Silo Pharma, Inc 10-Q for FY2025 Q1
Silo Pharma, Inc. (SILO)
About this 10-Q
Silo Pharma, Inc filed this 10-Q on May 9, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).
Headline figures
Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $18.03K
- unchanged from $18.03K a year earlier
- Net loss
- $1.03M
- compared with a net loss of $801.67K a year earlier
- Diluted EPS
- -$0.23
- compared with -$0.28 a year earlier
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 | ||
| The |
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 8, 2025 was:
SILO PHARMA, INC. AND SUBSIDIARY
FORM 10-Q
MARCH 31, 2025
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, intensions, 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, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Short-term investments | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total Current Assets | ||||||||
| LONG-TERM ASSETS: | ||||||||
| Prepaid expenses and other assets - non-current | ||||||||
| 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 7) | ||||||||
| 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, | ||||||||
| 2025 | 2024 | |||||||
| LICENSE FEE REVENUE | $ | $ | ||||||
| COST OF REVENUES | ||||||||
| GROSS 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 | ||||||||
| Foreign currency transaction loss | ( | ) | ||||||
| Total other income, 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, 2025 AND 2024
(Unaudited)
| Additional | Accumulated Other | Total | ||||||||||||||||||||||||||||||
| Common Stock | Paid In | Treasury Stock | Comprehensive | Accumulated | Stockholders’ | |||||||||||||||||||||||||||
| Shares | Amount | Capital | Shares | Amount | Income | Deficit | Equity | |||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Accumulated other comprehensive gain - short-term investments | - | - | - | |||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | $ | ( | ) | $ | ||||||||||||||||||||||||
| Additional | Accumulated Other | Total | ||||||||||||||||||||||||||||||
| Common Stock | Paid In | Treasury Stock | Comprehensive | Accumulated | Stockholders’ | |||||||||||||||||||||||||||
| Shares | Amount | Capital | Shares | Amount | Income (Loss) | Deficit | Equity | |||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ||||||||||||||||||||
| Purchase of treasury stock | - | ( | ) | ( | ) | |||||||||||||||||||||||||||
| Accumulated other comprehensive gain - short-term investments | - | - | ||||||||||||||||||||||||||||||
| Net loss | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||
| Balance, March 31, 2024 | $ | $ | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||||||||||||||||
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, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Amortization expense | ||||||||
| Net realized gain on short-term investments | ( | ) | ( | ) | ||||
| 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 investments | ( | ) | ( | ) | ||||
| NET CASH PROVIDED BY INVESTING ACTIVITIES | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Purchase of treasury stock | ( | ) | ||||||
| NET CASH USED IN FINANCING 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: | ||||||||
| Change in accumulated other comprehensive income | $ | $ | ||||||
See accompanying notes to unaudited consolidated financial statements.
4
SILO PHARMA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(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.
The Company is a developmental stage biopharmaceutical company developing novel therapeutics that address under-served conditions using therapies that include conventional drugs and psychedelic formulations. 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 (the “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, 2024 included in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on March 28, 2025.
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
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(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, 2025 and 2024 include the percentage of completion of research and development projects, valuation of short-term investments, 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 which 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 unaudited 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.
An impairment loss may be recognized when the decline in fair value of the debt securities 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 $
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
6
SILO PHARMA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(UNAUDITED)
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 7).
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 7).
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.
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, 2025 and December 31, 2024 that would require either recognition or disclosure in the accompanying unaudited consolidated financial statements.
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,
2025 and 2024, 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, 2025 and December 31, 2024, 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.
7
SILO PHARMA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(UNAUDITED)
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, 2025 and 2024:
| March 31, | March 31, | |||||||
| 2025 | 2024 | |||||||
| Stock options | ||||||||
| Warrants | ||||||||
Segment Reporting
The Company operates as a single 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
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 consolidated financial statements.
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, 2025 and December 31, 2024. Accordingly, the estimates presented in these 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. |
8
SILO PHARMA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(UNAUDITED)
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, 2025 and December 31, 2024.
| March 31, 2025 | December 31, 2024 | |||||||||||||||||||||||
| Description | Level 1 | Level 2 | Level 3 | Level 1 | Level 2 | Level 3 | ||||||||||||||||||
| Short-term investments | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
The Company’s short-term investments, consisting of exchange traded funds, are level 1 measurements and are based on redemption value at each date.
Short-Term Investments, at Fair Value
The following table summarizes activity in the Company’s short-term investments, at fair value for the periods presented:
| Three Months Ended March 31, | Three Months March 31, | |||||||
| 2025 | 2024 | |||||||
| Balance, beginning of period | $ | $ | ||||||
Purchases of short-term investments | ||||||||
| Sales at original cost | ( | ) | ( | ) | ||||
| Net realized gain on short-term investments | ||||||||
| Unrealized gains | ||||||||
| Balance, end of period | $ | $ | ||||||
NOTE 4 – 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, 2025 and December 31, 2024, intangible assets consisted of the following:
| Useful life | March 31, 2025 | December 31, 2024 | ||||||||
| License | $ | $ | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||||
| $ | $ | |||||||||
For the three months ended March 31, 2025 and
2024, amortization expense amounted to $
9
SILO PHARMA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(UNAUDITED)
Amortization of intangible assets with finite lives attributable to future periods is as follows:
| Year ending March 31: | Amount | |||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 | ||||
| 2030 | ||||
| Thereafter | ||||
| Total | $ | |||
NOTE 5 – STOCKHOLDERS’ EQUITY
Shares Authorized
On December 19, 2023, the Company reincorporated
as a Nevada corporation and filed Articles of Incorporation with the Nevada Secretary of State on such date. The Company has
Sale of Common Stock and Warrants
June 2024
On June 4, 2024, the Company entered into a securities
purchase agreement (the “June 2024 Purchase Agreement”) with certain institutional investors (the “June 2024 Investors”),
pursuant to which the Company agreed to sell to such investors
Concurrently with the sale of the June 2024 Shares
and/or the Pre-Funded Warrants, pursuant to the June 2024 Purchase Agreement in a private placement, for each June 2924 Share and/or Pre-Funded
Warrant purchased by the June 2024 investors, such investors received from the Company an unregistered warrant (the “June 2024 Common
Warrant”) to purchase
On April 23, 2024, the Company entered into an
engagement agreement with H.C. Wainwright & Co., LLC, as exclusive placement agent (the “Placement Agent”), pursuant to
which the Placement Agent agreed to act as placement agent on a reasonable “best efforts” basis in connection with the June
2024 Offering. The Company agreed to pay the Placement Agent an aggregate cash fee equal to
The closing of the sales of these securities under
the June 2024 Purchase Agreement took place on June 6, 2024. The public offering price for each June 2024 Shares was $
10
SILO PHARMA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(UNAUDITED)
The per share exercise price for the Pre-Funded
Warrants was $
The June 2024 Common Warrants and the June 2024 Common 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.
Pursuant to the terms of the June 2024 Purchase Agreement and subject to certain exceptions as set forth in the June 2024 Purchase Agreement, from the date of the June 2024 Purchase Agreement until fifteen (15) 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. In addition, until the one year from the Closing Date, the Company is prohibited from entering into a Variable Rate Transaction (as defined in the June 2924 Purchase Agreement), subject to certain limited exceptions.
The Company agreed to file a registration statement on Form S-3 (or other appropriate form if the Company is not then S-3 eligible) providing for the resale of the Common Warrant Shares (the “June 2024 Resale Registration Statement”) within 45 calendar days of the date of the June 2024 Purchase Agreement (the “Filing Date”), and to use commercially reasonable efforts to cause the June 2024 Resale Registration Statement to be declared effective by the SEC within 60 calendar days following the date of the Filing Date and to keep the June 2024 Resale Registration Statement effective at all times until the Holders no longer own any June 2024 Common Warrants or June 2024 Common Warrant Shares. On July 25, 2024, the Company filed an S-1 registration statement related to the June 2024 Common Warrant Shares and June 2024 Placement Agent Warrant Shares, which was declared effective on July 30, 2024.
July 2024
On July 18, 2024, the Company entered into a securities
purchase agreement (the “July 2024 Purchase Agreement”) with certain institutional investors (“July 2024 Investors”),
pursuant to which the Company agreed to sell to such investors
Concurrently with the sale of Common Stock, pursuant
to the July 2024 Purchase Agreement in a private placement, for each share of Common Stock purchased by the July 2024 Investors, such
July 2024 Investors received from the Company an unregistered warrant (the “July 2024 Common Warrants”) to purchase
The closing of the sales of these securities under
the July 2024 Purchase Agreement took place on July 22, 2024. The gross proceeds from the July 2024 Offering were $
In connection with the April 23, 2024 engagement
agreement with the Placement Agent discussed above, in connection with the July 2024 Purchase Agreement, the Placement Agent received
warrants to purchase up to
The July 2024 Common Warrants were sold without registration under 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.
11
SILO PHARMA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(UNAUDITED)
The July 2024 Placement Agent Warrants are exercisable
immediately upon issuance for a period of five years following the commencement of the sales pursuant to the July 2024 Offering. In addition,
the Company paid to pay the July 2024 Placement Agent $
Pursuant to the terms of the July 2024 Purchase Agreement and subject to certain exceptions as set forth in the July 2024 Purchase Agreement, from the date of the July 2024 Purchase Agreement until fifteen 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. In addition, until the one year from the Closing Date, the Company is prohibited from entering into a Variable Rate Transaction (as defined in the July 2024 Purchase Agreement), subject to certain limited exceptions.
Each of our executive officers and directors have agreed, subject to certain exceptions, not to dispose of or hedge any shares of Common Stock or securities convertible into or exchangeable for shares of Common Stock during the period from the date of the lock-up agreement continuing through the fifteen (15) days after the closing of the July 2024 Offering.
The Company agreed to file a registration statement on Form S-3 (or other appropriate form if the Company is not then S-3 eligible) providing for the resale of the Common Warrant Shares (the “July 2024 Resale Registration Statement”) within 45 calendar days of the date of the July 2024 Purchase Agreement (the “July 0224 Filing Date”), and to use commercially reasonable efforts to cause the July 2024 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 July 2024 Resale Registration Statement effective at all times until the Holders no longer own any July 2024 Common Warrants or July 2024 Common Warrant Shares. On August 21, 2024, the Company filed an S-1 registration statement related to the July 2024 Common Warrant Shares and July 2024 Placement Agent Warrant Shares, which was declared effective on September 3, 2024.
Stock Repurchase Plan
On January 26, 2023, the Company’s Board
of Directors authorized a stock repurchase plan to repurchase up to $
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.
12
SILO PHARMA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(UNAUDITED)
Stock option activities for the three months ended March 31, 2025 are summarized as follows:
| Number of Options | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Balance Outstanding, December 31, 2024 | $ | $ | ||||||||||||||
| Granted | - | - | ||||||||||||||
| Balance Outstanding, March 31, 2025 | $ | $ | ||||||||||||||
| Exercisable, March 31, 2025 | $ | $ | ||||||||||||||
Stock Warrants
As discussed above under sale of June 2024 Shares
and June 2024 Warrants, on June 4, 2024, the Company Pre-Funded Warrants to purchase up to
On June 4, 2024, concurrently with the sale of
Common Stock and/or the Pre-Funded Warrants, pursuant to the June 2024 Purchase Agreement in a private placement as discussed above, the
Company issued an aggregate of
On July 18, 2024, concurrently with the sale of
July 2024 Shares, pursuant to the July 2024 Purchase Agreement in a private placement as discussed above, the Company issued an aggregate
of
Warrant activities for the three months ended March 31, 2025 are summarized as follows:
| Number of Warrants | Weighted Average Exercise Price | Weighted Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||||
| Balance Outstanding, December 31, 2024 | $ | $ | ||||||||||||||
| Granted | ||||||||||||||||
| Balance Outstanding, March 31, 2025 | $ | $ | ||||||||||||||
| Exercisable, March 31, 2025 | $ | $ | ||||||||||||||
NOTE 6 – CONCENTRATIONS
Customer concentration
For the three months ended March 31, 2025 and
2024, one licensee accounted for
Vendor concentrations
For the three months ended March 31, 2025 and
2024, one licensor accounted for
13
SILO PHARMA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(UNAUDITED)
NOTE 7 – 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 $
Dr. James Kuo
On January 27, 2022, the Company and Dr. James
Kuo entered into an employment agreement (“Kuo Employment Agreement”) for Dr. Kuo to serve as the Vice President of Research
& Development. The Kuo Employment Agreement shall be effective as of the date of the agreement and shall automatically renew for a
period of one year at every anniversary of the effective date, with the same terms and conditions, unless either party provides written
notice of its intention not to extend the term of the Kuo Employment Agreement at least thirty days prior to the applicable renewal date.
Dr. Kuo shall be paid an annual base salary of $
14
SILO PHARMA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(UNAUDITED)
License Agreements between the Company and Vendors
Master License Agreement with the University of Maryland, Baltimore
As disclosed above, 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.
The Master License Agreement will remain in effect
on a Licensed Product-by-Licensed Product basis and country-by-country basis until the later of: (a) the last patent covered under the
Master License Agreement expires, (b) the expiration of data protection, new chemical entity, orphan drug exclusivity, regulatory exclusivity,
or other legally enforceable market exclusivity, if applicable, or (c)
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 $
| Milestone | Payment | |||
| $ | ||||
| $ | ||||
| $ | ||||
| $ | ||||
| $ | ||||
Royalty Payments Terms:
| (i) |
| (ii) |
15
SILO PHARMA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(UNAUDITED)
| (iii) |
| Years | Minimum Annual Royalty | |||
| $ | ||||
| $ | ||||
| $ | ||||
| $ | ||||
| $ | ||||
On November 10, 2023, the Company entered into a Third Amendment to Master License Agreement (the “Third Amendment”) with UMB, pursuant to which the parties agreed to an amended and restated schedule of diligence milestones for the Master License Agreement.
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
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)
| (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) |
16
SILO PHARMA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(UNAUDITED)
| (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 $ |
| (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. |
17
SILO PHARMA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(UNAUDITED)
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
During the three months ended March 31, 2025
and 2024, 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
18
SILO PHARMA, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(UNAUDITED)
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, 2025 and
2024, the Company recorded research and development expense of $
On March 31, 2025, future amounts due under sponsored study and research agreements between the Company and vendors is as follows:
| Year ended March 31, | Amount | |||
| 2025 | $ | |||
| Total | $ | |||
19
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 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, 2024 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 developmental stage biopharmaceutical company 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. The Company’s 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 with 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.
20
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 the exclusive license agreement entered into with Columbia on July 1, 2024. See “Item 1 Business --License Agreements between the Company and Vendor—Exclusive License Agreement with Columbia University.”
On November 15, 2023, we entered into 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 early March 2025 we completed first dosing in an IND-enabling GLP-compliant toxicology and toxicokinetics, and we are aiming for an IND submission in 2025. 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.
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.
21
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 “Item 1 Business--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 “Item 1 Business--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).
We believe SPU-16 provides a competitive advantage by using homing peptides to reduce toxicity while enhancing therapeutic payload delivery.
Results of Operations
Comparison of Our Results of Operations for the Three Months Ended March 31, 2025 and 2024
The following table summarizes the results of operations for the three months ending March 31, 2025 and 2024 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 consolidated financial statements and the notes to those statements that are included elsewhere in this report.
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenues | $ | 18,026 | $ | 18,026 | ||||
| Cost of revenues | 1,460 | 1,460 | ||||||
| Gross profit | 16,566 | 16,566 | ||||||
| Operating expenses | 1,110,687 | 896,079 | ||||||
| Loss from operations | (1,094,121 | ) | (879,513 | ) | ||||
| Other income | 62,684 | 77,846 | ||||||
| Net loss | $ | (1,031,437 | ) | $ | (801,667 | ) | ||
Revenues
During the three months ended March 31, 2025 and 2024, we generated minimal revenues from operations. For the three months ended March 31, 2025 and 2024, 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.
Cost of Revenues
During the three months ended March 31, 2025 and 2024, cost of revenues amounted to $1,460 and $1,460, respectively, and consisted of license fees related to the UMB License and Sublicense Agreement, which are being amortized into cost of revenues over the estimated 15-year terms of their respective agreements with Akido and UMB.
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Operating Expenses
For the three months ended March 31, 2025 and 2024, total operating expenses consisted of the following:
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Compensation expense | $ | 178,469 | $ | 173,346 | ||||
| Professional fees | 273,824 | 318,427 | ||||||
| Research and development | 593,962 | 318,240 | ||||||
| Other selling, general and administrative expenses | 64,432 | 86,066 | ||||||
| Total operating expenses | $ | 1,110,687 | $ | 896,079 | ||||
| ● | Compensation Expense: |
For the three months ended March 31, 2025 and 2024, compensation expense was $178,469 and $173,346, respectively, an increase of $5,123, or 3.01%. This increase solely resulted from an increase in payroll expense and related benefits.
| ● | Professional Fees: |
For the three months ended March 31, 2025 and 2024, professional fees were $273,824 and $318,427, respectively, a decrease of $44,603, or 14.0%. The decrease was primarily attributable to a decrease in consulting fees of $77,574, and a decrease in legal fees of $18,949, offset by an increase in investor relations of $47,245, and an increase in accounting and auditing fees of $4,675.
| ● | Research and Development: |
For the three months ended March 31, 2025 and 2024, we incurred research and development expense of $593,962 and $318,240, respectively, an increase of $275,722, or 86.6%. The increase was a result of an increase in research and development costs in connection with our key Investigator-sponsored Study Agreements and other research projects with third party vendors and universities. 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, 2025 and 2024, selling, general and administrative expenses were $64,432 and $86,066, respectively, a decrease of $21,634, or 25.1%. The decrease was primarily attributed to a decrease in proxy meeting fees of $19,000, and filing fees of $7,837, offset by a net increase in other general and administrative expenses of $5,203.
Loss from Operations
For the three months ended March 31, 2025 and 2024, loss from continuing operations amounted to $1,094,121 and $879,513, respectively, an increase of $214,608, or 24.4%. The increase was primarily a result of the changes in operating expenses discussed above.
Other Income
For the three months ended March 31, 2025 and 2024, other income amounted to $62,684 and $77,846, respectively, a decrease of $15,162, or 19.5%. The decrease in other income was primarily due to a decrease in interest and dividend income of $26,349, and a decrease in interest expense of $196, offset by an increase in foreign currency transaction loss of $8,695, and an increase in net realized gain on short-term investments of $2,688.
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Net Loss
For the three months ended March 31, 2025, net loss amounted to $1,031,437 or $0.23 per common share (basic and diluted), as compared to net loss of $801,667 or $0.28 per common share (basic and diluted) for the three months ended March 31, 2024, an increase of $229,770, or 28.7%. 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 $4,418,858, $2,314,550 in short-term investments, and $3,136,880 in cash and cash equivalents as of March 31, 2025, and working capital of $5,455,483, $3,174,724 in short-term investments and $3,905,799 in cash and cash equivalents as of December 31, 2024, respectively.
| March 31, 2025 | December 31, 2024 | Working Capital Change | Percentage Change | |||||||||||||
| Working capital: | ||||||||||||||||
| Total current assets | $ | 5,604,161 | $ | 7,111,480 | $ | (1,507,319 | ) | (21 | )% | |||||||
| Total current liabilities | (1,185,303 | ) | (1,655,997 | ) | 470,694 | 28 | % | |||||||||
| Working capital: | $ | 4,418,858 | $ | 5,455,483 | $ | (1,036,625 | ) | (19 | )% | |||||||
The decrease in working capital of $1,036,625 was primarily attributable to a decrease in current assets of $1,507,319 primarily due to a decrease in cash of $769,919 and a decrease in short-term investments of $860,174, offset by an increase in prepaid expenses and other current assets of $121,774, and a decrease in current liabilities of $470,694.
Cash Flows
A summary of cash flow activities is summarized as follows:
| Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Net cash used in operating activities | $ | (1,640,300 | ) | $ | (838,179 | ) | ||
| Net cash provided by investing activities | 871,381 | 97,596 | ||||||
| Net cash used in financing activities | - | (115,452 | ) | |||||
| Net decrease in cash and cash equivalents | $ | (768,919 | ) | $ | (856,035 | ) | ||
Net Cash Used in Operating Activities
Net cash used in operating activities for the three months ended March 31, 2025 and 2024 were $1,640,300 and $838,179, respectively, an increase of $802,121, or 95.7%.
| ● | 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 the add-back of non-cash items such as amortization expense of $3,092, and net realized gain on short-term 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 operating activities for the three months ended March 31, 2024 primarily reflected a net loss of $801,667, adjusted for the add-back of non-cash items such as net realized gain on short-term investments of $234, and changes in operating asset and liabilities primarily consisting of an increase in prepaid expenses and other current assets of $116,334, an increase in accounts payable and accrued expenses of $98,082, and a decrease in deferred revenue of $18,026. |
Net Cash Provided by Investing Activities
Net cash provided by investing activities for the three months ended March 31, 2025 and 2024 were $871,381 and $97,596, respectively, an increase of $773,785, or 792.8%.
| ● | 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 investments of $33,972. |
| ● | Net cash provided by investing activities for the three months ended March 31, 2024 was $97,596 which consisted of proceeds from sale of short-term investments of $150,389, offset by aggregate payments for the purchase of short-term investments of $52,793. |
Net cash Used in Financing Activities
Net cash used in financing activities for the three months ended March 31, 2024 was $115,452 which solely consisted of the repurchase of shares of our common stock under our stock repurchase plan. We did not have any cash provided by or used in financing activities for the three months ended March 31, 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 $1,031,437 and used cash in operations of $1,640,300 during the three months ended March 31, 2025. Additionally, we have an accumulated deficit of $16,296,128 on March 31, 2025. As of March 31, 2025, we had working capital of $4,418,858, $2,314,550 in short-term investments, and $3,136,880 in cash and cash equivalents.
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 the Company has sufficient cash to meet its obligations for a minimum of twelve months from the date of this filing.
Off-Balance Sheet Arrangements
None.
Critical Accounting Estimates
Research and Development
In accordance with ASC 730-10, “Research and Development-Overall,” research and development costs are expensed when incurred. Significant estimates during the three months ended March 31, 2025 and 2024 include the percentage of completion of certain research and development projects.
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 consolidated financial statements.
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.
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
Our principal executive officer and principal financial officer evaluated the effectiveness of our “disclosure controls and procedures” as of March 31, 2025, the end of the period covered by this Quarterly Report on Form 10-Q. The term “disclosure controls and procedures” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files under the Exchange Act is accumulated and communicated to a company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Based on the evaluation of our disclosure controls and procedures as of March 31, 2025, our Chief Executive Officer and our Chief Financial Officer determined that we maintained effective internal control over financial reporting as of March 31, 2025.
Changes in Internal Control Over Financial Reporting
During the three months ended March 31, 2025, we continued implementing the remedial actions disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, to address previously identified material weaknesses. These actions included enhancements to segregation of duties, monitoring controls, and bank reconciliation processes. In addition, we are taking steps to review and enhance business policies, procedures, and related internal controls to standardize business processes. Other than these ongoing remediation efforts, there were no changes in our internal control over financial reporting that 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 be subject to litigation and claims arising in the ordinary course of business. We are not currently a party to any material legal proceedings, and we are not aware of any pending or threatened legal proceeding against us that we believe could have a material adverse effect on our business, operating results, cash flows or financial condition.
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, 2024 as filed with the SEC on March 28, 2025 (“Annual Report”). 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. |
On January 26, 2023, the Company’s Board of Directors authorized a stock repurchase plan to repurchase up to $1 million of the Company’s issued and outstanding common stock, from time to time, with such plan to be in place until December 31, 2023. On January 9, 2024, the Board of Directors of the Company approved an extension of the previously announced stock repurchase program authorizing the purchase of up to $1 million of the Company’s common stock until March 31, 2024 and on April 4, 2024, the Stock Repurchase Plan was extended to April 30, 2024. During the year ended December 31, 2023, the Company purchased 252,855 shares of common stock for a cost of $471,121, which is reflected in treasury stock on the accompanying consolidated balance sheet. During the year ended December 31, 2024, the Company purchased 102,855 shares of common stock for a cost of $173,113. In aggregate, during the years ended December 31, 2024 and 2023, the Company repurchased a total of 355,710 shares of its common stock for a total cost of $644,234 pursuant to its Stock Repurchase Program. During the year ended December 31, 2024, all 355,710 shares treasury shares with a cost of $644,234 were cancelled.
We did not repurchase any common stock during the quarterly period ended March 31, 2025.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
During our quarter ended March 31, 2025, none
of our directors or executive officers
26
ITEM 6. EXHIBITS
| * | Filed herewith. |
| ** | Furnished herewith. |
27
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 9, 2024 | By: | /s/ Eric Weisblum |
| Name: | Eric Weisblum | |
| Title: | Chairman and Chief Executive Officer (Principal Executive Officer) | |
| Dated: May 9, 2024 | By: | /s/ Daniel Ryweck |
| Name: | Daniel Ryweck | |
| Title: | Chief Financial Officer (Principal Financial and Accounting Officer) |
28
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER OF SILO PHARMA, INC.
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Eric Weisblum, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Silo Pharma, Inc. (the “registrant”) for the period ended March 31, 2025; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer, and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer, and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| SILO PHARMA, INC. | ||
| Dated: May 9, 2025 | By: | /s/ Eric Weisblum |
| Name: | Eric Weisblum | |
| Title: | Chairman and Chief Executive Officer (Principal Executive Officer) | |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER OF SILO PHARMA, INC.
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Daniel Ryweck, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of Silo Pharma, Inc. (the “registrant”) for the period ended March 31, 2025; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer, and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; | |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; | |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and | |
| d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer, and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and | |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| SILO PHARMA, INC. | ||
| Dated: May 9, 2025 | By: | /s/ Daniel Ryweck |
| Name: | Daniel Ryweck | |
| Title: | Chief Financial Officer (Principal Financial and Accounting Officer) | |
Exhibit 32.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this quarterly report on Form 10-Q of Silo Pharma, Inc. (the “Company”) for the period ended March 31, 2025, as filed with the Securities and Exchange Commission (the “Report”), I, Eric Weisblum, Chief Executive Officer of the Company, certify, pursuant to Section 1350 of Title 18 of the United States Code as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
| SILO PHARMA, INC. | ||
| Dated: May 9, 2025 | By: | /s/ Eric Weisblum |
| Name: | Eric Weisblum | |
| Title: | Chairman and Chief Executive Officer (Principal Executive Officer) | |
Exhibit 32.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with this quarterly report on Form 10-Q of Silo Pharma, Inc. (the “Company”) for the period ended March 31, 2025 as filed with the Securities and Exchange Commission (the “Report”), I, Daniel Ryweck, Chief Financial Officer of the Company, certify, pursuant to Section 1350 of Title 18 of the United States Code as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. |
| SILO PHARMA, INC. | ||
| Dated: May 9, 2025 | By: | /s/ Daniel Ryweck |
| Name: | Daniel Ryweck | |
| Title: | Chief Financial Officer (Principal Financial Officer) | |