Smartkem (NASDAQ:SMTK) Enters into Agreement with Holders to Amend Terms of 2023 Private Placement

Smartkem, Inc., a Delaware-based company specializing in advanced display technologies, disclosed on a recent Form 8-K filing that it has entered into a Consent and Amendment Agreement with certain securities holders. This agreement pertains to securities issued in the company’s June 2023 private placement. The key highlights of the agreement include amendments to the Purchase Agreement and the Series A-1 Convertible Preferred Stock, aimed at setting conditions effective prior to a Qualified Offering.

The Qualified Offering, defined in the Agreement, involves the sale of common stock and/or common stock equivalents, ensuring a minimum gross proceeds threshold of $4,000,000 to the company. If a Qualified Offering does not take place, the outlined amendments will not materialize, and the current terms of the Purchase Agreement and Series A-1 Preferred Stock will remain in place.

Important amendments to the Purchase Agreement include the removal of certain restrictions related to the issuance of common stock and dividends, as well as changes in terms regarding Variable Rate Transactions and at-the-market offerings. Additionally, conditions have been revised concerning Lower Price Issuances, requiring consent from a majority of Original Significant Purchasers of the Series A-1 Preferred Stock.

In a parallel development, Smartkem has updated the terms of the Series A-1 Preferred Stock through a Second Amendment and Restatement. This amendment notably removes the liquidation preference, reduces the conversion price to $4.34, and triggers an automatic conversion mechanism into common stock or Class C Warrants under specific conditions.

Furthermore, the company engaged in a Hewlett Settlement, wherein it entered a General Release agreement with the Hewlett Fund LP, releasing both parties from any claims related to prior transactions and other matters. Consequently, the Hewlett Fund received Class C Warrants to purchase 750,000 shares of Common Stock, constituting the Hewlett Settlement.

The complete details of the Consent and Amendment Agreement and the Hewlett Settlement can be found in Exhibits 10.1 and 10.2 respectively attached to Smartkem’s Form 8-K filing.

This article is not a definitive account but a summary of the Company’s recent activities. For comprehensive information, refer to the exhibits attached to the Form 8-K filing.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Smartkem’s 8K filing here.

Smartkem Company Profile

SmartKem, Inc, together with its subsidiaries, develops materials and processes used to make organic thin-film (OTFT) transistors for the manufacture of flexible electronics. The company offers TRUFLEX semiconductor and dielectric inks, which uses low temperature printing processes to make transistors for the display industry.