SmartKem shares surge 16.49% premarket after converting $2M in payables to equity at $2.75 per share, reducing debt and strengthening balance sheet.

SmartKem surged 16.49% in premarket trading following its announcement of a debt conversion agreement to settle $2.0 million in accounts payable through equity and pre-funded warrants at $2.75 per share. The transaction eliminated the obligation without cash outlay, strengthening the balance sheet and reducing future cash requirements, which investors likely viewed as a liquidity boost. The deal, structured as a private exemption under Section 4(a)(2), underscores the company’s efforts to optimize capital structure amid its focus on advanced semiconductor materials. While a proposed acquisition of Carbonium Core (announced Feb 5) added strategic intrigue, the immediate catalyst was the debt reduction, which directly addressed financial pressures and signaled operational discipline. The pre-funded warrants, exercisable at $0.01, also suggest alignment with long-term value creation, reinforcing positive sentiment.