Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 11, 2022 | |
Entity Addresses [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 000-55136 | |
Entity Registrant Name | Skye Bioscience, Inc. | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 45-0692882 | |
Entity Address, Address Line One | 11250 El Camino Real, | |
Entity Address, Address Line Two | Suite 100 | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92130 | |
City Area Code | 858 | |
Local Phone Number | 410-0266 | |
Title of 12(g) Security | Common Stock, par value $0.001 | |
Trading Symbol | SKYE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 912,195,626 | |
Entity Central Index Key | 0001516551 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Former Address | ||
Entity Addresses [Line Items] | ||
Entity Address, Address Line One | 5910 Pacific Blvd | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92121 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets | ||
Cash and cash equivalents | $ 415,389 | $ 8,983,007 |
Restricted cash | 4,574 | 4,571 |
Prepaid expenses | 708,477 | 554,217 |
Prepaid expenses - related party | 0 | 13,432 |
Deferred asset acquisition costs | 1,388,444 | 0 |
Other current assets | 143,859 | 56,870 |
Other current assets - related party | 22,542 | 0 |
Total current assets | 2,683,285 | 9,612,097 |
Property and equipment, net | 86,163 | 87,710 |
Operating lease right-of-use asset | 91,064 | 146,972 |
Other asset | 8,309 | 8,309 |
Total assets | 2,868,821 | 9,855,088 |
Current liabilities | ||
Accounts payable | 2,067,766 | 897,880 |
Accounts payable - related parties | 120,216 | 2,130 |
Accrued interest due to related party | 305,734 | 174,911 |
Accrued payroll liabilities | 443,983 | 344,450 |
Insurance premium loan payable | 30,615 | 0 |
Other current liabilities | 526,818 | 375,842 |
Other current liabilities - related party | 102,390 | 0 |
Derivative liability | 326 | 59,732 |
Multi-draw credit agreement - related party | 450,000 | 450,000 |
Convertible multi-draw credit agreement - related party, net of discount | 2,005,371 | 1,524,905 |
Operating lease liability, current portion | 92,356 | 82,372 |
Total current liabilities | 6,145,575 | 3,912,222 |
Non-current liabilities | ||
Operating lease liability, net of current portion | 8,227 | 78,700 |
Total liabilities | 6,153,802 | 3,990,922 |
Commitments and contingencies (Note 10) | ||
Stockholders’ (deficit) equity | ||
Preferred stock, $0.001 par value; 50,000,000 shares authorized at September 30, 2022 and December 31, 2021; no shares issued and outstanding at September 30, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.001 par value; 5,000,000,000 shares authorized at September 30, 2022 and December 31, 2021; 495,925,112 and 476,108,445 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively | 495,925 | 476,108 |
Additional paid-in-capital | 53,065,217 | 52,644,221 |
Accumulated deficit | (56,846,123) | (47,256,163) |
Total stockholders’ equity | (3,284,981) | 5,864,166 |
Total liabilities and stockholders’ equity | $ 2,868,821 | $ 9,855,088 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 5,000,000,000 | 5,000,000,000 |
Common stock, shares issued (in shares) | 495,925,112 | 476,108,445 |
Common stock, shares outstanding (in shares) | 495,925,112 | 476,108,445 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Operating expenses | ||||
Research and development | $ 1,781,724 | $ 327,731 | $ 4,474,531 | $ 1,818,059 |
General and administrative | 1,140,558 | 1,491,378 | 4,554,131 | 3,567,985 |
Total operating expenses | 2,922,282 | 1,819,109 | 9,028,662 | 5,386,044 |
Operating loss | (2,922,282) | (1,819,109) | (9,028,662) | (5,386,044) |
Other expense (income) | ||||
Change in fair value of derivative liability | (6,228) | (189,649) | (59,406) | 169,349 |
Interest expense | 211,229 | 195,358 | 615,563 | 570,322 |
Gain on forgiveness of PPP loan | 0 | 0 | 0 | (117,953) |
Total other expense, net | 205,001 | 5,709 | 556,157 | 621,718 |
Loss before income taxes | (3,127,283) | (1,824,818) | (9,584,819) | (6,007,762) |
Provision for income taxes | 0 | 0 | 5,141 | 1,600 |
Net loss and comprehensive loss | $ (3,127,283) | $ (1,824,818) | $ (9,589,960) | $ (6,009,362) |
Loss per common share: | ||||
Basic (in dollars per share) | $ (0.01) | $ 0 | $ (0.02) | $ (0.02) |
Diluted (in dollars per share) | $ (0.01) | $ 0 | $ (0.02) | $ (0.02) |
Weighted average shares of common stock outstanding used to compute earnings per share: | ||||
Basic (in shares) | 495,925,112 | 413,489,603 | 495,891,596 | 376,547,498 |
Diluted (in shares) | 495,925,112 | 414,461,032 | 495,891,596 | 376,547,498 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (9,589,960) | $ (6,009,362) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 83,466 | 9,412 |
Stock-based compensation expense | 425,846 | 747,252 |
Change in fair value of derivative liabilities | (59,406) | 169,349 |
Amortization of debt discount | 480,466 | 439,053 |
Gain on forgiveness of PPP loan | 0 | (117,953) |
Changes in assets and liabilities: | ||
Prepaid expenses | 121,277 | (131,088) |
Prepaid expenses - related party | 13,432 | (18,125) |
Other current asset | (86,989) | 0 |
Other current assets - related party | (22,542) | 0 |
Other asset | 0 | (8,309) |
Accounts payable | 370,136 | (72,719) |
Accounts payable - related parties | 118,086 | 2,968 |
Accrued interest - related party | 130,823 | 86,737 |
Accrued payroll liabilities | 99,533 | 201,334 |
Operating lease liability | (60,489) | (6,442) |
Other current liabilities | 1,381 | 201,861 |
Other current liabilities - related party | 102,390 | 0 |
Net cash used in operating activities | (7,872,550) | (4,506,032) |
Cash flows from investing activities: | ||
Asset acquisition costs | (436,554) | 0 |
Purchase of property and equipment | (15,556) | (36,828) |
Net cash used in investing activities | (452,110) | (36,828) |
Cash flows from financing activities: | ||
Proceeds from stock option exercises | 0 | 4,783 |
Repayment of insurance premium loan payable | (244,922) | 0 |
Net cash (used in) provided by financing activities | (242,955) | 13,163,078 |
Net (decrease) increase in cash and restricted cash | (8,567,615) | 8,620,218 |
Cash and restricted cash, beginning of period | 8,987,578 | 2,473,976 |
Cash and restricted cash, end of period | 419,963 | 11,094,194 |
Reconciliation of cash and restricted cash: | ||
Cash and cash equivalents | 415,389 | 11,089,624 |
Restricted cash | 4,574 | 4,570 |
Total cash and restricted cash shown in the consolidated statements of cash flows | 419,963 | 11,094,194 |
Cash paid during the period for: | ||
Interest | 4,275 | 44,087 |
Income taxes | 5,141 | 1,600 |
Supplemental disclosures of non-cash financing activities: | ||
Asset acquisition costs in other current liabilities and accounts payable | 951,890 | 0 |
Financing of insurance premium | 275,537 | 0 |
Release of share liability to additional paid-in-capital | 13,000 | 0 |
Purchases of property and equipment in other current liabilities | 10,455 | 39,607 |
Establishment of right-of-use asset | 0 | 170,606 |
Accrued financing charges | 0 | 83,722 |
Common Stock Warrants | ||
Cash flows from financing activities: | ||
Proceeds from the sale of common stock and warrants – net of $851,538 for the September 30, 2021 period | 0 | 6,146,496 |
Proceeds from warrant exercises | 0 | 6,999,999 |
Prefunded Warrants | ||
Cash flows from financing activities: | ||
Proceeds from warrant exercises | $ 1,967 | $ 11,800 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parentheticals) | 9 Months Ended |
Sep. 30, 2021 USD ($) | |
Statement of Cash Flows [Abstract] | |
Common stock issuance costs | $ 851,538 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY - USD ($) | Total | Common Stock Warrants | Prefunded Warrants | Common Stock | Common Stock Common Stock Warrants | Common Stock Prefunded Warrants | Additional Paid-In Capital | Additional Paid-In Capital Common Stock Warrants | Additional Paid-In Capital Prefunded Warrants | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2020 | 288,074,415 | |||||||||
Beginning balance at Dec. 31, 2020 | $ 450,786 | $ 288,074 | $ 38,896,693 | $ (38,733,981) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock-based compensation expense (in shares) | 600,000 | |||||||||
Stock-based compensation expense | 146,580 | $ 600 | 145,980 | |||||||
Exercise warrant (in shares) | 67,166,667 | 11,800,000 | ||||||||
Exercise warrant | $ 4,030,000 | $ 11,800 | $ 67,167 | $ 11,800 | $ 3,962,833 | |||||
Net loss | (2,160,517) | (2,160,517) | ||||||||
Ending balance (in shares) at Mar. 31, 2021 | 367,641,082 | |||||||||
Ending balance at Mar. 31, 2021 | 2,478,649 | $ 367,641 | 43,005,506 | (40,894,498) | ||||||
Beginning balance (in shares) at Dec. 31, 2020 | 288,074,415 | |||||||||
Beginning balance at Dec. 31, 2020 | 450,786 | $ 288,074 | 38,896,693 | (38,733,981) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net loss | (6,009,362) | |||||||||
Ending balance (in shares) at Sep. 30, 2021 | 476,108,445 | |||||||||
Ending balance at Sep. 30, 2021 | 8,264,782 | $ 476,108 | 52,532,017 | (44,743,343) | ||||||
Beginning balance (in shares) at Mar. 31, 2021 | 367,641,082 | |||||||||
Beginning balance at Mar. 31, 2021 | 2,478,649 | $ 367,641 | 43,005,506 | (40,894,498) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock-based compensation expense | 111,699 | 111,699 | ||||||||
Exercise of common stock options (in shares) | 106,250 | |||||||||
Exercise of common stock options | 4,783 | $ 107 | 4,676 | |||||||
Exercise warrant (in shares) | 28,333,334 | |||||||||
Exercise warrant | $ 1,700,000 | $ 28,333 | $ 1,671,667 | |||||||
Net loss | (2,024,027) | (2,024,027) | ||||||||
Ending balance (in shares) at Jun. 30, 2021 | 396,080,666 | |||||||||
Ending balance at Jun. 30, 2021 | 2,271,104 | $ 396,081 | 44,793,548 | (42,918,525) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock-based compensation expense (in shares) | 750,000 | |||||||||
Stock-based compensation expense | 485,723 | $ 750 | 484,973 | |||||||
Exercise warrant (in shares) | 21,166,667 | |||||||||
Exercise warrant | 1,269,999 | $ 21,166 | $ 1,248,833 | |||||||
Common stock and warrants issued (in shares) | 58,111,112 | |||||||||
Common stock and warrants issued | 6,062,774 | $ 58,111 | 6,004,663 | |||||||
Net loss | (1,824,818) | (1,824,818) | ||||||||
Ending balance (in shares) at Sep. 30, 2021 | 476,108,445 | |||||||||
Ending balance at Sep. 30, 2021 | 8,264,782 | $ 476,108 | 52,532,017 | (44,743,343) | ||||||
Beginning balance (in shares) at Dec. 31, 2021 | 476,108,445 | |||||||||
Beginning balance at Dec. 31, 2021 | 5,864,166 | $ 476,108 | 52,644,221 | (47,256,163) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock-based compensation expense (in shares) | 150,000 | |||||||||
Stock-based compensation expense | 150,358 | $ 150 | 150,208 | |||||||
Exercise warrant (in shares) | 19,666,667 | |||||||||
Exercise warrant | $ 1,967 | $ 19,667 | $ (17,700) | |||||||
Net loss | (3,043,399) | (3,043,399) | ||||||||
Ending balance (in shares) at Mar. 31, 2022 | 495,925,112 | |||||||||
Ending balance at Mar. 31, 2022 | 2,973,092 | $ 495,925 | 52,776,729 | (50,299,562) | ||||||
Beginning balance (in shares) at Dec. 31, 2021 | 476,108,445 | |||||||||
Beginning balance at Dec. 31, 2021 | $ 5,864,166 | $ 476,108 | 52,644,221 | (47,256,163) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Exercise of common stock options (in shares) | 0 | |||||||||
Exercise warrant (in shares) | 19,666,667 | |||||||||
Net loss | $ (9,589,960) | |||||||||
Ending balance (in shares) at Sep. 30, 2022 | 495,925,112 | |||||||||
Ending balance at Sep. 30, 2022 | (3,284,981) | $ 495,925 | 53,065,217 | (56,846,123) | ||||||
Beginning balance (in shares) at Mar. 31, 2022 | 495,925,112 | |||||||||
Beginning balance at Mar. 31, 2022 | 2,973,092 | $ 495,925 | 52,776,729 | (50,299,562) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock-based compensation expense | 144,364 | 144,364 | ||||||||
Net loss | (3,419,278) | (3,419,278) | ||||||||
Ending balance (in shares) at Jun. 30, 2022 | 495,925,112 | |||||||||
Ending balance at Jun. 30, 2022 | (301,822) | $ 495,925 | 52,921,093 | (53,718,840) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock-based compensation expense | 144,124 | 144,124 | ||||||||
Net loss | (3,127,283) | (3,127,283) | ||||||||
Ending balance (in shares) at Sep. 30, 2022 | 495,925,112 | |||||||||
Ending balance at Sep. 30, 2022 | $ (3,284,981) | $ 495,925 | $ 53,065,217 | $ (56,846,123) |
Nature of Operations and Busine
Nature of Operations and Business Activities | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Nature of Operations and Business Activities | Nature of Operations and Business Activities Nature of Operations Skye Bioscience, Inc. (the “Company”) was initially incorporated in Nevada on March 16, 2011 as Load Guard Logistics, Inc. On October 31, 2014, the Company closed a reverse merger transaction (the “Merger”) pursuant to which Nemus, a California corporation (“Nemus Sub”), became the Company’s wholly owned subsidiary, and the Company assumed the operations of Nemus Sub. Nemus Sub was incorporated in the State of California on July 17, 2012. On November 3, 2014, the Company changed its name to Nemus Bioscience, Inc. by merging with Nemus Sub to form a Nevada company. Effective March 25, 2019, the Company changed its name from Nemus Bioscience, Inc. to Emerald Bioscience, Inc. Effective January 19, 2021, the Company changed its name from Emerald Bioscience, Inc. to Skye Bioscience, Inc. In August 2019, the Company formed a new subsidiary in Australia, SKYE Bioscience Pty Ltd. (formerly "EMBI Australia Pty Ltd."), an Australian proprietary limited company ("SKYE Bioscience Australia"), in order to qualify for the Australian government’s research and development tax credit for research and development dollars spent in Australia. The primary purpose of SKYE Bioscience Australia is to conduct clinical trials for the Company’s product candidates. The Company is a preclinical pharmaceutical company located in San Diego, California that researches, develops and plans to commercialize cannabinoid derivatives through its own directed research efforts and through several license agreements with the University of Mississippi ("UM"). On May 11, 2022, the Company entered into an Arrangement Agreement, as amended on June 14, 2022, July 15, 2022 and October 14, 2022 (the “Arrangement Agreement”) with Emerald Health Therapeutics, Inc., a corporation existing under the laws of the Province of British Columbia, Canada (“EHT”), pursuant to a plan of arrangement under the Business Corporations Act (British Columbia) (the “Acquisition”) (Note 3). On November 10, 2022, the Company completed the Acquisition. Each share of EHT common stock outstanding immediately prior to the effective time of the Acquisition was transferred to the Company in exchange for 1.95 shares of Company common stock (the “Exchange Ratio”). As of September 30, 2022, the Acquisition had not yet been completed and as such, the financial statements do not reflect the effect of the transaction. Also, on November 10, 2022, EHT and certain other parties entered into a share purchase agreement with a third party for the sale of EHT's subsidiaries, Verdélite Sciences, Inc. for an aggregate purchase price of approximately USD $9,300,000, subject to certain adjustments. The sale of these subsidiaries will complete the divestiture of EHT's most significant cannabis production and cultivation assets (Note 11). As of September 30, 2022, the Company has devoted substantially all its efforts to securing product licenses, carrying out its own research and development, building infrastructure and raising capital. The Company has not yet realized revenue from its planned principal operations and is a number of years away from potentially being able to do so. Liquidity and Going Concern The Company has incurred operating losses and negative cash flows from operations since inception and as of September 30, 2022, had a working capital deficit of $3,462,290 and an accumulated deficit of $56,846,123. As of September 30, 2022, the Company had unrestricted cash in the amount of $415,389. For the three and nine months ended September 30, 2022 and 2021, the Company incurred losses from operations of $2,922,282 and $1,819,109, and 9,028,662 and 5,386,044, respectively. For the three and nine months ended September 30, 2022 and 2021, the Company incurred net losses of $3,127,283 and $1,824,818, and $9,589,960 and $6,009,362, respectively. The Company expects to continue to incur significant losses through the end of 2022 and expects to incur significant losses and negative cash flows from operations in the future. The Company’s continued existence is dependent on its ability to raise sufficient additional funding to cover operating expenses and to carry out its research and development activities. As the Company approaches the initiation of its Phase 1 clinical trial, which is expected to occur in December 2022, it has increased research and development spending. During the nine months ended September 30, 2022, the Company expended significant resources on the Acquisition and experienced various transactional delays which resulted in the further extension of the outside date to close the transaction. Due to these delays, in October 2022 the Company entered into a working capital loan from EHT to provide funds to continue operations through the date of closing of the Acquisition (Note 11). These two factors, among others, have resulted in an overall increase in cash used in operating activities for the nine months ended September 30, 2022. Based on the Company’s expected cash requirements, without obtaining additional funding by the second half of 2023, management believes that the Company will not have enough funds to continue clinical studies. These conditions give rise to substantial doubt as to the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Subsequent to September 30, 2022, the Acquisition was completed and the Company acquired the cash and other assets of EHT (Note 3). Management expects that the Acquisition will provide funding for the Company into at least the second quarter of 2023, which is expected to allow Skye to complete its Phase 1 clinical trial and commence its Phase 2 clinical trial. During the third quarter of 2022, the Company met its operational funding requirements during the pre-closing period by, among other things, laying off two employees and entered into a $700,000 working capital Loan Agreement from EHT ( Note 11). In late 2022 and early 2023, the Company will continue with the liquidation of EHT's assets, including the closing of the Verdélite SPA, and explore additional financing options. However, the Company cannot provide any assurances that such additional funds will be available on reasonable terms, or at all. If the Company raises additional funds by issuing equity securities, dilution to existing stockholders would result. On October 5, 2018, the Company entered into a Multi-Draw Credit Agreement (the “Credit Agreement”) with Emerald Health Sciences ("Sciences"), a related party (Note 9). On April 29, 2020, the Company entered into an Amended and Restated Multi-Draw Credit Agreement (the “Amended Credit Agreement”) with Sciences. As of September 30, 2022, the Company had an outstanding principal balance of $2,464,500 under the Amended Credit Agreement. Effective September 15, 2021, the disbursement line under the Amended Credit Agreement was closed and it no longer serves as a potential source of liquidity to the Company. The outstanding advances plus accrued interest under the Amended Credit Agreement were due on October 5, 2022 and the Company is currently within the 30 business day grace period for repayment (Note 5). On July 8, 2022, Sciences distributed its shareholdings in EHT to the individual shareholders of Sciences in the form of a return of capital. As a result, there is no longer a common ownership interest by Sciences in both Skye and EHT. During the second quarter of 2022, the Company was indirectly impacted by a cyberattack on the contract manufacturer for its Phase 1 clinical trial material. This disruption delayed the Company's production timeline and the anticipated initiation of enrollment in the Company's Phase 1 clinical study for SBI-100 Ophthalmic Emulsion ("SBI-100 OE") to the fourth quarter of 2022. The overall potential delay in the Company's drug product research and development from these types of incidents is unknown. It is possible that the Company may encounter other similar issues relating to supply chain issues, a lack of production or laboratory resources, global economic and political conditions, pandemics or cyberattacks that could cause business disruptions and clinical trial delays which will need to be managed in the future. The factors to take into account in going concern judgements and financial projections include travel bans, restrictions, government assistance and potential sources of replacement financing, financial health of service providers and the general economy. The Company does not believe that inflation has had a material impact on its operating results during the periods presented. However, inflation, led by supply chain constraints, federal stimulus funding, increases to household savings, and the sudden macroeconomic shift in activity levels arising from the loosening or removal of many government restrictions and the broader availability of COVID-19 vaccines, has had, and may continue to have, an impact on general and administrative costs such as professional fees, employee costs and travel costs, and may in the future adversely affect the Company's operating results. In addition, increased inflation has had, and may continue to have, an effect on interest rates. Increased interest rates may adversely affect the terms under which we can obtain, any potential additional funding. Notably, the Company relies on third party manufacturers to produce its product candidates. The manufacturing of SBI-100 OE is conducted in the United States and Europe. Formulation of the eye drop for testing is also performed in the United States but can rely on regulatory-accepted excipients that can be sourced from countries outside the United States. Since the COVID-19 pandemic, global supply chain disruptions have become more common and the Company may encounter future issues related to sourcing materials that are part of the eye drop formulation or manufacturing process, as well as impacting volunteer and/or patient recruitment in Australia for clinical studies. The location of the clinical trial site is in Australia and since the COVID-19 outbreak in that country, multiple cities have experienced health emergency lockdowns which have had a negative impact on the conduct and timelines of the clinical studies. After considering management's plans, management has concluded that there is substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The accompanying Condensed Consolidated Financial Statements do not include any adjustments that might result from the outcome of this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation In the opinion of management, the accompanying Unaudited Interim Condensed Consolidated Financial Statements have been prepared on a consistent basis with the Company’s Audited Consolidated Financial Statements as of and for the year ended December 31, 2021, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein. The Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and therefore, omit certain information and footnote disclosures necessary to present the financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or any future periods. The Condensed Consolidated Balance Sheet as of December 31, 2021 was derived from the Company’s audited financial statements as of December 31, 2021, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2022. The Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q should be read in conjunction with the Audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, which includes a broader discussion of the Company’s business and the risks inherent therein. Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries SKYE Bioscience Australia and Nemus Sub. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates. The most significant accounting estimates inherent in the preparation of the Company’s financial statements include estimates and judgements as to the appropriate carrying values of equity instruments, derivative liabilities, debt with embedded features, estimates related to the Company's estimation of the percentage of completion under its research and development contracts and the valuation of stock based compensation awards, which are not readily apparent from other sources. Risks and Uncertainties The Company’s operations are subject to a number of risks and uncertainties, including but not limited to, changes in the general economy, the size and growth of the potential markets for any of the Company’s product candidates, uncertainties related to the current global environment, including economic factors such as inflation, and risks related to the global supply chain disruptions (Note 1), risks related to operating primarily in a virtual environment, results of research and development activities, uncertainties surrounding regulatory developments in the United States, the European Union and Australia and the Company’s ability to attract new funding. Fair Value Measurements Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (the “exit price”) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based on three levels of inputs, of which the first two are considered observable, and the last is considered unobservable, is used to measure fair value: Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources such as quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities or other inputs that are observable or can be corroborated by observable market data. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values of the Company’s financial instruments, with the exception of the derivative liabilities, approximate their fair value due to their short maturities. The derivative liabilities are valued on a recurring basis utilizing Level 3 inputs (Note 4). Convertible Instruments The Company accounts for hybrid contracts with embedded conversion features in accordance with ASC 815, Derivatives and Hedging Activities (“ASC 815”), which requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible debt instruments with embedded conversion features in accordance with ASC 470-20, Debt with Conversion and Other Options (“ASC 470-20”) if it is determined that the conversion feature should not be bifurcated from their host instruments. Under ASC 470-20, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the difference between the fair value of the underlying common stock at the commitment date and the embedded effective conversion price. When the Company determines that the embedded conversion option should be bifurcated from its host instrument, the embedded feature is accounted for in accordance with ASC 815. Under ASC 815, a portion of the proceeds received upon the issuance of the hybrid contract is allocated to the fair value of the derivative. The derivative is subsequently recorded at fair value at each reporting date based on current fair value, with the changes in fair value reported in the results of operations. The Company also follows ASC 480-10, Distinguishing Liabilities from Equity (“ASC 480-10”) when evaluating the accounting for its hybrid instruments. A financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares shall be classified as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly on any one of the following: (a) a fixed monetary amount known at inception (for example, a payable settled with a variable number of the issuer’s equity shares); (b) variations in something other than the fair value of the issuer’s equity shares (for example, a financial instrument indexed to the Standard and Poor’s S&P 500 Index and settled with a variable number of the issuer’s equity shares); or (c) variations inversely related to changes in the fair value of the issuer’s equity shares (for example, a written put option that could be net share settled). Hybrid instruments meeting these criteria are not further evaluated for any embedded derivatives and are carried as a liability at fair value at each balance sheet date with a re-measurement reported in other expense (income), net in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss. When determining the short-term vs. long-term classification of derivative liabilities, the Company first evaluates the instruments’ exercise provisions. Generally, if a derivative is a liability and exercisable within one year, it will be classified as short-term. However, because of the unique provisions and circumstances that may impact the accounting for derivative instruments, the Company carefully evaluates all factors that could potentially restrict the instrument from being exercised or create a situation where exercise would be considered remote. The Company re-evaluates its derivative liabilities at each reporting period end and makes updates for any changes in facts and circumstances that may impact classification. Warrants Issued in Connection with Financings The Company generally accounts for warrants issued in connection with debt and equity financings as a component of equity, unless the warrants include a conditional obligation to issue a variable number of shares or there is a deemed possibility that the Company may need to settle the warrants in cash. For warrants issued with a conditional obligation to issue a variable number of shares or the deemed possibility of a cash settlement, the Company records the fair value of the warrants as a liability at each balance sheet date and records changes in fair value in other expense (income), net in the Condensed Consolidated Statements of Operations and Comprehensive Loss. Debt Issuance Costs and Interest Discounts related to bifurcated derivatives, freestanding instruments issued in bundled transactions and issuance costs are recorded as a reduction to the carrying value of the debt and amortized over the life of the debt using the effective interest method. The Company makes changes to the effective interest rate, as necessary, on a prospective basis. For debt facilities that provide for multiple advances, the Company initially defers any issuance costs until the first advance is made and then amortizes the costs over the life of the facility. Research and Development Expenses and Licensed Technology Research and development costs are expensed when incurred. These costs may consist of external research and development expenses incurred under agreements with third-party contract research organizations and investigative sites, third-party manufacturing organizations and consultants, license fees, employee-related expenses, which include salaries and benefits for the personnel involved in the Company’s preclinical drug development activities, other expenses and equipment and laboratory supplies. Costs incurred for the rights to use licensed technologies in the research and development process, including licensing fees and milestone payments, are charged to research and development expense as incurred in situations where the Company has not identified an alternative future use for the acquired rights, and are capitalized in situations where there is an identified alternative future use. None of the costs associated with the use of licensed technologies have been capitalized to date. Stock-Based Compensation Expense Stock-based compensation expense is estimated at the grant date based on the fair value of the award, and the fair value is recognized as expense ratably over the vesting period with forfeitures accounted for as they occur. Upon the exercise of stock option awards, the Company's policy is to issue new shares of its common stock. The Company uses the Black-Scholes valuation method for estimating the grant date fair value of stock options using the following assumptions: • Volatility - Expected volatility is estimated using the historical stock price performance over the expected term of the award. • Expected term - The expected term is based on a simplified method which defines the life as the weighted average of the contractual term of the options and the vesting period for each award. • Risk-free rate - The risk-free interest rate for the expected term of the option is based on the average market rate on U.S. Treasury securities in effect during the period in which the awards were granted. • Dividends - The dividend yield assumption is based on the Company’s history and expectation of paying no dividends in the foreseeable future. The Company accounts for liability-classified stock option awards (“liability options”) under ASC 718 - Compensation - Stock Compensation (“ASC 718”), under which the Company accounts for its awards containing other conditions as liability classified instruments. Liability options are initially recognized at fair value in stock-compensation expense and subsequently re-measured to their fair values at each reporting date with changes in the fair value recognized in share-based compensation expense or additional paid-in capital upon settlement or cancellation. Loss Per Common Share The Company applies ASC No. 260, Earnings per Share in calculating its basic and diluted loss per common share. Basic loss per common share is computed by dividing net loss available to common stockholders by the weighted-average number of shares of common stock outstanding for the period. Diluted loss per share of common stock is computed by giving effect to all potential common stock equivalents outstanding for the period determined using the treasury stock method. For purposes of this calculation, options to purchase common stock, restricted stock subject to vesting, warrants to purchase common stock and common shares underlying convertible debt instruments are considered to be common stock equivalents. The computations of basic and diluted loss per common share are as follows: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Basic net loss per share: Net loss $ (3,127,283) $ (1,824,818) $ (9,589,960) $ (6,009,362) Weighted average common shares outstanding – diluted 495,925,112 413,489,603 495,891,596 376,547,498 Loss per share - basic $ (0.01) $ — $ (0.02) $ (0.02) Diluted net loss per share: Net loss (as adjusted) $ (3,127,283) $ (1,704,980) $ (9,589,960) $ (6,009,362) Weighted average common shares outstanding – diluted 495,925,112 414,461,032 495,891,596 376,547,498 Net loss per share - diluted $ (0.01) $ — $ (0.02) $ (0.02) The following outstanding shares of common stock equivalents were excluded from the computation of diluted loss per share of common stock for the periods presented because including them would have been anti-dilutive: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Stock options 37,755,000 23,490,000 37,755,000 23,490,000 Common shares underlying convertible debt 5,661,025 5,303,591 5,661,025 5,303,591 Warrants 136,187,225 133,945,796 136,187,225 134,917,225 Unvested restricted stock units 4,000,000 — 4,000,000 — Asset Acquisition The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets. For asset acquisitions, a cost accumulation model is used to determine the cost of an asset acquisition. Common stock issued as consideration in an asset acquisition is generally measured based on the acquisition date fair value of the equity interests issued. Direct transaction costs are recognized as part of the cost of an asset acquisition. The Company also evaluates which elements of a transaction should be accounted for as a part of an asset acquisition and which should be accounted for separately. Consideration deposited into escrow accounts are evaluated to determine whether it should be included as part of the cost of an asset acquisition or accounted for as contingent consideration. Amounts held in escrow where we have legal title to such balances but where such accounts are not held in the Company's name, are recorded on a gross basis as an asset with a corresponding liability in our condensed consolidated balance sheet. The cost of an asset acquisition, including transaction costs, are allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values. However, as of the date of acquisition, if certain assets are carried at fair value under other applicable GAAP the consideration is first allocated to those assets with the remainder allocated to the non-monetary identifiable assets based on relative fair value basis. Government Assistance The Company early adopted ASU 2021-10 Government Assistance on January 1, 2022. The Company accounts for the tax rebates received from the Australian Taxation Office ("ATO") under such guidance. The Company accounts for the rebates that it receives under the AusIndustry research and development tax incentive program under the income recognition model of IAS 20. Under this model, when there is reasonable assurance that the rebate will be received, the Company recognizes the income from the tax rebate as an offset to research and development expense during the period which the benefit applies to the research and development costs incurred. As of September 30, 2022 and December 31, 2021, the Company has recognized $131,959 and $44,616, respectively, in other current assets in its Condensed Consolidated Balance Sheets. Subsequent Events The Company has evaluated events that have occurred after the balance sheet date but before these condensed consolidated financial statements were issued. Based upon that evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed in Note 11 - Subsequent Events. Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity and improves and amends the related EPS guidance for both Subtopics. The ASU will be effective for annual reporting periods after December 15, 2023 and interim periods within those annual periods and early adoption is permitted in fiscal periods ending after December 15, 2020. Upon implementation, the Company may use either a modified retrospective or full retrospective method of adoption. The adoption of ASU 2020-06 will impact the way the Company calculates its (loss) earnings per share, result in expanded disclosures around convertible instruments and remove the requirement to assess and record beneficial conversion features. The Company currently plans to adopt the provisions of this ASU on the effective date. However, it reserves the right to early adopt these provisions. |
Acquisition of Emerald Health T
Acquisition of Emerald Health Therapeutics, Inc. | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition of Emerald Health Therapeutics, Inc. | Acquisition of Emerald Health Therapeutics, Inc. On May 11, 2022, the Company entered into an Arrangement Agreement, as amended on June 14, 2022, July 15, 2022 and October 14, 2022 (the “Arrangement Agreement”) with Emerald Health Therapeutics, Inc., a corporation existing under the laws of the Province of British Columbia, Canada (“EHT”), pursuant to a plan of arrangement under the Business Corporations Act (British Columbia) (the “Acquisition”) (Note 3). The Acquisition was completed on November 10, 2022. As of September 30, 2022, the Acquisition had not yet been completed and as such, the financial statements do not reflect the effect of the transaction. On July 11, 2022, the Company and EHT entered into a consulting agreement pursuant to which representatives of the Company will provide administrative assistance to EHT to assist EHT in satisfying its financial reporting, operational and regulatory obligations. EHT will pay the Company $150 for each hour of services provided by the Company. The consulting agreement terminated on the date of the closing of the Acquisition (Note 11). The consulting agreement had an effective date of May 12, 2022 and as of September 30, 2022, the Company has recorded a receivable of $22,542 in other current assets - related party in the Condensed Consolidated Balance Sheets. Under the Arrangement Agreement, the Company issued each EHT shareholder (other than the shares held by EHT dissenting shareholders) 1.95 shares of Skye common stock, for each share of EHT common stock outstanding as of the closing date of the Acquisition. On November 10, 2022, the Company issued 416,270,514 shares of stock as consideration in the Acquisition and no fractional shares of Skye Common Stock were issued (Note 11). It is expected that, for U.S. and Canadian federal income tax purposes, the Acquisition constitutes a taxable exchange by the EHT shareholders of EHT Shares for Skye Common Stock. In addition, all outstanding stock options and warrants of EHT will be exchanged for replacement options and warrants of Skye on identical terms, as adjusted in accordance with the Exchange Ratio. The Company has evaluated the expected accounting for the transaction and expects that the Acquisition will be accounted for as an asset acquisition due to the wind-down state of EHT (Note 1). The primary purpose of the Acquisition is to utilize EHT's remaining cash and cash equivalents and liquidate the primary real estate asset owned by EHT in order to fund the Company's operations. As of September 30, 2022, the realization process is in the advanced stages and EHT has laid off substantially its entire workforce and has no remaining revenue generating activities. In addition, EHT owns a vacant laboratory facility that is fully-licensed to handle controlled substances under Canadian regulations, which the Company is currently evaluating for research and development activities and to support certain manufacturing capabilities. In negotiating the Exchange Ratio, the Company performed a review of EHT's assets and the costs expected to wind down operations. However, there is inherent risk and uncertainty around what the ultimate liquidation value of EHT will be. As of September 30, 2022, the Company deferred $1,388,444 in asset acquisition costs. Unaudited Pro Forma Condensed Combined Balance Sheet The following unaudited pro forma condensed combined balance sheet and related notes give effect to the Acquisition involving the Company and EHT. The unaudited pro forma condensed combined balance sheet as of September 30, 2022 combines the Company’s and EHT’s historical unaudited balance sheets as of September 30, 2022. The unaudited pro forma condensed combined balance sheet as of September 30, 2022 is presented as if the acquisition of EHT by the Company had occurred on September 30, 2022. The transaction accounting adjustments for the acquisition consist of those necessary to account for the acquisition. In the unaudited pro forma condensed combined balance sheet, the Acquisition is accounted for as an asset acquisition in accordance with FASB ASC 805, Business Combinations , as the Company is acquiring inputs with non-substantive processes, no outputs and no assembled workforce. Given the shift in, and wind-down of, EHT’s business as described above and in Note 3, the Company believes EHT’s historical income statements are not reflective of what the Company’s shareholders should expect from the Acquisition. Accordingly, the Company has excluded, pro forma income statements that otherwise would have been required. Wind-down costs consist primarily of employee payroll and benefits, legal fees related to the liquidation of EHT’s assets and closing of the transaction, other professional fees for accounting, tax and audit, tax payments, the advisory fee related to the sale of the primary real estate asset, insurance, contract terminations fees and operational costs through the cease operations date at each site. The Company estimates that EHT will incur the following costs in the periods specified below to wind-down its operations: Quarter ending: (USD)* December 31, 2022 $ 970,000 March 31, 2023 140,000 Thereafter 40,000 Total future estimated costs: $ 1,150,000 *The timing and realization of the expected costs are based on management’s estimates and are subject to change based on various factors, including but not limited to, the sale of EHT facilities at terms favorable to Skye, the timely termination of obsolete contracts, the implementation of cost-cutting measures necessary to maximize the remaining asset balance, the effective management of the termination of remaining personnel and related severance payments, the implementation of a successful transition plan, which includes the effective cessation of regulatory requirements related to operating in the cannabis industry and the successful migration of historical data. In addition, the Company expects to incur increased operating costs post closing as a result of the Acquisition which it does not consider to be “wind-down” costs of EHT. These costs are estimated to be between $425,000 and $475,000 annually. These costs relate to the expected hiring of two EHT employees, ongoing legal and professional fees related to the listing on the Canadian Stock Exchange, increased board fees, minimum operational costs to maintain the vacant lab facility, which is not currently held for sale, and other incidental costs. The Company excluded costs related to compensation expense that is expected to be triggered upon the closing of the Acquisition, the estimated cost of the tail insurance policy, and direct costs expected to liquidate EHT’s assets of $599,507, $193,548 and $550,000, respectively, from the wind-down costs disclosed in the table above. Such costs are included in the pro forma condensed combined balance sheet as transaction accounting adjustments. The Company expects to incur aggregate transaction costs of $1,994,034 in connection with the Acquisition, of which $339,590 were expensed, $1,604,444 have been considered part of the transaction consideration and $50,000, representing estimated equity issuance costs, have been included as an offset to equity. The historical balance sheets of the Company and EHT have been adjusted in the accompanying unaudited pro forma condensed combined balance sheet to give effect to pro forma events that are transaction accounting adjustments that are necessary to account for the transaction. The pro forma adjustments are based upon available information and certain assumptions that the Company's management believes are reasonable. The assumptions underlying the pro forma adjustments in the accompanying notes are described in more detail in the notes below, which should be read in conjunction with this unaudited pro forma condensed combined balance sheet. These assumptions are based on preliminary estimates and information. Accordingly, the actual adjustments on the consolidated financial statements upon the completion of the transaction may materially differ from the pro forma adjustments. The following unaudited pro forma condensed combined balance sheet and notes thereto is prepared for illustrative purposes only and are not necessarily indicative of or intended to represent the results that would have been achieved had the transaction been consummated as of the date indicated or that may be achieved in the future. It also may not be useful in predicting the future financial condition and results of operations of the combined company. Our actual financial condition and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. SKYE EHT EHT Transaction Accounting Adjustments Pro Forma Combined Note A Notes B, C Note D Note E ASSETS Current assets Cash and cash equivalents $ 415,389 $ 11,196,364 $ 8,177,488 $ — $ 8,592,877 Restricted cash 4,574 — — — 4,574 Accounts receivable — 864,424 631,349 (52,210) (a) 579,139 Prepaid expenses 708,477 1,146,140 837,106 (837,106) (a) 708,477 Deferred asset acquisition costs 1,388,444 — — (1,388,444) (b) — Other current assets 143,859 — — — 143,859 Other current assets - related party 22,542 — — (22,542) (c) — Assets held for sale — 12,465,122 9,104,151 (1,849,575) (d) 7,254,576 Total current assets 2,683,285 25,672,050 18,750,094 (4,149,877) 17,283,502 Property, plant and equipment, net 86,163 1,978,872 1,445,309 (1,445,086) (e) 86,386 Operating lease right-of-use asset 91,064 — — — 91,064 Promissory note receivable — 479,745 350,391 (350,391) (f) — Other asset 8,309 — — — 8,309 Total assets $ 2,868,821 $ 28,130,667 $ 20,545,794 $ (5,945,354) $ 17,469,261 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 2,067,766 $ 1,269,523 $ 927,222 $ (22,542) (c) $ 2,972,446 Accounts payable - related parties 120,216 12,355 9,024 — 129,240 Accrued interest due to related party 305,734 — — — 305,734 Accrued payroll liabilities 443,983 29,167 21,303 646,415 (g) 1,111,701 Insurance premium loan payable 30,615 253,785 185,357 — 215,972 Other current liabilities 526,818 1,890,173 1,380,526 459,548 (h) 2,366,892 Other current liabilities - related party 102,390 — — — 102,390 Derivative liability 326 — — — 326 Multi-draw credit agreement - related party 450,000 — — — 450,000 Convertible multi-draw credit agreement - related party, net of discount 2,005,371 — — — 2,005,371 Current liabilities held for sale — 43,811 31,998 (31,998) (i) — Operating lease liability, current portion 92,356 — — — 92,356 Total current liabilities 6,145,575 3,498,814 2,555,430 1,051,423 9,752,428 Non-current liabilities Operating lease liability, net of current portion 8,227 — — — 8,227 Total liabilities 6,153,802 3,498,814 2,555,430 1,051,423 9,760,655 Stockholders’ equity Common stock, $0.001 par value; 5,000,000,000 shares authorized; 912,187,027 shares issued and outstanding at September 30, 2022 495,925 — — 416,271 (j) 912,196 Additional paid-in-capital 53,065,217 281,379,472 205,511,125 (194,643,023) (k) 63,933,319 Accumulated other comprehensive income — 114,115 83,346 (83,346) (l) — Accumulated deficit (56,846,123) (256,861,734) (187,604,107) 187,313,321 (l) (57,136,909) Total stockholders’ equity (3,284,981) 24,631,853 17,990,364 (6,996,777) 7,708,606 Total liabilities and stockholders’ equity $ 2,868,821 $ 28,130,667 $ 20,545,794 $ (5,945,354) $ 17,469,261 See notes to the unaudited pro forma condensed combined balance sheet. Notes to the Unaudited Pro Forma Condensed Combined Balance Sheet Basis of Presentation The unaudited pro forma condensed combined balance sheet as of September 30, 2022 assumes that the acquisition was completed on September 30, 2022. The unaudited pro forma condensed combined balance sheet is presented for informational purposes only and is not necessarily indicative of the combined financial position had the acquisition occurred as of the dates indicated, nor is it meant to be indicative of any anticipated combined financial position that the Resulting Issuer will experience after the completion of the acquisition. EHT’s unaudited condensed consolidated balance sheet was prepared in accordance with IFRS as issued by the IASB and is presented in Canadian dollars. Adjustments made to translate the historical condensed combined balance sheet of EHT from Canadian dollars (“CAD”) to US dollars (“USD”) and convert the historical condensed combined balance sheet of EHT from IFRS to GAAP, as issued by FASB, are discussed in greater detail in Note C. Pro forma adjustments reflected in the unaudited pro forma condensed combined balance sheet are based on items that are factually supportable and directly attributable to the acquisition. The unaudited pro forma condensed combined balance sheet does not reflect the cost of any integration activities or benefits from the acquisition. Pro Forma Adjustments The following pro forma adjustments give effect to the acquisition. Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2022 Note A Derived from the unaudited condensed consolidated financial statements of Skye as of September 30, 2022, as contained in this Form 10-Q. Note B Derived from the unaudited condensed interim consolidated financial statements of EHT as of September 30, 2022. Note C Management determined that no adjustments were needed in order to convert the unaudited condensed interim consolidated financial statements of EHT as of September 30, 2022 from IFRS to US GAAP for the purpose of the pro forma financial information. Note D Derived from the unaudited condensed interim consolidated financial statements of EHT as of September 30, 2022 and translated from Canadian dollars (“ C$ ”) to USD. The indicated exchange rate used to translate C$ to USD at September 30, 2022 was the rate of 0.73037 as set out in the table below. EHT Exchange EHT (Converted to U.S. GAAP) Rate (Converted to U.S. GAAP) (CAD) 0.73037 (USD) ASSETS Current Cash and cash equivalents $ 11,196,364 $ 8,177,488 Accounts receivable 864,424 631,349 Prepaid expenses 1,146,140 837,106 Assets held for sale 12,465,122 9,104,151 Total current assets 25,672,050 18,750,094 Property, Plant and equipment, net 1,978,872 1,445,309 Promissory note receivable 479,745 350,391 Total assets $ 28,130,667 $ 20,545,794 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued liabilities $ 1,269,523 $ 927,222 Accounts payable - related parties 12,355 9,024 Accrued payroll liabilities 29,167 21,303 Other current liabilities 1,890,173 1,380,526 Insurance premium loan payable 253,785 185,357 Current liabilities held for sale 43,811 31,998 Total current liabilities 3,498,814 2,555,430 SHAREHOLDERS' EQUITY Additional paid-in-capital 281,379,472 205,511,125 Accumulated other comprehensive income 114,115 83,346 Accumulated deficit (256,861,734) (187,604,107) TOTAL SHAREHOLDERS' EQUITY 24,631,853 17,990,364 TOTAL LIABILITIES AND EQUITY $ 28,130,667 $ 20,545,794 Note E The transaction accounting adjustments are summarized as follows: a. Accounts receivable and prepaid expense , are reduced to reflect adjustments to estimated fair value to Skye. b. Deferred asset acquisition costs, are reclassified to the assets acquired as part of the total purchase consideration. c. Other current assets - related party, from the consulting agreement entered into with EHT were eliminated against Accounts payable . d. Assets held for sale, is decreased by estimated direct costs to liquidate EHT’s assets of $550,000, including legal costs, advisory fees and other professional fees. In addition, assets held for sale were reduced by $1,299,575 to reflect the fair value to Skye. e. Property plant and equipment, is adjusted based on a relative fair value allocation to reflect the amount of consideration attributable to the vacant lab facility which management of SKYE plans to evaluate and currently has no current plans to liquidate. f. Promissory note receivable, is reduced to reflect adjustments to estimated fair value to Skye. g. Accrued payroll liabilities, is adjusted to reflect (i) the severance provision in EHT’s COO’s executive employment agreement which provides for total payments in the amount of $438,222, (ii) an in-substance severance arrangement, with a former member of the Skye's Board of Directors which provides for total payments in the amount of $78,693, and (iii) transaction bonuses payable to Skye's CEO and CFO aggregating $129,500. h. Other current liabilities, is adjusted to reflect the accrual for estimated transaction costs of $216,000, the accrual for equity issuance costs of $50,000 and an estimate of $193,548 for the tail insurance policy for the benefit of the EHT directors and officers. i. Current liabilities held for sale, were reduced by the amount of the remaining lease liability related to the Richmond lease which is expected to be terminated prior to closing. j. Common stoc k, is increased by $416,271 to reflect the par value ($0.001) of 416,270,514 Skye shares expected to be issued as consideration for all the outstanding shares of EHT. The Company's shares were valued at $0.026 per share or $10,823,033. Common stock is also increased by the issuance of convertible securities for an aggregate fair value of $428,747 and transaction costs of $1,604,444 (the “Purchase Consideration”). The following table summarizes the relative fair value allocation for the preliminary purchase price as of the acquisition date as if the acquisition was accounted for as an asset acquisition. EHT relative fair value allocation: September 30, 2022 Purchase Consideration Common stock $ 10,823,033 Stock options issued 114,249 Warrants issued 314,498 Transaction costs 1,604,444 Total consideration $ 12,856,224 Assets acquired Cash and cash equivalents $ 8,177,488 Accounts receivable 579,139 Property, plant and equipment 223 Current assets held for sale (property, plant and equipment) 7,254,576 Accounts payable (927,222) Accrued payroll liabilities (459,525) Other current liabilities (1,380,526) Insurance Payable (378,905) Accounts payable - related parties (9,024) Total net assets acquired $ 12,856,224 k. Additional paid-in capital is adjusted to reflect the following: (i) The total value of the shares of common stock expected to be issued as consideration for the Acquisition of $10,823,033 less the associated par value of $416,271 recorded in Common stock (“j” above) and less equity issuance costs of $50,000. (ii) The estimated fair value of warrants issued as consideration for the Acquisition in the amount of $314,498. These warrants represent EHT warrants outstanding as of September 30, 2022 which will be converted into warrants to purchase shares of SKYE common stock at the agreed-upon exchange ratio of 1.95. The chart below summarizes the details of these warrants: EHT Warrants EHT Exercise Number of Adjusted Exercise Term Number of November 2019 $ 0.75 4,385,965 $ 0.28 5 8,552,630 December 2019 $ 0.385 5,172,942 $ 0.14 5 10,087,236 February 2020 $ 0.385 7,596,551 $ 0.14 5 14,813,272 February 2020 $ 0.385 2,748,276 $ 0.14 5 5,359,137 June 2020 $ 0.27 11,351,351 $ 0.10 5 22,135,132 31,255,085 60,947,407 The assumptions used to value these warrants are as follows: September 30, 2022 Dividend yield 0.00% Volatility 100.6 - 120.4% Risk-free interest rate 3.96 - 4.23% Expected term (years) 0.67 - 2.38 (iii) The estimated fair value of options issued as consideration for the Acquisition in the amount of $114,249. These options represent EHT options outstanding as of September 30, 2022 totaling 4,247,500, which will be converted into options to acquire shares of SKYE common stock at the agreed-upon exchange ratio of 1.95 for a total of 8,282,626 SKYE options. The assumptions to value these options are as follows: September 30, 2022 Dividend yield 0.00% Volatility 89.45 - 126.82% Risk-free interest rate 2.79 - 4.25% Expected term (years) 0.06 - 4.94 (iv) The grant date fair value of $82,592 for one of two tranches of a stock option grant to a former member of the SKYE Board of Directors that provides for 2,000,000 shares of SKYE common stock, subject to an exercise contingency related to the satisfaction of a performance based provision tied to closing of the acquisition. This tranche meets the criteria for equity classification. (v) The elimination of the historical equity of EHT. l. Accumulated other comprehensive income and Accumulated deficit are adjusted to reflect the elimination of the remaining historical equity balances of EHT as well as the applicable effects of the acquisition transactions as presented above. |
Warrants and Derivative Liabili
Warrants and Derivative Liabilities | 9 Months Ended |
Sep. 30, 2022 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants and Derivative Liabilities | Warrants and Derivative LiabilitiesThere are significant judgements and estimates inherent in the determination of the fair value of the Company’s warrants and derivative liabilities. These judgements and estimates include assumptions regarding the Company’s future operating performance, the time to completing a liquidity event, if applicable, and the determination of the appropriate valuation methods. If the Company had made different assumptions, the fair value of the warrants and derivative liabilities could have been significantly different (Note 2). Warrants Warrants vested and outstanding as of September 30, 2022 are summarized as follows: Source Exercise Term Number of Pre 2015 Common Stock Warrants $ 1.00 10 1,110,000 2015 Common Stock Warrants 5.00 10 100,000 2016 Common Stock Warrants to Service Providers 1.15 10 40,000 2018 Emerald Financing Warrants 0.10 5 3,400,000 Emerald Multi-Draw Credit Agreement Warrants 0.50 5 7,500,000 2019 Common Stock Warrants 0.35 5 8,000,000 2020 Common Stock Warrants to Placement Agent 0.08 5 8,166,667 2021 Inducement Warrants 0.15 5 21,166,667 2021 Inducement Warrants to Placement Agent 0.19 5 1,481,667 2021 Common Stock Warrants 0.09 5 77,777,779 2021 Common Stock Warrants to Placement Agent 0.11 5 5,444,445 2022 Common Stock Warrants to Service Provider 0.04 2 2,000,000 Total warrants outstanding as of September 30, 2022 136,187,225 As of September 30, 2022, all of the Company's warrants are fully vested with the exception of the "2022 Common Stock Warrants to Service Provider." 2022 Common Stock Warrants Issued to a Service Provider On April 1, 2022, the Company granted 2,000,000 equity classified warrants with a fair value of $35,688 to a service provider at an exercise price of $0.04 per share. The warrants vest monthly over one year and expire on April 1, 2024. Refer to Note 7 for the summary of stock-based compensation expense. As of the date of grant, the Company valued the warrants with a Black-Scholes valuation method using the following assumptions: April 1, 2022 Date of Issuance Dividend yield — % Volatility factor 118.5 % Risk-free interest rate 1.92 % Expected term (years) 1.27 Underlying common stock price $ 0.04 Derivative Liability The following tables summarize the activity of the derivative liability for the periods indicated: Nine Months Ended September 30, 2022 December 31, 2021 Fair Value of Derivative Liability Fair Change in Reclassification September 30, 2022 Fair Value of Derivative Liability Emerald Financing - warrant liability $ 59,732 $ — $ (59,406) $ — $ 326 Current balance of derivative liability $ 59,732 $ — $ (59,406) $ — $ 326 Nine Months Ended September 30, 2021 December 31, 2020 Fair Value of Derivative Liability Fair Change in Reclassification September 30, 2021 Fair Value of Derivative Liability Emerald Financing - warrant liability $ 38,567 $ — $ 169,349 $ — $ 207,916 Total derivative liability $ 38,567 $ — $ 169,349 $ — $ 207,916 Emerald Financing Warrant Liability The Emerald Financing Warrants were issued during 2018 in connection with the Emerald Financing, and originally contained a price protection feature. In connection with the August 2020 Financing, the exercise price was permanently set to $0.10. The warrants contain a contingent put option if the Company undergoes a subsequent financing that results in a change in control. The warrant holders also have the right to participate in certain subsequent financing transactions on an as-if converted basis. The Company reviewed the warrants for liability or equity classification under the guidance of ASC 480-10, Distinguishing Liabilities from Equity , and concluded that the warrants should be classified as a liability and re-measured to fair value at the end of each reporting period. The Company also reviewed the warrants under ASC 815, Derivatives and Hedging/Contracts in Entity’s Own Equity , and determined that the warrants also meet the definition of a derivative. With the assistance of a third party valuation specialist, the Company valued the warrant liabilities utilizing the Monte Carlo valuation method pursuant to the accounting guidance of ASC 820-10, Fair Value Measurements . Beginning March 31 2021, the Company changed its valuation model for the Emerald Financing Warrant Liability to a Black-Scholes valuation method, as it was determined that a more simplistic model such as the Black-Scholes valuation method yields a substantially similar result as a Monte Carlo simulation due to the Company's current assumptions. The warrant liability is valued at the balance sheet dates using the following assumptions: September 30, December 31, Dividend yield — % — % Volatility factor 93.3 % 126.5 % Risk-free interest rate 2.79 % 0.43 % Expected term (years) 0.38 1.13 Underlying common stock price $ 0.03 $ 0.05 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Multi-Draw Credit Agreement- Related Party The Company’s Debt with Sciences consists of the following: Conversion As of September 30, As of December 31, Total principal value of convertible debt—related party $ 0.40 $ 2,014,500 $ 2,014,500 Unamortized debt discount (8,535) (487,668) Unamortized debt issuance costs (594) (1,927) Carrying value of total convertible debt - related party 2,005,371 1,524,905 Total principal value of non-convertible debt—related party n/a 450,000 450,000 Total carrying value of advances under the multi-draw credit agreement $ 2,455,371 $ 1,974,905 On October 5, 2018, the Company entered into the Credit Agreement with Sciences, a related party (Note 9). On April 29, 2020, the Company entered into the Amended Credit Agreement with Sciences, which amends and restates the Credit Agreement. For all pre-existing and new advances, the Amended Credit Agreement removed the change in control as an event of default. The amendments to the pre-existing advances were accounted for as a modification. On March 29, 2021, the Company amended the Amended Credit Agreement to defer interest payments through the earlier of maturity or prepayment of the principal balance. On September 15, 2021, the Company further amended the Amended Credit Agreement to close the disbursement line. The amendments were considered a modification for accounting purposes. Advances under the Amended Credit Agreement are unsecured, and bear interest at an annual rate of 7% and mature on October 5, 2022 (Note 11). The Company is currently within the 30 business day grace period which expires on November 17, 2022. At Sciences’ election, convertible advances and unpaid interest may be converted into common stock at the applicable fixed conversion price of the underlying advance, subject to customary adjustments for stock splits, stock dividends, recapitalizations, etc. The Amended Credit Agreement provides for customary events of default which may result in the acceleration of the maturity of the advances in addition to, but not limited to, cross acceleration to certain other indebtedness of the Company. In the case of an event of default arising from specified events of bankruptcy or insolvency or reorganization, all outstanding advances will become due and payable immediately without further action or notice. If any other event of default under the Amended Credit Agreement occurs or is continuing, Sciences may, by written notice, terminate its commitment to make any advances and/or declare all the advances, including accrued interest, payable due immediately. If any amount under the Amended Credit Agreement is not paid when due, such overdue amount shall bear interest at an annual default interest rate of the applicable rate plus 10%, until such amount is paid in full. In connection with each advance under the Amended Credit Agreement, the Company has agreed to issue to Sciences warrants to purchase shares of common stock in an amount equal to 50% of the number of shares of common stock that each advance may be converted into. The warrants have a term of five years and are immediately exercisable upon issuance. Under the Amended Credit Agreement, Sciences may issue notice that no warrants will be granted at the time of the advance request. The warrants issued under the Credit Agreement have an exercise price of $0.50 per share. The exercise prices are subject to adjustment in the event of certain stock dividends and distributions, stock splits, stock combinations, reclassifications or similar events or upon any distributions of assets, including cash, stock or other property to the Company’s stockholders (Note 4). As of September 30, 2022, the unamortized debt discount on the convertible advances will be amortized over a remaining period of 0.01 years. As of September 30, 2022, the fair value of the shares underlying the convertible advances under the Amended Credit Agreement was $130,943. As of September 30, 2022, the if-converted value did not exceed the principal balance. Insurance premium loan payable On February 28, 2022, the Company entered into an annual financing arrangement for a portion of its Directors and Officers Insurance Policy (the “D&O Insurance”) with Marsh & McLennan in an amount of $275,537. The loan is payable in equal monthly installments of $31,149, matures on October 28, 2022 and bears interest at a rate 4.17% per annum. As of September 30, 2022, a total of $132,028 and $30,615, remains financed in prepaid expenses and loans payable, respectively. Interest Expense The Company’s interest expense consists of the following: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Related party interest expense – stated rate $ 44,086 $ 44,086 $ 130,824 $ 130,824 Insurance premium loan payable - stated rate 1,602 — 4,273 — PPP loan interest expense – stated rate — — — 445 Non-cash interest expense: Amortization of debt discount 165,082 150,852 479,133 437,834 Amortization of transaction costs 459 420 1,333 1,219 $ 211,229 $ 195,358 $ 615,563 $ 570,322 |
Stockholders' Equity and Capita
Stockholders' Equity and Capitalization | 9 Months Ended |
Sep. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Equity and Capitalization | Stockholders’ Equity and Capitalization Warrant Exercises During the nine months ended September 30, 2022, 19,666,667 pre-funded warrants with an intrinsic value of $1,178,033 were exercised in exchange for 19,666,667 shares of common stock for gross proceeds of $1,967. Common Stock Issuance On March 2, 2022, the Company released 150,000 shares of common stock to a service provider (Note 7). |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock Incentive Plan On October 31, 2014, the Board of Directors approved the Company’s 2014 Omnibus Incentive Plan (the “2014 Plan”). On June 14, 2022, in connection with the Acquisition, the Board approved the 2014 Amended and Restated Omnibus Incentive Plan (the “2014 Amended and Restated Plan”) which replaced the 2014 Plan in its entirety. The 2014 Amended and Restated Plan, among other things, fixed the number of shares that can be issued under the plan to 91,219,570, provided that each January 1 beginning in 2023 and ending on (and including) January 1, 2032 the number of shares will increase by 5% of the outstanding shares of Common Stock as of the prior December 31, unless the Board of Directors of the Company decides to a lesser increase. On September 30, 2022, the Amended and Restated 2014 Plan was approved by the shareholders. The 2014 Amended and Restated Plan authorizes the issuance of awards including stock options, stock appreciation rights, restricted stock, stock units and performance units to employees, directors, and consultants of the Company. As of September 30, 2022, the Company had 47,514,820 shares available for future grant under the 2014 Plan. Stock Options The following is a summary of option activities under the Company’s 2014 Plan for the nine months ended September 30, 2022: Number of Weighted Weighted Aggregate Intrinsic Value Outstanding, December 31, 2021 35,405,000 $ 0.07 9.08 $ 134,750 Granted 4,350,000 0.04 Exercised — — Cancelled (321,250) 0.06 Forfeited (1,678,750) 0.08 Outstanding, September 30, 2022 37,755,000 $ 0.07 8.45 $ — Exercisable, September 30, 2022 14,782,500 $ 0.08 7.81 $ — The weighted-average grant-date fair value of stock options granted during the nine months ended September 30, 2022 was $0.04. The fair value of the Company's stock option grants were estimated on the date of grant using the Black-Scholes option-pricing model under the following assumptions: Nine Months Ended Dividend yield — % Volatility factor 126.3 - 132.6% Risk-free interest rate 2.89 - 3.60% Expected term (years) 5.00 - 6.08 Stock Option Awards with Performance and Other Conditions During the nine months ended September 30, 2022, the Company granted 4,000,000 stock options with an exercise price of $0.04 which include a combination of performance vesting conditions and other vesting conditions pursuant to a consulting agreement entered with Mr. Jim Heppell, a former director of Skye and related party of the Company (Note 9). The vesting conditions of the stock option award provide that 50% of the options are vested upon grant and the remaining 50% will vest upon the sale of a real estate asset held by EHT at an amount greater than or equal to an amount specified in the agreement. None of the options are exercisable until the Acquisition is consummated, which was not deemed probable for accounting purposes as of September 30, 2022, (Note 3). The conditions related to the sale of EHT's real estate are considered other conditions and the condition related to the closing of the Acquisition is considered a performance condition. When a performance condition is deemed to be probable of achievement, time-based vesting and recognition of stock-based compensation expense commences. As a result, no share-based compensation expense will be recognized for these stock options until the performance condition is considered to be probable. As of September 30, 2022, the Company has determined that the closing of the Acquisition is not deemed probable, as the consummation of the Acquisition is not solely within the control of the Company. As of September 30, 2022, the Company has included $73,368 related to the first tranche of these awards in total unrecognized stock-based compensation expense below. The Company has evaluated the second tranche and has determined that due to the other conditions contained in these awards that they will be recorded as liability options once the Acquisition is deemed probable and will be remeasured through their settlement date or cancellation. Restricted Stock Units On December 14, 2021, the Company granted restricted stock units (“RSUs”) to its executive management team. The RSUs cliff vest 33% per year on the anniversary of the grant date over a three year period. As of September 30, 2022, 4,000,000 RSUs with a weighted average grant date fair value of $0.06 per share remain unvested. Awards Granted Outside the 2014 Plan The following is a summary of restricted stock activity outside of the 2014 Amended and Restated Plan during the nine months ended September 30, 2022: Number of Weighted Unvested, December 31, 2021 150,000 $ 0.13 Released (150,000) 0.13 Unvested, September 30, 2022 — $ — Stock-Based Compensation Expense The Company recognizes stock-based compensation expense using the straight-line method over the requisite service period. The Company recognized stock-based compensation expense, including compensation expense for warrants with vesting provisions issued to a service provider (Note 4), and the RSUs discussed above, in its Condensed Consolidated Statements of Operations and Comprehensive Loss as follows: Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Research and development $ 23,966 $ 17,986 $ 64,507 $ 37,350 General and administrative 120,158 470,987 361,339 709,902 $ 144,124 $ 488,973 $ 425,846 $ 747,252 The total amount of unrecognized compensation cost was $1,217,236 as of September 30, 2022. This amount will be recognized over a weighted average period of 3.65 years. |
Significant Contracts - Univers
Significant Contracts - University of Mississippi | 9 Months Ended |
Sep. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Significant Contracts - University of Mississippi | Significant Contracts - University of Mississippi UM 5050 and UM 8930 License Agreements In July 2018, the Company renewed its ocular licenses for UM 5050 and UM 8930. On May 24, 2019, the ocular delivery licenses were replaced by “all fields of use” licenses for both UM 5050 and UM 8930 (collectively, the “License Agreements”). Pursuant to the License Agreements, UM granted the Company an exclusive, perpetual license, including, with the prior written consent of UM, not to be unreasonably withheld, the right to sublicense, the intellectual property related to UM 5050 and UM 8930 for all fields of use. The License Agreements contain certain milestone payments, royalty and sublicensing fees payable by the Company, as defined therein. Each License Agreement provides for an annual maintenance fee of $75,000 payable on the anniversary of the effective date. The Company made upfront payments for UM 5050 and UM 8930 of $100,000 and $200,000, respectively. In addition, in March 2020, the Company was notified by the United States Patent and Trademark Office that a notice of allowance was issued for the proprietary molecule under the UM 8930 License Agreement. As a result, the Company paid UM a fee of $200,000. The milestone payments payable for each license are as follows: i) $100,000 paid within 30 days following the submission of the first Investigational New Drug (“IND”) application to the Food and Drug Administration or an equivalent application to a regulatory agency anywhere in the world, for a product; ii) $200,000 paid within 30 days following the first submission of a New Drug Application (“NDA”), or an equivalent application to a regulatory agency anywhere in the world, for each product that is administered in a different route of administration from that of the earlier submitted product(s); and iii) $400,000 paid within 30 days following the approval of an NDA, or an equivalent application to a regulatory agency anywhere in the world, for each product that is administered in a different route of administration from that of the early approved product(s). The royalty percentage due on net sales under each License Agreement is in the mid-single digits. The Company must also pay to UM a portion of all licensing fees received from any sublicensees, subject to a minimum royalty on net sales, and the Company is required to reimburse patent costs incurred by UM related to the licensed products. The royalty obligations apply by country and by licensed product, and end upon the later of the date that no valid claim of a licensed patent covers a licensed product in a given country, or ten years after the first commercial sale of such licensed product in such country. Each License Agreement continues, unless terminated, until the later of the expiration of the last to expire of the patents or patent applications within the licensed technology, and the expiration of the Company’s payment obligations under such License Agreement. UM may terminate each License Agreement, by giving written notice of termination, upon the Company’s material breach of such License Agreement, including failure to make payments or satisfy covenants, representations or warranties without cure, noncompliance, a bankruptcy event, the Company’s dissolution or cessation of operations, the Company’s failure to make reasonable efforts to commercialize at least one product or failure to keep at least one product on the market after the first commercial sale for a continuous period of one year, other than for reasons outside the Company’s control, or the Company’s failure to meet certain pre-established development milestones. The Company may terminate each License Agreement upon 60 days’ written notice to UM. As of September 30, 2022, the Company has paid the fee due for the notice of patent allowance for the proprietary molecule under the UM 8930 License Agreement. In July 2022, the Company met milestone i) above under its UM 5050 license agreement upon submission of our application for authorization to conduct the Company's Phase 1 trial of SBI-100 OE to the Therapeutic Goods Administration in Australia. As of September 30, 2022, none of the other milestones under these license agreements have been met. UM 5070 License Agreement In January 2017, the Company entered into a license agreement with UM pursuant to which UM granted the Company an exclusive, perpetual license, including the right to sublicense, to intellectual property related to a platform of cannabinoid-based molecules ("UM 5070"), to research, develop and commercialize products for the treatment of infectious diseases. |
Related Party Matters
Related Party Matters | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related Party Matters | Related Party Matters Emerald Health Sciences In January 2018, the Company entered into a securities purchase agreement with Sciences pursuant to which Sciences purchased a majority of the equity interest in the Company, resulting in a change in control (the "Emerald Financing"). While Sciences no longer maintains a controlling interest in the Company, it holds a significant equity interest as of September 30, 2022 and has provided the Company with financing under the Amended Credit Agreement (Note 5). On December 19, 2019, the Company entered into an Independent Contractor Services Agreement with Dr. Avtar Dhillon, at the time a member of Sciences Board of Directors and its CEO, pursuant to which Dr. Dhillon provided ongoing corporate finance and strategic business advisory services to the Company. In exchange for his services, Dr. Dhillon received a fee of $10,000 per month for his services. On September 14, 2021, Dr. Dhillon provided his notice to terminate the Independent Contractor Services Agreement, with an effective termination date of October 14, 2021. As of October 14, 2021, the Company no longer has any obligations or business relationship with Dr. Dhillon. No expenses were incurred under this agreement during the three months and nine months ended September 30, 2022. Under this agreement, for the three and nine months ended September 30, 2021, the Company incurred fees of $30,000 and $90,000, respectively. On May 18, 2022, Jim Heppell resigned from the Company's board of directors and concurrently entered into a consulting agreement with the Company pursuant to which Mr. Heppell will provide services mutually agreed upon by the Company. The consulting agreement has an initial minimum term of one-year and will be automatically renewed for a one-year period on the anniversary of the contract unless terminated with 60 days' notice. Under the consulting agreement, Mr. Heppell is entitled to a monthly fee of $6,300, which will be increased to $16,600 per month upon the closing of the Acquisition. The consulting agreement provides Mr. Heppell with a termination payment in an amount equal to the monthly fees through the then-remaining term of the agreement if Mr. Heppell’s engagement is terminated by the Company without cause. In addition, Mr. Heppell was awarded 4,000,000 stock options which are subject to certain performance and other conditions (Note 7). The Company has accounted for the consulting contract as an in-substance severance arrangement and recognized $0 and $75,600 in severance expense during the three and nine months ended September 30, 2022. The accrual for Mr. Heppell's severance will be adjusted to include the increased fee payments when the Company determines that the closing of the Acquisition is probable. As of September 30, 2022, the Company recognized $6,300, in accounts payable - related party and $47,555 in other current liabilities - related party under this consulting agreement. As of September 30, 2022, Mr. Heppell is a board member of Emerald Health Pharmaceuticals, Inc. and EHT (Note 3). As of September 30, 2022, Sciences owns 23% and 48% of the Company and Emerald Health Pharmaceuticals, Inc., respectively. As of September 30, 2022, Mr. Heppell is also a board member and the CEO of Sciences. Mr. Heppell also served on VivaCell's board until he tendered his resignation on January 10, 2022. VivaCell Biotechnology España, S.L.U (formerly known as Emerald Health Biotechnology España, S.L.U.) In January 2021 and April 2021, the Company entered into two separate Collaborative Research Agreements pursuant to a Master Services Agreement with VivaCell Biotechnology España, S.L.U ("VivaCell"), a research and development entity with substantial expertise in cannabinoid science and a subsidiary of Emerald Health Research, Inc., which is 100% owned by Sciences. Under the Collaborative Research Agreements, VivaCell will provide research and development services pursuant to agreed-upon project plans for the research and development of SBI-200 and the preclinical development services for novel derivatives. The term of each agreement is initially for a one-year period. The agreements will terminate upon delivery and acceptance of the final deliverables under the project plans or if either party is in breach of the terms of the contract and such breach remains uncured for 45 days. Payment for services are based on the negotiated amounts for the completion of agreed upon objectives as provided in the Collaborative Research Agreements. For the three months ended September 30, 2022 and 2021, the Company incurred $0 and $73,678, respectively, in expenses under the Collaborative Research Agreements. For the nine months ended September 30, 2022 and 2021, the Company incurred $87,926 and $143,278, respectively, in expenses under the Collaborative Research Agreements. As of December 31, 2021, the Company recognized prepaid asset in the amount of $8,056. On October 11, 2021, the Company entered into an Exclusive Sponsored Research Agreement (the “ESRA”) with VivaCell to fund certain research and development programs which are of mutual interest to both the Company and VivaCell. The Company will have the right to use all data, products, and information, including intellectual property which are generated in the performance of the research under each and all projects funded by the Company pursuant to the ESRA, and VivaCell assigns and agrees to assign, to the Company all rights to any intellectual property created or reduced-to-practice under, or as a part of, a project funded by the Company pursuant to the ESRA. The Company has agreed to pay to VivaCell a royalty based on any and all licensing revenue or other consideration paid to the Company by a third-party licensee, assignee or purchaser of intellectual property rights created under the ESRA. In addition, upon a change of control transaction, the Company has agreed to pay an amount equal to the royalty percentage multiplied by the fair value of the intellectual property created under the ESRA. Pursuant to the ESRA, VivaCell will provide a budget to be approved by the Company for each project, and the Company will make payments in accordance with the approved budget and pay an annual retainer to VivaCell of $200,000 per year. For the three and nine months ended September 30, 2022, the Company incurred $50,000 and $150,000, respectively, in research and development expenses related to the retainer under the ESRA. As of September 30, 2022 and December 31, 2021, the Company has recognized $50,000 and $5,376 in accounts payable - related parties and prepaid expense - related party, respectively, related to the retainer under the ESRA. The initial term of the agreement is one-year, with automatic renewal for successive one-year terms unless either party terminates upon 60 days' prior written notice to the other party pursuant to the ESRA. On March 1, 2022, the Company entered into a research project with VivaCell under the ESRA Agreement for the development of a screening platform for anteroposterior ocular diseases. The project budget is $190,500. For the three and nine months ended September 30, 2022, the Company incurred $47,000 and $167,000, respectively of research and development expenses under the ESRA. As of September 30, 2022, the Company recognized $54,835, in other current liabilities - related parties related to the first research project. As of September 30, 2022, the Company recognized $63,916, in accounts payable - related parties under this agreement. Management Conflicts As of September 30, 2022, the Company's CEO Punit Dhillon, is a board member of the Company and EHT (Note 3 & 11). Mr. Dhillon also served as a board member of Sciences, VivaCell and , Emerald Health Pharmaceuticals, Inc. ("EHP") until he tendered his resignation from such boards on August 10, 2020, September 22, 2021 and August 19, 2022, respectively. On July 8, 2022, Punit Dhillon was appointed to serve as the interim principal executive officer of EHP under a consulting arrangement (Note 11). On October 28, 2022, Mr. Dhillon resigned as the interim principal executive officer of EHP and the consulting arrangement was terminated. On February 28, 2022, the Company entered into a standard consulting agreement with the CEO's brother. Compensation under the agreement is for a rate of approximately $73 per hour. The consulting agreement may be terminated by either party upon providing 15 days of advance notice. For the nine months ended September 30, 2022, the Company incurred $8,595, in consulting expenses in general and administrative expenses under this agreement. No expense was incurred under this agreement during the three months ended September 30, 2022. As of September 30, 2022, the Company recorded $10,779 to deferred asset acquisition cost related to this consulting agreement. |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Office Lease The Company leases office space for its corporate headquarters, located at 11250 El Camino Real, Suite 100 San Diego, California 92130. The lease is effective from September 1, 2021 through October 31, 2023 and contains a renewal option for a two-year extension after the current expiration date. The Company does not expect that the renewal option will be exercised, and has therefore excluded the option from the calculation of the right of use asset and lease liability. The lease provides for two months of rent abatement and the initial monthly rent is $8,067 per month with annual increases of 3% commencing on November 1, 2022. The lease includes non-lease components (i.e., property management costs) that are paid separately from rent, based on actual costs incurred, and therefore were not included in the right-of-use asset and lease liability but are reflected as an expense in the period incurred. In calculating the present value of the lease payments, the Company has elected to utilize its incremental borrowing rate based on the lease term. For the three and nine months ended September 30, 2022 and 2021 lease expense comprised of $22,675 and $7,558, and $68,026 and $7,558, respectively in lease cost from the Company's non-cancellable operating lease. The remaining lease term and discount rate related to the operating lease are presented in the following table: September 30, 2022 Weighted-average remaining term – operating lease (in years) 1.08 Weighted-average discount rate – operating lease 12 % Future minimum lease payments as of September 30, 2022 are presented in the following table: Year: 2022 $ 24,686 2023 83,093 Total future minimum lease payments: 107,779 Less imputed interest (7,196) Total $ 100,583 Reported as: Operating lease liability $ 92,356 Operating lease liability, net of current portion 8,227 Total lease liability $ 100,583 General Litigation and Disputes From time to time, in the normal course of operations, the Company may be a party to litigation and other dispute matters and claims. Litigation can be expensive and disruptive to normal business operations. Moreover, the results of complex legal proceedings are difficult to predict. An unfavorable outcome to any legal matter, if material, could have a materially adverse effect on the Company’s operations or financial position, liquidity or results of operations. As of September 30, 2022, the Company is party to a legal proceeding with a former employee alleging wrongful termination. Due to the stage of the proceedings as of September 30, 2022, the Company is unable to estimate the potential contingency as the outcome remains uncertain. The Company is expensing the legal costs related to this proceeding as incurred. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Loan Agreement with EHT On October 17, 2022, Skye and EHT entered into a loan agreement (the “ Loan Agreement ”) pursuant to which EHT loaned Skye USD$700,000 (the “ Loan ”) in accordance with the terms of a promissory note (“ Note ”). Skye intends to use the proceeds from the Loan for general working capital purposes. The Loan is unsecured and will accrue simple interest from October 17, 2022, until paid at an interest rate of 12% per annum, provided, however, that upon closing of the Acquisition, such interest rate has been reduced to 5% per annum. The entire outstanding principal amount of the Loan and applicable interest accrued matures in full on October 17, 2023. As required under the Skye's amended and restated multi-draw credit facility, Skye has obtained a waiver from Emerald Health Sciences, Inc. to incur debt under the Loan. Acquisition of EHT On November 7, 2022, EHT agreed to waive the requirement to obtain a conditional letter from the CSE and the Acquisition closed on November 10, 2022. The Company has covenanted to use its best efforts to continue to pursue the CSE listing subsequent to the closing date. (See Note 3 Acquisition of EHT for more information). Sale of Verdélite On November 10, 2022, EHT, C3 Souvenir Holding, Inc., a corporation governed under the Canada Business Corporations Act ("Purchaser"), Verdélite Sciences, Inc. ("Verdélite"), Verdélite Property Holdings, Inc. ("VPHI") entered into a stock purchase agreement (the "Verdélite SPA") effective November 8, 2022, pursuant to which Purchaser will acquire all of the outstanding shares of Verdélite, the holder of EHT's most significant real estate asset, for an aggregate purchase price of approximately USD$9,312,000, subject to certain adjustments. Prior to the closing of the Acquisition, VPHI was wound up into Verdélite and Verdélite is a wholly owned subsidiary of EHT. The terms of the Verdélite SPA provide for an upfront, non refundable deposit, except in the case of material breach, in the amount of approximately $548,000, which as already been received by EHT. The remainder of the purchase price will be paid as follows, (i) approximately $6,026,000 to be paid on the closing date of the Verdélite SPA, (ii) three equal installments of approximately $913,000 to be paid on each of the 18-month ("Term 1"), 30-month ("Term 2"), and 42 month ("Term 3") anniversaries of the closing date. Annual compounded interest on the loan receivable will be payable at the end of Term 3 and will accrue at a rate equal to the Prime Rate set by the Bank of Montreal plus 1.55%, 3.55% and 5.55% per annum for Term 1, Term 2 and Term 3, respectively. The Purchaser has the option to prepay the principal term payments in full at any time during Term 1 or Term 2. If prepayment occurs, the interest rate will be retrospectively adjusted to the Prime Rate plus 1.55%, compounded annually, until the installment payments are paid in full. The balance of the purchase price after closing will be secured against the assets and stock of the Purchaser. The Verdélite SPA contains customary closing conditions including, but not limited to, the completion of an environmental audit by EHT. The foregoing description of the Verdelite SPA do not purport to be complete and are qualified in their entirety by reference to the text of the Verdelite SPA which is attached as exhibit 10.3 to this Quarterly Report on Form 10-Q and is incorporated herein by reference. Management Conflicts On October 28, 2022, the Company's CEO, Punit Dhillon, tendered his resignation as principal executive officer of EHP. As such, Mr. Dhillon is no longer affiliated with EHP. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation In the opinion of management, the accompanying Unaudited Interim Condensed Consolidated Financial Statements have been prepared on a consistent basis with the Company’s Audited Consolidated Financial Statements as of and for the year ended December 31, 2021, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein. The Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) and therefore, omit certain information and footnote disclosures necessary to present the financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 2022 or any future periods. The Condensed Consolidated Balance Sheet as of December 31, 2021 was derived from the Company’s audited financial statements as of December 31, 2021, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 28, 2022. The Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q should be read in conjunction with the Audited Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, which includes a broader discussion of the Company’s business and the risks inherent therein. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries SKYE Bioscience Australia and Nemus Sub. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of income and expense during the reporting period. Actual results could differ from those estimates. The most significant accounting estimates inherent in the preparation of the Company’s financial statements include estimates and judgements as to the appropriate carrying values of equity instruments, derivative liabilities, debt with embedded features, estimates related to the Company's estimation of the percentage of completion under its research and development contracts and the valuation of stock based compensation awards, which are not readily apparent from other sources. |
Risks and Uncertainties | Risks and Uncertainties The Company’s operations are subject to a number of risks and uncertainties, including but not limited to, changes in the general economy, the size and growth of the potential markets for any of the Company’s product candidates, uncertainties related to the current global environment, including economic factors such as inflation, and risks related to the global supply chain disruptions (Note 1), risks related to operating primarily in a virtual environment, results of research and development activities, uncertainties surrounding regulatory developments in the United States, the European Union and Australia and the Company’s ability to attract new funding. |
Fair Value Measurements | Fair Value Measurements Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (the “exit price”) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based on three levels of inputs, of which the first two are considered observable, and the last is considered unobservable, is used to measure fair value: Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources such as quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities or other inputs that are observable or can be corroborated by observable market data. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values of the Company’s financial instruments, with the exception of the derivative liabilities, approximate their fair value due to their short maturities. The derivative liabilities are valued on a recurring basis utilizing Level 3 inputs (Note 4). |
Convertible Instruments | Convertible Instruments The Company accounts for hybrid contracts with embedded conversion features in accordance with ASC 815, Derivatives and Hedging Activities (“ASC 815”), which requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible debt instruments with embedded conversion features in accordance with ASC 470-20, Debt with Conversion and Other Options (“ASC 470-20”) if it is determined that the conversion feature should not be bifurcated from their host instruments. Under ASC 470-20, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the difference between the fair value of the underlying common stock at the commitment date and the embedded effective conversion price. When the Company determines that the embedded conversion option should be bifurcated from its host instrument, the embedded feature is accounted for in accordance with ASC 815. Under ASC 815, a portion of the proceeds received upon the issuance of the hybrid contract is allocated to the fair value of the derivative. The derivative is subsequently recorded at fair value at each reporting date based on current fair value, with the changes in fair value reported in the results of operations. The Company also follows ASC 480-10, Distinguishing Liabilities from Equity (“ASC 480-10”) when evaluating the accounting for its hybrid instruments. A financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares shall be classified as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly on any one of the following: (a) a fixed monetary amount known at inception (for example, a payable settled with a variable number of the issuer’s equity shares); (b) variations in something other than the fair value of the issuer’s equity shares (for example, a financial instrument indexed to the Standard and Poor’s S&P 500 Index and settled with a variable number of the issuer’s equity shares); or (c) variations inversely related to changes in the fair value of the issuer’s equity shares (for example, a written put option that could be net share settled). Hybrid instruments meeting these criteria are not further evaluated for any embedded derivatives and are carried as a liability at fair value at each balance sheet date with a re-measurement reported in other expense (income), net in the accompanying Condensed Consolidated Statements of Operations and Comprehensive Loss. When determining the short-term vs. long-term classification of derivative liabilities, the Company first evaluates the instruments’ exercise provisions. Generally, if a derivative is a liability and exercisable within one year, it will be classified as short-term. However, because of the unique provisions and circumstances that may impact the accounting for derivative instruments, the Company carefully evaluates all factors that could potentially restrict the instrument from being exercised or create a situation where exercise would be considered remote. The Company re-evaluates its derivative liabilities at each reporting period end and makes updates for any changes in facts and circumstances that may impact classification. |
Warrants Issued in Connection with Financings | Warrants Issued in Connection with Financings The Company generally accounts for warrants issued in connection with debt and equity financings as a component of equity, unless the warrants include a conditional obligation to issue a variable number of shares or there is a deemed possibility that the Company may need to settle the warrants in cash. For warrants issued with a conditional obligation to issue a variable number of shares or the deemed possibility of a cash settlement, the Company records the fair value of the warrants as a liability at each balance sheet date and records changes in fair value in other expense (income), net in the Condensed Consolidated Statements of Operations and Comprehensive Loss. |
Debt Issuance Costs and Interest | Debt Issuance Costs and Interest Discounts related to bifurcated derivatives, freestanding instruments issued in bundled transactions and issuance costs are recorded as a reduction to the carrying value of the debt and amortized over the life of the debt using the effective interest method. The Company makes changes to the effective interest rate, as necessary, on a prospective basis. For debt facilities that provide for multiple advances, the Company initially defers any issuance costs until the first advance is made and then amortizes the costs over the life of the facility. |
Research and Development Expenses and Licensed Technology | Research and Development Expenses and Licensed Technology Research and development costs are expensed when incurred. These costs may consist of external research and development expenses incurred under agreements with third-party contract research organizations and investigative sites, third-party manufacturing organizations and consultants, license fees, employee-related expenses, which include salaries and benefits for the personnel involved in the Company’s preclinical drug development activities, other expenses and equipment and laboratory supplies. |
Stock-Based Compensation Expense | Stock-Based Compensation Expense Stock-based compensation expense is estimated at the grant date based on the fair value of the award, and the fair value is recognized as expense ratably over the vesting period with forfeitures accounted for as they occur. Upon the exercise of stock option awards, the Company's policy is to issue new shares of its common stock. The Company uses the Black-Scholes valuation method for estimating the grant date fair value of stock options using the following assumptions: • Volatility - Expected volatility is estimated using the historical stock price performance over the expected term of the award. • Expected term - The expected term is based on a simplified method which defines the life as the weighted average of the contractual term of the options and the vesting period for each award. • Risk-free rate - The risk-free interest rate for the expected term of the option is based on the average market rate on U.S. Treasury securities in effect during the period in which the awards were granted. • Dividends - The dividend yield assumption is based on the Company’s history and expectation of paying no dividends in the foreseeable future. The Company accounts for liability-classified stock option awards (“liability options”) under ASC 718 - Compensation - Stock Compensation |
Loss Per Common Share | Loss Per Common Share The Company applies ASC No. 260, Earnings per Share |
Subsequent Events | Subsequent Events The Company has evaluated events that have occurred after the balance sheet date but before these condensed consolidated financial statements were issued. Based upon that evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the financial statements, except as disclosed in Note 11 - Subsequent Events. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity . This ASU amends the guidance on convertible instruments and the derivatives scope exception for contracts in an entity’s own equity and improves and amends the related EPS guidance for both Subtopics. The ASU will be effective for annual reporting periods after December 15, 2023 and interim periods within those annual periods and early adoption is permitted in fiscal periods ending after December 15, 2020. Upon implementation, the Company may use either a modified retrospective or full retrospective method of adoption. The adoption of ASU 2020-06 will impact the way the Company calculates its (loss) earnings per share, result in expanded disclosures around convertible instruments and remove the requirement to assess and record beneficial conversion features. The Company currently plans to adopt the provisions of this ASU on the effective date. However, it reserves the right to early adopt these provisions. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Schedule of earnings per share, basic and diluted | The computations of basic and diluted loss per common share are as follows: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Basic net loss per share: Net loss $ (3,127,283) $ (1,824,818) $ (9,589,960) $ (6,009,362) Weighted average common shares outstanding – diluted 495,925,112 413,489,603 495,891,596 376,547,498 Loss per share - basic $ (0.01) $ — $ (0.02) $ (0.02) Diluted net loss per share: Net loss (as adjusted) $ (3,127,283) $ (1,704,980) $ (9,589,960) $ (6,009,362) Weighted average common shares outstanding – diluted 495,925,112 414,461,032 495,891,596 376,547,498 Net loss per share - diluted $ (0.01) $ — $ (0.02) $ (0.02) |
Schedule of outstanding shares of common stock equivalents were excluded from the computation of diluted earnings per share | The following outstanding shares of common stock equivalents were excluded from the computation of diluted loss per share of common stock for the periods presented because including them would have been anti-dilutive: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Stock options 37,755,000 23,490,000 37,755,000 23,490,000 Common shares underlying convertible debt 5,661,025 5,303,591 5,661,025 5,303,591 Warrants 136,187,225 133,945,796 136,187,225 134,917,225 Unvested restricted stock units 4,000,000 — 4,000,000 — |
Acquisition of Emerald Health_2
Acquisition of Emerald Health Therapeutics, Inc. (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Summary of Asset Acquisition Transaction | The Company estimates that EHT will incur the following costs in the periods specified below to wind-down its operations: Quarter ending: (USD)* December 31, 2022 $ 970,000 March 31, 2023 140,000 Thereafter 40,000 Total future estimated costs: $ 1,150,000 *The timing and realization of the expected costs are based on management’s estimates and are subject to change based on various factors, including but not limited to, the sale of EHT facilities at terms favorable to Skye, the timely termination of obsolete contracts, the implementation of cost-cutting measures necessary to maximize the remaining asset balance, the effective management of the termination of remaining personnel and related severance payments, the implementation of a successful transition plan, which includes the effective cessation of regulatory requirements related to operating in the cannabis industry and the successful migration of historical data. EHT relative fair value allocation: September 30, 2022 Purchase Consideration Common stock $ 10,823,033 Stock options issued 114,249 Warrants issued 314,498 Transaction costs 1,604,444 Total consideration $ 12,856,224 Assets acquired Cash and cash equivalents $ 8,177,488 Accounts receivable 579,139 Property, plant and equipment 223 Current assets held for sale (property, plant and equipment) 7,254,576 Accounts payable (927,222) Accrued payroll liabilities (459,525) Other current liabilities (1,380,526) Insurance Payable (378,905) Accounts payable - related parties (9,024) Total net assets acquired $ 12,856,224 |
Schedule of Pro Forma Information | The following unaudited pro forma condensed combined balance sheet and notes thereto is prepared for illustrative purposes only and are not necessarily indicative of or intended to represent the results that would have been achieved had the transaction been consummated as of the date indicated or that may be achieved in the future. It also may not be useful in predicting the future financial condition and results of operations of the combined company. Our actual financial condition and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. SKYE EHT EHT Transaction Accounting Adjustments Pro Forma Combined Note A Notes B, C Note D Note E ASSETS Current assets Cash and cash equivalents $ 415,389 $ 11,196,364 $ 8,177,488 $ — $ 8,592,877 Restricted cash 4,574 — — — 4,574 Accounts receivable — 864,424 631,349 (52,210) (a) 579,139 Prepaid expenses 708,477 1,146,140 837,106 (837,106) (a) 708,477 Deferred asset acquisition costs 1,388,444 — — (1,388,444) (b) — Other current assets 143,859 — — — 143,859 Other current assets - related party 22,542 — — (22,542) (c) — Assets held for sale — 12,465,122 9,104,151 (1,849,575) (d) 7,254,576 Total current assets 2,683,285 25,672,050 18,750,094 (4,149,877) 17,283,502 Property, plant and equipment, net 86,163 1,978,872 1,445,309 (1,445,086) (e) 86,386 Operating lease right-of-use asset 91,064 — — — 91,064 Promissory note receivable — 479,745 350,391 (350,391) (f) — Other asset 8,309 — — — 8,309 Total assets $ 2,868,821 $ 28,130,667 $ 20,545,794 $ (5,945,354) $ 17,469,261 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 2,067,766 $ 1,269,523 $ 927,222 $ (22,542) (c) $ 2,972,446 Accounts payable - related parties 120,216 12,355 9,024 — 129,240 Accrued interest due to related party 305,734 — — — 305,734 Accrued payroll liabilities 443,983 29,167 21,303 646,415 (g) 1,111,701 Insurance premium loan payable 30,615 253,785 185,357 — 215,972 Other current liabilities 526,818 1,890,173 1,380,526 459,548 (h) 2,366,892 Other current liabilities - related party 102,390 — — — 102,390 Derivative liability 326 — — — 326 Multi-draw credit agreement - related party 450,000 — — — 450,000 Convertible multi-draw credit agreement - related party, net of discount 2,005,371 — — — 2,005,371 Current liabilities held for sale — 43,811 31,998 (31,998) (i) — Operating lease liability, current portion 92,356 — — — 92,356 Total current liabilities 6,145,575 3,498,814 2,555,430 1,051,423 9,752,428 Non-current liabilities Operating lease liability, net of current portion 8,227 — — — 8,227 Total liabilities 6,153,802 3,498,814 2,555,430 1,051,423 9,760,655 Stockholders’ equity Common stock, $0.001 par value; 5,000,000,000 shares authorized; 912,187,027 shares issued and outstanding at September 30, 2022 495,925 — — 416,271 (j) 912,196 Additional paid-in-capital 53,065,217 281,379,472 205,511,125 (194,643,023) (k) 63,933,319 Accumulated other comprehensive income — 114,115 83,346 (83,346) (l) — Accumulated deficit (56,846,123) (256,861,734) (187,604,107) 187,313,321 (l) (57,136,909) Total stockholders’ equity (3,284,981) 24,631,853 17,990,364 (6,996,777) 7,708,606 Total liabilities and stockholders’ equity $ 2,868,821 $ 28,130,667 $ 20,545,794 $ (5,945,354) $ 17,469,261 The following pro forma adjustments give effect to the acquisition. Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30, 2022 Note A Derived from the unaudited condensed consolidated financial statements of Skye as of September 30, 2022, as contained in this Form 10-Q. Note B Derived from the unaudited condensed interim consolidated financial statements of EHT as of September 30, 2022. Note C Management determined that no adjustments were needed in order to convert the unaudited condensed interim consolidated financial statements of EHT as of September 30, 2022 from IFRS to US GAAP for the purpose of the pro forma financial information. Note D Derived from the unaudited condensed interim consolidated financial statements of EHT as of September 30, 2022 and translated from Canadian dollars (“ C$ ”) to USD. The indicated exchange rate used to translate C$ to USD at September 30, 2022 was the rate of 0.73037 as set out in the table below. EHT Exchange EHT (Converted to U.S. GAAP) Rate (Converted to U.S. GAAP) (CAD) 0.73037 (USD) ASSETS Current Cash and cash equivalents $ 11,196,364 $ 8,177,488 Accounts receivable 864,424 631,349 Prepaid expenses 1,146,140 837,106 Assets held for sale 12,465,122 9,104,151 Total current assets 25,672,050 18,750,094 Property, Plant and equipment, net 1,978,872 1,445,309 Promissory note receivable 479,745 350,391 Total assets $ 28,130,667 $ 20,545,794 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable and accrued liabilities $ 1,269,523 $ 927,222 Accounts payable - related parties 12,355 9,024 Accrued payroll liabilities 29,167 21,303 Other current liabilities 1,890,173 1,380,526 Insurance premium loan payable 253,785 185,357 Current liabilities held for sale 43,811 31,998 Total current liabilities 3,498,814 2,555,430 SHAREHOLDERS' EQUITY Additional paid-in-capital 281,379,472 205,511,125 Accumulated other comprehensive income 114,115 83,346 Accumulated deficit (256,861,734) (187,604,107) TOTAL SHAREHOLDERS' EQUITY 24,631,853 17,990,364 TOTAL LIABILITIES AND EQUITY $ 28,130,667 $ 20,545,794 Note E The transaction accounting adjustments are summarized as follows: a. Accounts receivable and prepaid expense , are reduced to reflect adjustments to estimated fair value to Skye. b. Deferred asset acquisition costs, are reclassified to the assets acquired as part of the total purchase consideration. c. Other current assets - related party, from the consulting agreement entered into with EHT were eliminated against Accounts payable . d. Assets held for sale, is decreased by estimated direct costs to liquidate EHT’s assets of $550,000, including legal costs, advisory fees and other professional fees. In addition, assets held for sale were reduced by $1,299,575 to reflect the fair value to Skye. e. Property plant and equipment, is adjusted based on a relative fair value allocation to reflect the amount of consideration attributable to the vacant lab facility which management of SKYE plans to evaluate and currently has no current plans to liquidate. f. Promissory note receivable, is reduced to reflect adjustments to estimated fair value to Skye. g. Accrued payroll liabilities, is adjusted to reflect (i) the severance provision in EHT’s COO’s executive employment agreement which provides for total payments in the amount of $438,222, (ii) an in-substance severance arrangement, with a former member of the Skye's Board of Directors which provides for total payments in the amount of $78,693, and (iii) transaction bonuses payable to Skye's CEO and CFO aggregating $129,500. h. Other current liabilities, is adjusted to reflect the accrual for estimated transaction costs of $216,000, the accrual for equity issuance costs of $50,000 and an estimate of $193,548 for the tail insurance policy for the benefit of the EHT directors and officers. i. Current liabilities held for sale, were reduced by the amount of the remaining lease liability related to the Richmond lease which is expected to be terminated prior to closing. j. Common stoc k, is increased by $416,271 to reflect the par value ($0.001) of 416,270,514 Skye shares expected to be issued as consideration for all the outstanding shares of EHT. The Company's shares were valued at $0.026 per share or $10,823,033. Common stock is also increased by the issuance of convertible securities for an aggregate fair value of $428,747 and transaction costs of $1,604,444 (the “Purchase Consideration”). The following table summarizes the relative fair value allocation for the preliminary purchase price as of the acquisition date as if the acquisition was accounted for as an asset acquisition. EHT relative fair value allocation: September 30, 2022 Purchase Consideration Common stock $ 10,823,033 Stock options issued 114,249 Warrants issued 314,498 Transaction costs 1,604,444 Total consideration $ 12,856,224 Assets acquired Cash and cash equivalents $ 8,177,488 Accounts receivable 579,139 Property, plant and equipment 223 Current assets held for sale (property, plant and equipment) 7,254,576 Accounts payable (927,222) Accrued payroll liabilities (459,525) Other current liabilities (1,380,526) Insurance Payable (378,905) Accounts payable - related parties (9,024) Total net assets acquired $ 12,856,224 k. Additional paid-in capital is adjusted to reflect the following: (i) The total value of the shares of common stock expected to be issued as consideration for the Acquisition of $10,823,033 less the associated par value of $416,271 recorded in Common stock (“j” above) and less equity issuance costs of $50,000. (ii) The estimated fair value of warrants issued as consideration for the Acquisition in the amount of $314,498. These warrants represent EHT warrants outstanding as of September 30, 2022 which will be converted into warrants to purchase shares of SKYE common stock at the agreed-upon exchange ratio of 1.95. The chart below summarizes the details of these warrants: EHT Warrants EHT Exercise Number of Adjusted Exercise Term Number of November 2019 $ 0.75 4,385,965 $ 0.28 5 8,552,630 December 2019 $ 0.385 5,172,942 $ 0.14 5 10,087,236 February 2020 $ 0.385 7,596,551 $ 0.14 5 14,813,272 February 2020 $ 0.385 2,748,276 $ 0.14 5 5,359,137 June 2020 $ 0.27 11,351,351 $ 0.10 5 22,135,132 31,255,085 60,947,407 The assumptions used to value these warrants are as follows: September 30, 2022 Dividend yield 0.00% Volatility 100.6 - 120.4% Risk-free interest rate 3.96 - 4.23% Expected term (years) 0.67 - 2.38 (iii) The estimated fair value of options issued as consideration for the Acquisition in the amount of $114,249. These options represent EHT options outstanding as of September 30, 2022 totaling 4,247,500, which will be converted into options to acquire shares of SKYE common stock at the agreed-upon exchange ratio of 1.95 for a total of 8,282,626 SKYE options. The assumptions to value these options are as follows: September 30, 2022 Dividend yield 0.00% Volatility 89.45 - 126.82% Risk-free interest rate 2.79 - 4.25% Expected term (years) 0.06 - 4.94 (iv) The grant date fair value of $82,592 for one of two tranches of a stock option grant to a former member of the SKYE Board of Directors that provides for 2,000,000 shares of SKYE common stock, subject to an exercise contingency related to the satisfaction of a performance based provision tied to closing of the acquisition. This tranche meets the criteria for equity classification. (v) The elimination of the historical equity of EHT. l. Accumulated other comprehensive income and Accumulated deficit are adjusted to reflect the elimination of the remaining historical equity balances of EHT as well as the applicable effects of the acquisition transactions as presented above. |
Schedule of Stockholders' Equity Note, Warrants or Rights | The chart below summarizes the details of these warrants: EHT Warrants EHT Exercise Number of Adjusted Exercise Term Number of November 2019 $ 0.75 4,385,965 $ 0.28 5 8,552,630 December 2019 $ 0.385 5,172,942 $ 0.14 5 10,087,236 February 2020 $ 0.385 7,596,551 $ 0.14 5 14,813,272 February 2020 $ 0.385 2,748,276 $ 0.14 5 5,359,137 June 2020 $ 0.27 11,351,351 $ 0.10 5 22,135,132 31,255,085 60,947,407 Warrants vested and outstanding as of September 30, 2022 are summarized as follows: Source Exercise Term Number of Pre 2015 Common Stock Warrants $ 1.00 10 1,110,000 2015 Common Stock Warrants 5.00 10 100,000 2016 Common Stock Warrants to Service Providers 1.15 10 40,000 2018 Emerald Financing Warrants 0.10 5 3,400,000 Emerald Multi-Draw Credit Agreement Warrants 0.50 5 7,500,000 2019 Common Stock Warrants 0.35 5 8,000,000 2020 Common Stock Warrants to Placement Agent 0.08 5 8,166,667 2021 Inducement Warrants 0.15 5 21,166,667 2021 Inducement Warrants to Placement Agent 0.19 5 1,481,667 2021 Common Stock Warrants 0.09 5 77,777,779 2021 Common Stock Warrants to Placement Agent 0.11 5 5,444,445 2022 Common Stock Warrants to Service Provider 0.04 2 2,000,000 Total warrants outstanding as of September 30, 2022 136,187,225 |
Schedule of Fair Value Measurement Inputs and Valuation Techniques | The assumptions used to value these warrants are as follows: September 30, 2022 Dividend yield 0.00% Volatility 100.6 - 120.4% Risk-free interest rate 3.96 - 4.23% Expected term (years) 0.67 - 2.38 September 30, 2022 Dividend yield 0.00% Volatility 89.45 - 126.82% Risk-free interest rate 2.79 - 4.25% Expected term (years) 0.06 - 4.94 As of the date of grant, the Company valued the warrants with a Black-Scholes valuation method using the following assumptions: April 1, 2022 Date of Issuance Dividend yield — % Volatility factor 118.5 % Risk-free interest rate 1.92 % Expected term (years) 1.27 Underlying common stock price $ 0.04 The warrant liability is valued at the balance sheet dates using the following assumptions: September 30, December 31, Dividend yield — % — % Volatility factor 93.3 % 126.5 % Risk-free interest rate 2.79 % 0.43 % Expected term (years) 0.38 1.13 Underlying common stock price $ 0.03 $ 0.05 |
Warrants and Derivative Liabi_2
Warrants and Derivative Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of warrants vested and outstanding | The chart below summarizes the details of these warrants: EHT Warrants EHT Exercise Number of Adjusted Exercise Term Number of November 2019 $ 0.75 4,385,965 $ 0.28 5 8,552,630 December 2019 $ 0.385 5,172,942 $ 0.14 5 10,087,236 February 2020 $ 0.385 7,596,551 $ 0.14 5 14,813,272 February 2020 $ 0.385 2,748,276 $ 0.14 5 5,359,137 June 2020 $ 0.27 11,351,351 $ 0.10 5 22,135,132 31,255,085 60,947,407 Warrants vested and outstanding as of September 30, 2022 are summarized as follows: Source Exercise Term Number of Pre 2015 Common Stock Warrants $ 1.00 10 1,110,000 2015 Common Stock Warrants 5.00 10 100,000 2016 Common Stock Warrants to Service Providers 1.15 10 40,000 2018 Emerald Financing Warrants 0.10 5 3,400,000 Emerald Multi-Draw Credit Agreement Warrants 0.50 5 7,500,000 2019 Common Stock Warrants 0.35 5 8,000,000 2020 Common Stock Warrants to Placement Agent 0.08 5 8,166,667 2021 Inducement Warrants 0.15 5 21,166,667 2021 Inducement Warrants to Placement Agent 0.19 5 1,481,667 2021 Common Stock Warrants 0.09 5 77,777,779 2021 Common Stock Warrants to Placement Agent 0.11 5 5,444,445 2022 Common Stock Warrants to Service Provider 0.04 2 2,000,000 Total warrants outstanding as of September 30, 2022 136,187,225 |
Schedule of input and valuation technique used to value warrant liabilities | The assumptions used to value these warrants are as follows: September 30, 2022 Dividend yield 0.00% Volatility 100.6 - 120.4% Risk-free interest rate 3.96 - 4.23% Expected term (years) 0.67 - 2.38 September 30, 2022 Dividend yield 0.00% Volatility 89.45 - 126.82% Risk-free interest rate 2.79 - 4.25% Expected term (years) 0.06 - 4.94 As of the date of grant, the Company valued the warrants with a Black-Scholes valuation method using the following assumptions: April 1, 2022 Date of Issuance Dividend yield — % Volatility factor 118.5 % Risk-free interest rate 1.92 % Expected term (years) 1.27 Underlying common stock price $ 0.04 The warrant liability is valued at the balance sheet dates using the following assumptions: September 30, December 31, Dividend yield — % — % Volatility factor 93.3 % 126.5 % Risk-free interest rate 2.79 % 0.43 % Expected term (years) 0.38 1.13 Underlying common stock price $ 0.03 $ 0.05 |
Schedule of the activity of derivative liabilities | The following tables summarize the activity of the derivative liability for the periods indicated: Nine Months Ended September 30, 2022 December 31, 2021 Fair Value of Derivative Liability Fair Change in Reclassification September 30, 2022 Fair Value of Derivative Liability Emerald Financing - warrant liability $ 59,732 $ — $ (59,406) $ — $ 326 Current balance of derivative liability $ 59,732 $ — $ (59,406) $ — $ 326 Nine Months Ended September 30, 2021 December 31, 2020 Fair Value of Derivative Liability Fair Change in Reclassification September 30, 2021 Fair Value of Derivative Liability Emerald Financing - warrant liability $ 38,567 $ — $ 169,349 $ — $ 207,916 Total derivative liability $ 38,567 $ — $ 169,349 $ — $ 207,916 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of debt | The Company’s Debt with Sciences consists of the following: Conversion As of September 30, As of December 31, Total principal value of convertible debt—related party $ 0.40 $ 2,014,500 $ 2,014,500 Unamortized debt discount (8,535) (487,668) Unamortized debt issuance costs (594) (1,927) Carrying value of total convertible debt - related party 2,005,371 1,524,905 Total principal value of non-convertible debt—related party n/a 450,000 450,000 Total carrying value of advances under the multi-draw credit agreement $ 2,455,371 $ 1,974,905 |
Schedule of interest expense | The Company’s interest expense consists of the following: Three Months Ended Nine Months Ended 2022 2021 2022 2021 Related party interest expense – stated rate $ 44,086 $ 44,086 $ 130,824 $ 130,824 Insurance premium loan payable - stated rate 1,602 — 4,273 — PPP loan interest expense – stated rate — — — 445 Non-cash interest expense: Amortization of debt discount 165,082 150,852 479,133 437,834 Amortization of transaction costs 459 420 1,333 1,219 $ 211,229 $ 195,358 $ 615,563 $ 570,322 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of stock option activity | The following is a summary of option activities under the Company’s 2014 Plan for the nine months ended September 30, 2022: Number of Weighted Weighted Aggregate Intrinsic Value Outstanding, December 31, 2021 35,405,000 $ 0.07 9.08 $ 134,750 Granted 4,350,000 0.04 Exercised — — Cancelled (321,250) 0.06 Forfeited (1,678,750) 0.08 Outstanding, September 30, 2022 37,755,000 $ 0.07 8.45 $ — Exercisable, September 30, 2022 14,782,500 $ 0.08 7.81 $ — |
Schedule of fair value assumptions of stock option granted | The fair value of the Company's stock option grants were estimated on the date of grant using the Black-Scholes option-pricing model under the following assumptions: Nine Months Ended Dividend yield — % Volatility factor 126.3 - 132.6% Risk-free interest rate 2.89 - 3.60% Expected term (years) 5.00 - 6.08 |
Schedule of RSA activity | The following is a summary of restricted stock activity outside of the 2014 Amended and Restated Plan during the nine months ended September 30, 2022: Number of Weighted Unvested, December 31, 2021 150,000 $ 0.13 Released (150,000) 0.13 Unvested, September 30, 2022 — $ — |
Schedule of stock-based compensation expense | The Company recognized stock-based compensation expense, including compensation expense for warrants with vesting provisions issued to a service provider (Note 4), and the RSUs discussed above, in its Condensed Consolidated Statements of Operations and Comprehensive Loss as follows: Three Months Ended September 30, Nine Months Ended 2022 2021 2022 2021 Research and development $ 23,966 $ 17,986 $ 64,507 $ 37,350 General and administrative 120,158 470,987 361,339 709,902 $ 144,124 $ 488,973 $ 425,846 $ 747,252 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of lease information | The remaining lease term and discount rate related to the operating lease are presented in the following table: September 30, 2022 Weighted-average remaining term – operating lease (in years) 1.08 Weighted-average discount rate – operating lease 12 % Reported as: Operating lease liability $ 92,356 Operating lease liability, net of current portion 8,227 Total lease liability $ 100,583 |
Schedule of future minimum lease payments | Future minimum lease payments as of September 30, 2022 are presented in the following table: Year: 2022 $ 24,686 2023 83,093 Total future minimum lease payments: 107,779 Less imputed interest (7,196) Total $ 100,583 |
Nature of Operations and Busi_2
Nature of Operations and Business Activities (Details) | 3 Months Ended | 9 Months Ended | |||||||||||
Oct. 17, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Nov. 14, 2022 business_day | Nov. 10, 2022 USD ($) | Oct. 05, 2022 business_day | Dec. 31, 2021 USD ($) | |
Nature Of Operations And Business Activities [Line Items] | |||||||||||||
Working capital deficit | $ 3,462,290 | $ 3,462,290 | |||||||||||
Accumulated deficit | 56,846,123 | 56,846,123 | $ 47,256,163 | ||||||||||
Unrestricted cash | 415,389 | $ 11,089,624 | 415,389 | $ 11,089,624 | $ 8,983,007 | ||||||||
Operating loss | (2,922,282) | (1,819,109) | (9,028,662) | (5,386,044) | |||||||||
Net loss | (3,127,283) | $ (3,419,278) | $ (3,043,399) | $ (1,824,818) | $ (2,024,027) | $ (2,160,517) | (9,589,960) | $ (6,009,362) | |||||
Multi-Draw Credit Agreement | |||||||||||||
Nature Of Operations And Business Activities [Line Items] | |||||||||||||
Outstanding principal balance | $ 2,464,500 | $ 2,464,500 | |||||||||||
Subsequent Event | Multi-Draw Credit Agreement | |||||||||||||
Nature Of Operations And Business Activities [Line Items] | |||||||||||||
Grace period (in days) | business_day | 30 | 30 | |||||||||||
Subsequent Event | Discontinued Operations, Disposed of by Sale | Sale Of Subsidiary | |||||||||||||
Nature Of Operations And Business Activities [Line Items] | |||||||||||||
Aggregate purchase price | $ 9,312,000 | ||||||||||||
Emerald Health Therapeutics, Inc. | |||||||||||||
Nature Of Operations And Business Activities [Line Items] | |||||||||||||
Exchange ratio | 1.95 | 1.95 | |||||||||||
Number of employees laid off | 2 | ||||||||||||
Working capital loan | $ 700,000 | ||||||||||||
Emerald Health Therapeutics, Inc. | Subsequent Event | |||||||||||||
Nature Of Operations And Business Activities [Line Items] | |||||||||||||
Exchange ratio | 1.95 | ||||||||||||
Working capital loan | $ 700,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Nature Of Operations And Business Activities [Line Items] | ||
Costs associated with the use of licensed technologies capitalized to date | $ 0 | |
Other current assets | 143,859 | $ 56,870 |
Accounting Standards Update 2021-10 | ||
Nature Of Operations And Business Activities [Line Items] | ||
Other current assets | $ 131,959 | $ 44,616 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Basic and Diluted Net Loss per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Basic net loss per share: | ||||
Net loss | $ (3,127,283) | $ (1,824,818) | $ (9,589,960) | $ (6,009,362) |
Weighted average common shares outstanding – basic (in shares) | 495,925,112 | 413,489,603 | 495,891,596 | 376,547,498 |
Loss per share - basic (in dollars per share) | $ (0.01) | $ 0 | $ (0.02) | $ (0.02) |
Diluted net loss per share: | ||||
Net loss (as adjusted) | $ (3,127,283) | $ (1,704,980) | $ (9,589,960) | $ (6,009,362) |
Weighted average common shares outstanding – diluted (in shares) | 495,925,112 | 414,461,032 | 495,891,596 | 376,547,498 |
Net loss per share - diluted (in dollars per share) | $ (0.01) | $ 0 | $ (0.02) | $ (0.02) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Outstanding Shares of Common Stock Equivalents Excluded from Calculation (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive excluded from the calculation of diluted loss per common share (in shares) | 37,755,000 | 23,490,000 | 37,755,000 | 23,490,000 |
Common shares underlying convertible debt | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive excluded from the calculation of diluted loss per common share (in shares) | 5,661,025 | 5,303,591 | 5,661,025 | 5,303,591 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive excluded from the calculation of diluted loss per common share (in shares) | 136,187,225 | 133,945,796 | 136,187,225 | 134,917,225 |
Unvested restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive excluded from the calculation of diluted loss per common share (in shares) | 4,000,000 | 0 | 4,000,000 | 0 |
Acquisition of Emerald Health_3
Acquisition of Emerald Health Therapeutics, Inc. - Narrative (Details) | 9 Months Ended | |||||
Nov. 10, 2022 shares | Sep. 30, 2022 USD ($) employee | Sep. 30, 2022 USD ($) employee | Sep. 30, 2021 USD ($) | Jul. 11, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Asset Acquisition [Line Items] | ||||||
Other current assets - related party | $ 22,542 | $ 22,542 | $ 0 | |||
Deferred asset acquisition costs | 1,388,444 | 1,388,444 | 0 | |||
Decrease in other current liabilities | (526,818) | (526,818) | $ (375,842) | |||
Decrease to assets held for sale | 0 | 0 | ||||
Common stock issuance costs | $ 851,538 | |||||
Pro Forma | ||||||
Asset Acquisition [Line Items] | ||||||
Other current assets - related party | 0 | 0 | ||||
Deferred asset acquisition costs | 0 | 0 | ||||
Decrease in other current liabilities | (2,366,892) | (2,366,892) | ||||
Decrease to assets held for sale | $ (7,254,576) | $ (7,254,576) | ||||
Emerald Health Therapeutics, Inc. | ||||||
Asset Acquisition [Line Items] | ||||||
Exchange ratio | 1.95 | 1.95 | ||||
Number of employees expected to be hired | employee | 2 | 2 | ||||
Benefit costs | $ 599,507 | $ 599,507 | ||||
Aggregate transaction costs | 1,994,034 | |||||
Transaction costs | 339,590 | |||||
Transaction costs | 1,604,444 | 1,604,444 | ||||
Common stock issuance costs | 50,000 | |||||
Emerald Health Therapeutics, Inc. | Minimum | ||||||
Asset Acquisition [Line Items] | ||||||
Additional operating costs expected | 425,000 | 425,000 | ||||
Emerald Health Therapeutics, Inc. | Maximum | ||||||
Asset Acquisition [Line Items] | ||||||
Additional operating costs expected | 475,000 | 475,000 | ||||
Emerald Health Therapeutics, Inc. | Subsequent Event | ||||||
Asset Acquisition [Line Items] | ||||||
Exchange ratio | 1.95 | |||||
Number of shares issued (in shares) | shares | 416,270,514 | |||||
Emerald Health Therapeutics, Inc. | Consulting Agreement | Affiliated Entity | ||||||
Asset Acquisition [Line Items] | ||||||
Annual rate per hour | $ 150 | |||||
Other current assets - related party | 22,542 | 22,542 | ||||
EHT Transactions Accounting Adjustments, Tail Insurance Policy | Pro Forma | ||||||
Asset Acquisition [Line Items] | ||||||
Decrease in other current liabilities | 193,548 | 193,548 | ||||
EHT Transactions Accounting Adjustments, Direct Costs | Pro Forma | ||||||
Asset Acquisition [Line Items] | ||||||
Decrease to assets held for sale | $ 550,000 | $ 550,000 |
Acquisition of Emerald Health_4
Acquisition of Emerald Health Therapeutics, Inc. - Estimated Cost Incurred For Wind-down Of Operation (Details) - Emerald Health Therapeutics, Inc. | Sep. 30, 2022 USD ($) |
Asset Acquisition [Line Items] | |
Business exit costs, quarter one | $ 970,000 |
Business exit costs, quarter two | 140,000 |
Thereafter | 40,000 |
Total future estimated costs: | $ 1,150,000 |
Acquisition of Emerald Health_5
Acquisition of Emerald Health Therapeutics, Inc. - Unaudited Pro Forma Condensed Combined Balance Sheet (Details) | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2022 CAD ($) shares | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) |
Current assets | |||||||||
Cash and cash equivalents | $ 415,389 | $ 8,983,007 | $ 11,089,624 | ||||||
Restricted cash | 4,574 | 4,571 | 4,570 | ||||||
Accounts receivable | 0 | ||||||||
Prepaid expenses | 708,477 | 554,217 | |||||||
Deferred asset acquisition costs | 1,388,444 | 0 | |||||||
Other current assets | 143,859 | 56,870 | |||||||
Other current assets - related party | 22,542 | 0 | |||||||
Assets held for sale | 0 | ||||||||
Total current assets | 2,683,285 | 9,612,097 | |||||||
Property, plant and equipment, net | 86,163 | 87,710 | |||||||
Operating lease right-of-use asset | 91,064 | 146,972 | |||||||
Promissory note receivable | 0 | ||||||||
Other asset | 8,309 | 8,309 | |||||||
Total assets | 2,868,821 | 9,855,088 | |||||||
Current liabilities | |||||||||
Accounts payable | 2,067,766 | 897,880 | |||||||
Accounts payable - related parties | 120,216 | 2,130 | |||||||
Accrued interest due to related party | 305,734 | 174,911 | |||||||
Accrued payroll liabilities | 443,983 | 344,450 | |||||||
Insurance premium loan payable | 30,615 | 0 | |||||||
Other current liabilities | 526,818 | 375,842 | |||||||
Other current liabilities - related party | 102,390 | 0 | |||||||
Derivative liability | 326 | 59,732 | |||||||
Multi-draw credit agreement - related party | 450,000 | 450,000 | |||||||
Convertible multi-draw credit agreement - related party, net of discount | 2,005,371 | 1,524,905 | |||||||
Current liabilities held for sale | 0 | ||||||||
Operating lease liability, current portion | 92,356 | 82,372 | |||||||
Total current liabilities | 6,145,575 | 3,912,222 | |||||||
Non-current liabilities | |||||||||
Operating lease liability, net of current portion | 8,227 | 78,700 | |||||||
Total liabilities | 6,153,802 | 3,990,922 | |||||||
Stockholders’ equity | |||||||||
Common stock, $0.001 par value; 5,000,000,000 shares authorized; 912,187,027 shares issued and outstanding at September 30, 2022 | 495,925 | 476,108 | |||||||
Additional paid-in-capital | 53,065,217 | 52,644,221 | |||||||
Accumulated other comprehensive income | 0 | ||||||||
Accumulated deficit | (56,846,123) | (47,256,163) | |||||||
Total stockholders’ equity | (3,284,981) | $ (301,822) | $ 2,973,092 | 5,864,166 | $ 8,264,782 | $ 2,271,104 | $ 2,478,649 | $ 450,786 | |
Total liabilities and stockholders’ equity | $ 2,868,821 | $ 9,855,088 | |||||||
Stockholders’ equity, parenthetical | |||||||||
Common stock, shares issued (in shares) | shares | 495,925,112 | 495,925,112 | 476,108,445 | ||||||
Common stock, shares outstanding (in shares) | shares | 495,925,112 | 495,925,112 | 476,108,445 | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||||||
Common stock, shares authorized (in shares) | shares | 5,000,000,000 | 5,000,000,000 | 5,000,000,000 | ||||||
Pro Forma | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ 8,592,877 | ||||||||
Restricted cash | 4,574 | ||||||||
Accounts receivable | 579,139 | ||||||||
Prepaid expenses | 708,477 | ||||||||
Deferred asset acquisition costs | 0 | ||||||||
Other current assets | 143,859 | ||||||||
Other current assets - related party | 0 | ||||||||
Assets held for sale | 7,254,576 | ||||||||
Total current assets | 17,283,502 | ||||||||
Property, plant and equipment, net | 86,386 | ||||||||
Operating lease right-of-use asset | 91,064 | ||||||||
Promissory note receivable | 0 | ||||||||
Other asset | 8,309 | ||||||||
Total assets | 17,469,261 | ||||||||
Current liabilities | |||||||||
Accounts payable | 2,972,446 | ||||||||
Accounts payable - related parties | 129,240 | ||||||||
Accrued interest due to related party | 305,734 | ||||||||
Accrued payroll liabilities | 1,111,701 | ||||||||
Insurance premium loan payable | 215,972 | ||||||||
Other current liabilities | 2,366,892 | ||||||||
Other current liabilities - related party | 102,390 | ||||||||
Derivative liability | 326 | ||||||||
Multi-draw credit agreement - related party | 450,000 | ||||||||
Convertible multi-draw credit agreement - related party, net of discount | 2,005,371 | ||||||||
Current liabilities held for sale | 0 | ||||||||
Operating lease liability, current portion | 92,356 | ||||||||
Total current liabilities | 9,752,428 | ||||||||
Non-current liabilities | |||||||||
Operating lease liability, net of current portion | 8,227 | ||||||||
Total liabilities | 9,760,655 | ||||||||
Stockholders’ equity | |||||||||
Common stock, $0.001 par value; 5,000,000,000 shares authorized; 912,187,027 shares issued and outstanding at September 30, 2022 | 912,196 | ||||||||
Additional paid-in-capital | 63,933,319 | ||||||||
Accumulated other comprehensive income | 0 | ||||||||
Accumulated deficit | (57,136,909) | ||||||||
Total stockholders’ equity | 7,708,606 | ||||||||
Total liabilities and stockholders’ equity | $ 17,469,261 | ||||||||
Stockholders’ equity, parenthetical | |||||||||
Common stock, shares issued (in shares) | shares | 912,187,027 | 912,187,027 | |||||||
Common stock, shares outstanding (in shares) | shares | 912,187,027 | 912,187,027 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | ||||||||
Common stock, shares authorized (in shares) | shares | 5,000,000,000 | 5,000,000,000 | |||||||
EHT, Transactions Accounting Adjustments | Pro Forma | |||||||||
Current assets | |||||||||
Cash and cash equivalents | $ 0 | ||||||||
Restricted cash | 0 | ||||||||
Accounts receivable | (52,210) | ||||||||
Prepaid expenses | (837,106) | ||||||||
Deferred asset acquisition costs | (1,388,444) | ||||||||
Other current assets | 0 | ||||||||
Other current assets - related party | (22,542) | ||||||||
Assets held for sale | (1,849,575) | ||||||||
Total current assets | (4,149,877) | ||||||||
Property, plant and equipment, net | (1,445,086) | ||||||||
Operating lease right-of-use asset | 0 | ||||||||
Promissory note receivable | (350,391) | ||||||||
Other asset | 0 | ||||||||
Total assets | (5,945,354) | ||||||||
Current liabilities | |||||||||
Accounts payable | (22,542) | ||||||||
Accounts payable - related parties | 0 | ||||||||
Accrued interest due to related party | 0 | ||||||||
Accrued payroll liabilities | 646,415 | ||||||||
Insurance premium loan payable | 0 | ||||||||
Other current liabilities | 459,548 | ||||||||
Other current liabilities - related party | 0 | ||||||||
Derivative liability | 0 | ||||||||
Multi-draw credit agreement - related party | 0 | ||||||||
Convertible multi-draw credit agreement - related party, net of discount | 0 | ||||||||
Current liabilities held for sale | (31,998) | ||||||||
Operating lease liability, current portion | 0 | ||||||||
Total current liabilities | 1,051,423 | ||||||||
Non-current liabilities | |||||||||
Operating lease liability, net of current portion | 0 | ||||||||
Total liabilities | 1,051,423 | ||||||||
Stockholders’ equity | |||||||||
Common stock, $0.001 par value; 5,000,000,000 shares authorized; 912,187,027 shares issued and outstanding at September 30, 2022 | 416,271 | ||||||||
Additional paid-in-capital | (194,643,023) | ||||||||
Accumulated other comprehensive income | (83,346) | ||||||||
Accumulated deficit | 187,313,321 | ||||||||
Total stockholders’ equity | (6,996,777) | ||||||||
Total liabilities and stockholders’ equity | (5,945,354) | ||||||||
Emerald Health Therapeutics, Inc. | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 8,177,488 | $ 11,196,364 | |||||||
Restricted cash | 0 | 0 | |||||||
Accounts receivable | 631,349 | 864,424 | |||||||
Prepaid expenses | 837,106 | 1,146,140 | |||||||
Deferred asset acquisition costs | 0 | 0 | |||||||
Other current assets | 0 | 0 | |||||||
Other current assets - related party | 0 | 0 | |||||||
Assets held for sale | 9,104,151 | 12,465,122 | |||||||
Total current assets | 18,750,094 | 25,672,050 | |||||||
Property, plant and equipment, net | 1,445,309 | 1,978,872 | |||||||
Operating lease right-of-use asset | 0 | 0 | |||||||
Promissory note receivable | 350,391 | 479,745 | |||||||
Other asset | 0 | 0 | |||||||
Total assets | 20,545,794 | 28,130,667 | |||||||
Current liabilities | |||||||||
Accounts payable | 927,222 | 1,269,523 | |||||||
Accounts payable - related parties | 9,024 | 12,355 | |||||||
Accrued interest due to related party | 0 | 0 | |||||||
Accrued payroll liabilities | 21,303 | 29,167 | |||||||
Insurance premium loan payable | 185,357 | 253,785 | |||||||
Other current liabilities | 1,380,526 | 1,890,173 | |||||||
Other current liabilities - related party | 0 | 0 | |||||||
Derivative liability | 0 | 0 | |||||||
Multi-draw credit agreement - related party | 0 | 0 | |||||||
Convertible multi-draw credit agreement - related party, net of discount | 0 | 0 | |||||||
Current liabilities held for sale | 31,998 | 43,811 | |||||||
Operating lease liability, current portion | 0 | 0 | |||||||
Total current liabilities | 2,555,430 | 3,498,814 | |||||||
Non-current liabilities | |||||||||
Operating lease liability, net of current portion | 0 | 0 | |||||||
Total liabilities | 2,555,430 | 3,498,814 | |||||||
Stockholders’ equity | |||||||||
Common stock, $0.001 par value; 5,000,000,000 shares authorized; 912,187,027 shares issued and outstanding at September 30, 2022 | 0 | 0 | |||||||
Additional paid-in-capital | 205,511,125 | 281,379,472 | |||||||
Accumulated other comprehensive income | 83,346 | 114,115 | |||||||
Accumulated deficit | (187,604,107) | (256,861,734) | |||||||
Total stockholders’ equity | 17,990,364 | 24,631,853 | |||||||
Total liabilities and stockholders’ equity | $ 20,545,794 | $ 28,130,667 |
Acquisition of Emerald Health_6
Acquisition of Emerald Health Therapeutics, Inc. - Pro Forma Adjustments (Details) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 CAD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) |
Asset Acquisition [Line Items] | |||||||||
Exchange rate | 0.73037 | 0.73037 | |||||||
Current assets | |||||||||
Cash and cash equivalents | $ 415,389 | $ 8,983,007 | $ 11,089,624 | ||||||
Accounts receivable | 0 | ||||||||
Prepaid expenses | 708,477 | 554,217 | |||||||
Assets held for sale | 0 | ||||||||
Total current assets | 2,683,285 | 9,612,097 | |||||||
Property, plant and equipment, net | 86,163 | 87,710 | |||||||
Promissory note receivable | 0 | ||||||||
Total assets | 2,868,821 | 9,855,088 | |||||||
Current liabilities | |||||||||
Accounts payable - related parties | 120,216 | 2,130 | |||||||
Accrued payroll liabilities | 443,983 | 344,450 | |||||||
Other current liabilities | 526,818 | 375,842 | |||||||
Insurance premium loan payable | 30,615 | 0 | |||||||
Current liabilities held for sale | 0 | ||||||||
Total current liabilities | 6,145,575 | 3,912,222 | |||||||
Equity [Abstract] | |||||||||
Additional paid-in-capital | 53,065,217 | 52,644,221 | |||||||
Accumulated other comprehensive income | 0 | ||||||||
Accumulated deficit | (56,846,123) | (47,256,163) | |||||||
Total stockholders’ equity | (3,284,981) | $ (301,822) | $ 2,973,092 | 5,864,166 | $ 8,264,782 | $ 2,271,104 | $ 2,478,649 | $ 450,786 | |
Total liabilities and stockholders’ equity | 2,868,821 | $ 9,855,088 | |||||||
Emerald Health Therapeutics, Inc. | |||||||||
Current assets | |||||||||
Cash and cash equivalents | 8,177,488 | $ 11,196,364 | |||||||
Accounts receivable | 631,349 | 864,424 | |||||||
Prepaid expenses | 837,106 | 1,146,140 | |||||||
Assets held for sale | 9,104,151 | 12,465,122 | |||||||
Total current assets | 18,750,094 | 25,672,050 | |||||||
Property, plant and equipment, net | 1,445,309 | 1,978,872 | |||||||
Promissory note receivable | 350,391 | 479,745 | |||||||
Total assets | 20,545,794 | 28,130,667 | |||||||
Current liabilities | |||||||||
Accounts payable and accrued liabilities | 927,222 | 1,269,523 | |||||||
Accounts payable - related parties | 9,024 | 12,355 | |||||||
Accrued payroll liabilities | 21,303 | 29,167 | |||||||
Other current liabilities | 1,380,526 | 1,890,173 | |||||||
Insurance premium loan payable | 185,357 | 253,785 | |||||||
Current liabilities held for sale | 31,998 | 43,811 | |||||||
Total current liabilities | 2,555,430 | 3,498,814 | |||||||
Equity [Abstract] | |||||||||
Additional paid-in-capital | 205,511,125 | 281,379,472 | |||||||
Accumulated other comprehensive income | 83,346 | 114,115 | |||||||
Accumulated deficit | (187,604,107) | (256,861,734) | |||||||
Total stockholders’ equity | 17,990,364 | 24,631,853 | |||||||
Total liabilities and stockholders’ equity | $ 20,545,794 | $ 28,130,667 |
Acquisition of Emerald Health_7
Acquisition of Emerald Health Therapeutics, Inc. - Footnote Information (Details) | 9 Months Ended | |||
Nov. 10, 2022 shares | Sep. 30, 2022 USD ($) agreement $ / shares shares | Sep. 30, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Asset Acquisition [Line Items] | ||||
Decrease to assets held for sale | $ 0 | $ 0 | ||
Decrease to accrued payroll liabilities | (443,983) | (443,983) | $ (344,450) | |
Decrease in other current liabilities | (526,818) | (526,818) | (375,842) | |
Common stock, $0.001 par value; 5,000,000,000 shares authorized; 912,187,027 shares issued and outstanding at September 30, 2022 | $ 495,925 | $ 495,925 | $ 476,108 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |
Outstanding shares (in shares) | shares | 37,755,000 | 37,755,000 | 35,405,000 | |
Grant date fair value | $ 0 | $ 0 | $ 134,750 | |
Granted (in shares) | shares | 4,350,000 | |||
Pro Forma | ||||
Asset Acquisition [Line Items] | ||||
Decrease to assets held for sale | (7,254,576) | $ (7,254,576) | ||
Decrease to accrued payroll liabilities | (1,111,701) | (1,111,701) | ||
Decrease in other current liabilities | (2,366,892) | (2,366,892) | ||
Common stock, $0.001 par value; 5,000,000,000 shares authorized; 912,187,027 shares issued and outstanding at September 30, 2022 | $ 912,196 | $ 912,196 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Emerald Health Therapeutics, Inc. | ||||
Asset Acquisition [Line Items] | ||||
Number of shares to be issued per acquiree share (in shares) | shares | 0.026 | |||
Common stock | $ 10,823,033 | |||
Convertible securities | 428,747 | |||
Transaction costs | 1,604,444 | $ 1,604,444 | ||
Warrants issued | $ 314,498 | |||
Exchange ratio | 1.95 | 1.95 | ||
Stock options issued | $ 114,249 | |||
Outstanding shares (in shares) | shares | 4,247,500 | 4,247,500 | ||
Number of tranches | agreement | 2 | |||
Emerald Health Therapeutics, Inc. | Subsequent Event | ||||
Asset Acquisition [Line Items] | ||||
Number of shares issued (in shares) | shares | 416,270,514 | |||
Exchange ratio | 1.95 | |||
Emerald Health Therapeutics, Inc. | Director | ||||
Asset Acquisition [Line Items] | ||||
Grant date fair value | $ 82,592 | $ 82,592 | ||
Granted (in shares) | shares | 2,000,000 | |||
Emerald Health Therapeutics, Inc. | Director | First Tranche | ||||
Asset Acquisition [Line Items] | ||||
Number of tranches | agreement | 1 | |||
Emerald Health Therapeutics, Inc. | Pro Forma | ||||
Asset Acquisition [Line Items] | ||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Outstanding shares (in shares) | shares | 8,282,626 | 8,282,626 | ||
EHT, Transactions Accounting Adjustments | COO | ||||
Asset Acquisition [Line Items] | ||||
Decrease to accrued payroll liabilities | $ 438,222 | $ 438,222 | ||
EHT, Transactions Accounting Adjustments | Director | ||||
Asset Acquisition [Line Items] | ||||
Decrease to accrued payroll liabilities | (78,693) | (78,693) | ||
EHT, Transactions Accounting Adjustments | CEO & CFO | ||||
Asset Acquisition [Line Items] | ||||
Decrease to accrued payroll liabilities | (129,500) | (129,500) | ||
EHT, Transactions Accounting Adjustments | Pro Forma | ||||
Asset Acquisition [Line Items] | ||||
Decrease to assets held for sale | 1,849,575 | 1,849,575 | ||
Decrease to accrued payroll liabilities | (646,415) | (646,415) | ||
Decrease in other current liabilities | (459,548) | (459,548) | ||
Common stock, $0.001 par value; 5,000,000,000 shares authorized; 912,187,027 shares issued and outstanding at September 30, 2022 | 416,271 | 416,271 | ||
EHT Transactions Accounting Adjustments, Direct Costs | Pro Forma | ||||
Asset Acquisition [Line Items] | ||||
Decrease to assets held for sale | 550,000 | 550,000 | ||
EHT Transactions Accounting Adjustments, Fair Value | Pro Forma | ||||
Asset Acquisition [Line Items] | ||||
Decrease to assets held for sale | 1,299,575 | 1,299,575 | ||
EHT Transactions Accounting Adjustments, Estimated Transaction Costs | Pro Forma | ||||
Asset Acquisition [Line Items] | ||||
Decrease in other current liabilities | (216,000) | (216,000) | ||
EHT Transactions Accounting Adjustments, Equity Issuance Costs | Pro Forma | ||||
Asset Acquisition [Line Items] | ||||
Decrease in other current liabilities | (50,000) | (50,000) | ||
EHT Transactions Accounting Adjustments, Tail Insurance Policy | Pro Forma | ||||
Asset Acquisition [Line Items] | ||||
Decrease in other current liabilities | $ 193,548 | $ 193,548 |
Acquisition of Emerald Health_8
Acquisition of Emerald Health Therapeutics, Inc. - Fair Value Allocation of Preliminary Purchase Price (Details) - Emerald Health Therapeutics, Inc. - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | |
Purchase Consideration | ||
Common stock | $ 10,823,033 | |
Stock options issued | 114,249 | |
Warrants issued | 314,498 | |
Transaction costs | 1,604,444 | $ 1,604,444 |
Total consideration | 12,856,224 | |
Assets acquired | ||
Cash and cash equivalents | 8,177,488 | |
Accounts receivable | 579,139 | |
Property, plant and equipment | 223 | |
Current assets held for sale (property, plant and equipment) | 7,254,576 | |
Accounts payable | (927,222) | |
Accrued payroll liabilities | (459,525) | |
Other current liabilities | (1,380,526) | |
Insurance Payable | (378,905) | |
Accounts payable - related parties | (9,024) | |
Total net assets acquired | $ 12,856,224 |
Acquisition of Emerald Health_9
Acquisition of Emerald Health Therapeutics, Inc. - Warrants (Details) - Sep. 30, 2022 - Emerald Health Therapeutics, Inc. | $ / shares shares | $ / shares shares |
EHT Warrants | ||
Class of Warrant or Right [Line Items] | ||
Number of warrants issued and outstanding (in shares) | 60,947,407 | 60,947,407 |
EHT Warrants | Emerald Health Therapeutics, Inc. | ||
Class of Warrant or Right [Line Items] | ||
Number of EHT warrants outstanding (in shares) | 31,255,085 | 31,255,085 |
November 2019 | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | (per share) | $ 0.75 | $ 0.28 |
Term (Years) | 5 years | 5 years |
Number of warrants issued and outstanding (in shares) | 8,552,630 | 8,552,630 |
November 2019 | Emerald Health Therapeutics, Inc. | ||
Class of Warrant or Right [Line Items] | ||
Number of EHT warrants outstanding (in shares) | 4,385,965 | 4,385,965 |
December 2019 | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | (per share) | $ 0.385 | $ 0.14 |
Term (Years) | 5 years | 5 years |
Number of warrants issued and outstanding (in shares) | 10,087,236 | 10,087,236 |
December 2019 | Emerald Health Therapeutics, Inc. | ||
Class of Warrant or Right [Line Items] | ||
Number of EHT warrants outstanding (in shares) | 5,172,942 | 5,172,942 |
February 2020 | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | (per share) | $ 0.385 | $ 0.14 |
Term (Years) | 5 years | 5 years |
Number of warrants issued and outstanding (in shares) | 14,813,272 | 14,813,272 |
February 2020 | Emerald Health Therapeutics, Inc. | ||
Class of Warrant or Right [Line Items] | ||
Number of EHT warrants outstanding (in shares) | 7,596,551 | 7,596,551 |
February 2020 | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | (per share) | $ 0.385 | $ 0.14 |
Term (Years) | 5 years | 5 years |
Number of warrants issued and outstanding (in shares) | 5,359,137 | 5,359,137 |
February 2020 | Emerald Health Therapeutics, Inc. | ||
Class of Warrant or Right [Line Items] | ||
Number of EHT warrants outstanding (in shares) | 2,748,276 | 2,748,276 |
June 2020 | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | (per share) | $ 0.27 | $ 0.10 |
Term (Years) | 5 years | 5 years |
Number of warrants issued and outstanding (in shares) | 22,135,132 | 22,135,132 |
June 2020 | Emerald Health Therapeutics, Inc. | ||
Class of Warrant or Right [Line Items] | ||
Number of EHT warrants outstanding (in shares) | 11,351,351 | 11,351,351 |
Acquisition of Emerald Healt_10
Acquisition of Emerald Health Therapeutics, Inc. - Schedule of Fair Value Measurement Inputs and Valuation Techniques (Details) - Emerald Health Therapeutics, Inc. | 9 Months Ended |
Sep. 30, 2022 | |
Stock options | |
Class of Warrant or Right [Line Items] | |
Dividend yield | 0% |
Volatility, minimum | 89.45% |
Volatility, maximum | 126.82% |
Risk-free interest rate, minimum | 2.79% |
Risk-free interest rate, maximum | 4.25% |
Minimum | Stock options | |
Class of Warrant or Right [Line Items] | |
Expected term (years) | 21 days |
Maximum | Stock options | |
Class of Warrant or Right [Line Items] | |
Expected term (years) | 4 years 11 months 8 days |
Dividend yield | EHT Warrants | |
Class of Warrant or Right [Line Items] | |
Warrants and rights outstanding measurement input | 0 |
Volatility factor | EHT Warrants | Minimum | |
Class of Warrant or Right [Line Items] | |
Warrants and rights outstanding measurement input | 1.006 |
Volatility factor | EHT Warrants | Maximum | |
Class of Warrant or Right [Line Items] | |
Warrants and rights outstanding measurement input | 1.204 |
Risk-free interest rate | EHT Warrants | Minimum | |
Class of Warrant or Right [Line Items] | |
Warrants and rights outstanding measurement input | 0.0396 |
Risk-free interest rate | EHT Warrants | Maximum | |
Class of Warrant or Right [Line Items] | |
Warrants and rights outstanding measurement input | 0.0423 |
Expected term (years) | EHT Warrants | Minimum | |
Class of Warrant or Right [Line Items] | |
Expected term (years) | 8 months 1 day |
Expected term (years) | EHT Warrants | Maximum | |
Class of Warrant or Right [Line Items] | |
Expected term (years) | 2 years 4 months 17 days |
Warrants and Derivative Liabi_3
Warrants and Derivative Liabilities - Schedule of Warrants Vested and Outstanding (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2022 | Aug. 31, 2020 | |
Class of Warrant or Right [Line Items] | ||
Number of Warrants Vested and Outstanding (in shares) | 136,187,225 | |
Pre 2015 Common Stock Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 1 | |
Term (Years) | 10 years | |
Number of Warrants Vested and Outstanding (in shares) | 1,110,000 | |
2015 Common Stock Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 5 | |
Term (Years) | 10 years | |
Number of Warrants Vested and Outstanding (in shares) | 100,000 | |
2016 Common Stock Warrants to Service Providers | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 1.15 | |
Term (Years) | 10 years | |
Number of Warrants Vested and Outstanding (in shares) | 40,000 | |
2018 Emerald Financing Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 0.10 | $ 0.10 |
Term (Years) | 5 years | |
Number of Warrants Vested and Outstanding (in shares) | 3,400,000 | |
Emerald Multi-Draw Credit Agreement Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 0.50 | |
Term (Years) | 5 years | |
Number of Warrants Vested and Outstanding (in shares) | 7,500,000 | |
2019 Common Stock Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 0.35 | |
Term (Years) | 5 years | |
Number of Warrants Vested and Outstanding (in shares) | 8,000,000 | |
2020 Common Stock Warrants to Placement Agent | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 0.08 | |
Term (Years) | 5 years | |
Number of Warrants Vested and Outstanding (in shares) | 8,166,667 | |
2021 Inducement Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 0.15 | |
Term (Years) | 5 years | |
Number of Warrants Vested and Outstanding (in shares) | 21,166,667 | |
2021 Inducement Warrants to Placement Agent | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 0.19 | |
Term (Years) | 5 years | |
Number of Warrants Vested and Outstanding (in shares) | 1,481,667 | |
2021 Common Stock Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 0.09 | |
Term (Years) | 5 years | |
Number of Warrants Vested and Outstanding (in shares) | 77,777,779 | |
2021 Common Stock Warrants to Placement Agent | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 0.11 | |
Term (Years) | 5 years | |
Number of Warrants Vested and Outstanding (in shares) | 5,444,445 | |
2022 Common Stock Warrants to Service Provider | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 0.04 | |
Term (Years) | 2 years | |
Number of Warrants Vested and Outstanding (in shares) | 2,000,000 |
Warrants and Derivative Liabi_4
Warrants and Derivative Liabilities - Narrative (Details) - 2022 Common Stock Warrants to Service Provider - USD ($) | 9 Months Ended | |
Apr. 01, 2022 | Sep. 30, 2022 | |
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 0.04 | |
Term of warrant (in years) | 2 years | |
Warrants Granted To Service Provider | ||
Class of Warrant or Right [Line Items] | ||
Number of shares issued in transaction (in shares) | 2,000,000 | |
Fair value of warrants | $ 35,688 | |
Exercise price (in dollars per share) | $ 0.04 | |
Term of warrant (in years) | 1 year |
Warrants and Derivative Liabi_5
Warrants and Derivative Liabilities - Schedule of Input and Valuation Techniques Used to Value Warrant Liabilities (Details) | Sep. 30, 2022 $ / shares | Apr. 01, 2022 $ / shares | Dec. 31, 2021 $ / shares |
2018 Emerald Financing Warrants | |||
Class of Warrant or Right [Line Items] | |||
Underlying common stock price (in dollars per share) | $ 0.03 | $ 0.05 | |
Dividend yield | 2022 Common Stock Warrants to Service Provider | |||
Class of Warrant or Right [Line Items] | |||
Warrants and rights outstanding measurement input | 0 | ||
Dividend yield | 2018 Emerald Financing Warrants | |||
Class of Warrant or Right [Line Items] | |||
Warrants and rights outstanding measurement input | 0 | 0 | |
Volatility factor | 2022 Common Stock Warrants to Service Provider | |||
Class of Warrant or Right [Line Items] | |||
Warrants and rights outstanding measurement input | 1.185 | ||
Volatility factor | 2018 Emerald Financing Warrants | |||
Class of Warrant or Right [Line Items] | |||
Warrants and rights outstanding measurement input | 0.933 | 1.265 | |
Risk-free interest rate | 2022 Common Stock Warrants to Service Provider | |||
Class of Warrant or Right [Line Items] | |||
Warrants and rights outstanding measurement input | 0.0192 | ||
Risk-free interest rate | 2018 Emerald Financing Warrants | |||
Class of Warrant or Right [Line Items] | |||
Warrants and rights outstanding measurement input | 0.0279 | 0.0043 | |
Expected term (years) | 2022 Common Stock Warrants to Service Provider | |||
Class of Warrant or Right [Line Items] | |||
Expected term (years) | 1 year 3 months 7 days | ||
Expected term (years) | 2018 Emerald Financing Warrants | |||
Class of Warrant or Right [Line Items] | |||
Expected term (years) | 4 months 17 days | 1 year 1 month 17 days | |
Underlying common stock price | 2022 Common Stock Warrants to Service Provider | |||
Class of Warrant or Right [Line Items] | |||
Underlying common stock price (in dollars per share) | $ 0.04 |
Warrants and Derivative Liabi_6
Warrants and Derivative Liabilities - Schedule of Derivative Liability Activity (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value Of Derivative Liabilities [Roll Forward] | ||
Fair Value of Derivative Liabilities, beginning | $ 59,732 | $ 38,567 |
Fair Value of Derivative Liability | 0 | 0 |
Change in Fair Value of Derivative Liability | (59,406) | 169,349 |
Reclassification of Derivative to Equity | 0 | 0 |
Fair Value of Derivative Liabilities, ending | 326 | 207,916 |
Emerald Financing - warrant liability | ||
Fair Value Of Derivative Liabilities [Roll Forward] | ||
Fair Value of Derivative Liabilities, beginning | 59,732 | 38,567 |
Fair Value of Derivative Liability | 0 | 0 |
Change in Fair Value of Derivative Liability | (59,406) | 169,349 |
Reclassification of Derivative to Equity | 0 | 0 |
Fair Value of Derivative Liabilities, ending | $ 326 | $ 207,916 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - Multi-Draw Credit Agreement - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Debt Instrument [Line Items] | ||
Total principal value of convertible debt—related party | $ 2,464,500 | |
Total carrying value of advances under the multi-draw credit agreement | $ 2,455,371 | $ 1,974,905 |
Convertible debt | ||
Debt Instrument [Line Items] | ||
Conversion Price (in dollars per share) | $ 0.40 | |
Total principal value of convertible debt—related party | $ 2,014,500 | 2,014,500 |
Unamortized debt discount | (8,535) | (487,668) |
Unamortized debt issuance costs | (594) | (1,927) |
Total carrying value of advances under the multi-draw credit agreement | 2,005,371 | 1,524,905 |
Non-convertible debt | ||
Debt Instrument [Line Items] | ||
Total carrying value of advances under the multi-draw credit agreement | $ 450,000 | $ 450,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 9 Months Ended | |||||||
Feb. 28, 2022 USD ($) | Sep. 15, 2021 $ / shares | Sep. 30, 2022 USD ($) | Nov. 14, 2022 business_day | Nov. 10, 2022 | Oct. 17, 2022 | Oct. 05, 2022 business_day | Dec. 31, 2021 USD ($) | |
Debt Instrument [Line Items] | ||||||||
Prepaid expenses | $ 708,477 | $ 554,217 | ||||||
Insurance premium loan payable | 30,615 | $ 0 | ||||||
Subsequent Event | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate (as a percent) | 5% | 12% | ||||||
Insurance Premium Loan Payable | Loans Payable | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt, face amount | $ 275,537 | |||||||
Monthly installment amount | $ 31,149 | |||||||
Interest rate (as a percent) | 4.17% | |||||||
Prepaid expenses | 132,028 | |||||||
Insurance premium loan payable | $ 30,615 | |||||||
Multi-Draw Credit Agreement | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate percentage (as a percent) | 7% | |||||||
Debt default interest rate spread (as a percent) | 10% | |||||||
Warrant coverage on the debt facility (as a percent) | 50% | |||||||
Term of warrant (in years) | 5 years | |||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.50 | |||||||
Unamortized debt discount period (in years) | 3 days | |||||||
Fair value of shares underlying convertible debt | $ 130,943 | |||||||
Multi-Draw Credit Agreement | Subsequent Event | ||||||||
Debt Instrument [Line Items] | ||||||||
Grace period (in days) | business_day | 30 | 30 |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Disclosure [Abstract] | ||||
Related party interest expense – stated rate | $ 44,086 | $ 44,086 | $ 130,824 | $ 130,824 |
Insurance premium loan payable - stated rate | 1,602 | 0 | 4,273 | 0 |
Interest Expense, Debt | 0 | 0 | 0 | 445 |
Non-cash interest expense: | ||||
Amortization of debt discount | 165,082 | 150,852 | 479,133 | 437,834 |
Amortization of transaction costs | 459 | 420 | 1,333 | 1,219 |
Interest expense | $ 211,229 | $ 195,358 | $ 615,563 | $ 570,322 |
Stockholders' Equity and Capi_2
Stockholders' Equity and Capitalization (Details) - USD ($) | 9 Months Ended | ||
Mar. 02, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Equity [Line Items] | |||
Common stock issued for services (in shares) | 150,000 | ||
Prefunded Warrants | |||
Equity [Line Items] | |||
Warrants exercised (in shares) | 19,666,667 | ||
Intrinsic value of warrant exercises | $ 1,178,033 | ||
Exercise warrant (in shares) | 19,666,667 | ||
Proceeds from warrant exercises | $ 1,967 | $ 11,800 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Jun. 14, 2022 | Dec. 14, 2021 | Jun. 30, 2022 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in dollars per share) | $ 0.04 | |||
Granted (in shares) | 4,350,000 | |||
Amount of unrecognized compensation cost | $ 1,217,236 | |||
Recognized weighted average period (in years) | 3 years 7 months 24 days | |||
Jim Heppell | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in dollars per share) | $ 0.04 | |||
Granted (in shares) | 4,000,000 | |||
Stock options | First Tranche | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total amount of unrecognized compensation cost | $ 73,368 | |||
Stock options | First Tranche | Jim Heppell | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Issued percentage (as a percent) | 50% | |||
Stock options | Second Tranche | Jim Heppell | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Issued percentage (as a percent) | 50% | |||
Omnibus Incentive Plan 2014 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of authorized shares reserved for future grants (in shares) | 91,219,570 | |||
Percent increase of shares | 5% | |||
Number of shares reserved for future grants (in shares) | 47,514,820 | |||
Omnibus Incentive Plan 2014 | Restricted Stock Units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Issued percentage (as a percent) | 33% | |||
Vesting period (in years) | 3 years | |||
Granted (in shares) | 4,000,000 | |||
Granted (in dollars per share) | $ 0.06 | |||
2022 Employee Stock Purchase Plan | Employee Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percent discount (as a percent) | 15% | |||
Percent limit (as a percent) | 15% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | |
Number of Shares | ||
Balance at the beginning (in shares) | 35,405,000 | |
Granted (in shares) | 4,350,000 | |
Exercised (in shares) | 0 | |
Cancelled (in shares) | (321,250) | |
Forfeited (in shares) | (1,678,750) | |
Balance at the ending (in shares) | 37,755,000 | 35,405,000 |
Exercisable (in shares) | 14,782,500 | |
Weighted Average Exercise Price | ||
Balance outstanding (in dollars per share) | $ / shares | $ 0.07 | $ 0.07 |
Granted (in dollars per share) | $ / shares | 0.04 | |
Exercised (in dollars per share) | $ / shares | 0 | |
Cancelled (in dollars per share) | $ / shares | 0.06 | |
Forfeited (in dollars per share) | $ / shares | 0.08 | |
Exercisable (in dollars per share) | $ / shares | $ 0.08 | |
Weighted Average Remaining Contractual Term (Years) | ||
Weighted Average Remaining Contractual Term (Years) | 8 years 5 months 12 days | 9 years 29 days |
Weighted Average Remaining Contractual Term, Exercisable | 7 years 9 months 21 days | |
Aggregate Intrinsic Value | $ | $ 0 | $ 134,750 |
Aggregate Intrinsic Value, Exercisable | $ | $ 0 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Assumptions of Stock Option Granted (Details) - Stock options - Omnibus Incentive Plan 2014 | 9 Months Ended |
Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 126.30% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 2.89% |
Expected term (years) | 5 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 132.60% |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate | 3.60% |
Expected term (years) | 6 years 29 days |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Restricted Stock Activity (Details) - Restricted Stock | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Number of Shares | |
Unvested, beginning balance (in shares) | shares | 150,000 |
Released (in shares) | shares | (150,000) |
Unvested, ending balance (in shares) | shares | 0 |
Weighted Average Grant Date Fair Value | |
Unvested, beginning balance (in dollars per share) | $ / shares | $ 0.13 |
Released (in dollars per share) | $ / shares | 0.13 |
Unvested, ending balance (in dollars per share) | $ / shares | $ 0 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 144,124 | $ 488,973 | $ 425,846 | $ 747,252 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 23,966 | 17,986 | 64,507 | 37,350 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 120,158 | $ 470,987 | $ 361,339 | $ 709,902 |
Significant Contracts - Unive_2
Significant Contracts - University of Mississippi (Details) - University Of Mississippi $ in Thousands | 1 Months Ended | ||||
May 24, 2019 USD ($) | Mar. 31, 2020 USD ($) | Jul. 31, 2018 | Jan. 31, 2017 USD ($) | Sep. 30, 2022 milestone | |
Um 5050 Pro-Drug And Um 8930 Analog Agreements | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Annual maintenance fee payable | $ 75 | ||||
Term of agreement | 1 year | ||||
Royalty obligation, expiration term (in years) | 10 years | ||||
Notice period for termination (in days) | 60 days | ||||
Number of milestones met | milestone | 0 | ||||
Um 5050 Pro-Drug And Um 8930 Analog Agreements | Milestone 1 | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Aggregate milestone payments if milestones achieved | $ 100 | ||||
Term of agreement | 30 days | ||||
Um 5050 Pro-Drug And Um 8930 Analog Agreements | Milestone 2 | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Aggregate milestone payments if milestones achieved | $ 200 | ||||
Term of agreement | 30 days | ||||
Um 5050 Pro-Drug And Um 8930 Analog Agreements | Milestone 3 | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Aggregate milestone payments if milestones achieved | $ 400 | ||||
Term of agreement | 30 days | ||||
UM 5050 pro-drug agreements | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Payment for upfront fees | $ 100 | ||||
UM 8930 analogue agreements | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Payment for upfront fees | $ 200 | ||||
Annual fees for license agreement | $ 200 | ||||
UM 5070 license agreement | |||||
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items] | |||||
Annual maintenance fee payable | $ 25 | ||||
Annual fees for license agreement | 65 | ||||
Aggregate milestone payments if milestones achieved | $ 700 | ||||
Royalty obligation, expiration term (in years) | 10 years |
Related Party Matters (Details)
Related Party Matters (Details) | 3 Months Ended | 4 Months Ended | 9 Months Ended | ||||||||
May 18, 2022 USD ($) shares | Mar. 01, 2022 USD ($) | Feb. 28, 2022 USD ($) | Oct. 11, 2021 USD ($) | Dec. 19, 2019 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Apr. 30, 2021 agreement | Sep. 30, 2022 USD ($) shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Related Party Transaction [Line Items] | |||||||||||
Granted (in shares) | shares | 4,350,000 | ||||||||||
Research and development expense | $ 1,781,724 | $ 327,731 | $ 4,474,531 | $ 1,818,059 | |||||||
Exclusive Sponsored Research Agreement | EHBE | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Initial term of research agreement (in years) | 1 year | ||||||||||
Prepaid expenses - related party | 50,000 | 50,000 | $ 5,376 | ||||||||
Annual retainer amount | $ 200,000 | ||||||||||
Research and development expense | 50,000 | 150,000 | |||||||||
Renewal term of research agreement (in years) | 1 year | ||||||||||
Notice period for termination (in days) | 60 days | ||||||||||
ESRA Agreement, Screening Platform For Anteroposterior Ocular Diseases | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Accounts payable | 63,916 | 63,916 | |||||||||
Research and development expense | 47,000 | 167,000 | |||||||||
Accrued expenses | 54,835 | 54,835 | |||||||||
ESRA Agreement, Screening Platform For Anteroposterior Ocular Diseases | EHBE | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Annual retainer amount | $ 190,500 | ||||||||||
Consulting Agreement | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Accounts payable | 10,779 | 10,779 | |||||||||
Dr. Avtar Dhillon | Independent Contractor Agreement | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Fees incurred under agreement | 30,000 | 90,000 | |||||||||
Accrued expense under agreement | $ 0 | $ 73,678 | $ 87,926 | $ 143,278 | |||||||
Prepaid expenses - related party | $ 8,056 | ||||||||||
Jim Heppell | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Granted (in shares) | shares | 4,000,000 | ||||||||||
Jim Heppell | Emerald Health Sciences | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Ownership (as a percentage) | 23% | 23% | |||||||||
Jim Heppell | Emerald Health Pharmaceuticals, Inc. | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Ownership (as a percentage) | 48% | 48% | |||||||||
Independent Contractor Services Agreement | Dr. Avtar Dhillon | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Monthly fee | $ 10,000 | ||||||||||
Related party expenses | $ 0 | $ 0 | |||||||||
Independent Contractor Services Agreement | Jim Heppell | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Monthly fee | $ 6,300 | ||||||||||
Initial term of research agreement (in years) | 1 year | ||||||||||
Rights and obligations, renewal term (in year) | 1 year | ||||||||||
Termination terms, period following uncured breach (in days) | 60 days | ||||||||||
Increase In monthly fee | $ 16,600 | ||||||||||
Granted (in shares) | shares | 4,000,000 | ||||||||||
Severance expense | 0 | 75,600 | |||||||||
Accounts payable | 6,300 | 6,300 | |||||||||
Other current liabilities | $ 47,555 | 47,555 | |||||||||
Collaborative Research Agreement | Emerald Health Biotechnology Espana, S.L.U. | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Initial term of research agreement (in years) | 1 year | ||||||||||
Termination terms, period following uncured breach (in days) | 45 days | ||||||||||
Number of collaborative research agreements | agreement | 2 | ||||||||||
Collaborative Research Agreement | Emerald Health Biotechnology Espana, S.L.U. | Emerald Health Research, Inc | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Subsidiary ownership (as a percent) | 100% | ||||||||||
Consulting Agreement | Dr. Avtar Dhillon | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Fees incurred under agreement | $ 8,595 | ||||||||||
Consulting Agreement | Immediate Family Member of Management or Principal Owner | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Annual rate per hour | $ 73 | ||||||||||
Termination notice period (in days) | 15 days |
Commitment and Contingencies -
Commitment and Contingencies - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 01, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Renewal option term (in years) | 2 years | ||||
Rent abatement term (in months) | 2 months | ||||
Initial monthly rent | $ 8,067 | ||||
Annual rent increase percentage (as a percent) | 3% | ||||
Lease expense | $ 22,675 | $ 7,558 | $ 68,026 | $ 7,558 |
Commitment and Contingencies _2
Commitment and Contingencies - Weighted Average Remaining Lease Term and Discount Rate (Details) | Sep. 30, 2022 |
Commitments and Contingencies Disclosure [Abstract] | |
Weighted-average remaining term – operating lease (in years) | 1 year 29 days |
Weighted-average discount rate – operating lease | 12% |
Commitment and Contingencies _3
Commitment and Contingencies - Schedule of Future Minimum Lease Payments (Details) | Sep. 30, 2022 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2022 | $ 24,686 |
2023 | 83,093 |
Total future minimum lease payments: | 107,779 |
Less imputed interest | (7,196) |
Total | $ 100,583 |
Commitment and Contingencies _4
Commitment and Contingencies - Current and Noncurrent Portions of Operating Lease (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease liability | $ 92,356 | $ 82,372 |
Operating lease liability, net of current portion | 8,227 | $ 78,700 |
Total lease liability | $ 100,583 |
Subsequent Events (Details)
Subsequent Events (Details) | 3 Months Ended | ||
Nov. 10, 2022 USD ($) installment | Oct. 17, 2022 USD ($) | Sep. 30, 2022 USD ($) | |
Emerald Health Therapeutics, Inc. | |||
Subsequent Event [Line Items] | |||
Working capital loan | $ 700,000 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Interest rate (as a percent) | 5% | 12% | |
Subsequent Event | Discontinued Operations, Disposed of by Sale | Sale Of Subsidiary | |||
Subsequent Event [Line Items] | |||
Aggregate purchase price | $ 9,312,000 | ||
Non-refundable deposit | 548,000 | ||
Amount paid | $ 6,026,000 | ||
Number of installments | installment | 3 | ||
Subsequent Event | Discontinued Operations, Disposed of by Sale | Sale Of Subsidiary | Total Installment | |||
Subsequent Event [Line Items] | |||
Amount paid | $ 913,000 | ||
Subsequent Event | Discontinued Operations, Disposed of by Sale | Sale Of Subsidiary | Installment Term One | |||
Subsequent Event [Line Items] | |||
Installment term | 18 months | ||
Basis spread | 1.55% | ||
Subsequent Event | Discontinued Operations, Disposed of by Sale | Sale Of Subsidiary | Installment Term Two | |||
Subsequent Event [Line Items] | |||
Installment term | 30 months | ||
Basis spread | 3.55% | ||
Subsequent Event | Discontinued Operations, Disposed of by Sale | Sale Of Subsidiary | Installment Term Three | |||
Subsequent Event [Line Items] | |||
Installment term | 42 months | ||
Basis spread | 5.55% | ||
Subsequent Event | Discontinued Operations, Disposed of by Sale | Sale Of Subsidiary | Installment Term Upon Prepayment | |||
Subsequent Event [Line Items] | |||
Basis spread | 1.55% | ||
Subsequent Event | Emerald Health Therapeutics, Inc. | |||
Subsequent Event [Line Items] | |||
Working capital loan | $ 700,000 |