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0001817760
0001817760
2026-03-30
2026-03-30
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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):
March 30, 2026
(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.
Series A Preferred
Stock Offering
On
March 30, 2026, SmartKem, Inc. (the "Company") entered into a Securities Purchase Agreement (the "Preferred Stock
Purchase Agreement") with certain institutional investors (collectively, the "Buyers"), including certain March Noteholders
(as defined below) pursuant to which the Company agreed to issue and sell to the Buyers in a private placement (the “Private Placement”),
at an initial closing, (i) 11,411.5 shares of the Company's newly designated Series A Convertible Preferred Stock, par value
$0.0001 per share (the "Series A Preferred Stock"), with a stated value of $1,000 per share, convertible into shares of
the Company's common stock, par value $0.0001 per share (the "Common Stock"), at an initial conversion price of $0.5812 per
share, subject to adjustment as set forth in the Certificate of Designations (as defined below), and (ii) warrants to purchase up
to 23,251,960 shares of Common Stock (the "Warrants"). The purchase price under the Preferred Stock Purchase Agreement may be
satisfied in cash or by exchange of Notes (defined below).
As
previously reported in a Current Report on Form 8-K filed by the Company, on March 18, 2026, entered
into a Securities Purchase Agreement (the "March Note Purchase Agreement") with certain accredited investors (the “March Noteholders”),
pursuant to which the Company agreed to issue and sell to the March Note Holders senior secured promissory notes (the "Notes")
in the aggregate original principal amount of $3,750,000 for an aggregate purchase price of $2,625,000, reflecting an original issue discount
of approximately 30%. Pursuant to the Notes, each March Noteholder may elect to exchange all or any portion of the then outstanding
principal amount of its Note into the securities being issued in such subsequent placement, with the aggregate amount of such securities
valued at 120% of the exchanged principal amount.
Each
Warrant is exercisable for shares of Common Stock at an initial exercise price of $0.5812 per share, subject to adjustment, and is exercisable
at any time after the six-month anniversary of the issuance date and until the third anniversary thereof. The Warrants provide for cashless
exercise in the event a registration statement covering the resale of the shares of Common Stock issuable upon exercise of the Warrants
is not effective. The exercise of the Warrants is subject to a beneficial ownership limitation of 4.99% of the outstanding shares of Common
Stock (adjustable to 9.99% upon 61 days' prior written notice by the holder). The exercise price of the Warrants is subject to customary
adjustments for stock dividends, stock splits and similar transactions, as well as full ratchet anti-dilution protection upon the issuance
of shares of Common Stock or Common Stock equivalents (other than certain excluded securities) at a price per share below the then-effective
exercise price. The exercise price is also subject to adjustment upon certain stock combination events and, following the date the Preferred
Stock Stockholder Approval (as defined below) is obtained, is subject to periodic adjustment to the market price of the Common Stock for
a period of 180 calendar days. Prior to the date the Preferred Stock Stockholder Approval is obtained, no adjustment may reduce the exercise
price below $0.5812.
The
Preferred Stock Purchase Agreement also provides the Buyers with the right, subject to the satisfaction of certain conditions, to require
the Company to participate in one or more additional closings for the purchase of up to an aggregate of 10,000 additional shares of Series A
Preferred Stock and Warrants within 12 months of the initial closing date. In connection with the Preferred Stock Purchase Agreement,
each holder of a Note provided a limited waiver of any term or condition of the transaction documents entered into in connection with
the March Note Purchase Agreement that would otherwise restrict or prohibit the execution and delivery of the Preferred Stock Purchase
Agreement and the other transaction documents entered into in connection therewith and the issuance of the securities thereunder, solely
with respect to the transactions contemplated by the Preferred Stock Purchase Agreement.
The
Preferred Stock Purchase Agreement contains customary representations and warranties of the Company and the Buyers customary for similar
transactions. The representations, warranties and covenants contained in the Preferred Stock Purchase Agreement were made solely for the
benefit of the parties to the Preferred Stock Purchase Agreement and may be subject to limitations agreed upon by the contracting parties.
Accordingly, the Preferred Stock Purchase Agreement is incorporated herein by reference only to provide investors with information regarding
the terms thereof and not to provide investors with any other factual information regarding the Company or its business, and should be
read in conjunction with the disclosures in the Company’s periodic reports and other filings with the SEC.
In
addition, the Preferred Stock Purchase Agreement prohibits the Company from issuing any shares of Series A Preferred Stock (other
than to the Buyers) without the prior written consent of the Required Holders (as defined under the Preferred Stock Purchase Agreement).
During the period commencing on the date of the Preferred Stock Purchase Agreement and ending on the date immediately following the 90th
trading day after the earlier of (x) the effectiveness of the initial registration statement required by the Preferred Stock Registration
Rights Agreement and (y) the date all registrable securities are eligible for resale under Rule 144, the Company and its subsidiaries
are prohibited from directly or indirectly issuing, offering, selling or otherwise disposing of any equity or equity-linked securities,
subject to certain exceptions for employee equity awards, conversions of existing securities and shares issuable under the ELOC Purchase
Agreement (as defined below). Furthermore, the Company and its subsidiaries are prohibited from effecting any variable rate transaction
(other than in connection with the ELOC Purchase Agreement) until the later of (x) the expiration of the additional closing period
and (y) the date no shares of Series A Preferred Stock remain outstanding. The Company is also prohibited from granting, issuing
or selling shares of Common Stock or Common Stock equivalents (other than certain excluded securities) at a price per share less than
the then-effective conversion price of the Series A Preferred Stock during the period commencing on the initial closing date and
ending on the third anniversary of the initial closing date.
The
Company is required to seek stockholder approval (the "Preferred Stock Stockholder Approval"), either by (x) obtaining
the written consent of the requisite stockholders and filing an information statement with the SEC no later than 45 calendar days after
the initial closing date, or (y) holding a special or annual meeting of stockholders no later than the 60th calendar day after the
initial closing date, for (i) an increase in the Company's authorized shares of Common Stock from 300,000,000 to 5,000,000,000, (ii) the
removal of the restriction on stockholder action by written consent, (iii) the issuance of all securities under the Preferred Stock
Purchase Agreement in compliance with the rules and regulations of The Nasdaq Stock Market LLC, (iv) a reverse stock split of
the Common Stock in such ratio as determined by the Board of Directors, and (v) an increase in the number of shares issuable under
the Company's 2021 Equity Incentive Plan. Moreover, until the later of (x) the expiration of the additional closing period and (y) the
date no shares of Series A Preferred Stock remain outstanding, the Company is prohibited from (a) directly or indirectly redeeming,
or declaring or paying any cash dividend or distribution on, any securities of the Company without the prior written consent of the Buyers
(other than as required by the Certificate of Designations) and (b) effecting any stock combination, reverse stock split or similar
transaction without the prior written consent of the Required Holders (except as necessary to maintain the listing of the Common Stock
on The Nasdaq Stock Market LLC). The Company is also required to retain a consultant, recommended by the Required Holders and reasonably
acceptable to the Company, to provide advice on strategic acquisitions and new business development and related consulting services within
30 days of the initial closing date, for compensation not to exceed $240,000.
In
connection with the Preferred Stock Purchase Agreement, on March 30, 2026, the Company entered into a Registration Rights Agreement
(the "Preferred Stock Registration Rights Agreement") with the Buyers, pursuant to which the Company agreed to file a registration
statement with the Securities and Exchange Commission (the "SEC") registering the resale of the shares of Common Stock issuable
upon conversion of the Series A Preferred Stock and exercise of the no later than the tenth day following the Company's filing of its annual report on Form 10-K for the year ended December 31, 2025, and to use its reasonable best efforts to cause such registration statement to be declared effective by the SEC no later than 60
calendar days after the initial closing date (or 120 calendar days if subject to a full review by the SEC). The Preferred Stock Registration
Rights Agreement provides for the payment of certain cash penalties to the Buyers in the event the Company fails to satisfy its registration
obligations thereunder.
The
closing of the Private Placement is expected to take place on our about March 31, 2026, subject to the satisfaction of customary
closing conditions. The gross proceeds of the Private Placement are expected to be $9,129,200, prior to the deduction of any fees and
expenses. The gross proceeds of the Private Placement include the exchange of an aggregate of $3,750,000 which were valued at a premium
of 120% or an aggregate of $4,500,000 in accordance with the terms of the Notes. The Company expects to use the net proceeds from the
Private Placement for working capital and general corporate purposes.
The
foregoing descriptions of the Preferred Stock Purchase Agreement, the Warrants, and the Preferred Stock Registration Rights Agreement
are not complete and are qualified in their entirety by reference to the full text of such documents, copies of which are filed as Exhibits
10.1, 4.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated by reference herein.
Equity Line of Credit
On March 30, 2026, the Company entered into a Common Stock Purchase
Agreement (the "ELOC Purchase Agreement") with an equity line investor (the “Investor”), pursuant to which the Company
has the right, but not the obligation, to sell to the Investor, and the Investor is obligated to purchase, up to the lesser of (a) $500,000,000
and (b) 19.99% of the Company's outstanding shares of Common Stock as of the date of the ELOC Purchase Agreement, which number of shares
shall be reduced, on a share-for-share basis, by the number of shares of Common Stock issued or issuable pursuant to any transaction or
series of transactions that may be aggregated with the transactions contemplated by the ELOC Purchase Agreement under applicable rules
of the Trading Market (as defined under the ELOC Purchase Agreement), (unless stockholder approval is obtained or applicable sales qualify
as "at market" under applicable rules of The Nasdaq Stock Market LLC), from time to time during the period commencing on the
effective date of a registration statement registering the resale of shares issuable under the ELOC Purchase Agreement and ending upon
termination of the ELOC Purchase Agreement. Sales of Common Stock to the Investor under the ELOC Purchase Agreement, if any, will be made
by the Company at its sole discretion from time to time by delivering purchase notices to the Investor (each, a "VWAP Purchase").
The purchase price per share for each VWAP Purchase will be equal to 90% of the lesser of (i) the lowest sale price of the Common Stock
on the applicable purchase date and (ii) the volume weighted average price of the Common Stock during the applicable purchase period.
The Investor's aggregate committed obligation under any single VWAP Purchase shall not exceed $5,000,000. The ELOC Purchase Agreement
prohibits the Company from issuing shares to the Investor to the extent such shares, when aggregated with all other shares of Common Stock
then beneficially owned by the Investor and its affiliates, would cause the Investor's beneficial ownership to exceed 4.99% of the outstanding
shares of Common Stock.
The
ELOC Purchase Agreement requires stockholder approval (the "ELOC Stockholder Approval") to the approve the issuance of shares
of Common Stock to the Investor in excess of 4,220,772 shares (representing 19.99% of the shares of Common Stock outstanding as of the
date of the ELOC Purchase Agreement) in accordance with Nasdaq Listing Rule 5635(d). The Company expects to seek the ELOC Stockholder
Approval concurrently with the Preferred Stock Stockholder Approval. Within two business days following the increase in authorized shares
of Common Stock contemplated by the Preferred Stock Stockholder Approval, the Company is required to confirm that an aggregate of 1,000,000,000
shares of Common Stock have been reserved for issuance under the ELOC Purchase Agreement.
As
consideration for the Investor's irrevocable commitment to purchase shares of Common Stock under the ELOC Purchase Agreement, the Company
agreed to issue to the Investor 10,000 shares of Series A Preferred Stock (the "Commitment Shares"). Pursuant to the ELOC
Purchase Agreement, the Company has agreed to use 25% of the gross proceeds from any sale of shares of Common Stock under the ELOC Purchase
Agreement towards the redemption of the Company's Series A Preferred Stock pursuant to the Company's optional redemption provisions
thereof, including any stated premiums thereon.
In
connection with the ELOC Purchase Agreement, on March 30, 2026, the Company entered into a Registration Rights Agreement (the "ELOC
Registration Rights Agreement") with the Investor, pursuant to which the Company agreed to file a registration statement with the
SEC registering the resale of the shares of Common Stock issuable under the ELOC Purchase Agreement no later than the tenth day following
the Company's filing of its annual report on Form 10-K for the year ended December 31, 2025, and to use its commercially reasonable
efforts to cause such registration statement to be declared effective by the SEC no later than the 60th calendar day following the filing
thereof (or, if not reviewed by the SEC, the third business day following notification that such registration statement will not be reviewed).
The
foregoing descriptions of the ELOC Purchase Agreement and the ELOC Registration Rights Agreement are not complete and are qualified in
their entirety by reference to the full text of such documents, copies of which are filed as Exhibits 10.3 and 10.4, 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 under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The Series A
Preferred Stock, the Warrants and the Commitment Shares were offered and sold in transactions exempt from registration under the Securities
Act, in reliance on Section 4(a)(2) thereof and Rule 506(b) of Regulation D promulgated thereunder.
Item 5.03 Amendments
to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On
March 30, 2026, the Company filed the Certificate of Designations with the Secretary of State of the State of Delaware, establishing
the terms of the Series A Preferred Stock. The Certificate of Designations became effective upon filing. The authorized number of
shares of Series A Preferred Stock is 31,412 shares, each with a par value of $0.0001 per share and a stated value of $1,000 per
share. Each share of Series A Preferred Stock is convertible at any time at the option of the holder into shares of Common Stock
at a conversion rate determined by dividing the conversion amount by the conversion price of $0.5812 per share, with alternate conversion
options available following stockholder approval (at 90% of the lowest VWAP during the five preceding trading days) or upon a triggering
event (at 80% of such VWAP, with the conversion amount subject to a required premium of 125%), in each case subject to a 4.99% beneficial
ownership limitation (adjustable to 9.99% upon 61 days' prior written notice). Dividends are payable when and as declared by the Board
of Directors in its sole discretion, in cash, securities or other assets, on the stated value of each share, provided that upon the occurrence
and continuance of a triggering event, default dividends accrue at a rate of 15.0% per annum.
The
Series A Preferred Stock ranks senior to the Common Stock and all other junior capital stock with respect to dividends, distributions
and payments upon the liquidation, dissolution and winding up of the Company. Upon a liquidation event, holders of Series A Preferred
Stock are entitled to receive, before any payment to holders of junior stock, an amount per share equal to the sum of (i) the Black-Scholes
value of the outstanding portion of all Warrants held by such holder and (ii) the greater of (A) 125% of the applicable conversion
amount and (B) the amount per share such holder would receive upon conversion immediately prior to such event; holders of Series A
Preferred Stock have no voting power except as required by the Delaware General Corporation Law or as set forth in the Certificate of
Designations with respect to certain protective matters requiring the consent of the Required Holders.
The
foregoing description of the Certificate of Designations is not complete and is qualified in its entirety to the full text of such document,
a copy of which is filed as Exhibit 3.1 to this Current Report on Form 8-K and is incorporated by reference herein.
Item 8.01 Other Events
As previously disclosed, August 15, 2025, the Company was notified by the Listing Qualifications Staff
of The Nasdaq Stock Market LLC (“Nasdaq”) that the Company’s securities were subject to delisting based upon the Company’s
non-compliance with the $2.5 million stockholders’ equity requirement set forth in Nasdaq Listing Rule 5550(b) (the “Rule”).
The Company requested a hearing before the Nasdaq Hearings Panel (the “Panel”) to address the deficiency, which request stayed
any delisting action pending the issuance of the Panel’s decision following the hearing.
As a result of the Private Placement, the
Company believes it has stockholders’ equity of at least $2.5 million as of the date of this Current Report on Form 8-K. The Company
awaits Nasdaq’s formal confirmation that it has regained compliance with the Rule and will provide a further update when appropriate.
Furthermore, Nasdaq will continue to monitor the Company’s ongoing compliance with the Rule and, if the Company’s next periodic
report does not evidence compliance with the Rule, the Company may again be subject to delisting.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit No. |
|
Description |
| 3.1 |
|
Certificate of Designations of Rights and Preferences of Series A Convertible Preferred Stock of SmartKem, Inc., filed with the Secretary of State of the State of Delaware on March 30, 2026 |
| 4.1 |
|
Form of Warrant |
| 10.1 |
|
Form of Preferred Stock Purchase Agreement |
| 10.2 |
|
Form of Preferred Stock Registration Rights Agreement |
| 10.3 |
|
Common Stock Purchase Agreement, dated March 27, 2026, by and between SmartKem, Inc. and the investor signatory thereto |
| 10.4 |
|
Registration Rights Agreement, dated March 27, 2026, by and between SmartKem, Inc. and the investor signatory thereto |
| 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: March 31, 2026 |
By: |
/s/ Barbra
C. Keck |
| |
|
Barbra C. Keck |
| |
|
Chief Financial Officer |
