SynergenX Legacy Holdings - Chapter 11 Case Summary

Business Description

Headquartered in Houston, TX, SynergenX Legacy Holdings, LLC ("SynergenX Legacy"), together with its affiliated debtors (collectively, "SynergenX," the "Debtors," or the "Company"), operates a multi-state healthcare platform focused on hormone health, weight management, and adult medicine. The Debtors, along with their non-debtor Providers, collectively provide health care services related to hormone replacement (particularly testosterone), weight loss, and related healthcare services.

• The SynergenX portfolio of companies includes HerKare, Low T Center, and SynergenX Health.
• Collectively, these organizations have served more than 500,000 patients and employ more than 850 team members across 10 states, including physicians and licensed healthcare professionals.

Through its operating businesses and SynergenX platform, the Company delivers personalized treatment protocols designed to address hormone imbalances and improve patient outcomes. Core services include testosterone replacement therapy (TRT) and hormone replacement therapy (HRT) for men and women, and weight loss programs, supported by clinical oversight and ongoing monitoring.

• The platform utilizes a hybrid care model that combines physical clinic locations with telemedicine capabilities, enabling scalable delivery of services across multiple states.
• SynergenX has treated a large and growing patient base and emphasizes customized care rather than standardized treatment approaches.

The Company currently operates under three primary clinic brands — SynergenX, Low T Centers, and HerKare — alongside an affiliated 503a pharmacy platform (Village Lane), enabling both in-clinic and at-home treatment modalities.

Financial Performance

The Company's financial information is unaudited and subject to change. The Company reported revenues of $161.59 million in 2024 and $168.10 million in 2025, an increase of 4.0% supported by increased pharmacy script volume, remote visits, and expanded service offerings. Revenue over the LTM period was $172.11 million.

• Gross margins were 25% in 2024, 25% in 2025, and 26.7% over the LTM period.
• Income from operations was $13.69 million in 2024, $8.11 million in 2025, and $9.42 million over the LTM period.
• EBITDA was $28.46 million in 2024, $12.34 million in 2025, and $16.78 million over the LTM period.
  • Reported EBITDA declined significantly year-over-year, driven in part by non-cash items, including warrant valuation adjustments and lease-related expenses.
  • Operating expenses were further impacted by increased compensation, professional fees, software costs, and investments in infrastructure and marketing to support growth initiatives.

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Corporate History

Wayne Wilson, the Company's CEO, founded SynergenX Health Holdings, LLC ("SynergenX Health") in 2016 and has served as CEO since its inception. He is also a board member and an owner of SynergenX Legacy, the majority owner of SynergenX Joint Holdings, LLC ("SynergenX Joint"), which in turn owns SynergenX Health.

• In the last several years, SynergenX completed the acquisition of Low T Centers, Inc. and the HerKare brand, which broadened its clinical footprint and service offerings across both male and female patient populations.

Ownership Structure

Contemporaneously with execution of the prepetition Credit Agreement, on September 6, 2022, SynergenX Legacy and SynergenX Joint entered into a Contribution Agreement, under which SynergenX Legacy contributed one hundred percent (100%) of its membership interests in SynergenX Health to SynergenX Joint as a capital contribution.

• This created the ownership structure existing today, where SynergenX Legacy owns all of the common membership interests in SynergenX Joint, and SynergenX Joint owns all of the membership interests in SynergenX Health.
• The PLLC entities are not part of the SynergenX corporate structure. They are owned separately by physicians and provide services to SynergenX through arms-length management agreements.

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Operations Overview

SynergenX provides a comprehensive suite of services centered around hormone optimization, wellness, and preventative care. Core offerings include:

• Testosterone replacement therapy (injectable and pellet-based)
• Female hormone therapy
• Weight loss programs (including GLP-1 and related therapies)
• Telemedicine and remote patient management
• Laboratory testing and diagnostics
• Supplements and ancillary wellness services

The Company delivers recurring treatment programs with defined frequencies — such as weekly injections, monthly weight management programs, and quarterly telehealth follow-ups, all customized for individual patients — supporting predictable patient engagement and revenue streams. Revenue is primarily driven by clinical visits, supplemented by pharmacy revenue, weight loss services, laboratory services, and ancillary offerings.

Clinic Network

SynergenX operates a geographically diversified network of clinics across the United States, comprising 21 SynergenX clinics, 38 Low T Centers, and 5 HerKare clinics.

• The Company has a presence in 10 states, with key markets including Texas, Colorado, Illinois, Tennessee, Indiana, and North Carolina.

Management Services Organization Model

SynergenX Health together with Low T Center and affiliated professional practice entities operate a Management Services Organization model. The parties have structured the combined enterprise in a way that allows the professional entities to focus on patient care while outsourcing, through an arms-length management agreement, the balance of all other attendant services required by the professional entities, including billing and collection, human resources, accounting, marketing, and IT.

• Two of the Debtors, SynergenX Health and Low-T Centers, Inc. (the "Managers"), provide management services to SynergenX Physician Services, PLLC and its affiliated professional limited liability companies (the "Providers") pursuant to an Amended and Restated Full Service Facility and Management Agreement (the "Management Agreement").
  • The Managers provide the Providers with management services consisting of marketing, capital, equipment, supplies, support services, personnel (excluding licensed medical personnel), billing and collection services, management, administration, financial record keeping and reporting, and other business office services.
  • The Providers in turn provide professional medical services in primary care and hormone replacement therapy centers and related health care services.
• Under the Management Agreement, the Providers pay the Managers a monthly per-location fee consisting of (i) 10% of collected revenue for billing and revenue cycle management; (ii) $50,000 for management services; and (iii) $32,000 for use of licensed intellectual property and facility leases.
• Revenue is received by the Providers, who in turn pay the salaries of the medical professionals and certain other expenses and then pay a management fee to the Debtors for the management services provided under the Management Agreement, out of which the Debtors pay their remaining expenses.

The professional entities provide care for which their patients pay either in cash or through reimbursement from insurance providers such as Cigna, United Healthcare, and Blue Cross. Some of these carriers have stopped payments pending the outcome of claim audits, which has restricted cash flow.

Workforce

• Prior to the Petition Date, SynergenX employed approximately 400 individuals in its field operations and 143 individuals in corporate roles (collectively, the "Pre-Petition Employees"), plus 32 individuals as independent contractors (the "Pre-Petition Independent Contractors").
• In addition, SynergenX maintains and offers various employee benefit plans, policies, and programs for health care.

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Prepetition Obligations

On a book basis, as of May 31, 2026, the Company's total current assets are $21.349 million, net fixed assets are $14.776 million, other assets are $82.350 million, and total assets are $118.476 million, down from $134.85 million in 2023. The value of the equity of SynergenX was recently determined to be $108.30 million.

Total current liabilities are $43.886 million, and long-term debt is $70.108 million, as of May 31, 2026. Total liabilities over the past several years have ranged from $137.61 million in 2023 to $146.00 million in 2024, and stand at $146.028 million as of May 31, 2026. The Company's prepetition capital structure is summarized below.

Senior Debt

• The Senior Lenders are owed approximately $67.579 million.
  • The Senior Debt is secured by substantially all of the assets of the Debtors, but is not secured by the physician entities.
  • The Senior Debt is accruing interest at the default rate of 17.60% (stated as 17.25% elsewhere in the declaration).

Junior Debt

• The Junior Lender is owed approximately $14.726 million.
  • The Junior Debt is secured by a junior lien on substantially all of the assets of the Debtors, but is not secured by the physician entities.
  • The Junior Debt is subject to a Subordination and Intercreditor Agreement with the Senior Lenders.

Unsecured Obligations

• The Debtors have trade payables of close to $1 million and accrued liabilities of $20.191 million.
• The Debtors' other unsecured obligations consist of, among other things:
  • Lease liability of $32.595 million;
  • Potential amounts owed to Cigna and the State of Delaware depending on the outcome of audits;
  • A lease/license liability on the closed 503b pharmacy in the disputed amount of approximately $10 million; and
  • Unpaid tax distributions to owners of SynergenX Legacy in the amount of approximately $10 million.

Warrants Payable

• The Debtors have a book liability for warrants payable in the amount of $10.557 million. The warrants were recently valued at $9.98 million.

Pre-Petition Wage Claims

• As of the Petition Date, certain Pre-Petition Employees and Pre-Petition Independent Contractors were owed wages by SynergenX Health totaling $748,300.01 in gross (the "Pre-Petition Wage Claims").
  • All of the Pre-Petition Wage Claims were incurred within 180 days of the Petition Date, and all employees' claims are less than the $17,150 priority cap set by 11 U.S.C. § 507(a)(4)(A).

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Events Leading to Bankruptcy

Overview of Senior Lender Control

According to the Company, this is not a typical lending relationship. Chatham Capital Management, LLC ("Chatham") and JP Morgan Asset Management ("JPAM"), through various entities, are not only the senior lenders to the Debtors, but also own roughly 16% of SynergenX Legacy (through a separately established, jointly-owned holding company), hold warrants to SynergenX Joint, hold a board seat, and hold board observation rights.

• Through these intertwined positions, the Senior Lenders have held SynergenX in a perpetual 18-month state of default — based on covenant defaults alleged to have occurred on December 31, 2024 — with their debt accruing and being paid at a default rate of 17.25%, while blocking payments to the Junior Lender and tax distributions to the owners of SynergenX Legacy.
• The Company asserts that the Senior Lenders put SynergenX in a position where its only options were a refinance or a sale, and then opposed those efforts as well.

The Prepetition Credit Agreement

On September 6, 2022, SynergenX Joint and SynergenX Health entered into a Credit Agreement with Chatham Investment Fund V, L.P. ("Chatham Fund V"), Chatham Investment Fund V-A, L.P. ("Chatham Fund V-A"), and Credit Suisse Loan Funding, LLC, obtaining a total term loan commitment of $66.5 million and a total revolving commitment of $5 million (the "Senior Debt") for SynergenX Health and named affiliated subsidiaries. The Credit Agreement irrevocably appointed Chatham as administrative agent for each of the lenders, vesting Chatham with complete authority to act for the lenders.

• The related loan documents of even date included: (i) a Guaranty and Collateral Agreement in favor of Chatham granting collateral security interests in substantially all of the assets of SynergenX Health and its subsidiaries with limited exclusions; (ii) a Subordination and Intercreditor Agreement in favor of Chatham as administrative agent; (iii) a Warrant for the purchase of 7,300 common units of SynergenX Joint in favor of Chatham as agent for Chatham Fund V and Chatham Fund V-A; (iv) a Warrant for the purchase of 2,300 common units of SynergenX Joint in favor of Chatham; and (v) a Warrantholder Rights Agreement.
• At the time of these agreements, SynergenX Legacy held all outstanding common shares in SynergenX Joint (90,400 of 100,000 authorized), with all outstanding warrants (9,600) held or controlled by Chatham.

Assignment of Lender Positions

• On September 29, 2022, pursuant to an Assignment and Assumption agreement, Credit Suisse Loan Funding, LLC assigned its lender position to Lynstone SSF Holdings II S.a.r.l. ("Lynstone"), a private foreign limited liability investment fund controlled by JPAM. In conjunction therewith, Lynstone acquired by transfer from Chatham a Warrant for the purchase of 5,104.500 common units of SynergenX Joint.
• In or about December 2024, Lynstone transferred its Warrant to Sandstone SSF II (Del) LLC, another investment fund believed to be controlled by JPAM.
• The Senior Debt is currently held by Chatham, Chatham Fund V, Chatham Fund V-A, and Lynstone (the "Senior Lenders").

Amendments, Covenant Defaults, and the Perpetual Default Rate

• On January 3, 2024, the parties entered into Amendment No. 1 and Limited Waiver and Consent to Credit Agreement ("Amendment No. 1"), acknowledging the existence of certain non-payment defaults and effectuating a waiver upon terms including (i) joinder by other entities as additional guarantors to the Guaranty and Collateral Agreements, and (ii) an amendment fee of $353,708.39 allocable to the lenders.
• On July 14, 2025, David Hollander, an executive of JPAM, was appointed to the Board of each of SynergenX Legacy, SynergenX Joint, and SynergenX Health.
• Also on July 14, 2025, Chatham Health Management, LLC, an affiliate of the Chatham defendants, acquired all of the membership interests of Medpro Consulting, LLC in SynergenX Legacy — 150 of the total 900 issued and outstanding membership units, constituting approximately 16.67% of the membership of SynergenX Legacy.
• Eight days later, on July 22, 2025, Chatham issued a Notice of Default and Reservation of Rights to SynergenX Health, alleging certain covenant (not payment) defaults related to: (i) the delivery of financial reporting; (ii) the delivery of financial projections; (iii) failure of notice of meetings of the board of directors; (iv) payment of subordinated debt; (v) failure to maintain a certain EBITDA; (vi) failure to maintain a certain Fixed Charge Coverage Ratio; (vii) failure to maintain a certain Total Debt to EBITDA Ratio; and (viii) excessive capital expenditures on technology.
  • Therein, Chatham sought production of certain documents, made a demand directive with respect to payment of subordinated debt, and sought to increase the applicable cash interest rate on each loan by 3.00% to the present default rate of 17.25%, effective December 31, 2024, the date of the first alleged default.
  • The Company notes that the Senior Lenders declared an event of default but never accelerated the debt, agreed to a forbearance, or amended the Credit Agreement, but rather held the Debtors in a perpetual state of default while blocking payments to other creditors and collecting interest at the 17.25% default rate.

Campaign to Acquire Equity and Control

According to the Company, following execution of the Credit Agreement, the Senior Lenders engaged in a cooperative, concerted effort to exert excessive control over the SynergenX business, using their positioning as senior lenders and warrantholders as leverage, with the alleged end goal of obtaining greater equity at a reduced valuation and ultimately gaining primary control of the business. The Company describes the following conduct:

• Efforts to buy ownership: Hollander sought out the CEO in an effort to encourage the owners to sell all or some subset of their units to the Senior Lenders, with the verbal promise that the Senior Lenders would "take care of" the CEO on the back end.
• At a board meeting in May 2025, the Senior Lenders waited until Ken Sly — owner of Medpro Consulting, LLC ("Medpro") and a 1/6th owner of SynergenX Legacy — left the room to present a proposed refinancing term sheet, because the term sheet might have impacted their planned purchase of Medpro's interest.
• On June 3, 2025, the Senior Lenders notified SynergenX that they would not discuss covenant relief or a revolving credit line until the Board approved the sale of equity to the Chatham parties. On June 9, 2025, the Board, acting under this threat, approved the sale of Medpro's equity stake.
• On June 11, 2025, the Senior Lenders required the CEO to fly to Atlanta, where they ordered SynergenX to stop making payments on the 503b pharmacy space, stop making payments on the junior secured debt (the "Junior Debt") to Michael Sisk (including his wife and affiliates, collectively the "Junior Lender"), and to hire Keen Summit, a contact from Jeff Hagar at Chatham.
• In July 2025, the Senior Lenders made verbal commitments that they would resolve covenant breaches in order to coerce the Board into approving the sale of Medpro's ownership interest to a Chatham-affiliated entity, seeking to condition a new credit agreement on the issuance of additional equity to the lenders and other onerous terms. The Senior Lenders did not follow through on this arrangement.
• With Board approval secured, on July 14, 2025, Chatham Health acquired Medpro's membership interests (1/6th of SynergenX Legacy) and, with it, a seat on SynergenX's board. In August 2025, the Senior Lenders sent a reservation of rights letter notifying SynergenX of the same covenant defaults they had indicated would be resolved if the equity sale was approved.
• Dictating new business ventures: In October 2024, before obtaining board approval, Chatham had the CEO fly to Vietnam to meet with contacts identified as potential buyers of GLP-1 products, instigating the creation of the 503b pharmacy business. At the urging of the Senior Lenders, the Company formed a 503b pharmacy business that ultimately closed for a loss to SynergenX of between $8 and $18 million.
• Blocking refinancing efforts: The Senior Lenders refused to allow SynergenX to use an audit or a quality of earnings report (which SynergenX paid for but which was commissioned by Chatham) in its refinancing efforts, and otherwise hindered the process such that no offers to refinance were received. The Chatham parties threatened to use the put option under the Warrants to prevent any refinance or sale.
• Blocking tax distributions: The Senior Lenders used their right to block distributions to equity as leverage in offers to purchase equity, and actively lobbied to block distributions even when there was sufficient cash. On September 3, 2025, Hollander advised the CEO that he would do away with all tax distributions to owners and instead buy their equity so they could cover their taxes.
• Dictating management decisions: The Senior Lenders actively participated in board meetings and drove management decisions, such as increased spending on marketing, pharmacy, and the self-inject business. In November 2024, at Chatham's recommendation, SynergenX retained Korn Ferry to conduct a CFO search, which was conducted in tandem with the Chatham parties — with Chatham executive Brian Reynolds often taking part in the interview process — culminating in the hiring of David Fletcher at Chatham's insistence.
• Blocking efforts to sell the Company: The Senior Lenders and/or their affiliates leveraged their rights under the Warrants and the Warrantholders Rights Agreement to delay and attempt to block a sale of SynergenX by falsely claiming the correct valuation was multiples larger than the purchase offer. Chatham also threatened to block the sale using its equity position in SynergenX Legacy and its claim to an alleged tax distribution, and filed an arbitration demand against SynergenX Legacy on April 29, 2026, seeking $10 million in damages even though the tax distribution amount was only approximately $1 million.
• Interference with payments to other creditors: The Senior Lenders required payments to be stopped on the 503b license/lease and the Junior Debt, creating liability issues and further hindering refinance or sale.
• Misuse of board seat: At a board meeting on August 21, 2025, Hollander voted against approving the company budget after initially abstaining, calling Jeff Hagar at Chatham before voting no for the stated purpose of preserving the Senior Lenders' rights. Hollander also announced he was abstaining from voting for the sale to Future Standard ("FS") even though it would pay the Senior Debt in full and distribute tens of millions to equity holders, including approximately $10 million to the Chatham parties as warrant holders.
• Efforts to buy junior secured debt: On April 28, 2026, JPAM made an offer to buy the Junior Debt — just weeks before the expected closing of the sale to FS — seeking an exclusivity period through May 10, 2026. The Company characterizes the offer as a blatant attempt to interfere with the FS sale, which involved negotiations with the Junior Lender. Not long after, the sale to FS failed to close.

Failed Refinancing and Failed Sale

Unable to extricate itself from a perpetual default and 17.25% interest rate, or to make payments on its Junior Debt or tax distributions to its owners, SynergenX, with the assistance of Texas Capital Bank as its financial advisor, conducted a broad-based capital markets outreach to a range of private credit providers during 2025.

• The process generated limited actionable interest on the credit side but did result in interest from two parties to acquire SynergenX. Ultimately, two letters of intent were received with similar valuation ranges, and FS was selected based on execution considerations.
• After many months of due diligence, the sale did not close. One of the reasons for the failed transaction was the inability of SynergenX to obtain audits for 2024 and 2025, which is directly attributable to the lack of an amended Credit Agreement to cure the defaults and put SynergenX in a non-default position.

Chapter 11 Filing

On July 2, 2026 (the "Petition Date"), the Debtors filed for protection under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division. Under the direction of the CEO, the Debtors intend to operate their businesses and manage their assets as debtors-in-possession, and seek approval to use the cash collateral of the Senior Lenders and Junior Lender to fund their ongoing business operations and preserve going-concern value.