UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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): September 1925, 2023 (September 1819, 2023)

Molekule Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware		001-41096		45-3213164
(State or other jurisdiction  of incorporation)		(Commission  File Number)		(IRS Employer Identification No.)

10455 Riverside Dr. Palm Beach Gardens, FL		33410
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (833) 652-5326

Not Applicable

(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 each exchange on which registered
Common stock, par value $0.01 per share		MKUL		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 2.05 Costs Associated with Exit or Disposal Activities.

On September 18, 2023, Molekule Group Inc. (the “Company”) commenced a plan to reduce the Company’s headcount by approximately 15% (the “Workforce Reduction”). The Workforce Reduction is part of the Company’s cost-reduction efforts intended to reduce operating expenses. The Company expects that it will incur non-recurring costs of approximately $150,000 to $200,000 as a result of this action, principally in severance expenses. The Company expects that the majority of these costs will be incurred in the third quarter of 2023 and the Workforce Reduction, including related cash payments, will be substantially complete by the end of the fiscal year ending December 31, 2023.

The estimates of the charges and expenditures that the Company expects to incur in connection with the Workforce Reduction, and the timing thereof, are subject to several assumptions and the actual amounts incurred may differ from these estimates. In addition, the Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur, including in connection with the implementation of the Workforce Reduction.

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On September 19, 2023, Ritankar Ronti Pal, the Chief Operating Officer of the Company, resigned from all positions at the Company, effective as of September 19, 2023, due to personal reasons.

Item 8.01 Other Events

~~The~~On ~~Company~~September 19, ~~filed a registration~~2023, ~~statement~~the onlegacy ~~Form~~lease ~~S-1~~landlord, ~~(File~~140 ~~No.~~Partners ~~333-274332) with the U~~L.SP. ~~Securities~~(the ~~and~~“Landlord”) ~~Exchange~~filed ~~Commission~~a oncomplaint ~~September~~for 1,breach ~~2023~~of ~~with~~lease ~~respect~~and todeclaratory ~~a potential~~relief ~~rights offering~~ (the “~~Registration Statement~~Complaint”). ~~The~~against ~~rights offering as described in the Registration Statement was subject to~~Molekule, Inc. ~~among other conditions,~~ (the “Company (i”), ~~reaching~~the ansubsidiary ~~agreement~~of ~~with~~Molekule ~~Silicon~~Group, Inc. ~~Valley Bank~~ (“~~SVB~~Molekule Group”), toin ~~restructure~~ the ~~Company’s indebtedness~~Superior ~~and~~Court ~~(ii)~~of ~~renegotiating~~the orState ~~otherwise~~of ~~reaching~~California afor ~~settlement with respect to a legacy building lease, each on terms acceptable to~~ the ~~Company.~~County ~~The~~of ~~Company~~San ~~previously~~Francisco ~~disclosed~~under ~~that if it could not achieve~~ the ~~preceding~~caption ~~conditions~~140 ~~then~~Partners, itL.P. ~~would not be able to continue~~vs asMolekule, Inc. aet ~~going~~al, ~~concern~~Case ~~without restructuring and reorganization initiatives~~No. CGC-23-609205.

The ~~Company~~Complaint ~~recently~~alleges ~~concluded~~that ~~its~~the ~~discussions~~Company ~~and~~has ~~negotiations~~breached ~~with~~ the legacy lease ~~landlord~~between the Landlord and ~~failed~~the Company (the “Lease”) by failing to ~~reach~~timely apay ~~settlement~~monthly rents and ~~agreement~~other ~~acceptable~~additional fees and interests from May 2023 to itSeptember of ~~and~~2023, ~~SVB~~in the amount of at least $1,217,877.87. The AsLandlord adrew ~~result~~down the letter of ~~such~~credit ~~failure~~(the “LOC”), which was provided by the ~~legacy~~Company ~~landlord~~to ~~has~~the ~~communicated~~Landlord ~~that~~in itthe ~~will~~amount beof ~~filing~~$1,673,848.00 as a ~~civil~~security ~~complaint~~pursuant ~~against~~to the ~~Company’s subsidiary~~Lease, ~~for~~to ~~breach~~an ofamount ~~the~~leaving ~~subject~~$1.00 ~~lease~~to credit for ~~damages~~unpaid rents and ~~will~~other ~~seek~~additional tofees ~~attach~~and interests. The Complaint further alleges that the Company failed to timely deposit cash ~~operating~~or ~~accounts~~reinstate ofthe LOC to the ~~Company~~amount of $1,115,898.67 ~~The~~as ~~filing~~required ofunder the ~~landlord~~Lease following the Landlord’s ~~complaint~~drawdown ~~will~~of ~~constitute~~the aLOC. ~~default~~The ~~under~~Complaint ~~the~~states ~~Company’s~~that ~~credit~~there ~~agreement~~is ~~with~~an ~~SVB,~~actual ~~which~~controversy ~~would~~as ~~allow~~to ~~SVB~~whether tothe ~~foreclose~~Lease onrequires the Company’s ~~assets~~to ~~which~~timely ~~constitute~~deposit ~~collateral~~sufficient ~~securing~~cash ~~the~~or ~~credit~~reinstate ~~agreement.~~the ~~Such~~LOC ~~actions~~to ~~by either~~ the ~~legacy landlord~~amount orof ~~SVB~~$1,115,898.67 ~~would~~and ~~prevent~~whether the Company has ~~from~~breached ~~continuing~~the asLease afor ~~going~~failing ~~concern~~to take such actions.

InThe ~~light~~Complaint ~~of the foregoing~~seeks, among ~~the~~other ~~board~~forms of ~~directors~~relief, offor ~~the~~a ~~Company~~judgment ~~has~~for ~~authorized~~ the ~~Company’s~~balance ~~management to commence preparation~~ of aunpaid ~~voluntary~~rent ~~petition~~for ~~under Chapter~~September 2023 11in of the ~~U.S.~~sum ~~Bankruptcy~~of ~~Code (the “Bankruptcy Filing”)~~$107,576.61, ~~The~~together ~~Company~~with any ~~has~~late ~~engaged~~fees ~~bankruptcy~~and ~~counsel~~interest, ~~and~~a isdeclaration ~~currently preparing~~that the ~~Bankruptcy~~Lease ~~Filing.~~requires ~~During such preparations~~ the Company ~~will~~to ~~continue~~deposit tocash ~~have~~or ~~discussions~~reinstate ~~with~~the ~~SVB~~LOC into ~~hopes~~the amount of ~~reaching~~$1,115,898.67 anand ~~agreement~~further ~~with~~damages itresulting ~~prior~~from tothe ~~making~~Company’s ~~the~~alleged ~~Bankruptcy~~breach ~~Filing~~of the Lease.

InThe ~~addition,~~Landlord ~~the~~has ~~Company~~agreed ~~has~~to ~~determined~~a ~~not~~litigation standstill on any further action to ~~proceed~~be ~~with~~taken by it on the ~~rights~~Complaint, ~~offering~~beyond ~~described~~filing inand confirming service on the ~~Registration~~Company, through ~~Statement~~October 2, ~~which~~2023. ~~has~~Following ~~not~~October 2, ~~yet~~2023, ~~been~~the ~~declared~~Landlord ~~effective. Accordingly,~~is free to commence further action against the Company, ~~has~~including, but ~~taken~~not ~~steps~~limited to, ~~withdraw~~ the ~~Registration~~filing ~~Statement~~for asa writ of ~~September~~attachment ~~19,~~against ~~2023~~the assets of the Company.

The filing of the Complaint constitutes a breach of a third party agreement that will have a material adverse effect on the business of Molekule, Inc. and an event of default under Molekule Group’s senior and mezzanine loan and security agreements with Silicon Valley Bank (“SVB”). In addition, Molekule Group and the Company have failed to maintain unrestricted and unencumbered cash with SVB of at least $2,000,000, which is also an event of default under the loan agreements. Each such event of default allows SVB to declare that the debt outstanding under the loan agreements has been accelerated and foreclose on Molekule Group’s assets which constitute collateral securing the loan agreements and would prevent Molekule Group and the Company from continuing as a going concern. In addition, the filing of any writ application by the Landlord against the assets of Molekule Group or the Company would result in SVB foreclosing on its security to protect its first priority secured position. The filing of any service of process by the Landlord seeking to attach any funds of Molekule Group or the Company in an amount greater than $100,000, if not cured within 10 days, is also an event of default under the loan agreements with SVB. As previously disclosed, Molekule Group continues to have discussions with SVB in hopes of reaching an agreement prior to making a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code.

Forward-Looking Statements

This Current Report on Form 8-K contains “forward-looking statements” within the meaning of the “safe harbor” ~~provisions~~ provisions of the Private Securities Litigation Reform Act of 1995. Forward looking statements include statements regarding the potential costs and charges related to the Workforce Reduction and the potential filing of a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code. These forward-looking statements are based upon current beliefs and expectations of our management and are subject to known and unknown risks and uncertainties. Words or expressions such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” “may,” “will,” “projects,” “could,” “should,” “would,” “seek,” “forecast” or other similar expressions help identify forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors. Although Molekule Group believes that the expectations reflected in the forward-looking statements are reasonable based on information currently available, Molekule Group cannot assure you that the expectations will prove to have been correct. Accordingly, you should not place undue reliance on these forward-looking statements. In any event, these statements speak only as of the date of this Current Report on Form 8-K. The parties undertake no obligation to revise or update any of the forward-looking statements to reflect events or circumstances after the date of this Current Report on Form 8-K or to reflect new information or the occurrence of unanticipated events.

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.

	MOLEKULE GROUP, INC.
Dated: September 19, 2023	By:	/s/ Ryan Tyler
Dated: September 25, 2023	By:	/s/ Ryan Tyler
		Name:	Ryan Tyler
		Name: Ryan Tyler
		Title:	Chief Financial Officer
		Title: Chief Financial Officer

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