SmartKem extends third Ferrox bridge loan at $4.5 million, takes $400,000 origination fee
WILMINGTON, Del., July 27. SmartKem, Inc. (Nasdaq: SMTK) funded a $4,500,000 convertible promissory note to Ferrox Critical Minerals, a British Virgin Islands company, collecting a $400,000 origination fee at closing, the company disclosed in an 8-K filed with the Securities and Exchange Commission. The note carries a 5.0% annual interest rate and matures January 31, 2027.
WILMINGTON, Del., July 27. SmartKem, Inc. (Nasdaq: SMTK) funded a $4,500,000 convertible promissory note to Ferrox Critical Minerals, a British Virgin Islands company, collecting a $400,000 origination fee at closing, the company disclosed in an 8-K filed with the Securities and Exchange Commission. The note carries a 5.0% annual interest rate and matures January 31, 2027.
Third note in three months
The July 27 loan follows two earlier bridge notes SmartKem extended to Ferrox, dated April 23 and June 22, 2026. SmartKem holds conversion rights into Ferrox ordinary shares at the lower of an independently appraised fair market value or a price implied by a total Ferrox equity value of $80,000,000, on a fully diluted basis. The company may exercise that option at any time, and the conversion price adjusts for stock dividends, splits, and combinations.
If Ferrox defaults, the interest rate rises to 15% per annum and SmartKem begins collecting a $4,500-per-day default management fee. The note's negative covenants bar Ferrox from redeeming equity, incurring or repaying debt, declaring dividends, disposing of assets, or amending its charter without SmartKem's consent.
Exclusivity and first refusal through year-end
Alongside the note, Ferrox granted SmartKem a right of first refusal on any fundamental transaction. The filing defines that category to include asset or equity transfers, mergers, consolidations, recapitalizations, reorganizations, and new equity or debt raises involving Ferrox or its subsidiaries. Ferrox also extended SmartKem exclusivity on any such transaction through December 31, 2026.
Preferred stock placements run in parallel
The same 8-K disclosed a July 24 additional closing under a Securities Purchase Agreement SmartKem entered March 30, 2026, with institutional investors. At the initial March 30 closing, the company issued 11,411.5 shares of Series A convertible preferred stock and 23,251,960 warrants to purchase common stock. At the July 24 closing, the company added 2,500 preferred shares and 5,377,025 warrants, raising approximately $2.0 million. Earlier additional closings produced approximately $4.0 million on June 22 (5,000 preferred shares, 10,753,615 warrants) and approximately $1.0 million on July 16 (1,250 preferred shares, 2,688,404 warrants). The full agreement covers up to 21,411.5 Series A shares for aggregate proceeds of up to $17,129,200. All securities were placed in reliance on the exemption under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D.