Filing Details

Accession Number:
0001193125-21-071323
Form Type:
13D Filing
Publication Date:
2021-03-05 15:03:58
Filed By:
Entrepreneurs Fund General Partner Ltd
Company:
Smartkem Inc.
Filing Date:
2021-03-05
SEC Url:
13D Filing
Ownership Summary

Please notice the below summary table is generated without human intervention and may contain errors. Please refer to the complete filing displayed below for exact figures.

Name Sole Voting Power Shared Voting Power Sole Dispositive Power Shared Dispositive Power Aggregate Amount Owned Power Percent of Class
Entrepreneurs Fund General Partner Limited 0 3,585,252 0 3,585,252 3,585,252 14.1%
Entrepreneurs Fund 0 3,585,252 0 3,585,252 3,585,252 14.1%
Filing

 

 

UNITED STATES

SECURITIES & EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D

Under the Securities Exchange Act of 1934

(Amendment No.     )*

 

 

SmartKem, Inc.

(Name of Issuer)

Common Stock, $0.0001 par value per share

(Title of Class of Securities)

83193D 104

(CUSIP Number)

Entrepreneurs Fund LP

Entrepreneurs Fund General Partner Limited

2nd Floor, Windward House, La Route

de la Liberation, St. Helier

Jersey, Channel Islands JE2 3BQ

Attention: Paul Bradshaw

TEL: +44 1534 754500

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

February 23, 2021

(Date of Event Which Requires Filing of This Statement)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ☐

 

 

NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See § 13d-7(b) for other parties to whom copies are to be sent.

 

 

 

*

The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be filed for purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 


CUSIP No.: 83193D 104

 

  1.    

  NAME OF REPORTING PERSON

 

  Entrepreneurs Fund General Partner Limited

  2.  

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☐

 

  3.  

  SEC USE ONLY

 

  4.  

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO (1)

  5.  

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

 

  ☐

  6.  

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Jersey, Channel Islands

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

 

     7.     

  SOLE VOTING POWER

 

  0

     8.   

  SHARED VOTING POWER

 

  3,585,252 (2)

     9.   

  SOLE DISPOSITIVE POWER

 

  0

   10.   

  SHARED DISPOSITIVE POWER

 

  3,585,252 (2)

11.    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  3,585,252 (2)

12.  

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13.  

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  14.1% (3)

14.  

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  HC, CO

 

(1)

The source of funds was working capital of Entrepreneurs Funds (as defined in footnote (2) below).

(2)

The aggregate amount of shares of common stock, $0.0001 par value per share, of the Issuer (the Common Stock) that may be deemed beneficially owned by the Reporting Person is directly held by Entrepreneurs Fund LP (the Entrepreneurs Fund). Entrepreneurs Fund General Partner Limited (the Entrepreneurs General Partner, together with Entrepreneurs Fund, the Entrepreneurs Funds) is the general partner of Entrepreneurs Fund. By virtue of such relationship, Entrepreneurs General Partner may be deemed to have voting and investment power with respect to the securities held by Entrepreneurs Fund. Entrepreneurs General Partner disclaims beneficial ownership of the shares of Common Stock held by Entrepreneurs Fund except to the extent of its indirect pecuniary interest therein.

(3)

Percent of class calculated based on 25,437,000 shares of Common Stock outstanding as of February 23, 2021, as disclosed in the Issuers Current Report on Form 8-K filed with the SEC on February 24, 2021 (the Form 8-K).


CUSIP No.: 83193D 104

 

  1.    

  NAME OF REPORTING PERSON

 

  Entrepreneurs Fund LP

  2.  

  CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)

  (a)  ☐        (b)  ☐

 

  3.  

  SEC USE ONLY

 

  4.  

  SOURCE OF FUNDS (SEE INSTRUCTIONS)

 

  OO (1)

  5.  

  CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e)

 

  ☐

  6.  

  CITIZENSHIP OR PLACE OF ORGANIZATION

 

  Jersey, Channel Islands

NUMBER OF

SHARES

BENEFICIALLY

OWNED BY

EACH

REPORTING

PERSON

WITH

 

     7.     

  SOLE VOTING POWER

 

  0

     8.   

  SHARED VOTING POWER

 

  3,585,252 (2)

     9.   

  SOLE DISPOSITIVE POWER

 

  0

   10.   

  SHARED DISPOSITIVE POWER

 

  3,585,252 (2)

11.    

  AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

 

  3,585,252 (2)

12.  

  CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS)

 

  ☐

13.  

  PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

 

  14.1% (3)

14.  

  TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)

 

  PN

 

(1)

The source of funds was working capital of Entrepreneurs Funds.

(2)

The aggregate amount of shares of Common Stock that may be deemed beneficially owned by the Reporting Person is directly held by Entrepreneurs Fund. Entrepreneurs Fund General Partner is the general partner of Entrepreneurs Fund. By virtue of such relationship, Entrepreneurs General Partner may be deemed to have voting and investment power with respect to the securities held by Entrepreneurs Fund. Entrepreneurs General Partner disclaims beneficial ownership of the shares of Common Stock held by Entrepreneurs Fund except to the extent of its indirect pecuniary interest therein.

(3)

Percent of class calculated based on 25,437,000 shares of Common Stock outstanding as of February 23, 2021, as disclosed in the Form 8-K.


ITEM 1.

Security and Issuer.

The security to which this Schedule 13D relates is the common stock, $0.0001 par value per share (Common Stock), of SmartKem, Inc., a Delaware corporation (the Issuer). The principal executive offices of the Issuer are located at Manchester Technology Center, Hexagon Tower, Delaunays Road, Blackley, Manchester, M9 8GQ U.K.

 

ITEM 2.

Identity and Background.

(a), (b), (c) and (f).

This Schedule 13D is being filed jointly by Entrepreneurs Fund General Partner Limited, a Jersey, Channel Islands corporation (Entrepreneurs General Partner), and Entrepreneurs Fund LP, a Jersey, Channel Islands limited partnership (Entrepreneurs Fund, together with Entrepreneurs General Partner, the Reporting Persons), pursuant to the provisions of Rule 13d-1(k)(1) under the Securities Exchange Act of 1934, as amended (the Exchange Act), as separate persons and not as members of a group. See Exhibit 99.1 to this Schedule 13D for their Joint Filing Agreement.

Entrepreneurs Fund General Partner Limited

Entrepreneurs Fund General Partner Limited is a Jersey, Channel Islands corporation whose principal business is to operate as the general partner to the Entrepreneurs Fund LP. The business address of Entrepreneurs Fund General Partner Limited is 2nd Floor, Windward House, La Route de la Liberation, St. Helier, Jersey, Channel Islands JE2 3BQ.

Entrepreneurs Fund LP

Entrepreneurs Fund LP is a Jersey, Channel Islands limited partnership whose principal business is to operate as a private investment fund. The business address of Entrepreneurs Fund LP is 2nd Floor, Windward House, La Route, de la Liberation, St. Helier, Jersey, Channel Islands JE2 3BQ. Entrepreneurs Fund General Partner Limited serves as the general partner for Entrepreneurs Fund LP.

(d) and (e).

During the last five years, none of the Reporting Persons has been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. During the last five years, none of the Reporting Persons has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).

 

ITEM 3.

Source and Amount of Funds or Other Consideration.

The information set forth in Item 6 of this Schedule 13D is hereby incorporated by reference.

 

ITEM 4.

Purpose of Transaction.

Purpose of the Transaction

The information set forth in Item 6 of this Schedule 13D is hereby incorporated by reference.

Plans or Proposals

The Reporting Persons from time to time intend to review their investment in the Issuer on the basis of various factors, including the Issuers business, financial condition, results of operations and prospects, general economic and industry conditions, the securities markets in general and those for the Issuers Common Stock in particular, as well as other developments and other investment opportunities. Based upon such review, the Reporting Persons will


take such actions in the future as the Reporting Persons may deem appropriate in light of the circumstances existing from time to time. If the Reporting Persons believe that further investment in the Issuer is attractive, whether because of the market price of the Common Stock or otherwise, they may acquire Common Stock or other securities of the Issuer either in the open market or in privately negotiated transactions. Similarly, depending on market and other factors, the Reporting Persons may determine to dispose of some or all of the Common Stock currently owned by the Reporting Persons or otherwise acquired by the Reporting Persons either in the open market or in privately negotiated transactions.

Except as described above, none of the Reporting Persons currently has any plan or proposal that relates to or would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D.

The Reporting Persons acquired the securities reported herein for investment purposes.

 

ITEM 5.

Interest in Securities of the Issuer.

The information set forth in Item 6 of this Schedule 13D is hereby incorporated by reference.

(a)-(b) The responses of each Reporting Person to rows 7, 8, 9, 10, 11 and 13 of the cover pages of this Schedule 13D are hereby incorporated by reference into this Item 5.

Except as disclosed in this Schedule 13D, none of the Reporting Persons nor, to the best of their knowledge, any of the persons listed in Schedule I hereto, beneficially owns any Common Stock or has the right to acquire any Common Stock.

Except as disclosed in this Schedule 13D, none of the Reporting Persons presently has the power to vote or to direct the vote or to dispose or direct the disposition of any of the Common Stock which it may be deemed to beneficially own.

(c) Except as disclosed in this Schedule 13D, none of the Reporting Persons nor, to the best of their knowledge, any of the persons listed in Schedule I hereto, has effected any transactions relating to the Common Stock during the past 60 days.

(d) To the best knowledge of the Reporting Persons, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds of the sale of, the securities that are the subject of this Schedule 13D.

(e) Not applicable.

 

ITEM 6.

Contracts, Arrangements, Understandings or Relationship with Respect to the Securities of the Issuer.

On February 23, 2021, Parasol Investments Corporation (Parasol) entered into a Share Exchange Agreement (the Exchange Agreement) with SmartKem Limited (SmartKem), a private company incorporated under the Laws of England and Wales, and the former shareholders of SmartKem. Pursuant to the Exchange Agreement, all of the equity interests in SmartKem, except certain deferred shares which had no economic or voting rights (Deferred Shares) and which were purchased by Parasol for an aggregate purchase price of $1.40, were exchanged for shares of common stock, par value $0.0001 per share (common stock), and SmartKem became the Parasols wholly owned subsidiary (the Exchange). The Exchange was consummated on February 23, 2021. As a result of the Exchange, Parasol acquired the business of SmartKem and continues the existing business operations of SmartKem as a public reporting company under the name SmartKem, Inc.

At the closing of the Exchange (the Closing), each SmartKem ordinary share issued and outstanding immediately prior to the Closing (other than the Deferred Shares) was exchanged for 0.0111907 of a share of common stock and each SmartKem A ordinary share issued and outstanding immediate prior to the Closing was exchanged for 0.0676668 of a share of common stock, with the maximum number of shares of common stock issuable to the former holders of SmartKems ordinary shares and A ordinary shares equal to 12,725,000.


Prior to the Exchange, Entrepreneurs Fund had acquired certain amount of A ordinary shares and ordinary shares in SmartKem since July 2014. Entrepreneurs Fund also held convertible loan notes issued by SmartKem, which bore interest at different rates per annum and outstanding interest and principal on which was convertible into SmartKems A ordinary shares and ordinary shares at corresponding conversion prices per share (Convertible Loan Notes). In July 2018 and January 2020, SmartKem issued certain amount of A ordinary shares and ordinary shares to Entrepreneurs Fund for outstanding principal and interest on the Convertible Loan Notes. Following the conversion of its A ordinary shares into ordinary shares, Entrepreneurs Fund held a total of 320,377,568 ordinary shares in SmartKem prior to the Exchange. As a result of the Exchange, Entrepreneurs Fund received in consideration for SmartKems ordinary shares 3,585,252 shares of Common Stock of the Issuer.

The shares of Common Stock beneficially owned by the Reporting Persons are subject to a registration rights agreement that Entrepreneurs Fund and other investors entered into in connection with the Exchange (the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuer agreed to promptly, but no later than 60 calendar days from the final closing of a certain private placement offering the Issuer conducted following the Closing on February 23, 2021 (the Offering), file, subject to customary exceptions, a registration statement with the SEC (the Registration Statement), covering, among others, the shares of common stock issued or issuable as a result of the Exchange (the Registrable Shares). The Issuer will use commercially reasonable efforts to cause such Registration Statement to be declared effective within 150 calendar days after the closing of the Offering. The Issuer must use commercially reasonable efforts to keep the Registration Statement effective for the earlier of (i) five years from the date it is declared effective by the SEC, (ii) the date on which all Registrable Shares have been transferred other than to certain enumerated permitted assignees under the Registration Rights Agreement, or (iii) the date on which no Registrable Securities are outstanding. The Registration Rights Agreement is included as Exhibit 99.2 to this Schedule 13D.

Klaas de Boer, the Managing Partner at Entrepreneurs Fund Management LLP, the investment advisor to Entrepreneurs General Partner Limited, is a member of the Issuers board of directors.


ITEM 7.

Material to Be Filed as Exhibits.

 

Exhibit

Number

  

Description

Exhibit 99.1    Joint Filing Agreement, dated as of March 5, 2020, by and among Entrepreneurs Fund General Partner Limited and Entrepreneurs Fund LP.
Exhibit 99.2    Form of Registration Rights Agreement (incorporated by reference to Exhibit 4.1 to the Issuers Current Report on Form 8-K filed on February 24, 2021).

SIGNATURE

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Dated: March 5, 2020
       ENTREPRENEURS FUND GENERAL PARTNER LIMITED.
 

/s/ Paul Bradshaw

  Name: Paul Bradshaw
  Title: Director
 

/s/ Colin Dow

  Name: Colin Dow
  Title: Director
Dated: March 5, 2020
  ENTREPRENEURS FUND LP
  BY: ENTREPRENEURS FUND GENERAL PARTNER LIMITED, ITS GENERAL PARTNER
 

/s/ Paul Bradshaw

  Name: Paul Bradshaw
  Title: Director
 

/s/ Colin Dow

  Name: Colin Dow
  Title: Director