UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date
of Report (Date of earliest event reported): December 6, 2023 (
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Item 1.01 Entry into a Material Definitive Agreement.
As previously reported, on May 5, 2023, Smart for Life, Inc. (the “Company”) issued a warrant for the purchase of 31,178 shares of common stock at an exercise price of $27.72 per share to an accredited investor (the “May 5 Warrant”). On May 19, 2023, the Company issued an additional warrant for the purchase of 64,988 shares of common stock at an exercise price of $23.31 per share to the same accredited investor (the “May 19 Warrant”). In addition, on May 31, 2023, the Company issued warrants for the purchase of an aggregate of 780,835 shares of common stock at an exercise price of $19.53 per share to certain accredited investors (the “May 31 Warrants,” and together with the May 5 Warrant and the May 19 Warrant, the “Existing Warrants”).
On November 30, 2023, the Company entered into warrant solicitation inducement letters (the “Inducement Letters”) with the foregoing holders of the Existing Warrants (collectively, the “Exercising Holders”), pursuant to which the Exercising Holders agreed to exercise the Existing Warrants for cash at a reduced exercise price of $1.77 per share, or for gross proceeds of $1,552,291.77 in the aggregate. In consideration for the immediate exercise of the Existing Warrants for cash, the Company agreed to issue to the Exercising Holders new warrants for the purchase of an aggregate of 1,754,002 shares of common stock (the “New Warrants”). The closing of this transaction was completed on December 4, 2023.
The New Warrants are exercisable for a period of 5.5 years at an initial exercise price of $1.52 per share and may be exercised on a cashless basis if at the time of exercise there is no effective registration statement registering, or the prospectus contained therein is not available for the resale of, the shares issuable upon exercise of the New Warrants. The exercise price is subject to customary adjustments in the event of stock splits, stock dividends, stock combinations and similar recapitalization transactions. The New Warrants also contain a beneficial ownership limitation which provides that the Company shall not effect any exercise, and a holder shall not have the right to exercise, any portion of a New Warrant to the extent that, after giving effect to the exercise, such holder (together with such holder’s affiliates) would beneficially own in excess of 4.99% of the number of shares of common stock outstanding immediately after giving effect to the issuance of shares issuable upon the exercise; provided that the limitation for one holder is 9.99%. This limitation may be waived (up to a maximum of 9.99%) by a holder in its sole discretion upon not less than sixty-one (61) days’ prior notice to the Company.
Pursuant to the Inducement Letters, the Company agreed to file a registration statement providing for the resale of the shares of common stock underlying the New Warrants as soon as practicable, and in any event, within 15 calendar days of the date of the Inducement Letters, and use its best efforts to cause such registration statement to become effective within 45 calendar days following the date of the Inducement Letters or, in the event of a “full review” by Securities and Exchange Commission, the 75th calendar day following the date of the Inducement Letters. In addition, for a period of 15 days after the closing date, the Company agreed that neither it nor any of its subsidiaries will (i) issue, enter into any agreement to issue or announce the issuance or proposed issuance of, any common stock or securities convertible into or exercisable or exchangeable for common stock or (ii) file any registration statement or any amendment or supplement to any existing registration statement (other than the resale registration statement referred to above).
H.C. Wainwright & Co., LLC (the “Agent”) acted as warrant inducement agent and financial advisor in connection with the transaction and received a cash fee equal to 7.5% of the gross proceeds, a management fee equal to 1% of the gross proceeds and reimbursement of certain expenses. In addition, the Company issued to certain designees of the Agent warrants to purchase 65,775 shares of common stock at an exercise price of $2.2125 per share (the “Agent Warrants”), which such Agent Warrants have the same terms of the New Warrants (other than the exercise price).
The foregoing summary of the terms and conditions of the Inducement Letters, the New Warrants and the Agent Warrants does not purport to be complete and is qualified in its entirety by reference to the full text of those documents attached as Exhibits hereto, which are incorporated herein by reference.
This Current Report on Form 8-K does not constitute an offer to sell any securities or a solicitation of an offer to buy any securities, nor shall there be any sale of any securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
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Item 3.02 Unregistered Sales of Equity Securities.
The information set forth under Item 1.01 regarding the issuance of the New Warrants and the Agent Warrants is incorporated by reference into this Item 3.02. The issuance of these securities is being made in reliance upon an exemption from the registration requirements of Section 5 of the Securities Act contained in Section 4(a)(2) thereof and/or Regulation D promulgated thereunder.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description of Exhibit | |
| 4.1 | Form of Common Stock Purchase Warrant issued on December 4, 2023 | |
| 4.2 | Form of Placement Agent Common Stock Purchase Warrant issued on December 4, 2023 | |
| 10.1 | Form of Inducement Letter, dated December 4, 2023 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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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: December 6, 2023 |
SMART FOR LIFE, INC. | |
| /s/ Darren C. Minton | ||
| Name: | Darren C. Minton | |
| Title: | Chief Executive Officer | |
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