Smartkem Reports Second Quarter 2025 Financial Results

Rhea-AI Summary

Smartkem (NASDAQ:SMTK), a transistor technology company, reported its Q2 2025 financial results, marked by significant operational progress but challenging financial metrics. The company's cash position decreased to $1.2 million from $7.1 million at year-end 2024, with funding projected to last only through September 2025.

Q2 revenue was $32,000, down from $40,000 in Q2 2024, while operating expenses increased to $4.7 million from $3.0 million year-over-year. The quarter's operating loss widened to $4.4 million from $2.8 million in Q2 2024. Notable developments included introducing a 12.3-inch MicroLED Smart Backlight demo, partnering with Manz Asia, and securing a new UK patent for MicroLED manufacturing.

Positive

• Secured new UK patent for MicroLED manufacturing process enabling wafer reuse
• Established strategic partnership with Manz Asia for inkjet dielectric solutions
• Introduced 12.3-inch MicroLED Smart Backlight demonstration for automotive displays

Negative

• Cash position critically low at $1.2M, only sufficient until September 2025
• Revenue declined to $32K from $40K year-over-year
• Operating loss increased 57% to $4.4M from $2.8M in Q2 2024
• Operating expenses rose significantly by 57% to $4.7M

Insights

Financial Analyst

Smartkem's severe cash burn and limited runway through September 2025 signals serious financial distress despite technological developments.

Smartkem's Q2 2025 results reveal critical financial challenges that overshadow their technological progress. The most concerning metric is their rapid cash depletion, with $1.2 million remaining as of June 30, down 83% from $7.1 million at year-end 2024. Management explicitly states this only funds operations through September 30, 2025 - giving the company merely weeks of runway remaining.

Revenue remains minimal at just $32 thousand, actually declining 20% from the year-ago period. This indicates the company's OTFT backplanes and TRUFLEX materials are still in customer assessment phases rather than commercial production.

Operating expenses surged to $4.7 million, representing a 57% increase year-over-year. This concerning trend shows accelerating cash burn when the company can least afford it. R&D expenses climbed by $1.5 million, partly due to costs associated with the CPI Framework agreement extension. G&A expenses also increased by $0.6 million for professional services.

The $4.4 million quarterly operating loss (versus $2.8 million last year) highlights the widening gap between minimal revenue and growing expenses. Without significant near-term revenue or external funding, Smartkem faces imminent financial pressure that threatens its ability to commercialize its technology pipeline.

While the company showcases promising developments with MicroLED technology and partnerships with Manz Asia, these initiatives require substantial capital to reach commercialization. The severe cash constraint puts these opportunities at risk and suggests urgent financing needs that may significantly dilute existing shareholders.

MANCHESTER, England, Aug. 12, 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 its financial results for the three and six months ended June 30, 2025.

Second quarter 2025 and recent highlights included:

• Introducing a 12.3-inch MicroLED Smart Backlight demonstration targeting next-generation automotive LCD displays.
• Signing a preliminary joint development agreement with Manz Asia to co-develop inkjet dielectric inks for advanced chip packaging.
• Forming a collaboration with Manz Asia to showcase inkjet-printed dielectric solutions for AI chip packaging at SEMICON Southeast Asia.
• Securing a new UK patent for a MicroLED manufacturing process that enables wafer reuse and supports its expanding IP portfolio.
• Presenting and exhibiting Smarkem's MicroLED technologies at Display Week 2025, with CEO Ian Jenks speaking on commercialization opportunities.

Second Quarter 2025 Financial Highlights:

• Cash and cash equivalents were $1.2 million as of June 30, 2025, compared to $7.1 million as of December 31, 2024. The company believes the cash balance at June 30, 2025 will be sufficient to fund operations through September 30, 2025.
• Revenue was $32 thousand for the three months ended June 30, 2025, compared to $40 thousand for the same period of 2024, primarily as a result of sales of OTFT backplanes and TRUFLEX® materials for customer assessment and development purposes.
• Operating expenses were $4.7 million for the three months ended June 30, 2025, compared to $3.0 million for the same period of 2024. The increase in operating expenses in Q2 2025 was due to a $1.5 million increase in R&D expenses primarily resulting from a $0.8 million increase in costs in the second quarter of 2025 pursuant to the terms of the extension of the CPI Framework agreement and higher personnel expenses as well as $0.6 million higher G&A expenses related to professional services, including $0.3 million in non-cash expenses.
• Loss from operations was $4.4 million for the three months ending June 30, 2025, compared to $2.8 million for the same period of 2024.

About Smartkem

Smartkem is seeking to change the world of electronics with a new class of transistors developed using its proprietary advanced semiconductor materials. Our TRUFLEX® semiconductor polymers enable low temperature printing processes that are compatible with existing manufacturing infrastructure to deliver low-cost, high-performance displays. Our semiconductor platform can be used in a range of display technologies including MicroLED, LCD and AMOLED, as well as in applications in advanced computer and AI chip packaging, sensors, and logic.   

Smartkem designs and develops its materials at its research and development facility in Manchester, UK and provides prototyping services at the Centre for Process Innovation (CPI) in Sedgefield, UK. It operates a field application office in Hsinchu, Taiwan, close to collaboration partner, The Industrial Technology Research Institute (ITRI). Smartkem is developing a commercial-scale production process and Electronic Design Automation (EDA) tools to demonstrate the commercial viability of manufacturing a new generation of displays using its materials.   

The company has an extensive IP portfolio including 140 granted patents across 17 patent families, 14 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.   

Contacts:

Selena Kirkwood
Head of Communications for Smartkem
T : +44 (0) 7971 460 364
s.kirkwood@smartkem.com

U.S. Investors
David Barnard, CFA
Alliance Advisors Investor Relations
T: 1 415 433 3777
dbarnard@allianceadvisors.com

 

SMARTKEM, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
(in thousands, except number of shares and per share data)
		June 30,			December 31,
		2025			2024
Assets
Current assets
Cash and cash equivalents		$	1,152		$	7,141
Research and development tax credit receivable			842			519
Prepaid expenses and other current assets			1,436			849
Total current assets			3,430			8,509
Property, plant and equipment, net			174			269
Right-of-use assets, net			678			120
Other assets, non-current			—			6
Total assets		$	4,282		$	8,904
Liabilities and stockholders' (deficit) / equity
Current liabilities
Accounts payable and accrued expenses		$	3,071		$	1,791
Lease liabilities, current			243			47
Other current liabilities			674			450
Total current liabilities			3,988			2,288
Lease liabilities, non-current			421			25
Total liabilities			4,409			2,313
Contingencies (Note 7)			—			—
Stockholders' (deficit) / equity:
Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized, 0 and 856 shares issued and outstanding, at June 30, 2025 and December 31, 2024, respectively			—			—
Common stock, par value $0.0001 per share, 300,000,000 shares authorized, 4,441,165 and 3,590,217 shares issued and outstanding, at June 30, 2025 and December 31, 2024, respectively			—			—
Additional paid-in capital			123,201			122,316
Accumulated other comprehensive loss			(4,174)			(1,105)
Accumulated deficit			(119,154)			(114,620)
Total stockholders' (deficit) / equity			(127)			6,591
Total liabilities and stockholders' (deficit) / equity		$	4,282		$	8,904

 

SMARTKEM, INC. AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
(in thousands, except number of shares and per share data)
		Three Months Ended June 30,						Six Months Ended June 30,
		2025			2024			2025			2024
Revenue		$	32		$	40		$	55		$	40
Cost of revenue			28			32			29			32
Gross profit			4			8			26			8
Other operating income			279			236			530			438
Operating expenses
Research and development			2,426			1,158			3,923			2,434
General and administrative			2,360			1,844			4,369			3,206
(Gain) / loss on foreign currency transactions			(131)			19			(226)			32
Total operating expenses			4,655			3,021			8,066			5,672
Loss from operations			(4,372)			(2,777)			(7,510)			(5,226)
Non-operating income / (expense)
Gain / (loss) on foreign currency transactions			1,970			(243)			2,939			(249)
Change in fair value of the warrant liability			—			(81)			—			672
Interest income / (expense)			3			3			13			9
Total non-operating income / (expense)			1,973			(321)			2,952			432
Loss before income taxes			(2,399)			(3,098)			(4,558)			(4,794)
Income tax refund / (expense)			(1)			(1)			24			(1)
Net loss		$	(2,400)		$	(3,099)		$	(4,534)		$	(4,795)
Preferred stock deemed dividends			—			—			—			(7,094)
Net loss attributed to common stockholders		$	(2,400)		$	(3,099)		$	(4,534)		$	(11,889)
Weighted average shares outstanding - basic and diluted			8,070,836			3,157,334			7,364,145			2,946,354
Common share data:
Basic net loss per common share		$	(0.30)		$	(0.98)		$	(0.62)		$	(1.63)
Diluted net loss per common share			(0.30)			(0.98)			(0.62)			(4.04)
Dividend per common share			—			—			—			(2.41)
Net loss		$	(2,400)		$	(3,099)		$	(4,534)		$	(4,795)
Other comprehensive loss:
Foreign currency translation			(2,064)			174			(3,069)			156
Total comprehensive loss		$	(4,464)		$	(2,925)		$	(7,603)		$	(4,639)

 

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SOURCE SmartKem, Inc.

FAQ

What is Smartkem's (SMTK) current cash position and runway?

Smartkem has $1.2 million in cash as of June 30, 2025, down from $7.1 million at end-2024, with funding expected to last only through September 30, 2025.

How much did Smartkem's (SMTK) operating expenses increase in Q2 2025?

Operating expenses increased to $4.7 million in Q2 2025, up from $3.0 million in Q2 2024, primarily due to increased R&D costs and G&A expenses.

What were Smartkem's (SMTK) Q2 2025 revenue and operating loss?

Revenue was $32,000 (down from $40,000 in Q2 2024) and operating loss was $4.4 million (increased from $2.8 million in Q2 2024).

What major developments did Smartkem (SMTK) announce in Q2 2025?

Key developments included introducing a 12.3-inch MicroLED Smart Backlight demonstration, partnering with Manz Asia for inkjet dielectric solutions, and securing a new UK patent for MicroLED manufacturing.

What caused the increase in Smartkem's (SMTK) operating expenses?

The increase was driven by a $1.5 million rise in R&D expenses from the CPI Framework agreement extension and higher personnel costs, plus $0.6 million in higher G&A expenses for professional services.