Revenue and Income - For the three months ended June 30, 2022, revenue was $4 thousand, a 100% increase compared to none in the same period of 2021[138]. - Revenue for the six months ended June 30, 2022 was $34 thousand, compared to none in the same period of 2021, resulting from sales of TRUFLEX® materials[148]. - Other operating income increased by $38 thousand, or 15%, to $294 thousand for the three months ended June 30, 2022, primarily due to higher research and development tax credits[139]. Expenses - The cost of revenue for the same period was $2 thousand, also a 100% increase from none in the prior year[138]. - Total operating expenses were $2.7 million for the three months ended June 30, 2022, consistent with the equivalent period of 2021[140]. - Research and development expenses remained at $1.3 million, representing 50% of total operating expenses for both periods[141]. - Selling, general and administrative expenses also remained at $1.4 million, accounting for 50% of total operating expenses for both periods[142]. - Total operating expenses decreased by $6.6 million, or 55%, to $5.4 million for the six months ended June 30, 2022, compared to $12.0 million for the same period in 2021[150]. - Research and development expenses decreased by $2.6 million to $2.8 million for the six months ended June 30, 2022, primarily due to a decrease in stock compensation expense[151]. - Selling, general and administrative expenses decreased by $2.7 million to $2.6 million for the six months ended June 30, 2022, mainly due to a decrease in stock compensation expense[152]. Losses and Deficits - The loss before income taxes was $3.7 million for the three months ended June 30, 2022, compared to $2.4 million for the same period in 2021[124]. - For the three months ended June 30, 2022, the net loss was $3.7 million, an increase of $1.3 million or 54% compared to a net loss of $2.4 million for the same period in 2021[146]. - The accumulated deficit as of June 30, 2022, was $81.5 million, primarily due to research and development and general administrative costs[124]. - The company has experienced recurring losses since inception and expects to incur additional losses in the future related to research and development activities[171]. Cash Flow and Financing - Cash and cash equivalents as of June 30, 2022 were $7.8 million, down from $12.2 million as of December 31, 2021[159]. - Net cash used in operating activities was $5.6 million for the six months ended June 30, 2022, a decrease of $0.4 million, or 6%, compared to the same period in 2021[164]. - Net cash provided by financing activities was $1.8 million for the six months ended June 30, 2022, a decrease of $20.4 million, or 92%, compared to $22.2 million in the same period of 2021[167]. - The company believes existing cash will be sufficient to fund operations through April 2023, but additional capital will be required thereafter[160]. - In the six months ended June 30, 2022, the company raised net proceeds of $1.8 million through the sale of common stock[172]. - As of June 30, 2022, the company had $7.8 million in cash after funding net cash used in operations of $5.6 million for the six-month period, with $2.4 million used in operations for the three months ended June 30, 2022[172]. - The company is assessing options for financing working capital requirements through equity offerings, debt financings, collaborations, and strategic alliances[176]. - If unable to obtain additional financing, the company may have to delay, reduce, or eliminate research and development programs and product portfolio expansion[177]. Accounting and Financial Reporting - The financial statements are prepared on a going concern basis, indicating the expectation of realizing assets and satisfying liabilities in the normal course of business[171]. - There were no material changes to critical accounting policies or estimates during the three and six months ended June 30, 2022[170]. - The company has elected to use the extended transition period under the JOBS Act for complying with new or revised accounting standards[179]. - Foreign exchange did not have a significant impact on reported USD amounts for the three and six-month periods ended June 30, 2022[178]. Intellectual Property and Development - The company has an extensive intellectual property portfolio with approximately 120 issued patents[122]. - A joint development agreement was established with Nanosys Inc. to work on low-cost solution printed micro-LED and quantum dot materials for advanced displays[126].
SmartKem, Inc.(SMTK) - 2022 Q2 - Quarterly Report