SMFL Smart for Life Inc (CE)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): October 4, 2024 (September 30, 2024)

 

SMART FOR LIFE, INC.

(Exact name of registrant as specified in its charter)

 

Nevada		001-41290		81-5360128
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

990 Biscayne Boulevard, Suite 505, Miami, FL		33132
(Address of principal executive offices)		(Zip Code)

 

(786) 749-1221

(Registrant’s telephone number, including area code)

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		SMFL		N/A(1)

 

(1)

On September 17, 2024, the Nasdaq Stock Market LLC (“Nasdaq”) notified the Company that a hearings panel had determined to delist the Company’s common stock from The Nasdaq Capital Market. Trading of the Company’s common stock on Nasdaq was suspended at the open of trading on September 19, 2024. Nasdaq will file a Form 25 with the U.S. Securities and Exchange Commission to delist the common stock from Nasdaq. The deregistration of the common stock under Section 12(b) of the Act will be effective 90 days, or such shorter period as the U.S. Securities and Exchange Commission may determine, after filing of the Form 25. The common stock is currently quoted on the OTC Pink Market maintained by the OTC Markets Group, Inc. under the symbol “SMFL.”

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.

 

Emerging Growth Company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

Signing of Securities Purchase Agreement

 

On September 30, 2024, Smart for Life, Inc. (the “Company”) entered into a securities purchase agreement (the “Purchase Agreement”) with Hyperion, L.L.C. (“Hyperion”) and Online Publishing & Marketing, LLC (“OPM”), and their respective owners (together, the “Sellers”), pursuant to which the Company agreed to acquire all of the issued and outstanding limited liability membership interests of Hyperion and OPM from the Sellers for an aggregate purchase price of $2,500,000. At Closing (as defined below), Hyperion and OPM must be debt-free and the Company also has committed to fund the immediate working capital requirements of Hyperion.

 

The Purchase Agreement contains customary representations, warranties and covenants, including a covenant that the Sellers will not compete with the business of Hyperion and OPM for a period of five (5) years following the Closing. The Purchase Agreement also contains mutual indemnification for breaches of representations or warranties and failure to perform covenants or obligations contained in the Purchase Agreement.

 

The closing of the transactions contemplated by the Purchase Agreement (the “Closing”) is subject to customary closing conditions, including, without limitation, the completion of accounting and legal due diligence investigations; a financing contingency; and the receipt of all authorizations, consents and approvals of all governmental authorities and third parties; the release of any liens against any of the assets of Hyperion and OPM; and delivery of all documents required for the transfer of the equity interests of Hyperion and OPM to the Company.

 

Exercise of Purchase Option

 

As previously disclosed, on January 29, 2024, the Company entered into an asset purchase agreement with First Health FL LLC (the “Buyer”) and the Company’s wholly owned subsidiary Ceautamed Worldwide, LLC (“Ceautamed”), along with its wholly owned subsidiaries, Wellness Watchers Global, LLC (“Wellness Watchers”) and Greens First Female LLC (together with Ceautamed and Wellness Watchers, the “Subsidiaries”), pursuant to which the Company agreed to sell all assets of the Subsidiaries to the Buyer, which upon consummation of the transaction was 51% owned by certain affiliates of the Buyer and 49% owned by the Company, subject to a purchase option which may be exercised by such affiliates of the Buyer (the “Option”). On October 1, 2024, such affiliates of the Buyer elected to exercise the Option, effective as of October 2, 2024, paid to the Company the Option price of $1.00, and the Company delivered the remaining 49% interest in the Buyer to such affiliates (the “Disposition”).

 

Item 2.01 Completion of Acquisition or Disposition of Assets.

 

The information set forth under Item 1.01 regarding the exercise of the Option is incorporated by reference into this Item 2.01.

 

Item 9.01 Financial Statements and Exhibits.

 

(b) Pro forma financial information

 

The unaudited pro forma combined financial information giving effect to the Disposition is filed as Exhibit 99.2 attached hereto and is incorporated herein by reference.

 

(d) Exhibits

 

Exhibit No.		Description of Exhibit
10.1		Limited Liability Company Agreement, dated as of January 29, 2024, among Smart for Life, Inc., Joseph X. Xiras, Stuart Benson and Ryan Benson (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on February 2, 2024)
99.1		Smart for Life, Inc. Unaudited Pro Forma Condensed Consolidated Financial Information
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: October 4, 2024	SMART FOR LIFE, INC.
	/s/ Darren C. Minton
	Name:	Darren C. Minton
	Title:	Chief Executive Officer

 

 

 

2

 

Exhibit 99.1

 

SMART FOR LIFE, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

The following unaudited pro forma condensed consolidated financial statements are based on the Company’s historical consolidated results of operations and financial position, adjusted to give effect to the Disposition, as defined in Item 2.01 of this Form 8-K, as if it had been completed on December 31, 2023 with respect to the unaudited pro forma condensed consolidated balance sheet and on January 1, 2023 with respect to the unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2023.

 

These unaudited pro forma condensed consolidated financial statements have been prepared in accordance with Article 11 of Regulation S-X and do not include all of the information and note disclosures required by generally accepted accounting principles of the United States.

 

The unaudited pro forma condensed consolidated financial information is subject to the assumptions and adjustments described in the accompanying notes. These assumptions and adjustments are based on information presently available. Actual adjustments may differ materially from the information presented. The unaudited pro forma condensed consolidated financial statements are based on the historical financial statements of the Company for each period presented and in the opinion of the Company’s management, all adjustments and disclosures necessary for a fair presentation of the pro forma data have been made. These unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of the results of operations or financial condition that would have been achieved had events reflected been completed as of the dates indicated, and may not be useful in predicting the impact of the Disposition on the future financial condition and results of operations of the Company due to a variety of factors.

 

 

SMART FOR LIFE, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET

DECEMBER 31, 2023

 

		Historical				Pro Forma Adjustments								Pro Forma
ASSETS
Current assets:
Cash		$	188,596			$	(29,871	)			<A>			$	158,725
Accounts receivable, net			70,231				(18,687	)			<A>				51,544
Inventory			1,242,777				(89,997	)			<A>				1,152,780
Related party receivable, net			332,142				-								332,142
Prepaid expenses and other current assets			148,993				(6,500	)			<A>				142,493
Discontinued operations current assets			348,971				-								348,971
Total current assets			2,331,710				(145,055	)							2,186,655
Property and equipment, net			100,539				(4,188	)			<A>				96,351
Intangible assets, net			11,046,767				(3,911,019	)			<A>				7,135,748
Goodwill			3,045,000				-				<A>				3,045,000
Deposits and other assets			57,324				-								57,324
Right of use asset			2,015,299				(702,818	)			<A>				1,312,481
Discontinued operation noncurrent assets			1,062,588				-								1,062,588
Total assets		$	19,659,227			$	(4,763,080	)						$	14,896,147
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable		$	3,612,578			$	(528,126	)			<B>			$	3,084,452
Accrued expenses			3,718,070				(109,623	)			<B>				3,608,447
Accrued expenses, related parties			264,141				-								264,141
Contract liabilities			464,721				(99,408	)			<A>				365,313
Preferred stock dividend payable			450,562				-								450,562
Lease liability, current			298,644				(72,431	)			<A>				226,213
Debt, current, net of debt discounts			10,616,114				(51,767				<A>				10,564,347
Discontinued operations current liabilities			2,631,078				-								2,631,078
Total current liabilities			22,055,908				(861,355	)							21,194,553
Long-term liabilities:
Lease liability, noncurrent			1,800,158				(647,258	)			<A>				1,152,900
Debt, noncurrent			1,748,686				-								1,748,686
Discontinued operation noncurrent liabilities			441,929				-								441,929
Total liabilities			26,046,681				(1,508,613	)							24,538,068
Commitments and contingencies
Stockholders’ equity
Series B Preferred Stock			3				-								3
Common Stock			37				-								37
Additional paid in capital			61,280,662				-								61,280,662
Accumulated deficit			(67,668,156	)			(3,254,467	)			<C>				(70,922,623	)
Total stockholders’ equity			(6,387,454	)			(3,254,467	)							(9,641,921	)
Total liabilities and stockholders’ equity		$	19,659,227			$	(4,763,080	)						$	14,896,147

 

 

SMART FOR LIFE, INC.

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

YEAR ENDED DECEMBER 31, 2023

 

		Historical				Pro Forma Adjustments								Pro Forma
Revenues
Products		$	7,863,977			$	(3,275,011	)			<D>			$	4,588,966
Advertising			361,815				-								361,815
Total revenues			8,225,792				(3,275,011	)							4,950,781
Costs of revenues
Products			4,854,554				(1,877,019	)			<D>				2,977,535
Advertising			281,131				-								281,131
Total cost of revenues			5,135,685				(1,877,019	)							3,258,666
Gross profit			3,090,107				(1,397,992	)							1,692,115
Operating expenses:
General and administrative			4,258,202				(440,199	)			<D>				3,818,003
Compensation			5,561,017				(519,010	)			<D>				5,042,007
Professional services			2,263,405				3,500				<D>				2,266,905
Consulting fee - related party			46,686				-								46,686
Impairment of intangible assets			5,843,501				(2,603,233	)			<D>				3,240,268
Depreciation and amortization expense			2,273,288				(1,425,606	)			<D>				847,682
Total operating expenses			20,246,099				(4,984,548	)							15,261,551
Loss from continuing operations			(17,155,992	)			3,586,556								(13,569,436	)
Other income (expense)
Gain on disposal of subsidiary							726,225				<C>				726,225
Other income (expense)			400,397				(8,826	)			<D>				391,571
Gain on debt extinguishment			269,828				(67,332	)			<D>				202,496
Interest expense			(4,634,839	)			349,871				<D>				(4,284,968	)
Total expense			(3,964,614	)			999,938								(2,964,676	)
Net loss from continuing operations			(21,120,606	)			-								(21,120,606	)
Net loss from discontinued operations			(1,555,135	)			(3,586,556	)			<E>				(5,141,691	)
Net loss		$	(22,675,741	)		$	(3,586,556	)						$	(26,262,297	)
Weighted average shares outstanding			136,346												136,346
Loss per share continuing operations		$	(154.90	)										$	(154.90	)
Loss per share discontinued operations		$	(11.41	)										$	(37.71	)
Net loss per share		$	(166.31	)										$	(192.62	)

 

Notes:

 

<A>	Adjustment to eliminate the assets and liabilities attributable to the divested assets.

 

<B>	Adjustment reflects the elimination of debts forgiven and paid as consideration in the Disposition.

 

<C>	Amount represents the loss on sale of the divested assets resulting from the Disposition.

 

<D>	Adjustment to eliminate the historical revenue and expenses (operating and other) of the divested assets.

 

<E>	Adjustment represents the reclassification of the eliminated historical revenues and expenses into a single component for disclosure purposes.

 

 

3

 

v3.24.3

Cover	Sep. 30, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Sep. 30, 2024
Entity File Number	001-41290
Entity Registrant Name	SMART FOR LIFE, INC.
Entity Central Index Key	0001851860
Entity Tax Identification Number	81-5360128
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	990 Biscayne Boulevard
Entity Address, Address Line Two	Suite 505
Entity Address, City or Town	Miami
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33132
City Area Code	786
Local Phone Number	749-1221
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	SMFL
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

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