10-Q: Silo Pharma Q3 Loss Widens Amid R&D Surge, Crypto Strategy Launch

Sentiment:

Quarterly Report 13 November 2025 4:18 PM

Silo Pharma reported an increased net loss in Q3 2025, driven by higher R&D expenses and accelerated license amortization, while launching a new cryptocurrency treasury strategy.

Delay expectedThe Master License Agreement with the University of Maryland, Baltimore (UMB) for SPU-16 was terminated on July 8, 2025, and replaced with an option agreement expiring March 31, 2026. This indicates a change in the development path for SPU-16, potentially delaying its progress under the original license terms.The previously announced non-binding letter of intent to form a strategic joint venture with Hoth Therapeutics, Inc. to develop a treatment for obesity and metabolic disease was mutually decided not to move forward, indicating a delay or termination of that specific strategic initiative.

Capital raiseThe company completed a public offering in May 2025, raising aggregate gross proceeds of $1,999,942 and net proceeds of $1,593,897.In October 2025 (subsequent event), the company completed a registered direct offering, raising gross proceeds of $2,500,000 and net proceeds of $2,146,000.The company issued warrants in connection with both the May 2025 and October 2025 offerings, which, upon exercise, provide additional capital. Proceeds from warrant exercises for the nine months ended September 30, 2025, were $1,134,983.

Worse than expectedNet loss significantly increased for both the three months ($1,110,438 vs $928,814) and nine months ($3,346,168 vs $2,662,260) ended September 30, 2025, compared to the prior year.Cash used in operating activities increased by 33.1% to $3,881,061 for the nine months ended September 30, 2025, indicating a higher cash burn rate.Gross profit shifted to a loss of $(2,662) for the three months ended September 30, 2025, from a profit of $16,566 in the prior year, primarily due to increased cost of revenues from accelerated license amortization.The accumulated deficit grew to $18,610,859 as of September 30, 2025.The company received a Nasdaq notification for non-compliance with the minimum bid price requirement, indicating a potential risk to its listing status.

Summary

Net loss for the nine months ended September 30, 2025, increased to $3,346,168 from $2,662,260 in the prior year period.
Net loss for the three months ended September 30, 2025, increased to $1,110,438 from $928,814 in the prior year period.
Research and development expenses significantly increased by 43.5% to $1,854,824 for the nine months ended September 30, 2025, partly due to a $518,225 non-cash expense for acquired crypto-related software.
Cash used in operating activities increased by 33.1% to $3,881,061 for the nine months ended September 30, 2025.
The company launched a cryptocurrency treasury strategy in August 2025, holding $72,283 in crypto assets (BTC, USDC, ETH, SOL, RSC, XRP) as of September 30, 2025, and approximately $400,000 as of the filing date.
The Master License Agreement with the University of Maryland, Baltimore (UMB) was terminated on July 8, 2025, replaced by an option agreement expiring March 31, 2026, leading to accelerated amortization of related license fees.
The company completed a public offering in May 2025, raising net proceeds of $1,593,897, and a subsequent offering in October 2025, raising net proceeds of $2,146,000.
Silo Pharma is developing four product candidates: SPC-15 (PTSD/Anxiety), SP-26 (Fibromyalgia), SPC-14 (Alzheimer's), and SPU-16 (CNS/MS).
The previously announced joint venture with Hoth Therapeutics, Inc. for obesity and metabolic disease treatment will not proceed.
The company received a Nasdaq notification for non-compliance with the minimum bid price requirement ($1.00 per share) on July 3, 2025, with a deadline of December 24, 2025, to regain compliance.

Sentiment

Score: 4

Explanation: While the company successfully raised significant capital and is progressing its R&D pipeline, it reported increased net losses and cash burn. The termination of a potential joint venture and the Nasdaq minimum bid price non-compliance add to the concerns. The new cryptocurrency strategy introduces both potential upside and significant new risks.

Positives

Successful capital raises in May 2025 ($1,593,897 net proceeds) and October 2025 ($2,146,000 net proceeds) bolster liquidity.
Working capital slightly increased to $5,456,030 as of September 30, 2025, from $5,455,483 at December 31, 2024.
Management believes the company has sufficient cash and liquid short-term investments to meet obligations for at least twelve months from the filing date.
Progress in the biopharmaceutical pipeline with SPC-15 aiming for IND submission in 2026 and SP-26 in preclinical animal studies.
Establishment of a cryptocurrency treasury strategy and advisory board, diversifying the company's focus.
Net loss per common share improved for both the three-month ($0.12 vs $0.22) and nine-month ($0.50 vs $0.78) periods ended September 30, 2025, compared to 2024, despite higher net losses, due to increased shares outstanding.

Negatives

Net loss significantly increased for both the three months ($1,110,438 vs $928,814) and nine months ($3,346,168 vs $2,662,260) ended September 30, 2025, compared to the prior year.
Cash used in operating activities increased by 33.1% to $3,881,061 for the nine months ended September 30, 2025, indicating a higher cash burn rate.
Gross profit shifted to a loss of $(2,662) for the three months ended September 30, 2025, from a profit of $16,566 in the prior year, primarily due to increased cost of revenues from accelerated license amortization.
Total current assets decreased by 13% to $6,164,369 as of September 30, 2025, from $7,111,480 at December 31, 2024, mainly due to a decrease in short-term investments.
The accumulated deficit grew to $18,610,859 as of September 30, 2025.
The joint venture with Hoth Therapeutics, Inc. for obesity and metabolic disease treatment was mutually terminated.
The company received a Nasdaq notification for non-compliance with the minimum bid price requirement ($1.00 per share) and faces potential delisting if compliance is not regained by December 24, 2025.

Risks

Inability to maintain listing on Nasdaq due to non-compliance with the minimum bid price requirement ($1.00 per share), potentially leading to delisting and reduced liquidity.
Risks related to the new cryptocurrency treasury strategy, including potential adverse impacts from central bank digital currencies (CBDCs).
Possibility that digital assets acquired may be classified as securities, subjecting the company to additional regulation under the Investment Company Act of 1940, which could make current business operations impractical.
High price volatility of digital assets (Bitcoin, Ethereum, Solana) could adversely influence financial results and the market price of common stock.
Digital assets are less liquid than cash and cash equivalents, potentially limiting their use as a source of liquidity during market instability.
Security breaches or cyberattacks on digital asset custody accounts could lead to partial or total loss of digital assets, which may not be covered by insurance.
The availability of spot exchange-traded products (ETPs) for Bitcoin and other digital assets may adversely affect the market price of the company's common stock by offering alternative investment exposure.
Temporary or permanent blockchain forks could disrupt networks, lead to cybersecurity attacks, or result in the loss of digital assets.
Staking digital assets introduces risks of loss due to validator misbehavior or inactivity (penalties, slashing, inactivity leaks), and staked assets may be inaccessible for variable periods.
Limited history in generating staking revenues from digital assets, making future operating results difficult to forecast.
Competition from other companies focused on digital asset staking operations.
Potential for trade errors in investment and trading activities, which could result in material losses.

Future Outlook

The company aims for an IND submission for SPC-15 in 2026, following preclinical and GLP-compliant studies. It plans to actively pursue the acquisition and/or development of intellectual property or technology rights to treat rare diseases and expand its business into this area. The new cryptocurrency treasury strategy is expected to focus on acquiring leading digital assets. The 2020 Omnibus Equity Incentive Plan will see an automatic annual increase in reserved shares starting January 1, 2026.

Management Comments

We believe that we have sufficient cash and liquid short-term investments to meet our obligations for a minimum of twelve months from the date of this filing.
We expect our research and development activities to increase as we develop our existing product candidates and potentially acquire new product candidates.
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.
We believe SP-26's implant design provides a compelling non-opioid alternative to traditional pain management, improving dosage control compared to intravenous delivery.
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).
We believe SPU-16 provides a competitive advantage by using homing peptides to reduce toxicity while enhancing therapeutic payload delivery.

Industry Context

Silo Pharma operates in the highly competitive and capital-intensive biopharmaceutical industry, focusing on niche areas like PTSD, fibromyalgia, Alzheimer's, and MS, some of which involve psychedelic formulations. The company's move into a cryptocurrency treasury strategy is a significant diversification, placing it at the intersection of traditional biotech and the nascent, volatile digital asset market. This strategy aligns with a broader trend of corporate treasury diversification but introduces unique regulatory and market risks not typically associated with biopharma. The Alzheimer's therapeutics market is projected to exceed $30.8 billion by 2033, indicating a large potential market for SPC-14 if successful. The increasing acceptance of psilocybin in clinical studies by FDA/DEA reflects a growing trend in psychedelic medicine research.

Comparison to Industry Standards

The company's R&D spending is increasing, which is typical for a developmental-stage biopharmaceutical company, but specific benchmarks for its niche psychedelic-based therapies are not provided in the filing.
The shift to a cryptocurrency treasury strategy is a non-standard move for a biopharmaceutical company, making direct comparisons to industry peers difficult. Companies like MicroStrategy have adopted significant Bitcoin treasury strategies, but they are primarily software/business intelligence firms, not biopharma.
The Nasdaq minimum bid price non-compliance is a common issue for smaller, developmental-stage companies, indicating a challenge in maintaining market valuation compared to established industry players.
The termination of the Hoth Therapeutics joint venture suggests a failure to meet internal or external benchmarks for that specific project, though no specific comparable projects or results are detailed.

Management Changes

Role	Previous Person	New Person	Effective Date	Reason
Crypto Advisory Board Member	N/A	Corwin Yu	2025-08-04	Appointment to the newly established Crypto Advisory Board.

Corporate Governance

Change Type	Description	Effective Date	Impact Assessment
Plan Amendment	Shareholders approved an amendment to the Silo Pharma Inc. Amended and Restated 2020 Omnibus Equity Incentive Plan to increase the number of shares of common stock reserved for issuance thereunder to 1,400,000 shares from 470,000 shares. The amendment also added an automatic annual increase provision, effective January 1, 2026, equal to the lesser of 5% of the outstanding shares of Common Stock on the first day of the fiscal year or a number determined by the Board.	2025-10-24	Increases the pool of shares available for equity incentives, potentially impacting dilution but also enhancing ability to attract and retain talent. The automatic increase provision ensures ongoing flexibility for equity compensation.
New Advisory Board	Board of Directors approved the establishment of a cryptocurrency advisory board (the Crypto Advisory Board) to advise on the company's cryptocurrency treasury strategy.	2025-08-04	Enhances strategic guidance for the new cryptocurrency treasury strategy, bringing specialized expertise to this new business segment.

Legal Proceedings

Not currently a party to any material legal proceedings.
Not aware of any pending or threatened legal proceeding that could have a material adverse effect on business, operating results, cash flows, or financial condition.

Stakeholder Impact

Shareholders: Potential for dilution from recent and future equity offerings and warrant exercises. Risk of delisting from Nasdaq could negatively impact stock liquidity and price. The new cryptocurrency strategy introduces significant new risks and potential rewards. Increased R&D spending could lead to future value creation if product candidates are successful.
Employees/Management: Equity incentive plan expanded, providing more opportunities for stock-based compensation. Management compensation includes base salaries and potential annual bonuses.
Customers: No direct customer impact mentioned, as the company is developmental-stage.
Suppliers/Creditors: No specific impact mentioned. The company's liquidity position is stated as sufficient for 12 months.

Next Steps

Regain compliance with Nasdaq's minimum bid price requirement by December 24, 2025.
Continue GLP-compliant pharmacokinetic and pharmacodynamic studies for SPC-15, aiming for an IND submission in 2026.
Continue preclinical research and animal studies for SP-26.
Pursue the exclusive option with UMB for SPU-16 intellectual property, which expires March 31, 2026.
Actively pursue the acquisition and/or development of intellectual property or technology rights to treat rare diseases.
Implement and manage the cryptocurrency treasury strategy, focusing on acquiring leading digital assets.
Evaluate the impact of ASU 2024-03 on financial statements, effective for fiscal years beginning after December 15, 2026.
The 2020 Omnibus Equity Incentive Plan will have an automatic annual increase provision effective January 1, 2026.

Key Dates

Date	Description
2021-01-05	Company entered into a patent license agreement with Aikido Pharma Inc.
2021-01-18	Board of Directors approved the Silo Pharma, Inc. 2020 Omnibus Equity Incentive Plan.
2021-02-12	Company and University of Maryland, Baltimore (UMB) entered into the Master License Agreement (terminated July 8, 2025).
2021-03-10	2020 Omnibus Equity Incentive Plan approved by stockholders.
2021-04-06	Company entered into a Sublicense Agreement with Aikido Pharma Inc.
2021-04-12	Amendment to the License Agreement with Aikido Pharma Inc. was entered.
2022-01-27	Company and Dr. James Kuo entered into an employment agreement for Dr. Kuo to serve as VP of Research & Development.
2022-09-27	Board appointed Daniel Ryweck as Chief Financial Officer.
2022-09-28	Company entered into an employment agreement with Daniel Ryweck.
2022-10-12	Company entered into an employment agreement with Eric Weisblum.
2022-10-13	Extended the term of the sponsored research agreement with Columbia University for SPC-14.
2023-01-26	Board of Directors authorized a stock repurchase plan for up to $1 million of common stock.
2023-03-01	Company filed a provisional patent application with the USPTO for SP-26 for treatment of chronic pain, including fibromyalgia.
2023-09-15	Board of Directors adopted the Silo Pharma, Inc. Amended and Restated 2020 Omnibus Equity Incentive Plan.
2023-12-04	Amended and Restated 2020 Omnibus Equity Incentive Plan approved by stockholders.
2023-12-19	Company changed its state of incorporation from Delaware to Nevada.
2024-01-09	Board of Directors approved an extension of the stock repurchase program until March 31, 2024.
2024-01-30	Shelf registration statement on Form S-3 (File No. 333-276658) declared effective by the SEC.
2024-04-04	Stock Repurchase Plan extended to April 30, 2024.
2024-04-23	Company entered into an engagement agreement with H.C. Wainwright & Co., LLC as exclusive placement agent.
2024-05-23	SEC approved rule changes permitting the listing and trading of spot ETPs that invest in ether.
2024-06-04	Company entered into a securities purchase agreement for the June 2024 Offering and submitted a pre-Investigational New Drug (pre-IND) briefing package for SPC-15.
2024-06-06	Closing of sales under the June 2024 Purchase Agreement took place.
2024-06-28	Effective date of the exclusive license agreement with Columbia University.
2024-07-01	Company entered into an exclusive license agreement with Columbia University.
2024-07-18	Company entered into a securities purchase agreement for the July 2024 Offering.
2024-07-22	Closing of sales under the July 2024 Purchase Agreement took place.
2024-07-25	Company filed an S-1 registration statement related to the June 2024 Common Warrant Shares and Placement Agent Warrant Shares.
2024-07-30	S-1 registration statement related to June 2024 warrants declared effective.
2024-08-21	Company filed an S-1 registration statement related to the July 2024 Common Warrant Shares and Placement Agent Warrant Shares.
2024-09-03	S-1 registration statement related to July 2024 warrants declared effective.
2024-09-30	End of the current reporting period.
2024-10-01	Company paid a bonus of $200,000 to Eric Weisblum.
2024-10-31	Effective date of the exclusive license agreement with Medspray Pharma BV.
2024-11-01	Company paid $50,000 of the Estimated Past Patents Expenses to Columbia University.
2024-11-11	Company entered into a Second Amendment to Employment Agreement with Daniel Ryweck.
2024-11-30	FASB issued ASU 2024-03, Income StatementReporting Comprehensive IncomeExpense Disaggregation Disclosures.
2024-12-01	Company paid a bonus of $25,000 to Daniel Ryweck.
2024-12-24	Deadline to regain Nasdaq minimum bid price compliance.
2025-03-01	Company completed first dosing in an IND-enabling GLP-compliant toxicology and toxicokinetics study for SPC-15.
2025-05-01	Columbia revised the Estimated Past Patent Expenses downward from $197,400 to $185,000.
2025-05-15	Registration Statement on Form S-1 (File No. 333-286777) declared effective by the SEC for the May 2025 Offering.
2025-05-16	Company completed a public offering (the May 2025 Offering).
2025-05-19	May 2025 Purchasers exercised 610,002 May 2025 Pre-Funded Warrants.
2025-05-22	Board granted 400,000 incentive stock options under the 2020 Plan to executive officers and board members.
2025-06-06	Certain May 2025 Purchasers exercised 833,334 May 2025 Series A-2 Warrants.
2025-06-25	Company announced a non-binding letter of intent to form a strategic joint venture with Hoth Therapeutics, Inc. (later terminated).
2025-07-03	Company received a notification from Nasdaq regarding non-compliance with the minimum bid price requirement.
2025-07-08	Company entered into a Termination, Commercial Evaluation License, and Option Agreement with UMB, terminating the Master License Agreement.
2025-07-29	Company entered into an asset purchase agreement with MAVS Holdings LLC to purchase certain software and domain names.
2025-08-04	Board of Directors approved the establishment of a cryptocurrency advisory board and appointed Corwin Yu as initial member.
2025-08-05	Company announced the launch of a cryptocurrency treasury strategy.
2025-09-23	Company announced engagement with Fireblocks for its institutional crypto treasury platform.
2025-09-29	Company entered into a securities purchase agreement for the October 2025 Registered Direct Offering.
2025-10-01	Closing of the October 2025 Registered Direct Offering.
2025-10-24	Shareholders approved an amendment to the 2020 Omnibus Equity Incentive Plan to increase reserved shares and add an automatic annual increase provision.
2025-11-13	Date of this Quarterly Report on Form 10-Q filing.
2026-01-01	Effective date for the automatic annual increase provision of the Amended and Restated 2020 Omnibus Equity Incentive Plan.
2026-03-31	Expiration date of the option agreement with UMB.
2026-12-15	Effective date for ASU 2024-03 for fiscal years beginning after this date.
2027-12-15	Effective date for ASU 2024-03 for interim periods within fiscal years beginning after this date.
2030-01-18	Termination date of the 2020 Omnibus Equity Incentive Plan.
2033-01-01	Projected global Alzheimer's therapeutics market to exceed $30.8 billion by this year.

Recommendation

hold

The company is in a transitional phase, marked by significant R&D investments in its biopharmaceutical pipeline and a new, high-risk cryptocurrency treasury strategy. While recent capital raises have improved liquidity, the widening net losses, increased cash burn, and the Nasdaq minimum bid price non-compliance present considerable challenges. The termination of the Hoth Therapeutics JV is a setback. The long-term potential of its drug candidates and the success of its crypto strategy are highly uncertain. Given the mixed signals and high inherent risks of a developmental-stage company diversifying into a volatile asset class, a "hold" recommendation is appropriate for investors already exposed, awaiting clearer signs of progress in both segments and resolution of the Nasdaq listing issue. New investors should exercise extreme caution.

Keywords

Biopharmaceutical, Cryptocurrency, SEC Filing, 10-Q, PTSD, Fibromyalgia, Alzheimer's Disease, Multiple Sclerosis, Drug Development, Clinical Trials, Nasdaq Listing, Digital Assets, Bitcoin, Ethereum, Solana, Ketamine, Psilocybin, Financial Results, Operating Loss, Capital Raise, Risk Factors, Corporate Governance, Biotech, Pharma, Mental Health, Chronic Pain, Neuroinflammatory Disease

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