aibioPasithea Therapeutics files for share and warrant offering, later prices at $1.40
Tickers KTTA
The May 1, 2025 registration statement covered up to 3,246,753 shares at an assumed $1.54. The deal priced on May 6, 2025 at $1.40 for 3,571,428 shares or pre-funded warrants.
Key facts
- Company
- Pasithea Therapeutics Corp. (NASDAQ: KTTA)
- News type
- Financings
- Primary source
- Pasithea Therapeutics Corp. S-1 (2025-05-01)
The registration and the pricing
Pasithea Therapeutics Corp. (Nasdaq: KTTA) filed a registration statement on Form S-1 on May 1, 2025 for a reasonable best efforts offering of up to 3,246,753 shares of common stock, or pre-funded warrants in their place. Each share would come with a Series C and a Series D common warrant. The filing assumed a combined price of $1.54 per share, based on the April 22, 2025 Nasdaq closing price.
The company priced the deal on May 6, 2025 at $1.40 per share, for 3,571,428 shares or pre-funded warrants, with accompanying Series C and Series D warrants. Each warrant lets the holder buy one share at $1.40. The Series C warrants are exercisable on issuance and expire five years later. The Series D warrants expire 18 months after issuance. The company said gross proceeds should be about $5.0 million before the placement agent's fees and other expenses. Closing was expected on or about May 7, 2025.
The final prospectus lists 3,094,284 shares and 477,144 pre-funded warrants. It shows placement agent fees of $349,999.94 and proceeds before expenses of $4,649,522.12. The prospectus estimates net proceeds of about $4.3 million at the $1.40 combined price.
Who sold the deal
H.C. Wainwright & Co., LLC was the exclusive placement agent. The prospectus says Wainwright will also receive warrants for 7% of the shares sold, at $1.75 per share. The offering had no minimum amount.
The S-1 cover lists two law firms under "copies to": Lowenstein Sandler LLP, with James O'Grady, and Troutman Pepper Locke LLP, with Rakesh Gopalan and David S. Wolpa. The final prospectus says Lowenstein Sandler LLP is counsel to the company and Troutman Pepper Locke LLP is counsel to the placement agent.
What the money is for
The company says it will use the net proceeds for general corporate purposes. Those include ongoing research and pre-clinical studies, clinical trials, development of new biological and pharmaceutical technologies, investing in or acquiring companies, licensing activities for its product candidates, and working capital. The prospectus says the company's management will have broad discretion over how the money is spent.
The prospectus lists 6,529,291 common shares outstanding after the offering, assuming all the pre-funded warrants are exercised and no common warrants are exercised. The common warrants would add shares if holders exercised them, and the prospectus does not say how many would be.
The business and its trial
Pasithea is developing PAS-004, a next-generation macrocyclic MEK inhibitor, for neurofibromatosis type 1 and other cancers. PAS-004 has orphan drug designation from the FDA for NF1. The FDA cleared the investigational new drug application in December 2023. The first-in-human Phase 1 trial is an open-label dose escalation study in patients with MAPK pathway-driven advanced tumors, and the company is conducting it at four U.S. sites and three in Eastern Europe.
The company announced safety, tolerability, pharmacokinetic and what it called preliminary efficacy data from the first two cohorts on September 26, 2024. It says it has completed dosing through the dose-limiting toxicity period for 19 patients through cohort 5. The prospectus says the trial's primary objective is to assess safety and tolerability. The company reports no dose-limiting toxicities, rash or ocular toxicities in the cohorts assessed to date, and says all treatment-related adverse events were Grade 1 or Grade 2. Those are company statements from a small, open-label study. The company plans a Phase 1/1b trial in adult NF1 plexiform neurofibroma patients, followed by pediatric patients, and then registrational trials.
The balance sheet and the auditor's warning
The prospectus says the auditor's report on the 2024 financial statements contains an explanatory paragraph about substantial doubt over the company's ability to continue as a going concern. It says the company's ability to meet its operating and capital expenses is uncertain. The company completed a private placement of about $4.5 million in gross proceeds that closed on September 30, 2024. It also effected a one-for-20 reverse stock split on January 2, 2024.
The prospectus puts cash and cash equivalents at $6.9 million as of December 31, 2024, and does not say how long the proceeds will fund the company's operations.