Petros Pharmaceuticals(US:PTPI)2024-05-15 21:00Financial Performance - For the three months ended March 31, 2024, net sales were $1,388,806, a decrease of 45% compared to $2,517,972 for the same period in 2023[122]. - Prescription Medicines contributed $613,095 to net sales in Q1 2024, down from $1,506,278 in Q1 2023, while Medical Devices sales decreased from $1,011,694 to $775,711[123][125]. - Gross profit for Q1 2024 was $1,056,975, a decline of 46% from $1,967,230 in Q1 2023[122]. - The company reported a net loss of $2,162,663 for Q1 2024, compared to a net loss of $1,385,147 in Q1 2023, reflecting a worsening financial position[122]. - Adjusted EBITDA for Q1 2024 was $(3,030,053), compared to $(352,166) in Q1 2023, indicating a substantial decline in operational performance[171]. - Gross billings for Q1 2024 were $2,543,006, down from $4,145,738 in Q1 2023, representing a decrease of approximately 38.6%[177]. Operating Expenses - Total operating expenses increased to $4,985,248 in Q1 2024, compared to $3,276,527 in Q1 2023, primarily due to higher selling, general, and administrative expenses[122]. - Selling, general and administrative expenses increased by $580,817 or 27% during the three months ended March 31, 2024, totaling $2,711,456[138]. - Research and development expenses surged by $1,236,860 or 388% during the three months ended March 31, 2024, totaling $1,555,953, primarily due to increased clinical development expenses related to OTC strategies[142]. Cash Flow and Capital - Cash totaled $11,080,716 at March 31, 2024, down from $13,336,975 at December 31, 2023, indicating a need for additional capital to fund operations[150]. - Net cash used in operating activities for Q1 2024 was $1,134,848, compared to $748,363 in Q1 2023, reflecting a significant increase in cash outflow[161]. - The company reported a net decrease in cash of $2,256,259 for Q1 2024, compared to a decrease of $1,106,196 in Q1 2023[160]. - Net cash used in financing activities was $1,121,411 in Q1 2024, significantly higher than $357,833 in Q1 2023, primarily due to redemptions of Series A Preferred Stock[165]. Debt and Obligations - As of March 31, 2024, the principal balance on the promissory note to Vivus is $8.0 million, with quarterly installments beginning April 1, 2022, through January 1, 2027[119][117]. - The company has a royalty obligation of 5% on the first $500 million of net sales of Stendra® and 6% thereafter, with the last scheduled patent expiration in April 2025[109]. Compliance and Regulatory Issues - The company received a notice from Nasdaq regarding non-compliance with the minimum bid price requirement, with a compliance period until November 11, 2024[120]. - The company has faced challenges with the Sublicense Agreement with Acerus, which has been halted indefinitely due to regulatory issues[114]. - Management is actively working on remediation of internal control deficiencies, which include insufficient monitoring and oversight controls[181]. - There were no changes in internal control over financial reporting that materially affected the company during Q1 2024, aside from noted deficiencies[183]. Stock and Shareholder Information - The company redeemed or converted approximately 4,359 shares of Series A Preferred Stock and issued 3,812,659 shares of Common Stock during the three months ended March 31, 2024[157]. - The Series A Preferred Stock carries an 8% annual dividend, compounded monthly, with the option for payment in cash or shares of Common Stock[156]. Other Financial Metrics - Interest income for the three months ended March 31, 2024, was $151,819, compared to $66,317 in the same period in 2023[148]. - Cost of sales decreased by $218,911 or 40% during the three months ended March 31, 2024, with cost of sales as a percentage of net sales increasing to 24% from 22% in the same period in 2023[133]. - Gross profit for the three months ended March 31, 2024, was $1,056,975, representing 76% of net sales, down from $1,967,230 or 78% of net sales in the same period in 2023[134]. - Noncash adjustments in Q1 2024 included $728,396 for depreciation and amortization, contributing to the net cash used in operating activities[163].