Smart for Life Inc, a prominent player in the global Health & Wellness sector, specializing in the marketing and manufacturing of nutritional foods and supplements, made a noteworthy announcement on Thursday, revealing that several accredited investors have entered into an agreement to exercise certain outstanding warrants. These warrants allow the investors to purchase a cumulative total of 877,001 shares of common stock issued by Smart for Life Inc on May 5, 2023, May 19, 2023, and May 31, 2023. The exercise prices for these warrants initially ranged between $19.53 and $27.72 per share but have now been reduced to a more attractive $1.77 per share.
However, this positive development led to an unexpected consequence for Smart for Life Inc. Following the announcement, the company’s stock experienced a significant decline on Friday. The stock, which had closed the Thursday trading session at $2.41, saw a dramatic drop as it opened Friday morning at $1.43.
At the time of this publication, Smart for Life Inc stock (SMFL) has witnessed a decline.
Smart for Life Inc
Current Price: $1.44
Change : -0.97
Change (%): (-40.25%)
Volume: 685.4K
Source: Tomorrow Events Market Data
The shares of common stock that can be obtained by exercising these warrants are registered under effective registration statements on Form S-3 (File No. 333-271701 and 333-272424). The company anticipates gross proceeds of approximately $1.5 million from the exercise of the warrants, though this is subject to deductions for placement agent fees and estimated offering expenses.
H.C. Wainwright & Co. is playing a crucial role as the exclusive placement agent for this offering.
In exchange for the immediate cash exercise of the warrants, the investors exercising the warrants will be granted new unregistered warrants. These warrants will enable the purchase of shares of common stock in a private placement, governed by Section 4(a)(2) of the Securities Act of 1933. The new warrants have an exercise price of $1.52 per share and a term of exercise lasting five and one-half years. In total, they allow the purchase of up to 1,754,002 shares of common stock.
The net proceeds generated from this offering are earmarked for Smart for Life Inc’s working capital and other general corporate purposes.
It is crucial to note that the new warrants, along with the shares of common stock obtainable through their exercise, were offered in a private placement exempt from the registration requirements of the Securities Act of 1933. They have not been registered under the Act, and as such, may not be offered or sold in the United States without registration with the SEC or an applicable exemption. The offering was exclusively available to accredited investors. In recognition of this, Smart for Life Inc has committed to filing a registration statement with the SEC to cover the resale of the shares of common stock obtained through the exercise of the new warrants.
