S-1: Pasithea Therapeutics Launches $20.8M Securities Offering

Pasithea Therapeutics Corp. is offering up to $20.875 million in common stock, pre-funded warrants, and common warrants to fund operations and clinical trials, while facing Nasdaq delisting risk.

Summary

• Offering up to 13,929,516 shares of common stock, pre-funded warrants, and common warrants, with an assumed public offering price of $0.7179 per share of common stock and accompanying Common Warrant.
• Pre-Funded Warrants are exercisable at $0.001 per share, and Common Warrants at $0.7179 per share, exercisable upon stockholder approval or if specific pricing conditions are met.
• The placement agent, H.C. Wainwright & Co., LLC, will receive a 7% cash fee, a 1% management fee, and warrants to purchase 7% of the shares sold at an exercise price of $0.897375.
• Estimated net proceeds from this offering are approximately $8.9 million, assuming only common stock is sold and no warrants are exercised, with potential to reach $18.2 million if all Common Warrants are exercised for cash.
• Pasithea Therapeutics is a clinical-stage biotechnology company focused on CNS disorders, RASopathies, and MAPK pathway-driven tumors, with lead product candidate PAS-004.
• The company is conducting a FIH Phase 1 Dose Escalation Study for PAS-004 in advanced tumors (expected completion 2026) and a Phase 1/1b trial for PAS-004 in adult NF1-PN patients across five sites.
• Discovery stage programs include PAS-003 for ALS and PAS-001 for schizophrenia.
• The company received a Nasdaq deficiency notice on June 23, 2025, for not meeting the $1.00 minimum bid price requirement, with a compliance deadline of December 22, 2025.
• Stockholders approved an amendment to the 2023 Stock Incentive Plan on September 3, 2025, increasing authorized shares for issuance by 1,750,000 to a total of 2,014,221 shares.
• Cash and cash equivalents were $6.9 million as of December 31, 2024, and $4.1 million as of September 30, 2025.
• Net losses were approximately $13.9 million for 2024, $16.0 million for 2023, $3.0 million for Q3 2025, and $10.3 million for the nine months ended September 30, 2025.
• The accumulated deficit was approximately $49.6 million as of December 31, 2024, and $59.9 million as of September 30, 2025.
• The independent audit firm included an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern.

Sentiment

Score: 2

Explanation: The company is in a precarious financial position with limited cash runway and a going concern warning. While clinical trials are progressing, the immediate need for capital and the Nasdaq deficiency overshadow these developments, indicating high risk and significant financial instability.

Positives

• FDA cleared the Investigational New Drug (IND) application for PAS-004 in December 2023, allowing clinical trials to proceed.
• Initiated a Phase 1/1b clinical trial for PAS-004 in adult Neurofibromatosis Type 1 (NF1) patients with symptomatic plexiform neurofibromas (PN) in May 2025.
• Completed enrollment and initial dosing of cohort 6 (30mg capsules) for the FIH Phase 1 Dose Escalation Study of PAS-004 on April 29, 2025.
• Announced pharmacodynamics results demonstrating robust target engagement from the ongoing FIH Phase 1 Dose Escalation Study of PAS-004 on May 6, 2025.
• Completed enrollment and initial dosing of the first cohort of three patients from the Phase 1/1b clinical trial in adult NF1-PN patients on July 31, 2025.
• Activated two clinical trial sites in South Korea (Asan Medical Centre and Severance Hospital Yonsei University Health System) on September 16, 2025, expanding international reach for clinical trials.
• Activated a new U.S. clinical trial site at the University of Alabama at Birmingham on November 4, 2025, further expanding clinical trial infrastructure.
• Stockholders approved an amendment to the 2023 Stock Incentive Plan on September 3, 2025, increasing authorized shares by 1,750,000, which can help attract and retain talent.

Negatives

• Incurred significant operating losses since inception, with net losses of approximately $13.9 million in 2024, $16.0 million in 2023, and $10.3 million for the nine months ended September 30, 2025.
• Reported an accumulated deficit of approximately $59.9 million as of September 30, 2025.
• Existing cash and cash equivalents of $4.1 million as of September 30, 2025, are only sufficient to fund operations through December 2025.
• The independent audit firm included an explanatory paragraph in its report regarding substantial doubt about the company's ability to continue as a going concern.
• Received a Nasdaq deficiency notice on June 23, 2025, for not meeting the $1.00 minimum bid price requirement, with a compliance deadline of December 22, 2025, risking delisting.
• The Common Warrants offered are not exercisable until stockholder approval, which is not guaranteed, potentially limiting their value.
• The offering is a 'best efforts' offering, meaning there is no guarantee of raising the full amount or even sufficient capital to address immediate funding needs.
• New investors will experience immediate and substantial dilution of approximately $0.11 per share in the net tangible book value.
• There is no established public trading market for the new Common Warrants or Pre-Funded Warrants, which will limit their liquidity.

Risks

• Lack of operating history.
• Expectation of significant operating losses for the foreseeable future and the need for substantial additional capital.
• Uncertainty regarding the period existing cash and cash equivalents will be sufficient to fund future operating expenses and capital expenditure requirements.
• Estimates regarding expenses, future revenue, capital requirements, and needs for additional financing may prove incorrect.
• Ability to regain and maintain compliance with Nasdaq listing standards is uncertain.
• The development and commercialization of product candidates involve a lengthy and expensive process with an uncertain outcome.
• No assurance of obtaining regulatory approval for the marketing of any drug candidates.
• No assurance of generating significant revenues or achieving profitability even if drug candidates are commercialized.
• Revenue from current and potential future collaborations is uncertain because milestones or other contingent payments may not be achieved or received.
• Substantial cash resources will be expended for clinical development, preclinical studies, clinical trials, manufacturing, supply, marketing, and selling.
• Phase 3 clinical studies for product candidates will require substantial funds to complete.
• Inability to reasonably estimate the actual amounts necessary to successfully complete the development and commercialization of current and future product candidates due to clinical trial uncertainty.
• Failure to obtain necessary financing may prevent the completion of drug development and commercialization.
• The independent audit firm's report contains an explanatory paragraph regarding substantial doubt about the ability to continue as a going concern, which may adversely affect stock price and financing ability.
• The perception of inability to continue as a going concern may impede the ability to raise additional funds or operate the business.
• As a best efforts offering with no minimum amount, the company may be unable to raise sufficient capital to extend its cash runway beyond December 2025.
• Management has broad discretion in the use of net proceeds, and ineffective use could result in financial losses.
• Investment of net proceeds may not produce income or may lose value.
• Immediate and substantial dilution in the net tangible book value of shares purchased in this offering.
• Further dilution may occur if common stock is issued under outstanding options and warrants at exercise prices lower than the public offering price.
• No public market for the Common Warrants or Pre-Funded Warrants, limiting liquidity.
• The Common Warrants and Pre-Funded Warrants are speculative in nature.
• No assurance that the market price of common stock will ever equal or exceed the exercise price of the warrants.
• Holders of warrants have no rights as common stockholders until exercise, except for certain distribution or dividend rights.
• Common Warrants are not exercisable until Warrant Stockholder Approval, which is not guaranteed.
• Purchasers who purchase securities via a securities purchase agreement may have rights not available to other purchasers.
• Failure to comply with Nasdaq Capital Market continued listing requirements may result in delisting.
• A reverse stock split, if implemented to maintain Nasdaq listing, may not achieve intended results and could negatively impact the stock price.
• Future sales of outstanding securities (e.g., underlying warrants, ATM facility) may cause the market price of securities to drop significantly.
• A warrant overhang may depress the market price of common stock if the market price remains below the applicable exercise price.
• Potential impacts of increased trade tariffs, import quotas, or other trade restrictions or measures.
• Impact of global economic and market conditions and political developments (e.g., inflation, capital market disruptions, economic sanctions, regional conflicts, economic slowdowns/recessions) on business, research and development, stock value, and access to capital markets.

Future Outlook

The company expects to complete its FIH Phase 1 Dose Escalation Study for PAS-004 in 2026. It plans to conduct a Phase 1 trial for pediatric NF1-PN patients and ultimately complete registrational clinical trials in both adult and pediatric NF1-PN populations for PAS-004. The company will require additional capital to fund operations and continue planned development and commercialization activities beyond December 2025. Net proceeds from the current offering are intended for general corporate purposes, including ongoing research, preclinical studies, clinical trials, development of new technologies, investments/acquisitions, licensing activities, and working capital. The company commits to promptly seeking Warrant Stockholder Approval, if required, and holding subsequent meetings every 90 days until approval or warrant expiration. It also intends to maintain its Nasdaq listing and apply for listing of the newly issued shares and warrant shares.

Management Comments

• "We believe that our existing cash and cash equivalents, together with interest or dividends thereon, before giving effect to the proceeds of this offering, will be sufficient to fund our operations through December 2025."
• "We intend to monitor the closing bid price of our common stock and are considering our options to regain compliance with the Bid Price Requirement within the allotted deadlines for compliance, including implementing a potential reverse stock split of our common stock, authority for which was granted to our board of directors by our stockholders at our 2025 annual meeting of stockholders for a period of one year following such meeting."

Industry Context

The company operates in the clinical-stage biotechnology sector, focusing on central nervous system (CNS) disorders, RASopathies, and MAPK pathway-driven tumors. This industry is characterized by high research and development costs, lengthy and uncertain clinical trial processes, and significant regulatory hurdles. The development of PAS-004 as a next-generation MEK inhibitor positions the company within the competitive landscape of targeted therapies for oncology and rare diseases. The continuous need for capital raises and the inherent financial risks, including the 'going concern' warning, are common challenges for companies at this stage of drug development, particularly those without commercialized products.

Comparison to Industry Standards

• The filing does not provide specific comparisons to comparable companies, projects, or results within the biotechnology industry.

Corporate Governance

Stakeholder Impact

• Shareholders: Face significant dilution from the current offering and potential future sales of shares underlying existing warrants and the ATM facility. The risk of Nasdaq delisting could severely impact share price and liquidity. The value of warrants is speculative and dependent on future stock price performance.
• Employees: Benefit from the increased number of shares authorized under the 2023 Stock Incentive Plan, providing continued opportunities for equity compensation and incentives.
• Creditors: The 'going concern' warning from the independent audit firm indicates increased financial risk, potentially affecting the company's ability to meet its obligations.

Next Steps

• Complete the FIH Phase 1 Dose Escalation Study for PAS-004 in 2026.
• Conduct a Phase 1 trial for pediatric NF1-PN patients and ultimately complete registrational clinical trials in both adult and pediatric NF1-PN populations for PAS-004.
• Regain compliance with Nasdaq's $1.00 minimum bid price requirement by December 22, 2025, potentially through a reverse stock split.
• Seek stockholder approval for the issuance of shares upon exercise of Common Warrants, if required, and hold subsequent meetings every 90 days until approval or warrant expiration.
• Apply to list all newly issued shares and warrant shares on Nasdaq.
• Maintain eligibility for electronic transfer through the Depository Trust Company.
• Continue ongoing research and pre-clinical studies for product candidates PAS-004, PAS-003, and PAS-001.
• Develop new biological and pharmaceutical technologies.
• Invest in or acquire companies that are synergistic with or complementary to existing technologies.
• Engage in licensing activities related to current and future product candidates.

Key Dates

Recommendation

The company is in a critical financial state, evidenced by substantial and increasing net losses, a very limited cash runway (projected only through December 2025), and an explicit 'going concern' warning from its auditors. The Nasdaq deficiency notice for failing to meet the minimum bid price requirement signals severe market underperformance and a high risk of delisting, which would further erode shareholder value and liquidity. While clinical trials are progressing, the immediate and pressing need for capital, coupled with the 'best efforts' nature of this offering (meaning no guaranteed funds), creates immense uncertainty regarding the company's ability to sustain operations. The potential for significant dilution from this and future offerings, along with a large overhang of existing warrants, suggests continued downward pressure on the stock price. Given these severe financial and operational risks, a seasoned investor would likely recommend selling to mitigate further losses.

Keywords

Pasithea Therapeutics, KTTA, S-1, Securities Offering, Common Stock, Warrants, Pre-Funded Warrants, Biotechnology, Clinical-Stage, CNS Disorders, RASopathies, MAPK Pathway, MEK Inhibitor, PAS-004, NF1-PN, Neurofibromatosis Type 1, Clinical Trials, Nasdaq Listing, Capital Raise, Going Concern, Dilution