SmartKem, Inc.(SMTK) - 2024 Q3 - Quarterly Results

Smartkem Q3 2024 Financial Results & Business Update Q3 2024 Overview and Strategic Focus Smartkem's Q3 2024 results highlight progress in OTFT commercialization for microLED displays, strategic partnerships, and a focus on 2025 qualifications and design wins - Entered a joint development agreement (JDA) with Chip Foundation for microLED-based backlight technology for LCDs[2] - ITRI requested Smartkem to develop packaging solutions for advanced computer and AI chips[2] - The microLED display industry is projected to grow from $150 million in 2024 to over $4 billion by 2031[3] - Strategic focus for 2025 is on delivering qualifications and design wins to increase adoption of advanced display technologies[4] Recent Business Highlights Smartkem's recent business highlights include a JDA with Shanghai Chip Foundation and active participation in key industry forums and exhibitions - Signed a JDA with Shanghai Chip Foundation Semiconductor Technology Co. to co-develop microLED-based backlight technology for LCDs[5] - Presented a keynote at the PlayNitride 2024 MicroLED Technology Forum, highlighting advantages for microLED display mass adoption[5] - Exhibited and presented at multiple international conferences, including SEMICON® Taiwan 2024, IMID 2024, ICFPE 2024, and TechBlick[5] Company Information About Smartkem Smartkem develops patented TRUFLEX® liquid semiconductor polymers and OTFTs for next-generation microLED displays, leveraging low-temperature printing and an extensive IP portfolio - Smartkem develops disruptive organic thin-film transistors (OTFTs) and patented TRUFLEX® liquid semiconductor polymers for next-generation displays, including microLEDs[7] - Their inks enable low-temperature printing processes compatible with existing manufacturing infrastructure for cost-effective, high-performance displays[7] - The company holds an extensive IP portfolio, including 125 granted patents across 19 patent families and 40 codified trade secrets[8] Forward-Looking Statements This section contains cautionary forward-looking statements regarding Smartkem's future, subject to risks and uncertainties, with no obligation to update - All statements not historical are forward-looking, encompassing expectations for market position, product development, manufacturing, sales, and partnerships[9] - Forward-looking statements involve known and unknown risks, uncertainties, and assumptions, with actual results potentially differing materially[9] - The Company undertakes no obligation to revise or update this information to reflect future events or circumstances[9] Financial Performance Q3 2024 Financial Highlights Smartkem's Q3 2024 financial highlights show a significant decrease in cash, increased operating expenses, and negligible revenue Q3 2024 Financial Highlights (in millions, except revenue) | Metric | Sep 30, 2024 | Dec 31, 2023 | | :------------------------ | :----------- | :----------- | | Cash and cash equivalents | $1.8 | $8.8 | | Operating expenses (Q3) | $3.0 | $2.7 | | Revenues (Q3) | Nil | $0.003 | Condensed Consolidated Balance Sheets Smartkem's balance sheet as of September 30, 2024, shows decreased total assets, liabilities, and stockholders' equity, primarily due to reduced cash and warrant liability elimination Condensed Consolidated Balance Sheets (in thousands) | Metric | Sep 30, 2024 | Dec 31, 2023 | | :--------------------------- | :----------- | :----------- | | Assets | | | | Cash and cash equivalents | $1,783 | $8,836 | | Total current assets | $3,750 | $10,525 | | Total assets | $4,306 | $11,272 | | Liabilities | | | | Total current liabilities | $1,995 | $1,768 | | Warrant liability | $— | $1,372 | | Total liabilities | $2,026 | $3,159 | | Stockholders' Equity | | | | Total stockholders' equity | $2,280 | $8,113 | Condensed Consolidated Statements of Operations and Comprehensive Loss Smartkem reported nil revenue and increased operating expenses for Q3 and the nine months ended September 30, 2024, resulting in significant net and comprehensive losses Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Metric | 3 Months Ended Sep 30, 2024 | 3 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2023 | | :---------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Revenue | $— | $3 | $40 | $27 | | Gross profit | $— | $2 | $8 | $4 | | Operating expenses | $3,125 | $2,954 | $8,797 | $8,315 | | Loss from operations | $(2,838) | $(2,695) | $(8,064) | $(7,616) | | Net loss | $(2,842) | $(3,022) | $(7,637) | $(7,097) | | Total comprehensive loss | $(2,717) | $(2,172) | $(7,356) | $(7,220) | | Basic net loss per common share | $(0.86) | $(1.78) | $(2.49) | $(5.82) | | Weighted average basic shares outstanding | 3,308,975 | 1,701,166 | 3,068,110 | 1,219,450 | Additional Information Investor and Media Contacts This section provides contact information for Smartkem's CFO, Head of Communications, and U.S. Investor Relations - Contact details provided for Smartkem's Chief Financial Officer (Barbra Keck), Head of Communications (Selena Kirkwood), and U.S. Investor Relations (David Barnard, Alliance Advisors)[10]