Investor Group reaches agreement with Pasithea Therapeutics (KTTA)

Market Cap: $24 million | Pasithea Therapeutics Corp., a biotechnology company, engages in research and discovery of treatments for psychiatric and neurological disorders. 

On June 1, 2022, Camac Partners and Leonite Capital  ("Investor group" together 5.8%)  sent a letter to the company outlining its concerns including (1) the 83% decline in the stock price since IPO; (2) the substantial discount to the company’s cash value per share implied by the current valuation; (3) and concerns regarding the compensation paid to the members of the Board. The Letter notes Camac Fund's belief that the Board should be significantly reconstituted. 

On June 23, 2022, Investor group expressed its concerns regarding the Company’s dilutive and reactionary acquisition of Alpha-5 integrin, LLC. Also, they intend to WITHHOLD on the election of all of the sitting directors at Pasithea’s upcoming AGM. In addition, they intend to convene a special meeting of stockholders at the earliest possible opportunity to remove and replace all of the sitting directors. Source

At the AGM held o June 23, 2022, all the incumbent directors were re-elected to the Board.

On July 1, 2022, Investor group filed proxy materials requesting a special meeting for the following proposals, (i) To remove, without cause, Dr. Tiago Reis Marques, Dr. Yassine Bendiabdallah, Professor Lawrence Steinman, Simon Dumesnil and Dr. Emer Leahy as directors of Pasithea, (ii) To vote on a proposal related to the filling of vacancies on the Board that arise as the result of the removal of one or more directors by stockholders, (iii) To repeal each provision or amendment of the Bylaws adopted by the Board without the approval of Pasithea’s stockholders after April 13, 2021 and (iv) Transact such other business as may properly come before the Special Meeting. Source

On July 14, 2022, Investor group filed proxy materials reiterating its proposals.

On July 26, 2022, Investor group issued a presentation detailing its plan for the company, (i) Reduce the burn rate of $7mm per year to $1-2mm per year to maintain cash position, (ii) Initiate a strategic review to evaluate all options for value creation.

On July 27, 2022, Investor group filed proxy materials soliciting votes for its three nominees.

On August 5, 2022, Investor group filed proxy materials soliciting votes for its three nominees.

On August 24, 2022, Investor group filed proxy materials soliciting votes for its three nominees.

On September 2, 2022,  Investor group announced that they have received sufficient support from its fellow stockholders to request the call of a Special Meeting of Stockholders. Accordingly, the Investor Group has formally commenced the process of calling the Special Meeting. At the Special Meeting, the Investor Group plans to seek the removal of all of Pasithea’s sitting directors.

On September 2, 2022, Investor group filed proxy materials requesting a special meeting for the following proposals, (i) To remove, without cause, Dr. Tiago Reis Marques, Alfred Novak, Professor Lawrence Steinman, Simon Dumesnil and Dr. Emer Leahy as directors of Pasithea, (ii) To vote on a proposal related to the filling of vacancies on the Board that arise as the result of the removal of one or more directors by stockholders, (iii) To repeal each provision or amendment of the Bylaws adopted by the Board without the approval of Pasithea’s stockholders after April 13, 2021 and (iv) Transact such other business as may properly come before the Special Meeting. Source

On September 28, 2022, Investor group sent a letter to the Board urging them to hold the special meeting without further delay. Also, it expresses its disappointment with the Board’s entrenchment tactics, including its recent decision to appoint a director without consulting stockholders.

On October 12, 2022, Investor group filed proxy materials seeking support from the shareholders for the following proposals, (i) To remove, without cause, Dr. Tiago Reis Marques, Alfred Novak, Professor Lawrence Steinman, Simon Dumesnil and Dr. Emer Leahy as directors of Pasithea, (ii) To vote on a proposal related to the filling of vacancies on the Board that arise as the result of the removal of one or more directors by stockholders, (iii) To repeal each provision or amendment of the Bylaws adopted by the Board without the approval of Pasithea’s stockholders after April 13, 2021 and (iv) Transact such other business as may properly come before the Special Meeting. Source

On October 12, 2022, the company announced that it acquired AlloMek Therapeutics, LLC , a privately-held biotechnology company.

On October 13, 2022, Investor group expressed its disappointment on the company's dilutive acquisition of AlloMek Therapeutics. Source

On October 31, 2022, Investor group filed a lawsuit against the directors alleging that they breached their fiduciary duties by approving the company’s recent acquisitions of Alpha-5 Integrin, LLC and Allomek Therapeutics, LLC for the primary purpose of diluting the shares held by the Investor group and other stockholders supporting the special meeting request, while increasing the voting power of the Directors’ allies. The Lawsuit seeks, among other things, (i) a preliminary and permanent injunction to enjoin the company from counting the shares issued in the Acquisitions at the upcoming special meeting and the next annual meeting with respect to the election of directors, (ii) a temporary restraining order that restrains the Directors from holding the special meeting until the preliminary injunction motion is resolved, (iii) a declaration that the Directors breached their fiduciary duties, and (iv) an order rescinding the Acquisitions. Source

On November 17, 2022, Investor group filed proxy materials seeking support from the shareholders for the following proposals, (i) To remove, without cause, Dr. Tiago Reis Marques, Alfred Novak, Professor Lawrence Steinman, Simon Dumesnil and Dr. Emer Leahy as directors of Pasithea, (ii) To vote on a proposal related to the filling of vacancies on the Board that arise as the result of the removal of one or more directors by stockholders, (iii) To repeal each provision or amendment of the Bylaws adopted by the Board without the approval of Pasithea’s stockholders after April 13, 2021 and (iv) Transact such other business as may properly come before the Special Meeting. Source

On November 22, 2022, Investor group filed proxy materials reiterating its proposals.

On December 9, 2022, the company entered into a Cooperation Agreement with the Investor group. Pursuant to the agreement, the Investor group has agreed to a three-year stanstill provision and the parties have agreed to dismiss with prejudice the pending Delaware litigation against the company and the Board filed by the Investor group. The company has agrees to purchase all the shares of common stock held by the Investor group at a price of $1.0003 per share, the equivalent to the 5-day volume-weighted average price of the Common Stock