How will the dilution from the additional 45‑day under‑writers option affect the share count and earnings per share?

The under‑written offering will initially add 1,750,000 new shares to the capital‐stock. The 45‑day option gives the underwriters the right to buy up to 262,500 additional shares at the same $2.50 price. If the option is exercised in full, the total new issuances rise to 2,012,500 shares – a ≈15 % increase over the primary offering (262,500 / 1,750,000 ≈ 0.15).

Because the company’s earnings are not expected to change in the short term, the extra shares will dilute earnings per share (EPS) proportionally. For example, if Synergy CHC Corp. reports $10 million of net income and had 20 million shares outstanding before the deal, the pre‑offering EPS would be $0.50. Adding the full option‑‑driven 2.012 M shares would raise the share base to about 22.0 M (20 M + 2.012 M), cutting the EPS to roughly $0.45 – a roughly 10 % dip in earnings per share. Even a partial exercise will produce a measurable downward shift in EPS and a modest widening of the free‑float.

Trading implications – the potential dilution is priced at $2.50 per share, roughly 30 %‑40 % below the recent trading range (≈$3.60‑$4.00). The net effect is a near‑term down‑pressure on the stock as the market anticipates a lower EPS and a larger share supply, which can trigger short‑covering or margin‑call activity. However, because the proceeds are modest ($4.4 M) and the financing price is deeply discounted, a buy‑the‑dip approach may be justified if the company’s growth narrative remains intact and the dilution is fully priced‑in. Risk‑managed positions—e.g., a modest long with a stop just below $2.75 or a short‑cover on a breakout above $4.00—capture the upside from a successful equity‑raise while protecting against the EPS‑drain impact.