Synergy CHC Corp. Executes Second Amendment to Term Loan Credit Agreement and Issues Common Stock Purchase Warrant to Acme Credit Partners Fund I, LP

Synergy CHC Corp. Executes Second Amendment to Term Loan and Issues Equity to Lender – Key Details for Investors

Summary of Key Events

Second Amendment to Term Loan Credit Agreement signed on March 24, 2026
Company issues 3,000,000-share common stock purchase warrant to Acme Credit Partners Fund I, LP
Revised financial covenants, leverage ratio requirements, and mandatory prepayment rules
Potential for substantial equity dilution; shareholder approval sought
Interest rate increases possible if equity raising targets not met

Detailed Analysis of Material Developments

1. Second Amendment to Term Loan Credit Agreement

On March 24, 2026, Synergy CHC Corp. (Nasdaq: SNYR) executed a Second Amendment to its Term Loan Credit Agreement with Acme Credit Partners Fund I, LP and related lenders. This amendment brings significant changes to the Company’s debt structure, financial covenants, and equity issuance flexibility.

2. New Minimum EBITDA Requirements

The amendment introduces new minimum Consolidated Adjusted EBITDA covenants:

At least \$500,000 must be achieved for the quarter ending June 30, 2026
At least \$1,000,000 must be achieved for the quarter ending September 30, 2026

Failure to meet these targets could trigger default and have material adverse effects on the Company.

3. Revised Leverage Ratios and Prepayment Provisions

The Company’s maximum permitted consolidated senior net leverage ratio is set at 20.00:1.00 for the quarter ending December 31, 2025, with a step-down schedule thereafter, tightening the Company’s allowable leverage.

The amendment also changes mandatory prepayment rules for equity issuance proceeds:

The first \$6 million in net cash proceeds from new equity can be retained for corporate purposes
The next \$4 million must be used to prepay the term loan principal
Amounts above \$10 million are subject to additional prepayment, including a requirement to prepay 50% of excess proceeds if the leverage ratio is 2.50:1.00 or higher (0% if below this threshold)

4. Restrictions on SOFR-based Interest & Debt Service

From February 1, 2026, all outstanding SOFR Rate Loans will automatically convert to Reference Rate Loans, and the Company cannot elect SOFR-based interest options until it has made at least \$4 million in principal reduction payments. This limits interest rate flexibility and could increase financing costs if the Company does not reduce its debt as required.

5. Common Stock Purchase Warrant Issuance

In connection with the amendment, Synergy CHC issued a warrant to Acme Credit Partners Fund I, LP, allowing the lender to purchase 3,000,000 shares of common stock at \$0.00001 per share. The warrant contains a “Beneficial Ownership Limitation” to prevent the lender from owning more than a specified percentage of outstanding shares, but the Company has committed to seek shareholder approval at its next annual meeting (no later than June 30, 2026) to allow for issuances above this limit.

Notably, the warrant is not registered under the Securities Act of 1933 and was issued in a private transaction exempt from registration. The Company is required to use best efforts to obtain shareholder approval for unlimited issuance under this warrant, and the Board will recommend approval.

6. Financial and Strategic Impact – Shareholder Considerations

Potential Equity Dilution: If the warrant is exercised, existing shareholders will be diluted by up to 3,000,000 shares, subject to shareholder approval for issuance above the Beneficial Ownership Limitation.
Tightened Financial Covenants: The new EBITDA and leverage requirements may restrict the Company’s operational flexibility and increase the risk of default if not met.
Interest Rate Step-Up: If Synergy CHC fails to raise at least \$10 million in net equity proceeds by September 30, 2026 (and apply as specified), the interest margin on its debt will increase by 2%, raising borrowing costs until the target is met.
Price Sensitive Shareholder Action: Shareholders will be asked to approve the removal of the Beneficial Ownership Limitation at the 2026 annual meeting, paving the way for potentially significant equity issuance and further dilution.

7. Other Noteworthy Details

The Lender Warrant features a cashless exercise provision if a Qualified Event of Default occurs.
The Company covenants to maintain reporting compliance to facilitate possible resale of the warrant shares under Rule 144.
The transaction involved payment of \$55,000 in legal fees to KTBS Law LLP, as stipulated in the amendment.

Conclusion – Potential Share Price Impact

This series of amendments and warrant issuance is highly material and likely to be price sensitive:

Shareholders face the prospect of significant dilution if the warrant is exercised and approval for excess issuance is granted.
Tightened covenants and mandatory prepayment rules may constrain the Company’s financial flexibility.
The interest rate penalty clause introduces an additional risk if equity raising targets are missed.
Shareholder action at the 2026 annual meeting is critical and could influence the Company’s capital structure and market valuation.

Investors should monitor the Company’s ability to meet EBITDA targets, manage leverage, and raise equity over the coming quarters.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should consult their own financial advisors and review the full SEC filings before making investment decisions. The Company’s future performance is subject to risks, including the ability to meet amended financial covenants, raise equity, and secure required shareholder approvals.