As filed with the Securities and Exchange Commission on June 21, 2024

Registration No. 333-273392

 

  

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

POST-EFFECTIVE AMENDMENT NO. 2

TO

FORM S-1

ON

FORM S-3

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

SmartKem, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware 85-1083654
(State or other jurisdiction of
(I.R.S. Employer Identification Number)
incorporation or organization)  

 

Manchester Technology Center, Hexagon Tower

Delaunays Road, Blackley

Manchester, M9 8GQ U.K.

011-44-161-721-1514

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

Barbra C. Keck

Chief Financial Officer

Manchester Technology Center, Hexagon Tower

Delaunays Road, Blackley

Manchester, M9 8GQ U.K.

011-44-161-721-1514

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

Copy to:

John D. Hogoboom, Esq.

Tracy F. Buffer, Esq.

Lowenstein Sandler LLP

1251 Avenue of the Americas

New York, New York 10020

(646) 414-6846

 

Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective.

 

If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ¨

 

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. x

 

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

 

If this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨

 

If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer: ¨ Accelerated filer: ¨
Non-accelerated filer: x Smaller reporting company: x
    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 7(a)(2)(B) of Securities Act. ¨

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission acting pursuant to said Section 8(a), may determine.

 

 

 

 

 

  

EXPLANATORY NOTE

 

On July 24, 2023, we filed a registration statement with the Securities and Exchange Commission (the “SEC”) on Form S-1 (File No. 333- 273392) (the “Registration Statement”). The Registration Statement was initially declared effective by the SEC on July 28, 2023 and initially registered the offer and sale from time to time by the selling stockholders of up to 3,234,234 shares of our common stock, $0.0001 par value per share, which consisted of shares of (i) shares of common stock issued or issuable upon exercise of our Series A-1 Preferred Stock (the “Series A-1 Preferred Stock”) issued to selling stockholders in the private placement offering (the “Private Placement”) that closed in June of 2023 (the “Private Placement”), (ii) shares of our common stock issued or issuable upon the conversion of our Series A-2 Preferred Stock (the “Series A-2 Preferred Stock”) issued to selling stockholders in the Private Placement and (iii) shares of our common stock issuable upon the exercise of Class A Warrants (the “Class A Warrants”) issued to selling stockholders in the Private Placement.

 

We are filing this Post-Effective Amendment No. 2 to the Registration Statement (this “Amendment”) to (i) convert the Registration Statement into a registration statement on Form S-3 because we are eligible to use Form S-3 for the transaction covered hereby and (ii) update certain information regarding our company and the securities being offered pursuant to the prospectus contained herein.

 

Updating for sales and transfers, this Amendment covers a total of 2,363,127 shares of common stock originally included in the Registration Statement.

 

All applicable filing fees were paid at the time of filing of the Registration Statement. No additional securities are being registered under this Amendment.

 

 

 

 

The information in this prospectus is not complete and may be changed. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold until the registration statement is effective. This prospectus is not an offer to sell these securities and does not solicit an offer to buy these securities in any state or other jurisdiction where the offer or sale is not permitted.

 

Subject to completion, dated June 21, 2024

 

PRELIMINARY PROSPECTUS

 

SMARTKEM, INC.

 

 

 

2,363,127 Shares of Common Stock

 

This prospectus relates to the sale or other disposition by the selling stockholders identified herein of up to 2,363,127 shares of common stock, par value $0.0001 per share, of SmartKem, Inc., consisting of: (i) shares of common stock issued or issuable upon exercise of our Series A-1 Preferred Stock (the “Series A-1 Preferred Stock”) issued to selling stockholders in the private placement offering (the “Private Placement”) that closed in June of 2023 (the “Private Placement”), (ii) shares of our common stock issued upon the conversion of our Series A-2 Preferred Stock (the “Series A-2 Preferred Stock”) issued to selling stockholders in the Private Placement and (iii) shares of our common stock issuable upon the exercise of Class A Warrants (the “Class A Warrants”) issued to selling stockholders in the Private Placement.

 

We will not receive any proceeds from the sale or other disposition of the shares of our common stock by the selling stockholders. We will, however, receive the proceeds from any cash exercise of the Class A Warrants. The selling stockholders may sell or otherwise dispose of the shares of our common stock offered by this prospectus from time to time through the means described in this prospectus under the caption “Plan of Distribution.” For a list of the selling stockholders, see the section entitled “Selling Stockholders” on page 8 of this prospectus. We have borne and will continue to bear the costs relating to the registration of these shares.

 

Our common stock is listed on the Nasdaq Capital Market under the symbol “SMTK.” The last reported sale price for our common stock on the Nasdaq Capital Market on June 18, 2024 was $6.00 per share.

 

You should read this prospectus and any supplement, together with additional information described under the headings “Additional Information” and “Incorporation of Certain Information by Reference” carefully before you invest.

 

We are an “emerging growth company” and a “smaller reporting company” as defined under the federal securities laws and, as such, are eligible for reduced public company reporting requirements. See “Prospectus Summary – Implications of Being an Emerging Growth Company and a Smaller Reporting Company.”

 

Investing in our common stock involves a high degree of risk. Before making an investment decision. See “Risk Factors” in our most recent Annual Report on Form 10-K as such risk factors may be updated in our subsequent reports filed with the Securities and Exchange Commission, which are incorporated by reference herein, and as may be amended, supplemented or superseded from time to time by other reports we file with the Securities and Exchange Commission.

 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

The date of this prospectus is             , 2024.

 

 

 

 

TABLE OF CONTENTS

 

   Page 
ABOUT THIS PROSPECTUS  1 
PROSPECTUS SUMMARY  2 
THE OFFERING  4 
RISK FACTORS  5 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS  6 
SELLING STOCKHOLDERS  8 
PLAN OF DISTRIBUTION  18 
DESCRIPTION OF SECURITIES  20 
LEGAL MATTERS  25 
EXPERTS  25 
ADDITIONAL INFORMATION  26 
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE  27 

 

 

 

 

ABOUT THIS PROSPECTUS

 

This prospectus is part of a registration statement on Form S-3 we filed with the SEC using the “shelf” registration process. Under this shelf registration process, the selling stockholders may, from time to time, sell or otherwise dispose of the shares of common stock offered by them described in this prospectus. We will not receive any proceeds from the sale or other disposition of the shares of common stock offered by the selling stockholders described in this prospectus. We will, however, receive the proceeds from any cash exercise of the Class A Warrants.

 

Neither we nor the selling stockholders have authorized anyone to provide you with any information or to make any representations other than those contained in this prospectus or any applicable prospectus supplement or any free writing prospectuses prepared by or on behalf of us or to which we have referred you. Neither we nor the selling stockholders take responsibility for and can provide no assurance as to the reliability of, any other information that others may give you. Neither we nor the selling stockholders will make an offer to sell these securities in any jurisdiction where the offer or sale is not permitted.

 

For investors outside the United States: neither we nor the selling stockholders have done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of our securities covered hereby and the distribution of this prospectus outside the United States.

 

This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below under “Additional Information” and “Incorporation of Certain Information by Reference.”

 

We may also provide a prospectus supplement or post-effective amendment to the registration statement to add information to, or update or change information contained in, this prospectus. You should read both this prospectus and any applicable prospectus supplement or post-effective amendment to the registration statement together with the additional information to which we refer you in the sections of this prospectus entitled “Additional Information” and “Incorporation of Certain Information by Reference.”

 

Unless otherwise stated or the context otherwise indicates, references to “SmartKem,” the “Company,” “we,” “our,” “us,” or similar terms refer to SmartKem, Inc. and its subsidiaries.

 

1

 

 

PROSPECTUS SUMMARY

 

The following summary highlights some information from this prospectus. It is not complete and does not contain all of the information that you should consider before making an investment decision. You should read this entire prospectus, including the “Risk Factors” section on page 5 and the disclosures to which that section refers you, the financial statements and related notes and the other more detailed information appearing elsewhere or incorporated by reference into this prospectus before investing in any of the securities described in this prospectus.

 

Overview

 

We are seeking to reshape the world of electronics with our disruptive organic thin-film transistors (“OTFTs”) that we believe have the potential to drive the next generation of displays. Our patented TRUFLEX® semiconductor and dielectric inks, or electronic polymers, are used to make a new type of transistor that we believe have the capability to revolutionize the display industry. Our inks enable low temperature printing processes that are compatible with existing manufacturing infrastructure to deliver low-cost displays that outperform existing technologies. Our electronic polymer platform can be used in a range of display technologies including microLED, miniLED and AMOLED displays for next generation televisions, laptops, augmented reality (“AR”) and virtual reality (“VR”) headsets, smartwatches and smartphones.

 

Implications of Being an Emerging Growth Company and a Smaller Reporting Company

 

As a company with less than $1.235 billion in revenue during our last fiscal year, we qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or JOBS Act, and as a “smaller reporting company” under applicable SEC regulations. An emerging growth company and a smaller reporting company may take advantage of reduced reporting requirements that are otherwise applicable to public companies. These provisions include, but are not limited to:

 

·being permitted to present only two years of audited financial statements and only two years of related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure in our periodic reports and registration statements, including this prospectus; reduced disclosure about our executive compensation arrangements;
·not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, as amended, on the effectiveness of our internal controls over financial reporting;
·reduced disclosure obligations regarding executive compensation arrangements in our periodic reports, proxy statements and registration statements, including this prospectus; and
·exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

 

We will cease to be an emerging growth company on the last day of our fiscal year in which the fifth anniversary of the first sale of our common stock pursuant to our initial registration statement occurs. However, if certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenues exceed $1.235 billion or we issue more than $1.0 billion of non- convertible debt in any three-year period, we will cease to be an emerging growth company prior to the end of such five-year period. We will continue to be a smaller reporting company as long as we have a public float (determined as of the end of our second fiscal quarter) of less than $250 million or have annual revenues of less than $100 million as of the last fiscal year for which we have audited financial statements and a public float of less than $700 million.

 

We have elected to take advantage of certain of the reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, the information that we provide to our stockholders may be different than you might receive from other public reporting companies in which you hold equity interests.

 

2

 

 

The JOBS Act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards, until those standards apply to private companies. We have elected to take advantage of the benefits of this extended transition period and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies. Our financial statements may therefore not be comparable to those of companies that comply with such new or revised accounting standards. Until the date that we are no longer an emerging growth company or affirmatively and irrevocably opt out of the exemption provided by Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Securities Act”), upon issuance of a new or revised accounting standard that applies to our financial statements and that has a different effective date for public and private companies, we will disclose the date on which we will adopt the recently issued accounting standard.

 

If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

 

Corporate Information

 

We were incorporated as Parasol Investments Corporation in the State of Delaware on May 13, 2020. SmartKem Limited was incorporated under the laws of England and Wales on July 21, 2008. On February 23, 2021, we completed an exchange with SmartKem Limited and the former shareholders of SmartKem Limited (the “Exchange”) pursuant to which substantially all of the equity interests in SmartKem Limited were exchanged for shares of our common stock, and SmartKem Limited became our wholly owned subsidiary. Immediately following the Exchange, the business of SmartKem Limited became our business and we changed our name to “SmartKem, Inc.” Prior to the Exchange, Parasol Investments Corporation was a “shell” company registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with no specific business plan or purpose until it began operating the business of SmartKem Limited following the closing of the Exchange.

 

Our principal executive offices are located at Manchester Technology Center, Hexagon Tower, Delaunays Road, Blackley Manchester, M9 8GQ U.K. Our telephone number is 011-44-161-721-1514. Our website address is www.smartkem.com. Information contained on, or that can be accessed through, our website is not a part of this prospectus.

 

All trademarks, service marks and trade names appearing in this prospectus are the property of their respective holders. Use or display by us of other parties’ trademarks, trade dress, or products in this prospectus is not intended to, and does not, imply a relationship with, or endorsements or sponsorship of, us by the trademark or trade dress owners.

 

3

 

 

THE OFFERING

 

The following summary of the offering contains basic information about the offering and our securities and is not intended to be complete. It does not contain all the information that may be important to you. For a more complete understanding of our securities, please refer to the section titledDescription of Securities.

 

Common stock offered by the selling stockholders   2,363,127 shares
     
Common stock outstanding as of June 10, 2024   1,713,900 shares
     
Use of proceeds   We will not receive any proceeds from the sale or other disposition of the shares of our common stock covered hereby by the selling stockholders. We will, however, receive the proceeds from any cash exercise of the Class A Warrants.
     
Offering price   The selling stockholders may sell or otherwise dispose of all or a portion of the shares of our common stock covered hereby through public or private transactions at prevailing market prices or at privately negotiated prices.
     
Risk factors   See “Risk Factors” in our most recent Annual Report on Form 10-K and in our subsequent reports filed with the SEC, which are incorporated by reference herein, and other information in this prospectus for a discussion of the factors you should consider before you decide to invest in our securities.
     
Market for our shares   Our common stock is listed on the Nasdaq Capital Market under the symbol “SMTK.” The last reported sale price for our common stock on the Nasdaq Capital Market on June 18, 2024 was $6.00 per share.

  

4

 

 

RISK FACTORS

 

Investing in our securities involves a high degree of risk. Before purchasing any of the securities you should carefully consider the risk factors incorporated by reference in this prospectus from our most recent Annual Report on Form 10-K and any subsequent updates described in our Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. For a description of these reports and information about where you can find them, see “Additional Information” and “Incorporation of Certain Information By Reference.” Additional risks not presently known or that we presently consider to be immaterial could subsequently materially and adversely affect our financial condition, results of operations, business and prospects.

 

5

 

 

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This prospectus and the documents incorporated by reference in this prospectus contain, and our officers and representatives may from time to time make, forward-looking statements that involve substantial risks and uncertainties. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “estimate,” “believe,” “estimate,” “predict,” “potential” or “continue” or the negative of these terms or other similar expressions intended to identify statements about the future. These statements speak only as of the date of this prospectus and involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements include, without limitation, statements about the following:

 

·the implementation of our business model and strategic plans for our business, technologies and products;
·the rate and degree of market acceptance of any of our products or organic semiconductor technology in
·general, including changes due to the impact of (i) new semiconductor technologies, (ii) the performance of organic semiconductor technology, whether perceived or actual, relative to competing semiconductor materials, and (iii) the performance of our products, whether perceived or actual, compared to competing silicon-based and other products;
·the timing and success of our, and our customers’, product releases;
·our ability to develop new products and technologies;
·our estimates of our expenses, ongoing losses, future revenue and capital requirements, including our needs for additional financing;
·our ability to obtain additional funds for our operations and our intended use of any such funds;
·our ability to remain eligible on an over-the-counter quotation system;
·our receipt and timing of any royalties, milestone payments or payments for products, under any current or future collaboration, license or other agreements or arrangements;
·our ability to obtain and maintain intellectual property protection for our technologies and products and our ability to operate our business without infringing the intellectual property rights of others;
·the strength and marketability of our intellectual property portfolio;
·our dependence on current and future collaborators for developing, manufacturing or otherwise bringing our products to market;
·the ability of our third-party supply and manufacturing partners to meet our current and future business needs;
·our exposure to risks related to international operations;
·our dependence on third-party fabrication facilities;
·the impact of the COVID-19 pandemic and any future communicable disease outbreak on our business and operations;
·our relationships with our executive officers, directors, and significant stockholders;
·our expectations regarding our classification as a “smaller reporting company,” as defined under Exchange Act,” and an “emerging growth company” under the JOBS Act in future periods;
·our future financial performance;
·the competitive landscape of our industry; and
·the impact of government regulation and developments relating to us, our competitors, or our industry.

 

The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein and in the documents incorporated by reference herein or risk factors that we are faced with that may cause our actual results to differ from those anticipate in our forward-looking statements. Factors that may affect our results include, but are not limited to, the risks and uncertainties discussed in the “Risk Factors” section on page 5 of this prospectus, in our Annual Report on Form 10-K or in other reports we file with the SEC.

  

Moreover, new risks regularly emerge, and it is not possible for our management to predict or articulate all risks we face, nor can we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from those contained in any forward-looking statements. The Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act, do not protect any forward-looking statements that we make in connection with this offering. All forward-looking statements included in this prospectus and in the documents incorporated by reference in this prospectus are based on information available to us on the date of this prospectus or the date of the applicable document incorporated by reference. Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained above and throughout this prospectus and in the documents incorporated by reference in this prospectus. We qualify all of our forward-looking statements by these cautionary statements.

 

6

 

 

USE OF PROCEEDS

 

All of the shares of common stock offered by the selling stockholders pursuant to this prospectus will be sold or disposed of by the selling stockholders for their respective accounts. We will not receive any proceeds from the sale or other disposition of the shares of common stock covered hereby. We will, however, receive the proceeds from any cash exercise of the Class A Warrants.

 

7

 

 

SELLING STOCKHOLDERS

 

This prospectus covers the sale or other disposition by the selling stockholders identified below of up to 2,363,127 shares of our common stock. The common stock being offered by the selling stockholders were issued or are issuable to the selling stockholders upon the conversion of Series A-1 Preferred Stock and Series A-2 Preferred Stock and exercise of the Class A Warrants. The shares of Series A-1 Preferred Stock, shares of Series A-2 Preferred Stock and Class A Warrants were issued in the Private Placement, which closed in June of 2023. We will not receive any proceeds from the resale of the common stock by the selling stockholders. We will, however, receive the proceeds from any cash exercise of the Class A Warrants.

 

Except as disclosed in the footnotes below, none of the selling stockholders has been an officer or director of ours or any of our predecessors or affiliates within the last three years. Except as disclosed in the footnotes below, no selling stockholder had a material relationship with us or any of our affiliates within the last three years.

 

The following table and the accompanying footnotes are based in part on information supplied to us by the selling stockholders. The table and footnotes assume that the selling stockholders will sell all of the shares registered hereby. However, because the selling stockholders may sell all or some of their shares under this prospectus from time to time, or in another permitted manner, we cannot assure you as to the actual number of shares that will be sold by the selling stockholders in this offering or that will be held by the selling stockholders after completion of this offering. We do not know how long the selling stockholders will hold the shares before selling them. The inclusion of any shares in this table does not constitute an admission of beneficial ownership by the persons named below. See “Plan of Distribution.”

 

Certain selling stockholders own warrants and convertible preferred stock that contain blockers preventing the exercise or conversion thereof, as applicable, if as a result of such exercise or conversion, the holder would beneficially own more than 4.99% or 9.99%, as applicable, of our common stock. The number of shares listed in the first and third columns of the table below assume the exercise in full of the warrants and the conversion in full of the convertible preferred stock held by each selling stockholder without giving effect to such blockers, but the percentages set forth in the fourth column give effect to such blockers.

 

Name of Selling Stockholder  Shares
Beneficially
Owned prior
to Offering
   Shares
Offered
by this
Prospectus
     Shares
Beneficially
Owned after
Offering
    Percentage of
Shares

Beneficially
Owned after
Offering (%)(1)
 
Candy D’Azevedo under the Pauline M. Howard Trust dtd 01.02.98(2)   5,716   5,716(3)        
Thomas A. McGurk, Jr.  5,716   5,716(4)         
Peter Ohler  19,430   19,430(5)         
David Rarey  3,073   2,286(6)    787    * 
Casimir S. Skrzypczak  3,044   2,286(7)    758(8)   * 
The Glen Sato & Hope G. Nakamura Trust dtd 11.01.01(9)   3,401   2,286(10)    1,115(11)   * 
Frank Berman  2,286   2,286(12)         
Jeffrey Berman  17,716   9,144(13)    8,572(14)   * 
Lee Harrison Corbin  5,716   5,716(15)         
John V. Wagner, Jr.  7,145   5,716(16)    1,429    * 
Thomas Zahavi  11,430   11,430(17)         
Daniel W. and Allaire Hummel, JTWROS  8,000   8,000(18)         
Robert Burkhardt  5,716   5,716(19)         
Aukee LLC(20)   3,430   3,430(21)         
Stephen Renaud  24,144   9,144(22)    15,000(23)   * 
Michael Silverman  44,003   12,574(24)    31,429(25)   1.8 
Isaac Fruchthandler  1,523   1,144(26)    379(27)   * 
Kirby Frank  6,087   4,572(28)    1,515(29)   * 
Michael Bergstein  5,716   5,716(30)         

 

8

 

 

Celia Berman  2,286   2,286(31)        
Douglas Berman  2,286   2,286(32)        
Chesed Avraham  19,688   13,716(33)   5,972(34)   * 
Fame Associates(35)   30,430   22,858(36)   7,572(37)   * 
Yitzchok Fruchthandler  1,219   916(38)   303(39)   * 
Richard Molinsky  5,716   5,716(40)        
Lindsay Silverman  2,286   2,286(41)        
Michael Zimmerman  3,430   3,430(42)        
MPS Equity Group LLC(43)   8,826   6,630(44)   2,196(45)   * 
Gabriel Feder  1,219   916(46)   303(47)   * 
Samuel Nebenzahl  45,716   45,716(48)        
Jacob L. Bojman  3,043   2,286(49)   757(50)   * 
Yosef Reuven Leizerson  2,293   1,830(51)   463(52)   * 
Jane Renaud  2,286   2,286(53)        
The Prag Living Trust UTD 9/23/2019(54)   11,430   11,430(55)        
Adlane Realty Co. LLC(56)   3,430   3,430(57)        
Charles Alpert  60,859   45,716(58)   15,143(59)   * 
Elizabeth Berman  2,286   2,286(60)        
M. Jake Arjang  3,044   2,286(61)   758(62)   * 
James Satloff  5,716   5,716(63)        
Matthew Arno  2,286   2,286(64)        
James Satloff ttee Emily U Satloff Family Trust u/a 3/25/93(65)   5,716   5,716(66)        
James Satloff ttee Theodore Jean Satloff u/a 10/4/96(67)   5,716   5,716(68)        
Andrew Arno  1,144   1,144(69)        
James Satloff ttee Dustin Nathaniel Satloff u/a 6/1/93(70)   5,716   5,716(71)        
Jesse Arno  2,286   2,286(72)        
Mazel D&K(73)   19,545   13,716(74)   5,829(75)   * 
Gregory Castaldo  5,716   5,716(76)        
Joseph Reda  38,511   13,716(77)   24,795(78)   1.4 
Jonathan Schechter  38,511   13,716(79)   24,795(80)   1.4 
Five Plus Investments LLC(81)   12,173   9,144(82)   3,029(83)   * 
3i, LP(84)   57,144   57,144(85)        
Yehoshua Leib Fruchlander  3,044   2,286(86)   758(87)   * 
Iroquois Master Fund Ltd.(88)   3,775   2,286(89)   1,489    * 
James Mish  1,144   1,144(90)        
Igor Semenov  22,858   22,858(91)        
Iroquois Capital Investment Group, LLC(92)   2,286   2,286(93)        
Yaakov Bodner  60,844   45,716(94)   15,128(95)   * 
Brio Capital Master Fund Ltd.(96)   68,572   68,572(97)        
JED II Associates, LLC(98)   2,858   2,858(99)        
Mel Mac Alt LLC(100)   30,429   22,858(101)   7,571(102)   * 
Daniel Salvas  2,286   2,286(103)        
Steven Rader  5,716   5,716(104)        
Ignite Capital Partners, Inc.(105)   6,858   6,858(106)        
Laskowski Revocable Trust dated 09/22/2018(107)   5,716   5,716(108)        
AME Capital Group LLC(109)   30,429   22,858(110)   7,571(111)   * 
Jordan Bergstein  2,858   2,858(112)        
Zachary Genatt  5,716   5,716(113)        
Seafield Brothers Holdings LLC(114)   5,716   5,716(115)        
HLH Holdings LLC(116)   6,083   4,572(117)   1,511(118)   * 
AIGH Investment Partners LP(119)   1,258,461   474,344(120)   784,117(121)   9.99 
WVP Emerging Manager Onshore Fund LLC - Optimized Equity Series(119)   91,149   29,942(122)    61,207(123)    9.99 

 

9

 

 

WVP Emerging Manager Onshore Fund LLC - AIGH Series(119)    311,306     109,372 (124)    201,934 (125)    9.99  
AIGH Investment Partners LLC(119)    224,873     66,629 (126)    158,244 (127)    9.99  
Hershel Berkowitz   9,130     6,858 (128)    2,272 (129)    *  
Walleye Opportunities Master Fund Ltd(130)    228,572     228,572 (131)         
Timothy Tyler Berry   2,858     2,858 (132)         
The Hewlett Fund LP(133)    798,002     314,286 (134)    483,716 (135)    9.99  
VUZIX Corporation(136)    22,858     22,858 (137)         
Michael Scrobe   2,858     2,858 (138)         
Five Narrow Lane L.P.(139)    271,760     246,760 (140)    25,000     1.2  
Adam J. Krosser   2,286     2,286 (141)         
Kingsbrook Opportunities Master Fund LP(142)    1,715     1,715 (143)         
Anne Berrien Wyman de Boer(144)    17,764     11,430 (145)    6,334 (146)    *  
Justin Daniels   5,716     5,716 (147)         
Cavalry Fund I LP(148)    129,739     129,739 (149)         
WVP Emerging Manager Onshore Fund LLC - Structured Small Cap Lending Series(150)    22,482     22,482 (151)         
Dawson James Securities, Inc.(152)    17,327     4,572 (153)    12,755 (154)    *  
Linda Mackay   3,715     2,286 (155)    1,429 (156)    *  
Barbara J. Glenns   7,513     2,058 (157)    5,455 (158)    *  

   

* Represents less than 1%

 

(1) Percentage is based on 1,713,900 shares of common stock outstanding as of June 10, 2024.

 

(2) Ms. Candy D’Azevedo Bathon is the trustee of the Candy D’Azevedo under the Pauline M. Howard Trust dtd 01.02.98 and has voting and investment control over the securities held by the Candy D’Azevedo under the Pauline M. Howard Trust dtd 01.02.98.
   
(3) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

(4) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

(5) Includes 9,715 shares issuable upon exercise of Class A Warrants.

 

(6) Includes 1,143 shares issuable upon exercise of Class A Warrants.

 

(7) Includes 1,143 shares issuable upon exercise of Class A Warrants.

 

(8) Includes 400 shares issuable upon exercise of Class B Warrants.

 

(9) Mr. Glen Sato is the trustee of the The Glen Sato & Hope G. Nakamura Trust dtd 11.01.01 and has voting and investment control over the securities held by the The Glen Sato & Hope G. Nakamura Trust dtd 11.01.01.

 

(10) Includes 1,143 shares issuable upon exercise of Class A Warrants.

 

(11) Includes 400 shares issuable upon exercise of Class B Warrants.

 

(12) Includes 1,143 shares issuable upon exercise of Class A Warrants.

 

(13) Includes (i) 343 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 4,572 shares issuable upon exercise of Class A Warrants.

 

(14) Includes 8,752 shares issuable upon exercise of warrants issued to the placement agents for the Private Placement (the “Placement Agent Warrants”).

 

(15) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

(16) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

(17) Includes 5,715 shares issuable upon exercise of Class A Warrants.

 

(18) Includes 4,000 shares issuable upon exercise of Class A Warrants.

 

(19) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

10

 

 

(20) Kyle McGurk is the Vice President of Aukee LLC and has voting and investment control over the securities held by Aukee LLC.

 

(21) Includes 1,715 shares issuable upon exercise of Class A Warrants.

 

(22) Includes 4,572 shares issuable upon exercise of Class A Warrants.

 

(23) Includes 15,000 shares issuable upon exercise of Placement Agent Warrants.

 

(24) Includes (i) 343 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 6,287 shares issuable upon exercise of Class A Warrants.

 

(25) Includes 31,429 shares issuable upon exercise of Placement Agent Warrants

 

(26) Includes 572 shares issuable upon exercise of Class A Warrants.

 

(27) Includes 200 shares issuable upon exercise of Class B Warrants.
   
(28) Includes 2,286 shares issuable upon exercise of Class A Warrants.

 

(29) Includes 800 shares issuable upon exercise of Class B Warrants.

 

(30) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

(31) Includes 1,143 shares issuable upon exercise of Class A Warrants.

 

(32) Includes 1,143 shares issuable upon exercise of Class A Warrants.

 

(33) Includes 6,858 shares issuable upon exercise of Class A Warrants.

 

(34) Includes 2,400 shares issuable upon exercise of Class B Warrants.

 

(35) Mr. Abraham Fruchthandler is the general partner of Fame Associates and has voting and investment control over the securities held by Fame Associates.

 

(36) Includes 11,429 shares issuable upon exercise of Class A Warrants.

 

(37) Includes 4,000 shares issuable upon exercise of Class B Warrants.

 

11

 

 

(38) Includes 458 shares issuable upon exercise of Class A Warrants.

 

(39) Includes 160 shares issuable upon exercise of Class B Warrants.

 

(40) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

(41) Includes 1,143 shares issuable upon exercise of Class A Warrants.

 

(42) Includes 1,715 shares issuable upon exercise of Class A Warrants.

 

(43) Mr. Paul Fruchthandler is the sole member of the limited liability company that is the sole member of MPS Equity Group LLC and has voting and investment control over the securities held by MPS Equity Group LLC.

 

(44) Includes 3,315 shares issuable upon exercise of Class A Warrants.

 

(45) Includes 1,160 shares issuable upon exercise of Class B Warrants.

 

(46) Includes 458 shares issuable upon exercise of Class A Warrants.

 

(47) Includes 160 shares issuable upon exercise of Class B Warrants.

 

(48) Includes 22,858 shares issuable upon exercise of Class A Warrants.

 

(49) Includes 1,143 shares issuable upon exercise of Class A Warrants.

 

(50) Includes 400 shares issuable upon exercise of Class B Warrants.

 

(51) Includes 915 shares issuable upon exercise of Class A Warrants.

 

(52) Includes 320 shares issuable upon exercise of Class B Warrants.

 

(53) Includes 1,143 shares issuable upon exercise of Class A Warrants.
   
(54) Mr. Robert B. Prag is the trustee of the Prag Living Trust UTD 9/23/2019 and has voting and investment control over the securities held by the Prag Living Trust UTD 9/23/2019.

 

(55) Includes 5,715 shares issuable upon exercise of Class A Warrants.

 

(56) Mr. Adam Krosser is the manager of Adlane Realty Co. LLC and has voting and investment control over the securities held by Adlane Realty Co. LLC

 

(57) Includes 1,715 shares issuable upon exercise of Class A Warrants.

 

(58) Includes  22,858 shares issuable upon exercise of Class A Warrants.

 

12

 

 

(59) Includes 8,000 shares issuable upon exercise of Class B Warrants.

 

(60) Includes 1,143 shares issuable upon exercise of Class A Warrants.

 

(61) Includes 1,143 shares issuable upon exercise of Class A Warrants.

 

(62) Includes 400 shares issuable upon exercise of Class B Warrants.

 

(63) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

(64) Includes  1,143 shares issuable upon exercise of Class A Warrants.

 

(65) Mr. James Satloff is the trustee of the James Satloff ttee Emily U Satloff Family Trust u/a 3/25/93 and has voting and investment control over the securities held by the James Satloff ttee Emily U Satloff Family Trust u/a 3/25/93

 

(66) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

(67) Mr. James Satloff is the trustee of the James Satloff ttee Theodore Jean Satloff u/a 10/4/96 and has voting and investment control over the securities held by the James Satloff ttee Theodore Jean Satloff u/a 10/4/96.

 

(68) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

(69) Includes 572 shares issuable upon exercise of Class A Warrants.

 

(70) Mr. James Satloff is the trustee of the James Satloff ttee Dustin Nathaniel Satloff u/a 6/1/93 and has voting and investment control over the securities held by theJames Satloff ttee Dustin Nathaniel Satloff u/a 6/1/93.

 

(71) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

(72) Includes 1,143 shares issuable upon exercise of Class A Warrants.

 

(73) Mr. Reuven Dessler is the managing member of Mazel D&K and has voting and investment control over the securities held by Mazel D&K

 

(74) Includes 6,858 shares issuable upon exercise of Class A Warrants.

 

(75) Includes 2,400 shares issuable upon exercise of Class B Warrants.

 

(76) Includes 2,858 shares issuable upon exercise of Class A Warrants.
   
(77) Includes (i) 342 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 6,858 shares issuable upon exercise of Class A Warrants.

 

(78) Includes 24,795 shares issuable upon exercise of Placement Agent Warrants

 

(79) Includes (i) 342 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 6,858 shares issuable upon exercise of Class A Warrants.

 

(80) Includes 24,795 shares issuable upon exercise of Placement Agent Warrants

 

13

 

 

(81) Mr. Reuven Dessler is the sole member of Five Plus Investments LLC and has voting and investment control over the securities held by Five Plus Investments LLC.

 

(82) Includes 4,572 shares issuable upon exercise of Class A Warrants.

 

(83) Includes 1,600 shares issuable upon exercise of Class B Warrants.

 

(84) Maier J. Tarlow is the manager of 3i Management LLC, which is the general partner of 3i, LP and in such capacity has voting and investment control over the securities held by 3i, LP

 

(85) Includes 28,572 shares issuable upon exercise of Class A Warrants.

 

(86) Includes 1,143 shares issuable upon exercise of Class A Warrants.

 

(87) Includes 400 shares issuable upon exercise of Class B Warrants.

 

(88) Iroquois Capital Management L.L.C. is the investment manager of Iroquois Master Fund, Ltd. Iroquois Capital Management, LLC has voting control and investment discretion over securities held by Iroquois Master Fund. As Managing Members of Iroquois Capital Management, LLC, Richard Abbe and Kimberly Page make voting and investment decisions on behalf of Iroquois Capital Management, LLC in its capacity as investment manager to Iroquois Master Fund Ltd. As a result of the foregoing, Mr. Abbe and Mrs. Page may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended) of the securities held by Iroquois Capital Management and Iroquois Master Fund..

 

(89) Includes 1,143 shares issuable upon exercise of Class A Warrants.

 

(90) Includes 572 shares issuable upon exercise of Class A Warrants.

 

(91) Includes  11,429 shares issuable upon exercise of Class A Warrants.

 

(92) Iroquois Capital Management L.L.C. is the investment manager of Iroquois Master Fund, Ltd. Iroquois Capital Management, LLC  has voting control and investment discretion over securities held by Iroquois Master Fund. As Managing Members of Iroquois Capital Management, LLC , Richard Abbe and Kimberly Page make voting and investment decisions on behalf of Iroquois Capital Management, LLC  in its capacity as investment manager to Iroquois Master Fund Ltd. As a result of the foregoing, Mr. Abbe and Mrs. Page may be deemed to have beneficial ownership (as determined under Section 13(d) of the Securities Exchange Act of 1934, as amended) of the securities held by Iroquois Capital Management and Iroquois Master Fund.

 

(93) Includes 1,143 shares issuable upon exercise of Class A Warrants.

 

(94) Includes 22,858 shares issuable upon exercise of Class A Warrants.

 

(95) Includes 8,000 shares issuable upon exercise of Class B Warrants.

 

(96) Mr. Shaye Hirsch is the director of Brio Capital Master Fund Ltd. and has voting and investment control over the securities held by Brio Capital Master Fund Ltd.

 

(97) Includes 34,286 shares issuable upon exercise of Class A Warrants.

 

(98) Mr. Jordan Bergstein is the managing member of JED II Associates, LLC and has voting and investment control over the securities held by JED II Associates, LLC.

 

(99) Includes 1,429 shares issuable upon exercise of Class A Warrants.

 

(100) Mr. Avi Schron is the managing member of Mel Mac Alt LLC and has voting and investment control over the securities held by Mel Mac Alt LLC.

 

14

 

 

(101) Includes 11,429 shares issuable upon exercise of Class A Warrants.
   
(102) Includes 4,000 shares issuable upon exercise of Class B Warrants.

 

(103) Includes 1,143 shares issuable upon exercise of Class A Warrants.

 

(104) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

(105) Mr. Richard Gonda is the president of Ignite Capital Partners, Inc. and has voting and investment control over the securities held by Ignite Capital Partners, Inc.”

 

(106) Includes 3,249 shares issuable upon exercise of Class A Warrants.

 

(107) Mr. Jan Laskowski is the trustee of the Laskowski Revocable Trust dated 09/22/2018 and has voting and investment control over the securities held by Laskowski Revocable Trust dated 09/22/2018.

 

(108) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

(109) Mr. Avi Schron is the managing member of AME Capital Group, LLC and has voting and investment control over the securities held by AME Capital Group, LLC.

 

(110) Includes 11,429 shares issuable upon exercise of Class A Warrants.

 

(111) Includes 4,000 shares issuable upon exercise of Class B Warrants.

 

(112) Includes 1,429 shares issuable upon exercise of Class A Warrants.

 

(113) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

(114) Mr. Robert Haag is the managing member of Seafield Brothers Holdings LLC and has voting and investment control over the securities held by Seafield Brothers Holdings LLC.

 

(115) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

(116) Mr. Aaron Martin is the managing member of HLH Holdings LLC and has voting and investment control over the securities held by HLH Holdings LLC.

 

(117) Includes 2,286 shares issuable upon exercise of Class A Warrants.

 

(118) Includes (i) 796 shares issuable upon conversion of Class B Warrants and (ii) 715 shares issuable upon exercise of pre-funded warrants.

 

(119) Mr. Orin Hirschman is the managing member of AIGH Capital Management, LLC, a Maryland limited liability company (“AIGH CM”), which is an advisor or sub-advisor with respect to the securities held by AIGH Investment Partners, LP (“AIGH LP”), WVP Emerging Manager Onshore Fund, LLC — AIGH Series, and WVP Emerging Manager Onshore Fund, LLC — Optimized Equity Series, and president of AIGH Investment Partners, LLC (“AIGH LLC”). Mr. Hirschman has voting and investment control over the securities indirectly held by AIGH CM and directly by AIGH LP and AIGH LLC.

 

(120) Includes (i) 38,743 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 387,543 shares issuable upon exercise of Class A Warrants.

 

15

 

 

(121) Includes (i) 391,680 shares issuable upon conversion of Class B Warrants, (ii) 41,943 shares issuable upon exercise of pre-funded warrants and (iii) 300,742 shares issuable upon conversion of Class C Warrants

 

(122) Includes (i) 2,742 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 27,200 shares issuable upon exercise of Class A Warrants.

 

(123) Includes (i) 29,696 shares issuable upon exercise of Class B Warrants and (ii) 24,458 shares issuable upon conversion of Class C Warrants
(124) Includes (i) 9,943 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 99,429 shares issuable upon exercise of Class A Warrants.

 

(125) Includes (i) 90,624 issuable upon exercise of Class B Warrants and (ii) 89,486 shares issuable upon conversion of Class C Warrants

 

(126) Includes (i) 6,057 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 60,572 shares issuable upon exercise of Class A Warrants.

 

(127) Includes (i) 84,800 shares issuable upon exercise of Class B Warrants, (ii) 18,989 shares issuable upon exercise of pre-funded warrants and (iii) 54,515 shares issuable upon exercise of Class C Warrants.

 

(128) Includes 3,429 shares issuable upon exercise of Class A Warrants.

 

(129) Includes 1,200 shares issuable upon exercise of Class B Warrants.

 

(130) Mr. William England is the chief executive officer of the manager of Walleye Opportunities Master Fund Ltd and in such capacity has voting and investment control over the securities held by Walleye Opportunities Master Fund Ltd.

 

(131) Includes (i) 11,428 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 114,286 shares issuable upon exercise of Class A Warrants.

 

(132) Includes 1,429 shares issuable upon exercise of Class A Warrants.

 

(133) Mr. Martin Chopp is the general partner of The Hewlett Fund LP and has voting and investment control over the securities held by The Hewlett Fund LP.

 

(134) Includes (i) 28,571 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 285,715 shares issuable upon exercise of Class A Warrants.

 

(135) Includes (i) 106,430 shares issuable upon exercise of Class B Warrants and (ii) 257,143 shares issuable upon the exercise of Class C Warrants.

 

(136) Mr. Paul Travers is the chief executive officer of VUZIX Corporation and has voting and investment control over the securities held by VUZIX Corporation.

 

(137) Includes  (ii) 11,429 shares issuable upon exercise of Class A Warrants.

 

(138) Includes 1,429 shares issuable upon exercise of Class A Warrants.

 

(139) Mr. Arie Rabinowitz is a managing member of Five Narrow Lane L.P. and has voting and investment control over the securities held by Five Narrow Lane L.P.

 

(140) Includes (i) 13,714 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 137,143 shares issuable upon exercise of Class A Warrants.

 

(141) Includes ,143 shares issuable upon exercise of Class A Warrants.

 

(142) Kingsbrook Partners LP (“Kingsbrook Partners”) is the investment manager of Kingsbrook Opportunities Master Fund LP (“Kingsbrook Opportunities”) and consequently has voting control and investment discretion over securities held by Kingsbrook Opportunities. Kingsbrook Opportunities GP LLC (“Opportunities GP”) is the general partner of Kingsbrook Opportunities and may be considered the beneficial owner of any securities deemed to be beneficially owned by Kingsbrook Opportunities. KB GP LLC (“GP LLC”) is the general partner of Kingsbrook Partners and may be considered the beneficial owner of any securities deemed to be beneficially owned by Kingsbrook Partners. Ari J. Storch, Adam J. Chill and Scott M. Wallace are the sole managing members of Opportunities GP and GP LLC and as a result may be considered beneficial owners of any securities deemed beneficially owned by Opportunities GP and GP LLC. Each of Kingsbrook Partners, Opportunities GP, GP LLC and Messrs. Storch, Chill and Wallace disclaim beneficial ownership of these securities.

 

16

 

 

(143) Includes 1,715 shares issuable upon exercise of Class A Warrants.
   
(144) Anne Berrien Wyman de Boer is the spouse of Mr. de Boer, a member of our board of directors.

 

(145) Includes 5,715 shares issuable upon exercise of Class A Warrants.

 

(146) Includes (i) options to acquire 519 shares exercisable within 60 days of June 10, 2024 held by Mr. de Boer, spouse of Anne Berrien Wyman de Boer and (ii) 100 shares held by held by Mr. de Boer, spouse of Anne Berrien Wyman de Boer.

 

(147) Includes 2,858 shares issuable upon exercise of Class A Warrants.

 

(148) Mr. Thomas Walsh is the managing member of Cavalry Fund I LP and has voting and investment control over the securities held by Cavalry Fund I LP.

 

(149) Includes (i) 11,428 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 114,286 shares issuable upon exercise of Class A Warrants.

 

(150) Mr. Thomas Walsh is the managing member of WVP Emerging Manager Onshore Fund LLC - Structured Small Cap Lending Series and has voting and investment control over the securities held by WVP Emerging Manager Onshore Fund LLC - Structured Small Cap Lending Series.

 

(151) Includes (i) 1,985 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 19,585 shares issuable upon exercise of Class A Warrants.

 

(152) Mr. Richard Aulidino is the president of Dawson James Securities, Inc. and has voting and investment control over the securities held by Dawson James Securities, Inc.

 

(153) Includes (i) 228 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 2,286 shares issuable upon exercise of Class A Warrants.

 

(154) Includes 12,755 shares issuable upon exercise of Placement Agent Warrants.

 

(155) Includes (i) 114 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 1,143 shares issuable upon exercise of Class A Warrants.

 

(156) Includes 1,429 shares issuable upon exercise of Placement Agent Warrants.

 

(157) Includes (i) 114 shares issuable upon conversion of Series A-1 Preferred Stock and (ii) 1,029 shares issuable upon exercise of Class A Warrants.

 

(158) Includes 5,455 shares issuable upon exercise of Placement Agent Warrants.

 

17

 

 

PLAN OF DISTRIBUTION

 

Each Selling Stockholder (the “Selling Stockholders”) of the shares of common stock covered hereby and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their shares of common stock covered hereby on the principal trading market or any other stock exchange, market or trading facility on which shares of our common stock are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling shares of our common stock covered hereby:

 

·ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;
·block trades in which the broker-dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
·purchases by a broker-dealer as principal and resale by the broker-dealer for its account;
·an exchange distribution in accordance with the rules of the applicable exchange;
·privately negotiated transactions;
·settlement of short sales;
·in transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such shares of common stock at a stipulated price per security;
·through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;
·a combination of any such methods of sale; or
·any other method permitted pursuant to applicable law.

 

The Selling Stockholders may also sell the shares of common stock covered hereby under Rule 144 or any other exemption from registration under the Securities Act, if available, rather than under this prospectus.

 

Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of shares of common stock, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2121; and in the case of a principal transaction a markup or markdown in compliance with FINRA Rule 2121.

 

In connection with the sale of the shares of common stock covered hereby or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of our common stock in the course of hedging the positions they assume. The Selling Stockholders may also sell shares of our common stock short and deliver shares of common stock covered hereby to close out their short positions, or loan or pledge shares of common stock covered hereby to broker-dealers that in turn may sell the shares. The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares of common stock covered by this prospectus, which shares of common stock such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

 

The Selling Stockholders and any broker-dealers or agents that are involved in selling the shares of common stock covered hereby may be deemed to be “underwriters” within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the shares purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Stockholder has informed us that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the shares of common stock covered hereby.  

 

We are required to pay certain fees and expenses incurred by us incident to the registration of the shares of common stock covered hereby. We have agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

 

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We agreed to keep the registration statement of which this prospectus forms a part effective until the earlier of (i) the date on which the shares of common stock covered hereby may be resold by the Selling Stockholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for us to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the shares of common stock covered hereby have been sold pursuant to the registration statement of which this prospectus forms a part or Rule 144 under the Securities Act or any other rule of similar effect. The shares of common stock covered hereby will be resold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the shares of common stock covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

 

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the shares of common stock covered hereby may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

 

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DESCRIPTION OF SECURITIES

 

We have authorized capital stock consisting of 300,000,000 shares of common stock and 10,000,000 shares of preferred stock. As of June 10, 2024, we had 1,713,900 shares of common stock issued and outstanding, and 1,106 shares of Series A-1 Preferred Stock issued and outstanding. Unless stated otherwise, the following discussion summarizes the term and provisions of our amended and restated certificate of incorporation and our amended and restated bylaws. This description is summarized from, and qualified in its entirety by reference to, our amended and restated certificate of incorporation and our amended and restated bylaws, which are filed as exhibits to the registration statement of which this prospectus forms a part.

 

Common Stock

 

Voting Rights

 

Each holder of common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors. Our amended and restated certificate of incorporation and our amended and restated bylaws do not provide for cumulative voting rights. Because of this, the holders of a plurality of the shares of common stock entitled to vote in any election of directors can elect all of the directors standing for election, if they should so choose. With respect to matters other than the election of directors, at any meeting of the stockholders at which a quorum is present or represented, the affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at such meeting and entitled to vote on the subject matter shall be the act of the stockholders, except as otherwise required by law. The holders of one-third of the stock issued and outstanding and entitled to vote, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders.

 

Dividends

 

Subject to preferences that may be applicable to any then-outstanding convertible preferred stock, holders of our common stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of legally available funds.

 

We have never paid cash dividends on our common stock. Moreover, we do not anticipate paying periodic cash dividends on our common stock for the foreseeable future. Any future determination about the payment of dividends will be made at the discretion of our board of directors and will depend upon our earnings, if any, capital requirements, operating and financial conditions, contractual restrictions, including any loan or debt financing agreements, and on such other factors as our board of directors deems relevant.

 

Liquidation

 

In the event of our liquidation, dissolution, or winding up, holders of our common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then-outstanding shares of preferred stock.

 

Preferred Stock

 

Our board of directors has the authority, without further action by the stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences, and privileges could include dividend rights, conversion rights, voting rights, redemption rights, liquidation preferences, sinking fund terms, and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. The issuance of preferred stock could adversely affect the voting power of holders of common stock and the likelihood that such holders will receive dividend payments and payments upon liquidation. In addition, the issuance of preferred stock could have the effect of delaying, deferring or preventing change in our control or other corporate action.

 

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Series A-1 Preferred Stock

 

On June 14, 2023, we filed a Certificate of Designation of Preferences, Rights and Limitations with the Secretary of State of the State of Delaware, and on January 29, 2024, we filed an Amended and Restated Certificate of Designation of Preferences, Rights and Limitation with the Secretary of the State of Delaware designating 11,100 shares out of the authorized but unissued shares of its preferred stock as Series A-1 Preferred Stock with a stated value of $10,000 per share (as amended and restated, the “Series A-1 Certificate of Designation”). The following is a summary of the principal terms of the Series A-1 Preferred Stock as set forth in the Series A-1 Certificate of Designation is qualified in its entirety by reference to the Series A-1 Certificate of Designation, which is included in our amended and restated certificate of incorporation, which is filed as an exhibit to the registration statement of which this prospectus forms a part.

 

Dividends

 

The holders of Series A-1 Preferred Stock are entitled to dividends, on an as-if converted basis, equal to and in the same form as dividends actually paid on shares of common stock, when and if actually paid. In addition, in the event that on December 14, 2024, the trailing 30-day VWAP (as defined in the Series A-1 Certificate of Designation) is less than the then-effective Series A-1 Conversion Price, the Series A-1 Preferred Stock will begin accruing dividends at the annual rate of 19.99% of the stated value thereof (the “Series A-1 Dividend”). The Series A-1 Dividend would be paid in cash, or, at the option of the Company if certain equity conditions are met, in shares of common stock at a price per share equal to ninety percent (90%) of the trailing 10-day VWAP for the last 10 trading date prior to the date the Series A-1 Dividend is paid.

 

Voting Rights

 

The shares of Series A-1 Preferred Stock have no voting rights, except to the extent required by the Delaware General Corporation Law (the “DGCL”).

 

As long as any shares of Series A-1 Preferred Stock are outstanding, we may not, without the approval of a majority of the then outstanding shares of Series A-1 Preferred Stock which must include AIGH Investment Partners LP and its affiliates (“AIGH”) for so long as AIGH is holding at least $1,500,000 in aggregate stated value of Series A-1 Preferred Stock acquired pursuant to the Purchase Agreement (as defined in the Series A-1 Certificate of Designation) (a) alter or change the powers, preferences or rights given to the Series A-1 Preferred Stock, (b) alter or amend our amended and restated certificate of incorporation, the Series A-1 Certificate of Designation or our amended and restated bylaws in such a manner so as to materially adversely affect any rights given to the Series A-1 Preferred Stock, (c) authorize or create any class of stock ranking as to dividends, redemption or distribution of assets upon a Liquidation (as defined below) senior to, or otherwise pari passu with, the Series A-1 Preferred Stock, (d) increase the number of authorized shares of Series A-1 Preferred Stock, (e) issue any Series A-1 Preferred Stock except pursuant to the Purchase Agreement, or (f) enter into any agreement to do any of the foregoing.

 

Liquidation

 

Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the then holders of the Series A-1 Preferred Stock are entitled to receive out of the assets available for distribution to stockholders of the Company an amount equal to 100% of the stated value, plus any accrued and unpaid dividends thereon and any other fees or liquidated damages then due and owing thereon, prior and in preference to the common stock or any other series of preferred stock.

 

Conversion

 

The Series A-1 Preferred Stock is convertible into common stock at any time at a conversion price of $87.50, subject to adjustment for certain anti-dilution provisions set forth in the Series A-1 Certificate of Designation (the “Series A-1 Conversion Price”). Upon conversion the shares of Series A-1 Preferred Stock will resume the status of authorized but unissued shares of preferred stock of the Company.

 

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Conversion at the Option of the Holder

 

The Series A-1 Preferred Stock is convertible at the then-effective Series A-1 Conversion Price at the option of the holder at any time and from time to time.

 

Mandatory Conversion at the Option of the Company

 

So long as certain equity conditions are satisfied, we may give notice requiring the holders to convert all of the outstanding shares of Series A-1 Preferred Stock into shares of common stock at the then-effective Series A-1 Conversion Price.

 

Beneficial Ownership Limitation

 

The Series A-1 Preferred Stock cannot be converted to common stock if the holder and its affiliates would beneficially own more than 4.99% (or 9.99% at the election of the holder) of the outstanding common stock. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99% upon notice to us, provided that any increase in this limitation will not be effective until 61 days after such notice from the holder to us and such increase or decrease will apply only to the holder providing such notice.

 

Preemptive Rights

 

No holders of Series A-1 Preferred Stock will, as holders of Series A-1 Preferred Stock, have any preemptive rights to purchase or subscribe for common stock or any of our other securities.

 

Redemption

 

The shares of Series A-1 Preferred Stock are not redeemable by the Company.

 

Negative Covenants

 

As long as any Series A-1 Preferred Stock is outstanding, unless the holders of more than 50% in stated value of the then outstanding shares of Series A-1 Preferred Stock shall have otherwise given prior written consent (which must include AIGH for so long as AIGH is holding at least $1,500,000 in aggregate stated value of Series A-1 Preferred Stock acquired pursuant to the Purchase Agreement), the Company cannot, subject to certain exceptions, (a) enter into, create, incur, assume, guarantee or suffer to exist any indebtedness, (b) enter into, create, incur, assume or suffer to exist any liens, (c) repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its common stock, common stock equivalents or junior securities, (d) enter into any transaction with any affiliate of the Company which would be required to be disclosed in any public filing with the SEC, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company, (e) declare or pay a dividend on junior securities or (f) enter into any agreement with respect to any of the foregoing.

 

Trading Market

 

There is no established trading market for any of the Series A-1 Preferred Stock, and we do not expect a market to develop. We do not intend to apply for a listing for any of the Series A-1 Preferred Stock on any securities exchange or other nationally recognized trading system.

 

Transfer Agent and Registrar

 

The transfer agent and registrar for our common stock and Series A-1 Preferred Stock is VStock Transfer, LLC. The transfer agent’s address is 18 Lafayette Place, Woodmere, NY 11598, and its telephone number is (212) 828-8436.

 

22

 

 

Anti-Takeover Effects of Certain Provisions of Delaware Law, Our Amended and Restated Certificate of Incorporation and Our Amended and Restated Bylaws

 

Certain provisions of Delaware law and certain provisions included in our amended and restated certificate of incorporation and in our amended and restated bylaws summarized below may be deemed to have an anti-takeover effect and may delay, deter, or prevent a tender offer or takeover attempt that a stockholder might consider to be in its best interests, including attempts that might result in a premium being paid over the market price for the shares held by stockholders.

 

Preferred Stock

 

Our amended and restated certificate of incorporation contains provisions that permit our board of directors to issue, without any further vote or action by the stockholders, shares of preferred stock in one or more series and, with respect to each such series, to fix the number of shares constituting the series and the designation of the series, the voting rights (if any) of the shares of the series and the powers, preferences, or relative, participation, optional, and other special rights, if any, and any qualifications, limitations, or restrictions, of the shares of such series.

 

Classified Board of Directors

 

Our amended and restated certificate of incorporation provides that our board of directors is divided into three classes, with the number of directors in each class being as nearly equal in number as possible. The directors in each class serve for a three-year term, one class being elected each year by our stockholders, with staggered three-year terms. These provisions may have the effect of deferring, delaying or discouraging hostile takeovers, or changes in control of us or our management.

 

Removal of Directors

 

Our amended and restated certificate of incorporation provides that stockholders may only remove a director for cause.

 

Director Vacancies

 

Our amended and restated certificate of incorporation authorizes only our board of directors to fill vacant directorships.

 

No Cumulative Voting

 

Our amended and restated certificate of incorporation does not provide stockholders with the right to cumulate votes in the election of directors.

 

Special Meetings of Stockholders

 

Our amended and restated certificate of incorporation and amended and restated bylaws provide that, except as otherwise required by law, special meetings of the stockholders may be called only by the chairperson of our board of directors, the chief executive officer, or our board of directors.

 

Advance Notice Procedures for Director Nominations

 

Our bylaws provide that stockholders seeking to nominate candidates for election as directors at an annual or special meeting of stockholders must provide timely notice thereof in writing. To be timely, a stockholder’s notice generally will have to be delivered to and received at our principal executive offices before notice of the meeting is issued by our secretary, with such notice being served not less than 90 nor more than 120 days before the meeting. Although the amended and restated bylaws do not give the board of directors the power to approve or disapprove stockholder nominations of candidates to be elected at an annual meeting, the amended and restated bylaws may have the effect of precluding the conduct of certain business at a meeting if the proper procedures are not followed or may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempting to obtain control of our company.

 

23

 

 

Action by Written Consent

 

Our amended and restated certificate of incorporation and amended and restated bylaws provide that any action to be taken by the stockholders must be effected at a duly called annual or special meeting of stockholders and may not be effected by written consent.

 

Amending our Certificate of Incorporation and Bylaws

 

Our amended and restated certificate of incorporation provides that the affirmative vote of at least 66 2∕3% of the votes entitled to be cast by holders of all outstanding shares then entitled to vote, voting together as a single class, is required to amend certain provisions of our amended and restated certificate of incorporation.

 

Our amended and restated bylaws may be adopted, amended, altered or repealed by stockholders only upon approval of at least 66 2∕3% of the votes entitled to be cast by holders of all outstanding shares then entitled to vote, voting together as a single class. Additionally, our amended and restated certificate of incorporation provides that our bylaws may be amended, altered or repealed by the board of directors.

 

Authorized but Unissued Shares

 

Our authorized but unissued shares of common stock and preferred stock will be available for future issuances without stockholder approval, except as required by the listing standards of any exchange upon which our common stock may become listed and could be utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage an attempt to obtain control of our company by means of a proxy contest, tender offer, merger, or otherwise.

 

Exclusive Jurisdiction

 

Our amended and restated certificate of incorporation provides that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware, or if the Court of Chancery does not have jurisdiction, the federal district court for the District of Delaware, is the exclusive forum for (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, or other employee to the us or our stockholders, any action arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws (as either may be amended from time to time), or (iv) (A) any action asserting a claim governed by the internal affairs doctrine of the law of the State of Delaware shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware and (B) the federal district courts of the United States shall be the exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. As a result, the exclusive forum provision will not apply to actions arising under the Exchange Act or the rules and regulations thereunder. Although our amended and restated certificate of incorporation contains the exclusive forum provisions described above, it is possible that a court could find that such provision is inapplicable for a particular claim or action or that such provision is unenforceable, and our stockholders will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

 

Delaware Anti-Takeover Statute

 

We are subject to Section 203 of the DGCL, which prohibits a person deemed an “interested stockholder” from engaging in a “business combination” with a publicly held Delaware corporation for three years following the date such person becomes an interested stockholder unless the business combination is, or the transaction in which the person became an interested stockholder was, approved in a prescribed manner or another prescribed exception applies. Generally, an “interested stockholder” is a person who, together with affiliates and associates, owns, or within three years prior to the determination of interested stockholder status did own, 15% or more of a corporation’s voting stock.

 

Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. The existence of this provision may have an anti- takeover effect with respect to transactions not approved in advance by the board of directors, such as discouraging takeover attempts that might result in a premium over the price of our common stock.

 

24

 

 

LEGAL MATTERS

 

The validity of the shares of our common stock covered by this prospectus will be passed upon for us by Lowenstein Sandler LLP, New York, New York.

 

EXPERTS

 

The financial statements as of December 31, 2022 and for the year ended December 31, 2022 incorporated by reference herein have been so incorporated in reliance on the report of BDO LLP, an independent registered public accounting firm (the report on the financial statements contains an explanatory paragraph regarding the Company’s ability to continue as a going concern) incorporated by reference herein, given on the authority of said firm as experts in auditing and accounting. BDO LLP, Manchester, United Kingdom, is a member of the Institute of Chartered Accountants in England and Wales.

 

The financial statements as of December 31, 2023 and for the year in the period ended December 31, 2023 incorporated by reference herein have been so incorporated in reliance on the report of Marcum, LLP, an independent registered public accounting firm  incorporated by reference herein, given on the authority of said firm as experts in auditing and accounting.

 

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ADDITIONAL INFORMATION

 

We have filed with the SEC a registration statement on Form S-3 under the Securities Act with respect to the securities offered by this prospectus. Pursuant to SEC rules, this prospectus, which is part of the registration statement, omits certain information, exhibits, schedules and undertakings set forth in the registration statement. For further information pertaining to us and our securities, reference is made to our SEC filings and to the registration statement and the exhibits and schedules to the registration statement of which this prospectus forms a part. Statements contained in this prospectus as to the contents or provisions of any documents referred to in this prospectus are not necessarily complete, and in each instance where a copy of the document has been filed as an exhibit to the registration statement, reference is made to the exhibit for a more complete description of the matters involved.

 

In addition, registration statements and certain other filings made with the SEC electronically are publicly available through the SEC’s web site at http://www.sec.gov. The registration statement, including all exhibits and amendments to the registration statement, has been filed electronically with the SEC.

 

We are subject to the information and periodic reporting requirements of the Exchange Act and, in accordance with such requirements, will file periodic reports, proxy statements, and other information with the SEC. These periodic reports, proxy statements, and other information will be available for inspection and copying at the web site of the SEC referred to above. We also maintain a website at www.smartkem.com, at which you may access these materials free of charge as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. The information contained in, or that can be accessed through, our website is not part of, and is not incorporated into, this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.

 

You should rely only on the information in this prospectus and the additional information described above and under the heading “Incorporation of Certain Information by Reference” below. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely upon it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information in this prospectus was accurate on the date of the front cover of this prospectus only. Our business, financial condition, results of operations and prospects may have changed since that date.

 

The representations, warranties and covenants made by us in any agreement that is filed as an exhibit to any document that is incorporated by reference into this prospectus were made solely for the benefit of the parties to such agreement, including, in some cases, for the purpose of allocating risk among the parties to such agreement, and should not be deemed to be a representation, warranty or covenant to you. Moreover, such representations, warranties or covenants were accurate only as of the date when made. Accordingly, such representations, warranties and covenants should not be relied on as accurately representing the current state of our affairs.

 

26

 

 

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

 

The SEC allows us to “incorporate by reference” information that we file with it into this prospectus, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus. The information incorporated by reference is considered to be a part of this prospectus, and information that we file later with the SEC will automatically update and supersede information contained in this prospectus and any accompanying prospectus supplement.

 

We incorporate by reference the documents listed below that we have previously filed with the SEC:

 

·our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on March 27, 2024;
·our Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 filed with the SEC on May 20, 2024;
·our Current Reports on Form 8-K filed with the SEC on January 29, 2024, February 28, 2024, May 31, 2024, and June 17, 2024 (other than any portions thereof deemed furnished and not filed); and
·the description of our common stock contained in our Registration Statement on Form 8-A, filed with the SEC on May 30, 2024.

 

All reports and other documents that we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of the initial filing of the registration statement and prior to effectiveness of the registration statement and after the date of this prospectus but prior to the termination of the offering of the securities hereunder will also be considered to be incorporated by reference into this prospectus from the date of the filing of these reports and documents, and will supersede the information herein; provided, however, that all reports, exhibits and other information that we “furnish” to the SEC will not be considered incorporated by reference into this prospectus. Any statement contained in a document incorporated by reference in this prospectus or any prospectus supplement shall be deemed to be modified or superseded to the extent that a statement contained herein, therein or in any other subsequently filed document that also is incorporated by reference herein or therein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus or any prospectus supplement.

 

We will provide you without charge, upon your oral or written request, with a copy of any or all reports, proxy statements and other documents we file with the SEC, as well as any or all of the documents incorporated by reference in this prospectus or the registration statement (other than exhibits to such documents unless such exhibits are specifically incorporated by reference into such documents). Requests for such copies should be directed to SmartKem, Inc., Attn: Chief Financial Officer, Manchester Technology Center, Hexagon Tower, Delaunays Road, Blackley Manchester, M9 8GQ U.K.. You may also direct any requests for documents to us by telephone at 011-44-161-721-1514.

 

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

 

Item 14. Other Expenses of Issuance and Distribution

 

The following table sets forth the fees and expenses payable by us in connection with the offering of the securities being registered. All amounts are estimated except the SEC registration fee.

 

SEC registration fee  $2,993.78*
Accounting fees and expenses   15,000 
Legal fees and expenses   50,000 
Printing and miscellaneous expenses   5,006.22 
Total  $73,000 

 

* Previously paid.

 

Item 15. Indemnification of Directors and Officers

 

Section 145 of the Delaware General Corporation Law (the “DGCL”) provides, in general, that a corporation incorporated under the laws of the State of Delaware, as we are, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than a derivative action by or in the right of the corporation) by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another enterprise, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person’s conduct was unlawful. In the case of a derivative action, a Delaware corporation may indemnify any such person against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification will be made in respect of any claim, issue or matter as to which such person will have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery of the State of Delaware or any other court in which such action was brought determines such person is fairly and reasonably entitled to indemnity for such expenses.

 

Our amended and restated certificate of incorporation provides that to the fullest extent permitted by the DGCL, a director shall not be personally liable to us or our stockholders for monetary damages for breach of fiduciary duty as a director. Our amended and restated bylaws provide that we shall indemnify and hold harmless our directors and officers to the fullest extent permitted by applicable law, except that we will not be required to indemnify or hold harmless any director or officer in connection with any proceeding initiated by such person unless the proceeding was authorized by our board of directors. Under our amended and restated bylaws, such rights shall not be exclusive of any other rights acquired by directors and officers, including by agreement.

 

Our amended and restated bylaws provide that we will pay expenses to any director or officer prior to the final disposition of the proceeding, provided, however, that such advancements shall be made only upon receipt of an undertaking by such director or officer to repay all amounts advanced if it should be ultimately determined that such director or officer is not entitled to indemnification under the amended and restated bylaws of or otherwise.

 

In addition to the indemnification obligations required by our amended and restated certificate of incorporation and amended and restated bylaws, we have entered into indemnification agreements with each of our directors and officers. These agreements provide for the indemnification of our directors and executive officers for all reasonable expenses and liabilities incurred in connection with any action or proceeding brought or threatened to be brought against them by reason of the fact that they are or were our agents.

 

In connection with our transaction with SmartKem Limited (the “Exchange”), we are also party to an indemnity agreement with our former officers and directors, pursuant to which we agreed to indemnify such former officers and directors for actions taken by them in their official capacities relating to the consideration, approval and consummation of the Exchange and certain related transactions.

 

II-1

 

 

Item 16. Exhibits

 

Exhibit No.   Description
3.1   Amended and Restated Certificate of Incorporation of the Registrant, as amended to date (incorporated by referenced to Exhibit 3.1 to the Company’s Annual Report on Form 10-K filed on March 27, 2024)
     
3.2   Amended and Restated Bylaws of the Registrant, as currently in effect (incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K filed on February 24, 2021)
     
4.1   Form of Class A Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed June 15, 2023)
     
5.1**   Opinion of Lowenstein Sandler LLP
     
23.1*   Consent of Marcum LLP
     
23.2*   Consent of BDO LLP
     
23.3**   Consent of Lowenstein Sandler LLP (included in Exhibit 5.1)
     
24.1**   Power of Attorney (included on the signature page)
     
107**   Filing Fee Table

 

* Filed herewith 

** Previously Filed

 

Item 17. Undertakings

 

(a) The undersigned registrant hereby undertakes:

 

(1)            To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

(i)             To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

 

(ii)            To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Security and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

 

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(iii)           To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

 

Provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.

 

(2)            That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(3)           To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

(4)           That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:

 

(i)            If the registrant is relying on Rule 430B:

 

(A) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and

 

(B) Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which the prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or

 

(C) If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be a part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.

 

(5)            That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the registrant undertakes that in a primary offering of securities of the registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

 

(a) Any preliminary prospectus or prospectus of the registrant relating to the offering required to be filed pursuant to Rule 424;

 

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(b) Any free writing prospectus relating to the offering prepared by or on behalf of the registrant or used or referred to by the registrant;

 

(c) The portion of any other free writing prospectus relating to the offering containing material information about registrant or its securities provided by or on behalf of the registrant; and

 

(d) Any other communication that is an offer in the offering made by a registrant to the purchaser.

 

(6) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

(b)            Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to any charter provision, by law or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Manchester, Great Britain, the United Kingdom on June 21, 2024.

 

  SMARTKEM, INC.
     
  By: /s/ Ian Jenks
   

Ian Jenks

Chief Executive Officer

 

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities held on the dates indicated:

 

Person   Capacity   Date
         
/s/ Ian Jenks   Chief Executive Officer and Director    
Ian Jenks   (Principal Executive Officer)   June 21, 2024
         
/s/ Barbra C. Keck   Chief Financial Officer    
Barbra C. Keck   (Principal Financial and Accounting Officer)   June 21, 2024
         
*        
Klaas de Boer   Director   June 21, 2024
         
*        
Steven DenBaars   Director   June 21, 2024
         
*        
Sri Peruvemba   Director   June 21, 2024
         
*        
Melisa Denis   Director   June 21, 2024
         

 

*By: /s/ Ian Jenks  
Name: Ian Jenks  
Title: Attorney-in-fact  

 

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