What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-10 compared with 2025-03-20 · 89 added, 92 removed, 175 unchanged (51% of the section changed)

4 unchanged sentences

Unless otherwise provided in this Annual Report, references to “we,” “us,” “our” and “Skye” in this discussion and analysis refer to Skye Bioscience, Inc., a Nevada corporation, together with its wholly owned subsidiaries, Nemus, a California corporation, SKYE Bioscience Pty Ltd ("SKYE Bioscience Australia"), an Australian proprietary limited company, Emerald Health Therapeutics, Inc.

(EHT) a corporation governed by the Business Corporations Act (British Columbia), Bird Rock Bio Sub, Inc.

("BRB"), a Delaware corporation and Ruiyi Acquisition Corp, a Delaware corporation.

(EHT) a corporation governed by the Business Corporations Act (British Columbia), and Bird Rock Bio Sub, Inc.

("BRB"), a Delaware corporation.

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.

In August of 2024, we commenced our Phase 2a clinical trial, CBeyond TM , for nimacimab.

The CBeyond TM clinical trial includes 136 patients, 16 clinical trial sites and an exploratory combination arm with a GLP-1 receptor agonist to assess differences in weight loss, body composition, and other attributes.

The CBeyond TM clinical trial is 100% enrolled and we expect to provide topline data near the end of the third quarter or the beginning of the four quarter 2025.

In October of 2025, we reported topline data from our Phase 2a clinical trial, CBeyond TM , for nimacimab and in February 2026 we reported interim results from the combination cohort of the 26 week extension study.

In response to the trial results, we have shifted focus to a combination therapy strategy while continuing to evaluate the monotherapy as a potential standalone or second-line therapy if efficacy can be achieved with higher doses.

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 wil l comprise two cohorts of nim acimab 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.

On August 18, 2023, we 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.

4 unchanged sentences

The purpose of the BRB Acquisition was to acquire BRB's clinical asset, nimacimab, an antibody targeting the CB1 receptor, for development to treat metabolic, inflammatory, and fibrotic conditions.

On September 6, 2023, we 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-250, of the Company’s issued and outstanding shares of common stock (the "Reverse Split").

The Reverse Split was effective on September 8, 2023.

As a result of the Reverse Split, each two-hundred fifty (250) shares of common stock was combined into one (1) share of common stock and the total number of shares of common stock authorized was reduced from 5,000,000,000 to 20,000,000 and the number of shares of common stock issued and outstanding was reduced from 3,078,137,871 shares of common stock to 12,312,551 shares of common stock.

Subsequently, on November 6, 2023, we increased our authorized shares of common stock to 100,000,000.

In January 2024 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.

The net proceeds raised from the January and March PIPE Financings, along with the reallocation of funds from the elimination of our ocular program (as described below) will allow us to fund our clinical trial of nimacimab for obesity through top-line Phase 2a data, complete process intensification manufacturing activities along with drug substance and product manufacturing work needed for our phase 2b study and enable us to expand upon our metabolic program with our other research and development efforts.

Our cash runway currently excludes the Phase 2b clinical study or manufacturing activities necessary to supply a Phase 3 clinical study.

The net proceeds raised from the January and March PIPE Financings, along with the reallocation of funds from the elimination of our ocular program (as described below) have allowed us to fund our clinical trial of nimacimab for obesity through top-line Phase 2a data, complete process intensification manufacturing activities along with drug substance and product manufacturing work needed for our Phase 2b study and enable us to expand upon our metabolic program with our other research and development efforts.

Our cash runway currently excludes the Phase 2b clinical study, additional manufacturing activities expected to complete the Phase 2b resupply and costs related to future registrational studies.

In April 2024, Skye uplisted to the Nasdaq Global Market® stock exchange from the OTCQB.

9 unchanged sentences

We have also terminated our license agreement with the University of Mississippi and other vendor contracts related to the manufacture, development, and sublicense of SBI-100 OE.

In August of 2024, the Convertible Note (as defined in Note 6 to the accompanying consolidated financial statements).

with a principal value of $5,000,000, was converted into 968,973 shares of our common stock.

In August of 2024, the Convertible Note (as defined in Note 6 to the accompanying consolidated financial statements) with a principal value of $5,000,000, was converted into 968,973 shares of our common stock.

During the fourth quarter of 2024, we were successful in our appeal in the Ninth Circuit Court of Appeals (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.

Additionally, in a related case with our insurance carrier, we collected $2,000,000 during the fourth quarter of 2024.

The recovered funds have been reallocated to further our clinical pipeline and extended our cash runway.

The recovered funds were reallocated to further our clinical pipeline and extended our cash runway.

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

We also maintain office space in San Francisco, 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.

3 unchanged sentences

Research and Development Expenses

During the year ended December 31, 2025, we incurred $42,361,879 in research and development expenses primarily related to our efforts in conducting the Phase 2a clinical trial of nimacimab for obesity and manufacturing costs in preparation of our Phase 2b trial.

During the year ended December 31, 2024, we incurred $18,701,694 in research and development expenses primarily related to our efforts in conducting the Phase 2a clinical trial of nimacimab for obesity, manufacturing and residual costs from our legacy Phase 2a SBI-100 OE clinical trial.

During the year ended December 31, 2023, we incurred $5,819,461 in research and development expense primarily related to our efforts in conducting the Phase 1 SBI-100 clinical trial and the manufacturing of the API required for the Phase 1 and Phase 2a SBI-100 OE clinical studies.

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:

9 unchanged sentences

We expect to incur increased research and development expenses in the future as we continue our efforts towards advancing our lead program for nimacimab.

Cost to Acquire In-Process Research and Development ("IPR&D") Asset

During the year ended December 31, 2023, we incurred a one-time non-cash charge of $21,215,214 related to the acquisition of our lead clinical asset, nimacimab.

This in-process R&D was expensed when purchased in exchange for shares of our common stock, as its only future use was determined to be for drug development.

General and Administrative Expenses

4 unchanged sentences

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 2024 and 2023, which have resulted in increased stock-based compensation expense.

To incentivize our employees and be competitive to retain strong talent we issued additional equity awards in 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

Estimated Legal Contingency and Income from Insurance Recovery

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

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 judgement in the Ninth Circuit and the case was remanded back to the District Court for a new trial, as a result of which we adjusted the estimated legal contingency based on new key assumptions.

During 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 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 December 31, 2025, the estimated legal contingency, including accrued legal expenses, is $2,069,067.

See Note 12 to the accompanying consolidated financial statements for more information.

Additionally, in a related case with our insurance carrier, we collected $2,000,000 during the fourth quarter of 2024.

The recovered funds were reallocated to further our general operations.

Other Expense

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

("AVI") building (the "AVI building") (see Note 3 to the accompanying consolidated financial statements), and interest expense.

In 2023, we also reported wind-down costs from our 2022 acquisition of EHT which we did not incur in 2024.

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

Other (income) expense primarily includes gains from installment payments related to the sale of Verdelite Sciences, Inc.

("VDL") and 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 and cash equivalent balances and short term investments.

Critical Accounting Estimates

45 unchanged sentences

See Note 2 to the accompanying consolidated financial statements for information on recently issued accounting pronouncements and recently adopted accounting pronouncements.

While we expect certain recently adopted accounting pronouncements to impact our estimates in future periods, the impact upon adoption was not significant to our current estimates and operations.

The adoption of recently adopted accounting pronouncements did not have a material impact on our consolidated financial statements.

Results of Operations

6 unchanged sentences

Research and development expenses for the year ended December 31, 2025 increased by $23,660,185 when compared to the year ended December 31, 2024.

The increase in research and development e xpenses was primarily due to the following increases:

• Clinical study costs increased by $7,721,375 due to the planning and launch of the CBeyond TM study in August of 2024, which achieved 50% enrollment by the end of 2024.

During 2024, we also completed our Phase 2a SBI-100 trial for glaucoma.

• Contract manufacturing costs increased by $1,234,445 due to nimacimab process intensification and drug resupply manufacturing runs which will allow us to seamlessly transition to a Phase 2b and build a scalable manufacturing process for future studies.

• Consulting costs increased by $691,185 to support our nimacimab program.

• Discovery research and development costs increased by $348,313 from non-clinical studies related to the development of a diet induced obesity model to demonstrate proof of concept and mechanism of action studies related to nimacimab.

The increase in research and development expenses was primarily due to the following increases:

• Clinical study costs decreased by $1,497,323 due to the planning and launch of the CBeyond TM study in August of 2024, which achieved 50% enrollment by the end of 2024 and topline data in October 2025.

During the first half of 2024, we also completed our Phase 2a SBI-100 trial for glaucoma which was the driver for the decrease as this program was eliminated in the first half of 2024.

• Contract manufacturing costs increased by $20,689,916 due to nimacimab drug product and drug substance runs to resupply the Phase 2a study and prepare for the Phase 2b study.

Additional costs related to process intensification and dose concentration activities which are intended to allow us to seamlessly transition to a Phase 2b and build a scalable manufacturing process for future studies.

• Discovery research and development costs increased by $1,857,009 primarily from studies related to the development of a diet induced obesity model to demonstrate proof of concept and mechanism of action studies related to nimacimab.

• Quality assurance costs increased by $108,747 from the use of consultants.

• Salaries and stock-based compensation increased by $1,932,840 due to increased headcount to support our metabolic pipeline and organizational expertise.

• General business expenses increased by $459,054 due to increased travel and the write off of non-refundable deposits related to our glaucoma program.

• In addition, we recognized additional depreciation of $156,628 on specialized manufacturing equipment that was purchased in 2024 to support manufacturing activities.

Cost to acquire IPR&D asset

Below is a summary of our cost to acquire the IPR&D asset during the December 31, 2024 and 2023:

Year Ended December 31,

2024 2023 $ Change

2023 % Change

Cost to acquire IPR&D asset $ — $ 21,215,214 $ (21,215,214) (100) %

Cost to acquire the IPR&D asset for the December 31, 2024, decreased by $21,215,214 as compared to the year ended December 31, 2023.

The decrease is due to the cost to acquire nimacimab in the BRB Acquisition, which occurred in 2023.

• Consulting and advisory fees increased by $724,360 to support our nimacimab program.

• General business expenses decreased by $350,061 due to the non-recurrence of fees associated with eliminating our glaucoma program.

• Depreciation and amortization expense increased by $223,456.

General and Administrative Expenses

3 unchanged sentences

General and administrative expenses $ 15,801,686 $ 17,725,741 $ (1,924,055) (11) %

General and administrative expenses for the year ended December 31, 2024 increased by $9,873,401 as compared to the year ended December 31, 2023.

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

• Salaries and stock-based compensation increased by $6,980,398 due to increased headcount and the recognition of stock based compensation expense due to the achievement of certain performance based milestones related to RSUs granted to members of management and members of the board of directors of the Company.

We also had an increase of $148,497 in human resources related fees to attract new talent.

• Legal, professional fees and consulting advisory increased by $1,397,512 due to one time services provided under a financial advisory agreement, professional services related to the registration of the resale of shares issued in the BRB Acquisition and the August 2023 PIPE Financing, the January and March 2024 PIPE Financings and general corporate legal fees associated with our uplisting to Nasdaq, the filing of our shelf registration statement, legal fees related to nimacimab patent prosecution, increased tax fees due to increased tax complexity and the entry into the ATM Agreement.

• General business expenses increased by $912,725 primarily due to increased insurance costs and regulatory fees associated with our uplisting to Nasdaq and the filing of our registration statements in connection with the January and March PIPE Financings.

Other increases related to investments in building internal infrastructure and hosting internal and external corporate events.

• Travel and entertainment along with investor relations, marketing and public relations increased by $350,401, from increased activity to drive awareness for nimacimab.

Change in Estimate for Legal Contingency

Below is a summary of the estimated legal contingency during the years ended December 31, 2024 and 2023:

General and administrative expenses for the year ended December 31, 2025 decreased by $1,924,055 as compared to the year ended December 31, 2024.

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

• Salaries, benefits and other direct employee related costs decreased by $742,057 primarily due to lower of stock based compensation expense in the current period due to the achievement of certain performance based milestones related to RSUs granted to members of management and members of the board of directors of the Company in 2024, the decrease was offset by increased headcount.

• Investor relations, marketing and communications expenses increased by $580,995 due primarily to a market evaluation study for nimacimab and increased investor communications and marketing activities.

• Professional, fees decreased by $1,408,506 primarily due to the decrease in professional fees from tax and financial advisory services.

• Consulting and advisory fees increased by $499,909 primarily due to the increase in finance accounting and human resource consultants and the cost of the company's annual general meeting of shareholders.

• Recruiting fees expenses decreased by $176,176 due to the one time cost to hire an executive in the prior period.

• General business expenses decreased by $314,569 primarily due to the one time Nasdaq listing fee and filing fees in the prior period and lower insurance premiums in 2025, these decreases were offset by an increase in software costs.

• Legal fees decreased by $137,852 due to decreases in litigation related activities, one-time fees related to SEC filings in the prior period, decreases in external legal costs.

• General and administrative foreign exchange expenses decreased by $244,212 due to exchange rate fluctuation of the operation of our foreign subsidiaries.

Change in Estimate for Legal Contingencies

Below is a summary of the estimated legal contingencies during the years ended December 31, 2025 and 2024:

Year ended December 31,

2025 2024 $ Change

2023 % Change

Change in estimate for legal contingency $ (4,234,717) $ (151,842) $ (4,082,875) 2689 %

The change in estimate for legal contingency decreased by $4,082,875 for the year ended December 31, 2024, as compared to the year ended December 31, 2023 .

The adjustment of $4,234,717 was due to a change in managements estimate related to the total liability due in the Cunning Lawsuit.

Change in estimate for legal contingencies $ — $ (4,234,717) $ 4,234,717 (100) %

There was no change in estimate for legal contingency for the year ended December 31, 2025, as compared to the gain during the year ended December 31, 2024 .

The adjustment for the year ended December 31, 2024 was due to a change in managements estimate related to the total liability due in the Cunning Lawsuit.

For additional information regarding the adjustment to the legal contingency, see Note 12 to the accompanying consolidated financial statements.

3 unchanged sentences

2025 2024 $ Change

2023 % Change

Income from insurance recovery $ — $ (2,000,000) $ 2,000,000 (100) %

$ (2,000,000) $ — $ (2,000,000) 100 %

The change in the income from insurance recovery increased by $2,000,000 for the year ended December 31, 2024 as compared to the year ended December 31, 2023.

The increase is due to the Company reaching a settlement with its former D&O carrier for coverage related to the Cunning Lawsuit.

There was no income from insurance recovery for the year ended December 31, 2025, as compared to the income during the year ended December 31, 2024 .

The income for the year ended December 31, 2024 is due to the Company reaching a settlement with its former D&O carrier for coverage related to the Cunning Lawsuit.

Other Expense (Income)

4 unchanged sentences

Interest income (1,883,903) (3,028,762) 1,144,859 (38) %

Wind-down costs — 409,347 (409,347) (100) %

(Gain) loss from asset sale (1,358,412) 307,086 (1,665,498) (542) %

Debt conversion inducement expense — 1,383,285 (1,383,285) (100) %

Other expense (income) 2,200 (3) 2,203 (73433) %

Gain from asset sale (360,750) (1,358,412) 997,662 (73) %

Other expense 502 2,200 (1,698) (77) %

Total other expense (income), net $ (2,244,151) $ (3,635,666) $ 1,391,515 (38) %

For the year ended December 31, 2024, we had net other income of $3,635,666, which was primarily related to interest income of $3,028,762 and a gain from the divestiture of the AVI real estate and collections from Verdelite Sciences, Inc.

("VDL") related to its sale in 2023.

Income was offset by interest expense of $749,308 (including cash and non-cash interest).

For the year ended December 31, 2023, we had net other expense of $2,906,011 primarily related to interest expense of $906,270 (including cash and non-cash interest), a non-cash charge of $1,383,285 related to the induced conversion of our multi-draw credit agreement with Emerald Health Sciences, Inc.

(“Sciences”), dated October 5, 2018, as amended between April 29, 2020 and March 29, 2021 (the "Amended Credit Facility"), $409,347 in wind down costs associated with the EHT Acquisition (as defined below) and a $307,086 loss from the divestiture of VDL.

The increase was offset by interest income of 99,974.

Liquidity and Capital Resources

We have incurred operating losses and negative cash flows from operations since inception and as of December 31, 2024, had working capital of $66,488,360 and an accumulated deficit of $130,949,672.

For the year ended December 31, 2025, we had a decrease in other income, net of $1,391,515 as compared to the same period in 2024 primarily due to:

• Gain on sale of asset decreased by $997,662, due to the one-time sale of the AVL real estate during the year ended December 31, 2024.

During the year ended December 31, 2025, the Company continued to collect installment payments from the sale of VDL totaling $360,750.

• Decreased interest expense of $749,308 due to the reduction of debt.

• Decreased interest income of $1,144,859 due to the decreased interest from our cash and 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

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 December 31, 2025, had working capital of $18,888,688 and an accumulated deficit of $186,874,486.

As of December 31, 2025, the Company had cash and cash equivalents in the amount of $25,737,221.

1 unchanged sentence

For the years ended December 31, 2025 and 2024, the Company incurred net losses of $55,924,814 and $26,567,123, respectively.

The Company expects to continue to incur significant losses and negative cash flows from operations through 2025 and expects to incur significant losses and negative cash flows from operations in the future.

In January 2024 and March 2024, we completed the January and March PIPE Financings with institutional accredited investors, in which we raised combined net aggregate proceeds of $83,556,563.

The net proceeds raised from the January and March PIPE Financings, along with the reallocation of funds from the elimination of our ocular program, 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.

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 July 2024, 1,301,573 pre-funded warrants, with an intrinsic value of $10,424,294, were exercised on a cashless basis, resulting in the issuance 1,301,410 shares of our common stock (see Note 7 to the accompanying consolidated financial statements).

On July 1, 2024, 1,301,573 pre-funded warrants issued in the January 2024 PIPE Financing with an intrinsic value of $10,424,294, were exercised on a cashless basis, resulting in the issuance 1,301,410 shares of Company's common stock (see Note 8 to the accompanying consolidated financial statements).

On October 7, 2025, 1,059,441 pre-funded warrants issued in the January 2024 PIPE Financing with an intrinsic value of $2,012,938 were exercised on a cashless basis, resulting in the issuance of 1,059,441 shares of Company's common stock.

On December 18, 2025, 1,289,861 pre-funded warrants issued in the January 2024 PIPE Financing with an intrinsic value of $1,360,803 were exercised on a cashless basis, resulting in the issuance of 1,289,861 shares of Company's common stock.

On December 23, 2025, 25,192 pre-funded warrants issued in the January 2024 PIPE Financing with an intrinsic value of $23,177 were exercised on a cashless basis, resulting in the issuance of 25,192 shares of Company's common stock.

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.

2 unchanged sentences

The recovered funds have been reallocated to further our clinical pipeline and extend our cash runway.

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 will be sufficient to fund its projected operations for at least 12 months from the date of the issuance of these consolidated financial statements.

However, our forecast of the period of time through which our financial resources will be adequate to support our operations is a forward-looking statement that involves risks and uncertainties, and actual results could vary materially.

We have based this estimate on assumptions that may prove to be wrong, and we could use our capital resources sooner than we expect.

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

Going Concern

Our independent registered public accounting firm has issued a report on our audited consolidated financial statements as of and for the year ended December 31, 2025 that included an explanatory paragraph referring to our recurring operating losses and expressing substantial doubt in our ability to continue as a going concern.

Our consolidated financial statements have been prepared on a going concern basis, which assumes the realization of assets and settlement of liabilities in the normal course of business.

Our consolidated financial statements do not include any adjustments to the amount and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

As of December 31, 2025, 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 " for additional information.

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

11 unchanged sentences

Year ended December 31,

Net cash and cash equivalents and restricted cash provided by (used in):

Net cash and cash equivalents provided by (used in):

Operating activities $ (43,062,529) $ (25,237,480)

1 unchanged sentence

Financing activities 29,571 83,562,181

Net increase in cash and cash equivalents and restricted cash

$ 58,079,086 $ 9,087,548

Net increase (decrease) in cash and cash equivalents $ (62,533,243) $ 58,079,086

Cash Flows from Operating Activities

The primary use of cash and cash equivalents for our operating activities during the years ended December 31, 2024 and 2023 was to fund research and development activities for our clinical product candidates, nimacimab and SBI-100 OE, along with general and administrative activities.

Our cash and cash equivalents used in operating activities also reflected changes in our working capital, net of adjustments for non-cash charges, such as, stock-based compensation expense, non-cash interest expense related to the amortization of debt discounts on our convertible debt, a charge to induce the conversion of the Amended Credit Agreement in February 2023 and the expense related to the acquisition of our lead asset for obesity, nimacimab.

The primary use of cash and cash equivalents for our operating activities during the years ended December 31, 2025 and 2024 was to fund research and development activities for our clinical product candidates, nimacimab and our prior drug candidate, SBI-100 OE, along with general and administrative activities.

Our cash and cash equivalents used in operating activities also reflected changes in our working capital, net of adjustments for non-cash charges.

Cash and cash equivalents used in operating activities of $43,062,529 during the year ended December 31, 2025, reflected a net loss of $55,924,814, the loss was adjusted by aggregate non-cash charges of $8,130,296 and included a $4,731,989 decrease in our operating assets and liabilities.

Non-cash charges included $723,352 of depreciation and amortization, $7,767,694 for stock-based compensation expense, $360,750 for a non-cash gain on the sale of an asset.

The net change in our operating assets and liabilities included a $1,054,580 increase in our prepaid expenses and other current assets, a decrease in accounts payable of $1,395,428, and a $2,281,981 decrease in our accrued expenses and other current liabilities.

Cash and cash equivalents used in operating activities of $25,237,480 during the year ended December 31, 2024, reflected a net loss of $26,567,123, the loss was adjusted by aggregate non-cash charges of $3,958,401 and included a $2,628,758 decrease in our operating assets and liabilities.

Non-cash charges included $298,640 of depreciation and amortization, $325,610 in vendor deposit write offs, $8,317,480 for stock-based compensation expense, $599,006 in non-cash interest expense from the amortization of the debt discount on our convertible debt, a gain of $4,234,717 from our change in estimate related to our legal contingency for the Cunning Lawsuit, $1,358,412 for a non-cash gain on the sale of an asset.

The net change in our operating assets and liabilities included a $1,422,928 increase in our prepaid expenses and other current assets, a decrease in accounts payable of $586,533, and a $573,696 decrease in our accrued expense and other current liabilities.

Cash used in operating activities of $13,952,178 during the year ended December 31, 2023, reflected a net loss of $37,644,784, adjusted by aggregate non-cash charges of $24,161,913 and included a $469,307 decrease in our operating assets and liabilities.

Non-cash charges included $124,251 of depreciation and amortization, $987,510 for stock-based compensation expense, $329,890 in non-cash interest expense from the amortization of the debt discount on our convertible debt, a gain of $151,842 from the courts decision to reduce the legal fees due to the plaintiff in the Cunning Lawsuit, $307,086 for a non-cash loss on the divestiture of VDL, a debt conversion inducement charge of $1,383,285 related to the conversion of the multi-draw credit agreement and in-process research and development expenses of $21,215,214 related to the acquisition of our lead asset, nimacimab.

The net change in our operating assets and liabilities included a $306,442 increase in our prepaid expense and other current assets, a decrease in accounts payable of $701,285, and a $74,464 decrease in our accrued expense and other current liabilities.

Cash Flows from Investing Activities

Cash and cash equivalents used in investing activities of $245,615 during the year ended December 31, 2024 consisted of our capital expenditures from the purchase of property and equipment of $1,604,027 offset by the proceeds from the sale of AVI of $1,358,412.

Cash provided from investing activities of $6,596,456 during the year ended December 31, 2023 consisted of our capital expenditures in relation to the purchase of property and equipment of $12,550, cash divested net of proceeds received from the sale of VDL of $5,532,266 and cash proceeds received from the BRB Acquisition of $1,076,740.

Cash and cash equivalents used in investing activities of $19,500,285 during the year ended December 31, 2025 consisted of proceeds from the sale of VDL of $360,750 and purchase of short-term investments of $19,854,723, offset by capital expenditures from the purchase of property and equipment of $6,312.

Cash Flows from Financing Activities

During the year ended December 31, 2025, cash and cash equivalents provided by financing activities was composed of $29,571 in proceeds received from the purchase of shares of our common stock pursuant to our employee stock purchase plan.

During the year ended December 31, 2024, cash and cash equivalents provided by financing activities included $83,556,563 in net proceeds received from the January and March 2024 PIPE Financings.

During the year ended December 31, 2023, cash provided by financing activities included $11,734,947 in net proceeds received from the Company’s issuance on August 18, 2023 of an aggregate of 2,989,981 shares of common stock and accompanying warrants to purchase up to 2,325,537 shares of common stock pursuant to a PIPE financing arrangement (the "August 2023 PIPE Financing"), $4,973,684 in net proceeds from the issuance of a convertible note, offset by $259,335 in repayments on our insurance premium financing.

Off-Balance Sheet Arrangements

7 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-K

Item 7. Management’s Discussion and Analysis