Private Placement (Form 8-K)

Item 3.02 Unregistered Sales of Equity Securities.

On October 7, 2025, SmartKem, Inc. (the "Company") entered into agreements with two consulting firms to provide investor relations related services to the Company, and in consideration for such services, agreed to issue up 500,000 shares (the "Shares") of common stock of the Company, par value $0.0001 per share (the "Common Stock"), subject to certain restrictions. The Shares will be issued and sold in reliance upon the exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), afforded by Section 4(a)(2) of the Securities Act. The Company may enter into similar agreements in the future.

On July 1, 2025, the Company issued 10,000 shares of Common Stock to a vendor as consideration for consulting services. Such issuance was exempt from registration under 4(a)(2) of the Securities Act.

On August 1, 2025, the Company issued 10,000 shares of Common Stock to a vendor as consideration for consulting services. Such issuance was exempt from registration under 4(a)(2) of the Securities Act.

On September 2, 2025, the Company issued 10,000 shares of Common Stock to a vendor as consideration for consulting services. Such issuance was exempt from registration under 4(a)(2) of the Securities Act.

Item 8.01 Other Events.

On October 6, 2025, the Company entered into a non-binding letter of intent (the "LOI") with Jericho Energy Ventures Inc. ("Jericho"), an energy innovation company, to pursue a potential business combination (the "Proposed Transaction"). Under the LOI, the Proposed Transaction would be structured as an all-stock business combination, effected through either a share exchange or statutory merger, pursuant to which the Company would be the surviving legal entity and would continue as a publicly listed company on The Nasdaq Stock Market ("Nasdaq") (such surviving company, the "Combined Company"). Upon the closing of the Proposed Transaction, Jericho stockholders would own 65% and Company stockholders prior to the Proposed Transaction would own 35% of the fully diluted issued and outstanding equity securities of the Combined Company, subject to adjustment in certain circumstances. Brian Williamson, the current chief executive officer of Jericho, would become the chief executive officer of the Combined Company, and the board of directors of the Combined Company would be reconstituted to include a majority of members designated by Jericho, subject to compliance with applicable requirements of Nasdaq and the Securities and Exchange Commission.

The LOI is non-binding, and there can be no assurance that the Company and Jericho will ultimately enter into a definitive agreement for the Proposed Transaction, that the Proposed Transaction will be consummated, or as to the timing or ultimate terms of any Proposed Transaction that may occur. Both the Company and Jericho will need significant additional capital to complete the negotiation of the Proposed Transaction, obtain any required stockholder approvals and ultimately complete the Proposed Transaction. The closing of the Proposed Transaction would be subject to significant closing conditions, including the negotiation of the definitive agreement, the satisfactory completion of due diligence, required board and stockholder approvals, and approval of continued listing by Nasdaq.

In the LOI, the Company and Jericho have agreed to a 60-day exclusivity period to negotiate the terms of a definitive agreement, which exclusivity period is terminable by either party under certain circumstances including, in the case of Jericho, if the Company does not purchase Jericho common shares having a value of at least $500,000 on or prior to November 30, 2025. So long as the LOI is still in effect, upon the earlier of (i) the Company's chief financial officer's good faith determination that the Company has regained compliance with Nasdaq's minimum stockholders' equity requirement and (ii) the Company's issuance of securities (including upon exercise of outstanding convertible securities) for aggregate gross proceeds of not less than $5,000,000, the Company will purchase from treasury Jericho common shares in an amount equal to the greater of (a) $500,000 and (b) 10% of the gross proceeds of such issuances, subject to a cap of $1,000,000. There can be no assurance that the circumstances necessary for the Company to satisfy the requirements for completion of the investment will occur.

No Offer or Solicitation

This Form 8-K does not constitute a solicitation of a proxy, consent, or authorization with respect to any securities or in respect of the Proposed Transaction. This Form 8-K also does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act or an exemption therefrom.