What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-13 compared with 2025-08-14 · 149 added, 150 removed, 184 unchanged (62% of the section changed)

9 unchanged sentences

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 Delaware.

Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, is a

private limited company, registered in Portugal.

set forth in the section titled “Risk Factors” included in our most recent 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 (U.K.), 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 (U.K.), legally dissolved

as of January 2, 2024, was a private limited company, registered in the United Kingdom (U.K.).

Pasithea Clinics Inc., legally dissolved

as of September 3, 2025, was 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.

Pasithea MacroMEK Pty Ltd is registered

in Australia.

The operations of Pasithea Therapeutics Limited (U.K.), Pasithea Therapeutics Portugal, Sociedade Unipessoal Lda, and Pasithea

have been discontinued.

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potential impacts of increased trade tariffs, import quotas or other trade restrictions or measures taken by the United States and other countries, including the recent and potential changes in U.S.

trade policies that may be made by the Trump presidential administration;

trade policies that have been and may be made by the Trump presidential administration;

the timing and focus of our future preclinical studies and clinical trials, and the reporting of data from those studies and trials;

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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 Public 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 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.

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 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.

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

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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.

In May 2025, we initiated our 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”).

We are currently conducting 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 approximately 24 patients in an expansion phase.

The initial indication we plan to seek FDA marketing

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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

have an exercise price of $1.40 per share, are exercisable upon issuance and will expire five years thereafter.

The Series D warrants

have an exercise price of $1.40 per share, are exercisable upon issuance and will expire 18 months thereafter.

Additionally, in connection

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.

On September 16, 2025, we announced the activation

of two clinical trial sites in South Korea—Asan Medical Centre and Severance Hospital Yonsei University Health System—in connection

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

On November 4, 2025, we announced the activation

of a new U.S.

clinical trial site at the University of Alabama at Birmingham in connection with the Phase 1/1b clinical trial of PAS-004

in adult NF1-PN patients.

Amendment to the 2023 Stock Incentive Plan

On September 3, 2025, at our 2025 Annual Meeting

of Stockholders, our stockholders approved an amendment (the “Plan Amendment”) to our 2023 Stock Incentive Plan (the “2023

Incentive Plan”) increasing the number of shares of Common Stock authorized for issuance under the 2023 Incentive Plan by 1,750,000

shares to 2,014,221 shares.

The Plan Amendment became effective following its approval by our stockholders.

Impact of Inflation

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Results of Operations

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

Comparison of the Three and Nine Months Ended

September 30, 2025 and 2024

Our financial results for the three and nine months

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

For the Three Months Ended September 30,

General and administrative

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Other income, net

For the Six Months Ended

$ (3,037,420 )

$ (2,999,834 )

For the Nine Months Ended September 30,

General and administrative

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Loss from operations

(10,601,133 )

(10,990,412 )

Other income, net

$ (10,316,815 )

$ (10,726,923 )

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 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

by approximately $329,000, or 23%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

The increase was primarily driven by increases in (i) legal expenses of approximately $157,000, (ii) corporate expenses including asset

write-off of approximately $114,000, (iii) public company expenses of approximately $46,000, (iv) accounting and business development

expenses of approximately $43,000, (v) other income of approximately $41,000, (vi) personnel and other expense of approximately $14,000

and (vii) consulting costs of approximately $10,000.

These increases were partially offset by decreases in (i) non-cash stock-based expense

of approximately $87,000 and (ii) gain on asset disposal of approximately $9,000.

General and administrative expenses increased

by approximately $63,000, or 1%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

increase was primarily driven by increases in (i) accounting and business development expenses of approximately $160,000, (ii) other income

of approximately $135,000, (iii) personnel and other expense of approximately $108,000, (iv) corporate expenses including asset write-off

of approximately $77,000 and (v) consulting expenses of approximately $19,000.

These increases were partially offset by decreases in (i)

non-cash stock-based expense of approximately $297,000, (ii) legal expenses of approximately $88,000 and (iii) public company expenses

of approximately $51,000.

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.

to increase throughout fiscal year 2025 as compared to fiscal year 2024 primarily due to increased non-cash stock-based compensation expenses.

Research and Development

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.

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

for the three and nine months ended September 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

expenses decreased by approximately $224,000, or 14%, for the three months ended September 30, 2025 compared to the three months ended

September 30, 2024.

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.

of our discovery programs of approximately $365,000, (ii) consulting expense of approximately $61,000 and (iii) other expense of approximately

These decreases were partially offset by an increase in clinical trials expense of approximately $419,000 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.

expenses decreased by approximately $452,000, or 8%, for the nine months ended September 30, 2025 compared to the nine months ended September

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

programs of approximately $1,690,000, (ii) manufacturing and CMC expenses of approximately $347,000, (iii) other expense of approximately

$338,000, (iv) consulting expense of approximately $190,000 and (v) stock compensation expense of approximately $135,000.

These decreases

were partially offset by an increase in clinical trials expense of approximately $2,248,000 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

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Other income, net

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.

For the three months ended September 30, 2025, other income, net increased

by approximately $68,000, or 1,423%, compared to the three months ended September 30, 2024.

The increase in other income, net is primarily

due to (i) increases in 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 $117,000 and (ii) other income of approximately $9,000, partially offset by (i) a decrease

in interest and dividends, net of approximately $32,000 and (ii) foreign currency transactions gain of approximately $26,000.

For the nine months ended September 30, 2025, other income, net increased

by approximately $21,000, or 8%, compared to the nine months ended September 30, 2024.

The increase in other income, net is due primarily

to increases in (i) fair value of the Public Warrants and the Representative Warrants of approximately $195,000, (ii) other income of

approximately $28,000 and (iii) foreign currency transactions gain of approximately $3,000.

These increases were partially offset by decreases

in (i) interest and dividends, net of approximately $198,000 and (ii) a realized foreign currency translation loss from dissolution of

subsidiaries of approximately $7,000.

Working Capital

September 30,

Current assets

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Working capital

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.

Working capital decreased by approximately $2.1

million between September 30, 2025 and December 31, 2024 primarily due to cash flow used to fund operations, partially offset by cash

received from the May 2025 Public Offering.

Liquidity and Financial Condition

For the Six Months Ended

For the Nine Months Ended

September 30,

$ (10,316,815 )

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Effect of foreign currency translation on cash

Increase (decrease) in cash and cash equivalents

Decrease in cash, cash equivalents and restricted cash

$ (2,699,177 )

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.

$ (6,969,883 )

Cash, cash equivalents and restricted cash decreased

by approximately $2.7 million for the nine months ended September 30, 2025 compared to a decrease of approximately $7.0 million for the

nine months ended September 30, 2024.

The decrease in cash, cash equivalents and restricted cash for the nine months ended September 30,

2025 was primarily attributable to cash provided by financing activities related to net loss of approximately $10.3 million, which was

partially offset by 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.

The decrease in cash, cash equivalents

and restricted cash of approximately $7.0 million for the nine months ended September 30, 2024 was primarily attributable to cash used

to fund operations of approximately $11.5 million, which was partially offset by net proceeds from the sale of warrants for the September

2024 Offering of approximately $4.5 million.

Liquidity & Capital Resources Outlook

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.

As of September 30, 2025, we had approximately

$4.1 million in operating bank accounts and money market funds, with working capital of approximately $4.2 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 public offering we consummated in May 2025, 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 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

a shelf registration statement in any twelve-month period, so long as the aggregate market value of our Common Stock held by non-affiliates

As of September 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 a shelf registration statement in any twelve-month period, so long as the aggregate market value of our Common Stock held by non-affiliates

is less than $75.0 million.

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Critical Accounting Estimates

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

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 September

30, 2025, there were no material changes to our critical accounting policies and estimates from those described in our Form 10-K.

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