Investment Thesis
Synergy CHC is in severe financial distress with negative stockholders equity (-$23.1M), indicating technical insolvency. The company is burning cash operationally (-$2.6M OCF) while experiencing declining revenue (-12.8% YoY) and operating losses (-$8.5M). Despite a healthy 66.8% gross margin, the company's capital structure is unsustainable with $25.1M debt against only $10.2M in total assets.
Strengths
- Gross margin of 66.8% demonstrates viable core product economics
- Current ratio of 1.22x provides near-term operational liquidity
- Maintains $2.6M cash reserves despite ongoing losses
Risks
- Negative stockholders equity (-$23.1M) represents technical insolvency
- Operating cash flow negative at -$2.6M indicating unsustainable burn rate
- Revenue declining 12.8% YoY while operating losses expand
- Quick ratio of 0.76x below 1.0 threshold signals liquidity stress
- Long-term debt ($25.1M) exceeds total assets ($10.2M) creating debt crisis
- Zero insider Form 4 filings in 90 days indicates management confidence collapse
Key Metrics to Watch
- Operating cash flow trend - survival depends on stabilization
- Revenue decline rate - acceleration would signal accelerating distress
- Monthly cash burn rate - determines approximate runway to depletion
- Debt maturity schedule - refinancing ability and covenant status
Financial Metrics
Revenue
30.4M
Net Income
-12.3M
EPS (Diluted)
$-1.27
Free Cash Flow
-2.7M
Total Assets
10.2M
Cash
2.6M
Profitability Ratios
Gross Margin
66.8%
Operating Margin
-27.8%
Net Margin
-40.6%
ROE
N/A
ROA
-121.4%
FCF Margin
-8.9%
Balance Sheet & Liquidity
Current Ratio
1.22x
Quick Ratio
0.76x
Debt/Equity
N/A
Debt/Assets
327.5%
Interest Coverage
-4.32x
Long-term Debt
25.1M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-16T07:06:24.259168 |
Data as of: 2025-12-31 |
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