X0202 4 2007-10-15 0 0001331301 SMART BALANCE, INC. SMBL 0001218321 OSS CAPITAL MANAGEMENT 598 MADISON AVENUE NEW YORK NY 10022 0 0 1 0 Common Stock ($.0001 par value) 2007-10-15 4 P 0 27700 11.81 A 3750770 I See Footnote This Form 4 is being filed to report that O.S.S. Capital Management LP, a Delaware limited partnership (the "Investment Manager"), Schafer Brothers LLC, a Delaware limited liability company (the "SB LLC") and Mr. Oscar S. Schafer ("Mr. Schafer", collectively with the Investment Manager and SB LLC, the "Reporting Persons") purchased an additional 27,700 shares of Smart Balance, Inc. (the "Issuer") on October 15, 2007. The Reporting Persons have investment discretion with respect to shares of common stock and warrants held by a Cayman Islands exempted company, two Delaware limited partnerships and a separately managed account which is held for the benefit of a third party as more fully described in: (i) the Form 3 filed on December 28, 2005 (Accession Number: 0000902664-05-002439); (ii) the Form 4 filed on August 8, 2007 (Accession Number: 0000902664-07-002472); (iii) the Form 4 filed on September 9, 2007 (Accession Number: 0000902664-07-002769); (iv) the Form 4 filed on September 11, 2007 (Accession Number: 0000902664-07-002790); (v) the Form 4 filed on September 27, 2007 (Accession Number: 0000902664-07-002890); (vi) the Form 4 filed on September 28, 2007 (Accession Number: 0000902664-07-002907); (vii) the Form 4 filed on October 1, 2007 (Accession Number: 0000902664-07-002915); (viii) the Form 4 filed on October 11, 2007 (Accession Number: 0000902664-07-002964); and (ix) the Form 4 filed on October 15, 2007 (Accession Number: 0000902664-07-002987). Each of the Investment Manager, SB LLC and Mr. Schafer may be deemed to beneficially own 3,750,770 shares of common stock and 1,875,000 warrants, which represent, together, approximately 17.5% of the outstanding shares of common stock and warrants. Each of the Investment Manager, SB LLC, and Mr. Schafer disclaims beneficial ownership of the securities included in this report and this report shall not be deemed an admission that either the Investment Manager, SB LLC, or Mr. Schafer is the beneficial owner of such securities for purposes of Section 16 or for any other purpose. This report shall not be deemed an admission that the Reporting Persons are or have been the beneficial owners of such securities for purposes of Section 16 or for any other purpose. /s/ Oscar S. Schafer 2007-10-16