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What changed in Synergy CHC Corp.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Synergy CHC Corp.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+233 added−261 removedSource: 10-K (2026-04-01) vs 10-K (2025-03-31)

Top changes in Synergy CHC Corp.'s 2025 10-K

233 paragraphs added · 261 removed · 194 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

68 edited+5 added−8 removed94 unchanged
Biggest changeIn the United Kingdom, where we have distribution with Costco and Holland & Barrett, we have established relationships with manufacturers who began producing FOCUSfactor in-country in December 2021. We currently plan to enter the Taiwan and Mexico markets during 2025 and in Australia and Asia in the first quarter of 2026, initially with FOCUSfactor, then followed by Flat Tummy.
Biggest changeWe entered the Mexico market in the fourth quarter of 2025 and plan to enter Taiwan and Asia in 2026, initially with FOCUSfactor, followed by Flat Tummy. We then plan to expand our brands into Australia (where we have Therapeutic Goods Administration (“TGA”) approval for our FOCUSfactor products).
FOCUSfactor. Our marketing strategy for FOCUSfactor is primarily focused on increased distribution and advertising campaigns that appeal to the demographics of our wellness focused customer base. We also utilize in-store promotions along with online and social media advertising to promote our FOCUSfactor brand.
Our marketing strategy for FOCUSfactor is primarily focused on increased distribution and advertising campaigns that appeal to the demographics of our wellness focused customer base. We also utilize in-store promotions along with online and social media advertising to promote our FOCUSfactor brand.
Additionally, customs procedures and tariffs introduced post-Brexit have further impeded the flow of goods, increasing costs for businesses and potentially limiting consumer access to certain products. Flat Tummy products are not currently sold in the United Kingdom. 10 In Australia, FOCUSfactor products are “Listed Medicines” that are regulated by the TGA and require an AUST L (Australia Listed Medicine) number.
Additionally, customs procedures and tariffs introduced post-Brexit have further impeded the flow of goods, increasing costs for businesses and potentially limiting consumer access to certain products. Flat Tummy products are not currently sold in the United Kingdom. In Australia, FOCUSfactor products are “Listed Medicines” that are regulated by the TGA and require an AUST L (Australia Listed Medicine) number.
Generally, we take ownership of the formulas and related intellectual property, unless the products use a generic formulation. 6 Manufacturing and Related Operations Our company collaborates with external manufacturers, known for their reliability, to produce our diverse range of products. We carefully select partners based on their expertise and manufacturing capabilities, ensuring our products are of the highest quality.
Generally, we take ownership of the formulas and related intellectual property, unless the products use a generic formulation. Manufacturing and Related Operations Our company collaborates with external manufacturers, known for their reliability, to produce our diverse range of products. We carefully select partners based on their expertise and manufacturing capabilities, ensuring our products are of the highest quality.
FSMA also requires importers of food, including dietary supplements and dietary ingredients, to conduct verification activities to ensure that the food or ingredients they import meet applicable domestic requirements. 8 We take several actions to ensure manufacturers we engage comply with the Bioterrorism Act, have implemented FSMA procedures (as applies), and are operating under cGMPs.
FSMA also requires importers of food, including dietary supplements and dietary ingredients, to conduct verification activities to ensure that the food or ingredients they import meet applicable domestic requirements. We take several actions to ensure manufacturers we engage comply with the Bioterrorism Act, have implemented FSMA procedures (as applies), and are operating under cGMPs.
Listed Medicines are regulated by the TGA, and the advertising of these products is also regulated by the TGA under the Therapeutic Goods Administrative Code (“TGAC”). Flat Tummy products are not currently sold in Australia. New Legislation or Regulation Legislation may be introduced which, if passed, would impose substantial new regulatory requirements on dietary supplements.
Listed Medicines are regulated by the TGA, and the advertising of these products is also regulated by the TGA under the Therapeutic Goods Advertising Code (“TGAC”). Flat Tummy products are not currently sold in Australia. New Legislation or Regulation Legislation may be introduced which, if passed, would impose substantial new regulatory requirements on dietary supplements.
We regard our trademarks and other proprietary rights as valuable assets and believe they make a significant positive contribution to the marketing of our products. 11 We protect our legal rights concerning our trademarks by appropriate measures, which may include legal action. We possess a portfolio of both registered and unregistered (i.e., common law) trademarks.
We regard our trademarks and other proprietary rights as valuable assets and believe they make a significant positive contribution to the marketing of our products. We protect our legal rights concerning our trademarks by appropriate measures, which may include legal action. We possess a portfolio of both registered and unregistered (i.e., common law) trademarks.
The FDA OTC monographs include well-known ingredients and specific requirements for permitted indications, required warnings and precautions, allowable combinations of ingredients and dosage levels. Products marketed under the OTC monograph system must conform to specific quality, formula and labeling requirements. We do not currently sell UrgentRx. 7 The U.S.
The FDA OTC monographs include well-known ingredients and specific requirements for permitted indications, required warnings and precautions, allowable combinations of ingredients and dosage levels. Products marketed under the OTC monograph system must conform to specific quality, formula and labeling requirements. We do not currently sell UrgentRx. The U.S.
The Australian approval process generally takes four to eight weeks from the time the packet is submitted, while in Canada the approval process can take from six to twelve months from submission. In Canada, HC has oversight over our FOCUSfactor and Flat Tummy products.
The Australian approval process generally takes four to eight weeks from the time the packet is submitted, while in Canada the approval process can take from six to twelve months from submission. 10 In Canada, HC has oversight over our FOCUSfactor and Flat Tummy products.
We expect these trends will benefit the Flat Tummy brand and allow for new and innovative products to appeal to the changing market demographics. Research and Development The development of new products is comprised of two distinct steps.
We expect these trends will benefit the Flat Tummy brand and allow for new and innovative products to appeal to the changing market demographics. 6 Research and Development The development of new products is comprised of two distinct steps.
Patent 8,329,227 covering FOCUSfactor’s proprietary formulation “for enhanced mental function.” This patent was issued by the United States Patent and Trademark Office in December 2012 and expires in April 2025. In addition to this intellectual property, we also rely on our proprietary knowledge and ongoing technological innovation to develop a competitive position in the market for our products.
Patent 8,329,227 covering FOCUSfactor’s proprietary formulation “for enhanced mental function.” This patent was issued by the United States Patent and Trademark Office in December 2012 and expired in April 2025. In addition to this intellectual property, we also rely on our proprietary knowledge and ongoing technological innovation to develop a competitive position in the market for our products.
We anticipate a coordinated expansion of our advertising strategy during 2025, as we focus on pushing additional SKUs within our retail sales partner network to continue to build brand awareness and increase reach for FOCUSfactor. We also plan to invest in online marketing to promote all of our brands, including social media and influencer driven marketing.
We anticipate a coordinated expansion of our advertising strategy during 2026, as we focus on pushing additional SKUs within our retail sales partner network to continue to build brand awareness and increase reach for FOCUSfactor. We also plan to continue to invest in online marketing to promote all of our brands, including social media and influencer driven marketing.
Our Brands Our flagship brand, FOCUSfactor, is a brain health nutritional supplement with over 24 years of history and a clinically-tested formula (this study was performed independently and is not related to any FDA-approved IND application) comprised of a proprietary blend of key brain supporting ingredients along with vitamins, minerals, and other nutrients.
Our Brands Our flagship brand, FOCUSfactor, is a brain health nutritional supplement with over 25 years of history and a clinically-tested formula (this study was performed independently and is not related to any FDA-approved IND application) comprised of a proprietary blend of key brain supporting ingredients along with vitamins, minerals, and other nutrients.
Fragmented state-level regulations develop in the United States from time-to-time. Once such bill, the New York Weight Loss Products Bill, effective as of April 22, 2024, imposes stricter regulations on weight loss and athletic performance products. Among its provisions, it requires manufacturers to implement age verification measures for the sale of consumers in the state of New York.
Fragmented state-level regulations develop in the United States from time-to-time. One such bill, the New York Weight Loss Products Bill, effective as of April 22, 2024, imposes stricter regulations on weight loss and athletic performance products. Among its provisions, it requires manufacturers to implement age verification measures for the sale of consumers in the state of New York.
FOCUSfactor has successfully demonstrated the ability to leverage its existing retailer relationships to expand its RTDs. From March 2023 through August 2023, FOCUSfactor conducted a 5-month trial of its RTD products in 44 clubs of a warehouse club retailer throughout Texas with sales ranging from $550 per club per week to $2,382 per club per week.
FOCUSfactor has successfully demonstrated the ability to leverage its existing retailer relationships to expand its RTDs. From March 2023 through August 2023, FOCUSfactor conducted a five-month trial of its RTD products in 44 clubs of a warehouse club retailer throughout Texas with sales ranging from $550 per club per week to $2,382 per club per week.
In addition to offering a direct-to-consumer sales channel for our products, we also host a lifestyle blog on our website with a focus on health and fitness. ● Instagram: Our primary social media platform is Instagram. As of December 31, 2024, we had approximately 1.7 million followers.
In addition to offering a direct-to-consumer sales channel for our products, we also host a lifestyle blog on our website with a focus on health and fitness. ● Instagram: Our primary social media platform is Instagram. As of December 31, 2025, we had approximately 1.7 million followers.
We mainly use the platform to share promotions and to relay content and advertisements. ● Flat Tummy App: Our Flat Tummy app had approximately 1.9 million unique downloads as of December 31, 2024, across both the Apple and Android platforms. The app provides customized workouts, nutrition information, and diet plans.
We mainly use the platform to share promotions and to relay content and advertisements. ● Flat Tummy App: Our Flat Tummy app had approximately 1.9 million unique downloads as of December 31, 2025, across both the Apple and Android platforms. The app provides customized workouts, nutrition information, and diet plans.
This is evidenced by our expanded FOCUSfactor product line, including focus and energy Ready-to-Drink (RTD) and liquid shots that are marketed to a younger adult audience. In 2023, we successfully launched an RTD pilot program in the United States through a major retailer.
This is evidenced by our expanded FOCUSfactor product line, including focus and energy RTD and liquid shots that are marketed to a younger adult audience. In 2023, we successfully launched an RTD pilot program in the United States through a major retailer.
We have registered and intend to register certain trademarks in certain limited jurisdictions outside the United States where our products are sold, but we may not register all or even some of our trademarks in every country in which we conduct business or intend to conduct business. We own U.S.
We have registered and intend to register certain trademarks in certain limited jurisdictions outside the United States where our products are sold, but we may not register all or even some of our trademarks in every country in which we conduct business or intend to conduct business. We owned U.S.
We believe that we are well positioned to benefit from these favorable trends. The brain health segment is slated to grow at 8% per year in the United States and 13% per year globally, according to Grand View Research.
We believe that we are well positioned to benefit from these favorable trends. The brain health segment is slated to grow at 8% per year in the United States and 13% per year globally through 2030, according to Grand View Research.
Additionally, FOCUSfactor has long-term relationships with large retailers where it has an established presence, which will assist in market penetration for its RTD products. FOCUSfactor is looking to attract both existing consumers of supplement products (typically age 50+) to RTDs as well as a younger demographic (age 18-49).
Additionally, FOCUSfactor has long-term relationships with large retailers where it has an established presence, which will assist in market penetration for its RTD products. FOCUSfactor is looking to attract both existing consumers of supplement products (typically customers over age 50) to RTDs as well as a younger demographic (aged 18-49).
Across three of our key partners, we have increased the number of SKUs sold through the retailer from the single SKU available at the beginning of our relationships, which began in 2015 and 2016.
Across three of our key partners, we have increased the number of SKUs sold through the retailer from the single SKU available at the beginning of our relationships in 2015 and 2016.
In addition, we are developing our marketing plans in compliance with applicable laws, and are initiating retailer meetings as we seek to gain distribution across these new retail markets.
In addition, we are developing our marketing plans in compliance with applicable law and are initiating retailer meetings as we seek to gain distribution across these new retail markets.
While the most recent MPL attempt failed in 2022, the FDA’s outlined budget and legislative proposals for 2025 continue to include the modernization of DSHEA regulations and the introduction of an MPL.
While the most recent MPL attempt failed in 2022, the FDA’s outlined budget and legislative proposals for 2026 continue to include the modernization of DSHEA regulations and the introduction of an MPL.
The app contains a library of brain games and guided meditation sessions on topics related to mindfulness and brain health in order to keep consumers engaged. As of December 31, 2024, we have approximately 13,000 app downloads. Flat Tummy. We employ a primarily online and social media driven strategy for our Flat Tummy brand.
The app contains a library of brain games and guided meditation sessions on topics related to mindfulness and brain health in order to keep consumers engaged. As of December 31, 2025, we have approximately 17,000 app downloads. Flat Tummy. We employ a primarily online and social media driven strategy for our Flat Tummy brand.
In July 2021, we acquired Hand MD Corp. as a wholly-owned subsidiary. We were a public reporting company until July 17, 2020, the date on which we filed a Form 15 to voluntarily suspend our duty to file reports under Sections 13 and 15(d) of the Exchange Act.
In July 2021, we acquired Hand MD Corp. as a wholly-owned subsidiary. We were a public reporting company until July 17, 2020, the date on which we filed a Form 15 to voluntarily suspend our duty to file reports under Sections 13 and 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”).
Our marketing strategy for Flat Tummy seeks to leverage our large online following to promote products from across the Flat Tummy brand. More recently we have engaged with social media influencers as a new strategy to promote our products. ● Facebook: As of December 31, 2024, we had approximately 531,000 followers.
Our marketing strategy for Flat Tummy seeks to leverage our large online following to promote products from across the Flat Tummy brand. More recently we have engaged with social media influencers as a new strategy to promote our products. ● Facebook: As of December 31, 2025, we had approximately 524,000 followers.
Our goal is to increase our net revenues generated from new markets. As we target new international markets, our strategy is to develop highly competitive and differentiated products that are produced in-country for ease of entry, with support from our regulatory group and an in-country regulatory consultant to help expedite the approval process.
As we target new international markets, our strategy is to develop highly competitive and differentiated products that are produced in-country for ease of entry, with support from our regulatory group and an in-country regulatory consultant to help expedite the approval process.
Based on the success of our products with these leading retail partners, we believe that we are well positioned to add new retailers that will enhance our distribution footprint. We believe we have expansion opportunities with food retailers, including those focused on health foods.
Partner with Additional Leading Retailers to Expand the Reach of Our Products Based on the success of our products with our established leading retail partners, we believe that we are well positioned to add new retailers that will enhance our distribution footprint. We believe we have expansion opportunities with food retailers, including those focused on health foods.
UrgentRx is an over-the-counter (“OTC”) drug, which has specific regulatory requirements, including ingredient and manufacturing requirements. Under the OTC monograph system, selected OTC drugs are generally recognized as safe and effective and do not require the submission and approval of a new drug application.
The FDA is not aware of scientific evidence to support homeopathy as effective. UrgentRx is an over-the-counter (“OTC”) drug, which has specific regulatory requirements, including ingredient and manufacturing requirements. Under the OTC monograph system, selected OTC drugs are generally recognized as safe and effective and do not require the submission and approval of a new drug application.
As of December 31, 2024, we had approximately 13,600 followers. ● FOCUSfactor — Brain Hub App: Early in 2021 we launched our Brain Hub app on the Android and Apple iOS platforms to provide an additional point of engagement with customers.
As of December 31, 2025, we had approximately 332,000 followers. ● FOCUSfactor — Brain Hub App: Early in 2021 we launched our Brain Hub app on the Android and Apple iOS platforms to provide an additional point of engagement with customers.
Our FOCUSfactor brand consists of over 34 SKUs and is sold primarily through leading retailers in the United States, including Costco, Walmart, Amazon.com, Walgreens, CVS, Meijer, and Albertson’s, in addition to selling direct to consumer through the FOCUSfactor website.
Our FOCUSfactor brand consists of over 34 SKUs and is sold primarily through leading retailers in the United States, including Costco, Amazon.com, Walmart, Walgreens, BJ’s, and The Vitamin Shoppe, in addition to selling direct to consumer through the FOCUSfactor website.
We also provide a Flat Tummy mobile app, which, as of December 31, 2024, had approximately 1.9 million unique downloads and is intended as a tool to promote the Flat Tummy lifestyle centered around general wellness and health.
We also provide a Flat Tummy mobile app, which, as of December 31, 2025, had approximately 2.0 million unique downloads and is intended as a tool to promote the Flat Tummy lifestyle centered around general wellness and health.
According to Zion Research in January 2024, the beverage market is a large ($176 billion in 2022) and growing (projected 8.6% CAGR covering eight years from 2022 through 2030) market with an expanding range of functional benefits such as energy, hydration, cognition/focus, weight loss, gut health and immunity.
FOCUSfactor has expanded into the beverage market with its focus plus energy RTD. According to Zion Research in January 2024, the global beverage market is large ($176 billion in 2022) and growing (projected 8.6% CAGR covering eight years from 2022 through 2030) with an expanding range of functional benefits such as energy, hydration, cognition/focus, weight loss, gut health and immunity.
While the FDA doesn’t mandate pre-approval or registration for dietary supplements or food products, it does stipulate that these items must adhere to current good manufacturing practices (“cGMPs”) and be produced in FDA-registered and audited facilities. Additionally, the FDA exercises regulatory oversight of ingredients and labeling of these products.
While the FDA doesn’t mandate pre-approval or registration for dietary supplements or food products, it does stipulate that these items must adhere to current good manufacturing practices (“cGMPs”) and be produced in FDA-registered and audited facilities.
This expansion included SKUs within our FOCUSfactor vision line as well as focus and energy Ready-to-Drink (RTD). We intend to accelerate the growth of both our FOCUSfactor supplements and FOCUSfactor energy RTD products. Our asset-light business model, in which we partner with third-party manufacturers to produce our brand offerings, allows us to scale quickly and profitably while satisfying growing demand.
We intend to accelerate the growth of both our FOCUSfactor supplements and FOCUSfactor energy Ready To Drink (RTD) products. Our asset-light business model, in which we partner with third-party manufacturers to produce our brand offerings, allows us to scale quickly and profitably while satisfying growing demand.
In addition, DSHEA provides that so-called “third-party literature,” e.g., “a publication, including an article, a chapter in a book, or an official abstract of a peer-reviewed scientific publication that appears in an article and was prepared by the author or the editors of the publication” supplements, when reprinted in its entirety, may be used “in connection with the sale of a dietary supplement to consumers” without the literature being subject to regulation as labeling.
Our regulatory team engages in the review of web copy, e-commerce copy, and other marketing copy at the request of the brand directors of each respective brand. 9 In addition, DSHEA provides that so-called “third-party literature,” e.g., “a publication, including an article, a chapter in a book, or an official abstract of a peer-reviewed scientific publication that appears in an article and was prepared by the author or the editors of the publication” supplements, when reprinted in its entirety, may be used “in connection with the sale of a dietary supplement to consumers” without the literature being subject to regulation as labeling.
We acquired the FOCUSfactor brand in January 2015 for cash consideration of $6.0 million, including an earnout. In November 2015, we acquired our second marquee brand, Flat Tummy, for AUD $10.0 million (or approximately $7.0 million), using a mix of cash and stock.
In November 2015, we acquired our second marquee brand, Flat Tummy, for AUD 10.0 million (approximately $7.0 million), using a mix of cash and stock.
Concurrently, Health Canada is in the consultation period for an updated fee schedule for Health Canada-related activities, such as the review of product submission packets, site licensing, and other activities relevant to maintaining operations and regulatory compliance in Canada.
Health Canada has also provided updated labeling formatting for NHPs, with a compliance date for existing products of 2028. Concurrently, Health Canada is in the consultation period for an updated fee schedule for Health Canada-related activities, such as the review of product submission packets, site licensing, and other activities relevant to maintaining operations and regulatory compliance in Canada.
All FOCUSfactor products and Flat Tummy products are governed by the FDA regulations in 21 CFR Part 111 (dietary supplements) or 21 CFR Part 117 (foods). Neuragen (NDC 15377-010-04) is a homeopathic product and has not been evaluated by the FDA for safety or efficacy. The FDA is not aware of scientific evidence to support homeopathy as effective.
Additionally, the FDA exercises regulatory oversight of ingredients and labeling of these products. 7 All FOCUSfactor products and Flat Tummy products are governed by the FDA regulations in 21 CFR Part 111 (dietary supplements) or 21 CFR Part 117 (foods). Neuragen (NDC 15377-010-04) is a homeopathic product and has not been evaluated by the FDA for safety or efficacy.
If the literature fails to satisfy each of these requirements, we may be prevented from disseminating such literature with our products, and any continued dissemination could subject our product to regulatory action as an illegal drug. 9 The FDA has broad authority to enforce the provisions of federal law applicable to dietary supplements, including powers to issue a public warning or notice of violation letter to a company, publicize information about illegal products, detain products intended for import, require the reporting of serious adverse events, require a recall of illegal or unsafe products from the market, and request the Department of Justice to initiate a seizure action, an injunction action or a criminal prosecution in United States courts.
The FDA has broad authority to enforce the provisions of federal law applicable to dietary supplements, including powers to issue a public warning or notice of violation letter to a company, publicize information about illegal products, detain products intended for import, require the reporting of serious adverse events, require a recall of illegal or unsafe products from the market, and request the Department of Justice to initiate a seizure action, an injunction action or a criminal prosecution in United States courts.
The cGMP requirements are in effect for all dietary supplement manufacturers, and the FDA conducts inspections of dietary supplement manufacturers pursuant to these requirements. The failure of a manufacturing facility to comply with the cGMP regulations renders products manufactured in such facility “adulterated,” and subjects such products and the manufacturer to a variety of potential FDA enforcement actions.
The failure of a manufacturing facility to comply with the cGMP regulations renders products manufactured in such facility “adulterated,” and subjects such products and the manufacturer to a variety of potential FDA enforcement actions.
The benefit of this proposed pay scheme is that it may significantly reduce the number of product submissions from other companies in the Canadian market, which may reduce competition in the Canadian market and perhaps reduce review timelines by Health Canada for new product registrations and other such activities, therefore decreasing the time barrier to entry.
The benefit of this proposed pay scheme is that it may significantly reduce the number of product submissions from other companies in the Canadian market, which may reduce competition in the Canadian market and perhaps reduce review timelines by Health Canada for new product registrations and other such activities, therefore decreasing the time barrier to entry. 11 Intellectual Property We own 27 trademarks that have been registered with the United States Patent and Trademark Office and have filed applications to register additional trademarks.
In addition, we have increased our presence in retail locations for these key partners, resulting in a significant increase in points of distribution, being the number of SKUs multiplied by the number of retail locations for each retailer.
In addition, we have increased our presence in retail locations for these key partners, resulting in a significant increase in points of distribution, defined as the number of SKUs multiplied by the number of retail locations for each retailer. We have also expanded the brand internationally into Canada (2020) and Mexico (2025).
We have an in-house regulatory team that reviews the scientific literature and develops substantiation as part of the product development process to ensure the crafting of compliant structure-function claims and product positioning. Our regulatory team engages in the review of web copy, e-commerce copy, and other marketing copy at the request of the brand directors of each respective brand.
We have an in-house regulatory team that reviews the scientific literature and develops substantiation as part of the product development process to ensure the crafting of compliant structure-function claims and product positioning.
As of December 31, 2024, we had 21 full-time employees. We intend to grow our employee base in response to the demands and requirements of the business. We believe that the employer-employee relationships in our Company are positive. We have no labor union contracts.
As of December 31, 2025, we had 28 full-time employees. We believe that the employer-employee relationships in our Company are positive. We have no labor union contracts.
In the United Kingdom, on the other hand, no formal regulatory submission or pre-approval is needed for products within the food supplement category. Launch timing varies by country. In the United States and United Kingdom, once a formula is established and labeling has been approved by our regulatory and legal advisors, the product can be launched upon production.
Launch timing varies by country. In the United States and United Kingdom, once a formula is established and labeling has been approved by our regulatory and legal advisors, the product can be launched upon production.
Intellectual Property We own 23 trademarks that have been registered with the United States Patent and Trademark Office and have filed applications to register additional trademarks. In addition, we claim domestic trademark and service mark rights in numerous additional marks that we use. We own a number of trademark registrations in countries outside the United States.
In addition, we claim domestic trademark and service mark rights in numerous additional marks that we use. We own a number of trademark registrations in countries outside the United States.
Additionally, we plan to employ this strategy of expanding our brands into international markets that include Mexico and Asia, among others. 4 Marketing and Sales Our targeted, consumer-driven marketing strategy has been key to building our brands and driving revenue growth. We manage dedicated marketing strategies for each of our brands in order to build deep connections with our customers.
In the fourth quarter of 2025, we introduced FOCUSfactor to Mexico. 4 Marketing and Sales Our targeted, consumer-driven marketing strategy has been key to building our brands and driving revenue growth. We manage dedicated marketing strategies for each of our brands in order to build deep connections with our customers. FOCUSfactor.
The use of third-party manufacturing partners allows us to scale quickly, as we ensure that our partners have sufficient capacity to meet our demand needs. We also maintain multiple relationships with different contract manufacturers, ensuring diversification of our manufacturing base and reducing the likelihood of supply bottlenecks or deficits that could potentially slow our growth.
We also maintain multiple relationships with different contract manufacturers, ensuring diversification of our manufacturing base and reducing the likelihood of supply bottlenecks or deficits that could potentially slow our growth.
Experienced Management Team with Proven Track Record of Value Creation Our executive team has a combined 90 years of experience in consumer marketing and distribution and has been instrumental in acquiring and building our core brands. Management has exercised strong financial discipline in its acquisition strategy, with a focus on acquiring brands at attractive valuations.
See “ — FOCUSfactor Study ” for additional information. Experienced Management Team with Proven Track Record of Value Creation Our executive team has a combined 90 years of experience in consumer marketing and distribution and has been instrumental in acquiring and building our core brands.
Our products are sold through some of the nation’s leading club, mass drug, and other retailers such as Costco, Amazon.com, Walmart, Walgreens, CVS, The Vitamin Shoppe, Target.com, H-E-B, Meijer, and Albertson’s. Additionally, we have expanded into Canada and the United Kingdom. We built our brand portfolio through strategic acquisitions.
Our products are sold through some of the nation’s leading club, mass drug, and other retailers such as Costco, Amazon.com, Walmart, Walgreens, BJ’s, and The Vitamin Shoppe. Additionally, we have expanded into Canada and Mexico. We built our brand portfolio through strategic acquisitions. We acquired the FOCUSfactor brand in January 2015 for cash consideration of $6.0 million, including earnout.
For example, Canada and Australia require a product submission packet and approval from Health Canada (“HC”) and the Therapeutic Goods Administration (“TGA”), respectively, for products that would be considered “Natural Health Products” (in Canada) or “Listed Medicines” (in Australia).
For example, Canada and Australia require a product submission packet and approval from Health Canada (“HC”) and the TGA, respectively, for products that would be considered “Natural Health Products” (in Canada) or “Listed Medicines” (in Australia). In the United Kingdom, on the other hand, no formal regulatory submission or pre-approval is needed for products within the food supplement category.
Additionally, the international footprint of certain of our various retail partners facilitates our geographic expansion plans. Scalable and Flexible Asset-Light Model to Support Growth Our focus is on brand management, marketing, product development and distribution, and we utilize contract manufacturing partners in order to produce our various brand offerings.
Scalable and Flexible Asset-Light Model to Support Growth Our focus is on brand management, marketing, product development and distribution, and we utilize contract manufacturing partners in order to produce our various brand offerings. The use of third-party manufacturing partners allows us to scale quickly, as we ensure that our partners have sufficient capacity to meet our demand needs.
For example, we acquired FOCUSfactor for approximately 3x trailing EBITDA. Management’s philosophy is to acquire promising brands that fit within our health, beauty and lifestyle offerings, and apply our marketing and distribution strategies to develop brands to their full potential. We believe we are adept at identifying promising opportunities that build out and complement our core brand portfolio.
Management has exercised strong financial discipline in its acquisition strategy, with a focus on acquiring brands at attractive valuations. For example, we acquired FOCUSfactor for approximately 3x trailing EBITDA. Management’s philosophy is to acquire promising brands that fit within our health, beauty and lifestyle offerings, and apply our marketing and distribution strategies to develop brands to their full potential.
The FOCUSfactor line is produced by several respected manufacturers, such as Nutrition Formulators Inc., Vit-Best Nutrition, and ProTab Laboratories, to ensure supply continuity and support brand growth.
The FOCUSfactor line is produced by several respected manufacturers, including Nutrition Formulators Inc., Vit-Best Nutrition, Multi-Pak Packaging, ProTab Laboratories and Tailored Bottling Solutions to ensure supply continuity and support brand growth. For the Flat Tummy line, we work closely with manufacturers, including Caraway Tea Company, Nutrition Formulators Inc., and Clever Foods.
Premier Retail Partners Our premier retail partners include Costco, BJ’s Wholesale Club, Walmart, Amazon.com, Publix, Meijer, Albertson’s, CVS, Walgreens and others. We sell products to these partners under their standard arrangements, which do not include a term or duration as sales under each vendor agreement are generally made on a purchase order basis.
We sell products to these partners under their standard arrangements, which do not include a term or duration as sales under each vendor agreement are generally made on a purchase order basis. Our partners provide a platform to expand the breadth of our current offerings through product line extensions and new product innovation.
We compete against other domestic and international manufacturers, specialty retailers, mass merchants, multi-level marketing organizations, mail-order and direct-to-consumer companies, and e-commerce companies. This market is highly sensitive to the introduction of new products, which may rapidly capture a significant share of the market.
Competition The U.S. nutritional supplements retail industry is a large and highly fragmented industry with few barriers to entry. We compete against other domestic and international manufacturers, specialty retailers, mass merchants, multi-level marketing organizations, mail-order and direct-to-consumer companies, and e-commerce companies.
These retailers include club, mass, drug and other retailers such as Costco, Walmart, Amazon.com, Walgreens, Meijer, Albertson’s and CVS. All of our brands are also sold directly to consumers through their respective brand websites. Competition The U.S. nutritional supplements retail industry is a large and highly fragmented industry with few barriers to entry.
Distribution Most of our revenues are generated through the retail channels, primarily due to our FOCUSfactor brand which is sold mainly through leading retailers. These retailers include club, mass, drug and other retailers such as Costco, Amazon.com, Walmart, Walgreens, BJ’s, and The Vitamin Shoppe. All of our brands are also sold directly to consumers through their respective brand websites.
In June 2007, pursuant to the authority granted by the FD&C Act as amended by DSHEA, the FDA published detailed current Good Manufacturing Practice (“cGMP”) regulations that govern the manufacturing, packaging, labeling, and holding operations of dietary supplement manufacturers. The cGMP regulations, among other things, imposed significant recordkeeping requirements on manufacturers.
This legislation enhanced food safety by facilitating better monitoring of food facilities and imports, improving traceability and recall efforts, and strengthening the FDA’s ability to respond swiftly to potential threats to public health. 8 In June 2007, pursuant to the authority granted by the FD&C Act as amended by DSHEA, the FDA published detailed current Good Manufacturing Practice (“cGMP”) regulations that govern the manufacturing, packaging, labeling, and holding operations of dietary supplement manufacturers.
Food and Drug Administration (the “FDA”), the Federal Trade Commission (the “FTC”), the Consumer Product Safety Commission, and by various agencies and programs of the states and localities in which our products are sold.
Government Regulation Domestic (United States) Overview The processing, formulation, safety, manufacturing, packaging, labeling, advertising and distribution of our products in the United States are subject to regulation by several agencies, including the FDA, the Federal Trade Commission (the “FTC”), the Consumer Product Safety Commission, and by various agencies and programs of the states and localities in which our products are sold.
Our current brand portfolio consists of two marquee brands, FOCUSfactor, a clinically-tested brain health supplement (this study was performed independently and is not related to any FDA-approved IND application) that has been shown to improve memory, concentration and focus, and Flat Tummy, a lifestyle and wellness brand that provides a suite of nutritional products to help women achieve their nutrition and weight management goals.
Food and Drug Administration (“FDA”) -approved investigational new drug (IND) application) that has been shown to improve memory, concentration and focus, and Flat Tummy, a lifestyle and wellness brand that provides a suite of nutritional products to help women achieve their nutrition and weight management goals. Collectively, these brands are referred to as nutraceuticals.
Our partners provide a platform to expand the breadth of our current offerings through product line extensions and new product innovation. We continue to introduce new SKUs to our current retail partners, such as the addition of FOCUSfactor RTDs and vision products to our membership club and other channels.
We continue to introduce new SKUs to our current retail partners, such as the addition of FOCUSfactor RTDs and vision products to these retail partners and other channels. Additionally, the international footprint of certain of our various retail partners facilitates our geographic expansion plans.
This differentiates FOCUSfactor from other brain-health supplements and is a prime reason why FOCUSfactor has been placed in premier retailers. See ” — FOCUSfactor Study ” for additional information.
This differentiates FOCUSfactor from other brain-health supplements and is a prime reason why FOCUSfactor has been placed in premier retailers. This controlled study was conducted in healthy male and female subjects between the ages of 18 and 65 who were randomized in a control group and a placebo group. Subjects were compensated for their participation.
In the first quarter of 2025, we plan on introducing new complementary products to the Flat Tummy line-up, including new protein shakes, gut-healthy ready-to-drink beverage, hydration powder and pre-workout powder.
Additionally, in the second quarter of 2024, we launched three core FOCUSfactor focus and energy RTD products in Canada. In the first quarter of 2025, we introduced new complementary products to the Flat Tummy line-up, including new protein shakes, GLP-1 support products and pre-workout powders.
Our Flat Tummy brand competes in well-established segments with a diverse range of competition both domestically and internationally. Government Regulation Domestic (United States) Overview The processing, formulation, safety, manufacturing, packaging, labeling, advertising and distribution of our products in the United States are subject to regulation by several agencies, including the U.S.
Our Flat Tummy brand competes in well-established segments with a diverse range of competition both domestically and internationally.
We intend to introduce three to five new SKUs across potential retailers, which would potentially result in the addition of approximately 50,000 points of distribution. Diversify Our Geographic Presence through Entry into New Markets We seek to accelerate our sales growth by expanding and further diversifying our geographic footprint.
Diversify Our Geographic Presence through Entry into New Markets We seek to accelerate our sales growth by expanding and further diversifying our geographic footprint. For the year ended December 31, 2025, substantially all of our revenue was generated within North Ameri ca. Our goal is to increase our revenues generated from new markets.
We have grown our FOCUSfactor brand from 3 SKUs at acquisition to over 34 SKUs, and our Flat Tummy Brand from 1 SKU to 13 SKUs. Our growth from 2022 to the present was driven by expanded distribution of our FOCUSfactor product line to some of our major retailers, such as Costco, CVS and Walmart, among others.
We have grown our FOCUSfactor brand from 3 SKUs at acquisition to over 34 SKUs, and our Flat Tummy Brand from 1 SKU to 13 SKUs. We use the term SKU, or stock-keeping unit, to refer to a product with a unique UPC (Universal Product Code), which is the barcode used to identify products.
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We have also expanded the brand internationally into Canada (2020), the United Kingdom (2023) and we anticipate being in Taiwan and Mexico during 2025 and in Australia and Asia in the first quarter of 2026. FOCUSfactor has expanded into the beverage market with its focus plus energy RTD.
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Our current brand portfolio consists of two marquee brands, FOCUSfactor, a clinically-tested brain health supplement (this study was performed independently and is not related to any U.S.
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These developing brands are: ● Hand MD — complete hand care brand to help maintain clean and healthy hands while reducing the signs of aging. ● Perfekt Beauty — beauty line of products for the eyes, lips, brows, cheeks and skin. ● Sneaky Vaunt — a lingerie brand with a line of women’s shapewear, bralettes and panties. ● The Queen Pegasus — eyelash enhancement products for longer, thicker, natural lashes. ● Neuragen — fast-acting topical treatments for neuropathic (nerve) pain. ● UrgentRx — line of fast-acting, portable, powdered over-the-counter medications.
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We believe we are adept at identifying promising opportunities that build out and complement our core brand portfolio. Premier Retail Partners Our premier retail partners include Costco, Amazon.com, Walmart, Walgreens, BJ’s, and The Vitamin Shoppe and others.
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Partner with Additional Leading Retailers to Expand the Reach of Our Products We have established distribution relationships with premier retail partners, including Costco, Walmart, Amazon.com, Walgreens, CVS, The Vitamin Shoppe, Target.com, H-E-B, Meijer, and Albertson’s.
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This market is highly sensitive to the introduction of new products, which may rapidly capture a significant share of the market.
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In Mexico, we have identified local manufacturers and will begin connecting with retailers in Mexico in 2025. We then plan to expand our brands into Australia (where we have TGA approval for our FOCUSfactor products) and Asian markets in 2026.
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The cGMP regulations, among other things, imposed significant recordkeeping requirements on manufacturers. The cGMP requirements are in effect for all dietary supplement manufacturers, and the FDA conducts inspections of dietary supplement manufacturers pursuant to these requirements.
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Additionally, in the second quarter of 2024, we launched three core FOCUSfactor focus and energy RTD products in Canada. In 2025, we plan to introduce an additional FOCUSfactor supplement for Taiwan, RTDs for the UK and focus and energy coffee for the United States.
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If the literature fails to satisfy each of these requirements, we may be prevented from disseminating such literature with our products, and any continued dissemination could subject our product to regulatory action as an illegal drug.
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For the Flat Tummy line, we work closely with manufacturers: Caraway Tea Company to make our teas, Vit-Best Nutrition for shakes and capsules, Global Widget for gummies, and Clever Foods for appetite suppression lollipops. Distribution Most of our revenues are generated through the retail channels, primarily due to our FOCUSfactor brand which is sold mainly through leading retailers.
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This legislation enhanced food safety by facilitating better monitoring of food facilities and imports, improving traceability and recall efforts, and strengthening the FDA’s ability to respond swiftly to potential threats to public health.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf we need additional capital and cannot raise it on acceptable terms, we may not be able to meet our business objectives and be unable to continue operating as a going concern.
Biggest changeIf we need additional capital and cannot raise it on acceptable terms, we may not be able to meet our business objectives and be unable to continue operating as a going concern. 20 In connection with the preparation of our consolidated financial statements as of and for the year ended December 31, 2025, management identified material weaknesses in our internal control over financial reporting, and we may identify additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls over financial reporting, which may cause us to fail to meet our reporting obligations, result in material misstatements of our consolidated financial statements and could have a material adverse effect on our business and the market price of our common stock.
Any of these government agencies, as well as legislative bodies, can change existing regulations, or impose new ones, or could take aggressive measures, causing or contributing to a variety of negative consequences, including: ● requirements for the reformulation of certain or all products to meet new standards; ● the recall or discontinuance of certain or all products; ● additional record keeping; ● expanded documentation of the properties of certain or all products; ● expanded or different labeling; ● adverse event tracking and reporting; and ● additional scientific substantiation.
Any of these government agencies, as well as legislative bodies, can change existing regulations, or impose new ones, or could take aggressive measures, causing or contributing to a variety of negative consequences, including: ● requirements for the reformulation of certain or all products to meet new standards; ● the recall or discontinuance of certain or all products; 21 ● additional record keeping; ● expanded documentation of the properties of certain or all products; ● expanded or different labeling; ● adverse event tracking and reporting; and ● additional scientific substantiation.
There can also be no guarantee that we will be able to obtain debt on favorable terms, or at all. 14 As has been the case with our historical acquisition transactions, future business combinations could involve the acquisition of significant tangible and intangible assets, which could require us to record ongoing amortization expense with respect to identified intangible assets acquired.
There can also be no guarantee that we will be able to obtain debt on favorable terms, or at all. As has been the case with our historical acquisition transactions, future business combinations could involve the acquisition of significant tangible and intangible assets, which could require us to record ongoing amortization expense with respect to identified intangible assets acquired.
As a result of such legal or regulatory challenges, consumers may avoid purchasing products from us or seek alternatives, even if the basis for the claim is unfounded. The FTC has instituted numerous enforcement actions against dietary supplement companies for failure to have adequate substantiation for claims made in advertising or for the use of false or misleading advertising claims.
As a result of such legal or regulatory challenges, consumers may avoid purchasing products from us or seek alternatives, even if the basis for the claim is unfounded. 22 The FTC has instituted numerous enforcement actions against dietary supplement companies for failure to have adequate substantiation for claims made in advertising or for the use of false or misleading advertising claims.
See the section entitled “Cautionary Note Regarding Forward-Looking Statements.” Risks Related to Our Business, Strategy and Industry We operate in a highly competitive industry and our failure to compete effectively could materially and adversely affect our sales and growth prospects. The U.S. nutritional supplements retail industry is a large and highly fragmented industry with few barriers to entry.
See the section entitled “Cautionary Note Regarding Forward-Looking Statements.” 12 Risks Related to Our Business, Strategy and Industry We operate in a highly competitive industry and our failure to compete effectively could materially and adversely affect our sales and growth prospects. The U.S. nutritional supplements retail industry is a large and highly fragmented industry with few barriers to entry.
Further, those provisions and resulting costs may discourage us or our stockholders from bringing a lawsuit against any of our current or former directors or officers for breaches of their fiduciary duties, even if such actions might otherwise benefit our stockholders. Anti-takeover effects of certain provisions of Nevada state law hinder a potential takeover of us.
Further, those provisions and resulting costs may discourage us or our stockholders from bringing a lawsuit against any of our current or former directors or officers for breaches of their fiduciary duties, even if such actions might otherwise benefit our stockholders. 27 Anti-takeover effects of certain provisions of Nevada state law hinder a potential takeover of us.
The effect of Nevada’s business combination law is to potentially discourage parties interested in taking control of us from doing so if it cannot obtain the approval of our board of directors. 26 We may experience fluctuations in our tax obligations and effective tax rate, which could materially and adversely affect our results of operations.
The effect of Nevada’s business combination law is to potentially discourage parties interested in taking control of us from doing so if it cannot obtain the approval of our board of directors. We may experience fluctuations in our tax obligations and effective tax rate, which could materially and adversely affect our results of operations.
These events also could have indirect consequences, such as increases in the cost of insurance, if they were to result in significant loss of property or other insurable damage. Loss of key vendor relationships or failure of a vendor to protect our data or confidential and proprietary information could affect our operations.
These events also could have indirect consequences, such as increases in the cost of insurance, if they were to result in significant loss of property or other insurable damage. 18 Loss of key vendor relationships or failure of a vendor to protect our data or confidential and proprietary information could affect our operations.
We cannot predict the amount of the additional costs that we might incur, the timing of such costs or the impact that management’s attention to these matters will have on our business. 25 The existence of indemnification rights held by our directors, officers and employees may result in substantial expenses.
We cannot predict the amount of the additional costs that we might incur, the timing of such costs or the impact that management’s attention to these matters will have on our business. The existence of indemnification rights held by our directors, officers and employees may result in substantial expenses.
If such claims are found to be correct, this would have a material adverse effect on us and our reputation. We carry insurance coverage in the types and amounts that we consider reasonably adequate to cover the risks we face from product liability claims.
If such claims are found to be correct, this would have a material adverse effect on us and our reputation. 23 We carry insurance coverage in the types and amounts that we consider reasonably adequate to cover the risks we face from product liability claims.
There can be no assurance that the protection afforded by the patent and these trademarks and service marks will provide us with a competitive advantage or that we will be able to assert our intellectual property rights in infringement actions.
There can be no assurance that the protection afforded by these trademarks and service marks will provide us with a competitive advantage or that we will be able to assert our intellectual property rights in infringement actions.
We urge investors to consult with their legal and tax advisers regarding implications of potential changes in U.S. tax laws on an investment in our common stock. Item 1B. Unresolved Staff Comments None.
We urge investors to consult with their legal and tax advisers regarding implications of potential changes in U.S. tax laws on an investment in our common stock. 28 Item 1B. Unresolved Staff Comments None.
These acquisitions may involve significant cash expenditures, debt incurrence, additional operating losses and expenses, and compliance risks that could have a material adverse effect on our financial condition and results of operations.
These acquisitions may involve significant cash expenditures, debt incurrence, additional operating losses and expenses, and compliance risks that could have a material adverse effect on our financial condition, results of operations and cash flows.
In addition, these acquisitions involve risks that the acquired businesses will not perform in accordance with expectations, that we may become liable for unforeseen financial or business liabilities of the acquired businesses, including liabilities for failure to comply with healthcare regulations, that the expected synergies associated with acquisitions will not be achieved, and that business judgments concerning the value, strengths, and weaknesses of businesses acquired will prove incorrect, which could have a material adverse effect on our financial condition and results of operations.
In addition, these acquisitions involve risks that the acquired businesses will not perform in accordance with expectations, that we may become liable for unforeseen financial or business liabilities of the acquired businesses, including liabilities for failure to comply with healthcare regulations, that the expected synergies associated with acquisitions will not be achieved, and that business judgments concerning the value, strengths, and weaknesses of businesses acquired will prove incorrect, which could have a material adverse effect on our financial condition, results of operations and cash flows.
The nutritional supplement industry increasingly relies on intellectual property rights and although we seek to ensure that we do not infringe the intellectual property rights of others, there can be no assurance that third parties will not assert intellectual property infringement claims against us, which claims may result in substantial costs and diversion of management and other resources and could have a material adverse effect on our business, financial condition and operating results.
The nutritional supplement industry increasingly relies on intellectual property rights and although we seek to ensure that we do not infringe the intellectual property rights of others, there can be no assurance that third parties will not assert intellectual property infringement claims against us, which claims may result in substantial costs and diversion of management and other resources and could have a material adverse effect on our business, financial condition, operating results and cash flows.
Any failures or inadequacies in these third-party systems, even if unrelated to our business, could result in significant liability, could materially and adversely affect our reputation and business and could cause government agencies to enact additional regulatory requirements or to modify their enforcement or investigation activities. 22 Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results.
Any failures or inadequacies in these third-party systems, even if unrelated to our business, could result in significant liability, could materially and adversely affect our reputation and business and could cause government agencies to enact additional regulatory requirements or to modify their enforcement or investigation activities. 24 Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results.
Even when unmerited, class claims, action by the FTC or state attorneys general enforcement actions can be expensive to defend and adversely affect our reputation with existing and potential customers and consumers and our corporate and brand image, which could have a material and adverse effect on our business, financial condition or results of operations.
Even when unmerited, class claims, action by the FTC or state attorneys general enforcement actions can be expensive to defend and adversely affect our reputation with existing and potential customers and consumers and our corporate and brand image, which could have a material and adverse effect on our business, financial condition, results of operations or cash flows.
If our data security is compromised, it could have a material adverse effect on our reputation, results of operations and financial condition, materially increase the costs we incur to protect against those events in the future and subject us to additional legal risk and a competitive disadvantage and damage to our brand reputation.
If our data security is compromised, it could have a material adverse effect on our reputation, results of operations, cash flows and financial condition, materially increase the costs we incur to protect against those events in the future and subject us to additional legal risk and a competitive disadvantage and damage to our brand reputation.
Our success depends, in a large degree, on the skills of our management team and our ability to retain, recruit and motivate key officers and employees. Our active senior executive leadership team, including Jack Ross, Jaime Fickett and Alfred Baumeler, have significant experience, and their knowledge and relationships would be difficult to replace.
Our success depends, in a large degree, on the skills of our management team and our ability to retain, recruit and motivate key officers and employees. Our active senior executive leadership team, including Jack Ross and Jaime Fickett, have significant experience, and their knowledge and relationships would be difficult to replace.
In addition, if our e-commerce businesses or our other customer-facing technology systems do not function as designed, we may experience a loss of customer confidence, lost sales, or data security breaches, any of which could materially and adversely affect our business and results of operations.
In addition, if our e-commerce businesses or our other customer-facing technology systems do not function as designed, we may experience a loss of customer confidence, lost sales, or data security breaches, any of which could materially and adversely affect our business, results of operations and cash flows.
Natural disasters and unusually adverse weather conditions could cause permanent or temporary damage to our distribution centers, impair our ability to purchase, receive or replenish inventory or cause customer traffic to decline, all of which could result in lost sales and otherwise materially and adversely affect our results of operations.
Natural disasters and unusually adverse weather conditions could cause permanent or temporary damage to our distribution centers, impair our ability to purchase, receive or replenish inventory or cause customer traffic to decline, all of which could result in lost sales and otherwise materially and adversely affect our results of operations and cash flows.
In addition, the failure of those products to comply with applicable regulatory and legislative requirements could prevent us from marketing the products or require us to recall or remove such products from the market, which in certain cases could materially and adversely affect our business, financial condition and results of operations.
In addition, the failure of those products to comply with applicable regulatory and legislative requirements could prevent us from marketing the products or require us to recall or remove such products from the market, which in certain cases could materially and adversely affect our business, financial condition, results of operations and cash flows.
Additional risks of which we are not presently aware or that we currently believe are immaterial may also harm our business and results of operations. Some statements in this Annual Report, including such statements in the following risk factors, constitute forward-looking statements.
Additional risks of which we are not presently aware or that we currently believe are immaterial may also harm our business, results of operations and cash flows. Some statements in this Annual Report, including such statements in the following risk factors, constitute forward-looking statements.
If our stock price is volatile, we may become the target of securities litigation. Securities litigation could result in substantial costs and divert our management’s attention and resources from our business. This could have a material adverse effect on our business, results of operations, and financial condition.
If our stock price is volatile, we may become the target of securities litigation. Securities litigation could result in substantial costs and divert our management’s attention and resources from our business. This could have a material adverse effect on our business, results of operations, cash flows and financial condition.
If any of the following risks are realized, our business, financial condition and results of operations could be materially and adversely affected. In that event, the trading price of our common stock could decline, and you could lose all or part of your investment in our common stock.
If any of the following risks are realized, our business, financial condition, results of operations and cash flows could be materially and adversely affected. In that event, the trading price of our common stock could decline, and you could lose all or part of your investment in our common stock.
In addition, to attract and retain personnel with appropriate skills and knowledge to support our business, we may offer a variety of benefits, which could reduce our earnings or have a material adverse effect on our business, financial condition or results of operations.
In addition, to attract and retain personnel with appropriate skills and knowledge to support our business, we may offer a variety of benefits, which could reduce our earnings or have a material adverse effect on our business, financial condition, results of operations or cash flows.
Any developments of this nature could increase our costs significantly and could have a material adverse effect on our business, financial condition and results of operations. Our failure to comply with regulations could result in substantial monetary penalties and could adversely affect our operating results.
Any developments of this nature could increase our costs significantly and could have a material adverse effect on our business, financial condition, results of operations and cash flows. Our failure to comply with regulations could result in substantial monetary penalties and could adversely affect our operating results.
We are reliant on third-party electronic payment systems and platforms, such as PayPal, Stripe, Amazon Pay, Afterpay and Shopify Payments, not only to protect the security of the information stored, but also to appropriately track and record data.
We are reliant on third-party electronic payment systems and platforms, such as PayPal, Stripe, Amazon Pay, Afterpay, Tik-Tok and Shopify Payments, not only to protect the security of the information stored, but also to appropriately track and record data.
Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could materially adversely affect our business, financial condition and results of operations.
Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could materially adversely affect our business, financial condition, results of operations and cash flows.
The loss of the services of any senior executive or other key personnel, or the inability to recruit and retain qualified personnel in the future, could have a material adverse effect on our business, financial condition or results of operations.
The loss of the services of any senior executive or other key personnel, or the inability to recruit and retain qualified personnel in the future, could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If we fail to protect the integrity and security of customer-related and other confidential information, we could be exposed to litigation, increased costs and reputational damage, and our business, results of operations and financial condition could be materially and adversely affected.
If we fail to protect the integrity and security of customer-related and other confidential information, we could be exposed to litigation, increased costs and reputational damage, and our business, results of operations, cash flows and financial condition could be materially and adversely affected.
Furthermore, if we fail to maximize the efficiency of our ship direct to customers strategies, or fail to provide our customers with an attractive omni-channel experience, our business and results of operations could be materially and adversely affected.
Furthermore, if we fail to maximize the efficiency of our ship direct to customers strategies, or fail to provide our customers with an attractive omni-channel experience, our business, results of operations and cash flows could be materially and adversely affected.
Our officers and directors have the ability to significantly influence or control matters requiring a stockholder vote, and other stockholders may not have the ability to influence corporate transactions. Currently, our officers and directors beneficially own approximately 58% of our outstanding common stock.
Our officers and directors have the ability to significantly influence or control matters requiring a stockholder vote, and other stockholders may not have the ability to influence corporate transactions. Currently, our officers and directors beneficially own approximately 43% of our outstanding common stock.
If we do not introduce new products or make enhancements to meet the changing needs of our customers in a timely manner, some of our products could be rendered obsolete, which could negatively impact our revenues, financial condition, and operating results. We depend on a small number of large retailers for a significant portion of our sales.
If we do not introduce new products or make enhancements to meet the changing needs of our customers in a timely manner, some of our products could be rendered obsolete, which could negatively impact our revenues, financial condition, operating results and cash flows. 13 We depend on a small number of large retailers for a significant portion of our sales.
The occurrence of one or more natural disasters, such as hurricanes, fires, floods, earthquakes, tornadoes, high winds and other severe weather, could materially and adversely affect our operations and results of operations.
The occurrence of one or more natural disasters, such as hurricanes, fires, floods, earthquakes, tornadoes, high winds and other severe weather, could materially and adversely affect our operations, results of operations and cash flows.
Failure by us to comply with applicable regulations could result in substantial monetary penalties, which could have a material adverse effect on our financial condition or results of operations.
Failure by us to comply with applicable regulations could result in substantial monetary penalties, which could have a material adverse effect on our financial condition, results of operations or cash flows.
Increased competition from companies that distribute through retail, e-commerce or wholesale channels could have a material adverse effect on our financial condition and results of operations.
Increased competition from companies that distribute through retail, e-commerce or wholesale channels could have a material adverse effect on our financial condition, results of operations and cash flows.
In addition, the increasing costs of compliance with those laws and regulations and related technology investments could materially and adversely affect our business and results of operations.
In addition, the increasing costs of compliance with those laws and regulations and related technology investments could materially and adversely affect our business, results of operations and cash flows.
If we are unsuccessful in this international expansion, we would be required to reevaluate our growth strategy, and we may have incurred substantial expenses and devoted significant management time and resources in pursuing international growth. 16 We may experience product recalls, withdrawals or seizures, which could materially and adversely affect our business, financial condition and results of operations.
If we are unsuccessful in this international expansion, we would be required to reevaluate our growth strategy, and we may have incurred substantial expenses and devoted significant management time and resources in pursuing international growth. 17 We may experience product recalls, withdrawals or seizures, which could materially and adversely affect our business, financial condition, results of operations and cash flows.
Any decision to declare and pay dividends in the future will be made at the discretion of our Board taking into account various factors, including our business, operating results and financial condition, current and anticipated cash needs, plans for expansion, any legal or contractual limitations on our ability to pay dividends under our loan agreements or otherwise.
Any decision to declare and pay dividends in the future will be made at the discretion of our Board considering various factors, including our business, operating results and financial condition, current and anticipated cash needs, plans for expansion, any legal or contractual limitations on our ability to pay dividends under our loan agreements or otherwise.
Our sales growth is dependent upon maintaining our relationships with existing customers, and the loss of any one such customer could materially adversely affect our business and financial performance. Certain retailers make up a significant percentage of our products’ retail volume. For the year ended December 31, 2024, our top two customers accounted for 73% of our net revenue.
Our sales growth is dependent upon maintaining our relationships with existing customers, and the loss of any one such customer could materially adversely affect our business and financial performance. Certain retailers make up a significant percentage of our products’ retail volume. For the year ended December 31, 2025, our top two customers accounted for 79% of our revenue.
U.S. generally accepted accounting principles and related pronouncements, implementation guidelines and interpretations with regard to a wide variety of matters that are relevant to our business, such as, but not limited to, revenue recognition, stock-based compensation, trade promotions, and income taxes are highly complex and involve many subjective assumptions, estimates and judgments by our management.
U.S. GAAP and related pronouncements, implementation guidelines and interpretations with regard to a wide variety of matters that are relevant to our business, such as, but not limited to, revenue recognition, stock-based compensation, trade promotions, and income taxes are highly complex and involve many subjective assumptions, estimates and judgments by our management.
If a material number of our customers were not able to meet their payment obligations, our results of operations could be harmed.
If a material number of our customers were not able to meet their payment obligations, our results of operations and cash flows could be harmed.
For the year ended December 31, 2023, our top three customers accounted for 78% of our net revenue. We sell products to our customers under their standard vendor agreements. These vendor agreements do not include a term or duration as sales under each vendor agreement are generally made on a purchase order basis, and do not include any termination provisions.
For the year ended December 31, 2024, our top two customers accounted for 73% of our revenue. We sell products to our customers under their standard vendor agreements. These vendor agreements do not include a term or duration as sales under each vendor agreement are generally made on a purchase order basis, and do not include any termination provisions.
Factors that could cause fluctuations in the trading price of our common stock include the following: ● actual or anticipated fluctuations in our financial condition and operating results; ● actual or anticipated changes in our growth rate relative to our competitors; ● commercial success and market acceptance of our products; ● success of our competitors in developing or commercializing products; ● ability to commercialize or obtain regulatory approvals for our product, or delays in commercializing or obtaining regulatory approvals; ● strategic transactions undertaken by us; ● additions or departures of key personnel; ● product liability claims; ● prevailing economic conditions; 23 ● disputes concerning our intellectual property or other proprietary rights; ● FDA or other U.S. or foreign regulatory actions affecting us or our industry; ● sales of our common stock by our officers, directors or significant stockholders; ● future sales or issuances of equity or debt securities by us; ● business disruptions caused by earthquakes, fires or other natural disasters; ● issuance of new or changed securities analysts’ reports or recommendations regarding us; ● changes in our capital structure, such as future issuances of debt or equity securities; ● short sales, hedging and other derivative transactions involving our capital stock; and ● general economic and geopolitical conditions, including the current or anticipated impact of military conflict and related sanctions imposed on Russia by the United States and other countries due to Russia’s invasion of Ukraine.
Factors that could cause fluctuations in the trading price of our common stock include the following: ● actual or anticipated fluctuations in our financial condition and operating results; ● actual or anticipated changes in our growth rate relative to our competitors; ● commercial success and market acceptance of our products; ● success of our competitors in developing or commercializing products; ● ability to commercialize or obtain regulatory approvals for our product, or delays in commercializing or obtaining regulatory approvals; ● strategic transactions undertaken by us; ● additions or departures of key personnel; ● product liability claims; ● prevailing economic conditions; ● disputes concerning our intellectual property or other proprietary rights; ● FDA or other U.S. or foreign regulatory actions affecting us or our industry; ● sales of our common stock by our officers, directors or significant stockholders; 25 ● future sales or issuances of equity or debt securities by us; ● business disruptions caused by earthquakes, fires or other natural disasters; ● issuance of new or changed securities analysts’ reports or recommendations regarding us; ● changes in our capital structure, such as future issuances of debt or equity securities; ● short sales, hedging and other derivative transactions involving our capital stock; and ● general economic and geopolitical conditions.
We currently intend to retain our future earnings, if any, for the foreseeable future, to repay indebtedness and to fund the development and growth of our business. We do not intend to pay any dividends to holders of our common stock in the foreseeable future.
We do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently intend to retain our future earnings, if any, for the foreseeable future, to repay indebtedness and to fund the development and growth of our business.
As of December 31, 2024 and December 31, 2023, our outstanding current liabilities were approximately $17.1 million and $14.0 million, respectively. 19 We may need to raise additional capital in the future, and our failure to do so could restrict our operations or adversely affect our ability to operate and continue our business.
As of December 31, 2025 and December 31, 2024, our outstanding current liabilities were approximately $8.3 million and $17.2 million, respectively. We may need to raise additional capital in the future, and our failure to do so could restrict our operations or adversely affect our ability to operate and continue our business.
In addition, while we generally monitor vendor risk, including the security and stability of our critical vendors, we may fail to properly assess and understand the risks and costs involved in the third-party relationships, and our financial condition and results of operations could be materially and adversely affected. 17 We anticipate that we will continue to rely on third-party vendors in the future.
In addition, while we generally monitor vendor risk, including the security and stability of our critical vendors, we may fail to properly assess and understand the risks and costs involved in the third-party relationships, and our financial condition, results of operations and cash flows could be materially and adversely affected.
Litigation with respect to such matters could result in substantial costs and diversion of management and other resources and could have a material adverse effect on our business, financial condition and results of operations. 15 We have one U.S. patent (which expires in April 2025) and numerous U.S. and foreign trademarks and service marks.
Litigation with respect to such matters could result in substantial costs and diversion of management and other resources and could have a material adverse effect on our business, financial condition, results of operations and cash flows. 16 We have numerous U.S. and foreign trademarks and service marks.
Additionally, our ability to utilize net operating loss carryforwards, if any, acquired in any acquisitions may be significantly limited or unusable by us under Section 382 or other sections of the Internal Revenue Code (as has been the case with our net operating loss carryforwards attributable to the acquisition of Breakthrough Products, Inc.).
Additionally, our ability to utilize net operating loss carryforwards, if any, acquired in any acquisitions may be significantly limited or unusable by us under Section 382 or other sections of the Internal Revenue Code (as has been the case with our net operating loss carryforwards attributable to the acquisition of Breakthrough Products, Inc.). 15 Current and future acquisitions may use significant resources, may be unsuccessful, and could expose us to unforeseen liabilities.
In addition, results of such litigation are difficult to predict and if we are not successful in defending our intellectual property rights, this could have a material adverse effect on our business, financial condition and results of operations. If we are not able to adequately prevent disclosure of proprietary knowledge, the value of our products could be materially diminished.
In addition, results of such litigation are difficult to predict and if we are not successful in defending our intellectual property rights, this could have a material adverse effect on our business, financial condition, results of operations and cash flows.
We are subject to credit risk. We are exposed to credit risk primarily on our accounts receivable. We provide credit to our customers in the ordinary course of our business and perform ongoing credit evaluations.
We provide credit to our customers in the ordinary course of our business and perform ongoing credit evaluations.
These events could interrupt the marketing and sales of our products, severely damage our brand reputation and public image, increase our legal expenses, result in product recalls or litigation, and impede our ability to deliver our products in sufficient quantities or quality, which could result in a material adverse effect on our business, financial condition, results of operations and cash flows. 21 We may experience product liability claims and litigation to prosecute such claims, and although we maintain product liability insurance, which we believe to be adequate for our needs, there can be no assurance that our insurance coverage will be adequate or that we will be able to obtain adequate insurance coverage in the future.
These events could interrupt the marketing and sales of our products, severely damage our brand reputation and public image, increase our legal expenses, result in product recalls or litigation, and impede our ability to deliver our products in sufficient quantities or quality, which could result in a material adverse effect on our business, financial condition, results of operations and cash flows.
Increases in the price or shortages of supply of key raw materials could materially and adversely affect our business, financial condition and results of operations. Our products are composed of certain key raw materials. If the prices of these raw materials were to increase significantly, it could result in a significant increase to us in the prices charged to us.
Increases in the price or shortages of supply of key raw materials could materially and adversely affect our business, financial condition, results of operations and cash flows. Our products are composed of certain key raw materials.
Trade secrets are difficult to protect. We rely on trade secrets to protect our proprietary knowledge, especially where we do not believe patent protection is appropriate or obtainable, or where such patents would be difficult to enforce. We rely in part on confidentiality agreements to protect our trade secrets and other proprietary knowledge.
If we are not able to adequately prevent disclosure of proprietary knowledge, the value of our products could be materially diminished. Trade secrets are difficult to protect. We rely on trade secrets to protect our proprietary knowledge, especially where we do not believe patent protection is appropriate or obtainable, or where such patents would be difficult to enforce.
Although we believe that there are commercially reasonable alternatives to the third-party vendors we currently utilize, this may not always be the case, or they may be difficult or costly to replace. In addition, integration of new third-party vendors may require significant work and require substantial investment of our time and resources.
We anticipate that we will continue to rely on third-party vendors in the future. Although we believe that there are commercially reasonable alternatives to the third-party vendors we currently utilize, this may not always be the case, or they may be difficult or costly to replace.
The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members. As a public company, we are subject to the reporting requirements of the Exchange Act, as amended, the Sarbanes-Oxley Act, the Dodd-Frank Act, and other applicable securities rules and regulations.
As a public company, we are subject to the reporting requirements of the Exchange Act, as amended, the Sarbanes-Oxley Act, the Dodd-Frank Act, and other applicable securities rules and regulations.
These relationships may be dependent upon third-party tools, such as search engines, established business terms negotiated by us, or utilization of third-party marketplaces.
Our e-commerce business has several third-party relationships that contribute to our ability to generate revenue from a variety of online sources. These relationships may be dependent upon third-party tools, such as search engines, established business terms negotiated by us, or utilization of third-party marketplaces.
Our use of additional or alternative third-party vendors would require us to enter into agreements with third parties, which may not be available on commercially reasonable terms or at all. Many of the risks associated with the use of third-party vendors cannot be eliminated, and these risks could negatively affect our business.
In addition, integration of new third-party vendors may require significant work and require substantial investment of our time and resources. Our use of additional or alternative third-party vendors would require us to enter into agreements with third parties, which may not be available on commercially reasonable terms or at all.
Raw material prices may increase in the future, and we may not be able to pass on those increases to customers who purchase our products. A significant increase in the price of raw materials that cannot be passed on to customers could have a material adverse effect on our business, financial condition and results of operations.
If the prices of these raw materials were to increase significantly, it could result in a significant increase to us in the prices charged to us. Raw material prices may increase in the future, and we may not be able to pass on those increases to customers who purchase our products.
We cannot guarantee that we have entered into such agreements with each party that may have had access to our proprietary knowledge, or that such agreements, even if in place, will not be circumvented. These agreements may not effectively prevent disclosure of proprietary knowledge and may not provide an adequate remedy in the event of unauthorized disclosure of such information.
We rely in part on confidentiality agreements to protect our trade secrets and other proprietary knowledge. We cannot guarantee that we have entered into such agreements with each party that may have had access to our proprietary knowledge, or that such agreements, even if in place, will not be circumvented.
There can be no assurance that the regulatory environment in which we operate will not change or that such regulatory environment, or any specific action taken against us, will not result in a material adverse effect on us. 20 Congress and/or regulatory agencies may impose additional laws or regulations or change current laws or regulations, and state attorneys general may increase enforcement of existing or new laws, and compliance with new or changed governmental regulations, or any state attorney proceeding, could increase our costs significantly and materially and adversely affect our business, financial condition and results of operations.
Congress and/or regulatory agencies may impose additional laws or regulations or change current laws or regulations, and state attorneys general may increase enforcement of existing or new laws, and compliance with new or changed governmental regulations, or any state attorney proceeding, could increase our costs significantly and materially and adversely affect our business, financial condition, results of operations and cash flows.
Moreover, if one or more of the analysts who cover us downgrades our stock or publishes inaccurate or unfavorable research about our business, or if our results of operations do not meet their expectations, our stock price could decline.
Moreover, if one or more of the analysts who cover us downgrades our stock or publishes inaccurate or unfavorable research about our business, or if our results of operations do not meet their expectations, our stock price could decline. 26 The requirements of being a public company may strain our resources, divert management’s attention and affect our ability to attract and retain executive management and qualified board members.
We may not be able to compete effectively, and any of the factors listed above may cause price reductions, reduced margins and losses of our market share. 12 Our failure to appropriately respond to changing consumer preferences and demand for new products or product enhancements could significantly harm our relationship with customers and our product sales, as well as our financial condition and operating results.
Our failure to appropriately respond to changing consumer preferences and demand for new products or product enhancements could significantly harm our relationship with customers and our product sales, as well as our financial condition, operating results and cash flows.
If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile. 18 We are highly dependent on our management team, and the loss of our senior executive officers or other key employees could harm our ability to implement our strategies, impair our relationships with customers and adversely affect our business, results of operations and growth prospects.
As a result, they have the ability to determine the outcome on all matters requiring approval of our stockholders, including the election of directors and approval of significant corporate transactions. 19 We are highly dependent on our management team, and the loss of our senior executive officers or other key employees could harm our ability to implement our strategies, impair our relationships with customers and adversely affect our business, results of operations and growth prospects.
If our suppliers are unable to perform, any delay in replacing or substituting such ingredients could adversely affect our business. 13 A downturn in the economy, could affect consumer purchases of discretionary items such as the health and wellness products that we offer, which could have an adverse effect on our business, financial condition, profitability, and cash flows.
While our current structure mitigates many of the risks associated with global sourcing, we cannot eliminate the possibility that future global events or trade policies may have an adverse effect on our business, financial condition, results of operations or cash flows. 14 A downturn in the economy could affect consumer purchases of discretionary items such as the health and wellness products that we offer, which could have an adverse effect on our business, financial condition, profitability, and cash flows.
Our e-commerce business is dependent on certain third parties. Changes in business practices or terms by such third parties could have a material adverse effect on our results of operations. Our e-commerce business has several third-party relationships that contribute to our ability to generate revenue from a variety of online sources.
Many of the risks associated with the use of third-party vendors cannot be eliminated, and these risks could negatively affect our business. Our e-commerce business is dependent on certain third parties. Changes in business practices or terms by such third parties could have a material adverse effect on our results of operations.
Any or all of these requirements could have a material adverse effect on us.
Any or all of these requirements could have a material adverse effect on us. There can be no assurance that the regulatory environment in which we operate will not change or that such regulatory environment, or any specific action taken against us, will not result in a material adverse effect on us.
A decline in the market price of our common stock might impede our ability to raise capital through the issuance of additional shares of common stock or other equity securities. 24 We do not anticipate paying any cash dividends on our common stock in the foreseeable future.
We do not intend to pay any dividends to holders of our common stock in the foreseeable future.
Removed
Current and future acquisitions may use significant resources, may be unsuccessful, and could expose us to unforeseen liabilities.
Added
We may not be able to compete effectively, and any of the factors listed above may cause price reductions, reduced margins and losses of our market share.
Removed
As a result, they have the ability to determine the outcome on all matters requiring approval of our stockholders, including the election of directors and approval of significant corporate transactions. We are a “controlled company” within the meaning of the Nasdaq rules and, as a result, qualify for, and may rely on, exemptions and relief from certain corporate governance requirements.
Added
If our suppliers are unable to perform, any delay in replacing or substituting such ingredients could adversely affect our business. While our exposure to international markets and foreign sourcing is limited, we may still be indirectly affected by global trade developments.
Removed
If we rely on these exemptions, our stockholders will not have the same protections afforded to stockholders of companies that are subject to such requirements. Our Chief Executive Officer and Chairman, Jack Ross, beneficially owns approximately 55% of the voting power of our common stock as of December 31, 2024.
Added
We primarily operate within the United States, and in 2025 and 2024, international sales accounted for 10.1% and 11.5%, respectively, of our total revenue. We purchase only finished goods from third-party manufacturers and do not engage in the direct sourcing of raw materials. This structure limits our direct exposure to international markets, tariffs, and global supply chain disruptions.
Removed
As a result, we are a “controlled company” within the meaning of the Nasdaq corporate governance standards.
Added
However, because our manufacturers may source raw materials from abroad, changes in international trade policies, tariffs, or geopolitical tensions could still affect our supply chain and cost of goods. Any disruptions or cost increases experienced by our manufacturers may impact the availability or pricing of the products we purchase.
Removed
Under these corporate governance standards, a company of which more than 50% of the voting power in the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements.
Added
These agreements may not effectively prevent disclosure of proprietary knowledge and may not provide an adequate remedy in the event of unauthorized disclosure of such information.
Removed
For example, controlled companies are not required to have: ● a board that is composed of a majority of “independent directors,” as defined under the Nasdaq rules; ● a compensation committee that is composed entirely of independent directors; and ● director nominations be made, or recommended to the full board of directors, by its independent directors, or by a nominations/governance committee that is composed entirely of independent directors.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFor a description of the risks from cybersecurity threats that may materially affect our Company and how they may do so, please see “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K. Cybersecurity Governance.
Biggest changeFor a description of the risks from cybersecurity threats that may materially affect our Company and how they may do so, please see “Risk Factors” included in Part I, Item 1A of this Annual Report. Cybersecurity Governance.
Item 1C. Cybersecurity Risk Management and Strategy We depend on software applications, information technology systems, computing infrastructure and cloud service providers to operate our business. Certain of these systems are managed, hosted, provided or used by third parties, to assist in conducting our business and which have their own cyber security measures in place.
Item 1C. Cybersecurity Risk Management and Strategy We depend on software applications, information technology systems, computing infrastructure and cloud service providers to operate our business. Certain of these systems are managed, hosted, provided or used by third parties, to assist in conducting our business and which have their own cybersecurity measures in place.
Our Audit Committee has primary responsibility for overseeing our risk-management program relating to cybersecurity, although our Board of Directors participates in periodic reviews and discussion dedicated to cyber risks, threats, and protections.
Our Audit Committee has primary responsibility for overseeing our risk-management program relating to cybersecurity, although our Board participates in periodic reviews and discussion dedicated to cyber risks, threats, and protections.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties The following table describes our principal properties leased as of the date of this Annual Report. Purpose Location Square Footage Technology Center (1) Halifax, NS 8,500 (1) Monthly rental payments are $10,000 Canadian Dollars per month on a month-to-month basis.
Biggest changeItem 2. Properties The following table describes our principal properties leased as of the date of this Annual Report. Purpose Location Square Footage Office (1) Halifax, NS 8,500 (1) Monthly rental payments are $19,608 Canadian Dollars per month on a month-to-month basis.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSee the sections titled Business – Legal Proceedings and Note 13 – Commitments and Contingencies – Litigation of the Notes to the Consolidated Financial Statements contained in this Annual Report on Form 10-K for information about certain legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 27 PART II
Biggest changeSee the sections titled Business – Legal Proceedings and Note 13 – Commitments and Contingencies – Litigation of the Notes to the Consolidated Financial Statements contained in this Annual Report for information about certain legal proceedings. Item 4. Mine Safety Disclosures Not applicable. 29 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on the Nasdaq Capital Market under the symbol “SNYR.” Holders As of March 27, 2025, there were 30 holders of record of our common stock.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our common stock is listed on the Nasdaq Capital Market under the symbol “SNYR.” Holders As of March 27, 2026, there were 69 holders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeThe decrease was primarily due to increases in accounts receivable and prepaid expenses and a decrease of accounts payable and accrued liabilities. 34 For 2024, net cash used in operating activities of $4,803,390 consisted of our net income of $2,124,976 adjusted by: Amortization of debt issuance cost $ 56,796 Depreciation and amortization 133,334 Foreign currency transaction loss 54,321 Remeasurement gain on translation of foreign subsidiary (18,954 ) Non cash implied interest 4,799 Write-off of inventory 125,364 Stock issued for loan financing 97,920 Income from employee retention credits (252,405 ) Income from insurance on stolen goods (258,129 ) Changes in operating assets and liabilities: Accounts receivable (3,214,943 ) Other receivables (1,489,103 ) Loan receivable, related party 84,937 Inventory 1,884,324 Prepaid expenses (1,250,023 ) Prepaid expense, related party (145,092 ) Income taxes payable 57,312 Contract liabilities 10,050 Accounts payable and accrued liabilities (2,870,633 ) Accounts payable, related party 61,759 For 2023, net cash provided by operating activities of $421,729 consisted of our net income of $6,338,750 adjusted by: Amortization of debt issuance cost $ 48,610 Depreciation and amortization 33,333 Gain on settlement of liabilities (4,635,986 ) Foreign currency transaction gain (105,192 ) Remeasurement gain on translation of foreign subsidiary (1,517 ) Non cash implied interest 29,401 Accrual of loan success fee and warrants converted to loan 83,250 Write-off of inventory 251,021 Changes in operating assets and liabilities: Accounts receivable 1,378,620 Loan receivable, related party (51,245 ) Inventory 3,990,456 Prepaid expenses (288,789 ) Prepaid expense, related party (369,427 ) Income taxes receivable 14,339 Income taxes payable 185,665 Contract liabilities 9,005 Accounts payable and accrued liabilities (6,645,324 ) Accounts payable, related party 156,759 Investing Activities For the years ended December 31, 2024 and 2023, we used net cash of $0 in investing activities. 35 Financing Activities For the year ended December 31, 2024, net cash provided by financing activities was $4,804,086, as compared to $2,090,782 used in financing activities for the year ended December 31, 2023.
Biggest changeThe decrease was primarily due to decreases in accounts receivable, other receivables and related party loan receivable. 34 For 2025, net cash used in operating activities of $2,585,022 consisted of our net loss of $12,341,208 adjusted by: Amortization of debt discount and debt issuance cost $ 1,633,776 Depreciation and amortization 133,334 Stock based compensation 136,247 Stock issued for modification of notes payable 847,062 Stock issued for services 127,200 Foreign currency transaction loss 5,531 Remeasurement gain on translation of foreign subsidiary 14,833 Bad debts 2,256,846 Bad debt, related party 4,403,804 Gain on settlement of debt (2,154,522 ) Write-off of inventory 894,341 Changes in operating assets and liabilities: Accounts receivable 1,514,935 Other receivables 345,388 Inventory (2,915,298 ) Prepaid expenses 1,306,351 Prepaid expense, related party 202,163 Income taxes payable (84,271 ) Contract liabilities (22,726 ) Accounts payable and accrued liabilities 622,099 Accounts payable, related party 489,093 For 2024, net cash used in operating activities of $4,803,390 consisted of our net income of $2,124,976 adjusted by: Amortization of debt issuance cost $ 56,796 Depreciation and amortization 133,334 Foreign currency transaction loss 54,321 Remeasurement gain on translation of foreign subsidiary (18,954 ) Non cash implied interest 4,799 Write-off of inventory 125,364 Stock issued for loan financing 97,920 Income from employee retention credits (252,405 ) Income from insurance on stolen goods (258,129 ) Changes in operating assets and liabilities: Accounts receivable (3,214,943 ) Other receivables (1,489,103 ) Loan receivable, related party 84,937 Inventory 1,884,324 Prepaid expenses (1,250,023 ) Prepaid expense, related party (145,092 ) Income taxes payable 57,312 Contract liabilities 10,050 Accounts payable and accrued liabilities (2,870,633 ) Accounts payable, related party 61,759 Investing Activities For the years ended December 31, 2025 and 2024, we used net cash of $0 in investing activities. 35 Financing Activities For the year ended December 31, 2025, net cash provided by financing activities was $4,654,664, as compared to $4,804,086 provided by financing activities for the year ended December 31, 2024.
Specifically, for FOCUSfactor, we are working on increased distribution for our recently launched ready-to-drink beverage. Lastly, we intend to grow further through additional strategic acquisitions and we continue to evaluate opportunities and candidates that we believe fit well with our brand portfolio. Off-Balance Sheet Arrangements During the years ended December 31, 2024 and 2023, we had no off-balance sheet arrangements.
Specifically, for FOCUSfactor, we are working on increased distribution for our recently launched ready-to-drink beverage. Lastly, we intend to grow further through additional strategic acquisitions and we continue to evaluate opportunities and candidates that we believe fit well with our brand portfolio. Off-Balance Sheet Arrangements During the years ended December 31, 2025 and 2024, we had no off-balance sheet arrangements.
Key factors affecting our results of operations include revenues, cost of revenue, operating expenses and income and taxation. 28 Non-GAAP Financial Measures We currently focus on EBITDA to evaluate our business relationships and our resulting operating performance and financial position. EBITDA is defined as net income plus interest expense, income tax expense, depreciation and amortization.
Key factors affecting our results of operations include revenues, cost of revenue, operating expenses and income and taxation. 30 Non-GAAP Financial Measures We currently focus on EBITDA to evaluate our business relationships and our resulting operating performance and financial position. EBITDA is defined as net income plus interest expense, income tax expense, depreciation and amortization.
In connection with preparing consolidated financial statements for the year ended December 31, 2024, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to continue as a going concern within one year from the date that the consolidated financial statements are issued.
In connection with preparing consolidated financial statements for the year ended December 31, 2025, management evaluated whether there were conditions and events, considered in the aggregate, that raised substantial doubt about the Company’s ability to continue as a going concern within one year from the date that the consolidated financial statements are issued.
Our definition of EBITDA might not be comparable to similarly titled measures reported by other companies. Results of Operations for the Years Ended December 31, 2024 and December 31, 2023 During both 2024 and 2023, we focused on developing our currently owned brands into new markets and by product extensions.
Our definition of EBITDA might not be comparable to similarly titled measures reported by other companies. Results of Operations for the Years Ended December 31, 2025 and December 31, 2024 During both 2025 and 2024, we focused on developing our currently owned brands into new markets and by product extensions.
Inflation The effect of inflation on our operating results was not significant in the years ended December 31, 2024 and 2023. Critical Accounting Policies Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
Inflation The effect of inflation on our operating results was not significant in the years ended December 31, 2025 and 2024. Critical Accounting Policies Management’s Discussion and Analysis of Financial Condition and Results of Operations discusses our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the audited condensed consolidated financial statements and the notes thereto contained elsewhere in this Annual Report.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the notes thereto contained elsewhere in this Annual Report.
The terms of the warrants were, at the sole option of the holder, to convert the warrant at a 25% discount in the event we consummated an IPO, a cash option whereby the holder could convert the warrants at a cash value of $1.5 million or convert the warrants into the private entity valued by an independent third-party appraiser.
The terms of the warrants were, at the sole option of the holder, to convert the warrant at a 25% discount in the event we consummated an IPO, a cash option whereby the holder could convert the warrants at a cash value of $1,500,000 or convert the warrants into the private entity valued by an independent third-party appraiser.
The exchange rates used to translate amounts in AUD and CAD into USD for the purposes of preparing the consolidated financial statements were as follows: Balance sheet: December 31, 2024 December 31, 2023 Period-end AUD: USD exchange rate $ 0.6183 $ 0.6805 Period-end CAD: USD exchange rate $ 0.6950 $ 0.7561 Income statement: December 31, 2024 December 31, 2023 Average Yearly AUD: USD exchange rate $ 0.6599 $ 0.6644 Average Yearly CAD: USD exchange rate $ 0.7301 $ 0.7411 Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated into either Australian Dollars or Canadian Dollars, as the case may be, at the rate on the date of the transaction and included in the results of operations as incurred. 38
The exchange rates used to translate amounts in AUD, CAD and MXN into USD for the purposes of preparing the consolidated financial statements were as follows: Balance sheet: December 31, 2025 December 31, 2024 Period-end AUD: USD exchange rate $ 0.6696 $ 0.6183 Period-end CAD: USD exchange rate $ 0.7296 $ 0.6950 Period-end MXN: USD exchange rate $ 0.0555 $ - Income statement: December 31, 2025 December 31, 2024 Average Yearly AUD: USD exchange rate $ 0.6447 $ 0.6599 Average Yearly CAD: USD exchange rate $ 0.7157 $ 0.7301 Average Period MXN: USD exchange rate $ 0.0555 $ - Translation gains and losses that arise from exchange rate fluctuations from transactions denominated in a currency other than the functional currency are translated into either Australian Dollars, Canadian Dollars or Mexican Pesos, as the case may be, at the rate on the date of the transaction and included in the results of operations as incurred. 38
Freight billed to customers is presented as revenues, and the related freight costs are presented as cost of goods sold. Cancelled orders are refunded if not already dispatched, refunds are only paid if stock is damaged in transit, discounts are only offered with specific promotions and orders will be refilled if lost in transit.
Freight billed to customers is presented as revenues, and the related freight costs are presented in selling and marketing expense. Cancelled orders are refunded if not already dispatched, refunds are only paid if stock is damaged in transit, discounts are only offered with specific promotions and orders will be refilled if lost in transit.
Contract liability results from transactions in which we have been paid for products by customers, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the contract liabilities are recognized.
Contract Liabilities Our contract liabilities consist of advance customer payments. Contract liability results from transactions in which we have been paid for products by customers, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the contract liabilities are recognized.
Our 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 unaudited interim condensed consolidated financial statements and audited consolidated financial statements and accompanying notes thereto included elsewhere in this prospectus.
Our management’s discussion and analysis of our financial condition and results of operations are based on our current business and should be read in conjunction with our consolidated financial statements and accompanying notes thereto included elsewhere in this Annual Report.
Cash payments of interest shall be made monthly, on the final day of each month commencing in April 2024. We are required to make principal payments of $1,000,000 each quarter starting from March 31, 2025 until December 31, 2025. The remaining principal and unpaid interest is fully due on March 31, 2026.
Effective March 31, 2024, the interest rate is 12%, compounded quarterly. Cash payments of interest shall be made monthly, on the final day of each month commencing in April 2024. We are required to make principal payments of $1,000,000 each quarter starting from March 31, 2025 until December 31, 2025.
This Agreement consolidates this $2,000,000 loan and the $6,000,000 March 8, 2022 loan as detailed below. 32 On March 8, 2022, we entered into Securities Purchase Agreements with debenture holders for the Senior Subordinated Debentures in the amount of $6,000,000 with an original maturity date of September 8, 2022 and warrants with a term of 3 years.
On March 8, 2022, we entered into Securities Purchase Agreements with debenture holders for the Senior Subordinated Debentures in the amount of $6,000,000 with an original maturity date of September 8, 2022 and warrants equal to the principal amount with a term of 3 years.
The increase was attributable to the issuance of common stock offset by repayment on notes payable.
The decrease was attributable to the issuance of common stock and proceeds from notes payable offset by repayment on notes payable.
Revenue For the year ended December 31, 2024, we had revenues of $34,834,243 from sales of our products, as compared to revenue of $42,777,633 for the year ended December 31, 2023.
Revenue For the year ended December 31, 2025, we had revenues of $30,380,809 from sales of our products, as compared to revenue of $34,834,243 for the year ended December 31, 2024.
Operating Activities For the year ended December 31, 2024, we had net cash used in operating activities of $4,803,390 as compared to $421,729 of net cash provided by operating activities for the year ended December 31, 2023.
Operating Activities For the year ended December 31, 2025, we had net cash used in operating activities of $2,585,022 as compared to $4,803,390 of net cash used in operating activities for the year ended December 31, 2024.
Financing activities during 2024: Proceeds from issuance of common stock $ 8,397,044 Advances from related party 3,528,003 Repayments of advances to related party (3,200,000 ) Proceeds from notes payable 1,360,000 Repayment of notes payable (5,196,461 ) Repayment of notes payable, related party (84,500 ) Financing activities during 2023: Advances from related party $ 1,170,000 Repayments of advances to related party (1,170,000 ) Repayment of notes payable, related party (145,500 ) Proceeds from notes payable 360,000 Repayment of notes payable (2,305,282 ) Key Near-Term Initiatives During 2025, we intend to organically grow our current product lines by developing and launching new products and expanding into new markets.
Financing activities during 2025: Proceeds from issuing common stock $ 3,719,547 Advances from related party 235,000 Repayments of advances to related party (135,000 ) Repayment of notes payable, shareholder (10,000,000 ) Proceeds from notes payable 20,996,250 Payment of loan financing fees (2,024,287 ) Repayment of notes payable (8,136,846 ) Financing activities during 2024: Proceeds from issuance of common stock $ 8,397,044 Advances from related party 3,528,003 Repayments of advances to related party (3,200,000 ) Proceeds from notes payable 1,360,000 Repayment of notes payable (5,196,461 ) Repayment of notes payable, related party (84,500 ) Key Near-Term Initiatives During 2026, we intend to organically grow our current product lines by developing and launching new products and expanding into new markets.
We believe that EBITDA, viewed in addition to, and not in lieu of, our reported results in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”), provides useful information to investors.
We believe that EBITDA, viewed in addition to, and not in lieu of, our reported results in accordance with U.S. GAAP, provides useful information to investors.
Dollars at period end exchange rates and stockholders’ equity is translated at the historical rates. Income and expense items were translated using average exchange rate for the period. The resulting translation adjustments, net of income taxes, are reported as other comprehensive income and accumulated other comprehensive income in the stockholder’s equity in accordance with ASC 220 — Comprehensive Income.
Income and expense items were translated using average exchange rate for the period. The resulting translation adjustments, net of income taxes, are reported as other comprehensive income and accumulated other comprehensive income in the stockholder’s equity in accordance with ASC 220 — Comprehensive Income. The functional currency of our other foreign subsidiary (Synergy CHC Mexico) is the Mexican Peso (MXN).
Upon September 8, 2022, the date of exercise of the warrants, we offset this warrant liability and added the $1.5 million balance to the Senior Subordinated Debentures, for a combined outstanding balance of $7.5 million.
Pursuant to ASC 480 warrants were liability classified and we accrued the warrant liability of $1,500,000 on March 8, 2022, the date of issuance. On September 8, 2022, the date of exercise of the warrants, we offset this warrant liability and added the $1,500,000 balance to the Senior Subordinated Debentures, for a combined outstanding balance of $7,500,000.
A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized. 37 We generated a deferred tax asset through net operating loss carry-forward. However, a valuation allowance of 100% has been established due to the uncertainty of our realization of the net operating loss carry forward prior to its expiration.
A valuation allowance is recorded when it is “more likely-than-not” that a deferred tax asset will not be realized. We generated a deferred tax asset through net operating loss carry-forward.
Other Income and Expenses For the years ended December 31, 2024 and December 31, 2023, we had other (income) and expense items of the following: Year ended December 31, 2024 Year ended December 31, 2023 Other income $ (510,534 ) $ - Interest income (1,523 ) (1,616 ) Interest expense 4,105,198 4,236,149 Remeasurement (gain) loss on translation of foreign subsidiary (18,954 ) (1,517 ) Total $ 3,574,187 $ 4,233,016 The increase in other income in 2024 is related to Employee Retention Credits and an insurance claim on stolen goods.
Other Income and Expenses For the years ended December 31, 2025 and December 31, 2024, we had other (income) and expense items of the following: Year ended December 31, 2025 Year ended December 31, 2024 Other income $ - $ (510,534 ) Interest income (15,065 ) (1,523 ) Interest expense 5,919,742 4,105,198 Gain on settlement of notes payable (2,154,522 ) - Remeasurement (gain) loss on translation of foreign subsidiary 14,833 (18,954 ) Total $ 3,764,988 $ 3,574,187 The decrease in other income in 2025 was related to Employee Retention Credits and an insurance claim on stolen goods from 2024 that did not repeat.
On February 10, 2022, we entered into a promissory note for $2,000,000 with an individual which was to be repaid with subsequent financing. On March 31, 2024, we entered into a Modification Agreement in relation to this loan. Effective March 31, 2024, the interest rate is 12%, compounded quarterly.
For additional information regarding our prior Knight indebtedness and the related repayment, see the notes to our consolidated financial statements. On February 10, 2022, we entered into a promissory note for $2,000,000 with an individual which was to be repaid with subsequent financing. On March 31, 2024, we entered into a Modification Agreement in relation to this loan.
In addition, a loan renegotiation fee of $500,000 shall be earned and payable on March 31, 2026 or at such time the loan is paid in full. Upon closing of a sale transaction, as defined in the agreement, a bonus success fee of $1,800,000 will be earned and payable.
The remaining principal and unpaid interest is fully due on March 31, 2026. In addition, a loan renegotiation fee of $500,000 shall be earned and payable on March 31, 2026 or at such time the loan is paid in full.
Dollars at period end exchange rates, non-monetary assets and liabilities of the foreign subsidiary were translated into U.S. Dollars at transaction day exchange rates. Income and expense items related to non-monetary items were translated at exchange rates prevailing during the transaction date and other incomes and expenses were translated using average exchange rate for the period.
Income and expense items related to non-monetary items were translated at exchange rates prevailing during the transaction date and other incomes and expenses were translated using average exchange rate for the period. The resulting translation adjustments were recorded in statements of operations as Remeasurement gain or loss on translation of foreign subsidiary.
Cost of Sales For the year ended December 31, 2024, our cost of sales was $11,191,224. Our cost of sales for the year ended December 31, 2023 was $10,697,323. The increase in cost of sales was primarily due to a settlement with a supplier in 2023 resulting in a reduction in cost of sales for 2023.
Our cost of sales for the year ended December 31, 2024 was $11,191,224. The decrease in cost of sales was primarily due to lower revenue.
Gross Profit Gross profit was $23,643,019, or 68% of revenue for the year ended December 31, 2024, as compared to gross profit of $32,080,310 or 75% of revenue for the same period in 2023, a decrease of $8,437,291 or 26%.
Gross Profit Gross profit was $20,302,817, or 67% of revenue for the year ended December 31, 2025, as compared to gross profit of $23,643,019 or 68% of revenue for the same period in 2024, a decrease of $3,340,202 or 14%. The decrease in gross profit related to lower revenue.
Management concluded that the above factors alleviate doubts about the Company’s ability to generate enough cash from operations and other available sources to satisfy its obligations for the next twelve months from the issuance date.
Management concluded that the above factors alleviate doubts about the Company’s ability to generate enough cash from operations and other available sources to satisfy its obligations for the next twelve months from the issuance date. 33 Short- and Long-Term Borrowings On May 30, 2025, we entered into a term credit loan agreement of $17,500,000 with ACP Agency, LLC.
Effect of Exchange Rate on Results The functional currency of one of our foreign subsidiaries (NomadChoice Pty Ltd.) is the U.S. Dollar. This foreign subsidiary maintains its records using local currency (Australian Dollar–“AUD”). All monetary assets and liabilities of the foreign subsidiary were translated into U.S.
This foreign subsidiary maintains its records using local currency (Australian Dollar–“AUD”). All monetary assets and liabilities of the foreign subsidiary were translated into U.S. Dollars at period end exchange rates, non-monetary assets and liabilities of the foreign subsidiary were translated into U.S. Dollars at transaction day exchange rates.
Year Ended December 31, 2024 Year Ended December 31, 2023 Net income $ 2,124,976 $ 6,338,750 Interest income (1,523 ) (1,616 ) Interest expense 4,105,198 4,236,149 Taxes 102,085 234,980 Depreciation and amortization 133,334 33,333 EBITDA $ 6,464,070 $ 10,841,596 EBITDA is considered non-GAAP financial measures. EBITDA represents earnings before interest, taxes, depreciation and amortization.
Year Ended December 31, 2025 Year Ended December 31, 2024 Net income (loss) $ (12,341,208 ) $ 2,124,976 Interest income (15,065 ) (1,523 ) Interest expense 5,919,742 4,105,198 Taxes 117,471 102,085 Depreciation and amortization 133,334 133,334 EBITDA $ (6,185,726 ) $ 6,464,070 EBITDA is considered a non-GAAP financial measure. EBITDA represents earnings before interest, taxes, depreciation and amortization.
NomadChoice Pty Ltd, our wholly-owned Australian subsidiary, is subject to income taxes in the jurisdictions in which it operates. Significant judgment is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain.
Significant judgment is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. We recognize liabilities for anticipated tax audit issues based on our current understanding of the tax law.
Synergy CHC Inc., our wholly-owned Canadian subsidiary, is subject to income taxes in the jurisdictions in which it operates. Significant judgment is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain.
Significant judgment is required in determining the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. We recognize liabilities for anticipated tax audit issues based on our current understanding of the tax law.
The resulting translation adjustments were recorded in statements of operations as Remeasurement gain or loss on translation of foreign subsidiary. The functional currency of our other foreign subsidiary (Synergy CHC Inc.) is the Canadian Dollar (CAD). This foreign subsidiary maintains its records using local currency (CAD). All assets and liabilities of the foreign subsidiary were translated into U.S.
The functional currency of one of our foreign subsidiaries (Synergy CHC Inc.) is the Canadian Dollar (CAD). This foreign subsidiary maintains its records using local currency (CAD). All assets and liabilities of the foreign subsidiary were translated into U.S. Dollars at period end exchange rates and stockholders’ equity is translated at the historical rates.
We recognize liabilities for anticipated tax audit issues based on our current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.
Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made. Effect of Exchange Rate on Results The functional currency of one of our foreign subsidiaries (NomadChoice Pty Ltd.) is the U.S. Dollar.
The Senior Subordinated Debentures were modified on June 14, 2023 in conjunction with the promissory note. The modification included the exercise of $1.5 million on cash payment in lieu of the exercise of warrants. Pursuant to ASC 480 warrants were liability classified and we accrued the warrant liability of $1.5 million on March 8, 2022, the date of issuance.
The Senior Subordinated Debentures were modified on June 14, 2023 and consolidated with the promissory note dated February 10, 2022. The modification included the exercise of a $1,500,000 cash payment in lieu of the exercise of warrants.
We recognize liabilities for anticipated tax audit issues based on our current understanding of the tax law. Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made.
Where the final tax outcome of these matters is different from the carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such determination is made. Synergy CHC Inc., our wholly-owned Canadian subsidiary, is subject to income taxes in the jurisdictions in which it operates.
On December 5, 2024, we entered into a cash advance agreement of $800,000 with Cedar Advance LLC for an advancement of working capital. We received $760,000 and recorded $40,000 as interest expense. The loan bears a repayment rate of $41,100 per week. We recognized total interest expense of $136,000 as of December 31, 2024.
On November 12, 2025, we entered into a cash advance agreement of $3,024,000 with Cedar Advance LLC for an advancement of working capital via the sale of receivables. We received $2,000,000 and recorded $1,024,000 as original issue discount. The loan bears a repayment rate of $84,000 per week.
On March 31, 2024, we entered into a Modification Agreement in relation to this loan, which consolidates it with the $2,000,000 February 10, 2022 loan above. On May 10, 2022, we entered into a loan agreement of $355,950 with Shopify Capital Inc. for an advancement of working capital from our online processing account.
On March 31, 2024, we entered into a Modification Agreement in relation to this loan, which consolidates it with the $2,000,000 February 10, 2022 loan above. We have utilized various short-term working capital arrangements from time to time (including merchant financing and settlement-related payment arrangements) to support liquidity and working capital needs.
An event of default, as defined in the agreement, will trigger a default interest rate increase by 5% to 17%. An incentive fee of a maximum of $563,092 will be paid, prorated if the loan is paid off early.
Upon closing of a sale transaction, as defined in the agreement, a bonus success fee of $1,800,000 will be earned and payable. An event of default, as defined in the agreement, will trigger a default interest rate increase by 5% to 17%.
We recognize revenue for our digital products in the month the download by the customer occurs. All product sales were initiated based upon the retailer’s purchase orders at a fixed transaction price and revenues recognized when the products were shipped to our customers. Contract Liabilities Our contract liabilities consist of advance customer payments.
Therefore, we have determined the right to use its IP was satisfied at a point in time (on the date the rights to the IP were granted). All product sales were initiated based upon the retailer’s purchase orders at a fixed transaction price and revenues recognized when the products were shipped to our customers.
If the loan is not repaid by March 31, 2026, Jack Ross, majority shareholder, shall grant warrants covering 10% of his stock struck at $0.12 per share. There is a cross-default clause in the agreement which states that if Knight triggers an event of default on its own loan facility, this loan will also be under default.
An incentive fee of a maximum of $563,092 will be paid, prorated if the loan is paid off early. There is a cross-default clause in the agreement which states that if Knight triggers an event of default on its own loan facility, this loan will also be under default.
The decrease in gross profit is largely related to the decrease in net sales due to the rebranding of FOCUSfactor. 29 Operating Expenses Selling and Marketing Expenses For the year ended December 31, 2024, our selling and marketing expenses were $12,991,431 as compared to $15,188,528 for the year ended December 31, 2023. The decrease is due to management of expenses.
Operating Expenses Selling and Marketing Expenses For the year ended December 31, 2025, our selling and marketing expenses were $13,137,779 as compared to $12,991,431 for the year ended December 31, 2024. The increase is related to the mix of advertising utilized. General and Administrative Expenses For the year ended December 31, 2025, our general and administrative expenses were $8,829,803.
Depreciation and Amortization Expenses For the year ended December 31, 2024, our depreciation and amortization expenses were $133,334 as compared to $33,333 for the year ended December 31, 2023. The increase is due to full year of amortization on license fee during 2024.
Depreciation and Amortization Expenses For both the years ended December 31, 2025 and 2024, our depreciation and amortization expenses were $133,334.
The Company considered the following: ● At December 31, 2024, the Company had an accumulated deficit of $44,099,813. ● At December 31, 2024, the Company had a working capital deficit of $1,124,601. ● At December 31, 2024, the Company had a decrease in net revenue of $7,943,390. ● At December 31, 2024, the Company had a decrease in net income of $4,213,774. ● At December 31, 2024, the Company used $4,803,390 in operating activities.
The Company considered the following: ● At December 31, 2025, the Company had an accumulated deficit of $56,441,021. ● At December 31, 2025, the Company had a decrease in revenue of $4,453,434. ● At December 31, 2025, the Company had a decrease in net income of $14,466,184. ● During the year ended December 31, 2025, the Company used $2,585,022 in operating activities.
General and Administrative Expenses For the year ended December 31, 2024, our general and administrative expenses were $4,717,006. For the year ended December 31, 2023, our general and administrative expenses were $6,051,703. The decrease is largely due to management of expenses.
For the year ended December 31, 2024, our general and administrative expenses were $4,717,006. The increase is largely due to an increase in professional fees, legal expense, board of directors’ expense, the write off of prepaid media credits carried over from 2024 and the increased overhead as we build the beverage division.
The outstanding loan balance at March 28, 2025 was $1,008,000. As of the date of this filing, we are in compliance with all of the terms, conditions and covenants associated with the loan agreements described above.
As of the date of filing of this Annual Report, we are in compliance with the material terms, conditions and covenants applicable to our outstanding debt arrangements.
The decrease in interest expense in 2024 was due to reduction in interest rate upon loan consolidation. Income tax expense For the year ended December 31, 2024, we incurred income tax expense of $102,085. For the year ended December 31, 2023 we incurred income tax expense of $234,980. The decrease in 2024 relates to estimated future taxes.
The gain on settlement of notes payable relates to discounts negotiated on loan payoffs during 2025. 32 Income tax expense For the year ended December 31, 2025, we incurred income tax expense of $117,471. For the year ended December 31, 2024 we incurred income tax expense of $102,085.
This decrease was due to lower revenue due to undertaking a rebranding and packaging upgrade for FOCUSfactor that resulted in customers selling through their existing inventory before bringing in the new packaging. 30 Liquidity and Capital Resources Overview As of December 31, 2024, we had $687,920 cash on hand and restricted cash of $100,000 which is held for credit card collateral.
Liquidity and Capital Resources Overview As of December 31, 2025, we had $2,622,313 cash and cash equivalents and restricted cash of $100,000 which is held for credit card collateral.
Net Income For the year ended December 31, 2024, our net income was $2,124,976. For the year ended December 31, 2023 our net income was $6,338,750.
Reserve for Bad Debts For the year ended December 31, 2025, our reserve for bad debts was $6,660,650 compared to $0 for the year ended December 31, 2024.
The Company evaluated its ability to meet its obligations as they become due within one year from the date that the consolidated financial statements are issued by considering the following: ● In 2024, the Company repaid $8.5 million of loans from related party and others and received $4.9 million through loans from related party and others. ● During 2024, the Company had net income of $2,124,976. ● During 2024, the Company raised additional capital of $8.4 million through its Initial Public Offering (IPO). ● The Company has the option of selling any of its brands to raise additional capital. ● The Company has restructured its debt agreements in 2024 which extends the terms into 2026. ● The Company is currently in negotiations with lenders to refinance its existing debt.
The Company evaluated its ability to meet its obligations as they become due within one year from the date that the consolidated financial statements are issued by considering the following: ● At December 31, 2025, the Company had a working capital surplus of $1,778,308. ● During 2025, the Company raised additional capital of $3.7 million through sale of its common stock. ● The Company has restructured its debt agreements in 2025 which extends the terms into 2029. ● The Company entered into a second amendment with its current lender during 2026 which adjusts various covenants and payment terms. ● The Company has laid off 13 employees in order to right size its overhead expenses. ● The Company has established an at-the-market (“ATM”) equity offering program pursuant to which we may issue and sell shares of our common stock from time to time, subject to market conditions and other factors.
Removed
This is comprised of the following categories: December 31, 2024 December 31, 2023 Nutraceuticals $ 34,817,333 $ 42,753,052 Consumer Goods 16,910 24,581 $ 34,834,243 $ 42,777,633 For the year ended December 31, 2024, our Nutraceuticals revenue consisted of $30,798,145 from our FOCUSfactor brand and $4,019,188 from our Flat Tummy brand, as compared to $37,202,521 and $5,550,531, respectively, for the year ended December 31, 2023.
Added
This is comprised of the following categories: December 31, 2025 December 31, 2024 Nutraceuticals $ 29,731,490 $ 33,392,094 Beverages 631,332 1,425,239 Consumer Goods 17,987 16,910 $ 30,380,809 $ 34,834,243 The decrease in our Nutraceutical category was due to a shift in management focus on developing new products for the Beverages category and an overall decrease in sales.
Removed
The decrease in our Nutraceutical category was due to undertaking a rebranding and packaging upgrade for FOCUSfactor that resulted in customers selling through their existing inventory before bringing in the new packaging. The decrease in the Consumer Goods category is due to normalization of business after the 2019 launch of our online application.
Added
The decrease in our Beverage category was due to limited test during 2024 in Canada. During first and second quarter of 2025, we licensed our FOCUSfactor and Flat Tummy intellectual property for $2,900,000 and we recognized revenue for the license fee at that time.
Removed
The 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 restructuring and cost reductions. ● Raise additional capital through an additional capital raise.
Added
During fourth quarter of 2025, due to the instability in the regions the licensee was expanding to, the entity canceled its license with the Company resulting in a reversal of the revenue of the same $2,900,000. 31 Cost of Sales For the year ended December 31, 2025, our cost of sales was $10,077,992.
Removed
Short- and Long-Term Borrowings On June 26, 2015, we, through our 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.
Added
The increase is due to the write off of a related party loan receivable of $4,403,804, a write off of uncollectible other receivables of $1,654,249, a write off of uncollectible accounts receivable of $225,018 and recognizing an allowance for doubtful accounts of $377,579.
Removed
The note required that $250,000 be paid on or before June 30, 2016, and $700,000 to be paid in quarterly installments (beginning with the quarter ending September 30, 2015) equal to the greater of $12,500 or 5% of U.S. net sales, and 2% of U.S. net sales of Neuragen for 60 months thereafter.
Added
The increase in interest expense in 2025 was primarily due to an advance taken, shares issued related to the modification of notes payable and the amortization of original debt discount on the May 2025 loan.
Removed
The payment of such amounts was 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. During March 2024, this Security Agreement was consolidated with the other outstanding loans to Knight Therapeutics (Barbados) Inc. (“Knight”).
Added
Net Income (Loss) For the year ended December 31, 2025, our net loss was $12,341,208. For the year ended December 31, 2024 our net income was $2,124,976. This decrease was due to lower revenue, higher expenses, the write off of other receivables and the write off of the loan receivable.
Removed
On August 9, 2017, we entered into a Second Amendment to Loan Agreement (“Second Amendment”) with Knight, pursuant to which Knight agreed to loan us an additional $10 million, and an ongoing credit facility of up to $20 million, and which amount was borrowed at closing (the “Financing”) for working capital purposes.
Added
We received $15,000,000 in May 2025 on the initial draw and $2,500,000 in June 2025 on a delayed draw. The proceeds of the loan were used to repay existing debt, including the payoff of the Company’s indebtedness to Knight Therapeutics. We recorded $2,385,954 as original debt discount and is being amortized to interest expense over the term of the loan.
Removed
At closing, we paid Knight an origination fee of $200,000 and a work fee of $100,000 and also paid $100,000 of Knight’s expenses associated with the Loan. 31 On May 8, 2020, we entered into a Third Amendment Agreement (the “Third Amendment”) to the Amended and Restated Loan Agreement (the “Loan Agreement”) with Knight, pursuant to which Knight agreed to loan us an additional $2.5 million (the “Additional Loan”).
Added
We recognized $360,511 as amortization during the year ended December 31, 2025. The unamortized balance amounts to $2,025,443 at December 31, 2025. The note bears interest at Term SOFR rate, plus 8.5%, currently 12.5% and matures on May 31, 2029. We recognized total interest expense of $1,326,732 as of December 31, 2025.
Removed
That same day (the “Closing”), we paid Knight a work fee of $36,000, and $25,000 for Knight’s legal costs and expenses incurred in connection with the Third Amendment. The Third Amendment amends the original loan agreement that we entered into with Knight in January 2015 and subsequently amended (as amended, the “Original Loan Agreement”).
Added
The outstanding loan balance at December 31, 2025 was $17,500,000 (See Note 11). We previously had secured indebtedness with Knight Therapeutics (Barbados) Inc. and related arrangements. During 2025, this indebtedness was repaid in full in connection with the Company’s refinancing transactions, including the ACP term loan described above.
Removed
The Additional Loan matured on May 8, 2021 (the “TA Maturity Date”) and bore interest at 12.5% per annum compounding quarterly. On the TA Maturity Date, we were obligated to pay Knight a success fee (the “Success Fee”) of $83,250. The Success Fee was payable in cash or stock as set forth in the Loan Agreement.
Added
This Agreement consolidates this $2,000,000 loan and the $6,000,000 March 8, 2022 loan as detailed below.
Removed
The Third Amendment includes customary representations, warranties, and affirmative and restrictive covenants, including covenants to attain and maintain certain financial metrics, including an undertaking to maintain at all times a cash balance of $600,000 and EBITDA of $3,000,000 for the twelve months ended June 30, 2020 and $4,000,000 for the twelve-month period ending on the last day of each fiscal quarter thereafter.
Added
Substantially all of these arrangements were repaid prior to December 31, 2025. As of December 31, 2025, the primary short-term amount outstanding relates to the Cedar Advance LLC receivables purchase arrangement described below. For additional information, see the notes to our consolidated financial statements.
Removed
Terms of the $10,000,000 August 9, 2017 loan (“Third Tranche”) were modified in the Third Amendment. The Third Tranche bore interest from May 8, 2020 at a rate equal to 12.5% per annum compounded quarterly.
Added
In conjunction with the advance, we issued 52,000 shares of common stock to the consultant who facilitated the facility and thus recognized $103,220 as financing cost. We recognized total interest expense of $349,435 as of December 31, 2025. The outstanding loan balance at December 31, 2025 was $1,658,215.
Removed
We were obligated to pay a success fee in the amount of $1,000,000 with respect to the Third Tranche, which was fully earned on May 8, 2020 and payable no later than August 31, 2022. The Third Tranche success fee bore interest at 12.5% per annum compounding quarterly. The loan was extended to a maturity date of December 31, 2021.
Added
We recognize revenue for our digital products in the month the download by the customer occurs. We account for our IP license revenue, which provides our customers with rights to use our IP, in accordance with ASC 606. A license may be perpetual or time limited in its application.
Removed
Because these amendments were considered not substantive changes, we accounted for the modifications as modification of debt. On July 7, 2022, we entered into a Fourth Amendment Agreement (the “Fourth Amendment”) to the Loan Agreement with Knight, pursuant to which Knight agreed to loan us an additional $2.0 million (the “Second Additional Loan”).
Added
In accordance with ASC 606, we continue to recognize revenue from IP license at the time of delivery when the customer accepts control of the IP, as the IP is functional without professional services, updates and technical support. We have concluded that its IP license is distinct as the customer can benefit from the functional IP on its own.
Removed
The Fourth Amendment amended the Original Loan Agreement. The Second Additional Loan matured on the earlier of October 31, 2022 and the date that is ninety days after the date, if any, on which Knight delivers a Second Additional Loan Repayment Notice to us.

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