Key Highlights

  • Synergy CHC disclosed that Costco, which accounted for approximately 58% of 2025 net Revenue after a 16-year relationship, is discontinuing its flagship FOCUSfactor products, a structural loss the company said would have a material adverse effect on its business.
  • Weeks later, the company defaulted on its $17.6 million senior secured term Loan after missing an interest payment, with the forbearance agreement terminating and triggering a roughly $404,000 forbearance fee.
  • The company's own Solvency assessment stating going-concern doubt was alleviated predates both the Costco notice and the loan default, meaning that conclusion no longer reflects the company's current situation.

Shares of Synergy CHC Corp. (NASDAQ:SNYR) have drawn intense attention this summer, and not for good reasons. Within four weeks the Westbrook, Maine-based consumer health company disclosed that Costco is discontinuing its flagship FOCUSfactor products, then that it had defaulted on its senior secured term loan.

Synergy sells brain-health supplements and women's wellness products under the FOCUSfactor and Flat Tummy brands, and has spent two years pushing FOCUSfactor beyond pills into functional beverages. That expansion now sits behind a blunter question: can the company finance itself through the rest of 2026?

The backdrop was already difficult: a Nasdaq minimum bid price deficiency notice, Shareholder authorisation for a reverse split of up to 1-for-200, and under $300,000 of cash at the most recent quarter end. At roughly $0.17 in early August, Market Value was about $2.5 million against $27.75 million of debt.

What Happened

On 29 July 2026, Synergy filed a Form 8-K disclosing that on 15 July it had been notified that Costco would discontinue carrying its FOCUSfactor products. Costco accounted for approximately 58% of Synergy's net revenue in 2025, and had been a significant customer for more than 16 years.

Synergy said it expects a material adverse effect on its business, results of operations, Liquidity and financial condition, and that it was evaluating available financing and other strategic alternatives.

The second disclosure landed on 11 August. In a Form 8-K filed under Item 2.04, used to report events that accelerate or increase a direct financial obligation, Synergy said it missed an interest payment due 3 August under its Term Loan Credit Agreement with ACP Agency, LLC. The cure period lapsed on 6 August.

Roughly $17.6 million of principal remains outstanding, excluding accrued interest, fees and expenses. A forbearance agreement dated 28 May 2026 terminated on 6 August, triggering a $404,173.06 forbearance fee. ACP reserved its remedies, including default-rate interest and acceleration.

Why It Matters

Losing a customer that supplied roughly three-fifths of revenue is a structural event, not a bad quarter. Warehouse clubs buy in large, concentrated orders, and losing that shelf space removes both Volume and consumer visibility. Synergy's first-quarter 10-Q had already flagged that three customers made up about 85% of net revenue.

The timing compounds it. The term loan is secured by substantially all of the company's Assets and by pledges of Subsidiary equity, so an unremedied default gives the lender Leverage over the whole enterprise rather than one contract.

The Numbers

Synergy's most recently reported quarter is the first quarter of 2026. Revenue fell to $5.49 million from $8.17 million a year earlier, gross Margin narrowed to 72.3% from 75.4%, and operating expenses rose to $4.54 million, producing a $0.57 million operating loss against $1.95 million of operating income.

The Bottom Line swung to a net loss of $2.57 million, or $0.23 per share, from Net Income of $0.88 million. Adjusted EBITDA, a profit measure excluding interest, tax, depreciation, Amortisation and certain one-offs, was a $0.35 million loss versus positive $1.98 million.

Cash stood at $0.29 million on 31 March 2026, down from $2.62 million at the end of 2025, after $2.04 million of operating cash burn. Working Capital had turned to a $0.50 million deficit, against total Debt of $27.75 million. The term loan carries Term SOFR plus 8.50%.

Full-year 2025 set the trend: revenue fell 12.8% to $30.38 million and the net loss was $12.34 million, against $2.12 million of net income in 2024. Most of the damage came in the fourth quarter, when the net loss reached $14.82 million on roughly $6.7 million of bad debt reserves and inventory write-offs.

What It Means for the Company

Synergy had been building a case around beverages. Chief Executive Jack Ross said alongside the first-quarter release that the beverage division was running at an estimated annual rate above $4 million, and in January the company announced FOCUSfactor beverage distribution across Canada through Walmart Canada and McKesson Canada. Even so, that does not replace 58% of a $30 million revenue base.

The financing tools assembled earlier this year now look thin. In May, Synergy signed an Equity purchase agreement with Hudson Global Ventures, LLC for up to $36 million over roughly 24 months, priced at 95% of the average of the three lowest traded prices in a reference period, and registered 101.7 million shares for resale.

Risks Investors Should Watch

Dilution is the most concrete risk. Those 101.7 million registered shares compare with 14,899,883 shares outstanding as of 11 May 2026, and shareholders approved expanding the equity incentive pool to 150,000,000 shares, plus authority to reprice awards, at the 29 June annual meeting.

Nasdaq notified the company on 15 May 2026 that it had traded below the $1.00 minimum bid price for 30 consecutive Business days, opening a 180-day compliance window to 11 November 2026. Regaining compliance requires ten consecutive business days at or above $1.00.

Solvency risk sits above both. The first-quarter 10-Q described management's evaluation of substantial doubt about the company's ability to continue as a going concern, with management concluding then that the doubt was alleviated by a covenant amendment, 13 Job cuts, an at-the-market offering and the equity line. That assessment predates the Costco notice and the default.

What Comes Next

The immediate item is the lender. ACP reserved acceleration rights but, as of the 11 August filing, had not accelerated. Any forbearance extension, restructuring, Waiver or enforcement step would be disclosable, and is the variable most likely to determine the outcome for shareholders.

Second-quarter results had not been released as of 14 August, so no reporting period yet covers the Costco decision. The quarter ended 30 June largely predates the impact; the third quarter is the first to show it.

The Nasdaq clock runs to 11 November 2026, with a possible second 180-day period if other listing standards are met. Whether the board implements the authorised reverse split, and at what ratio, is a further decision to watch.

Conclusion

Synergy CHC is facing two compounding crises rather than one: losing a customer that supplied 58% of revenue is a structural blow on its own, but it arrived just weeks before the company defaulted on a term loan secured by substantially all of its assets, giving the lender leverage over the entire enterprise rather than a single relationship. The beverage Diversification the company had been building, an estimated $4 million annual run rate, offers nowhere near enough scale to replace what Costco represented. With the lender having reserved but not yet exercised acceleration rights as of the most recent filing, whether ACP Agency extends forbearance, restructures, or moves to enforce its remedies is now the single variable most likely to determine shareholder outcomes, well before any operational recovery could matter.