Pasithea Therapeutics Corp
For the period ended Jun 30, 2024. Filed Aug 13, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 13, 2024
KTTA$0.58+11.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-14.
0001213900-24-042981
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-13.
0001213900-24-068297
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 52 previous paragraphs and 54 current paragraphs.
39 unchanged; 11 reworded; 3 added; 2 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 45 previous and 44 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
General and administrative expenses decreased by approximately $213,000, or 12%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The decrease was primarily driven by decreases in (i) accounting and business development of approximately $27,000 (ii) non-cash amortization and depreciation and stock-based compensation of approximately $184,000, (iii) personnel related expenses of approximately $67,000, (iv) legal expenses of approximately $48,000, (v) public company and corporate communications expenses of approximately $25,000 and (vi) other expenses of approximately $104,000, offset by increases in (i) office expenses of approximately $204,000 and (ii) consulting costs of approximately $38,000.
Current report
General and administrative expenses decreased by approximately $38,000, or 1%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease was primarily driven by decreases in (i) personnel costs of approximately $324,000, (ii) accounting and business development of approximately $95,000 and (iii) other expenses of approximately $104,000, offset by increases in (i) legal expenses of approximately $171,000, (ii) office expenses, including franchise taxes and insurance of approximately $145,000, (iii) public company and corporate communications expenses of approximately $80,000, (iv) non-cash amortization and depreciation and stock-based compensation of approximately $52,000 and (v) consulting costs of approximately $37,000.
Current report
Research and development expenses increased by approximately $982,000, or 31%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily driven by increases in (i) clinical trial costs of approximately $1,527,000 related to the initiation of the Phase 1 clinical trial of PAS-004, (ii) personnel expenses, including salaries, benefits and severance payments of approximately $257,000 related to the closure of our research laboratory and reduction in related workforce, (iii) consulting costs of approximately $102,000, iv) general expenses of approximately $65,000 and (v) non-cash stock-based compensation of approximately $61,000, offset by decreases in (i) preclinical research and development expenses related to our discovery programs of approximately $893,000 and (ii) manufacturing and CMC expenses of approximately $137,000.
Removed paragraphs (2)
Previous report
General and administrative expenses increased by approximately $175,000, or 8%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was primarily driven by increases in (i) non-cash amortization and depreciation and stock-based compensation of approximately $78,000, (ii) legal expenses of approximately $219,000, (iii) public company and corporate communications expenses of approximately $105,000, (iv) insurance costs of approximately $30,000 and (v) other expenses totaling approximately $69,000, offset by decreases in (vi) personnel related expenses of approximately $257,000, (vii) accounting and auditing fees of approximately $44,000, and (viii) business development and consulting costs of approximately $25,000.
Previous report
We believe that the following critical accounting estimates are particularly subject to management’s judgment and could materially affect our financial condition and results of operations.
Reworded paragraphs (11)
Previous wording
Comparison of the Three Months Ended March 31, 2024 and 2023
Current wording
Comparison of the Three and Six Months Ended June 30, 2024 and 2023
Previous wording
Our financial results for the three months ended March 31, 2024 and 2023 are summarized as follows:
Current wording
Our financial results for the three and six months ended June 30, 2024 and 2023 are summarized as follows:
Previous wording
We expect general and administrative expenses to decrease in fiscal year 2024 as compared to fiscal year 2023 due to the non-recurring expenses that were incurred in 2023 related to the unsolicited, non-binding proposal to acquire all outstanding shares of the Company from a third party and the tender offer we completed in September 2023.
Current wording
We expect general and administrative expenses to continue at lower levels in fiscal year 2024 as compared to fiscal year 2023 due to the non-recurring expenses that were incurred in 2023 related to the unsolicited, non-binding proposal to acquire all outstanding shares of the Company from a third party and the tender offer we completed in September 2023.
Previous wording
Research and development expenses relate to activities primarily focused on the development of PAS-004 for the three months ended March 31, 2024, and PAS-004, PAS-003, and PAS-001 for the three months ended March 31, 2023.
Current wording
Research and development expenses relate to activities primarily focused on the development of PAS-004 for the three and six months ended June 30, 2024, and PAS-004, PAS-003, and PAS-001 for the three and six months ended June 30, 2023.
Previous wording
Research and development expenses increased by approximately $652,000, or 60%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The increase was primarily driven by increases in (i) clinical development costs of approximately $683,000 related to the initiation of the Phase 1 clinical trial of PAS-004, (ii) CMC expenses of approximately $342,000 related to the manufacturing of PAS-004 drug substance and drug product, and (iii) non-cash stock-based compensation of approximately $92,000, offset by decreases in preclinical research and development expenses related to our discovery programs of approximately $463,000.
Current wording
Research and development expenses increased by approximately $307,000, or 15%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increase was primarily driven by increases in (i) clinical trial costs of approximately $844,000 related to the initiation of the Phase 1 clinical trial of PAS-004, (ii) personnel expenses, including salaries, benefits and severance payments of approximately $279,000 related to the closure of our research laboratory and reduction in related workforce, and (iii) general expenses of approximately $74,000, offset by decreases in (i) manufacturing and CMC expenses of approximately $323,000, (ii) preclinical research and development expenses related to our discovery programs of approximately $ 460,000, (iii) consulting costs of approximately $53,000 and (iv) non-cash stock-based compensation of approximately $54,000.
Previous wording
We expect research and development expenses to increase in fiscal year 2024 as compared to fiscal year 2023 primarily due to the clinical development of PAS-004 as well as PAS-004 CMC activities.
Current wording
We expect research and development expenses to increase in fiscal year 2024 as compared to fiscal year 2023 primarily due to the clinical development of PAS-004 as well as PAS-004 CMC activities, offset by decreases in preclinical research and development related to the closure of our research laboratory.
Previous wording
For the three months ended March 31, 2024, other income (expense), net increased by approximately $233,000 compared to the three months ended March 31, 2023. The increase in other income (expense), net is due primarily to dividend income of $153,000 during the three months ended March 31, 2024 that did not occur in the three months ended March 31, 2023. The remaining increase in other income (expense), net is related to the decrease in the fair value of warrant liabilities. See “Note 2 – Summary of Significant Accounting Policies” in the Notes to Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for more information on the accounting treatment of the Public Warrants and the Representative Warrants.
Current wording
For the six months ended June 30, 2024, other income (expense), net increased by approximately $81,000, or 46%, compared to the six months ended June 30, 2023. The increase in other income (expense), net is due primarily to dividend income of $268,000 during the six months ended June 30, 2024 compared to approximately $111,000 of dividend income during the six months ended June 30, 2023. This increase was partially offset related to the decrease in the fair value of warrant liabilities. See “Note 2 – Summary of Significant Accounting Policies” in the Notes to Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q for more information on the accounting treatment of the Public Warrants and the Representative Warrants.
Previous wording
Working capital decreased by approximately $3.3 million between December 31, 2023 and March 31, 2024 due primarily to cash used to fund operations for the three months ended March 31, 2024.
Current wording
Working capital decreased by approximately $6.8 million between December 31, 2023 and June 30, 2024 due primarily to cash used to fund operations for the six months ended June 30, 2024.
Previous wording
Cash and cash equivalents decreased by approximately $4.3 million for the three months ended March 31, 2024, compared to a decrease of approximately $3.2 million for the three months ended March 31, 2023, which was primarily attributable to cash used to fund operations and an increase in prepaid expenses.
Current wording
Cash and cash equivalents decreased by approximately $8.4 million for the six months ended June 30, 2024, compared to a decrease of approximately $6.4 million for the six months ended June 30, 2023, which was primarily attributable to cash used to fund operations and an increase in prepaid expenses.
Previous wording
As of March 31, 2024, we had approximately $12.0 million in operating bank accounts and money market funds, with working capital of approximately $10.7 million. We have incurred significant operating losses and negative cash flows from operations. On March 31, 2024, we had an accumulated deficit of approximately $39.1 million. We have incurred recurring losses, have experienced recurring negative operating cash flows, and require significant cash resources to execute our business plans. Historically, our major sources of cash have been comprised of proceeds from various public and private offerings of our capital stock. We are dependent on obtaining additional working capital funding from the sale of equity and/or debt securities in order to continue to execute our development plans and continue operations. Subsequent to the consummation of the Initial Public Offering, our liquidity was and continues to be satisfied through the net proceeds from the Initial Public Offering, the private placement we consummated in November 2021 and the receipt of cash upon the prior exercise of our outstanding warrants. Based on the foregoing, management believes that we will not have sufficient working capital to meet our needs through twelve months from the issuance date of the financial statements included in this annual report, without raising additional capital.
Current wording
As of June 30, 2024, we had approximately $8.0 million in operating bank accounts and money market funds, with working capital of approximately $7.2 million. We have incurred significant operating losses and negative cash flows from operations. On June 30, 2024, we had an accumulated deficit of approximately $43.0 million. We have incurred recurring losses, have experienced recurring negative operating cash flows, and require significant cash resources to execute our business plans. Historically, our major sources of cash have been comprised of proceeds from various public and private offerings of our capital stock. We are dependent on obtaining additional working capital funding from the sale of equity and/or debt securities in order to continue to execute our development plans and continue operations. Subsequent to the consummation of the Initial Public Offering, our liquidity was and continues to be satisfied through the net proceeds from the Initial Public Offering, the private placement we consummated in November 2021 and the receipt of cash upon the prior exercise of our outstanding warrants. Based on the foregoing, management believes that we will not have sufficient working capital to meet our needs through twelve months from the issuance date of the condensed consolidated financial statements, without raising additional capital.
Previous wording
Our critical accounting estimates, which include (1) revenue recognition, (2) stock-based compensation and (3) fair value measurements, are more fully described in the Notes to our Consolidated Financial Statements included in our Form 10-K for the fiscal year ended December 31, 2023, as filed on March 29, 2024. During the three months ended March 31, 2024, there were no material changes to our critical accounting policies and estimates from those described in our Form 10-K.
Current wording
Our critical accounting estimates, which include (1) revenue recognition, (2) stock-based compensation and (3) fair value measurements, are more fully described in the Notes to our Consolidated Financial Statements included in our Form 10-K for the fiscal year ended December 31, 2023, as filed on March 29, 2024. During the six months ended June 30, 2024, there were no material changes to our critical accounting policies and estimates from those described in our Form 10-K.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
For the three months ended June 30, 2024, other income (expense), net decreased by approximately $152,000, or 66%, compared to the three months ended June 30, 2023. The decrease in other income (expense), net is due primarily to a decrease in the fair value of the Public Warrants and the Representative Warrants (as such terms are defined in “Note 2 – Summary of Significant Accounting Policies” in the Notes to Unaudited Condensed Consolidated Financial Statements in Part I, Item 1 of this Form 10-Q) that occurred during the three months ended June 30, 2024, compared to a larger increase in the fair value of the Public Warrants and the Representative Warrants that occurred during the three months ended June 30, 2023.