SmartKem (SMTK) 10-K 30 Mar 23 2022 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2022	Mar. 24, 2023	Jun. 30, 2022
Document and Entity Information [Abstract]
Document Type	10-K
Document Annual Report	true
Document Period End Date	Dec. 31, 2022
Document Transition Report	false
Entity File Number	000-56181
Entity Registrant Name	SmartKem, Inc.
Entity Address State Or Province	DE
Entity Tax Identification Number	85-1083654
Entity Address, Address Line One	Manchester Technology Centre, Hexagon Tower.
Entity Address, Address Line Two	Delaunays Road
Entity Address, Address Line Three	Blackley
Entity Address, City or Town	Manchester
Entity Incorporation, State or Country Code	X0
Entity Address, Postal Zip Code	M9 8GQ
City Area Code	44 161
Local Phone Number	721 1514
Title of 12(b) Security	Common stock, par value $0.0001 per share
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Public Float			$ 29,622,066
Entity Common Stock, Shares Outstanding		27,034,996
Entity Central Index Key	0001817760
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false
Auditor Name	BDO LLP
Auditor Firm ID	1295
Auditor Location	Manchester, United Kingdom

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Current assets
Cash and cash equivalents	$ 4,235	$ 12,226
Accounts receivable, net	30
Research and development tax credit receivable	1,121	1,070
Prepaid expenses and other current assets	1,056	802
Total current assets	6,442	14,098
Property, plant and equipment, net	602	802
Right-of-use assets, net	475	154
Other assets, non-current	6	6
Total assets	7,525	15,060
Current liabilities
Accounts payable and accrued expenses	931	1,423
Lease liabilities, current	206	87
Income taxes payable	22
Other current liabilities	244
Total current liabilities	1,403	1,510
Lease liabilities, non-current	239	28
Total liabilities	1,642	1,538
Commitments and contingencies (Note 8)
Stockholders' Equity
Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized, zero shares issued and outstanding, at December 31, 2022 and December 31, 2021, respectively
Common stock, par value $0.0001 per share, 300,000,000 shares authorized, 26,984,996 and 25,554,309 shares issued and outstanding, at December 31, 2022 and December 31, 2021, respectively	3	3
Additional paid-in capital	92,930	89,954
Accumulated other comprehensive loss	(483)	(1,363)
Accumulated deficit	(86,567)	(75,072)
Total stockholders' equity	5,883	13,522
Total liabilities and stockholders' equity	$ 7,525	$ 15,060

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2022	Dec. 31, 2021
Consolidated Balance Sheets
Preferred shares, par value	$ 0.0001	$ 0.0001
Preferred stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Common shares, par value	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	300,000,000	300,000,000
Common Stock, Shares Issued	26,984,996	25,554,309
Common Stock, Shares Outstanding	26,984,996	25,554,309

Consolidated Statements of Oper

Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Consolidated Statements of Operations and Comprehensive Loss
Revenue	$ 40	$ 18
Cost of revenue	33	8
Gross profit	7	10
Other operating income	1,172	1,285
Operating expenses
Research and development	5,802	8,199
Selling, general and administrative	5,071	8,069
Transaction expenses		1,329
Total operating expenses	10,873	17,597
Operating Loss	(9,694)	(16,302)
Non-operating income/(expense)
Loss on foreign currency transactions	(1,782)	(808)
Interest expense		(19)
Interest income	5	3
Total non-operating expense	(1,777)	(824)
Loss before income taxes	(11,471)	(17,126)
Income tax expense	(24)
Net loss	(11,495)	(17,126)
Other comprehensive gain/(loss)
Foreign currency translation gain	880	117
Total comprehensive loss	$ (10,615)	$ (17,009)
Basic net loss per common share	$ (0.40)	$ (0.68)
Diluted net loss per common share	$ (0.40)	$ (0.68)
Basic weighted average shares outstanding	28,861,789	25,233,384
Diluted weighted average shares outstanding	28,861,789	25,233,384

Consolidated Statements of Stoc

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Total
Beginning Balance at Dec. 31, 2020	$ 1	$ 61,276	$ (1,480)	$ (57,946)	$ 1,851
Beginning Balance (in shares) at Dec. 31, 2020	13,627,887
Issuance of common shares due to exercise of stock-options	$ 1	19			$ 20
Issuance of common shares due to exercise of stock-options (in shares)	1,424,622				1,424,622
Stock-based compensation expense		6,196			$ 6,196
Repurchase of common stock (in shares)	(2,307,700)
Effect of reverse capitalization (in shares)	2,500,000
Issuance of common stock to vendor		280			280
Issuance of common stock to vendor (in shares)	147,500
Issuance of common stock and warrants in private placement	$ 1	24,637			24,638
Issuance of common stock and warrants in private placement (in shares)	10,162,000
Issuance costs related to common stock and warrants in private placement		(2,454)			(2,454)
Foreign currency translation adjustment			117		117
Net loss				(17,126)	(17,126)
Ending Balance at Dec. 31, 2021	$ 3	89,954	(1,363)	(75,072)	$ 13,522
Ending Balance (in shares) at Dec. 31, 2021	25,554,309
Issuance of common shares due to exercise of stock-options (in shares)					0
Stock-based compensation expense		488			$ 488
Issuance of common stock to vendor		658			658
Issuance of common stock to vendor (in shares)	430,687
Issuance of common stock in private placement		2,000			2,000
Issuance of common stock in private placement (in shares)	1,000,000
Issuance costs related to common stock and warrants in private placement		(170)			(170)
Foreign currency translation adjustment			880		880
Net loss				(11,495)	(11,495)
Ending Balance at Dec. 31, 2022	$ 3	$ 92,930	$ (483)	$ (86,567)	$ 5,883
Ending Balance (in shares) at Dec. 31, 2022	26,984,996

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Cash flows from operating activities:
Net loss	$ (11,495)	$ (17,126)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense	198	209
Common shares issued to vendor for services	391	263
Amortization of right of use asset	264	234
Stock option compensation expense	488	6,196
Loss on foreign currency transactions	1,782	808
Change in assets and liabilities:
Accounts receivable, net	(32)	19
Research & development tax credit receivable	(213)	(104)
Prepaid expenses and other current assets	(42)	(532)
Accounts payable and accrued expenses	(385)	579
Lease liabilities	(265)	(276)
Other assets		2
Income taxes payable	22
Other current liabilities	238
Net cash used in operating activities	(9,049)	(9,728)
Cash flows from investing activities:
Purchases of property, plant and equipment	(79)	(341)
Net cash used by investing activities	(79)	(341)
Cash flows from financing activities:
Proceeds from term loan payable		738
Repayment of term loan payable		(738)
Proceeds from the issuance of common stock and warrants in private placement		24,638
Proceeds from the issuance of common stock in private placement	2,000
Payment of issuance costs	(170)	(2,454)
Proceeds from the exercise of stock options		20
Net cash provided by financing activities	1,830	22,204
Foreign currency effects on cash	(693)	(673)
Net change in cash	(7,991)	11,462
Cash and cash equivalents, beginning of year	12,226	764
Cash and cash equivalents, end of year	4,235	12,226
Supplemental disclosure of cash and non-cash investing and financing activities
Cash paid for interest		19
Right of use asset and lease liability additions	583	136
Issuance of common shares for consulting services	$ 633	$ 256

BUSINESS

BUSINESS	12 Months Ended
	Dec. 31, 2022
BUSINESS
BUSINESS	1. 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 The Company is seeking to reshape the world of electronics with our proprietary organic semiconductor platform that we believe has the potential to affect the form and function of the next generation of low-cost displays and sensors. The Company’s patented TRUFLEX® inks are solution deposited at a low temperature, on low-cost substrates to make OTFT circuits. SmartKem’s organic semiconductor platform can be used in a number of applications including mini- and micro-LED displays, AMOLED displays, AR and VR headsets, fingerprint sensors and integrated logic circuits. The Company has a research and development facility in Manchester, UK, and manufactures product protypes for prospective customers using its semiconductor manufacturing processes housed at the Centre for Process Innovation (CPI) at Sedgefield, UK. The Company has an extensive IP portfolio including over 125 issued patents across 19 patent families. 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, 2022, and 2021, respectively were deemed to be immaterial to the consolidated financial statements. The Company anticipates there may be additional costs relating to the Pandemic incurred in the upcoming months that will be attributable to fiscal year 2023 and thereafter. These costs are not expected to be material. 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, 2022
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. Going Concern The accompanying consolidated financial statements have been prepared on the basis of continuity of operations, realization of assets and the satisfaction of liabilities, and commitments in the ordinary course of business. We have incurred recurring losses including net losses of $11.5 million and $17.1 million for the years ended December 31, 2022, and 2021, respectively. As of December 31, 2022, we had an accumulated deficit of $86.6 million. 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. We expect that our cash and cash equivalents of $4.2 million as of December 31, 2022, will be sufficient to fund our operating expenses and capital expenditure requirements through the end of May 2023. 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 to continue as a going concern. There is substantial doubt that the Company will be able to pay its obligations as they fall due, and this substantial doubt is not alleviated by management plans. The consolidated financial statements as of December 31, 2022 have been prepared assuming that the Company will continue as a going concern. Accordingly, the consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. Basis of Consolidation The consolidated financial statements include the accounts of SmartKem, Inc. and its wholly-owned subsidiaries, SmartKem Delaware, Inc. and 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. The Company's formerly wholly owned subsidiary, SmartKem Delaware Inc. was dissolved on May 13, 2021. 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, fair value of embedded conversion features in the convertible notes, and the valuation allowance of deferred tax assets. 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, 2022 and 2021, 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 doubtful accounts would be required. There was no allowance for doubtful accounts recorded as of December 31, 2022, and 2021. 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. Management believes that the Company is not exposed to significant credit risk as the Company’s deposits are held at financial institutions that management believes to be of high credit quality and the Company has not experienced any losses in these deposits. 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, 2022, and 2021, Company’s management believed that no revision to the remaining useful lives or impairment of the Company’s long-lived assets was required. Derivative Asset for Embedded Conversion Features The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates convertible notes to determine if those contracts or embedded components of those contracts qualify as derivatives to be accounted for separately. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The result of this accounting treatment is that the fair value of the embedded derivative is recorded as a liability and marked-to-market each balance sheet date, with the change in fair value recorded in the statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. The fair value of the embedded conversion features is estimated using a Monte Carlo simulation model, in which possible outcomes and their values are simulated repeatedly and randomly. Under the Monte Carlo method the Company estimated the fair value of the convertible notes conversion feature at the time of issuance and subsequent remeasurement dates, utilizing the with-and without method, where the value of the derivative feature is the difference in values between a note simulated with the embedded conversion feature and the value of the same note simulated without the embedded conversion feature. Estimating fair values of embedded conversion features requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. 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, 2022, and 2021. The carrying value of the Company’s cash, accounts receivable, other receivables, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value because of the short-term maturity of these financial instruments. Convertible Notes The Company accounts for its convertible notes in accordance with ASC 470-20, Debt with Conversion and Other Options Debt discount created by the bifurcation of embedded feature in the convertible notes are reflected as a reduction to the related debt liability. The discount is amortized to interest expense over the term of the debt using the effective-interest method. Warrants The accounting treatment of warrants issued is determined pursuant to the guidance provided by ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging Non-retirement Post-employment Benefits The company records employee severance benefits as non-retirement post-employment benefits that are accounted for under ASC 712-10. A liability is accrued when it becomes probable that a payment will be made, and the amount is estimable. In most cases, a payment is not deemed probable until the employer makes the decision to terminate the employee. All severance payments identified were paid and expensed in the period incurred. 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, 2022 and 2021. 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 the information available at adoption date of ASC 842 (January 1, 2019) in determining the present value of lease payments. Revenue The Company applies the provisions of ASC 606, Revenue from Contracts with Customers consideration the Company expects to be entitled to. In order to achieve that core principle, the Company applies the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contact and (5) recognize revenue when a performance obligation is satisfied. 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® inks and of demonstrator units to customers evaluating organic semiconductor technology. The transaction price is stated in each customer agreement and is allocated to a single performance obligation. Revenue is recognized upon shipment of each TRULFEX® ink or demonstrator, at a point in time. The Company does not have any significant financing components as payment is received at or shortly after the point of sale. Costs incurred to obtain a contract will be expensed as incurred when the amortization period is less than a year. Collaboration Arrangements The company entered into several joint development agreements during the year. The business arrangement between the two parties is not accounted for as a Collaborative Arrangement, as defined within the guidance under ASC 808, as both parties are not exposed to significant risks and rewards dependent on the commercial success of the activity. It has also determined that other party is a vendor and not a customer, as defined within the guidance under ASC 606, as the other party 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 party to obtain design services from it. These agreements are accounted for under the guidance of ASC 705, Cost of Sales and Service. 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. For the year ended December 31, 2022 and 2021, the Company recorded grant income and research & development tax credits of $1,172 thousand and $1,285 thousand, respectively, which are recorded as other operating income in the accompanying consolidated statements of operations. As of December 31, 2022, and December 31, 2021, the Company had receivables related to research & development tax credits for payments not yet received of $1,121 thousand and $1,070 thousand, respectively. 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, 2022 and 2021were $0.5 million and $6.2 million, respectively (see also Note 10). 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, 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 (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. 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, 2022 and 2021. 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, 2022, and 2021, 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. The Company is a party to certain litigation and disputes arising in the normal course of business. As of December 31, 2022, the Company does not expect that such matters will have a material adverse effect on the Company’s business, financial position, results of operations, or cash flows. Issuance Costs Direct and incremental legal and accounting costs associated with the Company’s issuance of common 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, 2022, For the year ended December 31, 2021, $1.3 million of direct and incremental costs associated with the Exchange were recorded as Transaction Expenses in the Consolidated Statement of Operations and Comprehensive Loss. 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). The Company has 2,168,000 pre-funded common stock warrants outstanding as of December 31, 2022, which became exercisable on April 23, 2021 based on terms and conditions of the agreements. As the pre-funded common stock warrants are exercisable for $0.01, 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 Company included these pre-funded common stock warrants in basic and diluted earnings per share when all conditions were met on April 23, 2021. ​ 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, ​ 2022 2021 Options ​ ​ 2,829,756 ​ ​ 1,953,882 Warrants ​ 985,533 ​ 985,533 Total ​ ​ 3,815,289 ​ ​ 2,939,415 ​ Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments: Credit Losses (Topic 326)

PREPAID EXPENSES AND OTHER CURR

PREPAID EXPENSES AND OTHER CURRENT ASSETS	12 Months Ended
	Dec. 31, 2022
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, ​ 2022 2021 Prepaid service charges and property taxes ​ $ 55 ​ $ 58 Prepaid utilities ​ 51 ​ 51 Prepaid insurance ​ 358 ​ 412 Prepaid administrative expenses ​ 35 ​ 63 Prepaid technical fees ​ ​ 22 ​ ​ 141 Prepaid consulting fees ​ ​ 304 ​ ​ 27 VAT receivable ​ 195 ​ 50 Other receivable and other prepaid expenses ​ ​ 36 ​ ​ — Total prepaid expenses and other current assets ​ $ 1,056 ​ $ 802 ​ ​ As of December 31, 2022 and 2021, there was $169 thousand and $217 thousand, respectively, of non-current prepaid insurance related to directors’ and officers’ liability insurance that was included in the amounts above.

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT	12 Months Ended
	Dec. 31, 2022
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, ​ 2022 2021 Plant and equipment ​ $ 1,478 ​ $ 1,633 Furniture and fixtures ​ 218 ​ 245 Computer hardware and software ​ 24 ​ 26 ​ ​ 1,720 ​ 1,904 Less: Accumulated depreciation ​ (1,118) ​ (1,102) Property, plant and equipment, net ​ $ 602 ​ $ 802 ​ Depreciation expense was $198 thousand and $209 thousand for the year ended December 31, 2022 and 2021, respectively, and is classified as research and development expense.

ACCOUNTS PAYABLE AND ACCRUED EX

ACCOUNTS PAYABLE AND ACCRUED EXPENSES	12 Months Ended
	Dec. 31, 2022
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, ​ 2022 2021 Accounts payable ​ $ 230 ​ $ 510 Accrued expenses – lab refurbishments ​ 117 ​ 131 Accrued expenses – technical fees ​ 130 ​ 66 Accrued expenses – variable rent & utilities ​ 15 ​ 20 Accrued expenses – audit & accounting fees ​ 128 ​ 191 Accrued expenses – other ​ 80 ​ 112 Credit card liabilities ​ 20 ​ 10 Payroll and social security liabilities ​ 211 ​ 383 Total accounts payable and accrued expenses ​ $ 931 ​ $ 1,423 ​

LEASES

LEASES	12 Months Ended
	Dec. 31, 2022
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. There was no sublease rental income for the year ended December 31, 2022 and 2021. The Company is not the lessor in any lease agreement, and no related party transactions for lease arrangements have occurred. ​ The table below presents certain information related to the lease costs for the Company’s operating leases for the periods ended: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 2021 Operating lease cost ​ $ 262 ​ $ 225 Short-term lease cost ​ 10 ​ 32 Variable lease cost ​ 186 ​ 140 Total lease cost ​ $ 458 ​ $ 397 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 2021 Research and development ​ $ 430 ​ $ 373 Selling, general and administrative ​ 28 ​ 24 Total lease cost ​ $ 458 ​ $ 397 ​ ​ 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, ​ 2022 2021 Assets ​ ​ ​ Operating lease right of use assets ​ $ 475 ​ $ 154 Total lease assets ​ $ 475 ​ $ 154 Liabilities ​ ​ Current liabilities: ​ ​ Operating lease liability – current portion ​ $ 206 ​ $ 87 Noncurrent liabilities: ​ ​ ​ Operating lease liability, net of current portion ​ 239 ​ 28 Total lease liabilities ​ $ 445 ​ $ 115 ​ The Company had no right of use lease assets and lease liabilities for financing leases as of December 31, 2022 and 2021. The table below presents certain information related to the cash flows for the Company’s operating leases for the periods ended: ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 2021 Operating cash outflows from operating leases $ 265 ​ $ 276 Supplemental non-cash amounts of operating lease liabilities arising from obtaining right of use assets $ 583 ​ $ 136 ​ 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: ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 ​ ​ 2021 ​ Weighted average remaining lease term (in years) – operating leases 2.19 ​ 1.40 Weighted average discount rate – operating leases 7.73 % ​ 6.07 % ​ Undiscounted operating lease liabilities as of December 31, 2022, by year and in the aggregate, having non-cancelable lease terms in excess of one year were as follows: ​ ​ ​ ​ ​ ​ As of ​ ​ December 31, ​ ​ 2022 2023 ​ $ 234 2024 ​ 234 2025 ​ 19 Total undiscounted lease payments ​ 487 Less imputed interest ​ (42) Total net lease liabilities ​ $ 445 ​

NOTES PAYABLE

NOTES PAYABLE	12 Months Ended
	Dec. 31, 2022
NOTES PAYABLE.
NOTES PAYABLE	7. NOTES PAYABLE: ​ ​ ​ ​ On January 26, 2021, the Company entered into a term loan facility agreement for the amount of $738 thousand. The funds were available to be drawn on from the effective date of the agreement through to January 27, 2021. The Company drew down the full loan amount on January 26, 2021. The Company’s research and development tax credit was to be utilized as collateral. The Lender was to be paid immediately following payment of research and development tax credit from the United Kingdom’s HM Revenue and Customs. The final repayment was due six months from the agreement date, if the loan and any interest was not repaid in full prior to this date. The loan carried a monthly interest rate of 1.25%. The interest accrued daily and compounded monthly on the monthly anniversary of the draw down date of the loan. For the year ended December 31, 2021, the Company incurred an effective interest rate of 26.20% relating to notes payable. The interest expense recognized based on the debt’s effective interest rate for the year ended December 31, 2022 and 2021, was zero and $19 thousand, respectively, relating to notes payable. The Company repaid the note payable in full on March 2, 2021. There were no notes payable outstanding at the years ended December 31, 2022 and 2021.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Dec. 31, 2022
COMMITMENTS AND CONTINGENCIES.
COMMITMENTS AND CONTINGENCIES	8. 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. ​ ​ ​ Commitments Expenditure commitments contracted for but not yet incurred totaled $681 thousand and primarily consists of purchase commitments in the normal course of business for research & development services, communications infrastructure and administrative services. ​ ​

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	12 Months Ended
	Dec. 31, 2022
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY	9. STOCKHOLDERS’ EQUITY: 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 ​ Our common stock is traded on the OTC Market Group’s OTCQB® Market (“OTCQB”) under the ticker symbol “SMTK”. ​ Preferred Stock ​ The Company currently has no shares of preferred stock outstanding. 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. ​ Common Stock Warrants On February 23, 2021, a total of 985,533 fully vested common stock warrants were issued to a vendor for financial advisory services provided in connection with the sale of the Company’s common stock. The common stock warrants are exercisable at a per share price of $2.00 until they expire on February 23, 2026. During the years ended December 31, 2021 and December 31, 2022, no warrants issued to vendors for financial advisory services were exercised. The grant date fair value for these warrants of $0.91 per warrant for a total fair value of $896 thousand, was determined using the Black-Scholes options valuation model. The Company recorded the warrants at fair value, as both an increase and decrease in additional paid-in capital during the year ended December 31, 2021. A summary of the Company’s warrants to purchase common stock activity is as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ Weighted- ​ Remaining ​ ​ ​ ​ Average ​ Contractual ​ ​ Number of ​ Exercise ​ Term ​ ​ Shares ​ Price ​ (Years) Warrants outstanding at January 1, 2021 ​ — ​ $ — — Exercised ​ — ​ — — Forfeited or Expired ​ — ​ — — Granted ​ 985,533 ​ ​ 2.00 ​ 5.00 Warrants outstanding at January 1, 2022 985,533 ​ $ 2.00 4.15 Exercised — ​ — — Forfeited or Expired — ​ — — Granted — ​ — — Warrants outstanding at December 31, 2022 985,533 ​ $ 2.00 3.15 ​ On February 23, 2021, a total of 2,168,000 pre-funded common stock warrants were issued to investors with an exercise price of $0.01 per share for total proceeds to the Company of $4,314 thousand. During the years ended December 31, 2021, and December 31, 2022, no warrants issued to investors were exercised. The grant date fair value for these warrants of $1.99 is based on the stock price at issuance date of $2.00 less the exercise price of $0.01. The pre-funded common stock warrants have no expiration date and terminate upon exercise. 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, 2021 ​ — ​ $ — Exercised ​ — ​ ​ — Forfeited or Expired ​ — ​ ​ — Granted ​ 2,168,000 ​ ​ 0.01 Pre-funded warrants outstanding at January 1, 2022 2,168,000 ​ $ 0.01 Exercised — ​ — Forfeited or Expired — ​ — Granted — ​ — Pre-funded warrants outstanding at December 31, 2022 2,168,000 ​ $ 0.01 ​ The grant date 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 estimated its expected stock volatility based on historical volatility of publicly traded peer companies. The Company did not issue any warrants in the year ended December 31, 2022. ​ Common Stock Issued to Vendors for Services On February 23, 2021, the Company issued 50,000 shares of common stock for advisory services. On May 27, 2021, and November 29, 2021, the Company issued 25,000 and 12,500 shares of common stock, respectively, as payment for investor relations services. On August 13, 2021, the company issued 60,000 shares of common stock for advisory services. On February 28, 2022, May 27, 2022, and November 29, 2022, the Company issued 12,500, 22,473 and 35,714 shares of common stock, respectively, as payment for investor relations services. On June 29, 2022, the Company issued 360,000 shares of common stock as payment for a one-year internet advertising contract.

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	12 Months Ended
	Dec. 31, 2022
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION	10. 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 2,275,000 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) 2,275,000 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. As of January 1, 2021, there were 1,810,749 SmartKem Limited options that were outstanding. Of these options 1,424,622 were accelerated and exercised by the holders thereof for a like number of ordinary shares of SmartKem Limited and exchanged for shares of the Company’s common stock pursuant to the Exchange. As a result of the reverse merger and recapitalization, an aggregate of 402,586 options were issued during February 2021 under the 2021 Plan in consideration for the cancellation of the SmartKem Limited options that were outstanding. Of these options, 336,557 had an exercise price of $0.001 per share and 66,029 had an exercise price of $2.00 per share and all expire on the ten-year anniversary of the grant date. These options were fully vested on the grant date. ​ During the year ended December 31, 2022, the Company issued additional options exercisable for 918,000 shares of common stock to employees, directors and consultants. The options vest over a period of three ten-year Determining the appropriate fair value of share-based awards requires the input of subjective assumptions, including the fair value of the Company’s common shares, 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 involves 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. Options granted under the 2021 Plan for year ended December 31, 2022, and December 31, 2021, were valued using the Black-Scholes option-pricing model with the following assumptions: ​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended ​ December 31, 2022 ​ December 31, 2021 Expected term (years) 6 years - 6.3 years ​ 5 years - 6 years Risk-free interest rate 3.1% - 3.6% ​ 0.3% - 1.2% Expected volatility 64% ​ 54% - 58% Expected dividend yield 0% ​ 0% ​ 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 option plans for the years ended December 31, 2022, and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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, 2021 ​ 1,810,749 ​ $ 0.06143 9.70 ​ $ 3.46867 ​ ​ ​ Exercised ​ (1,424,622) ​ 0.01447 ​ ​ ​ ​ Cancelled ​ (405,936) ​ 0.06452 ​ ​ ​ ​ Forfeited ​ (136,221) ​ ​ 0.00100 ​ ​ ​ ​ ​ ​ ​ ​ Granted ​ 2,109,912 ​ 1.68113 ​ ​ ​ ​ Options outstanding at December 31, 2021 1,953,882 ​ $ 1.72323 9.31 ​ $ 1.12355 ​ ​ ​ Exercised — ​ — ​ ​ ​ ​ Cancelled — ​ — ​ ​ ​ ​ Forfeited ​ (42,126) ​ ​ 2.00000 ​ ​ ​ ​ ​ ​ ​ ​ Granted 918,000 ​ 2.00000 ​ ​ ​ ​ Options outstanding at December 31, 2022 2,829,756 ​ $ 1.80889 8.77 ​ $ 0.98273 ​ ​ ​ Options exercisable at December 31, 2022 ​ 986,636 ​ $ 1.45189 ​ 8.26 ​ ​ ​ ​ $ 162 Vested and expected to vest after December 31, 2022 ​ 2,829,756 ​ $ 1.80889 ​ 8.77 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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. ​ No options were exercised in the year end December 31, 2022. The aggregate intrinsic value of options exercised during the year ended December 31, 2021, was $2.4 million. The total fair value of options vesting in the year ended December 31, 2022 was $690 thousand. The total fair value of options vesting in the year ended December 31, 2021 was $6.6 million. ​ The weighted-average grant date fair value per option granted for the year ended December 31, 2022 and 2021 was ​ Stock-based compensation, including stock options is included in the consolidated statements of operations as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 2021 Research and development ​ $ 216 ​ $ 2,982 Selling, general and administrative ​ 272 ​ 3,214 Total ​ $ 488 ​ $ 6,196 ​ As of December 31, 2022, there was $1.4 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, 2022
INCOME TAXES
INCOME TAXES	11. United States and foreign profit/(loss) from operations before income taxes was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 2021 United States ​ $ 584 ​ $ (5,039) Foreign ​ (12,055) ​ (12,087) Loss before income taxes ​ $ (11,471) ​ $ (17,126) ​ A reconciliation of the statutory income tax rate to the Company’s effective tax rate consists of the following: ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 Taxes at domestic rate ​ 21.0 % 21.0 % State and local income taxes ​ — % — % Non-US statutory rates ​ 2.9 % (0.8) % Permanent items ​ (6.3) % (7.3) % Change in valuation allowance ​ (17.9) % (22.4) % Statutory Rate Change ​ — % 9.6 % Other ​ 0.1 % (0.1) % Effective tax rate ​ (0.2) % (0.0) % ​ The components of income tax provision/(benefit) are as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2022 2021 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, ​ 2022 2021 Deferred tax assets/(liabilities): ​ ​ ​ Net operating loss carryforwards ​ $ 9,151 ​ $ 7,506 Property plant and equipment ​ (150) ​ (190) Other ​ 68 ​ 229 ​ ​ 9,069 ​ 7,545 Valuation allowance ​ (9,069) ​ (7,545) Deferred tax assets, net of allowance ​ $ — ​ $ — ​ The Company recorded a full valuation allowance against its net deferred tax assets as of December 31, 2022, and 2021. The Company 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. When the Company changes its determination as to the amount of its deferred tax assets that can be realized, the valuation allowance is adjusted with a corresponding impact to the provision for income taxes in the period in which such determination is made. As of December 31, 2022, and 2021, the Company had net operating loss carry-forwards of approximately $39.5 million and $30.7 million, respectively. The net operating loss carry-forwards were generated in the tax years from 2009 to 2022 with an unlimited carry-forward period. The Company has no uncertain tax positions, or penalties and interest accrued, that if recognized would reduce net operating loss carry-forwards or affect tax expense. The Company files tax returns as prescribed by the tax laws in the Unites States and United Kingdom in which they operate. In the normal course of business, the Company is subject to examination by the federal jurisdiction based on the statute of limitations. As of December 31, 2022, open years related to the United States and United Kingdom are 2019 to 2021. The Company has no open tax audits with any taxing authority as of December 31, 2022. As of December 31, 2022, and December 31, 2021, the Company had no accrued interest and penalties related to uncertain tax positions and no amounts have been recognized in the Company’s statements of operations.

DEFINED CONTRIBUTION PENSION

DEFINED CONTRIBUTION PENSION	12 Months Ended
	Dec. 31, 2022
DEFINED CONTRIBUTION PENSION
DEFINED CONTRIBUTION PENSION	12. 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: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years End December 31, ​ 2022 2021 Research and development ​ $ 108 ​ $ 98 Selling, general and administrative ​ 52 ​ 42 Total pension cost ​ $ 160 ​ $ 140 ​ As of December 31, 2022, there was $1 thousand owed to the pension scheme that is recorded under accounts payable and accrued expenses on the consolidated balances sheets. As of December 31, 2021, there were no amounts owed to the pension scheme.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	12 Months Ended
	Dec. 31, 2022
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS	13. RELATED PARTY TRANSACTIONS: In addition to transactions and balances related to share-based compensation to officers and directors, the Company incurred expenses of $110 thousand and $65 thousand, for the year ended December 31, 2022 and 2021, respectively, due to reimbursement of expenses and compensation for members of the Board of Directors. These expenses are recorded in selling, general & administrative in the consolidated statements of operations. As of December 31, 2022 and December 31, 2021, there was $16 thousand and $18 thousand, respectively, payable to members of the Board of Directors that are recorded in accounts payable and accrued expenses on the consolidated balance sheets. ​ During the year ended December 31, 2021, the Company reimbursed an owner for legal fees and other expenses as a result of the Exchange (see Note 1). The reimbursement of these fees for services resulted in an expense of $66 thousand for the year ended December 31, 2021 and there was zero payable as of December 31, 2021. ​ During the year ended December 31, 2021, the Company obtained consulting services from an individual who is a family member of a Director of the Company. The consulting services resulted in an expense of $35 thousand for the year ended December 31, 2021 and there was zero payable as of December 31, 2021. ​ Octopus Share Purchase On January 27, 2022, we sold an aggregate of 1,000,000 shares of our common stock at a purchase price of $2.00 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, 2022
SUBSEQUENT EVENTS.
SUBSEQUENT EVENTS	14. SUBSEQUENT EVENTS: Under the evergreen adjustment provisions of the 2021 Plan, on January 1, 2023 the number of shares of the Company’s common stock available for issuance under the 2021 Plan was increased by 1,079,399 or four percent (4%) of the total number of shares of Common Stock outstanding on December 31, 2022. After giving effect to increase, the total number of shares of Common Stock that may be issued under Plan will be 4,376,571. ​ In January 2023, 50,000 shares of our common stock were issued to a vendor in consideration for services to be provided. ​ ​

SUMMARY OF SIGNIFICANT ACCOUN_2

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Dec. 31, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of 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.
Basis of Consolidation	Basis of Consolidation The consolidated financial statements include the accounts of SmartKem, Inc. and its wholly-owned subsidiaries, SmartKem Delaware, Inc. and 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. The Company's formerly wholly owned subsidiary, SmartKem Delaware Inc. was dissolved on May 13, 2021.
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, fair value of embedded conversion features in the convertible notes, and the valuation allowance of deferred tax assets. 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, 2022 and 2021, 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 doubtful accounts would be required. There was no allowance for doubtful accounts recorded as of December 31, 2022, and 2021.
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. Management believes that the Company is not exposed to significant credit risk as the Company’s deposits are held at financial institutions that management believes to be of high credit quality and the Company has not experienced any losses in these deposits.
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, 2022, and 2021, Company’s management believed that no revision to the remaining useful lives or impairment of the Company’s long-lived assets was required.
Derivative Asset for Embedded Conversion Features	Derivative Asset for Embedded Conversion Features The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates convertible notes to determine if those contracts or embedded components of those contracts qualify as derivatives to be accounted for separately. In circumstances where the embedded conversion option in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The result of this accounting treatment is that the fair value of the embedded derivative is recorded as a liability and marked-to-market each balance sheet date, with the change in fair value recorded in the statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity. The fair value of the embedded conversion features is estimated using a Monte Carlo simulation model, in which possible outcomes and their values are simulated repeatedly and randomly. Under the Monte Carlo method the Company estimated the fair value of the convertible notes conversion feature at the time of issuance and subsequent remeasurement dates, utilizing the with-and without method, where the value of the derivative feature is the difference in values between a note simulated with the embedded conversion feature and the value of the same note simulated without the embedded conversion feature. Estimating fair values of embedded conversion features requires the development of significant and subjective estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors.
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, 2022, and 2021. The carrying value of the Company’s cash, accounts receivable, other receivables, prepaid expenses and other current assets, accounts payable and accrued expenses approximate fair value because of the short-term maturity of these financial instruments.
Convertible Notes	Convertible Notes The Company accounts for its convertible notes in accordance with ASC 470-20, Debt with Conversion and Other Options Debt discount created by the bifurcation of embedded feature in the convertible notes are reflected as a reduction to the related debt liability. The discount is amortized to interest expense over the term of the debt using the effective-interest method.
Warrants	Warrants The accounting treatment of warrants issued is determined pursuant to the guidance provided by ASC 480, Distinguishing Liabilities from Equity Derivatives and Hedging
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 ASC 712-10. A liability is accrued when it becomes probable that a payment will be made, and the amount is estimable. In most cases, a payment is not deemed probable until the employer makes the decision to terminate the employee. All severance payments identified were paid and expensed in the period incurred.
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, 2022 and 2021. 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 the information available at adoption date of ASC 842 (January 1, 2019) in determining the present value of lease payments.
Revenue	Revenue The Company applies the provisions of ASC 606, Revenue from Contracts with Customers consideration the Company expects to be entitled to. In order to achieve that core principle, the Company applies the following five step approach: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contact and (5) recognize revenue when a performance obligation is satisfied. 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® inks and of demonstrator units to customers evaluating organic semiconductor technology. The transaction price is stated in each customer agreement and is allocated to a single performance obligation. Revenue is recognized upon shipment of each TRULFEX® ink or demonstrator, at a point in time. The Company does not have any significant financing components as payment is received at or shortly after the point of sale. Costs incurred to obtain a contract will be expensed as incurred when the amortization period is less than a year.
Collaboration Arrangements	Collaboration Arrangements The company entered into several joint development agreements during the year. The business arrangement between the two parties is not accounted for as a Collaborative Arrangement, as defined within the guidance under ASC 808, as both parties are not exposed to significant risks and rewards dependent on the commercial success of the activity. It has also determined that other party is a vendor and not a customer, as defined within the guidance under ASC 606, as the other party 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 party to obtain design services from it. These agreements are accounted for under the guidance of ASC 705, Cost of Sales and Service.
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. For the year ended December 31, 2022 and 2021, the Company recorded grant income and research & development tax credits of $1,172 thousand and $1,285 thousand, respectively, which are recorded as other operating income in the accompanying consolidated statements of operations. As of December 31, 2022, and December 31, 2021, the Company had receivables related to research & development tax credits for payments not yet received of $1,121 thousand and $1,070 thousand, respectively.
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, 2022 and 2021were $0.5 million and $6.2 million, respectively (see also Note 10). 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, 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 (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. 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, 2022 and 2021. 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, 2022, and 2021, 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. The Company is a party to certain litigation and disputes arising in the normal course of business. As of December 31, 2022, the Company does not expect that such matters will have a material adverse effect on the Company’s business, financial position, results of operations, or cash flows.
Issuance Costs	Issuance Costs Direct and incremental legal and accounting costs associated with the Company’s issuance of common 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, 2022, For the year ended December 31, 2021, $1.3 million of direct and incremental costs associated with the Exchange were recorded as Transaction Expenses in the Consolidated Statement of Operations and Comprehensive Loss.
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). The Company has 2,168,000 pre-funded common stock warrants outstanding as of December 31, 2022, which became exercisable on April 23, 2021 based on terms and conditions of the agreements. As the pre-funded common stock warrants are exercisable for $0.01, 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 Company included these pre-funded common stock warrants in basic and diluted earnings per share when all conditions were met on April 23, 2021. ​ 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, ​ 2022 2021 Options ​ ​ 2,829,756 ​ ​ 1,953,882 Warrants ​ 985,533 ​ 985,533 Total ​ ​ 3,815,289 ​ ​ 2,939,415 ​
Recent Accounting Pronouncements	Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments: Credit Losses (Topic 326)

SUMMARY OF SIGNIFICANT ACCOUN_3

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Dec. 31, 2022
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Schedule of Antidilutive Securities	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2022 2021 Options ​ ​ 2,829,756 ​ ​ 1,953,882 Warrants ​ 985,533 ​ 985,533 Total ​ ​ 3,815,289 ​ ​ 2,939,415 ​

PREPAID EXPENSES AND OTHER CU_2

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables)	12 Months Ended
	Dec. 31, 2022
PREPAID EXPENSES AND OTHER CURRENT ASSETS
Schedule of Prepaid Expenses and Other Current Assets	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 Prepaid service charges and property taxes ​ $ 55 ​ $ 58 Prepaid utilities ​ 51 ​ 51 Prepaid insurance ​ 358 ​ 412 Prepaid administrative expenses ​ 35 ​ 63 Prepaid technical fees ​ ​ 22 ​ ​ 141 Prepaid consulting fees ​ ​ 304 ​ ​ 27 VAT receivable ​ 195 ​ 50 Other receivable and other prepaid expenses ​ ​ 36 ​ ​ — Total prepaid expenses and other current assets ​ $ 1,056 ​ $ 802 ​

PROPERTY, PLANT AND EQUIPMENT (

PROPERTY, PLANT AND EQUIPMENT (Tables)	12 Months Ended
	Dec. 31, 2022
PROPERTY, PLANT AND EQUIPMENT
Schedule of Property, Plant and Equipment	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 Plant and equipment ​ $ 1,478 ​ $ 1,633 Furniture and fixtures ​ 218 ​ 245 Computer hardware and software ​ 24 ​ 26 ​ ​ 1,720 ​ 1,904 Less: Accumulated depreciation ​ (1,118) ​ (1,102) Property, plant and equipment, net ​ $ 602 ​ $ 802 ​

ACCOUNTS PAYABLE AND ACCRUED _2

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)	12 Months Ended
	Dec. 31, 2022
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Schedule of Accounts Payable and Accrued Expenses	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 Accounts payable ​ $ 230 ​ $ 510 Accrued expenses – lab refurbishments ​ 117 ​ 131 Accrued expenses – technical fees ​ 130 ​ 66 Accrued expenses – variable rent & utilities ​ 15 ​ 20 Accrued expenses – audit & accounting fees ​ 128 ​ 191 Accrued expenses – other ​ 80 ​ 112 Credit card liabilities ​ 20 ​ 10 Payroll and social security liabilities ​ 211 ​ 383 Total accounts payable and accrued expenses ​ $ 931 ​ $ 1,423

LEASES (Tables)

LEASES (Tables)	12 Months Ended
	Dec. 31, 2022
LEASES
Schedule of Lease Costs	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 2021 Operating lease cost ​ $ 262 ​ $ 225 Short-term lease cost ​ 10 ​ 32 Variable lease cost ​ 186 ​ 140 Total lease cost ​ $ 458 ​ $ 397 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ ​ 2022 2021 Research and development ​ $ 430 ​ $ 373 Selling, general and administrative ​ 28 ​ 24 Total lease cost ​ $ 458 ​ $ 397 ​
Schedule of Operating Lease Assets And Liabilities	​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ 2022 2021 Assets ​ ​ ​ Operating lease right of use assets ​ $ 475 ​ $ 154 Total lease assets ​ $ 475 ​ $ 154 Liabilities ​ ​ Current liabilities: ​ ​ Operating lease liability – current portion ​ $ 206 ​ $ 87 Noncurrent liabilities: ​ ​ ​ Operating lease liability, net of current portion ​ 239 ​ 28 Total lease liabilities ​ $ 445 ​ $ 115 ​
Schedule of Operating Lease Cash Flow Information	​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 2021 Operating cash outflows from operating leases $ 265 ​ $ 276 Supplemental non-cash amounts of operating lease liabilities arising from obtaining right of use assets $ 583 ​ $ 136 ​
Schedule of Weighted Average Remaining Lease Term and Weighted Average Discount Rate	​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 ​ ​ 2021 ​ Weighted average remaining lease term (in years) – operating leases 2.19 ​ 1.40 Weighted average discount rate – operating leases 7.73 % ​ 6.07 % ​
Schedule of Operating Lease, Liability, Maturity	​ ​ ​ ​ ​ ​ As of ​ ​ December 31, ​ ​ 2022 2023 ​ $ 234 2024 ​ 234 2025 ​ 19 Total undiscounted lease payments ​ 487 Less imputed interest ​ (42) Total net lease liabilities ​ $ 445

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	12 Months Ended
	Dec. 31, 2022
Common Stock Warrants
Schedule of Warrants	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ ​ ​ ​ Average ​ ​ ​ ​ Weighted- ​ Remaining ​ ​ ​ ​ Average ​ Contractual ​ ​ Number of ​ Exercise ​ Term ​ ​ Shares ​ Price ​ (Years) Warrants outstanding at January 1, 2021 ​ — ​ $ — — Exercised ​ — ​ — — Forfeited or Expired ​ — ​ — — Granted ​ 985,533 ​ ​ 2.00 ​ 5.00 Warrants outstanding at January 1, 2022 985,533 ​ $ 2.00 4.15 Exercised — ​ — — Forfeited or Expired — ​ — — Granted — ​ — — Warrants outstanding at December 31, 2022 985,533 ​ $ 2.00 3.15 ​
Pre Funded Warrants
Schedule of Warrants	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted- ​ ​ ​ ​ Average ​ ​ Number of ​ Exercise ​ ​ Shares ​ Price Pre-funded warrants outstanding at January 1, 2021 ​ — ​ $ — Exercised ​ — ​ ​ — Forfeited or Expired ​ — ​ ​ — Granted ​ 2,168,000 ​ ​ 0.01 Pre-funded warrants outstanding at January 1, 2022 2,168,000 ​ $ 0.01 Exercised — ​ — Forfeited or Expired — ​ — Granted — ​ — Pre-funded warrants outstanding at December 31, 2022 2,168,000 ​ $ 0.01 ​

SHARE-BASED COMPENSATION (Table

SHARE-BASED COMPENSATION (Tables)	12 Months Ended
	Dec. 31, 2022
SHARE-BASED COMPENSATION
Schedule of Black Scholes option-pricing model with assumptions used	​ ​ ​ ​ ​ ​ Year Ended ​ Year Ended ​ December 31, 2022 ​ December 31, 2021 Expected term (years) 6 years - 6.3 years ​ 5 years - 6 years Risk-free interest rate 3.1% - 3.6% ​ 0.3% - 1.2% Expected volatility 64% ​ 54% - 58% Expected dividend yield 0% ​ 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, 2021 ​ 1,810,749 ​ $ 0.06143 9.70 ​ $ 3.46867 ​ ​ ​ Exercised ​ (1,424,622) ​ 0.01447 ​ ​ ​ ​ Cancelled ​ (405,936) ​ 0.06452 ​ ​ ​ ​ Forfeited ​ (136,221) ​ ​ 0.00100 ​ ​ ​ ​ ​ ​ ​ ​ Granted ​ 2,109,912 ​ 1.68113 ​ ​ ​ ​ Options outstanding at December 31, 2021 1,953,882 ​ $ 1.72323 9.31 ​ $ 1.12355 ​ ​ ​ Exercised — ​ — ​ ​ ​ ​ Cancelled — ​ — ​ ​ ​ ​ Forfeited ​ (42,126) ​ ​ 2.00000 ​ ​ ​ ​ ​ ​ ​ ​ Granted 918,000 ​ 2.00000 ​ ​ ​ ​ Options outstanding at December 31, 2022 2,829,756 ​ $ 1.80889 8.77 ​ $ 0.98273 ​ ​ ​ Options exercisable at December 31, 2022 ​ 986,636 ​ $ 1.45189 ​ 8.26 ​ ​ ​ ​ $ 162 Vested and expected to vest after December 31, 2022 ​ 2,829,756 ​ $ 1.80889 ​ 8.77 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
Schedule of stock-based compensation	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 2021 Research and development ​ $ 216 ​ $ 2,982 Selling, general and administrative ​ 272 ​ 3,214 Total ​ $ 488 ​ $ 6,196 ​

INCOME TAXES (Tables)

INCOME TAXES (Tables)	12 Months Ended
	Dec. 31, 2022
INCOME TAXES
Schedule of loss from operations before income taxes	​ ​ ​ ​ ​ ​ ​ ​ ​ For the Year Ended December 31, ​ 2022 2021 United States ​ $ 584 ​ $ (5,039) Foreign ​ (12,055) ​ (12,087) Loss before income taxes ​ $ (11,471) ​ $ (17,126) ​
Schedule of reconciliation of the statutory income tax rate to company's effective tax rate	​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, ​ 2022 2021 Taxes at domestic rate ​ 21.0 % 21.0 % State and local income taxes ​ — % — % Non-US statutory rates ​ 2.9 % (0.8) % Permanent items ​ (6.3) % (7.3) % Change in valuation allowance ​ (17.9) % (22.4) % Statutory Rate Change ​ — % 9.6 % Other ​ 0.1 % (0.1) % Effective tax rate ​ (0.2) % (0.0) % ​
Schedule of components of income tax provision/(benefit)	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ 2022 2021 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, ​ 2022 2021 Deferred tax assets/(liabilities): ​ ​ ​ Net operating loss carryforwards ​ $ 9,151 ​ $ 7,506 Property plant and equipment ​ (150) ​ (190) Other ​ 68 ​ 229 ​ ​ 9,069 ​ 7,545 Valuation allowance ​ (9,069) ​ (7,545) Deferred tax assets, net of allowance ​ $ — ​ $ — ​

DEFINED CONTRIBUTION PENSION (T

DEFINED CONTRIBUTION PENSION (Tables)	12 Months Ended
	Dec. 31, 2022
DEFINED CONTRIBUTION PENSION
Schedule of pension cost	​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the Years End December 31, ​ 2022 2021 Research and development ​ $ 108 ​ $ 98 Selling, general and administrative ​ 52 ​ 42 Total pension cost ​ $ 160 ​ $ 140 ​

BUSINESS - Organization and Rev

BUSINESS - Organization and Reverse Recapitalization (Details)	Feb. 23, 2021 $ / shares shares	Dec. 31, 2022 $ / shares	Dec. 31, 2021 $ / shares
Common shares, par value | $ / shares		$ 0.0001	$ 0.0001
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
Shares exchange, number of shares exchanged	1,127,720,477
Management incentive options to purchase	124,497,910
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	12 Months Ended
	Dec. 31, 2022 USD ($) segment $ / shares shares	Dec. 31, 2021 USD ($) $ / shares shares	Feb. 23, 2021 $ / shares
Class of Warrant or Right [Line Items]
Net loss	$ 11,495	$ 17,126
Accumulated deficit	86,567	75,072
Cash and cash equivalents	4,235	12,226
Cash equivalents	0	0
Allowance for doubtful accounts	$ 0	0
Estimated useful life	4 years
Other operating income	$ 1,172	1,285
Research & development tax credits	1,121	1,070
Share based compensation	$ 488	6,196
Expiration term	10 years
Number of operating segments | segment	1
Number of reportable segments | segment	1
Offering costs recorded in additional paid-in capital	$ 170	2,454
Transaction Expenses		1,329
Loss on foreign currency transactions	$ (1,782)	$ (808)
Pre Funded Warrants
Class of Warrant or Right [Line Items]
Common stock warrants outstanding | shares	2,168,000	2,168,000
Warrants exercisable price | $ / shares	$ 0.01	$ 0.01	$ 0.01

SUMMARY OF SIGNIFICANT ACCOUN_5

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Dilutive Securities (Details) - shares	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	3,815,289	2,939,415
Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	2,829,756	1,953,882
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	985,533	985,533

PREPAID EXPENSES AND OTHER CU_3

PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
PREPAID EXPENSES AND OTHER CURRENT ASSETS
Prepaid service charges and property taxes	$ 55	$ 58
Prepaid utilities	51	51
Prepaid insurance	358	412
Prepaid administrative expenses	35	63
Prepaid technical fees	22	141
Prepaid consulting fees	304	27
VAT receivable	195	50
Other receivable and other prepaid expenses	36
Total prepaid expenses and other current assets	1,056	802
Prepaid Insurance Noncurrent	$ 169	$ 217

PROPERTY, PLANT AND EQUIPMENT_2

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Property, Plant and Equipment [Line Items]
Property, plant and equipment, Gross	$ 1,720	$ 1,904
Less: Accumulated depreciation	(1,118)	(1,102)
Property, plant and equipment, net	602	802
Depreciation expense	198	209
Plant and equipment
Property, Plant and Equipment [Line Items]
Property, plant and equipment, Gross	1,478	1,633
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property, plant and equipment, Gross	218	245
Computer hardware and software
Property, Plant and Equipment [Line Items]
Property, plant and equipment, Gross	24	26
Research and development
Property, Plant and Equipment [Line Items]
Depreciation expense	$ 198	$ 209

ACCOUNTS PAYABLE AND ACCRUED _3

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable	$ 230	$ 510
Accrued expenses - lab refurbishments	117	131
Accrued expenses - technical fees	130	66
Accrued expenses - variable rent & utilities	15	20
Accrued expenses - audit & accounting fees	128	191
Accrued expenses - other	80	112
Credit card liabilities	20	10
Payroll and social security liabilities	211	383
Total accounts payable and accrued expenses	$ 931	$ 1,423

LEASES - Lease Costs (Details)

LEASES - Lease Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Operating lease cost	$ 262	$ 225
Short-term lease cost	10	32
Variable lease cost	186	140
Total lease cost	458	397
Research and development
Total lease cost	430	373
Selling, general and administrative
Total lease cost	$ 28	$ 24

LEASES - Lease Assets And Liabi

LEASES - Lease Assets And Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Assets
Operating lease right of use assets	$ 475	$ 154
Total lease assets	475	154
Current liabilities
Operating lease liability - current portion	206	87
Noncurrent liabilities:
Operating lease liability, net of current portion	239	28
Total lease liabilities	$ 445	$ 115

LEASES - Operating And Finance

LEASES - Operating And Finance Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
LEASES
Operating cash flows from operating leases	$ 265	$ 276
Supplemental non-cash amounts of operating lease liabilities arising from obtaining right of use assets	$ 583	$ 136

LEASES - Weighted Average (Deta

LEASES - Weighted Average (Details)	Dec. 31, 2022	Dec. 31, 2021
LEASES
Weighted average remaining lease term (in years) - operating leases	2 years 2 months 8 days	1 year 4 months 24 days
Weighted average discount rate - operating leases	7.73%	6.07%

LEASES - Undiscounted Operating

LEASES - Undiscounted Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2023	$ 234
2024	234
2025	19
Total undiscounted lease payments	487
Less imputed interest	(42)
Total net lease liabilities	$ 445	$ 115

LEASES - Additional Information

LEASES - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Sublease rental income	$ 0	$ 0
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

NOTES PAYABLE - Additional Info

NOTES PAYABLE - Additional Information (Details) - Term Loan Facility Agreement - USD ($) $ in Thousands		12 Months Ended
	Jan. 26, 2021	Dec. 31, 2022	Dec. 31, 2021
Debt Instrument [Line Items]
Effective interest rate			26.20%
Aggregate principal	$ 738
Debt term	6 months
Monthly interest rate	1.25%
Notes payable		$ 0	$ 0
Interest expense of notes payable		$ 0	$ 19

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2022 USD ($)
COMMITMENTS AND CONTINGENCIES.
Capital expenditures to be paid in the future	$ 681

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details)									12 Months Ended
	Nov. 29, 2022 shares	Jun. 29, 2022 shares	May 27, 2022 shares	Feb. 28, 2022 shares	Nov. 29, 2021 shares	Aug. 13, 2021 shares	May 27, 2021 shares	Feb. 23, 2021 shares	Dec. 31, 2022 Vote shares	Dec. 31, 2021 shares
STOCKHOLDERS' EQUITY
Number of votes, common shares | Vote									1
Preferred shares, outstanding (in shares)									0	0
Preferred stock available for issuance									10,000,000
Issuance of common stock to vendor (in shares)	35,714	360,000	22,473	12,500	12,500	60,000	25,000	50,000
Term Of Internet Advertising Agreement		1 year

STOCKHOLDERS' EQUITY - Common S

STOCKHOLDERS' EQUITY - Common Stock Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Feb. 23, 2021	Dec. 31, 2022	Dec. 31, 2021
Common Stock Warrants
Number of shares
Warrants outstanding at beginning of the year		985,533
Exercised		0	0
Granted			985,533
Warrants outstanding at end of the year		985,533	985,533
Weighted-Average Exercise Price
Warrants outstanding at beginning of the year		$ 2
Granted			$ 2
Warrants outstanding at end of the year		$ 2	$ 2
Weighted Average Remaining Contractual Term (years)
Warrants outstanding at beginning of the year		4 years 1 month 24 days
Granted			5 years
Warrants outstanding at end of the year		3 years 1 month 24 days	4 years 1 month 24 days
Warrants issued	985,533
Warrants exercisable price	$ 2		$ 0.91
Fair value of warrant			$ 896
Warrants
Number of shares
Granted		0
Pre Funded Warrants
Number of shares
Warrants outstanding at beginning of the year		2,168,000
Granted			2,168,000
Warrants outstanding at end of the year		2,168,000	2,168,000
Weighted-Average Exercise Price
Warrants outstanding at beginning of the year		$ 0.01
Granted			$ 0.01
Warrants outstanding at end of the year		$ 0.01	$ 0.01
Weighted Average Remaining Contractual Term (years)
Warrants issued	2,168,000	0	0
Warrants exercisable price	$ 0.01	$ 0.01	$ 0.01
Fair value of per warrant			1.99
Exercise less amount			$ 2
Proceeds from Warrant	$ 4,314

SHARE-BASED COMPENSATION - Assu

SHARE-BASED COMPENSATION - Assumptions (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Black-Scholes option-pricing model, Assumptions:
Risk-free interest rate, minimum	3.10%	0.30%
Risk-free interest rate, maximum	3.60%	1.20%
Expected volatility	64%
Expected dividend yield	0%	0%
Minimum
Black-Scholes option-pricing model, Assumptions:
Expected term (years)	6 years	5 years
Expected volatility		54%
Maximum
Black-Scholes option-pricing model, Assumptions:
Expected term (years)	6 years 3 months 18 days	6 years
Expected volatility		58%

SHARE-BASED COMPENSATION - Shar

SHARE-BASED COMPENSATION - Share option activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Number of Shares
Options outstanding at beginning	1,953,882	1,810,749
Exercised	0	(1,424,622)
Cancelled		(405,936)
Forfeited	(42,126)	(136,221)
Granted	918,000	2,109,912
Options outstanding at end	2,829,756	1,953,882	1,810,749
Options exercisable at December 31, 2022	986,636
Vested and expected to vest after December 31, 2022	2,829,756
Weighted-Average Exercise Price
Options outstanding at beginning	$ 1.72323	$ 0.06143
Exercised		0.01447
Cancelled		0.06452
Forfeited	2	0.00100
Granted	2	1.68113
Options outstanding at end	1.80889	$ 1.72323	$ 0.06143
Options exercisable at December 31, 2022	1.45189
Vested and expected to vest after December 31, 2022	$ 1.80889
Weighted-Average Remaining Contractual Term :
Weighted-Average Remaining Contractual Term (in Years)	8 years 9 months 7 days	9 years 3 months 21 days	9 years 8 months 12 days
Options exercisable weighted average remaining contractual term	8 years 3 months 3 days
Vested and expected to vest outstanding weighted average remaining contractual term	8 years 9 months 7 days
Weighted- Average Fair Value at Grant Date :
Weighted- Average Fair Value at Grant Date at beginning (in dollars)	$ 1.12355	$ 3.46867
Weighted- Average Fair Value at Grant Date at end (in dollars)	$ 0.98273	$ 1.12355	$ 3.46867
Aggregate Intrinsic Value, Options exercisable	$ 162

SHARE-BASED COMPENSATION - Stoc

SHARE-BASED COMPENSATION - Stock Based Compensation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation	$ 488	$ 6,196
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation	216	2,982
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation	$ 272	$ 3,214

SHARE-BASED COMPENSATION - Addi

SHARE-BASED COMPENSATION - Additional information (Details) - USD ($) $ / shares in Units, $ in Thousands			12 Months Ended
	Feb. 28, 2021	Feb. 23, 2021	Dec. 31, 2022	Dec. 31, 2021	Dec. 31, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)			918,000	2,109,912
Exercisable options (in shares)			986,636
Granted			$ 2	$ 1.68113
Expiration term			10 years
Options outstanding			2,829,756	1,953,882	1,810,749
Exercised (in shares)			0	1,424,622
Intrinsic value of options exercised				$ 2,400
Option vested in fair value			$ 690	$ 6,600
Weighted-average grant-date fair value (in dollars per share)			$ 0.68	$ 1.14
Unrecognized compensation costs			$ 1,400
Options | Exercise Price Range One
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)	336,557
Granted	$ 0.001
Options | Exercise Price Range Two
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)	66,029
Granted	$ 2
Options | Employees, Directors and Consultants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercisable options (in shares)			918,000
Granted			$ 2
Expiration term			10 years
Options | Employees, Directors and Consultants | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			3 years
Options | Employees, Directors and Consultants | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			4 years
2021 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)		2,275,000
Percentage of outstanding shares		4%
2021 Plan | Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares)	402,586

INCOME TAXES - Loss from operat

INCOME TAXES - Loss from operations before income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
INCOME TAXES
United States	$ 584	$ (5,039)
Foreign	(12,055)	(12,087)
Loss before income taxes	$ (11,471)	$ (17,126)

INCOME TAXES - Reconciliation o

INCOME TAXES - Reconciliation of effective tax rate (Details)	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
Reconciliation of the statutory income tax rate to effective tax rate
Taxes at domestic rate	21%	21%
Non-US statutory rates	2.90%	(0.80%)
Permanent items	(6.30%)	(7.30%)
Change in valuation allowance	(17.90%)	(22.40%)
Statutory Rate Change		9.60%
Other	0.10%	(0.10%)
Effective tax rate	(0.20%)	0%

INCOME TAXES - Components of in

INCOME TAXES - Components of income tax (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, 2022	Dec. 31, 2021
Deferred tax assets/(liabilities):
Net operating loss carryforwards	$ 9,151	$ 7,506
Property plant and equipment	(150)	(190)
Other	68	229
Total	9,069	7,545
Valuation allowance	(9,069)	(7,545)
Net operating loss carryforwards	39,500	30,700
Accrued interest and penalties	0	0
Unrecognized tax benefits	$ 0	$ 0

DEFINED CONTRIBUTION PENSION (D

DEFINED CONTRIBUTION PENSION (Details) - USD ($) $ in Thousands	Dec. 31, 2022	Dec. 31, 2021
DEFINED CONTRIBUTION PENSION
Amounts owed to the pension scheme	$ 1	$ 0

DEFINED CONTRIBUTION PENSION -

DEFINED CONTRIBUTION PENSION - Pension cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2022	Dec. 31, 2021
DEFINED CONTRIBUTION PENSION
Total pension cost	$ 160	$ 140
Research and development
DEFINED CONTRIBUTION PENSION
Total pension cost	108	98
Selling, general and administrative
DEFINED CONTRIBUTION PENSION
Total pension cost	$ 52	$ 42

RELATED PARTY TRANSACTIONS (Det

RELATED PARTY TRANSACTIONS (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	Jan. 27, 2022	Dec. 31, 2022	Dec. 31, 2021
Accounts payable and accrued expenses
Related Party Transaction [Line Items]
Related party payable		$ 16	$ 18
Selling, general and administrative
Related Party Transaction [Line Items]
Related party expenses		110	65
Owner | Securities Exchange
Related Party Transaction [Line Items]
Reimbursement expenses incurred		11	66
Related party payable		$ 0	0
Family member of a Director | Consulting services
Related Party Transaction [Line Items]
Reimbursement expenses incurred			35
Related party payable			$ 0
Octopus share purchase
Related Party Transaction [Line Items]
Sale of Stock, Number of Shares Issued in Transaction	1,000,000
Sale of Stock, Price Per Share	$ 2

SUBSEQUENT EVENTS (Details)

SUBSEQUENT EVENTS (Details) - shares										1 Months Ended
	Jan. 01, 2023	Nov. 29, 2022	Jun. 29, 2022	May 27, 2022	Feb. 28, 2022	Nov. 29, 2021	Aug. 13, 2021	May 27, 2021	Feb. 23, 2021	Jan. 31, 2023
Subsequent Event [Line Items]
Issuance of common stock to vendor (in shares)		35,714	360,000	22,473	12,500	12,500	60,000	25,000	50,000
2021 Plan
Subsequent Event [Line Items]
Percentage of outstanding shares									4%
Subsequent events
Subsequent Event [Line Items]
Issuance of common stock to vendor (in shares)										50,000
Subsequent events | 2021 Plan
Subsequent Event [Line Items]
Number of shares increased	1,079,399
Percentage of outstanding shares	4%
Reserved for future issuance	4,376,571