Breaking Down Pasithea Therapeutics Corp. (KTTA) Financial Health: Key Insights for Investors

You're looking at Pasithea Therapeutics Corp. (KTTA) and seeing the classic high-stakes biotech dilemma: a company with virtually zero revenue but a recent, powerful clinical catalyst. The near-term financial picture is defintely challenging; the trailing twelve months (TTM) show a Net Loss of approximately $13.46 million against a TTM Research & Development (R&D) spend of $6.97 million, which explains why the stock trades around $0.2923 as of late November 2025, and why the consensus analyst rating is a clear "Sell." But here's the quick math on the opportunity: the company maintains a strong liquidity profile with a Current Ratio of 4.02 and holds about $4.12 million in cash, giving it a runway to execute on its core mission-plus, the recent announcement of Positive Phase 1/1b Study Results for PAS-004 is precisely the kind of data that can instantly re-rate a micro-cap with a market capitalization of only $2.18 million, so we need to map out if the cash on hand is enough to bridge the gap to a Phase 2 trial and what that means for your investment decision.

Revenue Analysis

If you are looking at Pasithea Therapeutics Corp. (KTTA) for a revenue-driven investment, you need to understand one critical fact upfront: this is a clinical-stage biotechnology company, and its revenue for the 2025 fiscal year is effectively zero. This isn't a red flag for a biotech firm, but it is a crucial context for valuation.

The company's primary focus is not generating sales but advancing its drug pipeline, specifically its lead therapeutic candidate, PAS-004, a next-generation MEK inhibitor. So, when we break down the revenue streams, there are none to speak of. The trailing twelve months (TTM) revenue ending June 30, 2025, was reported as $0.00. This means all operational activity is currently a cost center-Research and Development (R&D) and General and Administrative (G&A)-not a profit center.

Year-over-year revenue growth is a non-starter here. Since the reported revenue for the trailing 12 months ending June 30, 2025, is $0.00, the year-over-year growth rate is technically N/A, or 0% from a zero base. To be fair, this is the standard financial profile for a company that is still in clinical trials for its core product, not one selling a commercialized drug. The focus is on reaching a major clinical milestone, not on quarterly sales targets.

This lack of revenue means there are no contributing business segments to analyze in the traditional sense. All of the company's resources are dedicated to its core pipeline programs, which include PAS-004 for Neurofibromatosis Type 1 (NF1) and certain oncology indications, plus earlier-stage programs targeting Amyotrophic Lateral Sclerosis (ALS) and Schizophrenia.

Here's the quick math on where the money is actually going, which is the real story for a pre-revenue biotech. For the nine months ended September 30, 2025, the net loss was $10.32 million, reflecting the heavy investment in R&D and G&A, not sales.

The most significant change in the revenue profile is the sustained commitment to a pure R&D model since moving away from any small prior revenue sources, like the 2021 annual revenue of $15.06 thousand. That tiny revenue stream is now completely gone, which defintely clarifies the company's current all-in bet on its clinical pipeline. For a deeper dive into the cost side of the ledger, you should check out our full analysis: Breaking Down Pasithea Therapeutics Corp. (KTTA) Financial Health: Key Insights for Investors.

Your clear action here is to shift your analytical focus from the Income Statement's revenue line to the Balance Sheet's cash position and the R&D burn rate. As of September 30, 2025, the company reported approximately $4.1 million in cash and cash equivalents, and they are actively seeking additional funding.

Profitability Metrics

You're looking at Pasithea Therapeutics Corp. (KTTA) and trying to figure out if the financial engine is even running yet. The direct takeaway is this: as a clinical-stage biotechnology company, Pasithea Therapeutics Corp. is currently a pure expense machine, which is normal, but the size of the burn rate is what matters.

In the 2025 fiscal year, the company's profitability ratios are exactly what you'd expect for a firm with no commercialized products. Pasithea Therapeutics Corp. reported effectively $0 in revenue for the trailing twelve months (TTM) ending June 30, 2025, which means the gross profit margin is 0%. This isn't a sign of poor cost of goods sold (COGS) management; it's just the reality of a pre-revenue business. The focus must shift immediately to the operating and net losses.

Here's the quick math on the core losses for the TTM period ending in mid-2025:

• Operating Loss: -$13.74 million.
• Net Loss: -$13.46 million.
• Return on Equity (ROE): -89.90%.

The net loss is slightly lower than the operating loss, largely thanks to non-operating income like interest and investment income offsetting some of the operating expenses. Still, you're looking at a significant cash burn. That's the nature of the game.

Profitability vs. Industry Benchmarks

To be fair, you can't compare Pasithea Therapeutics Corp.'s margins to a profitable Big Pharma company. You have to compare it to the broader Biotechnology industry, which is full of other clinical-stage firms. The industry average for 468 Biotechnology companies as of November 2025 shows a remarkably high Average Gross Profit Margin of 86.3% and an Average Net Profit Margin of -177.1%.

Why the high gross margin? Most biotech revenue comes from high-margin licensing deals or early product sales, where the direct cost of revenue is low. Pasithea Therapeutics Corp.'s 0% gross margin simply tells you they haven't hit that revenue-generating milestone yet. Their net loss, while substantial, is not outside the realm of the industry's average negative margin, which is defintely a high bar for losses.

Operational Efficiency and Cost Trends

The real story of operational efficiency lies in how management is handling the two major expense buckets: Research and Development (R&D) and Selling, General, and Administrative (G&A) costs. This is where you see the strategic pivot.

In the third quarter of 2025, the company made some clear choices:

• R&D Expenses: Decreased by 14% to $1.35 million. This reduction was primarily due to deprioritizing some discovery programs, which is a common, necessary action to focus capital on lead candidates like PAS-004.
• G&A Expenses: Increased by approximately 23% year-over-year. This rise was driven by higher legal and corporate expenses, which often signals increased activity around clinical trials, regulatory filings, or corporate development, including the potential M&A activity the sector is seeing.

The trend shows a strategic shift in cost management: less on early-stage discovery, more on the corporate infrastructure needed to support the Phase 1/1b trials for PAS-004. If you want to dive deeper into the strategic rationale behind these investments, you should review the company's Mission Statement, Vision, & Core Values of Pasithea Therapeutics Corp. (KTTA).

What this estimate hides is the binary risk of clinical-stage biotech. All these expenses are sunk costs until a major clinical milestone is hit. The cost management is focused, but the profitability remains entirely dependent on the success of the pipeline.

Next step: Monitor the cash reserves of $4.1 million as of September 30, 2025, since that's the true constraint on operations.

Debt vs. Equity Structure

The most striking feature of Pasithea Therapeutics Corp.'s (KTTA) financial structure is its complete reliance on equity financing, which is a common but high-stakes strategy for a clinical-stage biotechnology company. You don't see this often, but it's a clear signal about their risk tolerance.

As of the most recent data in November 2025, Pasithea Therapeutics Corp. reports essentially no debt on its balance sheet. This means both long-term and short-term debt obligations are negligible, if not zero. For instance, while total liabilities were around $1.83 million in the second quarter of 2025, this figure primarily represents non-debt items like accounts payable and accrued expenses, not bank loans or corporate bonds.

Here's the quick math on what that means for leverage (the use of borrowed money to finance assets):

• Pasithea Therapeutics Corp.'s Debt-to-Equity (D/E) ratio is 0.
• The average D/E ratio for the Biotechnology industry is typically around 0.17.

A zero D/E ratio is defintely a double-edged sword. It means the company has zero interest expense risk and is insulated from rising interest rates, but it also means they forgo the potential tax benefits and leverage of debt to fund their expensive research and development (R&D) programs.

Since Pasithea Therapeutics Corp. carries no debt, they also have no formal credit ratings to report, which is typical for a pre-revenue, clinical-stage firm. Their financing strategy is entirely focused on equity funding, which is the only way to sustain operations when you have an accumulated deficit of roughly $59.9 million as of September 30, 2025.

The company has been aggressively tapping the equity markets in 2025 to fund the Phase 1/1b trial of their lead candidate, PAS-004. This is where the rubber meets the road.

Exploring Pasithea Therapeutics Corp. (KTTA) Investor Profile: Who's Buying and Why?

They've executed several capital raises:

• June 2025 ATM Offering: Pasithea Therapeutics Corp. increased its At-The-Market (ATM) equity offering to a maximum of $4,227,000 in common stock.
• November 2025 Offering: A new primary securities offering was filed for up to 13,929,516 shares with warrants, aiming for net proceeds of about $8.9 million.

What this estimate hides is the massive dilution risk for existing shareholders. Every time they issue new shares, your piece of the company shrinks. This heavy reliance on equity is a survival mechanism for a biotech firm with only about $4.1 million in cash and cash equivalents as of Q3 2025, especially when management believes those funds only last through December 2025 without a new raise. They are trading financial stability for shareholder dilution to keep the lights on and the clinical trials running.

Liquidity and Solvency

You need to know if Pasithea Therapeutics Corp. (KTTA) can pay its bills in the near term, and the quick answer is yes, but with a major caveat. The company's liquidity ratios look strong, but its cash burn rate is a serious, near-term risk that requires constant monitoring.

As of September 30, 2025, Pasithea Therapeutics Corp. reported a Current Ratio of 4.02 and a Quick Ratio of 4.02. This is defintely a high level of liquidity, meaning the company has significantly more current assets (cash, receivables) than current liabilities (payables, short-term debt). Since the Quick Ratio (acid-test) is the same as the Current Ratio, it tells us the company has virtually no inventory to worry about, which is typical for a clinical-stage biotech focused on research.

Here's the quick math on their short-term health:

• Current Ratio: 4.02
• Quick Ratio: 4.02
• Cash & Equivalents (Q3 2025): approximately $4.1 million

Still, the working capital trend is pointing down. The company's working capital position, which was about $4.2 million as of Q3 2025, saw a significant decline of $2.1 million compared to December 31, 2024. This drop is the direct result of cash being used to fund operations, primarily the ongoing clinical trials for its lead candidate, PAS-004. A high ratio is great, but a rapidly shrinking numerator is a red flag.

When you look at the cash flow statement, the picture gets clearer, and honestly, a little concerning. For a clinical-stage biotech, cash flow from operations is almost always negative, but the magnitude matters. The company's trailing twelve months (TTM) Operating Cash Flow was a negative $12.26 million. This cash burn is the engine driving the need for new capital.

Let's break down the cash flow activity for the nine months ended September 30, 2025:

The strength is their debt-free balance sheet, with a debt-to-equity ratio of 0. But the critical risk is the runway. Pasithea Therapeutics Corp. has stated it is actively seeking additional funding through equity or debt to sustain operations, as it may face liquidity challenges over the next twelve months without that support. This is the reality of a development-stage company: strong ratios today are only as good as the next capital raise. You can read more about the capital sources in Exploring Pasithea Therapeutics Corp. (KTTA) Investor Profile: Who's Buying and Why?

Action: Monitor the Q4 2025 cash balance and any announcements of new equity financing. The Current Ratio will drop sharply if a new raise doesn't happen soon.

Valuation Analysis

You're looking at Pasithea Therapeutics Corp. (KTTA) and wondering if the price reflects its true value, especially with the volatility in the biotech sector. The quick takeaway is that traditional valuation metrics are largely unhelpful right now, but the Price-to-Book (P/B) ratio suggests the stock is trading well below its net asset value. This is a common situation for early-stage clinical biotechnology companies.

Here's the quick math on why standard metrics are a bust: Pasithea Therapeutics Corp. is a clinical-stage company, so it's not profitable yet. This means its Price-to-Earnings (P/E) ratio is not applicable (N/A) because the company has negative earnings. Similarly, its Enterprise Value-to-EBITDA (EV/EBITDA) ratio is also not a meaningful metric, as its Quarterly EBITDA for June 2025 was a negative $3.7 million. You can't divide by a negative number and get a useful comparison.

What you can use is the Price-to-Book (P/B) ratio, which compares the stock's market price to the company's book value per share (its assets minus its liabilities). As of a recent filing, the P/B ratio for Pasithea Therapeutics Corp. sits at approximately 0.18. A P/B ratio under 1.0 often indicates a stock is undervalued, meaning the market is valuing the company at less than the net value of its physical and financial assets. That's defintely worth noting.

• P/E Ratio: N/A (Due to negative earnings)
• P/B Ratio: 0.18 (Suggests potential undervaluation)
• EV/EBITDA: N/A (Due to negative EBITDA)

The company also has a strong cash position relative to its market capitalization, with a net cash position of $4.12 million, or $0.55 per share, which is significantly higher than the recent stock price of $0.2923.

Stock price trends over the last 12 months show extreme pressure. The stock's 52-week range has been between a low of $0.28 and a high of $3.85. As of November 21, 2025, the stock closed at approximately $0.2923, reflecting a massive decline of over 90% in the last year. This volatility is a clear risk, but also the reason for the low P/B ratio. Pasithea Therapeutics Corp. does not pay a dividend, with a trailing twelve-month (TTM) dividend yield of 0.00%.

The analyst consensus is mixed and cautious, which isn't surprising for a micro-cap biotech. Formal coverage is sparse, but the technical indicators as of November 2025 lean bearish. The average analyst price target for 2025 is around $0.5108, which is substantially higher than the current trading price. However, this forecast is based on clinical trial milestones and future potential, not current financials. The market is pricing in significant risk, which is why the stock is trading near its 52-week low. For a deeper dive into who is buying and why, check out Exploring Pasithea Therapeutics Corp. (KTTA) Investor Profile: Who's Buying and Why?

The action here is clear: Treat this as a high-risk, high-reward bet on the pipeline, not a value play based on current earnings. The P/B of 0.18 is a flashing signal that the company's assets are cheap, but what this estimate hides is the execution risk of its clinical trials.

Risk Factors

You're looking at Pasithea Therapeutics Corp. (KTTA) because of the promising Phase 1/1b trial data for PAS-004, but let's be real: this is a clinical-stage biotech. Your primary risk isn't a competitor's price war; it's the binary nature of drug development and a pressing need for capital. The core takeaway is that while the balance sheet is clean (zero debt), the cash burn is real, and the market is unforgiving about trial results.

Here's the quick math on the financial tightrope: For the nine months ending September 30, 2025, the net loss was -$10.32 million. That's a lot of money out the door for a company that had about $4.1 million in cash and cash equivalents as of that date. The working capital also declined by a significant $2.1 million since the end of 2024, driven by funding operations. This is why the company is actively seeking new funding.

The biggest operational risk is the inherent uncertainty of the biotechnology sector. Even with positive pharmacokinetic data on the PAS-004 tablet formulation, which showed nearly three times the exposure compared to the capsule, the path to commercialization is long and fraught with regulatory hurdles. Honestly, the market reaction to the initial Phase 1 efficacy data-a 25% drop-shows just how high the stakes are for each trial readout. Investors are defintely focused on efficacy, not just safety.

The good news is the company's balance sheet is strong in terms of structural debt, with a debt-to-equity ratio of 0. They are not burdened by interest payments, which is a key mitigation strategy for a pre-revenue company. Still, the Altman Z-Score of 0 is a warning sign of potential financial distress, so you need to monitor their cash burn closely. The management's mitigation plan is clear: secure new equity or debt financing to sustain operations and continue advancing their pipeline, particularly the PAS-004 trial in neurofibromatosis type 1. This is the whole ballgame for now.

For a deeper dive into the financial metrics, check out our full post: Breaking Down Pasithea Therapeutics Corp. (KTTA) Financial Health: Key Insights for Investors.

Growth Opportunities

You're looking at Pasithea Therapeutics Corp. (KTTA), a clinical-stage biotech, and trying to map its future. Honestly, the growth story here is a binary bet on its lead drug candidate, PAS-004. The core opportunity isn't about current revenue-which is near zero, as is typical for a company at this stage-but about the potential market size for its innovative product pipeline.

The company's growth is defintely tied to its next-generation macrocyclic MEK inhibitor, PAS-004. This drug is currently in Phase 1/1b trials for Neurofibromatosis type 1-associated plexiform neurofibromas (NF1-PN) and advanced solid tumors. Positive interim Phase 1 data, released in November 2025, showed a promising Disease Control Rate (DCR) of 42.8% across 21 evaluable patients in the advanced cancer study, which is a strong signal for a monotherapy.

Key Growth Drivers: The PAS-004 Pipeline

The near-term growth catalysts are entirely clinical and regulatory milestones. These are the steps that will drive the company's valuation from a micro-cap biotech to a potential acquisition target or a commercial entity.

• Product Innovation: The macrocyclic structure of PAS-004 is designed to be a more selective MEK inhibitor, potentially offering a better safety profile than existing treatments, which is a significant competitive advantage in oncology and rare diseases.
• Market Expansion: Pasithea Therapeutics Corp. is actively expanding its clinical footprint, activating a new U.S. clinical trial site at the University of Alabama at Birmingham (UAB) in November 2025 for the NF1-PN trial. This broadens patient enrollment and accelerates data collection.
• Strategic Focus: Targeting NF1-PN, a rare, debilitating condition, positions the company for potential Orphan Drug status and a faster regulatory path, which can be a game-changer for a small firm. You can read more about their core focus here: Mission Statement, Vision, & Core Values of Pasithea Therapeutics Corp. (KTTA).

Financial Reality and Funding Path

As a clinical-stage entity, Pasithea Therapeutics Corp. operates at a net loss, but it manages its cash position to fund its key trials. For the third quarter ending September 30, 2025, the company reported a net loss of -$3.03 million. Here's the quick math on their liquidity, which is crucial for a biotech's runway:

What this estimate hides is the need for continuous funding. The company secured $5 million in a public offering in May 2025, but with a quarterly burn rate (net loss) of around $3 million, they are constantly seeking additional equity or debt to sustain operations over the next twelve months. This is the primary risk: dilution from future capital raises.

Competitive Advantages and Analyst Outlook

Pasithea Therapeutics Corp.'s primary competitive advantage is the novelty and early clinical success of PAS-004 in a high-unmet-need space. The positive interim data, including a 71.4% DCR in BRAF-mutated tumors, suggests a strong mechanism of action that could differentiate it from competitors if the safety profile holds up. However, the market remains skeptical, with a consensus analyst rating of 'Sell' and a projected 2025 average stock price of $0.5108, underscoring the high-risk, high-reward nature of clinical-stage biotech investing. Your action here is simple: monitor the PAS-004 trial readouts and the cash balance every quarter.