Debt swap cuts obligations at SmartKem (Nasdaq: SMTK) via equity

Rhea-AI Filing Summary

SmartKem, Inc. entered into a debt conversion agreement that eliminates approximately $2,016,821 of obligations owed by its subsidiary through the issuance of equity securities. The creditor received 385,130 shares of common stock at an ascribed price of $2.75 per share and pre-funded warrants to purchase 348,260 shares at an exercise price of $0.0001 per share.

The pre-funded warrants are immediately exercisable but include a beneficial ownership cap of 4.99%, adjustable up to 9.99% with 61 days’ notice. The transaction was structured as a private, unregistered issuance under Section 4(a)(2) of the Securities Act, reducing accounts payable with no cash consideration and lowering ongoing cash requirements.

Insights

Capital structure and corporate finance analyst

SmartKem swaps about $2.0 million of payables for equity and pre-funded warrants, reducing liabilities without using cash.

SmartKem converted approximately $2,016,821 of obligations owed by its subsidiary into 385,130 common shares at $2.75 plus pre-funded warrants for 348,260 shares at a nominal exercise price of $0.0001. This removes a sizable payable while preserving cash.

The pre-funded warrants include a beneficial ownership cap of 4.99%, which the creditor can adjust up to 9.99% with 61 days’ notice, limiting any single holder’s stake at exercise. The company highlights balance sheet strengthening and reduced ongoing cash requirements, while acknowledging potential dilution from the new equity and warrant exercises.

false 0001817760 0001817760 2026-02-05 2026-02-05 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

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): February 5, 2026

SmartKem, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-42115	85-1083654
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Manchester Technology Center, Hexagon Tower

Delaunays Road, Blackley

Manchester, M9 8GQ U.K.

(Address of principal executive offices, including zip code)

011-44-161-721-1514

(Registrant’s telephone number, including area code)

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))

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

Title of each class		Trading Symbol(s)		Name of exchange on which registered
Common Stock, par value $0.0001 per share		SMTK		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b - 2 of the Securities Exchange Act of 1934 (§240.12b - 2 of this chapter).

Emerging growth company x

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

Item 1.01 Entry into a Material Definitive Agreement.

On February 5, 2026, SmartKem, Inc. (the “Company”) entered into a debt conversion agreement (the “Debt Conversion Agreement”) with SmartKem Limited, a wholly owned subsidiary of the Company, and a creditor (the “Creditor”), pursuant to which the Company agreed to issue to the Creditor (i) 385,130 shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”), at an ascribed price of $2.75 per share and (ii) pre-funded warrants (the “Pre-Funded Warrant”) to purchase 348,260 shares of Common Stock in satisfaction of approximately $2,016,821 owed to the Creditor by SmartKem Limited.

The Pre-Funded Warrants are immediately exercisable at an exercise price of $0.0001 per share and may be exercised at any time until the Pre-Funded Warrants are exercised in full. The Creditor will not have the right to exercise any portion of a Pre-Funded Warrant if it (together with its Attribution Parties (as defined in the Pre-Funded Warrant)) would beneficially own in excess of 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Pre-Funded Warrant. However, the Creditor may increase or decrease such percentage to any other percentage not in excess of 9.99% upon notice to the Company, provided, that any increase in this limitation will not be effective until 61 days after such notice from the Creditor to the Company.

The foregoing descriptions of the Pre-Funded Warrant and Debt Conversion Agreement are not complete and are qualified in their entirety by reference to the full text of the form of Pre-Funded Warrant and the form of the Debt Conversion Agreement, copies of which are filed as Exhibits 4.1 and 10.1, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.

Item 3.02. Unregistered Sales of Equity Securities.

The information set forth in Item 1.01 is incorporated herein by reference. The shares of Common Stock and the Pre-Funded Warrants issued pursuant to the Debt Conversion Agreement were issued in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description
4.1		Form of Pre-Funded Warrant
10.1		Form of Debt Conversion Agreement
99.1		Press Release, dated February 6, 2026
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

Signature

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.

	SMARTKEM, INC.
Dated: February 6, 2026	By:	/s/ Barbra C. Keck
		Barbra C. Keck
		Chief Financial Officer

Exhibit 99.1

PRESS RELEASE

Smartkem Announces Significant Reduction in Accounts Payable Through Debt Conversion Agreement

MANCHESTER, England, February 6, 2026 – Smartkem, Inc. (Nasdaq: SMTK), (“Smartkem” or the “Company”), a leader in advanced materials, today announced that it has entered into a debt conversion agreement, pursuant to which certain outstanding accounts payable of Smartkem were satisfied in full through the issuance of equity securities of the Company.

Under the terms of the agreement, approximately $2.0 million of outstanding obligations owed were converted into a combination of shares of the Company’s common stock and pre-funded warrants at an implied conversion price of $2.75 per share. Upon issuance of the securities, the obligations were fully discharged.

The transaction resulted in a significant reduction of the Company’s accounts payable, with no cash consideration paid. The Company believes the transaction strengthens its balance sheet by removing this obligation and is expected to result in a meaningful reduction in ongoing cash requirements.

The securities were issued in a private transaction exempt from registration under the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof. The securities have not been registered and may not be offered or sold absent registration or an applicable exemption.

About Smartkem

Smartkem is seeking to change the world of electronics with a new class of transistors developed using its proprietary advanced semiconductor materials. Our TRUFLEX® semiconductor polymers enable low temperature printing processes that are compatible with existing manufacturing infrastructure to deliver low-cost, high-performance electronics. Our semiconductor platform can be used in a range of technologies including MicroLED, LCD and AMOLED, as well as in applications in advanced computer and AI chip packaging, sensors, and logic.   

Smartkem designs and develops its materials at its research and development facility in Manchester, UK and operates a field application office in Hsinchu, Taiwan, close to collaboration partner, The Industrial Technology Research Institute (ITRI), where it provides prototyping services. Smartkem is developing a commercial-scale production process and Electronic Design Automation (EDA) tools to demonstrate the commercial viability of manufacturing a new generation of displays using its materials.   

The company has an extensive IP portfolio including 141 granted patents across 17 patent families, 15 pending patents and 40 codified trade secrets. 

For more information, visit the Smartkem website or follow on LinkedIn.  

Smartkem Ltd

Manchester Technology Center, Hexagon Tower,

Delaunays Road, Blackley, Manchester, M9 8GQ UK

+44 (0) 161 721 1514

enquiries@smartkem.com

PRESS RELEASE

Forward-Looking Statements

All statements in this press release that are not historical are forward-looking statements, including, among other things, the impact that the transaction will have on the Company’s balance sheet and its ongoing cash requirements, the potential dilutive effect of the issuance of the securities in connection with the debt conversion agreement, its market position and market opportunity, expectations and plans as to its product development, manufacturing and sales, and relations with its partners and investors. These statements are not historical facts but rather are based on Smartkem, Inc.'s current expectations, estimates, and projections regarding its business, operations and other similar or related factors. Words such as "may," "will," "could," "would," "should," "anticipate," "predict," "potential," "continue," "expect," "intend," "plan," "project," "believe," "estimate," and other similar or elated expressions are used to identify these forward-looking statements, although not all forward-looking statements contain these words. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and assumptions that are difficult or impossible to predict and, in some cases, beyond the Company's control. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in the Company's filings with the Securities and Exchange Commission. The Company undertakes no obligation to revise or update information in this release to reflect events or circumstances in the future, even if new information becomes available.  

Contacts

Selena Kirkwood
Head of Communications for Smartkem

s.kirkwood@smartkem.com

Smartkem Ltd

Manchester Technology Center, Hexagon Tower,

Delaunays Road, Blackley, Manchester, M9 8GQ UK

+44 (0) 161 721 1514

enquiries@smartkem.com

FAQ

What did SmartKem (SMTK) announce in its latest 8-K filing?

SmartKem announced a debt conversion agreement that satisfied approximately $2.0 million of outstanding obligations through issuing common stock and pre-funded warrants. This non-cash transaction fully discharged the obligations and significantly reduced the company’s accounts payable balance, which it believes strengthens its balance sheet and lowers ongoing cash needs.

How much debt did SmartKem (SMTK) convert and into what securities?

SmartKem converted approximately $2,016,821 of obligations into 385,130 shares of common stock at an implied $2.75 per share and pre-funded warrants for 348,260 shares. Together, these equity securities fully discharged the outstanding accounts payable owed to the creditor under the agreement.

What are the key terms of SmartKem’s pre-funded warrants in this transaction?

The pre-funded warrants are immediately exercisable to purchase 348,260 common shares at an exercise price of $0.0001 per share. They remain exercisable until fully used and include a beneficial ownership cap of 4.99%, adjustable up to 9.99% with 61 days’ prior notice to SmartKem.

How does the SmartKem (SMTK) debt conversion affect its cash position?

The transaction required no cash consideration; obligations were settled entirely with equity securities. SmartKem states that this significantly reduces accounts payable and is expected to produce a meaningful reduction in ongoing cash requirements, thereby improving liquidity compared with paying the obligations in cash over time.

Was SmartKem’s debt conversion registered with the SEC?

The common stock and pre-funded warrants issued in the conversion were not registered under the Securities Act. They were issued in a private transaction relying on the exemption in Section 4(a)(2). As a result, the securities cannot be freely resold without registration or another applicable exemption.

Does the SmartKem debt conversion create potential dilution for shareholders?

The transaction issues new common shares and pre-funded warrants that may later convert into additional shares, increasing the share count. SmartKem notes the transaction may have a dilutive effect, though it also emphasizes the benefit of removing the accounts payable and reducing future cash outflows from its balance sheet.