Synergy CHC Corp. 8-K

What Happened

• Synergy CHC Corp. (SNYR) filed an 8-K on March 25, 2026 reporting a Second Amendment (effective March 24, 2026) to its May 30, 2025 term loan credit agreement with ACP Agency, LLC and the lenders, and the issuance of a lender warrant to a lender. The amendment changes the loan amortization, interest mechanics, covenant tests, and how equity proceeds must be applied. The company also issued a common stock purchase warrant to Acme Credit Partners Fund I, LP.

Key Details

• Amended payment schedule: $175,000 due July 1, 2026 and Oct 1, 2026; $525,000 due Jan 1, 2027; then $350,000 on April 1, 2027 and each quarter thereafter.
• Equity raise and margin step-up: If Synergy does not raise at least $10,000,000 of Net Cash Proceeds from equity issuances by Sept 30, 2026 and apply them as required, the loan’s Applicable Margin increases by 2.00% per annum starting Oct 1, 2026 until the condition is met.
• Interest and capitalization: The interest payment due March 2, 2026 is being paid in kind (capitalized into principal); the company may elect to capitalize all or part of the April 1, 2026 interest payment as well.
• New covenants and tests: Adds minimum Consolidated Adjusted EBITDA requirements ($500,000 for quarter ended June 30, 2026; $1,000,000 for quarter ended Sept 30, 2026) and revises consolidated senior net leverage testing (including a 20.00:1.00 max for quarter ended Dec 31, 2025 and a step-down schedule).
• Equity proceeds prepayment mechanics: Net Cash Proceeds received on/after the amendment — first $6,000,000 may be retained for general purposes, next $4,000,000 must prepay term loan principal, and amounts over $10,000,000 are subject to additional prepayment (50% of excess if leverage ≥2.5x; 0% if <2.5x).
• Term SOFR limitation: Effective Feb 1, 2026 all Term SOFR Loans automatically converted to Reference Rate Loans; the company cannot elect Term SOFR again until it has made at least $4,000,000 of principal reductions after the amendment effective date.
• Warrant issued: Acme Credit Partners Fund I, LP received a warrant to buy 3,000,000 shares at $0.00001 per share, 10‑year term, exercisable only upon a “Qualified Event of Default”; exercise limited so holder cannot exceed 19.9% beneficial ownership until stockholder approval sought (to be requested by the June 30, 2026 annual meeting). Warrant issued in a private transaction (Section 4(a)(2)).

Why It Matters

• These changes materially affect the company’s debt repayment schedule, cash flow requirements and financing flexibility. Mandatory prepayment rules and the margin step-up create incentives to raise equity quickly (target $10M) and may increase borrowing costs if equity is not raised by the deadline. The new EBITDA and leverage covenant thresholds are additional operating constraints investors should monitor.
• The lender warrant creates potential future equity dilution (3,000,000 shares) if triggered by a default and if stockholder approval is obtained beyond the 19.9% cap. Together, the amendment and warrant are significant for holders because they alter credit costs, default mechanics and possible ownership outcomes without a public offering.