What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-14 compared with 2025-05-15 · 195 added, 154 removed, 139 unchanged (72% of the section changed)

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of Financial Condition and Results of Operations

You should read the following

discussion and analysis of financial condition and operating results together with our financial statements and the related notes and

other financial information included elsewhere in this quarterly report on Form 10-Q, as well as our audited consolidated financial statements

and related notes as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed on March 24, 2025.

discussion contains forward-looking statements that involve risks and uncertainties.

As a result of many factors, such as those set forth

in the section of this report captioned “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q as well as the

risk factors set forth in the section titled “Risk Factors” included in our Annual Report on Form 10-K, our actual results

may differ materially from those anticipated in these forward-looking statements.

For convenience of presentation some of the numbers

have been rounded in the text below.

Throughout this report, the terms “our,”

“we,” “us,” and the “Company” refer to Pasithea Therapeutics Corp.

and its subsidiaries, Pasithea

Therapeutics Limited (UK), Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, Pasithea Clinics Inc., Alpha-5 Integrin, LLC (“Alpha-5”),

AlloMek Therapeutics, LLC (“AlloMek” )and Pasithea MacroMEK Pty Ltd.

Pasithea Therapeutics Limited (UK), legally dissolved

as of January 2, 2024, was a private limited Company, registered in the United Kingdom (UK).

You should read the following discussion and

analysis of financial condition and operating results together with our financial statements and the related notes and other financial

information included elsewhere in this quarterly report on Form 10-Q, as well as our audited consolidated financial statements and related

notes as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed on March 24, 2025.

This discussion

contains forward-looking statements that involve risks and uncertainties.

As a result of many factors, such as those set forth in the

section of this report captioned “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q as well as the risk factors

set forth in the section titled “Risk Factors” included in our Annual Report on Form 10-K, our actual results may differ materially

from those anticipated in these forward-looking statements.

For convenience of presentation some of the numbers have been rounded in the

Throughout this report, the terms

“our,” “we,” “us,” and the “Company” refer to Pasithea Therapeutics Corp.

subsidiaries, Pasithea Therapeutics Limited (UK), Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, Pasithea Clinics Inc.,

Alpha-5 Integrin, LLC (“Alpha-5”), AlloMek Therapeutics, LLC (“AlloMek”) and Pasithea MacroMEK Pty Ltd.

Pasithea Therapeutics Limited (UK), legally dissolved as of January 2, 2024, was a private limited company, registered in the United

Kingdom (UK).

Pasithea Clinics Inc.

is incorporated in

Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, is a private limited Company, registered in Portugal.

AlloMek are both Delaware limited liability companies.

Pasithea MacroMEK Pty Ltd is registered in Australia.

The operations of Pasithea

Therapeutics Limited (UK), Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, and Pasithea Clinics Inc.

is incorporated in Delaware.

Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, is a

private limited company, registered in Portugal.

Alpha-5 and AlloMek are both Delaware limited liability companies.

MacroMEK Pty Ltd is registered in Australia.

The operations of Pasithea Therapeutics Limited (UK), Pasithea Therapeutics Portugal,

Sociedade Unipessoal Lda, and Pasithea Clinics Inc.

have been discontinued.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form

10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E

of the Securities Exchange Act of 1934, as amended.

This Quarterly Report on Form 10-Q contains forward-looking

statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act

of 1934, as amended (the “Exchange Act”).

These statements are generally identified by the use of such words as “may,”

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our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

our plans to develop and commercialize our product candidates involves a lengthy and expensive process, with an uncertain outcome;

our ability to regain and maintain compliance with the listing standards of The Nasdaq Capital Market;

our plans to develop and commercialize our product candidates involve a lengthy and expensive process, with an uncertain outcome;

the initiation, enrollment, timing, progress, results, and cost of our research and development programs and our current and future preclinical studies and clinical trials, including statements regarding the timing of initiation and completion of studies or trials and related preparatory work, the period during which the results of the trials will become available;

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our plans and ability to obtain or protect intellectual property rights, including extensions of patent terms where available and our ability to avoid infringing the intellectual property rights of others;

our financial performance and sustaining an active trading market for our Common Stock and Warrants;

our financial performance

and sustaining an active trading market for our Common Stock and Public Warrants;

our ability to restructure our operations to comply with any potential future changes in government regulation;

the impact of global economic and market conditions and political developments on our business, including, among others, rising inflation and capital market disruptions, economic sanctions, bank failures, regional conflicts around the world, and economic slowdowns or recessions that may result from such developments which could harm our research and development efforts as well as the value of our Common Stock and our ability to access capital markets.

Because forward-looking statements are inherently

subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should

not rely on these forward-looking statements as predictions of future events.

The events and circumstances reflected in our forward-looking

statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements.

You should refer to the “Risk Factors” section of this Quarterly Report for a discussion of important factors that may cause

our actual results to differ materially from those expressed or implied by our forward-looking statements.

We operate in an evolving environment

and new risk factors and uncertainties may emerge from time to time.

It is not possible for management to predict all risk factors and

uncertainties.

As a result of these factors, we cannot assure you that the forward-looking statements in this Quarterly Report will prove

to be accurate.

Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained

herein, whether as a result of any new information, future events, changed circumstances or otherwise.

You should review the factors and

risks and other information we describe in the reports we will file from time to time with the SEC.

Because forward-looking statements are

inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our

control, you should not rely on these forward-looking statements as predictions of future events.

The events and circumstances

reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those

projected in the forward-looking statements.

You should refer to the “Risk Factors” section of this Quarterly Report as

well as the section titled “Risk Factors” included in our most recent Annual Report on Form 10-K for a discussion of

important factors that may cause our actual results to differ materially from those expressed or implied by our forward-looking

We operate in an evolving environment and new risk factors and uncertainties may emerge from time to time.

possible for management to predict all risk factors and uncertainties.

As a result of these factors, we cannot assure you that the

forward-looking statements in this Quarterly Report will prove to be accurate.

Except as required by applicable law, we do not plan

to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future

events, changed circumstances or otherwise.

You should review the factors and risks and other information we describe in the reports

we will file from time to time with the SEC.

Company Summary

We are a clinical-stage biotechnology company

primarily focused on the discovery, research and development of innovative treatments for CNS disorders and other diseases, including

Our primary operations, (the

“Therapeutics” segment) are focused on developing our lead product candidate, PAS-004, a next-generation macrocyclic

mitogen-activated protein kinase, or MEK inhibitor that we believe may address the limitations and liabilities associated with

existing drugs targeting a similar mechanism of action.

primarily focused on the discovery, research and development of innovative treatments for CNS disorders, RASopathies, MAPK pathway-driven

tumors and other diseases.

Our primary operations (the “Therapeutics”

segment) are focused on developing our lead product candidate, PAS-004, a next-generation macrocyclic mitogen-activated protein kinase,

or MEK inhibitor that we believe may address the limitations and liabilities associated with existing drugs targeting a similar mechanism

In December 2023, the U.S.

Food and Drug Administration (the

“FDA”) cleared our Investigational New Drug application (the “IND”) for PAS-004 and we received a study may

proceed letter from the FDA for our Phase 1 multicenter, open-label, dose escalation trial of PAS-004 in patients with MAPK

pathway-driven advanced tumors with a documented RAS, NF1 or RAF mutation or patients who have failed BRAF/MEK inhibition (the

“FIH Phase 1 Dose Escalation Study”).

We are currently conducting the FIH Phase 1 Dose Escalation Study at four clinical

sites in the United States and three additional sites in Eastern Europe.

Our clinical development plan is to advance PAS-004 into a

Phase 1/1b clinical trial in adult patients with neurofibromatosis type 1 (NF1)-associated plexiform neurofibromas

(“NF1-PN”) followed by pediatric NF1-PN patients and ultimately complete registrational clinical trials in these patient

populations, which are the initial indications that the Company plans to seek marketing approval for PAS-004.

Additionally, we have two programs that are in the discovery stage,

which we believe address limitations in the treatment paradigm of the indications we plan to address with these programs, which are currently

ALS for PAS-003 and schizophrenia for PAS-001.

Food and Drug Administration (the “FDA”) cleared our Investigational New Drug application

(the “IND”) for PAS-004 and we received a study may proceed letter from the FDA for our Phase 1 multicenter, open-label, dose

escalation trial of PAS-004 in patients with MAPK pathway-driven advanced tumors with a documented RAS, NF1 or RAF mutation or patients

who have failed BRAF/MEK inhibition (the “FIH Phase 1 Dose Escalation Study”).

We are currently conducting the FIH Phase 1

Dose Escalation Study at four clinical sites in the United States and three additional sites in Eastern Europe and expect to complete

the FIH Phase 1 Dose Escalation Study in 2026.

In May 2025, we initiated a Phase 1/1b multicenter,

open-label, dose escalation trial of PAS-004 in adult patients with neurofibromatosis type 1 (“NF1”) with symptomatic and

inoperable, incompletely resected, or recurrent plexiform neurofibromas (“PN”) with the activation of the first clinical trial

site in Australia.

We expect to conduct the trial at a total of five sites in Australia, South Korea and the United States in up to 24

patients in a dose escalation phase followed by 24 patients in an expansion phase.

The initial indication we plan to seek FDA marketing

approval for PAS-004 is the treatment of symptomatic PNs in both adult and pediatric patients with NF1.

As such, we aim 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.

Additionally, we have two programs that are in

the discovery stage, which we believe address limitations in the treatment paradigm of the indications we plan to address with these programs,

which are currently amyotrophic lateral sclerosis (“ALS”) for PAS-003 and schizophrenia for PAS-001.

Our ability to generate product revenue will depend

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hire additional clinical, scientific and commercial personnel;

add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts, as well as to support our transition to a public reporting company;

add operational, financial and management information systems and personnel, including personnel to support our product development and planned future commercialization efforts;

acquire or in-license or invent other product candidates or technologies.

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Clinical Updates

On April 29, 2025, we announced completion of enrollment and initial dosing of three subjects in cohort 6 with

30mg capsules of PAS-004 from our ongoing FIH Phase 1 Dose Escalation Study.

On May 6, 2025, we announced pharmacodynamics

results demonstrating robust target engagement from our ongoing FIH Phase 1 Dose Escalation Study of PAS-004.

On May 14, 2025, we announced the initiation of our Phase 1/1b clinical trial to assess PAS-004 in adults NF1-PN patients.

May 2025 Offering

On May 7, 2025, we closed a public offering (the

“May 2025 Offering”) of 3,571,428 shares of Common Stock (or pre-funded warrants in lieu thereof) and accompanying Series

C warrants to purchase up to 3,571,428 shares of Common Stock and Series D warrants to purchase up to 3,571,428 shares of Common Stock,

at a combined offering price of $1.40 per share of Common Stock (or per pre-funded warrant) and accompanying warrants.

On April 29, 2025, we announced completion of

enrollment and initial dosing of three subjects in cohort 6 with 30mg capsules of PAS-004 from our ongoing FIH Phase 1 Dose Escalation

On May 6, 2025, we announced pharmacodynamics results demonstrating robust target engagement from our ongoing FIH Phase 1 Dose

Escalation Study of PAS-004.

On May 14, 2025, we announced the initiation of our Phase 1/1b clinical trial to assess PAS-004 in adult

NF1-PN patients.

On July 31, 2025, we announced the completion of enrollment and initial dosing of the first cohort of three patients

from our Phase 1/1b clinical trial in adult NF1-PN patients.

May 2025 Public Offering

On May 7, 2025, we closed a public offering (the “May 2025 Public

Offering”) of 3,571,428 shares of Common Stock (or pre-funded warrants in lieu thereof) and accompanying Series C warrants to purchase

up to 3,571,428 shares of Common Stock and Series D warrants to purchase up to 3,571,428 shares of Common Stock, at a combined offering

price of $1.40 per share of Common Stock (or per pre-funded warrant in lieu thereof) and accompanying warrants.

The Series C warrants

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Additionally, in connection

with the closing of the offering, certain investors exercised Series D warrants to purchase an aggregate of 914,286 shares of Common

Stock, resulting in additional gross proceeds of approximately $1.3 million.

Total gross proceeds to the Company from the offering

were $5.0 million, before deducting the placement agent’s fees and other offering expenses payable by the Company.

Aggregate gross

proceeds from the offering and the exercise of the Series D warrants were approximately $6.3 million.

with the closing of the May 2025 Public Offering, certain investors exercised Series D warrants to purchase an aggregate of 914,286 shares

of Common Stock, resulting in additional gross proceeds of approximately $1.3 million.

Total gross proceeds to the Company from the May

2025 Public Offering were $5.0 million, before deducting the placement agent’s fees and other offering expenses payable by the

Aggregate gross proceeds from the May 2025 Public Offering and the exercise of the Series D warrants were approximately $6.3

Nasdaq Deficiency

On June 23, 2025, we received a written notice

(the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) indicating that

we are not in compliance with the $1.00 minimum bid price requirement set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing

on The Nasdaq Capital Market (the “Bid Price Requirement”).

The Notice does not result in the immediate delisting of our Common

Stock from The Nasdaq Capital Market.

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 as contemplated in our proxy statement for our

2025 annual meeting of stockholders.

Impact of Inflation

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Results of Operations

Comparison of the Three Months Ended March

31, 2025 and 2024

Our financial results for the three months ended

March 31, 2025 and 2024 are summarized as follows:

For the Three Months Ended March 31,

Comparison of the Three and Six Months Ended

June 30, 2025 and 2024

Our financial results for the three and six months

ended June 30, 2025 and 2024 are summarized as follows:

For the Three Months Ended

General and administrative

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Other income, net

For the Six Months Ended

General and administrative

General and administrative expenses consist primarily

of personnel expenses, including salaries, benefits, and stock-based compensation expense, for employees and consultants in executive,

finance and accounting, legal, operations support, information technology and human resource functions.

General and administrative expenses

also include corporate facility costs not otherwise included in research and development expenses, including rent, utilities, depreciation,

amortization, and maintenance, as well as legal fees related to intellectual property and corporate matters, fees for accounting and consulting

services and other expenses, including insurance, public company and corporate communications, information technology, and board fees.

Research and development

Loss from operations

Other income, net

General and administrative

General and administrative expenses increased

by approximately $75,000, or 5%, for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

was primarily driven by increases in (i) accounting and business development of approximately $126,000, (ii) other income of $94,000,

(iii) personnel and other expense of approximately $80,000, (iv) gain on asset disposal of approximately $9,000, (v) consulting costs

of approximately $9,000, and (vi) legal expenses of approximately $5,000.

These increases were partially offset by decreases in (i) office

expenses of approximately $153,000, (ii) non-cash stock-based expense of approximately $54,000 and (iii) public company expenses of approximately

General and administrative expenses decreased by approximately $266,000,

or 15%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

The decrease was primarily driven

by decreases in (i) legal expenses of approximately $246,000, (ii) non-cash stock-based expense of approximately $161,000, (iii) public

company expenses of approximately $57,000, (iv) accounting and business development of approximately $8,000 and (v) personnel and other

expense of approximately $8,000.

These decreases were partially offset by an increase in office and other general and administrative expenses

of approximately $139,000.

We expect general and administrative expenses to decrease slightly

in fiscal year 2025 as compared to fiscal year 2024 primarily due to reduced legal and public company and corporate communications expenses.

or 7%, for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The decrease was primarily driven by decreases

in (i) legal expenses of approximately $241,000, (ii) non-cash stock-based expense of approximately $215,000, (iii) public company expenses

of approximately $96,000, and (iv) office expenses of approximately $38,000.

These decreases were partially offset by increases

in (i) accounting and business development of approximately $117,000, (ii) personnel and other expense of approximately $95,000, (iii)

other income of approximately $94,000, (iv) gain on asset disposal of approximately $9,000, and (v) consulting costs of approximately

We expect general and administrative expenses

to decrease slightly throughout fiscal year 2025 as compared to fiscal year 2024 primarily due to reduced legal and public company and

corporate communications expenses.

Research and Development

Research and development expenses relate to activities primarily focused

on the development of PAS-004 for the three months ended March 31, 2025, and PAS-004, PAS-003, and PAS-001 for the three months ended

March 31, 2024.

Research and development expenses decreased by approximately $19,000,

or 1%, for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

The decrease was primarily driven

by decreases in (i) preclinical research and development expenses related to our discovery programs of approximately $475,000, (ii) consulting

expense of approximately $97,000, (iii) stock compensation expense of approximately $87,000, (iv) manufacturing and CMC expenses of approximately

$56,000 and (v) other expense of approximately $30,000.

These decreases were offset by an increase in clinical trials expense of approximately

$726,000 related to the ongoing FIH Phase 1 Dose Escalation Study of PAS-004.

We expect research and development expenses to increase in fiscal year

2025 as compared to fiscal year 2024 primarily due to (i) an increase in clinical research for PAS-004 related to the ongoing FIH Phase

1 Dose Escalation Study and the planned upcoming phase 1/1b clinical trial of PAS-004 in adult NF1-PN patients, and (ii) an increase in

manufacturing costs related to the drug supply for our clinical trials, offset by decreases in pre-clinical research and the reduction

in workforce related to the closure of our research laboratory.

Research and development expenses relate to activities

primarily focused on the development of PAS-004 for the three and six months ended June 30, 2025, and PAS-004, PAS-003, and PAS-001 for

the three and six months ended June 30, 2024.

Research and development

expenses decreased by approximately $209,000, or 9%, for the three months ended June 30, 2025 compared to the three months ended June

The decrease was primarily driven by decreases in (i) preclinical research and development expenses related to de-prioritization

of our discovery programs of approximately $850,000, (ii) consulting expense of approximately $32,000, (iii) stock compensation expense

of approximately $49,000, (iv) manufacturing and CMC expenses of approximately $289,000 and (v) other expense of approximately $69,000.

These decreases were partially offset by an increase in clinical trials expense of approximately $1,080,000 related to the ongoing FIH

Phase 1 Dose Escalation Study of PAS-004 and the initiation of the Phase 1/1b clinical trial of PAS-004 in adult NF1-PN patients.

Research and development

expenses decreased by approximately $229,000, or 6%, for the six months ended June 30, 2025 compared to the six months ended June 30,

The decrease was primarily driven by decreases in (i) preclinical research and development expenses related to our discovery programs

of approximately $1,325,000, (ii) consulting expense of approximately $130,000, (iii) stock compensation expense of approximately $136,000,

(iv) manufacturing and CMC expenses of approximately $345,000 and (v) other expense of approximately $122,000.

These decreases were partially

offset by an increase in clinical trials expense of approximately $1,829,000 related to the ongoing FIH Phase 1 Dose Escalation Study

of PAS-004 and the initiation of the Phase 1/1b clinical trial of PAS-004 in adult NF1-PN patients.

We expect research and development expenses to

increase throughout fiscal year 2025 as compared to fiscal year 2024 primarily due to (i) an increase in clinical research for PAS-004

related to the ongoing FIH Phase 1 Dose Escalation Study and the Phase 1/1b clinical trial of PAS-004 in adult NF1-PN patients, and (ii)

an increase in manufacturing costs related to the drug supply for our clinical trials, offset by decreases in pre-clinical research and

the reduction in workforce related to the closure of our research laboratory.

Other income, net

For the three months ended March 31, 2025, other income, net decreased

by approximately $63,000, or 35%, compared to the three months ended March 31, 2024.

The decrease in other income, net is due primarily

to a decrease in interest and dividends, net of approximately $106,000, a realized foreign currency translation loss from dissolution

of subsidiaries of approximately $7,000, partially offset by an increase 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) of approximately $50,000.

For the three months ended June 30, 2025, other

income, net increased by approximately $16,000, or 20%, compared to the three months ended June 30, 2024.

The increase in other income,

net is primarily due to increases in foreign currency transactions gain of approximately $29,000, 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) of approximately $27,000, and other

income of approximately $20,000, partially offset by a decrease in interest and dividends, net of approximately $60,000.

For the six months ended June 30, 2025, other

income, net decreased by approximately $47,000, or 18%, compared to the six months ended June 30, 2024.

The decrease in other income,

net is due primarily to decreases in interest and dividends, net of approximately $166,000 and a realized foreign currency translation

loss from dissolution of subsidiaries of approximately $7,000, partially offset by an increase in fair value of the Public Warrants and

the Representative Warrants of approximately $77,000, foreign currency transactions gain of approximately $29,000 and other income of

approximately $20,000.

Working Capital

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Working capital

Working capital decreased by approximately $1.7

million between March 31, 2025 and December 31, 2024 primarily due to cash used to fund operations for the three months ended March 31,

Working capital increased by approximately $0.6

million between June 30, 2025 and December 31, 2024 primarily due to cash received from the May 2025 Public Offering.

Liquidity and Financial Condition

For the Three Months

For the Six Months Ended

$ (7,279,395 )

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Effect of foreign currency translation on cash

Decrease in cash and cash equivalents

$ (1,581,451 )

Increase (decrease) in cash and cash equivalents

$ (8,363,483 )

Cash and cash equivalents decreased by approximately $1.6 million for

the three months ended March 31, 2025 compared to a decrease of approximately $4.3 million for the three months ended March 31, 2024.

The decrease for the three months ended March 31, 2025 was primarily attributable to cash used to fund operations which was partially

offset by at-the-market sales of common stock of approximately $1.7 million.

The decrease for the three months ended March 31, 2024 was

primarily attributable to cash used to fund operations and an increase in prepaid expenses.

Cash and cash equivalents increased by approximately

$0.3 million for the six months ended June 30, 2025 compared to a decrease of approximately $8.4 million for the six months ended June

The increase in cash and cash equivalents for the six months ended June 30, 2025 was primarily attributable to cash provided

by financing activities related to proceeds from at-the-market sales of common stock of $2.0 million, proceeds from the issuance of common

stock through a May 2025 Public Offering of $4.2 million and proceeds from the exercise of warrants of $1.3 million, which was partially

offset by payments on director and officer insurance of $0.3 million.

These net financing proceeds were partially offset by cash used

in operations of approximately $6.9 million.

The decrease for the six months ended June 30, 2024 was primarily attributable to cash used

to fund operations.

Liquidity & Capital Resources Outlook

As of March 31, 2025, we had approximately

$5.3 million in operating bank accounts and money market funds, with working capital of approximately $4.5 million.

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 placements we consummated in

November 2021 and September 2024, the May 2025 Offering described above, the receipt of cash upon the prior exercise of our

outstanding warrants and the sale of Common Stock pursuant to the ATM Agreement.

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 Quarterly Report, without raising additional capital.

As of June 30, 2025, we had approximately $7.2 million in operating

bank accounts and money market funds, with working capital of approximately $6.9 million.

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 placements we consummated in November 2021 and September 2024, the May 2025 Public Offering

described above, the receipt of cash upon the prior exercise of our outstanding warrants and the sale of Common Stock pursuant to the

ATM Agreement.

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 Quarterly Report, without raising additional capital.

We are able to sell securities on a shelf registration

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to an aggregate of one-third of our public float, which is referred to as the baby shelf rules.

As of March 31, 2025, our calculated public

As of June 30, 2025, our calculated public

float is below $75.0 million and we will be restricted from selling more than an aggregate of one-third of our public float pursuant to

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Critical Accounting Estimates

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

Our critical accounting estimates, which include (1) stock-based compensation and (2) 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, 2024, as filed on March 24, 2025.

During the three

months ended March 31, 2025, there were no material changes to our critical accounting policies and estimates from those described in

our Form 10-K.

months ended June 30, 2025, there were no material changes to our critical accounting policies and estimates from those described in our

Recent Accounting Pronouncements

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis