Financial Performance - The company incurred net losses of approximately 16.0 million for the years ended December 31, 2024 and 2023, respectively, with an accumulated deficit of approximately 13,904,584, a decrease of 15,961,658 in 2023 [359]. - Working capital decreased by 9.4 million for the year ended December 31, 2024, compared to a decrease of approximately 126,000, or 26.8%, for the year ended December 31, 2024, primarily due to an increase in the fair value of warrant liabilities [365]. Capital Requirements - As of December 31, 2024, the company had cash and cash equivalents of approximately 2,076,000 of its Common Stock [217]. Product Development and Regulatory Challenges - The company is dependent on the successful development and commercialization of its lead product candidate, PAS-004, which is not yet approved [204]. - The regulatory approval processes for product candidates are lengthy and unpredictable, with no assurance of obtaining necessary approvals [243]. - The FDA or foreign regulatory bodies may delay or deny approval of product candidates, significantly harming the company's business prospects [247]. - The company may need to abandon or change the prioritization of product candidates based on various factors, including regulatory requirements and market conditions [238]. - Clinical trial delays may arise from various factors, including inability to generate sufficient preclinical data and delays in reaching agreements with contract research organizations [255]. Market and Economic Risks - The company faces risks from unfavorable global economic conditions, including extreme volatility in credit and financial markets, rising interest rates, and geopolitical events [228]. - Future adverse developments in the financial services industry may lead to market-wide liquidity shortages, impairing the company's ability to access working capital [230]. - Disruptions in the global economy and supply chains since 2020 have resulted in longer lead times and increased costs, impacting the company's financial condition and operations [281]. - Inflation may increase costs related to clinical trials and research and development, potentially leading to faster depletion of cash reserves [282]. Operational and Staffing Challenges - Increased labor costs and staffing challenges are expected, which could disrupt business operations and increase operating expenses [233]. - The company has incurred increased labor costs and may face challenges in attracting and retaining key leadership talent, impacting operational efficiency [232]. - The company has a limited operating history, making it difficult for investors to evaluate its current business and predict future success [205]. Internal Controls and Compliance - The company identified a material weakness in financial reporting related to certain tax disclosures, which has since been remediated [315]. - Management evaluated the effectiveness of internal control over financial reporting as of December 31, 2024, using the criteria from the Internal Control - Integrated Framework (2013) [392]. - Management concluded that internal control over financial reporting was effective at a reasonable assurance level as of December 31, 2024 [393]. - There were no changes in internal control over financial reporting during the fiscal quarter ended December 31, 2024, that materially affected internal control [398]. Stock and Market Conditions - The market price of the company's Common Stock ranged from 8.75 per share for the year ended December 31, 2024, indicating high volatility [305]. - The company has never declared or paid any cash dividends on its equity securities and does not anticipate doing so in the foreseeable future [326]. - The company’s stockholders may face significant fluctuations in the market price of its Common Stock and Warrants due to various market conditions [306]. Strategic Partnerships and Collaborations - The company may face significant competition in securing strategic partnerships, which could delay the development and commercialization of product candidates [275]. - Future collaborations may restrict the company's ability to independently pursue new product candidates, impacting strategic initiatives [304]. - The company faces risks related to potential conflicts with collaborators that could delay or terminate product development [300]. Research and Development Focus - The company is focused on developing PAS-004, a next-generation MEK inhibitor, with a Phase 1 multicenter trial currently underway at four U.S. sites and three in Eastern Europe [351]. - The FDA cleared the Investigational New Drug application for PAS-004 in December 2023, allowing the company to proceed with clinical trials [351]. - The company anticipates an increase in research and development expenses in fiscal year 2025 due to ongoing clinical research for PAS-004 [364].
Pasithea Therapeutics (KTTA) - 2024 Q4 - Annual Report