The loss of a major Costco distribution deal has pushed Synergy CHC Corp., the maker of the Focus Factor brain supplement, into Chapter 11 bankruptcy, according to court filings.

Unlike prescription drugs, dietary supplements sold to American consumers do not undergo a rigorous premarket approval process. The Food and Drug Administration (FDA) does not approve supplements, and while there are some limits on the claims companies in this space can make, there is a fair amount of latitude.

"The manufacturer must have substantiation that the claim is truthful and not misleading and must submit a notification with the text of the claim to FDA no later than 30 days after marketing the dietary supplement with the claim. If a dietary supplement label includes such a claim, it must state in a 'disclaimer' that FDA has not evaluated the claim," according to the FDA website.

Supplement makers can make certain structure/function claims without FDA preapproval, provided they have substantiation that the claims are truthful and not misleading and that they meet the agency's other requirements.

"The disclaimer must also state that the dietary supplement product is not intended to 'diagnose, treat, cure or prevent any disease,' because only a drug can legally make such a claim," the federal agency shared.

This legal grey area allows supplements to be advertised as helping with fitness, hair growth, sleep, and the ability to focus.

Synergy CHC Corp., the maker of Focus Factor — described on its Amazon sales page as a "Brain Supplement for Memory, Concentration and Focus" — has filed for Chapter 11 bankruptcy. Chapter 11 allows a company to keep operating while it reorganizes its debts under court supervision, rather than liquidating immediately under Chapter 7.

Focus Factor has been a bestseller

Synergy makes bold claims about what Focus Factor can do for consumers.

"Focus Factor Extra Strength brain supplements contain a powerful combination of vitamins, minerals, and neuro-nutrients that not only power your brain but can also replace your daily multivitamin," the company shared.

On Amazon, the company also said the supplement promotes concentration and memory: "Like other parts of your body, your brain needs proper nutrition to perform its best. This advanced formula improves and enhances memory, concentration, and your ability to focus."

Synergy CHC backs that up with a claim that does not directly speak to efficacy: "Focus Factor is the #1 Pharmacist Recommended Brand based on the results of the U.S. Pharmacy Times Survey of Pharmacists' OTC Recommendations for 'Memory Support' dietary supplement, 2025-2026."

Synergy CHC Corp. develops and markets consumer health and wellness products, led by its flagship brands Focus Factor and Flat Tummy.

"Focus Factor, a clinically studied brain health supplement and functional beverage line with a 25-year legacy, enjoys established distribution in the U.S., Canada, and Mexico through major retailers including Walmart, Amazon, BJ's, and Walgreens, among others. Flat Tummy complements Synergy's portfolio as a lifestyle brand focused on women's wellness and weight management," the company shared in a press release.

Focus Factor maker lost its Costco deal

Synergy CHC warned of potential significant financial problems after receiving notice from Costco that the warehouse club would be dropping the company's products.

"On July 15, 2026, Costco Wholesale Corporation informed Synergy CHC Corp. that Costco will discontinue carrying the Company's Focus Factor products. Costco has been a significant customer of the Company for more than 16 years," the company shared in an SEC filing.

Costco did not share a reason for dropping Synergy CHC's brands.

"Costco accounted for approximately 58% of the Company's net revenue during the fiscal year ended December 31, 2025. The Company expects Costco's decision to have a material adverse effect on the Company's business, results of operations, liquidity, and financial condition and is evaluating available financing and other strategic alternatives," the filing continued.

That level of concentration — nearly six of every ten revenue dollars coming from a single retailer — left the company with little buffer when the relationship ended, a risk factor that companies dependent on one large customer routinely disclose to investors.

Costco still sells supplements and functional beverages

Costco continues to sell other supplement brands and recently added Hiyo, a drink line that falls into the functional beverage space.

"Made with organic adaptogens, natural nootropics, and functional botanicals, each can offers what the brand calls a 'mood-enhancing, stress-relieving lift,' or 'the float,'" according to a press release.

The FDA regulates ingredients and requires drink labels to be truthful, and the Federal Trade Commission can step in if companies make false claims.

"Functional beverage makers generally make less specific claims, and the science behind them is sometimes inconclusive. SkinTe, a sparkling tea, says it 'supports skin hydration and elasticity' with 3,000 milligrams of collagen in a 12-ounce can. But last year, Harvard Medical School researchers said there's not yet solid evidence that collagen drinks or supplements enhance skin, hair, or nail growth," according to The Chicago Sun-Times.

Synergy CHC Chapter 11 bankruptcy at a glance

Synergy CHC Corp., publicly traded as SNYR, filed Chapter 11 on Sept. 4, 2026, in the U.S. Bankruptcy Court for the District of Columbia, case 26-00465.

Its petition identifies its DBAs as Synergy Strips Corp. and Focus Factor Nutrition Labs.

• Headquarters: Sebago, Maine
• Assets: $1 million to $10 million
• Liabilities: $10 million to $50 million
• Creditors: 1-49
• Businesses/brands listed on the petition: Synergy Strips Corp., Focus Factor, and Factor Nutrition Labs

Sources: Bankruptcy Observer, Inforuptcy

Synergy Reorg, LLC, which happens to share the Synergy name, also filed for Chapter 11 bankruptcy on Sept. 4. Despite the similar name, the two cases do not appear to be connected.

Nasdaq sends Synergy a warning

Synergy CHC Corp. received a notice from The Nasdaq Stock Market on August 20 indicating that the company is not in compliance with Nasdaq Listing Rule 5250(c)(1) due to the delayed filing of its Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 with the Securities and Exchange Commission (the "SEC").

The Listing Rule requires companies with securities listed on Nasdaq to timely file all required periodic reports with the SEC.

That notice led the agent of the company's lender, ACP Agency, LLC, to send Synergy CHC an Acceleration Notice.

"The Acceleration Notice states that, following the Events of Default previously disclosed by the company in its Current Report on Form 8-K filed on August 11, 2026, ACP, at the direction of the required lenders, has exercised remedies under the Credit Agreement," according to an SEC filing.

The notice means that Synergy CHC's lenders will not extend the company any more credit and want to be repaid in full.

"The Acceleration Notice further states that, as of August 21, 2026, approximately $18.9 million was immediately due and payable under the Credit Agreement and related loan documents, exclusive of additional interest, fees, costs and expenses that continue to accrue," the filing continued.

Synergy CHC continues to operate under its Chapter 11 bankruptcy filing. The company has not shared its plans going forward. What remains to be seen is whether Focus Factor's distribution through other major retailers — Walmart, Amazon, BJ's, and Walgreens among them — can sustain the business through the reorganization.

This story was originally published by TheStreet on Sep 7, 2026, where it first appeared in the Retail section.