[Executive Summary & Business Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Highlights) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) CEO Jack Ross celebrated Synergy CHC Corp.'s tenth profitable quarter, highlighting year-over-year growth, global brand expansion, beverage business growth, and successful debt refinancing - Reported tenth consecutive quarter of profitability[4](index=4&type=chunk) - Revenue, gross profit, net income, and earnings per share all grew year-over-year[4](index=4&type=chunk) - Expanded the global footprint of the FOCUSfactor brand through a licensing agreement in Turkey[4](index=4&type=chunk) - Secured distribution partners across North America for the RTD beverage business[4](index=4&type=chunk) - Successfully completed a **$20 million** debt refinancing, extending maturity profile and enhancing financial flexibility[4](index=4&type=chunk) [Second Quarter 2025 Financial Summary](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Summary) Synergy CHC Corp. reported strong Q2 2025 results: revenue up 1% to $8.1 million, gross margin at 76.7%, net income up 125% to $1.5 million, and EBITDA surging 136% to $3.80 million Q2 2025 Financial Performance vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--------------------- | :---------- | :---------- | :----------- | | Revenue | $8.1 million | $8.0 million | +1% | | Gross Margin | 76.7% | 69.5% | +7.2 ppts | | Income from Operations | $1.62 million | $1.58 million | +2.5% | | Net Income | $1.5 million | $655.2 thousand | +125% | | Earnings Per Share | $0.17 | $0.09 | +86% | | EBITDA (non-GAAP) | $3.80 million | $1.61 million | +136% | [Recent Business Highlights](index=1&type=section&id=Recent%20Business%20Highlights) Recent highlights include major North American retail and distribution wins for FOCUSfactor and beverages, international expansion to Turkey, a $20 million term loan, key beverage hires, and significant liability reductions - Announced major North American retail and distribution wins across FOCUSfactor supplement and beverage lines, expected to yield significant results in the fourth quarter of 2025[7](index=7&type=chunk) - Expanded international licensing deal with Gravity Pharma, adding Turkey alongside the UAE for exclusive distribution of FOCUSfactor[7](index=7&type=chunk) - Entered into a **$20 million** term loan credit agreement, due May 2029, with **$17.5 million** drawn[7](index=7&type=chunk) - Added key individuals to drive the Company's beverage growth during the second quarter[7](index=7&type=chunk) - Reduced outstanding liabilities by **$869 thousand** during the second quarter and by an additional **$1.8 million** subsequent to quarter end[7](index=7&type=chunk) [Detailed Financial Performance](index=2&type=section&id=Detailed%20Financial%20Performance) [Second Quarter 2025 Income Statement Analysis](index=2&type=section&id=Second%20Quarter%202025%20Financial%20Results) Q2 2025 total revenue rose 1% to $8.1 million, driven by $1.4 million license revenue. Gross margin improved to 76.7%, net income surged 125% to $1.5 million, and diluted EPS grew 86% to $0.17 Q2 2025 Income Statement Highlights (YoY Comparison) | Metric | Q2 2025 ($) | Q2 2024 ($) | Change (YoY) | | :--------------------- | :---------- | :---------- | :----------- | | Total Revenue | $8.1 million | $8.0 million | +1% | | Product Sales | $6.73 million | $8.02 million | -16.1% | | License Revenue | $1.40 million | $0 | N/A | | Gross Margin | 76.7% | 69.5% | +7.2 ppts | | Operating Expenses | $4.6 million | $4.0 million | +16% | | Income from Operations | $1.62 million | $1.58 million | +2.5% | | Net Income | $1.5 million | $655.2 thousand | +125% | | Diluted EPS | $0.17 | $0.09 | +86% | - The increase in gross margin was largely driven by license revenue[8](index=8&type=chunk) - The increase in operating expenses was driven by incremental costs associated with being a public company[9](index=9&type=chunk) [Balance Sheet and Cash Flow Overview](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Flow%20Overview) As of June 30, 2025, cash increased to $1.5 million, working capital shifted to a $12.4 million surplus, and inventory rose to $2.4 million. Operating cash outflow decreased, with financing activities providing $1.63 million Balance Sheet Highlights (Period-end Comparison) | Metric | June 30, 2025 ($) | December 31, 2024 ($) | Change ($) | | :-------------------------- | :-------------- | :---------------- | :------- | | Cash and Cash Equivalents | $1.5 million | $687.9 thousand | +$770.6K | | Working Capital | $12.4 million surplus | $1.12 million deficit | Significant improvement | | Inventory | $2.4 million | $1.7 million | +$0.7M | Cash Flow from Operating Activities (Six Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change ($) | | :-------------------------------- | :----------- | :----------- | :------- | | Net cash used in operating activities | $(899.7) thousand | $(1.1) million | -$240.3K | - Net cash provided by financing activities for the six months ended June 30, 2025, was **$1.63 million**, primarily driven by proceeds from notes payable (**$18.99 million**) partially offset by repayments of notes payable (**$15.38 million**)[26](index=26&type=chunk) [Non-GAAP Financial Measure Reconciliation: EBITDA](index=2&type=section&id=Non-GAAP%20Financial%20Measure%20Reconciliation%3A%20EBITDA) Synergy CHC Corp. presents EBITDA as a non-GAAP measure to clarify core operating results, with Q2 2025 EBITDA significantly increasing to $3.80 million from $1.61 million in Q2 2024 - EBITDA is disclosed as a non-GAAP financial measure to enhance investors' overall understanding of financial performance by excluding certain items that may not be indicative of core operating results[14](index=14&type=chunk)[15](index=15&type=chunk) EBITDA Reconciliation (Three Months Ended June 30) | Metric | Q2 2025 ($) | Q2 2024 ($) | | :-------------------------- | :---------- | :---------- | | Net income for the period | $1.47 million | $0.66 million | | Adjusted for: | | | | Interest expense, net | $2.11 million | $0.74 million | | Amortization of intangible assets | $0.03 million | $0.03 million | | Tax expense | $0.19 million | $0.18 million | | **EBITDA** | **$3.80 million** | **$1.61 million** | [Company Information](index=3&type=section&id=Company%20Information) [About Synergy CHC Corp.](index=3&type=section&id=About%20Synergy%20CHC%20Corp.) Synergy CHC Corp. is a consumer health and wellness company, offering FOCUSfactor brain supplements and Flat Tummy women's wellness and weight management products - Synergy CHC Corp. is a provider of consumer health and wellness products[18](index=18&type=chunk) - Its brand portfolio includes FOCUSfactor (brain health supplement) and Flat Tummy (women's wellness and weight management)[18](index=18&type=chunk) [Forward Looking Statements](index=3&type=section&id=Forward%20Looking%20Statements) This report contains forward-looking statements on future events, subject to risks and uncertainties outlined in SEC filings, and the company does not commit to updates unless legally required - Statements regarding expansion and growth initiatives, refinancing of indebtedness, and free cash flow constitute "forward-looking statements"[19](index=19&type=chunk) - These forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from the results discussed[19](index=19&type=chunk)[20](index=20&type=chunk) - Synergy does not undertake any obligation to update or revise any forward-looking statement, except as required by law[20](index=20&type=chunk) [Investor Relations](index=3&type=section&id=Investor%20Relations) Investor relations inquiries for Synergy CHC Corp. can be directed to Gateway Group, with contacts Cody Slach and Greg Robles, via phone or email - Investor Relations contact information is provided for Gateway Group (Cody Slach, Greg Robles) via phone and email[21](index=21&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $19.7 million, total liabilities decreased to $32.1 million, and the stockholders' deficit improved to $(12.4) million Condensed Consolidated Balance Sheets (Selected Items) | Item | June 30, 2025 ($) | December 31, 2024 ($) | | :------------------------------------------ | :-------------- | :---------------- | | **Assets** | | | | Cash and cash equivalents | $1,458,561 | $687,920 | | Accounts receivable, net | $7,069,889 | $5,321,037 | | Inventory, net | $2,364,158 | $1,716,552 | | Total Current Assets | $19,509,679 | $16,059,768 | | Total Assets | $19,726,346 | $16,343,101 | | **Liabilities** | | | | Total Current Liabilities | $7,126,547 | $17,184,369 | | Notes payable, net of debt discount (long-term) | $24,978,999 | $7,457,022 | | Total Liabilities | $32,105,546 | $32,974,444 | | **Stockholders' Deficit** | | | | Total stockholders' deficit | $(12,379,200) | $(16,631,343) | [Unaudited Condensed Consolidated Statements of Income and Comprehensive Income](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) The income statement shows Q2 2025 total revenue at $8.1 million with $1.5 million net income. For H1 2025, total revenue was $16.3 million, and net income reached $2.3 million, indicating improved profitability Condensed Consolidated Statements of Income (Three Months Ended June 30) | Metric | Q2 2025 ($) | Q2 2024 ($) | | :-------------------------------- | :---------- | :---------- | | Product Sales | $6,734,996 | $8,024,840 | | License Revenue | $1,400,000 | - | | Total Revenue | $8,134,996 | $8,024,840 | | Cost of sales | $1,896,391 | $2,448,890 | | Gross profit | $6,238,605 | $5,575,950 | | Operating expenses | $4,614,870 | $3,992,358 | | Income from operations | $1,623,735 | $1,583,592 | | Net income after tax | $1,473,237 | $655,186 | | Net income per share – basic | $0.17 | $0.09 | Condensed Consolidated Statements of Income (Six Months Ended June 30) | Metric | H1 2025 ($) | H1 2024 ($) | | :-------------------------------- | :---------- | :---------- | | Product Sales | $13,405,530 | $17,436,703 | | License Revenue | $2,900,000 | - | | Total Revenue | $16,305,530 | $17,436,703 | | Cost of sales | $3,902,904 | $5,086,029 | | Gross profit | $12,402,626 | $12,350,674 | | Operating expenses | $8,831,188 | $8,958,753 | | Income from operations | $3,571,438 | $3,391,921 | | Net income after tax | $2,349,501 | $1,235,716 | | Net income per share – basic | $0.27 | $0.17 | [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2025, operating cash outflow improved to $899.7 thousand, while financing activities provided $1.63 million, resulting in a net cash increase of $770.6 thousand Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Metric | H1 2025 ($) | H1 2024 ($) | | :------------------------------------------ | :-------------- | :-------------- | | Net income | $2,349,501 | $1,235,716 | | Amortization of debt discount and debt issuance cost | $892,435 | - | | Gain on settlement of debt | $(2,154,522) | - | | Net cash used in operating activities | $(899,731) | $(1,140,005) | | Net cash provided by financing activities | $1,632,433 | $407,391 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $770,641 | $(545,241) | | Cash and restricted cash, end of period | $1,558,561 | $187,293 | - Significant financing activities included proceeds from notes payable of **$18,996,250** and repayment of notes payable of **$15,382,903** for the six months ended June 30, 2025[26](index=26&type=chunk)

Core Insights - Synergy CHC Corp. reported strong financial results for Q2 2025, marking its tenth consecutive quarter of profitability, with year-over-year growth in revenue, gross profit, net income, and earnings per share [2][5][7] Financial Performance - Revenue for Q2 2025 was $8.1 million, a 1% increase from $8.0 million in Q2 2024 [5][8] - Gross margin improved to 76.7% in Q2 2025 from 69.5% in Q2 2024, primarily due to increased license revenue [5][8] - Operating expenses rose to $4.6 million, up 16% from $4.0 million in Q2 2024, attributed to costs related to being a public company [6][8] - Income from operations was $1.62 million, a 2.5% increase compared to $1.58 million in Q2 2024 [6][8] - Net income surged to $1.5 million, reflecting a 125% increase from $655.2 thousand in Q2 2024 [7][8] - Earnings per share increased to $0.17, up 86% from $0.09 in Q2 2024 [7][8] - EBITDA for Q2 2025 was $3.80 million, a 136% increase from $1.61 million in Q2 2024 [9] Strategic Developments - The company expanded its FOCUSfactor brand's global presence through a licensing agreement in Turkey [2][8] - Synergy secured distribution partners across North America for its ready-to-drink (RTD) beverage business [2][8] - A $20 million debt refinancing was completed, enhancing financial flexibility and supporting long-term growth strategies [2][8] Balance Sheet and Cash Flow - As of June 30, 2025, cash and cash equivalents increased to approximately $1.5 million from $687.9 thousand at the end of 2024 [10][20] - Working capital surplus improved to $12.4 million from a deficit of $1.12 million at the end of 2024 [10][20] - Inventory rose to $2.4 million from $1.7 million at the end of 2024 [10][20] - Cash used in operating activities for the first half of 2025 was $899.7 thousand, an improvement from $1.1 million in the same period of 2024 [11][27]

Company Overview - Synergy CHC Corp. is a fast-growing consumer health and wellness company, providing products aimed at improving health and wellness [3] Upcoming Financial Results - The company plans to release its financial results for the second quarter ended June 30, 2025, on August 14, 2025, before market trading opens [1] - A conference call will be held at 9:00 a.m. ET / 6:00 a.m. PT with CEO Jack Ross and CFO Jaime Fickett to discuss the results [2] Product Portfolio - Synergy's brand portfolio includes FOCUSfactor, a clinically studied brain health supplement that enhances memory, concentration, and focus, and Flat Tummy, a lifestyle brand focused on women's wellness and weight management [3]

Core Insights - Synergy CHC Corp. has announced significant retail and distribution wins for its FOCUSfactor supplement and functional beverage lines, reflecting a focused strategy to scale its cognitive health portfolio [1][2] Supplement Gains - London Drugs will launch FOCUSfactor brain health supplements across all 80 store locations in Western Canada starting this summer, targeting a growing health and wellness consumer base [3][4] - Synergy has secured a national distribution agreement with McKesson Canada, allowing access to thousands of pharmacy and health-focused retail locations across Canada, with a rollout scheduled for Q4 2025 [4][5] Beverage Gains - Gabe's will introduce FOCUSfactor Focus + Energy beverages to 137 stores in the Mid-Atlantic and Southeast, with additional exposure through Old Time Pottery's 34 stores, totaling 171 retail locations across 20 states [5][6] - FOCUSfactor will showcase its beverage line at the 2025 ECRM Beverage Show in Dallas, meeting with over 25 national retailers and distributors representing over 32,000 doors across the USA [6][7] Building Momentum - The recent distribution wins follow a series of major agreements earlier this year, indicating accelerating momentum across both product lines and key regions, with expectations for further updates in the coming months [8]

Core Insights - Synergy CHC Corp. has announced significant retail and distribution gains in North America for its supplement and functional beverage portfolios, marking a major expansion in access to its products [1][2] Beverage Gains - Core-Mark has granted national item authorization for FOCUSfactor Focus + Energy beverages, allowing distribution across over 50,000 customer locations in all 50 U.S. states and Canada, with products expected on shelves in Q3 2025 [3][4] - Metro Ontario has launched FOCUSfactor Focus + Energy in over 125 grocery stores, while its convenience division will introduce the brand to over 600 locations starting July 2025 [4] - Energy North Group will add FOCUSfactor beverages to its offerings across its 70 convenience stores and gas stations in New England and Upstate New York, with availability beginning in Q3 2025 [5] - Downey Wholesale has included FOCUSfactor Focus + Energy in its national portfolio, targeting over 10,000 small wholesalers and independent retailers, with products expected to be available in Q3 2025 [6][7] Supplement Gains - Synergy has secured national placement for two FOCUSfactor SKUs within Walmart Canada's vitamin set, with rollout scheduled for Q4 2025, enhancing the brand's international growth strategy [8] - The expansion into Walmart Canada is seen as a significant milestone, building on an 18-year partnership with Walmart in the U.S. and reinforcing FOCUSfactor's leadership in the brain health category [8][9]

Core Insights - Synergy CHC Corp. has expanded its international licensing deal with Gravity Pharma to include Turkey, alongside the UAE, for exclusive distribution of FOCUSfactor®, generating $2 million in upfront licensing revenue with additional performance-based royalties [1][2][5] Company Overview - Synergy CHC Corp. is a consumer health and wellness company known for its flagship brands, including FOCUSfactor®, a clinically tested brain health supplement, and Flat Tummy®, a lifestyle wellness brand for women [4] Strategic Growth - The licensing model in the UAE and Turkey allows Synergy to scale the FOCUSfactor® brand without diluting ownership or diverting focus from U.S. operations, retaining 100% ownership and global intellectual property [2] - The company is pursuing a high-margin, global expansion strategy through capital-efficient partnerships, positioning itself to capitalize on the growing demand for cognitive health solutions [3][5] Market Potential - The brain health market is projected to exceed $20 billion by 2030, indicating significant growth opportunities for Synergy CHC Corp. [5]

Core Insights - Synergy CHC Corp. has appointed Damian Marano as Vice President of Beverage, marking a significant step in its expansion into the functional beverage market [1][2] Company Overview - Synergy CHC Corp. is a consumer health and wellness company with a focus on cognitive-enhancing and clean-energy drinks, leveraging its flagship brand FOCUSfactor [7][8] - The company is rapidly scaling its operations across North America, the U.K., and new international markets, indicating strong growth potential [7] Leadership and Expertise - Damian Marano brings over 20 years of experience in sales and business development within the beverage and consumer goods sectors, having held significant roles at The Coca-Cola Company [2][3] - His previous achievements include leading a $200 million ARR portfolio and implementing AI-driven revenue growth strategies at Coca-Cola [2] - Marano's experience also includes generating $2.5 million in ARR at Cypre and achieving a 10x increase in enterprise deal size at H2O.ai [3] Product Development - The company is launching FOCUSfactor Energy Drinks, which are designed to enhance mental clarity and provide clean energy through fast-acting B-vitamins and nootropics [5] - These beverages are positioned alongside Synergy's existing health products, aiming to meet the growing demand for better-for-you drinks [5][6]

Core Viewpoint - Synergy CHC Corp. has secured a $20 million term loan credit agreement to enhance its capital structure and support growth initiatives [1][3]. Financial Details - The company received a $15 million term loan at closing with an interest rate of SOFR plus 8.5%, structured as interest-only through 2025 [2]. - Quarterly principal payments will commence in January 2026 at $175,000, increasing to $350,000 per quarter in 2027 and beyond [2]. - Additionally, a $2.5 million delayed draw facility and a $2.5 million uncommitted term loan incremental facility are available [2]. Strategic Implications - The CEO of Synergy emphasized that the refinancing supports the company's growth strategy and strengthens its capital structure, providing necessary flexibility for future growth [3]. - The delayed draw proceeds will enable the company to repay debt related to settlement agreements, enhancing financial stability as it pursues strategic goals [3]. Company Overview - Synergy CHC Corp. specializes in consumer health care and lifestyle products, with notable brands including FOCUSfactor, a brain health supplement, and Flat Tummy, a wellness brand focused on nutritional products for weight management [4].

Core Insights - Synergy CHC Corp. has appointed Erik Shields as Vice President of Beverage, effective May 26, 2025, to enhance its beverage business strategy [1][2] - Shields brings nearly 20 years of experience in sales leadership within both alcoholic and non-alcoholic beverage sectors, previously serving as Director of C-Store Sales at Trilliant Food & Nutrition [2][3] - The company is focusing on expanding its flagship brain health brand, FOCUSfactor, into the functional beverage category with the launch of Focus + Energy Drinks, which are designed to meet rising consumer demand for health-oriented beverage options [3][5] Company Strategy - The appointment of Erik Shields is seen as a strategic move to accelerate growth in the beverage category, leveraging his expertise in national strategies and key account management [2][4] - Shields will oversee the go-to-market strategy, distribution, and brand execution for the new Focus + Energy Drinks, aligning with trends in mental performance and functional beverages [3][4] - Synergy's current brand portfolio includes FOCUSfactor, a brain health supplement, and Flat Tummy, a wellness brand aimed at women's nutritional needs [5]

Financial Data and Key Metrics Changes - The company reported a 30% growth in earnings per share year over year, marking the ninth consecutive quarter of profitability [4] - EBITDA margins expanded significantly to 24.1% compared to 19.7% in the prior period [4] - Net revenue for the first quarter was $8.2 million, reflecting a 13% decrease year over year [11] - Gross margin increased to 75.4% from 72% in the same quarter last year [11] - Operating expenses decreased by 15% to $4.2 million [11] - Net income for the first quarter was $876,000 or $0.10 per diluted share, compared to $580,000 or $0.08 per diluted share in the year-ago quarter [12] Business Line Data and Key Metrics Changes - The company has entered a three-year license agreement for the Focus Factor brand in the UAE, expecting revenue generation by the fourth quarter [5] - The RTD beverage segment generated $30,000 in revenue in the first quarter, with expectations of $2 million in the second quarter due to Amazon orders [16][17] - A long-term supplier agreement for Focus Factor products is expected to provide significant cost savings [9] Market Data and Key Metrics Changes - The company has opened over 400 additional convenience stores in Canada for RTD products [7] - Plans to expand into Australia and Taiwan markets are set for early fourth quarter [6] Company Strategy and Development Direction - The company aims to expand its global presence by adding new licensees in selected markets without establishing a direct footprint [5] - Focus on cost management while investing in key growth initiatives [11] - Refinancing of debt is expected to accelerate free cash flow and extend maturity dates into 2029 [9] Management's Comments on Operating Environment and Future Outlook - Management does not expect material impact from tariffs due to local sourcing of products [10] - The company is optimistic about revenue generation from new licensing agreements and RTD beverage growth [21][25] Other Important Information - Cash and cash equivalents decreased to $177,900 from $687,900 as of December 31, 2024 [13] - Total liabilities decreased to $31.3 million from $33 million at the end of the previous year [14] Q&A Session Summary Question: What are the plans for the RTD beverage rollout for the remainder of the year? - The company expects to generate about $2 million in revenue in the second quarter, primarily from Canada and the US [16][17] Question: Will G&A expenses rise through the year? - G&A expenses are expected to remain flat as a percentage, with some headcount additions [19] Question: What was the licensing revenue booked in the first quarter? - The company received a startup fee of $1.5 million for the UAE territory, with revenue expected to start in the fourth quarter [20][21]