Petros Pharmaceuticals(US:PTPI)2025-05-15 21:22Business Operations - Petros has discontinued sales of Stendra® to wholesalers as of December 2024, due to its less than six-month shelf life, and will no longer engage in its commercialization or development following the Vivus Termination Agreement in March 2025[98][101]. - The company is transitioning towards becoming a leader in the self-care market by focusing on Over-the-Counter (OTC) and nonprescription drug products with additional conditions for nonprescription use (ACNU Products) treatment options[98][101]. - Metuchen, a subsidiary of Petros, is undergoing an Assignment for the Benefit of Creditors (ABC) process, which will result in the assignment of all its assets to a third-party fiduciary for liquidation to satisfy creditors[113][115]. - Petros is developing a proprietary integrated technology solutions platform, which includes a SaaS component for Rx-to-OTC switches and a Software as a Medical Device (SaMD) component, currently in early development stages[99]. - The platform aims to comply with recent FDA rules, including the ACNU Rule, to enhance the development and marketing of nonprescription drug products[100]. Financial Performance - For the three months ended March 31, 2025, the Company reported total operating expenses of $1,458,349, a decrease of 3% from $1,502,926 in the same period of 2024[125][127]. - The Company incurred warrant issuance costs of $10,420,982 for the three months ended March 31, 2025, associated with the February 2025 Public Offering[128]. - The Company recorded a gain of approximately $10.6 million for the change in fair value of warrant liability for the three months ended March 31, 2025, compared to $0 million in 2024[131]. - Interest income decreased to $47,790 for the three months ended March 31, 2025, from $151,819 in the same period of 2024[132]. - Net cash used in operating activities for the three months ended March 31, 2025, was $1,494,593, reflecting a net loss of $1,199,541[177]. Compliance and Regulatory Issues - The Company received a notice from Nasdaq indicating it did not meet the minimum bid price of $1.00 per share for continued listing, with a compliance period until November 11, 2024[117]. - The Company was granted a 180-day extension to regain compliance with the minimum bid price requirement, extending the deadline to May 12, 2025[118]. - The Company is subject to delisting due to a closing bid price of $0.10 or less for ten consecutive trading days, with an appeal requested to stay the delisting action[119]. - The Company did not comply with the $2.5 million minimum stockholders' equity requirement, which became an additional basis for delisting[119]. Financing Activities - The Company raised approximately $15 million from a private placement of Series A Preferred Stock in July 2023[134]. - The conversion price of the Series A Preferred Stock was adjusted to $6.00 per share in February 2025 due to anti-dilution provisions[136]. - The Series A Preferred Stock holders are entitled to an 8% annual dividend, compounded monthly, which can be paid in cash or shares of Common Stock[143]. - Upon a Triggering Event, the dividend rate for the Series A Preferred Stock increases to 15% per annum[145]. - The Company raised approximately $9.6 million in gross proceeds from a public offering that closed on February 19, 2025[162]. Cash and Liquidity - As of March 31, 2025, the Company had cash and cash equivalents of approximately $8.9 million and an accumulated deficit of approximately $115.5 million[159]. - The Company experienced negative working capital of $2.1 million from continuing operations as of March 31, 2025[159]. - Net cash provided by financing activities was $8,707,002 for the three months ended March 31, 2025, from the February 2025 Equity Financing[179]. - The net increase in cash and cash equivalents for the three months ended March 31, 2025, was $7,212,409[176]. Warrant and Stock Adjustments - The exercise price of the Series A Warrants and Series B Warrants was adjusted to $12.00 per share as of March 31, 2025[162]. - The exercise price of the Series Warrants was adjusted to $0.0586 per share following the Reverse Stock Split[167]. - The change in the fair value of the Warrants due to anti-dilution was treated as a deemed dividend of approximately $8.4 million for the three months ended March 31, 2025[171]. - The Company incurred transaction costs of approximately $10.4 million related to the Series B Warrants, expensed immediately upon issuance[175]. Consulting and Advisory Services - The Company has engaged Sherwood Partners, Inc. for consulting services related to the ABC process, agreeing to pay a fee of $60,000 plus 9% of the gross proceeds from the sale of Metuchen's assets[116].