SmartKem, Inc.

SmartKem, Inc. Faces Delisting Threat Amidst Product Delays: A Critical Investor Update

Filed: February 13, 2026 (8-K Filing)

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1. What's the Big News?

SmartKem, Inc. (NASDAQ: SMKT) faces a severe challenge: Nasdaq has warned the company of potential delisting, a direct consequence of failing to meet crucial listing requirements. This serious threat follows closely on the heels of a significant delay in the commercial launch of its next-generation OLED material, a product vital for the company's future.

2. When Did This Happen?

• Nasdaq Delisting Notice: Received on February 12, 2026.
• OLED Material Delay Announcement: Previously disclosed on November 15, 2025.

3. Why Is This Happening?

The Delisting Threat: SmartKem failed to comply with Nasdaq Listing Rule 5550(b)(1), which mandates companies maintain at least $2.5 million in stockholders' equity. This "stockholders' equity" represents the company's net worth – what remains after all liabilities are paid. Its latest filing revealed a concerning negative $5.0 million in stockholders' equity, far below the required threshold.

Nasdaq first warned SmartKem about this deficiency in August 2025, granting an extension until February 11, 2026, to regain compliance. However, the company could not improve its financial position during this grace period.

The OLED Material Delay: The delay of their flagship OLED material, announced in November 2025, stems from unexpected technical challenges during final production scale-up and quality assurance testing. The company specifically struggled to achieve consistent material purity and yield rates, which are crucial for high-volume manufacturing and commercial viability. This means SmartKem needs more time and resources to refine its production processes before reliably supplying the material to customers.

4. Why Does This Matter So Much?

This situation severely challenges SmartKem's viability as a public company.

• Delisting Impact: If delisted, SmartKem's shares would likely trade on over-the-counter (OTC) markets, becoming significantly less liquid and harder to trade. This often triggers a dramatic drop in stock price, erodes investor confidence, and damages credibility. It also severely hampers the company's future ability to raise much-needed capital.
• OLED Delay Impact: The OLED material was central to SmartKem's revenue growth strategy. This delay postpones revenue generation and means continued operational expenses without corresponding income, further exacerbating financial distress. Combined, these issues paint a grim picture for the company's short-to-medium term outlook.

5. Who Is Affected?

• Investors/Shareholders: Directly impacted. Expect extreme stock price volatility and a high risk of capital loss. Trading liquidity will likely diminish, especially if delisting occurs.
• SmartKem Itself: The company faces an existential threat. Its ability to attract new investment, secure loans, and maintain public company status is severely compromised.
• Employees: Job security becomes a major concern as the company navigates severe financial difficulties and potential restructuring.
• Potential Customers: Electronics manufacturers considering SmartKem's OLED material may now hesitate to commit, seeking more stable and reliable suppliers. This could result in lost future business.

6. What Happens Next? (Company Strategy & Outlook)

Fighting Delisting: SmartKem plans to request a hearing with the Nasdaq Hearings Panel by February 19, 2026. This request temporarily halts the delisting process. At the hearing, SmartKem will present its compliance plan, which may include:

• Seeking new equity financing: Raising capital to boost stockholders' equity.
• Implementing cost-cutting measures: Reducing operational expenses.
• Potentially a reverse stock split: While this can increase share price, it does not directly address the underlying equity deficiency.

However, no guarantee exists that the Panel will grant an extension, or that SmartKem can successfully execute its compliance plan even if an extension is given.

OLED Material Development: The company states it actively works to resolve the OLED material's technical issues. Investors should monitor for specific updates on revised timelines, production consistency progress, and any potential partnerships that could accelerate development or provide funding.

Financial Runway: Given its negative stockholders' equity, SmartKem's cash position and financial runway are critical concerns. The company likely burns through cash rapidly and needs to secure significant new funding to continue operations, resolve technical issues, and regain Nasdaq compliance. Without a successful capital raise, its ability to continue as a going concern is highly questionable.

7. What Should Investors Know? (Practical Takeaways)

• Extreme Risk: This is not a minor setback. SmartKem faces a fundamental challenge to its existence as a publicly traded entity.
• Focus on Financials: Closely monitor future disclosures regarding cash position, debt, and capital-raising efforts. The success of its Nasdaq appeal hinges on a credible plan to significantly improve its financial health.
• Nasdaq Hearing is Key: The Nasdaq hearing's outcome will be the most immediate and critical event. A denial of an extension would likely lead to swift delisting.
• Long-Term Viability: Even if SmartKem avoids immediate delisting, its long-term viability depends on successfully launching its OLED material and achieving profitability, which now faces significant delays and funding challenges.
• Consider Your Position: Given the high uncertainty and risk, investors should carefully re-evaluate their SmartKem investment. This situation demands extreme caution.