Skye Bioscience Inc.

05/11/2026 | Press release | Distributed by Public on 05/11/2026 14:01

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our condensed consolidated financial statements (unaudited) for the three months ended March 31, 2026 and 2025, together with the notes thereto and the consolidated financial statements and the related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, which was filed with the Securities and Exchange Commission (SEC) on March 10, 2026.
Solely for convenience, certain trademark and service marks (the "marks") referred to in this Quarterly Report on Form 10-Q
appear without the ® or ™ symbols, but those references are not intended to indicate, in any way, that we will not assert, to
the fullest extent under applicable law, our rights to these marks.
Unless otherwise provided in this Quarterly Report on Form 10-Q, references to "we," "us," "our" and "Skye" in this discussion and analysis refer to Skye Bioscience, Inc., a Nevada corporation, together with its consolidated subsidiaries.
Overview
We are a clinical stage biotechnology company pioneering next-generation molecules that modulate G-protein-coupled receptors ("GPCRs") to treat obesity, overweight, and related conditions. Our lead candidate, nimacimab, is a peripherally restricted negative allosteric modulating antibody targeting cannabinoid receptor 1 ("CB1")-a key GPCR involved in metabolic regulation that is administered as a subcutaneous injectable initially for the treatment of obesity and overweight.
We are conducting CBeyondTM, a Phase 2a proof-of-concept clinical trial of nimacimab administered as a subcutaneous injectable for the treatment of obesity and overweight in the United States. The randomized, placebo- and active-controlled, double-blind CBeyond Phase 2a trial enrolled 136 adults with obesity or overweight, including individuals with a BMI ≥27 kg/m² with at least one comorbidity. Patients were randomized across four arms, 2:2:1:1 to arms with weekly nimacimab 200 mg subcutaneously, placebo, nimacimab 200 mg plus semaglutide (Wegovy®), or placebo plus semaglutide, and were dosed weekly for 26 weeks. Patients not participating in a 26-week extension were monitored for 13 weeks post-treatment.
In October 2025, we announced topline results from our CBeyond Phase 2a proof-of-concept clinical trial of nimacimab administered as a subcutaneous injectable for the treatment of obesity and overweight in the United States. We reported the following 26 week data from the CBeyond Phase 2a study:
•The nimacimab monotherapy arm did not achieve the primary endpoint of weight loss compared to placebo (-1.52% vs. -0.26 for placebo, mITT). Preliminary pharmacokinetic analysis suggested an association between exposure and response, indicating that the 200 mg, subcutaneous weekly dose was suboptimal as a monotherapy.
•At the tested dose and exposure levels, nimacimab 200 mg demonstrated a favorable safety profile with placebo-like tolerability. In combination with semaglutide, there was no increase in gastrointestinal (GI) adverse events. Importantly, there were no increases in neuropsychiatric adverse events reported resulting from treatment with nimacimab.
•In the combination arm, nimacimab 200 mg, subcutaneous weekly dose plus semaglutide demonstrated a clinically meaningful magnitude of weight loss compared to semaglutide alone (-13.2% vs -10.25%, p=0.0372, mITT), with no plateau being observed through Week 26. In the combination arm, 100% of patients achieved greater than 5% weight loss (vs. 85% with semaglutide alone) and 67% achieved greater than 10% weight loss (vs. 50% with semaglutide alone) based on the per protocol analysis. This finding supports potential further studies to evaluate combinations of nimacimab and incretin-based therapies, like semaglutide or tirzepatide. Other findings in the combination arm included:
◦Nimacimab plus semaglutide showed a change of -11.26cm (1.16cm) in waist circumference versus -8.09cm (1.2cm) for semaglutide alone, resulting in a difference of -3.17cm (1.59cm) (p=0.0492, using least-squares mean (LSM)).
◦An improvement in lean mass to fat mass ratio was observed at week 26 when comparing the nimacimab plus semaglutide combination arm to the placebo arm (0.26 vs. 0.02, p <0.0001), and the combination arm compared to semaglutide alone (0.26 vs. 0.13, p = 0.0126).
◦A decrease in rebound weight gain in an analysis of participants 12 weeks post-treatment when nimacimab 200 mg (subcutaneous, weekly) was combined with semaglutide when compared to semaglutide alone (17.8% versus 37.3% weight rebound). Moreover, at 12 weeks post-treatment, the nimacimab plus semaglutide group maintained significant weight loss compared to the placebo group (p=0.006), while the semaglutide alone group lost significance over the placebo group (p=0.12) and followed a trajectory of rebound weight gain
consistent with previously reported data (Wilding et al., 2022, STEP-1 Trial Extension), which demonstrated that patients will gain a majority of weight back within 1-year of stopping treatment with semaglutide.
Topline data from our CBeyond Phase 2a study was presented at ObesityWeek medical conference in November 2025.
Summary of Phase 2a Extension Study
Patients who completed 26 weeks of treatment in the Phase 2a study were eligible to enroll in a 26-week extension for a potential full treatment duration of 52 weeks with a 13-week follow-up period. A total of 43 patients were enrolled, with 19 and 24 patients in the combination and monotherapy cohorts, respectively. In the combination arms, continued with blinded treatment with nimacimab or placebo and continued receiving semaglutide (Wegovy®). Patients in the monotherapy arm received nimacimab 300 mg during the extension.
In February 2026, we reported the following interim results from the combination cohort of our Phase 2a extension study:
•19 participants in the combination cohorts completed week 26 were eligible for, and enrolled in the extension study, which continued in a blinded manner for 26 weeks, maintaining their original treatment assignment (10 nimacimab plus semaglutide; 9 placebo plus semaglutide). An additional 22 participants completed week 26 and were either ineligible for the extension or chose not to join the extension study and continued on post-treatment follow-up (11 nimacimab plus semaglutide; 11 placebo plus semaglutide).
•Of the 10 participants in the nimacimab plus semaglutide arm who joined the extension study, the mean weight loss at 26 weeks was 14.4%. 7 participants completed the additional 26 weeks of treatment and lost an additional 7.9% of weight, resulting in a mean weight loss of 22.3% after 52 weeks of treatment. According to initial results in this limited cohort, the combination therapy remained safe and well tolerated. No SAEs or AESIs were reported during the extension period.
•Of the 9 participants in the placebo plus semaglutide arm that joined the extension study, mean weight loss at 26 weeks was -13.9%. 7 participants completed treatment of the additional 26 weeks and lost an additional -5.8% of weight during the extension period, resulting in a mean weight loss of -19.7% after 52 weeks of treatment.
Full topline reporting of the CBeyond Phase 2a extension data including nimacimab monotherapy data and 13-week off-therapy follow-up is expected to take place in the third quarter of 2026.
In March 2026, we initiated an expansion study (Part C) of the CBeyond Phase 2a trial to assess preliminary safety and pharmacokinetic (PK) profile of nimacimab administered intravenously (IV). The expansion study will comprise two cohorts of nimacimab monotherapy (400 mg IV and 600 mg IV) compared to placebo administered weekly over 15 weeks (16 doses), with a 12 week follow up period, to generate preliminary monotherapy safety, PK, and exploratory efficacy data. Within each dose cohort, 8 participants will be randomized in a 3:1 ratio to nimacimab (n=6) or placebo (n=2). We expect to report topline data from the expansion study in the fourth quarter of 2026.
We believe multiple factors support evaluation of nimacimab at higher doses, including the combination of preclinical toxicology safety margins and modeling; preclinical pharmacology data showing dose-dependent increases in weight loss with nimacimab monotherapy and GLP-1 combinations; and the notable safety profile in the Phase 2a study. However, there can be no assurance that nimacimab at higher doses will result in the desired end points.
We have received comments from the agency regarding our Type C meeting request in which they responded to our proposed Phase 2b clinical trial design, we intend to use data from the CBeyond trial, including the CBeyond expansion study (Part C), to inform the design of a potential Phase 2b study and potential registration path for nimacimab as a combination therapy with GLP-1s. Key design elements under evaluation include patient selection, dose selection, treatment duration, and endpoints. Final trial design and timing remain subject to ongoing data analysis, regulatory feedback and capital considerations.
We were incorporated under the laws of the State of Nevada on March 16, 2011. Our headquarters are based in San Diego, CA. Since our incorporation, we have devoted substantially all of our efforts to building our product portfolio through the acquisition of clinical assets and licensing agreements, carrying out research and development, building infrastructure and raising capital.
Financial Overview
Revenues
To date, we have not generated any revenue. We do not expect to receive any revenue from our drug candidate, nimacimab, or any future drug candidates that we develop unless and until we obtain regulatory approval for, and commercialize, nimacimab or future drug candidates or generate revenue from collaborative agreements with third parties.
Research and Development Expenses
During the three months ended March 31, 2026, we incurred $7,935,680 in research and development expenses primarily related to our Phase 2a clinical trial of nimacimab for obesity and the manufacturing costs associated with future trials. During the three months ended March 31, 2025, we incurred $7,197,257 in research and development expense primarily related to our efforts in conducting our Phase 2a clinical trial related to our Phase 2a clinical trial for nimacimab for obesity.
We expect that our ongoing research and development expenses will consist of costs incurred for the development of our drug candidate, nimacimab, or any future drug candidates, including but not limited to:
• employee-related expenses, which include salaries, benefits and stock-based compensation;
• payments to third party contract research organizations and investigative sites;
• payments to third party manufacturing organizations and consultants; and
• payments to third parties related to our discovery research and development efforts to build our pipeline.
We expect to incur future research and development expenditures to support our preclinical, nonclinical, and clinical studies. Preclinical and nonclinical activities include early discovery efforts with novel molecules, laboratory evaluation of product chemistry, toxicity and formulation, as well as animal studies to assess safety and efficacy.
The process of conducting the necessary clinical research to obtain regulatory approval is costly and time consuming and the successful development of our drug candidate, nimacimab, and any future drug candidate is highly uncertain. Our future research and development expenses will depend on the clinical success of nimacimab and any future drug candidates as well as ongoing assessments of the commercial potential of such drug candidates. In addition, we cannot forecast with any degree of certainty whether nimacimab or any future drug candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements. We expect to incur increased research and development expenses in the future as we continue our efforts towards advancing our lead program for nimacimab.
General and Administrative Expenses
Our general and administrative expenses have fluctuated year-over-year as we have entered into various strategic acquisitions to restructure and reposition our company. Additionally, as a business in the early stages of drug development we are continually evaluating our operations and infrastructure to identify areas where we can increase efficiencies. As a public company, we expect to incur additional expenses related to insurance, investor relations activities, legal and other administration and professional services to comply with the rules and regulations of the SEC, the Financial Industry Regulatory Authority ("FINRA") and Nasdaq. Other significant costs are expected to include legal fees relating to patent and corporate matters, business development costs and fees for consulting services. To incentivize our employees and be competitive to retain strong talent we issued additional equity awards in 2026 and 2025 and we repriced certain options in the first quarter of 2026, which have resulted in increased stock-based compensation expense. We also expect that certain general and administrative expenses which are commensurate with headcount, will continue to increase in the future in order to support our expected increase in research and development activities, including increased salaries, technology, facilities and other related costs.
Estimate for Legal Contingencies and Related Expenses
The estimate for legal contingencies and related expenses relates to a litigation matter that related to a former employee of the Company. As of December 31, 2023, we had posted an appellate bond that was collateralized by an irrevocable letter of credit equal to, $9,080,202, approximately 150% of the liability recorded on our balance sheet. As of December 31, 2024, we were successful in our appeal of the judgment in the Ninth Circuit Court of Appeals and the case was remanded back to the District Court for a new trial, as a result of which we recovered the appellate bond and reduced the estimated legal contingency based on new key assumptions. The final amount of the loss and loss recoveries remains uncertain. We believe that it is at least reasonably possible that the estimated amount of the potential loss may change in the near term. As of March 31, 2026, the estimated legal contingency, including accrued legal expenses, is $2,574,759, an increase of $505,692 from December 31, 2025, due to accrual adjustments for services by legal firms in relation to the ongoing Cunning litigation.
Other (Income) Expense
Other (income) expense primarily includes interest income earned on our cash and cash equivalent balances and short term investments.
Critical Accounting Estimates
There have been no material changes in our Critical Accounting Estimates from the information provided in the "Critical Accounting Estimates" section of "Item 7- Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Recently Issued and Adopted Accounting Pronouncements
See Note 1 to the accompanying unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for information on recently issued accounting pronouncements and recently adopted accounting pronouncements. While we expect certain recently adopted accounting pronouncements to impact our disclosures in future periods, the impact upon adoption was not significant to our current estimates and operations.
Results of Operations
For the three months ended March 31, 2026 and 2025
Research and Development Expenses
Below is a summary of our research and development expenses during the three months ended March 31, 2026 and for the same period in 2025:
Three Months Ended March 31,
2026 2025 $ Change
2026 vs. 2025 		% Change
2026 vs. 2025
Research and development expenses $ 7,935,680 $ 7,197,257 $ 738,423 10 %
Research and development expenses for the three months ended March 31, 2026, increased by $738,423 as compared to the same period in 2025. The net increase in research and development expenses was primarily due to:
•Clinical trial costs increased by $190,765 due to increased site and patient costs related to our Phase 2a clinical study for nimacimab.
•Contract manufacturing costs increased by $203,916 from drug substance, product, labeling and packaging costs related to resupplying our extended Phase 2a clinical study for nimacimab, manufacturing in anticipation for our expansion study of nimacimab, and process intensification and dose optimization work.
•Discovery research and development costs decreased $168,387 primarily due to a reduction in work for life cycle management partially offset by increased work to interrogate nimacimab's mechanism of action.
•Quality assurance costs decreased by $64,896 from routine vendor site audits.
•Salaries and stock-based compensation increased by $375,048 primarily due to severance for one employee and incremental expenses form the stock option repricing.
•Consulting, advisory and professional fees increased by $216,413 to support our nimacimab program.
General and Administrative Expenses
Below is a summary of our general and administrative expenses during the three months ended March 31, 2026, and for the same period in 2025:
Three Months Ended March 31,
2026 2025 $ Change
2026 vs. 2025 		% Change
2026 vs. 2025
General and administrative expenses $ 4,738,686 $ 4,562,305 $ 176,381 4 %
General and administrative expenses for the three months ended March 31, 2026, increased by $176,381 as compared to the same period in 2025. The decrease in general and administrative expenses was primarily due to:
•Salaries, benefits and other direct employee related costs decreased by $275,661 primarily due to lower headcount and timing of new hires.
•Consulting, advisory and professional fees decreased by $28,245 primarily due to the timing of tax accounting services and financial advisory services.
•Investor relations, marketing and communications expenses decreased by $335,032 primarily due to reductions in content creation and digital marketing expenses.
•Recruiting fees decreased by $33,750 primarily due to the one time cost to hire an executive in the prior period.
•Legal fees increased by $988,624 due to increased patent prosecution activity and litigation defense costs.
•General business expenses decreased $139,555 primarily due to headcount reductions and associated travel and entertainment expenses, as compared to the same period in the prior year.
Other (Income) Expense
Below is a summary of our other (income) expense for the three months ended March 31, 2026 and for the same period in 2025:
Three Months Ended March 31,
2026 2025 $ Change
2026 vs. 2025 		% Change
2026 vs. 2025
Interest expense $ 2,199 $ 1,452 $ 747 51 %
Interest and other income, net (169,615) (619,054) 449,439 (73) %
Other (income) expense 2,411 (40,641) 43,052 (106) %
Total other income $ (165,005) $ (658,243) $ 493,238 (75) %
For the three months ended March 31, 2026, other income decreased $493,238 as compared to the same period in 2025 primarily due to:
•Decreases in interest income and other income, net of $449,439 due to decreased interest from our cash equivalents and short-term investments yields as a result of the decrease in cash equivalents and short-term investments on hand.
Liquidity, Going Concern and Capital Resources
Liquidity
We have incurred operating losses and negative cash flows from operations since our inception. We expect to continue to incur significant losses and negative cash flows from operations through 2026 and into the foreseeable future. We anticipate that we will continue to incur net losses in order to advance and develop potential drug candidates into preclinical and clinical development activities and support our corporate infrastructure, which includes the costs associated with being a public company. Historically, we have funded our operations primarily through issuance of equity securities, borrowings from a related party and strategic transactions.
As of March 31, 2026, we had working capital of $8,162,037, an accumulated deficit of $199,383,847, and stockholders' equity of $9,011,804. We had unrestricted cash and cash equivalents and short-term investments in the amount of $17,108,629 as of March 31, 2026, as compared to $25,737,221 as of December 31, 2025. For the three months ended March 31, 2026 and 2025, the Company incurred losses from operations of $12,674,366 and $11,759,562, respectively. For the three months ended March 31, 2026 and 2025, the Company incurred net losses of $12,509,361 and $11,103,319, respectively.
Going Concern
Our independent registered public accounting firm issued a report on our audited consolidated financial statements as of and for the year ended December 31, 2025 that included an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern due to our recurring operating losses. Our condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business. Our accompanying condensed consolidated financial statements do not include any adjustments to the carrying amounts or classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.
As of March 31, 2026, management estimates that we have sufficient capital to continue our operations through the fourth quarter of 2026, excluding the anticipated clinical cost of a proposed Phase 2b study and additional anticipated drug manufacturing costs to supply any such Phase 2b study. However, our continued operations beyond the fourth quarter of 2026 will depend on our ability to successfully raise additional capital through various potential sources, such as equity and/or debt financings, or strategic relationships. Our ability to access the capital markets is expected to be extremely limited. If we seek additional financing to fund our operations and there remains substantial doubt about our ability to continue as a going concern,
our financing sources may be unwilling to provide additional funding to us on commercially reasonable terms or at all. In addition, the uncertainty as to the resolution of the Cunning Lawsuit could limit our ability to raise new capital from investors to operate our business. If adequate funds are not available to us when needed we will be required to curtail or perhaps cease our operations which would, in turn, further raise substantial doubt about our ability to continue as a going concern. Refer to "Risks Related to Our Limited Operating History, Financial Position and Capital Requirements - Our independent registered public accounting firm has expressed substantial doubt about our ability to continue as a going concern, and if we are unable to continue, you may lose your entire investment" in our Annual Report on Form 10-K for additional information.
Our future capital requirements will depend on many factors, including:
•the scope, rate of progress, results and costs of our clinical trials, preclinical studies and other related activities;
•our ability to establish and maintain strategic collaborations, licensing or other arrangements and the financial terms of such agreements;
•the timing of, and the costs involved in, obtaining regulatory approvals for nimacimab or any future drug candidates;
•the number and characteristics of the drug candidates we seek to develop or commercialize;
•the cost of manufacturing clinical supplies, and establishing commercial supplies of our drug candidates;
•the cost of commercialization activities if our current or future drug candidates are approved for sale, including marketing, sales and distribution costs;
•the expenses needed to attract and retain skilled personnel;
•the costs associated with being a public company;
•the amount of revenue, if any, received from commercial sales of our drug candidates, should any of our drug candidates receive marketing approval;
•the costs involved in preparing, filing, prosecuting, maintaining, defending and enforcing possible patent claims, including litigation costs and the outcome of any such litigation;
•the results of the new trial in the litigation matter discussed above under "--General Litigation and Disputes - Wendy Cunning vs. Skye Bioscience, Inc." and "--Financial Overview - Estimated Legal Contingency"; and
•the impact of any of the foregoing of macroeconomic events, including inflation, fluctuating interest and exchange rates, and market volatility as a result of trade, fiscal and regulatory policies, including tariffs and any effects of a prolonged government shutdown.
Cash Flows
The following is a summary of our cash flows for the periods indicated and has been derived from our unaudited condensed consolidated financial statements which are included elsewhere in this Quarterly Report on Form 10-Q:
Three Months Ended March 31,
2026 2025
Net cash used in operating activities $ (8,557,917) $ (9,185,480)
Net cash provided by (used in) investing activities 10,895,959 (12,808,962)
Net cash used in financing activities (71,525) -
Cash Flows from Operating Activities
The primary use of cash for our operating activities during the period was to fund research development activities for our clinical product candidate and general and administrative activities. Our cash used in operating activities also reflected changes in our working capital, net of adjustments for non-cash charges, such as stock-based compensation, depreciation and amortization.
Cash used in operating activities of $8,557,917 during the three months ended March 31, 2026, reflected a net loss of $12,509,361, partially offset by aggregate non-cash charges of $1,677,490 and included a $2,273,954 net cash inflow in our operating assets and liabilities.
Non-cash charges included $1,496,989 for stock-based compensation expense primarily attributable to the recognition of current period expense on prior grants and $172,886 in depreciation and amortization. The net change in our operating assets and liabilities included a $220,450 cash inflow from the decrease in our prepaid expenses and other current assets, a $38,381
net cash outflow from decrease in our accrued expenses and other current liabilities and a $1,903,517 cash inflow from the increase of our accounts payable.
Cash used in operating activities of 9,185,480 during the three months ended March 31, 2025, reflected a net loss $11,103,319, partially offset by aggregate non-cash charges of $2,379,288 and included a $461,449 net cash outflow in our operating assets and liabilities.
Cash Flows from Investing Activities
During the three months ended March 31, 2026, our cash provided by investing activities related primarily to the maturity, of $10,895,109 in short-term investments.
During the three months ended March 31, 2025, our cash used in investing activities related primarily to the purchase of
$12,802,650 in short-term investments.
Cash Flows from Financing Activities
During the three months ended March 31, 2026, cash used in financing activities included $71,525 in repayments on the our insurance premium loan payable.
Off-Balance Sheet Arrangements
There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.
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