SILO 10-Q
Silo Pharma, Inc. (SILO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period ended
or
For the transition period from ___________ to ___________
Commission File Number:
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
| | ||
| (Address of principal executive offices) | (Zip code) |
Registrant’s telephone number, including
area code:
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class | Trading Symbol(s) | Name of exchange on which registered | ||
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Indicate by check mark whether the registrant
has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for such shorter period that the registration was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ |
| ☒ | Smaller reporting company | ||
| Emerging growth company | |||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
Number of shares of common stock, par value $0.0001
per share, outstanding as of May 13, 2026 was:
SILO PHARMA, INC. AND SUBSIDIARY
FORM 10-Q
MARCH 31, 2026
TABLE OF CONTENTS
i
CAUTIONARY NOTE ON FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this report, including statements regarding our strategy, future operations, future financial position, future revenue, projected costs, prospects, plans and objectives of management and expected market growth, are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “could,” “will,” “would,” “should,” “expect,” “plan,”, “anticipate,” “believe,” “estimate,” “intend,” “predict,” “seek,” “contemplate,” “project,” “continue,” “potential,” “ongoing” or the negative of these terms or other comparable terminology.
Any forward-looking statements are qualified in their entirety by reference to the risk factors discussed throughout this Quarterly Report on Form 10-Q. Some of the risks, uncertainties and assumptions that could cause actual results to differ materially from estimates or projections contained in the forward-looking statements include, but are not limited to:
| ● | our ability to obtain additional funds for our operations; |
| ● | our financial performance; |
| ● | risks relating to the timing and costs of clinical trials and the timing and costs of other expenses; |
| ● | risks related to market acceptance of products; |
| ● | intellectual property risks; |
| ● | the impact of government regulation and developments relating to our competitors or our industry; |
| ● | our competitive position; |
| ● | our industry environment; |
| ● | our anticipated financial and operating results, including anticipated sources of revenues; |
| ● | assumptions regarding the size of the available market, benefits of our products, product pricing and timing of product launches; |
| ● | our estimates of our expenses, losses, future revenue and capital requirements, including our needs for additional financing; |
| ● | our ability to attract and retain qualified key management and technical personnel; |
| ● | statements regarding our goals, intentions, plans and expectations, including the introduction of new products and markets; |
| ● | our cash needs and financing plans. |
These statements relate to future events or our future operational or financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under the section titled “Risk Factors” and elsewhere in this report.
Any forward-looking statement in this report reflects our current view with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our business, results of operations, industry and future growth. Given these uncertainties, you should not place undue reliance on these forward-looking statements. No forward-looking statement is a guarantee of future performance. You should read this report completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements.
This report also contains estimates, projections and other information concerning our industry, our business and our markets, including data regarding the estimated size of those markets and their projected growth rates. Information that is based on estimates, forecasts, projections or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained these industry, business, market and other data from reports, research surveys, studies and similar data prepared by third parties, industry, and general publications, government data and similar sources. While we believe that the reports, research surveys, studies and similar data prepared by third parties are reliable, we have not independently verified the data contained in them.
You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this report. Except as required by law, we do not undertake any obligation to update or release any revisions to these forward-looking statements to reflect any events or circumstances, whether as a result of new information, future events, changes in assumptions or otherwise, after the date hereof. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of the information presented in this Quarterly Report on Form 10-Q, and particularly our forward-looking statements, by these cautionary statements.
ii
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SILO PHARMA, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term investments, at fair value | ||||||||
| Crypto assets, at fair value | ||||||||
| Crypto assets, at cost | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| LONG-TERM ASSETS: | ||||||||
| Intangible assets, net | ||||||||
| Total Long-Term Assets | ||||||||
| Total Assets | $ | $ | ||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable and accrued expenses | $ | $ | ||||||
| Deferred revenue - current portion | ||||||||
| Total Current Liabilities | ||||||||
| LONG-TERM LIABILITIES: | ||||||||
| Deferred revenue - long-term portion | ||||||||
| Total Long-Term Liabilities | ||||||||
| Total Liabilities | ||||||||
| Commitment and Contingencies (see Note 8) | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
| Preferred stock, $ | ||||||||
| Common stock, $ | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive income | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total Stockholders’ Equity | ||||||||
| Total Liabilities and Stockholders’ Equity | $ | $ | ||||||
See accompanying notes to unaudited consolidated financial statements.
1
SILO PHARMA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| LICENSE FEE REVENUE | $ | $ | ||||||
| COST OF REVENUES | ||||||||
| GROSS (LOSS) PROFIT | ( | ) | ||||||
| OPERATING EXPENSES: | ||||||||
| Compensation expense | ||||||||
| Professional fees | ||||||||
| Research and development | ||||||||
| Other selling, general and administrative expenses | ||||||||
| Total operating expenses | ||||||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ||||
| OTHER INCOME (EXPENSE): | ||||||||
| Interest and dividend income, net | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Net realized gain on short-term debt investments | ||||||||
| Unrealized loss on short-term tokenized investments funds | ( | ) | ||||||
| Staking income on crypto assets | ||||||||
| Unrealized loss on crypto assets, at fair value | ( | ) | ||||||
| Impairment loss on crypto assets, at cost | ( | ) | ||||||
| Foreign currency transaction loss | ( | ) | ||||||
| Total other income (expense), net | ( | ) | ||||||
| LOSS BEFORE PROVISION FOR INCOME TAXES | ( | ) | ( | ) | ||||
| Provision for income taxes | ||||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||
| COMPREHENSIVE LOSS: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Other comprehensive income: | ||||||||
| Unrealized gain on short-term debt investments | ||||||||
| Total comprehensive loss | $ | ( | ) | $ | ( | ) | ||
| NET LOSS PER COMMON SHARE: | ||||||||
| Basic and diluted | $ | ( | ) | $ | ( | ) | ||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||
| Basic and diluted | ||||||||
See accompanying notes to unaudited consolidated financial statements.
2
SILO PHARMA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2026 AND 2025
(Unaudited)
| Additional | Accumulated Other | Total | ||||||||||||||||||||||
| Common Stock | Paid In | Comprehensive | Accumulated | Stockholders’ | ||||||||||||||||||||
| Shares | Amount | Capital | Income | Deficit | Equity | |||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Issuance of common stock in exchange of future services | - | |||||||||||||||||||||||
| Issuance of common stock in exchange of acquired technology | - | |||||||||||||||||||||||
| Accretion of stock-based compensation in connection with stock option grants | - | - | ||||||||||||||||||||||
| Accumulated other comprehensive gain - short-term debt investments | - | |||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Additional | Accumulated Other | Total | ||||||||||||||||||||||
| Common Stock | Paid In | Comprehensive | Accumulated | Stockholders’ | ||||||||||||||||||||
| Shares | Amount | Capital | Income | Deficit | Equity | |||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Accumulated other comprehensive gain - short-term debt investments | - | |||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
See accompanying notes to unaudited consolidated financial statements.
3
SILO PHARMA, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| For the Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Amortization expense | ||||||||
| Amortization of prepaid stock-based professional fees | ||||||||
| Net realized gain on short-term debt investments | ( | ) | ||||||
| Unrealized loss on short-term tokenized investment funds | ||||||||
| Staking income on crypto assets | ( | ) | ||||||
| Unrealized loss on crypto assets, at fair value | ||||||||
| Impairment loss on crypto assets, at cost | ||||||||
| Stock-based compensation | ||||||||
| Common stock issued for acquired technology expensed | ||||||||
| Change in operating assets and liabilities: | ||||||||
| Prepaid expenses and other current assets | ( | ) | ( | ) | ||||
| Accounts payable and accrued expenses | ( | ) | ||||||
| Deferred revenue | ( | ) | ( | ) | ||||
| NET CASH USED IN OPERATING ACTIVITIES | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Proceeds from the sale of short-term debt investments | ||||||||
| Purchases of short-term debt investments | ( | ) | ( | ) | ||||
| Proceeds from the sale of crypto assets | ||||||||
| Purchases of crypto assets | ( | ) | ||||||
| NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES | ( | ) | ||||||
| NET DECREASE IN CASH AND CASH EQUIVALENTS | ( | ) | ( | ) | ||||
| CASH AND CASH EQUIVALENTS - beginning of the period | ||||||||
| CASH AND CASH EQUIVALENTS - end of the period | $ | $ | ||||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid during the period for: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Issuance of common stock in exchange for future services | $ | $ | ||||||
| Unrealized gain on short-term debt investments | $ | $ | ||||||
See accompanying notes to unaudited consolidated financial statements.
4
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
NOTE 1 – ORGANIZATION AND BUSINESS
Silo Pharma, Inc. (the “Company”)
was incorporated in the State of New York on
On January 24, 2013, the Company changed its state of incorporation from New York to Delaware. On December 19, 2023, the Company changed its state of incorporation from the State of Delaware to the State of Nevada.
On April 8, 2020, the Company incorporated a new wholly-owned subsidiary, Silo Pharma Inc., in the State of Florida.
On April 15, 2026, the Company formed Qwikagentsai Inc. (“Qwikagentsai”), a Nevada corporation, as a wholly-owned subsidiary. Qwikagentsai was formed to diversify the Company’s business into artificial intelligence (“AI”) technology including the development and commercialization of web-based AI agent platforms.
The Company is a diversified developmental-stage biopharmaceutical and cryptocurrency company. The Company’s therapeutic focus is on developing novel therapeutics that address underserved conditions including PTSD, stress-induced anxiety disorders, fibromyalgia, and central nervous system (CNS) diseases. The Company is focused on developing (i) an intranasal drug targeting PTSD and stress-induced anxiety disorders (SPC-15); (ii) a time-release ketamine-based loaded implant for fibromyalgia and chronic pain relief (SP-26); (iii) an intranasal compound for the treatment of Alzheimer’s disease (SPC-14); and (iv) a CNS-homing peptide targeting the central nervous system in multiple sclerosis (SPU-16).
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ( “U.S. GAAP”) for interim financial information and with the instructions Article 8-03 of Regulation S-X. Operating results for interim periods are not necessarily indicative of results that may be expected for the fiscal year as a whole. Certain information and note disclosure normally included in financial statements prepared in accordance with U.S. GAAP has been condensed or omitted from these statements pursuant to such accounting principles and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements. These unaudited consolidated financial statements should be read in conjunction with the summary of significant accounting policies and notes to the consolidated financial statements for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 27, 2026.
The Company’s unaudited consolidated financial statements include financial statements for Silo Pharma, Inc. and its inactive wholly-owned subsidiary with the same name as the parent entity, Silo Pharma, Inc. All intercompany transactions and balances have been eliminated in consolidation. Management acknowledges its responsibility for the preparation of the accompanying unaudited consolidated financial statements which reflect all adjustments, consisting of normal recurring and non-recurring adjustments, considered necessary in its opinion for a fair statement of its unaudited consolidated financial position and the unaudited consolidated results of its operations for the periods presented.
Liquidity
As reflected in the accompanying unaudited consolidated
financial statements, the Company generated a net loss of $
The positive working capital serves to mitigate the conditions that historically raised substantial doubt about the Company’s ability to continue as a going concern. The Company believes that it has sufficient cash and liquid short-term investments to meet its obligations for a minimum of twelve months from the date of this filing.
5
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
Use of Estimates
The preparation of unaudited consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered in formulating its estimate could change in the near term due to one or more future events. Accordingly, the actual results could differ significantly from estimates. Significant estimates during the three months ended March 31, 2026 and 2025 include the percentage of completion of research and development projects, valuation of short-term investments, valuation of crypto assets, valuation of intangible assets, valuation allowances for deferred tax assets, and the fair value of shares and stock options issued for services.
Cash and Cash Equivalents
The Company considers all highly liquid investments
with a maturity of three months or less when acquired to be cash equivalents. The Company places its cash with high credit quality financial
institutions. The Company’s accounts at these institutions are insured by the Federal Deposit Insurance Corporation (“FDIC”)
up to $
Short-Term Investments
The Company’s portfolio of short-term investments consists of marketable debt securities and interests in private investment funds. Marketable debt securities are comprised solely of highly rated U.S. government securities with maturities of more than three months, but less than one year. The Company classifies these as available-for-sale at purchase date and will reevaluate such designation at each period end date. The Company may sell these marketable debt securities prior to their stated maturities depending upon changing liquidity requirements. These debt securities are classified as current assets in the unaudited consolidated balance sheet and recorded at fair value, with unrealized gains or losses included in accumulated other comprehensive income and as a component of the consolidated statements of comprehensive loss. Gains and losses are recognized when realized. Gains and losses are determined using the specific identification method and are reported in other income (expense), net in the unaudited consolidated statements of operations and comprehensive loss.
The Company also holds interests in private investment funds that are tokenized on public blockchains, specifically the Alphaledger/Simplify Target 12% Distribution Fund LLC (“T12 Fund”). While these assets utilize blockchain technology for record-keeping and settlement, they represent equity interests in a limited liability company and are managed as short-term investments. The Company classifies the T12 Fund as a trading security. The fund is an actively managed tokenized hedge fund that generates income through a diversified strategy including corporate bonds, U.S. treasuries, currency forwards, and derivative instruments such as index options and futures. Due to the lack of a widely recognized public exchange price for the fund units, these investments are recorded at fair value based on the Net Asset Value (NAV) provided by the fund administrator. Unrealized gains and losses for this investment are recognized in the unaudited consolidated statements of operations and comprehensive loss within “other income (expense)”. Distributions from these funds are recognized as income when declared and are either received in cash equivalents (ALUSD) or automatically reinvested into additional fund units.
An impairment loss may be recognized when the decline in fair value of the debt securities and other short-term investments is determined to be other-than-temporary. The Company evaluates its investments for other-than-temporary declines in fair value below the cost basis each quarter, or whenever events or changes in circumstances indicate that the cost basis of the short-term investments may not be recoverable. The evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below the cost basis, as well as adverse conditions related specifically to the security, such as any changes to the credit rating of the security and the intent to sell or whether the Company will more likely than not be required to sell the security before recovery of its amortized cost basis.
The Company recorded $
6
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
Crypto Assets
The Company’s crypto assets primarily include Bitcoin (BTC), Ethereum (ETH) and Solana (SOL), and liquid staked tokens consisting of Liquid Staked ETH (LsETH) and Marinade Solana (mSOL), tokens received when ETH and SOL was staked through a third-party protocol. The Company has ownership of and control over its crypto assets which are held through custodial arrangements with qualified third-party custodians. These custodians provide secure storage and safeguarding of the Company’s crypto assets.
The Company distinguishes between crypto assets which fall within the scope of ASC 350-60 and those which do not. The Company refers to crypto assets which fall within the scope of “ASC 350-60”, Accounting for and Disclosure of Crypto Assets, (BTC, ETH, USDC, SOL, XRP and RSC) as “crypto assets, at fair value.” Crypto assets which do not fall within the scope of ASC 350-60 (LsETH and mSOL) are referred to as “crypto assets, at cost.”
Crypto Assets, at Fair Value
Crypto assets that fall within the scope of ASC 350-60, such as BTC, ETH, SOL, native staked SOL, RSC and XRP, which are actively traded on public exchanges, are initially recorded at cost, which represents the cash, cash equivalents, or other financial assets paid to acquire the asset, including transaction fees.
Crypto assets are subsequently measured in accordance with ASC 350-60, at fair value in the statements of operations with unrealized gains and losses resulting from changes in fair value recognized in net income or loss. The Company determines and records at each reporting period the fair value of its crypto assets in accordance with ASC 820, Fair Value Measurement, based on quoted (unadjusted) prices on the coinmarketcap.com or Coinbase exchange, the active exchange that the Company has determined is its principal market (Level 1 inputs). Changes in the fair value are recognized in net income (loss) within “Unrealized gain (loss) on crypto assets”, while realized gains and losses from the derecognition of crypto assets are included in “Realized gain (loss) on crypto assets, net” in the Company’s unaudited consolidated statements of operations and comprehensive loss. The Company applies a weighted average cost methodology to assign costs for purposes of determining crypto assets held and realized gains and losses.
Purchases and sales of crypto assets are reflected as cash flows from investing activities in the unaudited consolidated statements of cash flows. Contributions of crypto assets received in connection with deposits of ETH and SOL into a liquid staking protocol are presented as non-cash investing and financing activities.
Crypto Assets, at Cost
Crypto assets, at cost are recognized at fair value on the date received, which becomes their cost basis. Crypto assets, at cost, such as LsETH and mSOL, do not fall in the scope of ASC 350-60 for subsequent measurement. LsETH and mSOL represent receipt tokens, which in general and by design, grants the holder an enforceable right to redeem ETH or SOL for which it was exchanged. Therefore, it fails the ‘other goods and services criterion’ in ASC 350-60-15-1(b) and is outside the scope of ASC 350-60. Crypto assets, at cost are therefore subsequently measured at cost, net of any impairment losses incurred since acquisition, in accordance with ASC 350-30, Intangibles—Goodwill and Other—General Intangibles Other Than Goodwill (“ASC 350-30”).
The Company performs an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted (unadjusted) prices in the Company’s principal market, indicate that it is more likely than not that any of the assets are impaired. The quoted (unadjusted) prices on the coinmarketcap.com or the Coinbase exchange, the active exchange that the Company has determined as its principal market, are used in the analysis. If the carrying value of LsETH and mSOL exceeds that end of period quoted price, an impairment loss has occurred in the amount equal to the difference between its carrying value and such period end closing price. Impairment losses are recognized in the period in which the impairment occurs and are reflected within “Impairment loss on crypto assets, at cost” in the Company’s unaudited consolidated statements of operations and comprehensive loss. The impaired crypto assets are written down to their fair value at the time of impairment and this becomes the new cost basis for those assets. The cost basis of LsETH or mSOL will not be adjusted upward for any subsequent increase in fair value.
7
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
Staking Activities
The Company participates in both native and liquid staking of its digital assets to generate yield. The Company’s role is that of a Delegator (a staker who does not run a validation node).
Native Staking
The Company participates in native staking exclusively as a delegator through third-party validators. The Company delegates SOL to validators, either directly or through third party asset managers, who operate nodes on the Solana network to validate transactions and add blocks to the blockchain. In return for delegating SOL to validators, the Company is entitled to a portion of the protocol-level rewards, comprising both consensus- and execution layer components received by the validators, in the form of SOL tokens, calculated based on the Company’s proportion of the total SOL staked. When the Company stakes SOL natively, the SOL does not remain in the Company’s custodial wallet, but is instead deposited into Solana’s staking deposit smart contract, which is required for participation in SOL staking as a delegator. Native staked SOL are not derecognized because their deposit into the smart contract does not give any other entity the right or ability to direct their use (for example, sell, lend, pledge or otherwise use those SOL) and the staked SOL may be withdrawn at any time by the delegator through the use of private withdrawal keys, subject only to protocol-defined withdrawal and exit queue mechanics. The withdrawal credentials in the smart contract are designated to the Company’s custodian who holds the Company’s SOL solely for the Company’s benefit and does not obtain control of the Company’s SOL via their custodial services. Native staked SOL are therefore not derecognized.
Rewards from native staking activities fall outside
the scope of ASC 606, Revenue from Contracts as these activities do not represent an output of the Company’s ordinary activities.
Therefore, we reflect any such rewards received as other income on the accompanying unaudited consolidated financial statements. In
this case the Company’s performance obligation is the provision of our validation rights to the validators, from which we earn variable
consideration, in the form of SOL, which is non-cash consideration, measured at the fair value of SOL as of contract inception based
on the quoted (unadjusted) prices on coinmarketcap.com or the Coinbase exchange, the active exchange that the Company has determined is
its principal market. Revenue is recognized at the point in time when the Solana network confirms that the validation is complete. As
a delegator, the Company has concluded it is not the principal to the block validation service provided to the Solana Network; it is the
validators that control the service. Instead, the Company’s service is one of providing the use of its SOL by the validators to
increase their validation opportunities. Consequently, the Company records staking revenue on a net basis, reflecting only the portion
of protocol rewards to which it is entitled after validator commissions are paid to the custodians. During the three months March 31,
2026, staking income from native staking activities amounted to $
Liquid Staking
The Company also participates in liquid staking through a liquid staking protocol. One key difference and intended benefit of liquid staking versus native staking is that it allows the Company to earn staking rewards, like native staking, but provides liquidity and the ability to enter into other transactions through the use of receipt token. Instead of directly locking ETH or SOL into the respective staking deposit contract, the Company deposits ETH or SOL through its custodian into the liquid staking protocol’s smart contract. The liquid staking protocol then controls the ETH or SOL for deposit into the respective staking deposit contract and further delegation to its chosen validators. In exchange for staking its ETH or SOL, the Company receives LsETH or mSOL, freely transferable liquid staking receipt tokens, which enables participation in decentralized finance (DeFi) and other crypto markets while the underlying ETH or SOL remains staked on Ethereum or SOL. Upon staking ETH or SOL through the liquid staking protocol, the ETH or SOL is derecognized because the liquid staking protocol obtains the ability to deploy and direct its use, and the LsETH token or mSOL token received concurrently is then recognized.
Any gain or loss on the derecognition of
ETH or SOL and the recognition of the LsETH or mSOL is recognized in accordance with ASC 610-20, Other Income - Gains and Losses from
the Derecognition of Nonfinancial Assets (“ASC 610-20”) based on the difference between the carrying
amount of the ETH or SOL staked and the fair value of the LsETH received or mSOL; and shall be included in “Realized gain or
loss on crypto assets” in the Company’s unaudited consolidated statements of operations and comprehensive loss. As of March
31, 2026 and December 31, 2025, liquid staked crypto assets amounted to $
Staking rewards in the form of ETH or SOL are only received upon redemption of LsETH or mSOL. During the three months ended March 31, 2026, no liquid staking rewards were received.
Since LsETH and mSOL are accounted for under ASC 350-30, any increases in LsETH and mSOL fair value while the Company remains staked with the liquid staking protocols, are not recognized. There is no ongoing performance obligation following the staking of ETH or SOL through the liquid staking protocol. Additionally, LsETH and mSOL are non-rebasing tokens, meaning its quantity remains fixed over time. Staking rewards are not continuously reflected in token balances but are instead realized separately. Staking rewards are therefore recognized only when the LsETH or mSOL is redeemed, measured at the fair value of ETH or SOL at contract inception, which is when the ETH or SOL were staked. Staking rewards on LsETH or mSOL shall be included in “Staking income on crypto assets” in the Company’s unaudited consolidated statements of operations and comprehensive loss. Gain or loss resulting from the difference between the carrying amount of the LsETH or mSOL redeemed and the fair value of ETH or SOL received at redemption (i.e., excluding staking rewards), shall be included in “Realized gain or loss on crypto assets” in the Company’s unaudited consolidated statements of operations and comprehensive loss.
8
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
Crypto assets are classified on the balance sheet based on management’s intent and the expected period of use or sale:
| ● | Current assets: Digital assets held for trading or intended to be sold within 12 months are classified as current assets. As of March 31, 2026 and December 31, 2025, the Company reflects its crypto assets as current assets since the crypto assets are held for trading or intended to be sold within 12 months. | |
| ● | Non-current assets: Digital assets held for investment or long-term strategic purposes are classified as non-current assets. |
See Note 4 - Crypto Assets for additional information.
Prepaid Expenses
Prepaid expenses and other current assets of $
Intangible Assets
Intangible assets, consisting of an exclusive license agreement, are
carried at cost less accumulated amortization, computed using the straight-line method over the estimated useful life of
Revenue Recognition
The Company applies ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most of the existing revenue recognition guidance. This standard requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services and also requires certain additional disclosures.
For the license and royalty income, revenue is recognized when the Company satisfies the performance obligation based on the related license agreement. Payments received from the licensee that are related to future periods are recorded as deferred revenue to be recognized as revenues over the term of the related license agreement (see Note 8).
Cost of Revenues
The primary components of cost of revenues on license fees includes the cost of the license fees. Payments made to the licensor that are related to future periods are recorded as prepaid expense to be amortized over the term of the related license agreement (see Note 8).
Stock-Based Compensation
Stock-based compensation is accounted for based on the requirements of ASC 718 – “Compensation – Stock Compensation”, which requires recognition in the financial statements of the cost of employee, director, and non-employee services received in exchange for an award of equity instruments over the period the employee, director, or non-employee is required to perform the services in exchange for the award (presumptively, the vesting period). The ASC also requires measurement of the cost of employee, director, and non-employee services received in exchange for an award based on the grant-date fair value of the award. The Company has elected to recognize forfeitures as they occur as permitted under Accounting Standards Update (“ASU”) 2016-09 Improvements to Employee Share-Based Payment.
Income Taxes
Deferred income tax assets and liabilities arise from temporary differences between the financial statements and tax basis of assets and liabilities, as measured by the enacted tax rates, which are expected to be in effect when these differences reverse. Deferred tax assets and liabilities are classified as current or non-current, depending upon the classification of the asset or liabilities to which they relate. Deferred tax assets and liabilities not related to an asset or liability are classified as current or non-current depending on the periods in which the temporary differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, which included among other provisions the restoration of immediate expensing of domestic research and experimental (“R&E”) expenditures under Section 174. Pursuant to the OBBBA’s transition rules, the Company elected to expense all unamortized domestic R&E costs previously capitalized between 2022 and 2024. As the Company maintains a valuation allowance against its net deferred tax assets, including NOLs, this election resulted in no change to tax expense.
The Company follows the provisions of Financial Accounting Standards Board (“FASB”) ASC 740-10, “Uncertainty in Income Taxes”. Certain recognition thresholds must be met before a tax position is recognized in the financial statements. An entity may only recognize or continue to recognize tax positions that meet a “more-likely-than-not” threshold. The Company does not believe it has any uncertain tax positions as of March 31, 2026 and December 31, 2025 that would require either recognition or disclosure in the accompanying unaudited consolidated financial statements.
9
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
Research and Development
In accordance with ASC 730-10, “Research
and Development-Overall,” research and development costs are expensed when incurred. During the three months ended March 31,
2026 and 2025, research and development costs were $
Leases
Leases are accounted for using ASU 2016-02, “Leases (Topic 842)”. ASU 2016-02 sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to recognize a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. As of March 31, 2026 and December 31, 2025, the Company has no leases. The Company will analyze any lease to determine if it would be required to record a lease liability and a right of use asset on its unaudited consolidated balance sheets at fair value. The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a term of 12 months or less.
Net Loss per Common Share
Basic loss per share is computed by dividing net loss allocable to common shareholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share is computed by dividing net loss available to common shareholders by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period using the as-if converted method. Potentially dilutive securities which include stock options and stock warrants are excluded from the computation of diluted shares outstanding if they would have an anti-dilutive impact on the Company’s net losses.
The following potentially dilutive shares have been excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive for the three months ended March 31, 2026 and 2025:
| March 31, | March 31, | |||||||
| 2026 | 2025 | |||||||
| Stock options | ||||||||
| Warrants | ||||||||
Segment Reporting
The Company operates as a operating segment as a clinical-stage biopharmaceutical company focused on developing new generation therapies for unmet medical needs. In accordance with ASC 280 – “Segment Reporting”, the Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews operating results to make decisions about allocating resources and assessing performance for the entire Company. Existing guidance, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products and services, major customers, and the countries in which the entity holds material assets and reports revenue. All material operating units qualify for aggregation under “Segment Reporting” due to their similarities in economic characteristics such as nature of services; and procurement processes. Since the Company operates in one segment, all financial information required by “Segment Reporting” can be found in the accompanying condensed notes to unaudited consolidated financial statements. All revenues and expenses as reflected in the accompanying unaudited consolidated statements of operations and comprehensive loss are allocated to the one segment. The Company’s single operating segment includes all of the Company’s assets and liabilities as reflected in the accompanying unaudited consolidated balance sheets.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company does not expect the adoption of this new guidance to have a material impact on its unaudited consolidated financial statements.
10
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270), Narrow-Scope Improvements, to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in ASU 2025-11 result in a comprehensive list of interim disclosures that are required by GAAP. The amendments in ASU 2025-11 also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027 and early adoption is permitted. The amendments in ASU 2025-11 can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the disclosure impact that ASU 2025-11 may have on its financial statement presentation and disclosures.
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the Company’s unaudited consolidated financial statements.
NOTE 3 – FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Fair Value Measurements and Fair Value of Financial Instruments
FASB ASC 820 - Fair Value Measurements and Disclosures, defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC 820 requires disclosures about the fair value of all financial instruments, whether or not recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to the Company on March 31, 2026 and December 31, 2025. Accordingly, the estimates presented in these unaudited consolidated financial statements are not necessarily indicative of the amounts that could be realized on disposition of the financial instruments. FASB ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).
| Level 1 - | Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date. |
| Level 2 - | Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data. | |
| Level 3 - | Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information. |
The carrying value of certain financial instruments, including cash and cash equivalents, prepaid expenses and other current assets, notes receivable, and accounts payable and accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these instruments.
The Company analyzes all financial instruments with features of both liabilities and equity under the Financial Accounting Standard Board’s (the “FASB”) accounting standard for such instruments. Under this standard, financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
The following table represents the Company’s fair value hierarchy of its financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025.
| March 31, 2026 | December 31, 2025 | |||||||||||||||||||||||||||||||
| Description | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||||
| Short-term investments | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Crypto assets, at fair value | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
11
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
The Company’s short-term investments consist of marketable debt securities, which are categorized as Level 1 measurements based on redemption values and an interest in the tokenized investment fund (“T12 Fund”), which is a Level 2 measurement based on the Net Asset Value (“NAV”) provided by the fund administrator.
See Note 4 for information related to crypto assets.
The following table summarizes activity in the Company’s short-term investments, which consist of debt securities and tokenized fund (T12 Fund), at fair value for the periods presented:
| Three Months Ended March 31, | Three Months Ended March 31, | |||||||
| 2026 | 2025 | |||||||
| Balance, beginning of period | $ | $ | ||||||
| Purchases of short-term debt investments | ||||||||
| Sales of short-term debt investments | ( | ) | ||||||
| Net realized gain on short-term debt investments | ||||||||
| Unrealized gain on short-term debt investments | ||||||||
| Unrealized loss on short-term tokenized investment funds | ( | ) | ||||||
| Balance, end of period | $ | $ | ||||||
NOTE 4 – CRYPTO ASSETS
Crypto Assets, at Fair Value
The following table sets forth the units held, cost basis, and fair value of crypto assets held, as shown on the unaudited consolidated balance sheet as of March 31, 2026:
| Name | Classification | Tokens Held | Cost Basis | Fair Value on March 31, 2026 | ||||||||||||
| BTC (Bitcoin) | $ | $ | ||||||||||||||
| USDC | ||||||||||||||||
| ETH (Ethereum) | ||||||||||||||||
| SOL (Solana), including native staked SOL | ||||||||||||||||
| RSC | ||||||||||||||||
| XRP | ||||||||||||||||
| Total | $ | $ | ||||||||||||||
The following table sets forth the units held, cost basis, and fair value of crypto assets held, as shown on the consolidated balance sheet as of December 31, 2025:
| Name | Classification | Tokens Held | Cost Basis | Fair Value on December 31, 2025 | ||||||||||||
| BTC (Bitcoin) | $ | $ | ||||||||||||||
| USDC | ||||||||||||||||
| ETH (Ethereum) | ||||||||||||||||
| SOL (Solana), including native staked SOL | ||||||||||||||||
| RSC | ||||||||||||||||
| XRP | ||||||||||||||||
| Total | $ | $ | ||||||||||||||
Cost basis is equal to the cost of the crypto assets or fund subscription plus transaction fees, if any, at the time of purchase or upon receipt, and staking income. Fair value represents the quoted (unadjusted) prices on coinmarketcap.com or the Coinbase exchange as of midnight UTC on the measurement date.
12
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
The following table represents a reconciliation of crypto assets held at fair value:
| For the Three Months Ended March 31, 2026 | ||||
| Fair Value, December 31, 2025 | $ | |||
| Additions from crypto assets received from purchases made with cash | ||||
| Receipt of crypto assets rewards from liquid staking activities | ||||
| Deductions from crypto assets (USDC) from sale for cash | ( | ) | ||
| Unrealized loss | ( | ) | ||
| Fair Value, March 31, 2026 | $ | |||
Crypto Assets, at Cost
The following table sets forth the units held, cost basis, and fair value of crypto assets held, as shown on the unaudited consolidated balance sheet as of March 31, 2026:
| Name | Classification | Units Held | Original Cost Basis | Impairment | Adjusted Carrying Amount on March 31, 2026 | |||||||||||||||
| LsETH (Staked Ethereum) | $ | $ | ( | ) | $ | |||||||||||||||
| mSOL (Marinade Solana) | ( | ) | ||||||||||||||||||
| Total | $ | $ | ( | ) | $ | |||||||||||||||
The following table sets forth the units held, cost basis, and fair value of crypto assets held, as shown on the consolidated balance sheet as of December 31, 2025:
| Name | Classification | Units Held | Original Cost Basis | Impairment | Adjusted Carrying Amount on December 31, 2025 | |||||||||||||||
| LsETH (Staked Ethereum) | $ | $ | ( | ) | $ | |||||||||||||||
| mSOL (Marinade Solana) | ( | ) | ||||||||||||||||||
| Total | $ | $ | ( | ) | $ | |||||||||||||||
Cost basis is equal to the cost of the crypto assets plus transaction fees, if any, at the time of purchase or upon receipt. Adjusted carrying amount represents the costs of the crypto asset less impairment recorded.
The following table represents a reconciliation of crypto assets held at cost:
| For the Three Months Ended March 31, 2026 | ||||
| Adjust Carrying Amount, December 31, 2025 | $ | |||
| Impairment loss | ( | ) | ||
| Adjusted Carrying Amount, March 31, 2026 | $ | |||
13
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
For the three months ended March 31, 2026, the
Company recorded an impairment loss of $
NOTE 5 – INTANGIBLE ASSETS
On July 1, 2024, the Company entered into an exclusive
license agreement (the “Columbia License Agreement”) with Columbia University (“Columbia”) with an effective date
of June 28, 2024 (the “Effective Date”) pursuant to which the Company has been granted exclusive rights to certain patents
and technical information to develop, manufacture and commercialize Products (as defined in the Columbia License Agreement), including
therapies for stress-induced affective disorders and other conditions, for a cost of $
On March 31, 2026 and December 31, 2025, intangible assets consisted of the following:
| Useful life | March 31, 2026 | December 31, 2025 | ||||||||
| License | $ | $ | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||||
| $ | $ | |||||||||
For the three months ended March 31, 2026 and
2025, amortization expense amounted to $
Amortization of intangible assets with finite lives attributable to future periods is as follows:
| Year ending March 31: | Amount | |||
| 2027 | $ | |||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| 2031 | ||||
| Thereafter | ||||
| Total | $ | |||
NOTE 6 – STOCKHOLDERS’ EQUITY
Shares Authorized
The Company has
Sale of Common Stock and Warrants
May 2025 Public Offering
On May 16, 2025, the Company completed a public
offering (the “May 2025 Offering”) of (i)
14
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
Each May 2025 Common Warrant has an exercise price
of $
The May 2025 Prefunded Warrants are immediately
exercisable and may be exercised at a nominal exercise price of $
As compensation to H.C. Wainwright & Co.,
LLC as the exclusive placement agent in connection with the May 2025 Offering (the “Placement Agent”), the Company paid the
Placement Agent a cash fee of
In connection with the issuance of the May 2025
Placement Agent Warrants, the Company calculated the fair value of such warrants using the Black-Scholes option-pricing model, and the
Company determined that the aggregate total fair value of the placement agent warrants amounted to $
In connection with the May 2025 Offering, the Company entered into a Securities Purchase Agreement (the “May 2025 Purchase Agreement”) with an institutional investor (the “May 2025 Purchaser”) on May 15, 2025. The May 2025 Purchase Agreement contained customary representations and warranties and agreements of the Company and the Purchaser and customary indemnification rights and obligations of the parties.
Pursuant to the terms of the May 2025 Purchase
Agreement, the Company has agreed for a period of
The May 2025 Securities, the May 2025 Placement Agent Warrants and the May 2025 Placement Agent Warrant Shares were offered pursuant to the Registration Statement on Form S-1 (File No. 333-286777), as amended, which was declared effective by the Securities and Exchange Commission on May 15, 2025.
The closing of the sales of these securities under
the May 2025 Purchase Agreement took place on May 16, 2025. The public offering price for each May 2025 Shares was $
On May 19, 2025, the May 2025 Purchasers exercised
the
15
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
On June 6, 2025, certain of the May 2025 Purchasers
exercised
During August and September 2025, certain of the
May 2025 Investors exercised the
October 2025 Registered Direct Offering with Concurrent Private Placement
On September 29, 2025, the Company entered into
a securities purchase agreement (the “September 2025 Purchase Agreement”) with certain institutional investors, pursuant to
which the Company agreed to sell to such investors
Concurrently with the sale of the October 2025
Shares pursuant to the September 2025 Purchase Agreement in a private placement, for each October 2025 Share purchased by the investors,
such investors received from the Company an unregistered warrant (the “October 2025 Warrants”) to purchase
The closing of the sales of these securities under the September 2025 Purchase Agreement took place on October 1, 2025.
The gross proceeds from the October 2025 Offering
were $
The October 2025 Warrants and the October 2025 Warrant Shares were sold without registration under the Securities Act of 1933 (the “Securities Act”) in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering and Rule 506 promulgated under the Securities Act as sales to accredited investors, and in reliance on similar exemptions under applicable state laws.
The representations, warranties and covenants contained in the September 2025 Purchase Agreement were made solely for the benefit of the parties to the September 2025 Purchase Agreement. In addition, such representations, warranties and covenants (i) are intended as a way of allocating the risk between the parties to the September 2025 Purchase Agreement and not as statements of fact, and (ii) may apply standards of materiality in a way that is different from what may be viewed as material by stockholders of, or other investors in, the Company. Accordingly, the September 2025 Purchase Agreement is included with this filing only to provide investors with information regarding the terms of the transaction, and not to provide investors with any other factual information regarding the Company. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the September 2025 Purchase Agreement, which subsequent information may or may not be fully reflected in public disclosures.
As compensation to H.C. Wainwright & Co.,
LLC, as exclusive placement agent (the “Placement Agent”) as amended on each of April 8, 2025, May 6, 2025 and September 29,
2025, the Company agreed to pay the Placement Agent an aggregate cash fee equal to
Pursuant to the terms of the September 2025 Purchase Agreement and subject to certain exceptions as set forth in the September 2025 Purchase Agreement, from the date of the September 2025 Purchase Agreement until thirty (30) days after the Closing Date, neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents (as defined in the September 2025 Purchase Agreement). In addition, until one (1) year after the Closing Date, the Company is prohibited from entering into a Variable Rate Transaction (as defined in the September 2025 Purchase Agreement), subject to certain limited exceptions.
16
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
The Company agreed to file a registration statement on Form S-1 providing for the resale of the October 2025 Warrant Shares (the “Resale Registration Statement”) within 15 calendar days of the date of the September 2025 Purchase Agreement (the “Filing Date”), and to use commercially reasonable efforts to cause the Resale Registration Statement to be declared effective by the SEC within 75 calendar days following the date of the Filing Date and to keep the Resale Registration Statement effective at all times until the Holders no longer own any October 2025 Warrants or October 2025 Warrant Shares. This registration statement on Form S-1 was filed with the SEC on October 29, 2025 and declared effective on November 26, 2025.
Common Stock Issued for Services
On February 20, 2026, the Company entered into
an addendum to a service agreement (the “Addendum”) with its investor relations consultant pursuant to which is agreed to
pay such consultant a monthly fixed fee of $
Asset Purchases
On July 29, 2025, the Company entered into an asset purchase agreement (the “MAVS Agreement”) with MAVS Holdings LLC (the “MAVS”). Pursuant to the MAVS Agreement, the MAVS agreed to sell, and the Company agreed to purchase, certain software of the web-based application currently marketed as “r2crypto.com” and the domain names socialscan.info, coinfeel.net, and r2crypto.com (the “MAVS Purchased Assets”).
In consideration for the MAVS Purchased Assets,
the Company issued to the MAVS
The MAVS Agreement contains certain representations, warranties and covenants of the parties that are customary for agreements of its type. In addition, the MAVS agreed to indemnify the Company for any misrepresentation or breach under the MAVS Agreement, infringement of any third-party right by any portion of the software and any acts of gross negligence, fraud or intentional misconduct by the MAVS.
On March 30, 2026, the Company entered into an
asset purchase agreement (the “Many Ads Agreement”) with Many Ads Inc. (“Many Ads”). Pursuant to the Many Ads
Agreement, Many Ads agreed to sell, and the Company agreed to purchase, certain software of the web-based application currently marketed
as “qwikagents.com” and the domain names qwikagents.com, qwikagents.ai, and qwikagents.co (the “Many Ads Purchased Assets”).
In consideration for the Many Ads Purchased Assets, the Company issued to Many Ads
The Many Ads Agreement contains certain representations, warranties and covenants of the parties that are customary for agreements of its type. In addition, Many Ads agreed to indemnify the Company for any misrepresentation or breach under the Many Ads Agreement, infringement of any third-party right by any portion of the software and any acts of gross negligence, fraud or intentional misconduct by Many Ads.
Stock Repurchase Plan
On February 20, 2026, the Company’s Board of Directors
approved a stock repurchase program authorizing the purchase of up to $
17
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
Stock Options
On January 18, 2021, the Company’s board
of directors (“Board”) approved the Silo Pharma, Inc. 2020 Omnibus Equity Incentive Plan (the “2020 Plan”) to
incentivize employees, officers, directors and consultants of the Company and its affiliates.
On May 22, 2025, and effective May 23, 2025, the
Board granted an aggregate of
On August 4, 2025, the Board approved the establishment
of a cryptocurrency advisory board (the “Crypto Advisory Board”) which will initially consists of up to three (3) members
in connection with the Company’s cryptocurrency treasury strategy. On August 4, 2025, the Board appointed Corwin Yu as the initial
member of the Crypto Advisory Board. In connection with this initiative, on August 4, 2025, the Company entered into an advisory agreement
with Corwin Yu, pursuant to which Mr. Yu will serve on the Crypto Advisory Board. In consideration of Mr. Yu’s services, the Company
granted him options to purchase
On December 4, 2025, the Board granted additional
option to purchase
During the three months ended March 31, 2026,
the Company amortized $
Stock option activities for the three months ended March 31, 2026 are summarized as follows:
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Balance Outstanding, December 31, 2025 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Balance Outstanding, March 31, 2026 | $ | $ | ||||||||||||||
| Exercisable, March 31, 2026 | $ | $ | ||||||||||||||
18
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
Stock Warrants
As discussed above under sale of May 2025 Shares
and May 2025 Warrants, on May 16, 2025, the Company issued Pre-Funded Warrants to purchase up to
On May 16, 2025, concurrently with the sale of
Common Stock and/or the Pre-Funded Warrants, pursuant to the May 2025 Purchase Agreement, the Company issued the Series A-1 Warrants to
purchase
As discussed above under the sale of October 2025
Shares and October 2025 Warrants, on September 29, 2025, the Company entered into the September 2025 Purchase Agreement with certain institutional
investors to sell
Concurrently with the sale of the October 2025
Shares, the Company issued the unregistered October 2025 Warrants to purchase
On December 12, 2025, an investor that participated
in the Company’s February 2021 financing provided the Company with notice of the irrevocable abandonment and surrender of warrants
to purchase
Warrant activities for the three months ended March 31, 2026 are summarized as follows:
| Number of Warrants | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Balance Outstanding, December 31, 2025 | $ | $ | ||||||||||||||
| Granted | - | |||||||||||||||
| Expired | ( | ) | - | |||||||||||||
| Balance Outstanding, March 31, 2026 | $ | $ | ||||||||||||||
| Exercisable, March 31, 2026 | $ | $ | ||||||||||||||
19
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
NOTE 7 – CONCENTRATIONS
Customer concentration
For the three months ended March 31, 2026 and
2025, one licensee accounted for
Vendor concentrations
For the three months ended March 31, 2026 and
2025, one licensor accounted for
NOTE 8 – COMMITMENTS AND CONTINGENCIES
Employment Agreements
Eric Weisblum
On October 12, 2022, the Company entered into
an employment agreement with Eric Weisblum (the “2022 Weisblum Employment Agreement”) pursuant to which Mr. Weisblum (i) has
a base salary will be $
Daniel Ryweck
On September 27, 2022, the Board appointed Daniel
Ryweck as Chief Financial Officer of the Company. On September 28, 2022, the Company entered into an employment agreement (the “Ryweck
Employment Agreement”) with Mr. Ryweck. Pursuant to the terms of the Ryweck Employment Agreement, which was amended on October 12,
2022, Mr. Ryweck will (i) receive a base salary at an annual rate of $
20
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
License Agreements between the Company and Vendors
Master License Agreement with the University of Maryland, Baltimore (Terminated)
Effective as of February 12, 2021, the Company and University of Maryland, Baltimore (“UMB”), entered into the Master License Agreement (“Master License Agreement”) which grants the Company an exclusive, worldwide, sublicensable, royalty-bearing license to certain intellectual property: (i) to make, have made, use, sell, offer to sell, and import certain licensed products and: (ii) to use the invention titled, “Central nervous system-homing peptides in vivo and their use for the investigation and treatment of multiple sclerosis and other neuroinflammatory pathology” and UMB’s confidential information to develop and perform certain licensed processes for the therapeutic treatment of neuroinflammatory disease.
On July 8, 2025, the Company entered into a Termination,
Commercial Evaluation License, and Option Agreement with the UMB, which terminated the Master License Agreement dated February 12, 2021.
Under the new Agreement, the Company was granted an exclusive option to negotiate and obtain a sublicensable, royalty-bearing license
for certain intellectual property related to central nervous system-homing peptides. The option requires submission of a commercialization
plan and payment of a $
The following clauses describe certain terms of the Master License Agreement prior to its termination on July 8, 2025:
The Company may assign, sublicense, grant, or
otherwise convey any rights or obligations under the Master License Agreement to a Company affiliate, without obtaining prior written
consent from UMB provided that it meets the terms defined in the Master License Agreement. The Company may grant sublicenses of some or
all of the rights granted by the Master License Agreement, provided that there is no uncured default or breach of any material term or
condition under the Master License Agreement, by Company, at the time of the grant, and that the grant complies with the terms and conditions
of the Master License Agreement. The Company shall be and shall remain responsible for the performance by each of the Company’s
sublicensee. Any sublicense shall be consistent with and subject to the terms and conditions of the Master License Agreement and shall
incorporate terms and conditions sufficient to enable Company to comply with the Master License Agreement. The Company or Company affiliates
shall pay to UMB a percentage of all income received from its sublicensee as follows: (i)
Pursuant to the Master License Agreement, the
Company shall pay UMB; (i) a license fee, (ii) certain event-based milestone payments (see below for payment terms), (iii) royalty payments
depending on net revenues (see below for payment terms), and (iv) a tiered percentage of sublicense income. The Company paid to UMB am
aggregate license fee of $
In April 2021, in connection with the Company’s
Sublicense Agreement with Aikido Pharma Inc. (see below – Customer Patent License Agreement with Aikido Pharma Inc.), the
Company paid
21
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
Exclusive License Agreement with the Trustees of Columbia University in the City of New York
On July 1, 2024, the Company entered into an exclusive license agreement (the “Columbia License Agreement”) with Columbia University (“Columbia”) with an effective date of June 28, 2024 (the “Effective Date”) and pursuant to which the Company has been granted exclusive rights to certain patents and technical information to develop, manufacture and commercialize Products (as defined in the Columbia License Agreement), including therapies for stress-induced affective disorders and other conditions. The term of the Columbia License Agreement commenced on the Effective Date and shall continue on a country-by-country and product-by-product basis until the latest of: (a) the date of expiration of the last to expire of the issued Patents (as defined in the Columbia License Agreement), (b) 20 years after the first bona fide commercial sale of the Product in the country in question, or (c) expiration of any market exclusivity period granted by a regulatory agency for a Product in the country in question. Pursuant to the Columbia License Agreement, the Company agreed to pay Columbia:
| (i) | an initial license fee
of $ |
| (ii) | an annual license fee of $ |
| (iii) | Royalties as follows: |
| (A) | Concerning sales of Products by the Company, its Designees, or their Affiliates in the Territory, a non-refundable and non-recoverable royalty of the following on a country-by-country and Product-by-Product basis: |
| (1) |
| (2) |
| (B) | No later than 30 days following the second (2nd) anniversary of the first bona fide commercial sale of a Product by the Company, a Sublicensee, a Designee, or any of their Affiliates to a Third-Party customer, and the first business day of each January after that, the Company shall pay Columbia a non-refundable and non-recoverable minimum royalty payment in the amount of $ |
| (iv) | Trigger Event Fee: The Company shall pay Columbia a Trigger Event Fee within 30 days after the Initial Date or, if later, within 10 days following the date upon which the Trigger Event Fee. A Trigger Event means any Assignment of the Columbia License Agreement or Change of Control and a Trigger Event Fee shall mean an additional cash license fee equal to |
| (v) | The Company shall reimburse Columbia for patent expenses as follows: |
| (i) | The Company shall reimburse Columbia for the actual fees, costs, and expenses Columbia has incurred before, on, and after the Effective Date in preparing, filing, prosecuting, and maintaining the Patents (and those patents and patent applications to which Patents claim priority) (collectively “Patent Expenses”). Patent Expenses include, without limitation, legal fees, the costs of any interference proceedings, oppositions, re-examinations, or any other ex parte or inter partes administrative proceeding before patent offices, taxes, annuities, issue fees, working fees, maintenance fees, and renewal charges, plus a five percent processing fee. |
| (ii) | Unreimbursed Patent Expenses that Columbia incurred for legal activities occurring before September 30, 2021 are “Past Patent Expenses.” |
| (iii) | Columbia, using reasonable
efforts, estimated that unreimbursed Patent Expenses for legal activities occurring before September 30, 2021 were $ |
22
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
| (iv) | The Company will pay any additional unreimbursed Past Patent Expenses within thirty (30) days after receiving an invoice from Columbia for the additional Past Patent Expenses. |
| (v) | The Company will reimburse Columbia for unreimbursed Patent Expenses incurred by Columbia after the Past Patent Expenses (“Ongoing Patent Expenses”) no later than thirty (30) days after receiving Columbia’s invoice. |
| (vi) | At Columbia’s election, Columbia may require advance payment of a reasonable estimate of Ongoing Patent Expenses (“Estimated Ongoing Patent Expenses”). Columbia shall give at least thirty (30) days’ notice to the Company before the date the advance payment is due, which payment Columbia may make due up to three months before the date Columbia has chosen for the legal work to be completed. Columbia may credit any unused balance towards future Patent Expenses, or upon the Company’s written request, Columbia shall return the unused balance to the Company. No later than thirty (30) days after receiving an invoice from Columbia for any Patent Expenses incurred over the reasonable estimate, the Company shall reimburse Columbia for the excess amount. |
License Agreements between the Company and Customer
Customer Patent License Agreement with Aikido Pharma Inc.
On January 5, 2021, the Company and its subsidiary Silo Pharma, Inc., entered into a patent license agreement (“License Agreement”) (collectively, the “Licensor”) with Aikido Pharma Inc. (“Aikido” or the “Customer”), as amended on April 12, 2021, pursuant to which the Licensor granted Aikido an exclusive, worldwide (“Territory”), sublicensable, royalty-bearing license to certain intellectual property: (i) to make, have made, use, provide, import, export, lease, distribute, sell, offer for sale, develop and advertise certain licensed products and (ii) to develop and perform certain licensed processes for the treatment of cancer and symptoms caused by cancer (“Field of Use”).
The License Agreement also provided that, if the
Licensor exercised the option granted to it pursuant to its commercial evaluation license and option agreement with UMB, effective as
of July 15, 2020, it would grant Aikido a non-exclusive sublicense (“Right”) to certain UMB patent rights in the field of
neuroinflammatory diseases occurring in patients diagnosed with cancer (“Field”). Pursuant to the License Agreement, Aikido
agreed to pay the Licensor, among other things, (i) a one-time non-refundable cash payment of $
Pursuant to the License Agreement, the Company
is required to prepare, file, prosecute, and maintain the licensed patents. Unless earlier terminated, the term of the license to the
licensed patents will continue until the expiration or abandonment of all issued patents and filed patent applications within the licensed
patents. The Company may terminate the License Agreement upon 30 day written notice if Aikido fails to pay any amounts due and payable
to the Company or if Aikido or any of its affiliates brings a patent challenge against the Company, assists others in bringing a legal
or administrative challenge to the validity, scope, or enforceability of or opposes any of the licensed patents (“Patent Challenge”)
against the Company (except as required under a court order or subpoena). Aikido may terminate the Agreement at any time without cause,
and without incurring any additional penalty, (i) by providing at least 30 days’ prior written notice and paying the Company all
amounts due to it through such termination effective date. Either party may terminate the Agreement for material breaches that have failed
to be cured within 60 days after receiving written notice. The Company collected the non-refundable cash payment of $
Prior to the April 12, 2021, issuance of the common
stock in lieu of the Series M Convertible Preferred Stock as discussed above, the Company valued the
23
SILO PHARMA, INC. AND SUBSIDIARY
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2026
(UNAUDITED)
During the three months ended March 31, 2026 and
2025, the Company recognized license fee revenues of $
The Right shall be, to the full extent permitted
by and on terms and conditions required by UMB, for a term consistent with the term of patent and technology licenses that UMB normally
grants. In the event that the Company exercises its option and executes a license with UMB to the UMB patent rights within 40 days after
the execution of such UMB license, for consideration to be agreed upon and paid by Aikido, which consideration shall in no event exceed
Customer Sublicense Agreement with Aikido Pharma Inc.
On April 6, 2021 (the “Sublicense Agreement Effective Date”), the Company entered into the Sublicense Agreement with Aikido pursuant to which the Company granted Aikido an exclusive worldwide sublicense to (i) make, have made, use, sell, offer to sell and import the Licensed Products (as defined below) and (ii) in connection therewith to (A) use an invention known as “Central nervous system-homing peptides in vivo and their use for the investigation and treatment of multiple sclerosis and other neuroinflammatory pathology” which was sublicensed to the Company pursuant to the Master License Agreement and (B) practice certain patent rights (“Patent Rights”) for the therapeutic treatment of neuroinflammatory disease in cancer patients. “Licensed Products” means any product, service, or process, the development, making, use, offer for sale, sale, importation, or providing of which: (i) is covered by one or more claims of the Patent Rights; or (ii) contains, comprises, utilizes, incorporates, or is derived from the Invention or any technology disclosed in the Patent Rights.
Pursuant to the Sublicense Agreement, Aikido agreed
to pay the Company (i) an upfront license fee of $
Sponsored Study and Research Agreements between the Company and Vendors
During the three months ended March 31, 2026 and
2025, the Company recorded research and development expense of $
On March 31, 2026, approximate future amounts due under sponsored study and research agreements between the Company and vendors is as follows:
| Year ending March 31, | Amount | |||
| 2027 | $ | |||
| Total | $ | |||
NOTE 9 – SUBSEQUENT EVENTS
Formation of Qwikagentsai Inc.
On April 15, 2026, the Company formed its wholly-owned subsidiary, Qwikagentsai to diversify the Company’s business into AI technology including the development and commercialization of web-based AI agent platforms.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and related notes for the year ended December 31, 2025 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Quarterly Report on Form 10-Q, including those factors set forth in the section entitled “Cautionary Note Regarding Forward-Looking Statements and Industry Data” and in the section entitled “Risk Factors” in Part II, Item 1A.
Overview
We are a diversified developmental-stage biopharmaceutical and cryptocurrency company. Our therapeutic focus is on developing novel therapeutics that address underserved conditions including PTSD, stress-induced anxiety disorders, fibromyalgia, and central nervous system (CNS) diseases. We are focused on developing novel therapies that include conventional drugs and psychedelic formulations. Our lead program, SPC-15, is an intranasal drug targeting PTSD and stress-induced anxiety disorders. SP-26 is a time-release ketamine-based loaded implant for fibromyalgia and chronic pain relief. Silo’s two preclinical programs are SPC-14, an intranasal compound for the treatment of Alzheimer’s disease, and SPU-16, a CNS-homing peptide targeting the central nervous system with initial research indication in multiple sclerosis (MS).
Therapeutics
We seek to acquire and/or develop intellectual property or technology rights from leading universities and researchers to treat rare diseases, including the use of psychedelic drugs, such as psilocybin, ketamine, and the potential benefits they may have in certain cases involving depression, mental health issues and neurological disorders. We are focused on developing traditional therapeutics and psychedelic medicine. The company concentrates on the development and commercialization of therapies for unmet needs from indications such as depression, post-traumatic stress disorder (“PTSD”), and other rare neurological disorders. Our mission is to identify assets to license and fund the research which we believe will be transformative to the well-being of patients and the health care industry.
Psilocybin is considered a serotonergic hallucinogen and is an active ingredient in some species of mushrooms. Recent industry studies using psychedelics, such as psilocybin, have been promising, and we believe there is a large unmet need with many people suffering from depression, mental health issues and neurological disorders. While classified as a Schedule I substance under the Controlled Substances Act (“CSA”), there is an accumulating body of evidence that psilocybin may have beneficial effects on depression and other mental health conditions. Therefore, the U.S. Food and Drug Administration (“FDA”) and U.S. Drug Enforcement Agency (“DEA”) have permitted the use of psilocybin in clinical studies for the treatment of a range of psychiatric conditions.
The potential of psilocybin therapy in mental health conditions has been demonstrated in a number of academic-sponsored studies over the last decade. In these early studies, it was observed that psilocybin therapy provided rapid reductions in depression symptoms after a single high dose, with antidepressant effects lasting for up to at least six months for a number of patients. These studies assessed symptoms related to depression and anxiety through a number of widely used and validated scales. The data generated by these studies suggest that psilocybin is generally well-tolerated and may have the potential to treat depression when administered with psychological support.
We have engaged in discussions with a number of world-renowned educational institutions and advisors regarding potential opportunities and have formed a scientific advisory board that is intended to help advise management regarding potential acquisition and development of products.
In addition, as more fully described below, we have entered into a license agreement with the University of Maryland, Baltimore, and developing a Ketamine polymer implant. In addition, we into a sponsored research agreement Columbia University for the study of ketamine in combination with other drugs for treatment of Alzheimer’s and depression disorders and we have also entered into an exclusive license agreement with Columbia under which we have rights to certain patents and inventions relating to the treatment of Alzheimer’s disease and stress-induced affective disorders using Ketamine in combination with certain other compounds.
We plan to actively pursue the acquisition and/or development of intellectual property or technology rights to treat rare diseases, and to ultimately expand our business to focus on this new line of business.
25
Product Candidates
We are currently focusing on four product candidates:
| 1. | SPC-15 for stress-induced psychiatric disorders, including PTSD and anxiety; |
| 2. | SP-26 for treatments of fibromyalgia and chronic pain; |
| 3. | SPC-14 for treatment of Alzheimer’s disease; and |
| 4. | SPU-16 for CNS disorders, initially targeting multiple sclerosis. |
SPC-15: Intranasal Treatment for PTSD and Anxiety Disorders
Our lead product candidate, SPC-15, is designed as a novel serotonin 4 (5-HT4) receptor agonist that utilizes biomarkers for treatment of stress-induced psychiatric disorders such as PTSD and anxiety disorders. This innovative treatment is administered via an intranasal formulation, potentially qualifying for the FDA’s streamlined 505(b)(2) regulatory pathway, which could expedite its approval process. We are actively collaborating with Columbia University, holding exclusive global rights to develop and commercialize SPC-15, pursuant to and that certain exclusive license agreement entered into with Columbia on July 1, 2024. See “----License Agreements between the Company and Vendor—Exclusive License Agreement with Columbia University.”
On November 15, 2023, we entered an exclusive license agreement with Medspray Pharma BV for its proprietary patented soft mist nasal spray technology, as the delivery mechanism for SPC-15, which agreement has an effective date of October 31, 2023. Preclinical and formulation studies were completed in the first half of 2024 and on June 4, 2024 the Company submitted a pre-Investigational New Drug (pre-IND) briefing package and meeting request to the U.S. Food and Drug Administration (FDA) for SPC-15, Silo’s intranasal prophylactic treatment for post-traumatic stress disorder (PTSD) and stress-induced anxiety disorder. In September 2024, we had a pre-IND meeting with the FDA to align on the 505(b)(2) regulatory pathway for approval of SPC-15 and review our proposed plan to support opening an IND.
Currently, we are conducting GLP-compliant pharmacokinetic and pharmacodynamic studies and in March 2025 we completed first dosing in an IND-enabling GLP-compliant toxicology and toxicokinetics, and we are aiming for an IND submission in 2026. The preclinical data suggests additional applications for eating disorders and anorexia, as well as enhanced efficacy when combined with an NMDA receptor antagonist for major depressive disorder and other severe stress-related conditions.
We believe our patented intranasal nose-to-brain drug dispersion technology provides a competitive advantage by increasing brain drug concentration, ensuring a faster onset of therapeutic effects with optimized safety.
SP-26: Ketamine Implant for Fibromyalgia
SP-26 represents a novel approach to treating chronic pain and fibromyalgia through a ketamine-based injectable dissolvable polymer implant. Designed for subcutaneous insertion, SP-26 focuses on regulating dosage and time release to provide sustained relief from chronic pain, offering a potentially safer alternative to opioids. Presently, our SP-26 product is in preclinical research. Initial animal studies, which began in early 2025, are evaluating the implant’s dosage, time release, and absorption.
In March 2023, we filed a provisional patent application with the USPTO to use SP-26 for treatment of chronic pain, including fibromyalgia We intend to develop SP-26 following the Section 505(b)(2) regulatory pathway of the FDA rules. Section 505(b)(2) of the FDCA was enacted to enable sponsors to seek NDA approval for novel repurposed drugs without the need for such sponsors to undertake time consuming and expensive pre-clinical safety studies and Phase 1 safety studies. Proceeding under this regulatory pathway, we will be able to rely upon publicly available data with respect to our active ingredient in our NDA submission to the FDA for marketing approval.
26
Fibromyalgia affects approximately 4 million U.S. adults (2% of the population). We believe SP-26’s implant design provides a compelling non-opioid alternative to traditional pain management, improving dosage control compared to intravenous delivery.
SPC-14: Treatment for Alzheimer’s Disease
SPC-14 targets glutamate receptor NDMAR and serotonin 5-HT4 to address cognitive and neuropsychiatric symptoms in Alzheimer’s disease. Given the global Alzheimer’s therapeutics market is projected to exceed $30.8 billion by 2033, SPC-14 presents a promising opportunity. SPC-14 was developed under a sponsored research agreement with Columbia University See “Investigator-Sponsored Study Agreements between the Company and Vendors---Sponsored Research Agreement with Columbia University for the Study of Ketamine in Combination with Other Drugs for Treatment of Alzheimer’s and Depression Disorders,” and we have exclusive global rights to develop and commercialize SPC-14, pursuant to and that certain exclusive license agreement entered into with Columbia on July 1, 2024. See “----License Agreements between the Company and Vendor—Exclusive License Agreement with Columbia University”. On October 13, 2022, we extended the term of the sponsored research agreement with Columbia to conduct further research studies into the mechanism of action of SPC-14 in the treatment of Alzheimer’s disease. In addition, we have been granted an option to license certain assets currently under development, including SPC-14 for the treatment of Alzheimer’s disease.
We believe our SPC-14 product has shown efficacy against luteinizing hormone (LH) in attenuating learned helplessness, preservative behavior and hyponeophagia (a measure of anxiety).
SPU-16: Treatment for CNS Disorders, Initial Indication for Multiple Sclerosis
SPU-16 is a promising candidate targeting central nervous system (CNS) disorders, with an initial indication for multiple sclerosis. On February 12, 2021, we entered into a Master License Agreement (the “UMB License Agreement”) with the University of Maryland, Baltimore (“UMB”) pursuant to which UMB granted us an exclusive, worldwide, sublicensable, royalty-bearing license to certain intellectual property (i) to make, have made, use, sell, offer to sell, and import certain licensed products and (ii) to use the invention titled “Central nervous system-homing peptides in vivo and their use for the investigation and treatment of multiple sclerosis and other neuroinflammatory pathology,” or SPU-16. See “License Agreements between the Company and Vendors--Vendor License Agreement with the University of Maryland, Baltimore for CNS Homing Peptide” for additional details.
On April 11, 2023 certain intellectual property under the UMB License Agreement described above were issued a patent from the U.S. Patent & Trademark Office (USPTO) for “Peptide-Targeted Liposomal Delivery For Treatment, Diagnosis, and Imaging of Diseases and Disorders” (US 11,766,403, B2).
On July 8, 2025, we entered into July 2025 Termination and Option Agreement with UMB which terminates the UMB License Agreement, previously in effect between us and UMB, and provides us with an exclusive, non-transferable evaluation license, as well as an exclusive option to negotiate a new exclusive commercial license, with respect to certain intellectual property related to central nervous system-homing peptides (the “Invention” and related “Patent Rights”) that were previously licensed under the UMB License Agreement.
Pursuant to the July 2025 Termination and Option Agreement, we were granted Option, exercisable during the term of the July 2025 Termination and Option Agreement, to negotiate and obtain an exclusive, sublicensable, royalty-bearing license to the Invention and Patent Rights for the therapeutic treatment of neuroinflammatory disease worldwide. The Option may be exercised by (i) providing written notice and submitting an acceptable commercialization plan to UMB, and (ii) paying a $1,000 option fee, which is creditable against certain future expenses if a commercial license is executed. The July 2025 Termination and Option Agreement was effective as of July 8, 2025, and will expire on March 31, 2026, unless earlier terminated or superseded by a new definitive license agreement upon exercise of the Option.
We believe SPU-16 provides a competitive advantage by using homing peptides to reduce toxicity while enhancing therapeutic payload delivery.
Cryptocurrency Treasury Strategy
Our strategy changed to include cryptocurrency treasury strategy in August 2025 to focus on the acquisition of leading digital assets. Management focused a portion of its resources in this cryptocurrency strategy. Our crypto assets primarily include Bitcoin (BTC), Ethereum (ETH) and Solana (SOL), and liquid staked tokens consisting of Liquid Staked ETH (LsETH) and Marinade Solana (mSOL), tokens received when ETH and SOL was staked through a third-party protocol. We have ownership of and control over our crypto assets which are held through custodial arrangements with qualified third-party custodians. These custodians provide secure storage and safeguarding of our crypto assets. We participate in both native and liquid staking of our digital assets to generate yield. Our role is that of a Delegator (a staker who does not run a validation node).
27
We have staked $68,673 and $98,584 of crypto assets, at cost as of March 31, 2026 and December 31, 2025, respectively. Our ability to sell or transfer staked digital assets is subject to restrictions related to unbonding periods, which are based on network traffic on the respective blockchains. As of March 31, 2026, all staked crypto assets could be unbonded within 2 to 3 days. As of March 31, 2026, our staked assets have near immediate terms. In exchange for staking the crypto assets on blockchain networks, we are entitled to a fractional share of the fixed digital asset award a third-party validator node receives for successfully validating or adding a block to the blockchain. As of March 31, 2026 and December 31, 2025, we held $173,462 and $221,817 of crypto assets comprised of BTC, ETH, SOL, RSC and XRP, at fair value, respectively. We reflect these assets held at fair value on the unaudited consolidated balance sheets within the “crypto assets” line item. In determining the fair value of the crypto assets in accordance with ASC 820, we utilize coinmarketcap.com or Coinbase as the principal market.
Recent Developments
On March 30, 2026, we entered into an asset purchase agreement (the “Many Ads Agreement”) with Many Ads Inc. (“Many Ads”), pursuant to which we acquired certain software of the web-based application currently marketed as “qwikagents.com” and the related domain names. In consideration, we issued to Many Ads 2,100,000 shares of our common stock, valued at $714,000 or $0.34 per share, based on the quoted closing stock price on March 30, 2026. The acquired assets did not meet the definition of a business under ASC 805, were obtained for a particular research and development project with no alternative future uses, and the entire $714,000 consideration was recorded as research and development expense for the three months ended March 31, 2026.
On April 15, 2026, we formed Qwikagentsai Inc. (“Qwikagentsai”), a Nevada corporation, as a wholly-owned subsidiary. We acquired 1,000,000 shares of Qwikagentsai’s common stock, par value $0.0001 per share, for aggregate consideration of $100. Qwikagentsai was formed to diversify the Company’s business into AI technology including the development and commercialization of web-based AI agent platforms.
Stock Repurchase Plan
On February 20, 2026, our Board of Directors approved a stock repurchase program authorizing the purchase of up to $1 million of our issued and outstanding common stock, from time to time, with such plan to be in place until December 31, 2026. As of March 31, 2026, no shares have been repurchased under this plan.
Results of Operations
Comparison of Our Results of Operations for the Three Months Ended March 31, 2026 and 2025
The following table summarizes the results of operations for the three months ended March 31, 2026 and 2025 and were based primarily on the comparative unaudited consolidated financial statements, footnotes and related information for the periods identified and should be read in conjunction with the unaudited consolidated financial statements and the notes to those statements that are included elsewhere in this report.
| For the Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues | $ | 18,026 | $ | 18,026 | ||||
| Cost of revenues | 20,688 | 1,460 | ||||||
| Gross profit (loss) | (2,662 | ) | 16,566 | |||||
| Operating expenses | 1,591,998 | 1,110,687 | ||||||
| Loss from operations | (1,594,660 | ) | (1,094,121 | ) | ||||
| Other income (expenses), net | (52,457 | ) | 62,684 | |||||
| Net loss | $ | (1,647,117 | ) | $ | (1,031,437 | ) | ||
Revenues
During the three months ended March 31, 2026 and 2025, we generated minimal revenues from operations. For the three months ended March 31, 2026 and 2025, revenues amounted to $18,026 and $18,026, respectively. Such revenues are related to the Aikido License and Sublicense Agreement and are recognized over the estimated 15-year term of the UMB license agreement.
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Cost of Revenues
During the three months ended March 31, 2026 and 2025, cost of revenues amounted to $20,688 and $1,460, respectively, an increase of $19,228, or 1,317.0%. Cost of revenues consisted of license fees related to the UMB License and Sublicense Agreement, which are being amortized into cost of revenues. Effective July 8, 2025, the estimated useful lives of the unamortized license and sublicense fees were changed to reflect the termination of the Master License Agreement and the expiration of the subsequent Option Agreement on March 31, 2026, resulting in accelerated amortization expense during the three months ended March 31, 2026.
Operating Expenses
For the three months ended March 31, 2026 and 2025, total operating expenses consisted of the following:
| For the Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Compensation expense | $ | 242,633 | $ | 178,469 | ||||
| Professional fees | 255,293 | 273,824 | ||||||
| Research and development | 1,013,265 | 593,962 | ||||||
| Other selling, general and administrative expenses | 80,807 | 64,432 | ||||||
| Total operating expenses | $ | 1,591,998 | $ | 1,110,687 | ||||
| ● | Compensation Expense: |
For the three months ended March 31, 2026 and 2025, compensation expense was $242,633 and $178,469, respectively, an increase of $64,164, or 36.0%. This increase primarily resulted from an increase in stock-based compensation of $56,619, health insurance of $8,963 offset by a decrease in payroll expense and related benefits of $1,418.
| ● | Professional Fees: |
For the three months ended March 31, 2026 and 2025, professional fees were $255,293 and $273,824, respectively, a decrease of $18,531, or 6.8%. The decrease was primarily attributable to a decrease in investor relations of $77,334, and a decrease in other consulting fees of $2,212, offset by an increase in stock-based consulting fees of $26,712, an increase in accounting and auditing fees of $19,113, and an increase in legal fees of $15,190.
| ● | Research and Development: |
For the three months ended March 31, 2026 and 2025, we incurred research and development expense of $1,013,265 and $593,962, respectively, an increase of $419,303, or 70.6%.
This increase was attributable to an increase in acquired software applications of $714,000 and an increase in research related consulting fees of $78,057, offset by a decrease in research and development expense associated with our various studies of $372,754. On March 30, 2026, we entered into an asset purchase agreement (the “Many Ads Agreement”) with Many Ads Inc. (“Many Ads”). Pursuant to the Many Ads Agreement, Many Ads agreed to sell, and we agreed to purchase, certain software of the web-based application currently marketed as “qwikagents.com” and the domain names qwikagents.com, qwikagents.ai, and qwikagents.co (the “Many Ads Purchased Assets”). In consideration for the Many Ads Purchased Assets, we issued to Many Ads 2,100,000 shares of its common stock, which were valued at $714,000 or $0.34 per share, based on the quoted closing stock price on March 30, 2026. Due to the nature of the Many Ads Purchased Assets and their lack of an established alternative future use, the fair value of the common stock issued was recorded as research and development expense of $714,000 during the three months ended March 31, 2026.
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We expect our research and development activities to increase as we develop our existing product candidates and potentially acquire new product candidates, reflecting increasing costs associated with the following:
| ● | fees related to in-licensed products and technology; |
| ● | expenses incurred under agreements with CROs, investigative sites and consultants that conduct our clinical trials and a substantial portion of our pre-clinical activities; |
| ● | the cost of acquiring and manufacturing clinical trial materials; and |
| ● | costs associated with non-clinical activities and regulatory approvals. |
| ● | Other Selling, General and Administrative Expenses: |
Other selling, general and administrative expenses include advertising and promotion, insurance expenses, patent related expenses, public company expenses, custodian fees, bank service charges, travel, and other office expenses.
For the three months ended March 31, 2026 and 2025, other selling, general and administrative expenses were $80,807 and $64,432, respectively, an increase of $16,375, or 25.4%. The increase was primarily attributed to a net increase in other general and administrative expenses of $26,895, offset by a decrease in filing fees of $10,520.
Loss from Operations
For the three months ended March 31, 2026 and 2025, loss from operations amounted to $1,594,660 and $1,094,121, respectively, an increase of $500,539, or 45.7%. The increase was primarily a result of the changes in operating expenses discussed above.
Other Income
For the three months ended March 31, 2026 and 2025, other income (expense), net amounted to $(52,457) and $62,684, respectively, a negative change of $115,141, or 183.7%. The negative change in other income (expense) was primarily due to an increase in unrealized loss on crypto assets of $53,348, an increase in impairment loss on crypto assets of $29,911, decrease in interest and dividend income of $23,110, a decrease in net realized gain on short-term debt investments of $2,922, an increase in foreign currency transaction loss of $2,674, an increase in unrealized loss on short-term tokenized investment funds of $2,060, and an increase in interest expense of $1,307, offset by an increase in staking income on crypto assets of $191.
Net Loss
For the three months ended March 31, 2026, net loss amounted to $1,647,117 or $0.12 per common share (basic and diluted), as compared to net loss of $1,031,437 or $0.23 per common share (basic and diluted) for the three months ended March 31, 2025, an increase of $615,680, or 59.7%.
The change was primarily a result of the changes discussed above.
Liquidity and Capital Resources
Liquidity is the ability of an enterprise to generate adequate amounts of cash to meet its needs for cash requirements. We had working capital of $6,098,849, $2,129,659 in short-term investments, and $3,902,514 in cash and cash equivalents as of March 31, 2026, and working capital of $6,737,542, $2,110,065 in short-term investments and $4,748,700 in cash and cash equivalents as of December 31, 2025, respectively.
| March 31, 2026 | December 31, 2025 | Working Capital Change | Percentage Change | |||||||||||||
| Working capital: | ||||||||||||||||
| Total current assets | $ | 6,803,694 | $ | 7,387,725 | $ | (584,031 | ) | (8 | )% | |||||||
| Total current liabilities | (704,845 | ) | (650,183 | ) | (54,662 | ) | (8 | )% | ||||||||
| Working capital: | $ | 6,098,849 | $ | 6,737,542 | $ | (638,693 | ) | (9 | )% | |||||||
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The decrease in working capital of $638,693 was primarily attributable to a decrease in current assets of $584,031 primarily due to a decrease in cash and cash equivalents of $846,186, a decrease in crypto assets, at fair value of $48,355, a decrease in crypto assets, at cost of $29,911, offset by an increase in prepaid expenses and other current assets of $320,827 and an increase in short-term investments, at fair value of $19,594, and an increase in current liabilities of $54,662 attributable to accounts payable and accrued expenses.
Cash Flows
A summary of cash flow activities is summarized as follows:
| Three Months Ended March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net cash used in operating activities | $ | (822,623 | ) | $ | (1,640,300 | ) | ||
| Net cash (used in) provided by investing activities | (23,563 | ) | 871,381 | |||||
| Net cash provided by financing activities | - | - | ||||||
| Net decrease in cash and cash equivalents | $ | (846,186 | ) | $ | (768,919 | ) | ||
Net Cash Used in Operating Activities
Net cash used in operating activities for the three months ended March 31, 2026 and 2025 were $822,623 and $1,640,300, respectively, a decrease of $817,677, or 49.8%.
| ● | Net cash used in operating activities for the three months ended March 31, 2026 primarily reflected a net loss of $1,647,117, adjusted for non-cash items such as amortization expense of $2,937, amortization of prepaid stock-based professional fees of $26,712, unrealized loss on short-term tokenized investment funds of $2,060, staking income on crypto assets of $191, unrealized loss on crypto assets, at fair value of $53,348, impairment loss on crypto assets, at cost of $29,911, stock-based compensation of $56,619, and common stock issued for acquired technology expensed of $714,000, and changes in operating asset and liabilities primarily consisting of an increase in prepaid expenses and other current assets of $97,539, an increase in accounts payable and accrued expenses of $54,662, and a decrease in deferred revenue of $18,025. |
| ● | Net cash used in operating activities for the three months ended March 31, 2025 primarily reflected a net loss of $1,031,437, adjusted for non-cash items such as amortization expense of $3,092, and net realized gain on short-term debt investments of $2,922, and changes in operating asset and liabilities primarily consisting of an increase in prepaid expenses and other current assets of $120,314, a decrease in accounts payable and accrued expenses of $470,693, and a decrease in deferred revenue of $18,026. |
Net Cash (Used in) Provided by Investing Activities
Net cash (used in) provided by investing activities for the three months ended March 31, 2026 and 2025 were $(23,563) and $871,381, respectively, a negative change of $894,944 or 102.7%.
| ● | Net cash used in investing activities for the three months ended March 31, 2026 was $23,563 which consisted of aggregate payments for the purchase of short-term debt investments of $18,761 and purchase of crypto assets of $49,990, offset by proceeds from sale of crypto assets of $45,188. |
| ● | Net cash provided by investing activities for the three months ended March 31, 2025 was $871,381 which consisted of proceeds from sale of short-term investments of $905,353, offset by aggregate payments for the purchase of short-term debt investments of $33,972. |
Net Cash Provided by Financing Activities
We did not have any net cash provided by financing activities for the three months ended March 31, 2026 and 2025.
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Cash Requirements
We believe that our current cash and cash equivalent amount and short-term investment amount will provide sufficient cash required to meet our obligations for a minimum of twelve months from the date of this filing.
Other than cash requirements pursuant to research and development agreements, we currently have no other material commitments for any capital expenditures.
Liquidity
As reflected in the accompanying unaudited consolidated financial statements, we generated a net loss of $1,647,117 and used cash in operations of $822,623 during the three months ended March 31, 2026. Additionally, we have an accumulated deficit of $21,139,506 on March 31, 2026. As of March 31, 2026, we had working capital of $6,098,849, $2,129,659 in short-term investments, and $3,902,514 in cash and cash equivalents.
On September 29, 2025, pursuant to the October 2025 Offering, we received net proceeds of $2,146,000, net of placement agent fees and offering costs of $303,450 and legal and other fees of $50,550.
The positive working capital serves to mitigate the conditions that historically raised substantial doubt about our ability to continue as a going concern. We believe that we have sufficient cash to meet our obligations for a minimum of twelve months from the date of this filing.
Off-Balance Sheet Arrangements
None.
Critical Accounting Estimates
Crypto Assets
Our crypto assets primarily include Bitcoin (BTC), Ethereum (ETH) and Solana (SOL), and liquid staked tokens consisting of Liquid Staked ETH (LsETH) and Marinade Solana (mSOL), tokens received when ETH and SOL was staked through a third-party protocol. We have ownership of and control over our crypto assets which are held through custodial arrangements with qualified third-party custodians. These custodians provide secure storage and safeguarding of our crypto assets.
We distinguish between crypto assets which fall within the scope of ASC 350-60, Accounting for and Disclosure of Crypto Assets, and those which do not. We refer to crypto assets which fall within the scope of ASC 350-60 (BTC, ETH, USDC, SOL, XRP and RSC) as “crypto assets, at fair value.” Crypto assets which do not fall within the scope of ASC 350-60 (LsETH and mSOL) are referred to as “crypto assets, at cost.”
Crypto Assets, at Fair Value
Crypto assets that fall within the scope of ASC 350-60, such as BTC, ETH, SOL, native staked SOL, RSC and XRP, which are actively traded on public exchanges, are initially recorded at cost, which represents the cash, cash equivalents, or other financial assets paid to acquire the asset, including transaction fees.
Crypto assets are subsequently measured in accordance with ASC 350-60, at fair value in the statements of operations with unrealized gains and losses resulting from changes in fair value recognized in net income or loss. We determine and record at each reporting period the fair value of our crypto assets in accordance with ASC 820, Fair Value Measurement, based on quoted (unadjusted) prices on the coinmarketcap.com or Coinbase exchange, the active exchange that we have determined is our principal market (Level 1 inputs). Changes in the fair value are recognized in net income (loss) within “Unrealized gain (loss) on crypto assets”, while realized gains and losses from the derecognition of crypto assets are included in “Realized gain (loss) on crypto assets, net” in our unaudited consolidated statements of operations and comprehensive loss. We apply a weighted average cost methodology to assign costs for purposes of determining crypto assets held and realized gains and losses.
Purchases and sales of crypto assets are reflected as cash flows from investing activities in the unaudited consolidated statements of cash flows. Contributions of crypto assets received in connection with deposits of ETH and SOL into a liquid staking protocol are presented as non-cash investing and financing activites.
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Crypto Assets, at Cost
Crypto assets, at cost are recognized at fair value on the date received, which becomes their cost basis. Crypto assets, at cost, such as LsETH and mSOL, do not fall in the scope of ASC 350-60 for subsequent measurement. LsETH and mSOL represent receipt tokens, which in general and by design, grant the holder an enforceable right to redeem ETH or SOL for which it was exchanged. Therefore, it fails the ‘other goods and services criterion’ in ASC 350-60-15-1(b) and is outside the scope of ASC 350-60. Crypto assets, at cost are therefore subsequently measured at cost, net of any impairment losses incurred since acquisition, in accordance with ASC 350-30, Intangibles—Goodwill and Other—General Intangibles Other Than Goodwill.
We perform an analysis each quarter to identify whether events or changes in circumstances, principally decreases in the quoted (unadjusted) prices in our principal market, indicate that it is more likely than not that any of the assets are impaired. The quoted (unadjusted) prices on the coinmarketcap.com or the Coinbase exchange, the active exchange that we have determined as our principal market, are used in the analysis. If the carrying value of LsETH and mSOL exceeds that end of period quoted price, an impairment loss has occurred in the amount equal to the difference between its carrying value and such period end closing price. Impairment losses are recognized in the period in which the impairment occurs and are reflected within “Impairment loss on crypto assets, at cost” in our unaudited consolidated statements of operations and comprehensive loss. The impaired crypto assets are written down to their fair value at the time of impairment and this becomes the new cost basis for those assets. The cost basis of LsETH or mSOL will not be adjusted upward for any subsequent increase in fair value.
Staking Activities
We participate in both native and liquid staking of our digital assets to generate yield. Our role is that of a Delegator (a staker who does not run a validation node).
Native Staking
We participate in native staking exclusively as a delegator through third-party validators. We delegate SOL to validators, either directly or through third party asset managers, who operate nodes on the Solana network to validate transactions and add blocks to the blockchain. In return for delegating SOL to validators, we are entitled to a portion of the protocol-level rewards, comprising both consensus- and execution-layer components received by the validators, in the form of SOL tokens, calculated based on our proportion of the total SOL staked. When we stake SOL natively, the SOL does not remain in our custodial wallet, but is instead deposited into Solana’s staking deposit smart contract, which is required for participation in SOL staking as a delegator. Native staked SOL are not derecognized because their deposit into the smart contract does not give any other entity the right or ability to direct their use (for example, sell, lend, pledge or otherwise use those SOL) and the staked SOL may be withdrawn at any time by the delegator through the use of private withdrawal keys, subject only to protocol-defined withdrawal and exit queue mechanics. The withdrawal credentials in the smart contract are designated to our custodian who holds our SOL solely for our benefit and does not obtain control of our SOL via their custodial services. Native staked SOL are therefore not derecognized.
Rewards from native staking activities fall outside the scope of ASC 606, Revenue from Contracts, as these activities do not represent an output of our ordinary activities. Therefore, we reflect any such rewards received as other income on the accompanying unaudited consolidated statements of operations and comprehensive loss. In this case our performance obligation is the provision of our validation rights to the validators, from which we earn variable consideration, in the form of SOL, which is non-cash consideration, measured at the fair value of SOL as of contract inception based on the quoted (unadjusted) prices on coinmarketcap.com or the Coinbase exchange, the active exchange that we have determined is our principal market. Revenue is recognized at the point in time when the Solana network confirms that the validation is complete. As a delegator, we have concluded we are not the principal to the block validation service provided to the Solana Network; it is the validators that control the service. Instead, our service is one of providing the use of our SOL by the validators to increase their validation opportunities. Consequently, we record staking revenue on a net basis, reflecting only the portion of protocol rewards to which we are entitled after validator commissions are paid to the custodians.
Liquid Staking
We also participate in liquid staking through a liquid staking protocol. One key difference and intended benefit of liquid staking versus native staking is that it allows us to earn staking rewards, like native staking, but provides liquidity and the ability to enter into other transactions through the use of receipt token. Instead of directly locking ETH or SOL into the respective staking deposit contract, we deposit ETH or SOL through our custodian into the liquid staking protocol’s smart contract. The liquid staking protocol then controls the ETH or SOL for deposit into the respective staking deposit contract and further delegation to its chosen validators. In exchange for staking our ETH or SOL, we receive LsETH or mSOL, freely transferable liquid staking receipt tokens, which enables participation in decentralized finance (DeFi) and other crypto markets while the underlying ETH or SOL remains staked on Ethereum or SOL. Upon staking ETH or SOL through the liquid staking protocol, the ETH or SOL is derecognized because the liquid staking protocol obtains the ability to deploy and direct its use, and the LsETH token or mSOL token received concurrently is then recognized. Any gain or loss on the derecognition of ETH or SOL and the recognition of the LsETH or mSOL is recognized in accordance with ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”) based on the difference between the carrying amount of the ETH or SOL staked and the fair value of the LsETH or mSOL received, and shall be included in “Realized gain or loss on crypto assets” in our unaudited consolidated statements of operations and comprehensive loss.
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Staking rewards in the form of ETH or SOL are only received upon redemption of LsETH or mSOL.
Since LsETH and mSOL are accounted for under ASC 350-30, any increases in LsETH and mSOL fair value while we remain staked with the liquid staking protocols are not recognized. There is no ongoing performance obligation following the staking of ETH or SOL through the liquid staking protocol. Additionally, LsETH and mSOL are non-rebasing tokens, meaning their quantity remains fixed over time. Staking rewards are not continuously reflected in token balances but are instead realized separately. Staking rewards are therefore recognized only when the LsETH or mSOL is redeemed, measured at the fair value of ETH or SOL at contract inception, which is when the ETH or SOL were staked. Staking rewards on LsETH or mSOL shall be included in “Staking income on crypto assets” in our unaudited consolidated statements of operations and comprehensive loss. Gain or loss resulting from the difference between the carrying amount of the LsETH or mSOL redeemed and the fair value of ETH or SOL received at redemption (i.e., excluding staking rewards), shall be included in “Realized gain or loss on crypto assets” in our unaudited consolidated statements of operations and comprehensive loss.
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We do not expect the adoption of this new guidance to have a material impact on our unaudited consolidated financial statements.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270), Narrow-Scope Improvements, to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in ASU 2025-11 result in a comprehensive list of interim disclosures that are required by GAAP. The amendments in ASU 2025-11 also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027 and early adoption is permitted. The amendments in ASU 2025-11 can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. The Company is currently evaluating the disclosure impact that ASU 2025-11 may have on its financial statement presentation and disclosures.
Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on our unaudited consolidated financial statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are not required to provide the information required by this Item as we are a “smaller reporting company,” as defined in Rule 12b-2 of the Exchange Act.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain “disclosure controls and procedures,” as that term is defined in Rule 13a-15(e) and 15d-15(e), promulgated by the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Our management, with the participation of our principal executive officer and principal financial officer, evaluated our company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of March 31, 2026, our disclosure controls and procedures were effective.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting that occurred during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may become involved in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are currently not aware of any such legal proceedings or claims that will have, individually or in the aggregate, a material adverse effect on our business, financial condition or operating results.
ITEM 1A. RISK FACTORS
Risk factors that affect our business and financial results are discussed in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 27, 2026 (“Annual Report”). Except as set forth below, there have been no material changes in our risk factors from those previously disclosed in our Annual Report. You should carefully consider the risks described in our Annual Report, which could materially affect our business, financial condition or future results. The risks described in our Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
| (a) | Recent Sales of Unregistered Securities |
None.
| (b) | Issuer Purchases of Equity Securities. |
We did not repurchase any common stock during the quarterly period ended March 31, 2026.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Material changes to the procedures by which security holders may recommend nominees to the board of directors.
None.
Director and Officer Trading Arrangements
During our quarter ended March 31, 2026, none
of our directors or executive officers
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ITEM 6. EXHIBITS
| * | Filed herewith. |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SILO PHARMA, INC. | ||
| Dated: May 13, 2026 | By: | /s/ Eric Weisblum |
| Name: | Eric Weisblum | |
| Title: | Chairman and Chief Executive Officer (Principal Executive Officer) | |
| Dated: May 13, 2026 | By: | /s/ Daniel Ryweck |
| Name: | Daniel Ryweck | |
| Title: | Chief Financial Officer (Principal Financial and Accounting Officer) |
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