and 2017, the total outstanding balance was $0.

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, 2017, the Company owed Knight $559,243 on this loan, net of discount,

which was paid-off during 2018 (see Note 12).

The Company accrued

and paid consulting fees of $57,917 per month through December 2019 to a company owned by Mr.

Jack Ross, Chief Executive Officer

of the Company.

The Company also paid thirteen months of a vehicle allowance of $1,500 per month.

The Company expensed $824,413

and $648,944, respectively during 2019 and 2018 as consulting fees, and made payments totaling $852,626 and $648,944

towards services to an entity owned and controlled by an officer and shareholder of the Company for the year ended December 31,

2019 and 2018, respectively.

As of December 31, 2019 and 2018, the total outstanding balance was $0 and $28,213, respectively.

On January 22, 2015,

the Company entered into a Loan Agreement with Knight Therapeutics (Barbados) Inc.

a related party (owner of greater than 10%

shares of the Company), for the purchase of the Focus Factor assets.

At December 31, 2017, the Company owed Knight $559,243

on this loan, net of discount, which was paid-off during 2018 (see Note 11).

June 26, 2015, the Company entered into a Security Agreement with Knight Therapeutics, Inc., through its wholly owned subsidiary

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$475,000 and $525,000 on this agreement (see Note 11).

The Company recorded present value of future payments of $260,461

and $272,151 as of December 31, 2019 and 2018, respectively.

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

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this agreement is $100,000 Canadian dollars.

As of December 31, 2018 the total outstanding balance was $200,000 Canadian dollars.

In US Dollars, the total outstanding balance was $152,834 and $79,534 as of December 31, 2018 and 2017, respectively.

As of December 31, 2019 and 2018, the total outstanding balance was $100,000 and

$200,000 Canadian dollars.

In US Dollars, the total outstanding balance was $70,295 and $152,834 as of December 31, 2019 and 2018,

respectively.

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

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

As of December 31, 2018 the total outstanding balance

was $25,000 Canadian dollars.

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

As of both December 31, 2019 and 2018, the total outstanding

balance was $25,000 Canadian dollars.

In US Dollars, the total outstanding balance was $17,574 and $18,325 as of December 31,

2019 and 2018, respectively.

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

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At December 31, 2019

2018 and 2017 Sneaky Vaunt Corp., a subsidiary of the Company, owed Knight Therapeutics $5,906 and 4,608, respectively, in connection

with a royalty distribution agreement.

and 2018, the Company owed Knight Therapeutics $246 and $5,906, respectively, in connection with a royalty distribution agreement.

Company expensed commissions of $9,065 and $43,374 for the years ended December 31, 2019 and 2018, respectively.

31, 2018 and 2017 Sneaky Vaunt Corp., a subsidiary of the Company, owed Founded Ventures, owned by a shareholder in the Company,

$10,579 and $2,581, respectively, in connection with a commission agreement.

The Company paid a development fee for the brand,

Sneaky Vaunt, in the amount of $761,935 for the year ended December 31, 2017.

At December 31,

2019 and 2018, the Company owed Founded Ventures, owned by a shareholder in the Company, $0 and $10,579, respectively, in connection

with a commission agreement.

Company expensed commissions of $644 and $10,016 for the years ended December 31, 2019 and 2018, respectively.

paid a development fee for the brand, The Queen Pegasus, in the amount of $1,000,000 for the year ended December 31, 2017.

December 31, 2018 and 2017, The Queen Pegasus, a subsidiary of the Company, owed Founded Ventures $3.547 and $1,462, respectively

in connection with a commission agreement.

Company expensed royalty of $2,361 and $10,274 for the years ended December 31, 2018 and 2017, respectively.

At December 31,

and 2017, The Queen Pegasus, a subsidiary of the Company, owed Knight Therapeutics $193 and $10,274, respectively, in connection

with a royalty distribution agreement.

Company paid $250,000 and $125,000 for the years ended December 31, 2018 and 2017, respectively, to Hand MD, Corp, related to

a royalty agreement.

At December 31, 2018 and 2017, the Company owed Hand MD Corp.

$0 and $250,000, respectively, in minimum future

2019 and 2018, the Company owed Founded Ventures $0 and $3,547, respectively in connection with a commission agreement.

Company expensed royalty of $0 and $2,361 for the years ended December 31, 2019 and 2018, respectively.

At December 31, 2019 and

2018, the Company owed Knight Therapeutics $0 and $193, respectively, in connection with a royalty distribution agreement.

Company paid $14,801 and $250,000 for the years ended December 31, 2019 and 2018, respectively, to Hand MD, Corp, related to a

royalty agreement.

As of both December 31, 2019 and 2018, the Company owed Hand MD Corp.

$0 in minimum future royalties.

Company expensed royalty of $192,700 and $392,589 for the years ended December 31, 2019 and 2018, respectively.

At December 31,

2018 and 2017, NomadChoice Pty Ltd.

a subsidiary of the Company owed Knight Therapeutics $109,329 and $39,682, respectively, in

connection with a royalty distribution agreement (see Note 3).

2019 and 2018, the Company owed Knight Therapeutics $5,528 and $109,329, respectively, in connection with a royalty distribution

A member of the Company’s Board of Directors is an executive

officer of a supplier to the Company.

During the years ended December 31, 2019 and 2018, the Company acquired $4,847,626 and $4,392,245,

of products from the supplier, respectively, and included in cost of sales.

The Company owed the supplier $956,438 and $1,775,617,

respectively at December 31, 2019 and 2018.

Company entered into transactions with a related party controlled by CEO, during the year ended December 31, 2019.

transactions were a pass through of expenses and reimbursements.

During the year ended December 31, 2019, the Company

received advances of $324,102 ($430,000 Canadian Dollars), which were fully repaid.

As of December 31, 2019, there was

$0 due or payable.

Company entered into transactions with a related party controlled by the CEO, during the year ended December 31, 2019.

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

As of December 31, 2019 the Company was

owed $277,432.

PRINCIPAL ACCOUNTING FEES AND SERVICES.

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TO CONSOLIDATED FINANCIAL STATEMENTS

of Independent Registered Public Accounting Firm

Balance Sheets

Statements of Operations and Comprehensive Income (Loss)

Statements of Stockholders’

Statements of Cash Flows

to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Statements of Operations and Comprehensive Loss

Consolidated Statements of Stockholders’

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Consolidated Financial Statement Schedules

Otherwise Indicated)

and Plan of Merger, dated April 7, 2014, by and among Oro Capital Corporation, Synergy Merger Sub, Inc.

and Synergy Strips

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).

Purchase Agreement, dated January 22, 2015, by and among Synergy Strips Corp.;

Agreement and Plan of Merger, dated April 7, 2014, by and among Oro Capital Corporation, Synergy Merger Sub, Inc.

and Synergy Strips Corp.

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).

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.

Purchase Agreement, dated June 26, 2015, by and between Neuragen Corp.

Vita Partners, LLC, RPR Partners, LLC, and Thor Associates, Inc.

Asset Purchase Agreement, dated June 26, 2015, by and between Neuragen Corp.

and Knight Therapeutics, Inc.

of Incorporation

to Articles of Incorporation

of Amendment to Articles of Incorporation

of Subscription Agreement

Articles of Incorporation

Amendment to Articles of Incorporation

Certificate of Amendment to Articles of Incorporation

Amendment to By-Laws

Form of Subscription Agreement

Synergy Strips Corp.

Common Stock Purchase Warrant, dated January 22, 2015.

Synergy Strips Corp.

Common Stock Purchase Warrant (10-Year Warrant), dated January 22, 2015.

Synergy CHC Corp.

Common Stock Purchase Warrant, dated November 12, 2015.

Synergy CHC Corp.

Common Stock Purchase Warrant (10-Year Warrant), dated November 12, 2015.

Synergy CHC Corp.

Common Stock Warrant dated December 17, 2015.

Claim Agreement for the Shipman Diamond Project, dated September 1, 2011.

of Mineral Dispositions with Danny Aaron, dated February 21, 2012.

of Sales and Marketing Consultant and Distribution Agreement, dated April 2, 2014.

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and Synergy Strips Corp.

Distribution Option Agreement, dated January 22, 2015, between Knight Therapeutics (Barbados) Inc.

Product Distribution Option Agreement, dated January 22, 2015, between Knight Therapeutics (Barbados) Inc.

and Synergy Strips Corp.

Distribution,

License and Supply Agreement, dated January 22, 2015, by and between Synergy Strips Corp.

and Knight Therapeutics (Barbados)

Distribution, License and Supply Agreement, dated January 22, 2015, by and between Synergy Strips Corp.

and Knight Therapeutics (Barbados) Inc.

Synergy Strips Corp.

2014 Equity Incentive Plan

Agreement, dated August 18, 2015, between Synergy CHC Corp.

Contribution Agreement, dated August 18, 2015, between Synergy CHC Corp.

and Hand MD Corp.

Agreement, dated August 18, 2015, among Hand MD, LLC, Principal Owners as listed therein, Synergy CHC Corp.

Property License Agreement, dated August 18, 2015, by and between Synergy CHC Corp.

Agreement, dated August 18, 2015, by and between Synergy CHC Corp.

Contribution Agreement, dated August 18, 2015, among Hand MD, LLC, Principal Owners as listed therein, Synergy CHC Corp.

Intellectual Property License Agreement, dated August 18, 2015, by and between Synergy CHC Corp.

Consulting Agreement, dated August 18, 2015, by and between Synergy CHC Corp.

And Kara Harshbarger.

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.

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

Amendment to Loan Agreement, dated November 12, 2015, between Knight Therapeutics (Barbados) Inc.

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.

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.

First Amendment to Loan Agreement, dated November 12, 2015, between Knight Therapeutics (Barbados) Inc.

and Synergy CHC Corp.

to First Amendment Agreement, dated December 3, 2015, between Knight Therapeutics (Barbados) Inc.

Amendment to First Amendment Agreement, dated December 3, 2015, between Knight Therapeutics (Barbados) Inc.

and Synergy CHC Corp.

and Confirmation Agreement, dated December 3, 2015, by and among Knight Therapeutics (Barbados) Inc., Nomad Choice Pty Ltd.,

Synergy CHC Corp.

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.

and Release Agreement, dated December 17, 2015, by and between Synergy CHC Corp., the former shareholders of Breakthrough

Products, Inc.

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.

of the Registration

Note to Danny Aaron, dated May 17, 2013.

Note and Future Advances Note to Danny Aaron, dated May 28, 2013.

Certification

of Principal Executive Officer pursuant to Rule 13a-14(a)

Certification

of Principal Financial Officer pursuant to Rule 13a-14(a)

Certification

of Principal Executive Officer pursuant to 18 U.S.C.

Certification

of Principal Financial Officer pursuant to 18 U.S.C.

Subsidiaries of the Registration

Certification of Principal Executive Officer pursuant to Rule 13a-14(a)

Certification of Principal Financial Officer pursuant to Rule 13a-14(a)

Certification of Principal Executive Officer pursuant to 18 U.S.C.

Certification of Principal Financial Officer pursuant to 18 U.S.C.

Instance Document.

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behalf by the undersigned, thereunto duly authorized.

March 29, 2019

April 29, 2020

Executive Officer

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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-K

Item 9A. Controls and Procedures