v3.25.4
Stock-Based Compensation
 12 Months Ended
Dec. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Stock-Based Compensation Stock-Based Compensation
Stock Incentive Plan
On October 31, 2014, the Board approved the Company’s 2014 Omnibus Incentive Plan (the “2014 Plan”). The 2014 Plan authorizes the issuance of awards including stock options, stock appreciation rights, restricted stock, stock units and performance units to employees, directors, and consultants of the Company. On June 14, 2022, the Board approved the 2014 Amended and Restated Omnibus Incentive Plan (the “2014 Amended and Restated Plan”) which replaced the 2014 Plan in its entirety. On September 29, 2023, the Board and Majority Stockholders adopted and approved Amendment No. 1 to the 2014 Amended and Restated Plan. Amendment No. 1 to the 2014 Amended and Restated Plan became effective on November 6, 2023. On October 22, 2024, the second amendment and restatement of the Company's 2014 Amended and Restated Plan was approved to increase the number of shares of the Company's common stock issuable thereunder by 1,535,655 to increase the number of incentive stock options that may be granted thereunder to 4,000,000, extend the expiration date of the plan to September 10, 2034, update the name of the plan to the “Skye Bioscience, Inc. Amended and Restated Omnibus Incentive Plan” and make certain administrative amendments (as so amended and restated, the "Amended and Restated Plan").
The Amended and Restated Plan, among other things, provides that each January 1 beginning in 2023 and ending on (and including) January 1, 2032 the number of shares will increase by 5% of the outstanding shares of common stock as of the prior December 31, unless the Board of Directors of the Company decides to a lesser increase.
As of December 31, 2025, the shares available for future grant under the Amended and Restated Plan are as follows:
Shares Available for Grant
Available as of December 31, 2024119,046 
Share pool increase1,548,728 
Forfeited/Cancelled324,248 
Option grants(1,672,200)
Available as of December 31, 2025319,822 
2024 Inducement Equity Incentive Plan
On July 2, 2024, the Board adopted the Skye Bioscience, Inc. 2024 Inducement Equity Incentive Plan (as amended and restated, the "Inducement Plan"). The Inducement Plan was adopted in order to grant share-based awards to newly hired employees as an inducement to join the Company. The terms of the Inducement Plan are substantially similar to the terms of the Company’s 2014 Amended and Restated Plan with the exception that awards may only be made to an employee who has not previously been an employee or member of the Board of Directors of the Company if the award is in connection with commencement of employment. The Company has reserved 600,000 shares of the Company’s common stock for issuance pursuant to awards granted under the Inducement Plan.
As of December 31, 2025, the shares available for future grant under the Amended and Restated Plan are as follows:
Shares Available for Grant
Available as of December 31, 2024286,500 
Forfeited/Cancelled
31,000 
Option grants(175,000)
Available as of December 31, 2025142,500 
Stock Options
Options granted under the Company's equity incentive plans expire no later than ten years from the date of grant. Options granted under the Company's equity incentive plans may be either incentive or non-qualified stock options. For incentive and non-qualified stock option grants, the option price shall be at least 100% of the fair value on the date of grants, as determined by the Company’s Board of Directors. If at any time the Company grants an option, and the optionee directly or by attribution owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, the option price shall be at least 110% of the fair value and shall not be exercisable more than five years after the date of grant. The shares issued generally vest over a period of one to four years from the date of grant.
The following is a summary of option activities under the Company’s Amended and Restated Plan and the Inducement Plan for the year ended December 31, 2025:
Number of
Shares		Weighted
Average
Exercise Price		Weighted
Average Remaining
Contractual
Term (Years)		Aggregate
Intrinsic
Value*
Outstanding, December 31, 20243,036,603 $7.72 8.91$22,624 
Granted
1,847,200 2.85 
Forfeited(176,334)4.34 
Cancelled(178,914)10.99 
Outstanding, December 31, 20254,528,555 $5.74 8.73$— 
Exercisable, December 31, 20251,863,551 $7.03 8.38$— 
Vested and expected to vest, December 31, 20254,528,555 $5.74 8.73$— 
*The aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company’s stock exceeded the exercise price of the stock options at December 31, 2025 for those stock options for which the quoted market price was in excess of the exercise price ("in-the-money options").
The weighted-average grant-date fair value of stock options granted for the years ended December 31, 2025 and 2024, was $2.09 and $6.04, respectively. The total fair value of the stock options that vested during the years ended December 31, 2025 and 2024 was $5,655,038 and $4,034,671, respectively.
The fair value of each stock option grant was estimated on the date of grant using the Black-Scholes option-pricing model under the following assumptions:
Year Ended December 31,
20252024
Dividend yield0.00 %0.00 %
Risk-free interest rate
3.79-4.27%
3.69-4.48%
Expected term (years)
5.27-6.08
5.27-6.08
Volatility
83.86-86.09%
81.73-99.96%
Restricted Stock Units
On February 29, 2024, the Company granted restricted stock units ("RSUs") to its executive management team and to certain members of the Board with market-based vesting conditions. The RSUs are eligible to vest subject to the achievement and attainment of certain market capitalization target goals and share price targets (market-based vesting conditions). The Company used the Monte Carlo Simulation model to evaluate the derived service period and fair value of awards with market and performance conditions, including assumptions of historical volatility and risk-free interest rate commensurate with the vesting term.
The fair value of the Company's market-based RSUs were estimated on the date of grant under the following assumptions:
Year Ended December 31,
2024
Dividend yield0.00%
Volatility factor93.71%
Risk-free interest rate4.16%
Derived service periods (years)
1.27 - 2.48
On August 22, 2024, the Board approved a modification to the terms of the RSUs issued on August 25, 2023, and September 29, 2023 to its executive management team and to a member of the Board. The vesting condition was modified from a performance-based condition to a market-based condition. Since the performance condition under the original award was improbable of being met at the time of the modification, no expense was previously recognized. Therefore, on the modification date, the Company established a new fair value and will recognize the expense over the derived service period. The Company used the Monte Carlo Simulation model to evaluate the derived service period and fair value of the awards.
The fair value of the Company's market-based RSUs were estimated on the modification date under the following assumptions:
August 22,
2024
Dividend yield0.00%
Volatility factor94.3%
Risk-free interest rate3.76%
Derived service periods (years)2.11
The following is a summary of restricted stock unit activity during the year ended December 31, 2025:
Number of
Shares		Weighted Average Grant Date Fair Value
Unvested, December 31, 2024503,113 $9.62 
Granted— — 
Released(10,625)4.80 
Unvested, December 31, 2025492,488 $9.72 
The Company used the Monte Carlo Simulation model to evaluate the derived service period and fair value of awards with market and performance conditions, including assumptions of historical volatility and risk-free interest rate commensurate with the vesting term.
Stock-Based Compensation Expense
Stock Compensation Adjustments Related to Board Member Resignations
On July 2, 2024, the Board accepted the resignations of several Board members effective August 1, 2024. Concurrently, the Board approved a modification to the option awards granted such Board members, which modification accelerated the vesting of all unvested options as of the resignation date and extended the post-termination exercise period to December 31, 2025. As a result of the modification, the Company recognized $274,019 in incremental stock compensation expense during the year ended December 31, 2024.
The Company recognizes stock-based compensation expense using the straight-line method over the requisite service period. The Company recognized stock-based compensation expense, including compensation expense for warrants with vesting provisions issued to a service provider (Note 6), and the RSUs discussed above, in its Consolidated Statements of Operations as follows:
Year Ended
December 31,
20252024
Research and development$2,061,154 $1,514,921 
General and administrative5,706,540 6,802,559 
$7,767,694 $8,317,480 
The total amount of unrecognized compensation cost was $10,276,636 as of December 31, 2025. This amount will be recognized over a weighted-average period of 2.5 years.
2022 Employee Stock Purchase Plan
In June 2022, the Board approved the 2022 Employee Stock Purchase Plan (the "ESPP"), under which the Company may offer eligible employees the option to purchase common stock at a 15% discount to the lower of the market value of the stock at the beginning or end of each participation period under the terms of the ESPP. Total individual purchases in any year are limited to 15% of compensation. The ESPP was approved by the Company's stockholders on September 30, 2022. As of December 31, 2025, 18,461 shares were issued under the ESPP. The compensation expense, computed using the Black-Scholes model was immaterial.