Equity deficit puts SmartKem (NASDAQ: SMTK) at risk of Nasdaq noncompliance

Rhea-AI Filing Summary

SmartKem, Inc. reports that Nasdaq has notified the company it is not meeting the Nasdaq Capital Market’s minimum stockholders’ equity requirement. The notice cites a stockholders’ deficit of ($127,000) in SmartKem’s Form 10-Q for the period ended June 30, 2025, below the required minimum equity of $2.5 million, and notes that the company also does not meet alternative standards based on market value or net income.

The company’s shares remain listed on Nasdaq for now while it works to regain compliance. SmartKem has until September 29, 2025 to submit a compliance plan, and Nasdaq may grant an extension to as late as February 11, 2026. SmartKem plans to submit a plan but warns there is no assurance Nasdaq will accept it or that it will be able to regain or maintain compliance.

Positive

• None.

Negative

• Nasdaq minimum equity noncompliance: SmartKem’s reported stockholders’ deficit of ($127,000) versus Nasdaq’s $2.5 million equity requirement triggers a formal deficiency notice and creates delisting risk if not cured.

Insights

Equity markets and listing standards analyst

Nasdaq equity deficiency raises delisting risk if SmartKem cannot regain compliance.

SmartKem, Inc. has been formally notified that it fails Nasdaq’s minimum stockholders’ equity requirement, with a reported stockholders’ deficit of ($127,000) versus the $2.5 million threshold as of its June 30, 2025 Form 10-Q. The company also does not qualify under Nasdaq’s alternative standards based on market value of listed securities or net income.

This situation means the listing remains in place for now, but SmartKem moves into a remediation phase with clear deadlines. The company must submit a plan to Nasdaq by September 29, 2025, and, if accepted, could have until February 11, 2026 to regain compliance under Listing Rule 5550(b)(1). If the plan is rejected or compliance is not regained within any granted extension, the matter could move to a hearings panel and potentially lead to delisting.

The company states it intends to file a compliance plan but explicitly acknowledges there is no assurance Nasdaq will accept it or that compliance with this or other requirements will be maintained. For investors, the key uncertainty is whether SmartKem can improve its equity position and satisfy Nasdaq’s standards within the available timeframe; the eventual outcome will depend on steps the company takes and Nasdaq’s determinations.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 15, 2025

SmartKem, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-42115	85-1083654
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

Manchester Technology Center, Hexagon Tower

Delaunays Road, Blackley

Manchester, M9 8GQ U.K.

(Address of principal executive offices, including zip code)

011-44-161-721-1514

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of exchange on which registered
Common Stock, par value $0.0001 per share		SMTK		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b - 2 of the Securities Exchange Act of 1934 (§240.12b - 2 of this chapter).

Emerging growth company x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.

On August 15, 2025, SmartKem, Inc. (the “Company”) received a letter (the “Letter”) from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that the Company was not in compliance with the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market, under Listing Rule 5550(b)(1), because the Company’s stockholders’ deficit of ($127,000) as reported in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2025 was below the required minimum of $2.5 million, and because, as of August 15, 2025, the Company did not meet the alternative compliance standards relating to the market value of listed securities of $35 million or net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years.

The Letter has no immediate impact on the listing of the Company’s common stock, which will continue to be listed and traded on Nasdaq, subject to the Company’s compliance with the other continued listing requirements. The Company has 45 calendar days from August 15, 2025, or until September 29, 2025, to submit to Nasdaq a plan to regain compliance with Listing Rule 5550(b)(1). If Nasdaq accepts the Company’s plan, Nasdaq may grant an extension of up to 180 calendar days from August 15, 2025, or until February 11, 2026, to regain compliance. If Nasdaq does not accept the Company’s plan, the Company will have the right to appeal such decision to a Nasdaq hearings panel.

The Company intends to submit to Nasdaq, within the requisite time period, a plan to regain compliance with Listing Rule 5550(b)(1). There can be no assurance that Nasdaq will accept the Company’s plan or that the Company will be able to regain compliance with Listing Rule 5550(b)(1) or maintain compliance with any other Nasdaq requirement in the future.

The Company, by filing this Form 8-K, discloses its receipt of the notification from Nasdaq in accordance with Listing Rule 5810(b).

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SMARTKEM, INC.
Dated: August 15, 2025	By:	/s/ Barbra C. Keck
		Barbra C. Keck
		Chief Financial Officer

FAQ

Why did SmartKem (SMTK) receive a Nasdaq noncompliance notice?

SmartKem received a notice because its Form 10-Q for the period ended June 30, 2025 reported a stockholders’ deficit of ($127,000), below Nasdaq’s minimum stockholders’ equity requirement of $2.5 million, and it did not meet alternative market value or net income standards.

Is SmartKem’s SMTK common stock still listed on Nasdaq after this notice?

Yes. The company states that the letter has no immediate impact on the listing of its common stock, which will continue to trade on the Nasdaq Capital Market while SmartKem works to address the deficiency.

How long does SmartKem (SMTK) have to regain compliance with Nasdaq’s equity rule?

SmartKem has 45 calendar days from August 15, 2025, or until September 29, 2025, to submit a plan to regain compliance. If Nasdaq accepts the plan, it may grant an extension of up to 180 calendar days from August 15, 2025, or until February 11, 2026.

What happens if Nasdaq does not accept SmartKem’s compliance plan?

If Nasdaq does not accept SmartKem’s plan to regain compliance with Listing Rule 5550(b)(1), the company states it will have the right to appeal that decision to a Nasdaq hearings panel.

What does SmartKem plan to do in response to the Nasdaq notice?

SmartKem states that it intends to submit a plan to Nasdaq within the required time period to regain compliance with Listing Rule 5550(b)(1), while cautioning there is no assurance that Nasdaq will accept the plan or that it will regain or maintain compliance.

Which specific Nasdaq rule is SmartKem currently not meeting?

SmartKem is not in compliance with Nasdaq Capital Market Listing Rule 5550(b)(1), which sets the minimum stockholders’ equity requirement for continued listing.