What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-08 · 118 added, 66 removed, 105 unchanged (64% of the section changed)

1 unchanged sentence

SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

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, 2025 and 2024, 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, 2024.

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 and six months ended June 30, 2025 and 2024, 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, 2024, which was filed with the Securities and Exchange Commission (SEC) on March 20, 2025.

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1943, as amended (the "Exchange Act") that involve substantial risks and uncertainties.

4 unchanged sentences

A further list and description of risks, uncertainties and other factors that could cause actual results or events to differ materially from the forward-looking statements that we make is included in the cautionary statements herein and in our other filings with the SEC, including those set forth under Part I, Item 1A, Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024.

Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make.

Our forward-looking statements do not reflect the potential impact of any future acquisitions,

mergers, dispositions, joint ventures or investments that we may make.

We have based the forward-looking statements included in this Quarterly Report on Form 10-Q on information available to us on the date of this quarterly report, and we assume no obligation to update any such forward-looking statements, other than as required by law.

Although we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that we may make directly to you or through reports that we, in the future, may file with the SEC, including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

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.

2 unchanged sentences

We are conducting CBeyond TM , 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 CBeyond TM study is also assessing the combination of nimacimab and a GLP-1 receptor agonist.

We anticipate providing a top-line readout from the CBeyond™ study late in the third quarter or early in the fourth quarter of 2025, enabling a comprehensive view of nimacimab’s safety and efficacy profile.

To obtain 52 weeks of treatment data, we are planning a trial extension that increases the originally planned 26 weeks of treatment to provide a longer-term assessment of safety, tolerability and efficacy.

The protocol extension will provide for continued assessment for all four treatment arms including both the nimacimab monotherapy (primary endpoint) and the nimacimab/GLP-1 combination cohort (exploratory endpoint).

The IRB has approved the open-label study extension to 52 weeks.

We are finalizing the study protocol with the FDA in preparation for enrollment.

The Data Safety Monitoring Committee for the CBeyond TM study has completed three regularly scheduled reviews and has recommended that the study continue in accordance with the study protocol.

During the three months ended March 31, 2025, we announced preclinical data supporting our hypothesis that our highly-peripherally restricted molecule, nimacimab, is able to drive similar efficacy when compared to a less-peripherally restricted CB1 inhibitor, monlunabant, in a diet-induced obesity (DIO) murine model.

The results of the preclinical DIO study demonstrated greater than 30% weight loss when nimacimab was combined with the dual GLP-1/GIP agonist, tirzepatide.

Nimacimab alone demonstrated 23.5% weight loss, which is comparable to monlunabant and tirzepatide alone in this study.

We also shared in vitro potency data demonstrating that nimacimab’s non-competitive allosteric binding to CB1 provides potential advantages over orthosteric-binding small-molecule drugs.

Binding to a different site on the receptor, nimacimab does not compete with natural CB1 agonists such as anandamide (AEA) and 2-arachidonoylglycerol (2-AG).

It can block CB1 activity even with an elevated concentration of CB1 agonists, which is associated with obesity.

In contrast, orthosteric-binding small molecule inhibitors must compete with CB1 agonists for binding at the receptor's orthosteric site, which was shown to negatively impact potency when tested under elevated CB1 agonist concentrations.

This distinction may give nimacimab a wider therapeutic window, with suitable potency at lower doses and less side effects.

Given the distinct mechanism and beneficial attributes of nimacimab as a peripheral CB1 inhibitor, within the large and heterogeneous obesity landscape we believe there is significant opportunity for nimacimab to potentially complement GLP-1 agonists and other anti-obesity drug mechanisms of action as well as to have a potential role as a monotherapy.

The CBeyond study is also assessing the combination of nimacimab and a GLP-1 receptor agonist.

We anticipate providing a top-line readout from the CBeyond study late in the third quarter or early in the fourth quarter of 2025.

To obtain 52 weeks of treatment data, we are enrolling a Phase 2a trial extension that increases the originally planned 26 weeks of treatment in the CBeyond study to provide a longer-term assessment of safety, tolerability and efficacy.

The protocol extension provides for continued assessment of nimacimab as a monotherapy and in combination with a GLP-1 receptor agonist.

The Data Safety Monitoring Committee for the CBeyond study has completed four regularly scheduled reviews and has recommended that the CBeyond study continue in accordance with the study protocol.

We recently shared new data from a preclinical diet induced obesity (DIO) mouse model which provides further evidence for the potential combination of nimacimab with incretins and demonstrated the potential durability of response with nimacimab as a monotherapy or maintenance therapy post-incretin treatment.

The preclinical DIO study demonstrated that at day 25 the combination of nimacimab and a suboptimal tirzepatide dose (3nmol/kg daily) yielded 44% vehicle-adjusted weight loss

(29.6% weight loss with an average of 30g mice).

The combination outperformed either agent alone with nimacimab demonstrating 21.5% vehicle-adjusted weight loss (7.1% weight loss with an average of 40g mice) and the suboptimal tirzepatide dose demonstrating 29.7% vehicle-adjusted weight loss (15.4% weight loss with an average of 36g mice).

The combination efficacy also exceeded an optimal dose of tirzepatide (10 nmol/kg), which resulted in 38.9% vehicle-adjusted weight loss (24.6% weight loss with 32g mice).

The preclinical DIO study also demonstrated that, when used as a monotherapy, nimacimab-driven weight loss persisted for about 20 days after treatment cessation, while mice treated with tirzepatide alone regained most of their lost weight within a week post-treatment.

Lastly, the preclinical DIO study demonstrated that when nimacimab alone was used after an initial tirzepatide or combination treatment in the preclinical DIO mouse model, it reduced rebound weight gain in these groups of mice.

We were incorporated under the laws of the State of Nevada on March 16, 2011, and our headquarters are based in San Diego, CA.

3 unchanged sentences

To date, we have not generated any revenue.

We do not expect to receive any revenue from our lead 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.

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, 2025, we incurred $7,197,257 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, 2024, we incurred $1,946,450 in research and development expense primarily related to our efforts in conducting our legacy Phase 2a SBI-100 OE clinical trial.

During the three and six months ended June 30, 2025, we incurred $14,337,753 and $21,535,010 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 and six months ended June 30, 2024, we incurred $4,078,751 and $6,025,201 in research and development expense primarily related to our efforts in conducting our Phase 2a clinical trial for SBI-100 OE and costs 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:

13 unchanged sentences

These initiatives have resulted in additional costs related to the implementation of certain systems, insurance, facilities, legal, tax and accounting costs.

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.

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 2025 and 2024, 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.

Estimated Legal Contingency

The estimated legal contingency relates to a material litigation matter that was related to our former management team.

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.

2 unchanged sentences

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, 2025, the estimated legal contingency, including accrued legal expenses, is $1,913,003.

Other Expense

As of June 30, 2025, the estimated legal contingency, including accrued legal expenses, is $1,806,065.

Other (Income) Expense

Other expense primarily includes a gain from the sale of the Avalite Sciences, Inc.

("AVI") building (the "AVI building") in the first quarter of 2024, and interest expense.

These expenses are offset by interest income earned on our cash balances.

These expenses are offset by interest income earned on our cash balances and investments.

Critical Accounting Estimates

4 unchanged sentences

Results of Operations

For the three months ended March 31, 2025 and 2024

For the three months ended June 30, 2025 and 2024

Research and Development Expenses

Below is a summary of our research and development expenses during the three months ended March 31, 2025 and for the same period in 2024:

Three Months Ended March 31,

Below is a summary of our research and development expenses during the three months ended June 30, 2025 and for the same period in 2024:

Three Months Ended June 30,

2025 2024 $ Change

1 unchanged sentence

Research and development expenses $ 14,337,753 $ 4,078,751 $ 10,259,002 252 %

Research and development expenses for the three months ended March 31, 2025, increased by $5,250,807 as compared to the same period in 2024 .

Research and development expenses for the three months ended June 30, 2025, increased by $10,259,002 as compared to the same period in 2024 .

The net increase in research and development expenses was primarily due to:

• Clinical trial costs increased by $1,266,302 due to increased site and patient costs related to our Nimacimab Phase 2a clinical study, offset by decrease in costs to complete our glaucoma study.

• Contract manufacturing costs increased by $2,532,130 from drug substance and product costs related to resupplying our extended Phase 2a study for nimacimab and process intensification and dose optimization work, labeling and packaging related to nimacimab's future studies.

• Clinical trial costs increased by $2,358,832 due to increased site and patient costs related to our Nimacimab Phase 2a clinical study, offset by a decrease in costs to complete our glaucoma study.

• Contract manufacturing costs increased by $6,617,742 from drug substance, product, labeling and packaging costs related to resupplying our extended Phase 2a study for nimacimab, manufacturing in anticipation for our Phase 2b clinical study for nimacimab, and process intensification and dose optimization work.

• Discovery research and development increased $721,676 from increased work to interrogate nimacimab's mechanism of action and for life cycle management.

• Salaries and stock-based compensation increased by $526,168 due to increased headcount and the recognition of stock based compensation expense.

• Salaries and stock-based compensation increased by $563,161 due to increased headcount.

• General business expenses decreased by $263,555 due to the non-recurrence of fees associated with eliminating our glaucoma program.

• Consulting costs increased by $142,092 to support our nimacimab program.

• Depreciation expense on equipment increased by $95,035.

General an d Administrative Expenses

Below is a summary of our general and administrative expenses during the three months ended March 31, 2025, and for the same period in 2024:

Three Months Ended March 31,

• Depreciation expense on equipment increased by $94,809 due to the depreciation of manufacturing equipment.

General and Administrative Expenses

Below is a summary of our general and administrative expenses during the three months ended June 30, 2025, and for the same period in 2024:

Three Months Ended June 30,

2025 2024 $ Change

1 unchanged sentence

General and administrative expenses $ 3,906,172 $ 4,326,820 $ (420,648) (10) %

General and administrative expenses for the three months ended March 31, 2025, increased by $356,505 as compared to the same period in 2024 .

The increase in general and administrative expenses was primarily due to:

• Salaries and stock-based compensation decreased by $136,137 primarily due to less stock-based compensation expense from the vesting of performance based restricted stock units which vested during the three months ended March 31, 2024, offset by an increase in cash compensation.

General and administrative expenses for the three months ended June 30, 2025, decreased by $420,648 as compared to the same period in 2024 .

The decrease in general and administrative expenses was primarily due to:

• Salaries, benefits and other direct employee related costs increased by $289,007 primarily due to higher headcount.

• Consulting and advisory fees increased by $276,812 from the use of finance consultants and board member compensation.

• Investor relations, marketing and communications expenses increased by $373,571 due to primarily to a market evaluation study for nimacimab and increased investor communications activities.

• Investor relations, marketing and communications expenses increased by $191,519 primarily due to to a market evaluation study for nimacimab and increased investor outreach activities.

• General business expenses decreased by $371,633 primarily due to the one time cost of uplisting to Nasdaq in the prior period.

• Legal and professional fees decreased by $854,783 due to decreases in litigation, one-time fees related to filings with the SEC in the prior period, and decreases in external legal costs and decreased financial advisory services.

Other (Income) Expense

Below is a summary of our other (income) expense for the three months ended March 31, 2025 and for the same period in 2024:

Three Months Ended March 31,

Below is a summary of our other (income) expense for the three months ended June 30, 2025 and for the same period in 2024:

Three Months Ended June 30,

2025 2024 $ Change

1 unchanged sentence

Interest expense $ — $ 450,052 $ (450,052) (100) %

Interest income (619,054) (427,554) (191,500) 45 %

Gain from the sale of asset — (1,145,141) 1,145,141 (100) %

Interest and other income, net (533,090) (961,237) 428,147 (45) %

(Gain) loss from asset sale (89,363) — (89,363) (100) %

Other (income) expense — 359 (359) (100) %

Total other (income) expense $ (622,453) $ (510,826) $ (111,627) 22 %

For the three months ended March 31, 2025, we had a reduction of other income of $476,476 primarily due to:

• Gain on sale of asset for $1,145,141 during the period ended March 31, 2024 which did not recur in the current period.

• Reduction of interest expenses for $435,484 due to the reduction of debt compared to the corresponding period of prior year.

• Increases in interest income and other income of $233,181 due to the increased interest from our short-term investments yields.

For the three months ended June 30, 2025, we had an increase of other (income) expense of $111,627 as compared to the same period in 2024 primarily due to:

• Increased gain from the sale of asset of $89,363 during the period ended June 30, 2025 from the collection of amounts due from the sale of real estate.

• Decreased interest expense of $450,052 due to the reduction of debt.

• Decreases in interest income and other income of $428,147 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.

For the six months ended June 30, 2025 and 2024

Research and Development Expenses

Below is a summary of our research and development expenses during the six months ended June 30, 2025 and for the same period in 2024:

Six Months Ended June 30,

2025 2024 $ Change

2024 % Change

Research and development expenses $ 21,535,010 $ 6,025,201 $ 15,509,809 257 %

Research and development expenses for the six months ended June 30, 2025 , increased by $15,509,809 as compared to the same period in 2024 .

The net increase in research and development expenses was primarily due to:

• Clinical trial costs increased by $3,625,342 due to increased site and patient costs related to our extended Nimacimab Phase 2a clinical study, offset by a decrease in costs to complete our glaucoma study.

• Contract manufacturing costs increased by $9,149,873 from drug substance, product, labeling and packaging costs related to resupplying our extended Phase 2a clinical study of nimacimab, manufacturing in anticipation for our Phase 2b clinical study for nimacimab, and process intensification and dose optimization work.

• Discovery research and development increased $1,344,695 from increased work to interrogate nimacimab's mechanism of action, potency and for life cycle management.

• Salaries, benefits and stock-based compensation increased by $1,089,121 due to increased headcount.

• Consulting costs increased by $292,071 to support our nimacimab program.

• General business expenses decreased by $262,745 due to the non-recurrence of fees associated with eliminating our glaucoma program.

• Depreciation expense on equipment increased by $189,844 due to the depreciation of manufacturing equipment.

• Travel and entertainment expenses increased by $61,417.

General and Administrative Expenses

Below is a summary of our general and administrative expenses during the six months ended June 30, 2025, and for the same period in 2024:

Six Months Ended June 30,

2025 2024 $ Change

General and administrative expenses $ 8,468,477 $ 8,532,620 $ (64,143) (1) %

General and administrative expenses for the six months ended June 30, 2025 , decreased by $64,143 as compared to the same period in 2024 .

The decrease in general and administrative expenses was primarily due to:

• Salaries, benefits and other direct employee related costs increased by $152,870 primarily due to higher headcount.

• Travel and entertainment expenses increased by $81,760.

• Consulting and advisory fees increased by $378,083 from the use of finance consultants, and fees associated with the Company's annual general meeting of stockholders.

• Human resources related expenses increased by $52,764 due to increased hiring activity.

• Investor relations, marketing and communications expenses increased by $565,089 due to primarily to a market evaluation study for nimacimab and increased investor communications activities.

• General business expenses decreased by $358,592 due to the one time cost of uplisting to Nasdaq in the prior period and one-time fees related to SEC filings in the prior period offset by increased software costs.

• Legal and professional fees decreased by $862,862 due to decreases in litigation, one-time fees related to SEC filings in the prior period, decreases in external legal costs and decreased financial advisory services.

Other (Income) Expense

Below is a summary of our other (income) expense for the six months ended June 30, 2025 and for the same period in 2024:

Six Months Ended June 30,

2025 2024 $ Change

Interest expense $ — $ 886,988 (886,988) (100) %

Interest and other income, net (1,191,333) (1,388,791) 197,458 (14) %

(Gain) loss from asset sale (89,363) (1,145,141) 1,055,778 (92) %

Other (income) expense — 1,399 (1,399) (100) %

Total other (income) expense $ (1,280,696) $ (1,645,545) $ 364,849 (22) %

For the six months ended June 30, 2025 , we had a reduction of other (income) expense of $364,849 as compared to the same period in 2024 primarily due to:

• Gain on sale of asset decreased by $1,055,645, due to the one-time sale of real estate.

• Decreased interest expense of $886,988 due to the reduction of debt.

• Decreased interest income and other income of $197,458 due to the 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 and Capital Resources

We have incurred operating losses and negative cash flows from operations since our inception, and as of March 31, 2025, we had working capital of $57,708,321, an accumulated deficit of $142,052,991, and stockholders’ equity of $59,250,314.

We had unrestricted cash and cash equivalents and short-term investments in the amount of $59,223,949 as of March 31, 2025, as compared to $68,415,741 as of December 31, 2024.

For the three months ended March 31, 2025 and 2024, the Company incurred losses from operations of $11,759,562 and $6,152,250, respectively.

For the three months ended March 31, 2025 and 2024, the Company incurred net losses of $11,103,319 and $5,019,531, respectively.

We have incurred operating losses and negative cash flows from operations since our inception, and as of June 30, 2025, we had working capital of $42,270,810, an accumulated deficit of $159,677,863, and stockholders’ equity of $43,676,709.

We had unrestricted cash and cash equivalents and short-term investments in the amount of $48,585,283 as of June 30, 2025, as compared to $68,415,741 as of December 31, 2024.

For the six months ended June 30, 2025 and 2024, the Company incurred losses from operations of $30,003,487 and $14,557,821, respectively.

For the six months ended June 30, 2025 and 2024, the Company incurred net losses of $28,728,191 and $12,922,347, respectively.

In January and March 2024, we completed two private placement equity transactions (the "January and March PIPE Financings") with institutional accredited investors in which we raised combined net aggregate proceeds of $83,556,563.

We expect that the net proceeds raised from the January and March PIPE Financings, will allow us to fund our clinical trial for obesity through top-line Phase 2a data, complete process intensification manufacturing activities along with drug substance and product manufacturing work needed for future studies, plan for our Phase 2b dose ranging study and provide us with the ability to expand upon our metabolic program with our other research and development efforts.

In May 2024 we entered into the ATM Agreement under which the Company may sell up to $100,000,000 of shares of common stock through the Sales Agent.

We expect that the net proceeds raised from the January and March PIPE Financings, will continue to allow us to fund our clinical trial of nimacimab for obesity through top-line Phase 2a data and the extension study, work on formulation development activities, manufacture drug substance to commence and plan for our Phase 2b dose ranging study of nimacimab for obesity and provide us with the ability to expand upon our metabolic program with our other research and development efforts.

We expect that the top-line data for our Phase 2a study will inform the size and magnitude of the Phase 2b dose ranging study, including the capital necessary to move forward.

Accordingly, we may need to seek additional funds sooner than planned, including through public or private equity or debt financings, other sources, or through strategic collaborations.

In May 2024 we entered into an Equity Distribution Agreement (the "ATM Agreement") with Piper Sandler & Co., as the sales agent (the "Sales Agent") under which the Company may sell up to $100,000,000 of shares of common stock through the Sales Agent.

The Company has not sold any shares under the ATM Agreement as of the date hereof and is not obligated to, and cannot provide any assurances that the Company will make any sales of the shares under the ATM Agreement.

In August 2024, the holder of the Convertible Note exercised their conversion option and converted the principal balance of $5,000,000 into 968,973 shares of our common stock.

In August 2024, the holder of a secured promissory note exercised their conversion option and converted the principal balance of $5,000,000 into 968,973 shares of our common stock.

During the fourth quarter of 2024, we were successful in our appeal in the Ninth Circuit of the judgment of a material litigation matter, which has been remanded to the District Court for a new trial, and the bond related to the judgement was exonerated, allowing us to recover $9,000,000 in restricted cash.

6 unchanged sentences

Additionally, the process of testing product candidates in clinical trials is costly, and the timing of progress and expenses in these trials is uncertain.

Accordingly, we may need to seek additional funds sooner than planned, including through public or private equity or debt financings, other sources, or through strategic collaborations.

Our future capital requirements will depend on many factors, including:

10 unchanged sentences

• 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 "--Financial Overview — Estimated Legal Contingency";

• 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.

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,

Six Months Ended June 30,

Net cash used in operating activities $ (19,931,667) $ (11,801,659)

4 unchanged sentences

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, amortization of debt discount and the gain on sale of asset.

Cash used in operating activities of $9,185,480 during the three months ended March 31, 2025, reflected a net loss of $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 used in operating activities of $19,931,667 during the six months ended June 30, 2025 , reflected a net loss of $28,728,191, partially offset by aggregate non-cash charges of $4,510,100 and included a $4,286,424 net cash outflow in our operating assets and liabilities.

Non-cash charges included $4,235,018 for stock-based compensation expense primarily attributable to the recognition of current period expense on prior grants and $364,445 in depreciation and amortization.

The net change in our operating assets and liabilities included a $1,392,326 cash outflow from the increase in our prepaid expenses and other current assets, a $284,902 net cash outflow from decrease in our accrued expenses and other current liabilities and a $1,215,779 cash inflow from the increase of our accounts payable.

Cash used in operating activities of $4,708,123 during the three months ended March 31, 2024, reflected a net loss of $5,019,531, partially offset by aggregate non-cash charges of $1,597,803 and included a $1,286,395 net change in our operating assets and liabilities.

The net change in our operating assets and liabilities included a $414,271 cash inflow from the decrease in our prepaid expenses and other current assets, a $1,287,646 net cash inflow from increase in our accrued expenses and other current liabilities and a $2,584,507 cash inflow from the increase of our accounts payable.

Cash used in operating activities of $11,801,659 during the six months ended June 30, 2024, reflected a net loss of $12,922,347, partially offset by aggregate non-cash charges of $3,963,183 and included a $2,842,495 net change in our operating assets and liabilities.

Cash Flows from Investing Activities

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.

During the three months ended March 31, 2024, our cash provided by investing activities related primarily to the net proceeds received in the amount of $1,145,141 from the sale of real estate .

During the six months ended June 30, 2025, our cash used in investing activities related primarily to the purchase of $24,747,039 in short-term investments and $89,363 in net proceeds from the sale of the AVI building.

During the six months ended June 30, 2024, the Company purchased $35,644 in machinery and office equipment and recognized $1,145,141 in net proceeds from the sale of the AVI building.

Cash Flows from Financing Activities

Cash flows from financing activities primarily reflect proceeds from the sale of our securities.

During the three months ended March 31, 2024, cash provided by financing activities included $85,652,617 in proceeds received in connection with the January and March PIPE Financings, net of issuance costs.

During the six months ended June 30, 2025, cash provided by financing activities included $18,158 in proceeds from the purchase under employee stock purchase plan.

During the six months ended June 30, 2024, cash provided by financing activities included $83,556,563 in proceeds received in connection with the January and March PIPE Financings, net of issuance costs.

Off-Balance Sheet Arrangements

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis