Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 04, 2023 | |
Entity Addresses [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
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 $0.001 | |
Trading Symbol | SKYE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 971,549,608 | |
Entity Central Index Key | 0001516551 | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Former Address | ||
Entity Addresses [Line Items] | ||
Entity Address, Address Line One | 5910 Pacific Blvd | |
Entity Address, City or Town | San Diego | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92121 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and Cash Equivalents, at Carrying Value | $ 553,443 | $ 1,244,527 |
Restricted cash | 4,591 | 4,580 |
Prepaid expenses | 270,539 | 780,807 |
Assets held for sale | 0 | 6,432,216 |
Other current assets | 1,064,114 | 481,588 |
Total current assets | 1,892,687 | 8,943,718 |
Property, plant and equipment, net | 64,395 | 87,854 |
Operating lease right-of-use asset | 270,553 | 71,191 |
Other assets | 8,309 | 8,309 |
Total assets | 2,235,944 | 9,111,072 |
Current liabilities | ||
Accounts payable | 1,551,510 | 1,669,997 |
Accounts payable - related parties | 108,301 | 124,901 |
Accrued interest - related party | 0 | 15,814 |
Accrued payroll liabilities | 913,932 | 657,734 |
Insurance premium loan payable | 90,615 | 55,451 |
Other current liabilities | 849,333 | 1,366,994 |
Other current liabilities - related parties | 1,772 | 95,850 |
Estimate for legal contingency | 6,235,639 | 6,205,310 |
Convertible multi-draw credit agreement - related party | 0 | 1,848,375 |
Operating lease liability, current portion | 65,452 | 78,700 |
Total current liabilities | 9,816,554 | 12,119,126 |
Non-current liabilities | ||
Operating lease liability, net of current portion | 208,588 | 0 |
Total liabilities | 10,025,142 | 12,119,126 |
Commitments and contingencies (Note 12) | ||
Stockholders’ deficit | ||
Preferred stock, $0.001 par value; 50,000,000 shares authorized at June 30, 2023 and December 31, 2022; no shares issued and outstanding at June 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock, $0.001 par value; 5,000,000,000 shares authorized at June 30, 2023 and December 31, 2022; 971,549,608 and 913,528,958 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 971,549 | 913,528 |
Additional paid-in-capital | 66,256,038 | 62,816,183 |
Accumulated deficit | (75,016,785) | (66,737,765) |
Total stockholders’ deficit | (7,789,198) | (3,008,054) |
Total liabilities and stockholders’ deficit | $ 2,235,944 | $ 9,111,072 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
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) | 971,549,608 | 913,528,958 |
Common stock, shares outstanding (in shares) | 971,549,608 | 913,528,958 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating expenses | ||||
Research and development | $ 1,788,434 | $ 1,427,154 | $ 2,973,314 | $ 2,692,807 |
General and administrative | 1,206,405 | 1,791,206 | 3,121,683 | 3,413,575 |
Gain (Loss) Related to Litigation Settlement | (151,842) | 0 | 151,842 | 0 |
Total operating expenses | 2,842,997 | 3,218,360 | 5,943,155 | 6,106,382 |
Operating loss | (2,842,997) | (3,218,360) | (5,943,155) | (6,106,382) |
Other expense | ||||
Change in fair value of derivative liability | 0 | (9,523) | (3) | (53,178) |
Interest expense | 186,429 | 205,300 | 204,828 | 404,332 |
Interest income | (8,598) | 0 | (33,112) | 0 |
Loss from divestiture of asset | 0 | 0 | 307,086 | 0 |
Debt conversion inducement expense | 0 | 0 | 1,383,285 | 0 |
Wind-down costs | 87,072 | 0 | 470,181 | 0 |
Total other expense, net | 264,903 | 195,777 | 2,332,265 | 351,154 |
Loss before income taxes | (3,107,900) | (3,414,137) | (8,275,420) | (6,457,536) |
Provision for income taxes | 3,600 | 5,141 | 3,600 | 5,141 |
Net loss | $ (3,111,500) | $ (3,419,278) | $ (8,279,020) | $ (6,462,677) |
Loss per common share: | ||||
Basic (in dollars per share) | $ 0 | $ (0.01) | $ (0.01) | $ (0.01) |
Diluted (in dollars per share) | $ 0 | $ (0.01) | $ (0.01) | $ (0.01) |
Weighted average shares of common stock outstanding used to compute earnings per share: | ||||
Basic (in shares) | 971,549,608 | 495,925,112 | 956,804,028 | 495,874,560 |
Diluted (in shares) | 971,549,608 | 495,925,112 | 956,804,028 | 495,874,560 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (8,279,020) | $ (6,462,677) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 67,091 | 54,661 |
Stock-based compensation expense | 234,450 | 281,722 |
Change in fair value of derivative liability | (3) | (53,178) |
Amortization of debt discount | 0 | 314,925 |
Estimate for legal contingency | 30,329 | 0 |
Loss from divestiture of asset | 307,086 | 0 |
Debt conversion inducement expense | 1,383,285 | 0 |
Accrued interest conversion expense | (15,952) | 0 |
Foreign currency remeasurement gain | (45,350) | 0 |
Changes in assets and liabilities: | ||
Prepaid expenses | 714,152 | (41,674) |
Prepaid expenses - related party | 0 | 13,432 |
Other current assets | (432,975) | (56,316) |
Other current assets - related party | 0 | (12,655) |
Accounts payable | (118,487) | (34,022) |
Accounts payable - related parties | (16,600) | 105,107 |
Accrued interest - related party | 0 | 86,736 |
Accrued payroll liabilities | 256,198 | 5,798 |
Operating lease liability | (45,794) | (39,722) |
Other current liabilities | (28,995) | (33,764) |
Other current liabilities - related parties | (94,078) | 55,668 |
Net cash used in operating activities | (6,052,759) | (5,815,959) |
Cash flows from investing activities: | ||
Proceeds from asset sale, net of legal expenses | 5,532,266 | 0 |
Asset acquisition costs | 0 | (80,830) |
Purchase of property and equipment | (1,860) | (5,212) |
Net cash provided by (used in) investing activities | 5,530,406 | (86,042) |
Cash flows from financing activities: | ||
Repayment of insurance premium loan payable | (168,720) | (153,076) |
Net cash used in financing activities | (168,720) | (151,109) |
Net increase (decrease) in cash and restricted cash | (691,073) | (6,053,110) |
Cash, cash equivalents and restricted cash, beginning of period | 1,249,107 | 8,987,578 |
Cash, cash equivalents and restricted cash, end of period | 558,034 | 2,934,468 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents | 553,443 | 2,929,895 |
Restricted cash | 4,591 | 4,573 |
Total cash, cash equivalents and restricted cash shown in the condensed consolidated statements of cash flows | 558,034 | 2,934,468 |
Cash paid during the period for: | ||
Interest | 8,533 | 2,669 |
Income taxes | 8,741 | 5,141 |
Supplemental disclosures of non-cash financing activities: | ||
Common stock warrant exercises | 282,905 | 0 |
Conversion of multi-draw credit agreement | 1,565,470 | 0 |
Conversion of accrued interest due to related party | 31,766 | 0 |
Purchases of property and equipment in other current liabilities | 0 | 761,364 |
Financing of insurance premium | 203,884 | 275,537 |
Release of share liability to additional paid-in-capital | 0 | 13,000 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | 241,134 | 0 |
Prefunded Warrants | ||
Cash flows from financing activities: | ||
Proceeds from pre-funded warrant exercises | $ 0 | $ 1,967 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIT) EQUITY (UNAUDITED) - 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, 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] | ||||||||||
Net loss | (6,462,677) | |||||||||
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) | ||||||
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) | ||||||
Beginning balance (in shares) at Dec. 31, 2022 | 913,528,958 | |||||||||
Beginning balance at Dec. 31, 2022 | (3,008,054) | $ 913,528 | 62,816,183 | (66,737,765) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock-based compensation expense (in shares) | 0 | |||||||||
Stock-based compensation expense | 131,579 | $ 0 | 131,579 | |||||||
Exercise warrant (in shares) | 16,641,486 | |||||||||
Exercise warrant | $ 282,905 | $ 16,642 | $ 266,263 | |||||||
Stock issued during period, shares, conversion of convertible securities | 41,379,164 | |||||||||
Conversion of multi-draw credit agreement - related party and accrued interest | 2,980,521 | $ 41,379 | 2,939,142 | |||||||
Net loss | (5,167,520) | (5,167,520) | ||||||||
Ending balance (in shares) at Mar. 31, 2023 | 971,549,608 | |||||||||
Ending balance at Mar. 31, 2023 | (4,780,569) | $ 971,549 | 66,153,167 | (71,905,285) | ||||||
Beginning balance (in shares) at Dec. 31, 2022 | 913,528,958 | |||||||||
Beginning balance at Dec. 31, 2022 | (3,008,054) | $ 913,528 | 62,816,183 | (66,737,765) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net loss | (8,279,020) | |||||||||
Ending balance (in shares) at Jun. 30, 2023 | 971,549,608 | |||||||||
Ending balance at Jun. 30, 2023 | (7,789,198) | $ 971,549 | 66,256,038 | (75,016,785) | ||||||
Beginning balance (in shares) at Mar. 31, 2023 | 971,549,608 | |||||||||
Beginning balance at Mar. 31, 2023 | (4,780,569) | $ 971,549 | 66,153,167 | (71,905,285) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock-based compensation expense | 102,871 | 102,871 | ||||||||
Net loss | (3,111,500) | (3,111,500) | ||||||||
Ending balance (in shares) at Jun. 30, 2023 | 971,549,608 | |||||||||
Ending balance at Jun. 30, 2023 | $ (7,789,198) | $ 971,549 | $ 66,256,038 | $ (75,016,785) |
Nature of Operations and Busine
Nature of Operations and Business Activities | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Nature of Operations and Business Activities | Nature of Operations and Business Activities Nature of Operations Skye Bioscience, Inc. (the “Company” or “Skye”) was incorporated in Nevada on March 16, 2011. The Company is a clinical stage pharmaceutical company focused on the discovery, development and commercialization of novel classes of therapeutic drugs to modulate the endocannabinoid system, which has been shown to play a vital role in overall human health and, notably, in multiple ocular indications. We are developing drugs with novel mechanisms of action through our own research efforts and multiple license agreements. 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”). In addition, on November 10, 2022, EHT entered into a share purchase agreement with a third party for the sale of EHT's subsidiary, Verdélite Sciences, Inc. ("VDL") for an aggregate purchase price of $9,451,233, subject to certain adjustments (the “Verdélite SPA"). The sale of VDL closed on February 9, 2023 and completes the divestiture of EHT's most significant asset (Note 3). As of June 30, 2023, the Company has devoted substantially all its efforts to securing product licenses, carrying out its own research and development, preparing for and conducting clinical trials, 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 June 30, 2023, had a working capital deficit of $7,923,867 and an accumulated deficit of $75,016,785. As of June 30, 2023, the Company had unrestricted cash in the amount of $553,443. For the three and six months ended June 30, 2023 and 2022, the Company incurred losses from operations of $2,842,997 and $3,218,360, and $5,943,155 and $6,106,382, respectively. For the three and six months ended June 30, 2023 and 2022, the Company incurred net losses of $3,111,500 and $3,419,278, and $8,279,020 and $6,462,677, respectively. The Company expects to continue to incur significant losses through the end of 2023 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. During the six months ended June 30, 2023, management has implemented cost cutting measures to extend its cash runway while searching for additional financing. These measures have included the deferral of payments to employees, the postponement of certain nonclinical studies, a hold on non-essential travel and hiring, and the deferral of certain operational contracts. Based on the Company’s expected cash requirements, without obtaining immediate near term funding, it will not have enough funds to continue clinical studies or operations. These conditions, including the uncertainty of our ability to successfully resolve our litigation with Cunning (as described below), 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. During the quarter ended June 30, 2023, the Company met its operational funding requirements through its cost cutting measures, including the termination of consulting agreements. In 2023, the Company will continue with the liquidation of EHT's assets, including the sale of the real-estate held by Avalite Sciences, Inc. ("AVI") and explore additional financing options. However, the Company cannot provide any assurances that such additional funds will be available on reasonable terms in sufficient time for us to continue operations, or at all. If the Company raises additional funds by issuing equity securities, dilution to existing stockholders would result. Further, in January 2023, the Company was subject to an unfavorable outcome in a lawsuit with a former employee which resulted in the recognition of an estimated legal contingency of $6,205,310. The Company strongly believes that this case was incorrectly decided as to liability, the amount of compensatory damages, and the appropriateness and amount of punitive damages. The Company intends to vigorously challenge the verdict in the trial court and appeal and pursue reimbursement under its existing insurance policies. However, the outcome of the litigation and the amount recoverable under its existing insurance policies, if any, is inherently uncertain (Note 12). The legal contingency that the Company recorded in connection with the jury verdict has had a significant negative effect on our business, including our ability to obtain funding. If the Company is unable to reduce the verdict prior to the rendering of a final judgment by the court or to reach a reasonable settlement with Ms. Cunning, the Company would be liable to pay substantial damages in excess of the Company's liquid assets. In addition, in connection with certain post-trial motions and an appeal, the court granted the Company's request for a stay of enforcement of the judgment pending post-trial motions and appeal conditioned on the Company posting a bond in the amount of $9,080,202 by August 10, 2023. For a further description of this litigation, see Note 12, " General Litigation and Disputes - Wendy Cunning vs. Skye Bioscience, Inc." to the accompanying Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. Concurrent with the Cunning Lawsuit, the Company brought a lawsuit against its D&O carrier, Partner RE, challenging the previous denial of coverage and seeking damages and an order that Partner RE is obligated to reimburse the Company for the defense fees and costs incurred in the defense of the Cunning Lawsuit and requiring Partner RE to indemnify the Company for any settlement or judgment in the Cunning Lawsuit. On April 17, 2023, PartnerRe filed a motion to dismiss the Company's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). On June 20, 2023, the judge issued a final ruling in favor of the Company and denied Partner Re's motion to dismiss the lawsuit. In the ruling, the Court rejected Partner Re's primary basis for denying coverage. Based on this outcome, the Company is pursuing up to $5,000,000 in coverage less the deductible, to cover legal expenses incurred and the final verdict or settlement. For a further description of this litigation, see Note 12, " General Litigation and Disputes - Skye Bioscience, Inc. vs. Partner Re Ireland Insurance " to the accompanying Unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. On February 16, 2023, Emerald Health Sciences ("Sciences"), a related party (Note 11) exercised all of its outstanding warrants and agreed to offset the remaining principal balance plus accrued interest outstanding under the Amended and Restated Multi-Draw Credit Agreement (the “Amended Credit Agreement”) by the aggregate exercise price of $282,905 before converting the remaining balance of the Amended Credit Agreement in the amount of $1,597,236 (Notes 5 & 6). As of June 30, 2023, Sciences has no outstanding warrants or debt with the Company. Subsequent to the period ended June 30, 2023, on July 24, 2023, the Company entered into a loan agreement in the principal amount of $250,000 (the “Bridge Loan”) with MFDI, LLC. The Bridge Loan was obtained in order to provide bridge financing for the business to secure additional strategic financing (Note 13). The bridge loan bears interest at a rate of 9.5% per annum and is payable in 30 days. It is possible that the Company may encounter issues relating to supply chain inefficiencies, 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 the Company 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 clinical trials is being conducted in Europe and relies 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 for clinical studies. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
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, 2022, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein. The Unaudited 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 six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or any future periods. The Condensed Consolidated Balance Sheet as of December 31, 2022 was derived from the Company’s audited financial statements as of December 31, 2022, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2023. 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, 2022, which includes a broader discussion of the Company’s business and the risks inherent therein. Certain reclassifications have been made to the amounts in prior periods to conform to the current period’s presentation, primarily the separate classification of prepaid expenses, other current assets, insurance premium loan payable and other current liabilities. Such reclassifications did not have a material impact on the Unaudited Condensed Financial Statements. Assets Held for Sale On November 10, 2022, the Company completed the Acquisition of EHT in accordance with the Arrangement Agreement. At the time of the Acquisition there were arrangements in place to sell the acquired assets and liabilities that comprised of two of EHT's subsidiaries, Emerald Health Therapeutics Canada, Inc. ("EHTC") and VDL. As a result, EHTC and VDL were considered held for sale since the Acquisition and the Company has classified the associated assets of VDL as held for sale on the Condensed Consolidated Balance Sheets and the period costs related to both EHTC and VDL have been presented as wind-down costs in the Consolidated Statements of Operations. EHTC was divested on December 28, 2022 and VDL was divested on February 9, 2023 (see Note 3). During the quarter ended June 30, 2023 the Board approved a plan to pursue the sale of the real-estate held by AVI, which is substantially the only asset held by AVI. Assets meeting the held for sale criteria are classified as held for sale on the Condensed Consolidated Balance Sheets in subsequent periods until sold. Assets that meet the held for sale criteria are held for sale and reported at the lower of their carrying value or their fair value, less estimated costs to sell. Changes in fair value are recorded as a gain or loss in the results of operations but not to exceed the original carrying value. Due to the asset acquisition accounting on the date of the Acquisition AVI had no initial carrying value. Derecognition of Nonfinancial Assets The Company generally accounts for sales of nonfinancial assets that are outside the scope of our ordinary activities under ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets . Pursuant to ASC 610-20, the Company applies the guidance in ASC 606 to determine if a contract exists, identify the distinct nonfinancial assets, and determine when control transfers and, therefore, when to derecognize the nonfinancial asset. Additionally, the Company applies the measurement principles of ASC 606 to determine the amount of consideration, if any, to include in the calculation of the gain or loss for the sale of the nonfinancial asset. Refer to Note 3 for further information. Principles of Consolidation The accompanying consolidated financial statements as of June 30, 2023 include the accounts of the Company and its wholly owned subsidiaries SKYE Bioscience Pty Ltd (“SKYE Bioscience Australia“), EHT, AVI, and Nemus Sub. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the Unaudited 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 Unaudited 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, debt with embedded features, estimates related to the Company's estimation of the percentage of completion under its research and development contracts, contingent legal liabilities, fair value of assets acquired, 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, the need to obtain immediate funding to continue operations, 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, Canada, the European Union, and Australia and the Company’s ability to attract new funding. As noted above, in January 2023, the Company was subject to an unfavorable outcome in a lawsuit with a former employee which resulted in the recognition of an estimated legal contingency of $6,205,310. The Company intends to vigorously challenge the verdict in the trial court and appeal and pursue reimbursement under its existing insurance policies. However, the outcome of the litigation and the amount recoverable under its existing insurance policies, if any, is inherently uncertain (Note 12). Furthermore, the legal contingency the Company recorded in connection with the jury verdict and the uncertainty as to the Company's ability to reduce the verdict prior to the rendering of a final judgment by the court or to reach a reasonable settlement with Ms. Cunning could limit our ability to raise new capital from investors, and expand the Company's therapeutic pipeline, both of which are needed to operate the business and the Company would be liable to pay substantial damages in excess of the Company's liquid assets. 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. In periods with a reported net loss, such common stock equivalents are excluded from the calculation of diluted net loss per share of common stock if their effect is anti-dilutive. For additional information regarding the loss per share (see Note 9) Government Assistance The Company 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. The Company did not receive any tax rebates under the AusIndustry incentive program during the three and six months ended June 30, 2023 and June 30, 2022 related to incentives earned in the prior year. As of June 30, 2023 and December 31, 2022, the Company recognized $613,940 and $179,687, respectively, in other current assets in its Condensed Consolidated Balance Sheets. Commitments and Contingencies The Company follows ASC 440, Commitments and ASC 450, Contingencies , subtopic 450-20 to report accounting for contingencies and commitments respectively. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Based upon information available at this time, management believes that the current litigation matter related to the Cunning lawsuit will have a material adverse effect on the Company’s consolidated financial position, results of operations and cash flows. Refer to Note 12 for additional information. Recent Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued 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 beginning 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, 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 using a modified retrospective method of adoption. |
Acquisition of Emerald Health T
Acquisition of Emerald Health Therapeutics, Inc. | 6 Months Ended |
Jun. 30, 2023 | |
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 the Arrangement Agreement, as amended on June 14, 2022, July 15, 2022 and October 14, 2022 with EHT, pursuant to a plan of arrangement under the Business Corporations Act (British Columbia). The Acquisition was consummated on November 10, 2022 (the "Closing Date"). The primary purpose of the Acquisition was 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. EHT is currently in the final stages of liquidating substantially all of its remaining assets, including AVI (Note 13). As of June 30, 2023, the Company has divested both of EHT's former operating entities. In negotiating the Exchange Ratio, the Company performed a review of EHT's assets and the costs expected to wind down operations. The remaining wind-down costs consist primarily of legal fees related to divesting of EHT’s assets and post-closing general corporate matters, other professional fees for accounting and tax, tax payments, insurance, contract termination costs and operational costs through the cease operations date at each site. As of June 30, 2023, the Company estimates that EHT will incur an additional $179,660 in wind-down costs. However, there are inherent risks and uncertainties around the ultimate liquidation value of EHT. Divestiture of VDL On November 10, 2022, EHT and C3, a third-party, entered into the Verdélite SPA, as amended, effective November 8, 2022, pursuant to which C3 would acquire all of the outstanding shares of VDL, the holder of EHT's most significant real estate asset. On February 9, 2023, u pon closing the transactions contemplated by the Verdélite SPA, the Company sold all of the outstanding shares of VDL for an aggregate purchase price of approximately $9,451,233 . Prior to closing the Acquisition, EHT received a $557,705 cash deposit, which was considered in the sale as of the closing date. Upon closing, the Company received gross proceeds, net of legal and advisory fees as of the closing date of $5,532,266. The remainder of the purchase price will be paid as follows: (i) $377,100 will be payable in five (5) equal monthly installments payable on the last day of each month beginning on December 31, 2023 and ending April 30, 2024, with interest in accordance with the terms of the Verdélite SPA and (ii) $2,828,250 will be payable in three (3) equal installments on each of the 18-month, 30-month, and 42-month anniversaries of the VDL Closing Date, with interest in accordance with the terms of the Verdélite SPA. The Company recognized the sale of VDL when control transferred on February 9, 2023. In accordance with recognition guidance, the Company has determined to fully reserve for the remaining receivables and will record a gain on the sale when additional cash payments are received. For the six months ended June 30, 2023, the Company has recorded a loss on sale of $307,086 based on the difference between the carrying amount of the assets sold and the net cash proceeds. Sale of AVI On April 10, 2023, the Board approved a plan to sell AVI. AVI was listed for sale in May 2023 and the Company expects that the facility will be disposed of by either share transfer or asset sale by the end of the year. However, there are inherent uncertainties around the timing and realizable value of the disposal due to various market factors. |
Other Current Assets and Liabil
Other Current Assets and Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
Other Assets And Liabilities, Current [Abstract] | |
Other Current Assets and Liabilities | Other Current Assets and Liabilities Other current assets consist of the following: As of June 30, 2023 As of December 31, 2022 AusIndustry incentive $ 613,940 $ 179,687 Other tax receivables 133,518 — Short-term deposits 282,910 282,740 Total other current assets 33,746 19,161 $ 1,064,114 $ 481,588 Other current liabilities consist of the following: As of June 30, 2023 As of December 31, 2022 Research and development costs $ 129,044 $ 40,597 Legal fees 225,254 227,350 Deposit - Verdélite SPA — 553,800 Acquisition related contingent liability 188,231 134,896 Total other accrued liabilities 306,804 410,351 $ 849,333 $ 1,366,994 |
Warrants and Derivative Liabili
Warrants and Derivative Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
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. These judgements and estimates include assumptions regarding the Company’s future operating performance and the determination of the appropriate valuation methods. If the Company had made different assumptions, the fair value of the warrants could have been significantly different (Note 2). Warrants Warrants vested and outstanding as of June 30, 2023 are summarized as follows: Source Exercise Weighted Number of 2015 Common Stock Warrants $ 5.00 1.82 100,000 2016 Common Stock Warrants to Service Providers 1.15 3.34 40,000 2019 Common Stock Warrants 0.35 1.40 8,000,000 2020 Common Stock Warrants to Placement Agent 0.08 2.09 8,166,667 2021 Inducement Warrants 0.15 3.07 21,166,667 2021 Inducement Warrants to Placement Agent 0.19 3.07 1,481,667 2021 Common Stock Warrants 0.09 3.25 77,777,779 2021 Common Stock Warrants to Placement Agent 0.11 3.25 5,444,445 2022 Common Stock Warrants to Service Provider 0.04 0.76 2,000,000 November 2019 EHT Common Stock Warrants 0.29 1.42 8,552,630 November 2019 EHT Common Stock Warrants 0.15 1.50 945,750 December 2019 EHT Common Stock Warrants 0.15 1.61 20,172,409 Total warrants outstanding as of June 30, 2023 153,848,014 As of June 30, 2023, all of the Company's warrants are fully vested . February 2023 Sciences Warrant Exercises Effective February 16, 2023, Company and Emerald entered into a Master Transaction Agreement (the "MTA"). Under the MTA, Emerald agreed to exercise 16,641,486 common stock warrants at $0.017 per share (the "MTA Warrants"). Under the MTA, the parties agreed that the aggregate proceeds from the exercise of the MTA Warrants of $282,905 was to be paid through a reduction of the Amended Credit Agreement owed by the Company to Sciences (Note 6). On February 22, 2023, the Company issued 16,641,486 shares of common stock to Emerald in connection with the exercise of the MTA Warrants (Note 5). Derivative Liability During the six months ended June 30, 2023, the warrant shares underlying the Emerald Financing - warrant liability expired unexercised and the decrease in fair value during the three months ended June 30, 2023 was nominal. The following table summarizes the activity of the derivative liability for the period indicated: Six Months Ended June 30, 2022 December 31, 2021 Fair Value of Derivative Liability Fair Change in Reclassification June 30, 2022 Fair Value of Derivative Liability Emerald Financing - warrant liability $ 59,732 $ — $ (53,178) $ — $ 6,554 Total derivative liability $ 59,732 $ — $ (53,178) $ — $ 6,554 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 contained a contingent put option in the event of a subsequent financing resulting in a change in control. The warrant holders also had 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. The warrant liability is valued at the balance sheet date using the following assumptions: December 31, Dividend yield — % Volatility factor 140.83 % Risk-free interest rate 4.21 % Expected term (years) 0.13 Underlying common stock price $ 0.02 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Multi-Draw Credit Agreement- Related Party On October 5, 2018, the Company entered into the Credit Agreement with Sciences, a related party (Note 11). Between April 29, 2020 and March 29, 2021, the Company and Sciences entered into a series of Amendments until the disbursement line was closed on September 15, 2021. The amendments were considered a modifications for accounting purposes. Advances under the Amended Credit Agreement were unsecured and accrued interest at an annual rate of 7%. The maturity date of the Amended Credit Agreement was extended to the earlier of (a) five business days after the closing of the sale of VDL (b) February 28, 2023 or (c) the Termination Date (as such term is defined in the Amended Credit Agreement). The terms of the Amended Credit Agreement provided that 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. Effective February 16, 2023, upon entering the MTA, the remaining principal balance plus accrued interest was offset by the aggregate exercise price of $282,905 from the exercise of the MTA Warrants (Note 5) and the Company induced conversion by reducing the conversion price of the Amended Credit Agreement from $0.40 to $0.0386. The remaining balance of $1,597,236 was converted into 41,379,164 shares of common stock of the Company. In connection with the induced conversion, the Company recorded a debt conversion inducement expense of $1,383,285 equal to the fair value of the incremental shares issued upon conversion. Following the issuance of shares described above, the Amended Credit Agreement was terminated in its entirety per the terms of the MTA. Additionally, under the MTA, Sciences agreed to use its best efforts to transfer all of the common stock of the Company held by Sciences to its shareholders on a pro-rata basis at or immediately prior to the Company's listing to a nationally recognized stock exchange, subject to compliance with applicable securities laws. Insurance premium loan payable On February 28, 2023, the Company entered into an annual financing arrangement for a portion of its Directors and Officers Insurance Policy (the “D&O Insurance”) with First Insurance Funding in an amount of $203,884. The loan is payable in equal monthly installments of $22,654, matures on October 28, 2023 and bears interest at a rate 4.24% per annum. As of June 30, 2023, a total of $118,932 and $90,615, remains financed in prepaid expenses and insurance premium loan payable, respectively. Interest Expense The Company’s interest expense consists of the following: Three Months Ended Six Months Ended 2023 2022 2023 2022 Related party interest expense – stated rate $ — $ 43,608 $ 15,952 $ 86,737 Insurance premium loan payable – stated rate 2,162 1,603 3,603 2,669 Legal judgment interest expense 182,171 — 182,171 — Other interest expense 2,096 — 3,102 — Non-cash interest expense: Amortization of debt discount — 159,645 — 314,052 Amortization of transaction costs — 444 — 874 $ 186,429 $ 205,300 $ 204,828 $ 404,332 |
Stockholders' Equity and Capita
Stockholders' Equity and Capitalization | 6 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity and Capitalization | Stockholders’ Equity and Capitalization Warrant Exercises During the six months ended June 30, 2023, 16,641,486 of the outstanding stock warrants held by Sciences in conjunction with the MTA, with an intrinsic value of $332,830 were exercised in exchange for 16,641,486 shares of common stock for gross proceeds of $282,905 (Note 5). Induced Conversion of Amended Credit Agreement |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023, the Company had 92,970,517 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 six months ended June 30, 2023: Number of Weighted Weighted Aggregate Intrinsic Value* Outstanding, December 31, 2022 42,995,062 $ 0.18 7.14 $ — Granted 5,100,000 0.02 — Exercised — — Cancelled (6,701,186) 0.35 Forfeited (3,418,126) 0.15 Outstanding, June 30, 2023 37,975,750 $ 0.14 7.21 $ — Exercisable, June 30, 2023 25,516,916 $ 0.19 6.59 $ — *The aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the stock options at June 30, 2023 for those stock options for which the quoted market price was in excess of the exercise price ("in-the-money options"). The weighted-average grant-date fair value of stock options granted during the six months ended June 30, 2023, was $0.02. 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: Six Months Ended Dividend yield — % Volatility factor 123.3 - 127.0% Risk-free interest rate 3.86 - 3.99% Expected term (years) 5.27 - 6.08 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 June 30, 2023, 2,666,668 RSUs with a weighted average grant date fair value of $0.06 per share remain unvested. 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 5), and the RSUs discussed above, in its Unaudited Condensed Consolidated Statements of Operations as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 Research and development $ 12,533 $ 21,955 $ 57,001 $ 40,541 General and administrative 90,338 122,409 177,449 241,181 $ 102,871 $ 144,364 $ 234,450 $ 281,722 |
Loss Per Share of Common Stock
Loss Per Share of Common Stock | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Loss Per Share of Common Stock | Loss Per Share of Common Stock The following tables are a reconciliation of the numerators and denominators used in the calculation of basic and diluted net loss per share computations: Six Months Ended 2023 2022 Basic EPS and diluted EPS: Loss (Numerator) Net loss $ (8,279,020) $ (6,462,677) Shares (Denominator) Weighted average common shares outstanding 956,804,028 495,874,560 Per-Share Amount $ (0.01) $ (0.01) The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have been anti-dilutive: Three Months Ended Six Months Ended 2023 2022 2023 2022 Stock options 37,975,750 37,755,000 37,975,750 37,755,000 Common shares underlying convertible debt — 5,570,932 — 5,570,932 Warrants 153,848,014 136,187,225 153,848,014 136,187,225 Unvested restricted stock units 2,666,668 4,000,000 2,666,668 4,000,000 |
Significant Contracts - Univers
Significant Contracts - University of Mississippi | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023, 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 June 30, 2023, none of the other milestones under these license agreements have been met. |
Related Party Matters
Related Party Matters | 6 Months Ended |
Jun. 30, 2023 | |
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 of 17.4%. As of June 30, 2023, the Amended Credit Agreement has been extinguished and all of the warrants held by Sciences were exercised pursuant to the MTA (Notes 5 & 6). 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 provided services mutually agreed upon with the Company. The consulting agreement had an initial minimum term of one-year. Under the consulting agreement, Mr. Heppell was entitled to a monthly fee of $6,300, which was increased to $16,600 per month upon the closing of the Acquisition. The consulting agreement provided Mr. Heppell with a termination payment of $74,700 on March 1, 2023, equal to the monthly fees through the then-remaining term of the agreement if Mr. Heppell’s engagement was 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. On February 9, 2023, the Company provided notice and terminated the consulting agreement with Mr. Heppell effective March 11, 2023. During the six months ended June 30, 2023, the first tranche of stock options issued to Mr. Heppell were cancelled, unexercised, and the second tranche of stock options were cancelled upon the closing of the Verdélite SPA. The Company accounted for the consulting contract as an in-substance severance arrangement. During the three and six months ended June 30, 2023 no severance expense was recognized. As of June 30, 2023, the Company no longer has any obligations or business relationship with Mr. Heppell. Effective March 10, 2023, Mr. Heppell was removed from the Board of Sciences and no longer serves as Sciences CEO. VivaCell Biotechnology España, S.L.U (formerly known as Emerald Health Biotechnology España, S.L.U.) In 2021, the Company entered into two separate Agreements pursuant to a Master Services Agreement with VivaCell Biotechnology España, S.L.U ("VivaCell"), a subsidiary of Emerald Health Research, Inc., which is 100%-owned by Sciences. Under the 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. Payment for services are based on the negotiated amounts for the completion of agreed upon objectives as provided in the Agreements. The Company did not incur any expenses for the three and six months ended June 30, 2023. For the three and six months ended June 30, 2022, the Company incurred $48,908 and $87,926, respectively, in expenses under the Agreements. As of December 31, 2022, the Company recognized prepaid asset in the amount of $8,056. In 2021, the Company entered into an Exclusive Sponsored Research Agreement (the “ESRA”) with VivaCell to fund certain research and development programs. 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. 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. For the three and six months ended June 30, 2023 and June 30, 2022, the Company incurred $0 and $50,000, and $50,000 and $100,000, respectively, in research and development expenses related to the retainer under the ESRA. As of June 30, 2023, and December 31, 2022, the Company has recognized $50,000 and $50,000 in accounts payable - related parties, respectively, related to the retainer under 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 six months ended June 30, 2023 and June 30, 2022, the Company incurred $10,967 and $39,167, $103,913 and $120,000, respectively of research and development expenses under the ESRA. As of June 30, 2023 and December 31, 2022, the Company recognized $0 and $7,835, in other current liabilities, $47,001 and $47,001 , in accounts payable- related parties under this agreement. On May 8, 2023, the Company terminated the ESRA effective March 31, 2023 and Vivacell waived the required notice period under the ESRA. Management Conflicts Until the date of the Acquisition, the Company's CEO, Punit Dhillon, was a board member of the Company and EHT (Note 3). |
Commitment and Contingencies
Commitment and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
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 original lease term was effective from September 1, 2021 through October 31, 2023 and contained a renewal option for a two-year extension after the current expiration date. At the commencement date, the Company did not expect to exercise the renewal option, 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 included 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. The Company entered into an amended and restated lease agreement on June 27, 2023 for its corporate headquarters, extending the lease term to 62 months, retroactive to September 1, 2021 through October 31, 2026. The Company treated the amended and restated lease agreement as a single modified lease. For the three and six months ended June 30, 2023 and 2022 lease expense comprised of $22,675 and $45,834, $22,675 and $45,350, 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: June 30, 2023 Weighted-average remaining term – operating lease (in years) 3.33 Weighted-average discount rate – operating lease 15 % Future minimum lease payments as of June 30, 2023 are presented in the following table: Year: 2023 $ 50,354 2024 103,216 2025 106,313 2026 90,797 Total future minimum lease payments: 350,680 Less imputed interest (76,640) Total $ 274,040 Reported as: Operating lease liability $ 65,452 Operating lease liability, net of current portion 208,588 Total lease liability $ 274,040 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. Wendy Cunning vs Skye Bioscience, Inc. The Company is a party to a legal proceeding with a former employee alleging, among other things, wrongful termination, violation of whistleblower protections under the Sarbanes-Oxley Act of 2002 and retaliation under California law against the Company relating to certain actions and events that occurred with the Company's former management during the employee's employment term from March 2018 to July 2019. The case, entitled Wendy Cunning vs Skye Bioscience, Inc. , was filed in U.S. District Court (the "District Court") for the Central District of California (the “Cunning Lawsuit”). On January 18, 2023, a jury rendered a verdict in favor of Ms. Cunning and awarded her $512,500 in economic damages (e.g., lost earnings, future earnings and interest), $840,960 in non-economic damages (e.g., emotional distress) and $3,500,000 in punitive damages. On February 13, 2023, the Company received the final judgment on the special verdict (the "Final Judgment") from the District Court. In March of 2023, the Company filed post-trial motions with the District Court seeking judgment as a matter of law, a new trial, and/or a reduction of the judgment. The District Court has taken these motions under submission. Additionally, in March of 2023, the Company appealed the judgment in the action. The Court of Appeals has ordered the remainder of the appeal to be kept in abeyance pending resolution of the Company’s post-trial motions by the District Court. On August 2, 2023, the District Court ruled on the plaintiff's motion for attorney fees and awarded the plaintiff $1,200,008. Based on this order, the Company reduced the aggregate estimate for the legal contingency by $151,842, the difference between the attorney fees awarded by the District Court and the Company's previous estimate. Additionally, on August 2, 2023, the District Court granted the Company's request for a stay of enforcement of the Final Judgment pending post-trial motions and appeal conditioned on the Company posting a bond in the amount of $9,080,202 by August 10, 2023. The Company strongly believes that this case was incorrectly decided as to liability, the amount of compensatory damages, and the appropriateness and amount of punitive damages. The Company intends to challenge the verdict in the trial court and appeal and pursue reimbursement under its existing insurance policies, but given the jury verdict, the Company has determined that a loss is probable and accordingly have recorded a legal contingency expense and a current balance sheet liability for the total amount of the jury verdict. The Company has recorded an aggregate estimate for the legal contingency of $6,053,468 plus accrued interest of $182,171 at an annual interest rate of 10.0%, which is determined by the Superior Court of California. Depending on the judge's final order on the post trial motions and appeal, it is reasonably possible that the legal contingency booked could materially change after the issuance of these financials. For the six months ended June 30, 2023 the Company recorded interest expense of $182,171, which is reflected as an increase to the estimated legal contingency on the Condensed Consolidated Balance Sheet (Note 6). Skye Bioscience, Inc. vs Partner Re Ireland Insurance In February 2023, the Company brought a suit against the Company's D&O carrier, Partner RE Ireland Insurance DAC ("Partner Re"), bringing claims for (a) breach of contract, (2) tortious breach of the implied covenant of good faith and fair dealing and (3) declaratory relief that Partner Re is obligated to reimburse the Company for the defense fees and costs incurred in defense of the Cunning Lawsuit and must indemnify the Company for any settlement or judgment in the Cunning Lawsuit. The Company's allegations arise out of Partner Re's refusal to reimburse the Company for costs incurred by the Company in defending the Cunning Lawsuit. The case, entitled Skye Bioscience, Inc., v. Partner Re Ireland Insurance DAC , was filed in the United Stated District Court for the Central District of California. On April 17, 2023, PartnerRe filed a motion to dismiss the Company's complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). On June 20, 2023, the judge issued a final ruling in favor of the Company and denied Partner Re's motion to dismiss the Company's lawsuit. In its ruling, the Court rejected Partner Re's primary basis for denying coverage. Based on the outcome, the Company is pursuing up to $5,000,000 in coverage less the deductible to cover legal expenses incurred and the final verdict or settlement of the Cunning Lawsuit. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On July 24, 2023, the Company entered into a loan agreement in the principal amount of $250,000 (the “Bridge Loan”) with MFDI, LLC. The Bridge Loan was obtained in order to provide bridge financing for the business to secure additional strategic financing. The bridge loan bears interest at a rate of 9.5% per annum and is payable in 30 days. On August 2, 2023, the Company received the final order from the District Court awarding the plaintiff reimbursement of attorney's fees of $1,200,008. Based on this order, the Company reduced the aggregate estimate for the legal contingency as of June 30, 2023 by $151,842, for the difference in attorney fees. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
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, 2022, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth herein. The Unaudited 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 six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, 2023 or any future periods. The Condensed Consolidated Balance Sheet as of December 31, 2022 was derived from the Company’s audited financial statements as of December 31, 2022, which are included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2023. 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, 2022, which includes a broader discussion of the Company’s business and the risks inherent therein. Certain reclassifications have been made to the amounts in prior periods to conform to the current period’s presentation, primarily the separate classification of prepaid expenses, other current assets, insurance premium loan payable and other current liabilities. Such reclassifications did not have a material impact on the Unaudited Condensed Financial Statements. Assets Held for Sale On November 10, 2022, the Company completed the Acquisition of EHT in accordance with the Arrangement Agreement. At the time of the Acquisition there were arrangements in place to sell the acquired assets and liabilities that comprised of two of EHT's subsidiaries, Emerald Health Therapeutics Canada, Inc. ("EHTC") and VDL. As a result, EHTC and VDL were considered held for sale since the Acquisition and the Company has classified the associated assets of VDL as held for sale on the Condensed Consolidated Balance Sheets and the period costs related to both EHTC and VDL have been presented as wind-down costs in the Consolidated Statements of Operations. EHTC was divested on December 28, 2022 and VDL was divested on February 9, 2023 (see Note 3). During the quarter ended June 30, 2023 the Board approved a plan to pursue the sale of the real-estate held by AVI, which is substantially the only asset held by AVI. Assets meeting the held for sale criteria are classified as held for sale on the Condensed Consolidated Balance Sheets in subsequent periods until sold. Assets that meet the held for sale criteria are held for sale and reported at the lower of their carrying value or their fair value, less estimated costs to sell. Changes in fair value are recorded as a gain or loss in the results of operations but not to exceed the original carrying value. Due to the asset acquisition accounting on the date of the Acquisition AVI had no initial carrying value. Derecognition of Nonfinancial Assets The Company generally accounts for sales of nonfinancial assets that are outside the scope of our ordinary activities under ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets . Pursuant to ASC 610-20, the Company applies the guidance in ASC 606 to determine if a contract exists, identify the distinct nonfinancial assets, and determine when control transfers and, therefore, when to derecognize the nonfinancial asset. Additionally, the Company applies the measurement principles of ASC 606 to determine the amount of consideration, if any, to include in the calculation of the gain or loss for the sale of the nonfinancial asset. Refer to Note 3 for further information. |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements as of June 30, 2023 include the accounts of the Company and its wholly owned subsidiaries SKYE Bioscience Pty Ltd (“SKYE Bioscience Australia“), EHT, AVI, and Nemus Sub. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the Unaudited 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 |
Risks and Uncertainties | Risks and Uncertainties The Company’s operations are subject to a number of risks and uncertainties, including but not limited to, the need to obtain immediate funding to continue operations, 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, Canada, the European Union, and Australia and the Company’s ability to attract new funding. |
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 |
Government Assistance | Government Assistance The Company adopted ASU 2021-10 Government Assistance |
Commitments and Contingencies | Commitments and Contingencies The Company follows ASC 440, Commitments and ASC 450, Contingencies , subtopic 450-20 to report accounting for contingencies and commitments respectively. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein. |
Recent Accounting Pronouncements Not Yet Adopted | Recent Accounting Pronouncements Not Yet Adopted In August 2020, the FASB issued 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 beginning 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, 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 using a modified retrospective method of adoption. |
Other Current Assets and Liab_2
Other Current Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Other Assets And Liabilities, Current [Abstract] | |
Schedule of other current assets | Other current assets consist of the following: As of June 30, 2023 As of December 31, 2022 AusIndustry incentive $ 613,940 $ 179,687 Other tax receivables 133,518 — Short-term deposits 282,910 282,740 Total other current assets 33,746 19,161 $ 1,064,114 $ 481,588 |
Schedule of other current liabilities | Other current liabilities consist of the following: As of June 30, 2023 As of December 31, 2022 Research and development costs $ 129,044 $ 40,597 Legal fees 225,254 227,350 Deposit - Verdélite SPA — 553,800 Acquisition related contingent liability 188,231 134,896 Total other accrued liabilities 306,804 410,351 $ 849,333 $ 1,366,994 |
Warrants and Derivative Liabi_2
Warrants and Derivative Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of warrants vested and outstanding | Warrants vested and outstanding as of June 30, 2023 are summarized as follows: Source Exercise Weighted Number of 2015 Common Stock Warrants $ 5.00 1.82 100,000 2016 Common Stock Warrants to Service Providers 1.15 3.34 40,000 2019 Common Stock Warrants 0.35 1.40 8,000,000 2020 Common Stock Warrants to Placement Agent 0.08 2.09 8,166,667 2021 Inducement Warrants 0.15 3.07 21,166,667 2021 Inducement Warrants to Placement Agent 0.19 3.07 1,481,667 2021 Common Stock Warrants 0.09 3.25 77,777,779 2021 Common Stock Warrants to Placement Agent 0.11 3.25 5,444,445 2022 Common Stock Warrants to Service Provider 0.04 0.76 2,000,000 November 2019 EHT Common Stock Warrants 0.29 1.42 8,552,630 November 2019 EHT Common Stock Warrants 0.15 1.50 945,750 December 2019 EHT Common Stock Warrants 0.15 1.61 20,172,409 Total warrants outstanding as of June 30, 2023 153,848,014 |
Schedule of the activity of derivative liabilities | The following table summarizes the activity of the derivative liability for the period indicated: Six Months Ended June 30, 2022 December 31, 2021 Fair Value of Derivative Liability Fair Change in Reclassification June 30, 2022 Fair Value of Derivative Liability Emerald Financing - warrant liability $ 59,732 $ — $ (53,178) $ — $ 6,554 Total derivative liability $ 59,732 $ — $ (53,178) $ — $ 6,554 |
Schedule of input and valuation technique used to value warrant liabilities | The warrant liability is valued at the balance sheet date using the following assumptions: December 31, Dividend yield — % Volatility factor 140.83 % Risk-free interest rate 4.21 % Expected term (years) 0.13 Underlying common stock price $ 0.02 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of interest expense | The Company’s interest expense consists of the following: Three Months Ended Six Months Ended 2023 2022 2023 2022 Related party interest expense – stated rate $ — $ 43,608 $ 15,952 $ 86,737 Insurance premium loan payable – stated rate 2,162 1,603 3,603 2,669 Legal judgment interest expense 182,171 — 182,171 — Other interest expense 2,096 — 3,102 — Non-cash interest expense: Amortization of debt discount — 159,645 — 314,052 Amortization of transaction costs — 444 — 874 $ 186,429 $ 205,300 $ 204,828 $ 404,332 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 six months ended June 30, 2023: Number of Weighted Weighted Aggregate Intrinsic Value* Outstanding, December 31, 2022 42,995,062 $ 0.18 7.14 $ — Granted 5,100,000 0.02 — Exercised — — Cancelled (6,701,186) 0.35 Forfeited (3,418,126) 0.15 Outstanding, June 30, 2023 37,975,750 $ 0.14 7.21 $ — Exercisable, June 30, 2023 25,516,916 $ 0.19 6.59 $ — *The aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the stock options at June 30, 2023 for those stock options for which the quoted market price was in excess of the exercise price ("in-the-money options"). |
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: Six Months Ended Dividend yield — % Volatility factor 123.3 - 127.0% Risk-free interest rate 3.86 - 3.99% Expected term (years) 5.27 - 6.08 |
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 5), and the RSUs discussed above, in its Unaudited Condensed Consolidated Statements of Operations as follows: Three Months Ended Six Months Ended 2023 2022 2023 2022 Research and development $ 12,533 $ 21,955 $ 57,001 $ 40,541 General and administrative 90,338 122,409 177,449 241,181 $ 102,871 $ 144,364 $ 234,450 $ 281,722 |
Loss Per Share of Common Stock
Loss Per Share of Common Stock (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | The following tables are a reconciliation of the numerators and denominators used in the calculation of basic and diluted net loss per share computations: Six Months Ended 2023 2022 Basic EPS and diluted EPS: Loss (Numerator) Net loss $ (8,279,020) $ (6,462,677) Shares (Denominator) Weighted average common shares outstanding 956,804,028 495,874,560 Per-Share Amount $ (0.01) $ (0.01) |
Schedule of anti-dilutive securities | The following outstanding shares of common stock equivalents were excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have been anti-dilutive: Three Months Ended Six Months Ended 2023 2022 2023 2022 Stock options 37,975,750 37,755,000 37,975,750 37,755,000 Common shares underlying convertible debt — 5,570,932 — 5,570,932 Warrants 153,848,014 136,187,225 153,848,014 136,187,225 Unvested restricted stock units 2,666,668 4,000,000 2,666,668 4,000,000 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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: June 30, 2023 Weighted-average remaining term – operating lease (in years) 3.33 Weighted-average discount rate – operating lease 15 % Reported as: Operating lease liability $ 65,452 Operating lease liability, net of current portion 208,588 Total lease liability $ 274,040 |
Schedule of future minimum lease payments | Future minimum lease payments as of June 30, 2023 are presented in the following table: Year: 2023 $ 50,354 2024 103,216 2025 106,313 2026 90,797 Total future minimum lease payments: 350,680 Less imputed interest (76,640) Total $ 274,040 |
Nature of Operations and Busi_2
Nature of Operations and Business Activities (Details) | 3 Months Ended | 6 Months Ended | |||||||||
Jul. 24, 2023 USD ($) | Feb. 16, 2023 USD ($) $ / shares shares | Nov. 10, 2022 USD ($) | Jun. 30, 2023 USD ($) $ / shares | Mar. 31, 2023 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) $ / shares | Jun. 30, 2022 USD ($) | Jan. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Nature Of Operations And Business Activities [Line Items] | |||||||||||
Working capital deficit | $ 7,923,867 | $ 7,923,867 | |||||||||
Accumulated deficit | 75,016,785 | 75,016,785 | $ 66,737,765 | ||||||||
Cash and cash equivalents | 553,443 | $ 2,929,895 | 553,443 | $ 2,929,895 | |||||||
Operating loss | 2,842,997 | 3,218,360 | 5,943,155 | 6,106,382 | |||||||
Net loss | 3,111,500 | $ 5,167,520 | $ 3,419,278 | $ 3,043,399 | 8,279,020 | $ 6,462,677 | |||||
Estimate for legal contingency | 6,235,639 | 6,235,639 | $ 6,205,310 | $ 6,205,310 | |||||||
Coverage received to cover legal expenses | $ 5,000,000 | $ 5,000,000 | |||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.10 | $ 0.10 | |||||||||
Number of EHT warrants outstanding (in shares) | shares | 0 | ||||||||||
Subsequent Event | Bridge Loan | |||||||||||
Nature Of Operations And Business Activities [Line Items] | |||||||||||
Debt, face amount | $ 250,000 | ||||||||||
Interest rate (as a percent) | 9.50% | ||||||||||
Debt Instrument, payable, term | 30 days | ||||||||||
MTA Warrants, Credit Consideration | |||||||||||
Nature Of Operations And Business Activities [Line Items] | |||||||||||
Common stock issuance costs | $ 1,597,236 | $ 1,597,236 | |||||||||
Common Stock Warrants | MTA Warrants | |||||||||||
Nature Of Operations And Business Activities [Line Items] | |||||||||||
Exercise price (in dollars per share) | $ / shares | $ 282,905 | $ 282,905 | $ 282,905 | ||||||||
Discontinued Operations, Disposed of by Sale | Verdelite SPA | |||||||||||
Nature Of Operations And Business Activities [Line Items] | |||||||||||
Aggregate purchase price | $ 9,451,233 | ||||||||||
Proceeds from asset sale, net of legal expenses | $ 5,532,266 | ||||||||||
Emerald Health Therapeutics, Inc. | |||||||||||
Nature Of Operations And Business Activities [Line Items] | |||||||||||
Exchange ratio | 1.95 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Nature Of Operations And Business Activities [Line Items] | ||
Other current assets | $ 1,064,114 | $ 481,588 |
Accounting Standards Update 2021-10 | ||
Nature Of Operations And Business Activities [Line Items] | ||
Other current assets | $ 613,940 | $ 179,687 |
Acquisition of Emerald Health_2
Acquisition of Emerald Health Therapeutics, Inc. (Details) | 3 Months Ended | 6 Months Ended | ||||
Feb. 09, 2023 | Nov. 10, 2022 USD ($) installment | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | |
Business Acquisition [Line Items] | ||||||
Wind-down costs | $ 87,072 | $ 0 | $ 470,181 | $ 0 | ||
Emerald Health Therapeutics, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Wind-down costs | 179,660 | |||||
Discontinued Operations, Disposed of by Sale | Verdelite SPA | ||||||
Business Acquisition [Line Items] | ||||||
Aggregate purchase price | $ 9,451,233 | |||||
Non-refundable deposit | 557,705 | |||||
Amount paid | 5,532,266 | |||||
Loss on sale | $ 307,086 | |||||
Discontinued Operations, Disposed of by Sale | Verdelite SPA | Disposal Group, Tranche One | ||||||
Business Acquisition [Line Items] | ||||||
Amount paid | $ 377,100 | |||||
Number of installments | installment | 5 | |||||
Discontinued Operations, Disposed of by Sale | Verdelite SPA | Disposal Group, Tranche Two | ||||||
Business Acquisition [Line Items] | ||||||
Amount paid | $ 2,828,250 | |||||
Number of installments | installment | 3 | |||||
Discontinued Operations, Disposed of by Sale | Verdelite SPA | Installment Term One | ||||||
Business Acquisition [Line Items] | ||||||
Installment term | 18 months | |||||
Discontinued Operations, Disposed of by Sale | Verdelite SPA | Installment Term Two | ||||||
Business Acquisition [Line Items] | ||||||
Installment term | 30 months | |||||
Discontinued Operations, Disposed of by Sale | Verdelite SPA | Installment Term Three | ||||||
Business Acquisition [Line Items] | ||||||
Installment term | 42 months |
Other Current Assets and Liab_3
Other Current Assets and Liabilities - Schedule of Other Current Assets (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Other Assets And Liabilities, Current [Abstract] | ||
AusIndustry incentive | $ 613,940 | $ 179,687 |
Other tax receivables | 133,518 | 0 |
Short-term deposits | 282,910 | 282,740 |
Total other current assets | 33,746 | 19,161 |
Other current assets | $ 1,064,114 | $ 481,588 |
Other Current Assets and Liab_4
Other Current Assets and Liabilities - Schedule of Other Current Liabilities (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Other Assets And Liabilities, Current [Abstract] | ||
Research and development costs | $ 129,044 | $ 40,597 |
Legal fees | 225,254 | 227,350 |
Deposit - Verdélite SPA | 0 | 553,800 |
Acquisition related contingent liability | 188,231 | 134,896 |
Total other accrued liabilities | 306,804 | 410,351 |
Total other current liabilities | $ 849,333 | $ 1,366,994 |
Warrants and Derivative Liabi_3
Warrants and Derivative Liabilities - Schedule of Warrants Vested and Outstanding (Details) | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 0.10 |
Number of Warrants Vested and Outstanding (in shares) | shares | 153,848,014 |
2015 Common Stock Warrants | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 5 |
Weighted Average Remaining Contractual Term (Years) | 1 year 9 months 25 days |
Number of Warrants Vested and Outstanding (in shares) | shares | 100,000 |
2016 Common Stock Warrants to Service Providers | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 1.15 |
Weighted Average Remaining Contractual Term (Years) | 3 years 4 months 2 days |
Number of Warrants Vested and Outstanding (in shares) | shares | 40,000 |
2019 Common Stock Warrants | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 0.35 |
Weighted Average Remaining Contractual Term (Years) | 1 year 4 months 24 days |
Number of Warrants Vested and Outstanding (in shares) | shares | 8,000,000 |
2020 Common Stock Warrants to Placement Agent | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 0.08 |
Weighted Average Remaining Contractual Term (Years) | 2 years 1 month 2 days |
Number of Warrants Vested and Outstanding (in shares) | shares | 8,166,667 |
2021 Inducement Warrants | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 0.15 |
Weighted Average Remaining Contractual Term (Years) | 3 years 25 days |
Number of Warrants Vested and Outstanding (in shares) | shares | 21,166,667 |
2021 Inducement Warrants to Placement Agent | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 0.19 |
Weighted Average Remaining Contractual Term (Years) | 3 years 25 days |
Number of Warrants Vested and Outstanding (in shares) | shares | 1,481,667 |
2021 Common Stock Warrants | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 0.09 |
Weighted Average Remaining Contractual Term (Years) | 3 years 3 months |
Number of Warrants Vested and Outstanding (in shares) | shares | 77,777,779 |
2021 Common Stock Warrants to Placement Agent | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 0.11 |
Weighted Average Remaining Contractual Term (Years) | 3 years 3 months |
Number of Warrants Vested and Outstanding (in shares) | shares | 5,444,445 |
2022 Common Stock Warrants to Service Provider | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 0.04 |
Weighted Average Remaining Contractual Term (Years) | 9 months 3 days |
Number of Warrants Vested and Outstanding (in shares) | shares | 2,000,000 |
November 2019 EHT Common Stock Warrants | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 0.29 |
Weighted Average Remaining Contractual Term (Years) | 1 year 5 months 1 day |
Number of Warrants Vested and Outstanding (in shares) | shares | 8,552,630 |
November 2019 EHT Common Stock Warrants | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 0.15 |
Weighted Average Remaining Contractual Term (Years) | 1 year 6 months |
Number of Warrants Vested and Outstanding (in shares) | shares | 945,750 |
December 2019 EHT Common Stock Warrants | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 0.15 |
Weighted Average Remaining Contractual Term (Years) | 1 year 7 months 9 days |
Number of Warrants Vested and Outstanding (in shares) | shares | 20,172,409 |
Warrants and Derivative Liabi_4
Warrants and Derivative Liabilities - Narrative (Details) - $ / shares | Feb. 22, 2023 | Feb. 16, 2023 | Jun. 30, 2023 |
Class of Warrant or Right [Line Items] | |||
Exercise price (in dollars per share) | $ 0.10 | ||
2021 Common Stock Warrants to Placement Agent | |||
Class of Warrant or Right [Line Items] | |||
Exercise price (in dollars per share) | 0.11 | ||
2021 Common Stock Warrants to Placement Agent | MTA Warrants | |||
Class of Warrant or Right [Line Items] | |||
Number of shares issued in transaction (in shares) | 16,641,486 | 16,641,486 | |
Exercise price (in dollars per share) | $ 0.017 | ||
Common Stock Warrants | MTA Warrants | |||
Class of Warrant or Right [Line Items] | |||
Exercise price (in dollars per share) | $ 282,905 | $ 282,905 |
Warrants and Derivative Liabi_5
Warrants and Derivative Liabilities - Schedule of Derivative Liability Activity (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Fair Value Of Derivative Liabilities [Roll Forward] | ||
Fair Value of Derivative Liabilities, beginning | $ 59,732 | |
Fair Value of Derivative Liability | 0 | |
Change in Fair Value of Derivative Liability | $ (3) | (53,178) |
Reclassification of Derivative to Equity | 0 | |
Fair Value of Derivative Liabilities, ending | 6,554 | |
Emerald Financing - warrant liability | ||
Fair Value Of Derivative Liabilities [Roll Forward] | ||
Fair Value of Derivative Liabilities, beginning | 59,732 | |
Fair Value of Derivative Liability | 0 | |
Change in Fair Value of Derivative Liability | (53,178) | |
Reclassification of Derivative to Equity | 0 | |
Fair Value of Derivative Liabilities, ending | $ 6,554 |
Warrants and Derivative Liabi_6
Warrants and Derivative Liabilities - Schedule of Input and Valuation Techniques Used to Value Warrant Liabilities (Details) - 2018 Emerald Financing Warrants | Dec. 31, 2022 $ / shares |
Class of Warrant or Right [Line Items] | |
Underlying common stock price (in dollars per share) | $ 0.02 |
Dividend yield | |
Class of Warrant or Right [Line Items] | |
Warrants and rights outstanding measurement input | 0 |
Volatility factor | |
Class of Warrant or Right [Line Items] | |
Warrants and rights outstanding measurement input | 1.4083 |
Risk-free interest rate | |
Class of Warrant or Right [Line Items] | |
Warrants and rights outstanding measurement input | 0.0421 |
Expected term (years) | |
Class of Warrant or Right [Line Items] | |
Expected term (years) | 1 month 17 days |
Debt - Narrative (Details)
Debt - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||||||||
Feb. 28, 2023 USD ($) | Feb. 22, 2023 shares | Feb. 16, 2023 USD ($) $ / shares shares | Jun. 30, 2023 USD ($) $ / shares | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) $ / shares shares | Jun. 30, 2022 USD ($) | Feb. 15, 2023 $ / shares | Dec. 31, 2022 USD ($) | Sep. 15, 2021 business_day | |
Debt Instrument [Line Items] | ||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.10 | $ 0.10 | ||||||||
Debt conversion inducement expense | $ 0 | $ 0 | $ 1,383,285 | $ 0 | ||||||
Insurance premium loan payable | $ 90,615 | 90,615 | $ 55,451 | |||||||
MTA Warrants, Credit Consideration | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Common stock issuance costs | $ 1,597,236 | $ 1,597,236 | ||||||||
2021 Common Stock Warrants to Placement Agent | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.11 | $ 0.11 | ||||||||
2021 Common Stock Warrants to Placement Agent | MTA Warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 0.017 | |||||||||
Number of shares issued in transaction (in shares) | shares | 16,641,486 | 16,641,486 | ||||||||
2021 Common Stock Warrants to Placement Agent | MTA Warrants, Credit Consideration | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Number of shares issued in transaction (in shares) | shares | 41,379,164 | 41,379,164 | ||||||||
Common Stock Warrants | MTA Warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 282,905 | $ 282,905 | $ 282,905 | |||||||
Insurance Premium Loan Payable | Loans Payable | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt, face amount | $ 203,884 | |||||||||
Monthly installment amount | $ 22,654 | |||||||||
Interest rate (as a percent) | 4.24% | |||||||||
Prepaid expense | $ 118,932 | $ 118,932 | ||||||||
Insurance premium loan payable | $ 90,615 | $ 90,615 | ||||||||
Multi-Draw Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate percentage (as a percent) | 7% | |||||||||
Grace period (in days) | business_day | 5 | |||||||||
Amended Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Conversion Price (in dollars per share) | $ / shares | $ 0.0386 | $ 0.0386 | $ 0.0386 | $ 0.40 |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Debt Disclosure [Abstract] | ||||
Related party interest expense – stated rate | $ 0 | $ 43,608 | $ 15,952 | $ 86,737 |
Insurance premium loan payable – stated rate | 2,162 | 1,603 | 3,603 | 2,669 |
Legal judgment interest expense | 182,171 | 0 | 182,171 | 0 |
Other interest expense | 2,096 | 0 | 3,102 | 0 |
Non-cash interest expense: | ||||
Amortization of debt discount | 0 | 159,645 | 0 | 314,052 |
Amortization of transaction costs | 0 | 444 | 0 | 874 |
Interest expense | $ 186,429 | $ 205,300 | $ 204,828 | $ 404,332 |
Stockholders' Equity and Capi_2
Stockholders' Equity and Capitalization (Details) - USD ($) | 6 Months Ended | |||
Feb. 22, 2023 | Feb. 16, 2023 | Jun. 30, 2023 | Feb. 15, 2023 | |
Equity [Line Items] | ||||
Exercise price (in dollars per share) | $ 0.10 | |||
Amended Credit Agreement | ||||
Equity [Line Items] | ||||
Conversion Price (in dollars per share) | $ 0.0386 | $ 0.0386 | $ 0.40 | |
MTA Warrants, Credit Consideration | ||||
Equity [Line Items] | ||||
Common stock issuance costs | $ 1,597,236 | $ 1,597,236 | ||
Warrant | ||||
Equity [Line Items] | ||||
Warrants exercised (in shares) | 16,641,486 | |||
Intrinsic value of warrant exercises | $ 332,830 | |||
Exercise warrant (in shares) | 16,641,486 | |||
Proceeds from pre-funded warrant exercises | $ 282,905 | |||
2021 Common Stock Warrants to Placement Agent | ||||
Equity [Line Items] | ||||
Exercise price (in dollars per share) | $ 0.11 | |||
2021 Common Stock Warrants to Placement Agent | MTA Warrants, Credit Consideration | ||||
Equity [Line Items] | ||||
Number of shares issued in transaction (in shares) | 41,379,164 | 41,379,164 | ||
2021 Common Stock Warrants to Placement Agent | MTA Warrants | ||||
Equity [Line Items] | ||||
Number of shares issued in transaction (in shares) | 16,641,486 | 16,641,486 | ||
Exercise price (in dollars per share) | $ 0.017 | |||
Common Stock Warrants | MTA Warrants | ||||
Equity [Line Items] | ||||
Exercise price (in dollars per share) | $ 282,905 | $ 282,905 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) | 6 Months Ended | ||
Jun. 14, 2022 | Dec. 14, 2021 | Jun. 30, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Amount of unrecognized compensation cost | $ 719,694 | ||
Recognized weighted average period (in years) | 1 year 6 months 18 days | ||
2014 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares, issued (in shares) | 91,219,570 | ||
Percentage of share reserve of the number of issued and outstanding shares (in percent) | 5% | ||
Number of shares reserved for future grants (in shares) | 92,970,517 | ||
2014 Plan | Share-Based Payment Arrangement, Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted-average fair value of stock options granted (in dollars per share) | $ 0.02 | ||
2014 Plan | 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) | 2,666,668 | ||
Granted (in dollars per share) | $ 0.06 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) - 2014 Plan - Share-Based Payment Arrangement, Option - USD ($) | 3 Months Ended | 6 Months Ended | |
Mar. 31, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Number of Shares | |||
Balance at the beginning (in shares) | 42,995,062 | 42,995,062 | |
Granted (in shares) | 5,100,000 | ||
Exercised (in shares) | 0 | ||
Cancelled (in shares) | (6,701,186) | ||
Forfeited (in shares) | (3,418,126) | ||
Balance at the ending (in shares) | 37,975,750 | ||
Exercisable (in shares) | 25,516,916 | ||
Weighted Average Exercise Price | |||
Balance at the beginning (in dollars per share) | $ 0.18 | $ 0.18 | |
Granted (in dollars per share) | 0.02 | ||
Exercised (in dollars per share) | 0 | ||
Cancelled (in dollars per share) | 0.35 | ||
Forfeited (in dollars per share) | 0.15 | ||
Balance at the ending (in dollars per share) | 0.14 | ||
Exercisable (in dollars per share) | $ 0.19 | ||
Weighted Average Remaining Contractual Term (Years) | |||
Weighted Average Remaining Contractual Term (Years) | 7 years 1 month 20 days | 7 years 2 months 15 days | |
Weighted Average Remaining Contractual Term, Exercisable | 6 years 7 months 2 days | ||
Aggregate Intrinsic Value | $ 0 | $ 0 | |
Aggregate Intrinsic Value, Exercisable | $ 0 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Assumptions of Stock Option Granted (Details) - Share-Based Payment Arrangement, Option - 2014 Plan | 6 Months Ended |
Jun. 30, 2023 | |
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] | |
Volatility factor | 123.30% |
Risk-free interest rate | 3.86% |
Expected term (years) | 5 years 3 months 7 days |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Volatility factor | 127% |
Risk-free interest rate | 3.99% |
Expected term (years) | 6 years 29 days |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 102,871 | $ 144,364 | $ 234,450 | $ 281,722 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 12,533 | 21,955 | 57,001 | 40,541 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 90,338 | $ 122,409 | $ 177,449 | $ 241,181 |
Loss Per Share of Common Stoc_2
Loss Per Share of Common Stock - Schedule of earnings per share, basic and diluted (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share, Basic: | ||||
Net loss | $ (3,111,500) | $ (8,279,020) | $ (6,462,677) | |
Weighted average common shares outstanding – basic (in shares) | 971,549,608 | 495,925,112 | 956,804,028 | 495,874,560 |
Basic (in dollars per share) | $ 0 | $ (0.01) | $ (0.01) | $ (0.01) |
Earnings Per Share, Diluted [Abstract] | ||||
Net loss | $ (3,111,500) | $ (8,279,020) | $ (6,462,677) | |
Weighted average common shares outstanding – diluted (in shares) | 971,549,608 | 495,925,112 | 956,804,028 | 495,874,560 |
Diluted (in dollars per share) | $ 0 | $ (0.01) | $ (0.01) | $ (0.01) |
Loss Per Share of Common Stoc_3
Loss Per Share of Common Stock - Anti-dilutive Securities (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
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) | 37,975,750 | 37,755,000 | 37,975,750 | 37,755,000 |
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) | 0 | 5,570,932 | 0 | 5,570,932 |
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) | 153,848,014 | 136,187,225 | 153,848,014 | 136,187,225 |
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) | 2,666,668 | 4,000,000 | 2,666,668 | 4,000,000 |
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 | Jun. 30, 2023 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 |
Related Party Matters (Details)
Related Party Matters (Details) | 3 Months Ended | 4 Months Ended | 6 Months Ended | ||||||||
Mar. 01, 2023 USD ($) | Feb. 28, 2023 USD ($) | May 18, 2022 USD ($) shares | Mar. 01, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Apr. 30, 2021 agreement | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Jan. 31, 2018 | |
Related Party Transaction [Line Items] | |||||||||||
Research and development expense | $ 1,788,434 | $ 1,427,154 | $ 2,973,314 | $ 2,692,807 | |||||||
Other current liabilities | 849,333 | 849,333 | $ 1,366,994 | ||||||||
Exclusive Sponsored Research Agreement | EHBE | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Prepaid expense - related party | 50,000 | 50,000 | 50,000 | ||||||||
Research and development expense | 0 | 50,000 | 50,000 | 100,000 | |||||||
ESRA Agreement, Screening Platform For Anteroposterior Ocular Diseases | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Research and development expense | 10,967 | 39,167 | 103,913 | 120,000 | |||||||
Other current liabilities | 0 | 0 | 7,835 | ||||||||
Accounts payable | 47,001 | 47,001 | 47,001 | ||||||||
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 | 1,772 | 1,772 | 12,511 | ||||||||
Dr. Avtar Dhillon | Independent Contractor Agreement | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Accrued expense under agreement | 0 | 48,908 | 0 | 87,926 | |||||||
Prepaid expense - related party | $ 8,056 | ||||||||||
Independent Contractor Services Agreement | Jim Heppell | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Initial term of research agreement (in years) | 1 year | ||||||||||
Monthly fee | $ 6,300 | ||||||||||
Increase In monthly fee | $ 16,600 | ||||||||||
Termination payment | $ 74,700 | ||||||||||
Granted (in shares) | shares | 4,000,000 | ||||||||||
Severance expense | 0 | ||||||||||
Collaborative Research Agreement | Emerald Health Biotechnology Espana, S.L.U. | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
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 | $ 11,686 | $ 32,369 | $ 10,779 | $ 19,374 | |||||||
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 | ||||||||||
Emerald | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Ownership (as a percentage) | 17.40% |
Commitment and Contingencies -
Commitment and Contingencies - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||||
Aug. 02, 2023 | Feb. 13, 2023 | Jan. 18, 2023 | Sep. 01, 2021 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Jun. 27, 2023 | |
Loss Contingencies [Line Items] | |||||||||
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% | ||||||||
Lessee, operating lease, term (in years) | 62 months | ||||||||
Lease expense | $ 22,675 | $ 22,675 | $ 45,834 | $ 45,350 | |||||
Wendy Cunning Vs Skye Bioscience, Inc | |||||||||
Loss Contingencies [Line Items] | |||||||||
Potential outcome | $ 6,053,468 | ||||||||
Loss contingency, interest rate on damages | 10% | ||||||||
Interest expense, other | $ 182,171 | ||||||||
Wendy Cunning Vs Skye Bioscience, Inc | Economic Damages | |||||||||
Loss Contingencies [Line Items] | |||||||||
Total compensatory damages | 512,500 | ||||||||
Wendy Cunning Vs Skye Bioscience, Inc | Non-Economic Damages | |||||||||
Loss Contingencies [Line Items] | |||||||||
Total compensatory damages | 840,960 | ||||||||
Wendy Cunning Vs Skye Bioscience, Inc | Punitive Damages | |||||||||
Loss Contingencies [Line Items] | |||||||||
Total compensatory damages | $ 3,500,000 | ||||||||
Wendy Cunning Vs Skye Bioscience, Inc | Punitive Damages | Subsequent Event | |||||||||
Loss Contingencies [Line Items] | |||||||||
Total compensatory damages | $ 1,200,008 | ||||||||
Loss Contingency Accrual, Period Increase (Decrease) | 151,842 | ||||||||
Loss contingency, bond | $ 9,080,202 |
Commitment and Contingencies _2
Commitment and Contingencies - Weighted Average Remaining Lease Term and Discount Rate (Details) | Jun. 30, 2023 |
Commitments and Contingencies Disclosure [Abstract] | |
Weighted-average remaining term – operating lease (in years) | 3 years 3 months 29 days |
Weighted-average discount rate – operating lease | 15% |
Commitment and Contingencies _3
Commitment and Contingencies - Schedule of Future Minimum Lease Payments (Details) | Jun. 30, 2023 USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2023 | $ 50,354 |
2024 | 103,216 |
2025 | 106,313 |
2026 | 90,797 |
Total future minimum lease payments: | 350,680 |
Less imputed interest | (76,640) |
Total | $ 274,040 |
Commitment and Contingencies _4
Commitment and Contingencies - Current and Noncurrent Portions of Operating Lease (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease liability | $ 65,452 | $ 78,700 |
Operating lease liability, net of current portion | 208,588 | $ 0 |
Total lease liability | $ 274,040 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) | Jul. 24, 2023 | Aug. 02, 2023 |
Wendy Cunning Vs Skye Bioscience, Inc | Punitive Damages | ||
Subsequent Event [Line Items] | ||
Loss contingency, bond | $ 9,080,202 | |
Bridge Loan | ||
Subsequent Event [Line Items] | ||
Debt, face amount | $ 250,000 | |
Interest rate (as a percent) | 9.50% | |
Debt Instrument, payable, term | 30 days |