Cover
Cover | 12 Months Ended |
Dec. 31, 2023 | |
Cover [Abstract] | |
Document Type | S-1 |
Entity Registrant Name | SKYE BIOSCIENCE, INC. |
Entity Central Index Key | 0001516551 |
Amendment Flag | false |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Incorporation, State or Country Code | NV |
Entity Tax Identification Number | 45-0692882 |
Entity Address, Address Line One | 11250 El Camino Real, Suite 100 |
Entity Address, City or Town | San Diego |
Entity Address, State or Province | CA |
Entity Address, Postal Zip Code | 92130 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash | $ 1,256,453 | $ 1,244,527 |
Restricted cash | 9,080,202 | 4,580 |
Prepaid expenses | 425,259 | 780,807 |
Assets held for sale | 0 | 6,432,216 |
Other current assets | 888,929 | 481,588 |
Total current assets | 11,650,843 | 8,943,718 |
Property, plant and equipment, net | 43,276 | 87,854 |
Operating lease right-of-use asset | 237,983 | 71,191 |
Other assets | 8,309 | 8,309 |
Total assets | 11,940,411 | 9,111,072 |
Current liabilities | ||
Accrued payroll liabilities | 888,381 | 657,734 |
Estimate for legal contingency | 6,053,468 | 6,205,310 |
Convertible multi-draw credit agreement - related party | 0 | 1,848,375 |
Convertible note - related party, net of discount | 4,371,998 | 0 |
Operating lease liability, current portion | 72,038 | 78,700 |
Total current liabilities | 13,900,999 | 12,119,126 |
Non-current liabilities | ||
Operating lease liability, net of current portion | 171,230 | 0 |
Total liabilities | 14,072,229 | 12,119,126 |
Commitments and contingencies (Note 13) | ||
Stockholders’ deficit | ||
Preferred stock, $0.001 par value; 200,000 shares authorized at December 31, 2023 and 2022; no shares issued and outstanding at December 31, 2023 and 2022 | 0 | 0 |
Common stock, $0.001 par value; 100,000,000 and 20,000,000 shares authorized at December 31, 2023 and 2022, respectively; 12,349,243 and 3,654,119 shares issued and outstanding at December 31, 2023 and 2022, respectively | 12,349 | 3,654 |
Additional paid-in-capital | 102,238,382 | 63,726,057 |
Accumulated deficit | (104,382,549) | (66,737,765) |
Total stockholders’ deficit | (2,131,818) | (3,008,054) |
Total liabilities and stockholders’ deficit | 11,940,411 | 9,111,072 |
Nonrelated Party | ||
Current liabilities | ||
Accounts payable | 1,155,785 | 1,669,997 |
Accrued interest - related party | 234,750 | 0 |
Other current liabilities | 998,552 | 1,422,445 |
Related Party | ||
Current liabilities | ||
Accounts payable | 0 | 124,901 |
Accrued interest - related party | 126,027 | 15,814 |
Other current liabilities | $ 0 | $ 95,850 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 200,000 | |
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) | 100,000,000 | 20,000,000 |
Common stock, shares issued (in shares) | 12,349,243 | 3,654,119 |
Common stock, shares outstanding (in shares) | 12,349,243 | 3,654,119 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating expenses | ||
Research and development | $ 5,819,461 | $ 6,011,805 |
Cost to acquire IPR&D asset | 21,215,214 | 0 |
General and administrative | 7,852,340 | 6,094,617 |
Estimated legal contingency | (151,842) | 6,205,310 |
Total operating expenses | 34,735,173 | 18,311,732 |
Operating loss | (34,735,173) | (18,311,732) |
Other expense | ||
Change in fair value of derivative liability | (3) | (59,729) |
Interest expense | 906,270 | 665,133 |
Interest income | 99,974 | 19,011 |
Finance charge | 0 | 120,228 |
Loss from asset sale | 307,086 | 0 |
Debt conversion inducement expense | 1,383,285 | 0 |
Wind-down costs | 409,347 | 456,508 |
Total other expense, net | 2,906,011 | 1,163,129 |
Loss before income taxes | (37,641,184) | (19,474,861) |
Provision for income taxes | 3,600 | 6,741 |
Net loss | $ (37,644,784) | $ (19,481,602) |
Loss per common share | ||
Basic (in dollars per share) | $ (5.37) | $ (8.77) |
Diluted (in dollars per share) | $ (5.37) | $ (8.77) |
Weighted average shares of common stock outstanding used to compute loss per share: | ||
Basic (in shares) | 7,006,038 | 2,221,080 |
Diluted (in shares) | 7,006,038 | 2,221,080 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (37,644,784) | $ (19,481,602) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Finance charge from Sciences warrant modification | 0 | 120,228 |
Depreciation and amortization | 124,251 | 114,998 |
Net gain on disposal of asset | (4,080) | 0 |
Stock-based compensation expense | 987,510 | 629,032 |
Change in fair value of derivative liability | (3) | (59,729) |
Amortization of debt discount | 329,890 | 489,595 |
Estimate for legal contingency | (151,843) | 6,205,310 |
Loss from divestiture of asset | 307,086 | 0 |
Debt conversion inducement expense | 1,383,285 | 0 |
Accrued interest conversion expense | 15,952 | 0 |
Cost to acquire IPR&D asset | 21,215,214 | 0 |
Foreign currency remeasurement gain | 45,350 | 0 |
Changes in assets and liabilities: | ||
Prepaid expenses | 564,232 | (16,396) |
Prepaid expenses - related party | 0 | 13,432 |
Other current assets | (257,790) | 112,907 |
Accounts payable | (576,384) | 688,269 |
Accounts payable – related parties | (124,901) | 111,471 |
Accrued payroll liabilities | 230,647 | 313,284 |
Other current liabilities | (493,471) | (1,839,252) |
Other current liabilities - related parties | (95,850) | 95,850 |
Operating lease liability | (76,566) | (82,372) |
Net cash and restricted cash used in operating activities | (13,952,178) | (12,744,072) |
Cash flows from investing activities: | ||
Proceeds from asset sale, net of legal expenses | 5,532,266 | (66,458) |
Purchases of property and equipment | (12,550) | (28,060) |
Cash acquired in asset acquisition, net of transaction costs of $0 and $1,475,144 for the years ended December 31, 2023 and 2022, respectively | 1,076,740 | 5,308,913 |
Net cash and restricted cash provided by investing activities | 6,596,456 | 5,214,395 |
Cash flows from financing activities: | ||
Proceeds from convertible note - related party | 4,973,684 | 0 |
Financing costs allocated to warrants issued with convertible debt | (6,026) | 0 |
Repayment of loan payable | (259,335) | (275,537) |
Proceeds from EHT bridge financing | 0 | 680,901 |
Repayment of Amended Credit Agreement | 0 | (616,125) |
Net cash and restricted cash provided by (used in) financing activities | 16,443,270 | (208,794) |
Net increase (decrease) in cash and restricted cash | 9,087,548 | (7,738,471) |
Cash and restricted cash, beginning of year | 1,249,107 | 8,987,578 |
Cash and restricted cash, end of year | 10,336,655 | 1,249,107 |
Reconciliation of cash and restricted cash: | ||
Cash | 1,256,453 | 1,244,527 |
Restricted cash | 9,080,202 | 4,580 |
Total cash and restricted cash shown in the consolidated statements of cash flows | 10,336,655 | 1,249,107 |
Cash paid during the year for: | ||
Interest | 198,352 | 333,547 |
Income taxes | 3,600 | 6,741 |
Supplemental disclosures of non-cash financing activities: | ||
Financing of insurance premium | 203,884 | 275,537 |
Common stock warrant exercises | 282,906 | 0 |
Conversion of multi-draw credit agreement | 1,565,470 | 0 |
Conversion of accrued interest due to related party | 31,766 | 0 |
Right of use asset obtained in exchange for operating lease liabilities | 241,134 | 0 |
Stock issued for assets, net of equity issuance costs | 20,532,846 | 3,074,098 |
Deferred issuance costs | 0 | 22,471 |
Purchases of property and equipment in other current liabilities | 0 | 11,300 |
Release of share liability to additional paid-in-capital | 0 | 13,000 |
Asset acquisition costs in other current liabilities and accounts payable | 0 | 102,857 |
Related Party | ||
Changes in assets and liabilities: | ||
Accrued interest – related party | 126,027 | (159,097) |
Nonrelated Party | ||
Changes in assets and liabilities: | ||
Accrued interest – related party | 234,750 | 0 |
Common Stock Warrants | ||
Cash flows from financing activities: | ||
Proceeds from warrant exercises | 11,734,947 | 0 |
Prefunded Warrants | ||
Cash flows from financing activities: | ||
Proceeds from warrant exercises | $ 0 | $ 1,967 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parentheticals) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Statement of Cash Flows [Abstract] | |
Transaction costs | $ 0 |
Debt issuance costs | $ 265,053 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Total | Prefunded Warrants | Common Stock | Common Stock Prefunded Warrants | Additional Paid-In Capital | Additional Paid-In Capital Prefunded Warrants | Accumulated Deficit |
Balance (in shares) at Dec. 31, 2021 | 1,904,434 | ||||||
Balance at Dec. 31, 2021 | $ 5,864,166 | $ 1,904 | $ 53,118,425 | $ (47,256,163) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation expense (in shares) | 5,935 | ||||||
Stock-based compensation expense | 629,032 | $ 6 | 629,026 | ||||
Warrant exercises (in shares) | 78,667 | 78,667 | |||||
Warrant exercises | 1,967 | $ 79 | 1,888 | ||||
Common stock issued in acquisition (in shares) | 1,665,083 | ||||||
Common stock issued in acquisition | 9,858,155 | $ 1,665 | 9,856,490 | ||||
Finance charge from Sciences warrant modification | 120,228 | 120,228 | |||||
Net loss for the year ended | (19,481,602) | (19,481,602) | |||||
Balance (in shares) at Dec. 31, 2022 | 3,654,119 | ||||||
Balance at Dec. 31, 2022 | (3,008,054) | $ 3,654 | 63,726,057 | (66,737,765) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Stock-based compensation expense (in shares) | 10,333 | ||||||
Stock-based compensation expense | 987,510 | $ 10 | 987,500 | ||||
Warrant exercises (in shares) | 66,566 | ||||||
Warrant exercises | $ 282,906 | $ 67 | $ 282,839 | ||||
Conversion of multi-draw credit agreement - related party and accrued interest (in shares) | 165,517 | ||||||
Conversion of multi-draw credit agreement - related party and accrued interest | 2,980,521 | $ 166 | 2,980,355 | ||||
Common stock issued in acquisition (in shares) | 5,436,378 | ||||||
Common stock issued in acquisition | 21,609,586 | $ 5,436 | 21,604,150 | ||||
PIPE Financing, net of equity issuance costs (in shares) | 2,989,981 | ||||||
PIPE Financing, net of equity issuance costs $265,053 | 11,734,947 | $ 2,990 | 11,731,957 | ||||
Warrants issued with Convertible Note | 925,550 | 925,550 | |||||
Common stock issued for fractional share adjustment in reverse stock split (in shares) | 26,349 | ||||||
Common stock issued for fractional share adjustment in reverse stock split | 0 | $ 26 | (26) | ||||
Net loss for the year ended | (37,644,784) | (37,644,784) | |||||
Balance (in shares) at Dec. 31, 2023 | 12,349,243 | ||||||
Balance at Dec. 31, 2023 | $ (2,131,818) | $ 12,349 | $ 102,238,382 | $ (104,382,549) |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parentheticals) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2023 | |
Statement of Stockholders' Equity [Abstract] | ||
Issuance costs | $ 25,511 | |
Debt issuance costs, gross | $ 265,053 |
Nature of Operations and Busine
Nature of Operations and Business Activities | 12 Months Ended |
Dec. 31, 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 located in San Diego, California, focused on the discovery, development and commercialization of novel classes of therapeutic drugs that modulate the endocannabinoid system, which has been shown to play a vital role in overall human health. Notably, the Company is developing drugs with novel mechanisms of action targeting the CB1 receptor through its own research efforts acquired intellectual property and license agreements. In August 2019, the Company formed a new subsidiary in Australia, SKYE Bioscience Pty Ltd. (formerly "EMBI Australia Pty Ltd."), an Australian proprietary limited company ("SKYE Bioscience Australia"), in order to qualify for the Australian government’s research and development tax credit for research and development dollars spent in Australia. The Company conducted its Phase 1 clinical trial for glaucoma at SKYE Bioscience Australia. On August 18, 2023, the Company completed a strategic transaction to acquire a clinical asset pursuant to an Agreement and Plan of Merger and Reorganization, dated as of August 15, 2023, by and among the Company, Bird Rock Bio, Inc. and Aquila Merger Sub, Inc., pursuant to which Aquila Merger Sub, Inc. merged with and into Bird Rock Bio, Inc. with Bird Rock Bio, Inc. surviving as a wholly owned subsidiary of the Company (the “BRB Acquisition”). In connection with the BRB Acquisition, Bird Rock Bio changed its name from Bird Rock Bio, Inc. to Bird Rock Bio Sub, Inc ("BRB"). In the BRB Acquisition, the Company issued to certain former stockholders of BRB an aggregate of 5,436,378 shares of the common stock of the Company, valued at $21,609,586 (Note 3). As of December 31, 2023, the Company has devoted substantially all its efforts to securing product licenses, carrying out its own research and development, building infrastructure and raising capital. The Company has not yet realized revenue from its planned principal operations and is a number of years away from potentially being able to do so. Liquidity and Capital Resources The Company has incurred operating losses and negative cash flows from operations since inception and as of December 31, 2023, had a working capital deficit of $2,250,156 and an accumulated deficit of $104,382,549. As of December 31, 2023, the Company had unrestricted cash in the amount of $1,256,453. For the years ended December 31, 2023 and 2022, the Company incurred losses from operations of $34,735,173 and $18,311,732, respectively. For the years ended December 31, 2023 and 2022, the Company incurred net losses of $37,644,784 and $19,481,602, respectively. The Company expects to continue to incur significant losses and negative cash flows from operations through 2024 and in the future. Historically, the Company has funded its operations through convertible debt, public equity financings, asset acquisitions and private investments in public equity. On August 18, 2023, the Company entered into the Convertible Note Financing, the August PIPE Financing and BRB Acquisition which provided the Company with the necessary funds to continue operations post an appeal bond to stay the execution of the judgment in the Cunning Lawsuit (Note 13) and reposition the Company to focus on nimacimab as its lead clinical asset for obesity. Following the August 2023 financings, the Company executed a 1:250 reverse stock split and increased its authorized shares outstanding (Note 7). On January 31, 2024 and March 13, 2024, the Company completed two private placement equity transactions with institutional investors, in which it raised combined net aggregate proceeds of approximately $83,500,000. The capital from the January and March financings will allow the Company to fund its planned Phase 2 clinical trials for glaucoma and obesity through top line data. The Company’s consolidated financial statements have been prepared on the basis of the Company continuing as a going concern for the next 12 months. Based on its current operational requirements, the Company believes that its current cash, and cash equivalents will be sufficient to fund its projected operations for at least 12 months from the date of the issuance of these consolidated financial statements. Impact of Geopolitical and Macroeconomic Factors It is possible that the Company may encounter supply chain issues related to global economic and political conditions such as a lack of production or laboratory resources. pandemics or cyberattacks that could cause business disruptions and clinical trial delays which will need to be managed in the future. There may also be significant uncertainty resulting from the impact of other geopolitical and macroeconomic factors, including global pandemics, inflation, supply chain issues, rising interest rates, future bank failures, increased geopolitical tensions between the U.S. and China and the impact of the Russia/Ukraine conflict and the Israel-Hamas war. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. Actual results could differ from those estimates. 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, estimate for legal contingency, accrued interest for legal contingency, and other current liabilities. Such reclassifications did not have a material impact on the Consolidated Financial Statements. Reverse Stock Split On September 6, 2023, the Company filed a Certificate of Change and Certificate of Correction with the Secretary of State of the State of Nevada which effected a reverse stock split at a ratio of one-for-two hundred and fifty (1-for-250) of the Company's issued and outstanding shares of common stock as of 12:01 a.m. Eastern Standard Time on September 8, 2023 . The Company did not issue fractional shares in the reverse stock split and elected to issue one whole share for each fractional share which resulted in the issuance of 26,349 common shares to our existing stockholders. The Company's financial statements have been adjusted on a retrospective basis to reflect the change. Assets Held for Sale On November 10, 2022, the Company completed the EHT Acquisition. At the time of the EHT Acquisition there were arrangements in place to sell the acquired assets and liabilities that comprised 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 EHT Acquisition and the Company has classified the associated assets of VDL as held for sale on the 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). Assets meeting the held-for-sale criteria are classified as held for sale on the 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 EHT 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 December 31, 2023, include the accounts of the Company and its wholly owned subsidiaries SKYE Bioscience Australia, EHT, AVI, BRB, Ruiyi Acquisition Corporation, and Nemus Sub. All intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the 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 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 used in determining stock based compensation expense and estimates related to the Company's estimation of the percentage of completion under its research and development contracts, which are not readily apparent from other sources. Risks and Uncertainties The Company’s operations are subject to a number of risks and uncertainties, including but not limited to, changes in the general economy, the size and growth of the potential markets for any of the Company’s product candidates, uncertainties related to the current global environment, including economic factors such as inflation, and risks related to the global supply chain disruptions (Note 1), risks related to operating primarily in a virtual environment, results of research and development activities, uncertainties surrounding regulatory developments in the United States, Canada, the European Union, and Australia and the Company’s ability to attract new funding. Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The carrying values of those investments approximate their fair value due to their short maturity and liquidity. Cash includes cash on hand and amounts on deposit with financial institutions, which amounts may at times exceed federally insured limits. The Company has not experienced any losses on such accounts and does not believe it is exposed to any significant credit risk. December 31, 2023, restricted cash on the balance sheet collateralizes an irrevocable letter of credit (Note 13). As of December 31, 2022, restricted cash is a certificate of deposit held by the Company’s bank as collateral for the Company’s credit cards. Property, Plant and Equipment, net Property, plant and equipment is stated at cost less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally three Fair Value Measurements Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (the “exit price”) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based on three levels of inputs, of which the first two are considered observable, and the last is considered unobservable, is used to measure fair value: Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources such as quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values of the Company’s financial instruments, with the exception of the derivative liabilities, approximate their fair value due to their short maturities. The derivative liabilities are valued on a recurring basis utilizing Level 3 inputs (Note 5). Income Taxes The Company accounts for deferred income tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities, net operating loss carryforwards (the “NOLs”) and other tax credit carryforwards. These items are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date. Any interest or penalties would be recorded in the Company’s Consolidated Statements of Operations in the period incurred. When necessary, the Company recognizes interest and penalties related to income tax matters in income tax expense. The Company records a valuation allowance against deferred tax assets to the extent that it is more likely than not that some portion or all of the deferred tax assets will not be realized. In making such determinations, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. Due to the substantial doubt related to the Company’s ability to utilize its deferred tax assets, a valuation allowance for the full amount of the deferred tax assets has been established at December 31, 2023 and 2022. As a result of this valuation allowance, there are no income tax benefits reflected in the accompanying Consolidated Statements of Operations to offset pre-tax losses. The Company recognizes a tax benefit from uncertain tax positions when it is more likely than not (50%) that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits of the position. Convertible Instruments The Company accounts for hybrid contracts with embedded conversion features in accordance with ASC 815, Derivatives and Hedging Activities ("ASC 815") which requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible debt instruments with embedded conversion features in accordance with ASC 470-20, Debt with Conversion and Other Options ("ASC 470-20") if it is determined that the conversion feature should not be bifurcated from their host instruments. Under ASC 470-20, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the difference between the fair value of the underlying common stock at the commitment date and the embedded effective conversion price. When the Company determines that the embedded conversion option should be bifurcated from its host instrument, the embedded feature is accounted for in accordance with ASC 815. Under ASC 815, a portion of the proceeds received upon the issuance of the hybrid contract is allocated to the fair value of the derivative. The derivative is subsequently recorded at fair value at each reporting date based on current fair value, with the changes in fair value reported in the results of operations. The Company also follows ASC 480-10, Distinguishing Liabilities from Equity ("ASC 480-10") when evaluating the accounting for its hybrid instruments. A financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares shall be classified as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly on any one of the following: (a) a fixed monetary amount known at inception (for example, a payable settled with a variable number of the issuer’s equity shares); (b) variations in something other than the fair value of the issuer’s equity shares (for example, a financial instrument indexed to the Standard and Poor’s S&P 500 Index and settled with a variable number of the issuer’s equity shares); or (c) variations inversely related to changes in the fair value of the issuer’s equity shares (for example, a written put option that could be net share settled). Hybrid instruments meeting these criteria are not further evaluated for any embedded derivatives and are carried as a liability at fair value at each balance sheet date with a re-measurement reported in other expense (income), net in the accompanying Consolidated Statements of Operations. When determining the short-term vs. long-term classification of derivative liabilities, the Company first evaluates the instruments’ exercise provisions. Generally, if a derivative is a liability and exercisable within one year, it will be classified as short-term. However, because of the unique provisions and circumstances that may impact the accounting for derivative instruments, the Company carefully evaluates all factors that could potentially restrict the instrument from being exercised or create a situation where exercise would be considered remote. The Company re-evaluates its derivative liabilities at each reporting period end and makes updates for any changes in facts and circumstances that may impact classification. Warrants Issued in Connection with Financings The Company generally accounts for warrants issued in connection with debt and equity financings as a component of equity, unless the warrants include a conditional obligation to issue a variable number of shares or there is a deemed possibility that the Company may need to settle the warrants in cash. For warrants issued with a conditional obligation to issue a variable number of shares or the deemed possibility of a cash settlement, the Company records the fair value of the warrants as a liability at each balance sheet date and records changes in fair value in other expense, net in the Consolidated Statements of Operations. Debt Issuance Costs and Interest Discounts related to bifurcated derivatives, freestanding instruments issued in bundled transactions, and issuance costs are recorded as a reduction to the carrying value of the debt and amortized over the life of the debt using the effective interest method. The Company makes changes to the effective interest rate, as necessary, on a prospective basis. For debt facilities that provide for multiple advances, the Company initially defers any issuance costs until the first advance is made and then amortizes the costs over the life of the facility. Revenue Recognition The Company accounts for its collaboration arrangement under the provisions of Accounting Standard Codification Topic 606, Revenue from Contract with Customers , or ASC 606. In accordance with ASC 606, when a customer obtains control of promised goods or services, in an amount that reflects the consideration expected to be received in exchange for those goods or services, the Company performs the following five steps in determining the appropriate amount of revenue to be recognized as it fulfills its obligations under such agreements: • identification of the promised goods and services in the contract; • determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; • measurement of the transaction price, including any constraint on variable consideration; • allocation of the transaction price to the performance obligations; and • recognition of revenue when, or as, we satisfy each performance obligation. If an agreement includes a license to the Company's intellectual property and that license is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligations to determine whether the combined performance obligations are satisfied over time or at a point in time. If over time, the Company evaluates the measure of progress over time proportionate to the costs incurred to perform the services using an input method as a measure of progress towards satisfying the performance obligation. Any change made to estimated progress towards completion of a performance obligation due to changes in the estimated activities required to complete the performance obligation and, therefore, revenue recognized will be recorded as a change in estimate. The Company receives payments from its collaborators based on billing schedules established in each contract. Upfront payments and other payments may require deferral of revenue recognition to a future period until the Company performs its obligation under its collaboration arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. Research and Development Expenses and Licensed Technology Research and development costs are expensed when incurred. These costs may consist of external research and development expenses incurred under agreements with third party contract research organizations and investigative sites; third party manufacturing organizations and consultants; license fees; employee-related expenses, which include salaries and benefits for the personnel involved in the Company’s preclinical; and clinical drug development activities, other expenses and equipment and laboratory supplies. Costs incurred for the rights to use licensed technologies in the research and development process, including licensing fees and milestone payments, are charged to research and development expense as incurred in situations where the Company has not identified an alternative future use for the acquired rights, and are capitalized in situations where there is an identified alternative future use. None of the costs associated with the use of licensed technologies has been capitalized to date. Similarly, costs incurred to acquire in-process research and development ("IPR&D") are charged to research and development expense in the situation where the Company has not identified an alternative future use and are capitalized in the situation where there is an alternative future use. All costs associated with the acquisition of IPR&D have been expensed to date. Stock-Based Compensation Expense Stock-based compensation expense is estimated at the grant date based on the fair value of the award, and the fair value is recognized as expense ratably over the vesting period with forfeitures accounted for as they occur. Upon the exercise of stock option awards, the Company's policy is to issue new shares of its common stock. The Company uses the Black-Scholes valuation method for estimating the grant date fair value of stock options using the following assumptions: • Volatility - Stock price volatility is estimated over the expected term based on a blended daily rate of industry peers stock volatility. • 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. Additionally, the Company uses the Monte Carlo Simulation model to evaluate the derived service period and fair value of awards with market conditions, including assumptions of historical volatility and risk-free interest rate commensurate with the vesting term. 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, restricted stock units, 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). Leases The Company applies ASU, No. 2016-02, Leases (Topic 842), in accounting for operating lease arrangements. At the inception of an arrangement, the Company determines whether the arrangement is, or contains, a lease based on the unique facts and circumstances present. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in the lease contract is typically not readily determinable. As such, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. Lease expense is recognized over the expected term on a straight-line basis. Operating leases are recognized on the Consolidated Balance Sheets as operating lease right-of-use assets, operating lease liability, current portion and operating lease liability, net of current portion. Asset Acquisitions The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets. For asset acquisitions, a cost accumulation model is used to determine the cost of an asset acquisition. Common stock, warrants and options issued as consideration in an asset acquisition are generally measured based on the acquisition date fair value of the equity interests issued. The Company refers to ASC 718 and utilizes a Black-Scholes Model to value the options and warrants issued is an asset acquisition and includes the fair value of such awards in the purchase consideration. Direct transaction costs are recognized as part of the cost of an asset acquisition. The Company also evaluates which elements of a transaction should be accounted for as a part of an asset acquisition and which should be accounted for separately. Consideration deposited into escrow accounts are evaluated to determine whether it should be included as part of the cost of an asset acquisition or accounted for as contingent consideration. Amounts held in escrow where we have legal title to such balances but where such accounts are not held in the Company's name, are recorded on a gross basis as an asset with a corresponding liability in our consolidated balance sheet. Unless an acquired asset is expensed at the date of acquisition, in accordance with other applicable GAAP, the cost of an asset acquisition, including transaction costs, are allocated to identifiable assets acquired and liabilities assumed based on a relative fair value basis. Goodwill is not recognized in an asset acquisition. Any difference between the cost of an asset acquisition and the fair value of the net assets acquired is allocated to the non-monetary identifiable assets based on their relative fair values. However, as of the date of acquisition, if certain assets are carried at fair value under other applicable GAAP the consideration is first allocated to those assets with the remainder allocated to the non-monetary identifiable assets based on a relative fair value basis. 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 total tax rebates received under the AusIndustry incentive program were $180,374 for the year ended December 31, 2023 related to incentives earned in the prior year and $34,189 for the year ended December 31, 2022. As of December 31, 2023 and 2022, the Company has recognized $540,604 and $179,687, respectively, in other current assets in its Consolidated Balance Sheets. Foreign Currency Translation The Company’s reporting currency and the functional currency of its foreign subsidiaries is the United States dollar. The local currencies of its foreign subsidiaries are the Canadian Dollar (“CAD”) or Australian dollar (“AUD”). Assets and liabilities are remeasured based on the exchange rates at the balance sheet date 0.7549 for the CAD, 0.6818 for the AUD as of December 31, 2023 and 0.7384 for the CAD and 0.6792 for the AUD as of December 31, 2022, while expense accounts are remeasured at the weighted average exchange rate for the period 0.7453 for the CAD and 0.6697 for the AUD for the year ended December 31, 2023 and 0.7361for the CAD and 0.6748 for the AUD as of December 31, 2022. Equity accounts are remeasured at historical exchange rates. The resulting remeasurement adjustments are recognized in general and administrative expenses in the consolidated financial statements. During the years ended December 31, 2023 and 2022, the Company recorded foreign currency remeasurements of $61,767 and $63,717, respectively, which are reflected in general and administrative expenses in the accompanying Consolidated Statements of Operations. Foreign currency gains and losses resulting from transactions denominated in foreign currencies are recorded in the Consolidated Statements of Operations. During the years ended December 31, 2023 and 2022, the Company recorded foreign currency transaction loss of $9,143 and gain of $3,352, respectively, which is reflected in the general and administrative expenses in the accompanying consolidated statement of operations. 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 13 for additional information. In accordance with ASC 450, Contingencies, subtopic 450-20, the Company does not reflect a contingency that may result in a gain until it is realized. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Account Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This ASU replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. The amendments in this ASU are effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU 2016-13 as of January 1, 2023 and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. Recent Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures . This ASU requires greater disaggregation of information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. This ASU applies to all entities subject to income taxes and is intended to help investors better understand an entity’s exposure to potential changes in jurisdictional tax legislation and assess income tax information that affects cash flow forecasts and capital allocation decisions. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. This ASU should be applied on a prospective basis although retrospective application is permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements and related disclosures In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual a |
Asset Acquisitions
Asset Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Asset Acquisitions | Asset Acquisitions BRB Acquisition On August 18, 2023, the Company acquired 100% of Bird Rock Bio Sub, Inc. pursuant to an Agreement and Plan of Merger and Reorganization, dated August 15, 2023. The purpose of the acquisition was to acquire BRB's clinical asset, nimacimab, an antibody targeting the CB1 receptor, for development to treat obesity. Pursuant to the BRB Acquisition, the Company issued 3,872,184 shares of Skye common stock to the former preferred shareholders of BRB equal to $20,000,000 in base merger consideration priced at $5.16. In addition, the former preferred shareholders of BRB were entitled to additional merger consideration for each dollar invested in the August 2023 PIPE Financing (Note 7). Because the August 2023 PIPE Financing and BRB Acquisition occurred contemporaneously and in contemplation of each other, in accounting for the transaction, the Company allocated the shares issued as additional merger consideration between the BRB Acquisition and PIPE Financing using a residual allocation method, whereby the fair value of the consideration transferred was first allocated to the monetary assets and August 2023 PIPE Financing proceeds with the remainder allocated to the IPR&D asset. As a result, 1,564,194 additional shares of common stock were allocated to the BRB Acquisition. Below is a summary of the total consideration, assets acquired and the liabilities assumed in connection with the BRB Acquisition: August 18, 2023 Purchase consideration Common stock $ 21,609,586 (a) Total consideration $ 21,609,586 Assets acquired and liabilities assumed: IPR&D asset $ 21,215,214 Cash and cash equivalents 1,076,740 Prepaid expenses 4,800 Accounts payable (73,473) Other current liabilities (613,695) Total net assets acquired $ 21,609,586 __________________ (a) Equal to the aggregate common shares issued of 5,436,378, multiplied by the Company's closing stock price of $3.975 as of August 18, 2023. The cost to acquire the IPR&D asset related to nimacimab was expensed on the date of the BRB Acquisition as it was determined to have no future alternative use. Accordingly, costs associated with the BRB Acquisition to acquire the asset were expensed as incurred. Acquisition of Emerald Health Therapeutics, Inc. On May 11, 2022, the Company entered into an Arrangement Agreement, as amended on June 14, 2022, July 15, 2022 and October 14, 2022 (the “Arrangement Agreement”) with Emerald Health Therapeutics, Inc., a corporation existing under the laws of the Province of British Columbia, Canada (“EHT”), pursuant to a plan of arrangement under the Business Corporations Act (British Columbia) (the “EHT Acquisition”). On November 10, 2022, the Company completed the EHT Acquisition and each share of EHT common stock outstanding immediately prior to the effective time of the EHT Acquisition was transferred to the Company in exchange for 1.95 shares of the Company's common stock (the “Exchange Ratio”). The Company evaluated the accounting for the transaction and accounted for the EHT Acquisition as an asset acquisition due to the wind-down state of EHT. The primary purpose of the EHT 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. To account for the Acquisition, the Company measured the equity interests issued on the Closing Date (including the value of the options and warrants rolled over) and accumulated the direct costs attributable to the Acquisition. Upon closing the EHT Acquisition, the Company acquired net assets with an estimated fair value of $15,045,412. The fair value of the consideration was allocated on a relative fair value basis to the “qualifying assets” in the EHT Acquisition and any excess in the fair value of the assets initially reduced the value of the qualifying assets before reducing the value of the assets held for sale. The only qualifying asset identified in the EHT Acquisition was AVI. The fair value of AVI at the time of Acquisition was $1,536,275 and the value attributable to AVI was fully eliminated in the Acquisition accounting . As of December 31, 2023 the Company has divested both of EHT's former operating entities and as of January 15, 2024, the divestiture of substantially all of EHTs assets, including the real estate held by AVI, is complete. Upon the Closing Date of the EHT Acquisition, the Company issued each EHT shareholder 1.95 shares of Skye common stock, for each share of EHT common stock outstanding as of the Closing Date. On November 10, 2022, the Company issued 1,665,083 shares of stock as consideration in the EHT Acquisition and no fractional shares of Skye Common Stock were issued. For U.S. and Canadian federal income tax purposes, the EHT Acquisition constitutes a taxable exchange by the EHT shareholders. In addition, all outstanding stock options and warrants of EHT were exchanged for replacement options and warrants of Skye with identical terms, as adjusted in accordance with the Exchange Ratio. Below is a summary of the total consideration, assets acquired and the liabilities assumed in connection with the Acquisition: November 10, 2022 Purchase consideration Common stock $ 9,574,222 (a) EHT rollover stock options 105,929 (b) EHT rollover warrants 203,515 (c) Transaction costs 1,552,490 (d) Total consideration $ 11,436,156 Assets acquired and liabilities assumed: Cash and cash equivalents $ 6,784,057 Accounts receivable 14,375 Prepaid Expenses 4,227 Assets held for sale 6,610,662 (e) Related party loan 680,901 (f) Other current assets 356,961 (g) Accounts payable (909,048) Short term liability (557,010) (h) Payroll liabilities (577,421) Insurance premium loan payable (89,851) Tax liabilities (158,858) Other current liabilities (722,839) (i) Total net assets acquired $ 11,436,156 a. Common Stock , The Company issued 1,665,083 shares of common stock at $5.75 per share for an aggregate fair value of $9,574,222. b. EHT Rollover Stock Options , The estimated fair value of options issued as consideration in the EHT Acquisition was $105,929 and 33,132 SKYE options were issued after applying the Exchange Ratio. The assumptions to value these options were as follows (see Note 8): November 10, 2022 Dividend yield 0.00 % Volatility 76.61 - 126.45% Risk-free interest rate 3.51 - 4.56% Expected term (years) 0.02 - 4.83 c. EHT Rollover Warrants , The estimated fair value of warrants issued as consideration for the Acquisition was $203,515 and 243,781 SKYE warrants were issued after applying the Exchange Ratio. The assumptions used to value these warrants are as follows: November 10, 2022 Dividend yield 0.00 % Volatility 102.9-114.6% Risk-free interest rate 4.29-4.53% Expected term (years) 0.56-2.27 d. Transaction Costs, The Company incurred aggregate transaction costs of $1,945,140 in connection with the Acquisition, of which $341,629 were expensed, $1,552,490 were considered part of the transaction consideration and $25,511, represented equity issuance costs, which were included as an offset to equity. e. Assets held for sale, The Company acquired assets related to EHT and its subsidiaries which are considered held for held for sale in the amount of $6,610,662. This amount is primarily composed of the following balances: i. The adjusted fair value of the VDL assets held for sale of $8,540,732, net of direct liquidation costs of $390,241, which includes legal costs, advisory fees and other professional fees. In addition, the VDL assets were further reduced by $2,072,981 as a result of the relative fair value allocation. The resulting carrying value of the asset recorded by the Company is $6,467,751. ii. The Company acquired deposits related to utilities for EHT's subsidiaries held for sale. The fair value of these deposits at the time of acquisition is $23,910. iii. The Company has acquired the value of EHTC's Health Canada license which was transferred with the sale of EHTC (See Divestiture of Emerald Health Therapeutics Canada, Inc. below). The value of the license at the time of the acquisition was $91,700. iv. The Company acquired prepaid expenses related to entities held for sale of $27,301. f. Related party loan , on October 17, 2022, the Company and EHT entered into a loan agreement pursuant to which EHT loaned the Company $700,000 in accordance with the terms of a promissory note. Upon closing the Acquisition, the loan was offset by the balance due to Skye under the consulting agreement. The net related party loan balance was $680,901 as of the closing of the Acquisition. After the closing of the EHT Acquisition, this balance eliminates in consolidation. g. Other current assets, The Company acquired other current assets related to EHT and its subsidiaries which are considered held for held for sale in the amount of $356,961. This amount is primarily composed of the following balances: i. The Company acquired deposits related to EHT's excise tax bonds of $252,418. As a condition of the EHTC and VDL stock purchase agreements it is expected that the cash value of these bonds will be received upon transfer of the Health Canada licenses to the purchasers of EHTC and VDL. ii. The Company acquired an open receivables balance of $104,543 made up of a balance due from the buyer of VDL, a former customer of EHT's of $75,396. Additionally, this balance includes a property tax refund due of $29,147. h. Short-term liability EHT received an upfront deposit of $557,010 for the sale of VDL, i. Other current liabilities , The Company acquired liabilities related to EHT and its subsidiaries which are considered in the amount of $722,839. This amount is primarily composed of the following balances: i. The Company acquired an outstanding accrued liabilities balance of $587,139. The majority of the balance includes estimated late fees related to late tax filings. ii. In accordance with ASC 450, the Company has recorded a contingent liability related credits due to customers of EHT's former operations. At the time of the EHT Acquisition, this liability was estimated at $135,700. Divestiture of Emerald Health Therapeutics Canada, Inc. On December 28, 2022, approximately six weeks after the EHT Acquisition, the Company entered into a Share Purchase Agreement (“SPA”) with a third-party whereby the Company transferred all of its outstanding and fully paid, non-assessable 11,776,338 shares of common stock (the "EHTC Common Shares"), all of which were held by EHT with no par value, for the total purchase price of $110,759. The purchase price also includes the transfer of two licenses issued by Health Canada. EHTC was classified as an asset acquisition and did not meet the criteria of a business at the of EHT Acquisition, and was considered held for sale at the time of EHT Acquisition. Therefore, the sale of EHTC is determined to be treated as the sale of an asset to a third-party due to the discontinued state of the business at the date of divestment. No gain or loss related to the divestiture of EHTC was recorded. 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 EHT 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) $370,350 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) $2,777,625 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 year ended December 31, 2023, the Company has recorded a loss on sale of asset of $307,086 in other expense based on the difference between the carrying amount of the assets sold and the net cash proceeds. |
Prepaid Expenses, Other Current
Prepaid Expenses, Other Current Assets and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses, Other Current Assets and Other Current Liabilities | Prepaid Expenses, Other Current Assets and Other Current Liabilities Prepaid expenses consist of the following: As of December 31 2023 2022 Prepaid clinical expenses $ 292,352 $ 646,072 Total other prepaid expenses 132,907 134,735 $ 425,259 $ 780,807 Other current assets consist of the following: As of December 31 2023 2022 AusIndustry incentive $ 540,604 $ 179,687 Vendor deposits 172,439 101,386 Excise Tax Bonds 125,784 74,121 Other tax receivables 32,458 — Other current assets 17,644 126,394 $ 888,929 $ 481,588 Other current liabilities consist of the following: As of December 31 2023 2022 Research and development costs $ 467,784 $ 40,597 Legal expenses 258,213 227,350 EHT Acquisition related liabilities 180,897 369,111 Consulting fees 47,400 — Professional fees 22,068 86,682 Insurance loan payable — 55,451 Deposit - Verdélite SPA — 553,800 Other accrued liabilities 22,190 89,454 $ 998,552 $ 1,422,445 |
Warrants and Derivative Liabili
Warrants and Derivative Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants and Derivative Liabilities | Warrants and Derivative Liabilities There 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 (See Note 2). Warrants Warrants vested and outstanding as of December 31, 2023 are summarized as follows: Source Exercise Remaining Term Number of 2015 Common Stock Warrants 1,250.00 1.32 400 2016 Common Stock Warrants to Service Providers 287.50 2.84 160 2019 Common Stock Warrants 87.50 0.89 32,000 2020 Common Stock Warrants to Placement Agent 20.00 1.58 32,668 2021 Inducement Warrants 37.50 2.57 84,667 2021 Inducement Warrants to Placement Agent 47.00 2.57 5,927 2021 Common Stock Warrants 22.50 2.75 311,113 2021 Common Stock Warrants to Placement Agent 27.50 2.75 21,778 2022 Common Stock Warrants to Service Provider 10.00 0.25 8,000 November 2019 EHT Common Stock Warrants* 72.25 0.92 34,213 December 2019 EHT Common Stock Warrants* 37.75 1.00 3,783 February 2020 EHT Common Stock Warrants* 37.25 1.11 80,694 August 2023 Convertible Note Common Stock Warrants 5.16 9.64 340,000 August 2023 PIPE Financing Common Stock Warrants 5.16 9.64 2,325,537 Total warrants outstanding as of December 31, 2023 3,280,940 *Replacement warrants issued on November 10, 2022 in conjunction with the Acquisition (see Note 3). As of December 31, 2023, all of the Company's warrants are fully vested. August 2023 PIPE Financing Common Stock Warrants In connection with the PIPE Financing (Note 7), the Company issued 2,325,537 common stock warrants. The warrants were equity classified at issuance and $4,784,894 of the gross proceeds from the PIPE Financing were allocated to the common stock warrants on a relative fair value basis. The warrants vested immediately and the fair value of $7,881,972 was determined using the Black-Scholes Merton option pricing model with the following assumptions: August 18, Dividend yield 0.00 % Volatility factor 87.88 % Risk-free interest rate 4.26 % Expected term (years) 10.00 Underlying common stock price $ 5.16 August 2023 Convertible Note Common Stock Warrants In connection with the Convertible Note (See Note 6), the Company issued 340,000 common stock warrants. The warrants were equity classified at issuance and $931,576 of the gross proceeds from the Convertible Note were allocated to the common stock warrants on a relative fair value basis. The warrants vested immediately and the fair value of $1,144,886 was determined using the Black-Scholes Merton option pricing model with the following assumptions: August 18, Dividend yield 0.00 % Volatility factor 87.88 % Risk-free interest rate 4.26 % Expected term (years) 10.00 Underlying common stock price $ 5.16 February 2023 Sciences Warrant Exercises Effective February 16, 2023, Company and Sciences entered into a Master Transaction Agreement (the "MTA"). Under the MTA, Sciences agreed to exercise 66,566 common stock warrants at $4.25 per share (the "MTA Warrants"). Under the MTA, the parties agreed that the aggregate proceeds from the exercise of the MTA Warrants of $282,906 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 66,566 shares of common stock to Sciences in connection with the exercise of the MTA Warrants (Note 7). November 2022 Sciences Warrant Repricing On November 17, 2022, the Company entered into an Amendment and Acknowledgement Agreement (the "Amendment Agreement") with Sciences. Under the terms of the Amendment Agreement, the exercise prices of all the outstanding Sciences Multi-Draw Credit Agreement Warrants and the December 2019 EHT Common Stock Warrants were repriced to $4.25. Refer to Note 6 for further information on the Amendment Agreement. The Company accounted for the repricing of the warrants as a modification by comparing the fair value of the warrants immediately before and after the modification date to determine the incremental fair value of the repricing. The aggregate modified fair value of $150,851 resulted in an increase in fair value of $120,228. The Company recorded the incremental fair value as a finance charge to other expense in the Consolidated Statements of Operations for the year ended December 31, 2023. On the date of modification, the Company revalued the warrants with a Black-Scholes valuation method using the following assumptions as of the repricing date: November 17, 2022 Dividend yield 0.00 % Volatility factor 97.53 - 115.96% Risk-free interest rate 4.40 - 4.67% Expected term (years) 0.96 - 2.12 Underlying common stock price $ 4.25 EHT Rollover Warrants On November 10, 2022, the Company issued equity classified replacement warrants with a fair value of $203,515 in exchange for all outstanding warrants of EHT adjusted in accordance with the Exchange Ratio. The replacement warrants were exchanged with identical terms, including exercise prices, vest terms, and expiration dates (see Note 3). 2022 Common Stock Warrants Issued to a Service Provider On April 1, 2022, the Company granted 8,000 equity classified warrants with a fair value of $35,688 to a service provider at an exercise price of $10.00 per share. The warrants vest monthly over one year and expire on April 1, 2024. Refer to Note 8 for the summary of stock-based compensation expense. As of the date of grant, the Company valued the warrants with a Black-Scholes valuation method using the following assumptions: April 1, 2022 Date of Issuance Dividend yield 0.00 % Volatility factor 118.46 % Risk-free interest rate 1.92 % Expected term (years) 1.27 Underlying common stock price $ 9.25 Derivative Liability During the year ended December 31, 2023, the warrant shares underlying the Emerald Financing Warrant Liability expired unexercised and the decrease in fair value during the year ended December 31, 2023 was nominal. The following table summarizes the activity of the derivative liability for the period indicated: Year Ended December 31, 2022 December 31, Fair Value of Derivative Liabilities Issued Change in Reclassification of Derivatives to Equity December 31, Emerald Financing - warrant liability 59,732 — (59,729) — 3 Total derivative liability $ 59,732 $ — $ (59,729) $ — $ 3 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 $25.00. The warrants contain a contingent put option if the Company undergoes a subsequent financing that results in a change in control. The warrant holders also have the right to participate in subsequent financing transactions on an as-if converted basis. The Company reviewed the warrants for liability or equity classification under the guidance of ASC 480-10, Distinguishing Liabilities from Equity, and concluded that the warrants should be classified as a liability and re-measured to fair value at the end of each reporting period. The Company also reviewed the warrants under ASC 815, Derivatives and Hedging/Contracts in Entity’s Own Equity , and determined that the warrants also meet the definition of a derivative. With the assistance of a third party valuation specialist, the Company valued the warrant liabilities utilizing the Monte Carlo valuation method pursuant to the accounting guidance of ASC 820-10, Fair Value Measurements . Beginning March 31, 2021, the Company changed its valuation model for the Emerald Financing Warrant Liability to a Black-Scholes valuation method, as it was determined that a more simplistic model such as the Black-Scholes valuation method yields a substantially similar result as a Monte Carlo simulation due to the Company's current assumptions. The warrant liability is valued at the balance sheet dates using the following assumptions: December, 31, 2022 Dividend yield — % Volatility factor 140.83 % Risk-free interest rate 4.21 % Expected term (years) 1.13 Underlying common stock price $ 4.00 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company’s convertible debt consists of the following: As of December 31, 2023 2022 Total principal value of convertible note - related party, net of debt discount $ 5,000,000 $ — Total principal value of convertible multi-draw credit agreement - related party — 1,848,375 Unamortized debt discount (610,749) — Unamortized debt issuance costs (17,253) — Carrying value of total convertible debt—related party $ 4,371,998 $ 1,848,375 Convertible Note - Related Party On August 15, 2023, the Company entered into a Secured Note and Warrant Purchase Agreement with MFDI, LLC (“MFDI”), pursuant to which the Company issued to MFDI a $5,000,000 secured convertible promissory note (the "Convertible Note") and a warrant to purchase 340,000 shares of common stock on August 18, 2023 (the "Convertible Note Financing") (Notes 5 & 12). The Convertible Note bears interest at a rate of 10% per annum and matures on August 18, 2024, unless earlier repurchased or converted. The Convertible Note may be converted at any time and the conversion price is fixed at $5.16. Accrued interest will be payable quarterly within 30 days of the last day of each calendar quarter. The Company may prepay the principal or interest outstanding under the Note at any time without penalty. In accounting for the Convertible Note, the Company allocated $4,068,424 in proceeds to the debt host and $931,576 in proceeds to the freestanding warrants based on relative fair value. The debt discounts of $931,576 and $26,316 related to the warrants, and debt issuance costs, respectively, are being amortized over the term of the Convertible Note using the effective interest rate method. Amortization of the debt discount is recognized as non-cash interest expense in Other expense within the Consolidated Statements of Operations. In addition, the Company recorded $6,026 in equity issuance costs as a deduction to additional paid in capital in the Statements of Stockholders' Deficit. For the year ended December 31, 2023, the effective interest rate on the Convertible Note was 31.39%, the remaining amortization period on the debt was 0.63 years and the fair value of the underlying conversion shares did not exceed the carrying value of the debt at December 31, 2023. Bridge Loan 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 operations of the Company until it completed the BRB Acquisition. Concurrent with the closing of the BRB Acquisition, August 2023 PIPE Financing and Convertible Note Financing, the Bridge Loan was cancelled and converted into an investment in the August 2023 PIPE Financing (Note 7). All interest and rights related to the Bridge Loan were concurrently cancelled. Multi-Draw Credit Agreement- Related Party On October 5, 2018, the Company entered into the Credit Agreement with Sciences, a related party (Note 12). 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 "Amended Credit Agreement"). The amendments were considered a modifications for accounting purposes. On November 17, 2022, the Company entered into Amendment No. 4 with Sciences. Under the terms of Amendment No. 4, the parties agreed that the Company would prepay 25% of the outstanding principal amount equal to $616,125, plus all accrued interest of $328,737 through the date of the Amendment No. 4. In addition, the Amended Credit Agreement was amended to extend the maturity date to the earlier of December 30, 2022, or the Termination Date (as such term is defined in the Credit Agreement) and the parties agreed to use good faith efforts to enter into a customary piggyback registration rights agreement. In exchange for the extension, the Company agreed to reprice all of the outstanding Sciences warrants to $4.25 per share (Note 5). On December 30, 2022, the Company entered into Amendment No. 5 to the Amended Credit Agreement to extend the maturity date to the earlier of (a) five 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. For the years ended December 31, 2023 and 2022, the effective interest rate related to the convertible portion of the Amended Credit Agreement was 0.00% and 29.20%, respectively. As of December 31, 2022, the debt discount on the convertible advances was fully amortized. 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 $23,374, matures on January 31, 2024, and bears interest at a rate 4.24% per annum. As of December 31, 2023 a total of $21,238 remains in prepaid expenses and the loan has been repaid. On February 28, 2022, the Company entered into an annual financing arrangement for a portion of its Directors and Officers Insurance Policy with First Insurance Funding in an amount of $275,537. The loan is payable in equal monthly installments of $31,150, matures on January 31, 2023 and bears interest at a rate 4.17% per annum. As of December 31, 2022, a total of $22,961 remains in prepaid expenses and the loan has been repaid. Interest Expense The Company’s interest expense consists of the following: Year Ended 2023 2022 Related party interest expense – stated rate $ 202,254 $ 169,640 Insurance premium loan payable – stated rate 6,485 5,896 Legal judgment interest expense 234,750 — Bond premium 59,929 — Premium on irrevocable letter of credit 69,861 — Other interest expense 3,100 — Non-cash interest expense: Amortization of debt discount 320,828 488,238 Amortization of transaction costs 9,063 1,359 $ 906,270 $ 665,133 |
Stockholders' Equity and Capita
Stockholders' Equity and Capitalization | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Stockholders’ Equity and Capitalization | Stockholders’ Equity and Capitalization The Company reserved shares of common stock, on an as-if converted basis, for issuance as follows: Year Ended 2023 2022 Options issued and outstanding 498,298 171,980 Awards available for grant under the 2014 Plan 487,672 169,099 Shares for issuance under our equity incentive plan 112,000 112,000 Restricted stock unit awards issued and outstanding 847,777 10,665 Unreleased restricted stock awards issued to a service provider 5,000 — Common stock underlying the Amended Credit Agreement — 18,642 Common stock underlying the Convertible Note - Related Party 968,973 — Warrants issued and outstanding 3,280,940 788,539 6,200,660 1,270,925 Increase to Authorized Shares of Capital Stock On November 6, 2023, the Company increased its authorized shares of common stock to 100,000,000. Common Stock Issuance BRB Acquisition On August 18, 2023, the Company issued an aggregate of 5,436,378 shares of common stock in connection with the BRB Acquisition (Note 3). August 2023 PIPE Financing Concurrent with the BRB Acquisition and Convertible Note Financing, on August 15, 2023, the Company entered into the August 2023 PIPE Financing, pursuant to which on August 18, 2023, the Company issued an aggregate of 2,989,981 shares of common stock and accompanying warrants to purchase up to 2,325,537 shares of common stock (the " August 2023 PIPE Financing Common Stock Warrants" - Note 5 ) for an aggregate purchase price of $12,000,000. The August 2023 PIPE Financing was priced at $5.16 per share based on the 60-day volume- weighted average share price preceding August 15, 2023. The two lead investors in the PIPE Financing were also former preferred shareholders of BRB. As an incentive to participate in the August 2023 PIPE Financing, the Agreement and Plan of Merger and Reorganization with BRB entitled each BRB stockholder participating in the August 2023 PIPE Financing an additional share of common stock for every share of common stock purchased in the PIPE Financing. As a result, the two former BRB preferred shareholders who participated in the August 2023 PIPE Financing were issued an additional 2,228,638 shares of common stock. Because the PIPE Financing and BRB Acquisition occurred contemporaneously and in contemplation of one another, the Company allocated 664,444 of the common shares issued in the BRB Acquisition to the August 2023 PIPE Financing (Note 3). In connection with the August 2023 PIPE Financing, the Company incurred $265,053 in direct equity issuance costs for net proceeds of $11,734,947. Stock Issued for Services On November 1, 2023, the Company released 5,000 shares of common stock to a service provider (Note 8). On March 2, 2022, the Company released 600 shares of common stock to a service provider (Note 8). EHT Acquisition On November 10, 2022, the Company issued 1,665,083 shares of common stock to EHT shareholders at a 1.95 conversion rate as consideration in the EHT Acquisition (Note 3). Warrant Exercises During the December 31, 2023, 66,566 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 66,566 shares of common stock for proceeds of $282,906 which were applied to the balance of the Amended Credit Agreement (Note 6). During the year ended December 31, 2022, 78,667 pre-funded warrants with an intrinsic value of $1,178,033 were exercised in exchange for 78,667 shares of common stock for proceeds of $1,967. As of December 31, 2023 all of the pre-funded warrants from the September 2021 Financing have been exercised. Induced Conversion of Amended Credit Agreement During the year ended December 31, 2023, the Company issued 165,517 shares of common stock to Sciences. The shares were issued in conjunction with the MTA, in exchange for the remaining principal balance plus accrued interest less the aggregate exercise price of $282,905 from the exercise of the MTA Warrants in the amount of $1,597,236 at a conversion price of $9.65 (Note 6). Restricted Stock Units Released On December 14, 2023, the Company released 5,333 restricted stock units that had vested to executives of the Company (Note 8). On December 14, 2022, the Company released 5,333 restricted stock units that had vested to executives of the Company (Note 8). |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Stock Incentive Plan On October 31, 2014, the Board approved the Company’s 2014 Omnibus Incentive Plan (the “2014 Plan”). The 2014 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. On June 14, 2022, 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 364,879, 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. On September 29, 2023, the Board and Majority Stockholders adopted and approved Amendment No. 1 to the 2014 Amended and Restated Plan. Amendment No. 1 to the 2014 Amended and Restated Plan became effective on November 6, 2023. The 2014 Amended and Restated Plan was amended to increase the number of shares of the Company’s common stock authorized for issuance under the Plan by 1,299,297 to an aggregate pool of 1,846,883, while retaining the automatic share replenishment feature. The Company has reserved shares for issuance under our equity incentive plan upon share option exercise. As of December 31, 2023, the Company had 487,672 shares available for future grant under the 2014 Plan. As of December 31, 2023, the shares available for future grant under the 2014 Amended and Restated Plan are as follows: Shares Available for Grant Available as of December 31, 2022 169,099 Share pool increase 1,482,003 Forfeited 24,448 Cancelled 37,789 RSU releases 5,333 RSU grants (842,445) Option grants (388,555) Available as of December 31, 2023 487,672 Stock Options Options granted under the 2014 Amended and Restated Plan expire no later than ten years from the date of grant. Options granted under the 2014 Amended and Restated Plan may be either incentive or non-qualified stock options. For incentive and non-qualified stock option grants, the option price shall be at least 100% of the fair value on the date of grants, as determined by the Company’s Board of Directors. If at any time the Company grants an option, and the optionee directly or by attribution owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, the option price shall be at least 110% of the fair value and shall not be exercisable more than five years after the date of grant. Options granted under the 2014 Amended and Restated Plan may be immediately exercisable if permitted in the specific grant approved by the Board of Directors and, if exercised early may be subject to repurchase provisions. The shares issued generally vest over a period of one The following is a summary of option activities under the Company’s 2014 Amended and Restated Plan for the year ended December 31, 2023: Number of Weighted Weighted Aggregate Outstanding, December 31, 2022 171,980 $ 45.00 7.14 $ — Granted 388,555 3.49 Forfeited (37,789) 116.95 Cancelled (24,448) 10.28 Outstanding, December 31, 2023 498,298 $ 8.96 7.24 $ 20,441 Exercisable, December 31, 2023 145,502 $ 19.88 7.24 $ 1,276 Vested and expected to vest, December 31, 2023 498,298 $ 8.96 8.86 $ 20,441 _______________ * 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 December 31, 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 for the years ended December 31, 2023 and 2022, excluding EHT rollover options issued related to the EHT Acquisition, was $2.95 and $10.00, respectively. The total fair value of the stock options that vested during the years ended December 31, 2023 and 2022 was $512,470 and $466,263, respectively. The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option-pricing model under the following assumptions: Year Ended December 31, 2023 2022 Dividend yield 0.00 % 0.00 % Risk-free interest rate 3.86-4.61% 2.89-3.60% Expected term (years) 5.27-6.08 5.00-6.08 Volatility 87.93-127.00% 126.27-132.58% In connection with the EHT Acquisition, the Company issued a total of 33,131 stock options to EHT option holders on November 10, 2022 (Note 3). The exercise price and rollover option shares were adjusted by the Exchange Ratio at the Acquisition date and retain the vest periods as originally issued. 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. On August 25, 2023, the Company granted RSUs to its executive management team and to certain members of the Board with market and performance based conditions. The RSUs are eligible to vest subject to the achievement and attainment of certain market capitalization target goals (market-based conditions) or the achievement of a successful exit (a performance-based condition); provided, however, that no RSUs shall vest until the Compensation Committee of the Board determines that shares can be sold into the market to cover withholding tax obligations associated with the vesting of the RSUs. The following is a summary of restricted stock unit activity during the year ended December 31, 2023: Number of Weighted Average Grant Date Fair Value Unvested, December 31, 2022 10,665 $ 14.43 Granted 842,445 3.59 Released (5,333) 14.43 Unvested, December 31, 2023 847,777 $ 3.66 The Company used the Monte Carlo Simulation model to evaluate the derived service period and fair value of awards with market and performance conditions, including assumptions of historical volatility and risk-free interest rate commensurate with the vesting term. The fair value of the Company's performance-based RSUs were estimated on the date of grant under the following assumptions: Year Ended December 31, 2023 Dividend yield 0.00 % Volatility factor 87.4- 87.9% Risk-free interest rate 4.21- 4.54% Derived service periods (years) 0.81 - 3.11 During the first quarter of 2024, the first three market based conditions of the RSUs were met. Awards Granted Outside the 2014 Amended and Restated Plan During the year ended December 31, 2023, the Company granted shares of common stock to a non-employee consultant for investor relations services. Half of the shares were issued upon entering each service contract and the remaining half will be issued on October 31, 2024, unless the agreement is earlier terminated. The following is a summary of restricted stock activity outside of the 2014 Amended and Restated Plan during the year ended December 31, 2023: Number of Weighted Average Grant Date Fair Value Unvested, December 31, 2022 — $ — Granted 10,000 1.55 Released (5,000) — *Unvested, December 31, 2023 5,000 $ 1.55 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 Consolidated Statements of Operations as follows: Year Ended 2023 2022 Research and development $ 188,886 $ 77,965 General and administrative 798,624 530,234 $ 987,510 $ 608,199 The total amount of unrecognized compensation cost was $3,955,054 as of December 31, 2023. This amount will be recognized over a weighted-average period of 7.19 years. 2022 Employee Stock Purchase Plan |
Loss Per Share of Common Stock
Loss Per Share of Common Stock | 12 Months Ended |
Dec. 31, 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: For the Year Ended December 31, 2023 Loss (Numerator) Shares (Denominator) Per-Share Amount Net loss $ (37,644,784) Basic EPS and diluted EPS Net loss available to common stockholders (37,644,784) 7,006,038 $ (5.37) For the Year Ended December 31, 2022 Income (Numerator) Shares (Denominator) Per-Share Amount Net loss $ (19,481,602) Basic EPS and diluted EPS Net loss available to common stockholders (19,481,602) 2,221,080 $ (8.77) 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: Year Ended 2023 2022 Stock options 498,298 171,980 Unvested restricted stock units 847,777 10,665 Unvested restricted stock (service provider) 5,000 — Common shares underlying convertible debt 968,973 18,642 Warrants 3,280,940 788,539 Total 5,600,988 989,826 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of loss before the income tax provision consist of the following: Year Ended 2023 2022 United States $ (25,799,330) $ (18,801,570) Foreign (11,841,854) (673,291) Pre-tax loss and comprehensive loss from operations $ (37,641,184) $ (19,474,861) The components of the income tax expense consisted of the following: Year Ended December 31, Current income tax expense 2023 2022 Federal $ — $ — State 3,600 6,741 Foreign — — Total current income tax expense $ 3,600 $ 6,741 The Company is subject to taxation in the United States, various states, Australia, and Canada. The Company’s tax years for 2020 (federal), 2019 (States), 2019 (Australia) and 2019 (Canada) and forward are subject to examination by the United States, state, Australian, and Canadian tax authorities. However, to the extent allowed by law, the taxing authorities may have the right to examine periods where NOLs and credits were generated and carried forward and make adjustments up to the amount of the NOL and credit carryforwards. The Company is not currently under examination by any jurisdiction. At December 31, 2023, the Company had federal and state NOLs aggregating $110,288,344 and $113,806,359, respectively. If not used, $46,622,953 of Federal NOLs and $113,678,291 of state NOLs will begin to expire in 2031, $63,665,391 of federal NOLs and $128,068 of state NOLs will carry forward indefinitely subject to an 80% limitation against taxable income. At December 31, 2023, the Company had Australia NOLs aggregating $233,321 which do not expire and $43,762,031 of Canadian NOLS which begin to expire in 2024. At December 31, 2023, the Company had Canadian capital loss carryforwards of approximately $64,743,505 which may be carried forward indefinitely. At December 31, 2023, the Company had federal and California research credit carryforwards of $3,480,111 and $2,073,709, respectively. The federal research credit carry forwards will begin to expire in 2027, unless previously utilized. The California research credits will carry forward indefinitely. The Company’s NOLs and research credit carryforwards are subject to a reserve. Additionally, the Company had Canadian SR&ED credits as of December 31, 2023 of $940,180 which may be carried forward indefinitely. Utilization of the domestic NOL's and research credits could be subject to a substantial annual limitation due to ownership change limitations that may have occurred, or that could occur in the future, as required by Section 382 and 383 of the Internal Revenue Code of 1986, as amended (the Code), as well as similar state provisions. These ownership changes may limit the amount of NOLs and credits that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change” as defined by Section 382 of the Code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders. Upon the occurrence of an ownership change under Section 382 as outlined above, utilization of the NOLs and credits are subject to an annual limitation under Section 382 of the Code, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments, as required. Any limitation may result in expiration of a portion of the NOLs and credits before utilization. While the Company has not performed a Section 382 study, multiple ownership changes may have already occurred as the Company raised capital through the issuance of stock. However, due to the existence of the valuation allowance for deferred tax assets, any potential change in ownership will not impact the Company’s effective tax rate. The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred income tax assets are as follows: As of December 31, Current deferred tax assets and (liabilities): 2023 2022 Net operating loss $ 40,900,348 $ 30,648,168 Capital loss carryforwards 17,157,029 8,824,896 Contingent legal accrual 1,320,526 1,306,098 Depreciation 663,197 286,452 Amortization 225,678 216,077 Research and development credits 3,694,501 1,199,256 Capitalized research and development costs 1,835,326 1,000,777 Lease liability 51,086 16,565 State taxes 777 756 Other 663,067 473,429 Gross deferred tax assets 66,511,533 43,972,473 Valuation allowance (66,461,557) (43,957,489) Net deferred tax assets $ 49,976 $ 14,984 Deferred tax liabilities Right-of-use asset $ (49,976) $ (14,984) Total deferred tax liabilities (49,976) (14,984) Net deferred tax assets $ — $ — The provision for income taxes on earnings subject to income taxes differs from the statutory Federal rate at December 31, 2023 and 2022, due to the following: As of December 31, 2023 2022 Expected income tax benefit at federal statutory tax rate $ (7,904,649) $ (4,089,720) State income taxes, net of federal benefit (847,810) (749,744) Change in fair value of warrants — (76,672) Change in valuation allowance 3,167,507 (892,837) Uncertain tax positions 1,008,482 884,911 Reduction in deferreds upon divestiture — 4,974,768 Non-deductible interest — 35,624 Stock compensation 100,958 69,754 Research and development credits (315,498) (281,709) Rate adjustment 6,042 (3,568) Foreign rate differential (1,918,633) 14,934 Divestiture of VDL 2,269,297 — In process research and development 4,455,195 — Other (17,293) 121,000 Provision for income taxes $ 3,600 $ 6,741 The Company records a valuation allowance against deferred tax assets to the extent that it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Due to the the substantial doubt related to the Company's ability to utilize its deferred tax assets, a valuation allowance for the full amount of the deferred tax assets has been established at December 31, 2023. During the year ended December 31, 2023, the valuation allowance increased by $22,504,068. The Tax Cuts and Jobs Act of 2017 subjects a U.S. shareholder to tax on global intangible low-taxed income ("GILTI") earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income , states that an entity can make an accounting policy election to recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. The Company elects to provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. Under the FASB’s accounting guidance related to income tax positions, among other things, the impact of an uncertain income tax position on the income tax return must be recognized at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Additionally, the guidance provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. A reconciliation of the beginning and ending amounts of unrecognized tax positions are as follows: As of December 31, 2023 2022 Unrecognized tax positions, beginning of the year $ 2,872,020 $ 1,784,626 Gross increase - current period tax positions 1,243,191 1,087,413 Gross increase - prior period tax positions 2,316,932 — Gross decrease – prior period tax positions — (19) Unrecognized tax positions, end of year $ 6,432,143 $ 2,872,020 If recognized, none of the unrecognized tax positions would impact the Company’s income tax benefit or effective tax rate as long as the Company’s net deferred tax assets remain subject to a full valuation allowance. The Company does not expect any significant increases or decreases to the Company’s unrecognized tax positions within the next twelve months. |
Licensed Intellectual Property
Licensed Intellectual Property | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Licensed Intellectual Property | Licensed Intellectual Property UM 5050 The Company in-licenses the intellectual property used in its glaucoma product, SBI-100 OE, from the University of Mississippi under an "all fields of use" license. The license grants the Company an exclusive, perpetual license, including, with the prior written consent of UM, not to be unreasonably withheld, the right to sublicense. The License Agreement provides for an annual maintenance fee of $75,000 payable on the anniversary of the effective date. The remaining milestone payments under the license are as follows: (i) $200,000 paid within 30 days following the first submission of an Investigational 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 early submitted product(s); and (ii) $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 or the expiration of the Company’s payment obligations under such License Agreement. In July 2022, the Company paid $100,000 upon submitting its Investigational New Drug Application to the Food and Drug Administration for authorization to conduct the Company's Phase 1 trial of SBI-100 OE to the Therapeutic Goods Administration in Australia. UM 5070 and 8930 License Agreements Until January 8, 2022 and January 30, 2024, the Company licensed UM 5070 and UM 8930, respectively. Under these agreements, the Company was required to pay annual maintenance fees and certain milestones. However, after further evaluation, both licenses were terminated. Tautomer Exclusive License Agreement On November 30, 2023, the Company provided Tautomer Bioscience, (Pty) Limited (“Tautomer”). with an exclusive license to develop and commercialize SBI-100 as a novel suppository formulation in the territory of the countries of the continent of Africa for chronic intractable pain and other indications in South Africa and the rest of Africa (the "Territory"). Under the terms of the agreement, Tautomer is responsible for all formulation, preclinical and clinical development, drug product manufacturing and regulatory costs. The Company is entitled to receive from |
Related Party Matters
Related Party Matters | 12 Months Ended |
Dec. 31, 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, MFDI has significant influence over Sciences and has been issued the Convertible Note from the Company (Note 6) and participated in the August 2023 PIPE Financing (Note 7). As of December 31, 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 will provide services mutually agreed upon by the Company. The consulting agreement has an initial minimum term of one-year and will be automatically renewed for a one-year period on the anniversary of the contract unless terminated with 60 days' notice. Under the consulting agreement, Mr. Heppell is entitled to a monthly fee of $6,300, which was increased to $16,600 per month upon the closing of the EHT 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 16,000 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 and effective March 10, 2023, Mr. Heppell was removed from the Board of Sciences and no longer serves as Sciences CEO. During the year ended December 31, 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 year ended December 31, 2023, no severance expense was recognized. The Company recognized $139,615 in severance expense during the year ended December 31, 2022. The accrual for Mr. Heppell's severance was adjusted to include the increased fee payments when the Company closed the EHT Acquisition. As of December 31, 2022, the Company recognized $16,600, in accounts payable - related party and $75,503 in other current liabilities - related party under this consulting agreement. As of December 31, 2023, the Company no longer has any obligations or business relationship with Mr. Heppell. 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 year ended December 31, 2023. For the year ended December 31, 2022, the Company incurred $87,927 in expenses under the Agreement. 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 years ended December 31, 2023 and 2022, the Company incurred $50,000 and $200,000, respectively, in research and development expenses related to the retainer under the ESRA. As of December 31, 2023 and 2022, the Company has recognized $0 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 years ended December 31, 2023 and 2022, the Company incurred $39,167 and $167,000, respectively, of research and development expenses under the ESRA. As of December 31, 2023 and 2022, the Company recognized $0 and $7,835 in other current liabilities, and $0 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 EHT Acquisition, the Company's CEO, Punit Dhillon, was a board member of the Company and EHT (Note 3). On February 28, 2022, the Company entered into a standard consulting agreement with the CEO's brother to assist with diligence on the EHT Acquisition due to his knowledge and expertise as a former executive of EHT. Compensation under the agreement is for a rate of approximately $73 per hour. The consulting agreement may be terminated by either party upon providing 15 days of advance notice. For the years ended December 31, 2023 and 2022, the Company incurred $35,087 and $46,684, respectively, in consulting expenses under this agreement. As of December 31, 2023 and 2022, the Company recorded $0 and $12,511 to other current liabilities - related parties related to this consulting agreement. Effective June 30, 2023, this contract was terminated. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 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 36 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 years ended December 31, 2023 and 2022, lease expense comprised of $97,986 and $90,701, 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: December 31, 2023 Weighted-average remaining term – operating lease (in years) 2.83 Weighted-average discount rate – operating lease 15 % Future minimum lease payments as of December 31, 2023 are presented in the following table: Year: 2024 103,216 2025 106,313 2026 90,798 Total future minimum lease payments: 300,327 Less imputed interest (57,059) Total $ 243,268 Reported as: December 31, 2023 December 31, 2022 Operating lease liability $ 72,038 $ 78,700 Operating lease liability, net of current portion 171,230 — Total lease liability $ 243,268 $ 78,700 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. 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. Immediately prior to the closing of the PIPE Financing, on August 17, 2023, the Company obtained a stay on enforcement of the judgment in the Cunning Lawsuit by posting an appeal bond in the amount of $9,080,202. On October 19, 2023, the Company received the final orders from the District Court denying the post-trial motions that the Company filed with the District Court in March 2023 seeking judgment as a matter of law, a new trial, and/or a reduction of the judgment. Additionally, in March of 2023, the Company appealed the judgment in the Cunning Lawsuit with the Ninth District Court of Appeals, which is moving forward now that the District Court has ruled on the post-trial motions. In March 2024, the Company filed the opening brief for the appeal with the Ninth District Court of Appeals. 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 is challenging the verdict in the Ninth District Court of Appeals and is pursuing 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 $234,750 at an annual interest rate of 4.87% on the judgment and 5.38% on the legal fees, 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. 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, Partner Re 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 | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Sale of Real Estate Held by AVI On January 15, 2024, the Company closed the sale of the real estate held by AVI, which comprised of substantially all of AVI's assets.. The real estate and related equipment was sold to Tab Labs, Inc. for an aggregate purchase price of $1,139,572. PIPE Financings January 2024 PIPE Financing On January 29, 2024, the Company entered into a Securities Purchase Agreement, pursuant to which on January 31, 2023, the Company issued an aggregate of 11,713,664 shares of common stock and 9,978,739 pre-fund warrants to purchase up to 9,978,739 shares of common stock (the "January 2024 PIPE Financing") for an aggregate purchase price of $49,991,010. The January 2024 PIPE Financing was priced at $2.31 per common share and per $2.30 pre-funded warrant based on the 5-day average share price preceding January 29, 2024. The pre-funded warrants are exercisable at any time for $0.001. In connection with the PIPE Financing, the Company incurred $3,824,841 in direct equity issuance costs for net proceeds of $46,166,169. March 2024 PIPE Financing On March 11, 2024, the Company entered into a Securities Purchase Agreement, pursuant to which on March 13, 2024, the Company issued an aggregate of 4,000,000 shares of common stock (the "March 2024 PIPE Financing") for an aggregate purchase price of $40,000,000. The March 2024 PIPE Financing was priced at $10.00 per common share. In connection with the PIPE Financing, the Company incurred $2,625,000 in direct equity issuance costs for net proceeds of approximately $37,375,000. Stock-based Compensation On February 29, 2024, the Company granted certain employees and directors 275,000 RSUs with market based vesting conditions. The RSUs vest on the following milestones: (i) 25% vests upon achieving a market cap of $750,000,000 and a stock price of $20.00 per share, (ii) 25% vests upon achieving a market cap of $1,000,000,000 and a stock price of $30.00 per share, (iii) 25% vests upon achieving a market cap of $1,250,000,000 and a stock price of $32.50 per share, and (iv) 25% vest upon achieving a market cap of $1,500,000,000 or greater and a stock price of $35.00 per share; provided, however, that no RSUs shall vest until the compensation committee of the Company determines that shares can be sold into the market to cover withholding tax obligations associated with the vesting of the RSUs. Upon a change in control of the Issuer, 100% of the RSUs will become fully vested. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and the accompanying notes. Actual results could differ from those estimates. 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, estimate for legal contingency, accrued interest for legal contingency, and other current liabilities. Such reclassifications did not have a material impact on the Consolidated Financial Statements. Reverse Stock Split On September 6, 2023, the Company filed a Certificate of Change and Certificate of Correction with the Secretary of State of the State of Nevada which effected a reverse stock split at a ratio of one-for-two hundred and fifty (1-for-250) of the Company's issued and outstanding shares of common stock as of 12:01 a.m. Eastern Standard Time on September 8, 2023 . The Company did not issue fractional shares in the reverse stock split and elected to issue one whole share for each fractional share which resulted in the issuance of 26,349 common shares to our existing stockholders. The Company's financial statements have been adjusted on a retrospective basis to reflect the change. Assets Held for Sale On November 10, 2022, the Company completed the EHT Acquisition. At the time of the EHT Acquisition there were arrangements in place to sell the acquired assets and liabilities that comprised 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 EHT Acquisition and the Company has classified the associated assets of VDL as held for sale on the 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). Assets meeting the held-for-sale criteria are classified as held for sale on the 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 EHT 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 December 31, 2023, include the accounts of the Company and its wholly owned subsidiaries SKYE Bioscience Australia, EHT, AVI, BRB, Ruiyi Acquisition Corporation, and Nemus Sub. All intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the 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 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 used in determining stock based compensation expense and estimates related to the Company's estimation of the percentage of completion under its research and development contracts, which are not readily apparent from other sources. |
Risks and Uncertainties | Risks and Uncertainties The Company’s operations are subject to a number of risks and uncertainties, including but not limited to, changes in the general economy, the size and growth of the potential markets for any of the Company’s product candidates, uncertainties related to the current global environment, including economic factors such as inflation, and risks related to the global supply chain disruptions (Note 1), risks related to operating primarily in a virtual environment, results of research and development activities, uncertainties surrounding regulatory developments in the United States, Canada, the European Union, and Australia and the Company’s ability to attract new funding. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The carrying values of those investments approximate their fair value due to their short maturity and liquidity. Cash includes cash on hand and amounts on deposit with financial institutions, which amounts may at times exceed federally insured limits. The Company has not experienced any losses on such accounts and does not believe it is exposed to any significant credit risk. |
Property and Equipment, net | Property, Plant and Equipment, net three |
Fair Value Measurements | Fair Value Measurements Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (the “exit price”) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based on three levels of inputs, of which the first two are considered observable, and the last is considered unobservable, is used to measure fair value: Level 1: Valuations for assets and liabilities traded in active markets from readily available pricing sources such as quoted prices in active markets for identical assets or liabilities. Level 2: Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The carrying values of the Company’s financial instruments, with the exception of the derivative liabilities, approximate their fair value due to their short maturities. The derivative liabilities are valued on a recurring basis utilizing Level 3 inputs (Note 5). |
Income Taxes | Income Taxes The Company accounts for deferred income tax assets and liabilities based on differences between the financial reporting and tax bases of assets and liabilities, net operating loss carryforwards (the “NOLs”) and other tax credit carryforwards. These items are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date. Any interest or penalties would be recorded in the Company’s Consolidated Statements of Operations in the period incurred. When necessary, the Company recognizes interest and penalties related to income tax matters in income tax expense. The Company records a valuation allowance against deferred tax assets to the extent that it is more likely than not that some portion or all of the deferred tax assets will not be realized. In making such determinations, management considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations. Due to the substantial doubt related to the Company’s ability to utilize its deferred tax assets, a valuation allowance for the full amount of the deferred tax assets has been established at December 31, 2023 and 2022. As a result of this valuation allowance, there are no income tax benefits reflected in the accompanying Consolidated Statements of Operations to offset pre-tax losses. The Company recognizes a tax benefit from uncertain tax positions when it is more likely than not (50%) that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, based on the technical merits of the position. |
Convertible Instruments | Convertible Instruments The Company accounts for hybrid contracts with embedded conversion features in accordance with ASC 815, Derivatives and Hedging Activities ("ASC 815") which requires companies to bifurcate conversion options from their host instruments and account for them as free-standing derivative financial instruments according to certain criteria. The criteria includes circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable GAAP with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. The Company accounts for convertible debt instruments with embedded conversion features in accordance with ASC 470-20, Debt with Conversion and Other Options ("ASC 470-20") if it is determined that the conversion feature should not be bifurcated from their host instruments. Under ASC 470-20, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the difference between the fair value of the underlying common stock at the commitment date and the embedded effective conversion price. When the Company determines that the embedded conversion option should be bifurcated from its host instrument, the embedded feature is accounted for in accordance with ASC 815. Under ASC 815, a portion of the proceeds received upon the issuance of the hybrid contract is allocated to the fair value of the derivative. The derivative is subsequently recorded at fair value at each reporting date based on current fair value, with the changes in fair value reported in the results of operations. The Company also follows ASC 480-10, Distinguishing Liabilities from Equity ("ASC 480-10") when evaluating the accounting for its hybrid instruments. A financial instrument that embodies an unconditional obligation, or a financial instrument other than an outstanding share that embodies a conditional obligation, that the issuer must or may settle by issuing a variable number of its equity shares shall be classified as a liability (or an asset in some circumstances) if, at inception, the monetary value of the obligation is based solely or predominantly on any one of the following: (a) a fixed monetary amount known at inception (for example, a payable settled with a variable number of the issuer’s equity shares); (b) variations in something other than the fair value of the issuer’s equity shares (for example, a financial instrument indexed to the Standard and Poor’s S&P 500 Index and settled with a variable number of the issuer’s equity shares); or (c) variations inversely related to changes in the fair value of the issuer’s equity shares (for example, a written put option that could be net share settled). Hybrid instruments meeting these criteria are not further evaluated for any embedded derivatives and are carried as a liability at fair value at each balance sheet date with a re-measurement reported in other expense (income), net in the accompanying Consolidated Statements of Operations. When determining the short-term vs. long-term classification of derivative liabilities, the Company first evaluates the instruments’ exercise provisions. Generally, if a derivative is a liability and exercisable within one year, it will be classified as short-term. However, because of the unique provisions and circumstances that may impact the accounting for derivative instruments, the Company carefully evaluates all factors that could potentially restrict the instrument from being exercised or create a situation where exercise would be considered remote. The Company re-evaluates its derivative liabilities at each reporting period end and makes updates for any changes in facts and circumstances that may impact classification. |
Warrants Issued in Connection with Financings | Warrants Issued in Connection with Financings The Company generally accounts for warrants issued in connection with debt and equity financings as a component of equity, unless the warrants include a conditional obligation to issue a variable number of shares or there is a deemed possibility that the Company may need to settle the warrants in cash. For warrants issued with a conditional obligation to issue a variable number of shares or the deemed possibility of a cash settlement, the Company records the fair value of the warrants as a liability at each balance sheet date and records changes in fair value in other expense, net in the Consolidated Statements of Operations. |
Debt Issuance Costs and Interest | Debt Issuance Costs and Interest Discounts related to bifurcated derivatives, freestanding instruments issued in bundled transactions, and issuance costs are recorded as a reduction to the carrying value of the debt and amortized over the life of the debt using the effective interest method. The Company makes changes to the effective interest rate, as necessary, on a prospective basis. For debt facilities that provide for multiple advances, the Company initially defers any issuance costs until the first advance is made and then amortizes the costs over the life of the facility. Revenue Recognition The Company accounts for its collaboration arrangement under the provisions of Accounting Standard Codification Topic 606, Revenue from Contract with Customers , or ASC 606. In accordance with ASC 606, when a customer obtains control of promised goods or services, in an amount that reflects the consideration expected to be received in exchange for those goods or services, the Company performs the following five steps in determining the appropriate amount of revenue to be recognized as it fulfills its obligations under such agreements: • identification of the promised goods and services in the contract; • determination of whether the promised goods or services are performance obligations including whether they are distinct in the context of the contract; • measurement of the transaction price, including any constraint on variable consideration; • allocation of the transaction price to the performance obligations; and • recognition of revenue when, or as, we satisfy each performance obligation. If an agreement includes a license to the Company's intellectual property and that license is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license. For licenses that are bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligations to determine whether the combined performance obligations are satisfied over time or at a point in time. If over time, the Company evaluates the measure of progress over time proportionate to the costs incurred to perform the services using an input method as a measure of progress towards satisfying the performance obligation. Any change made to estimated progress towards completion of a performance obligation due to changes in the estimated activities required to complete the performance obligation and, therefore, revenue recognized will be recorded as a change in estimate. The Company receives payments from its collaborators based on billing schedules established in each contract. Upfront payments and other payments may require deferral of revenue recognition to a future period until the Company performs its obligation under its collaboration arrangements. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. |
Research and Development Expenses and Licensed Technology | Research and Development Expenses and Licensed Technology Research and development costs are expensed when incurred. These costs may consist of external research and development expenses incurred under agreements with third party contract research organizations and investigative sites; third party manufacturing organizations and consultants; license fees; employee-related expenses, which include salaries and benefits for the personnel involved in the Company’s preclinical; and clinical drug development activities, other expenses and equipment and laboratory supplies. Costs incurred for the rights to use licensed technologies in the research and development process, including licensing fees and milestone payments, are charged to research and development expense as incurred in situations where the Company has not identified an alternative future use for the acquired rights, and are capitalized in situations where there is an identified alternative future use. None of the costs associated with the use of licensed technologies has been capitalized to date. Similarly, costs incurred to acquire in-process research and development ("IPR&D") are charged to research and development expense in the situation where the Company has not identified an alternative future use and are capitalized in the situation where there is an alternative future use. All costs associated with the acquisition of IPR&D have been expensed to date. |
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 - Stock price volatility is estimated over the expected term based on a blended daily rate of industry peers stock volatility. • 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. |
Loss Per Common Share | Loss Per Common Share The Company applies ASC No. 260, Earnings per Share |
Leases | Leases The Company applies ASU, No. 2016-02, Leases (Topic 842), in accounting for operating lease arrangements. At the inception of an arrangement, the Company determines whether the arrangement is, or contains, a lease based on the unique facts and circumstances present. Operating lease liabilities and their corresponding right-of-use assets are recorded based on the present value of lease payments over the expected lease term. The interest rate implicit in the lease contract is typically not readily determinable. As such, the Company utilizes its incremental borrowing rate, which is the rate incurred to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Certain adjustments to the right-of-use asset may be required for items such as initial direct costs paid or incentives received. Lease expense is recognized over the expected term on a straight-line basis. Operating leases are recognized on the Consolidated Balance Sheets as operating lease right-of-use assets, operating lease liability, current portion and operating lease liability, net of current portion. |
Asset Acquisition | Asset Acquisitions The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Significant judgment is required in the application of the screen test to determine whether an acquisition is a business combination or an acquisition of assets. |
Government Assistance | 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 total tax rebates received under the AusIndustry incentive program were $180,374 for the year ended December 31, 2023 related to incentives earned in the prior year and $34,189 for the year ended December 31, 2022. As of December 31, 2023 and 2022, the Company has recognized $540,604 and $179,687, respectively, in other current assets in its Consolidated Balance Sheets. |
Foreign Currency Transactions | Foreign Currency Translation The Company’s reporting currency and the functional currency of its foreign subsidiaries is the United States dollar. The local currencies of its foreign subsidiaries are the Canadian Dollar (“CAD”) or Australian dollar (“AUD”). Assets and liabilities are remeasured based on the exchange rates at the balance sheet date 0.7549 for the CAD, 0.6818 for the AUD as of December 31, 2023 and 0.7384 for the CAD and 0.6792 for the AUD as of December 31, 2022, while expense accounts are remeasured at the weighted average exchange rate for the period 0.7453 for the CAD and 0.6697 for the AUD for the year ended December 31, 2023 and 0.7361for the CAD and 0.6748 for the AUD as of December 31, 2022. Equity accounts are remeasured at historical exchange rates. The resulting remeasurement adjustments are recognized in general and administrative expenses in the consolidated financial statements. During the years ended December 31, 2023 and 2022, the Company recorded foreign currency remeasurements of $61,767 and $63,717, respectively, which are reflected in general and administrative expenses in the accompanying Consolidated Statements of Operations. |
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. 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 13 for additional information. In accordance with ASC 450, Contingencies, subtopic 450-20, the Company does not reflect a contingency that may result in a gain until it is realized. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Account Standards Update (“ASU”) No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. This ASU replaces the existing incurred loss impairment model with an expected loss model. It also eliminates the concept of other-than-temporary impairment and requires credit losses related to available-for-sale debt securities to be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. These changes will result in earlier recognition of credit losses. The amendments in this ASU are effective for the Company for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU 2016-13 as of January 1, 2023 and the adoption did not have a material impact on the Company’s consolidated financial statements and related disclosures. Recent Accounting Pronouncements Not Yet Adopted In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures . This ASU requires greater disaggregation of information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid. This ASU applies to all entities subject to income taxes and is intended to help investors better understand an entity’s exposure to potential changes in jurisdictional tax legislation and assess income tax information that affects cash flow forecasts and capital allocation decisions. This ASU is effective for annual periods beginning after December 15, 2024, with early adoption permitted. This ASU should be applied on a prospective basis although retrospective application is permitted. The Company is currently evaluating the impact the adoption of this ASU will have on its consolidated financial statements and related disclosures In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The amendments in this ASU require disclosures, on an annual and interim basis, of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), as well as the aggregate amount of other segment items included in the reported measure of segment profit or loss. This ASU requires that a public entity disclose the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. Public entities will be required to provide all annual disclosures currently required by Topic 280 in interim periods, and entities with a single reportable segment are required to provide all the disclosures required by the amendments in this ASU and existing segment disclosures in Topic 280. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments in this ASU should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating the impact of this standard on its consolidated financial statements and related disclosures, and does not expect the standard will have a material impact on the Company’s consolidated financial statements and related disclosures. 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. |
Asset Acquisitions (Tables)
Asset Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Asset Acquisition | Below is a summary of the total consideration, assets acquired and the liabilities assumed in connection with the BRB Acquisition: August 18, 2023 Purchase consideration Common stock $ 21,609,586 (a) Total consideration $ 21,609,586 Assets acquired and liabilities assumed: IPR&D asset $ 21,215,214 Cash and cash equivalents 1,076,740 Prepaid expenses 4,800 Accounts payable (73,473) Other current liabilities (613,695) Total net assets acquired $ 21,609,586 __________________ (a) Equal to the aggregate common shares issued of 5,436,378, multiplied by the Company's closing stock price of $3.975 as of August 18, 2023. Below is a summary of the total consideration, assets acquired and the liabilities assumed in connection with the Acquisition: November 10, 2022 Purchase consideration Common stock $ 9,574,222 (a) EHT rollover stock options 105,929 (b) EHT rollover warrants 203,515 (c) Transaction costs 1,552,490 (d) Total consideration $ 11,436,156 Assets acquired and liabilities assumed: Cash and cash equivalents $ 6,784,057 Accounts receivable 14,375 Prepaid Expenses 4,227 Assets held for sale 6,610,662 (e) Related party loan 680,901 (f) Other current assets 356,961 (g) Accounts payable (909,048) Short term liability (557,010) (h) Payroll liabilities (577,421) Insurance premium loan payable (89,851) Tax liabilities (158,858) Other current liabilities (722,839) (i) Total net assets acquired $ 11,436,156 a. Common Stock , The Company issued 1,665,083 shares of common stock at $5.75 per share for an aggregate fair value of $9,574,222. b. EHT Rollover Stock Options , The estimated fair value of options issued as consideration in the EHT Acquisition was $105,929 and 33,132 SKYE options were issued after applying the Exchange Ratio. The assumptions to value these options were as follows (see Note 8): November 10, 2022 Dividend yield 0.00 % Volatility 76.61 - 126.45% Risk-free interest rate 3.51 - 4.56% Expected term (years) 0.02 - 4.83 c. EHT Rollover Warrants , The estimated fair value of warrants issued as consideration for the Acquisition was $203,515 and 243,781 SKYE warrants were issued after applying the Exchange Ratio. The assumptions used to value these warrants are as follows: November 10, 2022 Dividend yield 0.00 % Volatility 102.9-114.6% Risk-free interest rate 4.29-4.53% Expected term (years) 0.56-2.27 d. Transaction Costs, The Company incurred aggregate transaction costs of $1,945,140 in connection with the Acquisition, of which $341,629 were expensed, $1,552,490 were considered part of the transaction consideration and $25,511, represented equity issuance costs, which were included as an offset to equity. e. Assets held for sale, The Company acquired assets related to EHT and its subsidiaries which are considered held for held for sale in the amount of $6,610,662. This amount is primarily composed of the following balances: i. The adjusted fair value of the VDL assets held for sale of $8,540,732, net of direct liquidation costs of $390,241, which includes legal costs, advisory fees and other professional fees. In addition, the VDL assets were further reduced by $2,072,981 as a result of the relative fair value allocation. The resulting carrying value of the asset recorded by the Company is $6,467,751. ii. The Company acquired deposits related to utilities for EHT's subsidiaries held for sale. The fair value of these deposits at the time of acquisition is $23,910. iii. The Company has acquired the value of EHTC's Health Canada license which was transferred with the sale of EHTC (See Divestiture of Emerald Health Therapeutics Canada, Inc. below). The value of the license at the time of the acquisition was $91,700. iv. The Company acquired prepaid expenses related to entities held for sale of $27,301. f. Related party loan , on October 17, 2022, the Company and EHT entered into a loan agreement pursuant to which EHT loaned the Company $700,000 in accordance with the terms of a promissory note. Upon closing the Acquisition, the loan was offset by the balance due to Skye under the consulting agreement. The net related party loan balance was $680,901 as of the closing of the Acquisition. After the closing of the EHT Acquisition, this balance eliminates in consolidation. g. Other current assets, The Company acquired other current assets related to EHT and its subsidiaries which are considered held for held for sale in the amount of $356,961. This amount is primarily composed of the following balances: i. The Company acquired deposits related to EHT's excise tax bonds of $252,418. As a condition of the EHTC and VDL stock purchase agreements it is expected that the cash value of these bonds will be received upon transfer of the Health Canada licenses to the purchasers of EHTC and VDL. ii. The Company acquired an open receivables balance of $104,543 made up of a balance due from the buyer of VDL, a former customer of EHT's of $75,396. Additionally, this balance includes a property tax refund due of $29,147. h. Short-term liability EHT received an upfront deposit of $557,010 for the sale of VDL, i. Other current liabilities , The Company acquired liabilities related to EHT and its subsidiaries which are considered in the amount of $722,839. This amount is primarily composed of the following balances: i. The Company acquired an outstanding accrued liabilities balance of $587,139. The majority of the balance includes estimated late fees related to late tax filings. ii. In accordance with ASC 450, the Company has recorded a contingent liability related credits due to customers of EHT's former operations. At the time of the EHT Acquisition, this liability was estimated at $135,700. |
Schedule of Fair Value Measurement Inputs and Valuation Techniques | The assumptions to value these options were as follows (see Note 8): November 10, 2022 Dividend yield 0.00 % Volatility 76.61 - 126.45% Risk-free interest rate 3.51 - 4.56% Expected term (years) 0.02 - 4.83 The assumptions used to value these warrants are as follows: November 10, 2022 Dividend yield 0.00 % Volatility 102.9-114.6% Risk-free interest rate 4.29-4.53% Expected term (years) 0.56-2.27 August 18, Dividend yield 0.00 % Volatility factor 87.88 % Risk-free interest rate 4.26 % Expected term (years) 10.00 Underlying common stock price $ 5.16 value of $1,144,886 was determined using the Black-Scholes Merton option pricing model with the following assumptions: August 18, Dividend yield 0.00 % Volatility factor 87.88 % Risk-free interest rate 4.26 % Expected term (years) 10.00 Underlying common stock price $ 5.16 November 17, 2022 Dividend yield 0.00 % Volatility factor 97.53 - 115.96% Risk-free interest rate 4.40 - 4.67% Expected term (years) 0.96 - 2.12 Underlying common stock price $ 4.25 As of the date of grant, the Company valued the warrants with a Black-Scholes valuation method using the following assumptions: April 1, 2022 Date of Issuance Dividend yield 0.00 % Volatility factor 118.46 % Risk-free interest rate 1.92 % Expected term (years) 1.27 Underlying common stock price $ 9.25 The warrant liability is valued at the balance sheet dates using the following assumptions: December, 31, 2022 Dividend yield — % Volatility factor 140.83 % Risk-free interest rate 4.21 % Expected term (years) 1.13 Underlying common stock price $ 4.00 |
Prepaid Expenses, Other Curre_2
Prepaid Expenses, Other Current Assets and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses | Prepaid expenses consist of the following: As of December 31 2023 2022 Prepaid clinical expenses $ 292,352 $ 646,072 Total other prepaid expenses 132,907 134,735 $ 425,259 $ 780,807 |
Schedule of Other Current Assets | Other current assets consist of the following: As of December 31 2023 2022 AusIndustry incentive $ 540,604 $ 179,687 Vendor deposits 172,439 101,386 Excise Tax Bonds 125,784 74,121 Other tax receivables 32,458 — Other current assets 17,644 126,394 $ 888,929 $ 481,588 |
Schedule of other current liabilities | Other current liabilities consist of the following: As of December 31 2023 2022 Research and development costs $ 467,784 $ 40,597 Legal expenses 258,213 227,350 EHT Acquisition related liabilities 180,897 369,111 Consulting fees 47,400 — Professional fees 22,068 86,682 Insurance loan payable — 55,451 Deposit - Verdélite SPA — 553,800 Other accrued liabilities 22,190 89,454 $ 998,552 $ 1,422,445 |
Warrants and Derivative Liabi_2
Warrants and Derivative Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of warrants vested and outstanding | Warrants vested and outstanding as of December 31, 2023 are summarized as follows: Source Exercise Remaining Term Number of 2015 Common Stock Warrants 1,250.00 1.32 400 2016 Common Stock Warrants to Service Providers 287.50 2.84 160 2019 Common Stock Warrants 87.50 0.89 32,000 2020 Common Stock Warrants to Placement Agent 20.00 1.58 32,668 2021 Inducement Warrants 37.50 2.57 84,667 2021 Inducement Warrants to Placement Agent 47.00 2.57 5,927 2021 Common Stock Warrants 22.50 2.75 311,113 2021 Common Stock Warrants to Placement Agent 27.50 2.75 21,778 2022 Common Stock Warrants to Service Provider 10.00 0.25 8,000 November 2019 EHT Common Stock Warrants* 72.25 0.92 34,213 December 2019 EHT Common Stock Warrants* 37.75 1.00 3,783 February 2020 EHT Common Stock Warrants* 37.25 1.11 80,694 August 2023 Convertible Note Common Stock Warrants 5.16 9.64 340,000 August 2023 PIPE Financing Common Stock Warrants 5.16 9.64 2,325,537 Total warrants outstanding as of December 31, 2023 3,280,940 *Replacement warrants issued on November 10, 2022 in conjunction with the Acquisition (see Note 3). |
Schedule of input and valuation technique used to value warrant liabilities | The assumptions to value these options were as follows (see Note 8): November 10, 2022 Dividend yield 0.00 % Volatility 76.61 - 126.45% Risk-free interest rate 3.51 - 4.56% Expected term (years) 0.02 - 4.83 The assumptions used to value these warrants are as follows: November 10, 2022 Dividend yield 0.00 % Volatility 102.9-114.6% Risk-free interest rate 4.29-4.53% Expected term (years) 0.56-2.27 August 18, Dividend yield 0.00 % Volatility factor 87.88 % Risk-free interest rate 4.26 % Expected term (years) 10.00 Underlying common stock price $ 5.16 value of $1,144,886 was determined using the Black-Scholes Merton option pricing model with the following assumptions: August 18, Dividend yield 0.00 % Volatility factor 87.88 % Risk-free interest rate 4.26 % Expected term (years) 10.00 Underlying common stock price $ 5.16 November 17, 2022 Dividend yield 0.00 % Volatility factor 97.53 - 115.96% Risk-free interest rate 4.40 - 4.67% Expected term (years) 0.96 - 2.12 Underlying common stock price $ 4.25 As of the date of grant, the Company valued the warrants with a Black-Scholes valuation method using the following assumptions: April 1, 2022 Date of Issuance Dividend yield 0.00 % Volatility factor 118.46 % Risk-free interest rate 1.92 % Expected term (years) 1.27 Underlying common stock price $ 9.25 The warrant liability is valued at the balance sheet dates using the following assumptions: December, 31, 2022 Dividend yield — % Volatility factor 140.83 % Risk-free interest rate 4.21 % Expected term (years) 1.13 Underlying common stock price $ 4.00 |
Schedule summary of the activity of derivative liabilities | The following table summarizes the activity of the derivative liability for the period indicated: Year Ended December 31, 2022 December 31, Fair Value of Derivative Liabilities Issued Change in Reclassification of Derivatives to Equity December 31, Emerald Financing - warrant liability 59,732 — (59,729) — 3 Total derivative liability $ 59,732 $ — $ (59,729) $ — $ 3 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of convertible and non-convertible advances | The Company’s convertible debt consists of the following: As of December 31, 2023 2022 Total principal value of convertible note - related party, net of debt discount $ 5,000,000 $ — Total principal value of convertible multi-draw credit agreement - related party — 1,848,375 Unamortized debt discount (610,749) — Unamortized debt issuance costs (17,253) — Carrying value of total convertible debt—related party $ 4,371,998 $ 1,848,375 |
Schedule of interest expense | The Company’s interest expense consists of the following: Year Ended 2023 2022 Related party interest expense – stated rate $ 202,254 $ 169,640 Insurance premium loan payable – stated rate 6,485 5,896 Legal judgment interest expense 234,750 — Bond premium 59,929 — Premium on irrevocable letter of credit 69,861 — Other interest expense 3,100 — Non-cash interest expense: Amortization of debt discount 320,828 488,238 Amortization of transaction costs 9,063 1,359 $ 906,270 $ 665,133 |
Stockholders' Equity and Capi_2
Stockholders' Equity and Capitalization (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Schedule of Reserved Shares Of Common Stock | The Company reserved shares of common stock, on an as-if converted basis, for issuance as follows: Year Ended 2023 2022 Options issued and outstanding 498,298 171,980 Awards available for grant under the 2014 Plan 487,672 169,099 Shares for issuance under our equity incentive plan 112,000 112,000 Restricted stock unit awards issued and outstanding 847,777 10,665 Unreleased restricted stock awards issued to a service provider 5,000 — Common stock underlying the Amended Credit Agreement — 18,642 Common stock underlying the Convertible Note - Related Party 968,973 — Warrants issued and outstanding 3,280,940 788,539 6,200,660 1,270,925 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of shares available for future grant | As of December 31, 2023, the shares available for future grant under the 2014 Amended and Restated Plan are as follows: Shares Available for Grant Available as of December 31, 2022 169,099 Share pool increase 1,482,003 Forfeited 24,448 Cancelled 37,789 RSU releases 5,333 RSU grants (842,445) Option grants (388,555) Available as of December 31, 2023 487,672 |
Schedule of summary of stock option activity | The following is a summary of option activities under the Company’s 2014 Amended and Restated Plan for the year ended December 31, 2023: Number of Weighted Weighted Aggregate Outstanding, December 31, 2022 171,980 $ 45.00 7.14 $ — Granted 388,555 3.49 Forfeited (37,789) 116.95 Cancelled (24,448) 10.28 Outstanding, December 31, 2023 498,298 $ 8.96 7.24 $ 20,441 Exercisable, December 31, 2023 145,502 $ 19.88 7.24 $ 1,276 Vested and expected to vest, December 31, 2023 498,298 $ 8.96 8.86 $ 20,441 _______________ * 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 December 31, 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 each stock option grant was estimated on the date of grant using the Black-Scholes option-pricing model under the following assumptions: Year Ended December 31, 2023 2022 Dividend yield 0.00 % 0.00 % Risk-free interest rate 3.86-4.61% 2.89-3.60% Expected term (years) 5.27-6.08 5.00-6.08 Volatility 87.93-127.00% 126.27-132.58% The fair value of the Company's performance-based RSUs were estimated on the date of grant under the following assumptions: Year Ended December 31, 2023 Dividend yield 0.00 % Volatility factor 87.4- 87.9% Risk-free interest rate 4.21- 4.54% Derived service periods (years) 0.81 - 3.11 |
Schedule of RSA activity | The following is a summary of restricted stock unit activity during the year ended December 31, 2023: Number of Weighted Average Grant Date Fair Value Unvested, December 31, 2022 10,665 $ 14.43 Granted 842,445 3.59 Released (5,333) 14.43 Unvested, December 31, 2023 847,777 $ 3.66 The following is a summary of restricted stock activity outside of the 2014 Amended and Restated Plan during the year ended December 31, 2023: Number of Weighted Average Grant Date Fair Value Unvested, December 31, 2022 — $ — Granted 10,000 1.55 Released (5,000) — *Unvested, December 31, 2023 5,000 $ 1.55 |
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 Consolidated Statements of Operations as follows: Year Ended 2023 2022 Research and development $ 188,886 $ 77,965 General and administrative 798,624 530,234 $ 987,510 $ 608,199 |
Loss Per Share of Common Stock
Loss Per Share of Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | The following tables are a reconciliation of the numerators and denominators used in the calculation of basic and diluted net loss per share computations: For the Year Ended December 31, 2023 Loss (Numerator) Shares (Denominator) Per-Share Amount Net loss $ (37,644,784) Basic EPS and diluted EPS Net loss available to common stockholders (37,644,784) 7,006,038 $ (5.37) For the Year Ended December 31, 2022 Income (Numerator) Shares (Denominator) Per-Share Amount Net loss $ (19,481,602) Basic EPS and diluted EPS Net loss available to common stockholders (19,481,602) 2,221,080 $ (8.77) |
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: Year Ended 2023 2022 Stock options 498,298 171,980 Unvested restricted stock units 847,777 10,665 Unvested restricted stock (service provider) 5,000 — Common shares underlying convertible debt 968,973 18,642 Warrants 3,280,940 788,539 Total 5,600,988 989,826 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income (loss) before the income tax provision (benefit) | The components of loss before the income tax provision consist of the following: Year Ended 2023 2022 United States $ (25,799,330) $ (18,801,570) Foreign (11,841,854) (673,291) Pre-tax loss and comprehensive loss from operations $ (37,641,184) $ (19,474,861) The components of the income tax expense consisted of the following: Year Ended December 31, Current income tax expense 2023 2022 Federal $ — $ — State 3,600 6,741 Foreign — — Total current income tax expense $ 3,600 $ 6,741 |
Schedule for significant portions of deferred income tax assets | The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred income tax assets are as follows: As of December 31, Current deferred tax assets and (liabilities): 2023 2022 Net operating loss $ 40,900,348 $ 30,648,168 Capital loss carryforwards 17,157,029 8,824,896 Contingent legal accrual 1,320,526 1,306,098 Depreciation 663,197 286,452 Amortization 225,678 216,077 Research and development credits 3,694,501 1,199,256 Capitalized research and development costs 1,835,326 1,000,777 Lease liability 51,086 16,565 State taxes 777 756 Other 663,067 473,429 Gross deferred tax assets 66,511,533 43,972,473 Valuation allowance (66,461,557) (43,957,489) Net deferred tax assets $ 49,976 $ 14,984 Deferred tax liabilities Right-of-use asset $ (49,976) $ (14,984) Total deferred tax liabilities (49,976) (14,984) Net deferred tax assets $ — $ — |
Schedule of provision for income taxes on earnings subject to income taxes differs from the statutory Federal rate | The provision for income taxes on earnings subject to income taxes differs from the statutory Federal rate at December 31, 2023 and 2022, due to the following: As of December 31, 2023 2022 Expected income tax benefit at federal statutory tax rate $ (7,904,649) $ (4,089,720) State income taxes, net of federal benefit (847,810) (749,744) Change in fair value of warrants — (76,672) Change in valuation allowance 3,167,507 (892,837) Uncertain tax positions 1,008,482 884,911 Reduction in deferreds upon divestiture — 4,974,768 Non-deductible interest — 35,624 Stock compensation 100,958 69,754 Research and development credits (315,498) (281,709) Rate adjustment 6,042 (3,568) Foreign rate differential (1,918,633) 14,934 Divestiture of VDL 2,269,297 — In process research and development 4,455,195 — Other (17,293) 121,000 Provision for income taxes $ 3,600 $ 6,741 |
Schedule of reconciliation of beginning and ending amounts of unrecognized tax positions | A reconciliation of the beginning and ending amounts of unrecognized tax positions are as follows: As of December 31, 2023 2022 Unrecognized tax positions, beginning of the year $ 2,872,020 $ 1,784,626 Gross increase - current period tax positions 1,243,191 1,087,413 Gross increase - prior period tax positions 2,316,932 — Gross decrease – prior period tax positions — (19) Unrecognized tax positions, end of year $ 6,432,143 $ 2,872,020 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 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: December 31, 2023 Weighted-average remaining term – operating lease (in years) 2.83 Weighted-average discount rate – operating lease 15 % Reported as: December 31, 2023 December 31, 2022 Operating lease liability $ 72,038 $ 78,700 Operating lease liability, net of current portion 171,230 — Total lease liability $ 243,268 $ 78,700 |
Schedule of Future Minimum Lease Payments | Future minimum lease payments as of December 31, 2023 are presented in the following table: Year: 2024 103,216 2025 106,313 2026 90,798 Total future minimum lease payments: 300,327 Less imputed interest (57,059) Total $ 243,268 |
Nature of Operations and Busi_2
Nature of Operations and Business Activities (Details) | 1 Months Ended | 12 Months Ended | |||
Sep. 06, 2023 | Aug. 18, 2023 USD ($) shares | Mar. 13, 2024 USD ($) transaction | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Nature Of Operations And Business Activities [Line Items] | |||||
Working capital deficit | $ 2,250,156 | ||||
Accumulated deficit | (104,382,549) | $ (66,737,765) | |||
Cash | 1,256,453 | 1,244,527 | |||
Operating loss | 34,735,173 | 18,311,732 | |||
Net loss for the year ended | $ (37,644,784) | $ (19,481,602) | |||
Stockholders' equity note, stock split, conversion ratio | 0.004 | ||||
Subsequent Event | |||||
Nature Of Operations And Business Activities [Line Items] | |||||
Number of private placement equity transactions | transaction | 2 | ||||
Gross proceeds from the transaction | $ 83,500,000 | ||||
Bird Rock Bio Sub, Inc. (BRB) | |||||
Nature Of Operations And Business Activities [Line Items] | |||||
Business acquisition, equity interest issued or issuable, number of shares (in shares) | shares | 5,436,378 | ||||
Business combination, consideration transferred, equity interests issued and issuable | $ 21,609,586 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 12 Months Ended | ||
Sep. 06, 2023 shares | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Nature Of Operations And Business Activities [Line Items] | |||
Stockholders' equity note, stock split, conversion ratio | 0.004 | ||
Stock issued during period, shares, stock splits (in shares) | shares | 26,349 | ||
Estimate for legal contingency | $ 6,053,468 | $ 6,205,310 | |
Other current assets | 888,929 | 481,588 | |
Foreign currency translations | 61,767 | 63,717 | |
Realized gain (loss), foreign currency transaction, after tax | $ (9,143) | $ (3,352) | |
Canada, Dollars | |||
Nature Of Operations And Business Activities [Line Items] | |||
Foreign currency exchange rate, translation | 0.7549 | 0.7384 | |
Australia, Dollars | |||
Nature Of Operations And Business Activities [Line Items] | |||
Foreign currency exchange rate, translation | 0.6818 | 0.6792 | |
Accounting Standards Update 2021-10 | |||
Nature Of Operations And Business Activities [Line Items] | |||
Tax rebates received | $ 180,374 | $ 34,189 | |
Other current assets | $ 540,604 | $ 179,687 | |
Minimum | |||
Nature Of Operations And Business Activities [Line Items] | |||
Estimated useful lives | 3 years | ||
Maximum | |||
Nature Of Operations And Business Activities [Line Items] | |||
Estimated useful lives | 5 years | ||
Weighted Average | Canada, Dollars | |||
Nature Of Operations And Business Activities [Line Items] | |||
Foreign currency exchange rate, translation | 0.7453 | 0.7361 | |
Weighted Average | Australia, Dollars | |||
Nature Of Operations And Business Activities [Line Items] | |||
Foreign currency exchange rate, translation | 0.6697 | 0.6748 |
Asset Acquisitions - BRB Acquis
Asset Acquisitions - BRB Acquisition - Narrative (Details) - USD ($) | 12 Months Ended | |||
Aug. 18, 2023 | Nov. 10, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Asset Acquisition [Line Items] | ||||
Common stock issued in acquisition (in shares) | 33,131 | |||
Common stock issued in acquisition | $ 21,609,586 | $ 9,858,155 | ||
Bird Rock Bio Sub, Inc. (BRB) | ||||
Asset Acquisition [Line Items] | ||||
Asset acquisition, percentage of voting interests acquired | 100% | |||
Common stock issued in acquisition (in shares) | 3,872,184 | |||
Common stock issued in acquisition | $ 20,000,000 | |||
Underlying common stock price (in dollars per share) | $ 5.16 | |||
Stock issued during period, shares, acquisitions, period increase (decrease) (in shares) | 1,564,194 |
Asset Acquisitions - Schedule o
Asset Acquisitions - Schedule of BRB Acquisition (Details) | Aug. 18, 2023 USD ($) $ / shares shares |
Asset Acquisition [Line Items] | |
Asset acquisition, share price (in dollars per share) | $ / shares | 3.975 |
Bird Rock Bio Sub, Inc. (BRB) | |
Asset Acquisition [Line Items] | |
Common stock | $ 21,609,586 |
Total consideration | 21,609,586 |
IPR&D asset | 21,215,214 |
Cash and cash equivalents | 1,076,740 |
Prepaid Expenses | 4,800 |
Accounts payable | (73,473) |
Other current liabilities | (613,695) |
Total net assets acquired | $ 21,609,586 |
Asset acquisition, equity interest issued or issuable, number of shares (in shares) | shares | 5,436,378 |
Asset Acquisitions - Acquisitio
Asset Acquisitions - Acquisition of Emerald Health Therapeutics, Inc., Narrative (Details) - Emerald Health Therapeutics Inc | Nov. 10, 2022 USD ($) shares |
Asset Acquisition [Line Items] | |
Exchange ratio | 1.95 |
Net assets acquired, fair value | $ 15,045,412 |
Qualifying asset | $ 1,536,275 |
Equity interest issued or issuable (in shares) | shares | 1,665,083 |
Asset Acquisitions - Schedule_2
Asset Acquisitions - Schedule of EHT Asset Acquisition (Details) - USD ($) | 12 Months Ended | ||
Nov. 10, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Asset Acquisition [Line Items] | |||
Transaction costs | $ 0 | $ 1,475,144 | |
Emerald Health Therapeutics Inc | |||
Asset Acquisition [Line Items] | |||
Common stock | $ 9,574,222 | ||
EHT rollover stock options | 105,929 | ||
EHT rollover warrants | 203,515 | ||
Transaction costs | 1,552,490 | ||
Total consideration | 11,436,156 | ||
Cash and cash equivalents | 6,784,057 | ||
Accounts receivable | 14,375 | ||
Prepaid Expenses | 4,227 | ||
Assets held for sale | 6,610,662 | ||
Related party loan | 680,901 | ||
Other current assets | 356,961 | ||
Accounts payable | (909,048) | ||
Short term liability | 557,010 | ||
Payroll liabilities | (577,421) | ||
Insurance premium loan payable | (89,851) | ||
Tax liabilities | (158,858) | ||
Other current liabilities | (722,839) | ||
Total net assets acquired | $ 11,436,156 |
Asset Acquisitions - Footnote I
Asset Acquisitions - Footnote Information From Schedule of Asset Acquisition (Details) - USD ($) | 12 Months Ended | |||
Nov. 10, 2022 | Oct. 17, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Asset Acquisition [Line Items] | ||||
Transaction costs | $ 0 | $ 1,475,144 | ||
Emerald Health Therapeutics Inc | ||||
Asset Acquisition [Line Items] | ||||
Equity interest issued or issuable (in shares) | 1,665,083 | |||
Equity interest issued or issuable (in dollars per share) | $ 5.75 | |||
Common stock | $ 9,574,222 | |||
EHT rollover stock options | $ 105,929 | |||
Options issued and outstanding (in shares) | 33,132 | |||
EHT rollover warrants | $ 203,515 | |||
Aggregate transaction costs | 1,945,140 | |||
Transaction costs | 341,629 | |||
Transaction costs | 1,552,490 | |||
Common stock issuance costs | (25,511) | |||
Assets held for sale | 6,610,662 | |||
Working capital loan | $ 700,000 | |||
Related party loan | 680,901 | |||
Other current assets | 356,961 | |||
Short term liability | 557,010 | |||
Other current liabilities - related parties | 722,839 | |||
Other accrued liabilities | 587,139 | |||
Contingent liability | $ 135,700 | |||
Emerald Health Therapeutics Inc | EHT Warrants | ||||
Asset Acquisition [Line Items] | ||||
Warrants issued (in shares) | 243,781 | |||
EHT, Verdelite Facility, Gross | ||||
Asset Acquisition [Line Items] | ||||
Assets held for sale | $ 8,540,732 | |||
EHT, Verdelite Facility, Direct Costs | ||||
Asset Acquisition [Line Items] | ||||
Assets held for sale | 390,241 | |||
EHT, Verdelite Facility, Fair Value | ||||
Asset Acquisition [Line Items] | ||||
Assets held for sale | 2,072,981 | |||
EHT, Verdelite Facility, Net | ||||
Asset Acquisition [Line Items] | ||||
Assets held for sale | 6,467,751 | |||
EHT, Deposits Related To Utilities | ||||
Asset Acquisition [Line Items] | ||||
Assets held for sale | 23,910 | |||
EHT, License | ||||
Asset Acquisition [Line Items] | ||||
Assets held for sale | 91,700 | |||
EHT, Prepaid Expenses | ||||
Asset Acquisition [Line Items] | ||||
Assets held for sale | 27,301 | |||
EHT, Deposits Related To Excise Bonds | ||||
Asset Acquisition [Line Items] | ||||
Other current assets | 252,418 | |||
EHT, Open Receivable Balance | ||||
Asset Acquisition [Line Items] | ||||
Other current assets | 104,543 | |||
EHT, Open Receivable Balance, Former Customer | ||||
Asset Acquisition [Line Items] | ||||
Other current assets | 75,396 | |||
EHT, Open Receivable Balance, Property Tax Refund | ||||
Asset Acquisition [Line Items] | ||||
Other current assets | $ 29,147 |
Asset Acquisitions - Assumption
Asset Acquisitions - Assumptions to Value Options (Details) | 12 Months Ended | ||
Nov. 10, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | |
Minimum | |||
Asset Acquisition [Line Items] | |||
Expected term (years) | 5 years 3 months 7 days | 5 years | |
Maximum | |||
Asset Acquisition [Line Items] | |||
Expected term (years) | 6 years 29 days | 6 years 29 days | |
Emerald Health Therapeutics Inc | Employee Stock | |||
Asset Acquisition [Line Items] | |||
Dividend yield | 0% | ||
Volatility, minimum | 76.61% | ||
Volatility, maximum | 126.45% | ||
Risk-free interest rate, minimum | 3.51% | ||
Risk-free interest rate, maximum | 4.56% | ||
Emerald Health Therapeutics Inc | Employee Stock | Minimum | |||
Asset Acquisition [Line Items] | |||
Expected term (years) | 7 days | ||
Emerald Health Therapeutics Inc | Employee Stock | Maximum | |||
Asset Acquisition [Line Items] | |||
Expected term (years) | 4 years 9 months 29 days |
Asset Acquisitions - Assumpti_2
Asset Acquisitions - Assumptions to Value Warrants (Details) - Emerald Health Therapeutics Inc - EHT Warrants | Nov. 10, 2022 |
Dividend yield | |
Asset Acquisition [Line Items] | |
Warrants and rights outstanding measurement input | 0 |
Volatility | Minimum | |
Asset Acquisition [Line Items] | |
Warrants and rights outstanding measurement input | 1.029 |
Volatility | Maximum | |
Asset Acquisition [Line Items] | |
Warrants and rights outstanding measurement input | 1.146 |
Risk-free interest rate | Minimum | |
Asset Acquisition [Line Items] | |
Warrants and rights outstanding measurement input | 0.0429 |
Risk-free interest rate | Maximum | |
Asset Acquisition [Line Items] | |
Warrants and rights outstanding measurement input | 0.0453 |
Expected term (years) | Minimum | |
Asset Acquisition [Line Items] | |
Expected term (years) | 6 months 21 days |
Expected term (years) | Maximum | |
Asset Acquisition [Line Items] | |
Expected term (years) | 2 years 3 months 7 days |
Asset Acquisitions - Divestitur
Asset Acquisitions - Divestiture of Emerald Health Therapeutics Canada, Inc. - Narrative (Details) | Dec. 28, 2022 USD ($) license $ / shares shares | Dec. 31, 2023 $ / shares | Dec. 31, 2022 $ / shares |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Share Purchase Agreement | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Number of shares issued in transaction (in shares) | shares | 11,776,338 | ||
Common stock, par value (in dollars per share) | $ 0 | ||
Net proceeds from the transaction | $ | $ 110,759 | ||
Number of licenses transferred in divestiture | license | 2 |
Asset Acquisitions - Divestit_2
Asset Acquisitions - Divestiture of VDL - Narrative (Details) | 12 Months Ended | |||
Feb. 09, 2023 | Nov. 10, 2022 USD ($) installment | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain (loss) on disposition of other assets | $ 4,080 | $ 0 | ||
Discontinued Operations, Disposed of by Sale | Verdelite SPA | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Aggregate purchase price | $ 9,451,233 | |||
Cash deposit | 557,705 | |||
Cash proceeds | 5,532,266 | |||
Gain (loss) on disposition of other assets | $ 307,086 | |||
Discontinued Operations, Disposed of by Sale | Verdelite SPA | Disposal Group, Tranche One | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash proceeds | $ 370,350 | |||
Number of installments | installment | 5 | |||
Discontinued Operations, Disposed of by Sale | Verdelite SPA | Disposal Group, Tranche Two | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Cash proceeds | $ 2,777,625 | |||
Number of installments | installment | 3 | |||
Discontinued Operations, Disposed of by Sale | Verdelite SPA | Installment Term One | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Installment term | 18 months | |||
Discontinued Operations, Disposed of by Sale | Verdelite SPA | Installment Term Two | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Installment term | 30 months | |||
Discontinued Operations, Disposed of by Sale | Verdelite SPA | Installment Term Three | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Installment term | 42 months |
Prepaid Expenses, Other Curre_3
Prepaid Expenses, Other Current Assets and Other Current Liabilities - Schedule of Prepaid Expenses (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid clinical expenses | $ 292,352 | $ 646,072 |
Total other prepaid expenses | 132,907 | 134,735 |
Prepaid expenses | $ 425,259 | $ 780,807 |
Prepaid Expenses, Other Curre_4
Prepaid Expenses, Other Current Assets and Other Current Liabilities - Schedule Of Other Current Assets (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
AusIndustry incentive | $ 540,604 | $ 179,687 |
Vendor deposits | 172,439 | 101,386 |
Excise Tax Bonds | 125,784 | 74,121 |
Other tax receivables | 32,458 | 0 |
Other current assets | 17,644 | 126,394 |
Other current assets | $ 888,929 | $ 481,588 |
Prepaid Expenses, Other Curre_5
Prepaid Expenses, Other Current Assets and Other Current Liabilities - Schedule of Other Current Liabilities (Details) - Nonrelated Party - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Research and development costs | $ 467,784 | $ 40,597 |
Legal expenses | 258,213 | 227,350 |
EHT Acquisition related liabilities | 180,897 | 369,111 |
Consulting fees | 47,400 | 0 |
Professional fees | 22,068 | 86,682 |
Insurance loan payable | 0 | 55,451 |
Deposit - Verdélite SPA | 0 | 553,800 |
Other accrued liabilities | 22,190 | 89,454 |
Total other current liabilities | $ 998,552 | $ 1,422,445 |
Warrants and Derivative Liabi_3
Warrants and Derivative Liabilities - Schedule of Warrants Vested and Outstanding (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Aug. 15, 2023 | |
Class of Warrant or Right [Line Items] | ||
Number of warrants vested and outstanding (in shares) | 3,280,940 | |
2015 Common Stock Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 1,250 | |
Term (Years) | 1 year 3 months 25 days | |
Number of warrants vested and outstanding (in shares) | 400 | |
2016 Common Stock Warrants to Service Providers | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 287.50 | |
Term (Years) | 2 years 10 months 2 days | |
Number of warrants vested and outstanding (in shares) | 160 | |
2019 Common Stock Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 87.50 | |
Term (Years) | 10 months 20 days | |
Number of warrants vested and outstanding (in shares) | 32,000 | |
2020 Common Stock Warrants to Placement Agent | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 20 | |
Term (Years) | 1 year 6 months 29 days | |
Number of warrants vested and outstanding (in shares) | 32,668 | |
2021 Inducement Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 37.50 | |
Term (Years) | 2 years 6 months 25 days | |
Number of warrants vested and outstanding (in shares) | 84,667 | |
2021 Inducement Warrants to Placement Agent | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 47 | |
Term (Years) | 2 years 6 months 25 days | |
Number of warrants vested and outstanding (in shares) | 5,927 | |
2021 Common Stock Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 22.50 | |
Term (Years) | 2 years 9 months | |
Number of warrants vested and outstanding (in shares) | 311,113 | |
2021 Common Stock Warrants to Placement Agent | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 27.50 | |
Term (Years) | 2 years 9 months | |
Number of warrants vested and outstanding (in shares) | 21,778 | |
2022 Common Stock Warrants to Service Provider | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 10 | |
Term (Years) | 3 months | |
Number of warrants vested and outstanding (in shares) | 8,000 | |
November 2019 EHT Common Stock Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 72.25 | |
Term (Years) | 11 months 1 day | |
Number of warrants vested and outstanding (in shares) | 34,213 | |
December 2019 EHT Common Stock Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 37.75 | |
Term (Years) | 1 year | |
Number of warrants vested and outstanding (in shares) | 3,783 | |
February 2020 EHT Common Stock Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 37.25 | |
Term (Years) | 1 year 1 month 9 days | |
Number of warrants vested and outstanding (in shares) | 80,694 | |
August 2023 Convertible Note Common Stock Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 5.16 | |
Term (Years) | 9 years 7 months 20 days | |
Number of warrants vested and outstanding (in shares) | 340,000 | |
August 2023 PIPE Financing Common Stock Warrants | ||
Class of Warrant or Right [Line Items] | ||
Exercise price (in dollars per share) | $ 5.16 | $ 5.16 |
Term (Years) | 9 years 7 months 20 days | |
Number of warrants vested and outstanding (in shares) | 2,325,537 |
Warrants and Derivative Liabi_4
Warrants and Derivative Liabilities - Narrative (Details) - USD ($) | 12 Months Ended | ||||||||
Feb. 22, 2023 | Feb. 16, 2023 | Nov. 17, 2022 | Nov. 10, 2022 | Apr. 01, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Aug. 15, 2023 | Aug. 31, 2020 | |
Class of Warrant or Right [Line Items] | |||||||||
Aggregate fair value | $ (3) | $ (59,729) | |||||||
Warrants Vested And Outstanding | 3,280,940 | ||||||||
Emerald Health Therapeutics Inc | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
EHT rollover warrants | $ 203,515 | ||||||||
Common Stock Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Fair value of warrants | $ 150,851 | ||||||||
Aggregate fair value | $ 120,228 | ||||||||
2022 Common Stock Warrants To Service Provider | Underlying common stock price | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Underlying common stock price (in dollars per share) | $ 4.25 | $ 9.25 | |||||||
2022 Common Stock Warrants To Service Provider | Warrants Granted To Service Provider | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Exercise price (in dollars per share) | $ 10 | ||||||||
Fair value of warrants | $ 35,688 | ||||||||
Number of shares issued in transaction (in shares) | 8,000 | ||||||||
2021 Inducement Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Exercise price (in dollars per share) | $ 37.50 | ||||||||
Term of warrant | 2 years 6 months 25 days | ||||||||
Warrants Vested And Outstanding | 84,667 | ||||||||
2021 Inducement Warrants to Placement Agent | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Exercise price (in dollars per share) | $ 47 | ||||||||
Term of warrant | 2 years 6 months 25 days | ||||||||
Warrants Vested And Outstanding | 5,927 | ||||||||
2021 Common Stock Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Exercise price (in dollars per share) | $ 22.50 | ||||||||
Term of warrant | 2 years 9 months | ||||||||
Warrants Vested And Outstanding | 311,113 | ||||||||
Emerald Financing Warrant Liability | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Exercise price (in dollars per share) | $ 25 | ||||||||
August 2023 PIPE Financing Common Stock Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Exercise price (in dollars per share) | $ 5.16 | $ 5.16 | |||||||
Fair value of warrants | $ 7,881,972 | ||||||||
Term of warrant | 9 years 7 months 20 days | ||||||||
Warrants Vested And Outstanding | 2,325,537 | ||||||||
Proceeds from warrant exercises | $ 4,784,894 | ||||||||
August 2023 Convertible Note Common Stock Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Exercise price (in dollars per share) | $ 5.16 | ||||||||
Fair value of warrants | $ 1,144,886 | ||||||||
Term of warrant | 9 years 7 months 20 days | ||||||||
Warrants Vested And Outstanding | 340,000 | ||||||||
Proceeds from warrant exercises | $ 931,576 | ||||||||
2022 Common Stock Warrants to Service Provider | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Exercise price (in dollars per share) | $ 10 | ||||||||
Term of warrant | 3 months | ||||||||
Warrants Vested And Outstanding | 8,000 | ||||||||
2022 Common Stock Warrants to Service Provider | MTA Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Exercise price (in dollars per share) | $ 4.25 | ||||||||
Number of shares issued in transaction (in shares) | 66,566 | 66,566 | |||||||
Common Stock Warrants | MTA Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Exercise price (in dollars per share) | $ 282,906 | $ 282,905 |
Warrants and Derivative Liabi_5
Warrants and Derivative Liabilities - Schedule of Input and Valuation Techniques Used to Value Warrant Liabilities (Details) | Aug. 18, 2023 | Dec. 31, 2022 $ / shares | Nov. 17, 2022 $ / shares | Apr. 01, 2022 $ / shares |
2022 Common Stock Warrants To Service Provider | Dividend yield | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 0 | 0 | ||
2022 Common Stock Warrants To Service Provider | Volatility factor | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 1.1846 | |||
2022 Common Stock Warrants To Service Provider | Volatility factor | Minimum | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 0.9753 | |||
2022 Common Stock Warrants To Service Provider | Volatility factor | Maximum | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 1.1596 | |||
2022 Common Stock Warrants To Service Provider | Risk-free interest rate | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 0.0192 | |||
2022 Common Stock Warrants To Service Provider | Risk-free interest rate | Minimum | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 0.0440 | |||
2022 Common Stock Warrants To Service Provider | Risk-free interest rate | Maximum | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 0.0467 | |||
2022 Common Stock Warrants To Service Provider | Expected term (years) | ||||
Class of Warrant or Right [Line Items] | ||||
Expected term (years) | 1 year 3 months 7 days | |||
2022 Common Stock Warrants To Service Provider | Expected term (years) | Minimum | ||||
Class of Warrant or Right [Line Items] | ||||
Expected term (years) | 11 months 15 days | |||
2022 Common Stock Warrants To Service Provider | Expected term (years) | Maximum | ||||
Class of Warrant or Right [Line Items] | ||||
Expected term (years) | 2 years 1 month 13 days | |||
2022 Common Stock Warrants To Service Provider | Underlying common stock price | ||||
Class of Warrant or Right [Line Items] | ||||
Underlying common stock price (in dollars per share) | $ 4.25 | $ 9.25 | ||
Emerald Financing | Dividend yield | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 0 | |||
Emerald Financing | Volatility factor | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 1.4083 | |||
Emerald Financing | Risk-free interest rate | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 0.0421 | |||
Emerald Financing | Expected term (years) | ||||
Class of Warrant or Right [Line Items] | ||||
Expected term (years) | 1 year 1 month 17 days | |||
Emerald Financing | Underlying common stock price | ||||
Class of Warrant or Right [Line Items] | ||||
Underlying common stock price (in dollars per share) | $ 4 | |||
August 2023 PIPE Financing Common Stock Warrants | Dividend yield | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 0 | |||
August 2023 PIPE Financing Common Stock Warrants | Volatility factor | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 0.8788 | |||
August 2023 PIPE Financing Common Stock Warrants | Risk-free interest rate | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 0.0426 | |||
August 2023 PIPE Financing Common Stock Warrants | Expected term (years) | ||||
Class of Warrant or Right [Line Items] | ||||
Expected term (years) | 10 years | |||
August 2023 PIPE Financing Common Stock Warrants | Measurement Input, Share Price | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 5.16 | |||
August 2023 Convertible Note Common Stock Warrants | Dividend yield | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 0 | |||
August 2023 Convertible Note Common Stock Warrants | Volatility factor | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 0.8788 | |||
August 2023 Convertible Note Common Stock Warrants | Risk-free interest rate | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 0.0426 | |||
August 2023 Convertible Note Common Stock Warrants | Expected term (years) | ||||
Class of Warrant or Right [Line Items] | ||||
Expected term (years) | 10 years | |||
August 2023 Convertible Note Common Stock Warrants | Measurement Input, Share Price | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants and rights outstanding measurement input | 5.16 |
Warrants and Derivative Liabi_6
Warrants and Derivative Liabilities - Derivative Liabilities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Of Derivative Liabilities [Roll Forward] | |||
Beginning balance | $ 3 | $ 59,732 | |
Fair Value of Derivative Liabilities Issued | 0 | ||
Change in Fair value of Liability | (3) | (59,729) | |
Reclassification of Derivatives to Equity | 0 | ||
Ending balance | $ 3 | ||
Derivative Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | Other current liabilities | |
Emerald Financing - warrant liability | |||
Fair Value Of Derivative Liabilities [Roll Forward] | |||
Beginning balance | $ 3 | $ 59,732 | |
Fair Value of Derivative Liabilities Issued | 0 | ||
Change in Fair value of Liability | (59,729) | ||
Reclassification of Derivatives to Equity | 0 | ||
Ending balance | $ 3 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) | Dec. 31, 2023 | Aug. 15, 2023 | Dec. 31, 2022 |
Convertible 10% Note | |||
Short-term Debt [Line Items] | |||
Unamortized debt issuance costs | $ (26,316) | ||
Convertible debt | Convertible 10% Note | |||
Short-term Debt [Line Items] | |||
Total principal value of convertible note - related party, net of debt discount | $ 5,000,000 | $ 0 | |
Convertible debt | Multi-Draw Credit Agreement | |||
Short-term Debt [Line Items] | |||
Total principal value of convertible note - related party, net of debt discount | 0 | 1,848,375 | |
Unamortized debt discount | (610,749) | 0 | |
Unamortized debt issuance costs | (17,253) | 0 | |
Total carrying value of advances under the multi-draw credit agreement | $ 4,371,998 | $ 1,848,375 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | 12 Months Ended | |||||||||
Aug. 15, 2023 | Feb. 28, 2023 | Feb. 16, 2023 | Dec. 30, 2022 | Nov. 17, 2022 | Feb. 28, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jul. 24, 2023 | Feb. 15, 2023 | |
Debt Instrument [Line Items] | ||||||||||
Common stock, shares, outstanding | 12,349,243 | 3,654,119 | ||||||||
Debt conversion inducement expense | $ 1,383,285 | $ 0 | ||||||||
Prepaid expenses | 21,238 | |||||||||
MTA Warrants, Credit Consideration | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Common stock issuance costs | $ 1,597,236 | $ 1,597,236 | ||||||||
Common Stock Warrants | MTA Warrants | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Exercise price (in dollars per share) | $ 282,906 | $ 282,905 | ||||||||
Bridge Loan | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument principal amount | $ 250,000 | |||||||||
Insurance Premium Loan Payable | Loans Payable | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument principal amount | $ 203,884 | $ 275,537 | ||||||||
Interest rate | 424% | 417% | ||||||||
Installment amount | $ 23,374 | $ 31,150 | ||||||||
Prepaid expenses | $ 22,961 | |||||||||
Convertible 10% Note | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt instrument principal amount | $ 5,000,000 | |||||||||
Warrants to purchase shares of common stock issued and outstanding (in shares) | 340,000 | |||||||||
Interest rate | 1,000% | |||||||||
Proceeds from convertible debt allocated to debt host | $ 4,068,424 | |||||||||
Proceeds from convertible debt allocated to freestanding warrants | 931,576 | |||||||||
Warrant issuance cost | 931,576 | |||||||||
Unamortized debt issuance costs | 26,316 | |||||||||
Adjustments to additional paid in capital, stock issued, issuance costs | $ 6,026 | |||||||||
Effective interest rate | 31.39% | |||||||||
Debt instrument, convertible, remaining discount amortization period | 7 months 17 days | |||||||||
Convertible 10% Note | Convertible debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Conversion price (in dollars per share) | $ 5.16 | |||||||||
Multi-Draw Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Conversion price (in dollars per share) | $ 9.65 | $ 4.25 | ||||||||
Effective interest rate | 0% | 29.20% | ||||||||
Percent of principal prepaid | 25% | |||||||||
Prepayment of debt | $ 616,125 | |||||||||
Accrued interest - related party | $ 328,737 | |||||||||
Common stock, shares, outstanding | 165,517 | |||||||||
Multi-Draw Credit Agreement | Convertible debt | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Unamortized debt issuance costs | $ 17,253 | $ 0 | ||||||||
Amended Credit Agreement | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Conversion price (in dollars per share) | $ 9.65 | $ 100 | ||||||||
Debt Instrument, Maturity, Extension | 5 days |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Related party interest expense – stated rate | $ 202,254 | $ 169,640 |
Insurance premium loan payable – stated rate | 6,485 | 5,896 |
Legal judgment interest expense | 234,750 | 0 |
Bond premium | 59,929 | 0 |
Premium on irrevocable letter of credit | 69,861 | 0 |
Other interest expense | 3,100 | 0 |
Amortization of debt discount | 320,828 | 488,238 |
Amortization of transaction costs | 9,063 | 1,359 |
Interest expense | $ 906,270 | $ 665,133 |
Stockholders_ Equity and Capita
Stockholders’ Equity and Capitalization - Reserved Shares of Common Stock (Details) - shares | Dec. 31, 2023 | Dec. 31, 2022 |
Class of Stock [Line Items] | ||
Reserved shares of common stock (in shares) | 6,200,660 | 1,270,925 |
Related Party | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock (in shares) | 968,973 | 0 |
Warrants | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock (in shares) | 3,280,940 | 788,539 |
Amended Credit Agreement | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock (in shares) | 0 | 18,642 |
2014 Plan | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock (in shares) | 487,672 | |
Stock options | Outside 2014 Plan | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock (in shares) | 498,298 | 171,980 |
Stock options | 2014 Plan | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock (in shares) | 112,000 | 112,000 |
Stock options | 2014 Amended And Restated Plan | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock (in shares) | 487,672 | 169,099 |
Unvested restricted stock units | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock (in shares) | 847,777 | 10,665 |
Unvested restricted stock (service provider) | ||
Class of Stock [Line Items] | ||
Reserved shares of common stock (in shares) | 5,000 | 0 |
Stockholders_ Equity and Capi_2
Stockholders’ Equity and Capitalization - Narrative (Details) | 12 Months Ended | ||||||||||||
Dec. 14, 2023 USD ($) | Nov. 01, 2023 shares | Aug. 18, 2023 USD ($) shares | Aug. 15, 2023 USD ($) $ / shares | Feb. 22, 2023 shares | Feb. 16, 2023 USD ($) $ / shares shares | Dec. 14, 2022 USD ($) | Nov. 10, 2022 USD ($) shares | Mar. 02, 2022 shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) shares | Feb. 15, 2023 $ / shares | Feb. 05, 2021 shares | |
Class of Stock [Line Items] | |||||||||||||
Common Stock, Shares Authorized | 100,000,000 | 20,000,000 | 100,000,000 | ||||||||||
Warrants Vested And Outstanding | 3,280,940 | ||||||||||||
Finance charge from Sciences warrant modification | $ | $ 120,228 | ||||||||||||
Common stock issued for services (in shares) | 5,000 | 1,665,083 | 600 | ||||||||||
Restricted stock units | $ | $ 5,333 | $ 5,333 | |||||||||||
Amended Credit Agreement | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Conversion price (in dollars per share) | $ / shares | $ 9.65 | $ 100 | |||||||||||
MTA Warrants, Credit Consideration | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Common stock issuance costs | $ | $ 1,597,236 | $ 1,597,236 | |||||||||||
August 2023 PIPE Financing Common Stock Warrants | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Class Of Warrant or Right, Issued, Acquisition | 2,989,981 | ||||||||||||
Warrants Vested And Outstanding | 2,325,537 | ||||||||||||
Payments for Repurchase of Warrants | $ | $ 12,000,000 | ||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 5.16 | $ 5.16 | |||||||||||
Finance charge from Sciences warrant modification | $ | $ 2,228,638 | ||||||||||||
Stock Issued During Period, Shares, New Issues, Acquisition | 664,444 | ||||||||||||
Adjustments to Additional Paid in Capital, Stock Issued, Issuance Costs | $ | (265,053) | ||||||||||||
Gross proceeds from the transaction | $ | $ 11,734,947 | ||||||||||||
Warrants | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Warrants exercise (in shares) | 66,566 | ||||||||||||
Intrinsic value of warrant exercises | $ | $ 332,830 | ||||||||||||
Warrant exercises (in shares) | 66,566 | ||||||||||||
Proceeds from warrant exercises | $ | $ 282,906 | ||||||||||||
Prefunded Warrants | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Warrants exercise (in shares) | 78,667 | ||||||||||||
Intrinsic value of warrant exercises | $ | $ 1,178,033 | ||||||||||||
Warrant exercises (in shares) | 78,667 | ||||||||||||
Proceeds from warrant exercises | $ | $ 0 | $ 1,967 | |||||||||||
2022 Common Stock Warrants to Service Provider | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Warrants Vested And Outstanding | 8,000 | ||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 10 | ||||||||||||
2022 Common Stock Warrants to Service Provider | MTA Warrants, Credit Consideration | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Number of shares issued in transaction (in shares) | 165,517 | ||||||||||||
2022 Common Stock Warrants to Service Provider | MTA Warrants | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 4.25 | ||||||||||||
Number of shares issued in transaction (in shares) | 66,566 | 66,566 | |||||||||||
Common Stock Warrants | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Proceeds from warrant exercises | $ | $ 11,734,947 | $ 0 | |||||||||||
Common Stock Warrants | MTA Warrants | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 282,906 | $ 282,905 | |||||||||||
Bird Rock Bio Sub, Inc. (BRB) | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Asset acquisition, equity interest issued or issuable, number of shares (in shares) | 5,436,378 | ||||||||||||
Emerald Health Therapeutics Inc | |||||||||||||
Class of Stock [Line Items] | |||||||||||||
Common stock issuance costs | $ | $ 25,511 | ||||||||||||
Exchange ratio | 1.95 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||||||
Dec. 14, 2023 | Sep. 29, 2023 | Dec. 14, 2022 | Nov. 10, 2022 | Dec. 14, 2021 | Oct. 31, 2014 | Jun. 30, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 14, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares reserved for future grants (in shares) | 6,200,660 | 1,270,925 | ||||||||
Restricted stock units | $ 5,333 | $ 5,333 | ||||||||
Common stock issued in acquisition (in shares) | 33,131 | |||||||||
Total amount of unrecognized compensation cost | $ 3,955,054 | |||||||||
Recognized weighted average period | 7 years 2 months 8 days | |||||||||
Unvested restricted stock (service provider) | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares reserved for future grants (in shares) | 5,000 | 0 | ||||||||
Unvested restricted stock units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares reserved for future grants (in shares) | 847,777 | 10,665 | ||||||||
2014 Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares, issued | 364,879 | |||||||||
Number of shares reserved for future grants (in shares) | 487,672 | |||||||||
2014 Plan | Stock options | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares reserved for future grants (in shares) | 112,000 | 112,000 | ||||||||
Option expiration period | 10 years | |||||||||
Option fair value percentage | 100% | |||||||||
Stock option processing percentage | 10% | |||||||||
Stock option price value percentage | 110% | |||||||||
Option price, exercisable period | 5 years | |||||||||
Weighted-average fair value of stock options granted (in dollars per share) | $ 2.95 | $ 10 | ||||||||
Restricted stock units | $ 512,470 | $ 466,263 | ||||||||
2014 Plan | Stock options | Minimum | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vested period | 1 year | |||||||||
2014 Plan | Stock options | Maximum | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vested period | 4 years | |||||||||
2014 Plan | Unvested restricted stock units | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Vested percentage | 33% | |||||||||
Vested period | 3 years | |||||||||
Outside 2014 Plan | Stock options | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares reserved for future grants (in shares) | 498,298 | 171,980 | ||||||||
2022 Employee Stock Purchase Plan | Employee Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares, issued | 0 | |||||||||
Percent discount | 15% | |||||||||
Percent limit | 15% | |||||||||
2014 Amended And Restated Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of additional shares reserved for future grants (in shares) | 1,299,297 | |||||||||
Share-based compensation arrangement by share-based payment award, number of shares authorized (in shares) | 1,846,883 | |||||||||
2014 Amended And Restated Plan | Stock options | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of shares reserved for future grants (in shares) | 487,672 | 169,099 |
Stock-Based Compensation - Shar
Stock-Based Compensation - Shares Available for Future Grant (Details) - 2014 Plan | 12 Months Ended |
Dec. 31, 2023 shares | |
Shares Available For Grant [Roll Forward] | |
Balance at the beginning (in shares) | 169,099 |
Share pool increase (in shares) | 1,482,003 |
Cancelled (in shares) | 24,448 |
Forfeited (in shares) | 37,789 |
RSU releases (in shares) | 5,333 |
RSU grants (in shares) | (842,445) |
Granted (in shares) | (388,555) |
Balance at the ending (in shares) | 487,672 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Option (Details) - 2014 Plan - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Granted (in shares) | 388,555 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period | (37,789) | |
Cancelled (in shares) | (24,448) | |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Balance at the beginning (in shares) | 171,980 | |
Granted (in shares) | 388,555 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Forfeitures in Period | (37,789) | |
Cancelled (in shares) | (24,448) | |
Balance at the ending (in shares) | 498,298 | 171,980 |
Exercisable (in shares) | 145,502 | |
Vested and expected to vest (in shares) | 498,298 | |
Weighted Average Exercise Price | ||
Balance at the beginning (in dollars per share) | $ 45 | |
Granted (in dollars per share) | 3.49 | |
Forfeited (in dollars per share) | 116.95 | |
Cancelled (in dollars per share) | 10.28 | |
Balance at the ending (in dollars per share) | 8.96 | $ 45 |
Exercisable (in dollars per share) | 19.88 | |
Vested and expected to vest (in dollars per share) | $ 8.96 | |
Share-based compensation arrangement by share-based payment award, options, additional disclosures | ||
Weighted average remaining contractual term (years) | 7 years 2 months 26 days | 7 years 1 month 20 days |
Weighted average remaining contractual term (years), exercisable | 7 years 2 months 26 days | |
Weighted average remaining contractual term (years), vested and expected to vest | 8 years 10 months 9 days | |
Aggregate intrinsic value | $ 20,441 | $ 0 |
Aggregate intrinsic value, exercisable | 1,276 | |
Aggregate intrinsic value, vested and expected to vest | $ 20,441 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value Assumptions of Stock Option Granted (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 3.86% | 2.89% |
Expected term (years) | 5 years 3 months 7 days | 5 years |
Volatility | 87.93% | 126.27% |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 4.61% | 3.60% |
Expected term (years) | 6 years 29 days | 6 years 29 days |
Volatility | 127% | 132.58% |
Stock options | 2014 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0% | 0% |
Unvested restricted stock units | 2014 Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0% | |
Unvested restricted stock units | 2014 Plan | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 421% | |
Expected term (years) | 9 months 21 days | |
Volatility | 87.40% | |
Unvested restricted stock units | 2014 Plan | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 454% | |
Expected term (years) | 3 years 1 month 9 days | |
Volatility | 87.90% |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Stock Awards (Details) | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
2014 Plan | |
Number of Shares | |
Granted (in shares) | 842,445 |
Unvested restricted stock units | 2014 Plan | |
Number of Shares | |
Unvested, beginning balance (in shares) | 10,665 |
Granted (in shares) | 842,445 |
Released (in shares) | (5,333) |
Unvested, ending balance (in shares) | 847,777 |
Weighted Average Grant Date Fair Value | |
Unvested, beginning (in dollars per share) | $ / shares | $ 14.43 |
Granted (in dollars per share) | $ / shares | 3.59 |
Released (in dollars per share) | $ / shares | 14.43 |
Unvested, ending (in dollars per share) | $ / shares | $ 3.66 |
Restricted Stock Awards | Outside 2014 Plan | |
Number of Shares | |
Unvested, beginning balance (in shares) | 0 |
Granted (in shares) | 10,000 |
Released (in shares) | (5,000) |
Unvested, ending balance (in shares) | 5,000 |
Weighted Average Grant Date Fair Value | |
Unvested, beginning (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 1.55 |
Released (in dollars per share) | $ / shares | 0 |
Unvested, ending (in dollars per share) | $ / shares | $ 1.55 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 987,510 | $ 608,199 |
Research and Development Expense | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 188,886 | 77,965 |
General and Administrative Expense | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 798,624 | $ 530,234 |
Loss Per Share of Common Stoc_2
Loss Per Share of Common Stock - Basic and Diluted Net Loss Per Share (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (37,644,784) | $ (19,481,602) |
Net loss available to common stockholders | $ (37,644,784) | $ (19,481,602) |
Net loss available to common stockholders (in shares) | 7,006,038 | 2,221,080 |
Net loss available to common stockholders (in dollars per share) | $ (5.37) | $ (8.77) |
Loss Per Share of Common Stoc_3
Loss Per Share of Common Stock - Anti-dilutive Securities (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive excluded from the calculation of diluted net loss per share (in shares) | 5,600,988 | 989,826 |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive excluded from the calculation of diluted net loss per share (in shares) | 498,298 | 171,980 |
Unvested restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive excluded from the calculation of diluted net loss per share (in shares) | 847,777 | 10,665 |
Unvested restricted stock (service provider) | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive excluded from the calculation of diluted net loss per share (in shares) | 5,000 | 0 |
Common shares underlying convertible debt | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive excluded from the calculation of diluted net loss per share (in shares) | 968,973 | 18,642 |
Warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive excluded from the calculation of diluted net loss per share (in shares) | 3,280,940 | 788,539 |
Income Taxes - Components of In
Income Taxes - Components of Income (Loss) Before the Income Tax Provision (Benefit) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (25,799,330) | $ (18,801,570) |
Foreign | (11,841,854) | (673,291) |
Loss before income taxes | $ (37,641,184) | $ (19,474,861) |
Income Taxes - Components of _2
Income Taxes - Components of Income Tax Expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current income tax expense | ||
Federal | $ 0 | $ 0 |
State | 3,600 | 6,741 |
Foreign | 0 | 0 |
Provision for income taxes | $ 3,600 | $ 6,741 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Increase in valuation allowance | $ 22,504,068 | |
Unrecognized tax positions that would impact the effective tax rate | 0 | |
Accrual for interest or penalties | 0 | $ 0 |
Interest and/or penalties recognized | 0 | $ 0 |
Canada Revenue Agency | Capital Loss Carryforward | ||
Operating Loss Carryforwards [Line Items] | ||
Tax carryforwards | 64,743,505 | |
Federal | ||
Operating Loss Carryforwards [Line Items] | ||
NOLs | 110,288,344 | |
NOLs subject to expiration | 46,622,953 | |
NOLs not subject to expiration | 63,665,391 | |
Research credit carryforwards | 3,480,111 | |
State | ||
Operating Loss Carryforwards [Line Items] | ||
NOLs | 113,806,359 | |
NOLs subject to expiration | 113,678,291 | |
NOLs not subject to expiration | 128,068 | |
Research credit carryforwards | 2,073,709 | |
Foreign | ||
Operating Loss Carryforwards [Line Items] | ||
Research credit carryforwards | 940,180 | |
Foreign | Australian Taxation Office | ||
Operating Loss Carryforwards [Line Items] | ||
NOLs not subject to expiration | 233,321 | |
Foreign | Canada Revenue Agency | ||
Operating Loss Carryforwards [Line Items] | ||
NOLs not subject to expiration | $ 43,762,031 |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Tax Assets (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets | ||
Net operating loss | $ 40,900,348 | $ 30,648,168 |
Capital loss carryforwards | 17,157,029 | 8,824,896 |
Contingent legal accrual | 1,320,526 | 1,306,098 |
Depreciation | 663,197 | 286,452 |
Amortization | 225,678 | 216,077 |
Research and development credits | 3,694,501 | 1,199,256 |
Capitalized research and development costs | 1,835,326 | 1,000,777 |
Lease liability | 51,086 | 16,565 |
State taxes | 777 | 756 |
Other | 663,067 | 473,429 |
Gross deferred tax assets | 66,511,533 | 43,972,473 |
Valuation allowance | (66,461,557) | (43,957,489) |
Net deferred tax assets | 49,976 | 14,984 |
Deferred tax liabilities | ||
Right-of-use asset | (49,976) | (14,984) |
Total deferred tax liabilities | (49,976) | (14,984) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes on Earnings (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Expected income tax benefit at federal statutory tax rate | $ (7,904,649) | $ (4,089,720) |
State income taxes, net of federal benefit | (847,810) | (749,744) |
Change in fair value of warrants | 0 | (76,672) |
Change in valuation allowance | 3,167,507 | (892,837) |
Uncertain tax positions | 1,008,482 | 884,911 |
Reduction in deferreds upon divestiture | 0 | 4,974,768 |
Non-deductible interest | 0 | 35,624 |
Stock compensation | 100,958 | 69,754 |
Research and development credits | (315,498) | (281,709) |
Rate adjustment | 6,042 | (3,568) |
Foreign rate differential | (1,918,633) | 14,934 |
Divestiture of VDL | 2,269,297 | 0 |
In process research and development | 4,455,195 | 0 |
Other | (17,293) | 121,000 |
Provision for income taxes | $ 3,600 | $ 6,741 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Positions (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax positions, beginning of the year | $ 2,872,020 | $ 1,784,626 |
Gross increase - current period tax positions | 1,243,191 | 1,087,413 |
Gross increase - prior period tax positions | 2,316,932 | 0 |
Gross decrease – prior period tax positions | 0 | (19) |
Unrecognized tax positions, end of year | $ 6,432,143 | $ 2,872,020 |
Licensed Intellectual Property
Licensed Intellectual Property (Details) - USD ($) | 1 Months Ended | |||
Nov. 30, 2023 | May 24, 2019 | Jul. 31, 2022 | Jul. 31, 2018 | |
Tautomer | ||||
University Of Mississippi Agreements [Line Items] | ||||
Aggregate milestone payments if milestones achieved | $ 11,350,000 | |||
Collaborative Arrangement, Rights and Obligations, Milestone Payments, Mark-Up Percentage | 20% | |||
UM 5050 Pro-Drug And UM 8930 Analog Agreements | University of Mississippi | ||||
University Of Mississippi Agreements [Line Items] | ||||
Annual maintenance fee payable | $ 75,000 | |||
Royalty obligation, expiration term | 10 years | |||
UM 5050 Pro-Drug And UM 8930 Analog Agreements | Milestone 1 | University of Mississippi | ||||
University Of Mississippi Agreements [Line Items] | ||||
Aggregate milestone payments if milestones achieved | $ 200,000 | |||
Term of agreement | 30 days | |||
UM 5050 Pro-Drug And UM 8930 Analog Agreements | Milestone 2 | University of Mississippi | ||||
University Of Mississippi Agreements [Line Items] | ||||
Aggregate milestone payments if milestones achieved | $ 400,000 | |||
Term of agreement | 30 days | |||
UM 5050 pro-drug agreements | University of Mississippi | ||||
University Of Mississippi Agreements [Line Items] | ||||
Payment for upfront fees | $ 100,000 |
Related Party Matters (Details)
Related Party Matters (Details) | 12 Months Ended | |||||||||
Mar. 01, 2023 USD ($) | Jun. 14, 2022 | May 18, 2022 USD ($) shares | Mar. 01, 2022 USD ($) | Feb. 28, 2022 USD ($) | Dec. 31, 2023 USD ($) shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 agreement | Nov. 10, 2022 | Jun. 30, 2022 | |
Related Party Transaction [Line Items] | ||||||||||
Related party transaction, compensation agreement, termination advance notice, duration | 15 days | |||||||||
2014 Plan | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Granted (in shares) | shares | 388,555 | |||||||||
Percentage of share reserve of the number of issued and outstanding shares. | 5% | |||||||||
2022 Employee Stock Purchase Plan | Employee Stock | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Percent limit | 15% | |||||||||
Emerald Health Therapeutics Inc | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Exchange ratio | 1.95 | |||||||||
Dr. Avtar Dhillon | Consulting Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party, fees incurred under agreement in the period | $ 35,087 | $ 46,684 | ||||||||
Emerald Health Biotechnology Espana, S.L.U. | Collaborative Research Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of collaborative research agreements | agreement | 2 | |||||||||
Emerald Health Biotechnology Espana, S.L.U. | Collaborative Research Agreement | Emerald Health Research, Inc | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Ownership percentage | 100% | |||||||||
Jim Heppell | Independent Contractor Services Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Initial term of research agreement | 1 year | |||||||||
Collaborative arrangement, rights and obligations, renewal term of agreement | 1 year | |||||||||
Related Party Transaction, Termination Payment | $ 74,700 | |||||||||
Granted (in shares) | shares | 16,000 | |||||||||
Severance costs | 0 | 139,615 | ||||||||
Outstanding accounts payable | 16,600 | |||||||||
Other current liabilities | 75,503 | |||||||||
Related party transaction, increase in monthly fee | $ 16,600 | |||||||||
Termination terms, period following uncured breach | 60 days | |||||||||
Monthly fee | $ 6,300 | |||||||||
Brother Of CEO | Consulting Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Annual rate per hour | $ 73 | |||||||||
Independent Contractor Agreement | Dr. Avtar Dhillon | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Accrued expense under agreement | 87,927 | |||||||||
Exclusive Sponsored Research Agreement | EHBE | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Related party transaction, accrued expenses | 50,000 | 200,000 | ||||||||
Research and development | 39,167 | 167,000 | ||||||||
ESRA Agreement, Screening Platform For Anteroposterior Ocular Diseases | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Outstanding accounts payable | 0 | 47,001 | ||||||||
Other current liabilities | 0 | 7,835 | ||||||||
ESRA Agreement, Screening Platform For Anteroposterior Ocular Diseases | EHBE | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Outstanding accounts payable | 0 | 50,000 | ||||||||
Annual retainer amount | $ 190,500 | |||||||||
Consulting Agreement | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Other current liabilities | $ 0 | $ 12,511 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) | 12 Months Ended | |||||||
Aug. 02, 2023 | Feb. 13, 2023 | Jan. 18, 2023 | Sep. 01, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Aug. 17, 2023 | Jun. 27, 2023 | |
Loss Contingencies [Line Items] | ||||||||
Renewal option term | 2 years | |||||||
Rent abatement term | 2 months | |||||||
Initial monthly rent | $ 8,067 | |||||||
Annual rent increase percentage | 3% | |||||||
Lease expense | $ 97,986 | $ 90,701 | ||||||
Lessee, Operating Lease, Term of Contract | 36 months | |||||||
Other interest expense | 3,100 | $ 0 | ||||||
Loss Contingency, Net Cash Received To Cover Legal Expenses | $ 5,000,000 | |||||||
Wendy Cunning Vs Skye Bioscience, Inc | ||||||||
Loss Contingencies [Line Items] | ||||||||
Total compensatory damages | $ 1,200,008 | |||||||
Estimate for legal contingency | $ 0.0538 | |||||||
Loss Contingency, Appeal Bond | $ 9,080,202 | |||||||
Other interest expense | $ 234,750 | |||||||
Loss Contingency, Interest Rate On Damages | 4.87% | |||||||
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 | |||||||
Loss Contingency Accrual, Period Increase (Decrease) | $ 151,842 | |||||||
Wendy Cunning Vs Skye Bioscience, Inc | Legal Fees | ||||||||
Loss Contingencies [Line Items] | ||||||||
Estimate for legal contingency | $ 6,053,468 |
Commitments and Contingencies_2
Commitments and Contingencies - Weighted Average Remaining Lease Term and Discount Rate (Details) | Dec. 31, 2023 |
Commitments and Contingencies Disclosure [Abstract] | |
Weighted-average remaining term – operating lease (in years) | 2 years 9 months 29 days |
Weighted-average discount rate – operating lease | 15% |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Future Minimum Lease Payments (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
2024 | $ 103,216 | |
2025 | 106,313 | |
2026 | 90,798 | |
Total future minimum lease payments: | 300,327 | |
Less imputed interest | (57,059) | |
Total | $ 243,268 | $ 78,700 |
Commitments and Contingencies_4
Commitments and Contingencies - Current and Noncurrent Portions of Operating Lease (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease liability | $ 72,038 | $ 78,700 |
Operating lease liability, net of current portion | 171,230 | 0 |
Total lease liability | $ 243,268 | $ 78,700 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) | 1 Months Ended | ||||
Mar. 11, 2024 | Feb. 29, 2024 | Jan. 29, 2024 | Jan. 15, 2024 | Mar. 13, 2024 | |
Subsequent Event [Line Items] | |||||
Gross proceeds from the transaction | $ 83,500,000 | ||||
Granted (in shares) | 703,100 | ||||
Granted (in dollars per share) | $ 14.56 | ||||
Unvested restricted stock units | |||||
Subsequent Event [Line Items] | |||||
Granted (in shares) | 275,000 | ||||
Share-Based Payment Arrangement, Tranche One | |||||
Subsequent Event [Line Items] | |||||
Granted (in shares) | 250,000 | ||||
Vested period | 1 year | ||||
Share-Based Payment Arrangement, Tranche One | Unvested restricted stock units | |||||
Subsequent Event [Line Items] | |||||
Vested percentage | 25% | ||||
Market capitaization | $ 750,000,000 | ||||
Share Price | $ 20 | ||||
Share-Based Payment Arrangement, Tranche Two | |||||
Subsequent Event [Line Items] | |||||
Granted (in shares) | 488,100 | ||||
Vested period | 4 years | ||||
Share-Based Payment Arrangement, Tranche Two | Unvested restricted stock units | |||||
Subsequent Event [Line Items] | |||||
Vested percentage | 25% | ||||
Market capitaization | $ 1,000,000,000 | ||||
Share Price | $ 30 | ||||
Share-Based Payment Arrangement, Tranche Three | Unvested restricted stock units | |||||
Subsequent Event [Line Items] | |||||
Vested percentage | 25% | ||||
Market capitaization | $ 1,250,000,000 | ||||
Share Price | $ 32.50 | ||||
Share-Based Payment Arrangement, Tranche Four | Unvested restricted stock units | |||||
Subsequent Event [Line Items] | |||||
Vested percentage | 25% | ||||
Market capitaization | $ 1,500,000,000 | ||||
Share Price | $ 35 | ||||
Change In Control Of The Issuer | Unvested restricted stock units | |||||
Subsequent Event [Line Items] | |||||
Vested percentage | 100% | ||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Real Estate Held by AVI | |||||
Subsequent Event [Line Items] | |||||
Proceeds from Divestiture of Real Estate Partnership | $ 1,139,572 | ||||
January 2024 PIPE Financing | |||||
Subsequent Event [Line Items] | |||||
Number of shares issued in transaction (in shares) | 11,713,664 | ||||
Net proceeds from the transaction | $ 49,991,010 | ||||
Sale price (in dollars per share) | $ 2.31 | ||||
Average share price, threshold trading days | 5 days | ||||
Common stock issuance costs | $ 3,824,841 | ||||
Gross proceeds from the transaction | $ 46,166,169 | ||||
March 2024 PIPE Financing | |||||
Subsequent Event [Line Items] | |||||
Number of shares issued in transaction (in shares) | 4,000,000 | ||||
Net proceeds from the transaction | $ 40,000,000 | ||||
Exercise price (in dollars per share) | $ 10 | ||||
Common stock issuance costs | $ 2,625,000 | ||||
Gross proceeds from the transaction | $ 37,375,000 | ||||
January 2024 PIPE Financing Pre-Funded Warrants | January 2024 PIPE Financing | |||||
Subsequent Event [Line Items] | |||||
Number of warrant issued (in shares) | 9,978,739 | ||||
Warrants to purchase shares of common stock issued and outstanding (in shares) | 9,978,739 | ||||
Sale price (in dollars per share) | $ 2.30 | ||||
Exercise price (in dollars per share) | $ 0.001 |