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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):
August 23, 2023
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 S Rogers Circle, Suite 3, Boca Raton, FL |
|
33487 |
(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 |
|
The Nasdaq Stock Market LLC |
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
2.02 Results of Operations and Financial Condition.
On August 23, 2023, Smart for Life, Inc.
(the “Company”) issued a press release regarding its financial results for the quarter ended June 30, 2023. A copy of the
press release is furnished as Exhibit 99.1 to this report.
The information furnished with this Item 2.02,
including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934,
as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing
under Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, except as expressly set forth by specific
reference in such a filing.
The Company is making reference to non-GAAP financial
information in the press release. A reconciliation of GAAP to non-GAAP results is provided in the press release.
Item
9.01 Financial Statements and Exhibits.
(d) Exhibits
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: August 23, 2023 |
SMART FOR LIFE, INC. |
|
|
|
/s/ Darren C. Minton |
|
Name: Darren C. Minton |
|
Title: Chief Executive Officer |
Exhibit 99.1
Smart for Life Announces Q2 2023 Financial Results
and Provides Business Update
Balance Sheet Transformation Includes Conversion
of Over $5.8 Million Debt to Equity
Stockholders’ Equity Improves from
Deficit of $2.4 Million to Equity of $4.6 Million
Loss for the Six-Month Period Decreases from
$20.0 Million to $8.5 Millon
Miami, FL – August 23, 2023 – 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 provided a business
update and reported financial results for the three months ended June 30, 2023.
“We continue to advance our operations and
have made significant progress growing our brands. During the quarter, we launched a new line of Sports Illustrated protein bars. We made
these bars to address a growing demand for clean and nutritional products. The bars are non-GMO, cold-pressed, with no sucralose and no
preservatives, and include options that are gluten-free. We look forward to launching them in select markets this quarter. Recently, we
entered into a distribution agreement with Boxout, a national distributor of medical, rehabilitation, and health & wellness products,
for nationwide distribution of our proprietary Sports Illustrated Nutrition products through Boxout’s distribution channels to sports
and fitness chains across North America. We look forward to working with Boxout and leveraging their broad distribution network.”
“We also executed a comprehensive Canadian
distribution agreement with Two Hands Corporation for our nutritional food products. We expect this agreement to significantly expand
our geographic reach by adding additional distribution partners and retail channels in Canada. Expansion of our sales in both domestic
and international markets is a key component of our growth strategy as part of our stated goal of reaching $100 million in revenue. Although
our revenues decreased in Q2 2023, due to cash constraints and fulfillment delays, we are confident that as we execute on the growing
sales pipeline and purchase orders, our sales should rapidly increase. Notably, during the quarter, we enhanced our balance sheet, by
converting over $5.8 million of debt to equity. We also converted $1.2 million of deferred executive and board compensation to equity
as well.”
“We continue to execute on our “Buy
and Build” strategy by acquiring cash flow positive companies at attractive multiples. Towards that end, we expect to close the
eCommerce nutraceuticals company acquisition in the next several weeks. The target is currently generating estimated revenue in excess
of $10 million, with over $2 million of EBITDA for the trailing twelve months. Overall, we believe we are well positioned to achieve strong
revenue growth and drive significant value for our shareholders.”
Financial Results
Revenue was $2.3 million for the three months
ended June 30, 2023, compared to $4.3 million for the three months ended June 30, 2022. The decrease in revenue was primarily due to a
delay in financing, which led to a temporary delay in production. Gross profit was approximately $742 thousand for the three months ended
June 30, 2023, compared to $1.8 million for the same period last year. Net loss attributable to common shareholders was $4.2 million for
the three months ended June 30, 2023, as compared to $3.5 million for the three months ended June 30, 2022.
Revenue was $4.7 million for the six months ended
June 30, 2023 compared to $8.7 million for the six months ended June 30, 2022. Gross profit was $1.6 million for the six months ended
June 30, 2023 compared to $3.3 million for same period last year. Net loss attributable to common shareholders was $8.5 million for the
six months ended June 30, 2023 compared to $20.2 million for same period last year.
EBITDA and Adjusted EBITDA
The Company reported Adjusted EBITDA loss of $2.6
million in Q2 2023, as compared to Adjusted EBITDA loss of $1.9 million in Q2 2022. For the six months ended June 30, 2023, the Company
reported Adjusted EBITDA loss of $4.5 million versus an Adjusted EBITDA loss of $4.5 million for the same period last year. The Company
defines EBITDA as earnings before interest, taxes and depreciation and amortization. The Company defines Adjusted EBITDA as earnings before
related party consulting fees, stock-based compensation, stock issued for services, bad debt expense, IPO related expenses, impairment
of intangible assets, and gain on debt extinguishment. Both EBITDA and Adjusted EBITDA are not measures of performance calculated in accordance
with Generally Accepted Accounting Principles in the United States of America (“GAAP”), and should not be considered in isolation
of, or as a substitute for, earnings as an indicator of operating performance or cash flows from operating activities as a measure of
liquidity. The Company believes the presentation of EBITDA and Adjusted EBITDA is relevant and useful by enhancing the readers’
ability to understand the Company’s operating performance. The Company’s management utilizes EBITDA and Adjusted EBITDA as
means to measure performance. The Company’s measurements of EBITDA and Adjusted EBITDA may not be comparable to similar titled measures
reported by other companies. The table below reconciles EBITDA and Adjusted EBITDA, both non-GAAP measures, to GAAP numbers for net loss
for net loss for the three and six months ended June 30, 2023 and 2022.
| |
3 Months ended June 20, | | |
6 Months ended June 20, | |
| |
2023 | | |
2022 | | |
2023 | | |
2022 | |
| |
| | |
| | |
| | |
| |
Net loss | |
| (4,219,996 | ) | |
| (3,385,195 | ) | |
| (8,504,311 | ) | |
| (19,959,762 | ) |
Interest expense | |
| 707,714 | | |
| 984,427 | | |
| 2,252,576 | | |
| 13,741,907 | |
Taxes | |
| - | | |
| - | | |
| - | | |
| - | |
Depreciation and amortization | |
| 507,593 | | |
| 430,092 | | |
| 1,198,803 | | |
| 853,102 | |
EBITDA | |
| (3,004,689 | ) | |
| (1,970,676 | ) | |
| (5,052,932 | ) | |
| (5,364,753 | ) |
Related party consulting fees | |
| - | | |
| - | | |
| 27,547 | | |
| - | |
Stock based compensation | |
| 27,735 | | |
| - | | |
| 80,208 | | |
| - | |
Change in fair value of derivative liability | |
| - | | |
| 38,997 | | |
| - | | |
| 38,997 | |
Stock issued for services | |
| 99,200 | | |
| - | | |
| 99,200 | | |
| - | |
IPO related expenses | |
| - | | |
| - | | |
| - | | |
| 702,581 | |
Bad debt expense | |
| 28,040 | | |
| - | | |
| 107,532 | | |
| | |
Gain on debt extinguishment | |
| (257,037 | ) | |
| - | | |
| (257,037 | ) | |
| 134,956 | |
Impairment of intangible asset | |
| 466,737 | | |
| | | |
| 466,737 | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
ADJUSTED EBITDA | |
| (2,640,014 | ) | |
| (1,931,679 | ) | |
| (4,528,745 | ) | |
| (4,488,219 | ) |
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 by the fourth quarter of 2026. 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/Sports
Illustrated Nutrition and Ceautamed Worldwide/Greens First. 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. 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.
Investor Relations Contact
Crescendo Communications, LLC
Tel: (212) 671-1021
SMFL@crescendo-ir.com
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Smart for Life (NASDAQ:SMFL)
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Smart for Life (NASDAQ:SMFL)
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から 6 2023 まで 6 2024