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SMART FOR LIFE, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL
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
| 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
OPERATIONS FOR THE YEAR ENDED
| 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
OPERATIONS FOR THE NINE MONTHS ENDED
| 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
AND STATEMENTS OF OPERATIONS