Smart for Life Announces the Successful Completion of Restructuring Program

Program Resulted in Improvement in Operations through Material Loss Reductions and Transformation of the Company’s Balance Sheet; Company Provides Update on Timing for Form 10-K

MIAMI, April 23, 2024 (GLOBE NEWSWIRE) -- Smart for Life, Inc. (Nasdaq: SMFL) (“Smart for Life” or the “Company”), a leader in the Health & Wellness sector marketing and manufacturing nutritional supplements and foods, announced today that it has successfully completed a comprehensive restructuring of the Company.

The comprehensive program included recapitalization of the Company with equity and debt financings, the sale of certain non-performing assets, the sale and leaseback of the Company’s 18,000 sq. ft. Doral manufacturing facility, the sale of 51% of Ceautamed Worldwide, LLC, a subsidiary, for $3.4 million and the successful liquidation of the Company’s senior debt facility with Diamond Creek Capital. In addition, the Company converted substantial debt obligations to equity materially improving the Company’s balance sheet resulting in an approximate 6-fold positive enhancement of the Company’s Net Shareholders’ Equity to an expected $6 million. The debt conversions also eliminated significant ongoing interest expense incurred by the Company.

“Working closely with Darren Minton, our CEO, and Alan Bergman, our CFO, we have been successful in overhauling operations and reducing or eliminating material debt obligations,” said A.J. Cervantes, Jr., the Company’s Founder and Chairman. “While our operations are substantially reduced with a corresponding decrease in revenues, we are in a much stronger position today. This sets the stage for the next chapter of Smart for Life, marked by a heightened commitment to substantially expanding the Company's pipeline of potential acquisitions.”

Darren Minton, the Company’s Chief Executive Officer noted, “We effectively addressed a broad spectrum of challenges facing the Company, successfully eliminating and converting significant amounts debt to equity as part of our recapitalization initiatives. This has notably strengthened our balance sheet, yielding an expected net shareholder's equity of $6 million. Additionally, we've reduced losses across all fronts, significantly enhancing the financial viability of Smart for Life. These actions position us favorably for the next phase of M&A activity.”