10-Q: Silo Pharma Reports Wider Loss, Pivots to Crypto Treasury

Silo Pharma, a biopharmaceutical company, reported a significantly wider net loss for the first half of 2025 while announcing a new cryptocurrency treasury strategy and facing a Nasdaq minimum bid price deficiency.

Summary

• Silo Pharma reported a net loss of $2,235,730 for the six months ended June 30, 2025, a 29.0% increase from $1,733,446 in the same period of 2024.
• Loss from operations increased by 24.5% to $2,342,672 for the first half of 2025, compared to $1,882,287 in 2024.
• Research and development expenses surged by 69.2% to $1,311,209 for the six months ended June 30, 2025, up from $774,889 in 2024.
• The company launched a new cryptocurrency treasury strategy in August 2025, focusing on acquiring leading digital assets like Bitcoin, Ethereum, and Solana.
• A Crypto Advisory Board was approved on August 4, 2025, with Corwin Yu appointed as the initial member.
• Silo Pharma received a Nasdaq minimum bid price deficiency notice on June 27, 2025, and has until December 24, 2025, to regain compliance.
• Cash and cash equivalents increased to $4,333,672 as of June 30, 2025, from $3,905,799 at December 31, 2024.
• Net cash used in operating activities increased by 86.3% to $2,925,568 for the six months ended June 30, 2025.
• The company completed a public offering in May 2025, raising aggregate gross proceeds of $1,999,942 and net proceeds of $1,593,897.
• The Master License Agreement with the University of Maryland, Baltimore (UMB) for SPU-16 was terminated on July 8, 2025, replaced by an option agreement.

Sentiment

Score: 4

Explanation: The company reported a significantly wider net loss and increased cash burn from operations, indicating deteriorating financial performance. While R&D spending increased, showing pipeline progression, the new cryptocurrency treasury strategy introduces substantial, unquantified risks and regulatory uncertainties. The Nasdaq bid price deficiency adds further pressure. The capital raise provides short-term liquidity but doesn't offset the fundamental financial challenges and strategic pivot risks.

Positives

• Increased cash and cash equivalents to $4,333,672 as of June 30, 2025, providing liquidity.
• Successful completion of a public offering in May 2025, raising $1,593,897 in net proceeds, strengthening the capital position.
• Significant increase in research and development expenses by 69.2% to $1,311,209, indicating active progression of biopharmaceutical pipeline candidates.
• Progress in SPC-15 program with pre-IND meeting with FDA completed and IND-enabling toxicology studies finished, aiming for IND submission in 2025.
• The company believes it has sufficient cash and liquid short-term investments to meet obligations for at least twelve months from the filing date.

Negatives

• Net loss widened by 29.0% to $2,235,730 for the six months ended June 30, 2025, compared to the prior year.
• Loss from operations increased by 24.5% to $2,342,672 for the first half of 2025.
• Net cash used in operating activities significantly increased by 86.3% to $2,925,568, indicating higher cash burn.
• Received a Nasdaq minimum bid price deficiency notice on June 27, 2025, requiring compliance by December 24, 2025, to avoid delisting.
• Accumulated deficit reached $17,500,421 as of June 30, 2025.
• Other income, net decreased by 28.2% due to lower interest and dividend income.

Risks

• Ability to obtain additional funds for operations.
• Risks relating to the timing and costs of clinical trials and other expenses.
• Risks related to market acceptance of products.
• Intellectual property risks.
• Impact of government regulation and developments relating to competitors or the industry.
• Our competitive position and industry environment.
• Assumptions regarding the size of the available market, benefits of products, product pricing, and timing of product launches.
• Estimates of expenses, losses, future revenue, and capital requirements, including needs for additional financing.
• Ability to attract and retain qualified key management and technical personnel.
• Cash needs and financing plans.
• The launch of central bank digital currencies (CBDCs) may adversely impact the cryptocurrency business.
• Potential classification of any acquired digital asset as a security, subjecting the company to additional regulation (e.g., Investment Company Act of 1940).
• Regulatory developments related to crypto assets and markets could adversely affect the business.
• Digital assets are less liquid than cash and cash equivalents, potentially limiting their use as a source of liquidity.
• Risk of security breaches or cyberattacks on digital assets, leading to partial or total loss not covered by insurance.
• Limited history in generating staking revenues from digital assets, making future results difficult to forecast.
• Competition from other companies staking and utilizing digital assets in their treasury plans.
• Failure to develop and execute successful investment or trading strategies in the cryptocurrency market.
• Exposure to trade errors in digital asset transactions, which could result in material losses.

Future Outlook

The company aims for an Investigational New Drug (IND) submission for SPC-15 in 2025. Research and development activities are expected to increase as existing product candidates are developed and new ones are potentially acquired. The company has launched a new cryptocurrency treasury strategy focused on acquiring leading digital assets, which is expected to be a significant part of its future operations. Management believes current cash and liquid short-term investments are sufficient to meet obligations for at least twelve months.

Management Comments

• We are a diversified developmental-stage biopharmaceutical and cryptocurrency treasury company.
• Our therapeutic focus is on developing novel therapeutics that address underserved conditions including PTSD, stress-induced anxiety disorders, fibromyalgia, and central nervous system (CNS) diseases.
• We 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.
• 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 for SPC-15.
• 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.
• Our strategy changed to include cryptocurrency treasury strategy in August 2025 which is expected to focus on the acquisition of leading digital assets.
• 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.

Industry Context

Silo Pharma operates in two distinct and rapidly evolving industries: biopharmaceuticals and cryptocurrency. In biopharma, the company is a developmental-stage entity focusing on novel therapies for unmet medical needs, including psychedelic-based treatments, aligning with a broader industry trend of exploring alternative compounds for neurological and psychiatric disorders. The shift to a cryptocurrency treasury strategy in August 2025 represents a significant diversification, positioning the company in the volatile and highly regulated digital asset market. This move is unusual for a biopharmaceutical company and introduces a new layer of market and regulatory risks, contrasting with the traditional R&D-heavy, long-cycle nature of drug development.

Comparison to Industry Standards

• NA

Management Changes

Corporate Governance

Legal Proceedings

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

Related Party Transactions

• NA

Stakeholder Impact

• **Shareholders**: Face increased financial risk due to wider losses and higher cash burn. The new cryptocurrency strategy introduces significant new risks and potential volatility. The Nasdaq bid price deficiency poses a delisting risk. However, the capital raise provides some short-term stability, and increased R&D could lead to future value.
• **Employees**: Continued employment and potential for stock-based compensation, but the company's financial performance and strategic pivot could introduce uncertainty.
• **Customers (Licensees)**: Current revenue from one licensee remains stable, but the termination of the UMB license for SPU-16 and the new option agreement could impact future product availability or licensing terms.
• **Suppliers/Vendors**: Increased R&D spending benefits research partners and vendors. Future amounts due under sponsored study and research agreements are substantial ($1,245,000 for 2026).

Next Steps

• Aim for Investigational New Drug (IND) submission for SPC-15 in 2025.
• Continue GLP-compliant pharmacokinetic and pharmacodynamic studies for SPC-15.
• Continue preclinical research and initial animal studies for SP-26.
• Negotiate and obtain a new exclusive commercial license with UMB for CNS-homing peptides (SPU-16) by March 31, 2026.
• Actively pursue acquisition and/or development of intellectual property or technology rights to treat rare diseases.
• Implement the new cryptocurrency treasury strategy, focusing on acquiring leading digital assets.
• Address the Nasdaq minimum bid price deficiency by December 24, 2025, potentially considering a reverse stock split.
• Evaluate the impact of the One Big Beautiful Bill Act (OBBBA) on tax provisions.

Key Dates

Recommendation

Silo Pharma presents a mixed and highly speculative investment profile. The company is burning cash at an accelerated rate, with a significantly wider net loss and increased operating cash outflow. The Nasdaq minimum bid price deficiency is a serious concern that could lead to delisting. While the May 2025 capital raise provides some liquidity, it's a short-term fix for ongoing operational losses. The pivot into a cryptocurrency treasury strategy introduces substantial new, unquantified risks, including regulatory uncertainty, liquidity concerns for digital assets, and the company's limited experience in this volatile market. This strategic shift fundamentally alters the company's risk-reward profile. The biopharmaceutical pipeline shows some progress with increased R&D, but it remains developmental-stage with no near-term revenue. Given the significant financial deterioration, the new high-risk crypto strategy, and the Nasdaq compliance issue, a 'sell' might be considered, but the potential for high-risk, high-reward in both biopharma and crypto, combined with recent capital infusion, suggests a 'hold' for investors willing to tolerate extreme volatility and monitor developments closely, particularly regarding the crypto strategy's execution and Nasdaq compliance. A 'buy' is not justified given the current financial performance and heightened risk profile.

Keywords

Biopharmaceutical, Psychedelic medicine, PTSD, Fibromyalgia, Alzheimer's disease, Multiple Sclerosis, Drug development, Clinical trials, Intranasal drug delivery, Ketamine implant, CNS disorders, Cryptocurrency treasury, Digital assets, Bitcoin, Ethereum, Solana, SEC filing, 10-Q, Nasdaq compliance, Capital raise