SmartKem, Inc.(SMTK) - 2025 Q3 - Quarterly Report

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]