Visit Smartkem and meet Chairman & CEO Ian Jenks and Head of Business Development Michelle Ouyang at the TaiNEX Nangang Exhibition Centre,Hall 1, Booth No: I3022MANCHESTER, England, Sept. 4, 2025 /PRNewswire/ -- Smartkem (NASDAQ: SMTK), which is seeking to change the world of electronics with a new class of transistor technology, today announced Smartkem Director Prof. Steven P. DenBaars (UCSB) will be discussing display applications at the PlayNitride 2025 MicroLED Technology Forum on September 9th, 2025. ...

MANCHESTER, England, Sept. 2, 2025 /PRNewswire/ -- Smartkem (Nasdaq: SMTK), which is seeking to change the world of electronics with a new class of transistor technology, today announced that it has engaged Anthony Amato and his firm, Bridge Associates International Pharmaceutical Consulting (BAIPC), to support specific strategic initiatives in support of the Company's long-term growth initiatives.Mr. Amato brings extensive executive and consulting experience in the life sciences and technology sectors. He ...

Smartkem is seeking to change the world of electronics with a new class of transistors developed using its proprietary advanced semiconductor materials. Our TRUFLEX® semiconductor polymers enable low temperature printing processes that are compatible with existing manufacturing infrastructure to deliver low- cost, high-performance displays. Our semiconductor platform can be used in a range of display technologies including MicroLED, LCD and AMOLED, as well as in applications in advanced computer and AI chip ...

Smartkem's Head of Technology Transfer Steven Tsai will be delivering a talk on behalf of the Dean of Hon Hai Research Institute, Prof. Hao-Chung Kuo, at 9:00 am on Wednesday, August 20, which will be followed by Smartkem's Chief Technology Officer Dr. Simon Ogier at 9:30 am MANCHESTER, England, Aug. 13, 2025 /PRNewswire/ -- Smartkem (Nasdaq: SMTK), which is seeking to change the world of electronics with a new class of transistor technology, will be delivering presentations at the 25th International Meetin ...

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) Smartkem's Q2 2025 results show decreased cash and revenue, increased operating expenses, and a larger operating loss, alongside advancements in MicroLED and AI chip packaging [Second Quarter 2025 and Recent Highlights](index=1&type=section&id=Second%20Quarter%202025%20and%20Recent%20Highlights) Smartkem's Q2 2025 results show decreased cash and revenue, increased operating expenses, and a larger operating loss, alongside advancements in MicroLED and AI chip packaging [Operational Highlights](index=1&type=section&id=Operational%20Highlights) Smartkem introduced a 12.3-inch MicroLED Smart Backlight demonstration, signed a preliminary joint development agreement with Manz Asia for inkjet dielectric inks, collaborated with Manz Asia for AI chip packaging solutions, and secured a new UK patent for a MicroLED manufacturing process - Introduced a **12.3-inch MicroLED Smart Backlight demonstration** targeting next-generation automotive LCD displays[6](index=6&type=chunk) - Signed a **preliminary joint development agreement** with Manz Asia to co-develop inkjet dielectric inks for advanced chip packaging[6](index=6&type=chunk) - Secured a **new UK patent** for a MicroLED manufacturing process that enables wafer reuse and supports its expanding IP portfolio[6](index=6&type=chunk) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) In Q2 2025, Smartkem's cash and cash equivalents significantly decreased to $1.2 million from $7.1 million at year-end 2024, with revenue declining to $32 thousand from $40 thousand YoY. Operating expenses rose to $4.7 million, primarily due to increased R&D and G&A costs, leading to an operating loss of $4.4 million Cash and cash equivalents Summary | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | Change (in millions) | | :----- | :-------------------------- | :------------------------------ | :------------------- | | Cash and cash equivalents | $1.2 | $7.1 | -$5.9 | - The company believes the cash balance at June 30, 2025, will be **sufficient to fund operations through September 30, 2025**[6](index=6&type=chunk) Revenue Summary | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YoY Change (in thousands) | | :----- | :--------------------- | :--------------------- | :------------------------ | | Revenue | $32 | $40 | -$8 | - Revenue decrease primarily resulted from sales of OTFT backplanes and TRUFLEX® materials for customer assessment and development purposes[6](index=6&type=chunk) Operating expenses Summary | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | YoY Change (in millions) | | :----- | :-------------------- | :-------------------- | :----------------------- | | Operating expenses | $4.7 | $3.0 | +$1.7 | - Increase in operating expenses was due to a **$1.5 million increase in R&D expenses** (primarily from CPI Framework agreement extension and higher personnel expenses) and **$0.6 million higher G&A expenses** (related to professional services, including $0.3 million non-cash)[6](index=6&type=chunk) Loss from operations Summary | Metric | Q2 2025 (in millions) | Q2 2024 (in millions) | YoY Change (in millions) | | :----- | :-------------------- | :-------------------- | :----------------------- | | Loss from operations | $4.4 | $2.8 | +$1.6 | [About Smartkem](index=1&type=section&id=About%20Smartkem) Smartkem develops TRUFLEX® semiconductor polymers for displays and chip packaging, operating R&D in the UK, a field office in Taiwan, and holding an extensive IP portfolio [Company Overview and Technology](index=1&type=section&id=Company%20Overview%20and%20Technology) Smartkem aims to revolutionize electronics with its TRUFLEX® semiconductor polymers, enabling low-temperature printing for cost-effective, high-performance displays across MicroLED, LCD, and AMOLED technologies, as well as applications in advanced computer and AI chip packaging, sensors, and logic - Smartkem is developing a **new class of transistor technology** using proprietary advanced semiconductor materials[5](index=5&type=chunk) - **TRUFLEX® semiconductor polymers** enable **low temperature printing processes** compatible with existing manufacturing infrastructure to deliver low-cost, high-performance displays[5](index=5&type=chunk) - The semiconductor platform can be used in a range of display technologies including **MicroLED, LCD and AMOLED**, as well as in applications in **advanced computer and AI chip packaging, sensors, and logic**[5](index=5&type=chunk) [Operations and Intellectual Property](index=2&type=section&id=Operations%20and%20Intellectual%20Property) Smartkem conducts R&D and material development in Manchester, UK, with prototyping services at CPI in Sedgefield, UK, and a field application office in Hsinchu, Taiwan. The company is also developing commercial-scale production processes and EDA tools and holds an extensive IP portfolio of 140 granted patents, 14 pending patents, and 40 codified trade secrets - Smartkem designs and develops its materials at its research and development facility in **Manchester, UK** and provides prototyping services at the Centre for Process Innovation (**CPI in Sedgefield, UK**)[7](index=7&type=chunk) - It operates a field application office in **Hsinchu, Taiwan**, close to collaboration partner, The Industrial Technology Research Institute (ITRI)[7](index=7&type=chunk) - The company has an extensive IP portfolio including **140 granted patents** across 17 patent families, **14 pending patents** and **40 codified trade secrets**[8](index=8&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) Smartkem's Q2 2025 balance sheet shows decreased assets and increased liabilities, resulting in a stockholders' deficit, while the income statement reflects an improved net loss due to foreign currency gains [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, Smartkem's total assets decreased to $4.28 million from $8.90 million at December 31, 2024, primarily driven by a significant reduction in cash and cash equivalents. Total liabilities increased to $4.41 million from $2.31 million, resulting in a stockholders' deficit of $(0.13) million compared to equity of $6.59 million Cash and cash equivalents Summary | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :-------------------- | :--------------------------- | :------------------------------- | :-------------------- | | Cash and cash equivalents | $1,152 | $7,141 | -$5,989 | | Total current assets | $3,430 | $8,509 | -$5,079 | | Total assets | $4,282 | $8,904 | -$4,622 | | Total current liabilities | $3,988 | $2,288 | +$1,700 | | Total liabilities | $4,409 | $2,313 | +$2,096 | | Total stockholders' (deficit) / equity | $(127) | $6,591 | -$6,718 | [Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Smartkem's Q2 2025 net loss improved to $(2.40) million from $(3.10) million YoY, driven by a foreign currency gain despite lower revenue and higher operating expenses, with basic net loss per share improving to $(0.30) Revenue Summary | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :--------------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue | $32 | $40 | $55 | $40 | | Gross profit | $4 | $8 | $26 | $8 | | Operating expenses | $4,655 | $3,021 | $8,066 | $5,672 | | Loss from operations | $(4,372) | $(2,777) | $(7,510) | $(5,226) | | Gain / (loss) on foreign currency transactions (non-operating) | $1,970 | $(243) | $2,939 | $(249) | | Net loss | $(2,400) | $(3,099) | $(4,534) | $(4,795) | | Basic net loss per common share (per share) | $(0.30) | $(0.98) | $(0.62) | $(1.63) | - The decrease in net loss for Q2 2025 compared to Q2 2024 was significantly influenced by a **$1.97 million gain** on foreign currency transactions in 2025, contrasting with a **$(0.24) million loss** in 2024[16](index=16&type=chunk) - Research and development expenses increased from **$1.16 million** in Q2 2024 to **$2.43 million** in Q2 2025[16](index=16&type=chunk) [Additional Information](index=2&type=section&id=Additional%20Information) This section outlines forward-looking statements, subject to risks and uncertainties, and provides contact information for Smartkem's communications and investor relations [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This report includes forward-looking statements on Smartkem's market, products, and partnerships, subject to known and unknown risks and uncertainties, with no obligation for future updates - Statements about market position, product development, manufacturing, sales, and partner relations are forward-looking[10](index=10&type=chunk) - Forward-looking statements involve **known and unknown risks, uncertainties, and assumptions** that are difficult or impossible to predict and may be beyond the Company's control[10](index=10&type=chunk) - The Company undertakes **no obligation to revise or update information** in this release to reflect events or circumstances in the future, even if new information becomes available[10](index=10&type=chunk) [Contacts](index=2&type=section&id=Contacts) Contact information is provided for Selena Kirkwood, Head of Communications for Smartkem, and David Barnard, CFA, of Alliance Advisors Investor Relations for U.S. investors - **Selena Kirkwood** is the **Head of Communications** for Smartkem[11](index=11&type=chunk) - **David Barnard, CFA**, of **Alliance Advisors Investor Relations**, is the contact for U.S. Investors[11](index=11&type=chunk)

MANCHESTER, England, Aug. 12, 2025 /PRNewswire/ -- Smartkem (Nasdaq: SMTK), which is seeking to change the world of electronics with a new class of transistor technology, today provides a business update and reports its financial results for the three and six months ended June 30, 2025.Second quarter 2025 and recent highlights included: Introducing a 12.3-inch MicroLED Smart Backlight demonstration targeting next-generation automotive LCD displays. Signing a preliminary joint development agreement with Manz ...

[Part I. Financial Information](index=3&type=section&id=Part%20I.%20Financial%20Information) This section presents SmartKem, Inc.'s unaudited condensed consolidated financial statements and related disclosures [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents SmartKem's unaudited consolidated financial statements, highlighting net loss and significant going concern doubt [Unaudited Condensed Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) Unaudited Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Cash and cash equivalents | $1,152 | $7,141 | | Total current assets | $3,430 | $8,509 | | Total assets | $4,282 | $8,904 | | Total current liabilities | $3,988 | $2,288 | | Total liabilities | $4,409 | $2,313 | | Total stockholders' (deficit) / equity | $(127) | $6,591 | - Cash and cash equivalents decreased significantly from **$7.1 million** at December 31, 2024, to **$1.2 million** at June 30, 2025[9](index=9&type=chunk) - Total stockholders' (deficit) / equity shifted from a positive **$6.6 million** to a deficit of **$(127) thousand**[9](index=9&type=chunk) [Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Revenue | $32 | $40 | $55 | $40 | | Gross profit | $4 | $8 | $26 | $8 | | Other operating income | $279 | $236 | $530 | $438 | | Total operating expenses | $4,655 | $3,021 | $8,066 | $5,672 | | Loss from operations | $(4,372) | $(2,777) | $(7,510) | $(5,226) | | Total non-operating income / (expense) | $1,973 | $(321) | $2,952 | $432 | | Net loss | $(2,400) | $(3,099) | $(4,534) | $(4,795) | | Basic net loss per common share | $(0.30) | $(0.98) | $(0.62) | $(1.63) | | Total comprehensive loss | $(4,464) | $(2,925) | $(7,603) | $(4,639) | - Net loss for the three months ended June 30, 2025, improved to **$(2.4) million** from **$(3.1) million** in the prior year, while for the six months, it improved to **$(4.5) million** from **$(4.8) million**[12](index=12&type=chunk) - Operating expenses significantly increased by **54.1%** for the three-month period and **42.2%** for the six-month period, driven by higher R&D and G&A costs[12](index=12&type=chunk)[90](index=90&type=chunk)[97](index=97&type=chunk) [Unaudited Condensed Consolidated Statements of Stockholders' (Deficit) / Equity](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Stockholders'%20(Deficit)%20%2F%20Equity) Unaudited Condensed Consolidated Statements of Stockholders' (Deficit) / Equity (in thousands) | Metric | January 1, 2025 (in thousands) | June 30, 2025 (in thousands) | | :------------------------------------ | :----------------------------- | :--------------------------- | | Total stockholders' (deficit) / equity | $6,591 | $(127) | | Stock-based compensation expense | — | $510 | | Issuance of common stock to vendor | — | $375 | | Foreign currency translation adjustment | — | $(3,069) | | Net loss | — | $(4,534) | - Total stockholders' equity decreased from **$6.6 million** at January 1, 2025, to a deficit of **$(127) thousand** at June 30, 2025, primarily due to net loss and foreign currency translation adjustments[14](index=14&type=chunk) - Preferred stock was fully converted into common stock and pre-funded warrants by May 7, 2025, eliminating all Series A-1 Preferred Stock outstanding[14](index=14&type=chunk)[56](index=56&type=chunk)[57](index=57&type=chunk) [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) | Metric | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(6,121) | $(4,402) | | Net cash provided by financing activities | $0 | $3 | | Net change in cash | $(5,989) | $(4,485) | | Cash, end of period | $1,152 | $4,351 | - Net cash used in operating activities increased to **$6.1 million** for the six months ended June 30, 2025, from **$4.4 million** in the prior year, mainly due to increased net loss[17](index=17&type=chunk)[104](index=104&type=chunk) - The company had no cash flows from investing or financing activities during the six months ended June 30, 2025, compared to **$3 thousand** from financing activities in the prior year[17](index=17&type=chunk)[104](index=104&type=chunk) [Notes to the Unaudited Interim Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) - SmartKem, Inc. develops proprietary advanced semiconductor materials (TRUFLEX® polymers) for low-cost, high-performance displays in MicroLED, LCD, AMOLED, AI chip packaging, sensors, and logic[23](index=23&type=chunk)[83](index=83&type=chunk) - The company's operations are subject to significant risks, including the need for additional funding, technological innovation by competitors, dependence on key personnel and third-party manufacturers, and protection of IP[25](index=25&type=chunk) - Costs at the CPI facility have significantly increased due to short-term extensions of the framework agreement, and longer-term agreements are expected to remain higher[27](index=27&type=chunk)[28](index=28&type=chunk) - The company's cash and cash equivalents of **$1.2 million** as of June 30, 2025, are not sufficient to fund operations for the next 12 months, necessitating additional capital or potential curtailment of operations[32](index=32&type=chunk) - The company operates as a single operating segment: Semiconductor materials, with revenue primarily from R&D grants and tax credits[42](index=42&type=chunk)[71](index=71&type=chunk) - As of June 30, 2025, **4,441,165 shares** of common stock were issued and outstanding, and **3,600,914 pre-funded warrants** were outstanding[9](index=9&type=chunk)[59](index=59&type=chunk) - The 2021 Equity Incentive Plan was amended in 2025 to increase shares reserved for issuance to **1,643,692** and set the 'evergreen' share amount to **4%** of outstanding common stock[62](index=62&type=chunk) - During the six months ended June 30, 2025, **710,268 stock options** were granted to employees, directors, and consultants, vesting over three years with an exercise price of **$2.51**[63](index=63&type=chunk) - Subsequent to June 30, 2025, **20,000 shares** of common stock were issued to a vendor, and **83,325 shares** were issued upon cashless exercise of **83,333 pre-funded warrants**[75](index=75&type=chunk)[76](index=76&type=chunk) - The company's financial statements are unaudited and prepared in accordance with GAAP for interim reporting, including all wholly-owned subsidiaries[37](index=37&type=chunk) - The company has incurred continuing losses, with a net loss of **$4.5 million** for the six months ended June 30, 2025, and an accumulated deficit of **$119.2 million**[31](index=31&type=chunk)[86](index=86&type=chunk) - Cash and cash equivalents were **$1.2 million** as of June 30, 2025, with net cash used in operating activities of **$6.1 million** for the six months ended June 30, 2025, indicating insufficient funds to cover operating expenses for the next 12 months[31](index=31&type=chunk)[32](index=32&type=chunk) - There is substantial doubt about the company's ability to meet its obligations as they fall due, and management's plans do not alleviate this doubt, leading to a going concern disclosure[35](index=35&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, liquidity, increased operating expenses, and non-operating foreign currency gains [DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS](index=18&type=section&id=DISCLOSURE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) - This section identifies statements about future business, financial condition, liquidity, and results of operations as 'forward-looking statements,' subject to risks and uncertainties[80](index=80&type=chunk) - Key risks include market acceptance of technology, timing of product releases, ability to develop new products, meeting management goals, maintaining Nasdaq listing, estimates of expenses and capital requirements, and dependence on collaborators and third-party facilities[80](index=80&type=chunk)[87](index=87&type=chunk) [Company Overview](index=20&type=section&id=Company%20Overview) - SmartKem aims to revolutionize the display industry with TRUFLEX® semiconductor polymers for low-cost, high-performance displays, applicable in MicroLED, LCD, AMOLED, AI chip packaging, sensors, and logic[83](index=83&type=chunk) - The company maintains an extensive IP portfolio with **140 granted patents**, **14 pending patents**, and **40 codified trade secrets**[84](index=84&type=chunk) [Results of Operations for the three and six months ended June 30, 2025](index=21&type=section&id=Results%20of%20Operations%20for%20the%20three%20and%20six%20months%20ended%20June%2030%2C%202025) Revenue and Cost of Revenue Comparison (in thousands) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :---------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Revenue | $32 | $40 | $55 | $40 | | Cost of revenue | $28 | $32 | $29 | $32 | - Revenue and cost of revenue are primarily from sales of OTFT backplanes and TRUFLEX® materials for customer assessment[88](index=88&type=chunk)[95](index=95&type=chunk) Operating Income and Expenses Comparison (in thousands) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Other operating income | $279 | $236 | $530 | $438 | | Research and development expenses | $2,426 | $1,158 | $3,923 | $2,434 | | General and administrative expenses | $2,360 | $1,844 | $4,369 | $3,206 | | Total operating expenses | $4,655 | $3,021 | $8,066 | $5,672 | - Research and development expenses increased by **109.5%** for the three-month period and **61.2%** for the six-month period, largely due to an **$800 thousand** increase in CPI Framework agreement costs[91](index=91&type=chunk)[98](index=98&type=chunk) - General and administrative expenses rose by **28.0%** for the three-month period and **36.3%** for the six-month period, driven by increased professional service fees, including non-cash expenses[92](index=92&type=chunk)[99](index=99&type=chunk) Non-Operating Income/(Expense) Comparison (in thousands) | Metric | 3 Months Ended June 30, 2025 (in thousands) | 3 Months Ended June 30, 2024 (in thousands) | 6 Months Ended June 30, 2025 (in thousands) | 6 Months Ended June 30, 2024 (in thousands) | | :------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | | Non-operating income/(expense) | $1,973 | $(321) | $2,952 | $432 | - Non-operating income saw a significant increase, primarily due to a **$3.2 million** gain on foreign currency related to intercompany loan revaluation, partially offset by a **$0.7 million** loss in 2024 from warrant liability changes[93](index=93&type=chunk)[100](index=100&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) - Cash and cash equivalents decreased from **$7.1 million** at December 31, 2024, to **$1.2 million** at June 30, 2025[101](index=101&type=chunk) - The company's current cash balance is expected to fund operations only through September 30, 2025, requiring additional capital to continue operations and R&D[101](index=101&type=chunk) - Future funding plans include equity offerings, debt financings, collaborations, strategic alliances, and licensing arrangements, with potential for dilution or increased debt obligations[103](index=103&type=chunk) - Expected cash payments over the next twelve months include **$3.1 million** for accounts payable and accrued expenses, and **$0.2 million** for current lease liabilities[102](index=102&type=chunk) [Cash Flow](index=23&type=section&id=Cash%20Flow) - Net cash used in operating activities increased by **$1.7 million** to **$6.1 million** for the six months ended June 30, 2025, compared to **$4.4 million** in the prior year, primarily due to increased comprehensive net loss[104](index=104&type=chunk) - There were no cash flows from investing or financing activities during the six months ended June 30, 2025[104](index=104&type=chunk) [Contractual Payment Obligations](index=23&type=section&id=Contractual%20Payment%20Obligations) - Principal commitments include obligations under office and lab space leases and purchase commitments for R&D facilities and services[105](index=105&type=chunk) [Critical Accounting Estimates](index=23&type=section&id=Critical%20Accounting%20Estimates) - Critical accounting estimates involve assumptions about highly uncertain matters, where changes could materially impact financial condition or results of operations[107](index=107&type=chunk) - Management discusses these estimates with the Audit Committee of the Board of Directors[108](index=108&type=chunk) - The company's business model focuses on proprietary advanced semiconductor materials (TRUFLEX® polymers) for display and AI chip packaging, with R&D facilities in the UK and a field application office in Taiwan[83](index=83&type=chunk)[84](index=84&type=chunk) - Loss before income taxes was **$4.5 million** for the six months ended June 30, 2025, an improvement from **$4.8 million** in the prior year, primarily due to non-operating foreign currency gains[86](index=86&type=chunk)[100](index=100&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there are no applicable quantitative and qualitative disclosures about market risk for the company - The company has no applicable quantitative and qualitative disclosures about market risk[109](index=109&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025. No material changes in internal control over financial reporting were identified during the period - Management concluded that disclosure controls and procedures were effective as of June 30, 2025[112](index=112&type=chunk) - No material changes in internal control over financial reporting were identified during the quarter ended June 30, 2025[113](index=113&type=chunk) - Control systems provide only reasonable, not absolute, assurance due to inherent limitations and resource constraints[110](index=110&type=chunk) [Part II. Other Information](index=25&type=section&id=Part%20II.%20Other%20Information) This section covers other required information, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings - There are no material legal proceedings[115](index=115&type=chunk) [Item 1A. Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K - No material changes to the risk factors previously disclosed in the 10-K[116](index=116&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=25&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the quarter ended June 30, 2025, the company issued a total of 130,000 shares of common stock to vendors for services, exempt from registration under Section 4(a)(2) of the Securities Act and Regulation D Unregistered Sales of Common Stock to Vendors (Q2 2025) | Date | Shares Issued | Value | | :----------- | :------------ | :------ | | April 1, 2025 | 10,000 | $29,000 | | April 23, 2025 | 100,000 | $223,000 | | May 1, 2025 | 10,000 | $23,700 | | June 2, 2025 | 10,000 | $14,300 | | **Total** | **130,000** | **$290,000** | - These issuances were exempt from registration under Section 4(a)(2) of the Securities Act and Regulation D[117](index=117&type=chunk)[118](index=118&type=chunk) [Item 3. Defaults Upon Senior Securities](index=25&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There are no defaults upon senior securities[119](index=119&type=chunk) [Item 4. Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[120](index=120&type=chunk) [Item 5. Other Information](index=25&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025 - No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter[121](index=121&type=chunk) [Item 6. Exhibits](index=25&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including agreements, corporate documents, certifications, and XBRL data files - The exhibit index includes various documents such as the Share Exchange Agreement, Amended and Restated Certificate of Incorporation, Bylaws, amendments to the Equity Incentive Plan, Letters of Variation with CPI Innovation Services Limited, a lease agreement, and certifications[124](index=124&type=chunk) - Certain annexes, schedules, and exhibits have been omitted but can be furnished to the SEC upon request[124](index=124&type=chunk)

Core Viewpoint - Smartkem has entered into a preliminary Joint Development Agreement (JDA) with Manz Asia to co-develop next-generation dielectric ink solutions for advanced packaging manufacturing, particularly for AI chip applications [1][2] Company Overview - Smartkem is focused on revolutionizing electronics with a new class of transistors using proprietary advanced semiconductor materials, specifically TRUFLEX® semiconductor polymers, which enable low-temperature printing processes [4][5] - The company has a strong intellectual property portfolio, including 140 granted patents across 17 families, 14 pending patents, and 40 codified trade secrets [6] Industry Context - The collaboration aims to address critical bottlenecks in advanced computer and AI chip packaging by combining Smartkem's semiconductor materials with Manz's precision inkjet technology [2] - The demand for AI computing is driving the need for advancements in 12" wafer-level packaging and large-area panel packaging, which could transform data center infrastructure [2] Joint Development Agreement Details - The JDA is focused on developing scalable, high-performance solutions that enhance manufacturing paradigms, aiming for higher yield and lower cost per packaged chip [2] - The agreement is preliminary and non-binding, with no assurance of a definitive agreement or project outcome [3] Manz Asia Overview - Manz Asia is a leading manufacturer of advanced semiconductor equipment, specializing in CoPoS technology for panel-level packaging [7][8] - The company provides comprehensive equipment solutions that enhance production efficiency and optimize process quality in semiconductor packaging [9]

Core Insights - Smartkem has received a UK patent for a new method of MicroLED display manufacturing, enhancing efficiency and sustainability in the production process [1][2] - The patented method allows for selective removal of MicroLEDs from a source wafer, significantly reducing material waste and production costs compared to traditional methods [2][3] - Smartkem's IP portfolio includes 140 granted patents across 17 families, indicating a strong position in the semiconductor materials market [2][6] Company Overview - Smartkem is focused on developing advanced transistor technology using proprietary semiconductor materials, aiming to revolutionize the electronics industry [4] - The company's TRUFLEX® semiconductor polymers enable low-temperature printing processes compatible with existing manufacturing infrastructure, targeting low-cost, high-performance displays [4] - Smartkem operates R&D facilities in Manchester, UK, and provides prototyping services at the Centre for Process Innovation in Sedgefield, UK [5] Manufacturing Process - The new MicroLED manufacturing method involves preparing a MicroLED wafer, applying an adhesion layer, and selectively transferring only necessary LEDs to a display substrate [2][3] - This approach allows the source wafer to be reused multiple times, leading to lower display costs compared to traditional monolithic methods [3]

First Quarter 2025 Overview Smartkem reported Q1 2025 financial results, highlighting progress in commercialization, strategic partnerships, and initial product sales, alongside a detailed financial summary [Introduction and CEO Commentary](index=1&type=section&id=1.1.%20Introduction%20and%20CEO%20Commentary) Smartkem reported its Q1 2025 financial results and provided a business update, with CEO Ian Jenks highlighting continued progress towards commercialization and strategic partnerships - Smartkem (Nasdaq: SMTK) reported Q1 2025 financial results and a business update on May 14, 2025[2](index=2&type=chunk) - CEO Ian Jenks emphasized continued progress toward commercialization[3](index=3&type=chunk) [Business Highlights and Strategic Progress](index=1&type=section&id=1.2.%20Business%20Highlights%20and%20Strategic%20Progress) Smartkem advanced commercialization efforts in Q1 2025 through key partnerships, initial product sales, and strategic appointments, further introducing its MiP4 platform in April - Commenced project with AUO to develop the world's first rollable, transparent MicroLED display[3](index=3&type=chunk) - Made first sales of TRUFLEX® advanced semiconductor materials to Chip Foundation[3](index=3&type=chunk) - Signed a memorandum of understanding with RiTdisplay Corporation for the integration of Smartkem's OTFT process on RiTdisplay's Gen2.5 line[3](index=3&type=chunk) - Appointed Jonathan Watkins as the new COO[3](index=3&type=chunk) - Introduced the first application of the 'MiP4' platform at Touch Taiwan 2025 in April, showcasing a MicroLED Smart Backlight for higher brightness and better contrast in LCDs, particularly for automotive displays[4](index=4&type=chunk) [First Quarter 2025 Financial Highlights Summary](index=1&type=section&id=1.3.%20First%20Quarter%202025%20Financial%20Highlights%20Summary) Smartkem reported $23 thousand in revenue for Q1 2025, a significant increase from nil in Q1 2024, primarily due to initial sales. However, cash and cash equivalents decreased, and operating expenses and loss from operations increased year-over-year First Quarter 2025 Financial Highlights | Metric | Q1 2025 | Q1 2024 | Change (YoY) | | :-------------------------------- | :------ | :------ | :----------- | | Cash and cash equivalents (as of period end) | $3.9M | $7.1M (Dec 31, 2024) | -$3.2M | | Revenues | $23K | $0 | +$23K | | Operating expenses | $3.4M | $2.7M | +$0.7M | | Loss from operations | $3.1M | $2.4M | +$0.7M | Company and Technology Profile Smartkem leverages its proprietary TRUFLEX® organic transistor technology for advanced displays and chip packaging, supported by global R&D and an extensive patent portfolio [About Smartkem and TRUFLEX® Technology](index=1&type=section&id=2.1.%20About%20Smartkem%20and%20TRUFLEX%C2%AE%20Technology) Smartkem aims to revolutionize electronics with its proprietary TRUFLEX® organic transistor technology, applicable across various display types, advanced chip packaging, and sensors - Smartkem is developing a new class of transistor technology using proprietary advanced semiconductor materials[8](index=8&type=chunk) - TRUFLEX® materials can be used in next-generation MicroLED, LCD, and AMOLED displays, as well as advanced computer and AI chip packaging, and new types of sensors[8](index=8&type=chunk) [Product Applications and Development](index=2&type=section&id=2.2.%20Product%20Applications%20and%20Development) Smartkem's MiP4 platform is designed to enhance LCD backlights by offering higher brightness, lower power, and reduced production costs, while its low-temperature process for MicroLED displays aims to reduce manufacturing defects and costs, making MicroLEDs more commercially viable across multiple sectors - Smartkem's MiP4 is designed to replace existing MiniLED packages in LCD backlights and signage applications, offering **higher brightness at lower power**, lower production costs, and compatibility with existing MiniLED die bonding equipment[10](index=10&type=chunk) - For MicroLED display applications, Smartkem's low-temperature process allows liquid transistors to be poured directly onto MicroLEDs, eliminating high-cost, low-yield manufacturing processes[11](index=11&type=chunk) - This innovation is expected to reduce defects, enhance yield, and integrate seamlessly into existing manufacturing infrastructure, potentially making MicroLED displays commercially viable across sectors like smartphones, wearables, automotives, and digital signage[11](index=11&type=chunk) [Operational Footprint and Intellectual Property](index=2&type=section&id=2.3.%20Operational%20Footprint%20and%20Intellectual%20Property) Smartkem conducts R&D in Manchester, UK, prototyping in Sedgefield, UK, and operates a field application office in Taiwan, while actively developing commercial-scale production processes and holding an extensive IP portfolio of 138 granted patents - Smartkem designs and develops materials at its R&D facility in Manchester, UK, and provides prototyping services at the Centre for Process Innovation (CPI) in Sedgefield, UK[12](index=12&type=chunk) - The company operates a field application office in Hsinchu, Taiwan, close to collaboration partner ITRI[12](index=12&type=chunk) - Smartkem is developing a commercial-scale production process and Electronic Design Automation (EDA) tools[12](index=12&type=chunk) - The company has an extensive IP portfolio including **138 granted patents** across 17 patent families, 16 pending patents, and 40 codified trade secrets[13](index=13&type=chunk) Consolidated Financial Statements The consolidated financial statements detail Smartkem's Q1 2025 balance sheet, showing decreased assets and increased net loss, alongside operational performance [Consolidated Balance Sheets](index=3&type=section&id=3.1.%20Consolidated%20Balance%20Sheets) As of March 31, 2025, Smartkem's total assets decreased to $5.91 million from $8.90 million at December 31, 2024, primarily driven by a reduction in cash and cash equivalents. Total liabilities also saw a slight decrease Consolidated Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | Change | | :-------------------------------- | :------------- | :---------------- | :----- | | Cash and cash equivalents | $3,881 | $7,141 | -$3,260 | | Total current assets | $5,636 | $8,509 | -$2,873 | | Total assets | $5,910 | $8,904 | -$2,994 | | Total current liabilities | $2,102 | $2,288 | -$186 | | Total liabilities | $2,123 | $2,313 | -$190 | | Total stockholders' equity | $3,787 | $6,591 | -$2,804 | [Consolidated Statements of Operations and Comprehensive Loss](index=4&type=section&id=3.2.%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) For the three months ended March 31, 2025, Smartkem reported revenue of $23 thousand, up from nil in the prior year. However, net loss increased to $2.13 million from $1.70 million (excluding preferred stock deemed dividends in 2024), driven by higher operating expenses, particularly in R&D and G&A. Basic and diluted net loss per common share improved significantly due to a higher weighted average share count Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (YoY) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | :----------- | | Revenue | $23 | $0 | +$23 | | Gross profit | $22 | $0 | +$22 | | Research and development expenses | $1,497 | $1,276 | +$221 | | General and administrative expenses | $2,009 | $1,362 | +$647 | | Total operating expenses | $3,411 | $2,651 | +$760 | | Loss from operations | $(3,138) | $(2,449) | -$(689) | | Net loss | $(2,134) | $(1,696) | -$(438) | | Basic and diluted net loss per common share | $(0.32) | $(3.21) | +$2.89 | | Weighted average shares outstanding | 6,649,603 | 2,735,375 | +3,914,228 | Legal and Investor Information This section outlines forward-looking statements, emphasizing inherent risks and uncertainties, and provides essential contact information for investors and media [Forward-Looking Statements](index=2&type=section&id=4.1.%20Forward-Looking%20Statements) The report contains forward-looking statements regarding Smartkem's market position, product development, manufacturing, sales, and partnerships, which are subject to known and unknown risks and uncertainties that could cause actual results to differ materially - Statements regarding market position, market opportunity, product development, manufacturing, sales, and relations with partners and investors are forward-looking[14](index=14&type=chunk) - These statements are based on current expectations, estimates, and projections but involve known and unknown risks, uncertainties, and assumptions that are difficult or impossible to predict[14](index=14&type=chunk) - Actual results may differ materially from forward-looking statements due to factors described in the Company's SEC filings, and the Company undertakes no obligation to revise or update this information[14](index=14&type=chunk) [Investor and Media Relations](index=2&type=section&id=4.2.%20Investor%20and%20Media%20Relations) Contact information is provided for industry representatives, media inquiries, and financial analysts and investors - Selena Kirkwood is the Head of Communications for Smartkem, serving as the contact for Industry Representatives and Media[15](index=15&type=chunk) - David Barnard, CFA, of Alliance Advisors Investor Relations, is the contact for Analysts and Investors[15](index=15&type=chunk)