Skye Bioscience, Inc. (NASDAQ:SKYE) shares rose 6.20% in after-hours trading Tuesday after the company entered into an equity purchase agreement with an affiliate of Redmile Group.

The stock closed Tuesday’s regular session down 7.14% at $2.02. It then rose 6.20% to $2.14 in after-hours trading.

Skye Bioscience is a biotechnology company focused on developing treatments for diseases involving the endocannabinoid system.

$22M Equity Purchase Agreement

On Aug. 21, Skye Bioscience entered into a Securities Purchase Agreement with Redmile Biopharma Investments III, L.P., under which the investor is obligated to purchase up to $22 million of the company’s equity, subject to certain conditions and limitations.

The amount available under the equity line will be reduced by any gross equity proceeds funded through the company’s previously announced private placement and other related equity financings exceeding $103 million. If those proceeds reach at least $125 million, Skye would not be required to sell any shares under the equity line.

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Monthly Purchases, Warrant

The equity purchase agreement will operate for up to three years from the closing date, subject to certain conditions. Skye will be required to direct Redmile to purchase up to $2 million of shares in each calendar month, subject to the agreement’s limitations.

Skye will also issue Redmile a warrant to purchase shares equal to $5 million divided by the PIPE price. The warrant will be exercisable from Jan. 1, 2027, through Jan. 1, 2030, at an exercise price based on the lower of the PIPE price or market price, subject to a floor of 90% of the PIPE price.

The aggregate number of shares that can be issued under the equity line is capped at 19.99% of Skye’s outstanding common stock unless shareholder approval is obtained. Redmile also faces a 9.99% beneficial ownership limitation.

Trading Metrics

Skye Bioscience has a market capitalization of approximately $8.92 million.

The stock has a 52-week high of $39.92 and a 52-week low of $1.97.

SKYE shares are down 92.95% over the past year.

Benzinga’s Edge Stock Rankings show a negative price trend across all time frames.

Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.

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