Skye Bioscience Inc.(SKYE) - 2024 Q4 - Annual Report

Part I Business The company is a clinical-stage biotech firm developing its lead candidate, nimacimab, for obesity treatment - Skye Bioscience is a clinical-stage biotechnology company focusing on GPCR-modulating molecules to treat obesity, with its lead candidate being nimacimab, a CB1 receptor targeting antibody[15] - The company is conducting the "CBeyond" Phase 2a trial for nimacimab, with top-line data anticipated in late Q3 or early Q4 of 2025[16] Development Pipeline Status | MOA | Disease | Discovery | Preclinical | Ph1 | Ph2 | Ph3 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Nimacimab | | | | | | | | CB1 Receptor Inhibitor | Obesity | | | ✓ | ► | | - The company's intellectual property portfolio includes 3 granted U.S. patents and 38 foreign patents for nimacimab, with expiration dates between 2035 and 2036[57][58] - As of March 19, 2025, the company has 16 full-time employees, four of whom hold a Ph.D or MD degree[117] Risk Factors The company faces substantial risks from its reliance on a single clinical candidate and its history of financial losses - Principal risk factors include dependence on third parties, a history of losses, need for additional financing, and reliance on nimacimab's clinical success[128] Historical Financial Losses | Metric | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Net Loss | $26,567,123 | $37,644,784 | | Accumulated Deficit (as of Dec 31, 2024) | $130,949,672 | | - The company is heavily dependent on the success of nimacimab, its only product candidate in clinical development[131] - The company will require substantial additional financing to complete the development of nimacimab beyond the current Phase 2a trial[135][136] - As of December 31, 2024, executive officers, directors, and principal stockholders collectively owned approximately 71% of the company's outstanding common stock[285] Unresolved Staff Comments The company reports that it has no unresolved staff comments - None[320] Cybersecurity The company maintains a cyber risk program based on the NIST framework, with oversight from the Audit Committee - The company's cyber risk management program is based on the NIST Cybersecurity Framework and includes annual third-party assessments[322] - The Audit Committee of the Board of Directors oversees the cybersecurity risk management program, receiving briefings at least annually[326] - While acknowledging the risk of future incidents, the company states that prior cybersecurity events have not materially impacted its business or financials[327] Properties The company leases its principal executive and corporate offices in San Diego, California, until October 2026 - The company's principal executive offices are leased at 11250 El Camino Real Suite 100, San Diego, CA 92130, with the lease expiring on October 31, 2026[328] Legal Proceedings Material legal proceedings are detailed in Note 11 of the consolidated financial statements - For details on material legal proceedings, the report refers to Note 11 of the financial statements[329] Mine Safety Disclosures This item is not applicable to the company - Not applicable[330] Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on Nasdaq under "SKYE", and no cash dividends are anticipated - The company's common stock trades on the Nasdaq Global Select Market under the symbol "SKYE"[333] - As of March 19, 2025, there were 190 stockholders of record[334] - The company has never declared or paid a cash dividend and does not expect to in the foreseeable future[335] Management's Discussion and Analysis of Financial Condition and Results of Operations The net loss decreased in 2024 while operating expenses rose, and liquidity improved significantly from equity financings - In 2024, the company raised combined net proceeds of $83.6 million from two private placement equity financings[342] - The company eliminated its ocular program (SBI-100 OE) after a Phase 2a trial did not meet its primary endpoint, redirecting resources to its metabolic program[345] - In Q4 2024, the company recovered $9 million in restricted cash after a favorable appeal in a material litigation matter and collected an additional $2 million from its insurance carrier[347] Comparison of Operating Expenses (2024 vs 2023) | Expense Category | 2024 ($) | 2023 ($) | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Research and development | 18,701,694 | 5,819,461 | 12,882,233 | 221% | | Cost to acquire IPR&D asset | 0 | 21,215,214 | (21,215,214) | (100)% | | General and administrative | 17,725,741 | 7,852,340 | 9,873,401 | 126% | Net Loss and Loss Per Share (2024 vs 2023) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net Loss | $(26,567,123) | $(37,644,784) | | Loss Per Share (Basic & Diluted) | $(0.73) | $(5.37) | Summary of Cash Flows (2024 vs 2023) | Cash Flow Activity | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Operating Activities | (25,237,480) | (13,952,178) | | Investing Activities | (245,615) | 6,596,456 | | Financing Activities | 83,562,181 | 16,443,270 | Financial Statements and Supplementary Data The financial statements show a reduced net loss and a shift from a stockholders' deficit to significant equity in 2024 Consolidated Balance Sheet Highlights (as of Dec 31) | Account | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Cash and cash equivalents | 68,415,741 | 1,256,453 | | Total Assets | 72,763,773 | 11,940,411 | | Total Liabilities | 4,612,049 | 14,072,229 | | Total Stockholders' Equity (Deficit) | 68,151,724 | (2,131,818) | Consolidated Statement of Operations Highlights (Year Ended Dec 31) | Account | 2024 ($) | 2023 ($) | | :--- | :--- | :--- | | Research and development | 18,701,694 | 5,819,461 | | General and administrative | 17,725,741 | 7,852,340 | | Net loss | (26,567,123) | (37,644,784) | | Loss per common share (Basic & Diluted) | (0.73) | (5.37) | - The company acquired nimacimab through the BRB Acquisition on August 18, 2023, for total consideration valued at $21.6 million, recorded as an IPR&D expense[487][489][490] - In the Cunning Lawsuit, the company won an appeal, leading to the recovery of a $9 million cash bond and a $4.2 million gain from a change in legal contingency[570][571] - The company settled a lawsuit with its D&O insurance carrier, Partner Re, for $2 million, recognized as income from insurance recovery in 2024[573] Changes in and Disagreements with Accountants on Accounting and Financial Disclosure This item is not applicable to the company - Not applicable[392] Controls and Procedures Management concluded that the company's disclosure controls and internal control over financial reporting were effective - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report[393] - Based on an assessment using the COSO 2013 framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2024[396][397] Other Information The company announced its 2025 Annual Meeting date and disclosed a director-affiliated Rule 10b5-1 stock sale plan - The 2025 Annual Meeting of Stockholders is scheduled for June 6, 2025[400] - On December 17, 2024, entities affiliated with a director entered into a Rule 10b5-1 plan to sell up to 2,000,000 shares of common stock[404] Part III Directors, Executive Officers and Corporate Governance Information on directors, officers, and governance is incorporated by reference from the 2025 Proxy Statement - Information required by this item is incorporated by reference from the company's definitive Proxy Statement for the 2025 Annual Meeting[408] Executive Compensation Details regarding executive compensation are incorporated by reference from the company's 2025 Proxy Statement - Information required by this item is incorporated by reference from the company's definitive Proxy Statement for the 2025 Annual Meeting[409] Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Security ownership information is incorporated by reference from the company's upcoming 2025 Proxy Statement - Information required by this item is incorporated by reference from the company's definitive Proxy Statement for the 2025 Annual Meeting[410] Certain Relationships and Related Transactions, and Director Independence Information on related party transactions and director independence is incorporated by reference from the 2025 Proxy Statement - Information required by this item is incorporated by reference from the company's definitive Proxy Statement for the 2025 Annual Meeting[412] Principal Accountant Fees and Services Details on principal accountant fees and services are incorporated by reference from the 2025 Proxy Statement - Information required by this item is incorporated by reference from the company's definitive Proxy Statement for the 2025 Annual Meeting[413] Part IV Exhibits, Financial Statement Schedules This section lists the consolidated financial statements, the independent auditor's report, and all filed exhibits - This section includes the consolidated financial statements of Skye Bioscience, Inc, and the report from its independent registered public accounting firm, Marcum LLP[416] - A comprehensive list of exhibits filed with the Form 10-K is provided, including merger agreements, bylaws, and financing agreements[579][580] Form 10-K Summary The company indicates that no Form 10-K summary is provided - None[583]