SmartKem, Inc. 8-K

What Happened
SmartKem, Inc. announced it funded a $2,300,000 convertible bridge loan to Ferrox Critical Minerals (BVI) on April 23, 2026. The loan is evidenced by a Convertible Promissory Note that accrues interest at 5.0% per annum, matures October 30, 2026, and may be converted into Ferrox ordinary shares under specified valuation terms.

Key Details

• Principal: $2,300,000 bridge loan issued April 23, 2026; maturity October 30, 2026.
• Interest & fees: 5.0% annual interest (rises to 15% on event of default); SmartKem received a $200,000 origination fee; default management fee of $4,500 per day on default.
• Conversion: SmartKem may convert the note into Ferrox ordinary shares at a per-share price equal to the lower of (i) fair market value from an independent appraisal or (ii) a value based on Ferrox total equity of $80,000,000 on a fully-diluted basis; conversion price subject to customary adjustments.
• Protective provisions: Note includes usual negative covenants, a right of first refusal on specified transfers or transactions (Fundamental Transactions), and Ferrox granted SmartKem exclusivity on any Fundamental Transaction through October 30, 2026.

Why It Matters
This is a financing/investment transaction: SmartKem has deployed cash to a third-party (Ferrox) in exchange for a convertible debt instrument that could convert into equity, giving SmartKem potential upside if Ferrox’s value rises. The terms include protective covenants and ROFR/exclusivity that limit certain Ferrox actions through the note maturity. For investors, the filing signals SmartKem engaging in strategic financing activity that affects its cash allocation and could result in an equity interest in Ferrox; it also creates credit exposure until repayment or conversion. The note’s fees, interest-rate step-up on default, and conversion mechanics are material terms to monitor.