Skye Bioscience Inc.(SKYE) - 2024 Q3 - Quarterly Report

Research and Development Expenses - For the three months ended September 30, 2024, the company incurred $4,883,337 in research and development expenses, a significant increase from$1,254,653 for the same period in 2023, primarily related to the Phase 2 clinical trial of nimacimab for obesity [77]. - Research and development expenses for the three months ended September 30, 2024, increased by $3,628,684 (289$4,883,337 [82]. - Research and development expenses for the nine months ended September 30, 2024, increased by $6,680,571 (158$10,908,538 [87]. - The increase in research and development expenses was primarily due to a $2,735,109 increase in contracted clinical and manufacturing costs for the Phase 2 clinical trial of nimacimab for obesity [82]. - The company anticipates ongoing research and development expenses will include costs for employee-related expenses, payments to third-party organizations, and manufacturing [78]. Clinical Trials - The Phase 2 clinical trial, CBeyond, for nimacimab includes 120 patients and aims to achieve 50$2,403,028 (107%) compared to the same period in 2023, totaling $4,638,927 [84]. - General and administrative expenses for the nine months ended September 30, 2024, increased by$7,813,970 (146%) compared to the same period in 2023, totaling $13,171,547 [90]. - Operating losses for the nine months ended September 30, 2024, were$19,526,617, compared to $30,648,916 for the same period in 2023 [94]. - Cash used in operating activities was$17,064,377 for the nine months ended September 30, 2024, reflecting a net loss of $16,820,644 [97]. Funding and Capital - The company raised a total of$83,556,563 from private placement equity transactions in January and March 2024, which will fund the clinical trial for obesity and expand the metabolic program [75]. - A Convertible Note with a principal value of $5,000,000 was converted into 968,973 shares of common stock in August 2024 [75]. - The company raised$83,556,563 in net proceeds from January and March PIPE Financings to fund its Phase 2 clinical trial for obesity [94]. - The company has not sold any shares under the ATM Agreement as of the date of the report, which allows for the sale of up to $100,000,000 of common stock [94]. Legal and Regulatory Matters - The Ninth Circuit Court of Appeals vacated the judgment in the Cunning Lawsuit, allowing the company to potentially extend its cash runway by the end of 2024 [75]. - The company expects to recover$9,080,202 in cash by exonerating the bond related to the Cunning Lawsuit, which will extend its cash runway [95]. - The change in estimate for legal contingencies for the three months ended September 30, 2024, was $(4,553,468), representing a 100$(4,553,468), a 2899% increase compared to $(151,842) in 2023 [92]. Other Financial Metrics - Interest income for the three months ended September 30, 2024, increased by$891,135 (5381%) compared to the same period in 2023 [86]. - Total other (income) expense for the three months ended September 30, 2024, was $(1,070,499), a decrease of$1,310,567 (546%) compared to the same period in 2023 [86]. - For the nine months ended September 30, 2024, the company reported a net other income of $2,716,044, primarily due to a gain on the sale of the AVI building and collections from the sale of VDL totaling$1,217,978 [93]. - Total other (income) expense for the nine months ended September 30, 2024, was $(2,716,044), a significant change from$2,572,338 in 2023, reflecting a 206% change [93]. - The company had working capital of $74,184,006 and an accumulated deficit of$121,203,193 as of September 30, 2024, with unrestricted cash and cash equivalents amounting to $67,412,614 [94].