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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 18, 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.
Senior Secured Notes Financing
On
March 18, 2026, SmartKem, Inc. (the “Company”) entered into a Securities Purchase Agreement (the "Purchase Agreement")
with certain accredited investors (the "Buyers"), pursuant to which the Company agreed to issue and sell to the Buyers 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%.
The
Notes do not bear interest unless an Event of Default (as defined therein) has occurred, in which case interest accrues at a rate of
14% per annum. The Notes mature on the six month anniversary of the original issuance date, subject to extension at the option of each
Buyer in the event that an Event of Default has occurred. In addition, if the Company or any of its subsidiaries consummates a subsequent
placement of securities, each Buyer 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.
In
connection with the Purchase Agreement, the Company and its subsidiaries entered into a Security and Pledge Agreement (the "Security
Agreement," and together with the Purchase Agreement, the Notes, and the Guaranties (as defined below), the "Transaction Documents")
in favor of the collateral agent (the "Collateral Agent") for the benefit of the Buyers. Pursuant to the Security Agreement,
the Grantors granted to the Collateral Agent a first priority perfected security interest in all existing and future assets of the Company
and its direct and indirect subsidiaries, including a pledge of all of the capital stock of each subsidiary, as security for the Company's
obligations under the Transaction Documents.
In
connection with the Security Agreement, the Company and its subsidiaries also entered into an Intellectual Property Security Agreement
(the "IP Security Agreement"), pursuant to which the Grantors granted to the Collateral Agent a continuing security interest
in certain of their intellectual property, as additional collateral security for the obligations under the Transaction Documents. In addition,
each subsidiary of the Company executed and delivered Guaranties (the "Guaranties") in favor of the Collateral Agent, for the
benefit of the Buyers, pursuant to which each such subsidiary unconditionally and irrevocably guaranteed the payment and performance of
all of the Company's obligations under the Purchase Agreement, the Notes, and the other Transaction Documents.
The
Purchase Agreement contains customary representations and warranties of the Company and the Buyers, including representations regarding
organization and authority, no conflicts, capitalization, reporting compliance, absence of certain changes, absence of undisclosed liabilities,
intellectual property, and other matters customary for transactions of this type.
The
foregoing descriptions of the Purchase Agreement, the Notes, the Security Agreement, the Guaranties, and the IP Security Agreement do
not purport to be complete and are qualified in their entirety by reference to the full text of the forms of such documents, copies of
which are filed as Exhibits 10.1, 10.2, 10.3, 10.4, and 10.5, respectively, to this Current Report on Form 8-K and are incorporated herein
by reference.
Settlement and Release Agreements
On
March 18, 2026, the Company entered into Settlement Agreements and Releases (collectively, the "Settlement Agreements") with certain
holders (collectively, the "Holders") of those certain Senior Secured Notes (the "Prior Notes") issued by the Company
on October 31, 2025, pursuant to a Securities Purchase Agreement dated June 14, 2023 (as amended, the "Prior Purchase Agreement").
The Settlement Agreements were entered into to resolve certain claims alleged by the Holders against the Company in connection with the
Prior Notes, which claims the Company denied. Pursuant to the Settlement Agreements, the Company agreed to (i) repay each Holder the
outstanding principal amount of its respective Prior Note in full within two (2) business days following the effective date of the Settlement
Agreements, and (ii) pay to the Holders an aggregate cash settlement payment of $300,000 by wire transfer of immediately available funds.
In addition, pursuant to the Settlement Agreements, the Company agreed
to assign, transfer, and convey to Smartkem IP LLC, a Delaware limited liability company, certain of the Company's right, title, and interest
in and to certain patents and patent applications, together with all continuations, continuations-in-part, divisionals, reissues, reexaminations,
extensions, foreign counterparts, and all rights to sue for past, present, and future infringement thereof. In furtherance thereof, the
Company and its subsidiary, Smartkem Ltd, a corporation organized under English law (the "Assignor"), entered into an Intellectual
Property Assignment Agreement (the "IP Assignment Agreement") with Smartkem IP LLC (the "Assignee"), pursuant to which
the Assignor irrevocably conveyed, transferred, and assigned to the Assignee certain of the Assignor's right, title, and interest in and
to certain patents, patent applications, and related intellectual property rights, together with all royalties, fees, income, and proceeds
related thereto, and all claims and causes of action with respect thereto. The Company also agreed to maintain the employment of a designated
patent liaison for a period of six (6) months following the effective date of the Settlement Agreements to provide the Holders with information,
assistance, and support relating to the Assigned IP.
The
Settlement Agreements contain mutual releases pursuant to which the Holders released the Company and its affiliates, and the Company
released the Holders and their affiliates, from any and all claims arising under the Prior Notes and the Prior Purchase Agreement, other
than with respect to the obligations set forth in the Settlement Agreements.
In connection with the Settlement Agreements, the Company and the Holders entered into Waiver and Termination Agreements (the "Waiver
and Termination Agreements") with respect to the Prior Purchase Agreement. Pursuant to the Waiver and Termination Agreements, the Holders
agreed to (i) waive compliance with the Lower Priced Issuance provision set forth in Section 4.12(c) of the Prior Purchase Agreement with
respect to the sale of securities pursuant to the Prior Purchase Agreement, (ii) amend Section 4.12(c) of the Prior Purchase Agreement
to reset the price threshold thereunder to the lowest price per share at which securities are sold in the contemplated registered direct
and private placement offering by the Company, and (iii) subject to the Company's payment of the settlement payment and completion of
the patent assignment contemplated by the Settlement Agreements, terminate the Variable Rate Transaction provision set forth in Section
4.12(b) of the Prior Purchase Agreement.
The
foregoing descriptions of the Settlement Agreements, the IP Assignment Agreement, and the Waiver and Termination Agreements do not purport
to be complete and are qualified in their entirety by reference to the full text of such documents, copies of which are filed as Exhibits
10.6, 10.7, and 10.8, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
Item 2.03 Creation
of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information
set forth in Item 1.01 above regarding the Notes is incorporated by reference into this Item 2.03.
Item 9.01 Financial
Statements and Exhibits.
(d) Exhibits.
| Exhibit
No. |
|
Description |
| 10.1 |
|
Form
of Securities Purchase Agreement |
| 10.2 |
|
Form
of Senior Secured Promissory Note |
| 10.3 |
|
Form
of Security and Pledge Agreement |
| 10.4 |
|
Form
of Guaranty |
| 10.5 |
|
Form
of Intellectual Property Security Agreement |
| 10.6 |
|
Form
of Settlement Agreement and Release |
| 10.7 |
|
Form
of Intellectual Property Assignment Agreement |
| 10.8 |
|
Form
of Waiver and Termination Agreement |
| 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 19, 2026 |
By: |
/s/ Barbra
C. Keck |
| |
|
Barbra C. Keck |
| |
|
Chief Financial Officer |
