Silo Pharma, Inc.: Form 10-Q for the period ended Jun 30, 2026

The following discussion and analysis of our financial condition and results of operations should be read together with the unaudited consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and related notes for the year ended December 31, 2025 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors. We discuss factors that we believe could cause or contribute to these differences below and elsewhere in this Quarterly Report on Form 10-Q, including those factors set forth in the section entitled “Cautionary Note Regarding Forward-Looking Statements and Industry Data” and in the section entitled “Risk Factors” in Part II, Item 1A.

Overview

We are a developmental-stage biopharmaceutical company with a cryptocurrency treasury strategy. Our therapeutic focus is on developing novel therapeutics that address underserved conditions including PTSD, stress-induced anxiety disorders, fibromyalgia, and central nervous system (CNS) diseases. We are focused on developing novel therapies that include conventional drugs and psychedelic formulations. Our lead program, SPC-15, is an intranasal drug targeting PTSD and stress-induced anxiety disorders. SP-26 is a time-release ketamine-based loaded implant for fibromyalgia and chronic pain relief. Silo’s two preclinical programs are SPC-14, an intranasal compound for the treatment of Alzheimer’s disease, and SPU-16, a CNS-homing peptide targeting the central nervous system with initial research indication in multiple sclerosis (MS).

Therapeutics

We seek to acquire and/or develop intellectual property or technology rights from leading universities and researchers to treat rare diseases, including the use of psychedelic drugs, such as psilocybin, ketamine, and the potential benefits they may have in certain cases involving depression, mental health issues and neurological disorders. We are focused on developing traditional therapeutics and psychedelic medicine. The company concentrates on the development and commercialization of therapies for unmet needs from indications such as depression, post-traumatic stress disorder (“PTSD”), and other rare neurological disorders. Our mission is to identify assets to license and fund the research which we believe will be transformative to the well-being of patients and the health care industry.

Psilocybin is considered a serotonergic hallucinogen and is an active ingredient in some species of mushrooms. Recent industry studies using psychedelics, such as psilocybin, have been promising, and we believe there is a large unmet need with many people suffering from depression, mental health issues and neurological disorders. While classified as a Schedule I substance under the Controlled Substances Act (“CSA”), there is an accumulating body of evidence that psilocybin may have beneficial effects on depression and other mental health conditions. Therefore, the U.S. Food and Drug Administration (“FDA”) and U.S. Drug Enforcement Agency (“DEA”) have permitted the use of psilocybin in clinical studies for the treatment of a range of psychiatric conditions.

The potential of psilocybin therapy in mental health conditions has been demonstrated in a number of academic-sponsored studies over the last decade. In these early studies, it was observed that psilocybin therapy provided rapid reductions in depression symptoms after a single high dose, with antidepressant effects lasting for up to at least six months for a number of patients. These studies assessed symptoms related to depression and anxiety through a number of widely used and validated scales. The data generated by these studies suggest that psilocybin is generally well-tolerated and may have the potential to treat depression when administered with psychological support.

We have engaged in discussions with a number of world-renowned educational institutions and advisors regarding potential opportunities and have formed a scientific advisory board that is intended to help advise management regarding potential acquisition and development of products.

In addition, we are developing a Ketamine polymer implant. We also entered into a sponsored research agreement Columbia University (“Columbia”) 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.

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, and hold exclusive global rights to develop and commercialize SPC-15, pursuant to and that certain exclusive license agreement entered into with Columbia on July 1, 2024.

On November 15, 2023, we entered an exclusive license agreement with Medspray Pharma BV for its proprietary patented soft mist nasal spray technology, as the delivery mechanism for SPC-15, which agreement has an effective date of October 31, 2023. Preclinical and formulation studies were completed in the first half of 2024 and on June 4, 2024 the Company submitted a pre-Investigational New Drug (pre-IND) briefing package and meeting request to the U.S. Food and Drug Administration (FDA) for SPC-15, Silo’s intranasal prophylactic treatment for post-traumatic stress disorder (PTSD) and stress-induced anxiety disorder. In September 2024, we had a pre-IND meeting with the FDA to align on the 505(b)(2) regulatory pathway for approval of SPC-15 and review our proposed plan to support opening an IND.

Currently, we are conducting GLP-compliant pharmacokinetic and pharmacodynamic studies and in March 2025 we completed first dosing in an IND-enabling GLP-compliant toxicology and toxicokinetics, and we are aiming for an IND submission in 2026. The preclinical data suggests additional applications for eating disorders and anorexia, as well as enhanced efficacy when combined with an NMDA receptor antagonist for major depressive disorder and other severe stress-related conditions.

We believe our patented intranasal nose-to-brain drug dispersion technology provides a competitive advantage by increasing brain drug concentration, ensuring a faster onset of therapeutic effects with optimized safety.

SP-26: Ketamine Implant for Fibromyalgia

SP-26 represents a novel approach to treating chronic pain and fibromyalgia through a ketamine-based injectable dissolvable polymer implant. Designed for subcutaneous insertion, SP-26 focuses on regulating dosage and time release to provide sustained relief from chronic pain, offering a potentially safer alternative to opioids. Presently, our SP-26 product is in preclinical research. Initial animal studies, which began in early 2025, are evaluating the implant’s dosage, time release, and absorption.

In March 2023, we filed a provisional patent application with the U.S. Patent & Trademark Office (“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.

SPC-14: Treatment for Alzheimer’s Disease

SPC-14 targets glutamate receptor NMDAR 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 and we have exclusive global rights to develop and commercialize SPC-14, pursuant to that certain exclusive license agreement entered into with Columbia on July 1, 2024. 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 CNS disorders, with an initial indication for multiple sclerosis. On February 12, 2021, we entered into the Master 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.

On April 11, 2023 certain intellectual property under the Master License Agreement described above were issued a patent from the USPTO for “Peptide-Targeted Liposomal Delivery For Treatment, Diagnosis, and Imaging of Diseases and Disorders” (US 11,766,403, B2).

On July 8, 2025, we entered into the July 2025 Termination and Option Agreement with UMB which terminates the UMB License Agreement, previously in effect between us and UMB, and provides us with an exclusive, non-transferable evaluation license, as well as an exclusive option to negotiate a new exclusive commercial license, with respect to certain intellectual property related to central nervous system-homing peptides (the “Invention” and related “Patent Rights”) that were previously licensed under the UMB License Agreement. The July 2025 Termination and Option Agreement was effective as of July 8, 2025, and expired on March 31, 2026.

We believe SPU-16 provides a competitive advantage by using homing peptides to reduce toxicity while enhancing therapeutic payload delivery.

Cryptocurrency Treasury Strategy

Our strategy changed to include cryptocurrency treasury strategy in August 2025 to focus on the acquisition of leading digital assets. Management focused a portion of its resources on this cryptocurrency strategy. As of June 30, 2026, our crypto assets primarily include Bitcoin (BTC), Ethereum (ETH) and Solana (SOL). We have ownership of and control over our crypto assets which are held through custodial arrangements with qualified third-party custodians. These custodians provide secure storage and safeguarding of our crypto assets. Previously, we participated in both native and liquid staking of our digital assets to generate yield. Our role was that of a Delegator (a staker who does not run a validation node). As of June 30, 2026, we held no staked crypto assets.

As of June 30, 2026 and December 31, 2025, we held $205,414 and $221,817 of crypto assets comprised of BTC, ETH, USDC, SOL, RSC and XRP, at fair value, respectively. We reflect these assets held at fair value on the unaudited consolidated balance sheets within the “crypto assets” line item. In determining the fair value of the crypto assets in accordance with ASC 820, we utilize coinmarketcap.com or Coinbase as the principal market.

Recent Developments

Reverse Stock Split and Concurrent Proportionate Reduction in Authorized Common Stock

On June 1, 2026, we filed a Certificate of Change with the Secretary of State of the State of Nevada to effectuate a 1-for-15 reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding and authorized shares of common stock, par value $0.0001 per share (“Common Stock”). The Reverse Stock Split became effective at 4:01 p.m., Eastern Time, on Tuesday, June 2, 2026, and the Company’s Common Stock began trading on a split-adjusted basis when The Nasdaq Stock Market (“Nasdaq”) opened on June 3, 2026. When the Reverse Stock Split became effective, every 15 shares of Common Stock issued and outstanding were automatically reclassified and combined into one share of Common Stock, without any change in the par value per share, and a proportionate reduction was made to the Company’s authorized shares of Common Stock such that the Company now has 6,666,667 shares of authorized Common Stock.

July 2026 Private Placement

On July 9, 2026, we entered into those securities purchase agreements with institutional and accredited investors (the “July 2026 Purchase Agreements”) with certain institutional investors for the issuance and sale in a private placement (the “Private Placement”) of (i) 124,000 shares of Common Stock at a purchase price of $6.452 per Share; (ii) Pre-Funded Warrants at a purchase price of $6.4519 per Pre-Funded Warrant to purchase up to an aggregate of 495,965 shares of Common Stock (the “Pre-Funded Warrant Shares”); (iii) Series A-3 Warrants to purchase up to 619,965 shares of the Common Stock (the “Series A-3 Warrant Shares”), and (iv) Series A-4 Warrants to purchase up to 619,965 shares of Common Stock (the “Series A-4 Warrant Shares”).

Each Series A-3 Warrant and Series A-4 Warrant has an exercise price of $6.21 per share and are immediately exercisable upon issuance. The Series A-3 Warrants will expire five (5) years after the effective date of the July 2026 Resale Registration Statement. The Series A-4 Warrants will expire eighteen (18) months after the effective date of the July 2026 Resale Registration Statement. A holder may not exercise any portion of the Series A-3 Warrants and/or Series A-4 Warrants to the extent the holder would own more than 4.99% or 9.99% of the outstanding Common Stock immediately after exercise. A holder may increase or decrease this percentage with respect to either the Series A-3 Warrants or the Series A-4 Warrants to a percentage not in excess of 9.99%, except that any such increase shall require at least 61 days’ prior notice to the Company.

The Pre-Funded Warrants are immediately exercisable and may be exercised at a nominal exercise price of $0.0001 per share of Common Stock at any time until all of the Pre-Funded Warrants are exercised in full. A holder may not exercise any portion of the Pre-Funded Warrants to the extent the holder would own more than 9.99% of the outstanding Common Stock immediately after exercise. A holder may increase or decrease this percentage with respect to Pre-Funded Warrants to a percentage not in excess of 9.99%, except that any such increase shall require at least 61 days’ prior notice to us.

Stock Repurchase Plan

On February 20, 2026, our Board of Directors approved a stock repurchase program authorizing the purchase of up to $1 million of our issued and outstanding common stock, from time to time, with such plan to be in place until December 31, 2026. As of June 30, 2026, no shares have been repurchased under this plan.

Results of Operations

Comparison of Our Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025

The following table summarizes the results of operations for the three and six months ended June 30, 2026 and 2025 and were based primarily on the comparative unaudited consolidated financial statements, footnotes and related information for the periods identified and should be read in conjunction with the unaudited consolidated financial statements and the notes to those statements that are included elsewhere in this report.

Revenues

During the three and six months ended June 30, 2026 and 2025, we generated minimal or no revenues from operations. For the three months ended June 30, 2026 and 2025, revenues amounted to $0 and $18,025, respectively. For the six months ended June 30, 2026 and 2025, revenues amounted to $18,026 and $36,051, respectively. Such revenues are related to the Aikido License and Sublicense Agreement and was being recognized over the estimated 15-year term of the UMB license agreement. Effective April 1, 2026, due to the expiration of the Option Agreement and related UMB Master License as discussed elsewhere, we ceased the recognition of license and sublicense fee revenues related to the License Agreement and reclassified all remaining deferred revenues to a liability named “contingently returnable sublicense fee” on the accompanying consolidated balance sheet since the sublicense is no longer available to Aikido or any of their assignees, if any.

Cost of Revenues

During the three months ended June 30, 2026 and 2025, cost of revenues amounted to $0 and $1,459, respectively, a decrease of $1,459, or 100.0%. During the six months ended June 30, 2026 and 2025, cost of revenues amounted to $20,688 and $2,919, respectively, an increase of $17,769, or 608.7%. Cost of revenues consisted of license fees related to the Master License Agreement, which are being amortized into cost of revenues. Effective July 8, 2025, the estimated useful lives of the unamortized license and sublicense fees were changed to reflect the termination of the Master License Agreement and the expiration of the subsequent Option Agreement on March 31, 2026, resulting in accelerated amortization expense during the six months ended June 30, 2026.

Operating Expenses

For the three and six months ended June 30, 2026 and 2025, total operating expenses consisted of the following:

• Compensation Expense:

For the three months ended June 30, 2026 and 2025, compensation expense was $222,684 and $195,305, respectively, an increase of $27,379, or 14.0%. This increase primarily resulted from an increase in stock-based compensation of $21,729 and payroll expense and related benefits of $5,650.

For the six months ended June 30, 2026 and 2025, compensation expense was $465,317 and $373,774, respectively, an increase of $91,543, or 24.5%. This increase primarily resulted from an increase in stock-based compensation of $78,348, and payroll expense and related benefits of $13,195.

• Professional Fees:

For the three months ended June 30, 2026 and 2025, professional fees were $311,846 and $299,592, respectively, an increase of $12,254, or 4.1%. The increase was primarily attributable to an increase in stock-based consulting fees of $62,500, an increase in legal fees of $23,881, and an increase in other consulting fees of $1,070, offset by a decrease in investor relations of $72,396 and a decrease in accounting and auditing fees of $2,801.

For the six months ended June 30, 2026 and 2025, professional fees were $567,139 and $573,416, respectively, a decrease of $6,277, or 1.1%. The decrease was primarily attributable to a decrease in investor relations of $149,730, and a decrease in other consulting fees of $1,142, offset by an increase in stock-based consulting fees of $89,212, an increase in legal fees of $39,071, and an increase in accounting and auditing fees of $16,312.

• Research and Development:

For the three months ended June 30, 2026 and 2025, we incurred research and development expense of $298,418 and $717,247, respectively, a decrease of $418,829, or 58.4%. The decrease was a result of a decrease in research and development costs in connection with our key Investigator-sponsored Study Agreements and other research projects with third party vendors and universities.

For the six months ended June 30, 2026 and 2025, we incurred research and development expense of $1,311,683 and $1,311,209, respectively, an increase of $474, or 0.0%.

On March 30, 2026, we entered into an asset purchase agreement (the “Many Ads Agreement”) with Many Ads Inc. (“Many Ads”). Pursuant to the Many Ads Agreement, Many Ads agreed to sell, and we agreed to purchase, certain software of the web-based application currently marketed as “qwikagents.com” and the domain names qwikagents.com, qwikagents.ai, and qwikagents.co (the “Many Ads Purchased Assets”). In consideration for the Many Ads Purchased Assets, we issued to Many Ads 140,000 shares of our common stock, which were valued at $714,000 or $5.10 per share, based on the quoted closing stock price on March 30, 2026. Due to the nature of the Many Ads Purchased Assets and their lack of an established alternative future use, the fair value of the common stock issued was recorded as research and development expense of $714,000 during the six months ended June 30, 2026.

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.
• Costs associated with the development of software, technologies and products related to our newly formed wholly-owned subsidiary Qwikagentsai, which was formed to diversify the Company’s business into AI technology including the development and commercialization of web-based AI agent platforms.
• 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 June 30, 2026 and 2025, other selling, general and administrative expenses were $96,001 and $52,973, respectively, an increase of $43,028, or 81.2%. The increase was primarily attributed to an increase in computer and internet expenses of $12,199, an increase in proxy meeting expenses of $10,500, and a net increase in other general and administrative expenses of $20,329.

For the six months ended June 30, 2026 and 2025, other selling, general and administrative expenses were $176,808 and $117,405, respectively, an increase of $59,403, or 50.6%. The increase was primarily attributed to an increase in computer and internet expenses of $17,980, an increase in license expenses of $12,500, and a net increase in other general and administrative expenses of $28,923.

Loss from Operations

For the three months ended June 30, 2026 and 2025, loss from operations amounted to $928,949 and $1,248,551, respectively, a decrease of $319,602, or 25.6%. For the six months ended June 30, 2026 and 2025, loss from operations amounted to $2,523,609 and $2,342,672, respectively, an increase of $180,937, or 7.7%. The changes were primarily a result of the changes in operating expenses discussed above.

Other Income

For the three months ended June 30, 2026 and 2025, other income, net amounted to $96,120 and $44,258, respectively, an increase of $51,862, or 117.2%. The increase in other income, net is primarily due to an increase in gain on debt settlement of $91,645, an increase in unrealized gain on short-term tokenized investment funds of $4,961 and an increase in staking income on crypto assets of $1,147, offset by an increase in unrealized loss on crypto assets, at fair value of $35,795, a decrease in interest and dividend income, net of $5,762, an increase in realized loss on crypto assets of $2,073, an increase in interest expense of $1,217, an increase in foreign currency transaction loss of $912, and a decrease in net realized gain on short-term debt investments of $132.

For the six months ended June 30, 2026 and 2025, other income, net amounted to $43,663 and $106,942, respectively, a decrease of $63,279, or 59.2%. The decrease in other income, net was primarily due to an increase in unrealized loss on crypto assets, at fair value of $89,143, an increase in impairment loss on crypto assets, at cost of $29,911, a decrease in interest and dividend income, net of $28,872, an increase in foreign currency transaction loss of $3,586, a decrease in net realized gain on short-term debt investments of $3,054, an increase in interest expense of $2,524, and an increase in realized loss on crypto assets of $2,073, offset by an increase in gain on debt settlement of $91,645, an increase in unrealized gain on short-term tokenized investment funds of $2,901 and an increase in staking income on crypto assets of $1,338.

Net Loss

For the three months ended June 30, 2026, net loss amounted to $832,829 or $0.76 per common share (basic and diluted), as compared to net loss of $1,204,293 or $2.88 per common share (basic and diluted) for the three months ended June 30, 2025, a decrease of $371,464, or 30.8%. For the six months ended June 30, 2026, net loss amounted to $2,479,946 or $2.46 per common share (basic and diluted), as compared to net loss of $2,235,730 or $6.22 per common share (basic and diluted) for the six months ended June 30, 2025, an increase of $244,216, or 10.9%.

The changes were 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 $4,647,793, $1,950,147 in short-term investments, and $3,277,095 in cash and cash equivalents as of June 30, 2026, and working capital of $6,737,542, $2,110,065 in short-term investments and $4,748,700 in cash and cash equivalents as of December 31, 2025, respectively.

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The decrease in working capital of $2,089,749 was primarily attributable to a decrease in current assets of $1,674,199 primarily due to a decrease in cash and cash equivalents of $1,471,605, a decrease in short-term investments, at fair value of $159,918, a decrease in crypto assets, at cost of $98,584, a decrease in crypto assets, at fair value of $16,403, offset by an increase in prepaid expenses and other current assets of $72,311, and an increase in current liabilities of $415,550 attributable to the reclassification of deferred revenue – long-term to a current liability named “contingently returnable sublicense fee”, offset by a decrease in accounts payable and accrued expenses of $215,900.

Cash Flows

A summary of cash flow activities is summarized as follows:

Net Cash Used in Operating Activities

Net cash used in operating activities for the six months ended June 30, 2026 and 2025 were $1,604,484 and $2,925,568, respectively, a decrease of $1,321,084, or 45.2%.

• Net cash used in operating activities for the six months ended June 30, 2026 primarily reflected a net loss of $2,479,946, adjusted for non-cash items such as amortization expense of $5,875, amortization of prepaid stock-based professional fees of $89,212, net realized gain on short-term debt investments of $857, unrealized gain on short-term tokenized investment funds of $2,901, staking income on crypto assets of $1,338, realized loss on crypto assets of $2,073, unrealized loss on crypto assets, at fair value of $89,143, impairment loss on crypto assets, at cost of $29,911, stock-based compensation of $95,793, and common stock issued for acquired technology expensed of $714,000, and a gain on settlement of accounts payable and accrued expenses of $91,945, and changes in operating asset and liabilities primarily consisting of a decrease in prepaid expenses and other current assets of $88,477, a decrease in accounts payable and accrued expenses of $124,255, and a decrease in deferred revenue of $18,026.
• Net cash used in operating activities for the six months ended June 30, 2025 primarily reflected a net loss of $2,235,730, adjusted for the add-back of non-cash items such as amortization expense of $5,565, net realized gain on short-term investments of $3,911, and stock-based compensation of $17,445, and changes in operating asset and liabilities primarily consisting of an increase in prepaid expenses and other current assets of $79,186, a decrease in accounts payable and accrued expenses of $593,700, and a decrease in deferred revenue of $36,051.

Net Cash Provided by Investing Activities

Net cash provided by investing activities for the six months ended June 30, 2026 and 2025 were $159,876 and $1,259,483, respectively, a decrease of $1,099,607 or 87.3%.

• Net cash provided by investing activities for the six months ended June 30, 2026 was $159,876 which consisted of proceeds from the sale of short-term debt investments of $202,279 and proceeds from sale of crypto assets of $45,188, offset by aggregate payments for the purchase of short-term debt investments of $37,601 and purchase of crypto assets of $49,990.
• Net cash provided by investing activities for the six months ended June 30, 2025 was $1,259,483 which consisted of proceeds from sale of short-term investments of $1,315,653, offset by aggregate payments for the purchase of short-term investments of $56,170.

Net Cash Provided by (Used in) Financing Activities

Net cash provided by (used in) financing activities for the six months ended June 30, 2026 and 2025 were $(26,997) and $2,093,958, respectively, a negative change of $2,120,955 or 101.3%.

• Net cash used in financing activities for the six months ended June 30, 2026 was $26,997 which consisted solely of payment of deferred offering costs.
• Net cash provided by financing activities for the six months ended June 30, 2025 was $2,093,958 which consisted of net proceeds from sale of common stock and pre-funded warrants of $1,593,897 and proceeds from the exercise of warrants and pre-funded warrants of $500,061.

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 $2,479,946 and used cash in operations of $1,604,484 during the six months ended June 30, 2026. Additionally, we have an accumulated deficit of $21,972,335 on June 30, 2026. As of June 30, 2026, we had working capital of $4,647,793, $1,950,147 in short-term investments, and $3,277,095 in cash and cash equivalents.

On September 29, 2025, pursuant to the October 2025 Offering, we received net proceeds of $2,146,000, net of placement agent fees and offering costs of $303,450 and legal and other fees of $65,511.

On July 9, 2026, pursuant to the July 2026 Offering, we received net proceeds of $3,527,392, net of placement agent fees and offering costs of $415,001, legal fees of $50,000 and escrow fees of $7,600.

The positive working capital serves to mitigate the conditions that historically raised substantial doubt about our ability to continue as a going concern. We believe that we have sufficient cash to meet our obligations for a minimum of twelve months from the date of this filing.

Off-Balance Sheet Arrangements

None.

Critical Accounting Estimates

Our consolidated financial statements are prepared in accordance with GAAP. These accounting principles require us to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements. We believe that the estimates, judgments and assumptions are reasonable based upon information available to us at the time that these estimates, judgments and assumptions are made. To the extent there are material differences between these estimates, judgments or assumptions and actual results, our financial statements will be affected. For a discussion of our critical accounting estimates, please read Part II, Item 7 — Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 27, 2026. There have been no material changes to the critical accounting estimates previously disclosed in such report.

Recent Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires entities to provide more detailed disaggregation of expenses in the income statement, focusing on the nature of the expenses rather than their function. The new disclosures will require entities to separately present expenses for significant line items, including but not limited to, depreciation, amortization, and employee compensation. Entities will also be required to provide a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively, disclose the total amount of selling expenses and, in annual reporting periods, provide a definition of what constitutes selling expenses. This pronouncement is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. We do not expect the adoption of this new guidance to have a material impact on our unaudited consolidated financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270), Narrow-Scope Improvements, to provide clarity about the current requirements, rather than evaluate whether to expand or reduce interim disclosure requirements. The amendments in ASU 2025-11 result in a comprehensive list of interim disclosures that are required by GAAP. The amendments in ASU 2025-11 also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The amendments in ASU 2025-11 are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027 and early adoption is permitted. The amendments in ASU 2025-11 can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the disclosure impact that ASU 2025-11 may have on our financial statement presentation and disclosures.

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on our unaudited consolidated financial statements.

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.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as that term is defined in Rule 13a-15(e) and 15d-15(e), promulgated by the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed in our company’s reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, to allow timely decisions regarding required disclosure. Our management, with the participation of our principal executive officer and principal financial officer, evaluated our company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our principal executive officer and principal financial officer concluded that as of June 30, 2026, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the three months ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Risk factors that affect our business and financial results are discussed in Part I, Item 1A “Risk Factors,” in our Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 27, 2026 (“Annual Report”). 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.