SmartKem funds $2.3M convertible bridge loan

SmartKem, Inc. funded a $2,300,000 convertible bridge loan to Ferrox Critical Minerals, earning a $200,000 origination fee and 5% annual interest until October 30, 2026.

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Form Type

8-K

Rhea-AI Filing Summary

SmartKem, Inc. funded a $2,300,000 convertible bridge loan to Ferrox Critical Minerals, earning a $200,000 origination fee and 5% annual interest until October 30, 2026. The loan is documented by a Convertible Promissory Note.

If Ferrox defaults, the interest rate increases to 15% and SmartKem becomes entitled to a $4,500-per-day default management fee. SmartKem can convert the debt into Ferrox ordinary shares at the lower of fair market value or a price based on an $80,000,000 fully‑diluted equity value.

The Note includes restrictive covenants on Ferrox’s ability to take on debt, pay dividends, or dispose of assets, and grants SmartKem a right of first refusal and exclusivity through October 30, 2026 on major equity, debt, or change‑of‑control “Fundamental Transactions.”

Insights

SmartKem extends a secured-style, high-fee convertible bridge loan with strategic rights over Ferrox.

SmartKem provides a $2.3M bridge loan at 5% interest, plus a $200,000 origination fee, which boosts effective yield. The note matures on October 30, 2026 and can convert into Ferrox equity at a price tied to either fair market value or an $80M fully‑diluted equity valuation.

Default terms are aggressive, with interest stepping up to 15% and a $4,500-per-day default management fee, which increases recovery potential but also signals credit risk if Ferrox struggles. Negative covenants and a right of first refusal over “Fundamental Transactions” give SmartKem influence over Ferrox’s capital structure and potential M&A.

Exclusivity on Fundamental Transactions through October 30, 2026 positions SmartKem as Ferrox’s preferred strategic or financing counterparty during the loan term. Future disclosures about Ferrox’s performance or any conversions or transactions under this framework will clarify whether this remains a credit investment or evolves into a larger equity stake.

8-K Event Classification

2 items: 1.01, 9.01

2 items

Item 1.01 Entry into a Material Definitive Agreement Business

The company signed a significant contract such as a merger agreement, credit facility, or major partnership.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, or exhibit attachments filed with this report.

Key Figures

Bridge loan principal: $2,300,000 Interest rate: 5.0% per annum Maturity date: October 30, 2026 +4 more

7 metrics

Bridge loan principal $2,300,000 Original principal amount of Ferrox Note

Interest rate 5.0% per annum Standard interest on Note before default

Maturity date October 30, 2026 Note maturity

Origination fee $200,000 Fee paid to SmartKem at funding

Default interest rate 15% per annum Interest after default event

Default management fee $4,500 per day Payable to SmartKem upon default

Equity valuation reference $80,000,000 Ferrox fully-diluted equity value for conversion

Key Terms

Convertible Promissory Note, negative covenants, right of first refusal, Fundamental Transaction, +1 more

5 terms

Convertible Promissory Note financial

"evidenced by that certain Convertible Promissory Note (the “Note”)"

A convertible promissory note is a loan a company takes now that can later be turned into shares instead of being repaid in cash. Think of it as lending money with the option to accept ownership in the business down the road; that matters to investors because it affects who gets paid first, how much ownership existing shareholders keep, and the company’s future valuation and cash needs. Terms such as conversion price, interest and maturity determine the financial impact.

negative covenants financial

"The Note also contains customary negative covenants restricting Ferrox’s ability"

right of first refusal financial

"The Note also contains a right of first refusal in favor of the Company"

A right of first refusal gives an existing shareholder or party the chance to buy an asset or shares before the owner can sell them to someone else. Think of it like being offered the first option to buy a house when the owner decides to sell; it matters to investors because it can limit who can acquire a stake, slow or block transactions, and affect the price and liquidity of an investment by restricting open-market sales or new buyers.

Fundamental Transaction financial

"each, a “Fundamental Transaction”"

fully-diluted basis financial

"based on a total equity value of Ferrox of $80,000,000, on a fully-diluted basis"

A fully-diluted basis is a way of counting a company's outstanding shares that includes not only shares already issued but also all shares that could be created from options, warrants, convertible debt, restricted stock units, and other rights. For investors, it shows what ownership percentages and per-share numbers (like earnings or valuation) would look like if every potential share were converted or exercised, similar to counting every possible slice of a pie, not just the slices already served.

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

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

SmartKem disclosed a bridge loan to Ferrox Critical Minerals for $2,300,000, documented by a Convertible Promissory Note. The loan carries 5% annual interest, a $200,000 origination fee, and potential conversion into Ferrox equity at a defined valuation framework.

What are the key economic terms of SmartKem’s loan to Ferrox?

The loan principal is $2,300,000 at 5% annual interest, maturing on October 30, 2026. SmartKem received a $200,000 origination fee. In default, interest increases to 15% and a $4,500-per-day default management fee applies, enhancing potential recovery economics.

How can SmartKem convert its Ferrox loan into equity?

SmartKem can convert the Note into Ferrox ordinary shares at any time. The conversion price per share equals the lower of fair market value from an independent appraisal or a price based on an $80,000,000 fully‑diluted equity valuation for Ferrox.

What rights and protections does SmartKem receive under the Ferrox Note?

The Note includes negative covenants limiting Ferrox’s ability to take on debt, pay dividends, dispose of assets, or amend its charter. SmartKem also gains a right of first refusal and exclusivity on specified “Fundamental Transactions” involving Ferrox or its subsidiaries through October 30, 2026.

What is meant by a Fundamental Transaction in SmartKem’s agreement with Ferrox?

A Fundamental Transaction covers major events such as sales or transfers of capital stock or assets, change‑of‑control mergers or combinations, recapitalizations, and specified equity issuances or debt incurrences. SmartKem holds a right of first refusal and exclusivity over such transactions during the agreement period.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Accepted by SEC EDGAR 04/29/2026 - 04:37 PM EDT

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): April 23, 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 ¨

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 April 23, 2026, SmartKem, Inc. (the “Company”) funded a bridge loan to Ferrox Critical Minerals, a British Virgin Islands company (“Ferrox”), in the original principal amount of $2,300,000.00, which loan was evidenced by that certain Convertible Promissory Note (the “Note”) issued by Ferrox to the Company. The obligations evidenced by the Note shall accrued interest at a rate of 5.0% per annum and will mature on October 30, 2026. Pursuant to the terms of the Note, the Company was paid an originate fee of $200,000.00. Upon an event of default (as defined in the Note), the Company will be paid a default management fee of $4,500.00 per day and the interest rate shall increase to 15% per annum.

The obligations under the Note are convertible into ordinary shares of Ferrox (“Ordinary Shares”) at any time by the Company at a price per Ordinary Share equal to the lower (i) the fair market value of an Ordinary Share at the time of conversion as determined by an independent appraisal firm or (ii) the value of an Ordinary Share determined based on a total equity value of Ferrox of $80,000,000, on a fully-diluted basis. The conversion price is subject to customary adjustments for stock dividends, stock splits and stock combinations.

The Note also contains customary negative covenants restricting Ferrox’s ability to, among other things, redeem any of its equity securities, incur or repay indebtedness, make or declare any dividends or distributions on its equity securities, sell, lease or otherwise dispose of its assets, amend its charter or enter into any transactions with its affiliates.

The Note also contains a right of first refusal in favor of the Company on any (i) direct or indirect transfer, sale, lease, license or encumbrance of all or any portion of the capital stock or assets of Ferrox or any of its subsidiaries (other than (x) inventory to be sold in the ordinary course of business consistent with past practice and (y) sales of immaterial or obsolete assets), (ii) any merger, consolidation or other business combination relating to Ferrox or any of its subsidiaries to the extent such transaction constitutes a change of control, (iii) any recapitalization, reorganization or any other extraordinary business transaction involving or otherwise relating to Ferrox or any of its subsidiaries to the extent such transaction constitutes a change of control or (iv) equity issuance or debt incurrence involving Ferrox or any of its subsidiaries (each, a “Fundamental Transaction”).

Ferrox has also granted the Company exclusivity with respect to any Fundamental Transaction through October 30, 2026.

The foregoing descriptions of the terms of the Note do not purport to be complete and are subject to, and qualified in their entirety by reference to, the Note which is annexed hereto as Exhibit 4.1 and is incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibits		Description
4.1		Convertible Promissory Note issued by Ferrox Critical Minerals to SmartKem, Inc. on April 23, 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: April 29, 2026	By:	/s/ Barbra C. Keck
		Barbra C. Keck
		Chief Financial Officer

Source: View Original Filing on SEC EDGAR

Filing Exhibits & Attachments

4 documents

SmartKem funds $2.3M convertible bridge loan

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