Core Viewpoint - Smartkem and Jericho Energy Ventures have agreed to a 60-day extension of their non-binding Letter of Intent for an all-stock business combination, aiming to create a U.S.-owned AI infrastructure company that integrates energy and semiconductor technologies to meet the growing demand for AI compute capacity [1][2][3] Company Overview - Smartkem is focused on developing a new class of organic semiconductor technology, specifically its TRUFLEX® semiconductor polymers, which enable low-temperature printing processes for high-performance displays and applications in AI chip packaging [4] - Jericho Energy Ventures is positioned at the intersection of energy and AI infrastructure, utilizing its oil and gas assets to provide scalable, on-site power solutions for AI data centers [5][6] Proposed Transaction Details - The proposed transaction aims to combine Smartkem's semiconductor innovations with Jericho's scalable energy platform, potentially unlocking significant value in the converging energy and AI sectors [3] - The extension of the LOI allows both companies additional time to negotiate and secure the necessary capital and approvals for the transaction [1][3] Strategic Commentary - Smartkem's leadership expresses optimism about the merger's potential to create a powerful AI infrastructure company, highlighting the complementary capabilities of both firms [3] - Jericho's CEO emphasizes the enthusiasm for progressing towards a definitive agreement that would leverage both companies' strengths in energy innovation and semiconductor technology [3]

Financial Performance - Revenue for Q3 2025 was $81 thousand, up 102.5% from $40 thousand in Q3 2024, driven by sales of OTFT backplanes and TRUFLEX® materials[5] - Loss from operations for Q3 2025 was $3.1 million, compared to $2.8 million in Q3 2024, indicating a 10.7% increase in losses[5] - The net loss attributed to common stockholders for Q3 2025 was $3.9 million, compared to $2.8 million in Q3 2024, a 37.8% increase[14] Operating Expenses - Operating expenses increased to $2 million in Q3 2025 from $1.5 million in Q3 2024, reflecting a 33.3% rise[5] - Research and development expenses for Q3 2025 were $2.1 million, up from $1.5 million in Q3 2024, a 37% increase[14] Cash and Assets - Cash and cash equivalents decreased to $0.9 million as of September 30, 2025, down from $7.1 million as of December 31, 2024[5] - The total assets decreased to $3.2 million as of September 30, 2025, from $8.9 million as of December 31, 2024[11] Strategic Initiatives - The company signed a non-binding Letter of Intent with Jericho Energy Ventures to establish a U.S.-owned, AI-focused infrastructure company[5] Intellectual Property - Smartkem has an extensive IP portfolio with 140 granted patents across 17 patent families, 14 pending patents, and 40 codified trade secrets[7] Financing - The company obtained $1 million in bridge financing on October 31, 2025, secured by all assets of the company and its subsidiaries[5]

Core Insights - Smartkem is focused on revolutionizing the electronics industry with its proprietary TRUFLEX® transistor technology aimed at applications such as MicroLED, LCD, AMOLED displays, and advanced AI chip packaging [4][8]. Financial Performance - Revenue for Q3 2025 was $81 thousand, up from $40 thousand in Q3 2024, driven by sales of OTFT backplanes and TRUFLEX® materials [8]. - Operating expenses increased to $2 million in Q3 2025 from $1.5 million in Q3 2024 [8]. - Loss from operations for Q3 2025 was $3.1 million, compared to $2.8 million in Q3 2024 [8]. - Cash and cash equivalents decreased to $0.9 million as of September 30, 2025, down from $7.1 million at the end of 2024 [8]. Capital and Financing - On October 31, 2025, Smartkem secured $1 million in bridge financing through the issuance of $1.1 million in Senior Secured Notes due April 30, 2026, along with warrants for 400,000 shares at an exercise price of $2.75 per share [8]. Research and Development - Smartkem operates a research and development facility in Manchester, UK, and collaborates with The Industrial Technology Research Institute (ITRI) in Taiwan for product prototyping [5]. - The company has a robust intellectual property portfolio with 140 granted patents and 14 pending patents [6]. Market Engagement - Smartkem has engaged in various industry events, including presentations at the International Meeting on Information Display (IMID) and exhibitions at SEMICON® Taiwan 2025 and MicroLED Connect 2025 [8].

Revenue and Income - Revenue for the three months ended September 30, 2025, was $81.0 thousand, with a cost of revenue of $5.0 thousand, compared to no revenue for the same period in 2024[108] - Revenue for the nine months ended September 30, 2025, was $136.0 thousand, compared to $40.0 thousand for the same period in 2024[114] - Non-operating income for the nine months ended September 30, 2025, was $2.2 million, an increase of $1.8 million, or 418.9%, compared to $0.4 million for the same period in 2024[120] - Other operating income for the nine months ended September 30, 2025, was $0.7 million, consistent with the same period in 2024, primarily from research grants and tax credits[116] Operating Expenses - Operating expenses for the three months ended September 30, 2025, were $3.4 million, an increase of $0.3 million, or 10.3%, compared to $3.1 million for the same period in 2024[110] - Operating expenses for the nine months ended September 30, 2025, were $11.5 million, an increase of $2.7 million, or 30.9%, compared to $8.8 million for the same period in 2024[117] Research and Development - Research and development expenses for the three months ended September 30, 2025, were $2.1 million, an increase of $0.6 million, or 36.7%, compared to $1.5 million for the same period in 2024[111] - Research and development expenses for the nine months ended September 30, 2025, were $6.0 million, an increase of $2.1 million, or 51.8%, compared to $3.9 million for the same period in 2024[118] Cash and Capital Requirements - As of September 30, 2025, cash and cash equivalents were $0.9 million, down from $7.1 million as of December 31, 2024, indicating a need for additional capital funding[121] - The company requires significant additional capital to fund operations, sales and marketing efforts, and research and development expenditures[125] - Expected cash payments over the next twelve months include $4.9 million for accounts payable and accrued expenses, and $0.3 million for lease liabilities[124] Financial Position and Commitments - The accumulated deficit as of September 30, 2025, was $123.1 million, primarily due to research and development expenses and general administrative costs[105] - The company's principal commitments consist of obligations under leases and purchase commitments for research and development facilities and services[129] Operational Changes - The company has significantly curtailed operations and delayed vendor payments, leading to a substantial increase in accounts payable since September 30, 2025[123] Cash Flow - Net cash used in operating activities was $6.3 million for the nine months ended September 30, 2025, a decrease of $0.7 million compared to the same period in 2024[126] - There were no cash flows from financing activities during the nine months ended September 30, 2025[128] Accounting and Estimates - The company prepares financial statements in accordance with U.S. GAAP, requiring management to make estimates affecting reported amounts of assets and liabilities[130] - Management has discussed critical accounting estimates with the Audit Committee, which could materially impact financial statements[132]

Core Insights - Smartkem, Inc. is showcasing its innovative organic semiconductor technology at TechBlick Berlin on October 22-23, 2025, with a focus on flexible electronics [1][2] - The company aims to revolutionize electronics with its TRUFLEX® semiconductor polymers, which enable low-cost, high-performance displays and are compatible with existing manufacturing processes [4] Company Presentation - Dr. Simon Ogier, Chief Technology Officer, will present on October 23, 2025, at 1:55 PM, discussing developments in OTFT circuits that facilitate low-voltage flexible processors [2] - The presentation will highlight Smartkem's strategy for flexible CMOS circuitry, showcasing near-ideal inverter performance and a roadmap for low-cost prototyping and production [2][3] Technology and Innovation - Smartkem has developed a CMOS platform that integrates p-type organic transistors with n-type oxide OTFTs, achieving low power operation and robust circuit performance [3] - The technology leverages existing IGZO manufacturing infrastructure and digital lithography-based OTFT processes for rapid prototyping and scalable production [3] Market Position and Applications - Smartkem's semiconductor platform is applicable in various display technologies, including MicroLED, LCD, and AMOLED, as well as in advanced computer and AI chip packaging, sensors, and logic [4] - The company is working on commercial-scale production processes and Electronic Design Automation (EDA) tools to validate the manufacturing viability of its new generation of displays [4] Intellectual Property - Smartkem holds an extensive intellectual property portfolio, including 140 granted patents across 17 families, 14 pending patents, and 40 codified trade secrets [4]

Company Overview - Smartkem is focused on revolutionizing electronics with a new class of transistor technology using proprietary advanced semiconductor materials [3][4] - The company's TRUFLEX® semiconductor polymers enable low-temperature printing processes compatible with existing manufacturing infrastructure, aimed at delivering low-cost, high-performance displays [3][4] - Smartkem's technology can be applied in various display technologies, including MicroLED, LCD, and AMOLED, as well as in advanced computer and AI chip packaging, sensors, and logic [3] Upcoming Events - Smartkem will participate in the PlayNitride 2025 MicroLED Technology Forum on September 9, 2025, where Prof. Steven P. DenBaars will discuss display applications [1][2] - The company will also exhibit at SEMICON Taiwan 2025 from September 10 to 12, 2025, at the TaiNEX Nangang Exhibition Centre, Hall 1, Booth No: I3022 [1][2] Research and Development - Smartkem conducts its R&D at its facility in Manchester, UK, and provides prototyping services at the Centre for Process Innovation in Sedgefield, UK [4] - The company operates a field application office in Hsinchu, Taiwan, in close proximity to its collaboration partner, The Industrial Technology Research Institute (ITRI) [4] Intellectual Property - Smartkem has an extensive intellectual property portfolio, including 140 granted patents across 17 patent families, 14 pending patents, and 40 codified trade secrets [5] Industry Context - SEMICON Taiwan is recognized as the most influential semiconductor event in Taiwan, attracting 700 exhibitors and utilizing a total of 2,450 booths [6] - The event focuses on key industry themes such as advanced manufacturing, heterogeneous integration, and semiconductor cybersecurity, making it a significant platform for business matching and showcasing innovations [6][7]

Core Insights - Smartkem has engaged Anthony Amato and his firm, Bridge Associates International Pharmaceutical Consulting (BAIPC), to support its long-term growth initiatives in the electronics sector [1][4][8] - Mr. Amato brings significant experience in life sciences and technology, having previously served as CEO of BioSig Technologies, Inc. and currently being on its Board of Directors [2][4] - The collaboration aims to evaluate and execute strategic opportunities and industry partnerships to enhance shareholder value [3][4] Company Overview - Smartkem is focused on revolutionizing electronics with a new class of transistors using proprietary advanced semiconductor materials, specifically TRUFLEX® semiconductor polymers [5][6] - The company's technology enables low-temperature printing processes compatible with existing manufacturing infrastructure, aimed at delivering low-cost, high-performance displays [5] - Smartkem's semiconductor platform is applicable in various display technologies, including MicroLED, LCD, and AMOLED, as well as in advanced computer and AI chip packaging, sensors, and logic [5] Research and Development - Smartkem operates a research and development facility in Manchester, UK, and provides prototyping services at the Centre for Process Innovation in Sedgefield, UK [6] - The company has a field application office in Hsinchu, Taiwan, to collaborate with The Industrial Technology Research Institute (ITRI) [6] - Smartkem is developing a commercial-scale production process and Electronic Design Automation (EDA) tools to demonstrate the viability of manufacturing a new generation of displays [6] Intellectual Property - The company holds an extensive intellectual property portfolio, including 140 granted patents across 17 patent families, 14 pending patents, and 40 codified trade secrets [7] Strategic Initiatives - On August 28, 2025, Smartkem's Board of Directors authorized management to consider and pursue strategic alternatives involving the company [7]

Core Insights - Smartkem is exploring strategic alternatives to enhance stockholder value, with no set timetable for any potential transactions [1][2] - The company remains committed to its operational plan to commercialize its patented technology during this review process [3] Company Overview - Smartkem is focused on revolutionizing electronics through a new class of transistors made from proprietary advanced semiconductor materials [4] - The TRUFLEX® semiconductor polymers developed by Smartkem allow for low-temperature printing processes, making them compatible with existing manufacturing infrastructure [4] - The technology can be applied in various display technologies, including MicroLED, LCD, and AMOLED, as well as in advanced computer and AI chip packaging, sensors, and logic [4] Research and Development - Smartkem conducts its R&D at its facility in Manchester, UK, and offers prototyping services at the Centre for Process Innovation in Sedgefield, UK [5] - The company has a field application office in Hsinchu, Taiwan, collaborating with The Industrial Technology Research Institute (ITRI) [5] - Smartkem is developing a commercial-scale production process and Electronic Design Automation (EDA) tools to validate the commercial viability of its display technologies [5] Intellectual Property - The company holds an extensive intellectual property portfolio, including 140 granted patents across 17 families, 14 pending patents, and 40 codified trade secrets [6]

Core Insights - Smartkem is presenting at the 25th International Meeting on Information Display (IMID 2025) in Busan, Korea, focusing on advancements in MicroLED technology and its proprietary chip-first microLED manufacturing architecture [1][8] Company Overview - Smartkem is innovating in 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 robust intellectual property portfolio with 140 granted patents across 17 families, 14 pending patents, and 40 trade secrets [6] Technology and Innovations - Steven Tsai will present on the technical roadmap for secondary optics in MicroLED and Smartkem's collaboration with AUO to develop a transparent, rollable display [2][7] - Dr. Simon Ogier will discuss the chip-first approach for MicroLED display fabrication, which utilizes low-temperature organic thin-film transistor (OTFT) technology to address challenges in commercialization, such as high manufacturing yields and small die sizes [3][7] - The patented chip-first method eliminates the need for eutectic bonding, reducing costs and improving yield by using a planarized organic layer and precision via metallization [3] Market Position and Future Prospects - Smartkem's innovations aim to overcome technical barriers in MicroLED commercialization, offering scalable solutions that enhance power efficiency, brightness uniformity, and the production of thinner display panels for next-generation consumer electronics [3]

[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)