SmartKem Reports Q3 2025 Revenue of $81,000 Amid Increased Losses and Deteriorating Financial Position

SmartKem, Inc. reported its financial results for the third quarter and the first nine months of 2025, revealing a revenue of $81,000 for the three months ended September 30, 2025, compared to no revenue in the same period of 2024. For the nine months, the company generated $136,000 in revenue, up from $40,000 in the prior year. The cost of revenue for the third quarter was $5,000, while for the nine-month period, it was $34,000, leading to a gross profit of $76,000 for the quarter and $102,000 for the nine months. Despite this increase in revenue, SmartKem reported a net loss of $3.9 million for the third quarter and $8.5 million for the nine months, compared to losses of $2.8 million and $7.6 million, respectively, in the prior year.

The company experienced a significant increase in operating expenses, which totaled $3.4 million for the third quarter, up from $3.1 million in the same period last year. Research and development expenses rose to $2.1 million, a 36.7% increase attributed to higher personnel costs and increased expenses related to the extension of the CPI Framework agreement. General and administrative expenses decreased to $1.3 million from $1.6 million, primarily due to reduced professional service fees. For the nine-month period, total operating expenses reached $11.5 million, a 30.9% increase from $8.8 million in 2024, driven largely by a 51.8% rise in research and development costs.

SmartKem's financial position has deteriorated, with total assets decreasing to $3.2 million as of September 30, 2025, down from $8.9 million at the end of 2024. Cash and cash equivalents fell sharply to $881,000 from $7.1 million, while current liabilities surged to $5.8 million, up from $2.3 million. The company's accumulated deficit also increased to $123.1 million, reflecting ongoing operational losses. The significant rise in accounts payable indicates a strategy to conserve cash by delaying payments to vendors.

In terms of strategic developments, SmartKem entered into a non-binding letter of intent with Jericho Energy Ventures Inc. on October 6, 2025, to explore a potential business combination. This proposed transaction would result in Jericho stockholders owning 65% of the combined entity, with SmartKem stockholders holding 35%. The company also secured $1 million in bridge financing through the issuance of senior secured notes, which are due in April 2026. However, the company has expressed substantial doubt about its ability to continue as a going concern without additional capital, as its current cash reserves are insufficient to fund operations for the next 12 months.

Looking ahead, SmartKem anticipates continued operational losses and recognizes the need for significant additional capital to support its research and development activities, as well as to meet its operational obligations. The company plans to explore various financing options, including equity offerings and strategic partnerships, to secure the necessary funds. The management's outlook remains cautious, emphasizing the importance of raising capital to sustain operations and advance its technology in the competitive semiconductor materials market.