Smart for Life Inc (NASDAQ:SMFL) shares are trading lower by 38% to $3.70 during Friday's session. The company entered into agreements with holders of warrants to exercise them at a reduced price.

In a Friday SEC filing the company said on December 4, 2023, it had issued warrants to purchase 250,572 shares of common stock at $10.64 per share, with 183,370 warrants still outstanding. On May 30, the company entered into agreements with holders of these warrants to exercise them at a reduced price of $4.25 per share, generating $779,322.50.

In return, the company will issue new warrants to purchase 550,110 shares at $4.25 per share, valid for 18 months. The transaction is expected to close on June 3.

The company will also file a registration statement for the resale of shares underlying the new warrants by July 15, 2024. For 15 days after the transaction closes, the company will not issue new stock or related securities, nor file any additional registration statements. This report is not an offer or solicitation for the sale of securities.

Should I Sell My SMFL Stock?

When deciding to hold on to or sell a stock, investors should consider their time horizon, unrealized gains and total return.

Shares of Smart for Life (NASDAQ:SMFL) have decreased by 95.39% in the past year. An investor who bought shares of Smart for Life at the beginning of the year would take a loss of $8.08 per share if they sold it today. The stock has risen 12.95% over the past month, meaning an investor who bought shares on Apr. 1 would see a capital loss of $0.18.

Investors may also consider market dynamics. The Relative Strength Index can be used to indicate whether a stock is overbought or oversold. Smart for Life stock currently has an RSI of 94.68, indicating overbought conditions.

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SMFL has a 52-week high of $86.33 and a 52-week low of $2.28.