SmartKem (SMTK) POS AM 5 Apr 24 2023 FY Prospectus update (post-effective amendment) Financial data

Document and Entity Information

Document and Entity Information	12 Months Ended
	Dec. 31, 2023
Document and Entity Information [Abstract]
Document Type	POS AM
Entity Registrant Name	SmartKem, Inc.
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Central Index Key	0001817760
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	FY
Amendment Flag	true
Amendment Description	AMENDMENT NO. 1

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 8,836	$ 4,235
Accounts receivable	268	30
Research and development tax credit receivable	610	1,121
Prepaid expenses and other current assets	811	1,056
Total current assets	10,525	6,442
Property, plant and equipment, net	455	602
Right-of-use assets, net	285	475
Other assets, non-current	7	6
Total assets	11,272	7,525
Current liabilities
Accounts payable and accrued expenses	1,178	931
Lease liabilities, current	230	206
Income tax payable		22
Other current liabilities	360	244
Total current liabilities	1,768	1,403
Lease liabilities, non-current	19	239
Warrant liability	1,372
Total liabilities	3,159	1,642
Commitments and contingencies (Note 7)
Stockholders' equity:
Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized, 13,765 and zero shares issued and outstanding, at December 31, 2023 and December 31, 2022, respectively
Common stock, par value $0.0001 per share, 300,000,000 shares authorized, 889,668 and 771,054 shares issued and outstanding, at December 31, 2023 and December 31, 2022, respectively
Additional paid-in capital	104,757	92,933
Accumulated other comprehensive loss	(1,578)	(483)
Accumulated deficit	(95,066)	(86,567)
Total stockholders' equity	8,113	5,883
Total liabilities and stockholders' equity	$ 11,272	$ 7,525

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical)	Dec. 31, 2023 $ / shares shares	Dec. 31, 2022 $ / shares shares
Consolidated Balance Sheets
Preferred shares, par value | $ / shares	$ 0.0001	$ 0.0001
Preferred stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	13,765	0
Preferred Stock, Shares Outstanding	13,765	0
Common shares, par value | $ / shares	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	300,000,000	300,000,000
Common Stock, Shares Issued	889,668	771,054
Common Stock, Shares Outstanding	889,668	771,054

Consolidated Statements of Oper

Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Consolidated Statements of Operations and Comprehensive Loss
Revenue	$ 27	$ 40
Cost of revenue	23	33
Gross profit	4	7
Other operating income	836	1,172
Operating expenses
Research and development	5,556	5,802
Selling, general and administrative	5,188	5,071
Loss on foreign currency transactions	87
Total operating expenses	10,831	10,873
Loss from operations	(9,991)	(9,694)
Non-operating income/(expense)
Gain/(loss) on foreign currency transactions	1,213	(1,782)
Transaction costs allocable to warrants	(198)
Change in fair value of the warrant liability, net	465
Interest income	12	5
Total non-operating income/(expense)	1,492	(1,777)
Loss before income taxes	(8,499)	(11,471)
Income tax expense		(24)
Net loss	(8,499)	(11,495)
Other comprehensive loss:
Foreign currency translation	(1,095)	880
Total comprehensive loss	$ (9,594)	$ (10,615)
Basic net loss per common share (in dollars per share)	$ (6.32)	$ (13.88)
Diluted net loss per common share (in dollars per share)	$ (6.32)	$ (13.88)
Basic weighted average shares outstanding (in shares)	1,344,892	827,906
Diluted weighted average shares outstanding (in shares)	1,344,892	827,906

Consolidated Statements of Op_2

Consolidated Statements of Operations and Comprehensive Loss (Parenthetical)	Sep. 21, 2023	Sep. 19, 2023
Consolidated Statements of Operations and Comprehensive Loss
Stock split ratio	0.0286	0.0286

Consolidated Statements of Stoc

Consolidated Statements of Stockholders Equity - USD ($) $ in Thousands	Preferred Stock	Common stock Private placement	Common stock	Additional paid-in capital Private placement	Additional paid-in capital	Accumulated other comprehensive income / (loss)	Accumulated deficit	Private placement	Total
Beginning Balance at Dec. 31, 2021					$ 89,957	$ (1,363)	$ (75,072)		$ 13,522
Beginning Balance (in shares) at Dec. 31, 2021			730,176
Stock-based compensation expense					488				488
Issuance of common stock to vendor					658				658
Issuance of common stock to vendor (in shares)			12,308
Issuance of common stock in private placement				$ 2,000				$ 2,000
Issuance of common stock in private placement (in shares)		28,573
Issuance of common stock and warrants in private placement				$ (170)				$ (170)
Issuance costs related to common stock in private placement									(170)
Reverse stock split rounding			(3)
Foreign currency translation adjustment						880			880
Net loss							(11,495)		(11,495)
Ending Balance at Dec. 31, 2022					92,933	(483)	(86,567)		5,883
Ending Balance (in shares) at Dec. 31, 2022			771,054
Stock-based compensation expense					717				717
Issuance of common stock to vendor					55				55
Issuance of common stock to vendor (in shares)			2,937
Issuance of preferred stock, net of issuance costs					11,027				11,027
Issuance of preferred stock, net of issuance costs (in shares)	14,149
Conversion of preferred stock into common stock (in shares)	(384)		43,891
Exercise of warrants into common stock					25				25
Exercise of warrants into common stock (in shares)			71,786
Issuance costs related to common stock in private placement									(1,300)
Foreign currency translation adjustment						(1,095)			(1,095)
Net loss							(8,499)		(8,499)
Ending Balance at Dec. 31, 2023					$ 104,757	$ (1,578)	$ (95,066)		$ 8,113
Ending Balance (in shares) at Dec. 31, 2023	13,765		889,668

Consolidated Statements of St_2

Consolidated Statements of Stockholders Equity (Parenthetical)	Sep. 21, 2023	Sep. 19, 2023
Consolidated Statements of Stockholders' Equity
Stock split ratio	0.0286	0.0286

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flow from operating activities:
Net loss	$ (8,499)	$ (11,495)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	145	198
Stock-based compensation expense	717	488
Issuance of common stock to vendor	55	391
Right-of-use asset amortization	263	264
Gain/(loss) on foreign currency transactions	(1,120)	1,782
Transaction costs allocable to warrants	198
Change in fair value of the warrant liability, net	(465)
Change in operating assets and liabilities:
Accounts receivable	(231)	(32)
Research and development tax credit receivable	562	(213)
Prepaid expenses and other current assets	70	(42)
Accounts payable and accrued expenses	459	(385)
Lease liabilities	(266)	(265)
Income tax payable	(23)	22
Other current liabilities	98	238
Net cash used in operating activities	(8,037)	(9,049)
Cash flows from investing activities:
Purchases of property, plant and equipment	(18)	(79)
Net cash used by investing activities	(18)	(79)
Cash flow from financing activities:
Proceeds from the issuance of preferred stock in private placement	12,386
Proceeds from the issuance of warrants in private placement	1,763
Proceeds from the issuance of common stock in private placement		2,000
Payment of issuance costs	(1,483)	(170)
Proceeds from the exercise of warrants	25
Net cash provided by financing activities	12,691	1,830
Effect of exchange rate changes on cash	(35)	(693)
Net change in cash	4,601	(7,991)
Cash, beginning of period	4,235	12,226
Cash, end of period	8,836	4,235
Supplemental disclosure of cash and non-cash investing and financing activities
Initial classification of fair value of warrants	1,837
Right-of-use asset and lease liability additions	$ 50	583
Issuance of common shares for consulting services		$ 633

ORGANIZATION & BUSINESS

ORGANIZATION & BUSINESS	12 Months Ended
	Dec. 31, 2023
ORGANIZATION & BUSINESS
ORGANIZATION & BUSINESS	1. ORGANIZATION & BUSINESS Organization & Reverse Recapitalization SmartKem, Inc. (“SmartKem” or the “Company”) a Delaware corporation, formerly known as Parasol Investments Corporation (“Parasol”), was formed on May 13, 2020, and is the successor, as discussed below, of SmartKem Limited, which was formed under the Laws of England and Wales. The Company was founded as a “shell” company registered under the Exchange Act, with no specific business plan or purpose until it began operating the business of SmartKem Limited following the closing of the Exchange described below. On February 23, 2021, Parasol entered into a Securities Exchange Agreement (“the Exchange Agreement”), with SmartKem Limited. Pursuant to the Exchange Agreement all of the equity interests in SmartKem Limited, except certain deferred shares which had no economic or voting rights (the “Deferred Shares”) and which were purchased by Parasol for an aggregate purchase price of $1.40, were exchanged for shares of Parasol common stock, par value $0.0001 per share (“common stock”), and SmartKem Limited became a wholly owned subsidiary of Parasol (the “Exchange”). As a result of the Exchange, Parasol legally acquired the business of SmartKem Limited, and continues as the existing business operations of SmartKem Limited as a public reporting company under the name SmartKem, Inc. Under ASC 805, Business Combinations, SmartKem Limited was deemed the accounting acquirer based on the following predominate factors: Parasol was created as a “shell” company to effect a business combination and had no operations, the former shareholders of SmartKem Limited own more than a majority of the outstanding voting stock of the Company, the Company’s board of directors and management consists of the former board of directors and management of SmartKem Limited, SmartKem Limited was the largest entity by assets at the time of the Exchange, and the principal operating location of the Company is SmartKem Limited’s premises which are located in Manchester, United Kingdom. The Exchange was accounted for as a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Under this method of accounting, Parasol was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Exchange was treated as the equivalent of SmartKem Limited issuing stock for the net assets of Parasol, accompanied by a recapitalization. The net assets of Parasol are stated at historical cost, with no goodwill or other intangible assets recorded. The consolidated assets, liabilities, and results of operations prior to the Exchange are those of SmartKem Limited. Reported shares and earnings per share available to holders of the Company’s common stock, prior to the Exchange, have been retroactively restated as shares reflecting the exchange ratios established in the Exchange. At the closing of the Exchange (the “Closing”), each SmartKem Limited ordinary share issued and outstanding immediately prior to the Closing (other than the Deferred Shares) was exchanged for 0.0111907 of a share of the Company’s common stock and each SmartKem Limited A ordinary share issued and outstanding immediately prior to the Closing was exchanged for 0.0676668 of a share of the Company’s common stock, with the maximum number of shares of our common stock issuable to the former holders of SmartKem Limited’s ordinary shares and A ordinary shares equal to 12,725,000. This includes enterprise management incentive options to purchase 124,497,910 SmartKem Limited ordinary shares (the “SmartKem Limited EMI Options”) issued and outstanding immediately prior to the Closing that were accelerated and exercised by the holders thereof for a like number of ordinary shares and exchanged for shares of the Company’s common stock pursuant to the Exchange. In aggregate 1,127,720,477 SmartKem Ltd shares were exchanged for 12,725,000 of the Company’s common stock, an average exchange ratio of 0.011283825. Immediately prior to the Closing, an aggregate of 2,500,000 shares of the Company’s common stock owned by the stockholders of Parasol prior to the Exchange were forfeited and cancelled (the “Stock Forfeiture”). Business We are seeking to reshape the world of electronics with our disruptive organic thin-film transistors (OTFTs) that we believe have the potential to drive the next generation of displays. Our patented TRUFLEX ® semiconductor and dielectric inks, or electronic polymers, are used to make a new type of transistor that we believe have the capability to revolutionize the display industry. Our inks enable low temperature printing processes that are compatible with existing manufacturing infrastructure to deliver low-cost displays that outperform existing technologies. Our electronic polymer platform can be used in a range of display technologies including microLED, miniLED and AMOLED displays for next generation televisions, laptops, augmented reality (AR) and virtual reality (VR) headsets, smartwatches and smartphones. COVID-19 Pandemic In March 2020, the World Health Organization declared the outbreak of COVID-19 as a global pandemic (the “Pandemic”). The Pandemic has had a widespread and detrimental effect on the global economy and has adversely impacted the Company’s business and results of operations. The Company has experienced travel bans, states of emergency, quarantines, lockdowns, “shelter in place” orders, business restrictions and shutdowns in the countries where it operates. The Company’s containment measures have impacted its day-to-day operations and disrupted its business. Because the severity, magnitude and duration of the Pandemic and its economic consequences are highly uncertain, rapidly changing and difficult to predict, the ultimate impact of the Pandemic on the Company’s business, financial condition and results of operations is currently unknown. The additional costs incurred by the Company related to COVID-19 for the years ended December 31, 2023, and 2022, respectively were deemed to be immaterial to the consolidated financial statements. The consolidated entity presented is referred to herein as “SmartKem”, “we”, “us”, “our”, or the “Company”, as the context requires and unless otherwise noted.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Dec. 31, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Basis for Presentation These consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and accounting principles generally accepted in the United States of America (“US GAAP”) as defined by the Financial Accounting Standards Board (FASB) within the FASB Accounting Standards Codification (“ASC”) and are presented in thousands, except number of shares and per share data. Reclassification Certain accounts in the prior period consolidated financial statements have been reclassified to conform to the presentation of the current year consolidated financial statements. These reclassifications had no effect on the previously reported operating results. Reverse Stock Split All share numbers and per share amounts presented in these financial statements, including these footnotes reflect a one-for-thirty-five Liquidity As of December 31, 2023, we have incurred recurring losses including net losses of $8.5 million and $11.5 million for the years ended December 31, 2023, and 2022, respectively. We anticipate operating losses to continue for the foreseeable future due to, among other things, costs related to research funding, further development of our technology and products and expenses related to the commercialization of our products. In June 2023 the Company raised $14.2 million through two closings of a private placement of Preferred Stock and Warrants. Net proceeds after related expenses was $12.7 million. In addition, the company has also gone through various cost cutting measures such as lowering personnel costs through a reduction in force, reduced spending on professional service fees and reduced our lease and related utility costs by consolidating office and lab space. All of these actions together have alleviated the going concern that was reported in 2022. We expect that our cash and cash equivalents of $8.8 million as of December 31, 2023, will be sufficient to fund our operating expenses and capital expenditure requirements through the end of April 2025. It is possible this period could be shortened if there are any significant increases in planned spending or development programs or more rapid progress of development programs than anticipated. Our future viability is dependent on our ability to raise additional capital to fund our operations. We will need to obtain additional funds to satisfy our operational needs and to fund our sales and marketing efforts, research and development expenditures, and business development activities. Until such time, if ever, as we can generate sufficient cash through revenue, management’s plans are to finance our working capital requirements through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. If we raise additional funds by issuing equity securities, our existing security holders will likely experience dilution. If we borrow money, the incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that could restrict our operations. If we enter into a collaboration, strategic alliance or other similar arrangement, we may be forced to give up valuable rights. There can be no assurance however that such financing will be available in sufficient amounts, when and if needed, on acceptable terms or at all. The precise amount and timing of the funding needs cannot be determined accurately at this time, and will depend on a number of factors, including the market demand for the Company’s products and services, the quality of product development efforts, management of working capital, and continuation of normal payment terms and conditions for purchase of services. If the Company is unable to substantially increase revenues, reduce expenditures, or otherwise generate cash flows for operations, then the Company will need to raise additional funding. Basis of Consolidation The consolidated financial statements include the accounts of SmartKem, Inc. and its wholly-owned subsidiary, SmartKem Limited. The Company does not have any nonconsolidated subsidiaries. All intercompany balances and transactions have been eliminated on consolidation, including unrealized gains and losses on transactions between the companies. Comprehensive loss Comprehensive loss of all periods presented is comprised primarily of net loss and foreign currency translation adjustments. Management’s Use of Estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingent assets and liabilities, at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The most significant estimates in the Company’s consolidated financial statements relates to the valuation of common share, fair value of share options, and the fair value of warrant liability. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the consolidated financial statements, actual results may materially vary from these estimates. Certain Risk and Uncertainties The Company’s activities are subject to significant risks and uncertainties including the risk of failure to secure additional funding to properly execute the Company’s business plan. The Company is subject to risks that are common to companies in the growth stage, including, but not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, reliance on third party manufacturers, protection of proprietary technology, and compliance with regulatory requirements. The Company has access under a framework agreement to equipment which is used in the manufacturing of demonstrator products employing the Company’s inks. If the Company lost access to this fabrication facility, it would materially and adversely affect the Company’s ability to manufacture prototypes and demonstrate products for potential customers. The loss of this access could significantly impede the Company’s ability to engage in product development and process improvement activities. Alternative providers of similar services exist but would take effort and time to bring into the Company’s operations. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. As of December 31, 2023 and 2022, the Company did not have any cash equivalents. Accounts Receivable Accounts receivable are stated at the amount the Company expects to collect and do not bear interest. The Company considers the following factors when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. These receivables have historically been paid timely. Due to the nature of the accounts receivable balance, the Company believes there is no significant risk of non-collection. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, allowances for credit losses would be required. There was no allowance for credit losses recorded as of December 31, 2023 and 2022. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. Periodically, the Company maintains deposits in financial institutions in excess of government insured limits. Property, Plant and Equipment Property, plant and equipment is stated at cost, less accumulated depreciation. Maintenance and repairs are expensed when incurred. Additions and improvements that extend the economic useful life of the asset are capitalized and depreciated over the remaining useful lives of the assets. The cost and accumulated depreciation of assets sold or retired are removed from the respective accounts, and any resulting gain or loss is reflected in current earnings. Depreciation and amortization are provided using the accelerated declining balance method in amounts considered to be sufficient to amortize the cost of the assets to operations over their estimated useful lives. Property, plant and equipment is depreciated over an estimated useful life of approximately 4 years. Impairment of Long-Lived Assets Management continually evaluates whether events or changes in circumstances might indicate that the remaining estimated useful life of long-lived assets may warrant revision, or that the remaining balance may not be recoverable. When factors indicate that long-lived assets should be evaluated for possible impairment, the Company uses an estimate of the related undiscounted cash flows in measuring whether the long-lived asset should be written down to fair value. Measurement of the amount of impairment would be based on generally accepted valuation methodologies, as deemed appropriate. If the carrying amount is greater than the undiscounted cash flows, the carrying amount of the asset is reduced to the asset’s fair value. An impairment loss is recognized immediately as an operating expense in the consolidated statements of operations. Reversal of previously recorded impairment losses are prohibited. As of December 31, 2023, and 2022, Company’s management believed that no revision to the remaining useful lives or impairment of the Company’s long-lived assets was required. Fair Value of Financial Instruments ASC 820, Fair Value Measurements The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little, or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of and during the years ended December 31, 2023, and 2022. The carrying value of the Company’s cash, accounts receivable, other receivables, and accounts payable approximate fair value because of the short-term maturity of these financial instruments. Warrants The accounting treatment of warrants issued is determined pursuant to the guidance provided by ASC 480, Distinguishing Liabilities from Equity Contracts in Entity’s Own Equity Issuance Costs The Company assessed the issuance cost in connection with the issuance of an equity offering. ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A, Expenses of Offering, Direct and incremental legal and accounting costs associated with the Company’s issuance of common stock, preferred stock and warrants are deferred and classified as a component of other assets on the consolidated balance sheet until completion of the issuance. Upon completion of the issuance, deferred offering costs are reclassified from other assets to equity in additional paid-in capital and recorded against the net proceeds received in the issuance. For the year ended December 31, 2023, we recorded $1.5 million of offering costs of which $1.3 million were recorded in additional paid-in capital and $0.2 million were recorded as non-operating expenses and for the year ended December 31, 2022, $170 thousand of offering costs were recorded in additional paid-in capital. Non-retirement Post-employment Benefits The company records employee severance benefits as non-retirement post-employment benefits that are accounted for under the guidance of ASC 712-10 Compensation - Nonretirement Postemployment Benefits Leases Operating lease assets are included within operating lease right-of-use assets, and the corresponding operating lease obligation on the consolidated balance sheets as of December 31, 2023 and 2022. The Company has elected not to present short-term leases as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that the Company is reasonably certain to exercise. All other lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of the Company’s leases do not provide an implicit rate of return, the Company used an incremental borrowing rate based on inception date of the lease agreement in determining the present value of lease payments. Revenue The Company applies the provisions of ASC 606, Revenue from Contracts with Customers The Company’s current contracts with customers do not contain significant estimates or judgments. All of the Company’s revenue contains a single performance obligation that is recognized upon fulfilment of the sales order. The Company derives its revenues primarily from sales of TRUFLEX ® ® Collaboration Arrangements The Company entered into several collaboration agreements during 2023. The business arrangements between the two parties are not accounted for as a Collaborative Arrangement, as defined within the guidance under ASC 808, Collaborative Arrangement It has also determined that other parties are a vendor and not a customer, as defined within the guidance under ASC 606, as the other parties did not primarily contract with SmartKem to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration. It was SmartKem that contracted with the other parties to obtain design services from it. These agreements are accounted for under the guidance of ASC 705, Cost of Sales and Service. Accounting for Consideration Received from a Vendor Research and Development Expenses The Company expenses research and development costs as incurred. Research and development costs include salaries, employee benefit costs, direct project costs, supplies and other related costs. Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received. Patent and Licensing Costs Patent and licensing costs are expensed as incurred because their realization is uncertain. These costs are classified as research and development expenses in the accompanying consolidated statements of operations and comprehensive loss. Other Operating Income The Company’s other operating income includes government grants received for qualifying research and development projects, and research and development tax credits related to the United Kingdom’s Research and Development tax relief for small and medium-sized enterprises, which is a government tax incentive designed to reward innovative companies for investing in research and development. Such incentives are recorded as other income when it is probable the amounts are collectible and can be reasonably estimated. The Company has applied the guidance of IAS 20, Accounting for Government Grants and Disclosure of Government Assistance For the year ended December 31, 2023 and 2022, the Company recorded grant income and research & development tax credits of $836 thousand and $1,172 thousand, respectively, which are recorded as other operating income in the accompanying consolidated statements of operations. As of December 31, 2023 and 2022, the Company had receivables related to research & development tax credits for payments not yet received of $610 thousand and $1,121 thousand, respectively and receivables related to a government grants of $160 thousand as of December 31, 2023. The Company had no receivables related to government grants as of December 31, 2022. Ordinary Shares Valuation Due to the absence of public trading market for the Company’s common stock before February 2022, the Company utilized methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its ordinary shares. In determining the exercise prices for options to be issued, the estimated fair value of the Company’s common stock on each grant date was estimated based upon a variety of factors, including: ● the issuance prices of shares of common stock; ● the rights and preferences of holders of preferred stock; ● the progress of the Company’s research and development programs; ● the Company’s stage of development and business strategy; ● external market conditions affecting the technology industry and trends within the technology industry; ● the Company’s financial position, including cash on hand; ● the Company’s historical and forecasted performance and operating results; ● the lack of active public market for the Company’s ordinary shares; ● the likelihood of achieving a liquidity event, such as a securities offering, initial public offering or a sale of the Company’s common stock From February 2022, the Company’s common stock is publicly traded, and the Company no longer has to estimate the fair value of the common stock, rather the value is determined based on quoted market prices. Significant changes to the key assumptions underlying the factors used could result in different fair values of ordinary shares at each valuation date. Shares of common stock are classified in stockholders’ equity and represent issued share capital. Share-based compensation All share-based payments, including grants of stock options, are measured based on the fair value of the share-based awards at the grant date and recognized over their respective vesting periods. Outstanding options generally expire 10 years after the grant date. The Company has issued options that vest based on service requirements and issued options that vest based on performance requirements. Options become exercisable when service requirements are met. In the case of performance-based options, options become exercisable when there is a liquidity event, such as a change in control or sale or admission (listing as a public company or initial public offering (“IPO”)), and the employee, or consultant, must be providing services to the Company at the time of the event. Due to the Exchange, all options outstanding immediately prior to the event with a performance obligation requirement became vested and exercisable. Non-cash stock-based compensation expense for the year ended December 31, 2023 and 2022 were $0.7 million and $0.5 million, respectively (see also Note 9). The estimated fair value of stock options at the grant date is determined using the Black-Scholes pricing model. The Black-Scholes option pricing model requires inputs such as the fair value of common stock on date of grant, expected term using a simplified method, expected volatility, dividend yield, and risk-free interest rate. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards. The Company records forfeitures when they occur. Functional Currency and Operations Prior to the Exchange, SmartKem Limited’s (“the predecessor’s”) functional currency was the British Pound Sterling (“GBP”), and the consolidated financial statements were presented in United States dollars (“USD”). The predecessor’s functional currency was the respective local currency of the primary economic environment in which an entity’s operations are conducted. The predecessor translated the consolidated financial statements into the presentation currency using exchange rates in effect on the balance sheet date for assets and liabilities and average exchanges rates for the period for statement of operations accounts, with the difference recognized in accumulated other comprehensive income/ (loss). The Company’s functional currency is the U.S. dollar (“USD”). The functional currency of the Company’s foreign operation is the respective local currency. Assets and liabilities of foreign operations denominated in local currencies are translated at the spot rate in effect at the applicable reporting date. The consolidated statements of operations and comprehensive loss are translated at the weighted average rate of exchange during the applicable period. The resulting unrealized gain/loss is recognized as foreign currency translation as a component of other comprehensive income. Income Taxes Valuation allowance of deferred tax assets Income taxes are recorded in accordance with ASC 740, Income Taxes We considered the positive and negative evidence bearing upon its ability to realize the deferred tax assets. In addition to the Company’s history of cumulative losses, the Company cannot be certain that future taxable income will be sufficient to realize its deferred tax assets. Accordingly, a full valuation allowance has been provided against its net deferred tax assets at both December 31, 2023 and 2022. Should the Company change its determination, based on the evidence available as to the amount of its deferred tax assets that can be realized, the valuation allowance will be adjusted with a corresponding impact to the provision for income taxes in the period in which such determination is made and which may be material. As of December 31, 2023, and 2022, there were no material uncertain tax positions. Contingent Liabilities A provision for contingent liabilities is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. From time to time, the Company may be party to certain litigation and disputes arising in the normal course of business. As of December 31, 2023, the Company is not a party to any litigation or disputes. Segment Information The Company has determined that it operates and reports in one segment Basic and Diluted Loss Per Share Basic and diluted net loss per share is determined by dividing net loss by the weighted average ordinary shares outstanding during the period. For all periods presented with a net loss, the shares underlying the ordinary share options and warrants have been excluded from the calculation because their effect would be anti-dilutive. Therefore, the weighted-average shares outstanding used to calculate both basic and diluted loss per share are the same for periods with a net loss. The loss per share information in these consolidated financial statements is reflected and calculated as if the Company had existed since January 1, 2021. Accordingly, loss per share for all periods was calculated based on the number of shares retroactively adjusted for the exchange ratio determined in the reverse recapitalization (see also Note 1). As of December 31, 2023, the Company had 61,587 pre-funded common stock warrants and 769,826 Class B Warrants outstanding and exercisable. As the pre-funded common stock warrants and Class B Warrants are exercisable for $0.35, these shares are considered outstanding common shares and included in computation of basic and diluted Earnings Per Share as the exercise of the pre-funded common stock warrants is virtually assured. The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 Common stock warrants ​ ​ 1,772,829 ​ ​ 28,161 Assumed conversion of preferred stock ​ ​ 1,573,226 ​ ​ — Stock options ​ ​ 70,412 ​ ​ 80,887 Total ​ ​ 3,416,467 ​ ​ 109,048 ​ Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments: Credit Losses (Topic 326) In November 2023, the FASB issued Accounting Standards Update (ASU) No. 2023-07, Segment Reporting Improvements to Reportable Segment Disclosures On December 14, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures The OECD reached an agreement among various countries to implement a minimum 15% tax rate on certain multinational enterprises, commonly referred to as Pillar Two. Many countries continue to announce changes in their tax laws and regulations based on Pillar Two Proposals. We are continuing to evaluate the impact of these proposed and enacted legislative changes as new guidance becomes available. Given the numerous proposed changes in law and uncertainty regarding such proposed changes, the impact cannot be determined at this time.

PREPAID EXPENSES AND OTHER CURR

PREPAID EXPENSES AND OTHER CURRENT ASSETS	12 Months Ended
	Dec. 31, 2023
PREPAID EXPENSES AND OTHER CURRENT ASSETS
PREPAID EXPENSES AND OTHER CURRENT ASSETS	3. PREPAID EXPENSES AND OTHER CURRENT ASSETS: Prepaid expenses and other current assets consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (in thousands) 2023 2022 Prepaid facility costs ​ $ 101 ​ $ 106 Prepaid insurance ​ 274 ​ 358 Prepaid professional service fees ​ 68 ​ 339 Research grant receivable ​ ​ 160 ​ ​ — Prepaid software licenses ​ ​ 24 ​ ​ 22 VAT receivable ​ ​ 104 ​ ​ 195 Other receivable and other prepaid expenses ​ ​ 80 ​ ​ 36 Total prepaid expenses and other current assets ​ $ 811 ​ $ 1,056 ​

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT	12 Months Ended
	Dec. 31, 2023
PROPERTY, PLANT AND EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT	4. PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (in thousands) 2023 2022 Plant and equipment ​ $ 1,584 ​ $ 1,478 Furniture and fixtures ​ 108 ​ 218 Computer hardware and software ​ 24 ​ 24 ​ ​ 1,716 ​ 1,720 Less: Accumulated depreciation ​ (1,261) ​ (1,118) Property, plant and equipment, net ​ $ 455 ​ $ 602 ​ ​ ​ ​ ​ ​ ​ ​ Depreciation expense was $145 thousand and $198 thousand for the year ended December 31, 2023 and 2022, respectively, and is classified as research and development expense.

ACCOUNTS PAYABLE AND ACCRUED EX

ACCOUNTS PAYABLE AND ACCRUED EXPENSES	12 Months Ended
	Dec. 31, 2023
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
ACCOUNTS PAYABLE AND ACCRUED EXPENSES	5. ACCOUNTS PAYABLE AND ACCRUED EXPENSES: Accounts payable and accrued expenses consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (in thousands) 2023 2022 Accounts payable ​ $ 355 ​ $ 250 Accrued expenses – lab refurbishments ​ — ​ 117 Accrued expenses – technical fees ​ 91 ​ 130 Accrued expenses – audit & accounting fees ​ 182 ​ 179 Accrued expenses – other ​ 175 ​ 44 Payroll liabilities ​ 375 ​ 211 Total accounts payable and accrued expenses ​ $ 1,178 ​ $ 931 ​

LEASES

LEASES	12 Months Ended
	Dec. 31, 2023
LEASES
LEASES	6. LEASES: The Company has operating leases consisting of office space, lab space, and equipment with remaining lease terms of 1 to 3 years, subject to certain renewal options as applicable. The table below presents certain information related to the lease costs for the Company’s operating leases for the periods ended: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2023 2022 Operating lease cost ​ $ 276 ​ $ 262 Short-term lease cost ​ 7 ​ ​ 10 Variable lease cost ​ 162 ​ ​ 186 Total lease cost ​ $ 445 ​ $ 458 ​ The total lease cost is included in the consolidated statements of operations as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2023 2022 Research and development ​ $ 419 ​ $ 430 Selling, general and administrative ​ 26 ​ 28 Total lease cost ​ $ 445 ​ $ 458 ​ Right of use lease assets and lease liabilities for our operating leases were recorded in the consolidated balance sheets as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (in thousands) 2023 2022 Assets ​ ​ ​ Right of use assets - Operating Leases ​ $ 285 ​ $ 475 Total lease assets ​ $ 285 ​ $ 475 ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ Current liabilities: ​ ​ Lease liability, current - Operating Leases ​ $ 230 ​ $ 206 Noncurrent liabilities: ​ ​ ​ Lease liability, non-current - Operating Leases ​ 19 ​ 239 Total lease liabilities ​ $ 249 ​ $ 445 ​ The Company had no right of use lease assets or lease liabilities for financing leases as of December 31, 2023 and 2022. ​ The table below presents certain information related to the cash flows for the Company’s operating leases for the periods ended: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2023 2022 Operating cash outflows from operating leases ​ $ 266 ​ $ 265 Supplemental non-cash amounts of operating lease liabilities arising from obtaining right of use assets ​ $ 50 ​ $ 583 ​ The table below presents certain information related to the weighted average remaining lease term and the weighted average discount rate for the Company’s operating leases as of the period ended: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 Weighted average remaining lease term (in years) – operating leases ​ ​ 1.31 ​ ​ 2.19 Weighted average discount rate – operating leases ​ 7.88 % 7.73% ​ Undiscounted operating lease liabilities as of December 31, 2023, by year and in the aggregate, having non-cancelable lease terms in excess of one year were as follows: ​ ​ ​ ​ ​ ​ ​ December 31, (in thousands) ​ 2023 2024 ​ $ 243 2025 ​ ​ 20 Total undiscounted lease payments ​ ​ 263 Less imputed interest ​ ​ (14) Total net lease liabilities ​ $ 249 ​

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 2023
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES	7. COMMITMENTS AND CONTINGENCIES: Legal proceedings In the normal course of business, the Company may become involved in legal disputes regarding various litigation matters. In the opinion of management, any potential liabilities resulting from such claims would not have a material effect on the consolidated financial statements. ​

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	12 Months Ended
	Dec. 31, 2023
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	8. STOCKHOLDERS’ EQUITY: Reverse Stock Split At the Company’s Annual Meeting of Stockholders held on August 25, 2023 (the “Annual Meeting”), the Company’s stockholders approved a proposal to approve and adopt an amendment to the Company’s Amended and Restated Certificate of Incorporation to effect a reverse stock split of its shares of common stock, issued and outstanding or reserved for issuance, at a specific ratio within a range from 1-for- 30 60 35 On September 19, 2023, the Company filed with the Secretary of State of the State of Delaware a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation (the “Charter Amendment”) to effect a reverse stock split of the issued and outstanding shares of the Company’s common stock, $0.01 par value per share, at a ratio of 1-for- 35 Preferred Stock The board of directors has the authority, without further action by the stockholders, to issue up to 10,000,000 shares of preferred stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof. These rights, preferences, and privileges could include dividend rights, conversion rights, voting rights, redemption rights, liquidation preferences, sinking fund terms, and the number of shares constituting any series or the designation of such series, any or all of which may be greater than the rights of common stock. Series A-1 Preferred Stock On June 14, 2023, the Company filed a Certificate of Designation of Preferences, Rights and Limitations with the Secretary of State of the State of Delaware designating 18,000 shares out of the authorized but unissued shares of its preferred stock as Series A-1 Preferred Stock with a stated value of $1,000 per share (the “Series A-1 Certificate of Designation”). On January 29, 2024, the Company filed an Amended and Restated Certificate of Designation of Preferences, Rights and Limitation with the Secretary of the State of Delaware designating 11,100 shares of Series A-1 Preferred Stock. The following is a summary of the principal amended and restated terms of the Series A-1 Preferred Stock as set forth in the Amended and Restated Series A-1 Certificate of Designation: Dividends The holders of Series A-1 Preferred Stock will be entitled to dividends, on an as-if converted basis, equal to and in the same form as dividends actually paid on shares of Common Stock, when and if actually paid. In addition, in the event that on the 18th month anniversary of the Closing Date, the trailing 30-day VWAP (as defined in the Series A-1 Certificate of Designation) is less than the then-effective Series A-1 Conversion Price, the Series A-1 Preferred Stock will begin accruing dividends at the annual rate of 19.99% of the stated value thereof (the “Series A-1 Dividend”). The Series A-1 Dividend would be paid in cash, or, at the option of the Company if certain equity conditions are met, in shares of Common Stock at a price per share equal to ninety percent (90%) of the trailing 10-day Voting Rights The shares of Series A-1 Preferred Stock have no voting rights, except to the extent required by the Delaware General Corporation Law. As long as any shares of Series A-1 Preferred Stock are outstanding, the Company may not, without the approval of a majority of the then outstanding shares of Series A-1 Preferred Stock which must include AIGH Investment Partners LP and its affiliates (“AIGH”) for so long as AIGH is holding at least $1,500,000 in aggregate stated value of Series A-1 Preferred Stock acquired pursuant to the Purchase Agreement (a) alter or change the powers, preferences or rights given to the Series A-1 Preferred Stock, (b) alter or amend the Amended and Restated Certificate of Incorporation (the “Charter”), the Series A-1 Certificate of Designation, the Series A-2 Certificate of Designation (as defined below) or the bylaws of the Company (the “Bylaws”) in such a manner so as to materially adversely affect any rights given to the Series A-1 Preferred Stock, (c) authorize or create any class of stock ranking as to dividends, redemption or distribution of assets upon a Liquidation (as defined below) senior to, or otherwise pari passu with, the Series A-1 Preferred Stock, other than 3,050 shares of Series A-2 Preferred Stock of the Company, (d) increase the number of authorized shares of Series A-1 Preferred Stock, (e) issue any Series A-1 Preferred Stock except pursuant to the Purchase Agreement, or (f) enter into any agreement to do any of the foregoing. Liquidation Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the then holders of the Series A-1 Preferred Stock are entitled to receive out of the assets available for distribution to stockholders of the Company an amount equal to 100% of the stated value, plus any accrued and unpaid dividends thereon and any other fees or liquidated damages then due and owing thereon, prior and in preference to the Common Stock or any other series of preferred stock (other than the Series A-2 Preferred Stock). Conversion The Series A-1 Preferred Stock is convertible into Common Stock at any time at a conversion price of $87.50, subject to adjustment for certain anti-dilution provisions set forth in the Series A-1 Certificate of Designation (the “Series A-1 Conversion Price”). Upon conversion the shares of Series A-1 Preferred Stock will resume the status of authorized but unissued shares of preferred stock of the Company. Conversion at the Option of the Holder The Series A-1 Preferred Stock is convertible at the then-effective Series A-1 Conversion Price at the option of the holder at any time and from time to time. Mandatory Conversion at the Option of the Company So long as certain equity conditions are satisfied, the Company may give notice requiring the holders to convert all of the outstanding shares of Series A-1 Preferred Stock into shares of Common Stock at the then-effective Series A-1 Conversion Price. Beneficial Ownership Limitation The Series A-1 Preferred Stock cannot be converted to Common Stock if the holder and its affiliates would beneficially own more than 4.99% (or 9.99% at the election of the holder) of the outstanding common stock. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99% upon notice to us, provided that any increase in this limitation will not be effective until 61 days after such notice from the holder to us and such increase or decrease will apply only to the holder providing such notice. Preemptive Rights No holders of Series A-1 Preferred Stock will, as holders of Series A-1 Preferred Stock, have any preemptive rights to purchase or subscribe for Common Stock or any of our other securities. Redemption The shares of Series A-1 Preferred Stock are not redeemable by the Company. Negative Covenants As long as any Series A-1 Preferred Stock is outstanding, unless the holders of more than 50% in stated value of the then outstanding shares of Series A-1 Preferred Stock shall have otherwise given prior written consent (which must include AIGH for so long as AIGH is holding at least $1,500,000 in aggregate stated value of Series A-1 Preferred Stock acquired pursuant to the Purchase Agreement), the Company cannot, subject to certain exceptions, (a) enter into, create, incur, assume, guarantee or suffer to exist any indebtedness, (b) enter into, create, incur, assume or suffer to exist any liens, (c) repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock, Common Stock equivalents or junior securities, (d) enter into any transaction with any affiliate of the Company which would be required to be disclosed in any public filing with the Commission, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company, (e) declare or pay a dividend on junior securities or (f) enter into any agreement with respect to any of the foregoing. Trading Market There is no established trading market for any of the Series A-1 Preferred Stock, and we do not expect a market to develop. We do not intend to apply for a listing for any of the Series A-1 Preferred Stock on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the Series A-1 Preferred Stock will be limited. Series A-2 Preferred Stock On June 14, 2023, the Company filed a Certificate of Designation of Preferences, Rights and Limitations with the Secretary of State of the State of Delaware designating 18,000 shares out of the authorized but unissued shares of its preferred stock as Series A-2 Preferred Stock with a stated value of $1,000 per share (the “Series A-2 Certificate of Designation”). The following is a summary of the principal terms of the Series A-2 Preferred Stock as set forth in the Series A-2 Certificate of Designation: Dividends The holders of Series A-2 Preferred Stock will be entitled to dividends, on an as-if converted basis, equal to and in the same form as dividends actually paid on shares of Common Stock, when and if actually paid. Voting Rights The shares of Series A-2 Preferred Stock have no voting rights, except to the extent required by the DGCL. As long as any shares of Series A-2 Preferred Stock are outstanding, the Company may not, without the approval of a majority of the then outstanding shares of Series A-2 Preferred Stock (a) alter or change the powers, preferences or rights of the Series A-2 Preferred Stock, (b) alter or amend the Charter, the Series A-2 Certificate of Designation or the Bylaws in such a manner so as to materially adversely affect any rights given to the Series A-2 Preferred Stock, (c) authorize or create any class of stock ranking as to dividends, redemption or distribution of assets upon a liquidation senior to, or otherwise pari passu Liquidation Upon a Liquidation, the then holders of the Series A-2 Preferred Stock are entitled to receive out of the assets available for distribution to stockholders of the Company an amount equal to 100% of the stated value, plus any accrued and unpaid dividends thereon and any other fees or liquidated damages then due and owing thereon, prior and in preference to the Common Stock or any other series of preferred stock (other than the Series A-1 Preferred Stock). Conversion The Series A-2 Preferred Stock is convertible into Common Stock at any time at a conversion price of $8.75, subject to adjustment for certain anti-dilution provisions set forth in the Series A-2 Certificate of Designation (the “Series A-2 Conversion Price”). Upon conversion the shares of Series A-2 Preferred Stock will resume the status of authorized but unissued shares of preferred stock of the Company. Conversion at the Option of the Holder The Series A-2 Preferred Stock is convertible at the then-effective Series A-2 Conversion Price at the option of the holder at any time and from time to time. Automatic Conversion On the trading day immediately preceding the date on which shares of Common Stock commence trading on the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange all, but not less than all, of the outstanding shares of Series A-2 Preferred Stock shall automatically convert, without any action on the part of the holder thereof and without payment of any additional consideration, into that number of shares of Common Stock determined by dividing the stated of such share of Series A-2 Preferred Stock by the then applicable Series A-2 Conversion Price. Beneficial Ownership Limitation The Series A-2 Preferred Stock cannot be converted to common stock if the holder and its affiliates would beneficially own more than 4.99% (or 9.99% at the election of the holder) of the outstanding common stock. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99% upon notice to us, provided that any increase in this limitation will not be effective until 61 days after such notice from the holder to us and such increase or decrease will apply only to the holder providing such notice. Preemptive Rights No holders of Series A-2 Preferred Stock will, as holders of Series A-2 Preferred Stock, have any preemptive rights to purchase or subscribe for Common Stock or any of our other securities. Redemption The shares of Series A-2 Preferred Stock are not redeemable by the Company. Trading Market There is no established trading market for any of the Series A-2 Preferred Stock, and the Company does not expect a market to develop. The Company does not intend to apply for a listing for any of the Series A-2 Preferred Stock on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the Series A-2 Preferred Stock will be limited. Series A-1 and A-2 Preferred Stock and Class A and Class B Warrant Issuances On June 14, 2023, the Company and certain investors entered into a securities purchase agreement (the “Purchase Agreement”) pursuant to which the Company sold an aggregate of (i) 9,229 shares of Series A-1 Convertible Preferred Stock at a price of $1,000 per share (the “Series A-1 Preferred Stock”), (ii) 2,950 shares of the Company’s Series A-2 Convertible Preferred Stock at a price of $1,000 per share (“Series A-2 Preferred Stock” and together with the Series A-1 Preferred Stock, the “Preferred Stock”), (iii) Class A Warrants to purchase up to an aggregate of 1,391,927 shares of common stock (the “Class A Warrant”), and (iv) Class B Warrants to purchase up to an aggregate of 798,396 shares of common stock (the “Class B Warrant” and together with the Class A Warrant, the “Warrants”) for aggregate gross proceeds of $12.2 million (the “June 2023 PIPE”). In addition, 34,286 Class B Warrants were issued in lieu of cash payments for consulting services related to the offering. The fair value of the service provided was $59 thousand. On June 22, 2023, in a second closing of the June 2023 PIPE, the Company sold an aggregate of (i) 1,870.36596 Series A-1 Preferred Stock, (ii) 100 shares of Series A-2 Preferred Stock, and (iii) Class A Warrants to purchase up to an aggregate of 225,190 shares of Common Stock pursuant to the Purchase Agreement for aggregate gross proceeds of $2.0 million. In addition, 8,572 Class B Warrants were issued in lieu of cash payments for consulting services related to the offering. The fair value of the service provided was $15 thousand. Each Class A Warrant has an exercise price of $8.75 and each Class B Warrant has an exercise price of $0.35, both subject to adjustments in accordance with the terms of the Warrants. The Warrants expire five years from the issuance date. There were an additional 127,551 warrants issues related to a placement agent fee. The fair value of this fee is $31 thousand. The Company has accounted for the Class A and Class B Warrants as derivative instruments in accordance with ASC 815, Derivatives and Hedging. The Company classified the Warrants as a liability because they cannot be considered indexed to the Company’s stock due to provisions that, in certain circumstances, adjust the number of shares to be issued if the exercise price is adjusted and the existence of a pre-specified volatility input to the Black-Scholes calculation which could be used to calculate consideration in the event of a Fundamental Transaction, as defined in the agreements. The Company received net proceeds after expenses of $12.7 million. Of the net proceeds, the Company allocated an estimated fair value of $1.8 million to the Warrants. The Company also expensed $0.2 million of issuance costs that were allocated to the warranty liability during the three and six months ended June 30, 2023. The terms of the June 2023 PIPE include a number of restrictions on our operations and on our ability to raise additional capital. The Purchase Agreement, among other things, provides that, for a period ending on June 14, 2024, we may not use cash from operating activities (as defined under GAAP) of more than an average of $2.8 million for any consecutive three-month period (subject to certain exceptions). This provision may cause us to delay certain actions that may benefit our business and may prevent us from pursuing potentially favorable business opportunities, even if a majority of our board of directors believes such actions or opportunities are in the best interest of our company and our stockholders. Under the terms of the Purchase Agreement, for a period ending on December 15, 2025, in the event that we issue common stock or common stock equivalents in a subsequent financing (as defined in the Purchase Agreement), the significant purchasers (defined in the Purchase Agreement as a purchaser acquiring at least 1,000 shares of Series A-1 Preferred Stock) will have the right to purchase up to 40% of the securities sold in the subsequent financing. This provision may make it more difficult for us to raise additional capital because other investors may want to provide all, or a larger portion of the capital provided in the subsequent financing or may be unwilling to co-invest with one or more of the significant purchasers or may be unwilling to commit to provide financing without knowing how much of the subsequent financing will be provided by the significant purchasers. In addition, during such period, the Company may not issue common stock or common stock equivalents in a subsequent financing with an effective price per share of common stock that is or may become lower than the then-effective conversion price of the Series A-1 Preferred Stock without the consent of the significant purchasers, which must include AIGH Investment Partners LP and its affiliates for so long as they are holding at least $1,500,000 in aggregate stated value of Series A-1 Preferred Stock acquired pursuant to the Purchase Agreement. This provision may prevent the Company from obtaining additional capital on market terms even if a majority of the Company’s board of directors believes that the terms of the subsequent financing are in the best interests of the Company and its stockholders. This provision may also have the effect of increasing the cost of obtaining additional capital either because the significant purchasers refuse to consent to any such subsequent financing unless provided by them on terms approved by them or because the Company is required to provide additional consideration to such significant purchasers in exchange for their consent. In the event that the Company issues common stock or common stock equivalents in a subsequent financing prior to the time the common stock is listed on a national securities exchange, the Purchase Agreement provides that if a significant purchaser reasonably believes that any of the terms and conditions of the subsequent financing are more favorable to an investor in the subsequent financing than the terms of the June 2023 PIPE, such significant purchaser has the right to require the Company to amend the terms of the June 2023 PIPE to include such more favorable term for such significant purchaser. This provision may make it more expensive to obtain additional capital prior to an uplisting because it permits any significant purchaser to “cherry pick” the terms of the subsequent financing and to require any term deemed to be more favorable to be included retroactively in the terms of the June 2023 PIPE. This provision also potentially creates uncertainty around the terms of a subsequent financing because the significant purchasers have the right to review terms of a completed subsequent financing before deciding which, if any, of the terms thereof they find more favorable to them. The Purchase Agreement provides that, until June 14, 2025, a significant purchaser may participate in a subsequent transaction by exchanging some or all of its Series A-1 Preferred Stock having a stated value equal to its subscription amount in the subsequent financing. This provision may adversely affect the amount of capital the Company raises in a subsequent financing, as it permits a significant purchaser to roll its existing investment into the new financing rather than being required to invest cash. This provision also has the potential to make it more difficult for the Company to raise additional capital as other investors may want to provide all or a larger portion of the capital provided in the subsequent financing or may require the Company to raise a minimum amount of new capital or may be unwilling to commit to provide financing without knowing how much of the subsequent financing will be provided by the significant purchasers in cash. If the Company is unable to raise additional capital when needed, the Company may be required to delay, limit, reduce or terminate commercialization, its research and product development, or grant rights to develop and market its products that the Company would otherwise prefer to develop and market itself and may have a material adverse effect on the Company’s business, financial condition and results of operations. Common Stock Voting Rights Each holder of common stock is entitled to one vote for each share on all matters submitted to a vote of the stockholders, including the election of directors. The Company’s amended and restated certificate of incorporation and the Company’s amended and restated bylaws do not provide for cumulative voting rights. The holders of one-third of the stock issued and outstanding and entitled to vote, present in person or represented by proxy, shall constitute a quorum for the transaction of business at all meetings of the stockholders. Dividends The Company has never paid any cash dividends to shareholders and does not anticipate paying any cash dividends to shareholders in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of our board of directors and will be dependent upon financial condition, results of operations, capital requirements and such other factors as the board of directors deems relevant. Market Information Quotations on the Company’s common stock on the OTC Market Group’s OTCQB ® Common Stock Issued to Vendors for Services On January 6, 2023, the Company issued 1,429 shares of common stock, as payment for investor relations and other financial consulting services. On February 27, 2023, the Company issued 1,508 shares of common stock as payment for investor relations services. Common Stock Warrants A summary of the Company’s warrants to purchase common stock activity is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ Weighted- ​ Remaining ​ ​ ​ ​ ​ ​ ​ Average ​ Contractual ​ ​ Number of ​ ​ Exercise Price ​ Exercise ​ Term ​ Shares per Share Price ​ (Years) Warrants outstanding at January 1, 2023 28,161 ​ ​ $70.00 ​ $ 70.00 3.15 Issued 2,585,923 ​ ​ ​ ​ ​ 6.01 Exercised (71,429) ​ ​ ​ ​ 0.35 Expired — ​ ​ ​ ​ ​ Warrants outstanding at December 31, 2023 2,542,655 ​ ​ $0.35 - $70.00 ​ $ 6.89 4.43 ​ A summary of the Company’s pre-funded warrants to purchase common stock activity is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average ​ ​ Number of ​ Exercise ​ ​ Shares ​ Price Pre-funded warrants outstanding at January 1, 2023 61,945 ​ $ 0.35 Issued — ​ ​ Exercised (358) ​ ​ Expired — ​ ​ Pre-funded warrants outstanding at December 31, 2023 61,587 ​ $ 0.35 ​ For any issuance dates prior to February 2022, the fair value of common stock warrants is determined using the Black Scholes option-pricing model. There was no public trading market for our shares before February 2022 and the Company estimates its expected stock volatility based on historical volatility of publicly traded peer companies.

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	12 Months Ended
	Dec. 31, 2023
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION	9. SHARE-BASED COMPENSATION: On February 23, 2021, the Company approved the 2021 Equity Incentive Plan (“2021 Plan”), in which a maximum aggregate number of shares of common stock that may be issued under the 2021 Plan is 65,000 shares. Subject to the adjustment provisions of the 2021 Plan, the number of shares of the Company’s common stock available for issuance under the 2021 Plan will also include an annual increase on the first day of each fiscal year beginning with 2022 fiscal year and ending on the Company’s 2031 fiscal year in an amount equal to the least of: 1) 65,000 shares of the Company’s common stock; 2) four percent (4%) of the outstanding shares of the Company’s common stock on the last day of the immediately preceding fiscal year; or 3) such number of shares of the Company’s common stock as the administrator may determine. At the 2023 Annual Meeting, the Company’s stockholders approved an amendment (the “2021 Plan Amendment”) to the Company’s 2021 Plan, increasing the number of the shares of common stock, par value $0.0001 per share (“Common Stock”), reserved for issuance under the 2021 Plan from 125,045 shares to 743,106 shares. The Company’s Board of Directors (the “Board”) had previously approved the 2021 Plan Amendment, subject to stockholder approval. Determining the appropriate fair value of share-based awards requires the input of subjective assumptions, including the fair value of the Company’s common stock, and for share options, the expected life of the option, and expected share price volatility. The Company uses the Black-Scholes option pricing model to value its share option awards. The assumptions used in calculating the fair value of share-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, the share-based compensation expense could be materially different for future awards. ​ ​ ​ ​ ​ ​ ​ ​ For Year Ended ​ December 31, 2022 Expected term (years) ​ ​ 6 years – 6.3 years Risk-free interest rate ​ ​ 3.1% – 3.6% Expected volatility ​ ​ 64% Expected dividend yield ​ ​ 0% ​ There were no options granted under the 2021 Plan during the year ended December 31, 2023. Prior to February 2022, in the absence of a public trading market for the common stock, on each grant date, the Company developed an estimate of the fair value of the shares of common stock underlying the option grants. The Company estimated the fair value of the shares of common stock by referencing arms-length transactions inclusive of the shares of common stock underlying which occurred on or near the valuation date(s). The Company determined the fair value of the common stock using methodologies, approaches and assumptions consistent with the AICPA Practice Guide, Valuation of Privately Held Company Equity Securities Issued as Compensation and based in part on input from an independent third-party valuation firm. From February 2022, the Company’s common stock is publicly traded, and the Company no longer has to estimate the fair value of the shares of common stock, rather the value is determined based on quoted market prices. The Company estimates its expected volatility by using a combination of historical share price volatilities of similar companies within our industry. The risk-free interest rate assumption is based on observed interest rates for the appropriate term of the Company’s options on a grant date. The contractual term is 10 years, and the expected option term is lower. The following table reflects share activity under the share option plans for the year ended December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ Remaining ​ Weighted- ​ Aggregate ​ ​ ​ ​ Average ​ Contractual ​ Average ​ Intrinsic ​ ​ Number of ​ Exercise ​ Term ​ Fair Value at ​ Value ​ Shares Price (Years) Grant Date (in thousands) Options outstanding at January 1, 2023 80,887 $ 63.31 8.77 $ 34.37 ​ ​ Exercised ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ Cancelled/Forfeited — — ​ ​ Expired (10,476) 64.96 ​ ​ Granted — — ​ ​ Options outstanding at December 31, 2023 70,411 $ 63.07 7.28 $ 33.98 ​ ​ Options exercisable at December 31, 2023 ​ 42,713 ​ $ 58.57 ​ 6.76 ​ ​ ​ ​ $ 39.52 ​ The aggregate intrinsic value of options is calculated as the difference between the exercise price of the options and the fair value of our common stock at the end of the year for those options that had exercise prices lower than the fair value of our common stock. Stock-based compensation, including stock options is included in the consolidated statements of operations as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2023 2022 Research and development ​ $ 254 ​ $ 216 Selling, general and administration ​ 463 ​ 272 Total ​ $ 717 ​ $ 488 ​ As of December 31, 2023, there was $0.7 million of compensation cost related to non-vested stock option awards not yet recognized that will be recognized on a straight-line basis through the end of the vesting periods in July 2026. The amount of future stock option compensation expense could be affected by any future option grants or by any forfeitures.

INCOME TAXES

INCOME TAXES	12 Months Ended
	Dec. 31, 2023
INCOME TAXES
INCOME TAXES	10. INCOME TAXES United States and foreign profit/(loss) from operations before income taxes was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 United States ​ ​ (2,299) ​ ​ 584 Foreign ​ ​ (6,200) ​ ​ (12,055) Loss before income taxes ​ $ (8,499) ​ $ (11,471) ​ ​ ​ ​ ​ ​ ​ ​ A reconciliation of the statutory income tax rate to the Company’s effective tax rate consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ 2023 ​ 2022 Taxes at domestic rate ​ 21.0 % ​ 21.0 % State and local income taxes ​ (1.4) % ​ — % Non-US statutory rates ​ 1.8 % ​ 2.9 % Permanent items ​ (1.6) % ​ — % Nondeductible Research Expense ​ (7.4) % ​ (6.3) % Change in valuation allowance ​ (16.9) % ​ (17.9) % Warrant revaluation ​ 1.1 % ​ — % Prior year true-up ​ 3.4 % ​ 0.1 % Effective tax rate ​ — % ​ (0.2) % ​ The components of income tax provision/(benefit) are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 Current ​ ​ Federal ​ $  — ​ $ — State ​ ​ — ​ ​ 2 Foreign ​ ​ — ​ ​ 22 Total Current ​ $ — ​ $ 24 ​ ​ ​ ​ ​ ​ ​ Deferred ​ ​ ​ ​ ​ ​ Federal ​ ​ — ​ ​ — State ​ ​ — ​ ​ — Foreign ​ — ​ ​ — Total Deferred ​ ​ — ​ ​ — Total ​ $ — ​ $ 24 ​ Deferred income taxes reflect the net tax effects of temporary differences between the carrying value of assets and liabilities for financial reporting purposes and amounts used for income tax purposes. The temporary differences that give rise to deferred tax assets and liabilities are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 Deferred tax assets/(liabilities): ​ ​ ​ Net operating loss carryforwards ​ $ 10,874 ​ $ 9,151 Stock Compensation ​ 207 ​ 187 Property plant and equipment ​ (114) ​ (150) Other ​ 45 ​ (119) ​ ​ 11,012 ​ 9,069 Valuation allowance ​ (11,012) ​ (9,069) Deferred tax assets, net of allowance ​ $ — ​ $ — ​ The As As The Company has no uncertain tax positions, or penalties and interest accrued, that if recognized would reduce net The The

DEFINED CONTRIBUTION PENSION

DEFINED CONTRIBUTION PENSION	12 Months Ended
	Dec. 31, 2023
DEFINED CONTRIBUTION PENSION
DEFINED CONTRIBUTION PENSION	11. DEFINED CONTRIBUTION PENSION: The Company operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund. The pension cost charge represents contributions payable by the Company to the fund. Pension cost is included in the consolidated statements of operations as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2023 2022 Research and development ​ $ 90 ​ $ 108 Selling, general and administration ​ 65 ​ 52 Total ​ $ 155 ​ $ 160 ​ As of December 31, 2023, there was $5 thousand owed to the pension scheme that is recorded under accounts payable and accrued expenses on the consolidated balances sheets. As of December 31, 2022, there was $1 thousand owed to the pension scheme.

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	12 Months Ended
	Dec. 31, 2023
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS	12. FAIR VALUE MEASUREMENTS: The table below presents activity within Level 3 of the fair value hierarchy, our liabilities carried at fair value for the year ended December 31, 2023: ​ ​ ​ ​ ​ (in thousands) Warrant Liability Balance at January 1,2023 ​ $ — Fair value of warrant issued in Private Placement Offering ​ ​ 1,837 Total change in the liability included in earnings ​ (465) Balance at December 31, 2023 ​ $ 1,372 ​ As disclosed in Note 8 of the Company’s consolidated financial statements, the Company allocated part of the proceeds of private placement of the Company’s Series A-1 Preferred Stock and Series A-2 Preferred Stock to warrant liability issued in connection with the transaction. The valuations of the warrants were determined using option pricing models. These models use inputs such as the underlying price of the shares issued at the measurement date, expected volatility, risk free interest rate and expected life of the instrument. Since our common stock was not publicly traded until February 2022 there has been insufficient volatility data available. Accordingly, we have used an expected volatility based on historical common stock volatility of our peers. The Company has accounted for them as derivative instruments in accordance with ASC 815, adjusting the fair value at the end of each reporting period. The fair value of the common warrants at December 31, 2023, June 22, 2023 and June 14, 2023 was determined by using option pricing models assuming the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ June 22, ​ June 14, ​ 2023 2023 2023 Expected term (years) ​ 4.46 ​ ​ 5.00 ​ ​ 5.00 Risk-free interest rate ​ 3.81% ​ ​ 3.95% ​ ​ 3.98% Expected volatility ​ 50.0% ​ ​ 50.0% ​ ​ 50.0% Expected dividend yield ​ 0.0% ​ ​ 0.0% ​ ​ 0.0% ​ Additionally, the Company has determined that the warrant liability should be classified within Level 3 of the fair-value hierarchy by evaluating each input for the option pricing models against the fair-value hierarchy criteria and using the lowest level of input as the basis for the fair-value classification as called for in ASC 820. There are six inputs: closing price of SmartKem stock on the day of evaluation; the exercise price of the warrants; the remaining term of the warrants; the volatility of the Company’s stock over that term; annual rate of dividends; and the risk-free rate of return. Of those inputs, the exercise price of the warrants and the remaining term are readily observable in the warrant agreements. The annual rate of dividends is based on the Company’s historical practice of not granting dividends. The closing price of SmartKem stock would fall under Level 1 of the fair-value hierarchy as it is a quoted price in an active market (ASC 820-10). The risk-free rate of return is a Level 2 input as defined in ASC 820-10, while the historical volatility is a Level 3 input as defined in ASC 820. Since the lowest level input is a Level 3, the Company determined the warrant liability is most appropriately classified within Level 3 of the fair value hierarchy. ​ The following tables present information about the Company’s financial assets and liabilities that have been measured at fair value as of December 31, 2023 and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value. We had no movement in or out ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices ​ Significant Other ​ Significant ​ ​ ​ ​ ​ in Active ​ Observable ​ Unobservable ​ ​ ​ ​ ​ Markets ​ Inputs ​ Inputs ​ December 31, ​ (Level 1) (Level 2) (Level 3) 2023 Description ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Warrant liability ​ $ — ​ $ — ​ $ 1,372 ​ $ 1,372 Total liabilities ​ $ — ​ $ — ​ $ 1,372 ​ $ 1,372 ​

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	12 Months Ended
	Dec. 31, 2023
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	13. RELATED PARTY TRANSACTIONS: On January 27, 2022, we sold an aggregate of 28,572 shares of our common stock at a purchase price of $70.00 per share to Octopus Titan VCT plc and Octopus Investments Nominees Limited in accordance with the Letter Agreement, dated as of February 23, 2021, between the Company and Octopus Titan VCT plc and certain related parties. During the year ended December 31, 2022, the Company reimbursed an owner for legal fees and other expenses as a result of the Octopus Share Purchase. The reimbursement of these fees for services resulted in an expense of $11 thousand for the year ended December 31, 2022 and there was zero payable as of December 31, 2022.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	12 Months Ended
	Dec. 31, 2023
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS	14. SUBSEQUENT EVENTS: Consent, Conversion and Amendment Agreement On January 26, 2024, the Company entered into a Consent, Conversion and Amendment Agreement (the “Consent Agreement”) with each holder of the Series A-1 Preferred Stock (each a “Holder” and together, the “Holders”). Pursuant to the Consent Agreement, each Holder converted, subject to the terms and conditions of the Consent Agreement, 90% of its Series A-1 Preferred Stock (the “Conversion Commitment”) into shares of Common Stock or Class C warrants (each a “Class C Warrant”) covering the shares of Common Stock that would have been issued to such Holder but for the Beneficial Ownership Limitation (the “Exchange”). The Class C Warrants have an exercise price of $0.0001, were exercisable upon issuance and will expire when exercised in full. Under the Consent Agreement, the Company issued (i) 412,293 shares of Common Stock and (ii) Class C Warrants to purchase up to 726,344 shares of Common Stock upon the conversion or exchange of an aggregate of 9,963 shares of Series A-1 Preferred Stock. 1,106 shares of Series A-1 Preferred Stock remain outstanding after giving effect to the transactions contemplated by the Consent Agreement. Pursuant to the Consent Agreement, the Company and the Holders agreed to amend and restate the Certificate of Designation of Preferences, Rights and Limitations for the Series A-1 Preferred Stock (the “Amended and Restated Series A-1 Certificate of Designation”) to (i) make certain adjustments to reflect the Reverse Split, (ii) remove all voting rights, except as required by applicable law, (iii) increase the stated value of the Series A-1 Preferred Stock to $10,000 from $1,000, and (iv) adjust the conversion price of the Series A-1 Preferred Stock to $87.50 as a result of the increase in stated value. The Consent Agreement, the Registration Rights Agreement, the Amended and Restated Series A-1 Certificate of Designation and the form of Class C Warrant, are attached as Exhibits 10.1, 10.2, 3.1 and 4.2 to the Form 8-K files with the SEC on January 29, 2024. 2021 Plan Under the evergreen adjustment provisions of the 2021 Plan, on January 1, 2024, the number of shares of the Company’s common stock available for issuance under the 2021 Plan was increased by 35,586 or four percent (4%) of the total number of shares of Common Stock outstanding on December 31, 2023. After giving effect to the increase, the total number of shares of Common Stock that may be issued under the 2021 Plan is 778,692. On January 31, 2024, the Company granted its employees Consultant Shares In March 2024, 50,000 shares of our common stock were issued to a vendor in consideration for services to be provided. New CPIIS Framework Agreement On March 22, 2024 we executed a new Framework Agreement with CPIIS for a twelve-month term commencing on April 1, 2024.

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis for Presentation	Basis for Presentation These consolidated financial statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and accounting principles generally accepted in the United States of America (“US GAAP”) as defined by the Financial Accounting Standards Board (FASB) within the FASB Accounting Standards Codification (“ASC”) and are presented in thousands, except number of shares and per share data.
Reclassifications	Reclassification Certain accounts in the prior period consolidated financial statements have been reclassified to conform to the presentation of the current year consolidated financial statements. These reclassifications had no effect on the previously reported operating results.
Reverse Stock Split	Reverse Stock Split All share numbers and per share amounts presented in these financial statements, including these footnotes reflect a one-for-thirty-five
Liquidity	Liquidity As of December 31, 2023, we have incurred recurring losses including net losses of $8.5 million and $11.5 million for the years ended December 31, 2023, and 2022, respectively. We anticipate operating losses to continue for the foreseeable future due to, among other things, costs related to research funding, further development of our technology and products and expenses related to the commercialization of our products. In June 2023 the Company raised $14.2 million through two closings of a private placement of Preferred Stock and Warrants. Net proceeds after related expenses was $12.7 million. In addition, the company has also gone through various cost cutting measures such as lowering personnel costs through a reduction in force, reduced spending on professional service fees and reduced our lease and related utility costs by consolidating office and lab space. All of these actions together have alleviated the going concern that was reported in 2022. We expect that our cash and cash equivalents of $8.8 million as of December 31, 2023, will be sufficient to fund our operating expenses and capital expenditure requirements through the end of April 2025. It is possible this period could be shortened if there are any significant increases in planned spending or development programs or more rapid progress of development programs than anticipated. Our future viability is dependent on our ability to raise additional capital to fund our operations. We will need to obtain additional funds to satisfy our operational needs and to fund our sales and marketing efforts, research and development expenditures, and business development activities. Until such time, if ever, as we can generate sufficient cash through revenue, management’s plans are to finance our working capital requirements through a combination of equity offerings, debt financings, collaborations, strategic alliances and marketing, distribution or licensing arrangements. If we raise additional funds by issuing equity securities, our existing security holders will likely experience dilution. If we borrow money, the incurrence of indebtedness would result in increased debt service obligations and could require us to agree to operating and financial covenants that could restrict our operations. If we enter into a collaboration, strategic alliance or other similar arrangement, we may be forced to give up valuable rights. There can be no assurance however that such financing will be available in sufficient amounts, when and if needed, on acceptable terms or at all. The precise amount and timing of the funding needs cannot be determined accurately at this time, and will depend on a number of factors, including the market demand for the Company’s products and services, the quality of product development efforts, management of working capital, and continuation of normal payment terms and conditions for purchase of services. If the Company is unable to substantially increase revenues, reduce expenditures, or otherwise generate cash flows for operations, then the Company will need to raise additional funding.
Basis of Consolidation	Basis of Consolidation The consolidated financial statements include the accounts of SmartKem, Inc. and its wholly-owned subsidiary, SmartKem Limited. The Company does not have any nonconsolidated subsidiaries. All intercompany balances and transactions have been eliminated on consolidation, including unrealized gains and losses on transactions between the companies.
Comprehensive Loss	Comprehensive loss Comprehensive loss of all periods presented is comprised primarily of net loss and foreign currency translation adjustments.
Management's Use of Estimates	Management’s Use of Estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingent assets and liabilities, at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The most significant estimates in the Company’s consolidated financial statements relates to the valuation of common share, fair value of share options, and the fair value of warrant liability. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Due to the uncertainty of factors surrounding the estimates or judgments used in the preparation of the consolidated financial statements, actual results may materially vary from these estimates.
Certain Risk and Uncertainties	Certain Risk and Uncertainties The Company’s activities are subject to significant risks and uncertainties including the risk of failure to secure additional funding to properly execute the Company’s business plan. The Company is subject to risks that are common to companies in the growth stage, including, but not limited to, development by the Company or its competitors of new technological innovations, dependence on key personnel, reliance on third party manufacturers, protection of proprietary technology, and compliance with regulatory requirements. The Company has access under a framework agreement to equipment which is used in the manufacturing of demonstrator products employing the Company’s inks. If the Company lost access to this fabrication facility, it would materially and adversely affect the Company’s ability to manufacture prototypes and demonstrate products for potential customers. The loss of this access could significantly impede the Company’s ability to engage in product development and process improvement activities. Alternative providers of similar services exist but would take effort and time to bring into the Company’s operations.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers all highly liquid investments purchased with original maturities of 90 days or less at acquisition to be cash equivalents. As of December 31, 2023 and 2022, the Company did not have any cash equivalents.
Accounts Receivable	Accounts Receivable Accounts receivable are stated at the amount the Company expects to collect and do not bear interest. The Company considers the following factors when determining the collectability of specific customer accounts: customer creditworthiness, past transaction history with the customer, current economic industry trends, and changes in customer payment terms. These receivables have historically been paid timely. Due to the nature of the accounts receivable balance, the Company believes there is no significant risk of non-collection. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, allowances for credit losses would be required. There was no allowance for credit losses recorded as of December 31, 2023 and 2022.
Concentrations of Credit Risk	Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentration of credit risk consist primarily of cash and cash equivalents and accounts receivable. Periodically, the Company maintains deposits in financial institutions in excess of government insured limits.
Property, Plant and Equipment	Property, Plant and Equipment Property, plant and equipment is stated at cost, less accumulated depreciation. Maintenance and repairs are expensed when incurred. Additions and improvements that extend the economic useful life of the asset are capitalized and depreciated over the remaining useful lives of the assets. The cost and accumulated depreciation of assets sold or retired are removed from the respective accounts, and any resulting gain or loss is reflected in current earnings. Depreciation and amortization are provided using the accelerated declining balance method in amounts considered to be sufficient to amortize the cost of the assets to operations over their estimated useful lives. Property, plant and equipment is depreciated over an estimated useful life of approximately 4 years.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets Management continually evaluates whether events or changes in circumstances might indicate that the remaining estimated useful life of long-lived assets may warrant revision, or that the remaining balance may not be recoverable. When factors indicate that long-lived assets should be evaluated for possible impairment, the Company uses an estimate of the related undiscounted cash flows in measuring whether the long-lived asset should be written down to fair value. Measurement of the amount of impairment would be based on generally accepted valuation methodologies, as deemed appropriate. If the carrying amount is greater than the undiscounted cash flows, the carrying amount of the asset is reduced to the asset’s fair value. An impairment loss is recognized immediately as an operating expense in the consolidated statements of operations. Reversal of previously recorded impairment losses are prohibited. As of December 31, 2023, and 2022, Company’s management believed that no revision to the remaining useful lives or impairment of the Company’s long-lived assets was required.
Fair Value of Financial Instruments	Fair Value of Financial Instruments ASC 820, Fair Value Measurements The accounting guidance classifies fair value measurements in one of the following three categories for disclosure purposes: Level 1: Quoted prices in active markets for identical assets or liabilities. Level 2: Inputs other than Level 1 prices for similar assets or liabilities that are directly or indirectly observable in the marketplace. Level 3: Unobservable inputs which are supported by little, or no market activity and values determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation. Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of and during the years ended December 31, 2023, and 2022. The carrying value of the Company’s cash, accounts receivable, other receivables, and accounts payable approximate fair value because of the short-term maturity of these financial instruments.
Warrants	Warrants The accounting treatment of warrants issued is determined pursuant to the guidance provided by ASC 480, Distinguishing Liabilities from Equity Contracts in Entity’s Own Equity
Issuance Costs	Issuance Costs The Company assessed the issuance cost in connection with the issuance of an equity offering. ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A, Expenses of Offering, Direct and incremental legal and accounting costs associated with the Company’s issuance of common stock, preferred stock and warrants are deferred and classified as a component of other assets on the consolidated balance sheet until completion of the issuance. Upon completion of the issuance, deferred offering costs are reclassified from other assets to equity in additional paid-in capital and recorded against the net proceeds received in the issuance. For the year ended December 31, 2023, we recorded $1.5 million of offering costs of which $1.3 million were recorded in additional paid-in capital and $0.2 million were recorded as non-operating expenses and for the year ended December 31, 2022, $170 thousand of offering costs were recorded in additional paid-in capital.
Non-retirement Post-employment Benefits	Non-retirement Post-employment Benefits The company records employee severance benefits as non-retirement post-employment benefits that are accounted for under the guidance of ASC 712-10 Compensation - Nonretirement Postemployment Benefits
Leases	Leases Operating lease assets are included within operating lease right-of-use assets, and the corresponding operating lease obligation on the consolidated balance sheets as of December 31, 2023 and 2022. The Company has elected not to present short-term leases as these leases have a lease term of 12 months or less at lease inception and do not contain purchase options or renewal terms that the Company is reasonably certain to exercise. All other lease assets and lease liabilities are recognized based on the present value of lease payments over the lease term at commencement date. Because most of the Company’s leases do not provide an implicit rate of return, the Company used an incremental borrowing rate based on inception date of the lease agreement in determining the present value of lease payments.
Revenue	Revenue The Company applies the provisions of ASC 606, Revenue from Contracts with Customers The Company’s current contracts with customers do not contain significant estimates or judgments. All of the Company’s revenue contains a single performance obligation that is recognized upon fulfilment of the sales order. The Company derives its revenues primarily from sales of TRUFLEX ® ®
Collaboration Arrangements	Collaboration Arrangements The Company entered into several collaboration agreements during 2023. The business arrangements between the two parties are not accounted for as a Collaborative Arrangement, as defined within the guidance under ASC 808, Collaborative Arrangement It has also determined that other parties are a vendor and not a customer, as defined within the guidance under ASC 606, as the other parties did not primarily contract with SmartKem to obtain goods or services that are an output of the entity’s ordinary activities in exchange for consideration. It was SmartKem that contracted with the other parties to obtain design services from it. These agreements are accounted for under the guidance of ASC 705, Cost of Sales and Service. Accounting for Consideration Received from a Vendor
Research and Development Expenses	Research and Development Expenses The Company expenses research and development costs as incurred. Research and development costs include salaries, employee benefit costs, direct project costs, supplies and other related costs. Advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received.
Patent and Licensing Costs	Patent and Licensing Costs Patent and licensing costs are expensed as incurred because their realization is uncertain. These costs are classified as research and development expenses in the accompanying consolidated statements of operations and comprehensive loss.
Other Operating Income	Other Operating Income The Company’s other operating income includes government grants received for qualifying research and development projects, and research and development tax credits related to the United Kingdom’s Research and Development tax relief for small and medium-sized enterprises, which is a government tax incentive designed to reward innovative companies for investing in research and development. Such incentives are recorded as other income when it is probable the amounts are collectible and can be reasonably estimated. The Company has applied the guidance of IAS 20, Accounting for Government Grants and Disclosure of Government Assistance For the year ended December 31, 2023 and 2022, the Company recorded grant income and research & development tax credits of $836 thousand and $1,172 thousand, respectively, which are recorded as other operating income in the accompanying consolidated statements of operations. As of December 31, 2023 and 2022, the Company had receivables related to research & development tax credits for payments not yet received of $610 thousand and $1,121 thousand, respectively and receivables related to a government grants of $160 thousand as of December 31, 2023. The Company had no receivables related to government grants as of December 31, 2022.
Ordinary Shares Valuation	Ordinary Shares Valuation Due to the absence of public trading market for the Company’s common stock before February 2022, the Company utilized methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its ordinary shares. In determining the exercise prices for options to be issued, the estimated fair value of the Company’s common stock on each grant date was estimated based upon a variety of factors, including: ● the issuance prices of shares of common stock; ● the rights and preferences of holders of preferred stock; ● the progress of the Company’s research and development programs; ● the Company’s stage of development and business strategy; ● external market conditions affecting the technology industry and trends within the technology industry; ● the Company’s financial position, including cash on hand; ● the Company’s historical and forecasted performance and operating results; ● the lack of active public market for the Company’s ordinary shares; ● the likelihood of achieving a liquidity event, such as a securities offering, initial public offering or a sale of the Company’s common stock From February 2022, the Company’s common stock is publicly traded, and the Company no longer has to estimate the fair value of the common stock, rather the value is determined based on quoted market prices. Significant changes to the key assumptions underlying the factors used could result in different fair values of ordinary shares at each valuation date. Shares of common stock are classified in stockholders’ equity and represent issued share capital.
Share-based Compensation	Share-based compensation All share-based payments, including grants of stock options, are measured based on the fair value of the share-based awards at the grant date and recognized over their respective vesting periods. Outstanding options generally expire 10 years after the grant date. The Company has issued options that vest based on service requirements and issued options that vest based on performance requirements. Options become exercisable when service requirements are met. In the case of performance-based options, options become exercisable when there is a liquidity event, such as a change in control or sale or admission (listing as a public company or initial public offering (“IPO”)), and the employee, or consultant, must be providing services to the Company at the time of the event. Due to the Exchange, all options outstanding immediately prior to the event with a performance obligation requirement became vested and exercisable. Non-cash stock-based compensation expense for the year ended December 31, 2023 and 2022 were $0.7 million and $0.5 million, respectively (see also Note 9). The estimated fair value of stock options at the grant date is determined using the Black-Scholes pricing model. The Black-Scholes option pricing model requires inputs such as the fair value of common stock on date of grant, expected term using a simplified method, expected volatility, dividend yield, and risk-free interest rate. The assumptions used in calculating the fair value of stock-based awards represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards. The Company records forfeitures when they occur.
Functional Currency and Operations	Functional Currency and Operations Prior to the Exchange, SmartKem Limited’s (“the predecessor’s”) functional currency was the British Pound Sterling (“GBP”), and the consolidated financial statements were presented in United States dollars (“USD”). The predecessor’s functional currency was the respective local currency of the primary economic environment in which an entity’s operations are conducted. The predecessor translated the consolidated financial statements into the presentation currency using exchange rates in effect on the balance sheet date for assets and liabilities and average exchanges rates for the period for statement of operations accounts, with the difference recognized in accumulated other comprehensive income/ (loss). The Company’s functional currency is the U.S. dollar (“USD”). The functional currency of the Company’s foreign operation is the respective local currency. Assets and liabilities of foreign operations denominated in local currencies are translated at the spot rate in effect at the applicable reporting date. The consolidated statements of operations and comprehensive loss are translated at the weighted average rate of exchange during the applicable period. The resulting unrealized gain/loss is recognized as foreign currency translation as a component of other comprehensive income.
Income Taxes	Income Taxes Valuation allowance of deferred tax assets Income taxes are recorded in accordance with ASC 740, Income Taxes We considered the positive and negative evidence bearing upon its ability to realize the deferred tax assets. In addition to the Company’s history of cumulative losses, the Company cannot be certain that future taxable income will be sufficient to realize its deferred tax assets. Accordingly, a full valuation allowance has been provided against its net deferred tax assets at both December 31, 2023 and 2022. Should the Company change its determination, based on the evidence available as to the amount of its deferred tax assets that can be realized, the valuation allowance will be adjusted with a corresponding impact to the provision for income taxes in the period in which such determination is made and which may be material. As of December 31, 2023, and 2022, there were no material uncertain tax positions.
Contingent Liabilities	Contingent Liabilities A provision for contingent liabilities is recorded when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. With respect to legal matters, provisions are reviewed and adjusted to reflect the impact of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. From time to time, the Company may be party to certain litigation and disputes arising in the normal course of business. As of December 31, 2023, the Company is not a party to any litigation or disputes.
Segment Information	Segment Information The Company has determined that it operates and reports in one segment
Basic and Diluted Loss Per Share	Basic and Diluted Loss Per Share Basic and diluted net loss per share is determined by dividing net loss by the weighted average ordinary shares outstanding during the period. For all periods presented with a net loss, the shares underlying the ordinary share options and warrants have been excluded from the calculation because their effect would be anti-dilutive. Therefore, the weighted-average shares outstanding used to calculate both basic and diluted loss per share are the same for periods with a net loss. The loss per share information in these consolidated financial statements is reflected and calculated as if the Company had existed since January 1, 2021. Accordingly, loss per share for all periods was calculated based on the number of shares retroactively adjusted for the exchange ratio determined in the reverse recapitalization (see also Note 1). As of December 31, 2023, the Company had 61,587 pre-funded common stock warrants and 769,826 Class B Warrants outstanding and exercisable. As the pre-funded common stock warrants and Class B Warrants are exercisable for $0.35, these shares are considered outstanding common shares and included in computation of basic and diluted Earnings Per Share as the exercise of the pre-funded common stock warrants is virtually assured. The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive: ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 Common stock warrants ​ ​ 1,772,829 ​ ​ 28,161 Assumed conversion of preferred stock ​ ​ 1,573,226 ​ ​ — Stock options ​ ​ 70,412 ​ ​ 80,887 Total ​ ​ 3,416,467 ​ ​ 109,048 ​
Recent Accounting Pronouncements	Recent Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments: Credit Losses (Topic 326) In November 2023, the FASB issued Accounting Standards Update (ASU) No. 2023-07, Segment Reporting Improvements to Reportable Segment Disclosures On December 14, 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures The OECD reached an agreement among various countries to implement a minimum 15% tax rate on certain multinational enterprises, commonly referred to as Pillar Two. Many countries continue to announce changes in their tax laws and regulations based on Pillar Two Proposals. We are continuing to evaluate the impact of these proposed and enacted legislative changes as new guidance becomes available. Given the numerous proposed changes in law and uncertainty regarding such proposed changes, the impact cannot be determined at this time.

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2023
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Schedule of Antidilutive Securities	​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 Common stock warrants ​ ​ 1,772,829 ​ ​ 28,161 Assumed conversion of preferred stock ​ ​ 1,573,226 ​ ​ — Stock options ​ ​ 70,412 ​ ​ 80,887 Total ​ ​ 3,416,467 ​ ​ 109,048

PREPAID EXPENSES AND OTHER CU_2

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)	12 Months Ended
	Dec. 31, 2023
PREPAID EXPENSES AND OTHER CURRENT ASSETS
Schedule of Prepaid Expenses and Other Current Assets	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (in thousands) 2023 2022 Prepaid facility costs ​ $ 101 ​ $ 106 Prepaid insurance ​ 274 ​ 358 Prepaid professional service fees ​ 68 ​ 339 Research grant receivable ​ ​ 160 ​ ​ — Prepaid software licenses ​ ​ 24 ​ ​ 22 VAT receivable ​ ​ 104 ​ ​ 195 Other receivable and other prepaid expenses ​ ​ 80 ​ ​ 36 Total prepaid expenses and other current assets ​ $ 811 ​ $ 1,056 ​

PROPERTY, PLANT AND EQUIPMENT (

PROPERTY, PLANT AND EQUIPMENT (Tables)	12 Months Ended
	Dec. 31, 2023
PROPERTY, PLANT AND EQUIPMENT
Schedule of Property, Plant and Equipment	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (in thousands) 2023 2022 Plant and equipment ​ $ 1,584 ​ $ 1,478 Furniture and fixtures ​ 108 ​ 218 Computer hardware and software ​ 24 ​ 24 ​ ​ 1,716 ​ 1,720 Less: Accumulated depreciation ​ (1,261) ​ (1,118) Property, plant and equipment, net ​ $ 455 ​ $ 602 ​ ​ ​ ​ ​ ​ ​

ACCOUNTS PAYABLE AND ACCRUED _2

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)	12 Months Ended
	Dec. 31, 2023
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Schedule of Accounts Payable and Accrued Expenses	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (in thousands) 2023 2022 Accounts payable ​ $ 355 ​ $ 250 Accrued expenses – lab refurbishments ​ — ​ 117 Accrued expenses – technical fees ​ 91 ​ 130 Accrued expenses – audit & accounting fees ​ 182 ​ 179 Accrued expenses – other ​ 175 ​ 44 Payroll liabilities ​ 375 ​ 211 Total accounts payable and accrued expenses ​ $ 1,178 ​ $ 931 ​

LEASES (Tables)

LEASES (Tables)	12 Months Ended
	Dec. 31, 2023
LEASES
Schedule of Lease Costs	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2023 2022 Operating lease cost ​ $ 276 ​ $ 262 Short-term lease cost ​ 7 ​ ​ 10 Variable lease cost ​ 162 ​ ​ 186 Total lease cost ​ $ 445 ​ $ 458 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2023 2022 Research and development ​ $ 419 ​ $ 430 Selling, general and administrative ​ 26 ​ 28 Total lease cost ​ $ 445 ​ $ 458
Schedule of Right of Use Lease Assets and Lease Liabilities	​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, (in thousands) 2023 2022 Assets ​ ​ ​ Right of use assets - Operating Leases ​ $ 285 ​ $ 475 Total lease assets ​ $ 285 ​ $ 475 ​ ​ ​ ​ ​ ​ ​ Liabilities ​ ​ Current liabilities: ​ ​ Lease liability, current - Operating Leases ​ $ 230 ​ $ 206 Noncurrent liabilities: ​ ​ ​ Lease liability, non-current - Operating Leases ​ 19 ​ 239 Total lease liabilities ​ $ 249 ​ $ 445
Schedule of Operating Lease Cash Flow Information	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2023 2022 Operating cash outflows from operating leases ​ $ 266 ​ $ 265 Supplemental non-cash amounts of operating lease liabilities arising from obtaining right of use assets ​ $ 50 ​ $ 583
Schedule of Weighted Average Remaining Lease Term and Weighted Average Discount Rate	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2023 2022 Weighted average remaining lease term (in years) – operating leases ​ ​ 1.31 ​ ​ 2.19 Weighted average discount rate – operating leases ​ 7.88 % 7.73%
Schedule of Operating Lease, Liability, Maturity	​ ​ ​ ​ ​ ​ ​ December 31, (in thousands) ​ 2023 2024 ​ $ 243 2025 ​ ​ 20 Total undiscounted lease payments ​ ​ 263 Less imputed interest ​ ​ (14) Total net lease liabilities ​ $ 249 ​

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	12 Months Ended
	Dec. 31, 2023
Common Stock Warrants
Schedule of Warrants	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ Weighted- ​ Remaining ​ ​ ​ ​ ​ ​ ​ Average ​ Contractual ​ ​ Number of ​ ​ Exercise Price ​ Exercise ​ Term ​ Shares per Share Price ​ (Years) Warrants outstanding at January 1, 2023 28,161 ​ ​ $70.00 ​ $ 70.00 3.15 Issued 2,585,923 ​ ​ ​ ​ ​ 6.01 Exercised (71,429) ​ ​ ​ ​ 0.35 Expired — ​ ​ ​ ​ ​ Warrants outstanding at December 31, 2023 2,542,655 ​ ​ $0.35 - $70.00 ​ $ 6.89 4.43
Pre Funded Warrants
Schedule of Warrants	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average ​ ​ Number of ​ Exercise ​ ​ Shares ​ Price Pre-funded warrants outstanding at January 1, 2023 61,945 ​ $ 0.35 Issued — ​ ​ Exercised (358) ​ ​ Expired — ​ ​ Pre-funded warrants outstanding at December 31, 2023 61,587 ​ $ 0.35

SHARE-BASED COMPENSATION (Table

SHARE-BASED COMPENSATION (Tables)	12 Months Ended
	Dec. 31, 2023
SHARE-BASED COMPENSATION
Schedule of Black Scholes option-pricing model with assumptions used	​ ​ ​ ​ ​ ​ ​ ​ For Year Ended ​ December 31, 2022 Expected term (years) ​ ​ 6 years – 6.3 years Risk-free interest rate ​ ​ 3.1% – 3.6% Expected volatility ​ ​ 64% Expected dividend yield ​ ​ 0%
Summary of non-vested share option activity under the share option plans	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ Remaining ​ Weighted- ​ Aggregate ​ ​ ​ ​ Average ​ Contractual ​ Average ​ Intrinsic ​ ​ Number of ​ Exercise ​ Term ​ Fair Value at ​ Value ​ Shares Price (Years) Grant Date (in thousands) Options outstanding at January 1, 2023 80,887 $ 63.31 8.77 $ 34.37 ​ ​ Exercised ​ — ​ ​ — ​ ​ ​ ​ ​ ​ ​ ​ Cancelled/Forfeited — — ​ ​ Expired (10,476) 64.96 ​ ​ Granted — — ​ ​ Options outstanding at December 31, 2023 70,411 $ 63.07 7.28 $ 33.98 ​ ​ Options exercisable at December 31, 2023 ​ 42,713 ​ $ 58.57 ​ 6.76 ​ ​ ​ ​ $ 39.52
Schedule of stock-based compensation	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2023 2022 Research and development ​ $ 254 ​ $ 216 Selling, general and administration ​ 463 ​ 272 Total ​ $ 717 ​ $ 488

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2023
INCOME TAXES
Schedule of loss from operations before income taxes	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 United States ​ ​ (2,299) ​ ​ 584 Foreign ​ ​ (6,200) ​ ​ (12,055) Loss before income taxes ​ $ (8,499) ​ $ (11,471) ​ ​ ​ ​ ​ ​ ​
Schedule of reconciliation of the statutory income tax rate to company's effective tax rate	​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years Ended December 31, ​ 2023 ​ 2022 Taxes at domestic rate ​ 21.0 % ​ 21.0 % State and local income taxes ​ (1.4) % ​ — % Non-US statutory rates ​ 1.8 % ​ 2.9 % Permanent items ​ (1.6) % ​ — % Nondeductible Research Expense ​ (7.4) % ​ (6.3) % Change in valuation allowance ​ (16.9) % ​ (17.9) % Warrant revaluation ​ 1.1 % ​ — % Prior year true-up ​ 3.4 % ​ 0.1 % Effective tax rate ​ — % ​ (0.2) %
Schedule of components of income tax provision/(benefit)	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 Current ​ ​ Federal ​ $  — ​ $ — State ​ ​ — ​ ​ 2 Foreign ​ ​ — ​ ​ 22 Total Current ​ $ — ​ $ 24 ​ ​ ​ ​ ​ ​ ​ Deferred ​ ​ ​ ​ ​ ​ Federal ​ ​ — ​ ​ — State ​ ​ — ​ ​ — Foreign ​ — ​ ​ — Total Deferred ​ ​ — ​ ​ — Total ​ $ — ​ $ 24
Schedule of deferred tax assets and liabilities	​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2023 2022 Deferred tax assets/(liabilities): ​ ​ ​ Net operating loss carryforwards ​ $ 10,874 ​ $ 9,151 Stock Compensation ​ 207 ​ 187 Property plant and equipment ​ (114) ​ (150) Other ​ 45 ​ (119) ​ ​ 11,012 ​ 9,069 Valuation allowance ​ (11,012) ​ (9,069) Deferred tax assets, net of allowance ​ $ — ​ $ —

DEFINED CONTRIBUTION PENSION (T

DEFINED CONTRIBUTION PENSION (Tables)	12 Months Ended
	Dec. 31, 2023
DEFINED CONTRIBUTION PENSION
Schedule of pension cost	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (in thousands) 2023 2022 Research and development ​ $ 90 ​ $ 108 Selling, general and administration ​ 65 ​ 52 Total ​ $ 155 ​ $ 160

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	12 Months Ended
	Dec. 31, 2023
FAIR VALUE MEASUREMENTS
Summary of activity within Level 3 of the fair value hierarchy, our liabilities carried at fair value	​ ​ ​ ​ ​ (in thousands) Warrant Liability Balance at January 1,2023 ​ $ — Fair value of warrant issued in Private Placement Offering ​ ​ 1,837 Total change in the liability included in earnings ​ (465) Balance at December 31, 2023 ​ $ 1,372
Summary of fair value of the preferred and common warrants determined by using option pricing models assumptions	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ June 22, ​ June 14, ​ 2023 2023 2023 Expected term (years) ​ 4.46 ​ ​ 5.00 ​ ​ 5.00 Risk-free interest rate ​ 3.81% ​ ​ 3.95% ​ ​ 3.98% Expected volatility ​ 50.0% ​ ​ 50.0% ​ ​ 50.0% Expected dividend yield ​ 0.0% ​ ​ 0.0% ​ ​ 0.0%
Summary of financial assets and liabilities that have been measured at fair value and indicate the fair value hierarchy of the valuation inputs utilized to determine such fair value	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Quoted Prices ​ Significant Other ​ Significant ​ ​ ​ ​ ​ in Active ​ Observable ​ Unobservable ​ ​ ​ ​ ​ Markets ​ Inputs ​ Inputs ​ December 31, ​ (Level 1) (Level 2) (Level 3) 2023 Description ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Warrant liability ​ $ — ​ $ — ​ $ 1,372 ​ $ 1,372 Total liabilities ​ $ — ​ $ — ​ $ 1,372 ​ $ 1,372 ​

ORGANIZATION & BUSINESS (Detail

ORGANIZATION & BUSINESS (Details) $ / shares in Units, $ in Millions		1 Months Ended
	Feb. 23, 2021 $ / shares shares	Jun. 30, 2023 USD ($) item	Dec. 31, 2023 $ / shares	Sep. 21, 2023 $ / shares	Dec. 31, 2022 $ / shares
Common shares, par value | $ / shares			$ 0.0001	$ 0.01	$ 0.0001
Gross proceeds from private placement preferred stock and warrants | $		$ 14.2
Number of closings of private placement of preferred stock and warrants | item		2
Net proceeds from issuance of private placement of preferred stock and warrants | $		$ 12.7
Securities Exchange Agreement, Smartkem Limited
Purchase price (in dollars per share) | $ / shares	$ 1.40
Common shares, par value | $ / shares	$ 0.0001
Share exchange ratio	0.0676668
Securities Exchange Agreement, Smartkem Limited | Common stock A Shares
Share exchange ratio	0.0111907
Share exchange, number of shares issued or issuable	12,725,000
Management incentive options to purchase	124,497,910
Shares exchange, number of shares exchanged	1,127,720,477
Average share exchange ratio	0.011283825
Effect of reverse capitalization (in shares)	2,500,000

SUMMARY OF SIGNIFICANT ACCOUN_4

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) $ / shares in Units, $ in Thousands			1 Months Ended	12 Months Ended
	Sep. 21, 2023	Sep. 19, 2023	Jun. 30, 2023 USD ($) item	Dec. 31, 2023 USD ($) segment $ / shares shares	Dec. 31, 2022 USD ($) shares	Jun. 14, 2023 $ / shares
Class of Warrant or Right
Stock split ratio	0.0286	0.0286
Net loss				$ (8,499)	$ (11,495)
Gross proceeds from private placement preferred stock and warrants			$ 14,200
Number of closings of private placement of preferred stock and warrants | item			2
Net proceeds from issuance of private placement of preferred stock and warrants			$ 12,700
Cash and cash equivalents				8,836	4,235
Cash equivalents				0	0
Allowance for doubtful accounts				$ 0	0
Estimated useful life				4 years
Issuance costs				$ 1,500
Offering costs recorded in additional paid-in capital				1,300	170
Non-Operating expenses					200
Other operating income				836	1,172
Research & development tax credits				$ 610	1,121
Expiration term				10 years
Share based compensation				$ 717	488
Number of operating segments | segment				1
Number of reportable segments | segment				1
Grants receivable				$ 160	$ 0
Pre Funded Warrants
Class of Warrant or Right
Common stock warrants outstanding | shares				61,587	61,945
Exercise Price per Share | $ / shares				$ 0.35
Class B Warrant
Class of Warrant or Right
Common stock warrants outstanding | shares				769,826
Exercise Price per Share | $ / shares						$ 0.35

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Dilutive Securities (Details) - shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Antidilutive Securities Excluded from Computation of diluted weighted average shares
Antidilutive securities excluded from computation of earnings per share	3,416,467	109,048
Warrants
Antidilutive Securities Excluded from Computation of diluted weighted average shares
Antidilutive securities excluded from computation of earnings per share	1,772,829	28,161
Preferred Stock
Antidilutive Securities Excluded from Computation of diluted weighted average shares
Antidilutive securities excluded from computation of earnings per share	1,573,226
Options
Antidilutive Securities Excluded from Computation of diluted weighted average shares
Antidilutive securities excluded from computation of earnings per share	70,412	80,887

PREPAID EXPENSES AND OTHER CU_3

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid facility costs	$ 101	$ 106
Prepaid insurance	274	358
Prepaid professional service fees	68	339
Research grant receivable	160
Prepaid software licenses	24	22
VAT receivable	104	195
Other receivable and other prepaid expenses	80	36
Total prepaid expenses and other current assets	$ 811	$ 1,056

PROPERTY, PLANT AND EQUIPMENT_2

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment
Property, plant and equipment, gross	$ 1,716	$ 1,720
Less: Accumulated depreciation	(1,261)	(1,118)
Property, plant and equipment, net	455	602
Depreciation	145	198
Plant and equipment
Property, Plant and Equipment
Property, plant and equipment, gross	1,584	1,478
Furniture and fixtures
Property, Plant and Equipment
Property, plant and equipment, gross	108	218
Computer hardware and software
Property, Plant and Equipment
Property, plant and equipment, gross	24	24
Research and development
Property, Plant and Equipment
Depreciation	$ 145	$ 198

ACCOUNTS PAYABLE AND ACCRUED _3

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable	$ 355	$ 250
Accrued expenses - lab refurbishments		117
Accrued expenses - technical fees	91	130
Accrued expenses - audit & accounting fees	182	179
Accrued expenses - other	175	44
Payroll liabilities	375	211
Total accounts payable and accrued expenses	$ 1,178	$ 931

LEASES - Lease Costs (Details)

LEASES - Lease Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Operating lease cost	$ 276	$ 262
Short-term lease cost	7	10
Variable lease cost	162	186
Total lease cost	445	458
Research and development
Total lease cost	419	430
Selling, general and administrative
Total lease cost	$ 26	$ 28

LEASES - Right of Use Lease Ass

LEASES - Right of Use Lease Assets And Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Assets
Right-of-use assets, net	$ 285	$ 475
Current liabilities
Lease liability, current - Operating Leases	230	206
Noncurrent liabilities:
Lease liability, non-current - Operating Leases	19	239
Total lease liabilities	$ 249	$ 445

LEASES - Operating And Finance

LEASES - Operating And Finance Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
LEASES
Operating cash flows from operating leases	$ 266	$ 265
Supplemental non-cash amounts of operating lease liabilities arising from obtaining right of use assets	$ 50	$ 583

LEASES - Weighted Average (Deta

LEASES - Weighted Average (Details)	Dec. 31, 2023	Dec. 31, 2022
LEASES
Weighted average remaining lease term (in years) - operating leases	1 year 3 months 21 days	2 years 2 months 8 days
Weighted average discount rate - operating leases	7.88%	7.73%

LEASES - Undiscounted Operating

LEASES - Undiscounted Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
LEASES
2024	$ 243
2025	20
Total undiscounted lease payments	263
Less imputed interest	(14)
Total net lease liabilities	$ 249	$ 445

LEASES - Additional Information

LEASES - Additional Information (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Finance lease, right-of-use assets	$ 0	$ 0
Finance lease, liabilities	$ 0	$ 0
Minimum
Operating leases terms	1 year
Maximum
Operating leases terms	3 years

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details)

1 Months Ended

6 Months Ended

12 Months Ended

Sep. 21, 2023 $ / shares

Sep. 19, 2023

Aug. 25, 2023

Jun. 22, 2023 USD ($) shares

Jun. 14, 2023 USD ($) Right Vote $ / shares shares

Feb. 27, 2023 shares

Jan. 06, 2023 shares

Mar. 31, 2024 shares

Jun. 30, 2023 USD ($)

Dec. 31, 2023 USD ($) Vote $ / shares shares

Dec. 31, 2022 USD ($) $ / shares shares

Jan. 29, 2024 shares

Sep. 30, 2023 shares

Class of Stock [Line Items]

Stock split ratio

0.0286

0.0286

Common shares, par value | $ / shares

$ 0.01

$ 0.0001

$ 0.0001

Preferred stock, shares authorized

10,000,000

10,000,000

10,000,000

Preferred shares, par value | $ / shares

$ 0.0001

$ 0.0001

Net proceeds from issuance of equity | $

$ 12,700,000

Proceeds from the issuance of warrants in private placement | $

$ 1,763,000

Warrants issuance costs | $

$ 200,000

Expected term (years)

5 years

Number of votes, common shares | Vote

1

Issuance of common stock to vendor (in shares)

1,508

1,429

Net cash used in operating activities | $

$ (8,037,000)

$ (9,049,000)

Term of restriction for usage of cash from operating activities

3 months

Securities sold in subsequent financing (as percentage)

40%

Securities purchase agreement

Class of Stock [Line Items]

Proceeds from the issuance of warrants in private placement | $

$ 12,200,000

Minimum

Class of Stock [Line Items]

Stock split ratio

0.0333

Preferred stock shares to be acquired

1,000

Maximum

Class of Stock [Line Items]

Stock split ratio

0.0167

Net cash used in operating activities | $

$ (2,800,000)

Class A Warrant

Class of Stock [Line Items]

Exercise price of warrant | $ / shares

$ 8.75

Class A Warrant | Securities purchase agreement

Class of Stock [Line Items]

Warrants to purchase shares of common stock

225,190

1,391,927

Proceeds from the issuance of warrants in private placement | $

$ 2,000,000

Warrants issued in lieu of private placement fee

127,551

Warrants issued in lieu of private placement fee fair value | $

$ 31,000

Class B Warrant

Class of Stock [Line Items]

Exercise price of warrant | $ / shares

$ 0.35

Class B Warrant | Securities purchase agreement

Class of Stock [Line Items]

Warrants to purchase shares of common stock

798,396

Warrants issued for consulting services

8,572

34,286

Fair value of warrant issued for consulting services | $

$ 15,000

$ 59,000

Series A-1 Preferred Stock

Class of Stock [Line Items]

Preferred stock, shares authorized

18,000

Preferred shares, par value | $ / shares

$ 1,000

Trailing period

30 days

Dividends distribution (as a percent)

19.99%

Percentage of trailing period VWAP for dividend payable in shares

90%

Trailing period for VWAP for dividend payable in Shares

10 days

Number of trading days prior to the dividend paid date considered for VWAP

10 days

Number of votes, preferred shares | Vote

0

Amount payable to preferred stockholders on liquidation (as percentage)

100%

Conversion price | $ / shares

$ 87.50

Term of notice period of limitation

61 days

Number of holders with preemptive rights | Right

0

Stated value of preferred stock shares outstanding (as percentage)

50%

Series A-1 Preferred Stock | AIGH Investment Partners LP and its Affiliates

Class of Stock [Line Items]

Preferred stock outstanding | $

$ 1,500,000

Series A-1 Preferred Stock | Securities purchase agreement

Class of Stock [Line Items]

Number of shares sold

1,870.36596

9,229

Price per share | $ / shares

$ 1,000

Series A-1 Preferred Stock | Minimum

Class of Stock [Line Items]

Beneficial ownership limitation on common stock (as percentage)

4.99%

Series A-1 Preferred Stock | Maximum

Class of Stock [Line Items]

Beneficial ownership limitation on common stock (as percentage)

9.99%

Series A-2 Preferred Stock

Class of Stock [Line Items]

Preferred stock, shares authorized

18,000

Preferred shares, par value | $ / shares

$ 1,000

Number of votes, preferred shares | Vote

0

Amount payable to preferred stockholders on liquidation (as percentage)

100%

Conversion price | $ / shares

$ 8.75

Term of notice period of limitation

61 days

Number of holders with preemptive rights | Right

0

Shares excluded in class of stock

3,050

Series A-2 Preferred Stock | Securities purchase agreement

Class of Stock [Line Items]

Number of shares sold

100

2,950

Price per share | $ / shares

$ 1,000

Series A-2 Preferred Stock | Minimum

Class of Stock [Line Items]

Beneficial ownership limitation on common stock (as percentage)

4.99%

Series A-2 Preferred Stock | Maximum

Class of Stock [Line Items]

Beneficial ownership limitation on common stock (as percentage)

9.99%

Subsequent events

Class of Stock [Line Items]

Issuance of common stock to vendor (in shares)

50,000

Subsequent events | Series A-1 Preferred Stock

Class of Stock [Line Items]

Preferred stock, shares authorized

11,100

STOCKHOLDERS' EQUITY - Common S

STOCKHOLDERS' EQUITY - Common Stock Warrants (Details) - $ / shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Common Stock Warrants
Number of shares
Warrants outstanding at beginning of the year	28,161
Issued	2,585,923
Exercised	(71,429)
Warrants outstanding at end of the year	2,542,655
Exercise Price per Share		$ 70
Weighted-Average Exercise Price
Warrants outstanding at beginning of the year	$ 70
Issued	6.01
Exercised	0.35
Warrants outstanding at end of the year	$ 6.89
Weighted Average Remaining Contractual Term (years)
Warrants outstanding at beginning of the year	3 years 1 month 24 days
Warrants outstanding at end of the year	4 years 5 months 4 days
Common Stock Warrants | Minimum
Number of shares
Exercise Price per Share	$ 0.35
Common Stock Warrants | Maximum
Number of shares
Exercise Price per Share	$ 70
Pre Funded Warrants
Number of shares
Warrants outstanding at beginning of the year	61,945
Exercised	(358)
Warrants outstanding at end of the year	61,587
Exercise Price per Share	$ 0.35
Weighted-Average Exercise Price
Warrants outstanding at beginning of the year	0.35
Warrants outstanding at end of the year	$ 0.35

SHARE-BASED COMPENSATION - Addi

SHARE-BASED COMPENSATION - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions		12 Months Ended
	Feb. 23, 2021	Dec. 31, 2023	Sep. 21, 2023	Aug. 25, 2023	Aug. 24, 2023	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares, par value		$ 0.0001	$ 0.01			$ 0.0001
Expiration term		10 years
Unrecognized compensation costs		$ 0.7
2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)	65,000
Annual share increase	65,000
Percentage of outstanding shares	4%
Common shares, par value				$ 0.0001
Reserved for future issuance				743,106	125,045
2021 Plan | Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)		0

SHARE-BASED COMPENSATION - Assu

SHARE-BASED COMPENSATION - Assumptions (Details)	12 Months Ended
	Dec. 31, 2023
Black-Scholes option-pricing model, Assumptions:
Risk-free interest rate, minimum	3.10%
Risk-free interest rate, maximum	3.60%
Expected volatility	64%
Expected dividend yield	0%
Minimum
Black-Scholes option-pricing model, Assumptions:
Expected term (years)	6 years
Maximum
Black-Scholes option-pricing model, Assumptions:
Expected term (years)	6 years 3 months 18 days

SHARE-BASED COMPENSATION - Shar

SHARE-BASED COMPENSATION - Share Option Activity (Details) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Number of Shares
Options outstanding at beginning	80,887
Expired	(10,476)
Options outstanding at end	70,411	80,887
Options exercisable at December 31, 2023	42,713
Weighted-Average Exercise Price
Options outstanding at beginning	$ 63.31
Expired	64.96
Options outstanding at end	63.07	$ 63.31
Options exercisable at December 31, 2023	$ 58.57
Weighted-Average Remaining Contractual Term :
Weighted-Average Remaining Contractual Term (in Years)	7 years 3 months 10 days	8 years 9 months 7 days
Options exercisable weighted average remaining contractual term	6 years 9 months 3 days
Weighted- Average Fair Value at Grant Date :
Weighted- Average Fair Value at Grant Date at beginning (in dollars)	$ 34.37
Weighted- Average Fair Value at Grant Date at end (in dollars)	$ 33.98	$ 34.37
Aggregate Intrinsic Value, Options exercisable	$ 39,520

SHARE-BASED COMPENSATION - Stoc

SHARE-BASED COMPENSATION - Stock Based Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation	$ 717	$ 488
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation	254	216
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation	$ 463	$ 272

INCOME TAXES - Loss from operat

INCOME TAXES - Loss from operations before income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
INCOME TAXES
United States	$ (2,299)	$ 584
Foreign	(6,200)	(12,055)
Loss before income taxes	$ (8,499)	$ (11,471)

INCOME TAXES - Reconciliation o

INCOME TAXES - Reconciliation of effective tax rate (Details)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Reconciliation of the statutory income tax rate to effective tax rate
Taxes at domestic rate	21%	21%
State and local income taxes	(1.40%)
Non-US statutory rates	1.80%	2.90%
Permanent items	(1.60%)
Nondeductible Research Expense	(7.40%)	(6.30%)
Change in valuation allowance	(16.90%)	(17.90%)
Warrant revaluation	1.10%
Other	3.40%	0.10%
Effective tax rate		(0.20%)

INCOME TAXES - Components of in

INCOME TAXES - Components of income tax provision/ (benefit) (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
Current
State	$ 2
Foreign	22
Total Current	24
Deferred
Total	$ 24

INCOME TAXES - Deferred tax ass

INCOME TAXES - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets/(liabilities):
Net operating loss carryforwards	$ 10,874	$ 9,151
Stock Compensation	207	187
Property plant and equipment	(114)	(150)
Other	45	(119)
Total	11,012	9,069
Valuation allowance	$ (11,012)	$ (9,069)

INCOME TAXES - Narrative (Detai

INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
INCOME TAXES
Accrued interest and penalties	$ 0	$ 0
Unrecognized tax benefits	0	0
Foreign
INCOME TAXES
Net operating loss carryforwards	38,400	32,900
Domestic
INCOME TAXES
Net operating loss carryforwards	5,400	3,300
State and local
INCOME TAXES
Net operating loss carryforwards	$ 1,800	$ 3,300

DEFINED CONTRIBUTION PENSION -

DEFINED CONTRIBUTION PENSION - Pension cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
DEFINED CONTRIBUTION PENSION
Total	$ 155	$ 160
Research and development
DEFINED CONTRIBUTION PENSION
Total	90	108
Selling, general and administrative
DEFINED CONTRIBUTION PENSION
Total	$ 65	$ 52

DEFINED CONTRIBUTION PENSION _2

DEFINED CONTRIBUTION PENSION - Additional Information (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
DEFINED CONTRIBUTION PENSION
Amounts owed to the pension scheme	$ 5	$ 1

FAIR VALUE MEASUREMENTS - Activ

FAIR VALUE MEASUREMENTS - Activity within Level 3 of the fair value hierarchy, our liabilities carried at fair value (Details) - Warrant Liability $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Activity within Level 3 of the fair value hierarchy, our liabilities carried at fair value
Fair value of warrant issued in Private Placement Offering	$ 1,837
Total change in the liability included in earnings	(465)
Balance at the end	$ 1,372

FAIR VALUE MEASUREMENTS - Fair

FAIR VALUE MEASUREMENTS - Fair value of the preferred and common warrants determined by using option pricing models assumptions (Details)	Dec. 31, 2023 Y	Jun. 22, 2023 Y	Jun. 14, 2023 Y
Expected term (years)
FAIR VALUE MEASUREMENTS
Fair value of the preferred and common warrants, measurement input	4.46	5	5
Risk-free interest rate
FAIR VALUE MEASUREMENTS
Fair value of the preferred and common warrants, measurement input	0.0381	0.0395	0.0398
Expected volatility
FAIR VALUE MEASUREMENTS
Fair value of the preferred and common warrants, measurement input	0.500	0.500	0.500
Expected dividend yield
FAIR VALUE MEASUREMENTS
Fair value of the preferred and common warrants, measurement input	0	0	0

FAIR VALUE MEASUREMENTS - Finan

FAIR VALUE MEASUREMENTS - Financial assets and liabilities that have been measured at fair value (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Liabilities:
Movements in to level 3	$ 0
Movement out of level 3	0
Warrant liability	1,372
Total liabilities	1,372
Significant Unobservable Inputs (Level 3)
Liabilities:
Warrant liability	1,372
Total liabilities	$ 1,372

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - Octopus share purchase - USD ($)		12 Months Ended
	Jan. 27, 2022	Dec. 31, 2022
Related Party Transaction [Line Items]
Reimbursement expenses incurred		$ 11,000,000
Sale of Stock, Number of Shares Issued in Transaction	28,572
Sale of Stock, Price Per Share	$ 70
Accounts payable and accrued expenses
Related Party Transaction [Line Items]
Reimbursement expenses incurred		$ 0

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - $ / shares

1 Months Ended

12 Months Ended

Jan. 31, 2024

Jan. 26, 2024

Jan. 01, 2024

Feb. 27, 2023

Jan. 06, 2023

Feb. 23, 2021

Mar. 31, 2024

Dec. 31, 2023

Dec. 31, 2022

Jan. 25, 2024

Aug. 25, 2023

Aug. 24, 2023

Jun. 14, 2023

SUBSEQUENT EVENTS

Preferred shares, outstanding

13,765

0

Preferred shares, par value

$ 0.0001

$ 0.0001

Issuance of common stock to vendor (in shares)

1,508

1,429

Series A-1 Preferred Stock

SUBSEQUENT EVENTS

Preferred shares, par value

$ 1,000

Conversion price

87.50

Series A-2 Preferred Stock

SUBSEQUENT EVENTS

Preferred shares, par value

1,000

Conversion price

$ 8.75

2021 Plan

SUBSEQUENT EVENTS

Percentage of outstanding shares

4%

Reserved for future issuance

743,106

125,045

Granted

65,000

Common stock

SUBSEQUENT EVENTS

Shares issued upon conversion

43,891

Issuance of common stock to vendor (in shares)

2,937

12,308

Subsequent events

SUBSEQUENT EVENTS

Issuance of common stock to vendor (in shares)

50,000

Subsequent events | Series A-1 Preferred Stock | Consent, Conversion and Amendment Agreement

SUBSEQUENT EVENTS

Percentage of preferred stock converted

90%

Shares converted

9,963

Preferred shares, outstanding

1,106

Preferred shares, par value

$ 1,000

$ 10,000

Conversion price

87.50

Subsequent events | Class C Warrants | Consent, Conversion and Amendment Agreement

SUBSEQUENT EVENTS

Exercise price of warrant

$ 0.0001

Warrants to purchase shares of common stock

726,344

Subsequent events | 2021 Plan

SUBSEQUENT EVENTS

Number of shares increased

35,586

Percentage of outstanding shares

4%

Reserved for future issuance

778,692

Granted

3,400

Share-Based Payment Arrangement, Grantee Status [Extensible Enumeration]

us-gaap:ShareBasedPaymentArrangementEmployeeMember

Subsequent events | Common stock | Consent, Conversion and Amendment Agreement

SUBSEQUENT EVENTS

Shares issued upon conversion

412,293