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<!-- Field: Rule-Page --><DIV ALIGN="CENTER"><DIV STYLE="font-size: 1pt; border-top: Black 1.5pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WASHINGTON, DC 20549</B></P>

<P STYLE="font: bold 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">FORM 8-K</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CURRENT REPORT</B> <B>PURSUANT TO SECTION&nbsp;13
OR 15(d) OF </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE SECURITIES EXCHANGE ACT OF 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Date of Report (Date of earliest event reported)
<B>July 2, 2012</B></P>

<P STYLE="font: 24pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SMART BALANCE, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Exact name of registrant as specified
in its charter)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="width: 36%">&nbsp;</TD>
    <TD STYLE="width: 1%; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 31%">&nbsp;</TD>
    <TD STYLE="width: 1%; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 31%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-bottom: windowtext 1pt solid; vertical-align: top; padding-right: 0.8pt; font-weight: bold; text-align: center">Delaware</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; vertical-align: top; padding-right: 0.8pt; font-weight: bold; text-align: center">001-33595</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; vertical-align: top; padding-right: 0.8pt; font-weight: bold; text-align: center">20-2949397</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0; text-align: center"><B>(State or other jurisdiction</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0; text-align: center"><B>of incorporation)</B></P></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0; text-align: center"><B>(Commission</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0; text-align: center"><B>File Number)</B></P></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0; text-align: center"><B>(IRS Employer</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0; text-align: center"><B>Identification No.)</B></P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TR>
    <TD STYLE="width: 51%">&nbsp;</TD>
    <TD STYLE="width: 2%; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 47%">&nbsp;</TD></TR>
<TR>
    <TD STYLE="border-bottom: windowtext 1pt solid; vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0; text-align: center"><B>115 West Century Road - Suite
        260</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8pt 0pt 0; text-align: center"><B>Paramus, New Jersey</B></P></TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; vertical-align: bottom; padding-right: 0.8pt; font-weight: bold; text-align: center">07652</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-right: 0.8pt; font-weight: bold; text-align: center">(Address of principal executive offices)</TD>
    <TD STYLE="vertical-align: bottom; padding-right: 0.8pt">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-right: 0.8pt; font-weight: bold; text-align: center">(Zip Code)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Registrant&rsquo;s telephone number including
area code: (201)&nbsp;568-9300</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-underline-style: none">N/A</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Former name or former address, if changed
since last report)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="width: 4%; padding-right: 0.8pt; font-family: Wingdings">&uml;</TD>
    <TD STYLE="width: 96%; padding-right: 0.8pt">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230 .425)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="width: 4%; padding-right: 0.8pt; font-family: Wingdings">&uml;</TD>
    <TD STYLE="width: 96%; padding-right: 0.8pt">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</TD></TR>
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    <TD STYLE="width: 4%; padding-right: 0.8pt; font-family: Wingdings">&uml;</TD>
    <TD STYLE="width: 96%; padding-right: 0.8pt">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="width: 4%; padding-right: 0.8pt; font-family: Wingdings">&uml;</TD>
    <TD STYLE="width: 96%; padding-right: 0.8pt">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</TD></TR>
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<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in"></P>

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    <TD STYLE="width: 10%; font-size: 10pt; font-weight: bold">Item 1.01.</TD>
    <TD STYLE="width: 90%; font-size: 10pt; font-weight: bold; text-align: justify">Entry into a Material Definitive Agreement</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">On
July 2, 2012, Smart Balance, Inc. (the &ldquo;Company&rdquo;) entered into a Credit Agreement, dated as of July 2, 2012, by and
among GFA Brands, Inc., Glutino USA, Inc., UHF Acquisition Corp. and Udi&rsquo;s Healthy Foods, LLC, as borrowers (the &ldquo;Borrowers&rdquo;),
the Company, as a guarantor, the other guarantors from time to time party thereto, the lenders from time to time party thereto
(the &ldquo;Lenders&rdquo;) and Bank of Montreal, as administrative agent (the &ldquo;Agent&rdquo;), pursuant to which the Borrowers
established a new senior secured credit facility (the &ldquo;Credit Facility&rdquo;) in an aggregate principal amount of $280
million, consisting of a term loan B (the &ldquo;Term Loan&rdquo;) in an aggregate principal amount of $240 million and a revolving
credit facility (the &ldquo;Revolving Facility&rdquo;) in an aggregate principal amount of $40 million (with sublimits for swingline
loans and the issuance of letters of credit). The Term Loan will mature on July 2, 2018 and the Revolving Facility will mature
on June 30, 2017.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">The
proceeds of the Term Loan were used to finance the Acquisition (as defined below), to refinance certain existing indebtedness
of the Company and its subsidiaries and to fund certain fees and expenses associated therewith. In the future, the Revolving Facility
may be used by the Company and its subsidiaries for working capital and for other general corporate purposes, including acquisitions
and investments, permitted under the Credit Agreement. The Credit Agreement also provides that, upon satisfaction of certain conditions,
the Borrowers may increase the aggregate principal amount of loans outstanding thereunder by up to $50 million, subject to receipt
of additional lending commitments for such loans.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">Outstanding
amounts under the Term Loan will bear interest at a rate per annum equal to, at the Borrowers&rsquo; option, either (a) LIBOR
plus 5.75% or (b) a Base Rate (equal in this context to the greater of (i) 2.25% and (ii) the lowest of (x) the Agent&rsquo;s
prime rate, (y) the federal funds rate plus 1/2 of 1.00% and (z) LIBOR plus 1.00%) plus 4.75%. The Term Loan will amortize in
equal quarterly installments of 0.25% of the initial principal amount beginning on September 30, 2012, with the balance due at
maturity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">Outstanding
amounts under the Revolving Facility will initially bear interest at a rate per annum equal to, at the Borrowers&rsquo; option,
either (a) LIBOR plus 5.25% or (b) a Base Rate (equal in this context to the lowest of (x) the Agent&rsquo;s prime rate, (y) the
federal funds rate plus 1/2 of 1.00% and (z) LIBOR plus 1.00%) plus 4.25%. From and after delivery to the Agent of financial statements
for the fiscal quarter ending on September 30, 2012, the margin over LIBOR and the Revolving Base Rate may be adjusted periodically
based on the Company&rsquo;s ratio of total funded debt to consolidated EBITDA, with 5.50% per annum being the maximum LIBOR margin
and 4.50% per annum being the maximum Base Rate margin established by such adjustment mechanism. The Borrowers are required to
pay a commitment fee on the unused commitments under the Revolving Facility at an initial rate equal to 0.50% per annum (subject
to a similar leverage-based step-down).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">The
loans and other obligations under the Credit Facility (including in respect of hedging agreements and cash management obligations)
are (a) guaranteed by the Company and its existing and future domestic subsidiaries and (b) secured by substantially all of the
assets of the Company and its existing and future domestic subsidiaries, in each case subject to certain customary exceptions
and limitations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">The
terms of the Credit Agreement require the Company and its subsidiaries (on a consolidated basis and subject to certain customary
exceptions) to meet the following financial tests:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-right: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">maintenance of maximum total funded debt
to consolidated EBITDA of not more than 5.00 to 1.0, initially, and decreasing to 3.50 to 1.00 over the life of the Credit Facility;
and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 1in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="padding-right: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">maintenance of minimum consolidated EBITDA
to consolidated interest charges of 2.75 to 1.0, initially, and increasing to 3.25 to 1.0 over the life of the Credit Facility.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">In
addition, the Credit Agreement contains (a) customary provisions related to mandatory prepayment of the loans thereunder with
(i) 50% of Excess Cash Flow (as defined in the Credit Agreement), subject to step-downs to 25% and 0% of Excess Cash Flow at certain
leverage-based thresholds and (ii) the proceeds of asset sales or casualty events (subject to certain customary limitations, exceptions
and reinvestment rights) and (b) certain covenants that, among other things, restrict additional indebtedness, liens and encumbrances,
investments, acquisitions, loans and advances, mergers, consolidations and asset dispositions, dividends and other restricted
payments, transactions with affiliates and other matters customarily restricted in such agreements, in each case, subject to certain
customary exceptions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: left">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">The
Credit Agreement also contains customary events of default, including payment defaults, breaches of representations and warranties,
covenant defaults, cross-defaults to certain material contracts and to other material indebtedness in excess of specified amounts,
certain events of bankruptcy and insolvency, certain ERISA events, judgments in excess of specified amounts, certain impairments
to the guarantees or collateral documents, and change in control defaults.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">Certain
of the lenders under the Credit Agreement (or their affiliates) have provided, and may in the future provide, certain commercial
banking, financial advisory, and investment banking services in the ordinary course of business for the Company and its subsidiaries,
for which they receive customary fees and commissions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">The
summary description of the Credit Agreement in this Item 1.01 does not purport to be complete and is qualified in its entirety
by reference to the full text of the Credit Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit
10.1 and is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font-family: Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%; font-size: 10pt; font-weight: bold">Item 2.01.</TD>
    <TD STYLE="width: 90%; font-size: 10pt; font-weight: bold; text-align: justify">Completion of Acquisition or Disposition of Assets</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">On
July 2, 2012, pursuant to the Membership Interest Purchase Agreement, dated as of May 31, 2012 (as amended, the &ldquo;Purchase
Agreement&rdquo;), by and among Hubson Acquisition, LLC, Ehud Baron, Etai Baron, Rivka Grinberg, Yosef Lutwak and Chadwick White
(the &ldquo;Sellers&rdquo;); the Company; UHF Acquisition Corp., a direct subsidiary of the Company; and, solely for purposes
of certain provisions thereof, Allan B. Hubbard, in his personal capacity and in his capacity as Trustee of the Allan B. Hubbard
Revocable Trust, and Devin Anderson, UHF Acquisition Corp. purchased from the Sellers all of the issued and outstanding units
of Udi&rsquo;s Healthy Foods, LLC (the &ldquo;Acquisition&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">On
July 2, 2012, UHF Acquisition Corp. caused an aggregate amount of $126,325,093.72 to be paid to the Sellers, which amount reflects
the initial purchase price of $125 million and an aggregate estimated purchase price adjustment of $1,325,093.72 (to be finalized
after closing) as provided for in the Purchase Agreement. $10 million of the purchase price will be held in escrow to secure Sellers&rsquo;
obligations to indemnify the Company under the Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">The
description of the Purchase Agreement contained in this Item 2.01 does not purport to be complete and is subject to
and qualified in its entirety by reference to the above referenced Membership Interest Purchase Agreement and the First
Amendment to the Membership Interest Purchase Agreement, dated as of June 29, 2012, by and between the Company and Hubson Acquisition, LLC (in
its capacity as Sellers&rsquo; Representative (as such term is defined in the Purchase Agreement)), copies of which are
attached to this Current Report on Form 8-K as Exhibit 2.1 and Exhibit 2.2, respectively, and are incorporated herein by
reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 1.5in; text-indent: -1in; text-align: left"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 1.5in; text-indent: -1in; text-align: left"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left"><B></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font-family: Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%; font-size: 10pt; font-weight: bold">Item 2.03.</TD>
    <TD STYLE="width: 90%; font-size: 10pt; font-weight: bold; text-align: justify">Creation of a Direct Financial Obligation under an Off-Balance Sheet Arrangement of a Registrant.</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">See
Item 1.01 above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 1.5in; text-indent: -1in; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 1.5in; text-indent: -1in; text-align: left"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font-family: Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%; font-size: 10pt; font-weight: bold">Item 5.02.</TD>
    <TD STYLE="width: 90%; font-size: 10pt; font-weight: bold; text-align: justify">Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 1.5in; text-indent: -1in; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">On
June 28, 2012, the compensation committee of the Board of Directors approved a severance arrangement, effective as of July 2,
2012, between the Company and Christine Sacco, the Chief Financial Officer of the Company (the &ldquo;Severance Agreement&rdquo;).
This severance agreement generally mirrors the form of severance agreement that the Company entered into with Messrs. Matar, Schulke
and Dray, other executive officers of the Company, as of January 1, 2012 and provides for benefits in the event that Ms. Sacco
is terminated by the Company without Cause or she terminates her employment with the Company for Good Reason (each term as defined
in the severance agreement and each, an &ldquo;Involuntary Termination&rdquo;) at any time prior to January 1, 2016. The severance
benefits that Ms. Sacco would be entitled to receive upon an Involuntary Termination include generally (a) a lump sum payment
in an amount equal to 1.5 times the sum of her base salary then in effect plus a bonus amount, and (b) reimbursement for premiums
for COBRA coverage for a maximum of eighteen months. In such case, the bonus amount that would be used to calculate the amount
of the severance payment would be the greatest of (i) a specified percentage of Ms. Sacco&rsquo;s base salary at the highest rate
in effect during the three year period immediately preceding the Involuntary Termination, (ii) the actual bonus amount earned
by Ms. Sacco under the Company&rsquo;s bonus program for the fiscal year prior to the fiscal year in which the termination occurs
or (iii) the actual bonus amount earned by Ms. Sacco under the Company&rsquo;s bonus program for the fiscal year in which the
termination occurs. Ms. Sacco would not generally be entitled to these severance benefits in the event that she is entitled to
benefits under her Change of Control Agreement with the Company (and in no event shall the executive be entitled to severance
benefits under both agreements). Upon an Involuntary Termination, Ms. Sacco would also have a one-year period to exercise her
previously-vested stock options<B>.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">In
addition, pursuant to the Severance Agreement, Ms. Sacco will generally be subject to certain non-competition and non-solicitation
restrictions for an 18-month period following a termination of employment for any reason (other than in connection with a Change
of Control (as defined in her Severance Agreement)).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">The
foregoing description of the Severance Agreement is a summary, is not complete and is qualified in its entirety by reference to
the form of severance agreement as previously filed as Exhibit 10.5 to the Current Report on Form 8-K filed by the Company on
January 6, 2012, and is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 1.5in; text-indent: -1in; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 1.5in; text-indent: -1in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 1.5in; text-indent: -1in; text-align: left"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font-family: Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%; font-size: 10pt; font-weight: bold">Item 7.01.</TD>
    <TD STYLE="width: 90%; font-size: 10pt; font-weight: bold; text-align: justify">Regulation FD Disclosure.</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 1.5in; text-indent: -1in; text-align: left"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 1.5in; text-indent: -1in; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">On
July 2, 2012, the Company issued a press release announcing the closing of the Acquisition and the closing of the Credit Agreement.
The text of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left"><B></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font-family: Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%; font-size: 10pt; font-weight: bold">Item 9.01.</TD>
    <TD STYLE="width: 90%; font-size: 10pt; font-weight: bold; text-align: justify">Financial Statements and Exhibits.</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 0.5in; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 1.5in; text-indent: -1in; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: justify">(d)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0pt 0">Exhibits<FONT STYLE="font: 10pt Times New Roman, Times, Serif">.&nbsp;</FONT></P>



<P STYLE="margin: 0"></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left">2.1</TD><TD STYLE="text-align: justify">Membership Interest Purchase Agreement, dated as of
May 31, 2012, by and among Hubson Acquisition, LLC, Ehud Baron, Etai Baron, Rivka Grinberg, Yosef Lutwak, Chadwick White, Smart
Balance, Inc., UHF Acquisition Corp. and, solely for purposes of Sections 5.3, 5.7, 5.13, 5.18 and 6.1(b) and Article 9 thereof,
Allan B. Hubbard, in his personal capacity and in his capacity as Trustee of the Allan B. Hubbard Revocable Trust, and Devin Anderson</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 76.6pt; text-align: justify; text-indent: -67.65pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left">2.2</TD><TD STYLE="text-align: justify">First Amendment to the Membership Interest Purchase
Agreement, dated as of June 29, 2012, by and between Smart Balance, Inc. and Hubson Acquisition, LLC</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 76.6pt; text-align: justify; text-indent: -67.65pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left">10.1</TD><TD STYLE="text-align: justify">Credit Agreement, dated as of July 2, 2012, by and
among GFA Brands, Inc., Glutino USA, Inc., UHF Acquisition Corp. and Udi&rsquo;s Healthy Foods, LLC, as borrowers, Smart Balance,
Inc., as a guarantor, the other guarantors from time to time party thereto, the lenders from time to time party thereto and Bank
of Montreal, as administrative agent</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 76.6pt; text-align: justify; text-indent: -67.65pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in; text-align: left">99.1</TD><TD STYLE="text-align: justify">Press Release, dated July 2, 2012</TD>
</TR></TABLE>



<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 40.5pt 0pt 31.5pt; text-align: center">SIGNATURES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 31.5pt; text-indent: 23pt">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
hereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.5in; text-indent: 0in; text-autospace: none">July 2, 2012</TD>
    <TD COLSPAN="2" STYLE="text-indent: 0in; text-autospace: none; font-weight: bold">SMART BALANCE, INC.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.5in; text-indent: 0in; text-autospace: none">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">(registrant)</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 46%; padding-right: 0.5in; text-indent: 0in; text-autospace: none">&nbsp;</TD>
    <TD STYLE="width: 5%; text-indent: 0in; text-autospace: none">&nbsp;</TD>
    <TD STYLE="width: 49%; text-indent: 0in; text-autospace: none">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.5in; text-indent: 0in; text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-indent: 0in; text-autospace: none">By:</TD>
    <TD STYLE="border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">/s/ Christine Sacco</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.5in; text-indent: 17.1pt; text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-indent: 17.1pt; text-autospace: none">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Christine Sacco</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Chief Financial Officer</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0.5in; text-indent: 17.1pt; text-autospace: none">&nbsp;</TD>
    <TD STYLE="text-indent: 17.1pt; text-autospace: none">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0; text-indent: 0.5in">&#9;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 4in; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 4in; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">EXHIBIT
INDEX</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 31.5pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 31.5pt; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-family: Times New Roman, Times, Serif">
<TR>
    <TD NOWRAP STYLE="width: 12%; vertical-align: top; font-size: 10pt; text-align: center"><U>Exhibit Number</U>&nbsp;</TD>
    <TD STYLE="width: 88%; vertical-align: top">
        <P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: -0.05pt"><U>Description</U>&nbsp;</P></TD>
    <TD STYLE="width: 0%; font-size: 10pt">&nbsp;</TD></TR>
<TR>
    <TD NOWRAP STYLE="vertical-align: top; font-size: 10pt; text-align: center">2.1</TD>
    <TD COLSPAN="2" STYLE="vertical-align: top"><P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: left"><FONT STYLE="text-underline-style: none">Membership Interest Purchase Agreement, dated as of May 31, 2012, by and among Hubson Acquisition, LLC, Ehud Baron, Etai Baron, Rivka Grinberg, Yosef Lutwak, Chadwick White, Smart Balance, Inc., UHF Acquisition Corp. and, solely for purposes of Sections 5.3, 5.7, 5.13, 5.18 and 6.1(b) and Article 9 thereof, Allan B. Hubbard, in his personal capacity and in his capacity as Trustee of the Allan B. Hubbard Revocable Trust, and Devin Anderson</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-size: 10pt; text-align: center">2.2</TD>
    <TD COLSPAN="2">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">First Amendment to the Membership Interest Purchase
        Agreement, dated as of June 29, 2012, by and between Smart Balance, Inc. and Hubson Acquisition, LLC</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 8.95pt">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-size: 10pt; text-align: center">10.1</TD>
    <TD COLSPAN="2">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">Credit Agreement, dated as of July 2, 2012,
        by and among GFA Brands, Inc., Glutino USA, Inc., UHF Acquisition Corp. and Udi&rsquo;s Healthy Foods, LLC, as borrowers, Smart
        Balance, Inc., as a guarantor, the other guarantors from time to time party thereto, the lenders from time to time party thereto
        and Bank of Montreal, as administrative agent</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 8.95pt">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-size: 10pt; text-align: center">99.1</TD>
    <TD COLSPAN="2">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify">Press
        Release, dated July 2, 2012</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.75in 0pt 76.6pt; text-align: justify; text-indent: -67.65pt">&nbsp;</P></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 31.5pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 31.5pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 31.5pt; text-align: center"></P>

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{"company-data": {"conformed-name": "SMART BALANCE, INC.", "cik": "0001331301", "assigned-sic": "2000", "irs-number": "202949397", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-33595", "film-number": "12940897"}, "business-address": {"street1": "115 WEST CENTURY ROAD", "street2": "SUITE 260", "city": "PARAMUS", "state": "NJ", "zip": "07652-1432", "phone": "3036821982"}, "mail-address": {"street1": "115 WEST CENTURY ROAD", "street2": "SUITE 260", "city": "PARAMUS", "state": "NJ", "zip": "07652-1432"}, "former-company": {"former-conformed-name": "Boulder Specialty Brands, Inc.", "date-changed": "20050624"}}
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13
OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
July 2, 2012
SMART BALANCE, INC.
(Exact name of registrant as specified
in its charter)
Delaware
001-33595
20-2949397
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
115 West Century Road - Suite
        260
Paramus, New Jersey
07652
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number including
area code: (201) 568-9300
N/A
(Former name or former address, if changed
since last report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230 .425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01.
Entry into a Material Definitive Agreement
On
July 2, 2012, Smart Balance, Inc. (the "Company") entered into a Credit Agreement, dated as of July 2, 2012, by and
among GFA Brands, Inc., Glutino USA, Inc., UHF Acquisition Corp. and Udi's Healthy Foods, LLC, as borrowers (the "Borrowers"),
the Company, as a guarantor, the other guarantors from time to time party thereto, the lenders from time to time party thereto
(the "Lenders") and Bank of Montreal, as administrative agent (the "Agent"), pursuant to which the Borrowers
established a new senior secured credit facility (the "Credit Facility") in an aggregate principal amount of $280
million, consisting of a term loan B (the "Term Loan") in an aggregate principal amount of $240 million and a revolving
credit facility (the "Revolving Facility") in an aggregate principal amount of $40 million (with sublimits for swingline
loans and the issuance of letters of credit). The Term Loan will mature on July 2, 2018 and the Revolving Facility will mature
on June 30, 2017.
The
proceeds of the Term Loan were used to finance the Acquisition (as defined below), to refinance certain existing indebtedness
of the Company and its subsidiaries and to fund certain fees and expenses associated therewith. In the future, the Revolving Facility
may be used by the Company and its subsidiaries for working capital and for other general corporate purposes, including acquisitions
and investments, permitted under the Credit Agreement. The Credit Agreement also provides that, upon satisfaction of certain conditions,
the Borrowers may increase the aggregate principal amount of loans outstanding thereunder by up to $50 million, subject to receipt
of additional lending commitments for such loans.
Outstanding
amounts under the Term Loan will bear interest at a rate per annum equal to, at the Borrowers' option, either (a) LIBOR
plus 5.75% or (b) a Base Rate (equal in this context to the greater of (i) 2.25% and (ii) the lowest of (x) the Agent's
prime rate, (y) the federal funds rate plus 1/2 of 1.00% and (z) LIBOR plus 1.00%) plus 4.75%. The Term Loan will amortize in
equal quarterly installments of 0.25% of the initial principal amount beginning on September 30, 2012, with the balance due at
maturity.
Outstanding
amounts under the Revolving Facility will initially bear interest at a rate per annum equal to, at the Borrowers' option,
either (a) LIBOR plus 5.25% or (b) a Base Rate (equal in this context to the lowest of (x) the Agent's prime rate, (y) the
federal funds rate plus 1/2 of 1.00% and (z) LIBOR plus 1.00%) plus 4.25%. From and after delivery to the Agent of financial statements
for the fiscal quarter ending on September 30, 2012, the margin over LIBOR and the Revolving Base Rate may be adjusted periodically
based on the Company's ratio of total funded debt to consolidated EBITDA, with 5.50% per annum being the maximum LIBOR margin
and 4.50% per annum being the maximum Base Rate margin established by such adjustment mechanism. The Borrowers are required to
pay a commitment fee on the unused commitments under the Revolving Facility at an initial rate equal to 0.50% per annum (subject
to a similar leverage-based step-down).
The
loans and other obligations under the Credit Facility (including in respect of hedging agreements and cash management obligations)
are (a) guaranteed by the Company and its existing and future domestic subsidiaries and (b) secured by substantially all of the
assets of the Company and its existing and future domestic subsidiaries, in each case subject to certain customary exceptions
and limitations.
The
terms of the Credit Agreement require the Company and its subsidiaries (on a consolidated basis and subject to certain customary
exceptions) to meet the following financial tests:
·
maintenance of maximum total funded debt
to consolidated EBITDA of not more than 5.00 to 1.0, initially, and decreasing to 3.50 to 1.00 over the life of the Credit Facility;
and
·
maintenance of minimum consolidated EBITDA
to consolidated interest charges of 2.75 to 1.0, initially, and increasing to 3.25 to 1.0 over the life of the Credit Facility.
In
addition, the Credit Agreement contains (a) customary provisions related to mandatory prepayment of the loans thereunder with
(i) 50% of Excess Cash Flow (as defined in the Credit Agreement), subject to step-downs to 25% and 0% of Excess Cash Flow at certain
leverage-based thresholds and (ii) the proceeds of asset sales or casualty events (subject to certain customary limitations, exceptions
and reinvestment rights) and (b) certain covenants that, among other things, restrict additional indebtedness, liens and encumbrances,
investments, acquisitions, loans and advances, mergers, consolidations and asset dispositions, dividends and other restricted
payments, transactions with affiliates and other matters customarily restricted in such agreements, in each case, subject to certain
customary exceptions.
The
Credit Agreement also contains customary events of default, including payment defaults, breaches of representations and warranties,
covenant defaults, cross-defaults to certain material contracts and to other material indebtedness in excess of specified amounts,
certain events of bankruptcy and insolvency, certain ERISA events, judgments in excess of specified amounts, certain impairments
to the guarantees or collateral documents, and change in control defaults.
Certain
of the lenders under the Credit Agreement (or their affiliates) have provided, and may in the future provide, certain commercial
banking, financial advisory, and investment banking services in the ordinary course of business for the Company and its subsidiaries,
for which they receive customary fees and commissions.
The
summary description of the Credit Agreement in this Item 1.01 does not purport to be complete and is qualified in its entirety
by reference to the full text of the Credit Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit
10.1 and is incorporated herein by reference.
Item 2.01.
Completion of Acquisition or Disposition of Assets
On
July 2, 2012, pursuant to the Membership Interest Purchase Agreement, dated as of May 31, 2012 (as amended, the "Purchase
Agreement"), by and among Hubson Acquisition, LLC, Ehud Baron, Etai Baron, Rivka Grinberg, Yosef Lutwak and Chadwick White
(the "Sellers"); the Company; UHF Acquisition Corp., a direct subsidiary of the Company; and, solely for purposes
of certain provisions thereof, Allan B. Hubbard, in his personal capacity and in his capacity as Trustee of the Allan B. Hubbard
Revocable Trust, and Devin Anderson, UHF Acquisition Corp. purchased from the Sellers all of the issued and outstanding units
of Udi's Healthy Foods, LLC (the "Acquisition").
On
July 2, 2012, UHF Acquisition Corp. caused an aggregate amount of $126,325,093.72 to be paid to the Sellers, which amount reflects
the initial purchase price of $125 million and an aggregate estimated purchase price adjustment of $1,325,093.72 (to be finalized
after closing) as provided for in the Purchase Agreement. $10 million of the purchase price will be held in escrow to secure Sellers'
obligations to indemnify the Company under the Purchase Agreement.
The
description of the Purchase Agreement contained in this Item 2.01 does not purport to be complete and is subject to
and qualified in its entirety by reference to the above referenced Membership Interest Purchase Agreement and the First
Amendment to the Membership Interest Purchase Agreement, dated as of June 29, 2012, by and between the Company and Hubson Acquisition, LLC (in
its capacity as Sellers' Representative (as such term is defined in the Purchase Agreement)), copies of which are
attached to this Current Report on Form 8-K as Exhibit 2.1 and Exhibit 2.2, respectively, and are incorporated herein by
reference.
Item 2.03.
Creation of a Direct Financial Obligation under an Off-Balance Sheet Arrangement of a Registrant.
See
Item 1.01 above.
Item 5.02.
Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On
June 28, 2012, the compensation committee of the Board of Directors approved a severance arrangement, effective as of July 2,
2012, between the Company and Christine Sacco, the Chief Financial Officer of the Company (the "Severance Agreement").
This severance agreement generally mirrors the form of severance agreement that the Company entered into with Messrs. Matar, Schulke
and Dray, other executive officers of the Company, as of January 1, 2012 and provides for benefits in the event that Ms. Sacco
is terminated by the Company without Cause or she terminates her employment with the Company for Good Reason (each term as defined
in the severance agreement and each, an "Involuntary Termination") at any time prior to January 1, 2016. The severance
benefits that Ms. Sacco would be entitled to receive upon an Involuntary Termination include generally (a) a lump sum payment
in an amount equal to 1.5 times the sum of her base salary then in effect plus a bonus amount, and (b) reimbursement for premiums
for COBRA coverage for a maximum of eighteen months. In such case, the bonus amount that would be used to calculate the amount
of the severance payment would be the greatest of (i) a specified percentage of Ms. Sacco's base salary at the highest rate
in effect during the three year period immediately preceding the Involuntary Termination, (ii) the actual bonus amount earned
by Ms. Sacco under the Company's bonus program for the fiscal year prior to the fiscal year in which the termination occurs
or (iii) the actual bonus amount earned by Ms. Sacco under the Company's bonus program for the fiscal year in which the
termination occurs. Ms. Sacco would not generally be entitled to these severance benefits in the event that she is entitled to
benefits under her Change of Control Agreement with the Company (and in no event shall the executive be entitled to severance
benefits under both agreements). Upon an Involuntary Termination, Ms. Sacco would also have a one-year period to exercise her
previously-vested stock options
.
In
addition, pursuant to the Severance Agreement, Ms. Sacco will generally be subject to certain non-competition and non-solicitation
restrictions for an 18-month period following a termination of employment for any reason (other than in connection with a Change
of Control (as defined in her Severance Agreement)).
The
foregoing description of the Severance Agreement is a summary, is not complete and is qualified in its entirety by reference to
the form of severance agreement as previously filed as Exhibit 10.5 to the Current Report on Form 8-K filed by the Company on
January 6, 2012, and is incorporated herein by reference.
Item 7.01.
Regulation FD Disclosure.
On
July 2, 2012, the Company issued a press release announcing the closing of the Acquisition and the closing of the Credit Agreement.
The text of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01.
Financial Statements and Exhibits.
(d)
Exhibits
.
2.1
Membership Interest Purchase Agreement, dated as of
May 31, 2012, by and among Hubson Acquisition, LLC, Ehud Baron, Etai Baron, Rivka Grinberg, Yosef Lutwak, Chadwick White, Smart
Balance, Inc., UHF Acquisition Corp. and, solely for purposes of Sections 5.3, 5.7, 5.13, 5.18 and 6.1(b) and Article 9 thereof,
Allan B. Hubbard, in his personal capacity and in his capacity as Trustee of the Allan B. Hubbard Revocable Trust, and Devin Anderson
2.2
First Amendment to the Membership Interest Purchase
Agreement, dated as of June 29, 2012, by and between Smart Balance, Inc. and Hubson Acquisition, LLC
10.1
Credit Agreement, dated as of July 2, 2012, by and
among GFA Brands, Inc., Glutino USA, Inc., UHF Acquisition Corp. and Udi's Healthy Foods, LLC, as borrowers, Smart Balance,
Inc., as a guarantor, the other guarantors from time to time party thereto, the lenders from time to time party thereto and Bank
of Montreal, as administrative agent
99.1
Press Release, dated July 2, 2012
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
hereunto duly authorized.
July 2, 2012
SMART BALANCE, INC.
(registrant)
By:
/s/ Christine Sacco
Christine Sacco
Chief Financial Officer
EXHIBIT
INDEX
Exhibit Number
Description
2.1
Membership Interest Purchase Agreement, dated as of May 31, 2012, by and among Hubson Acquisition, LLC, Ehud Baron, Etai Baron, Rivka Grinberg, Yosef Lutwak, Chadwick White, Smart Balance, Inc., UHF Acquisition Corp. and, solely for purposes of Sections 5.3, 5.7, 5.13, 5.18 and 6.1(b) and Article 9 thereof, Allan B. Hubbard, in his personal capacity and in his capacity as Trustee of the Allan B. Hubbard Revocable Trust, and Devin Anderson
2.2
First Amendment to the Membership Interest Purchase
        Agreement, dated as of June 29, 2012, by and between Smart Balance, Inc. and Hubson Acquisition, LLC
10.1
Credit Agreement, dated as of July 2, 2012,
        by and among GFA Brands, Inc., Glutino USA, Inc., UHF Acquisition Corp. and Udi's Healthy Foods, LLC, as borrowers, Smart
        Balance, Inc., as a guarantor, the other guarantors from time to time party thereto, the lenders from time to time party thereto
        and Bank of Montreal, as administrative agent
99.1
Press
        Release, dated July 2, 2012