On October 31, 2014, the Board of Directors of the Company (the "Board") approved the Company’s 2014 Omnibus Incentive Plan (the "2014 Omnibus Incentive Plan"). 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 Omnibus Incentive Plan in its entirety.

On September 29, 2023, the Board and holders of a majority of the voting power of the outstanding capital stock of the Company 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 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").

As of September 30, 2025, the Company had 165,785 shares available for future grant under the Amended and Restated Plan.

On July 2, 2024, the Board adopted the Skye Bioscience, Inc. 2024 Inducement Equity Incentive Plan (the "Inducement Plan"). 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 September 30, 2025, the Company had 142,500 shares available for future grant under the Inducement Plan.

The following is a summary of option activity under the Company’s Amended and Restated Plan and the Inducement Plan, for the nine months ended September 30, 2025:


	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value*
Outstanding, December 31, 2024	3,036,603	$	7.72	8.91	$	22,624

Granted	1,697,200	3.01

Cancelled	(7,211)	18.49
Forfeited	(44,000)	4.27
Outstanding, September 30, 2025	4,682,592	$	6.03	8.65	$	1,742,437
Exercisable, September 30, 2025	1,742,216	$	7.70	7.77	$	384,264

*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 September 30, 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 during the nine months ended September 30, 2025, was $2.20.

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:


	Nine Months Ended September 30,
	2025	2024
Dividend yield	0.00%	0.00%
Volatility	83.86 - 85.93%	81.73 - 99.96%
Risk-free interest rate	3.87- 4.27%	3.69 - 4.48%
Expected term (years)	5.27- 6.08	5.27 - 6.08

The following is a summary of restricted stock unit ("RSU") activity during the nine months ended September 30, 2025:


	Number of Shares	Weighted Average Grant Date Fair Value
Unvested, December 31, 2024	503,113	$	9.62

Vested	(4,687)	7.56

Unvested, September 30, 2025	498,426	$	9.63

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 September 30, 2025, 9,799 shares were issued under the ESPP.

The Company recognizes stock-based compensation expense using the straight-line method over the requisite service period or derived service period. The Company recognized stock-based compensation expense for the stock options, ESPP, and the RSUs discussed above, in its unaudited condensed consolidated statements of operations as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Research and development	$	550,491	$	360,845	$	1,559,097	$	1,056,564
General and administrative	1,363,645		1,560,772		4,590,057		5,171,706
	$	1,914,136	$	1,921,617	$	6,149,154	$	6,228,270

The total amount of unrecognized compensation cost was $12,200,136 as of September 30, 2025. This amount will be recognized over a weighted average period of 2.64 years.