UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10−Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: ~~September~~March 3031, ~~2023~~ 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to _____________

Commission File Number: 001-41290

SMART FOR LIFE, INC.

(Exact name of registrant as specified in its charter)

Nevada		81-5360128
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

990 S Rogers Circle, Suite 3, Boca Raton, FL		33487
990 Biscayne Blvd., Suite 505, Miami, FL		33132
(Address of principal executive offices)		(Zip Code)

(786) 749-1221

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $0.0001 per share		SMFL		~~The Nasdaq Stock Market LLC~~N/A(1)

~~Indicate~~(1) byOn ~~check~~March ~~mark~~21, ~~whether~~2025, the ~~registrant~~ Nasdaq Stock Market LLC (1“Nasdaq”) ~~has~~ filed ~~all~~a ~~reports~~Form ~~required~~25 towith bethe ~~filed~~U.S. bySecurities ~~Section~~and 13Exchange orCommission ~~15(d)~~to complete the delisting of the ~~Securities~~Company’s ~~Exchange~~common ~~Act~~stock offrom ~~1934~~The ~~during~~Nasdaq Capital Market, which became effective on March 31, 2025. The deregistration of the ~~preceding~~common ~~12 months~~stock under Section 12(orb) ~~for~~of the Act will be effective 90 days, or such shorter period ~~that~~as the ~~registrant~~U.S. ~~was~~Securities ~~required~~and toExchange ~~file~~Commission ~~such~~may ~~reports)~~determine, ~~and~~after ~~(2)~~filing ~~has~~of ~~been~~the ~~subject~~Form to25. ~~such~~The ~~filing~~common ~~requirements for~~stock is currently quoted on the ~~past~~OTC 90Pink ~~days~~Market maintained by the OTC Markets Group, Inc. ~~Yes ☒~~under ~~No ☐~~the symbol “SMFL.”

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company ☒
		Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for ~~comply~~complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~November~~May 179, ~~2023~~2025, there were ~~796~~7,~~666~~090,728 shares of the registrant’s common stock issued and outstanding.

Smart for Life, Inc.

Quarterly Report on Form 10-Q

Period Ended ~~September~~March 3031, ~~2023~~2024

TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION
Item 1.	Financial Statements ~~(Unaudited)~~	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2831
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3739
Item 4.	Controls and Procedures	3739
PART II
OTHER INFORMATION
Item 1.	Legal Proceedings	3840
Item 1A.	Risk Factors	3840
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3840
Item 3.	Defaults Upon Senior Securities	3840
Item 4.	Mine Safety Disclosures	3840
Item 5.	Other Information	3840
Item 6.	Exhibits	3941

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

SMART FOR LIFE, INC.

UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

		Page
Condensed Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022 (As Adjusted)		2
Condensed Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023		2
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022 (unaudited)		3
Condensed Consolidated Statements of Operations for the Three Months ended March 31, 2024 and 2023 (unaudited)		3
Condensed Consolidated Statements of Changes in Stockholders’ Equity (deficit) for the Three and Nine Months Ended September 30, 2023 and 2022 (unaudited)		4
Condensed Consolidated Statement of Changes in Stockholders’ Equity (deficit) for the Three Months ended March 31, 2024 and 2023 (unaudited)		4
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 (unaudited)		5
Condensed Consolidated Statements of Cash Flows for the Three Months ended March 31, 2024 and 2023 (unaudited)		5
Notes to Unaudited Condensed Consolidated Financial Statements		6

SMART FOR LIFE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS MARCH 31, 2024 AND DECEMBER 31, 2023

~~CONDENSED CONSOLIDATED BALANCE SHEETS~~(UNAUDITED)

SEPTEMBER 30, 2023 AND DECEMBER 31, 2022

	March 31, 2024			December 31, 2023
	(unaudited)
ASSETS
Current assets:
Cash	$	21,331		$	154,666
Accounts receivable, net		76,761			128,304
Inventory		1,187,773			1,424,989
Related party receivable, net		491,440			325,942
Prepaid expenses and other current assets		56,392			152,752
Current assets of discontinued operations		18,095			145,057
Total current assets		1,851,792			2,331,710

Property and equipment, net		217,355			264,937
Intangible assets, net		7,277,311			7,135,748
Goodwill		3,045,000			3,045,000
Deposits and other assets		66,291			98,945
Operating lease right-of-use assets		1,181,068			2,164,862
Assets of discontinued operations		—			4,618,025
Total other assets		11,787,025			17,327,517
Total assets	$	13,638,817		$	19,659,227

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	4,566,806		$	4,078,434
Accrued expenses		3,232,364			4,093,419
Accrued expenses, related parties		343,706			264,141
Contract liabilities		500,820			500,820
Preferred stock dividends payable		—			450,562
Operating lease liability, current		210,894			1,104,443
Debt, current, net of unamortized debt discounts		4,017,903			10,702,731
Current liabilities of discontinued operations		—			861,358
Total current liabilities		12,872,493			22,055,908

Long-term liabilities:
Operating lease liability, noncurrent		1,038,387			1,152,900
Debt, noncurrent, net of unamortized debt discounts		3,057,595			2,190,615
Liabilities of discontinued operations, noncurrent		—			647,258
Total long-term liabilities		4,095,982			3,990,773
Total liabilities		16,968,475			26,046,681

Commitments and contingencies

Stockholders’ Deficit
Series B Preferred Stock, $0.0001 par value, 5,000,000 shares authorized, 19,512 and 26,239 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		2			3
Series C Preferred Stock, $0.0001 par value, 5,000,000 shares authorized, 19,820 and 0 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		2			—
Common Stock, $.0001 par value, 7,936,508 shares authorized, 1,023,029 and 373,526 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively		102			37
Additional paid in capital		67,234,566			61,280,662
Accumulated deficit		(70,564,330	)		(67,668,156	)
Total stockholders’ deficit		(3,329,658	)		(6,387,454	)
Total liabilities and stockholders’ deficit	$	13,638,817		$	19,659,227

	September 30, 2023			December 31, 2022
	(Unaudited)			(As adjusted)
ASSETS
Current assets:
Cash	$	8,890		$	69,714
Accounts receivable, net		412,547			561,894
Inventory, net		1,987,730			2,665,501
Prepaid expenses and other current assets		139,928			306,867
Total current assets		2,549,095			3,603,976
Property and equipment, net		311,472			482,219
Intangible assets, net		14,341,745			16,462,158
Goodwill		5,816,100			5,816,100
Deposits and other assets		98,947			109,638
Operating lease right-of-use assets		2,421,550			2,672,866
Total other assets		22,989,814			25,542,981
Total assets	$	25,538,909		$	29,146,957
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	4,241,956		$	4,123,837
Accrued expenses		3,420,964			1,888,013
Accrued expenses, related parties		157,938			947,951
Contract liabilities		750,739			662,879
Preferred stock dividends payable		600,750			600,750
Operating lease liability, current		347,852			303,819
Debt, current, net of unamortized debt discounts		4,404,462			6,616,273
Total current liabilities		13,924,661			15,143,522
Long-term liabilities:
Operating lease liability, noncurrent		2,157,344			2,423,446
Debt, noncurrent, net of unamortized debt issuance cost		8,505,068			13,941,973
Total long-term liabilities		10,662,412			16,365,419
Total liabilities		24,587,073			31,508,941
Commitments and contingencies
Stockholders’ Equity (Deficit)
Preferred stock, $0.0001 par value, 10,000,000 shares authorized
Series A Convertible Preferred Stock, $0.0001 par value, 8,000 shares authorized and 0 and 1,000 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		—			—
Series B Preferred Stock, $0.0001 par value, 5,000,000 shares authorized and 34,818 and 0 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively (liquidation preference of $7,764,414 at September 30, 2023)		4			—
Common Stock, $0.0001 par value, 55,555,556 shares authorized, 631,600 and 81,729 issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		63			8
Additional paid in capital		58,792,603			42,630,423
Accumulated deficit		(57,840,834	)		(44,992,415	)
Total stockholders’ equity (deficit)		951,836			(2,361,984	)
Total liabilities and stockholders’ equity (deficit)	$	25,538,909		$	29,146,957

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

SMART FOR LIFE, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE ~~AND NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2023~~2024 AND ~~2022~~2023

(UNAUDITED)

	Three Months Ended September 30,						Nine Months Ended September 30,
	March 31, 2024			March 31, 2023
	2023			2022			2023			2022
Revenues
Revenues
Products	$	478,792		$	1,260,986
Products	$	2,744,306		$	4,501,657		$	7,077,105		$	11,537,041
Advertising		115			344,855
Advertising		5,999			855,328			361,470			2,560,321
Total revenues		478,907			1,605,841
Total revenues		2,750,305			5,356,985			7,438,575			14,097,362
Cost of revenues
Cost of revenues
Products		271,247			968,684
Products		1,688,097			2,094,198			4,528,103			6,281,486
Advertising		—			269,394
Advertising		522			630,123			279,037			1,884,479
Total cost of revenues		271,247			1,238,078
Total cost of revenues		1,688,619			2,724,321			4,807,140			8,165,965
Gross profit		207,660			367,763
Gross profit		1,061,686			2,632,664			2,631,435			5,931,397
Operating expenses
Operating expenses
General and administrative		642,346			994,844
Selling, general and administrative		1,238,625			1,760,381			3,838,333			5,139,263
Compensation - administrative		375,715			1,334,690
Compensation – administrative		2,046,220			1,479,816			4,929,327			5,120,518
Professional services		858,352			303,996
Professional services		349,098			316,440			1,565,396			1,622,871
Consulting fees – related parties		—			27,547
Consulting fees – related parties		19,139			—			46,686			—
Depreciation and amortization expense		323,126			435,795
Impairment of intangible assets		—			—			466,737			—
Total operating expenses		2,199,539			3,096,872
Depreciation and amortization expense		615,810			522,412			1,814,613			1,375,514
Operating loss		(1,991,879	)		(2,729,109	)
Total operating expenses		4,268,892			4,079,049			12,661,092			13,258,166
Other income (expenses)
Operating loss		(3,207,206	)		(1,446,385	)		(10,029,657	)		(7,326,769	)
Other income (expense)		(23,088	)		23,152
Other income (expense)
Gain on sale of subsidiary		16,462			—
Other income (expense)		19,820			(183,189	)		333,498			(693,614	)
Interest expense		(987,254	)		(1,363,045	)
Gain on debt extinguishment		16,021			—			273,058			134,956
Total other expenses		(993,880	)		(1,339,893	)
Change in fair value of derivative liability		—			108,426			—			146,513
Loss before income taxes		(2,985,759	)		(4,069,002	)
Interest expense		(1,172,742	)		(426,573	)		(3,425,318	)		(14,168,479	)
Income tax expense		—			—
Total other income (expense)		(1,136,901	)		(501,336	)		(2,818,762	)		(14,580,624	)
Income (loss) from discontinued operations		89,585			(215,314	)
Net loss	$	(42,~~344~~896,~~107~~174	)	$	(14,~~947~~284,~~721~~316	)	$	~~(12,848,419~~	)	$	~~(21,907,393~~	)
Series A preferred stock dividends		—			—			—			~~(600,750~~	)
Net loss attributable to common stockholders		(4,344,107	)		(1,947,721	)		(12,848,419	)		(22,508,143	)
Net loss attributable to common shareholders		(2,896,174	)		(4,284,316	)
Loss per share, basic and diluted	$	(7.51	)	$	(31.29	)	$	(42.13	)	$	(361.62	)
Loss per share basic and diluted	$	(11.13	)	$	(54.55	)
Weighted average shares outstanding, basic and diluted		578,686			62,242			304,950			62,242
Weighted average shares outstanding		268,348			78,536

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

SMART FOR LIFE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (DEFICIT) FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2023~~2024 AND ~~2022~~2023

(UNAUDITED)

For the Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2023~~ 2024

	Preferred Stock						Common Stock				Additional Paid-In			Accumulated
	Shares			Amount			Shares		Amount		Capital			Deficit			Total
Balance, January 1, 2023		1,000		$	—			81,729	$	8	$	42,630,423		$	(44,992,415	)	$	(2,361,984	)
Balance, January 1, 2024		26,239		$	3			373,526	$	37	$	61,280,662		$	(67,668,156	)	$	(6,387,454	)
Exercise of warrants		—			—			63,~~833~~572		1—		~~118~~38,000			—			~~119~~38,000
Stock based compensation		—			—			—		—		52,473			—			52,473
Stock-based compensation		—			—			—		—		27,613			—			27,613
Net loss		—			—			—		—		—			(4,284,315	)		(4,284,315	)
Conversion of series B preferred stock to common stock		(6,727	)		(1	)		10,678		1		—			—			—
Balance, March 31, 2023		1,000			—			88,562		9		42,683,014			(49,276,730	)		(6,593,707	)
Conversion of series C preferred stock to common stock		(16,688	)		(2	)		238,399		24		(22	)		—			—
Conversion of notes and interest		29,398			3			—		—		6,462,686			—			6,462,689
Common stock issued for services		—			—			9,377		1		91,249			—			91,250
Conversion of preferred stock		(1,000	)		—			3,334		—		—			—			—
Common stock issued for conversion of notes payable		—			—			285,305		29		1,695,833			—			1,695,862
Stock based compensation		—			—			—		—		27,735			—			27,735
Series C preferred stock issued for conversion of notes payable		36,507			4			—		—		3,650,677			—			3,650,681
Stock issued for services		—			—			1,112		—		99,199			—			99,199
Conversion of Series A dividends to common stock		—			—			102,172		10		450,554			—			450,564
Conversion of board fees		135			—			—		—		30,000			—			30,000
Net loss		—			—			—		—		—			(2,896,174	)		(2,896,174	)
Conversion of accrued compensation		5,285			1			—		—		1,178,340			—			1,178,341
Balance, March 31, 2024		39,331		$	4			1,023,029	$	102	$	67,234,566		$	(70,564,330	)	$	(3,329,658	)
Exercise of warrants		—			—			292,783		29		5,424,964			—			5,424,993
Shares issued for cash, net		—			—			96,166		10		2,151,300			—			2,151,310
Net loss		—			—			—		—		—			(4,219,997	)		(4,219,997	)
Balance, June 30, 2023		34,818		$	4			481,957	$	48	$	58,057,238		$	(53,496,727	)	$	4,560,563
Stock issued for services		—			—			15,083		2		49,998			—			50,000
Exercise of warrants		—			—			129,598		13		(13	)		—			—
Shares issued in connection with reverse stock split		—			—			4,962		—		—			—			—
Stock based compensation		—			—			—		—		685,380			—			685,380
Net loss		—			—			—		—		—			(4,344,107	)		(4,344,107	)
Balance, September 30, 2023		34,818		$	4			631,600	$	63	$	58,792,603		$	(57,840,834	)	$	951,836

For the Three ~~and Nine~~ Months Ended ~~September~~March 3031, ~~2022~~2023

	Preferred Stock						Common Stock				Additional Paid-In			Accumulated
	Shares			Amount			Shares		Amount		Capital			Deficit			Total
Balance, January 1, 2022		8,000		$	1			30,973	$	3	$	8,923,858		$	(15,014,600	)	$	(6,090,738	)
Balance, January 1, 2023		1,000		$	—			77,614	$	8	$	42,630,425		$	(44,992,414	)	$	(2,361,981	)
Stock issued for cash with initial public offering		—			—			3,200		1		10,623,491			—			10,623,492
Exercise of warrants		—			—			978		—		119			—			119
Series A warrants issued in connection with initial public offering		—			—			—		—		1,902,689			—			1,902,689
Stock based compensation		—			—			—		—		52,473			—			52,473
Series B warrants in connection with initial public offering		—			—			—		—		158,558			—			158,558
Net loss		—			—			—		—		—			(4,284,316	)		(4,284,316	)
Warrants issued in connection with debt		—			—			—		—		65,624			—			65,624
Balance, March 31, 2023		1,000		$	—			78,592	$	8	$	42,683,017		$	(49,276,730	)	$	(6,593,713	)
Stock issued upon exercise of Series B Warrants		—			—			3,195		—		—			—			—
Stock issued upon conversion of convertible notes		—			—			2,755		—		5,622,885			—			5,622,885
Stock issued in connection with acquisition		—			—			95		—		—			—			—
Stock issued for conversion of accounts payable		—			—			33		—		147,223			—			147,223
Stock issued for services		—			—			1,949		—		822,626			—			822,626
Stock issued upon conversion of preferred stock		(7,000	)		(1	)		23,332		2		(1	)		—			—
Common stock issued under future equity agreements		—			—			4,820		1		10,844,959			—			10,844,960
Preferred stock dividend payable		—			—			—		—		(85,417	)		—			(85,417	)
Net loss		—			—			—		—		—			(16,574,477	)		(16,574,477	)
Balance, March 31, 2022		1,000			—			70,352		7		39,026,495			(31,589,077	)		7,437,425
Common stock issued upon conversion of promissory note		—			—			163		—		73,727			—			73,727
Common stock issued upon option exercise		—			—			435		—		—			—			—
Preferred stock dividend payable		—			—			—		—		(159,916	)		—			(159,916	)
Change in derivative liability		—			—			—		—		32,959			—			32,959
Net loss		—			—			—		—		—			(3,385,195	)		(3,385,195	)
Balance, June 30, 2022		1,000		$	—			70,950	$	7	$	38,973,265		$	(34,974,272	)	$	3,999,000
Common stock issued upon exercise of series B warrants		—			—			4		1		—			(1	)		—
Net loss		—			—			—		—		—			(1,947,721	)		(1,947,721	)
Balance, September 30, 2022		1,000		$	—			70,754	$	8	$	38,973,265		$	(36,921,994	)	$	2,051,279

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

SMART FOR LIFE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH ~~FLOWS~~FLOW ~~FOR~~THREE ~~THE NINE~~ MONTHS ENDED ~~SEPTEMBER~~MARCH 3031, ~~2023~~2024 AND ~~2022~~2023

(UNAUDITED)

	Nine Months Ended September 30,
	March 31, 2024			March 31, 2023
	2023			2022
Cash flows from operating activities:
Net loss	$	(122,~~848~~896,~~419~~174	)	$	(214,~~907~~284,~~393~~316	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt issuance cost		1,150,800			1,737,976
Gain on sale of subsidiaries		(16,462	)		—
Discount on debt obtained		—			(302,045	)
Debt issuance cost		144,595			616,194
Depreciation and amortization expense		1323,~~814,613~~126			1435,~~375,514~~795
Gain on extinguishment of debt		(273,058	)		(134,956	)
Stock-based compensation		27,613			52,473
Impairment on intangible assets		466,737			—
Stock issued for services		91,244			—
Stock-based compensation		765,588			822,626
Non-cash finance fees		42,635			—
Interest expense associated with future equity agreements		—			10,844,961
Non-cash operating lease costs, net		(24,268	)		5,768
Non-cash financing expenses – stock issued for services		149,200			—
Non-cash operating lease costs, net		29,247			17,539
Change in value of derivative liability		—			127,214
Provision for bad debt		195,400			6,731
Changes in operating assets and liabilities:
Accounts receivable, net		~~(46~~51,~~053~~543	)		~~(314~~287,~~587~~818	)
Inventory		~~677~~237,~~771~~216			(2529,~~208,654~~993	)
Prepaid expenses and other current assets		~~166~~86,~~939~~104			53(11,~~749~~242	)
Deposits and other assets		1032,~~714~~654			(14,~~822~~425	)
Accounts payable		~~157~~488,~~789~~373			1737,~~597,032~~888
Accrued expenses		2332,~~040,792~~362			48682,~~496~~956
Accrued expenses, related parties		~~388~~79,~~327~~565			~~449~~179,~~497~~243
Contract liabilities		~~87,860~~—			~~296~~107,~~255~~898
Net cash used in operating activities		(5,065,754	)		(7,491,867	)
Discontinued operations		459,737			163,103
Cash flows from investing activities:
Net cash used in operating activities		(540,135	)		(500,854	)
Cash paid for acquisition of Ceautamed		—			(3,000,000	)
Additions to property and equipment		(3,450	)		(72,271	)
Net cash used in investing activities		(3,450	)		(3,072,271	)
Cash flows from financing activities:
Payments to related parties		—			(1,711,600	)
Receipts from related parties		629,041			102,694
Receipts from related parties		—			390,041
Payments to related parties		(544,540	)		—
Proceeds from initial public offering		—			12,738,288
Proceeds from exercise of warrants		290,000			119
Proceeds from issuance of common stock, net		2,151,310			—
Proceeds from debt		163,500			1,394,000
Proceeds from exercise of warrants		5,425,112			—
Repayments on debt		(131,201	)		(929,765	)
Proceeds from debt		2,749,791			8,151,889
Repayments on debt of discontinued operations		—			(96,859	)
Repayments on debt		(5,317,833	)		(8,852,491	)
Net cash provided by financing activities		406,800			470,189
Payment of fees from issuance of common stock		—			(53,549	)
Net (decrease) in cash		(133,335	)		(30,665	)
Net cash provided by financing activities		5,008,380			10,662,578
Cash, beginning of period		154,666			60,790
Net increase (decrease) in cash		(60,824	)		98,440
Cash, end of period	$	21,331		$	30,125
Cash, beginning of period		69,714			205,093
Cash, end of period	$	8,890		$	303,533
Supplemental disclosure of cash flow information:
Interest paid	$	113,~~661,288~~611		$	3111,~~257,894~~437
Taxes paid	$	—		$	—
Non-cash investing and financing activities:
Stock issued for conversion of accounts payable	$	—		$	147,223
Stock issued for exercise of warrants	$	37,998		$	—
Stock issued for conversion of accrued compensation	$	1,178,311		$	—
Non-cash debt issuance	$	1,155,633		$	—
Stock issued for conversion of convertible notes and interest	$	6,462,691		$	5,622,885
Conversion of interest to notes payable	$	563,034		$	—
Stock issued for exercise of warrants	$	13		$	—
Conversion of notes payable to accrued expenses	$	49,192		$	—
Conversion of interest to notes payable	$	334,950		$	—
Stock issued for conversion of accrued board fees	$	30,000		$	—
Debt issued in connection with acquisition of Ceautamed	$	—		$	5,600,000
Equipment obtained with financing	$	—		$	181,815

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~SEPTEMBER~~THREE 30MONTHS ENDED MARCH 31, ~~2023~~2024 AND ~~2022~~2023

(UNAUDITED)

Note 1 — Description of Business

Smart for Life, Inc., formerly Bonne Santé Group, Inc. (“SMFL”), is a Nevada corporation which was originally formed in the State of Delaware on February 27, 2017 and converted to a Nevada corporation on April 10, 2023. Structured as a global holding company, it is engaged in the development, marketing, manufacturing, acquisition, operation and sale of a broad spectrum of nutraceutical and related products with an emphasis on ~~Health~~health ~~& Wellness~~and wellness.

On March 8, 2018, SMFL acquired 51% of Millenium Natural Manufacturing Corp. and Millenium Natural Health Products, Inc. On October 8, 2019, SMFL entered into an agreement to acquire the remaining 49% of these companies, subject to certain conditions which were subsequently met. On September 30, 2020, the name of Millenium Natural Manufacturing Corp. was changed to Bonne Sante Natural Manufacturing, Inc. (“BSNM”), and on November 24, 2020, Millenium Natural Health Products Inc. was merged into BSNM. Based in Doral, Florida, BSNM operates a 22,000 square-foot FDA-certified manufacturing facility. It manufactures nutritional products for a significant number of customers. On March 6, 2024, the Company entered into a sale and leaseback agreement relating to BSNM as more fully described under Note 2.

On July 1, 2021, SMFL acquired ~~100% of~~ Doctors ~~Scientific~~ Scientific Organica, LLC d/b/a Smart for Life, Oyster Management Services, Ltd., Lawee Enterprises, L.L.C. and U.S. Medical Care Holdings, L.L.C. On August 27, 2021, SMFL transferred all of the equity interests of Oyster Management Services, Ltd., Lawee Enterprises, L.L.C. and U.S. Medical Care Holdings, L.L.C. to Doctors Scientific Organica, LLC. On May 19, 2022, SMFL acquired ~~100% of~~ Lavi Enterprises, LLC. On the same date, SMFL transferred all of the equity interests of Lavi Enterprises, LLC to Doctors Scientific Organica, LLC. On December 13, 2022, Oyster Management Services, Ltd. was converted to a limited liability company known as Oyster Management Services, L.L.C. As a result of the foregoing, Oyster Management Services, L.L.C., Lawee Enterprises, L.L.C., U.S. Medical Care Holdings, L.L.C. and Lavi Enterprises, LLC are now wholly owned subsidiaries of Doctors Scientific Organica, LLC (collectively, “DSO”). Based in Riviera Beach, Florida, DSO operates a 30,000 square-foot FDA-certified manufacturing facility. DSO manufactures and sells weight ~~management~~ management foods and related products. Additionally, DSO provides manufacturing services for other customers.

On August 24, 2021, Smart for Life Canada Inc. (“DSO Canada”) was established as a wholly owned subsidiary of Doctors Scientific Organica, LLC in Canada. SMFL Canada sells retail products through a retail store location in Montreal Canada and the same location also acts as distribution center for international direct to consumer and big box customers. ItOn ~~maintains~~January ~~inventory~~8, ~~and~~2024, ~~employees~~the atretail ~~this~~store location was closed.

On November 8, 2021, SMFL acquired 100% of Nexus Offers, Inc. (“Nexus”). Nexus is a network platform in the affiliate marketing space. Affiliate marketing is an advertising model in which a product vendor compensates third-party digital marketers to generate traffic or leads for the product vendor’s products and services. The third-party digital marketers are referred to as affiliates, and the commission fee incentivizes them to find ways to promote the products being sold by the product vendor. Based in Miami, Florida, Nexus operates virtually.

On December 6, 2021, SMFL acquired 100% of GSP Nutrition Inc. (“GSP”). GSP is a sports nutrition company that offers nutritional supplements for athletes and active lifestyle consumers ~~under the Sports Illustrated Nutrition brand~~. Based in Miami, Florida, GSP operates virtually.

On July 29, 2022, SMFL acquired ~~100% of~~ Ceautamed Worldwide, LLC and its wholly-owned subsidiaries Wellness Watchers Global, LLC and Greens First Female LLC (collectively, “Ceautamed”). Ceautamed is based in Boca Raton, Florida and owns the Greens First line of branded products which have been specifically marketed to the healthcare provider sector. On January 29, 2024, the Company entered into an asset purchase agreement pursuant to which the Company agreed to sell nearly all of the assets of Ceautamed for a 49% ownership interest in a new limited liability company, First Health FL LLC, or First Health. The agreement included an option for the 51% owner to purchase the remaining 49% for $1.00 at an unspecified future date. On October 1, 2024, such owner elected to exercise the option, effective as of October 2, 2024, paid to the Company the option price of $1.00, and the Company delivered the remaining 49% interest in First Health to such owner.

On August 15, 2022, SMFL entered into a joint venture with a seller of Ceautamed to form Smart Acquisition Group, LLC. This subsidiary iswas 50% owned by the Company and 50% owned by Stuart Benson, the former owner and principal of Ceautamed. This company was formed to expand M&A growth initiatives through the identification, negotiation, financing and acquisition of companies by SMFL. AsOn of September 30 22, 2023, ~~there~~we ~~are~~dissolved ~~no assets or activity associated with~~ this ~~joint venture~~subsidiary.

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~SEPTEMBER~~THREE 30MONTHS ENDED MARCH 31, ~~2023~~2024 AND ~~2022~~2023 (UNAUDITED)

(UNAUDITED)

Note 2 — Summary of Significant Accounting Policies

Principles of Consolidation

The condensed consolidated financial statements reflect the consolidated operations of SMFL, ~~and~~ its wholly owned subsidiaries ~~BSNM,~~ DSO, DSO Canada, Nexus, GSP, and ~~Ceautamed~~BSNM (collectively , the “Company”) and are prepared in the United States Dollars in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Ceautamed has been deemed to be a discontinued operation. Intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain prior period amounts have been reclassified to conform with the current year presentation.

Reclassifications - Discontinued Operations to Continued Operations

The 2023 financials have been reclassified from reporting BSNM as discontinued operations to continued operations due to a change in the plan of the sale / leaseback of BSNM. In December 2023, with the board’s approval, the Company planned to sell BSNM. The Company had a buyer, who signed an offer letter, but was unable to work out the economics of the deal and therefore had not closed the transaction. Following this, in October 2024, management and the board revised its decision to sell BSNM and continue operating the business line. Also in October 2024, the Company started moving most of the equipment and much of the usable inventory to its Riviera Beach facility. The Company also surrendered the BSNM facility in November 2024 back to the landlord. As a result, the classification of BSNM has been revised in accordance with Accounting Standards Codification (“ASC”) 360-10, Property, Plant, and Equipment. The results of BSNM have been reclassified from discontinued operations to continuing operations for all periods presented to ensure comparability of the financial statements. The impact of the reclassification on previously reported amounts is summarized below:

1. Reclassification of $505,643 of operating income, $834,487 in cost of goods sold, $1,167,481 in expenses and $58,808 in other expense from discontinued operations to continuing operations.

2. Adjustment to depreciation and amortization expenses, as BSNM is no longer classified as held for sale.

3. Reclassification of $1,401,300 in assets and $3,062,749 in liability balances to reflect continuing operations.

The comparative financial statements for the years ended December 31, 2023 and 2024 have been adjusted accordingly.

Ceautamed has been deemed to be a discontinued operation (see Note 3).

These reclassifications did not impact previously reported net income, earnings per share, or the Company’s consolidated financial position.

Basis of Presentation

The Company’s fiscal year end is December 31. The Company uses the accrual method of accounting. The accompanying unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements. The December 31, ~~2022~~2023 balance sheet has been derived from audited consolidated financial statements.

The accompanying unaudited condensed consolidated financial statements for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023 have been prepared in accordance with GAAP for interim ~~financial~~ financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in the Company’s annual financial statements have been condensed or omitted. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements.

The unaudited financial information included in this report includes all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary to reflect a fair statement of the results for the interim periods. The results of operations for the nine months ended September 30, 2023 are not necessarily indicative of the results of the full fiscal year.

The condensed consolidated financial statements included in this report should be read in conjunction with the financial statements and notes thereto included in the Company’s financial statements for the fiscal year ended December 31, 2022.

The December 31, 2022 condensed consolidated balance sheet reflected within the accompanying condensed consolidated financial statements reflects a change for a correction of an immaterial error. The error pertains to the classification of assets acquired in the acquisitions of Nexus and Ceautamed. A reclassification of $4,464,100 from intangible assets to goodwill is reflected within these condensed consolidated financial statements.

On April 24, 2023, the Company effected a 1-for-50 reverse stock split. The impact of this transaction is reflected within all common stock, options, and warrant information retrospectively in these condensed consolidated financial statements.

On August 2, 2023, the Company effected a 1-for-3 reverse stock split. The impact of this transaction is reflected within all common stock, options, and warrant information retrospectively in these condensed consolidated financial statements. As a result of the reverse stock split, the Company’s authorized common stock decreased to 166,666,667 shares.

On October 27, 2023, the Company effected a 1-for-3 reverse stock split. The impact of this transaction is reflected within all common stock, options, and warrant information retrospectively in these condensed consolidated financial statements. As a result of the reverse stock split, the Company’s authorized common stock decreased to 55,555,556 shares.

Liquidity, Capital Resources and Going Concern

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has sustained recurring losses and has a deficiency in working capital of approximately $11.4 million at September 30, 2023, a net loss for the nine months ended September 30, 2023 of $12.8 million, and cash used in operating activities of $5.1 million, which raises substantial doubt about its ability to continue as a going concern. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with GAAP applicable to a going concern, which assumes that the Company will be able to meet its obligations and continue its operations in the normal course of business. Management believes that current available resources will not be sufficient to fund the Company’s planned expenditures over the next 12 months. These factors, individually and collectively indicate that a material uncertainty exists that raises substantial doubt about the Company’s ability to continue as a going concern for one year from the date of issuance of these condensed interim consolidated financial statements.

The Company will be dependent upon the raising of additional capital through placement of common shares, and/or debt financing in order to implement its business plan and generating sufficient revenue in excess of costs. If the Company raises additional capital through the issuance of equity securities or securities convertible into equity, stockholders will experience dilution, and such securities may have rights, preferences or privileges senior to those of the holders of common stock or convertible senior notes. If the Company raises additional funds by issuing debt, the Company may be subject to limitations on its operations, through debt covenants or other restrictions. There is no assurance that the Company will be successful with future financing ventures, and the inability to secure such financing may have a material adverse effect on the Company’s financial condition. These unaudited condensed consolidated financial statements do not include any adjustments to the amounts and classifications of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~SEPTEMBER~~THREE 30MONTHS ENDED MARCH 31, ~~2023~~2024 AND ~~2022~~2023 (UNAUDITED)

~~(UNAUDITED)~~The condensed consolidated financial statements included in this report should be read in conjunction with the financial statements and notes thereto included in the Company’s financial statements for the fiscal year ended December 31, 2023.

The unaudited financial information included in this report includes all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary to reflect a fair statement of the results for the interim periods. The results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results of the full fiscal year.

On April 24, 2023, the Company effected a 1-for-50 reverse stock split of its outstanding common stock. The impact of this transaction is reflected within all common stock, options, and warrant information retrospectively in these condensed consolidated financial statements.

On August 2, 2023, the Company effected a 1-for-3 reverse stock split of its authorized and outstanding common stock. The impact of this transaction is reflected within all common stock, options, and warrant information retrospectively in these consolidated financial statements. As a result of the reverse stock split, the Company’s authorized common stock decreased to 166,666,667 shares.

On October 27, 2023, the Company effected a 1-for-3 reverse stock split of its authorized and outstanding common stock. The impact of this transaction is reflected within all common stock, options, and warrant information retrospectively in these consolidated financial statements. As a result of the reverse stock split, the Company’s authorized common stock decreased to 55,555,556 shares.

On April 22, 2024, the Company effected a 1-for-7 reverse stock split of its authorized and outstanding common stock. The impact of this transaction is reflected within all common stock, options, and warrant information retrospectively in these consolidated financial statements. As a result of the reverse stock split, the Company’s authorized common stock decreased to 7,936,508 shares.

Liquidity, Capital Resources and Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has sustained recurring losses and has a deficiency in working capital of approximately $11.0 million at March 31, 2024, which raises substantial doubt about its ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Use of Estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. These estimates include, among other items, assessing the collectability of receivables, the realization of deferred taxes, useful lives and recoverability of tangible and intangible assets, assumptions used in the valuation of options ~~and warrants~~, the computation of revenue based on the proportional delivery of services, and accruals for commitments and contingencies. Some of these estimates can be subjective and complex and, consequently, actual results could differ materially from those estimates.

Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three (3) months or less to be cash equivalents. At ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~2023, ~~there~~ there were no cash equivalents.

SMART FOR LIFE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(UNAUDITED)

Accounts Receivable and Allowance for Doubtful Accounts

The Company’s ~~allowance~~accounts ~~for~~receivable ~~doubtful accounts~~consists ~~represents~~primarily ~~the~~of ~~Company’s~~receivables ~~estimate~~from customers. The balance is presented net of an allowance for ~~uncollectible~~expected ~~receivables~~credit ~~based~~losses. onThe aCompany ~~review~~monitors the financial condition of ~~specific~~its ~~accounts~~customers and records the ~~Company’s historical~~allowance ~~collection~~for ~~experience.~~expected ~~The~~credit ~~Company~~losses ~~writes~~on ~~off~~receivables ~~specific~~when ~~accounts~~it believes customers are unable to make their required payments based on anfactors ~~ongoing~~such ~~review~~as ofdelinquencies ~~collectability,~~and asaging ~~well~~trends. asThe ~~management~~allowance for expected credit loss is the Company’s ~~past~~ ~~experience~~best ~~with~~estimate of the ~~customers~~amount of probable credit losses related to existing accounts receivable. Accounts ~~receivables~~ receivable are presented net of an allowance for ~~doubtful~~expected ~~accounts~~credit losses of $7822,~~947~~686 and $5722,~~581~~ 868 at ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~2023, respectively.

Inventory

Inventory consists of raw materials, packaging materials, and finished goods and is valued at the lower of cost (first-in, first-out) (replacement cost or net realizable value). An allowance for inventory obsolescence is provided for slow moving or obsolete inventory to write down historical cost to net realizable value. The Company primarily performs its manufacturing for functional foods and nutraceuticals in the form of bars, cookies, powders, tablets and capsules.

The allowance for obsolescence is an estimate established through charges to cost of goods sold. Management’s judgment in determining the adequacy of the allowance is based upon several factors which include, but are not limited to, analysis of slow-moving inventory, analysis of the selling price of inventory, the predetermined shelf life of the product, and management’s judgment with respect to current economic conditions. Given the nature of the inventory, it is reasonably possible the Company’s estimate of the allowance for obsolescence will change in the near term.

Property and Equipment

Property and equipment are recorded at cost. Expenditures for major betterments and additions are charged to the asset accounts, while replacements, maintenance and repairs which do not improve or extend the lives of the respective assets are charged to expense as incurred. The Company provides for depreciation and amortization over the estimated useful lives of various assets using the straight-line method ranging from 3-7 years.

Goodwill

The Company allocates goodwill to reporting units based on the reporting unit expected to benefit from the business combination. The Company evaluates its reporting units on an annual basis and, if necessary, reassign goodwill using a relative fair value allocation approach. Goodwill is tested for impairment at the reporting unit level (operating segment or one level below an operating segment) on December 31 and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, or sale or disposition of a significant portion of a reporting unit.

No goodwill impairments were recognized during the three ~~and nine~~ months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023.

Intangible Assets

Intangible assets consist of customer contracts, developed technology, non-compete agreements, license agreements, ~~patents, tradenames, supplier contracts,~~ and intellectual property acquired in the acquisitions of BSNM, DSO, Nexus, GSP, and Ceautamed. The Company amortizes intangible assets with finite lives on a straight-line basis over their estimated useful lives which ranges from 3 to 15 years.

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)

Long-Lived Assets

The Company assesses potential impairments to its long-lived assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. An impairment loss is recognized when the undiscounted cash flows expected to be generated by an asset (or group of assets) is less than its carrying amount. Any required impairment loss is measured as the amount by which the asset’s carrying value exceeds its fair value and is recorded as a reduction in the carrying value of the related asset and a charge to operating results. The Company recognized an impairment related to the affiliate relationships associated with the Nexus subsidiary of $466,737, and $0 for the nine months ended September 30, 2023 and 2022, respectively.

SMART FOR LIFE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(UNAUDITED)

Lease Right-of-Use Assets and Liabilities

The Company records a right-of-use ~~(“ROU”)~~ asset and lease liability on the ~~condensed consolidated~~ balance ~~sheets~~sheet for all leases with terms longer than 12 months. Leases are classified either as finance or operating with the classification affecting the pattern of expense recognition.

Related Parties

The Company follows ~~Accounting Standards Codification (“~~ASC”) 850, “Related Party Disclosures,” for the identification of related parties and disclosure of related party transactions (see Note 13).

Debt Issuance Costs

In accordance with ASC 835-30, “Other Presentation Matters”, the Company has reported debt issuance cost as a deduction from the carrying amount of debt and amortizes these costs using the effective interest method over the term of the debt as interest expense.

Fair Value Measurement

Under ASC Topic 820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., an exit price). ASC Topic 820 establishes a hierarchy for inputs to valuation techniques used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that reflect assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. There are three levels to the hierarchy based on the reliability of inputs, as follows:

Level 1 - Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

	Level 1 -	Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.

	Level 2 -	Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets and liabilities in markets that are not active.

	Level 3 -	Unobservable inputs for the asset or liability. The degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3.

Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets and liabilities in markets that are not active.

Level 3 - Unobservable inputs for the asset or liability. The degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3.

The Company’s cash and cash equivalents are measured using Level 1 inputs and include cash on hand, deposits in banks, certificates of deposit and money market funds. Due to their short-term nature, the carrying amounts reported in the consolidated balance sheets approximate the fair value of cash and cash equivalents.

The Company has certain assets that are measured at fair value on a non-recurring basis including those described in Note 6 ~~—Intangible Assets~~, and are adjusted to fair value only when the carrying values are more than the fair values. The categorization of the framework used to price the assets is considered a Level 3 measurement due to the subjective nature of the unobservable inputs used to determine the fair value.

Certain nonfinancial assets and liabilities are measured at fair value on a non-recurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The estimated fair value of financial instruments is determined using the best available market information and appropriate valuation methodologies. Considerable judgment is necessary, however, in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented are not necessarily indicative of the amounts that the Company could realize in a current market exchange, or the value that ultimately will be realized upon maturity or disposition. In the evaluation of the estimated value of such assets, data for determining the value of the estimates are utilized based on the relevant facts and circumstances. The use of different market assumptions may have a material effect on the estimated fair value amounts.

910

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~SEPTEMBER~~THREE 30MONTHS ENDED MARCH 31, ~~2023~~2024 AND ~~2022~~2023 (UNAUDITED)

(UNAUDITED)

Revenue Recognition

The Company evaluates and recognizes ~~revenues~~ revenue by:

●

identifying the contract(s) with the customer,

●

identifying the performance obligations in the contract,

●

determining the transaction price,

●

allocating the transaction price to performance obligations in the contract; and

●

recognizing revenue as each performance obligation is satisfied through the transfer of a promised good or service to a customer (i.e., “transfer of control”).

Products (BSNM, DSO, GSP, and Ceautamed)

The Company generates product revenues by manufacturing and packaging of nutraceutical products as a contract manufacturer for customers. The majority of the Company’s revenue is recognized when it satisfies a single performance obligation by transferring control of its products to a customer. Control is generally transferred when the Company’s products are either shipped or delivered based on the terms contained within the underlying contracts or agreements. The Company’s general payment terms are short-term in duration. For the three months ended March 31, 2024 and 2023, revenue was made up of contract manufacturing of $0 and $441,749, online marketplace of $498,792 and $759,013, wholesale of $0 and $33,578, and direct sales of $0 and $26,646, respectively, The Company does not have significant financing components or payment terms. The Company records deferred revenues for prepaid amounts from customers due to no performance obligations being met at such time. The Company ~~did~~had ~~not~~unsatisfied performance ~~have~~obligations ~~any~~of ~~material~~$496,762 ~~unsatisfied~~and ~~performance~~$496,762 ~~obligations~~ at ~~September~~March 3031, ~~2023~~2024 orand December 31, ~~2022~~2023, respectively.

Distribution expenses to transport the Company’s products, where applicable, and warehousing expense after manufacture are accounted for within operating expenses.

Advertising /Marketing (Nexus)

Nexus generates advertising revenue when sales of listed products are sold by product vendors through its network as a result of the marketing efforts of digital marketers. The products on the network come from several different customers, which pay Nexus a specific amount per sale, the amount of which is dictated by the customer. The revenue is recognized upon the sale of a product by the customer, net of fraudulent traffic or disputed transactions. A portion of the specific amount received by Nexus for that sale is paid out to the digital marketer as a commission, which is recorded in cost of sales.

Nexus’ general payment terms are short-term in duration. Nexus does not have significant financing components or payment terms. Nexus ~~did~~had ~~not~~unsatisfied ~~have~~performance ~~any~~obligations ~~material~~of ~~unsatisfied performance~~$4,057 ~~obligations~~and $4,057 at ~~September~~March 3031, ~~2023~~2024 orand December 31, ~~2022~~2023, respectively.

Freight

~~Freight~~For ~~costs are recorded in cost of goods sold as incurred. Freight costs for~~ the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 and 2023, ~~2022~~freight costs amounted to $~~231~~63,~~897~~946 and $~~754~~60,~~909~~135, respectively., ~~Freight costs~~and ~~for~~have ~~the~~been ~~three~~recorded ~~months~~in ~~ended~~cost ~~September~~of ~~30,~~goods ~~2023~~sold ~~and~~in ~~2022~~the ~~were~~accompanying ~~$61,952~~unaudited condensed ~~and~~consolidated ~~$226,063,~~statements ~~respectively~~of operations.

Advertising

Advertising costs are expensed as incurred. Advertising costs for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022 were $1,369,031 and $1,618,467, respectively. Advertising costs for the three months ended September 30,~~ 2023 ~~and 2022~~ were $~~501~~71,~~874~~033 and $~~621~~281,~~841~~392, respectively.

SMART FOR LIFE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(UNAUDITED)

Paycheck Protection Program

The Company records Paycheck Protection Program (“PPP”) loan proceeds in accordance with ASC 470, “Debt”. Debt is extinguished when either the debtor pays the creditor or the debtor is legally released from being the primary obligor, either judicially or by the creditor.

Stock-based Compensation

The Company recognizes expense for stock options and warrants granted over the vesting period based on the fair value of the award at the grant date and valued using a Black-Scholes ~~option~~ option pricing model to determine the fair market value of the stock options ~~and warrants~~. Forfeitures are reduced from ~~options and~~ warrants outstanding and the Company calculates the amount of tax benefit available by tracking each stock option award on an employee-by-employee basis and on a grant-by-grant basis. The Company then compares the recorded expense to the tax deduction received for each stock option ~~and~~ ~~warrant~~ grant. The Company’s policy is to recognize forfeitures as they occur.

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)

Income Taxes

The Company accounts for income taxes under the provisions of ASC 740, “Income Taxes”. The Company records a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated. At ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~2023, the Company had no liabilities for uncertain tax positions. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. The Company’s tax years subject to examination by tax authorities generally remain open for three (3) years from the date of filing.

The provision for income taxes is computed using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carry forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates that apply to taxable income in effect for the years in which those tax assets are expected to be realized or settled. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. Due to the continued losses, the Company has ~~recorded~~ recorded a full valuation allowance at the end of ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~2023.

Employee Retention Credits

In accordance with the ~~2022~~Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), the Company filed for Employee Retention Credits for applicable periods in 2020 and 2021. As amounts to be refunded are subject to IRS calculations, and the timing for processing of the credits are unknown, the Company recognizes as other income amounts refunded upon the receipt of the payment. During the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023, the Company received $~~586,556 and $~~0~~, respectively~~.

~~Net~~Recent ~~Loss~~Accounting ~~Per~~Standards ~~Share~~Adopted

~~Basic~~On ~~and~~August ~~diluted~~5, ~~net~~2020, ~~loss~~the ~~per~~Financial ~~share~~Accounting ~~of common~~Standards ~~stock~~Board ~~for~~(“FASB”) ~~the~~issued ~~three~~ASU ~~and~~2020-06, ~~nine~~“Debt ~~months~~– ~~ended~~Debt ~~September~~With ~~30,~~Conversion ~~2023,~~ and ~~2022~~Other ~~was~~Options ~~determined~~(Subtopic by470-20) ~~dividing~~and ~~net~~Derivatives and ~~loss~~Hedging by– ~~the~~Contracts ~~weighted~~in ~~average~~Entity’s ~~shares of~~Own ~~common~~Equity ~~stock~~(Subtopic ~~outstanding~~815-40),” ~~during~~which simplifies the ~~period.~~accounting ~~The~~for ~~Company’s~~certain ~~potentially~~financial instruments ~~dilutive~~with ~~shares,~~characteristics ~~consisting~~ of ~~974,513~~liabilities ~~warrants~~ and ~~304~~equity,~~511 stock~~ ~~options,~~including ~~have~~convertible ~~not~~instruments ~~been~~and ~~included~~contracts inon ~~the~~an ~~computation~~entity’s ofown ~~dilutive~~equity. The ~~net~~ASU ~~loss~~is ~~per~~part ~~share~~of ~~for~~ the ~~2023 periods as the result would be antidilutive. The Company~~FASB’s ~~potentially~~simplification ~~dilutive shares~~initiative, ~~consisting~~which ofaims ~~483,174~~to ~~warrants~~reduce ~~and~~unnecessary ~~8,334~~complexity ~~stock~~in ~~options,~~GAAP. ~~have~~This ~~not~~ASU ~~been~~is ~~included~~effective for infiscal ~~the computation~~years ofbeginning ~~dilutive~~after ~~net~~December ~~loss~~31, ~~per~~2023. ~~share~~The ~~for~~adoption ~~the~~of ~~2022~~this ~~periods~~guidance asdid ~~the~~not ~~result~~materially ~~would~~impact bethe ~~antidilutive~~financial statements.

~~Recent Accounting Standards Not Yet Adopted~~12

OnSMART ~~August~~FOR 5LIFE, ~~2020, the Financial Accounting Standards~~INC. ~~Board (“FASB”) issued ASU 2020-06, “Debt – Debt With Conversion and Other Options (Subtopic 470-20) and Derivatives~~ ~~and~~NOTES ~~Hedging~~TO –CONDENSED ~~Contracts~~CONSOLIDATED inFINANCIAL ~~Entity’s~~STATEMENTS ~~Own Equity (Subtopic 815-40),” which simplifies the accounting for certain financial~~ ~~instruments~~THREE ~~with~~MONTHS ~~characteristics~~ENDED ofMARCH liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in GAAP. This ASU is effective for fiscal years beginning after December 31, ~~2023.~~2024 ~~The~~AND ~~Company is evaluating the impact the adoption will have on the financial~~2023 ~~statements.~~(UNAUDITED)

InRecent ~~June~~Accounting ~~2016,~~Standards ~~the~~Not ~~FASB~~Yet issued ASU No. 2016-13, “Financial Instruments—Credit Losses (Topic 326)—Measurement of Credit Losses on Financial Instruments”, which has been subsequently amended (“ASU 2016-13”). This updated accounting guidance significantly changes the impairment model for most financial assets and certain other instruments. ASU 2016-13 will require immediate recognition of estimated credit losses expected to occur over the remaining life of many financial assets, which will generally result in earlier recognition of allowances for credit losses on trade receivables, loans and other financial instruments. This update is effective for the Company’s fiscal year beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted this new standard on January 1, 2023, and the adoption had no material impact on the Company's consolidated financial statements.Effective

~~Note~~In 3December —2023, ~~Correction~~the FASB issued ASU No. 2023-09, “Improvements to Income Tax Disclosures”. The ASU is intended to improve the transparency of ~~Prior~~income ~~Period~~tax disclosures by requiring ~~Immaterial~~consistent ~~Errors~~categories and greater disaggregation of information in the rate reconciliation, as well as income taxes paid disaggregated by jurisdiction. The ASU is effective for annual periods beginning after December 15, 2024 and should be applied on a prospective basis, but retrospective application is permitted. We are currently assessing the impact that this ASU will have on the Company’s financial statements.

~~The~~In ~~Company~~March ~~has~~2024, ~~identified~~the ~~immaterial~~FASB ~~errors in~~issued ~~the~~ASU ~~Company’s~~2024-02, ~~previously~~“Codification Improvements ~~issued~~– ~~consolidated~~Amendments ~~financial~~to ~~statements~~Remove ~~related~~References to ~~intangible~~the ~~assets~~Concept ~~and goodwill~~Statements”. The ~~error~~ASU ~~pertains~~is topart of the ~~classification~~Board’s ofstanding ~~assets~~project ~~acquired~~to inmake ~~the~~“Codification ~~acquisition~~updates offor ~~Nexus~~technical corrections such as conforming amendments, ~~whereby~~clarifications ~~intangible~~to ~~assets~~guidance, ~~and~~simplifications to wording or the ~~value~~structure of ~~such assets~~guidance, ~~were~~and ~~overstated~~other ~~and~~minor ~~goodwill~~improvements.” ~~was~~We ~~understated~~are currently assessing the impact that this ASU will have on the Company’s financial statements.

In ~~evaluating~~November ~~whether~~2024, the ~~previously~~FASB issued ~~Consolidated Financial~~ASU ~~Statements~~No. ~~were~~2024-03, “Disaggregation ~~materially~~of ~~misstated~~Income ~~for~~Statement ~~the~~Expenses”. ~~interim~~The orASU ~~annual~~is ~~periods~~intended ~~prior~~ to ~~December~~improve ~~31,~~financial ~~2022,~~reporting ~~the~~by ~~Company~~requiring ~~applied the~~disaggregated ~~guidance~~disclosure of ~~ASC~~certain ~~250,~~costs ~~Accounting Changes~~ and ~~Error~~expenses. ~~Corrections,~~The ~~SEC~~ASU ~~Staff~~is ~~Accounting~~effective ~~Bulletin~~for ~~(“SAB”)~~fiscal ~~Topic~~years ~~1.M,~~beginning ~~Assessing Materiality~~after ~~and~~December ~~SAB Topic 1.N~~15, ~~Considering~~2026 ~~the~~and ~~Effects~~for ofinterim ~~Prior~~periods within ~~Year~~fiscal ~~Misstatements~~years ~~when~~beginning ~~Quantifying~~after ~~Misstatements~~December in15, ~~Current~~2027, ~~Year~~with ~~Financial Statements~~early ~~and~~adoption ~~concluded~~permitted. ~~that~~The ~~the~~ASU ~~effect~~may ofbe ~~the~~applied ~~errors~~ on ~~prior~~either ~~period~~a ~~annual~~prospective ~~financial~~or retrospective ~~statements was immaterial~~basis. ~~The~~We ~~guidance~~are ~~states that~~currently ~~prior-year~~assessing ~~misstatements~~the ~~which,~~impact ifthat ~~corrected~~this inASU ~~the~~will ~~current~~have ~~year~~on ~~would materially misstate~~ the ~~current year~~Company’s financial statements~~, must be corrected by adjusting prior year financial statements, even though such correction previously was and continues to be immaterial to the prior-year financial statements~~. ~~Correcting prior-year financial statements for such immaterial misstatements does not require previously filed reports to be amended.~~

The ~~adjustments~~Company ~~required~~has toreviewed ~~correct~~all ~~the~~other ~~misstatement~~recently issued inaccounting ~~the~~pronouncements ~~financial~~and ~~statements~~concluded ~~for~~that ~~the~~they ~~year~~were ~~ended~~either ~~December~~not ~~31,~~applicable ~~2022~~or ~~are~~not ~~reflected~~expected into ~~the~~have ~~consolidated~~a ~~balance~~material ~~sheet.~~impact ~~The~~on ~~amount of~~ the ~~reclassification~~Company’s isfinancial ~~$4,134,000~~statements.

AsNote a3 ~~result~~— ~~of the misstatement pertaining to~~Discontinued the reclassification of the intangible assets, the Company noted an immaterial error associated with the recording of amortization expense. The Company recorded an error totaling $279,575 of amortization during the year ended December 31, 2022, and $67,075 for the three months ended March 31, 2023, respectively, collectively $346,768 that should not have been expensed. In accordance with ASC 250, Accounting Changes and Error Correction, the change in estimate for the fiscal year 2023 and beyond is reported on a prospective basis and the prior financial statements are not restated.Operations

11ASC 360, “Property, Plant, and Equipment” requires that a long-lived asset (disposal group) to be sold shall be classified as held for sale in the period in which a set of criteria have been met, including criteria that the sale of the asset (disposal group) is probable, and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. On January 29, 2024, the Company contributed nearly all of the assets of Ceautamed into First Health for a 49% ownership of First Health.

~~SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2023 AND 2022~~13

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (UNAUDITED)

~~The~~For ~~Company~~comparability ~~also reclassified $340~~purposes,~~100~~ ~~from~~certain ~~intangible~~prior period ~~assets~~line items relating to ~~goodwill~~the assets held for sale have been reclassified and presented as ~~the~~discontinued ~~result~~operations offor all periods presented in the ~~obtained~~accompanying ~~independent~~consolidated ~~professional~~statements ~~purchase~~of ~~price~~operations, ~~allocation~~consolidated ~~related~~statements toof cash flows, and the ~~acquisition~~consolidated ofbalance ~~Ceautamed~~sheets.

~~The~~In ~~Company’s~~accordance ~~consolidated~~with ~~balance~~ASC ~~sheets~~205-20-S99, “Allocation ~~have~~of ~~been~~Interest ~~revised~~to ~~from~~Discontinued Operations,” the ~~amounts~~Company ~~previously~~elected ~~reported~~ to ~~correct~~not ~~the~~allocate ~~error~~consolidated ~~and~~interest ~~the~~expense ~~impact~~to ofdiscontinued operations where the ~~purchase~~debt ~~price~~is ~~allocation~~not ~~change~~directly ~~as shown~~attributable into ~~the~~or ~~table~~related ~~below.~~to ~~See~~discontinued ~~Note 6~~operations.

~~Consolidated~~The ~~Balance~~following ~~Sheet~~information presents the major classes of line item of assets and liabilities included as part of discontinued operations in the consolidated balance sheets as of March 31, 2024 and December 31, ~~2022~~2023:

	As Previously Reported		PPA Finalization			Corrections			As Adjusted
	March 31, 2024		December 31, 2023
Intangible assets, net	$	20,936,258	$	(340,100	)	$	(4,134,000	)	$	16,462,158
ASSETS
Goodwill		1,342,000		340,100			4,134,000			5,816,100
Current assets:
Cash	$	18,095	$	29,872
Accounts receivable, net		—		18,688
Inventory		—		89,997
Prepaid expenses and other current assets		—		6,500
Total current assets		18,095		145,057
Property and equipment, net		—		4,188
Intangible assets, net		—		3,765,962
Operating lease right-of-use assets		—		702,818
Total other assets		—		4,472,968
Total assets	$	18,095	$	4,618,025
LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current liabilities:
Accounts payable	$	—	$	528,129
Accrued expenses		—		109,623
Contract liabilities		—		99,408
Lease liability, current		—		72,431
Debt, current, net of debt discounts		—		51,767
Total current liabilities		—		861,358
Long-term liabilities:
Lease liability, noncurrent		—		647,258
Total long-term liabilities		—		647,258
Total liabilities	$	—	$	1,508,616

~~Condensed Consolidated Balance Sheet as of March 31, 2023~~14

	As Previously Reported		PPA Finalization			Corrections			As Adjusted
Intangible assets, net	$	20,326,040	$	(340,100	)	$	(4,134,000	)	$	15,851,940
Goodwill		1,342,000		340,100			4,134,000			5,816,100

SMART FOR LIFE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(UNAUDITED)

The following information presents the major classes of line items constituting the after-tax loss from discontinued operations in the consolidated statements of operations for the three months ended March 31, 2024 and 2023:

	March 31, 2024			March 31, 2023
Revenues
Products	$	158,612		$	953,179
Cost of revenues
Products		18,988			493,214
Gross profit		139,624			459,965
Operating expenses
General and administrative		28,390			100,363
Compensation		18,205			137,684
Depreciation and amortization expense		—			255,415
Total operating expenses		46,595			493,462
Operating profit (loss)		93,029			(33,497	)
Other income (expense)
Interest expense		(3,444	)		(181,817	)
Total other income (expense)		(3,444	)		(181,817	)
Income (loss) from discontinued operations		89,585			(215,314	)
Income tax expense		—			—
Net income (loss) from discontinued operations	$	89,585		$	(215,314	)

Note 4 — Inventory

Inventory consisted of the following:

	September 30, 2023		December 31, 2022
	March 31, 2024		December 31, 2023
Raw materials	$	~~541~~400,~~520~~614	$	~~644~~386,~~202~~860
Packaging materials		~~906~~750,~~386~~030		~~946~~755,~~884~~059
Finished goods		~~438~~37,~~476~~129		1283,~~074,415~~070
Inventory in transit		101,348		—
		1,187,773		1,424,989
	$	1,987,730	$	2,665,501
Less: allowance for obsolescence		—		—
	$	1,187,773	$	1,424,989

Note 5 — Property and Equipment

Property and equipment consisted of the following:

	Estimated Useful Lives (in Years)	~~September~~March 3031, ~~2023~~2024			December 31, ~~2022~~2023
Furniture and fixtures	7	$	94,~~139~~461		$	9,~~139~~135
Equipment – manufacturing	5		1,~~346~~338,~~152~~218			1,~~342~~338,~~702~~218
Building and equipment	5		3,~~839~~840			3,840
Leasehold improvements	3.5		9075,~~099~~061			90,~~099~~100
			1,449,229			1,445,780
			1,421,580			1,441,293
Less: accumulated depreciation and amortization			(1,~~137~~204,~~757~~225	)		(~~963~~1,~~561~~176,356	)
Property and equipment, net		$	~~311~~217,~~472~~355		$	~~482~~264,~~219~~937

12Depreciation and amortization expense for the three months ended March 31, 2024 and 2023 totaled $41,009 and $80,331, respectively, which is included in depreciation and amortization expense.

~~SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2023 AND 2022~~15

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (UNAUDITED)

Depreciation and amortization expense for the nine months ended September 30, 2023 and 2022 totaled $174,174 and $222,184, respectively, which is included in depreciation and amortization expense. Depreciation and amortization expense for the three months ended September 30, 2023 and 2022 totaled $46,271 and $80,006, respectively, which is included in depreciation and amortization expense.

Note 6 — Intangible Assets

Intangible assets consisted of the following:

	Estimated Useful Lives (in Years)	~~September~~March 3031, ~~2023~~2024			December 31, ~~2022 (As adjusted)~~2023
Customer contracts	7-10	$	6,375,525		$	6,842,262
Goodwill		$	3,045,000		$	3,045,000
Customer contracts	7-10	$	5,483,263		$	5,483,263
Developed technology	15		1,660,000			1,660,000
Non-compete agreements	3		840,000			840,000
Patents	5-10		2230,~~950,~~000			2230,~~950,~~000
Tradename	10-15		42,~~170~~010,000			42,~~170~~010,000
Supplier contracts	10		1,800,000			1,800,000
Total intangible assets			10,223,263			10,223,263
Licenses agreements	5		584,220			584,220
Less: amortization			(2,945,952	)		(3,087,515	)
Total intangible assets			18,379,745			18,846,482
Intangibles, net		$	7,277,311		$	7,135,748
Less: amortization			(4,038,000	)		(2,384,324	)
Intangibles, net		$	14,341,745		$	16,462,158

~~The~~Amortization ~~allocation~~for of the ~~Nexus~~three ~~purchase~~months ~~price~~ended ~~in 2021 to intangibles assets,~~March ~~including~~31, ~~customer~~2024 ~~contracts~~ and ~~non-compete~~2023 ~~agreements,~~ was ~~based~~$282,117 onand ~~provisional valuations performed to estimate the fair value of the assets as of the acquisition date. During the three months ended June 30~~$355,464, ~~2023~~respectively, ~~the~~which ~~Company~~is ~~noted~~included ~~that an immaterial error existed~~ in ~~the~~ ~~recording~~depreciation ~~of the allocation of the intangible assets~~ and ~~has~~amortization ~~reclassified $4,134,000 from intangible assets to goodwill~~expense.

The allocation of the Ceautamed purchase price in 2022 to intangibles assets, including customer contracts and non-compete agreements, was based on provisional valuations performed to estimate the fair value of the assets as of the acquisition date. The Company engaged an independent valuation firm to perform a purchase price allocation, noting differences in the intangible assets and values. The independent valuation resulted in reclassification of the assets which have been represented in the December 31, 2022 balances. Additionally, $340,100 was reclassified from intangible assets to goodwill.

The table below identifies the changes to each of the intangible assets as a result of the PPAs obtained related to the Nexus and Ceautamed acquisitions.

	December 31, 2022 previously reported		PPA Adjustments			December 31, 2022 (As Adjusted)
Customer contracts	$	17,046,076	$	(10,203,814	)	$	6,842,262
Developed technology		1,570,000		90,000			1,660,000
Non-compete agreements		1,595,530		(755,530	)		840,000
Patents		230,000		2,720,000			2,950,000
Tradename		2,010,000		2,160,000			4,170,000
Intellectual property		385,199		(385,199	)		—
Supplier contracts		—		1,800,000			1,800,000
Licenses agreements		584,220		—			584,220
Total intangible assets	$	23,421,025	$	(4,574,543	)	$	18,846,482

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)

As a result of decreased revenues within the Nexus subsidiary during the six months ended June 30, 2023, which are not expected to recover to similar levels, the Company determined that a triggering event occurred requiring an impairment analysis in accordance with ASC 360. The impairment analysis resulted in the Company recognizing an impairment of the affiliate relationship asset associated with Nexus of $466,737.

Amortization for the three months ended September 30, 2023 and 2022 was $569,539 and $442,405, respectively, which is included in depreciation and amortization expense.

Amortization for the nine months ended September 30, 2023 and 2022 was $1,640,439 and $1,148,603, respectively, which is included in depreciation and amortization expense.

The future amortization is as follows:

Years Ending December 31:
2023 (remainder of year)	$	569,537
2024 (remainder of year)	$	846,350
2024		2,278,242
2025		1,015,571
2025		1,918,440
2026		858,466
2026		1,354,076
2027		858,466
2027		1,236,022
2028		724,350
Thereafter		62,~~985~~974,~~428~~108
Total	$	147,~~341~~277,~~745~~311

Note 7 — Leases

Leases Involving Real Estate

Leases of distribution and manufacturing facilities, customer support centers and the Company’s corporate headquarters have lease terms that generally range from 5 to 7 years.

Rental payments on these leases typically provide for fixed minimum payments that increase over the lease term at predetermined amounts. Certain leases of real estate provide for rental increases based on the consumer price index, which are included in the Company’s measurement of lease payments based on the rate or index in effect at lease commencement and are therefore included in the measurement of the lease liabilities.

SMART FOR LIFE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(UNAUDITED)

Leases Involving Equipment

Equipment leases have lease terms that generally range from less than 4 years to 5 years. Rental payments on these leases typically provide for fixed minimum payments that increase over the lease term at predetermined amounts, are included in the measurement of lease payments, and are included in the measurement of lease liabilities. Certain of the leases involving equipment have purchase options. When those options are reasonably certain of being exercised, the Company reflects such purchase options when measuring the lease term and lease payments for those leases.

Financial Information

The following provides information about the Company’s right of use assets and lease liabilities for its operating ~~and finance leases~~ as of ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~2023:

	Balance Sheet classification	September 30, 2023		December 31, 2022
	Balance Sheet Classification	March 31, 2024		December 31, 2023
Right of use assets Operating leases	Operating leases right-of-use asset	$	2,421,550	$	2,672,866
Right of use assets operating leases	Operating leases right-of-use asset	$	1,181,068	$	2,164,862
Lease liabilities
Current
Operating leases	Operating lease liabilities, current portion		~~347~~210,~~852~~894		~~303~~401,~~819~~577
Noncurrent
Operating leases	Operating lease liabilities, non-current portion		21,~~157~~038,~~344~~387		21,~~423~~855,~~446~~766
Total lease liabilities		$	21,~~505~~249,~~196~~281	$	2,~~727~~257,~~265~~343

The components of the Company’s lease ~~costs~~cost for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023 are as follows:

		Income Statement Classification		~~September~~March 3031, ~~2023~~2024				~~September~~March 3031, ~~2022~~2023
Rent expense		General and administration		$	~~431~~88,~~227~~114			$	~~492~~123,~~142~~043

14Supplemental cash flow information related to Company’s leases for the three months ended March 31, 2024:

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2023 AND 2022

		Operating Leases
Cash paid for amounts included in the measurement of lease liabilities		$	86,534

~~(UNAUDITED)~~Weighted average remaining lease term and weighted average discount rate for the Company’s leases as of March 31, 2024:

Supplemental cash flow information related to Company’s leases for the nine months ended September 30, 2023:

	Operating Leases
Weighted average remaining term (in years)		4.33
Weighted average discount rate		12.00	%

		Operating leases
Cash paid for amounts included in the measurement of lease liabilities		$	431,227

~~Weighted~~SMART ~~average~~FOR ~~remaining~~LIFE, ~~lease term and weighted~~INC. ~~average~~ NOTES ~~discount~~TO ~~rate~~CONDENSED ~~for~~CONSOLIDATED ~~the~~FINANCIAL ~~Company’s~~STATEMENTS ~~leases~~ THREE asMONTHS ofENDED ~~September~~MARCH 3031, 2024 AND 2023: (UNAUDITED)

	Operating leases
Weighted average remaining term (in years)		4.84
Weighted average discount rate		12.00	%

Annual maturity analysis of the Company’s lease liabilities as of March 31, 2024:

Annual maturity analysis of the Company’s lease liabilities as of September 30, 2023:

	Operating Leases
2024	$	260,466
2025		357,409
2026		368,132
2027		379,176
2028		259,718
2029		—
Thereafter		—
Total payments		1,624,901
Less: interest		375,620
Present value of lease liability		1,249,281
Less: Current portion of lease liabilities		(210,894	)
Noncurrent portion of lease liabilities	$	1,038,387

	Operating leases
2023	$	156,089
2024		633,037
2025		651,828
2026		671,213
2027		658,622
Thereafter		636,776
Total payments		3,407,565
Less: interest		(902,369	)
Present value of lease liability		2,505,196
Less: Current portion of lease liabilities		(347,852	)
Noncurrent portion of lease liabilities	$	2,157,344

Note 8 — Debt

Original Issue Discount Subordinated Debentures

In June 2022, the Company commenced offerings of original issue discount subordinated debentures. As of ~~September~~March 3031, ~~2023~~2024, the Company has completed multiple closings and issued debentures in the aggregate principal amount of $5,~~142~~277,~~040~~241, of which $1189,~~229,413~~613 was issued with ~~issuance~~issuances costs of $~~184~~26,~~413~~113, ~~for~~and $1,543,272 of principal and $295,678 of interest was converted into shares of stock for the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024. The debentures contain an original issue discount of 15%, or an aggregate original issue discount of $~~771~~726,~~183~~706. As a result, the total purchase price was $4,~~370~~550,~~858~~535. The debentures bear interest at a rate of 17.5% per annum and are due from January 2024 through ~~November~~January ~~2024~~2025. The outstanding principal amount and all accrued interest is due and payable on the earlier of (i) the completion of the Company’s next equity financing in which it receives gross proceeds in excess of $20 million, (ii) twenty-four months after the date of issuance or (iii) within 30 days after election of repayment from the holder so long as the election is after the 6-month anniversary of the debenture. The Company may voluntarily prepay the debentures in whole or in part without premium or penalty. The debentures contain customary events of default for a loan of this type. The debentures are unsecured and are subordinated in right of payment to the prior payment in full of all senior indebtedness and are pari passu in right of payment to any other unsecured indebtedness incurred by the Company in favor of any third party. AsThe ~~of September 30, 2023, the~~ outstanding principal balance of the debentures was $3,061,817 and $4,~~252~~415,~~947~~476, the unamortized debt issuance cost was $~~173~~23,~~423~~ 935 and ~~accrued interest was~~ $~~866~~84,~~272. On May 30~~774, ~~2023, two~~and ofaccrued ~~the~~interest ~~debenture~~was ~~agreements totaling~~ $~~250~~838,~~000~~712 ~~were~~and ~~converted into~~ $1,~~121 shares of the Company’s series B preferred stock~~053,260 at a ~~conversion~~March ~~price~~31, of2024 ~~$223.01.~~and ~~During~~December ~~the nine months ended September 30~~31, 2023, ~~an aggregate of $1,045,000 was raised via these debentures~~respectively.

15On February 21, 2024, a judgement on an original issue discount subordinated debenture, dated August 26, 2022, was received and the outstanding amount of the debenture was amended to $399,306, inclusive of legal fees (see Note 14 for updated information).

~~SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2023 AND 2022~~18

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS THREE MONTHS ENDED MARCH 31, 2024 AND 2023 (UNAUDITED)

Original Issue Discount Secured Subordinated Note

On July 29, 2022, the Company entered into a securities purchase agreement with an accredited investor, pursuant to which it sold an original issue discount secured subordinated note in the principal amount of $2,272,727 to such investor. The note contains an original issue discount of 12%, or $272,727. As a result, the total purchase price was $2,000,000, the proceeds of which were used to fund the acquisition of Ceautamed. The note shall bear interest at the rate of 16% per annum and matures on July 29, 2027. The outstanding principal and all accrued interest shall be amortized on a 60-month straight-line basis. The Company may prepay the principal and all accrued and unpaid interest on the note without penalty, in whole or in part; provided however, in no event before January 15, 2023, unless with the explicit prior written approval of the holder. The note contains customary events of default for a loan of this type. The note is guaranteed by BSNM, DSO, Nexus, GSP and Ceautamed and is secured by a security interest in all of the assets of the Company and such guarantors; provided that such security interest is subordinate to the rights of the lenders under any senior indebtedness (as defined in the note). AsOn ofJanuary ~~September~~26, 302024, ~~2023~~ the ~~outstanding~~note ~~principal~~was ~~balance~~modified ~~of the~~increasing ~~note~~the ~~was~~principal amount to $2,~~217~~800,~~853~~452 ~~the~~inclusive ~~unamortized~~of ~~debt~~interest ~~issuance~~and ~~cost~~finance ~~was $186~~fees,~~548~~ and ~~accrued~~the interest ~~was~~changed ~~$413,189~~to 13%. ~~During~~For the ~~nine~~three months ended ~~September~~ 30March 31, ~~2023~~2024, ~~the~~$500,000 ~~Company~~of ~~recognized~~principal ~~$63,477~~was converted into shares of ~~interest~~stock. ~~expense~~As ~~associated~~of ~~with~~March 31, 2024, the ~~amortization~~outstanding principal balance of the note was $2,300,452, the unamortized debt issuance cost was $123,565 and accrued interest was $53,257.

Acquisition Notes – Related Parties

On July 1, 2021, the Company issued a 6% secured subordinated promissory note in the principal amount of $3,000,000 to a related party, Sasson E. Moulavi (“Dr. Moulavi”), in connection with the acquisition of DSO. This note ~~accrues~~accrued interest at 6% per annum and the outstanding principal and interest ~~will be~~was amortized on a straight-line basis and ~~are~~was payable quarterly in accordance with the amortization schedule, with all amounts due and payable on July 1, 2024. On November 29, 2022, the Company entered into a letter agreement with Sasson E. Moulavi to amend the terms of the note. Pursuant to the letter agreement, the parties agreed to amend and restate the note to amend the amortization schedule, with the first payment deferred until February 15, 2023 and all amounts due and payable on August 15, 2024. In exchange for the agreement of Dr. Moulavi to enter into the letter agreement, the Company agreed to (i) issue to Dr. Moulavi 100,000 shares of common stock under the Company’s 2022 Equity Incentive Plan and (ii) pay to Dr. Moulavi a fee of $50,000 in cash, which shall be paid upon completion of the Company’s anticipated debt financing and is included in debt balance. ~~The~~On ~~Company~~February ~~may~~6, ~~prepay~~2024, ~~all~~$123,930 ~~or any portion~~ of ~~this~~principal ~~note any~~was ~~time~~converted ~~prior~~into to121,500 ~~maturity~~shares ~~without~~of ~~premium or penalty~~common stock. ~~This~~On ~~note~~February ~~contains~~21, ~~customary covenants and events of default for a loan of this type~~2024, ~~including if a default occurs under any senior secured indebtedness to banks and other financial institutions or private equity funds~~$100,400 ~~and is secured by a security interest in all~~ of ~~the~~principal ~~assets~~was ofconverted ~~DSO;~~into ~~provided~~125,500 ~~that~~shares ~~such security interest is subordinate to the rights~~ of ~~the~~common ~~lenders under any such senior secured indebtedness~~stock. ~~During~~On ~~the~~February ~~nine~~28, ~~months ended September 30~~2024, ~~2023~~$126,028 ~~the Company made principal~~of ~~cash~~principal ~~payments~~was ofconverted ~~$150,000~~into ~~and $196~~128,~~000~~600 ~~for~~shares ~~the~~of ~~new~~common ~~note~~stock. On ~~May~~February 2529, ~~2023~~2024, the ~~note~~outstanding ~~was~~balance ~~modified~~and ~~whereby~~accrued interest of $1,~~500~~038,~~000 in principal amount~~592 ofand ~~the~~$167,667, ~~note~~respectively was converted tointo 612,~~727~~063 shares of ~~the Company’s~~ series BC preferred stock. ~~The~~and ~~remaining $1~~53,~~400,000~~659 ofshares ~~principal plus accrued interest~~ of ~~$334,950~~common ~~was converted into a new note with the same interest rate and maturity date~~stock. As of ~~September 30~~March 31, ~~2023~~2024, the outstanding principal balance of this note was $~~1,538,950~~0 and accrued interest was $~~32,574~~0.

On November 8, 2021, the Company issued a 5% secured subordinated promissory note in the principal amount of $1,900,000 to related parties, Justin Francisco and Steven Rubert, in connection with the acquisition of Nexus. This note accrued interest at 5% per annum and the outstanding principal and interest was amortized on a straight-line basis and ~~are~~was payable quarterly in accordance with the amortization schedule attached to the note, with all amounts due and payable on November 8, 2024. OnDuring ~~May~~the 25year ended December 31, 2023, the ~~note~~outstanding ~~and~~balance including accrued interest ~~$12,966~~ was converted into toseries ~~8,579~~B ~~shares~~preferred stock. As of ~~the~~March ~~Company’s~~31, ~~series~~2024, Bthe ~~preferred stock~~outstanding ~~which~~principal ~~resulted~~balance inof ~~the~~this note ~~being~~was ~~fully~~$0 ~~paid~~and ataccrued ~~September~~interest ~~30,~~was ~~2023~~$0.

On July 29, 2022, the Company issued secured subordinated ~~convertible~~ convertible promissory notes in the aggregate principal amount of $2,150,000 in connection with the acquisition of Ceautamed, which are ~~partially~~ partially with a related party. The notes bore interest at the rate of 5% per annum with all principal and accrued interest being due and payable in one lump sum on July 29, 2025; provided that upon an event of default (as defined in the notes), such interest rate shall ~~increase~~ increase to 10%. On ~~May~~January 2529, ~~2023~~2024, ~~the~~this note ~~and~~was ~~accrued~~forgiven ~~interest~~as part of ~~$89,584~~the ~~was~~transaction ~~converted~~in towhich ~~10,458~~the ~~shares~~assets of ~~the~~Ceautamed ~~Company’s~~were ~~series~~contributed into BFirst ~~preferred stock~~Health. ~~which~~As ~~resulted~~of inMarch 31, 2024, the ~~note~~outstanding ~~being~~principal ~~fully~~balance ~~paid~~of atthese ~~September~~notes ~~30,~~was ~~2023~~$0 and accrued interest was $0.

1619

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~SEPTEMBER~~THREE 30MONTHS ENDED MARCH 31, ~~2023~~2024 AND ~~2022~~2023 (UNAUDITED)

On July 29, 2022, the Company issued secured subordinated promissory notes in the aggregate principal amount of $2,150,000 in connection with the acquisition of Ceautamed, which are partially with a related party. The notes bear interest at the rate of 5% per annum and mature on July 29, 2025; provided that upon an event of default (~~UNAUDITED~~as defined in the notes), such interest rate shall increase to 10%. The outstanding principal and all accrued interest shall be amortized on a five-year straight-line basis and payable quarterly in accordance with the amortization schedule to the notes. The Company may redeem all or any portion of the notes at any time without premium or penalty. The notes contain customary covenants and events of default for loans of this type, including upon any default under the senior indebtedness (as defined in the notes). The notes are guaranteed by Ceautamed and are secured by a security interest in all of the assets of such guarantors; provided that such security interest is subordinate to the rights of the lenders under any such senior indebtedness. On January 29, 2024, $1,097,997 of this note was forgiven as part of the transaction in which the assets of Ceautamed were contributed into First Health. Also on January 29, 2024, the remaining balance of $1,094,496 was modified to $351,293. As of March 31, 2024, the outstanding principal balance of these notes was $52,493 and accrued interest was $656.

On July 29, 2022, the Company issued secured ~~subordinated~~ subordinated promissory notes in the aggregate principal amount of $21,~~150~~300,000 in connection with the acquisition of Ceautamed, which are partially with a related party. The notes ~~shall~~bore ~~bear~~ interest at the rate of 5% per annum with all principal and ~~mature~~accrued oninterest ~~July~~being ~~29,~~due ~~2025~~and payable in one lump sum ninety (90) days from the date of the note; provided that upon an event of default (as defined in the notes), such interest rate shall increase to 10%. On November 28, 2022, the Company entered into letter agreements with the holders of most of the notes to amend the terms of these notes. Pursuant to letter agreements, the parties agreed to extend the maturity date to June 1, 2023 and agreed to a seven month payment schedule, with the first payment due December 1, 2022. The ~~outstanding~~parties ~~principal~~also agreed to increase the default interest rate from 10% to 15%. The Company also agreed that if an event of default (as defined in the notes) has occurred and ~~all~~is ~~accrued~~continuing, then ~~interest~~the Company shall benot ~~amortized~~create onany senior indebtedness (as defined in the notes) without the consent of the holders of a ~~five-year~~majority ~~straight-line~~of ~~basis~~the principal ~~and~~amount ~~payable~~of ~~quarterly~~the innotes. ~~accordance~~In ~~with~~exchange for the ~~amortization~~agreement ~~schedule~~of the holders to enter into the letter agreements, the Company agreed to pay certain amendment fees as more particularly described in the ~~notes~~letter agreements. The Company is in the process of negotiating a similar extension of one remaining note in the principal amount of $100,000. The Company may redeem all or any portion of the notes at any time without premium or penalty. The notes contain customary covenants and events of default for loans of this type, including upon any default under the senior indebtedness (as defined in the notes). The notes are guaranteed by Ceautamed and are secured by a security interest in all of the assets of such guarantors; provided that such security interest is subordinate to the rights of the lenders under any such senior indebtedness. AsOn ofJanuary ~~September~~29, 302024, ~~2023~~$1,210,000 of this note was forgiven as part of the ~~outstanding principal~~transaction ~~balance~~in which the assets of ~~these~~Ceautamed were ~~notes~~contributed ~~was~~into $2First Health. As of March 31,~~203~~ 2024,~~993,~~ ~~unamortized~~the ~~debt~~outstanding ~~issuance~~principal ~~cost~~balance of this note was $090,000 and accrued interest was $~~196~~7,~~552~~638.

On July 29, 2022, the Company issued secured subordinated promissory notes in the aggregate principal amount of $1,300,000 in connection with the acquisition of Ceautamed, which are partially with a related party. The notes bear interest at the rate of 5% per annum with all principal and accrued interest being due and payable in one lump sum ninety (90) days from the date of the note; provided that upon an event of default (as defined in the notes), such interest rate shall increase to 10%. On November 28, 2022, the Company entered into letter agreements with the holders of most of the notes to amend the terms of these notes. Pursuant to letter agreements, the parties agreed to extend the maturity date to June 1, 2023 and agreed to a seven month payment schedule, with the first payment due December 1, 2022. The parties also agreed to increase the default interest rate from 10% to 15%. The Company also agreed that if an event of default (as defined in the notes) has occurred and is continuing, then the Company shall not create any senior indebtedness (as defined in the notes) without the consent of the holders of a majority of the principal amount of the notes. In exchange for the agreement of the holders to enter into the letter agreements, the Company agreed to pay certain amendment fees as more particularly described in the letter agreements. On April 1, 2023, the Company entered into letter agreements with the holders of most of the notes, pursuant to which the Company agreed to pay the remaining balance of the notes in two payments on May 1, 2023 and June 1, 2023. One of the note holders agreed to settle the amount due to the holder for a lesser amount, resulting in a gain on extinguishment of debt of $60,764. In addition, the Company agreed to prepay a portion of the outstanding principal and accrued interest on the notes upon the occurrence of any of the following events: (i) in the event the Company receives any tax refunds claimed with respect to an “employee retention credit” pursuant to Section 2301 of the CARES Act (or any corresponding or similar provisions of state or local law) or receives any cash from factoring or assigning the right to receive such tax refunds, the Company must prepay $150,000 of the outstanding principal and accrued interest on the notes; (ii) in the event the Company or any its subsidiaries raise capital through the issuance of any convertible debentures, the Company must prepay the outstanding principal and accrued interest on the notes in an amount equal to one-third (1/3) of the net proceeds from such financing; and (iii) in the event the Company or any of its subsidiaries consummates an equity or equity-linked capital raise with the assistance of an investment bank, the Company must prepay the outstanding principal and accrued interest on the notes in an amount equal to one-third (1/3) of the proceeds raised by the Company or any of its subsidiaries, up to an aggregate amount of $350,000, plus any then overdue principal payments. The Company is in the process of negotiating a similar extension of one remaining note in the principal amount of $100,000. The Company may redeem all or any portion of the notes at any time without premium or penalty. The notes contain customary covenants and events of default for loans of this type, including upon any default under the senior indebtedness (as defined in the notes). The notes are guaranteed by Ceautamed and are secured by a security interest in all of the assets of such guarantors; provided that such security interest is subordinate to the rights of the lenders under any such senior indebtedness. As of September 30, 2023, the outstanding principal balance of these notes was $90,000, unamortized debt issuance cost was $0 and accrued interest was $5,350.

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)

Other Promissory Notes and Cash Advances

Promissory Notes

On July 1, 2021, the Company entered into a loan agreement with Diamond Creek Capital, LLC for a term loan in the principal amount of up to $3,000,000. The loan ~~bears~~bore interest at a rate of 15.0% per annum, provided that upon an event of default, such rate ~~shall~~would increase by 5%. The loan was due and payable on the earlier of July 1, 2022 or upon completion of the Company’s initial public offering (the “IPO”). The Company repaid $1,325,000 of the principal balance and $27,604 of the interest from the proceeds of the IPO. In connection with such repayment, the lender agreed that the remaining loan iswas due and payable on July 1, 2023. On April 20, 2023, the Company entered into aan ~~third~~ amendment to the loan agreement, which ~~provides~~provided that the Company ~~shall~~would make a payment towards the reduction of principal in the amount of $250,000 within two business days of ~~the~~certain ~~earlier to occur of the following~~ events: (i) the Company receives any tax refunds claimed with respect to an “employee retention credit” pursuant to Section 2301 of the CARES Act (or any corresponding or similar provisions of state or local law) or receives any cash from factoring or assigning the right to receive such tax refunds, orwhich ~~(ii)~~did ~~the~~not ~~completion of a public offering of securities pursuant to a Registration Statement on Form S-3~~occur. InOn ~~addition,~~January ~~within two business days following the completion of a public offering of securities pursuant to a Registration Statement on Form S-1~~29, ~~the Company agreed to pay in full all outstanding amounts owing under the loan agreement. The amendment also provides that following the payment of $250~~2024,~~000 described~~ ~~above,~~this ~~monthly payments~~note ofwas ~~principal~~fully ~~and~~paid ~~interest~~as ~~pursuant~~part ~~to shall be an aggregate~~ of ~~$30,000 per month, until~~ the ~~amounts~~transaction ~~owing~~in ~~under~~which the ~~loan~~assets ~~agreement are paid in full. The loan is secured by all~~ of ~~the~~Ceautamed ~~Company’s~~were ~~assets~~contributed ~~and~~into ~~contains~~First ~~customary events of default~~Health. As of ~~September~~March 3031, ~~2023~~2024, the outstanding principal balance of this note was $~~638,062~~0 and accrued interest was $0. ~~As of September 30, 2023, the Company was in compliance with the covenants related to this note.~~

In 2018, the Company entered into an amended ~~loan~~ note agreement and convertible promissory note for $200,000 with a third party. OnThe ~~September 30, 2023, the~~ outstanding amount was $100,000 and ~~accrued~~$100,000 and accrued interest was $~~158~~161,~~518~~351 and $149,351 at March 31, 2024 and December 31, 2023, respectively. The amended loan agreement and convertible promissory note (convertible at fair value of shares) was in default at ~~September~~March 3031, ~~2023~~2024.

~~On October 12, 2022, the Company issued promissory notes in the principal amount of $258,000 to third parties. These promissory notes bear interest of 15% to~~ 20% and are payable on December 2022 and January 2023. During the nine months ended September 30, 2023, the Company made various principal and interest payments on the notes. On May 26, 2023, only the remaining principal balance of $105,000 was converted into 489 shares of the Company’s series B preferred stock, the accrued interest was not converted. As of September 30, 2023, the outstanding principal balance was $0 and accrued interest was $14,329.

OnSMART ~~November~~FOR 2LIFE, ~~2022, the Company issued a promissory~~INC. ~~note~~ NOTES toTO aCONDENSED ~~board~~CONSOLIDATED ~~member~~FINANCIAL inSTATEMENTS ~~the principal amount of $50,000. This note bears interest at a rate of 12% and is due on demand. During the~~ ~~nine~~THREE ~~months~~MONTHS ~~ended~~ENDED ~~September~~MARCH 3031, ~~2023~~2024 ~~the~~AND ~~principal balance was paid in full, however the accrued interest was not paid. At September 30,~~ 2023~~, the outstanding amount was $0 and accrued interest was $2,387.~~ (UNAUDITED)

On ~~December~~October 612, 2022, the Company issued a promissory ~~note~~notes ~~to a board member~~ in the principal amount of $30258,000. ~~This~~to ~~note~~third ~~bore~~parties. ~~interest~~These atpromissory anotes ~~rate~~bear interest of 1215% to 20% and ~~was~~are ~~due~~payable on ~~demand~~December 2022 and January 2023. ~~The~~During ~~remaining principal~~the ~~balance~~year ofended ~~$30~~December 31,~~000~~ as2023, ofthe Company made various principal and interest payments on the notes. On May 26, 2023, only the remaining principal balance of $105,000 was converted into ~~142~~471 shares of the Company’s series B preferred stock, ~~which~~the ~~resulted in~~accrued ~~the~~interest ~~note~~was ~~being~~not ~~fully~~converted. ~~paid~~As atof ~~September~~March 3031,2024, ~~2023~~the outstanding principal balance was $0 and accrued interest was $11,999.

On ~~December~~November 212, 2022, the Company issued a promissory note to a board member in the principal amount of $~~100~~50,000. This note ~~bore~~bears interest at a rate of 12% and ~~was~~is due on demand. ~~The~~During ~~remaining~~the ~~principal~~year ~~balance~~ended ofDecember ~~$100~~31,~~000~~ as2023, ofthe ~~May~~principal ~~26,~~balance ~~2023~~ was ~~converted~~paid ~~into~~in ~~472~~full, ~~shares~~however of the ~~Company’s~~accrued ~~series~~interest Bwas ~~preferred~~not ~~stock~~paid. ~~which~~At ~~resulted in~~March 31,2024, the outstanding ~~note~~amount ~~being~~was ~~fully~~$0 ~~paid~~and ataccrued ~~September~~interest ~~30,~~was ~~2023~~$2,387.

On ~~February~~December 86, ~~2023~~2022, the Company issued a promissory note to a board member in the principal amount of $5030,000. This note bore interest at a rate of 12% and was due on demand. The remaining principal balance of $30,000 as of May 26, 2023 was converted into ~~232~~135 shares of the Company’s series B preferred stock which resulted in the note being fully paid ~~at September 30, 2023~~.

On ~~February~~December 1421, ~~2023~~2022, the Company issued a promissory note to a ~~third party~~board member in the principal amount of $50100,000. This note bore interest at a rate of 12% and was due on demand. ~~During the nine months ended September 30, 2023, the Company made various principal and interest payments on the notes.~~ The remaining principal balance of $20100,000 as of May 26, 2023 was converted into 93449 shares of the Company’s series B preferred stock. Atwhich ~~September~~resulted in ~~30, 2023,~~ the ~~outstanding amount~~note ~~was~~being $0fully ~~and accrued interest was $992~~paid.

On February 168, 2023, the Company issued a promissory note to a ~~third~~board ~~party~~member in the principal amount of $50,000. This note bore interest at a rate of 12% and was due on ~~August 26, 2023~~demand. The ~~remaining~~ remaining principal balance as of May 26, 2023 was converted into ~~224~~225 shares of the Company’s series B preferred stock which resulted in the note being fully paid ~~at September 30, 2023~~. ~~At September 30, 2023, the outstanding amount was $0 and accrued interest was $2,153.~~

18On February 14, 2023, the Company issued a promissory note to a third party in the principal amount of $50,000. This note bore interest at a rate of 12% and was due on demand. During the year ended December 31, 2023, the Company made various principal and interest payments on the note. The remaining principal balance of $20,000 as of May 26, 2023 was converted into 90 shares of the Company’s series B preferred stock which resulted in the note being fully paid.

~~SMART~~On ~~FOR~~February ~~LIFE~~19, ~~INC.~~2023, the Company issued a promissory ~~NOTES~~note TOto ~~CONDENSED~~a ~~CONSOLIDATED~~third ~~FINANCIAL~~party ~~STATEMENTS~~in the principal amount of $50,000. This note bore interest at a rate of 12% and was due on August 26, 2023. The ~~SEPTEMBER~~remaining 30principal balance as of May 26, 2023 ~~AND~~was ~~2022~~converted into 225 shares of the Company’s series B preferred stock which resulted in the note being fully paid.

~~(UNAUDITED)~~On March 7, 2023, the Company issued a promissory note to a board member in the principal amount of $137,000. This note bears interest at a rate of 12% and is due on demand. During the year ended December 31, 2023, the Company made various principal and interest payments on the notes. On May 26, 2023, $50,000 of principal and $1,137 of interest was converted into 230 shares of the Company’s series B preferred stock. The outstanding amount was $51,294 and $51,294 and accrued interest was $8,065 and $5,312 at March 31, 2024 and December 31, 2023, respectively.

On ~~March~~April 713, 2023, the Company issued a promissory note to a ~~board~~third ~~member~~party in the principal amount of $~~137~~59,000. This note ~~bears~~bore interest at a rate of 12% and iswas due on demand. ~~During~~The ~~the~~remaining ~~nine months ended September 30, 2023, the Company made various~~ principal ~~and~~balance ~~interest~~as ~~payments~~of ~~on the notes. On~~ May 26, 2023, ~~$50,000 of principal and $1,137 of interest~~ was converted ~~230~~into 265 shares of ~~into~~ the Company’s series B preferred stock. Atwhich ~~September~~resulted ~~30, 2023,~~in the ~~outstanding~~note ~~amount~~being ~~was~~fully ~~$51,294 and accrued interest was $4,086~~paid.

On April 1321, 2023, the Company issued a promissory note to a ~~third~~board ~~party~~member in the principal amount of $5953,000. This note ~~bore~~bears interest at a rate of 12% and ~~was~~is due on demand. The ~~remaining~~outstanding ~~principal~~amount ~~balance~~was as$30,000 ofand ~~May 26~~$30,000 ~~2023,~~and ~~was~~accrued ~~converted~~interest ~~into~~was ~~273~~$1,600 ~~shares~~and of$800 ~~the~~at ~~Company’s~~March ~~series~~31, B2024 ~~preferred~~and ~~stock~~December ~~which resulted in the note being fully paid at September 30~~31, 2023, respectively.

On ~~April~~June 2122, 2023, the Company issued aan ~~promissory~~original issue discount promissory note to a board member in the principal amount of $53118,000. This note bears interest at a rate of 1217.5% and is due on demand. AtFor ~~September 30~~the three months ended March 31, ~~2023~~2024, $61,600 of the principal was paid. The outstanding amount was $3056,400 and $118,000, unamortized discount was $0 and $8,400, and accrued interest was $~~800~~13,296 and $10,862 at March 31, 2024 and December 31, 2023, respectively.

On ~~June~~July 2212, 2023, the Company issued a promissory note to a ~~board~~third ~~member~~party in the principal amount of $~~118~~25,000. This note bears interest at a rate of ~~17.5~~12% and is due on demand. AtThe ~~September 30, 2023, the~~ outstanding amount was $~~118~~25,000 and $25,000 and accrued interest was $52,~~658~~162 and $1,414 at March 31, 2024 and December 31, 2023, respectively.

On July 12, 2023, the Company issued a promissory note to a third party in the principal amount of $25,000. This note bears interest at a rate of 12% and is due on demand. At September 30, 2023, the outstanding amount was $25,000 and accrued interest was $658.21

OnSMART ~~July~~FOR 25LIFE, ~~2023, the Company issued a promissory~~INC. ~~note~~ NOTES toTO aCONDENSED ~~board~~CONSOLIDATED ~~member~~FINANCIAL inSTATEMENTS ~~the principal amount of $100,000. This note bears interest at a rate of 12% and is due on demand. At September~~ ~~30,~~THREE ~~2023,~~MONTHS ~~the~~ENDED ~~outstanding~~MARCH ~~amount was $100~~31,~~000~~ ~~and~~2024 ~~accrued~~AND ~~interest was $2,203.~~2023 (UNAUDITED)

On August 10, 2023, the Company issued a promissory note to a board member in the principal amount of $50,000. This note bears interest at a rate of 12% and is due on demand. AtThe ~~September 30, 2023, the~~ outstanding amount was $50,000 and $50,000 and accrued interest was $~~838~~3,847 and $2,351 at March 31, 2024 and December 31, 2023, respectively.

On August 15, 2023, the Company issued a promissory note to a board member in the principal amount of $30,000. This note bears interest at a rate of 12% and is due on demand. AtThe ~~September 30, 2023, the~~ outstanding amount was $30,000 and $30,000 and accrued interest was $~~454~~2,259 and $1,361 at March 31, 2024 and December 31, 2023, respectively.

On August 24, 2023, the Company issued a promissory note to a third party in the principal amount of $60,000. This note bears interest at a rate of 12% and is due on demand. AtOn ~~September 30~~May 25, 2023, the ~~outstanding~~principal ~~amount~~of ~~was~~ $60,000 and ~~accrued~~ interest ~~was~~of $06,451 were converted into 346 shares of the Company’s series B preferred stock which resulted in the note being fully paid.

On September 7, 2023, the Company issued a promissory note to a board member in the principal amount of $35,000. This note bears interest at a rate of 12% and is due on demand. AtThe ~~September 30, 2023, the~~ outstanding amount was $35,000 and $35,000 and accrued interest was $~~265~~2,370 and $1,323 at March 31, 2024 and December 31, 2023, respectively.

On September 14, 2023, the Company issued a promissory note to a third party in the principal amount of $100,000. This note bears interest at a rate of 12% and is due on demand. AtOn ~~September~~February 3029, ~~2023~~2024, the ~~outstanding~~principal ~~amount~~of ~~was~~ $100,000 and accrued interest ~~was~~of $~~526~~5,523 were converted into 1,055 shares of the Company’s series C preferred stock which resulted in the note being fully paid.

On September 29, 2023, the Company issued a promissory note to a board member in the principal amount of $35,000. This note bears interest at a rate of 12% and is due on demand. AtThe ~~September 30, 2023, the~~ outstanding amount was $35,000 and $35,000 and accrued interest was $122,117 and $1,070 at March 31, 2024 and December 31, 2023, respectively.

19On October 4, 2023, the Company issued a promissory note to a board member in the principal amount of $15,000. This note bears interest at a rate of 12% and is due on demand. The outstanding amount was $15,000 and $15,000 and accrued interest was $883 and $434 at March 31, 2024 and December 31, 2023, respectively.

~~SMART~~On ~~FOR~~October ~~LIFE~~11, ~~INC.~~2023, the Company issued a promissory ~~NOTES~~note TOto ~~CONDENSED~~a ~~CONSOLIDATED~~third ~~FINANCIAL~~party ~~STATEMENTS~~in the principal amount of $24,000. This note bears interest at a rate of 12% and is due on demand. On February ~~SEPTEMBER~~29, 302024, ~~2023~~the ~~AND~~principal ~~2022~~of $24,000 and accrued interest of $6,157 was converted into 302 shares of the Company’s series C preferred stock which resulted in the note being fully paid.

~~(UNAUDITED)~~On November 14, 2023, the Company issued a promissory note to a board member in the principal amount of $30,000. This note bears interest at a rate of 12% and is due on demand. The outstanding amount was $30,000 and $30,.000 and accrued interest was $1,361 and $464 at March 31, 2024 and December 31, 2023, respectively.

AOn ~~note~~November ~~from~~30, ~~2018~~2023, ~~with~~the Company issued a promissory note to a board member in the principal ~~balance~~amount of $5515,000 ~~plus~~. ~~accrued~~This note bears interest at a rate of ~~$24,776~~12% ~~was~~and ~~converted~~is ~~into~~due ~~358~~on ofdemand. ~~the~~The ~~Company’s~~outstanding amount ~~series~~was B$15,000 ~~preferred~~and ~~stock~~$15,000 ~~which~~and ~~resulted~~accrued ininterest ~~the~~was ~~note~~$602 ~~being fully~~and ~~paid~~$153 at ~~September~~March 3031, 2024 and December 31, 2023.

Promissory Note – Related Party

On March 5, 2024, the Company issued a promissory note to a related party in the principal amount of $250,000. This note bears interest at a rate of 12% and is due on March 5, 2029. At March 31,2024, the outstanding amount was $250,000 and accrued interest was $2,137.

Cash Advances

In ~~June~~July 2022, the Company entered into a cash advance agreement for $~~341~~650,~~150~~000 with a required repayment amount of $~~490~~897,~~000~~750, which ~~required~~requires weekly payments of approximately $1940,~~738~~806. The ~~cash~~outstanding ~~advance~~amount ~~agreement~~ was ~~fully~~$97,846 ~~paid~~and $147,500 at ~~September~~March 3031, 2024 and December 31, 2023, respectively.

In July 2022, the Company entered into a cash advance agreement for $650,000 with a required repayment amount of $897,750, which requires weekly payments of approximately $40,806. In May 2023, the Company agreed to a settlement for a lesser amount resulting in a gain on extinguishment of $50,814. At September 30, 2023, the outstanding amount was $147,500.22

InSMART ~~August~~FOR ~~2022~~LIFE, ~~the Company entered into a cash~~INC. ~~advance~~ NOTES ~~agreement~~TO ~~for~~CONDENSED ~~$100,000~~CONSOLIDATED ~~with~~FINANCIAL aSTATEMENTS ~~required~~ THREE ~~repayment~~MONTHS ~~amount~~ENDED ofMARCH ~~$146~~31,~~260,~~ ~~which~~2024 ~~requires~~AND ~~weekly payments of approximately $6,200. At September 30,~~ 2023~~, the outstanding amount was $4,360.~~ (UNAUDITED)

In ~~September~~August 2022, the Company entered into a ~~cash~~ cash advance agreement for $~~243~~100,~~750~~000 with a required repayment amount of $~~372~~146,~~500~~260, which requires weekly payments of approximately $156,~~000~~200. The Inoutstanding ~~May 2023, the Company agreed to a settlement for a lesser~~ amount ~~resulting~~was in$2,020 aand ~~gain on extinguishment of~~ $374,~~500.~~360 Atat ~~September~~March 3031, ~~2023,~~ ~~the~~2024 ~~outstanding~~and ~~amount~~December ~~was~~31, ~~$24~~2023,~~979~~ respectively.

In ~~November~~September 2022, the Company entered into ~~cash~~a cash advance ~~agreements~~agreement for ~~an aggregate of~~ $~~592~~243,~~236~~750 with ana ~~aggregated~~ required repayment amount of $~~994~~372,~~460~~500, which requires weekly payments of approximately $5215,~~422~~000. The Inoutstanding ~~June 2023, the Company agreed to a settlement with one of the agreements for a lesser~~ amount ~~resulting~~was ~~in a gain on extinguishment of~~ $6312,~~968.~~584 Atat ~~September~~March 3031, ~~2023,~~2024 ~~the~~and ~~outstanding~~December ~~amount was $83~~31,~~037~~ 2023.

In ~~December~~November 2022, the Company entered into cash advance agreements for $~~293~~592,~~000~~236 with a required repayment amount of $~~439~~994,~~207~~460, which requires weekly payments of approximately $3952,~~905~~422. AtThe ~~September~~outstanding ~~30,~~amount ~~2023~~was $83,037 ~~the~~and ~~outstanding~~unamortized ~~amount~~debt issuance cost was $80 at March 31,~~271~~ 2024 and December 31, 2023.

In ~~January~~December ~~2023~~2022, the Company entered into cash advance agreements for $~~387~~293,000 with a required repayment amount of $~~593~~439,~~604~~207, which ~~required~~requires weekly payments of approximately $39,~~980~~905. The ~~cash~~outstanding ~~advance~~amount ~~agreements~~was ~~were~~$8,271 ~~fully~~and ~~satisfied~~unamortized ~~with~~debt ~~payments~~issuance ~~and~~cost awas ~~settlement~~$0 ~~resulting~~at inMarch a31, ~~gain~~2024 onand ~~extinguishment~~December ~~of $33~~31,~~579~~ ~~at September 30,~~ 2023.

In June 2023, the Company refinanced the January 2023 agreements with balances of $284,029 and entered into cash advance agreements and received an additional $107,071 with a required repayment amount of $~~652~~604,~~065~~035, which requires weekly payments of approximately $48,625. AtThe ~~September 30, 2023, the~~ outstanding amount was $~~76,670~~0 and $497,158 and unamortized debt issuance cost ofwas $200 and $0 at March 31,~~994~~ 2024 and December 31, 2023, respectively.

In July 2023, the Company entered into cash advance agreements for $74,950 with a required repayment amount of $74,950, which requires weekly payments of approximately $7,495. AtThe ~~September~~outstanding amount was $7,974 and $30,974 ~~2023~~at March 31, ~~the~~2024 ~~outstanding~~and ~~amount~~December ~~was~~31, ~~$38~~2023,~~974~~ respectively.

In August 2023, the Company refinanced an agreement from June 2023, as a result the Company received an additional $48,030. AtThe ~~September 30, 2023, the~~ outstanding amount was $~~514~~0 and $48,~~670~~030, and unamortized debt issuance cost ofwas $~~219~~0 and $0 at March 31,~~172~~ 2024 and December 31, 2023, respectively.

In November 2023, the Company entered into cash advance agreements for $49,476 with a required repayment amount of $49,476. The outstanding amount was $49,476 at March 31,2024 and December 31, 2023.

Equipment Financing Loan

In May 2022, the Company entered into an equipment financing loan for $146,765 used for the purchase of equipment within BSNM’s operations. The loan bears interest at 10.18% and ~~matures~~ matures on April 1, 2027. AtThe ~~September~~outstanding 30amount was $106,016 ~~2023~~and $108,249 ~~the~~at ~~outstanding~~March ~~amount~~31, ~~was~~2024 ~~$114~~and December 31,~~511~~ 2023, respectively.

In August 2022, the Company entered into an equipment financing loan for $35,050 used for the purchase of equipment within BSNM’s operations. The loan bears interest at 10.18% and matures on August 1, 2027. AtThe ~~September~~outstanding 30amount was $27,214 ~~2023~~and $27,831 ~~the~~at ~~outstanding~~March ~~amount~~31, ~~was~~2024 ~~$29~~and December 31,~~495~~ 2023, respectively.

In July 2022, the Company entered into an equipment financing loan for $8,463 used for the purchase of equipment within Ceautamed’s operations. AtThe ~~September~~outstanding 30amount was $0 and $4,360 at ~~2023~~March 31, ~~the~~2024 ~~outstanding amount~~and ~~was~~December $431,~~873~~ 2023, respectively, and is included within discontinued operations.

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)

Revolving Lines of Credit

In ~~2021~~August 2022, ~~DSO~~Ceautamed entered into ~~two~~a revolving ~~lines~~ line of credit with a bank, which ~~permit~~permits borrowings up to $~~958~~50,000 and ~~bear~~bears interest at 945.4909% with no expiration date. AsIn ~~of September 30,~~ 2023, the Company borrowed an additional $43,000. The outstanding principal balance of these lines of credit was $~~124~~0 and $47,~~051~~407 at March 31, 2024 and December 31, 2023, respectively, and is included within discontinued operations.

In August 2022, Ceautamed entered into a revolving line of credit with a bank, which permits borrowings up to $50,000 and bears interest at 45.09% with no expiration date. In 2023, the Company borrowed an additional $43,000. As of September 30, 2023, the outstanding principal balance of these lines of credit was $50,337.23

InSMART ~~September~~FOR ~~2022~~LIFE, ~~DSO entered into a revolving~~INC. ~~line~~ NOTES ofTO ~~credit~~CONDENSED ~~with~~CONSOLIDATED aFINANCIAL ~~bank,~~STATEMENTS ~~which~~ THREE ~~permits~~MONTHS ~~borrowings~~ENDED upMARCH ~~to $70~~31,~~000~~ ~~and~~2024 ~~bears~~AND ~~interest at 9.49% with no expiration date. As of September 30,~~ 2023~~, the outstanding principal balance of this line of credit was $16,544.~~ (UNAUDITED)

In September ~~2023~~2022, DSO entered into a ~~merchant~~revolving ~~loan~~line ~~agreement~~of ~~for~~credit ~~$110~~with a bank,~~740.~~ ~~Repayment~~which ~~amounts~~permits ~~are~~borrowings ~~17%~~up ofto ~~the~~$70,000 ~~daily~~and ~~account~~bears ~~credits~~interest ~~processed~~at ~~through~~9.49% ~~the~~with ~~provider~~no ~~until~~expiration ~~the~~date. ~~loan~~The ~~amount~~outstanding isprincipal ~~paid~~balance inof ~~full.~~this Asline of ~~September~~credit ~~30,~~was ~~2023~~$0 and $16,471 ~~the~~at ~~outstanding~~March ~~principal~~31, ~~balance~~2024 ~~was~~and ~~$110~~December 31,~~740~~ 2023, respectively.

In September 2023, DSO entered into a merchant loan agreement for $113,000. Repayment amounts are 17% of the daily account credits processed through the provider until the loan amount is paid in full. The outstanding principal balance was $103,648 at March 31, 2024 and December 31, 2023.

EIDL Loan

In June 2020, pursuant to the economic injury disaster loan ~~(“EIDL”)~~ program under the under the provisions of ~~the Coronavirus Aid, Relief and Economic Security Act (the “~~CARES Act”), the Company entered into a promissory note with the U.S. Small Business Administration ~~(the “SBA”)~~ with a principal amount of $300,000. This loan matures in 30 years and bears interest at a rate of 3.75%. The ~~loan~~loans is are secured by all of the Company’s assets. AsThe ~~of September 30, 2023, the~~ outstanding principal balance of this loan was $300,000 and $300,000 and accrued interest was $3642,~~781~~500 and $33,953 at March 31, 2024 and December 31, 2023, respectively.

PPP Loans

In February 2021, the Company received an additional $261,164 in PPP loans under the CARES Act. This loan bears interest at a rate of 1% per annum and matures in April 2025. AsThe ~~of September 30, 2023, the~~ outstanding balance of this loan was $197,457 and $197,457 and accrued interest was $910,~~927~~930 and $8,429 at March 31, 2024 and December 31, 2023, respectively.

Total Debt

Debt is comprised of the following components as of ~~September~~March 3031, ~~2023~~2024:

Original issue discount subordinated debentures	$	43,~~252~~061,~~947~~817
Original issue discount secured subordinated note		2,~~217~~300,~~853~~452
Acquisition notes		3,832,943
Acquisition notes – related party		142,493
Promissory notes and cash advances		2733,~~270,917~~902
Revolving lines of credit		301,672
Promissory notes – related party		250,000
Equipment financing loan		148,879
Revolving lines of credit		103,648
Equipment financing loan		133,229
EIDL loan		300,000
PPP loans		197,457
		13,522,668
		7,222,998
Debt issuance costs		(~~613~~147,~~138~~500	)
Debt, net		127,~~909~~075,~~530~~498
Debt, current		4,~~878~~055,~~552~~321
Debt issuance costs, current		(~~474~~37,~~090~~418	)
Current portion of debt, net		4,~~404~~017,~~462~~903
Debt, non-current		83,~~644~~167,~~116~~677
Debt issuance costs, non-current		(~~139~~110,~~048~~082	)
Non-current portion of debt, net	$	83,~~505~~057,~~068~~595

The Company was not in compliance will all debt covenants as of September 30, 2023, but waivers of non-compliance were obtained for all such debt, except as disclosed.

Balance at December 31, 2022	$	20,558,246
Proceeds from new debt issued in 2023		2,749,791
Repayment of principal during 2023		(5,317,833	)
Amortization of debt discounts		1,150,800
Stock issued for conversion of principal of debt		(6,266,895	)
Gain on extinguishment of debt in 2023		(273,058	)
Conversion of interest to notes payable		334,950
Conversion of principal to accrued expenses		(26,471	)
Balance at September 30, 2023	$	12,909,530

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)

The future contractual maturities of the debt are as follows:

For the Year Ended December 31:
2023 (remainder of year)	$	4,404,462
2024 (remainder of year)	$	4,049,947
2024		5,197,804
2025		82,751
2025		2,046,449
2026		458,324
2026		517,178
2027		165,114
2027		531,356
2028		181,851
Thereafter		~~212~~2,~~281~~137,511
Total	$	127,~~909~~075,~~530~~498

SMART FOR LIFE, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(UNAUDITED)

Note 9 — Concentrations of Credit Risks

Credit Risks

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and accounts receivable. The Company maintains bank accounts with several financial institutions. Concentrations of credit risk with respect to accounts receivable are limited to the dispersion of customers across different industries and geographic regions.

Cash

The Company places its cash with high credit ~~quality~~ quality financial institutions. At ~~September~~March 3031, ~~2023~~2024 and December 31, ~~2022~~2023, the Company had no cash balances in excess of the Federal Deposit Insurance Corporation coverage of $250,000 per institution. The Company has not experienced any losses in such accounts.

Major Customers

For the ~~nine~~three months ended ~~September~~March 3031, ~~2023 and 2022~~2024, the Company had two significant customers representing an aggregate of 5499% of revenues and 41one that accounted for 100% of ~~revenues~~the ~~and~~accounts receivable balance. For the three ~~that~~months ~~make~~ended upMarch 5231, 2023, the Company had two significant customers representing an aggregate of 46% of revenues and 66one that accounted for 26% of the accounts receivable balance,. The ~~respectively~~Company’s officers are closely monitoring the relationships with all customers.

For the three months ended September 30, 2023 and 2022, the Company had two and two significant customers representing an aggregate of 64% and 41% of revenues and three that make up 52% and 66% of the accounts receivable balance, respectively. The Company’s officers are closely monitoring the relationships with all customers.

Major Vendors

For the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024, ~~the~~ the Company had ~~one~~three major supplier representing 16an aggregate of 77% of purchases. For the three months ended March 31, ~~respectively.~~2023, ~~The~~the Company had noone major ~~suppliers~~supplier ~~for~~representing ~~the~~22% ~~nine~~of ~~months~~purchases. The Company’s officers are closely ~~ended~~monitoring ~~September~~the ~~30,~~relationships ~~2022~~with all significant suppliers.

For the three months ended September 30, 2023 and 2022, the Company had one major supplier representing 17% and 10% of purchases, respectively. The Company’s officers are closely monitoring the relationships with all significant suppliers.

Note 10 — Income Taxes

The Company has evaluated the positive and negative evidence in assessing the realizability of its deferred tax assets. This assessment included the evaluation of scheduled reversals of deferred tax liabilities, estimates of projected future taxable income and tax planning strategies to determine which deferred tax assets are more likely than not to be realized in the future. The Company has a 100% valuation allowance associated with the deferred tax asset.

The Company records a liability for uncertain tax positions when it is probable that a loss has been incurred and the amount can be reasonably estimated. Interest and penalties related to income tax matters, if any, would be recognized as a component of income tax expense. At ~~September~~March 3031, ~~2023~~2024 and December ~~2022~~2023, the ~~Company~~ Company had no liabilities for uncertain tax positions. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. Currently, the tax years subsequent to 2018 are open and subject to examination by the taxing authorities.

At ~~September~~March 3031, ~~2023~~2024, the Company had net operating loss carry forwards for federal income tax purposes of approximately $1719.27 million, which will be available to offset future taxable income. ~~The tax carryforwards have an indefinite life.~~

2225

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~SEPTEMBER~~THREE 30MONTHS ENDED MARCH 31, ~~2023~~2024 AND ~~2022~~2023 (UNAUDITED)

(UNAUDITED)

Note 11 — Stockholders’ Equity

~~Series A~~ Preferred Stock

During the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024, ~~the remaining 1~~6,~~000~~727 shares of ~~the~~ series AB preferred stock ~~was~~were converted into 310,~~334~~678 shares of ~~the Company’s~~ common stock.

~~Series~~On BMarch ~~Preferred~~1, ~~Stock~~2024, the Company filed a certificate of designation with the Nevada Secretary of State to create a new series of preferred stock designated as series C preferred stock. Pursuant to the certificate of designation, the Company designated 200,000 shares of its preferred stock as series C preferred stock. Following is a summary of the material terms of the series C preferred stock:

On● ~~May~~Dividend ~~25,~~Rights. ~~2023,~~Holders ~~the Company filed a certificate~~ of ~~designation~~series ~~with~~C ~~the~~preferred ~~Nevada~~stock ~~Secretary~~are ofentitled ~~State~~ to ~~establish~~receive ~~its~~dividends ~~series~~in Bthe ~~preferred~~same ~~stock.~~form ~~The~~as ~~Company~~dividends ~~designated~~paid aon ~~total of 5,000,000~~ shares of ~~its~~the ~~preferred~~common stock asonly ~~series~~when Band ~~preferred~~if ~~stock.~~such ~~The~~dividends ~~series~~are Bpaid ~~preferred~~on shares of common stock. ~~has~~No ~~the~~other ~~following~~dividends ~~voting~~shall ~~powers,~~be ~~designations, preferences~~paid ~~and~~on ~~relative~~shares ~~rights,~~of ~~qualifications,~~series ~~limitations~~C orpreferred ~~restrictions:~~stock.

~~Dividend~~● Liquidation Rights. ~~Holders~~Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of series BC preferred stock ~~are~~shall be entitled to receive ~~dividends~~out inof the ~~same~~assets ~~form~~of asthe ~~dividends~~Company ~~paid~~the onsame ~~shares~~amount that a holder of common stock would receive if the ~~common~~series C preferred stock ~~only~~were ~~when~~fully ~~and~~converted if(disregarding for such ~~dividends are~~purposes ~~paid~~any onconversion ~~shares~~limitations) ofto ~~the~~ common stock., Nowhich ~~other~~amounts ~~dividends~~ shall be paid onprior ~~shares~~to all holders of common stock and pari passu with all holders of series B preferred stock.

~~Liquidation~~● Voting Rights. ~~Upon~~The ~~any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of~~ series BC preferred stock shall bevote ~~entitled to~~together ~~receive~~with ~~out of~~ the ~~assets of the Company the same amount that a holder of~~ common stock ~~would~~on ~~receive~~an ~~if the series B preferred stock were fully~~ as-converted ~~(disregarding for such purposes any conversion limitations) to common stock which amounts shall be paid prior to all holders of common stock~~basis.

~~Voting~~● Conversion Rights. ~~The~~Each share of series BC preferred stock is convertible, at any time and from time to time at the option of the holder thereof, into that number of shares of common stock determined by dividing the stated value of such share of series C preferred stock ($100) by the conversion price. The conversion price is $7.00 (subject to adjustments for stock dividends, stock splits, recapitalizations and certain fundamental transactions). Notwithstanding the foregoing, the Company shall ~~vote~~not effect any conversion, and a holder shall not have the right to convert, any portion of the series C preferred stock to the extent that, after giving effect to the conversion, such holder (together with such holder’s affiliates) would beneficially own in excess of 4.99% of the number of shares of common stock onoutstanding animmediately asafter giving effect to the issuance of shares issuable upon the conversion. This limitation may be waived (up to a maximum of 9.99%) by the holder and in its sole discretion, upon not less than sixty-~~converted~~one ~~basis~~(61) days’ prior notice to the Company.

~~Conversion~~● ~~Rights.~~No Each share of series B preferred stock is convertible, at any time and from time to time from at the option of the holder thereof, into that number of shares of common stock determined by dividing the stated value of such share of series B preferred stock ($223) by the conversion priceRedemption. The ~~conversion~~ ~~price is $20.07 (subject to adjustments). Notwithstanding the foregoing, the Company shall not effect any conversion, and a holder shall not have the right to convert, any portion of the~~ series BC preferred stock tois the extent that, after giving effect to the conversion, 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 conversion. This limitation may be waived (up to a maximum of 9.99%) by the holder and in its sole discretion, upon not ~~less than sixty-one (61) days’ prior notice to the Company~~redeemable.

InDuring ~~May~~the ~~2023~~three months ended March 31, 2024, the Company issued 3436,~~001~~507 shares of series BC preferred stock asand ~~settlement of debt~~16,688 ~~accrued~~shares ~~interest,~~of ~~accrued~~series ~~compensation,~~C ~~and~~preferred ~~accrued~~stock ~~board~~were ~~fees~~subsequently ~~for~~converted into a238,399 ~~total~~shares ~~value~~ of ~~$7,488,877~~ common stock.

InThere ~~June~~were ~~2023,~~no ~~the Company issued 817 shares of series B~~ preferred stock astransactions ~~settlement~~during the ofthree ~~accrued~~months ~~interest~~ended ~~totaling~~March ~~$182~~31,~~153~~ 2023.

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)

Common Stock

OnDuring ~~February 16, 2022,~~ the ~~Company~~three ~~entered~~months ~~into an~~ended ~~underwriting~~March ~~agreement with Dawson James Securities~~31, ~~Inc.~~2024, ~~as representative of~~ the ~~several~~Company ~~underwriters~~issued ~~named~~(i) ~~on Schedule I thereto~~3, ~~relating~~572 toshares ~~its IPO~~ of ~~units, each unit consisting of one share of~~ common stock, aupon ~~series~~exercise ~~A warrant to purchase one share~~ of ~~common~~warrants; ~~stock and~~(ii) a10,678 ~~series~~shares ~~B warrant to purchase one share~~ of common stock. ~~Pursuant~~upon to the ~~underwriting~~conversion of ~~agreement~~6,727 ~~the~~shares ~~Company~~of ~~agreed~~series toB ~~sell~~preferred ~~3,200 units~~stock; to(iii) ~~the underwriters~~238,399 atshares ~~a purchase price per unit~~ of ~~$4,095.00~~common ~~(the~~stock ~~offering~~upon ~~price to~~ the ~~public~~conversion of $436,~~500.00~~507 ~~per~~shares ~~unit~~of ~~minus~~series ~~the~~C preferred ~~underwriters’~~stock; ~~discount~~(iv) 9,377 ~~and~~shares ~~also~~of ~~agreed~~common tostock ~~grant~~for toservices ~~the~~rendered; ~~underwriters~~(v) a285,305 ~~45-day option to purchase up to 480 additional~~ shares of common stock, upupon tothe ~~480~~conversion ~~additional~~of ~~series~~debt Aand ~~warrants,~~ interest; and~~/or~~ up(vi) ~~to 480 additional series B warrants~~102,172 inshares ~~any~~of ~~combination~~common ~~thereof,~~stock atupon ~~a purchase price to~~ the ~~public~~conversion of ~~$4,491.00~~series ~~per~~A ~~share~~preferred ~~and~~stock $4dividends.~~50 per warrant, less underwriting discounts and commissions, solely to cover over-allotments, if any.~~

OnDuring ~~February 18, 2022,~~ the ~~closing~~three ofmonths ~~the~~ended ~~IPO~~March ~~was completed. At the closing~~31, ~~the underwriters partially exercised the option and purchased 459 series A warrants and 459 series B warrants. Therefore~~2023, the Company ~~sold~~issued ~~3,200~~978 shares of common stock, ~~3,659~~upon ~~series A warrants and 3,659 series B warrants for total gross proceeds of $14,404,128. After deducting~~ the ~~underwriting~~cashless ~~commission~~exercise ~~and expenses, the Company received net proceeds~~ of ~~$12,738,288~~warrants.

On February 18, 2022, the Company issued 859 shares of common stock upon the conversion of the 5% secured subordinated convertible promissory note in the principal amount of $1,900,000 along with interest of $32,500 issued to Justin Francisco and Steven Rubert in connection with the acquisition of Nexus.26

~~On February~~SMART ~~18,~~FOR ~~2022~~LIFE, ~~the~~INC. NOTES ~~Company~~TO ~~issued~~CONDENSED ~~1,385~~CONSOLIDATED ~~shares~~FINANCIAL ofSTATEMENTS ~~common stock upon the conversion of the 6% secured subordinated convertible promissory~~ ~~note~~THREE inMONTHS ~~the~~ENDED ~~principal~~MARCH ~~amount of $3~~31,~~000,000~~ ~~along~~2024 ~~with~~AND ~~interest of $116,000 issued to Sasson E. Moulavi in connection with the acquisition~~2023 ~~of DSO.~~(UNAUDITED)

On February 18, 2022, the Company issued 511 shares of common stock upon the conversion of the convertible promissory note in the principal amount of $500,000 along with interest of $74,583 issued to East West Capital LLC.

On February 18, 2022, the Company issued 95 additional shares of common stock to the stockholders of GSP and 33 additional shares of common stock to certain vendors of GSP in accordance with the terms of the contribution and exchange agreement described above. Based on the IPO share allocation of the unit, it was determined that the Company would issue the additional 95 shares.

On February 18, 2022, the Company issued an aggregate of 4,820 shares of common stock to various lenders pursuant to future equity agreements which required the Company to issue shares of common stock upon closing of the IPO, which resulted in an interest expense of $10,844,960.

In February through March 2022, the Company issued 2,755 shares of common stock upon the conversion of the convertible promissory note in the principal amount of $2,250,000 along with interest of $292,500 issued to several debt holders.

On March 10, 2022, the Company granted restricted stock awards for an aggregate of 1,949 shares of common stock to certain directors, officers, and consultants. A total of 1,505 of these shares vested in full on the date of grant. The remaining 445 shares, which were granted to independent directors, vest monthly over a one-year period which were recorded as a prepaid of $46,900 at December 31, 2022. A total of 520 of these shares were granted under the 2020 Stock Incentive Plan described below. The remaining 734 were granted under the 2022 Equity Incentive Plan described below. The shares, valued at $822,626, were based on the closing trading price per share of $422.10 on the date of the grant.

On April 17, 2023, the Company issued 556 shares of common stock as compensation for amending the license agreement associated with Sports Illustrated Nutrition.

On May 4, 2023, a shareholder converted 1,000 shares of series A preferred stock into 3,334 shares of common stock.

On May 2, 2023, the Company entered into a securities purchase agreement with an institutional investor, pursuant to which the Company agreed to issue and sell, in a registered direct offering, 10,512 shares of common stock and a pre-funded warrant to purchase up to 20,667 shares of common stock at an exercise price of $0.0009, at an offering price per share and pre-funded warrant of $28.845 and $28.844, respectively. In addition, under the securities purchase agreement, the Company agreed to issue to the investor a warrant to purchase up to 31,178 shares of common stock at an exercise price of $27.72 per share in a concurrent private placement. At closing, the investor exercised the pre-funded warrant in full. Accordingly, the Company issued to the investor 31,178 shares of common stock and a warrant to purchase up to 31,178 shares of common stock at an exercise price of $27.72 per share for total gross proceeds of $899,326 and net proceeds of $776,933.

H.C. Wainwright & Co., LLC (the “Placement Agent”) acted as the exclusive placement agent in connection with this offering and received a cash fee equal to 7.5% of the gross proceeds of the offering and a management fee equal to 1% of the gross proceeds of the offering. The Company also agreed to reimburse the Placement Agent $30,000 for fees and expenses of its legal counsel and other out-of-pocket expenses and $15,950 for certain closing costs. In addition to the cash fees, the Company issued to the Placement Agent warrants to purchase up to 2,339 shares of common stock at an exercise price of $36.0564 per share (or 125% of the offering price).

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 2023 AND 2022

(UNAUDITED)

On May 17, 2023, the Company entered into a securities purchase agreement with an institutional investor, pursuant to which the Company agreed to issue and sell, in a registered direct offering 22,889 shares of common stock and a pre-funded warrant to purchase up to 42,100 shares of common stock at an exercise price of $0.0009, at an offering price per share and pre-funded warrant of $24.39 and $24.3891, respectively. In addition, under the securities purchase agreement, the Company agreed to issue to the investor a warrant to purchase up to 64,988 shares of common stock at an exercise price of $23.31 per share in a concurrent private placement. At closing, the investor exercised the pre-funded warrant in full. Accordingly, the Company issued to the investor 64,988 shares of common stock and a warrant to purchase up to 64,988 shares of common stock at an exercise price of $23.31 per share for total gross proceeds of $1,585,057 and net proceeds of $1,374,367.

The Placement Agent acted as the exclusive placement agent in connection with this offering and received a cash fee equal to 7.5% of the gross proceeds of the offering and a management fee equal to 1% of the gross proceeds of the offering. The Company also agreed to reimburse the Placement Agent $60,000 for fees and expenses of its legal counsel and other out-of-pocket expenses and $15,950 for certain closing costs. In addition to the cash fees, the Company issued to the Placement Agent warrants to purchase up to 4,875 shares of common stock at an exercise price of $30.4875 per share (or 125% of the offering price).

On May 24, 2023, the Company issued 556 shares of common stock to a note holder as compensation for amending the note.

On August 29, 2023, the Company issued 15,083 shares of common stock to a note holder as compensation for amending the note.

During the nine months ended September 30, 2023, the Company issued 429,214 shares of common stock upon exercise of warrants.

Stock Options and Warrants

In September 2020, the Company adopted its 2020 Incentive Plan (the “2020 Plan”) under which the Company is authorized to issue awards for up to ~~4,445~~635 shares of common stock to directors, officers, employees, and consultants who provide services to the Company. Awards that may be granted include incentive stock options, non-qualified stock options and awards of restricted stock. At March 31, 2024, there were no shares of common stock available for issuance under the 2020 Plan. The Company did not issue any stock options under the 2020 Plan during the three months ended March 31, 2024 or 2023.

AtIn January 2022, the Company adopted its 2022 ~~September~~Equity 30Inventive Plan, ~~2023~~as ~~and~~amended ~~December~~(the “2022 Plan”), under which the Company is authorized to issue awards for up to 47,620 shares of common stock to directors, officers, employees, and consultants who provide services to the Company. Awards that may be granted include incentive stock options, non-qualified stock options, stock appreciation rights, restricted awards, performance share awards and performance compensation awards. At March 31, 2024, there were 1011,432 shares of common stock available for issuance under the ~~2020~~2022 Plan. The Company did not issue any ~~other~~ stock options under the ~~2020~~2022 Plan during the ~~nine~~three months ended ~~September~~March 3031, 2024 or 2023.

InThe ~~January 2022, the~~ Company ~~adopted~~recognized ~~its~~$27,613 ~~2022 Equity~~and ~~Inventive Plan (the “2022 Plan”) under which the Company is authorized to issue awards for up to 333~~$52,~~334~~473 ~~shares~~ of ~~common~~compensation ~~stock~~expense torelated ~~directors, officers, employees, and consultants who provide services~~ to the ~~Company.~~vesting ~~Awards~~of ~~that may be granted include incentive stock~~ options, ~~non-qualified~~during ~~stock~~the ~~options,~~three ~~stock~~months ~~appreciation~~ended ~~rights,~~March ~~restricted awards~~31, ~~performance~~2024 ~~share awards~~ and ~~performance compensation awards. At September 30,~~ 2023, ~~there were 31,250 shares of common stock available for issuance under the 2022 Plan~~respectively.

~~On August 12, 2022, the Company issued stock options to employees under the 2022 Plan for an aggregate of 2,518 shares of common stock.~~ The stock options have an exercise price of $283.50 per share, will vest quarterly over a three-year period and expire ten (10) years after the date of issuance; provided that an option granted to Alfonso J. Cervantes, Jr., the Company’s ~~Executive Chairman, for the purchase of 667 shares of common stock has an exercise price of $311.85 per share and expires five (5) years after the date of issuance. The Company~~ did not issue any ~~other~~warrants ~~stock options under the 2022 Plan~~ during the ~~nine~~three months ended ~~September~~March 3031, 2024 or 2023.

~~The~~During ~~Company recognized $765,588 and $0 of compensation expense related to~~ the ~~vesting~~three ~~of options based on the service period during the nine~~ months ended ~~September~~March 3031, ~~2023 and 2022~~2024, ~~respectively.~~ ~~The~~warrant ~~compensation~~holders ~~expense~~exercised ~~recognized~~an ~~for~~aggregate ~~the~~of ~~three months ended September 30~~3,572 ~~2023~~shares ~~and~~for ~~2022~~proceeds ~~was~~of $~~685~~38,~~380 and $0, respectively~~000.

~~The~~During ~~series A warrants sold in~~ the ~~IPO~~three ~~are~~months ~~exercisable until~~ended ~~the~~March ~~fifth~~31, ~~anniversary of the issuance date at an exercise price equal to $1~~2023,~~050.00~~ warrant ~~per~~holders ~~share and may be~~ exercised ~~on a cashless basis if the issuance of common stock upon exercise of the warrants is not covered by~~ an ~~effective~~aggregate ~~registration statement. The exercise price and number~~ of 978 shares ofon ~~common stock issuable upon exercise of the series A warrants may be adjusted in certain circumstances, including in the event of~~ a ~~stock~~cashless ~~dividend, extraordinary dividend on or recapitalization, reorganization, merger, or consolidation~~basis.

The ~~series~~following Bis ~~warrants~~a ~~sold~~summary ~~in the IPO are exercisable until the fifth anniversary~~ of ~~the~~options ~~issuance date at an exercise price equal to $1,500.00 per share~~ and ~~may be exercised on a cashless~~warrants ~~basis~~granted, ~~whereby the holder will receive one share of common stock for each series B warrant~~ exercised., Asforfeited ofand ~~September~~outstanding ~~30,~~during ~~2023, 3,199 of~~ the ~~series~~three Bmonths ~~warrants~~ended ~~were~~March ~~exercised~~31, on2024 ~~a cashless basis~~ and ~~the Company issued 3,199 shares of common stock upon such exercise.~~2023:

In the nine months ended September 30, 2023 and 2022, warrant holders exercised an aggregate of 429,214 and 3,199 shares, respectively. In the three months ended September 30, 2023 and 2022 warrant holders exercised an aggregate of 129,598 and 4, respectively.

	2024-Stock Options				2024-Warrants
	Number of Options		Weighted Average Exercise Price		Number of Warrants			Weighted Average Exercise Price
Outstanding at January 1, 2024		43,259	$	32.73		217,313		$	812.73
Granted		—		—		—			—
Exercised		—		—		(3,572	)		(10.64	)
Forfeited		—		—		—			—
Outstanding at March 31, 2024		43,259	$	32.73		213,741		$	799.76
Exercisable at March 31, 2024		21,205				213,741

The warrant terms include a fundamental transaction clause whereby there is a change in control of the ownership of the company outside the control of the company – such as an unsolicited takeover of the company by an outsider – the holder of the warrant can demand either the fair value of the warrants in cash ( using a Black Scholes formula ) or common stock in the successor entity.

	2023-Stock Options				2023-Warrants
	Number of Options		Weighted Average Exercise Price		Number of Warrants		Weighted Average Exercise Price
Outstanding at January 1, 2023		876	$	1,984.50		71,513	$	0.3150
Granted		—		—		—		—
Exercised		—		—		978		0.3150
Forfeited		29		1,984.50		—		—
Outstanding at March 31, 2023		847	$	1,984.50		70,535	$	0.3150
Exercisable at March 31, 2023		847				70,535

2527

SMART FOR LIFE, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~SEPTEMBER~~THREE 30MONTHS ENDED MARCH 31, ~~2023~~2024 AND ~~2022~~2023 (UNAUDITED)

(UNAUDITED)

The following is a summary of options and warrants granted, exercised, forfeited and outstanding during the nine months ended September 30, 2023:

	2023-Stock Options				2023-Warrants
	Number of Options		Weighted Average Exercise Price		Number of Warrants		Weighted Average Exercise Price
Outstanding at January 1, 2023		5,729	$	150.93		502,009	$	184.23
Granted		299,167		3.14		918,363		15.93
Exercised		—		—		429,214		1.53
Forfeited		385		0.36		16,645		0.09
Outstanding at September 30, 2023		304,511	$	6.29		974,513	$	110.59
Exercisable at September 30, 2023		147,942				974,513

	2022-Stock Options				2022-Warrants
	Number of Options		Weighted Average Exercise Price		Number of Warrants		Weighted Average Exercise Price
Outstanding at January 1, 2022		3,223	$	4.50		32,894	$	52.11
Granted		2,951		283.50		7,517		63.00
Exercised		435		4.50		3,198		—
Forfeited		10		4.50		613		—
Outstanding at September 30, 2022		5,729	$	148.50		36,599	$	59.76
Exercisable at September 30, 2022		2,778				36,599

Valuation Assumptions for Stock Options and Warrants

The fair value of each option and warrant ~~issued in 2023~~ was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

Risk-free interest rate	24.8627 – 4.30	%
Expected volatility	53	%
Expected life (years)	5-10
Dividend yield	0	%

The expected life represents the weighted average period of time that options granted are expected to be outstanding giving consideration to vesting schedules and the Company’s historical exercise patterns. The risk-free rate is based on the U.S. Treasury yield constant maturity in effect at the time of grant for periods corresponding with the expected life of the option.

26Net Loss Per Share

~~SMART~~Basic and diluted net loss per share of common ~~FOR~~stock ~~LIFE~~for the three months ended March 31, ~~INC. NOTES~~2024, TOand ~~CONDENSED~~2023 ~~CONSOLIDATED~~was ~~FINANCIAL~~determined ~~STATEMENTS~~by dividing net loss by the weighted average shares of common ~~SEPTEMBER~~stock 30outstanding during the period. The Company’s potentially dilutive shares, ~~2023~~consisting ~~AND~~of ~~2022~~213,741 warrants and 43,259 stock options, have not been included in the computation of dilutive net loss per share for the periods as the result would be antidilutive.

(UNAUDITED)

Note 12 — Commitments and Contingencies

Legal Matters

From time to time, the Company may become subject to threatened and/or asserted claims arising in the ordinary course of business. Management is not aware of any matters, either individually or in the aggregate, that are reasonably likely to have a material adverse effect on the Company’s financial condition, results of operations or liquidity.

Note 13 — Related Party Transactions

The Company entered into debt with related parties which are reflected in Note 8.

The Company is party to a management services agreement with Trilogy Capital Group, LLC (“Trilogy”), a company controlled by the Company’s Executive Chairman. For the ~~nine~~three months ended ~~September~~March 3031, ~~2023~~2024 and ~~2022~~2023, the Company paid Trilogy $~~46,686 and $~~0, ~~respectively,~~ and ~~for the three months ended September 30, 2023 and 2022, the Company paid Trilogy~~ $1927,~~139 and $0~~547, respectively, for services rendered under a consulting ~~agreement~~ agreement which are reflected in the statements of operations as consulting fees – related parties.

Note 14 — Subsequent Events

In accordance with ASC 855-10, ~~Subsequent Events,~~ the Company has reviewed its operations subsequent to ~~September~~March 3031, ~~2023~~2024 to the date these condensed consolidated financial statements were issued, and has determined that, except as set forth below, it does not have any material subsequent events to disclose in these financial statements.

OnSEC ~~October 18, 2023, the Company issued 29,130 shares of common stock upon the cashless exercise of warrants.~~Order

On ~~October~~September 239, ~~2023~~2024, the ~~Company~~SEC issued an ~~aggregate~~order against the Company which found that the Company entered into two separation agreements with former employees that each contained language violating Rule 21F-17(a) of 95the Securities Exchange Act of 1934,~~234~~ ~~shares~~as amended. The order imposes a civil money penalty against the Company for the two noted violations in the total amount of ~~common~~$19,500, ~~stock~~to ~~upon~~be paid in four installments over the ~~conversion~~course of 360 days from the date of the order and according to the schedule set forth in the order. The first three installments are each in the amount of $5,000. The last installment is in the principal amount of $4,500 and must also contain an ~~aggregate~~amount for interest accrued. The SEC Division of 8Enforcement may,~~579~~ ~~shares~~at any time following the entry of ~~series~~this Border, ~~preferred~~petition ~~stock~~the SEC to: (1) reopen this matter to consider whether the Company provided accurate and complete financial information at the time representations in its Form 10-Q for the quarter ended September 30, 2023 were made; and (2) seek an order directing payment of the maximum civil penalty allowable under the law.

On October 30, 2023, the Company issued 21,631 shares of common stock upon the cashless exercise of warrants.

Following the reverse stock split on October 27, 2023, the Company issued 19,071 shares of common stock related to the rounding of fractional shares.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and cash flows as of and for the periods presented below. The following discussion and analysis should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this report. The discussion contains forward-looking statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report.

Use of Terms

Except as otherwise indicated by the context and for the purposes of this report only, references in this report to “we,” “us,” “our” and “our company” are to Smart for Life, Inc., a Nevada corporation, and its consolidated subsidiaries.

Special Note Regarding Forward Looking Statements

This report contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts are forward-looking statements. These statements relate to future events or to our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements include, but are not limited to, statements about:

● our goals and strategies;

● our future business development, financial condition and results of operations;

● expected changes in our revenue, costs or expenditures;

● growth of and competition trends in our industry;

● our expectations regarding demand for, and market acceptance of, our products;

● our expectations regarding our relationships with investors, institutional funding partners and other parties we collaborate with;

● fluctuations in general economic and business conditions in the markets in which we operate; and

● relevant government policies and regulations relating to our industry.

In some cases, you can identify forward-looking statements by terms such as “may,” “could,” “will,” “should,” “would,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Item 1A “Risk Factors” included in our Annual Report on Form 10-K for the year ended December 31, 2022 elsewhere in this report. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

~~The forward-looking~~SMART ~~statements~~FOR ~~made~~LIFE, ~~in this report relate only to events or information as of the date on which the statements are made in~~INC. ~~this~~ NOTES ~~report.~~TO ~~Except~~CONDENSED asCONSOLIDATED ~~expressly~~FINANCIAL ~~required~~STATEMENTS ~~by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking~~ ~~statements,~~THREE ~~whether~~MONTHS asENDED aMARCH ~~result of new information~~31, ~~future~~2024 ~~events,~~AND ~~changed circumstances or any other reason.~~2023 (UNAUDITED)

~~Overview~~Completion of Ceautamed Disposition

~~We are~~As ~~engaged~~noted ~~in the development~~above, ~~marketing,~~on October ~~manufacturing~~1, ~~acquisition~~2024, ~~operation~~the ~~and~~51% ~~sale~~owner of aFirst ~~broad~~Health ~~spectrum~~elected ofto ~~nutritional~~exercise ~~and~~the ~~related products~~option ~~with~~to anpurchase the ~~emphasis~~remaining on49% ~~health~~interest ~~and~~in ~~wellness.~~First ~~Structured~~Health asfrom athe ~~global holding company~~Company, weeffective ~~are~~as ~~executing a buy-and-build strategy with serial accretive acquisitions creating a vertically integrated company with an objective~~ of ~~aggregating~~October ~~companies~~2, ~~generating~~2024, ~~a minimum~~paid ofto ~~$300~~the ~~million~~Company ~~in revenues by~~ the ~~fourth~~option ~~quarter~~price of ~~2026~~$1.00, ~~To drive growth~~ and ~~earnings,~~the weCompany ~~are~~delivered ~~developing~~the ~~proprietary~~remaining ~~products~~49% asinterest ~~well as~~in ~~acquiring~~First ~~other~~Health ~~profitable~~to ~~companies,~~such ~~encompassing brands, manufacturing and distribution channels~~owner.

~~We also~~Securities ~~operate~~Purchase a network platform in the affiliate marketing space. Affiliate marketing is an advertising model in which a product vendor compensates third-party digital marketers to generate traffic or leads for the product vendor’s products and services. The third-party digital marketers are referred to as affiliates, and the commission fee incentivizes them to find ways to promote the products being sold by the product vendor.Agreement

On ~~March~~ 8April 3, ~~2018~~2024, wethe ~~acquired~~Company ~~51%~~entered ofinto ~~Millenium~~a ~~Natural~~securities purchase ~~Manufacturing~~agreement ~~Corp.~~with ~~and~~Purely ~~Millenium~~Optimal ~~Natural~~Nutrition ~~Health Products~~ Inc. (“Purely Optimal”) and onTan ~~October~~Enterprises, 9Inc., ~~2019,~~ weAvailiant ~~acquired~~Holdings ~~the~~Corporation, Dannel ~~remaining~~Tan, ~~49%~~Jason ofKwan ~~these~~and ~~companies.~~Timur OnKim ~~September~~(the 30“Sellers”), ~~2020,~~pursuant weto ~~changed~~which the ~~name~~Company ofagreed ~~Millenium Natural Manufacturing Corp.~~ to ~~Bonne~~acquire ~~Sante~~all ~~Natural~~of ~~Manufacturing,~~the ~~Inc.,~~issued orand outstanding ~~BSNM,~~membership ~~and~~interests onof ~~November~~Purely 24Optimal, ~~2020,~~a wehealth ~~merged~~supplement ~~Millenium~~brand, ~~Natural~~from ~~Health~~the ~~Products~~Sellers ~~Inc. into~~for ~~BSNM~~an toaggregate ~~better~~purchase ~~reflect~~price ~~our~~of ~~vertical integration~~$11,965,966.10 (the ~~BSNM~~“Purchase isPrice”), aconsisting ~~nutraceutical~~of ~~contract~~(i) ~~manufacturer~~$7,859,579.66 ~~It specializes~~ in acash ~~wide~~and ~~variety of~~(ii) ~~products~~$4, ~~from the private labeling of vitamins~~106,386.44 ~~dietary~~payable ~~supplements,~~as ~~nutraceuticals~~18,414 ~~sport~~newly ~~nutrition~~issued ~~and broad-spectrum nutritional~~shares ~~supplements,~~of ~~and~~series ~~sells~~D ~~them~~convertible ~~throughout~~preferred ~~the~~stock, ~~United~~a ~~States~~new ~~and~~series ~~around~~of ~~the~~preferred ~~world~~stock, ~~including~~subject ~~South~~to ~~America,~~certain ~~Central~~adjustments ~~America~~described ~~and Europe~~below.

~~On July~~The 1,Purchase ~~2021,~~Price weis ~~acquired~~based ~~100%~~upon ofa ~~Doctors~~six ~~Scientific~~(6) ~~Organica, LLC, Oyster Management Services, Ltd., Lawee Enterprises, L.L.C. and U.S.~~times ~~Medical~~multiple ~~Care Holdings, L.L.C. On August 27, 2021, we transferred all~~ of ~~the~~an ~~equity~~estimated ~~interests~~EBITDA of ~~Oyster Management Services~~$1, ~~Ltd.~~467, ~~Lawee Enterprises, L~~073.~~L.C.~~35 ~~and~~for ~~U.S.~~the ~~Medical~~twelve-month ~~Care~~period ~~Holdings,~~ending ~~L.L.C.~~on toNovember ~~Doctors Scientific Organica~~30, ~~LLC.~~2023 On(the ~~December~~“Reconstructed ~~13, 2022, we converted Oyster~~EBITDA”). ~~Management~~The ~~Services,~~Purchase ~~Ltd.~~Price towill abe ~~limited~~adjusted ~~liability~~upwards ~~company~~or ~~known~~downwards asbased ~~Oyster~~upon ~~Management~~the ~~Services,~~difference ~~L.L.C.~~between On(i) ~~May~~six ~~19,~~(6) ~~2022,~~times wethe ~~acquired~~Reconstructed ~~100%~~EBITDA ofand ~~Lavi~~the ~~Enterprises,~~Purchase ~~LLC,~~Price anand ~~affiliate~~(ii) ~~of these companies. On~~ the ~~same~~Estimated ~~date,~~Inventory wePayment ~~transferred~~(as ~~all~~defined ofin the ~~equity~~securities ~~interests~~purchase ofagreement) ~~Lavi~~and ~~Enterprises, LLC~~the toactual ~~Doctors~~amount of ~~Scientific~~Inventory ~~Organica,~~(as ~~LLC.~~defined Asin athe ~~result,~~securities ~~these~~purchase ~~entities~~agreement) ~~are~~on ~~now~~the ~~wholly~~closing ~~owned subsidiaries of Doctors Scientific Organica, LLC~~date. In ~~this report~~addition, ~~we collectively refer to Doctors Scientific Organica, LLC and its consolidated subsidiaries as DSO. DSO manufactures, sells and owns~~ the ~~Smart~~cash ~~for~~portion ~~Life brand~~ of ~~natural health and wellness meal replacement products. The brand includes proprietary hunger suppressing functional foods that are designed to work with~~ the ~~body’s~~Purchase ~~natural ability to lose weight. It also develops premium~~Price ~~supplements and commodities that~~ will ~~promote~~be ~~optimal~~decreased ~~health~~by ~~and~~the ~~wellness.~~amount ~~DSO~~of ~~has~~any ~~over~~outstanding 15indebtedness ~~years~~ of ~~experience~~Purely ~~providing~~Optimal ~~high-quality products~~for toborrowed ~~premium~~money ~~retail~~existing ~~locations~~as ~~and~~of ~~companies.~~the ~~Its~~closing ~~branded~~date ~~vitamins~~ and ~~supplements are also being sold through Amazon, and this~~ ~~sales~~any ~~channel~~unpaid istransaction ~~becoming a major contributor to the growth of the brand online~~expenses.

~~On August~~The 24securities purchase agreement contains customary representations, ~~2021~~warranties and covenants, weincluding ~~established~~a ~~Smart~~covenant that the Sellers will not compete with the business of Purely Optimal for ~~Life~~a ~~Canada~~period ~~Inc~~of two (2) years following closing. asThe asecurities ~~wholly~~purchase ~~owned~~agreement ~~subsidiary~~also contains mutual indemnification for breaches of representations ~~DSO~~or warranties and failure to perform covenants or obligations contained in ~~Canada.~~the ~~This~~securities ~~subsidiary~~purchase ~~sells~~agreement. ~~retail~~In the case ~~products~~of ~~through~~the aindemnification ~~retail~~provided ~~store~~by ~~location~~the inSellers ~~Montreal~~with ~~Canada~~respect to breaches of certain non-fundamental representations and warranties, the Sellers ~~same~~will ~~location~~only ~~also~~become ~~acts~~liable asfor ~~distribution~~indemnified ~~center~~losses ~~for~~if ~~our~~the ~~international~~amount exceeds ten percent (10%) of the Purchase Price, whereupon the Sellers ~~direct~~will be liable for all losses relating back to ~~consumer~~the first dollar, provided that the liability of the Sellers for breaches of certain non-fundamental representations and ~~big~~warranties ~~box~~shall ~~customers.~~not Weexceed ~~maintain~~thirty ~~inventory~~five (35%) of the Purchase Price and ~~employees~~each atSeller’s ~~this~~aggregate ~~location~~liability for the breach of fundamental representations shall be limited to the Purchase Price.

~~On November~~The 8,closing ~~2021,~~of wethe ~~acquired~~securities ~~100%~~purchase ofagreement is ~~Nexus~~subject ~~Offers~~to customary closing conditions, ~~Inc.~~including, orwithout ~~Nexus.~~limitation, ~~Nexus~~the ~~operates~~completion aof ~~cost~~accounting ~~per~~and ~~action/cost~~legal ~~per~~due ~~acquisition~~diligence ~~network. This~~investigations; ~~network~~the ~~consists~~receipt of ~~hundreds~~all ofauthorizations, ~~digital~~consents ~~marketers~~and ~~who~~approvals ~~stand~~of ~~ready~~all togovernmental ~~market~~authorities ~~products~~and ~~introduced~~third toparties; the ~~Nexus~~release ~~network.~~of ~~The~~any ~~cost per action/cost~~liens ~~per~~against ~~acquisition~~any ~~model~~of isthe ~~where~~assets ~~digital~~of ~~marketers~~Purely ~~are~~Optimal; ~~paid~~the ~~for~~Company anobtaining ~~action~~the ~~(e.g.,~~requisite aacquisition ~~product~~financing; ~~sale~~and ordelivery ~~lead~~of ~~generation)~~all ~~that is taken as a~~documents ~~direct~~required ~~result~~for ~~of their marketing efforts. Through~~ the ~~digital~~transfer ~~marketer’s method~~ of ~~marketing,~~ the ~~digital~~equity ~~marketer~~interests ~~sends traffic to one~~ of ~~the~~Purely ~~product~~Optimal ~~vendor’s~~to ~~offers listed on~~ the ~~network~~Company.

~~On December~~Warrant 6, 2021, we acquired 100% of GSP Nutrition Inc., or GSP. GSP is a sports nutrition company. It offers nutritional supplements for athletes and active lifestyle consumers through a variety of wellness solutions and delivery methods, including powders, tablets and soft gels that are formulated to support energy and performance; nutrition and wellness; and focus and clarity. GSP’s initial line of nutritional products are marketed under the Sports Illustrated Nutrition brand. GSP has a license for the exclusive use of the Sports Illustrated brand (excluding the Sports Illustrated Swimsuit brand for which it has a right of first offer under the license) for certain dietary and nutritional supplements, in each case to be sold to/through certain approved accounts in the United States and Canada. The product line currently consists of whey protein isolate powder, tablet supplements for joint health, nitric oxide, post workout blends, Omega-3 supplements, and pre-workout supplements, among others.Solicitation

On May 30, 2024, the Company entered into warrant solicitation inducement letters (the “Inducement Letters”) with the holders (the “Exercising Holders”) of warrants for the purchase of an aggregate of 183,370 shares of common stock at an exercise price of $10.64 issued on December 4, 2023 (the “Existing Warrants”), pursuant to which the Exercising Holders agreed to exercise the Existing Warrants for cash at a reduced exercise price of $4.25 per share, or for gross proceeds of $779,322.50 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 550,110 shares of common stock (the “New Warrants”).

~~On July~~SMART ~~29,~~FOR ~~2022~~LIFE, ~~we acquired 100% of Ceautamed Worldwide, LLC and its wholly-owned subsidiaries Wellness Watchers Global, LLC and Greens First Female LLC (which we collectively refer to as Ceautamed)~~INC. ~~Ceautamed~~ NOTES isTO ~~based~~CONDENSED inCONSOLIDATED ~~Boca~~FINANCIAL ~~Raton,~~STATEMENTS ~~Florida and owns the Greens First line of branded products which have been specifically marketed~~ toTHREE ~~the~~MONTHS ~~healthcare~~ENDED ~~provider~~MARCH ~~sector. These vitamins and supplements have been sold on a business-to-business basis~~31, ~~direct-to-consumer as~~2024 ~~well~~AND ~~as sold utilizing an international medical distribution company pursuant to a long-term contract. Ceautamed has historically~~2023 ~~utilized third-party contract manufacturing that will migrate to BSNM.~~ (UNAUDITED)

~~Recent~~On June 3, 2024, the closing of this transaction ~~Developments~~was completed, and the Company issued the New Warrants. The New Warrants are exercisable for a period of eighteen months at an initial exercise price of $4.25 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 will be 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. 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.

OnH.C. ~~October~~Wainwright ~~27,~~& ~~2023~~Co., weLLC ~~effected~~acted aas ~~1-for-3 reverse~~warrant ~~stock~~inducement ~~split~~agent ofand ~~our~~financial ~~authorized~~advisor ~~and~~in ~~issued~~connection with the transaction and ~~outstanding~~received ~~common~~a ~~stock~~cash fee equal to 7.5% Asof the gross proceeds, a ~~result~~management fee equal to 1% of ~~this~~the ~~reverse~~gross ~~split~~proceeds and reimbursement of certain expenses. After these fees, ~~our~~the ~~authorized~~Company ~~common~~received ~~stock~~net proceeds ~~decreased~~of ~~from~~approximately ~~166~~$458,~~666~~473. In addition,~~667~~ ~~shares~~the Company issued to ~~55,555,556~~certain ~~shares~~designees of H.C. ~~The~~Wainwright ~~impact~~& ofCo., ~~this~~LLC ~~transaction~~warrants isto ~~reflected~~purchase 13,753 ~~within~~shares ~~all~~of common stock, ~~options~~at an exercise price of $5.3125 per share, ~~and~~ ~~warrant~~which ~~information~~such ~~retrospectively~~warrants inwill ~~this~~have ~~report~~the same terms of the New Warrants (other than the exercise price).

~~Principal Factors~~Additional ~~Affecting~~Equity ~~Our Financial Performance~~Transactions

~~Our operating~~On ~~results~~June ~~are~~3, ~~primarily~~2024, ~~affected~~the byCompany issued 44,322 shares of common stock upon the ~~following~~cashless ~~factors:~~exercise of warrants.

●Subsequent ~~our~~to ~~ability~~March to31, ~~acquire~~2024, ~~new~~an ~~customers~~aggregate orof 10,088.17 ~~retain~~shares ~~existing~~of ~~customers;~~series C preferred stock were converted into an aggregate of 144,120 shares of common stock.

●Subsequent ~~our~~to ~~ability~~March to31, ~~access~~2024, ~~capital~~an ~~needed~~aggregate of 1,527 shares of series B preferred stock were exchanged for ~~operations~~debt, ~~including~~which ~~purchasing~~was ~~raw~~immediately ~~materials;~~converted into an aggregate of 258,125 shares of common stock.

●Subsequent ~~our~~to ~~ability~~March to31, ~~offer~~2024, ~~competitive~~holders ~~product~~returned an ~~pricing;~~aggregate of 105,670 shares of common stock in exchange for the return of an aggregate of 7,396.77 shares of series C preferred stock. All but 977.98 of those shares of series C preferred stock were then converted into debt and then immediately converted back into an aggregate of 381,934 shares of common stock.

●Subsequent ~~our~~to ~~ability~~March to31, ~~broaden~~2024, ~~product~~the ~~offerings;~~Company issued an aggregate of 5,215,865 shares of common stock upon the conversion of other debt.

●Subsequent ~~industry~~to ~~demand~~March ~~and~~31, ~~competition;~~2024, ~~and~~an aggregate of 160,037 shares of common stock were cancelled by the holders thereof.

●Memorandum ~~market~~of ~~conditions and our market position.~~Understanding

~~Emerging Growth~~On May 30, 2024, the Company entered into a Memorandum of Understanding with the holder of an original issue discount subordinated debenture related to a judgement in February 2024. The parties executed a conversion agreement to convert a portion of the outstanding balance of the debenture totaling $256,765.44 into 79,840 shares of common stock and the outstanding balance of $142,540.51 to be exchanged for prepaid warrants exercisable for 44,322 warrant shares.

We qualify as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). As a result, we will be permitted to, and intend to, rely on exemptions from certain disclosure requirements. For so long as we are an emerging growth company, we will not be required to:

● have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

● comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

● submit certain executive compensation matters to stockholder advisory votes, such as “say-on-pay” and “say-on-frequency;” and

● disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the benefits of this extended transition period. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards.

~~We will~~ITEM remain an emerging growth company until the earliest of (i) the last day of the fiscal year following the fifth anniversary of our initial public offering, (ii) the last day of the first fiscal year in which our total annual gross revenues are $12.07 ~~billion~~MANAGEMENT’S orDISCUSSION ~~more, (iii)~~AND ~~the~~ANALYSIS ~~date~~OF ~~that~~FINANCIAL weCONDITION ~~become~~AND aRESULTS ~~“large~~OF accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter or (iv) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year periodOPERATIONS.

~~Results~~The following discussion and analysis summarizes the significant factors affecting our operating results, financial condition, liquidity and cash flows as of ~~Operations~~and for the periods presented below. The following discussion and analysis should be read in conjunction with the financial statements and the related notes thereto included elsewhere in this report. The discussion contains forward-looking statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below and elsewhere in this report.

~~Comparison~~Use of ~~Three~~Terms ~~Months Ended September 30, 2023 and 2022~~

~~The following~~Except ~~table~~as ~~sets~~otherwise ~~forth~~indicated ~~key~~by ~~components~~the ofcontext ~~our~~and for ~~results~~the purposes of ~~operations~~this ~~during~~report ~~the~~only, ~~three~~references ~~months~~in ~~ended~~this ~~September~~report 30to “we,” ~~2023~~“us,” “our” and ~~2022, both~~“our incompany” ~~dollars~~are ~~and~~to asSmart for Life, Inc., a ~~percentage~~Nevada ofcorporation, ~~our~~and ~~revenues~~its consolidated subsidiaries.

	September 30, 2023						September 30, 2022
	Amount			% of Revenues			Amount			% of Revenues
Revenues
Products	$	2,744,306			99.78	%	$	4,501,657			84.03	%
Advertising		5,999			0.22	%		855,328			15.97	%
Total revenues		2,750,305			100.00	%		5,356,985			100.00	%
Cost of revenues
Products		1,688,097			61.38	%		2,094,198			39.09	%
Advertising		522			0.02	%		630,123			11.76	%
Total cost of revenues		1,688,619			61.40	%		2,724,321			50.86	%
Gross profit		1,061,686			38.60	%		2,632,664			49.14	%
Operating expenses
Selling, general and administrative		1,238,625			45.04	%		1,760,381			32.86	%
Compensation – administrative		2,046,220			74.40	%		1,479,816			27.62	%
Professional services		349,098			12.69	%		316,440			5.91	%
Consulting fees related party		19,139			0.70	%		—			—
Depreciation and amortization expense		615,810			22.39	%		522,412			9.75	%
Total operating expenses		4,268,892			155.22	%		4,079,049			76.14	%
Operating loss		(3,207,206	)		(116.61	)%		(1,446,385	)		(27.00	)%
Other income (expense)
Other income (expense)		19,820			0.72	%		(183,189	)		(3.42	)%
Gain on debt extinguishment		16,021			0.58	%		—			—	%
Change in fair value of derivative liability		—			—			108,426			2.02	%
Interest expense		(1,172,742	)		(42.64	)%		(426,573	)		(7.96	)%
Total other income (expense)		(1,136,901	)		(41.34	)%		(501,336	)		(9.36	)%
Net loss	$	(4,344,107	)		(157.95	)%	$	(1,947,721	)		(36.36	)%

Special Note Regarding Forward Looking Statements

~~Revenues~~This report contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to us. All statements other than ~~Our~~statements ~~total~~of ~~revenues~~historical ~~decreased~~facts byare ~~$2,606,680,~~forward-looking statements. These statements relate to future events or ~~48.66%~~to our future financial performance and involve known and unknown risks, touncertainties $2and other factors that may cause our actual results,~~750~~ levels of activity,~~305~~ ~~for~~performance or ~~the~~achievements ~~three~~to ~~months~~be ~~ended~~materially ~~September~~different 30from any future results, ~~2023~~levels ~~from~~of $5activity,~~356,985~~ ~~for~~performance or achievements expressed or implied ~~the~~by ~~three~~these ~~months~~forward-looking ~~ended~~statements. ~~September~~Forward-looking 30statements include, ~~2022.~~but are not limited to, statements about:

~~Our nutraceutical~~● ~~business generates revenue from the sales of nutritional and related products. Revenues from~~ our ~~nutraceutical~~goals business (products) decreased by $1,757,351, or 39.04%, to $2,744,306 for the three months ended September 30, 2023 from $4,501,657 for the three months ended September 30, 2022. This decrease was primarily due to our cash constraints and our inability to pay for raw materials used in the production of both branded and contract manufacturing products. The decreased revenues were the result of a decrease in the volume of products sold and not due to pricing changes.strategies;

~~Our digital~~● ~~marketing business generates revenues when sales of listed products are sold by product vendors through~~ our ~~network~~future ~~as a result of the marketing efforts of digital marketers. Revenues from our digital marketing~~ business ~~(advertising) decreased by $849~~development,~~329,~~ orfinancial ~~99.30%, to~~condition ~~$5,999 for the three months ended September 30, 2023 from $855,328 for the three months ended September 30, 2022. The decrease in revenue is attributable to our cash constraints~~ and ~~our~~results ~~inability~~of ~~to pay affiliates which provide revenue producing customers.~~operations;

~~Cost of~~● ~~revenues.~~expected ~~Our~~changes ~~total~~in ~~cost~~our ~~of revenues decreased by $1~~revenue,~~035,702,~~ costs or ~~38.02%, to $1,688,619 for the three months ended September 30, 2023 from $2,724,321 for the three months ended September 30, 2022. Such decrease is directly related to the decrease in revenues.~~expenditures;

31● growth of and competition trends in our industry;

~~Cost~~● ~~of revenues for~~ our ~~nutraceutical~~expectations ~~business consist~~regarding ofdemand ~~ingredients~~for, ~~packaging materials, freight,~~ and ~~labor~~market ~~associated~~acceptance ~~with the production~~ of ~~various products. Cost of revenues for our nutraceutical business (products) decreased by $406~~,~~101,~~ or 19.39%, to $1,688,097 for the three months ended September 30, 2023 from $2,094,198 for the three months ended September 30, 2022. As a percentage of product revenues, cost of revenues for product sales were 61.51% and 46.52% for the three months ended September 30, 2023 and 2022, respectively. The increased percentage is due to increased labor rates associated with production. Although we were not able to produce at capacity as in the prior year, we continued to compensate our ~~production~~ ~~workforce.~~products;

~~Cost~~● ~~of revenues for~~ our ~~digital~~expectations ~~marketing~~regarding ~~business consist of commissions and bonuses paid to digital marketers. Cost of revenues from~~ our ~~digital~~relationships ~~marketing~~with ~~business (advertising) decreased by $629~~investors,~~601,~~ orinstitutional ~~99.92%,~~funding topartners $522 for the three months ended September 30, 2023 from $630,123 for the three months ended September 30, 2022. As a percentage of advertising revenues, cost of revenues for advertising sales was 8.70% and ~~73.67%~~other ~~for~~parties ~~the three months ended September 30, 2023 and 2022, respectively. Such decrease in in line~~ with ~~the~~which ~~decrease~~we ~~in revenues from our digital marketing business.~~collaborate;

~~Gross profit.~~● Asfluctuations ain ~~result~~general ofeconomic ~~the~~and ~~foregoing,~~business ~~our~~conditions ~~gross~~in ~~profit decreased by $1,570,978, or 59.67%, to $1,061,686 for~~ the ~~three~~markets ~~months ended~~in ~~September~~which ~~30,~~we ~~2023~~operate; ~~from $2,632,664 for the three months ended September 30, 2022. As a percentage of revenues, our gross profit was 38.60%~~ and ~~49.14% for the three months ended September 30, 2023 and 2022, respectively.~~

~~Selling,~~● ~~general~~relevant ~~and~~government ~~administrative~~policies ~~expenses. Our selling, general~~ and ~~administrative~~regulations ~~expenses~~relating consist primarily of advertising expenses, bad debts, rent expense, insurance and other expenses incurred in connection with general operations. Our selling, general and administrative expenses decreased by $521,756, or 29.64%, to ~~$1,238,625~~our ~~for the three months ended September 30, 2023 from $1,760,381 for the three months ended September 30, 2022~~industry. Such decrease was primarily due to decreased rates for D&O insurance and reduced advertising in 2023. As a percentage of revenues, selling, general and administrative expenses was 45.04% and 32.86% for the three months ended September 30, 2023 and 2022, respectively.

~~Compensation -~~In ~~administrative. Our~~some ~~compensation~~cases, ~~expenses~~you ~~include~~can ~~both~~identify ~~cash~~forward-looking statements ~~and~~by ~~non-cash~~terms ~~items~~such as “may,” ~~including~~“could,” ~~salaries~~“will,” ~~plus~~“should,” ~~related~~“would,” ~~payroll~~“expect,” ~~taxes.~~“plan,” ~~Our~~“intend,” ~~compensation~~“anticipate,” ~~expenses~~“believe,” ~~increased~~“estimate,” ~~by $566~~“predict,~~404~~” “potential,” “project” or 38“continue” or the negative of these terms or other comparable terminology.~~28%~~ These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, touncertainties $2and other factors,~~046~~ which are,~~220~~ ~~for~~in ~~the~~some ~~three~~cases, ~~months~~beyond ~~ended~~our ~~September~~control ~~30,~~and ~~2023~~which could materially affect results. Factors that may cause actual results to differ materially from $1current expectations include,~~479~~ among other things,~~816~~ those listed under Item ~~for~~1A ~~the~~“Risk ~~three~~Factors” ~~months~~included ~~ended~~in ~~September~~our ~~30,~~Annual ~~2022.~~Report ~~Such~~on ~~increase~~Form ~~was~~10-K ~~primarily~~for ~~due~~the toyear aended ~~non-cash~~December ~~$685~~31,~~380~~ ~~expense~~2023, ~~for~~or the ~~issuance~~Form 10-K, and ~~amortization~~elsewhere ofin ~~stock~~this ~~options~~report. AsIf aone ~~percentage~~or more of ~~revenues~~these risks or uncertainties occur, ~~compensation~~or ~~expense~~if ~~was~~our ~~79.40%~~underlying ~~and~~assumptions ~~27.62%~~prove ~~for~~to be incorrect, actual events or results may vary significantly from those implied or projected by the ~~three~~forward-looking ~~months~~statements. ~~ended~~No ~~September~~forward-looking ~~30,~~statement ~~2023~~is a ~~and~~guarantee ~~2022,~~of ~~respectively~~future performance.

~~Professional services. Our~~In ~~professional~~addition, ~~services~~statements ~~expenses~~that ~~consist~~“we ~~primarily~~believe” and ofsimilar ~~investor~~statements ~~relations,~~reflect ~~consulting,~~our ~~advisory,~~beliefs ~~legal~~ and ~~audit expenses~~opinions ~~incurred~~on inthe ~~connection~~relevant ~~with general operations~~subject. ~~Our~~These ~~professional~~statements ~~services~~are ~~expenses~~based ~~increased~~upon byinformation ~~$32,658~~available to orus ~~10.32%,~~as toof ~~$349,098 for~~ the ~~three~~date ~~months~~of ~~ended~~this ~~September 30~~report, ~~2023~~and ~~from~~while ~~$316,440~~we ~~for~~believe ~~the~~such ~~three~~information ~~months~~forms ~~ended~~a ~~September~~reasonable ~~30,~~basis ~~2022.~~for ~~Such~~such ~~increase~~statements, ~~was~~such ~~primarily~~information ~~due~~may tobe ~~increased~~limited ~~legal~~or ~~fees~~incomplete, ~~associated~~and ~~with~~ our ~~NASDAQ~~statements ~~compliance,~~should ~~and~~not ~~sales~~be ~~and~~read ~~marketing~~to ~~consultants.~~indicate Asthat awe ~~percentage~~have ofconducted ~~revenues~~an exhaustive inquiry into, or ~~professional~~review ~~services~~of, ~~expense~~all ~~was~~potentially ~~12.69%~~available ~~and~~relevant 5information.~~91%~~ ~~for~~These ~~the~~statements ~~three~~are ~~months~~inherently ~~ended~~uncertain ~~September~~and ~~30,~~investors ~~2023~~are ~~and~~cautioned ~~2022,~~not ~~respectively~~to unduly rely upon these statements.

Consulting fees - related parties. For the three months ended September 30, 2023 and 2022, we paid Trilogy Capital Group, LLC, a company controlled by our Executive Chairman, $19,139 and $0, respectively, for services rendered under a consulting agreement.31

~~Depreciation and~~The ~~amortization. Depreciation~~forward-looking ~~and~~statements ~~amortization~~made ~~was~~in ~~$615,810,~~this report relate only to events or ~~22.39%~~information as of ~~revenues,~~the ~~for~~date on which the ~~three~~statements ~~months~~are ~~ended~~made ~~September 30,~~in ~~2023,~~this report. Except as ~~compared~~expressly torequired ~~$522~~by the federal securities laws,~~412,~~ orthere ~~9.75%~~is ofno ~~revenues,~~undertaking ~~for~~to ~~the~~publicly ~~three~~update ~~months~~or ~~ended~~revise ~~September~~any 30forward-looking statements, ~~2023.~~whether ~~The~~as ~~increase~~a inresult ~~amortization~~of new isinformation, ~~associated~~future ~~with~~events, ~~intangible~~changed ~~assets~~circumstances ~~resulting~~or ~~from~~any ~~acquisitions~~other reason.

Total other expense. We had $1,136,901 in total other expense, net, for the three months ended September 30, 2023, as compared to total other expense, net, of $501,336 for the three months ended September 30, 2022. Total other expense, net, for the three months ended September 30, 2023 consisted of interest expense of $1,172,742, offset by a gain on debt extinguishment of $16,021 and other income of $19,820, while other expense, net, for the three months ended September 30, 2022 consisted of interest expense of $426,573 and other expense of $183,189, offset by a change in fair value of derivative liability of $108,426. Overview

~~Net~~We ~~loss. As~~are engaged in the development, marketing, manufacturing, acquisition, operation and sale of a ~~result~~broad spectrum of ~~the~~nutritional and related products with an emphasis on health and ~~cumulative~~wellness. ~~effect~~Structured ofas ~~the~~a ~~factors~~global ~~described~~holding ~~above~~company, we ~~had~~are executing a ~~net~~buy-and-build ~~loss~~strategy ofwith ~~$4,344,107~~serial ~~for~~accretive ~~the~~acquisitions ~~three~~creating a ~~months~~vertically ~~ended~~integrated ~~September~~company. ~~30,~~To ~~2023,~~drive asgrowth ~~compared to~~and $1earnings,~~947,721~~ ~~for~~we ~~the~~are ~~three~~developing ~~months~~proprietary ~~ended~~products ~~September~~as ~~30,~~well ~~2022,~~as anacquiring ~~increase~~other ofprofitable companies, $2encompassing brands,~~396~~ manufacturing,~~386,~~ orand ~~123~~distribution channels.~~04%.~~

32We also operate a network platform in the affiliate marketing space. Affiliate marketing is an advertising model in which a product vendor compensates third-party digital marketers to generate traffic or leads for the product vendor’s products and services. The third-party digital marketers are referred to as affiliates, and the commission fee incentivizes them to find ways to promote the products being sold by the product vendor.

~~Comparison~~On March 8, 2018, we acquired 51% of ~~Nine~~Millenium Natural ~~Months~~Manufacturing ~~Ended~~Corp. ~~September~~and Millenium Natural Health Products Inc. and on October 9, 2019, we acquired the remaining 49% of these companies. On September 30, ~~2023~~2020, we changed the name of Millenium Natural Manufacturing Corp. to Bonne Sante Natural Manufacturing, Inc., or BSNM, and ~~2022~~on November 24, 2020, we merged Millenium Natural Health Products Inc. into BSNM to better reflect our vertical integration. In November 2024 we relocated the operations of BSNM from Doral, Florida to Riviera Beach, Florida. It manufactures nutritional products for a significant number of customers.

~~The~~On July 1, 2021, we acquired Doctors Scientific ~~following~~Organica, ~~table~~LLC ~~sets~~d/b/a ~~forth~~Smart ~~key~~for ~~components~~Life, Oyster Management Services, Ltd., Lawee Enterprises, L.L.C. and U.S. Medical Care Holdings, L.L.C. On August 27, 2021, we transferred all of ~~our~~the ~~results~~equity interests of ~~operations~~Oyster ~~during~~Management Services, Ltd., Lawee Enterprises, L.L.C. and U.S. Medical Care Holdings, L.L.C. to Doctors Scientific Organica, LLC. On May 19, 2022, we acquired Lavi Enterprises, LLC. On the ~~nine~~same ~~months~~date, ~~ended~~we ~~September~~transferred 30all of the equity interests of Lavi Enterprises, ~~2023~~LLC ~~and~~to Doctors Scientific Organica, LLC. On December 13, 2022, ~~both~~Oyster Management Services, Ltd. was converted to a limited liability company known as Oyster Management Services, L.L.C. As ina ~~dollars~~result of the foregoing, Oyster Management Services, L.L.C., Lawee Enterprises, L.L.C., U.S. Medical Care Holdings, L.L.C. and Lavi Enterprises, LLC are now wholly owned subsidiaries of Doctors Scientific Organica, LLC. In this report, we collectively refer to Doctors Scientific Organica, LLC and its consolidated subsidiaries as DSO. Based in Riviera Beach, Florida, DSO operates a ~~percentage~~30,000 ofsquare-foot FDA-certified ~~our~~manufacturing ~~revenues~~facility. DSO manufactures and sells weight management foods and related products. Additionally, DSO provides manufacturing services for other customers.

	September 30, 2023						September 30, 2022
	Amount			% of Revenues			Amount			% of Revenues
Revenues
Products	$	7,077,105			95.14	%	$	11,537,041			81.84	%
Advertising		361,470			4.86	%		2,560,321			18.16	%
Total revenues		7,438,575			100.00	%		14,097,362			100.00	%
Cost of revenues
Products		4,528,103			60.87	%		6,281,486			44.56	%
Advertising		279,037			3.75	%		1,884,479			13.37	%
Total cost of revenues		4,807,140			64.62	%		8,165,965			57.93	%
Gross profit		2,631,435			35.38	%		5,931,397			42.07	%
Operating expenses
Selling, general and administrative		3,838,333			51.60	%		5,139,263			36.46	%
Compensation - administrative		4,929,327			66.27	%		5,120,518			36.32	%
Professional services		1,565,396			21.04	%		1,622,871			11.51	%
Consulting fees - related parties		46,686			0.63	%		—			—
Impairment of intangible assets		466,737			6.27	%		—			—
Depreciation and amortization expense		1,814,613			24.39	%		1,375,514			9.76	%
Total operating expenses		12,661,092			170.21	%		13,258,166			94.05	%
Operating loss		(10,029,657	)		(134.83	)%		(7,326,769	)		(51.97	)%
Other income (expense)
Other income (expense)		333,498			4.48	%		(693,614	)		(4.92	)%
Gain on debt extinguishment		273,058			3.67	%		134,956			0.96	%
Change in fair value of derivative liability		—			—			146,513			1.04	%
Interest expense		(3,425,318	)		(46.05	)%		(14,168,479	)		(100.50	)%
Total other income (expense)		(2,818,762	)		(37.89	)%		(14,580,624	)		(103.43	)%
Net loss	$	(12,848,419	)		(172.73	)%	$	(21,907,393	)		(155.40	)%

On November 8, 2021, we acquired 100% of Nexus Offers, Inc., or Nexus. Nexus operates a cost per action/cost per acquisition network. This network consists of hundreds of digital marketers who stand ready to market products introduced to the Nexus network. The cost per action/cost per acquisition model is where digital marketers are paid for an action (e.g., a product sale or lead generation) that is taken as a direct result of their marketing efforts. Through the digital marketer’s method of marketing, the digital marketer sends traffic to one of the product vendor’s offers listed on the network.

~~Revenues. Our~~On ~~total~~December ~~revenues decreased by $~~6,~~658~~ 2021,~~787,~~ orwe ~~47.23~~acquired 100%, toof $7GSP Nutrition Inc.,~~438,575~~ ~~for~~or ~~the~~GSP. ~~nine~~GSP ~~months~~is ~~ended~~a ~~September~~sports ~~30,~~nutrition ~~2023~~company ~~from~~that ~~$14,097,362~~offers ~~for the~~nutritional ~~nine~~supplements ~~months~~for ~~ended~~athletes ~~September~~and ~~30,~~active ~~2022~~lifestyle consumers.

~~Revenues from~~Recent our nutraceutical business (products) decreased by $4,459,936, or 38.66%, to $7,077,105 for the nine months ended September 30, 2023 from $11,537,041 for the nine months ended September 30, 2022. This decrease was primarily due to our cash constraints and our inability to pay for raw materials used in the production of both branded and contract manufacturing products. The decreased revenues were the result of a decrease in the volume of products sold and not due to pricing changes.Developments

~~Revenues from~~Securities ~~our~~Purchase digital marketing business (advertising) decreased by $2,198,851, or 85.88%, to $361,470 for the nine months ended September 30, 2023 from $2,560,321 for the nine months ended September 30, 2022. The decrease in revenue is attributable to our cash constraints and the impact it had with our affiliate advertisers.Agreement

~~Cost~~On April 3, 2024, we entered into a securities ofpurchase ~~revenues~~agreement with Purely Optimal Nutrition Inc., ~~Our~~or ~~total~~Purely ~~cost~~Optimal, ofand ~~revenues~~Tan ~~decreased~~Enterprises, byInc., $3Availiant Holdings Corporation,~~358~~ Dannel Tan,~~825~~ Jason Kwan and Timur Kim, or ~~41.13%~~the Sellers, pursuant to ~~$4,807,140~~which ~~for~~we agreed to acquire all of the ~~nine~~issued ~~months~~and ~~ended~~outstanding ~~September~~membership interests 30of Purely Optimal, ~~2023~~a health supplement brand, from the Sellers for an aggregate purchase price of $811,~~165,~~965,966.10, ~~for~~or the ~~nine~~Purchase ~~months~~Price, consisting ~~ended~~of ~~September~~(i) 30$7,859,579.66 ~~2022~~in cash and (ii) $4,106,386.44 ~~Such~~payable ~~decrease~~as is18,414 ~~directly~~newly ~~related~~issued shares of series D convertible preferred stock, a new series of preferred stock, subject to ~~the~~certain ~~decrease~~adjustments indescribed ~~revenues~~below.

Cost of revenues for our nutraceutical business (products) decreased by $1,753,383, or 27.91%, to $4,528,103 for the nine months ended September 30, 2023 from $6,281,486 for the nine months ended September 30, 2022. As a percentage of product revenues, cost of revenues for product sales were 63.98% and 54.45% for the nine months ended September 30, 2023 and 2022, respectively. The increased percentage is due to increased labor rates associated with production. Although we were not able to produce at capacity as in the prior year, we continued to compensate our production workforce.32

~~Cost~~The ofPurchase ~~revenues~~Price ~~from~~is ~~our~~based ~~digital~~upon ~~marketing~~a ~~business~~ six (~~advertising~~6) ~~decreased~~times multiple byof ~~$1,605,442,~~an orestimated ~~85.19%,~~EBITDA toof $~~279~~1,~~037~~467,073.35 for the ~~nine~~twelve-month ~~months~~period ~~ended~~ending ~~September~~on November 30, 2023, ~~from~~or ~~$1,884,479~~the ~~for~~Reconstructed EBITDA. The Purchase Price will be adjusted upwards or downwards based upon the ~~nine~~difference between (i) six (6) times the Reconstructed EBITDA ~~months~~and ~~ended~~the ~~September~~Purchase ~~30,~~Price ~~2022.~~and ~~Such~~(ii) ~~decrease~~the inEstimated Inventory Payment (as defined in ~~line~~the ~~with~~securities purchase agreement) and the ~~decrease~~actual amount of Inventory (as defined in ~~revenues~~the ~~from~~securities ~~our~~purchase ~~digital~~agreement) ~~marketing~~on ~~business~~the closing date. AsIn aaddition, ~~percentage~~ the cash portion of ~~advertising~~the ~~revenues,~~Purchase ~~cost~~Price will ofbe ~~revenues~~decreased ~~for~~by ~~advertising~~the ~~sales~~amount ~~was~~of ~~77.20%~~any ~~and~~outstanding ~~73.60%~~indebtedness of Purely Optimal for ~~the~~borrowed ~~nine~~money ~~months~~existing ~~ended~~as ~~September~~of ~~30,~~the ~~2023~~closing date and ~~2022,~~any ~~respectively~~unpaid transaction expenses.

~~Gross~~The ~~profit.~~securities Aspurchase agreement contains customary representations, warranties and covenants, including a ~~result~~covenant ofthat the Sellers will not compete with the business of Purely Optimal ~~foregoing,~~for ~~our~~a ~~gross~~period ~~profit~~of ~~decreased~~two by(2) ~~$3,299,962,~~years following closing. The securities purchase agreement also contains mutual indemnification for breaches of representations or 55warranties and failure to perform covenants or obligations contained in the securities purchase agreement.~~64%,~~ In the case of the indemnification provided by the Sellers with respect to $2breaches of certain non-fundamental representations and warranties,~~631,435~~ the Sellers will only become liable for indemnified losses if the ~~nine~~amount ~~months~~exceeds ~~ended~~ten ~~September~~percent ~~30,~~(10%) ~~2023~~of ~~from~~the $5Purchase Price,~~931,397~~ whereupon the Sellers will be liable for ~~the~~all ~~nine~~losses ~~months~~relating ~~ended~~back ~~September~~to 30the first dollar, ~~2022.~~provided Asthat athe ~~percentage~~liability of ~~revenues,~~the ~~our~~Sellers ~~gross~~for ~~profit~~breaches ~~was~~of ~~35.38%~~certain non-fundamental representations and ~~42.07~~warranties shall not exceed thirty five (35%) ~~for~~of the ~~nine~~Purchase ~~months~~Price and each Seller’s aggregate liability for ~~ended~~the ~~September~~breach ~~30,~~of ~~2023~~fundamental ~~and~~representations ~~2022,~~shall ~~respectively~~be limited to the Purchase Price.

33The closing of the securities purchase agreement is subject to customary closing conditions, including, without limitation, the completion of accounting and legal due diligence investigations; the receipt of all authorizations, consents and approvals of all governmental authorities and third parties; the release of any liens against any of the assets of Purely Optimal; our obtaining the requisite acquisition financing; and delivery of all documents required for the transfer of the equity interests of Purely Optimal to us.

~~Selling,~~Warrant general and administrative expenses. Our selling, general and administrative expenses decreased by $1,300,930, or 25.31%, to $3,838,333 for the nine months ended September 30, 2023 from $5,139,263 for the nine months ended September 30, 2022. Such decrease was primarily due to decreased rates for D&O insurance, initial public offering, or IPO, related expenses in February 2022 and reduced advertising in 2023. As a percentage of revenues, selling, general and administrative expenses was 51.60% and 36.46% for the nine months ended September 30, 2023 and 2022, respectively.Solicitation

~~Compensation~~On May 30, 2024, we entered into warrant solicitation -inducement ~~administrative. Our~~letters ~~compensation~~with ~~expenses~~the ~~decreased~~holders byof ~~$191,191,~~warrants orfor ~~3.73%~~the purchase of an aggregate of 183,370 toshares of common stock at an exercise price of $10.64 issued on December 4,~~929~~ 2023,~~327~~ ~~for~~or the ~~nine~~Existing ~~months~~Warrants, ~~ended~~pursuant ~~September 30,~~to ~~2023~~which ~~from~~the ~~$5,120,518~~holders ~~for~~agreed to exercise the ~~nine~~Existing ~~months~~Warrants for ~~ended~~cash ~~September~~at ~~30,~~a ~~2022~~reduced exercise price of $4.25 ~~Such~~per ~~decrease~~share, ~~was~~or ~~primarily~~for ~~due~~gross toproceeds aof ~~reduction~~$779,322.50 in ~~headcount~~the aggregate. AsIn consideration for the aimmediate ~~percentage~~exercise of ~~revenues~~the Existing Warrants for cash, ~~compensation~~we ~~expenses~~agreed ~~was~~to ~~66.27%~~issue ~~and~~to ~~36.32%~~the holders new warrants for the ~~nine~~purchase ~~months~~of ~~ended~~an ~~September~~aggregate of 30550,110 ~~2023~~shares ~~and~~of ~~2022~~common stock, ~~respectively~~or the New Warrants.

~~Professional~~On ~~services. Our professional~~June ~~services~~3, ~~expenses~~2024, ~~decreased~~the byclosing ~~$57~~of this transaction was completed,~~475,~~ orand 3we issued the New Warrants.~~54%,~~ toThe ~~$1,565,396~~New Warrants are exercisable for ~~the~~a ~~nine~~period of eighteen months ~~ended~~at ~~September~~an ~~30,~~initial ~~2023~~exercise price ~~from~~of $~~1,622,871~~4.25 per share and may be exercised on a cashless basis if at the time of exercise there is no effective registration statement ~~for~~registering, or the ~~nine~~prospectus ~~months~~contained ~~ended~~therein ~~September~~is 30not available for the resale of, ~~2022~~the shares issuable upon exercise of the New Warrants. The ~~Such~~exercise ~~decrease~~price ~~was~~will ~~primarily~~be ~~related~~subject to ~~NASDAQ~~customary ~~listing~~adjustments ~~and~~in ~~compliance~~the ~~year~~event ~~over~~of ~~year~~stock splits, stock dividends, stock combinations and similar recapitalization transactions. AsThe New Warrants also contain a beneficial ownership limitation which provides that we shall not effect any exercise, and a ~~percentage~~holder shall not have the right to exercise, any portion of ~~revenues~~a New Warrant to the extent that, ~~professional~~after ~~services~~giving ~~expense~~effect to ~~was~~the 21exercise, such holder (together with such holder’s affiliates) would beneficially own in excess of 4.0499% ~~and~~of 11the number of shares of common stock outstanding immediately after giving effect to the issuance of shares issuable upon the exercise.51 This limitation may be waived (up to a maximum of 9.99%) ~~for~~by ~~the~~a ~~nine~~holder ~~months~~in ~~ended~~its ~~September~~sole ~~30,~~discretion ~~2023~~upon ~~and~~not ~~2022,~~less than sixty-one (61) days’ prior notice ~~respectively~~to us.

~~Consulting fees~~H.C. -Wainwright ~~related~~& ~~parties~~Co. ~~For~~, LLC acted as warrant inducement agent and financial advisor in connection with the ~~nine~~transaction ~~months~~and ~~ended~~received ~~September~~a 30cash fee equal to 7.5% of the gross proceeds, a ~~2023~~management fee equal to 1% of the gross proceeds and ~~2022~~reimbursement of certain expenses. After these fees, wethe ~~paid~~Company ~~Trilogy~~received ~~Capital~~net ~~Group~~proceeds of approximately $458,473. ~~LLC~~In addition, athe ~~company controlled~~Company byissued ~~our~~to ~~Executive~~certain ~~Chairman~~designees of H.C. Wainwright & Co., ~~$46~~LLC warrants to purchase 13,~~686~~753 ~~and~~shares of common stock at an exercise price of $0,5.3125 ~~respectively~~per share, ~~for~~which ~~services~~such ~~rendered~~warrants ~~under~~will ahave ~~consulting~~the ~~agreement~~same terms of the New Warrants (other than the exercise price).

~~Impairment of~~Principal ~~intangible~~Factors ~~assets.~~Affecting ~~Due~~Our toFinancial a significant decrease in advertising revenues, we performed an impairment analysis on the affiliate relationships associated with our Nexus subsidiary and recognized an impairment of $466,737 during the nine months ended September 30, 2023. No impairment was recognized in the nine months ended September 30, 2022.Performance

~~Depreciation~~Our ~~and~~operating ~~amortization. Depreciation and~~results ~~amortization~~are ~~was~~primarily ~~$1,814,613,~~affected orby ~~24.39% of revenues, for~~ the ~~nine~~following months ended September 30, 2023, as compared to $1,375,514, or 9.76% of revenues, for the nine months ended September 30, 2022. The increase in amortization is associated with intangible assets resulting from acquisitions.factors:

~~Total~~● ~~other~~our ~~expense.~~ability ~~We had $2,818,762 in total other expense, net, for the nine months ended September 30, 2023, as compared~~ to ~~total~~acquire ~~other~~new ~~expense,~~customers ~~net,~~or ofretain ~~$14,580,624~~existing for the nine months ended September 30, 2022. Total other expense, net, for the nine months ended September 30, 2023 consisted of interest expense of $3,425,318, offset by a gain on extinguishment of debt of $273,058 and other income of $333,948, while other expense, net, for the nine months ended September 30, 2022 consisted of interest expense of $14,168,479 related to interest expense in connection with common stock issued with future equity agreements and amortization of debt issuance cost and other expense of $693,614, offset by a change in fair value of derivative liability of $146,513 and a gain on extinguishment of debt of $134,956. customers;

~~Net~~● ~~loss. As~~our aability ~~result of the cumulative effect of the factors described above, we had a net loss of $12,848,419 for the nine months ended September 30, 2023, as compared~~ to ~~$21,907,393~~offer ~~for~~competitive ~~the~~product ~~nine months ended September 30, 2022, a decrease of $9,058,974, or 41.35%.~~pricing;

~~Liquidity and Capital Resources~~ 33

~~As of~~● ~~September 30, 2023, we had cash of $8,890. To date, we have financed~~ our ~~operations~~ability ~~primarily through revenue generated from operations, bank borrowings and sales of our securities. Since our inception in 2017, we have experienced losses and as a result have continued~~ to ~~use~~ ~~cash~~broaden inproduct ~~our operations. We have been dependent upon financing activities as we implement our acquisition strategy.~~offerings;

~~Our~~● ~~unaudited~~industry ~~condensed~~demand ~~consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets~~ and ~~liquidation of~~competition; ~~liabilities in the normal course of business. We have sustained recurring losses~~ and have a deficiency in working capital of approximately $11.4 million at September 30, 2023, a net loss for the nine months ended September 30, 2023 of $12.8 million, and cash used in operating activities of $5.1 million, which raises substantial doubt about our ability to continue as a going concern. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~It is~~● ~~management’s~~market ~~opinion~~conditions that current available resources will not be sufficient to fund our planned expenditures over the next 12 months from the date hereof. Accordingly, we will be dependent on the raising of additional capital through the placement of common and ~~preferred stock as well as debt financing in order to implement~~ our ~~business plan. To facilitate the raising of capital we have engaged a middle~~ market ~~investment banking firm which has completed two equity raises on our behalf during the second quarter of 2023 and anticipates additional rounds in the near future~~position.

~~We are~~Emerging ~~also~~Growth ~~engaged~~Company with a debt placement firm which has raised capital for prior acquisitions and is anticipated to raise debt capital for pending and prospective transactions. We are currently finalizing a previously announced acquisition, the financing for which will exceed the required purchase amount, providing additional working capital. In addition, we are in the process of arranging additional substantial debt financing for general working capital purposes.

~~There~~We qualify as an “emerging growth company” isunder nothe ~~assurance~~Jumpstart ~~that~~Our Business Startups Act of 2012, or the JOBS Act. As a result, we will be ~~successful~~permitted ~~with future financings~~to, and ~~the~~intend ~~inability~~ to, ~~secure~~rely ~~financings~~on ~~may~~exemptions ~~have~~from acertain ~~material~~disclosure ~~adverse~~requirements. ~~effect~~For onso ~~our~~long ~~financial~~as ~~condition.~~we are an emerging growth company, we will not be required to:

34● have an auditor report on our internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

~~Summary of~~● ~~Cash~~comply ~~Flow~~with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the financial statements (i.e., an auditor discussion and analysis);

~~The following~~● ~~table~~submit ~~provides~~certain ~~detailed~~executive ~~information~~compensation ~~about~~matters ~~our~~to ~~net~~stockholder ~~cash~~advisory ~~flow~~votes, ~~for~~such ~~the~~as ~~nine~~“say-on-pay” ~~months~~and ~~ended~~“say-on-frequency;” ~~September 30, 2023~~ and ~~2022.~~

	Nine Months Ended September 30,
	2023			2022
Net cash used in operating activities	$	(5,065,754	)	$	(7,491,867	)
Net cash used in investing activities		(3,450	)		(3,072,271	)
Net cash provided by financing activities		5,008,380			10,662,578
Net change in cash		(60,824	)		98,440
Cash and cash equivalents at beginning of period		69,714			205,093
Cash and cash equivalents at end of period	$	8,890		$	303,533

●

disclose certain executive compensation related items such as the correlation between executive compensation and performance and comparisons of the chief executive officer’s compensation to median employee compensation.

~~Our~~In ~~net cash~~addition, ~~used~~Section in107 ~~operating~~of ~~activities was $5,065,754 for~~ the ~~nine~~JOBS ~~months~~Act ~~ended September 30,~~also ~~2023,~~provides asthat ~~compared~~an toemerging ~~$7,491,867~~growth ~~for~~company ~~the~~can ~~nine~~take ~~months~~advantage ~~ended~~of ~~September 30, 2022. For~~ the ~~nine~~extended ~~months~~transition ~~ended~~period ~~September~~provided ~~30,~~in ~~2023,~~Section ~~our~~7(a)(2)(B) ~~net loss~~ of ~~$12,848,419,~~the ~~offset~~Securities Act ~~by an increase in accrued expenses~~ of $21933,~~040,792,~~ ~~depreciation and~~as ~~amortization of $1~~amended,~~814,613,~~ ~~stock~~for ~~based~~complying ~~compensation~~with ofnew ~~$765,588,~~or arevised ~~decrease~~accounting instandards. ~~inventory~~In ofother ~~$677~~words,~~771~~ ~~and~~ an ~~impairment~~emerging ofgrowth ~~intangible assets~~company ofcan ~~$466,737, were~~ delay the ~~primary~~adoption ~~drivers~~of ~~for~~certain ~~cash~~accounting ~~used~~standards inuntil ~~operations.~~those ~~For~~standards ~~the~~would ~~nine~~otherwise ~~months~~apply ~~ended~~to ~~September~~private ~~30,~~companies. ~~2022,~~We ~~our~~have ~~net~~elected ~~loss~~to oftake ~~$21,907,393~~advantage ~~and~~of ~~decreased~~the ~~inventory~~benefits of ~~$2,208,654,~~this ~~offset~~extended bytransition ~~$10,844,961~~period. ~~for~~Our ~~interest~~financial ~~expense~~statements onmay ~~future~~therefore ~~equity~~not ~~agreements,~~be ~~amortization of~~comparable ~~debt~~to ~~issuance~~those ~~costs~~ of ~~$1,737,976, increased accounts payable of $1,597,032, depreciation and amortization of $1,375,514 and stock-based~~companies ~~compensation~~that ofcomply ~~$822,626,~~with ~~were~~such ~~the~~new ~~primary~~or ~~drivers~~revised ~~for~~accounting ~~cash used in operations~~standards.

~~Our~~We ~~net cash~~will ~~used~~remain inan ~~investing~~emerging ~~activities~~growth ~~was~~company ~~$3,450~~until the ~~for~~earliest of (i) the ~~nine~~last ~~months~~day ~~ended~~of ~~September~~the ~~30,~~fiscal ~~2023,~~year ~~which~~following ~~consisted~~the fifth anniversary of ~~equipment~~our ~~purchases.~~initial ~~For~~public offering, (ii) the last day of the ~~nine~~first ~~months~~fiscal ~~ended~~year ~~September~~in ~~30,~~which ~~2022~~our total annual gross revenues are $1.235 billion or more, ~~our~~(iii) ~~net~~the ~~cash~~date ~~used~~that we become a “large accelerated filer” as defined in ~~investing~~Rule ~~activities~~12b-2 ~~was~~under $3the Securities Exchange Act of 1934,~~072~~ as amended,~~271~~ or the Exchange Act, which ~~consisted~~would occur if the market value of ~~cash~~our ~~paid~~common ~~for~~stock ~~the acquisition~~that is held by non-affiliates exceeds $700 million as of ~~Ceautamed~~the last business day of ~~$3,000,000~~our ~~and~~most recently completed second fiscal quarter or (iv) the date on which we have issued more than $~~72,271~~1 billion in ~~equipment~~non-convertible ~~purchases~~debt during the preceding three year period.

~~Our~~ Discontinued net cash provided by financing activities was $5,008,380 for the nine months ended September 30, 2023, as compared to $10,662,578 for the nine months ended September 30, 2022. Net cash provided by financing activities for the nine months ended September 30, 2023 consisted of proceeds from the exercise of warrants of $5,425,112, proceeds from debt of $2,749,791 and proceeds from the issuance of common stock of $2,151,310, offset by repayments on debt of $5,317,833, while net cash provided by financing activities for the nine months ended September 30, 2022 consisted of net proceeds from the IPO of $12,738,288, proceeds from convertible notes and notes payable of $8,151,889 and proceeds from related parties of $390,041, offset by repayments on debt of $8,852,491, payments to related parties of $1,711,600 and payment of fees from issuance of common stock of $53,549. Operations

~~Initial~~On July 29, 2022, we acquired 100% of Ceautamed ~~Public~~Worldwide, ~~Offering~~LLC and its wholly-owned subsidiaries Wellness Watchers Global, LLC and Greens First Female LLC (which we collectively refer to as Ceautamed), which owns the Greens First line of branded products which have been specifically marketed to the healthcare provider sector. On January 29, 2024, we entered into an asset purchase agreement pursuant to which we agreed to sell nearly all of the assets of Ceautamed and its subsidiaries for a 49% ownership interest in a new limited liability company, First Health FL LLC, or First Health. The agreement allows for the 51% owner to purchase the remaining 49% for $1 at an unspecified future date. On October 1, 2024, such owner elected to exercise the option, effective as of October 2, 2024, paid us the option price of $1.00, and we delivered the remaining 49% interest in First Health to such owner. As a result, the financial results and balances of Ceautamed have been classified as discontinued operations within this report and the accompanying unaudited condensed consolidated financial statements.

On February 16, 2022, we entered into an underwriting agreement with Dawson James Securities, Inc., as representative of the several underwriters named on Schedule I thereto, relating to our IPO of units, each unit consisting of one share of common stock, a series A warrant to purchase one share of common stock and a series B warrant to purchase one share of common stock. Pursuant to the underwriting agreement, we agreed to sell 3,200 units to the underwriters, at a purchase price per unit of $4,095.00 (the offering price to the public of $4,500.00 per unit minus the underwriters’ discount), and also agreed to grant to the underwriters a 45-day option to purchase up to 480 additional shares of common stock, up to 480 additional series A warrants, and/or up to 480 additional series B warrants, in any combination thereof, at a purchase price to the public of $4,491.00 per share and $4.50 per warrant, less underwriting discounts and commissions, solely to cover over-allotments, if any. 34

OnResults ~~February 18, 2022, the closing~~ of our IPO was completed. At the closing, the underwriters partially exercised the option and purchased 459 series A warrants and 459 series B warrants. Therefore, we sold 3,200 shares of common stock, 3,659 series A warrants and 3,659 series B warrants for total gross proceeds of $14,404,128. After deducting the underwriting commission and expenses, we received net proceeds of approximately $12,684,739. We used the proceeds of the offering to pay off certain debt and plan to use the remaining net proceeds for working capital and general corporate purposes. Operations

~~The~~Comparison ~~series A warrants are exercisable until the fifth anniversary~~ of ~~the~~Three ~~issuance~~Months ~~date~~Ended atMarch ~~an exercise price equal to $3~~31,~~150.00~~ 2024 ~~per share~~ and ~~may be exercised on a cashless basis if the issuance of common stock upon exercise of the warrants is not covered by an effective registration statement.~~2023

The ~~series B~~following ~~warrants~~table ~~are~~sets ~~exercisable~~forth ~~until~~key ~~the~~components of ~~fifth~~our ~~anniversary~~results of ~~the~~operations ~~issuance~~during ~~date~~the atthree anmonths ~~exercise~~ended ~~price~~March ~~equal to $4~~31,~~500.00~~ ~~per~~2024 ~~share~~ and ~~may be exercised on a cashless basis, whereby the holder will receive one share of common stock for each series B warrant exercised. As of September 30,~~ 2023, ~~3,195~~both ofin ~~the~~dollars ~~series~~and Bas ~~warrants were exercised on~~ a ~~cashless~~percentage ~~basis and we issued 3,195 shares~~ of ~~common~~our ~~stock upon such exercise~~revenues.

	March 31, 2024						March 31, 2023
	Amount			% of Revenues			Amount			% of Revenues
Revenues
Products	$	478,792			99.98	%	$	1,260,986			78.52	%
Advertising		115			0.02	%		344,855			21.48	%
Total revenues		478,907			100.00	%		1,605,841			100.00	%
Cost of revenues
Products		271,247			56.64	%		968,684			60.32	%
Advertising		—			—			269,394			16.78	%
Total cost of revenues		271,247			56.64	%		1,238,078			77.10	%
Gross profit		207,660			43.36	%		367,763			22.90	%
Operating expenses
General and administrative		642,346			134.13	%		994,844			61.95	%
Compensation - administrative		375,715			78.45	%		1,334,690			83.11	%
Professional services		858,352			179.23	%		303,996			18.93	%
Consulting fees - related parties		—			—			27,547			1.72	%
Depreciation and amortization expense		323,126			67.47	%		435,795			27.14	%
Total operating expenses		2,199,539			459.28	%		3,096,872			192.85	%
Operating loss from continuing operations		(1,991,879	)		(415.92	)%		(2,729,109	)		(169.95	)%
Other income (expense)
Other income (expense)		(23,088	)		(4.82	)%		23,152			1.44	%
Gain on sale of subsidiary		16,462			3.44	%		—			—
Interest expense		(987,254	)		(206.15	)%		(1,363,045	)		(84.88	)%
Total other income (expenses)		(993,880	)		(207.53	)%		(1,339,893	)		(83.44	)%
Net loss from continuing operations		(2,985,759	)		(623.45	)%		(4,069,002	)		(253.39	)%
Income (loss) from discontinued operations		89,585			18.71	%		(215,314	)		(13.41	)%
Net loss	$	(2,896,174	)		(604.75	)%	$	(4,284,316	)		(266.80	)%

~~Registered~~Revenues. Our total revenues decreased ~~Direct~~by ~~Offering~~$1,126,934, ~~and~~or ~~Related~~70.18%, ~~Private~~to ~~Placement~~$478,907 for the three months ended March 31, 2024 from $1,605,841 for the three months ended March 31, 2023.

~~On May~~Our 2,nutraceutical ~~2023,~~business wegenerates ~~entered~~revenue ~~into~~from the asales ~~securities~~of ~~purchase~~nutritional ~~agreement~~and ~~with~~related anproducts. ~~institutional~~Revenues ~~investor,~~from ~~pursuant~~our tonutraceutical ~~which~~business we(products) ~~agreed~~decreased toby ~~issue and sell~~$782,194, inor ~~a registered direct offering~~62.03%, 10to $478,~~512~~792 ~~shares~~for ofthe ~~common~~three ~~stock~~months ~~and~~ended aMarch ~~pre-funded~~31, ~~warrant~~2024 tofrom ~~purchase up to 20~~$1,~~667~~260,986 ~~shares~~for ofthe ~~common stock~~three atmonths anended ~~exercise~~March ~~price~~31, ~~of $0~~2023.~~0009,~~ atThis andecrease ~~offering~~was ~~price~~primarily due ~~per~~to ~~share~~our ~~and~~cash ~~pre-funded~~constraints ~~warrant of $28.845~~ and ~~$28.8441,~~our ~~respectively.~~inability ~~In addition,~~to ~~under~~pay ~~the~~for ~~securities~~raw ~~purchase~~materials ~~agreement,~~used wein ~~agreed~~the toproduction ~~issue~~of toboth ~~the~~branded ~~investor~~and acontract ~~warrant~~manufacturing products. toThe ~~purchase~~decreased uprevenues towere ~~31,178~~the ~~shares~~result of ~~common stock~~a atdecrease anin ~~exercise~~the ~~price~~volume of ~~$27.72~~products ~~per~~sold ~~share~~and innot adue ~~concurrent~~to ~~private~~pricing ~~placement~~changes.

OnOur digital marketing business generates revenues ~~May~~when 5,sales ~~2023,~~of ~~the~~listed ~~offering~~products ~~was~~are ~~completed.~~sold Atby ~~closing,~~product ~~the~~vendors ~~investor~~through ~~exercised~~our network as a result of the ~~pre-funded~~marketing ~~warrant~~efforts inof ~~full~~digital marketers. Revenues ~~Accordingly~~from our digital marketing business (advertising) decreased by $344,740, weor ~~issued~~99.97%, to $115 for the ~~investor~~three months ended March 31,~~178~~ ~~shares~~2024 offrom ~~common~~$344,855 ~~stock~~for ~~and~~the athree ~~warrant~~months toended ~~purchase~~March ~~up to~~ 31,~~178~~ ~~shares~~2023. ofThe ~~common~~decrease ~~stock~~in atrevenue anis ~~exercise~~attributable ~~price~~to our repurposing of ~~$27.72~~the subsidiary ~~per~~from ~~share~~affiliate ~~for~~network ~~total~~management ~~gross~~to ~~proceeds~~focusing ofon ~~$899,326~~the ~~and~~advertising ~~net~~of ~~proceeds~~our ofother ~~$751,933~~subsidiaries.

H.C. Wainwright & Co., LLC, or the Placement Agent, acted as the exclusive placement agent in connection with this offering and received a cash fee equal to 7.5% of the gross proceeds of the offering and a management fee equal to 1% of the gross proceeds of the offering. We also agreed to reimburse the Placement Agent $30,000 for fees and expenses of its legal counsel and other out-of-pocket expenses and $15,950 for certain closing costs. In addition to the cash fees, we issued to the Placement Agent warrants to purchase up to 2,339 shares of common stock at an exercise price of $36.046 per share (or 125% of the offering price).35

~~Second~~Cost of revenues. Our total cost ~~Registered~~of ~~Direct~~revenues ~~Offering~~decreased ~~and~~by ~~Related~~$966,831, ~~Private~~or ~~Placement~~78.09%, to $271,247 for the three months ended March 31, 2024 from $1,238,078 for the three months ended March 31, 2023. Such decrease is directly related to the decrease in revenues.

~~On May~~Cost ~~17,~~of ~~2023,~~revenues wefor ~~entered~~our ~~into~~nutraceutical abusiness consist ~~securities~~of ~~purchase~~ingredients, ~~agreement~~packaging ~~with~~materials, ~~an institutional investor~~freight, ~~pursuant~~and tolabor ~~which~~associated wewith ~~agreed~~the toproduction ~~issue~~of ~~and sell,~~various inproducts. aCost ~~registered~~of ~~direct~~revenues ~~offering~~for our ~~22,889~~nutraceutical ~~shares~~business of(products) ~~common~~decreased ~~stock~~by ~~and~~$697,437, aor ~~pre-funded~~72.00%, ~~warrant~~ to ~~purchase up to 42~~$271,~~100~~247 ~~shares~~for ofthe ~~common stock~~three atmonths anended ~~exercise~~March ~~price~~31, of2024 from $~~0.0009~~968,684 for atthe anthree ~~offering~~months ~~price~~ended ~~per~~March ~~share~~31, ~~and~~2023. ~~pre-funded~~As ~~warrant~~a percentage of ~~$24.39~~product ~~and $24.3891~~revenues, ~~respectively.~~cost ~~In addition,~~of ~~under~~revenues ~~the~~for ~~securities~~product ~~purchase~~sales ~~agreement,~~were we56.65% ~~agreed~~and to76.82% for ~~issue to~~ the ~~investor~~three amonths ~~warrant~~ended toMarch ~~purchase~~31, up2024 toand 642023,~~988~~ ~~shares~~respectively. ofThe ~~common stock~~decrease atin ancost ~~exercise~~percentage ~~price~~is ofdue ~~$23.31~~to ~~per~~the ~~share~~increased infocus aon ~~concurrent~~our branded ~~private~~products ~~placement~~from contract manufacturing products.

OnCost of revenues for our digital marketing business ~~May~~consist ~~19,~~of ~~2023,~~commissions ~~the~~and ~~offering~~bonuses ~~was~~paid ~~completed~~to digital marketers. AtCost ~~closing,~~of ~~the~~revenues ~~investor~~from ~~exercised~~our ~~the~~digital ~~pre-funded~~marketing ~~warrant~~business in(advertising) ~~full.~~decreased by ~~Accordingly~~$269,394, weor ~~issued~~100.00%, to $0 for the ~~investor~~three ~~64,988~~months ~~shares~~ended ofMarch ~~common~~31, ~~stock~~2024 ~~and~~from a$269,394 ~~warrant~~for tothe ~~purchase~~three upmonths toended 64March 31,~~988~~ ~~shares~~2023. As a percentage of ~~common~~advertising ~~stock~~revenues, atcost anof ~~exercise~~revenues ~~price~~for ofadvertising ~~$23~~sales was 0.~~31 per~~00% ~~share~~and 78.12% for ~~total~~the ~~gross~~three ~~proceeds~~months ofended $1March 31,~~585,057~~ 2024 and ~~net~~2023, ~~proceeds~~respectively. ofSuch ~~$1,074,377~~decrease is directly related to the decrease in revenues.

~~The Placement~~Gross ~~Agent~~profit. ~~acted~~As ~~as the exclusive placement agent in connection with this offering and received~~ a ~~cash~~result ~~fee equal to 7.5%~~ of the ~~gross~~foregoing, ~~proceeds~~our ofgross ~~the~~profit ~~offering~~decreased ~~and~~by a$160,103, ~~management~~or ~~fee equal to 1~~43.53%, ~~of the gross proceeds of the offering. We also agreed~~ to ~~reimburse the Placement Agent~~ $60207,~~000~~660 for ~~fees~~the ~~and~~three ~~expenses~~months ofended ~~its~~March ~~legal~~31, ~~counsel~~2024 ~~and~~from ~~other out-of-pocket expenses and~~ $15367,~~950~~763 for ~~certain closing costs.~~ Inthe ~~addition~~three tomonths ~~the~~ended ~~cash~~March ~~fees~~31, we2023. ~~issued~~As toa ~~the~~percentage ~~Placement~~of ~~Agent~~revenues, ~~warrants~~our togross ~~purchase~~profit upwas to43.36% ~~4,875~~and ~~shares~~22.90% offor ~~common~~the ~~stock~~three atmonths ~~an exercise~~ended ~~price~~March ~~of $~~31~~.88~~, ~~per~~2024 ~~share~~and ~~(or~~2023, ~~125% of the offering price)~~respectively.

~~Outstanding~~General and administrative expenses. ~~Debt~~Our general and administrative expenses consist primarily of advertising expenses, bad debts, rent expense, insurance and other expenses incurred in connection with general operations. Our general and administrative expenses decreased by $352,498, or 35.43%, to $642,346 for the three months ended March 31, 2024 from $994,844 for the three months ended March 31, 2023. As a percentage of revenues, our general and administrative expenses were 134.13% and 61.95% for the three months ended March 31, 2024 and 2023, respectively. Such decrease was primarily due to decreased rates for D&O insurance and reduced advertising in 2024.

~~The~~Compensation ~~Company~~- ~~has historically funded its acquisitions~~administrative. ~~and~~Our ~~operations~~compensation ~~through~~expenses ~~debt~~include ~~agreements.~~both ~~The~~cash ~~Company~~and ~~has~~non-cash ~~outstanding~~items, ~~debt~~including ofsalaries ~~$12,909,530~~plus atrelated ~~September~~payroll ~~30, 2023~~taxes. ~~The~~Our ~~Company~~compensation ~~has~~expenses decreased by $4958,~~404~~975,~~462 of~~ ~~principal~~or ~~payments~~71.85%, ~~due~~to ~~within~~$375,715 for the ~~next~~three 12 months. ~~The~~ended ~~Company’s~~March ~~has~~31, ~~not~~2024 ~~generated~~from ~~cash~~$1,334,690 ~~flow~~for ~~from~~the ~~operations~~three ~~and~~months ~~the~~ended ~~repayment~~March of31, ~~debt~~2023. isAs ~~dependent~~a onpercentage ~~raising~~of ~~new~~revenues, ~~equity~~our ~~transactions~~compensation ~~and~~expenses ~~new~~were ~~debt financings~~78.45% ~~There~~and is83.11% nofor ~~assurance~~the ~~that~~three wemonths ~~will~~ended beMarch ~~successful~~31, ~~with future~~2024 ~~financings~~and 2023, ~~and~~respectively. ~~the~~Such ~~inability~~decrease towas ~~secure~~primarily ~~financings~~due ~~may~~to ~~have~~reduced astock ~~material~~compensation ~~adverse~~expense ~~effect~~and ona ~~our~~reduction ~~financial~~of ~~condition~~headcount.

~~The~~Professional ~~following~~services. Our professional isservices aexpenses ~~roll-forward~~consist primarily of investor relations, consulting, advisory, legal and audit expenses incurred in connection with general operations. Our professional services expenses increased by $554,356, or 182.36%, to $858,352 for the ~~debt~~three ~~balances~~months ended March 31, 2024 from $303,996 for the ~~nine~~three months ended ~~September~~March 3031, 2023:. As a percentage of revenues, our professional services expenses were 179.23% and 18.93% for the three months ended March 31, 2024 and 2023, respectively. Such increase was primarily due to increased fees associated with Nasdaq compliance matters.

Balance at December 31, 2022	$	20,558,246
Proceeds from new debt issued in 2023		2,749,791
Repayment of principal during 2023		(5,317,833	)
Amortization of debt discounts		1,150,800
Stock issued for conversion of principal of debt		(6,266,895	)
Conversion of interest to notes payable		334,950
Gain on extinguishment of debt in 2023		(273,058	)
Conversion of principal to accrued expenses		(26,471	)
Balance at September 30, 2023	$	12,909,530

Consulting fees – related parties. For the three months ended March 31, 2024 and 2023, we paid Trilogy Capital Group, LLC, a company controlled by our Executive Chairman, $0 and $27,547, respectively, for services rendered under a consulting agreement.

36Depreciation and amortization. Depreciation and amortization was $323,126, or 67.47% of revenues, for the three months ended March 31, 2024, as compared to $435,795, or 27.14% of revenues, for the three months ended March 31, 2023. The decrease in amortization is associated with the impairment of intangible assets during the year end December 31, 2023.

~~Contractual Obligations~~36

~~Our~~Total other income (expense). We ~~principal~~had ~~commitments~~$993,880 ~~consist~~in ~~mostly~~total ofother ~~obligations~~expense, ~~under~~net, for the ~~loans~~three ~~described~~months ~~above~~ended ~~and~~March ~~pricing/margin~~31, ~~structures~~2024, as compared to total other expense, net, of $1,339,893 for ~~products~~the ~~established~~three months ended March 31, 2023. Total other expense, net, for the three months ended March 31, 2024 consisted of interest ~~with~~expense of $987,254 and other expense of $23,088, offset by a gain on our ~~clients~~disposition of Ceautamed of $16,462. WeThe doother ~~not~~expense, ~~have~~net, for ~~any~~the ~~purchase~~three ~~obligations~~months ~~with~~ended ~~any~~March ~~suppliers~~31, 2023 consisted of interest expense of $1,363,045, offset by other income of $23,152.

~~Off-Balance~~Income (loss) from discontinued operations. ~~Sheet~~We ~~Arrangements~~had $89,585 in net income from discontinued operations for the three months ended March 31, 2024, as compared to a loss in the three months ended March 31, 2023 of $215,314.

~~We have~~Net noloss. As ~~off-balance~~a ~~sheet~~result ~~arrangements~~of ~~that~~the cumulative ~~have~~effect orof ~~are~~the ~~reasonably~~factors ~~likely~~described toabove, ~~have~~we had a ~~current~~net orloss ~~future~~of ~~effect~~$2,896,174 onfor ~~our~~the ~~financial~~three ~~condition, changes~~months inended ~~financial~~March ~~condition~~31, ~~revenues~~2024, oras ~~expenses~~compared to $4,284,316 ~~results~~for ofthe ~~operations~~three months ended March 31, ~~liquidity~~2023, ~~capital~~a ~~expenditures~~decrease orof ~~capital~~$1,388,142, ~~resources~~or 32.40%.

~~Critical Accounting~~Liquidity ~~Policies~~and Capital Resources

~~The preparation~~As of ~~our~~March ~~unaudited~~31, ~~condensed~~2024, ~~consolidated~~we ~~financial~~had ~~statements~~cash ~~requires~~of ~~our~~$21,331. To ~~management~~date, towe ~~make~~have ~~estimates~~financed ~~and~~our ~~assumptions~~operations ~~that affect~~primarily ~~the~~through ~~reported~~revenue ~~amounts~~generated offrom ~~assets~~operations, ~~liabilities,~~bank ~~revenues~~borrowings and ~~expenses,~~sales ~~and related disclosure~~ of ~~contingent~~our ~~assets and liabilities~~securities. OnSince aour ~~regular~~inception ~~basis~~in 2017, we ~~evaluate~~have ~~these~~experienced ~~estimates.~~losses ~~These~~and ~~estimates~~as ~~are~~a ~~based~~result onhave ~~management’s~~continued ~~historical~~to ~~industry~~use ~~experience~~cash ~~and~~in ~~on various~~our ~~other~~operations. ~~assumptions~~We ~~that~~have ~~are~~been ~~believed~~dependent upon tofinancing beactivities ~~reasonable~~as ~~under~~we ~~the~~implement ~~circumstances.~~our ~~Actual~~acquisition ~~results may differ from these estimates~~strategy.

~~We assess~~Our ~~potential~~unaudited ~~impairments~~condensed toconsolidated ~~long-lived~~financial statements ~~assets~~have ~~when~~been ~~there~~prepared isassuming ~~evidence~~ that ~~events~~we orwill ~~changes~~continue inas ~~circumstances~~a ~~indicate~~going ~~that~~concern, ~~the~~which ~~carrying amount~~contemplates ~~of an asset may not be recovered. An impairment loss is recognized when~~ the ~~undiscounted~~realization ~~cash~~of ~~flows~~assets ~~expected~~and ~~to be generated by~~liquidation ~~an asset (or group~~ of ~~assets)~~liabilities isin ~~less~~the ~~than~~normal ~~its~~course ~~carrying~~of ~~amount~~business. ~~Any~~We ~~required~~have suffered ~~impairment~~recurring ~~loss~~losses isfrom ~~measured~~operations ~~as the amount by which the asset’s carrying value exceeds its fair value~~ and ishave ~~recorded as~~ a ~~reduction~~working incapital ~~the carrying value~~ deficiency of ~~the~~$11.0 ~~related asset~~million. These ~~Therefore,~~conditions asraise asubstantial ~~result of~~doubt ~~decreased~~about ~~revenues~~our ~~within~~ability ~~the Nexus subsidiary during the nine months ended September 30, 2023, which are not expected~~ to ~~recover to~~continue ~~similar~~as ~~levels, we determined that~~ a ~~triggering~~going ~~event occurred requiring an impairment analysis in accordance with ASC 360~~concern. The ~~impairment~~unaudited condensed ~~analysis~~consolidated ~~resulted~~financial instatements ~~the~~do ~~Company~~not ~~recognizing~~include anany ~~impairment~~adjustments ofthat ~~the~~might ~~affiliate~~result ~~relationship~~from ~~asset~~the ~~associated~~outcome ~~with Nexus~~ of ~~$466,737~~this uncertainty.

~~For a~~Management ~~description~~believes ~~of the accounting policies~~ that, incurrent ~~management’s~~available ~~opinion,~~resources will ~~involve~~not ~~the~~be ~~most~~sufficient ~~significant~~to ~~application~~fund ofour ~~judgment~~planned ~~or involve~~expenditures ~~complex~~over ~~estimation~~the ~~and~~next ~~which~~12 ~~could,~~months iffrom ~~different~~the ~~judgment~~date orhereof. ~~estimates were made~~Accordingly, ~~materially~~we ~~affect~~will ~~our~~be ~~reported~~dependent upon ~~financial~~the ~~position, results~~raising of ~~operations,~~additional orcapital ~~cash~~through ~~flows,~~placement ~~see “Management’s Discussion and Analysis~~ of ~~Financial~~common ~~Condition~~stock and/or ~~Results~~debt offinancing ~~Operations –~~in ~~Critical~~order ~~Accounting~~to ~~Policies”~~implement in our ~~Annual~~business ~~Report~~plan. There is onno ~~Form~~assurance ~~10-K~~that ~~for~~we ~~the~~will ~~fiscal~~be ~~year~~successful ~~ended~~with ~~December~~future 31financing ventures, ~~2022~~and ~~filed with~~ the ~~Securities~~inability ~~and~~to ~~Exchange~~secure ~~Commission,~~such orfinancing ~~the~~may ~~SEC,~~have a material adverse effect on ~~March~~our ~~31,~~financial ~~2023~~condition.

~~ITEM 3.~~Summary ~~QUANTITATIVE~~of ~~AND~~Cash ~~QUALITATIVE DISCLOSURES ABOUT MARKET RISK.~~Flow

~~Not~~The following table provides detailed information ~~applicable~~about our net cash flow for the three months ended March 31, 2024 and 2023.

ITEM 4. CONTROLS AND PROCEDURES.

	Three Months Ended March 31,
	2024			2023
Net cash used in operating activities	$	(540,135	)	$	(500,854	)
Net cash used in investing activities		—			—
Net cash provided by financing activities		406,800			470,189
Net change in cash		(133,335	)		(30,665	)
Cash and cash equivalents at beginning of period		154,666			60,790
Cash and cash equivalents at end of period	$	21,331		$	30,125

~~Evaluation~~Our net cash used in operating activities was $540,135 for the three months ended March 31, 2024, as compared to $500,854 for the three months ended March 31, 2023. For the three months ended March 31, 2024, our net loss of ~~Disclosure~~$2,896,172, ~~Controls~~adjusted for discontinued operations net activity of $459,737, offset by an increase in accounts payable of $488,373, an increase in accrued expenses of $332,362, depreciation and ~~Procedures~~amortization of $256,063, and a decrease in inventory of $237,216 were the primary drivers for cash used in operations. For the three months ended March 31, 2023, our net loss of $4,284,315, adjusted for discontinued operations net activity of $163,103, offset by an increase in accounts payable of $737,887, an increase in accrued expenses of $682,956, non-cash debt issuance costs of $616,194, a decrease in inventory of $529,993, and depreciation and amortization of $435,795, were the primary drivers for cash used in operations.

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures As of September 30, 2023. The term “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized, and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that, despite a certain deficiency in our internal controls over financial reporting, our disclosure controls and procedures were effective as of September 30, 2023. The deficiency related to non-routine transactions related to business combinations and impairment of intangible assets.37

InWe ~~response~~had tono ~~the~~investing ~~deficiency described~~activities ~~above,~~for ~~during~~ the ~~quarter ended~~three ~~September 30, 2023, we performed additional analysis and other post-closing procedures~~months toended ~~ensure~~March ~~our financial statements were prepared in accordance with United States generally accepted accounting principles. Accordingly~~31, we ~~believe~~2024 ~~that~~or ~~the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented~~2023.

~~Changes~~Our net cash provided by financing activities inwas ~~Internal~~$406,800 ~~Control~~for ~~Over~~the ~~Financial~~three ~~Reporting~~months ended March 31, 2024, as compared to $470,189 for the three months ended March 31, 2023. Net cash provided by financing activities for the three months ended March 31, 2024 consisted of proceeds from related parties of $629,041, proceeds from exercise of warrants of $290,000, and proceeds from debt of $163,500, offset by repayments to related parties of $544,540 and repayments of debt of $131,201, while net cash provided by financing activities for the three months ended March 31, 2023 consisted of net proceeds from the issuance of debt of $1,394,000, receipts from related parties of $102,694, and proceeds from exercise of warrants of $119, offset by repayments of debt of $929,765 and debt payments for discontinued operations of $96,859.

~~There~~Outstanding were no changes in our internal control over financial reporting or in any other factors that could significantly affect these controls during the three months ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.Debt

37The following table shows aggregate figures for our total debt outstanding at March 31, 2024. For a complete description of the terms of our outstanding debt, please see Note 8 to our unaudited condensed consolidated financial statements above.

PART II

Original issue discount subordinated debentures	$	3,061,817
Original issue discount secured subordinated note		2,300,452
Acquisition notes		142,493
Promissory notes and cash advances		983,902
Revolving lines of credit		103,648
Equipment financing loan		133,229
EIDL loan		300,000
PPP loans		197,457
		7,222,998
Debt issuance costs		(147,500	)
Debt, net		7,075,498
Debt, current		4,017,903
Debt issuance costs, current		(37,417	)
Current portion of debt, net		3,980,486
Debt, non-current		3,057,595
Debt issuance costs, non-current		(110,082	)
Non-current portion of debt, net	$	2,947,513

~~OTHER INFORMATION~~Contractual Obligations

~~ITEM~~Our principal commitments consist mostly of obligations 1under the loans described above and pricing/margin structures for products established with our clients. ~~LEGAL~~We ~~PROCEEDINGS~~do not have any purchase obligations with any suppliers.

~~From time~~Off-Balance toSheet time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.Arrangements

~~ITEM~~We have no off-balance sheet arrangements that ~~1A.~~have ~~RISK~~or ~~FACTORS~~are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

~~Not applicable.~~Critical Accounting Policies

~~ITEM~~The preparation of our unaudited condensed consolidated 2financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. ~~UNREGISTERED~~On ~~SALES~~a OFregular ~~EQUITY~~basis, ~~SECURITIES~~we ~~AND~~evaluate ~~USE~~these OFestimates. ~~PROCEEDS~~These estimates are based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

WeFor ~~have~~a ~~not~~description ~~sold~~of ~~any~~the ~~equity~~accounting ~~securities~~policies ~~during~~that, ~~the~~in ~~three~~management’s ~~months~~opinion, ~~ended~~involve ~~September~~the ~~30,~~most ~~2023~~significant ~~that~~application ~~were~~of ~~not~~judgment ~~previously~~or ~~disclosed~~involve incomplex aestimation ~~current~~and ~~report~~which oncould, ~~Form~~if different ~~8-K~~judgment ~~that~~or ~~was~~estimates ~~filed~~were ~~during the quarter~~made, ~~except~~materially ~~that~~affect onour ~~August~~reported 29financial position, ~~2023~~results of operations, weor ~~issued~~cash 15flows,~~083~~ ~~shares~~see “Management’s Discussion and Analysis of ~~common~~Financial ~~stock~~Condition toand aResults ~~note~~of ~~holder~~Operations as– ~~compensation~~Critical ~~for~~Accounting ~~amending~~Policies” in the ~~note~~Form 10-K.

~~We did not repurchase any shares of our common stock during the three months ended September 30, 2023.~~38

ITEM 3. ~~DEFAULTS~~QUANTITATIVE ~~UPON~~AND ~~SENIOR~~QUALITATIVE ~~SECURITIES~~DISCLOSURES ABOUT MARKET RISK.

~~None~~Not applicable.

ITEM 4. ~~MINE~~CONTROLS ~~SAFETY~~AND ~~DISCLOSURES~~PROCEDURES.

~~Not~~Evaluation of Disclosure Controls and Procedures ~~applicable.~~

~~ITEM~~We maintain disclosure controls and procedures 5(as defined in Rule 13a-15(e) under the Exchange Act). ~~OTHER~~Disclosure ~~INFORMATION~~controls and procedures refer to controls and other procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

~~None~~As required by Rule 13a-15(e) of the Exchange Act, our management has carried out an evaluation, with the participation and under the supervision of our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as of March 31, 2024. Based upon, and as of the date of this evaluation, our chief executive officer and chief financial officer determined that, because of the material weaknesses described in Item 9A “Controls and Procedures” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which we are still in the process of remediating as of March 31, 2024, our disclosure controls and procedures were not effective. Investors are directed to Item 9A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, for the description of these weaknesses.

38Remediation of Material Weaknesses in Internal Control Over Financial Reporting

~~ITEM~~As disclosed in our Annual Report on Form 10-K 6.for ~~EXHIBITS~~the fiscal year ended December 31, 2023, our management has identified the steps necessary to address the material weaknesses, and in the first quarter of 2024, we continued to implement these remedial procedures.

Exhibit No.		Description
3.1		Articles of Incorporation of Smart for Life, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 13, 2023)
3.2		Certificate of Amendment to Articles of Incorporation of Smart for Life, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 28, 2023)
3.3		Certificate of Change of Articles of Incorporation of Smart for Life, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on August 8, 2023)
3.4		Certificate of Change of Articles of Incorporation of Smart for Life, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on November 2, 2023)
3.5		Certificate of Designation of Series B Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on May 30, 2023)
3.6		Bylaws of Smart for Life, Inc. (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed on April 13, 2023)
4.1		Common Stock Purchase Warrant issued by Smart for Life, Inc. to Anson East Master Fund LP on May 31, 2023 (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-3 filed on June 5, 2023)
4.2		Common Stock Purchase Warrant issued by Smart for Life, Inc. to Anson Investments Master Fund LP on May 31, 2023 (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-3 filed on June 5, 2023)
4.3		Common Stock Purchase Warrant issued by Smart for Life, Inc. to District 2 Capital Fund LP on May 31, 2023 (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-3 filed on June 5, 2023)
4.4		Common Stock Purchase Warrant issued by Smart for Life, Inc. to Ionic Ventures, LLC on May 31, 2023 (incorporated by reference to Exhibit 4.4 to the Registration Statement on Form S-3 filed on June 5, 2023)
4.5		Common Stock Purchase Warrant issued by Smart for Life, Inc. to Sabby Volatility Warrant Master Fund, Ltd. on May 31, 2023 (incorporated by reference to Exhibit 4.5 to the Registration Statement on Form S-3 filed on June 5, 2023)
4.6		Placement Agent Common Stock Purchase Warrant issued by Smart for Life, Inc. to Charles Worthman on May 31, 2023 (incorporated by reference to Exhibit 4.6 to the Registration Statement on Form S-3 filed on June 5, 2023)
4.7		Placement Agent Common Stock Purchase Warrant issued by Smart for Life, Inc. to Craig Schwabe on May 31, 2023 (incorporated by reference to Exhibit 4.7 to the Registration Statement on Form S-3 filed on June 5, 2023)
4.8		Placement Agent Common Stock Purchase Warrant issued by Smart for Life, Inc. to Michael Vasinkevich on May 31, 2023 (incorporated by reference to Exhibit 4.8 to the Registration Statement on Form S-3 filed on June 5, 2023)
4.9		Placement Agent Common Stock Purchase Warrant issued by Smart for Life, Inc. to Noam Rubinstein on May 31, 2023 (incorporated by reference to Exhibit 4.9 to the Registration Statement on Form S-3 filed on June 5, 2023)
4.10		Common Stock Purchase Warrant issued by Smart for Life, Inc. to Armistice Capital Master Fund Ltd. on May 19, 2023 (incorporated by reference to Exhibit 4.10 to the Registration Statement on Form S-3 filed on June 5, 2023)
4.11		Placement Agent Common Stock Purchase Warrant issued by Smart for Life, Inc. to Charles Worthman on May 19, 2023 (incorporated by reference to Exhibit 4.11 to the Registration Statement on Form S-3 filed on June 5, 2023)
4.12		Placement Agent Common Stock Purchase Warrant issued by Smart for Life, Inc. to Craig Schwabe on May 19, 2023 (incorporated by reference to Exhibit 4.12 to the Registration Statement on Form S-3 filed on June 5, 2023)
4.13		Placement Agent Common Stock Purchase Warrant issued by Smart for Life, Inc. to Michael Vasinkevich on May 19, 2023 (incorporated by reference to Exhibit 4.13 to the Registration Statement on Form S-3 filed on June 5, 2023)
4.14		Placement Agent Common Stock Purchase Warrant issued by Smart for Life, Inc. to Noam Rubinstein on May 19, 2023 (incorporated by reference to Exhibit 4.14 to the Registration Statement on Form S-3 filed on June 5, 2023)
4.15		Common Stock Purchase Warrant issued by Smart for Life, Inc. to Armistice Capital Master Fund Ltd. on May 5, 2023 (incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-3 filed on May 5, 2023)

As part of our plan to remediate this material weakness, we are performing a full review of our internal control procedures. We have implemented, and plan to continue to implement, new controls and new processes. We have hired and plan to continue to hire additional qualified personnel and establish more robust processes to support our internal control over financial reporting, including clearly defined roles and responsibilities. We anticipate time being required to complete the implementation and to assess and ensure the sustainability of these controls. The material weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

39All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

4.16		Placement Agent Common Stock Purchase Warrant issued by Smart for Life, Inc. to H.C. Wainwright & Co., LLC on May 5, 2023 (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-3 filed on May 5, 2023)
4.17		Common Stock Purchase Warrant issued by Smart for Life, Inc. to Dawson James Securities, Inc. on December 8, 2022 (incorporated by reference to Exhibit 4.21 to the Current Report on Form 8-K filed on December 9, 2022)
4.18		Common Stock Purchase Warrant issued by Smart for Life, Inc. to Dawson James Securities, Inc. on December 8, 2022 (incorporated by reference to Exhibit 4.22 to the Current Report on Form 8-K filed on December 9, 2022)
4.19		Common Stock Purchase Warrant issued by Smart for Life, Inc. to Robert D. Keyser, Jr. on December 8, 2022 (incorporated by reference to Exhibit 4.23 to the Current Report on Form 8-K filed on December 9, 2022)
4.20		Common Stock Purchase Warrant issued by Smart for Life, Inc. to James Hopkins on December 8, 2022 (incorporated by reference to Exhibit 4.24 to the Current Report on Form 8-K filed on December 9, 2022)
4.21		Warrant Agent Agreement, dated February 16, 2022, between Smart for Life, Inc. and VStock Transfer, LLC and Forms of Warrants (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on February 23, 2022)
4.22		Warrant issued by Smart for Life, Inc. to Joseph Xiras on January 13, 2022 (incorporated by reference to Exhibit 4.21 to Amendment No. 2 to Registration Statement on Form S-1/A filed on January 21, 2022)
4.23		Warrant issued by Smart for Life, Inc. to Leonite Fund I, LP on January 13, 2022 (incorporated by reference to Exhibit 4.22 to Amendment No. 2 to Registration Statement on Form S-1/A filed on January 21, 2022)
4.24		Warrant issued by Smart for Life, Inc. to Laurie Rosenthal on January 7, 2022 (incorporated by reference to Exhibit 4.20 to Amendment No. 2 to Registration Statement on Form S-1/A filed on January 21, 2022)
4.25		Warrant issued by Smart for Life, Inc. to Robert Rein on January 3, 2022 (incorporated by reference to Exhibit 4.19 to Amendment No. 2 to Registration Statement on Form S-1/A filed on January 21, 2022)
4.26		Warrant issued by Smart for Life, Inc. to Thomas L Calkins II and Diane M Calkins JTIC on December 27, 2021 (incorporated by reference to Exhibit 4.18 to Amendment No. 2 to Registration Statement on Form S-1/A filed on January 21, 2022)
4.27		Warrant issued by Smart for Life, Inc. to Ryan Hazel on December 23, 2021 (incorporated by reference to Exhibit 4.17 to Amendment No. 2 to Registration Statement on Form S-1/A filed on January 21, 2022)
4.28		Amended and Restated Warrant issued by Smart for Life, Inc. to Dawson James Securities, Inc. on February 1, 2022 (incorporated by reference to Exhibit 4.25 to Amendment No. 3 to Registration Statement on Form S-1/A filed on February 2, 2022)
4.29		Warrant issued by Smart for Life, Inc. to Dawson James Securities, Inc. on July 1, 2021 (incorporated by reference to Exhibit 4.23 to Amendment No. 3 to Registration Statement on Form S-1/A filed on February 2, 2022)
4.30		Warrant issued by Smart for Life, Inc. to Dawson James Securities, Inc. on July 1, 2021 (incorporated by reference to Exhibit 4.24 to Amendment No. 3 to Registration Statement on Form S-1/A filed on February 2, 2022)
4.31		Common Stock Purchase Warrant issued by Smart for Life, Inc. to Peah Capital, LLC on December 18, 2020 (incorporated by reference to Exhibit 4.14 to the Registration Statement on Form S-1 filed on December 16, 2021)
4.32		Amendment No 1 to Common Stock Purchase Warrant, dated June 30, 2021, between Smart for Life, Inc. and Peah Capital, LLC (incorporated by reference to Exhibit 4.15 to the Registration Statement on Form S-1 filed on December 16, 2021)
31.1*		Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certifications of Principal Financial and Accounting Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**		Certifications of Principal Executive Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**		Certifications of Principal Financial and Accounting Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Changes in Internal Control Over Financial Reporting

*Other ~~Filed~~than ~~herewith~~in connection with the implementation of the remedial measures described above, there were no changes in our internal control over financial reporting or in any other factors that could significantly affect these controls during the three months ended March 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

** Furnished herewith39

40PART II

~~SIGNATURES~~OTHER INFORMATION

~~Pursuant to~~ITEM ~~the~~1. ~~requirements~~LEGAL ~~of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized~~PROCEEDINGS.

Date: November 20, 2023	SMART FOR LIFE, INC.
	/s/ Darren C. Minton
	Name:	Darren C. Minton
	Title:	Chief Executive Officer
	(Principal Executive Officer)
	/s/ Alan B. Bergman
	Name:	Alan B. Bergman
	Title:	Chief Financial Officer
	(Principal Financial and Accounting Officer)

From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these, or other matters, may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that we believe will have a material adverse effect on our business, financial condition or operating results.

41ITEM 1A. RISK FACTORS.

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Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

We have not sold any equity securities during the three months ended March 31, 2024 that were not previously disclosed in a current report on Form 8-K that was filed during the quarter.

We did not repurchase any shares of our common stock during the three months ended March 31, 2024.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

Exhibit No.		Description
2.1		Plan of Conversion, dated January 12, 2023 (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed on April 13, 2023)
2.2		Certificate of Conversion as filed with the Secretary of State of the State of Delaware on April 10, 2023 (incorporated by reference to Exhibit 2.2 to the Current Report on Form 8-K filed on April 13, 2023)
2.3		Articles of Conversion as filed with the Secretary of State of the State of Nevada on April 10, 2023 (incorporated by reference to Exhibit 2.3 to the Current Report on Form 8-K filed on April 13, 2023)
3.1		Articles of Incorporation of Smart for Life, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 13, 2023)
3.2		Certificate of Amendment to Articles of Incorporation of Smart for Life, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on April 28, 2023)
3.3		Certificate of Change to Articles of Incorporation of Smart for Life, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on August 8, 2023)
3.4		Certificate of Change to Articles of Incorporation of Smart for Life, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on November 2, 2023)
3.5		Certificate of Change to Articles of Incorporation of Smart for Life, Inc. (incorporated by reference to Exhibit 3.5 to the Annual Report on Form 10-K filed on September 20, 2024)
3.6		Certificate of Designation of Series B Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on May 30, 2023)
3.7		Certificate of Designation of Series C Preferred Stock (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed on March 7, 2024)
3.8		Bylaws of Smart for Life, Inc. (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K filed on April 13, 2023)
4.1		Form of Common Stock Purchase Warrant issued on June 3, 2024 (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on June 7, 2024)
4.2		Form of Placement Agent Common Stock Purchase Warrant issued on June 3, 2024 (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on June 7, 2024)
4.3		Form of Placement Agent Common Stock Purchase Warrant issued on December 4, 2023 (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed on December 6, 2023)
4.4		Placement Agent Common Stock Purchase Warrant issued by Smart for Life, Inc. to Charles Worthman on May 31, 2023 (incorporated by reference to Exhibit 4.6 to the Registration Statement on Form S-1 filed on June 5, 2023)
4.5		Placement Agent Common Stock Purchase Warrant issued by Smart for Life, Inc. to Craig Schwabe on May 31, 2023 (incorporated by reference to Exhibit 4.7 to the Registration Statement on Form S-1 filed on June 5, 2023)
4.6		Placement Agent Common Stock Purchase Warrant issued by Smart for Life, Inc. to Michael Vasinkevich on May 31, 2023 (incorporated by reference to Exhibit 4.8 to the Registration Statement on Form S-1 filed on June 5, 2023)
4.7		Placement Agent Common Stock Purchase Warrant issued by Smart for Life, Inc. to Noam Rubinstein on May 31, 2023 (incorporated by reference to Exhibit 4.9 to the Registration Statement on Form S-1 filed on June 5, 2023)
4.8		Form of Placement Agent Common Stock Purchase Warrant issued on May 19, 2023 (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed on May 23, 2023)
4.9		Placement Agent Common Stock Purchase Warrant issued by Smart for Life, Inc. to H.C. Wainwright & Co., LLC on May 5, 2023 (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-3 filed on May 5, 2023)
4.10		Common Stock Purchase Warrant issued by Smart for Life, Inc. to Dawson James Securities, Inc. on December 8, 2022 (incorporated by reference to Exhibit 4.21 to the Current Report on Form 8-K filed on December 9, 2022)

4.11		Common Stock Purchase Warrant issued by Smart for Life, Inc. to Dawson James Securities, Inc. on December 8, 2022 (incorporated by reference to Exhibit 4.22 to the Current Report on Form 8-K filed on December 9, 2022)
4.12		Common Stock Purchase Warrant issued by Smart for Life, Inc. to Robert D. Keyser, Jr. on December 8, 2022 (incorporated by reference to Exhibit 4.23 to the Current Report on Form 8-K filed on December 9, 2022)
4.13		Common Stock Purchase Warrant issued by Smart for Life, Inc. to James Hopkins on December 8, 2022 (incorporated by reference to Exhibit 4.24 to the Current Report on Form 8-K filed on December 9, 2022)
4.14		Warrant Agent Agreement, dated February 16, 2022, between Smart for Life, Inc. and VStock Transfer, LLC and Forms of Warrants (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed on February 23, 2022)
4.15		Warrant issued by Smart for Life, Inc. to Joseph Xiras on January 13, 2022 (incorporated by reference to Exhibit 4.21 to Amendment No. 2 to Registration Statement on Form S-1/A filed on January 21, 2022)
4.16		Warrant issued by Smart for Life, Inc. to Leonite Fund I, LP on January 13, 2022 (incorporated by reference to Exhibit 4.22 to Amendment No. 2 to Registration Statement on Form S-1/A filed on January 21, 2022)
4.17		Warrant issued by Smart for Life, Inc. to Laurie Rosenthal on January 7, 2022 (incorporated by reference to Exhibit 4.20 to Amendment No. 2 to Registration Statement on Form S-1/A filed on January 21, 2022)
4.18		Warrant issued by Smart for Life, Inc. to Robert Rein on January 3, 2022 (incorporated by reference to Exhibit 4.19 to Amendment No. 2 to Registration Statement on Form S-1/A filed on January 21, 2022)
4.19		Warrant issued by Smart for Life, Inc. to Thomas L Calkins II and Diane M Calkins JTIC on December 27, 2021 (incorporated by reference to Exhibit 4.18 to Amendment No. 2 to Registration Statement on Form S-1/A filed on January 21, 2022)
4.20		Warrant issued by Smart for Life, Inc. to Ryan Hazel on December 23, 2021 (incorporated by reference to Exhibit 4.17 to Amendment No. 2 to Registration Statement on Form S-1/A filed on January 21, 2022)
4.21		Amended and Restated Warrant issued by Smart for Life, Inc. to Dawson James Securities, Inc. on February 1, 2022 (incorporated by reference to Exhibit 4.25 to Amendment No. 3 to Registration Statement on Form S-1/A filed on February 2, 2022)
4.22		Warrant issued by Smart for Life, Inc. to Dawson James Securities, Inc. on July 1, 2021 (incorporated by reference to Exhibit 4.23 to Amendment No. 3 to Registration Statement on Form S-1/A filed on February 2, 2022)
4.23		Warrant issued by Smart for Life, Inc. to Dawson James Securities, Inc. on July 1, 2021 (incorporated by reference to Exhibit 4.24 to Amendment No. 3 to Registration Statement on Form S-1/A filed on February 2, 2022)
4.24		Common Stock Purchase Warrant issued by Smart for Life, Inc. to Peah Capital, LLC on December 18, 2020 (incorporated by reference to Exhibit 4.14 to the Registration Statement on Form S-1 filed on December 16, 2021)
4.25		Amendment No 1 to Common Stock Purchase Warrant, dated June 30, 2021, between Smart for Life, Inc. and Peah Capital, LLC (incorporated by reference to Exhibit 4.15 to the Registration Statement on Form S-1 filed on December 16, 2021)
10.1		Asset Purchase Agreement, dated January 29, 2024, among Smart for Life, Inc., First Health FL LLC, Ceautamed Worldwide, LLC, Wellness Watchers Global, LLC and Greens First Female, LLC (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on February 2, 2024)
10.2		Bill of Sale and Assignment and Assumption Agreement, dated January 29, 2024, among First Health FL LLC, Ceautamed Worldwide, LLC, Wellness Watchers Global, LLC and Greens First Female, LLC (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed on February 2, 2024)
10.3		Assignment of Intellectual Property, dated as of January 29, 2024, among First Health FL LLC, Ceautamed Worldwide LLC, Wellness Watchers, LLC and Greens First Female, LLC (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed on February 2, 2024)
10.4		Limited Liability Company Agreement, dated as of January 29, 2024, among Smart for Life, Inc., Joseph X. Xiras, Stuart Benson and Ryan Benson (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed on February 2, 2024)
10.5		Loan Agreement, dated March 5, 2024, among Smart for Life, Inc., Doctors Scientific Organica, LLC, Oyster Management Services Ltd., Lavi Enterprises, LLC and Abbsi LLC (incorporated by reference to Exhibit 10.13 to the Annual Report on Form 10-K filed on September 20, 2024)

10.6		Secured Promissory Note issued by Smart for Life, Inc., Doctors Scientific Organica, LLC, Oyster Management Services Ltd. and Lavi Enterprises, LLC to Abbsi LLC on March 5, 2024 (incorporated by reference to Exhibit 10.14 to the Annual Report on Form 10-K filed on September 20, 2024)
10.7		Amendment No. 2 to Original Issue Discount Secured Subordinated Note issued by Smart for Life, Inc. to Joseph X. Xiras on January 26, 2024 (incorporated by reference to Exhibit 10.8 to the Current Report on Form 8-K filed on February 2, 2024)
10.8		Agreement, dated January 29, 2024, among D&D Hayes, LLC, Ceautamed Worldwide, LLC, Wellness Watchers Global, LLC, Greens First Female, LLC, First Group Acquisition Company, LLC and First Health FL LLC (incorporated by reference to Exhibit 10.11 to the Current Report on Form 8-K filed on February 2, 2024)
10.9		Agreement, dated January 29, 2024, among Smart for Life, Inc., D&D Hayes, LLC, Ceautamed Worldwide, LLC, Wellness Watchers Global, LLC, Greens First Female, LLC, First Group Acquisition Company, LLC and First Health FL LLC (incorporated by reference to Exhibit 10.12 to the Current Report on Form 8-K filed on February 2, 2024)
10.10		Independent Director Agreement, dated March 8, 2024, between Smart for Life, Inc. and Loren Brown (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed on March 14, 2024)
31.1*		Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certifications of Principal Financial and Accounting Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certifications of Principal Executive Officer and Principal Financial and Accounting Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

Filed herewith

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 thereunto duly authorized.

Date: May 9, 2025	SMART FOR LIFE, INC.

	/s/ Darren C. Minton
	Name:	Darren C. Minton
	Title:	Chief Executive Officer and Chief Financial Officer
		(Principal Executive Officer and Principal Financial and Accounting Officer)

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