SmartKem, Inc. 8-K

What Happened
SmartKem, Inc. announced on March 18, 2026 that it entered a Securities Purchase Agreement to issue senior secured promissory notes with an aggregate original principal of $3,750,000 and aggregate purchase price (proceeds) of $2,625,000 (≈30% original issue discount). The Notes mature six months after issuance, accrue no interest unless an Event of Default occurs (then 14% per annum), and are secured by first-priority liens on the Company’s and its subsidiaries’ assets (including pledged subsidiary equity and certain intellectual property). Subsidiaries provided guaranties of SmartKem’s obligations.

On the same date the company also entered Settlement Agreements with holders of prior senior secured notes issued October 31, 2025. Under those agreements SmartKem agreed to repay the outstanding principal of the prior notes within two business days, pay an aggregate $300,000 cash settlement, and assign certain patents and related IP rights to Smartkem IP LLC. The settlement includes mutual releases and related waiver/amendment agreements to provisions of the prior purchase agreement.

Key Details

• New Notes: $3,750,000 aggregate principal; $2,625,000 gross proceeds (≈30% OID); six-month maturity; 0% interest unless default (14% p.a. on default).
• Security: First-priority perfected security interest in all existing and future assets of SmartKem and its subsidiaries, including pledged stock and a separate IP security agreement. Subsidiary guaranties were delivered.
• Conversion/Exchange feature: If the company completes a subsequent securities placement, each Buyer may elect to exchange outstanding Note principal into the new securities, with the securities valued at 120% of the exchanged principal.
• Settlement of prior notes: Repayment of prior note principals within two business days, $300,000 aggregate cash payment, and assignment of specified patents/patent applications (and related rights) to Smartkem IP LLC; a designated patent liaison will be maintained for six months.

Why It Matters
This filing creates a new secured, short-term financial obligation that increases the company’s near-term debt burden while providing immediate cash (net proceeds $2.625M). The lenders hold first-priority liens on company assets and IP and subsidiary guaranties, which elevates creditor claims on company property. The settlement resolves outstanding disputes tied to the prior notes but transfers certain patent rights to Smartkem IP LLC and requires a cash payment of $300,000. Investors should note the short six‑month maturity, the OID (reduced upfront proceeds), the potential equity-exchange feature at 120% value, and the strengthened secured creditor position when assessing near-term liquidity and capitalization.