Smartkem Reports Fourth Quarter and Full Year 2024 Financial Results

PR Newswire

MANCHESTER, England, April 1, 2025

MANCHESTER, England, April 1, 2025 /PRNewswire/ -- Smartkem (Nasdaq: SMTK), which is seeking to change the world of electronics with a new class of transistor technology, today provides a business update and reports financial results for the three and twelve months ended December 31, 2024.

Smartkem Chairman and CEO, Ian Jenks, commented: "During the fourth quarter of 2024, Smartkem made bold strides towards commercializing our advanced semiconductor materials, which enable flexible, transparent and lightweight MicroLED displays, an industry projected to grow to over $4 billion by 2030.(1) We delivered on every key milestone during the quarter, and in December, we raised $7.65 million in equity financing and received a $1.1 million grant from Innovate UK -- critical funding to supercharge our momentum, expand our resources, and support our ongoing programs.

"Our commercialization strategy is built on three pillars: advancing our polymer materials, developing EDA tools, and establishing scalable manufacturing processes. Concentrating on executing this strategy, we established some key goals for 2025, which included:

   -- Commencing development work on a rollable, transparent MicroLED display 
      with our partner, AUO; 
 
   -- Completing first sale of our TRUFLEX$(R)$ materials to Chip Foundation 
      under the terms of our co-development agreement; 
 
   -- Extending Technology Transfer Agreement with RiTdisplay to transfer 
      Smartkem's OTFT process from ITRI to RiTdisplay's Gen2.5 line; 
 
   -- Entering into a joint development agreement for a "chip-first" MicroLED 
      display; 
 
   -- Entering into additional collaboration and/or co-development agreements 
      that further advance our technology toward commercialization; and 
 
   -- Producing a demonstration of a MicroLED display using our OTFT 
      technology. 

"Our early wins in 2025, including the project commencement with AUO and the first commercial sales of our TRUFLEX(R) advanced semiconductor materials show our focus on accelerating towards commercialization of our technology. We are well on our way to delivering further objectives set out including additional joint development agreements and product demonstrations at upcoming industry events. I look forward to updating you of our progress throughout the year as we continue to solidify our position as a global leader in organic transistor technology that has the potential to change the world of electronics," added Jenks.

Recent Business Highlights

   -- Advanced strategic partnership with RiTdisplay Corporation, a leading 
      developer of optoelectronic solutions, visual displays and passive-matrix 
      OLED displays, in a new phase toward commercialization, including the 
      planned integration of Smartkem's OTFT process on to RiTdisplay's Gen 2.5 
      Pilot Line. 
 
   -- Positioned to unveil the first 
      MicroLED-in-a-Package (MiP) Backlight using Smartkem's unique and 
      proprietary technology at this year's Touch Taiwan conference in Taipei 
      City, Taiwan which runs from April 16-18th 2025. 
 
   -- Completed first sale of TRUFLEX(R) semiconductor materials to joint 
      development partner, Chip Foundation, a manufacturer of semiconductor and 
      integrated circuit devices, for use in the co-development of a new 
      generation of MicroLED-based backlight technology for Liquid Crystal 
      Displays. 
 
   -- Signed multi-year agreement with FlexiIC, a company providing innovation 
      in the design of flexible integrated circuits and systems, to begin a new 
      project to develop a new generation of CMOS for smart sensors. 
 
   -- Partnered with AUO, the largest display manufacturer in Taiwan, to 
      jointly develop the world's first advanced rollable, transparent MicroLED 
      display. 
 
   -- Appointed Jonathan Watkins as Chief Operating Officer $(COO)$, with 
      responsibility for global operations and strategic partnerships. 
 
   -- Participated at SEMICON(R) Korea 2025. 

Full Year 2024 Financial Highlights:

   -- Completed concurrent public and private offerings in December 2024 for 
      aggregate proceeds of $7.65 million. 
 
   -- Received and accepted a GBP900,000 (USD 1.1 million) grant from Innovate 
      UK for a project partnership with AUO to develop a rollable, transparent 
      MicroLED display. 
 
   -- Cash and cash equivalents were $7.1 million as of December 31, 2024, 
      compared to $8.8 million as of December 31, 2023. 
 
   -- Revenues were $82 thousand for the year ended December 31, 2024, up 
      compared to $27 thousand for the same period of 2023, primarily due to an 
      increase in the sale of demonstrator products to potential partners, as 
      the company sought to expand its marketing efforts. 
 
   -- Operating expenses were $11.5 million for the year ended December 31, 
      2024, compared to $10.8 million for the same period of 2023. 

About Smartkem

Smartkem is seeking to change the world of electronics with a new class of transistor using its proprietary advanced semiconductor materials. Its technology can be used in a range of applications including MicroLED, LCD and AMOLED displays, as well as advanced computer and AI chip packaging, and a new type of sensor.

In seeking to enable the adoption and mass commercialization of MicroLED displays, Smartkem's low temperature (80C) process allows its liquid transistors to be poured directly onto the MicroLEDs, eliminating many of the high-cost, low-yield manufacturing processes used in traditional production. This innovation reduces defects, enhances yield and integrates seamlessly into existing manufacturing infrastructure, making MicroLED displays more commercially viable across sectors including smartphones, wearables, automatives and digital signage.

Smartkem develops its materials at its research and development facility in Manchester, UK and provides prototyping services at the Centre for Process Innovation $(CPI.UK)$ at Sedgefield, UK. It has a field application office in Taiwan. The company has an extensive IP portfolio including 138 granted patents across 17 patent families, 16 pending patents and 40 codified trade secrets. For more information, visit our website or follow us on LinkedIn.

Forward-Looking Statements

All statements in this press release that are not historical are forward-looking statements, including, among other things, its market position and market opportunity, expectations and plans as to its product development, manufacturing and sales, and relations with its partners and investors. These statements are not historical facts but rather are based on Smartkem, Inc.'s current expectations, estimates, and projections regarding its business, operations and other similar or related factors. Words such as "may," "will," "could," "would," "should, " "anticipate," "predict," "potential," "continue," "expect," "intend," "plan," "project," "believe," "estimate," and other similar or elated expressions are used to identify these forward-looking statements, although not all forward-looking statements contain these words. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties, and assumptions that are difficult or impossible to predict and, in some cases, beyond the Company's control. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described in the Company's filings with the Securities and Exchange Commission. 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.

Industry Representatives and Media

Selena Kirkwood

Head of Communications for Smartkem

T: +44 (0) 7971 460 364

s.kirkwood@smartkem.com

Analysts and Investors

David Barnard, CFA

Alliance Advisors Investor Relations

T: 1 415 433 3777

dbarnard@allianceadvisors.com

(1) 2024 Omdia Report

 
              SMARTKEM, INC. AND SUBSIDIARIES 
                Consolidated Balance Sheets 
 (in thousands, except number of shares and per share data) 
 
                          December 31,     December 31, 
                              2024               2023 
                        -----------------  ----------------- 
Assets 
 Current assets 
 Cash and cash 
  equivalents                $      7,141        $     8,836 
 Accounts receivable                   --                268 
 Research and 
  development tax 
  credit receivable                   519                610 
 Prepaid expenses 
  and other current 
  assets                              849                811 
                        ------  ---------  -------  -------- 
   Total current 
    assets                          8,509             10,525 
 Property, plant and 
  equipment, net                      269                455 
 Right-of-use 
  assets, net                         120                285 
 Other assets, 
  non-current                           6                  7 
                        ------  ---------  -------  -------- 
     Total assets            $      8,904        $    11,272 
                        ======  =========  =======  ======== 
 
Liabilities and 
stockholders' 
equity 
 Current liabilities 
 Accounts payable 
  and accrued 
  expenses                   $      1,791        $     1,178 
 Lease liabilities, 
  current                              47                230 
 Other current 
  liabilities                         450                360 
                        ------  ---------  -------  -------- 
   Total current 
    liabilities                     2,288              1,768 
 Lease liabilities, 
  non-current                          25                 19 
 Warrant liability                     --              1,372 

                        ------  ---------  -------  -------- 
     Total 
      liabilities                   2,313              3,159 
                        ------  ---------  -------  -------- 
 
Commitments and 
contingencies (Note 
7)                                     --                 -- 
 
Stockholders' 
equity: 
 Preferred stock, 
 par value $0.0001 
 per share, 
 10,000,000 shares 
 authorized, 856 and 
 13,765 shares 
 issued and 
 outstanding, at 
 December 31, 2024 
 and December 31, 
 2023, respectively                    --                 -- 
 Common stock, par 
 value $0.0001 per 
 share, 300,000,000 
 shares authorized, 
 3,590,217 and 
 889,668 shares 
 issued and 
 outstanding, at 
 December 31, 2024 
 and December 31, 
 2023, respectively                    --                 -- 
 Additional paid-in 
  capital                         122,316            104,757 
 Accumulated other 
  comprehensive 
  loss                            (1,105)            (1,578) 
 Accumulated deficit            (114,620)           (95,066) 
                        ------  ---------  -------  -------- 
   Total 
    stockholders' 
    equity                          6,591              8,113 
                        ------  ---------  -------  -------- 
     Total 
      liabilities 
      and 
      stockholders' 
      equity                 $      8,904        $    11,272 
                        ======  =========  =======  ======== 
 
 
                    SMARTKEM, INC. AND SUBSIDIARIES 
      Consolidated Statements of Operations and Comprehensive Loss 
       (in thousands, except number of shares and per share data) 
 
                                           Year Ended December 31, 
                                           --------------------------- 
                                                2024          2023 
                                           --------------  ----------- 
Revenue                                     $          82  $        27 
Cost of revenue                                        32           23 
                                               ----------   ---------- 
 Gross profit                                          50            4 
 
Other operating income                              1,017          836 
 
Operating expenses 
 Research and development                           5,111        5,556 
 General and administrative                         6,342        5,188 
 (Gain)/loss on foreign currency 
  transactions                                         78           87 
                                               ----------   ---------- 
 Total operating expenses                          11,531       10,831 
                                               ----------   ---------- 
 
Loss from operations                             (10,464)      (9,991) 
 
Non-operating income/(expense) 
 Gain/(loss) on foreign currency 
  transactions                                      $(544.SI)$        1,213 
 Transaction costs allocable to warrants               --        (198) 
 Change in fair value of the warrant 
  liability                                           672          465 
 Interest income/(expense)                              7           12 
                                               ----------   ---------- 
 Total non-operating income/(expense)                 135        1,492 
                                               ----------   ---------- 
 
Loss before income taxes                         (10,329)      (8,499) 
 Income tax expense                                   (1)           -- 
                                               ----------   ---------- 
Net loss                                    $    (10,330)  $   (8,499) 
Preferred stock deemed dividends                  (9,224)           -- 
                                               ----------   ---------- 
Net loss attributed to common 
 stockholders                               $    (19,554)  $   (8,499) 
                                               ==========   ========== 
 
Weighted average shares outstanding - 
 basic and diluted                              3,260,127    1,344,892 
                                               ==========   ========== 
 
Basic and diluted net loss per common 
 share attributed to common stockholders    $      (6.00)  $    (6.32) 
 
Net loss                                    $    (10,330)  $   (8,499) 
Other comprehensive loss: 
 Foreign currency translation                         473      (1,095) 
                                               ----------   ---------- 
Total comprehensive loss                    $     (9,857)  $   (9,594) 
                                               ==========   ========== 
 

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SOURCE Smartkem

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April 01, 2025 07:00 ET (11:00 GMT)