Smart for Life Announces Capital Restructuring Designed to Address Nasdaq Listing Requirements and Unlock Shareholder Value

Includes $1.0M Private Placement with Accredited Institutional Investors; and Conversion of $2.5M of Debt to Equity

Restructuring Enhances Balance Sheet and Increases Shareholders’ Equity for Nasdaq Compliance

MIAMI, Dec. 09, 2022 (GLOBE NEWSWIRE) — Smart for Life, Inc. (Nasdaq: SMFL) (“Smart for Life” or the “Company”), a high growth global leader in the Health & Wellness sector marketing and manufacturing nutritional foods and supplements worldwide, today announced a series of agreements designed to enhance the capital structure, increase shareholders’ equity and contribute toward our continued Nasdaq listing requirements. First, the Company has entered into a securities purchase agreement with investors whereby the Company issued the investors an aggregate of 1,282,896 shares of common stock and prefunded warrants to purchase an aggregate of 1,574,248 shares of common stock for an aggregate purchase price of $1,000,000, or $0.35 per share.

The investors were previously issued 12% unsecured subordinated convertible debentures in the aggregate principal amount of $2,250,000, which were convertible into shares of common stock at a conversion price of $1.00 per share. In connection with the private placement, the investors agreed to convert all outstanding principal and interest on the debentures, in the amount of $2,542,500, into an aggregate of 2,542,501 shares of common stock in accordance with the terms of the debentures. In consideration for, and as an inducement for the agreement of the investors to convert the debentures, the Company also issued the investors prefunded warrants to purchase an aggregate of 4,721,787 shares of common stock.

The investors were also previously issued warrants to purchase common stock at $6.25 per share, which contained a full ratchet antidilution adjustment for securities issuances below such price. As a result of the private placement at $0.35, the exercise price of these warrants was reduced to $0.35 and the number of shares underlying the warrants increased in accordance with the full ratchet antidilution adjustment. Following such adjustment, the investors agreed to amend the terms of the warrants, including the removal of the feature of the full ratchet antidilution adjustment that required the issuance of additional shares upon a triggering event such that the exercise price would be reduced upon a triggering event but the number of shares underlying the warrant would not be further increased.

“We believe these latest agreements significantly improve and simplify our capital structure by removing anti-dilutive provisions in our warrants, while providing us additional working capital to execute our growth strategy and increasing our shareholders’ equity, a key requirement to maintain our listing on Nasdaq,” stated Darren Minton, CEO of Smart for Life. “We continue to make progress towards our goal of reaching $100 million in annualized revenue in 2023 and believe these latest steps will help unlock significant long-term value for shareholders through an enhanced capital structure.”

Additional details on the transaction are available in the Company’s Form 8-K, which has been filed with the Securities and Exchange Commission and is available on the Company’s website.

About Smart for Life, Inc.

Smart for Life, Inc. (Nasdaq: SMFL) is engaged in the development, marketing, manufacturing, acquisition, operation and sale of a broad spectrum of nutritional and related products with an emphasis on health and wellness. Structured as a publicly held global holding company, the Company is executing a Buy-and-Build strategy with serial accretive acquisitions creating a vertically integrated company with an objective of aggregating companies generating a minimum of $300 million in revenues within the next thirty-nine months. To drive growth and earnings, Smart for Life is developing proprietary products as well as acquiring other profitable companies, encompassing brands, manufacturing and distribution channels. The Company currently operates five subsidiaries including Doctors Scientific Organica, Nexus Offers, Bonne Santé Natural Manufacturing, GSP Nutrition and Ceautamed Worldwide. For more information about Smart for Life, please visit: www.smartforlifecorp.com.

Video regarding the Company’s manufacturing facility at Bonne Santé Natural Manufacturing is available at: www.bonnesantemanufacturing.com/video.

Investor material and a Fact Sheet with additional information about Smart for Life is available at: www.smartforlifecorp.com/investor-center.

Forward-Looking Statements

This press release may contain information about our views of future expectations, plans and prospects that constitute forward-looking statements. All forward-looking statements are based on management’s beliefs, assumptions and expectations of Smart for Life’s future economic performance, taking into account the information currently available to it. These statements are not statements of historical fact. Although Smart for Life believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Smart for Life does not undertake any duty to update any statements contained herein (including any forward-looking statements), except as required by law. No assurances can be made that Smart for Life will successfully acquire its acquisition targets. Forward-looking statements are subject to a number of factors, risks and uncertainties, some of which are not currently known to us, that may cause Smart for Life’s actual results, performance or financial condition to be materially different from the expectations of future results, performance or financial position. Actual results may differ materially from the expectations discussed in forward-looking statements. Factors that could cause actual results to differ materially from expectations include general industry considerations, regulatory changes, changes in local or national economic conditions and other risks set forth in “Risk Factors” included in our filings with the Securities and Exchange Commission.

Disclaimer

The information provided in this press release is intended for general knowledge only and is not a substitute for professional medical advice or treatment for specific medical conditions. Always seek the advice of your physician or other qualified health care provider with any questions you may have regarding a medical condition. This information is not intended to diagnose, treat, cure or prevent any disease.

Investor Relations Contact

Crescendo Communications, LLC
Tel: (212) 671-1021
SMFL@crescendo-ir.com