Revenue and Expenses - Revenue for the three months ended September 30, 2022, was $26 thousand, a 100% increase compared to none in the same period of 2021[137]. - Cost of revenue for the same period was also $26 thousand, reflecting a 100% increase from none in the prior year[138]. - Other operating income decreased by $170 thousand, or 38%, to $277 thousand in Q3 2022, primarily due to lower research and development tax credits[139]. - Total operating expenses for Q3 2022 were $2.738 million, a slight increase of $14 thousand, or 1%, compared to $2.724 million in Q3 2021[140]. - Research and development expenses were $1.346 million, representing 49% of total operating expenses, a decrease of $10 thousand from the previous year[141]. - Selling, general and administrative expenses remained at $1.392 million, accounting for 51% of total operating expenses, with a 2% increase compared to the prior year[142]. - Loss from operations for Q3 2022 was $2.461 million, an increase of $184 thousand, or 8%, from a loss of $2.277 million in Q3 2021[135]. - For the three months ended September 30, 2022, the net loss was $3.95 million, an increase of 48% compared to a net loss of $2.66 million in the same period of 2021[143]. - Non-operating expenses increased by $1.1 million, or 288%, to $1.5 million for the three months ended September 30, 2022, primarily due to higher losses on foreign currency transactions[143]. - Revenue for the nine months ended September 30, 2022, was $60 thousand, compared to none in the same period of 2021, resulting from sales of OTFT backplanes and TRUFLEX® materials[146]. - Total operating expenses decreased by $6.6 million, or 45%, to $8.15 million for the nine months ended September 30, 2022, compared to $14.75 million for the same period in 2021[150]. - Research and development expenses decreased by $2.6 million to $4.15 million for the nine months ended September 30, 2022, representing 51% of total operating expenses[151]. - Selling, general and administrative expenses decreased by $2.7 million to $4.00 million for the nine months ended September 30, 2022, representing 49% of total operating expenses[152]. Cash Flow and Financing - Net cash used in operating activities was $6.83 million for the nine months ended September 30, 2022, a decrease of 6% compared to $7.30 million for the same period in 2021[162]. - As of September 30, 2022, cash and cash equivalents were $6.3 million, down from $12.2 million as of December 31, 2021[156]. - Net cash provided by financing activities was $1.83 million for the nine months ended September 30, 2022, a decrease of 92% compared to $22.2 million in the same period of 2021[164]. - The company anticipates requiring additional capital funding to continue operations and research and development activities beyond April 2023[157]. - As of September 30, 2022, the company had $6.3 million in cash after incurring $6.8 million in net cash used in operations for the nine-month period[169]. - The company raised net proceeds of $1.8 million through the sale of common stock during the nine months ended September 30, 2022[169]. - The total operating lease liabilities for the years 2022 to 2025 amount to $518,000, with $66,000 due in 2022 and $218,000 in 2023[166]. - The company has total purchase obligations of $770,000, with $227,000 due in 2022 and $486,000 in 2023[166]. - The company expects to require additional capital funding to continue operations and research and development activities after April 2023[170]. - There is no assurance that financing will be available by April 2023 or on acceptable terms, which may impact future operations[171]. - The company is exploring financing options through equity offerings, debt financings, and strategic alliances to meet capital needs[172]. - If unable to secure additional financing, the company may have to delay or reduce research and development programs[173]. Company Outlook and Operations - The accumulated deficit as of September 30, 2022, was $85.5 million, with substantial losses attributed to research and development and administrative costs[124]. - The company has an extensive intellectual property portfolio with approximately 120 issued patents, supporting its competitive position in the market[122]. - The company is focused on developing organic thin-film transistor technology for applications in displays and sensors, which is expected to drive future growth[125]. - The financial statements are prepared on a going concern basis, indicating the company anticipates continuing operations despite uncertainties[174]. - The company has elected to use the extended transition period under the JOBS Act for compliance with new accounting standards[176].
SmartKem, Inc.(SMTK) - 2022 Q3 - Quarterly Report