Petros Pharmaceuticals Inc
For the period ended Jun 30, 2024. Filed Aug 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 14, 2024
PTPI$0.07-46.5%Stored close · as of May 21, 2025
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-15.
0001410578-24-000885
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001410578-24-001437
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 105 previous paragraphs and 143 current paragraphs.
61 unchanged; 35 reworded; 29 added; 7 removed; 2 previous and 18 current paragraphs rearranged.
Tables are not compared: 8 previous and 9 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (29)
Current report
Net sales for the six months ended June 30, 2024, were $2,810,276, composed of $1,228,115 of net sales from Prescription Medicines and net sales of $1,582,161 from Medical Devices. Net sales for the six months ended June 30, 2023, were $4,511,983, composed of $2,490,686 of net sales from Prescription Medicines and net sales of $2,021,297 from Medical Devices.
Current report
For the six months ended June 30, 2024, gross billings to customers representing 10% or more of the Company’s total gross billings included three customers that represented approximately 27%, 25%, and 14% of total gross billings, respectively. Gross billings is a non-GAAP financial measure. For a reconciliation of net sales to gross billings, see the section titled “Reconciliation of Non-GAAP Financial Measures” below.
Current report
Cost of sales for the six months ended June 30, 2024, were $660,939, composed of $145,327 of cost of sales for our Prescription Medicines segment and $515,612 for our Medical Devices segment.
Current report
Cost of sales for the six months ended June 30, 2023, were $1,064,599, composed of $257,721 of cost of sales for our Prescription Medicines segment and $806,878 for our Medical Devices segment.
Current report
Cost of sales for the Medical Device segment for the six months ended June 30, 2024, consisted of 84% raw materials and 16% production labor.
Current report
Selling, general and administrative expenses for the six months ended June 30, 2024, were $4,998,088, composed of $1,302,928 of selling, general and administrative expenses of our Prescription Medicines segment, $1,072,556 of selling, general and administrative expenses of our Medical Devices segment and $2,622,604 of general corporate expenses.
Current report
Selling, general and administrative expenses for the six months ended June 30, 2023, were $4,380,231, composed of $754,993 of selling, general and administrative expenses of our Prescription Medicines segment, $905,442 of selling, general and administrative expenses of our Medical Devices segment and $2,719,796 of general corporate expenses.
Current report
Research and development expenses for the six months ended June 30, 2024, were $1,924,750, composed of $1,924,750 for our Prescription Medicines segment and $0 for our Medical Devices segment, respectively.
Current report
Research and development expenses for the six months ended June 30, 2023, were $1,185,668, composed of $1,130,338 for our Prescription Medicines segment and $55,330 for our Medical Devices segment, respectively.
Current report
Depreciation and amortization expenses for the six months ended June 30, 2024, were $1,435,677, composed of $1,000,610 of depreciation and amortization expenses of our Prescription Medicines segment and $435,067 of depreciation and amortization expenses of our Medical Devices segment.
Current report
Depreciation and amortization expenses for the six months ended June 30, 2023, were $1,653,590, composed of $1,150,939 of depreciation and amortization expenses of our Prescription Medicines segment and $502,651 of depreciation and amortization expenses of our Medical Devices segment.
Current report
In January 2022, the Company executed a promissory note in favor of Vivus with a principal amount of $10,201,758 in connection with the Vivus Settlement Agreement. Interest expense, promissory note for the six months ended June 30, 2024, and 2023, was $234,721 and $278,966 respectively.
Current report
Net Sales
Current report
Net sales for the three months ended June 30, 2024, were $1,421,471, composed of $615,022 of net sales from Prescription Medicines and net sales of $806,449 from Medical Devices.
Current report
Net sales for the three months ended June 30, 2023, were $1,994,011, composed of $984,408 of net sales from Prescription Medicines and net sales of $1,009,603 from Medical Devices.
Current report
For the three months ended June 30, 2024, gross billings to customers representing 10% or more of the Company’s total gross billings included three customers that represented approximately 28%, 25%, and 12% of total gross billings, respectively. Gross billings is a non-GAAP financial measure. For a reconciliation of net sales to gross billings, see the section titled “Reconciliation of Non-GAAP Financial Measures” below.
Current report
Cost of Sales
Current report
Cost of sales for the three months ended June 30, 2024, were $329,110, composed of $69,971 of cost of sales for our Prescription Medicines segment and $259,139 for our Medical Devices segment.
Current report
Cost of sales for the three months ended June 30, 2023, were $513,857, composed of $83,451 of cost of sales for our Prescription Medicines segment and $430,406 for our Medical Devices segment.
Current report
Cost of sales for the Prescription Medicine segment for the three months ended June 30, 2024, consisted of 56% third-party product cost of sales, 44% royalty expenses, 7% 3PL order fulfillment and shipping expenses and a 7% benefit in inventory obsolescence reserves.
Current report
Gross Profit
Current report
Operating Expenses
Current report
Selling, general and administrative expenses for the three months ended June 30, 2024, were $2,286,630, composed of $625,030 of selling, general and administrative expenses of our Prescription Medicines segment, $569,782 of selling, general and administrative expenses of our Medical Devices segment and $1,091,818 of general corporate expenses.
Current report
Selling, general and administrative expenses for the three months ended June 30, 2023, were $2,249,592, composed of $258,145 of selling, general and administrative expenses of our Prescription Medicines segment, $481,572 of selling, general and administrative expenses of our Medical Devices segment and $1,509,875 of general corporate expenses.
Current report
Research and development
Current report
Research and development expenses for the three months ended June 30, 2023, were $866,575, composed of $865,122 for our Prescription Medicines segment and $1,453 for our Medical Devices segment, respectively.
Current report
Depreciation and amortization
Current report
Interest Income
Current report
Interest Expense, Promissory Note
Removed paragraphs (7)
Previous report
Net sales for the three months ended March 31, 2024, were $1,388,806, composed of $613,095 of net sales from Prescription Medicines and net sales of $775,711 from Medical Devices.
Previous report
Net sales for the three months ended March 31, 2023, were $2,517,972, composed of $1,506,278 of net sales from Prescription Medicines and net sales of $1,011,694 from Medical Devices.
Previous report
Cost of sales for the three months ended March 31, 2024, were $331,831, composed of $75,356 of cost of sales for our Prescription Medicines segment and $256,475 for our Medical Devices segment.
Previous report
Cost of sales for the three months ended March 31, 2023, were $550,742, composed of $174,270 of cost of sales for our Prescription Medicines segment and $376,472 for our Medical Devices segment.
Previous report
Selling, general and administrative expenses for the three months ended March 31, 2024, were $2,711,456, composed of $677,896 of selling, general and administrative expenses of our Prescription Medicines segment, $502,775 of selling, general and administrative expenses of our Medical Devices segment and $1,530,785 of general corporate expenses.
Previous report
Selling, general and administrative expenses for the three months ended March 31, 2023, were $2,130,639, composed of $496,847 of selling, general and administrative expenses of our Prescription Medicines segment, $423,871 of selling, general and administrative expenses of our Medical Devices segment and $1,209,921 of general corporate expenses.
Previous report
Research and development expenses for the three months ended March 31, 2023, were $319,093, composed of $265,216 for our Prescription Medicines segment and $53,877 for our Medical Devices segment, respectively.
Reworded paragraphs (35)
Previous wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of Petros’ financial statements with a narrative from the perspective of management on the Company’s financial condition, results of operations, liquidity and certain other factors that may affect future results. In certain instances, parenthetical references are made to relevant sections of the Notes to Condensed Consolidated Financial Statements to direct the reader to a further detailed discussion. This section should be read in conjunction with the Consolidated Financial Statements and Supplementary Data included in this Quarterly Report on Form 10-Q. This MD&A contains forward-looking statements reflecting Petros’ current expectations, whose actual outcomes involve risks and uncertainties. Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” contained in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
Current wording
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is designed to provide a reader of Petros’ financial statements with a narrative from the perspective of management on the Company’s financial condition, results of operations, liquidity and certain other factors that may affect future results. In certain instances, parenthetical references are made to relevant sections of the Notes to Condensed Consolidated Financial Statements to direct the reader to a further detailed discussion. This section should be read in conjunction with the Consolidated Financial Statements and Supplementary Data included in this Quarterly Report on Form 10-Q. This MD&A contains forward-looking statements reflecting Petros’ current expectations, whose actual outcomes involve risks and uncertainties. Actual results and the timing of events may differ materially from those stated in or implied by these forward-looking statements due to a number of factors, including those discussed in the sections entitled “Risk Factors” and “Cautionary Statement Regarding Forward-Looking Statements” contained in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as amended.
Previous wording
In addition to Stendra®, Petros’ ED portfolio also includes external penile rigidity devices, namely VEDs, which are sold domestically and internationally.
Current wording
In addition to Stendra®, Petros’ ED portfolio also includes external penile rigidity devices, namely Vacuum Erection Devices (“VEDs and related accessories”), which are sold domestically and internationally.
Previous wording
Security Agreement contains customary events of default. For the three months ended March 31, 2024, and 2023, the Company paid Vivus $0 million and $0.5 million, respectively. As of March 31, 2024, the principal balance on the Note is $8.0 million.
Current wording
Security Agreement contains customary events of default. For the six months ended June 30, 2024, and 2023, the Company paid Vivus $0.5 million and $1.0 million, respectively. As of June 30, 2024, the principal balance on the Note is $7.6 million.
Previous wording
For the three months ended March 31, 2023, gross billings to customers representing 10% or more of the Company’s total gross billings included four customers that represented approximately 23%, 19%, 15%, and 13% of total gross billings, respectively. Gross billings is a non-GAAP financial measure. For a reconciliation of net sales to gross billings, see the section titled “Reconciliation of Non-GAAP Financial Measures” below.
Current wording
For the six months ended June 30, 2023, gross billings to customers representing 10% or more of the Company’s total gross billings included four customers that represented approximately 23%, 18%, 17%, and 10% of total gross billings, respectively. Gross billings is a non-GAAP financial measure. For a reconciliation of net sales to gross billings, see the section titled “Reconciliation of Non-GAAP Financial Measures” below.
Previous wording
Prescription Medicines sales consist of sales of Stendra® in the U.S. for the treatment of male ED. Stendra® is primarily sold directly to the four main customers as described above, which collectively accounted for approximately 95% of Stendra® net sales for the March 31, 2024. Individually, sales to the three main customers accounted for 37%, 35%, and 23%, respectively, of Stendra® gross billings for the three months ended March 31, 2024.
Current wording
Prescription Medicines sales consist of sales of Stendra® in the U.S. for the treatment of male ED. Stendra® is primarily sold directly to three main customers, as described above, which collectively accounted for approximately 95% of Stendra® net sales for the six months ended June 30, 2024. Individually, sales to the three main customers, accounted for 39%, 36%, and 20% of Stendra® gross billings for the six months ended June 30, 2024.
Previous wording
Medical Device sales consist of domestic and international sales of men’s health products for the treatment of ED. The men’s health products do not require a prescription and include Vacuum Erection Devices (“VEDs and related accessories”).
Current wording
Medical Device sales consist of domestic and international sales of men’s health products for the treatment of ED. The men’s health products do not require a prescription and include VEDs.
Previous wording
Cost of sales for the Prescription Medicine segment for the three months ended March 31, 2024, consisted of 42% third-party product cost of sales, 41% royalty expenses and 17% inventory obsolescence reserves.
Current wording
Cost of sales for the Prescription Medicine segment for the six months ended June 30, 2024, consisted of 49% third-party product cost of sales, 42% royalty expenses, 5% benefit in inventory obsolescence reserves, and 4% 3PL order fulfillment and shipping expenses.
Previous wording
Research and development expenses for the Prescription Medicines segment for the three months ended March 31, 2024, are composed of $1,435,142 for clinical development, $112,223 for consulting fees, and $8,587 for legal fees related to the Company’s Non-Prescription / Over-The-Counter (“OTC”) Strategies related to Stendra®. Research and development expenses for the Prescription Medicines segment for the three months ended March 31, 2023, are composed of $252,803 for consulting fees related to the Company’s Non-Prescription / Over-The-Counter (“OTC”) Strategies related to Stendra®; $9,920 for consulting fees related to the H100 license acquired in March 2020; and $2,493 related to the Company’s tech transfer of its manufacturing process.
Current wording
Research and development expenses for the Prescription Medicines segment for the six months ended June 30, 2024, are composed of $1,694,258 for clinical development, $204,603 for consulting fees, and $25,889 for legal fees related to the Company’s Non-Prescription / OTC Strategies related to Stendra®. Research and development expenses for the Prescription Medicines segment for the six months ended June 30, 2023, are composed of $903,225 for consulting fees related to the Company’s Non-Prescription / OTC Strategies related to Stendra®; $200,000 for upfront licensing fees and $24,620 for consulting fees related to the H100 license acquired in March 2020 and $2,493 related to the Company’s tech transfer of its manufacturing process.
Previous wording
Prescription Medicines depreciation and amortization consists primarily of the amortization of the intangible assets related to Stendra® over its estimated useful life of 10 years. Medical Devices depreciation and amortization primarily consists of the amortization of the intangible assets related to Timm Medical and PTV over their estimated useful life of 12 years. The decrease in total depreciation and amortization results from the use of the accelerated method of amortization.
Current wording
Prescription Medicines depreciation and amortization consists primarily of the amortization of the intangible assets related to Stendra® over its estimated useful life of 10 years. Medical Devices depreciation and amortization primarily consists of the amortization of the intangible assets related to Timm Medical and PTV over their estimated useful life of 12 years.
Previous wording
For the three months ended March 31, 2024, gross billings to customers representing 10% or more of the Company’s total gross billings included three customers that represented approximately 26%, 24%, and 16% of total gross billings, respectively. Gross billings is a non-GAAP financial measure. For a reconciliation of net sales to gross billings, see the section titled “Reconciliation of Non-GAAP Financial Measures” below.
Current wording
For the three months ended June 30, 2023, gross billings to customers representing 10% or more of the Company’s total gross billings included three customers that represented approximately 24%, 19%, and 16% of total gross billings, respectively. Gross billings is a non-GAAP financial measure. For a reconciliation of net sales to gross billings, see the section titled “Reconciliation of Non-GAAP Financial Measures” below.
Previous wording
Net sales were $1,129,166 or 45% lower during the three months ended March 31, 2024, compared to the same period in 2023 consisting of a $893,183 decrease in the net sales of Stendra® and a $235,983 decrease in Medical Device Sales. The decrease in net sales of Stendra® was substantially due to decreased wholesaler demand. The decrease in net sales for Medical Devices included a decrease in domestic and international sales of VED systems.
Current wording
Net sales were $572,540 or 29% lower during the three months ended June 30, 2024, compared to the same period in 2023 consisting of a $369,386 decrease in the net sales of Stendra® and a $203,154 decrease in Medical Device Sales. The decrease in net sales of Stendra® was substantially due to decreased wholesaler sales due to decreased demand and decreased related sales allowances stemming from a reduction in promotional activities. The decrease in net sales for Medical Devices included a decrease in domestic and international sales of VED systems.
Previous wording
Cost of sales for the Medical Device segment for the three months ended March 31, 2024, consisted of 85% raw materials and 15% production labor.
Current wording
Cost of sales for the Medical Device segment for the three months ended June 30, 2024, consisted of 84% raw materials and 16% production labor.
Previous wording
Cost of sales decreased by $218,911 or 40% during the three months ended March 31, 2024, compared to the same period in 2023. For the three months ended March 31, 2024, and 2023, cost of sales as a percentage of net sales was 24% and 22%, respectively. The increase in cost of sales as a percentage of net sales was primarily the result of increased excess and obsolete inventory reserves.
Current wording
Cost of sales decreased by $184,747 or 36% during the three months ended June 30, 2024, compared to the same period in 2023. For the three months ended June 30, 2024, and June 30, 2023, cost of sales as a percentage of net sales was 23% and 26%, respectively. The decrease in cost of sales as a percentage of net sales was primarily the result of decreased sales order fulfillment costs (on a per unit basis) during the three months ended June 30, 2024, compared to the same period in 2023.
Previous wording
Gross profit for the three months ended March 31, 2024, was $1,056,975 or 76%, composed of $537,739 of gross profit from Prescription Medicines and $519,236 from Medical Devices. Gross profit for the three months ended March 31, 2023, was $1,967,230, or 78% of net sales, composed of $1,332,008 of gross profit from Prescription Medicines and $635,222 from Medical Devices. The decrease in gross profit was driven by the factors noted above.
Current wording
Gross profit for the three months ended June 30, 2024, was $1,092,361 or 77%, composed of $545,051 of gross profit from Prescription Medicines and $547,310 from Medical Devices. Gross profit for the three months ended June 30, 2023, was $1,480,154, or 74% of net sales, composed of $900,957 of gross profit from Prescription Medicines and $579,197 from Medical Devices. The decrease in gross profit was driven by the factors noted above.
Previous wording
Selling, general and administrative expenses increased by $580,817 or 27% during the three months ended March 31, 2024, compared to the compared to the same period in 2023. Increased selling general and administrative expenses were primarily driven by waiver of FY 23 PDUFA fees by the FDA resulting in a $312,551 increase in PDUFA expense, increased professional service fees of $191,565, increased stock-based compensation expense of $50,045, increased franchise taxes of $40,230, and increased other operating expenses of $75,413 partially offset by decreased insurance expenses of $88,987.
Current wording
Selling, general and administrative expenses increased by $37,038 or 2% during the three months ended June 30, 2024, compared to the same period in 2023. Increased selling general and administrative expenses were primarily driven by a waiver of FY 23 PDUFA fees by the FDA resulting in a $312,550 increase in PDUFA expense and increased professional service fees of $74,543 partially offset by decreased franchise taxes of $125,134, decreased insurance expenses of $56,360, decreased stock-based compensation expense of $26,842 and decreased other operating expenses of $141,719.
Previous wording
Research and development expenses for the three months ended March 31, 2024, were $1,555,953, composed of $1,555,953 for our Prescription Medicines segment and $0 for our Medical Devices segment, respectively.
Current wording
Research and development expenses for the three months ended June 30, 2024, were $368,798, composed of $368,798 for our Prescription Medicines segment and $0 for our Medical Devices segment, respectively.
Previous wording
Research and development expenses for the Medical Devices segment for the three months ended March 31, 2024, were $0. Research and development expenses for the Medical Devices segment for the three months ended March 31, 2023, are composed of $53,877 for license fees related to the Company’s Tissue-Specific Oxygenation Sensor Technology Strategies.
Current wording
Research and development expenses for the Medical Devices segment for the three months ended June 30, 2024, were $0. Research and development expenses for the Medical Devices segment for the three months ended June 30, 2023, are composed of $1,453 for license fees related to the Company’s Tissue-Specific Oxygenation Sensor Technology Strategies.
Previous wording
Research and development expenses increased by $1,236,860 or 388% during the three months ended March 31, 2024, compared to the same period in 2023. Increased research and development expenses were primarily driven by increased clinical development expenses related to the Company’s OTC strategies related to Stendra® partially offset by decreased upfront licensing fees related to the H100 license acquired in March 2020 and decreased license fees related to the Company’s Tissue-Specific Oxygenation Sensor Technology Strategies.
Current wording
Research and development expenses decreased by $497,777 or 57% during the three months ended June 30, 2024, compared to the same period in 2023. Decreased research and development expenses were primarily driven by decreased clinical development expenses and consulting fees related to the Company’s OTC strategies related to Stendra®.
Previous wording
Depreciation and amortization expenses for the three months ended March 31, 2024, were $717,839, composed of $500,305 of depreciation and amortization expenses of our Prescription Medicines segment and $217,534 of depreciation and amortization expenses of our Medical Devices segment.
Current wording
Depreciation and amortization expenses for the three months ended June 30, 2024, were $717,838, composed of $500,305 of depreciation and amortization expenses of our Prescription Medicines segment and $217,533 of depreciation and amortization expenses of our Medical Devices segment.
Previous wording
For the three months ended March 31, 2024, and March 31, 2023, the Company recorded gains of $1.7 million and $0.0 million, respectively, for the change in fair value of the derivative liability. The gain in 2024 is related to the decrease in the fair value of a derivative liability established for certain bifurcated features of the Series A Preferred Stock issued in the July 2023 private placement.
Current wording
For the three months ended June 30, 2024, and June 30, 2023, the Company recorded gains of $1.6 million and $0.0 million, respectively, for the change in fair value of the derivative liability. The gain in 2024 is related to the decrease in the fair value of a derivative liability established for certain bifurcated features of the Series A Preferred Stock issued in the July 2023 private placement.
Previous wording
Interest income for the three months ended March 31, 2024, and 2023, was $151,819 and $66,317, respectively. Petros invested its cash in money market securities during 2024 and 2023.
Current wording
Interest income for the three months ended June 30, 2024, and 2023, was $119,391 and $52,924, respectively. Petros invested its cash in money market securities during 2024 and 2023.
Previous wording
In January 2022, the Company executed a promissory note in favor of Vivus with a principal amount of $10,201,758 in connection with the Vivus Settlement Agreement. Interest expense, promissory note for the three months ended March 31, 2024, and 2023, was $120,209 and $142,167, respectively.
Current wording
In January 2022, the Company executed a promissory note in favor of Vivus with a principal amount of $10,201,758 in connection with the Vivus Settlement Agreement. Interest expense, promissory note for the three months ended June 30, 2024, and 2023, was $114,512 and $136,799, respectively.
Previous wording
Cash totaled $11,080,716 at March 31, 2024, compared to $13,336,975 at December 31, 2023.
Current wording
Cash totaled $7,460,014 at June 30, 2024, compared to $13,336,975 at December 31, 2023.
Previous wording
The Company has experienced net losses and negative cash flows from operations since inception. As of March 31, 2024, we had cash of $11.1 million, working capital of $6.7 million, and an accumulated deficit of $101.1 million. The Company’s plans include, or may include, utilizing cash on hand, as well as exploring additional ways to raise capital in addition to increasing cash flows from operations. In January 2022, the Company executed a promissory note in favor of Vivus in connection with the Vivus Settlement Agreement in the principal amount of $10,201,758, net of a prepayment of $900,000. The terms of this promissory note are discussed in the section titled “Vivus Settlement Agreement, Promissory Note and the Security Agreement” above.
Current wording
The Company has experienced net losses and negative cash flows from operations since inception. As of June 30, 2024, we had cash of $7.5 million, working capital of $4.0 million, and an accumulated deficit of $101.7 million. The Company’s plans include, or may include, utilizing cash on hand, as well as exploring additional ways to raise capital in addition to increasing cash flows from operations. In January 2022, the Company executed a promissory note in favor of Vivus in connection with the Vivus Settlement Agreement in the principal amount of $10,201,758, net of a prepayment of $900,000. The terms of this promissory note are discussed in the section titled “Vivus Settlement Agreement, Promissory Note and the Security Agreement” above.
Previous wording
On July 13, 2023, the Company entered into the Purchase Agreement with certain accredited investors (the “Investors”), pursuant to which the Company agreed to sell in a private placement to the Investors (i) an aggregate of 15,000 shares of the Company’s newly-designated Series A Preferred Stock initially convertible into up to 6,666,668 shares of the Company’s common stock at an initial conversion price of $2.25 per share and (ii) warrants to acquire up to an aggregate of 6,666,668 shares of common stock (the “Warrants”) at an initial exercise price of $2.25 per share (collectively, the “Private Placement”). Pursuant to the terms of the Certificate of Designations and the Warrants, each of the Conversion Price (as defined below) and the exercise price and the number of shares underlying the Warrants is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of common stock, or securities convertible, exercisable or exchangeable for common stock, at a price below the then-applicable Conversion Price (subject to certain exceptions). As of March 31, 2024, the Conversion Price and the exercise price of the Warrants was equal to $2.25 per share.
Current wording
On July 13, 2023, the Company entered into the Purchase Agreement with certain accredited investors (the “Investors”), pursuant to which the Company agreed to sell in a private placement to the Investors (i) an aggregate of 15,000 shares of the Company’s newly-designated Series A Preferred Stock initially convertible into up to 6,666,668 shares of the Company’s common stock at an initial conversion price of $2.25 per share and (ii) warrants to acquire up to an aggregate of 6,666,668 shares of common stock (the “Warrants”) at an initial exercise price of $2.25 per share (collectively, the “Private Placement”). Pursuant to the terms of the Certificate of Designations and the Warrants, each of the Conversion Price (as defined below) and the exercise price and the number of shares underlying the Warrants is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of common stock, or securities convertible, exercisable or exchangeable for
Previous wording
During the three months ended March 31, 2024, the Company has redeemed or converted approximately 4,359 shares of Series A Preferred Stock and issued 3,812,659 shares of Common Stock pursuant to the terms of the Certificate of Designations.
Current wording
During the six months ended June 30, 2024, the Company has redeemed or converted approximately 5,983 shares of Series A Preferred Stock and issued 5,983,175 shares of Common Stock pursuant to the terms of the Certificate of Designations.
Previous wording
The following table summarizes the Company’s cash flows for the three months ended March 31, 2024, and 2023:
Current wording
The following table summarizes the Company’s cash flows for the six months ended June 30, 2024, and 2023:
Previous wording
Net cash used in operating activities for the three months ended March 31, 2024, was $1,134,848, which primarily reflected the Company’s net loss of $2,162,663, in addition to noncash adjustments to reconcile net loss to net cash used in operating activities of
Current wording
Net cash used in operating activities for the six months ended June 30, 2024, was $2,797,210, which primarily reflected the Company’s net loss of $2,824,689, in addition to noncash adjustments to reconcile net loss to net cash used in operating activities of $1,449,943 consisting primarily of depreciation and amortization, change in the fair value of derivative liability, and changes in operating assets and liabilities of $1,477,422 largely driven by accrued expenses related to OTC development.
Previous wording
Net cash used in operating activities for the three months ended March 31, 2023, was $748,363, which primarily reflected the Company’s net loss of $1,385,147, in addition to noncash adjustments to reconcile net loss to net cash used in operating activities of $1,075,394 consisting primarily of depreciation and amortization, stock compensation, and changes in operating assets and liabilities of $438,610.
Current wording
Net cash used in operating activities for the six months ended June 30, 2023, was $1,320,433, which primarily reflected our net loss of $3,931,830, in addition to noncash adjustments to reconcile net loss to net cash used in operating activities of $1,937,017 consisting primarily of depreciation and amortization, stock compensation, and changes in operating assets and liabilities of $674,380.
Previous wording
Net cash used in financing activities was $1,121,411 for the three months ended March 31, 2024, consisting of redemptions of Series A Preferred Stock.
Current wording
Net cash used in financing activities was $3,079,751 for the six months ended June 30, 2024, consisting of $2,699,960 of redemptions of Series A Preferred Stock and $379,791 of payments of the promissory note.
Previous wording
Net cash used in financing activities was $357,833 for the three months ended March 31, 2023, consisting entirely of prepayments of promissory note.
Current wording
Net cash used in financing activities was $721,034 for the six months ended June 30, 2023, consisting of payments of the promissory note.
Previous wording
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management, in consultation with its legal counsel as appropriate, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company, in consultation with legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
Current wording
Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company’s management, in consultation with its legal counsel as appropriate, assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company, in consultation with legal counsel, evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency
Previous wording
evaluating adjustments, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments set forth below. The presentation of these adjustments should not be construed as an inference that future results will be unaffected by unusual or recurring items.
Current wording
Adjusted EBITDA is adjusted to exclude certain items that affect comparability. The adjustments are itemized in the tables below. You are encouraged to evaluate these adjustments and the reason the Company considers them appropriate for supplemental analysis. In evaluating adjustments, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments set forth below. The presentation of these adjustments should not be construed as an inference that future results will be unaffected by unusual or recurring items.
Previous wording
The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for the three months ended March 31, 2024, and 2023:
Current wording
The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for the three and six months ended June 30, 2024, and 2023:
Previous wording
The following table presents a reconciliation of net sales to gross billings for the three months ended March 31, 2024, and 2023:
Current wording
The following table presents a reconciliation of net sales to gross billings for the three and six months ended June 30, 2024, and 2023:
Rearranged current paragraphs (18)
Current report — wording carried from elsewhere
Six Months Ended June 30, 2024, and 2023 (Unaudited)
Current report — wording carried from elsewhere
The following table sets forth a summary of our statements of operations for the six months ended June 30, 2024, and 2023:
Current report — wording carried from elsewhere
Net sales were $1,701,707 or 38% lower during the six months ended June 30, 2024, compared to the same period in 2023 consisting of a $1,262,571 decrease in the net sales of Stendra® and a $439,136 decrease in Medical Device Sales. The decrease in net sales of Stendra® was substantially due to decreased wholesaler sales due to decreased demand and decreased related sales allowances stemming from a reduction in promotional activities. The decrease in net sales for Medical Devices included a decrease in domestic and international sales of VED systems.
Current report — wording carried from elsewhere
Cost of sales decreased by $403,660 or 38% during the six months ended June 30, 2024, compared to the same period in 2023. For the six months ended June 30, 2024, and June 30, 2023, cost of sales as a percentage of net sales was 24% and 24%, respectively.
Current report — wording carried from elsewhere
Gross profit for the six months ended June 30, 2024, was $2,149,337 or 76%, composed of $1,082,788 of gross profit from Prescription Medicines and $1,066,549 from Medical Devices. Gross profit for the six months ended June 30, 2023, was $3,447,384, or 76% of net sales, composed of $2,232,965 of gross profit from Prescription Medicines and $1,214,419 from Medical Devices. The decrease in gross profit was driven by the factors noted above.
Current report — wording carried from elsewhere
Selling, general and administrative expenses increased by $617,857 or 14% during the six months ended June 30, 2024, compared to the same period in 2023. Increased selling general and administrative expenses were primarily driven by a waiver of FY 23 PDUFA fees by the FDA resulting in a $625,101 increase in PDUFA expense and increased professional service fees of $266,108, and increased stock-based compensation expense of $23,563 partially offset by decreased insurance expenses of $145,347, decreased franchise taxes of $84,904, and decreased other operating expenses of $66,664.
Current report — wording carried from elsewhere
Research and development expenses for the Medical Devices segment for the six months ended June 30, 2024, were $0. Research and development expenses for the Medical Devices segment for the six months ended June 30, 2023, are composed of $55,330 for license fees related to the Company’s Tissue-Specific Oxygenation Sensor Technology Strategies.
Current report — wording carried from elsewhere
Research and development expenses increased by $739,082 or 62% during the six months ended June 30, 2024, compared to the same period in 2023. Increased research and development expenses were primarily driven by increased clinical development expenses related to the Company’s OTC strategies related to Stendra®.
Current report — wording carried from elsewhere
For the six months ended June 30, 2024, and June 30, 2023, the Company recorded gains of $3.3 million and $0.0 million, respectively, for the change in fair value of the derivative liability. The gain in 2024 is related to the decrease in the fair value of a derivative liability established for certain bifurcated features of the Series A Preferred Stock issued in the July 2023 private placement.
Current report — wording carried from elsewhere
Interest income for the six months ended June 30, 2024, and 2023, was $271,210 and $119,241, respectively. Petros invested its cash in money market securities during 2024 and 2023.
Current report — wording carried from elsewhere
Prescription Medicines sales consist of sales of Stendra® in the U.S. for the treatment of male ED. Stendra® is primarily sold directly to three main customers, as described above, which collectively accounted for approximately 96% of Stendra® net sales for the three months ended June 30, 2024. Individually, sales to the three main customers, accounted for 41%, 37%, and 18% of Stendra® gross billings for the three months ended June 30, 2024.
Current report — wording carried from elsewhere
Medical Device sales consist of domestic and international sales of men’s health products for the treatment of ED. The men’s health products do not require a prescription and include VEDs.
Current report — wording carried from elsewhere
Selling, general and administrative expenses for both segments include selling, marketing and regulatory expenses. Unallocated general corporate expenses include costs that were not specific to a particular segment but are general to the group, including expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees and other similar corporate expenses.
Current report — wording carried from elsewhere
Research and development expenses for the Prescription Medicines segment for the three months ended June 30, 2024, are composed of $259,116 for clinical development, $92,380 for consulting fees, and $17,302 for legal fees related to the Company’s Non-Prescription / OTC Strategies related to Stendra®. Research and development expenses for the Prescription Medicines segment for the three months ended June 30, 2023, are composed of $650,422 for consulting fees related to the Company’s Non-Prescription / OTC Strategies related to Stendra®; $200,000 for upfront licensing fees and $14,700 for consulting fees related to the H100 license acquired in March 2020, which later terminated in May 2023.
Current report — wording carried from elsewhere
Prescription Medicines depreciation and amortization consists primarily of the amortization of the intangible assets related to Stendra® over its estimated useful life of 10 years. Medical Devices depreciation and amortization primarily consists of the amortization of the intangible assets related to Timm Medical and PTV over their estimated useful life of 12 years
Current report — wording carried from elsewhere
Change in fair value of derivative liability
Current report — wording carried from elsewhere
common stock, at a price below the then-applicable Conversion Price (subject to certain exceptions). As of June 30, 2024, the Conversion Price and the exercise price of the Warrants was equal to $2.25 per share.
Current report — wording carried from elsewhere
indicates it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates a potentially material loss contingency is not probable, but is reasonably possible, or is probable, but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss, if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
$728,396 consisting primarily of depreciation and amortization, change in the fair value of derivative liability, and changes in operating assets and liabilities of $1,756,211 largely driven by accrued expenses related to OTC development.
Previous report — wording carried elsewhere
Adjusted EBITDA is adjusted to exclude certain items that affect comparability. The adjustments are itemized in the tables below. You are encouraged to evaluate these adjustments and the reason the Company considers them appropriate for supplemental analysis. In