Skye Bioscience Inc.(SKYE) - 2023 Q3 - Quarterly Report

Financial Performance - As of September 30, 2023, Skye Bioscience had a working capital of $1,567,627 and an accumulated deficit of $99,962,619[117]. - For the nine months ended September 30, 2023, the company incurred losses from operations of $30,648,916, compared to $9,028,662 for the same period in 2022, representing a 239% increase in losses[117]. - The net loss for the three months ended September 30, 2023, was $24,945,834, compared to $3,127,283 for the same period in 2022, indicating a significant increase in losses[117]. - The company incurred net losses of $33,224,854 for the nine months ended September 30, 2023, compared to $9,589,960 for the same period in 2022[135]. - The company expects to continue incurring significant losses and negative cash flows as it advances drug candidates in development and supports its corporate infrastructure[135]. - The net loss for the nine months ended September 30, 2023, was $33,224,854, partially offset by non-cash charges totaling $23,476,130[140]. Research and Development - Research and development expenses for the three months ended September 30, 2023, decreased by $527,071 (30%) to $1,254,653 compared to $1,781,724 in 2022[124]. - Research and development expenses for the nine months ended September 30, 2023 decreased by $246,564 (6%) to $4,227,967 compared to the same period in 2022, mainly due to reduced clinical contract costs and consulting expenses[129]. - The Phase 1 clinical study of SBI-100 Ophthalmic Emulsion (OE) was completed in June 2023, with a reported 23% mean reduction in intraocular pressure in a subset of participants[112]. - Skye plans to initiate a Phase 2 study of nimacimab for cardiometabolic disease, including obesity, in the first half of 2024[112]. - The Phase 2 study of SBI-100 OE will include 54 patients with primary open-angle glaucoma or ocular hypertension, with interim analysis expected in the first half of 2024[112]. - Skye's clinical pipeline includes nimacimab, a first-in-class molecule targeting the CB1 receptor, which is expected to add significant value to the company's offerings[115]. Expenses and Costs - General and administrative expenses for Q3 2023 increased by $1,095,341 (96%) to $2,235,899 compared to Q3 2022, driven by higher board fees, professional fees, and travel costs due to the BRB Acquisition and PIPE Financing[126]. - General and administrative expenses for the nine months ended September 30, 2023 rose by $803,446 (18%) to $5,357,577, influenced by increases in board and professional fees due to various financing activities[131]. - Total other expense for Q3 2023 was $240,068, an increase of $35,067 (17%) from $205,001 in Q3 2022, primarily due to increased interest expenses related to the Cunning Lawsuit[127]. - Total other expense for the nine months ended September 30, 2023 was $2,572,338, a significant increase of $2,016,181 (363%) from $556,157 in the same period of 2022, primarily due to debt conversion inducement expenses[134]. - Estimated legal contingency for the nine months ended September 30, 2023 was $(151,842), reflecting a reduction in legal fees related to the Cunning Lawsuit[133]. Financing and Cash Flow - The company raised $11,734,947 through PIPE Financing, issuing 2,989,981 shares of common stock and 2,325,537 warrants with an exercise price of $5.16[138]. - Cash provided by financing activities included $4,973,684 from a Convertible Note and $11,734,947 from PIPE Financing, net of issuance costs[145]. - The company reported a net cash used in operating activities of $10,107,460 for the nine months ended September 30, 2023, compared to $7,872,550 for the same period in 2022, reflecting an increase in operating losses[139]. - The company entered into a loan agreement for $250,000, which was later converted into an investment in PIPE Financing[138]. - The company has no outstanding warrants or debt as of September 30, 2023, following the exercise of all outstanding warrants by Sciences[138]. Operational Challenges - The company has implemented cost-cutting measures, including deferring employee payments and postponing non-essential studies, to extend its cash runway[136]. - The company faces substantial doubt regarding its ability to continue as a going concern due to recurring operating losses and the need for additional financing[138]. - The company expects to collect the remainder of the value from the divestiture of EHT's assets through 2026, but there are significant risks regarding the timing and realization of these assets[136].