SmartKem, Inc 10-K for FY2023

SmartKem, Inc. (SMTK)

10-K 2024-03-27 For: 2023-12-31

Added on April 12, 2026

About this 10-K

SmartKem, Inc filed this 10-K on March 27, 2024, covering the fiscal year ended December 31, 2023 (FY2023).

Headline figures

Fiscal year ended December 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $27K; down 32.5% from $40K a year earlier
Net loss: $8.5M; compared with a net loss of $11.5M a year earlier
Diluted EPS: -$6.32; compared with -$13.88 a year earlier

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Delaware		85-1083654
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

	SmartKem, Inc.
	SmartKem, Inc.
	Form 10-K for the Fiscal Year Ended December 31, 2023
	Table of Contents
		Page
	Glossary of Terms and Abbreviations	3
	Cautionary Note On Forward-Looking Statements	5

	PART I	7
Item 1.	Business	7
Item 1A.	Risk Factors	19
Item 1B.	Unresolved Staff Comments	39
Item 1C.	Cybersecurity	39
Item 2.	Properties	39
Item 3.	Legal Proceedings	39
Item 4.	Mine Safety Disclosures	39

	PART II	40
Item 5.	Market For Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	40
Item 6.	[Reserved]	40
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	45
Item 8.	Financial Statements and Supplementary Data	46
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	80
Item 9A.	Controls and Procedures	80
Item 9B.	Other Information	81
Item 9C.	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	81

	PART III	82
Item 10.	Directors, Executive Officers, and Corporate Governance	82
Item 11.	Executive Compensation	86
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	90
Item 13.	Certain Relationships and Related Transactions, and Director Independence	92
Item 14.	Principal Accountant Fees and Services	96

	PART IV	97
Item 15.	Exhibits and Financial Statement Schedules	97
Item 16.	Form 10-K Summary	100
Signatures		101


	SmartKem, Inc.
	Index to Consolidated Financial Statements
			Page
	Report of Independent Registered Public Accounting Firm (Marcum LLP, New York, USA, PCAOB ID # 688)		47

	Report of Independent Registered Public Accounting Firm (BDO LLP, London, United Kingdom, PCAOB ID # 1295)		48

	Consolidated Balance Sheets as of December 31, 2023, and 2022		49

	Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023, and 2022		50

	Consolidated Statements of Stockholders' Equity for the years ended December 31, 2023, and 2022		51

	Consolidated Statements of Cash Flows for the years ended December 31, 2023, and 2022		52

	Notes to the Consolidated Financial Statements		53


	December 31,		December 31,
	2023		2022
Assets
Current assets
Cash and cash equivalents	$	8,836	$	4,235
Accounts receivable		268		30
Research and development tax credit receivable		610		1,121
Prepaid expenses and other current assets		811		1,056
Total current assets		10,525		6,442
Property, plant and equipment, net		455		602
Right-of-use assets, net		285		475
Other assets, non-current		7		6
Total assets	$	11,272	$	7,525

Liabilities and stockholders’ equity
Current liabilities
Accounts payable and accrued expenses	$	1,178	$	931
Lease liabilities, current		230		206
Income tax payable		—		22
Other current liabilities		360		244
Total current liabilities		1,768		1,403
Lease liabilities, non-current		19		239
Warrant liability		1,372		—
Total liabilities		3,159		1,642

Commitments and contingencies (Note 7)		—		—

Stockholders’ equity:
Preferred stock, par value $0.0001 per share, 10,000,000 shares authorized, 13,765 and zero shares issued and outstanding, at December 31, 2023 and December 31, 2022, respectively		—		—
Common stock, par value $0.0001 per share, 300,000,000 shares authorized, 889,668 and 771,054 shares issued and outstanding, at December 31, 2023 and December 31, 2022, respectively *		—		—
Additional paid-in capital		104,757		92,933
Accumulated other comprehensive loss		(1,578)		(483)
Accumulated deficit		(95,066)		(86,567)
Total stockholders' equity		8,113		5,883
Total liabilities and stockholders’ equity	$	11,272	$	7,525

* reflects a one-for-thirty-five (1:35) reverse stock split effected on September 21, 2023


	Year Ended December 31,
	2023		2022
Revenue	$	27	$	40
Cost of revenue		23		33
Gross profit		4		7

Other operating income		836		1,172

Operating expenses
Research and development		5,556		5,802
Selling, general and administrative		5,188		5,071
Loss on foreign currency transactions		87		—
Total operating expenses		10,831		10,873

Loss from operations		(9,991)		(9,694)

Non-operating income/(expense)
Gain/(loss) on foreign currency transactions		1,213		(1,782)
Transaction costs allocable to warrants		(198)		—
Change in fair value of the warrant liability, net		465		—
Interest income		12		5
Total non-operating income/(expense)		1,492		(1,777)

Loss before income taxes		(8,499)		(11,471)
Income tax expense		—		(24)
Net loss	$	(8,499)	$	(11,495)

Net loss	$	(8,499)	$	(11,495)
Other comprehensive loss:
Foreign currency translation		(1,095)		880
Total comprehensive loss	$	(9,594)	$	(10,615)

Basic and diluted net loss per common share *	$	(6.32)	$	(13.88)

Basic and diluted weighted average shares outstanding *		1,344,892		827,906

* reflects a one-for-thirty-five (1:35) reverse stock split effected on September 21, 2023


									Accumulated
	Preferred Stock			Common stock *			Additional		other				Total
	$0.0001 par value			$0.0001 par value			paid-in		comprehensive		Accumulated		Stockholders'
	Shares	Amount		Shares	Amount		capital		income / (loss)		deficit		equity
Balance at January 1, 2023	—	$	—	771,054	$	—	$	92,933	$	(483)	$	(86,567)	$	5,883
Stock-based compensation expense	—		—	—		—		717		—		—		717
Issuance of common stock to vendor	—		—	2,937		—		55		—		—		55
Issuance of preferred stock, net of issuance costs	14,149		—	—		—		11,027		—		—		11,027
Conversion of preferred stock into common stock	(384)		—	43,891		—		—		—		—		—
Exercise of warrants into common stock	—		—	71,786		—		25		—		—		25
Foreign currency translation adjustment	—		—	—		—		—		(1,095)		—		(1,095)
Net loss	—		—	—		—		—		—		(8,499)		(8,499)
Balance at December 31, 2023	13,765	$	—	889,668	$	—	$	104,757	$	(1,578)	$	(95,066)	$	8,113

									Accumulated
	Preferred Stock			Common stock *			Additional		other				Total
	$0.0001 par value			$0.0001 par value			paid-in		comprehensive		Accumulated		Stockholders'
	Shares	Amount		Shares	Amount		capital		income / (loss)		deficit		equity
Balance at January 1, 2022	—	$	—	730,176	$	—	$	89,957	$	(1,363)	$	(75,072)	$	13,522
Stock-based compensation expense	—		—	—		—		488		—		—		488
Issuance of common stock to vendor	—		—	12,308		—		658		—		—		658
Issuance of common stock in private placement	—		—	28,573		—		2,000		—		—		2,000
Issuance costs related to common stock in private placement	—		—	—		—		(170)		—		—		(170)
Reverse stock split rounding	—		—	(3)		—		—		—		—		—
Foreign currency translation adjustment	—		—	—		—		—		880		—		880
Net loss	—		—	—		—		—		—		(11,495)		(11,495)
Balance at December 31, 2022	—	$	—	771,054	$	—	$	92,933	$	(483)	$	(86,567)	$	5,883

* reflects a one-for-thirty-five (1:35) reverse stock split effected on September 21, 2023


	December 31,		December 31,
(in thousands)	2023		2022
Prepaid facility costs	$	101	$	106
Prepaid insurance		274		358
Prepaid professional service fees		68		339
Research grant receivable		160		—
Prepaid software licenses		24		22
VAT receivable		104		195
Other receivable and other prepaid expenses		80		36
Total prepaid expenses and other current assets	$	811	$	1,056


					Weighted-
					Average
			Weighted-		Remaining
			Average		Contractual
	Number of	Exercise Price	Exercise		Term
	Shares	per Share	Price		(Years)
Warrants outstanding at January 1, 2023	28,161	$70.00	$	70.00	3.15
Issued	2,585,923			6.01
Exercised	(71,429)			0.35
Expired	—
Warrants outstanding at December 31, 2023	2,542,655	$0.35 - $70.00	$	6.89	4.43


			For Year Ended
			December 31, 2022
Expected term (years)			6 years - 6.3 years
Risk-free interest rate			3.1% - 3.6%
Expected volatility			64%
Expected dividend yield			0%


	For the Years Ended December 31,
	2023		2022
Taxes at domestic rate	21.0	%	21.0	%
State and local income taxes	(1.4)	%	—	%
Non-US statutory rates	1.8	%	2.9	%
Permanent items	(1.6)	%	—	%
Nondeductible Research Expense	(7.4)	%	(6.3)	%
Change in valuation allowance	(16.9)	%	(17.9)	%
Warrant revaluation	1.1	%	—	%
Prior year true-up	3.4	%	0.1	%
Effective tax rate	—	%	(0.2)	%


(in thousands)	Warrant Liability
Balance at January 1,2023	$	—
Fair value of warrant issued in Private Placement Offering		1,837
Total change in the liability included in earnings		(465)
Balance at December 31, 2023	$	1,372


	December 31,		June 22,		June 14,
	2023		2023		2023
Expected term (years)		4.46		5.00		5.00
Risk-free interest rate		3.81%		3.95%		3.98%
Expected volatility		50.0%		50.0%		50.0%
Expected dividend yield		0.0%		0.0%		0.0%


	Quoted Prices		Significant Other		Significant
	in Active		Observable		Unobservable
	Markets		Inputs		Inputs		December 31,
	(Level 1)		(Level 2)		(Level 3)		2023
Description
Liabilities:
Warrant liability	$	—	$	—	$	1,372	$	1,372
Total liabilities	$	—	$	—	$	1,372	$	1,372


Name	Position	Age
Ian Jenks	Chairman of the Board, Chief Executive Officer and President	69
Barbra C. Keck	Chief Financial Officer	46
Beverley Brown, Ph.D.	Chief Scientist	62
Simon Ogier, Ph.D.	Chief Technology Officer	49
Klaas de Boer ^{(1) (2) (3)}	Director	58
Steven DenBaars, Ph.D. ^{(1) (2) (3)}	Director	61
Melisa Denis ^{(1) (2) (3)}	Director	60
Sriram Peruvemba	Director	58

⁽¹⁾ Member of the Audit Committee.
⁽²⁾ Member of the Compensation Committee.
⁽³⁾ Member of the Corporate Governance and Nominating Committee.


				Option	All Other
Officer Name and Principle Position	Year	Salary	Bonus	Awards ⁽¹⁾	Compensation ⁽²⁾	Total
		$	$	$	$	$
Ian Jenks	2023	342,333	50,000	—	17,117	409,450
Chief Executive Officer	2022	313,500	76,500	156,840	22,093	568,933
Barbra Keck ⁽⁴⁾	2023	314,773	37,500	—	19,800	372,073
Chief Financial Officer
Beverly Brown ⁽³⁾	2023	200,093	—	—	—	200,093
Chief Scientist	2022	217,163	41,053	47,052	—	305,268


		Cash	Stock Option	All Other
Director Name	Year	Compensation	Awards	Compensation	Total
		$	$	$	$
Klaas de Boer ⁽¹⁾	2023	27,000	—	—	27,000
Steven DenBaars ⁽²⁾	2023	36,000	—	—	36,000
Sri Peruvemba ⁽³⁾	2023	9,000	—	—	9,000
Melisa Denis ⁽⁴⁾	2023	—	—	—	—
Barbra Keck ⁽⁵⁾	2023	—	—	—	—


(1)	The aggregate number of shares of common stock underlying stock options outstanding as of December 31, 2023 held by Mr. de Boer was 687.
(2)	The aggregate number of shares of common stock underlying stock options outstanding as of December 31, 2023 held by Mr. DenBaars was 515.
(3)	The aggregate number of shares of common stock underlying stock options outstanding as of December 31, 2023 held by Mr. Peruvemba was 1,887.
(4)	Ms. Denis was appointed to our board of directors in November 2023. The aggregate number of shares of common stock underlying stock options outstanding as of December 31, 2023 held by Ms. Denis was zero.
(5)	Ms. Keck, our Chief Financial Officer, resigned as a member of our board of directors in November 2023. Ms. Keck, who is our Chief Financial Officer, received no additional compensation for services provided as a director in 2023. The aggregate number of shares of common stock underlying stock options outstanding as of December 31, 2023 held by Ms. Keck was 13,545. Options to purchase 12,858 shares of common stock were issued to Ms. Keck in connection with her appointment as our Chief Financial Officer.


				Number of securities remaining
	Number of securities to		Weighted average	available for future issuance
	be issued upon exercise		exercise price of	under equity compensation plans
	of outstanding options,		outstanding options,	(excluding securities reflected in
Plan category	warrants and rights (a)		warrants and rights (b)	column a) c) ^{(2) (3)}
Equity compensation plans approved by security holders ⁽¹⁾	70,411	$	63.07	676,565
Equity compensation plans not approved by security holders	—	$	—	—
Total	70,411	$	63.07	676,565


⁽¹⁾ The amounts shown in this row include securities under the 2021 Plan.
⁽²⁾ In accordance with the “evergreen” provision in our 2021 Plan, an additional 35,586 shares were automatically made available for issuance on the first day of 2024, which represents 4.0% of the number of shares outstanding on December 31, 2023; these shares are included in this calculation.
⁽³⁾ At the 2023 Annual Meeting, the Company’s stockholders approved an amendment (the “2021 Plan Amendment”) to the Company’s 2021 Plan, increasing the number of the shares of Common Stock, reserved for issuance under the 2021 Plan from 125,045 shares to 743,106 shares. The Board had previously approved the 2021 Plan Amendment, subject to stockholder approval.


	Shares	Percentage
	Beneficially	Beneficially
Name of Beneficial Owner	Owned (#)	Owned (%)
5% Stockholders:
Octopus Investments Limited, 33 Holburn, London ECIN 2HT ⁽¹⁾	213,602	15.8%
Entrepreneurs Fund LP, 2nd Floor, Windward House, La Route de la Liberation, St Helier, Jersey, JE2 3BQ, The Chanel Islands ⁽²⁾	102,436	7.6%
Orin Hirschman, 6006 Berkeley Ave., Baltimore, MD 21209 ⁽³⁾	134,180	9.9%
The Hewlett Fund, LP ⁽⁴⁾	134,180	9.9%
Five Narrow Lane ⁽⁵⁾	134,180	9.9%

Executive Officers and Directors:
Ian Jenks ⁽⁶⁾	25,626	1.9%
Barbra Keck ⁽⁷⁾	5,130	*
Beverley Brown ⁽⁸⁾	10,460	*
Simon Ogier ⁽⁹⁾	10,459	*
Klaas de Boer ⁽¹⁰⁾	17,721	1.3%
Steven DenBaars ⁽¹¹⁾	1,051	*
Sri Peruvemba ⁽¹²⁾	1,987	*
Melisa Denis ⁽¹³⁾	100	*
All directors and current executive officers as a group:	72,534	5.2%

* Less than 1%


(1)	Consists of 211,895 shares of our common stock held by Octopus Titan VCT Plc and 1,707 shares of our common stock held by Octopus Investments Nominees Limited (collectively, the “Octopus Funds”). Octopus Investments Limited (“Octopus”) is the sole manager of each of the Octopus Funds. Through Octopus's position with Octopus Funds, Octopus is deemed to control the voting and disposition of the shares of our common stock held by the Octopus Funds. Octopus disclaims beneficial ownership of the shares of our common stock held by the Octopus Funds except to the extent of its pecuniary interest therein.
(2)	Consists of 102,436 shares of our common stock held by Entrepreneurs Fund LP (“Entrepreneurs Fund”). Entrepreneurs Fund General Partner Limited (the “Entrepreneurs General Partner”) is the general partner of the Entrepreneurs Fund. By virtue of such relationship, Entrepreneurs General Partner may be deemed to have voting and investment power with respect to the securities held by Entrepreneurs Fund. Entrepreneurs Fund General Partner disclaims beneficial ownership of the shares of our common stock held by Entrepreneurs Fund except to the extent of its indirect pecuniary interest therein.
(3)	Based upon information contained in a Schedule 13G/A filed by AIGH Capital Management, LLC (“AIGH CM”) and Mr. Orin Hirschman on February 7, 2024 and other information known to the Company. Consists of shares of our common stock held by AIGH Investment Partners, L.P. (“AIGH LP”), WVP Emerging Manger Onshore Fund, LLC (“WVP”) and by AIGH Investment Partners, LLC (“AIGH LLC”). Excludes, after giving effect to the 9.99% beneficial ownership blockers, shares of common stock issuable upon the conversion of Series A-1 Preferred Stock and the exercise of certain warrants. Mr. Hirschman is the managing member of AIGH CM, which is an advisor or sub-advisor with respect to the securities held by AIGH LP and WVP, and president of AIGH LLC. Mr. Hirschman has voting and investment control over the securities indirectly held by AIGH CM and directly by AIGH LP and AIGH LLC.
(4)	Based upon information known to the Company. Excludes, after giving effect to the 9.99% beneficial ownership blockers, shares of common stock issuable upon the conversion of Series A-1 Preferred Stock and the exercise of certain warrants.


(5)	Based upon information contained in a Schedule 13G filed by Five Narrow Lane LP on February 1, 2024 and other information known to the Company. Excludes, after giving effect to the 9.99% beneficial ownership blockers, shares of common stock issuable upon the conversion of Series A-1 Preferred Stock and the exercise of certain warrants.
(6)	Includes 10,511 shares of our common stock held and options to acquire 15,115 shares of our common stock exercisable within 60 days of March 28, 2024.
(7)	Includes of 100 shares of our common stock held and options to acquire 5,030 shares of our common stock exercisable within 60 days of March 28, 2024.
(8)	Includes 672 shares of our common stock held by B Brown Consultants Ltd and options to acquire 9,788 shares of our common stock exercisable within 60 days of March 28, 2024, held by Dr. Brown. Dr. Brown exercises dispositive and voting power over the securities owned by B Brown Consultants Ltd.
(9)	Includes 5,760 shares of our common stock held and options to acquire 4,699 shares of our common stock exercisable within 60 days of March 28, 2024.
(10)	Includes (i) 5,715 shares of our common stock purchased by Mr. de Boer’s spouse in our private placement that closed in February 2021, (ii) options to acquire 476 shares of our common stock exercisable within 60 days of March 28, 2024, (iii) 5,715 shares of common stock issuable upon conversion of Series A-2 Preferred Stock held by Mr. de Boer’s spouse (iv) 5,715 shares of common stock issuable upon exercise of certain warrants held by Mr. de Boer’s spouse and (v) 100 shares of common stock held by Mr. de Boer.
(11)	Includes 815 shares of our common stock held and options to acquire 236 shares of our common stock exercisable within 60 days of March 28, 2024.
(12)	Includes 100 shares of our common stock held and options to acquire 1,887 shares of our common stock exercisable within 60 days of March 28, 2024.
(13)	Includes 100 shares of our common stock held.


	For the Years End December 31,
US$(000)	2023		2022
Audit fees	$	336	$	368
Audit-related fees		—		—
Tax fees		—		—
All other fees		—		—
Total	$	336	$	368


Exhibit No.	Description

2.1*	Share Exchange Agreement, dated as of February 23, 2021, among the Registrant, SmartKem Limited and the shareholders of SmartKem Limited (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

3.1†	Amended and Restated Certificate of Incorporation of the Registrant, as amended to date

3.2	Amended and Restated Bylaws of the Registrant, as currently in effect (incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

4.1	Form of Registration Rights Agreement (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

4.2	Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

4.3	Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

4.4†	Description of Securities

4.5	Form of Class A Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on June 15, 2023)

4.6	Form of Class B Warrant (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on June 15, 2023)

4.7	Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on June 15, 2023)

4.8	Form of Class C Warrant (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on January 29, 2024)

10.1#	2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

10.2#	U.K. Tax Advantaged Sub-Plan (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

10.3*	Form of Subscription Agreement (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

10.4#	Employment Agreement, dated as of February 23, 2021, by and between the Registrant and Ian Jenks (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

10.5#	Employment Agreement, dated as of February 23, 2021, by and between SmartKem Limited and Simon Ogier (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

10.6#	Consultancy Agreement, dated as of February 23, 2021, by and between SmartKem Limited and B Brown Consultants Ltd. (incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

10.7*	License of Office Space, dated September 16, 2020, by and between SmartKem Limited and CPI Innovation Services Limited (incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

10.98*	License of Office Space, dated April 21, 2020, by and between SmartKem Limited and CPI Innovation Services Limited (incorporated by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

10.9**	Framework Services Agreement, dated February 23, 2021, by and between SmartKem Limited and CPI Innovation Services Limited (incorporated by reference to Exhibit 10.13 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

10.10	Facility Agreement, dated January 26, 2021, by and between SmartKem Limited and FRCF 2 Limited (incorporated by reference to Exhibit 10.14 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

10.11	Debenture Agreement, dated January 26, 2021, by and between SmartKem Limited and FRCF 2 Limited (incorporated by reference to Exhibit 10.15 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

10.12	Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.16 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

10.13	Form of Pre-Exchange Indemnity Agreement (incorporated by reference to Exhibit 10.17 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

10.14	Letter Agreement, dated as of February 23, 2021, among the Registrant and Octopus Titan VCT plc and certain related parties (incorporated by reference to Exhibit 10.18 to the Company’s Current Report on Form 8-K filed on February 24, 2021)

10.15	Subscription Agreement, dated January 27, 2022, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 27, 2022)

10.16	Registration Rights Agreement, dated January 27, 2022, by and between the Company and the Purchasers (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 27, 2022)

10.117**	Contract Variation relating to the Framework Services Agreement, dated February 23, 2021, by and between SmartKem Limited and CPI Innovation Services Limited (incorporated by reference to Exhibit 10.21 to the Company’s Current Report on Form 10-K/A filed on August 23, 2022)

10.18* **	Renewal Lease by Reference of Lease of The Whole of the 8th Floor, Hexagon Tower, Manchester, M9 8GP, dated April 12, 2022, between AG Hexagon BV and SmartKem Limited (incorporated by reference to Exhibit 10.3 on the Company’s Quarterly Report on Form 10-Q filed on May 13, 2022)

10.19#	Service Agreement, dated September 19, 2022, by and between SmartKem Limited and Robert Bahns (incorporated by reference to Exhibit 10.1 on the Company’s Current Report on Form 8-K filed September 19, 2022)

10.20#	Employment Agreement, dated as of December 14, 2022, by and between the Registrant and Barbra Keck (incorporated by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K filed on March 30, 2023)

10.21	Form of Purchase Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 15, 2023)

10.22	Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on June 15, 2023)

10.23*	Technical Service Agreement, dated July 1, 2023, by and between SmartKem Limited and Industrial Technology Research Institute (incorporated by reference to Exhibit 10.27 to the Company’s Registration Statement on Form S-1 filed on July 24, 2023)

10.24	License of Office Space, dated May 31, 2023, by and between SmartKem Limited and CPI Innovation Services Limited (incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed on August 14, 2023)

10.25	Amendment to the 2021 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on August 28, 2023)

10.26	Form of Consent Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January 29, 2024)

10.27	Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on January 29, 2024)

10.28†	Framework Supply Agreement, dated March 22, 2024, by and between SmartKem Limited and CPI Innovation Services Limited

21.1	List of Subsidiaries (incorporated by reference to Exhibit 21.1 to the Company’s Annual Report on Form 10-K filed on March 30, 2023)

23.1†	Consent of Marcum LLP, independent register public accounting firm (Marcum LLP, New York, USA, PCAOB ID # 688)

23.2†	Consent of BDO LLP, independent register public accounting firm (BDO LLP, London, United Kingdom, PCAOB ID # 1295)

31.1†	Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2†	Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1††	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2††	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS†	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH†	Inline XBRL Taxonomy Extension Schema Document

101.CAL†	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF†	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB†	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE†	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104†	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101)

	SMARTKEM, INC.

	By:	/s/ Ian Jenks
	Name:	Ian Jenks
	Title:	Chief Executive Officer and Chairman of the Board
		(Principal Executive Officer)

	By:	/s/ Barbra C. Keck
	Name:	Barbra C. Keck
	Title:	Chief Financial Officer
		(Principal Financial Officer)


Name	Title	Date


/s/ Ian Jenks Ian Jenks	Chief Executive Officer and Chairman of the Board (Principal Executive Officer)	March 27, 2024

/s/ Barbra C. Keck Barbra C. Keck	Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)	March 27, 2024

/s/ Klaas de Boer Klaas de Boer	Director	March 27, 2024

/s/ Steven DenBaars Steven DenBaars	Director	March 27, 2024

/s/ Sri Peruvemba Sri Peruvemba	Director	March 27, 2024

/s/ Melisa Denis Melisa Denis	Director	March 27, 2024

	PARASOL INVESTMENTS CORPORATION

	By:	/s/ Robert Bahns
		Name: Robert Bahns
		Title: Chief Financial Officer

/s/ Ian Jenks		/s/ Barbra Keck
Name: Ian Jenks		Name: Barbra Keck
Title:   Chairman		Title:    Secretary


1.	I have reviewed this annual report on Form 10-K of SmartKem, Inc.;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.