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 September 30, 2023 with respect to the pro forma condensed consolidated balance sheet and for the nine months ended September 30, 2023 and for the year ended December 31, 2022 with respect to the pro forma condensed consolidated statements of operations.
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
SEPTEMBER 30, 2023
| | | | | | Pro Forma | | | | | | |
| | | Historical | | | Adjustments | | | | | Pro Forma | |
| ASSETS | | | | | | | | | | | |
| Current assets: | | | | | | | | | | | |
| Cash and cash equivalents | | $ | 8,890 | | | $ | (1,635 | ) | | (a) | | $ | 7,255 | |
| Accounts receivable, net | | | 412,547 | | | | (48,984 | ) | | (a) | | | 363,563 | |
| Inventory | | | 1,987,730 | | | | (119,645 | ) | | (a) | | | 1,868,085 | |
| Prepaid expenses and other current assets | | | 139,928 | | | | (139,928 | ) | | (a) | | | - | |
| Total current assets | | | 2,549,095 | | | | (310,192 | ) | | | | | 2,238,903 | |
| Property and equipment, net | | | 311,472 | | | | (2,473 | ) | | (a) | | | 308,999 | |
| Intangible assets, net | | | 14,341,745 | | | | (3,307,455 | ) | | (a) | | | 11,034,290 | |
| Goodwill | | | 5,816,100 | | | | (173,451 | ) | | (a) | | | 5,642,649 | |
| Deposits and other assets | | | 98,947 | | | | - | | | | | | 98,947 | |
| Investments | | | - | | | | - | | | | | | - | |
| Right of use asset | | | 2,421,550 | | | | (368,501 | ) | | (a) | | | 2,053,049 | |
| Total assets | | $ | 25,538,909 | | | $ | (4,162,072 | ) | | | | $ | 21,376,837 | |
| | | | | | | | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | | |
| Current liabilities: | | | | | | | | | | | | | | |
| Accounts payable | | $ | 4,241,956 | | | $ | (835,962 | ) | | (b) | | $ | 3,405,994 | |
| Accrued expenses | | | 3,420,964 | | | | (107,719 | ) | | (b) | | | 3,313,245 | |
| Accrued expenses, related parties | | | 157,938 | | | | - | | | | | | 157,938 | |
| Due to related parties, net | | | - | | | | - | | | | | | - | |
| Deferred revenue | | | 750,739 | | | | (85,458 | ) | | (a) | | | 665,281 | |
| Preferred stock dividend payable | | | 600,750 | | | | - | | | | | | 600,750 | |
| Lease liability, current | | | 347,852 | | | | (35,199 | ) | | (a) | | | 312,653 | |
| Debt, current, net of debt discounts | | | 4,404,462 | | | | (28,157 | ) | | (a) | | | 4,376,305 | |
| Total current liabilities | | | 13,924,661 | | | | (1,092,495 | ) | | | | | 12,832,166 | |
| Lease liability, noncurrent | | | 2,157,344 | | | | (339,753 | ) | | (a) | | | 1,817,591 | |
| Debt, noncurrent | | | 8,505,068 | | | | (2,703,042 | ) | | (b) | | | 5,802,026 | |
| Total liabilities | | | 24,587,073 | | | | (4,135,290 | ) | | | | | 20,451,783 | |
| Commitments and contingencies | | | | | | | | | | | | | | |
| Equity: | | | | | | | | | | | | | | |
| Stockholders’ equity: | | | | | | | | | | | | | | |
| Series A Preferred | | | - | | | | - | | | | | | - | |
| Series B Preferred | | | 4 | | | | - | | | | | | 4 | |
| Common Stock | | | 63 | | | | - | | | | | | 63 | |
| Additional paid in capital | | | 58,792,603 | | | | - | | | | | | 58,792,603 | |
| Accumulated deficit | | | (57,840,834 | ) | | | (26,782 | ) | | (c) | | | (57,867,616 | ) |
| Total stockholders’ equity | | | 951,836 | | | | (26,782 | ) | | | | | 925,054 | |
| Total liabilities and equity | | $ | 25,538,909 | | | $ | (4,162,072 | ) | | | | $ | 21,376,837 | |
SMART FOR LIFE, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS FOR THE YEAR ENDED
DECEMBER 31, 2022
| | | | | | Pro Forma | | | | Pro | |
| | | Historical | | | Adjustments | | | | Forma | |
| Revenue – manufacturing | | $ | 14,331,482 | | | | (1,481,064 | ) | (d) | | $ | 12,850,418 | |
| Revenue - advertising | | | 3,434,879 | | | | - | | | | | 3,434,879 | |
| Total revenues | | $ | 17,766,361 | | | $ | (1,481,064 | ) | | | $ | 16,285,297 | |
| Cost of goods sold | | | 10,327,956 | | | | (986,309 | ) | | | | 9,341,647 | |
| Cost of sales - advertising | | | 2,561,276 | | | | - | | | | | 2,561,276 | |
| Total cost of revenue | | | 12,889,232 | | | | (986,309 | ) | (d) | | | 11,902,923 | |
| Gross Profit | | $ | 4,877,129 | | | $ | (494,755 | ) | | | $ | 4,382,374 | |
| Operating expenses: | | | | | | | | | | | | | |
| General and Administrative | | | 6,321,672 | | | | (639,594 | ) | (d) | | | 5,682,078 | |
| Compensation | | | 6,690,889 | | | | (245,976 | ) | (d) | | | 6,444,913 | |
| Professional services | | | 1,925,713 | | | | 171,352 | | (d) | | | 2,097,065 | |
| Depreciation and amortization | | | 2,145,441 | | | | (421,195 | ) | (d) | | | 1,724,246 | |
| Total operating expenses | | | 17,083,715 | | | | (1,135,413 | ) | | | | 15,948,302 | |
| Operating loss | | $ | (12,206,586 | ) | | $ | 640,658 | | | | $ | (11,565,928 | ) |
| | | | | | | | | | | | | | |
| Loss from discontinued operations | | | - | | | | (647,014 | ) | (e) | | | (647,014 | ) |
| Other non-operating income (expense), net | | | (8,900 | ) | | | - | | | | | (8,900 | ) |
| Consulting fee – related parties | | | (1,471,199 | ) | | | - | | | | | (1,471,199 | ) |
| IPO expenses | | | (702,394 | ) | | | - | | | | | (702,394 | ) |
| Gain on debt extinguishment | | | 329,052 | | | | - | | | | | 329,052 | |
| Interest (expense) | | | (15,917,788 | ) | | | 6,356 | | (d) | | | (15,911,432 | ) |
| Total other (expenses) | | | (17,771,229 | ) | | | (640,658 | ) | | | | (18,411,887 | ) |
| | | | | | | | | | | | | | |
| Net loss from continuing operations | | | (29,977,815 | ) | | | | | | | | (29,330,801 | ) |
| Net loss from discontinued operations | | | - | | | | | | | | | (647,014 | ) |
| Net loss | | $ | (29,977,815 | ) | | | | | | | $ | (29,977,815 | ) |
| Preferred Dividends | | $ | - | | | | | | | | $ | - | |
| Net loss attributable to common stockholders | | $ | (29,977,815 | ) | | | | | | | $ | (29,977,815 | ) |
| Weighted average shares outstanding | | | 304,950 | | | | | | | | | 304,950 | |
| Earnings per share for common stockholders: | | | | | | | | | | | | | |
| Continuing operations | | $ | (98.30 | ) | | | | | | | $ | (96.18 | ) |
| Discontinued operations | | $ | - | | | | | | | | $ | (2.12 | ) |
SMART FOR LIFE, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 2023
| | | | | | Pro Forma | | | | Pro | |
| | | Historical | | | Adjustments | | | | Forma | |
| Revenue – manufacturing | | $ | 7,077,105 | | | | (2,486,412 | ) | (d) | | $ | 4,590,693 | |
| Revenue - advertising | | | 361,470 | | | | - | | | | | 361,470 | |
| Total revenues | | $ | 7,438,575 | | | $ | (2,486,412 | ) | | | $ | 4,952,163 | |
| Cost of goods sold | | | 4,528,103 | | | | (1,372,528 | ) | | | | 3,155,575 | |
| Cost of sales - advertising | | | 279,037 | | | | - | | | | | 279,037 | |
| Total cost of revenue | | | 4,807,140 | | | | (1,372,528 | ) | (d) | | | 3,434,612 | |
| Gross Profit | | $ | 2,631,435 | | | $ | (1,113,884 | ) | | | $ | 1,517,551 | |
| Operating expenses: | | | | | | | | | | | | | |
| General and Administrative | | | 3,838,333 | | | | (258,236 | ) | (d) | | | 3,580,097 | |
| Compensation | | | 4,929,327 | | | | (401,995 | ) | (d) | | | 4,527,332 | |
| Professional services | | | 1,565,396 | | | | 3,500 | | (d) | | | 1,568,896 | |
| Consulting Fee Related Party | | | 46,686 | | | | - | | | | | 46,686 | |
| Impairment of intangible assets | | | 466,737 | | | | - | | | | | 466,737 | |
| Depreciation and amortization | | | 1,814,613 | | | | (1,113,890 | ) | (d) | | | 700,723 | |
| Total operating expenses | | | 12,661,092 | | | | (1,770,621 | ) | | | | 10,890,471 | |
| Operating loss | | $ | (10,029,657 | ) | | $ | 656,737 | | | | $ | (9,372,920 | ) |
| | | | | | | | | | | | | | |
| Loss from discontinued operations | | | - | | | | (976,983 | ) | (e) | | | (976,983 | ) |
| Loss on disposal of subsidiary | | | - | | | | (26,782 | ) | (c) | | | (26,782 | ) |
| Other non-operating income (expense), net | | | 333,498 | | | | (8,826 | ) | (d) | | | 324,672 | |
| Gain on debt extinguishment | | | 273,058 | | | | (67,331 | ) | (d) | | | 205,727 | |
| Interest (expense) | | | (3,425,318 | ) | | | 396,403 | | (d) | | | (3,028,915 | ) |
| Total other (expenses) | | | (2,818,762 | ) | | | (683,519 | ) | | | | (3,502,281 | ) |
| | | | | | | | | | | | | | |
| Net loss from continuing operations | | | (12,848,419 | ) | | | | | | | | (11,871,436 | ) |
| Net loss from discontinued operations | | | - | | | | | | | | | (976,983 | ) |
| Net loss | | $ | (12,848,419 | ) | | | | | | | $ | (12,875,201 | ) |
| Preferred Dividends | | $ | - | | | | | | | | $ | - | |
| Net loss attributable to common stockholders | | $ | (12,848,419 | ) | | | | | | | $ | (12,875,201 | ) |
| Weighted average shares outstanding | | | 304,950 | | | | | | | | | 304,950 | |
| Earnings per share for common stockholders: | | | | | | | | | | | | | |
| Continuing operations | | $ | (42.13 | ) | | | | | | | $ | (38.93 | ) |
| Discontinued operations | | $ | - | | | | | | | | $ | (3.20 | ) |
SMART FOR LIFE, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE
SHEET AND STATEMENTS OF OPERATIONS
| (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 for the respective periods of the nine months ended September 30, 2023 and December 31, 2022. |
| (e) | Adjustment represents the reclassification of the eliminated historical revenues and expenses into a single component for disclosure purposes. |
5
