🧾 What This Document Is

This is an 8-K filing, which is a report public companies file with the SEC to announce major events that shareholders should know about. In this case, Skye Bioscience is reporting that it has entered into a Master Services Agreement with a consulting firm called Lohman & Associates, Inc. (L&A). The agreement sets the general rules for the relationship, while a specific "Scope of Work" (SOW #1) details the first set of services.

👉 In simple terms: This filing tells investors, "We've hired an outside team to help with key finance and accounting duties while we build our internal capabilities."

🏢 What The Company Does

Skye Bioscience (ticker: SKYE) is a biopharmaceutical company focused on developing treatments for metabolic disorders. Think of them as a research-focused business that's still in the growth stage, which often means they don't have a full, in-house executive team for every function yet.

👉 Why this matters: Hiring a specialized consulting firm like L&A is a common strategy for smaller or growing public companies. It allows them to access expert-level services (like SEC reporting) without the cost and commitment of hiring full-time executives immediately.

🤝 The Deal: Core Agreement Terms

The main agreement lays out the standard legal and business terms for the relationship. Here are the key pieces:

• Services: L&A will provide accounting, business strategy, fractional CFO services, and HR consulting. Each project will be defined in a separate "Statement of Work" (SOW).
• Fees: Payment can be structured as time-and-materials, a monthly retainer, or a fixed fee, depending on the SOW.
• Intellectual Property: Skye will own the final work product (the "Deliverables") created by L&A. However, L&A's own pre-existing tools and methodologies remain their property.
• Liability: L&A's liability is limited to the fees Skye paid them for the specific work in question, except in cases of confidentiality breaches or misconduct.
• Termination: Either party can terminate the agreement with 30 days' notice, or immediately if the other party has a major breach they don't fix within 7 days.

🔍 The Details: Scope of Work #1 (Finance & Accounting)

This is the first specific project under the master agreement. It's where the real work gets defined.

• Primary Contact: Services will be led by John Sharp at the "Sr. Director" level. L&A cannot replace him or reduce his involvement without Skye's written consent.
• Crucial Caveat: John Sharp and L&A are advisors only. They are not officers, directors, or employees of Skye. They cannot sign SEC filings or bind the company to contracts unless separately approved by Skye's Board.
• Key Responsibilities:
  • Oversee the preparation of SEC filings (10-K, 10-Q, 8-K).
  • Coordinate with external auditors and legal counsel.
  • Support Sarbanes-Oxley (SOX) compliance and internal controls.
  • Help with investor relations materials and earnings calls.
  • Monitor cash flow and the monthly accounting close process.

💰 The Financial Commitment

The SOW #1 lays out the exact cost for this initial engagement.

• Monthly Retainer: $25,600 per month. This covers up to 64 hours of work per month.
• Overtime & Extras: Any work beyond 64 hours, travel, or special expenses must be approved by Skye in advance.
• Hourly Rates: If work goes beyond the retainer, these are the backup hourly rates (e.g., Senior Director: $455/hour).
• Stock Compensation: The agreement notes that Skye may separately give John Sharp stock-based compensation. This is a nice touch, as it aligns his interests with the company's performance, but it's separate from L&A's cash fees.

📅 Key Dates & Contacts

• Agreement Effective Date: March 31, 2026.
• Termination Notice: Requires 30 days written notice for convenience.
• Skye Bioscience Contact: Punit Dhillon, CEO. Email: [email protected]
• Lohman & Associates Contact: For official notices, email: [email protected]. The agreement is signed by Regan Lohman, CEO.

⚖️ Big Picture: Strengths & Risks

• 👍 Strengths (The Upside):
  • Expertise On-Demand: Skye gets immediate access to experienced SEC reporting and public company finance expertise.
  • Flexibility: The SOW model allows Skye to scale services up or down as needed.
  • Continuity: Locking in John Sharp provides a consistent point of contact during what is likely a transition period.
• ⚠️ Risks (The Considerations):
  • Transition Risk: This is explicitly a "transition-support" role. Skye will eventually need to hire a permanent internal team.
  • Dependency: Over-reliance on an external consultant could pose operational risks if the relationship ends abruptly.
  • Cost: While potentially cheaper than a full-time CFO, $307,200 per year (the $25,600 monthly retainer x12) is a significant operational expense for a clinical-stage company.

🧠 The Analogy

Imagine you're renovating your house but haven't hired a general contractor yet. Instead, you bring in a master electrician (L&A/John Sharp) on a contract. They handle all the complex wiring (SEC reporting, audits) with their own tools, follow your house rules (Skye's policies), and you pay them a monthly fee. They're essential to the project and work closely with you, but they don't own the house or make the final design decisions—that's still up to you and your architect (Skye's Board and CEO). This contract keeps the lights on while you find your permanent crew.

📇 Key Contacts & People

• Skye Bioscience, Inc.
  • Punit Dhillon, Chief Executive Officer (CEO)
  • Email: [email protected]
• Lohman & Associates, Inc.
  • Regan Lohman, Chief Executive Officer (CEO)
  • Notice Email: [email protected]
  • John Sharp, Sr. Director (primary service deliverer)

🧩 Final Takeaway

Skye Bioscience is proactively shoring up its financial reporting and compliance infrastructure by hiring a specialized firm on a consulting basis. This move signals the company is maturing as a public entity and preparing for future milestones, but it also highlights that building a permanent, internal executive team remains a work in progress.