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The Investor Group, comprising Camac Partners, Concord Investment Partners, and Leonite Capital, has expressed strong opposition to Pasithea Therapeutics Corp.'s recent acquisition of Alpha-5 integrin, which they deem dilutive and reactionary. They highlight a significant decline in Pasithea's stock price, down 79% since its IPO, and a 60% discount to cash on hand. The group intends to withhold votes for the current directors at the upcoming annual meeting and will seek a special meeting to remove the board, citing poor governance and a disregard for shareholders.
Positive
Investor Group seeks to replace the board, potentially leading to improved governance and strategic direction.
Negative
79% decline in stock price since IPO in September 2021.
Acquisition of Alpha-5 is seen as highly dilutive and not in the best interest of shareholders.
Transaction involves issuance of stock and warrants at significant discounts to cash per share.
Concerns over breaches of fiduciary duty by the board.
Intends to WITHHOLD on All of Pasithea’s Sitting Directors at the Upcoming Annual Meeting of Stockholders
Plans to Call a Special Meeting to Remove and Replace Pasithea’s Board of Directors, Which is Accountable for Misalignment, Poor Governance and Rapid Value Destruction
NEW YORK--(BUSINESS WIRE)--
Camac Partners, LLC, affiliates of Concord Investment Partners Ltd., and Leonite Capital LLC (collectively with their affiliates, the "Investor Group" or "we"), who together are the largest stockholder of Pasithea Therapeutics Corp. (Nasdaq: KTTA) (“Pasithea” or the “Company”), today issued the following statement regarding the Company's dilutive and reactionary acquisition of Alpha-5 integrin, LLC (“Alpha-5”):
“Given our group’s status as Pasithea’s largest stockholder and our prior warnings to the Board of Directors about making value-destructive moves, we are alarmed that the Company ignored our concerns and proceeded with the highly dilutive, related-party acquisition of Alpha-5. Pasithea has already been suffering from significant corporate governance lapses and chronic financial underperformance, including seeing a 79% stock price decline since its September 2021 initial public offering and sustaining a more than 60% trading price discount relative to cash on hand.1 We find it shocking that the Company’s leadership has now decided to pursue this transaction less than a month after we requested a discussion and indicated opposition to any major deployment of stockholders’ capital.
It is clear to us that the sitting directors are more focused on entrenchment than on advancing stockholders’ best interests. The issuance of stock at $1.15 per share and warrants at $1.88 per share – respectively representing significant discounts to the Company’s cash per share – in a related-party transaction is an egregious example of the directors’ indifference to, and disregard for, stockholders. We intend to investigate all aspects of this very troubling transaction, including for any breaches of fiduciary duty by the Board of Directors. We also question why a transaction in which a Pasithea director had a financial interest was not presented to stockholders for approval.
We will use all available means to hold the incumbents accountable for their poor decisions and consistent disregard for stockholders, who are the true owners of Pasithea. In that spirit, we want our fellow stockholders to be aware we intend to WITHHOLD on the election of all of the sitting directors at Pasithea’s upcoming annual meeting of stockholders. In addition, we intend to convene a special meeting of stockholders at the earliest possible opportunity to remove and replace all of the sitting directors.”
Additional Information and Where to Find It
Camac Partners, LLC, Concord IP2 Ltd., Elderhill Corporation and Leonite Capital LLC, together with the other participants identified below (collectively, the “Participants”), intend to file a preliminary special meeting request statement, together with a WHITE special meeting request card, with the Securities and Exchange Commission (the “SEC”) to be to be used to solicit requests for the calling of a special meeting of stockholders of Pasithea.
Promptly after filing their definitive special meeting request statement with the SEC, the Participants intend to mail such statement and a WHITE special meeting request card to Pasithea stockholders. STOCKHOLDERS ARE URGED TO READ SUCH STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT THE PARTICIPANTS WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders may obtain, free of charge, such statement, any amendments or supplements thereto, and any other relevant documents filed by the Participants with the SEC in connection with the Annual Meeting at the SEC’s website (http://www.sec.gov).
In addition to the previously identified entities, it is anticipated that Camac Capital, LLC, Camac Fund, LP, Eric Shahinian, David Delaney and Avi Geller will be participants in the solicitation of special meeting requests from Pasithea stockholders. Additional information regarding the Participants, including their direct or indirect interests, by security holdings or otherwise, will be included in the special meeting request statement and other relevant documents to be filed by the Participants with the SEC. Such information is also contained in a Schedule 13D filed by the Participants with the SEC.
1 Based on the Company’s IPO unit price of $5.00 per share and its closing price of $1.01 on June 21, 2022.
Source: Camac Partners, LLC, affiliates of Concord Investment Partners Ltd., and Leonite Capital LLC
FAQ
What is the significance of the recent press release regarding KTTA?
The press release outlines the Investor Group's opposition to Pasithea's acquisition of Alpha-5 integrin, highlighting governance issues and calling for board member changes.
What are the main criticisms from the Investor Group regarding Pasithea's board?
The Investor Group criticizes the board for poor governance, dilutive acquisitions, and a significant decline in stock value.
When does the annual meeting of Pasithea stockholders take place?
The specific date of the upcoming annual meeting has not been disclosed in the press release.
How does the stock performance of KTTA compare since its IPO?
Since its IPO in September 2021, Pasithea's stock price has declined by 79%.
What actions does the Investor Group plan to take against Pasithea's current directors?
The Investor Group plans to withhold votes for all sitting directors and call for a special meeting to remove and replace them.
