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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark One)

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended June 30, 2025

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the transition period from to

Commission File Number: 001-39752

Petros Pharmaceuticals, Inc.

(Exact name of registrant as specified in its charter)


Delaware		85-1410058
(State of Incorporation)		(I. R. S. Employer Identification No.)

1185 Avenue of the Americas, 3rd Floor, New York, New York		10036
(Address of principal executive offices)		(Zip Code)

(973) 242-0005

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 13, 2025, there were 42,372,260 shares of the registrant’s common stock, par value $0.0001 per share, outstanding.

Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q may contain or incorporate by reference forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements are based upon management’s assumptions, expectations, projections, intentions and beliefs about future events. Except for historical information, the use of predictive, future-tense or forward-looking words such as “intend,” “plan,” “predict,” “may,” “will,” “project,” “target,” “strategy,” “estimate,” “anticipate,” “believe,” “expect,” “continue,” “potential,” “forecast,” “should” and similar expressions, whether in the negative or affirmative, that reflect our current views with respect to future events and operational, economic and financial performance are intended to identify such forward-looking statements. Such forward-looking statements are only predictions, and actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of risks and uncertainties, including, without limitation, Petros’ ability to execute on its business strategy, including its plans to develop and commercialize a proprietary Rx-to-OTC switch technology; Petros’ ability to comply with obligations as a public reporting company; the ability of Petros to timely and effectively implement controls and procedures required by Section 404 of the Sarbanes-Oxley Act of 2002; risks resulting from Petros’ status as an emerging growth company, including that reduced disclosure requirements may make shares of Petros’ common stock, par value $0.0001 per share (“Common Stock”), less attractive to investors; risks related to Petros’ ability to continue as a going concern; risks related to Petros’ history of incurring significant losses; risks related to Petros’ ability to obtain regulatory approvals for, or market acceptance of, its Rx-to-OTC switch technology. Additional factors that could cause actual results to differ materially from the results anticipated in these forward-looking statements are described in this Quarterly Report on Form 10-Q, in “Risk Factor Summary” and in Part I, Item 1A., “Risk Factors,” in Petros’ Annual Report on Form 10-K for the year ended December 31, 2024, and in our other reports filed with the Securities and Exchange Commission (the “SEC”). We advise you to carefully review the reports and documents we file from time to time with the SEC, particularly our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q and our current reports on Form 8-K. Petros cautions readers that the forward-looking statements included in, or incorporated by reference into, this Quarterly Report on Form 10-Q represent our beliefs, expectations, estimates and assumptions only as of the date hereof and are not intended to give any assurance as to future results. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, Petros cannot assess the effect of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement.

Readers are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them and to the risk factors. We disclaim any obligation to update the forward-looking statements contained in, or incorporated by reference into, this Quarterly Report on Form 10-Q to reflect any new information or future events or circumstances or otherwise, except as required by the federal securities laws.

OTHER INFORMATION

All references to “Petros,” the “Company,” “we,” “us” and “our” in this Quarterly Report on Form 10-Q refer to Petros Pharmaceuticals, Inc. and its subsidiaries.

Table of Contents

TABLE OF CONTENTS

		Page

PART I—FINANCIAL INFORMATION		4

Item 1. Unaudited Financial Statements		4

Unaudited Condensed Consolidated Balance Sheets as of June 30, 2025, and December 31, 2024		4

Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025, and 2024		5

Unaudited Condensed Consolidated Statements of Changes in Convertible Redeemable Preferred Stock and Stockholders’ Equity and Deficit for the three and six months ended June 30, 2025, and 2024		6

Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025, and 2024		7

Notes to Unaudited Condensed Consolidated Financial Statements		8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.		21

Item 3. Quantitative and Qualitative Disclosures About Market Risk.		34

Item 4. Controls and Procedures.		34

PART II—OTHER INFORMATION		35

Item 1. Legal Proceedings.		35

Item 1A. Risk Factors.		35

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.		36

Item 3. Defaults Upon Senior Securities.		36

Item 4. Mine Safety Disclosures.		36

Item 5. Other Information.		36

Item 6. Exhibits.		38

Signatures.		39

Table of Contents

PART I—FINANCIAL INFORMATION

ITEM 1. UNAUDITED FINANCIAL STATEMENTS.

PETROS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30,		December 31,
	2025		2024
Assets
Current assets:
Cash and cash equivalents	$	7,321,501	$	1,718,645
Prepaid expenses and other current assets		75,342		885
Current assets of discontinued operations		—		5,574,748
Total current assets		7,396,843		7,294,278

Non-current assets held for sale		—		3,341,032
Total assets	$	7,396,843	$	10,635,310

Liabilities, Convertible Redeemable Preferred Stock and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable		970,025		764,333
Accrued expenses		260,624		99,641
Accrued Series A Convertible Preferred payments payable		1,715,711		1,909,496
Warrant Liability		3,600		—
Current liabilities held for sale		—		15,254,195
Total current liabilities		2,949,960		18,027,665

Non-current liabilities held for sale		—		75,223
Total liabilities	$	2,949,960	$	18,102,888

Commitments and contingencies (see note 9)
Series A convertible redeemable preferred stock (par value $0.0001 per share and $1,000 stated value), 15,000 and 15,000 shares authorized at June 30, 2025, and December 31, 2024, respectively; 0 and 0 shares issued and outstanding at June 30, 2025, and December 31, 2024, respectively		—		—

Stockholders’ Equity (Deficit):
Series B convertible redeemable preferred stock (par value $0.0001 per share and $1,000 stated value), 1,000,000 and 0 shares authorized at June 30, 2025, and December 31, 2024, respectively, 0 and 0 shares issued and outstanding as of June 30, 2025, and December 31, 2024, respectively		—		—
Common stock (par value $0.0001 per share, 7,000,000,000 and 250,000,000 shares authorized at June 30, 2025, and December 31, 2024, respectively; 42,284,502 and 421,124 shares issued and outstanding as of June 30, 2025, and December 31, 2024, respectively)		4,228		42

Additional paid-in capital		114,478,202		105,740,751
Accumulated deficit		(110,035,547)		(113,208,371)
Total Stockholders’ Equity (Deficit)		4,446,883		(7,467,578)

Total Liabilities and Stockholders’ Equity (Deficit)	$	7,396,843	$	10,635,310

The accompanying Notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

Table of Contents

PETROS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	For the Six Months Ended June 30,				For the Three Months Ended June 30,
	2025		2024		2025		2024
Operating expenses:
Selling, general and administrative	$	3,259,127	$	2,852,030	$	1,800,778	$	1,349,103
Total operating expenses		3,259,127		2,852,030		1,800,778		1,349,103

Loss from continuing operations		(3,259,127)		(2,852,030)		(1,800,778)		(1,349,103)
Other income (expense):
Warrant issuance costs		(10,420,982)		—		—		—
Change in fair value of derivative liability		—		3,348,000		—		1,614,000
Change in fair value of warrant liability		10,302,657		—		(329,343)		—
Interest income		136,639		271,210		88,849		119,391
Total other income (expenses)		18,314		3,619,210		(240,494)		1,733,391

Income (loss) before income taxes		(3,240,813)		767,180		(2,041,272)		384,288
Provision for income taxes		—		—		—		—
Income (loss) from continuing operations, net of tax		(3,240,813)		767,180		(2,041,272)		384,288

Gain from assignment of subsidiaries and Vivus settlement		6,973,302		—		6,973,302		—
Gain (loss) from discontinued operations		(559,665)		(3,591,869)		500,816		(1,046,314)

Net Income (loss)	$	3,172,824	$	(2,824,689)	$	5,432,846	$	(662,026)

Preferred Stock dividend and cash premiums		(493,357)		(812,303)		(218,190)		(216,798)
Preferred Stock accretion		—		(7,124,871)		—		(1,856,095)
Deemed dividend on Series A Preferred warrants		(43,754,824)		—		(35,399,000)		—
Deemed dividend on Series A Warrants		(3,270,000)		—		(3,270,000)		—

Net income (loss) from continuing operations attributable to common stockholders	$	(50,758,994)	$	(7,169,994)	$	(40,928,462)	$	(1,688,605)
Gain (loss) from discontinued operations attributable to common stockholders	$	6,413,637	$	(3,591,869)	$	7,474,118	$	(1,046,314)
Basic and Diluted – continuing operations	$	(3.73)	$	(29.52)	$	(1.58)	$	(5.71)
Basic and Diluted – discontinued operations, assignment and settlement	$	0.47	$	(14.79)	$	0.29	$	(3.54)
Basic and Diluted	$	(3.26)	$	(44.31)	$	(1.29)	$	(9.25)
Weighted average common shares outstanding
Basic and Diluted		13,610,547		242,894		25,922,503		295,524

The accompanying Notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

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PETROS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY AND DEFICIT

(Unaudited)


		Common		Additional
	Common	Stock		Paid-in		Accumulated
	Stock	Amount		Capital		Deficit		Total
Three Months Ended June 30, 2025
Balance, March 31, 2025	2,052,762	$	205	$	105,883,980	$	(115,468,393)	$	(9,584,208)
Stock-based compensation expense	—		—		74,321		—		74,321
Series A Preferred Stock dividends	—		—		(218,190)		—		(218,190)
Preferred Stock redemption including cash premium	1,000,000		100		137,823		—		137,923
Rounded Shares	22,912		2		(2)		—		—
Deemed dividend on Preferred Stock	—		—		(13,552)		—		(13,552)
Cashless exercise of Series B Warrants	39,208,828		3,921		8,613,822		—		8,617,743
Net Income	—		—		—		5,432,846		5,432,846
Balance, June 30, 2025	42,284,502	$	4,228	$	114,478,202	$	(110,035,547)	$	4,446,883


		Common		Additional
	Common	Stock		Paid-in		Accumulated
	Stock	Amount		Capital		Deficit		Total
Six Months Ended June 30, 2025
Balance, December 31, 2024	421,124	$	42	$	105,740,751	$	(113,208,371)	$	(7,467,578)
Stock-based compensation expense	—		—		154,359		—		154,359
Common Stock and prefunded warrants issued, net of expenses	1,600,000		160		(160)		—		—
Series A Preferred Stock dividends	—		—		(493,357)		—		(493,357)
Preferred Stock redemption including cash premium	1,031,638		103		476,341		—		476,444
Rounded Shares	22,912		2		(2)		—		—
Deemed dividend on Preferred Stock	—		—		(13,552)		—		(13,552)
Cashless exercise of Series B Warrants	39,208,828		3,921		8,613,822		—		8,617,743
Net loss	—		—		—		3,172,824		3,172,824
Balance, June 30, 2025	42,284,502	$	4,228	$	114,478,202	$	(110,035,547)	$	4,446,883


		Convertible
	Convertible	Redeemable
	Redeemable	Preferred			Common		Additional
	Preferred	Stock		Common	Stock		Paid-in		Accumulated
	Stock	Amount		Stock	Amount		Capital		Deficit		Total
Three Months Ended June 30, 2024
Balance, March 31, 2024	5,663	$	906,979	275,274	$	27	$	110,838,796	$	(101,052,244)	$	9,786,579
Stock-based compensation expense	—		—	—		—		16,834		—		16,834
Common Stock issued for services	—		—	9,806		1		99,999		—		100,000
Series A Preferred Stock accretion	—		1,856,095	—		—		(1,856,095)		—		(1,856,095)
Series A Preferred Stock dividends	—		153,842	—		—		(153,842)		—		(153,842)
Preferred Stock redemption including cash premium	(1,624)		(1,801,154)	86,821		9		901,780		—		901,789
Deemed dividends on Preferred Stock	—		—	—		—		(62,956)		—		(62,956)
Net loss	—		—	—		—		—		(662,026)		(662,026)
Balance, June 30, 2024	4,039	$	1,115,762	371,901	$	37	$	109,784,516	$	(101,714,270)	$	8,070,283


		Convertible
	Convertible	Redeemable
	Redeemable	Preferred			Common		Additional
	Preferred	Stock		Common	Stock		Paid-in		Accumulated
	Stock	Amount		Stock	Amount		Capital		Deficit		Total
Six Months Ended June 30, 2024
Balance, December 31, 2024	10,022	$	408,982	119,655	$	12	$	110,960,610	$	(98,889,581)	$	12,071,041
Stock-based compensation expense	—		—	—		—		197,215		—		197,215
Common Stock issued for services	—		—	12,919		1		209,999		—		210,000
Series A Preferred Stock accretion	—		7,124,871	—		—		(7,124,871)		—		(7,124,871)
Series A Preferred Stock dividends	—		754,962	—		—		(754,962)		—		(754,962)
Preferred Stock redemption including cash premium	(5,983)		(7,173,053)	239,327		24		6,353,866		—		6,353,890
Deemed dividends on Preferred Stock	—		—	—		—		(57,341)		—		(57,341)
Net loss	—		—	—		—		—		(2,824,689)		(2,824,689)
Balance, June 30, 2024	4,039	$	1,115,762	371,901	$	37	$	109,784,516	$	(101,714,270)	$	8,070,283

The accompanying Notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

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PETROS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	For the Six Months Ended June 30,
	2025		2024
Cash flows from operating activities:
Net Income (loss)	$	3,172,824	$	(2,824,689)
Less loss from discontinued operations		(559,665)		(3,591,869)
Operating Income from continuing operations		3,732,489		767,180
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of warrant liability		(10,302,657)		—
Change in fair value of derivative liability		—		(3,348,000)
Warrant issuance costs		10,420,982		—
Gain on asset disposition and Vivus settlement		(6,973,302)		—
Employee stock-based compensation		154,359		197,215
Stock issued for services		—		210,000
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(74,457)		(34,430)
Accounts payable		205,690		(212,057)
Accrued expenses		160,983		214,928
Net cash used in operating activities – continuing operations		(2,675,913)		(2,205,164)
Net cash used in operating activities – discontinued operations		(1,991,326)		(592,046)
Net cash used in operating activities		(4,667,239)		(2,797,210)

Cash flows from financing activities:
Proceeds from common stock and prefunded warrants, net		8,503,018		—
Redemption of Series A Preferred Stock		(224,249)		(2,699,960)
Net cash provided by (used in) financing activities – continuing operations		8,278,769		(2,699,960)
Net cash used in financing activities – discontinued operations		—		(379,791)
Net cash provided by (used in) financing activities		8,278,769		(3,079,751)

Net increase (decrease) in cash		3,611,530		(5,876,961)

Cash and cash equivalents, beginning of period		3,709,971		13,336,975
Cash and cash equivalents, end of period		7,321,501		7,460,014
Less: Cash and cash equivalents attributable to discontinued operations		—		(710,657)
Cash and cash equivalents, end of period – continuing operations	$	7,321,501	$	6,749,357

Supplemental cash flow information:
Cash paid for interest during the period	$	—	$	—

Noncash Items:
Noncash redemption of Series A Preferred Stock	$	476,444	$	6,353,890
Accrued Series A Preferred Stock payments payable		—		224,124
Accretion of Series A Preferred Stock to redemption value		—		7,124,871
Accrual of Series A Preferred Stock dividends		493,357		754,962
Non-cash warrant issuance costs		18,924,000		—
Cashless exercise of Series B warrants		8,617,743		—
Deemed dividend on Series A Preferred Stock		13,552		—
Deemed dividend on Series A Preferred Warrants		43,754,824		—
Deemed dividend on Series A Warrants		3,270,000		—

The accompanying Notes are an integral part of the Unaudited Condensed Consolidated Financial Statements.

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PETROS PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1) Nature of Operations, Basis of Presentation, Liquidity and Going Concern

Nature of Operations

Petros Pharmaceuticals, Inc. (“Petros” or the “Company”) was incorporated in Delaware on May 14, 2020, for the purpose of effecting the transactions contemplated by that certain Agreement and Plan of Merger, dated as of May 17, 2020 (as amended, the “Merger Agreement”), by and between Petros, Neurotrope, Inc., a Nevada corporation (“Neurotrope”), Metuchen Pharmaceuticals LLC, a Delaware limited liability company (“Metuchen”), and certain subsidiaries of Petros and Neurotrope. Prior to June 2025, Petros consisted of wholly owned subsidiaries: Metuchen, Neurotrope, Timm Medical Technologies, Inc. (“Timm Medical”), and Pos-T-Vac, LLC (“PTV” and, collectively with Metuchen and Timm Medical the “Subsidiaries”). The Company has historically been engaged in the commercialization and development of Stendra®, a U.S. Food and Drug Administration (“FDA”) approved PDE-5 inhibitor prescription medication for the treatment of erectile dysfunction (“ED”), which the Company licensed from Vivus, Inc. (“Vivus”). Petros also historically marketed its own line of ED products in the form of vacuum erection device products (“VEDs”) through its previous subsidiaries, Timm Medical and PTV, including VEDs marketed as “Osbon ErecAid” and “PosTVac.”

In December 2024, the Company determined to discontinue sales of Stendra® to wholesalers. As a result of the Vivus Termination Agreement (as defined herein) entered into by the Company in March 2025, the Company is no longer engaged in the commercialization, development or sales of Stendra®. Additionally, Timm Medical and PTV were assigned to a third-party in connection with the ABC (as defined herein), and accordingly, the Company is no longer engaged in the marketing or selling of VEDs following the completion of the ABC process. Today, the Company is working towards the goal of becoming a leading innovator in the emerging self-care market driving expanded access to key nonprescription pharmaceuticals as Over-the-Counter (“OTC”) and nonprescription drug products with additional condition for nonprescription use (“ACNU Products”) treatment options.

Petros is pursuing the development of a proprietary integrated technology solutions platform (the “platform”) containing two components (i) SaaS, designed to assist pharmaceutical companies in operationalizing and commercializing an Rx-to-OTC switch as an element in the development of an ACNU Product, and (ii) a potential Software as a Medical Device (“SaMD”) component, which must comply with FDA governance and approval and is expected to be a consumer interface that guides the consumer in navigating appropriate self-selection or deselection, through the acquisition process of the OTC product. The Company has been working towards the development of the platform, which is currently in early development stages and is being designed to serve as a retail or online interface, with clinically established algorithmic logic qualifying the intended consumer-patient for purchase and use of an ACNU Product, while reducing subjectivity to the least possible degree and maximizing objective qualifiers to the greatest possible degree.

On April 29, 2025, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware to effect a 1-for-25 reverse stock split of the shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), either issued and outstanding or held by the Company as treasury stock, effective as of 4:05 p.m. (New York time) on April 30, 2025. The shares of Common Stock began trading on a Reverse Stock Split-adjusted basis on Nasdaq on May 1, 2025 (the “Reverse Stock Split”). All share and per share amounts have been retroactively adjusted for the Reverse Stock Split.

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Liquidity and Going Concern

In accordance with Financial Accounting Standards Board (the “FASB”) Accounting Standards Update (“ASU”) ASU 2014-15, Presentation of Financial Statements - Going Concern (Subtopic 205-40) (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. To date, the Company’s principal sources of capital used to fund operations have been the revenues from product sales, private sales, registered offerings and private placements of equity securities. The Company has experienced net losses and negative cash flows from operations since inception. As of June 30, 2025, the Company had cash and cash equivalents of $7.3 million, working capital of $4.4 million from continuing operations, and accumulated deficit of $110 million. The Company’s plans include, or may include, utilizing cash and cash equivalents on hand, as well as exploring additional ways to raise capital in addition to increasing cash flows from operations. The Company does not currently have sufficient available liquidity to fund its operations for at least the next 12 months. These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued.

NASDAQ Capital Market Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard

On May 15, 2024, the Company received notice from the Listing Qualifications Staff of Nasdaq (the “Staff”) indicating that, based upon the closing bid price of the Company’s Common Stock for the 30 consecutive business day period between April 3, 2024, through May 14, 2024, the Company did not meet the minimum bid price of $1.00 per share required for continued listing on the Nasdaq Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2) (the “Rule”). The letter also indicated that the Company was provided with a compliance period until November 11, 2024, in which to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A).

On November 12, 2024, the Company received notice from the Staff granting the Company’s request for a 180-day extension to regain compliance with the Rule, or, until May 12, 2025 (the “Compliance Period”). In order to regain compliance with Nasdaq’s minimum bid price requirement, the Company’s Common Stock must maintain a minimum closing bid price of $1.00 for at least ten consecutive business days during the Compliance Period. On May 6, 2025, the Company addressed these concerns before a Nasdaq Hearings Panel (the “Panel”).

On March 26, 2025, the Company received a letter (the “March 2025 Letter”) from the Staff notifying the Company that the Company’s Common Stock had a closing bid price of $0.10 or less for ten consecutive trading days, and, accordingly, the Company is subject to the provisions contemplated under Nasdaq Listing Rule 5810(c)(3)(A)(iii) (the “Low Bid Price Listing Rule”) which the Company addressed before the Panel.

On April 8, 2025, Nasdaq notified the Company that it did not comply with the $2.5 million minimum stockholders’ equity requirement, as set forth in Nasdaq Listing Rule 5550(b)(1). Pursuant to Nasdaq Listing Rule 5810(d), this deficiency became an additional basis for delisting, and as such, the Company addressed these concerns before the Panel on May 6, 2025.

On April 28, 2025, the Company received a letter from the Staff indicating that the Staff had public interest concerns regarding the Company’s public offering of securities that closed on February 19, 2025, which serves as an additional basis for delisting the Company’s securities pursuant to Nasdaq Listing Rule 5810(d) (the “Matter”) and the Company addressed these concerns before the Panel on May 6, 2025.

On May 20, 2025, the Company received a letter (the “Letter”) from the Panel indicating that the Panel has determined to delist the Company’s securities from Nasdaq as a result of the foregoing. Pursuant to the Letter, the Panel determined to deny the Company’s request to continue its listing on Nasdaq and the Company’s Common Stock was suspended at the open of trading on May 22, 2025. Following the suspension of trading on Nasdaq, beginning on May 22, 2025, the Company’s Common Stock began and continues to trade publicly on the OTC Markets under its existing symbol “PTPI”. The Company is currently appealing the decision by Nasdaq to delist the Company’s securities. There can be no assurance that an appeal will be successful.

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Metuchen ABC

On January 18, 2022, Metuchen and Vivus, Inc. (“Vivus”) entered into a Settlement Agreement (the “Vivus Settlement Agreement”) related to the minimum purchase requirements under the Vivus Supply Agreement in 2018, 2019 and 2020 and certain reimbursement rights asserted by a third-party retailer in connection with quantities of Metuchen’s Stendra® product that were delivered to the third-party retailer and later returned. In connection with the Vivus Settlement Agreement, Metuchen retained approximately $7.3 million of API inventory (representing the 2018 and 2019 minimum purchase requirements) out of approximately $12.4 million due under the Vivus Supply Agreement, in conjunction with forgiveness of approximately $4.25 million of current liabilities relating to returned goods and minimum purchase commitments. In exchange for the API and reduction of current liabilities, Metuchen executed an interest-bearing promissory note (the “Note”) in favor of Vivus in the principal amount of $10,201,758. The parties also entered into that certain Security Agreement, dated January 18, 2022 (“Security Agreement”), pursuant to which Metuchen granted to Vivus a continuing security interest in all of its Stendra® API and products and its rights under the License Agreement (the “Collateral”) to secure Metuchen’s obligations under the Note. The Security Agreement contained customary events of default. The Company recorded the impact of this transaction, including the gain in the first quarter of 2022.

In addition to the payments to be made in accordance with the Note, Metuchen further agreed in the Vivus Settlement Agreement to (i) grant to Vivus a right of first refusal to provide certain types of debt and convertible equity (but not preferred equity) financing issued by or to Metuchen (including any subsidiaries and intermediaries) until the Note is paid in full, and (ii) undertake to make certain regulatory submissions to effectuate Vivus’ ability to exercise its rights under the License Agreement. On January 18, 2022, Metuchen made a prepayment of the obligations under the Note in the amount of $900,000, and a payment of $1,542,904 with respect to a purchase order made in 2021 to Vivus. In consideration of these payments and upon Metuchen’s satisfaction of certain regulatory submissions, Vivus released 50% of the quantity of bulk Stendra® tablets under Metuchen’s existing open purchase order (the “Open Purchase Order”) being held by Vivus, which represented approximately a six-month supply of inventory. Pursuant to the Vivus Settlement Agreement, Vivus released the remaining 50% of the quantity of bulk Stendra® tablets under the Open Purchase Order, later during the first quarter of 2022, upon Metuchen’s satisfaction of the remaining regulatory submission requirements.

On October 1, 2024, Metuchen failed to make the payment due pursuant to the Note and related Security Agreement in the amount of $0.5 million, constituting an Event of Default (as defined in the Note) under the Note and Security Agreement. The outstanding principal amount on the Note, plus accrued and unpaid interest thereon, was $7,574,824 as of December 31, 2024. As a result of an event of default under the Settlement Agreement and the Security Agreement existing and continuing by virtue of Metuchen’s failure to pay the Installment (as defined in the Note) that was due October 1, 2024 (the “Vivus Event of Default”), all the obligations under the Settlement Agreement and the Security Agreement (the “Obligations”) became immediately due and payable on the date of the Foreclosure Notice (as defined below).

Pursuant to the Security Agreement, Vivus holds a security interest against the Collateral. On December 10, 2024, pursuant to a Notice of Proposal to Accept Pledged Collateral in Partial Satisfaction of Indebtedness Pursuant to Uniform Commercial Code Section 9-620 (the “Foreclosure Notice”), Vivus proposed to accept all the Collateral (save and except the Specified License Agreement (as defined in the Security Agreement); collectively, the “Foreclosed Collateral”) in partial satisfaction of the Obligations. Vivus further proposed in the Foreclosure Notice that its acceptance of the Foreclosed Collateral would only constitute satisfaction of $2,000,000 worth of the Obligations and would not include any other amounts outstanding under the Note, the Settlement Agreement, or the Security Agreement, including but not limited to (i) all interest accrued or at any time accruing thereon and (ii) all other sums recoverable by Vivus from Metuchen by virtue of the Obligations. On December 13, 2024, Metuchen accepted and agreed to the Foreclosure Notice.

In connection with the Foreclosure Notice, Metuchen and Vivus entered into that certain termination agreement, dated as of March 31, 2025, pursuant to which, the parties mutually agreed to terminate the Vivus License Agreement, effective as of March 31, 2025 (the “Vivus Termination Agreement”), subject to the survival of certain provisions as set forth therein. As a result of the Vivus Termination Agreement, Metuchen no longer has any right in or to Vivus Technology (as defined in the Vivus License Agreement) in the United States of America and its territories and possessions, including Puerto Rico and U.S. military bases abroad, Canada, South America and India (the “Licensed Territory”) and Metuchen agreed to immediately cease the development, manufacturing and commercialization of Stendra® in the Licensed Territory. Metuchen further agreed to assign any trademarks incorporating the mark “Stendra®” to Vivus, subject to certain exceptions as set forth therein. In furtherance of the Foreclosure Notice, and pursuant to the Termination Agreement, Metuchen agreed to transfer all completed inventory of Stendra® and all substantially manufactured inventory of Stendra® on hand to Vivus at Metuchen’s sole expense within 30 days of the date of the Vivus Termination Agreement.

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Pursuant to the Vivus Termination Agreement, Metuchen agreed to provide transition services to Vivus, including transferring any agreements or arrangements with distributors of Stendra®, to enable the development, manufacturing and commercialization of Stendra® to proceed without disruption. Additionally, Metuchen agreed to transfer to Vivus any regulatory approvals with respect to Stendra® controlled by Metuchen or its affiliates within 30 days of the date of the Vivus Termination Agreement.

Pursuant to the Vivus Termination Agreement, Metuchen further agreed that Metuchen will retain liability for payment of all gross to net sales deductions (including returns, rebates and chargeback) of Stendra® products that were sold prior to the date of the Vivus Termination Agreement and agreed to reimburse Vivus for any such deductions charged to or otherwise borne by Vivus.

On June 16, 2025, in accordance with California state law, the Company effected an assignment (the “Assignment”) of all of the business, assets, properties, contractual rights, goodwill, going concern value, rights and claims (“Assets”) of Metuchen, including Metuchen’s wholly-owned subsidiaries, Timm Medical and PTV and each of their respective Assets (collectively, the “ABC Assets”), for the benefit of creditors to a special purpose vehicle that is managed by a third-party fiduciary (the “Assignee”) such that, as of June 16, 2025, the Assignee succeeded to all of each Subsidiary’s right, title and interest in and to the respective ABC Assets. Upon the completion of the Assignment, the Assignee obtained sole control over the ABC Assets and each Subsidiary no longer operates its business or controls the liquidation or distribution of its assets or the resolution of claims. The Assignment is a judicial insolvency procedure, which was commenced by each Subsidiary entering a contractual assignment for the benefit of creditors on June 16, 2025, that effectuates the assignment, grant, conveyance, transfer, and setting over to the Assignee, in trust, of all of the ABC Assets. The Assignee is expected to liquidate the property through an auction sale and distribute the proceeds to the Subsidiaries’ creditors according to their respective priorities at law to satisfy Metuchen’s obligations, including the Obligations, in accordance with the rules and regulations of the State of California. If any proceeds remain after all of Metuchen’s obligations, including the Obligations, and costs associated with the liquidation process have been satisfied, any remaining proceeds will be distributed to Metuchen’s equity holder, which is the Company (collectively, the “ABC”).

Pursuant to that certain letter agreement (the “Sherwood Agreement”), dated as of March 31, 2025, by and between Metuchen and Sherwood Partners, Inc. (“Sherwood”), Sherwood agreed to provide certain consulting and advisory services in connection with the ABC, including in connection with the sale process and budgeting and planning process (the “Services”). In consideration for the Services, Metuchen has agreed to pay a fee to Sherwood equal to $60,000 and a cash fee equal to 9% of the gross proceeds of the sale of the ABC Assets and has agreed to reimburse Sherwood for certain reasonable out of pocket expenses.

2) Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial reporting and with the instructions to Form 10-Q and Article 8-03 of Regulation S-X. In the opinion of management, the unaudited condensed consolidated financial statements included herein contain all adjustments necessary to present fairly the Company’s financial position and the results of its operations and cash flows for the interim periods presented. Such adjustments are of a normal recurring nature. The results of operations for the three and six months ended June 30, 2025, may not be indicative of results for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes to those statements for the year ended December 31, 2024, included in the Company’s Annual Report on Form 10-K filed with the SEC on March 31, 2025. All transactions between the consolidated entities have been eliminated in consolidation.

Discontinued Operations

Assets and liabilities of a business that meet the accounting requirements to be classified as held for sale are separated in a disposal group. Disposal group net assets are recorded at the lower of their carrying amount or estimated fair value less expected costs to sell. After being classified as held for sale, assets are not depreciated or amortized.

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Assets and liabilities of a disposal group that meet the accounting requirements to be classified as discontinued operations are presented separately for all current and prior periods in the condensed consolidated balance sheets. The results of discontinued operations are reported in income (loss) from discontinued operations, net of taxes in the condensed consolidated statements of operations (loss) for the current and prior periods beginning in the period in which the business meets the held for sale criteria. Income (loss) from discontinued operations includes direct costs attributable to the business held for sale, and an estimate of costs from corporate functions dedicated to the business, but excludes corporate expenses composed of selling, general and administrative expenses not attributable to any of the operating segments (see Note 3).

Unless otherwise indicated, the information in the notes to the condensed consolidated financial statements refers only to the Company’s continuing operations.

3) Discontinued Operations

ABC Assets’ Discontinued Operations

As a result of the Board ABC Resolution and Sherwood Agreement, as of March 31, 2025, the Company determined that the ABC Assets met the held for sale and discontinued operations accounting criteria. Accordingly, the ABC Assets were classified as held for sale in the condensed consolidated balance sheets for all periods presented, and its net assets were classified as current and non-current. Additionally, the Company classified the ABC Assets’ operations as discontinued operations in its condensed consolidated statements of operations for all periods presented.

Carrying amounts of assets and liabilities associated with the ABC Assets included as part of condensed consolidated discontinued operations:


	December 31,
	2024
	(Unaudited)
Assets held for sale:
Current assets:
Cash and cash equivalents	$	1,991,326
Accounts receivable, net		416,076
Inventories		1,349,802
Prepaid inventory		1,649,212
Prepaid expenses and other current assets		168,332
Total current assets held for sale		5,574,748

Fixed assets, net		22,948
Intangible assets, net		3,204,354
Right of use assets		113,730
Total non-current assets held for sale	$	3,341,032

Liabilities held for sale:
Current liabilities:
Current portion of promissory note	$	7,248,635
Accounts payable		1,564,631
Accrued expenses		6,362,763
Other current liabilities		78,166
Total current liabilities held for sale		15,254,195

Other long-term liabilities		75,223
Total non-current liabilities held for sale	$	75,223

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Condensed Consolidated statement of operations related to the ABC Assets’ discontinued operations:


	For the Six Months Ended June 30,
	2025		2024
Net sales	$	1,346,445	$	2,810,276
Cost of goods sold		379,628		660,939
Gross profit		966,817		2,149,337
Selling, general and administrative		964,573		2,146,058
Research and development expense		82,957		1,924,750
Depreciation and amortization expense		315,858		1,435,677
Interest expense, promissory note		163,094		234,721
Loss from discontinued operations before income tax		(559,665)		(3,591,869)
Provision for income taxes		—		—
Loss from discontinued operations	$	(559,665)	$	(3,591,869)


	For the Three Months Ended June 30,
		2025		2024
Net sales	$	632,908	$	1,421,471
Cost of goods sold		180,727		329,110
Gross profit		452,181		1,092,361
Selling, general and administrative		(175,749)		937,527
Research and development expense		770		368,798
Depreciation and amortization expense		126,344		717,838
Interest expense, promissory note		—		114,512
Gain (loss) from discontinued operations before income tax		500,816		(1,046,314)
Provision for income taxes		—		—
Gain (loss) from discontinued operations	$	500,816	$	(1,046,314)

As a result of the assignment of the net liabilities of Metuchen on June 15, 2025, the Company recognized a noncash gain of $6,973,302 during the three and six months ended June 30, 2025. Cash flows related to discontinued operations are included in the condensed consolidated statements of cash flows. There were no significant operating noncash items or investing activities cash flows from discontinued operations during the six months ended June 30, 2025, or the six months ended June 30, 2024.

4) Accrued Expenses

Accrued expenses are comprised of the following:


	June 30, 2025		December 31, 2024
Accrued professional fees	$	30,000	$	98,700
Accrued bonuses		230,399		—
Other accrued expenses		225		941
Total accrued expenses	$	260,624	$	99,641

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5) Stockholders’ Equity

Series A Preferred Stock

On January 23, 2025, the Company entered into an Amendment Agreement with the Required Holders (as defined in the Certificate of Designations (the “Certificate of Designations”) of the Company’s Series A Convertible Preferred Stock (“Series A Preferred Stock”)), pursuant to which, the Required Holders agreed to (i) amend the Certificate of Designations of the Company’s Series A Preferred Stock by filing a Certificate of Amendment to the Certificate of Designations (the “January 2025 Certificate of Amendment”) with the Secretary of State of the State of Delaware, (ii) defer any payment amounts that have accrued and that are unpaid as of January 23, 2025 pursuant to the Certificate of Designations, to February 15, 2025, and (iii) waive any breach or violation of that certain Purchase Agreement, dated as of July 13, 2023 (“Series A Purchase Agreement”), pursuant to which the Company issued the Series A Preferred Stock and the related warrants (the “Warrants”), the Certificate of Designations, or the Warrants resulting from the Company’s failure to pay such outstanding amounts. The January 2025 Certificate of Amendment amends the Certificate of Designations to, (i) extend the maturity date to February 15, 2025, (ii) modify the schedule of Installment Dates (as defined in the Certificate of Designations), (iii) amends the restrictive covenant to the Certificate of Designations requiring the Company from January 15, 2025 until February 15, 2025, to maintain unencumbered, unrestricted cash and cash equivalents on hand in amount equal to at least $500,000, and (iv) amends the restrictive covenant relating to the change in nature of the Company’s business, such that such covenant does not apply to the Company’s change in sales strategy related to the Company’s Stendra® avanafil and product development strategy as it relates to the development and commercialization of a proprietary platform focused on prescription medication to over - the - counter switch solutions. The January 2025 Certificate of Amendment was filed with the Secretary of State of the State of Delaware, effective as of January 24, 2025.

On March 30, 2025, the Company entered into an Amendment Agreement (the “March 2025 Amendment Agreement”) with the Required Holders (as defined in the Certificate of Designations), pursuant to which, the Required Holders agreed to (i) amend the Certificate of Designations of the Company’s Series A Preferred Stock by filing a Certificate of Amendment to the Certificate of Designations (the “March 2025 Certificate of Amendment”) with the Secretary of State of the State of Delaware, (ii) defer any payment amounts that have accrued and that are unpaid as of the date of the March 2025 Amendment Agreement, pursuant to the Certificate of Designations, to July 15, 2025, and (iii) waive any breach or violation of the Purchase Agreement, the Certificate of Designations, or the Warrants resulting from the Company’s failure to pay such outstanding amounts. The March 2025 Certificate of Amendment amends the Certificate of Designations to, (i) extend the maturity date to July 15, 2025, and (ii) modify the schedule of Installment Dates (as defined in the Certificate of Designations). The March 2025 Certificate of Amendment was filed with the Secretary of State of the State of Delaware, effective as of March 31, 2025. As of the date of this filing, the liability for accrued Series A Preferred payments payable has not been fully settled and the Certificate of Designations has not been further amended to extend the maturity date as set forth therein.

During the three and six months ended June 30, 2025, the Company issued 1,000,000 and 1,031,638 shares of Common Stock to settle $137,923 and $476,444 of the accrued Series A Preferred Stock payments payable, respectively. Additionally, during the three months ended June 30, 2025, the Company made cash payments totaling $224,249 in settlement of the accrued Series A Preferred Stock payments payable. During the three and six months ended June 30, 2025, the Company recognized additional Series A Preferred Stock dividends totaling $218,190 and $493,357, respectively, in Series A Preferred Stock dividends at the stated dividend rate, and recognized $13,552 in additional deemed dividends.

During the three months ended June 30, 2024, the Company redeemed a total of 1,624 Series A Preferred Shares in cash for $1,578,550 and issued 86,821 shares of Common Stock pursuant to the terms of the Certificate of Designations, equal to $901,789. During the three months ended June 30, 2024, the Company recognized a total of $216,798 of preferred dividends consisting of $153,842 of preferred dividends at the stated dividend rate, and $62,956 of cash premiums recognized as deemed dividends.

During the six months ended June 30, 2024, the Company redeemed a total of 5,983 Series A Preferred Shares for cash equal to $2,699,960 and issued 239,327 shares of Common Stock, elected pursuant to the terms of the Certificate of Designations, equal to $6,353,890. During the six months ended June 30, 2024, the Company recognized a total of $812,303 of preferred dividends consisting of $754,962 of preferred dividends at the stated dividend rate, and $57,341 of cash premium recognized as a deemed dividend.

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Series B Preferred Stock

On February 13, 2025, the Company filed a Certificate of Designations with the Secretary of State of the State of Delaware, establishing the designations, preferences, powers and rights of the shares of a new series of the Company’s preferred stock, Series B Convertible Preferred Stock, which was effective immediately on filing (the “Series B Certificate of Designations”).

February 2025 Equity Financing

On February 17, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional and accredited investors (collectively, the “Investors”) for the issuance and sale, in a best efforts public offering (the “Public Offering”), of (i) 558,000 units (the “Units”), each Unit consisting of one share (the “Shares”) of the Company’s Common Stock, one Series A Warrant (the “Series A Warrants”) to purchase 0.25 share of Common Stock (the “Series A Warrant Shares”) and one Series B Warrant (the “Series B Warrants,” and together with the Series A Warrants, the “Series Warrants”) to purchase one shares of Common Stock (the “Series B Warrant Shares” and, together with the Series A Warrant Shares, the “Warrant Shares”) and (ii) 1,042,000 pre-funded units (the “Pre-Funded Units”), each Pre-Funded Unit consisting of one pre-funded warrant (the “Pre-Funded Warrants”) to purchase one share of Common Stock (the “Pre-Funded Warrant Shares”), one Series A Warrant and one Series B Warrant. The public offering price was $6.00 per Unit and $5.9975 per Pre-Funded Unit. The Offering closed on February 19, 2025. The aggregate gross proceeds from the Offering were approximately $9.6 million before deducting estimated offering expenses payable by the Company totaling approximately $1.1 million. The Company intends to use the net proceeds from the offering of approximately $8.5 million for working capital and general corporate purposes.

In connection with the Company’s Reverse Stock Split, the exercise price of the Series A Warrants was adjusted to $0.36625 per 0.25 share, and the number of Series A Warrants was adjusted proportionally to 13,105,802 which are exercisable into 3,276,451 shares of Common Stock; and the exercise price of the Series B Warrants was adjusted to $0.4883 per share and the number of shares of Common Stock issuable upon exercise of the Series B Warrants was adjusted to 13,105,802 shares pursuant to the full ratchet anti-dilution provisions contained in the Series Warrants. As the Series B Warrants were classified as liabilities upon issuance, the changes in fair value as a result of these adjustments were recognized in earnings for the three and six months ended June 30, 2025.

The Company considers the change in exercise price due to the anti-dilution adjustments contained in the Series A Warrants to be of equity in nature, as the issuance allowed the Series A Warrant holders to exercise such Series A Warrants for Common Stock, which represents an equity-for-equity exchange. Therefore, the changes in the fair value of the Series A Warrants before and after the effect of the anti-dilution adjustments will be treated as deemed dividend in the amount of approximately $3.27 million during the three and six months ended June 30, 2025.

The Company valued the deemed dividend in connection with the Company’s 25-for-1 Reverse Stock Split as the difference between: (a) the modified fair value of the Series A Warrants in the amount of approximately $3.67 million and (b) the fair value of the original award prior to the modification of approximately $0.4 million. The fair value of the Series A Warrants before the anti-dilution adjustment was estimated utilizing the Black Scholes model and the following key inputs and assumptions: the number of the Series A Warrants totaling 1,600,000; the exercise price of $3.00 per 0.25 share; dividend yield of 0%; remaining term of 4.95 years; equity volatility of 165%; and a risk-free interest rate of 3.7%. The fair value of the Series A Warrants after the effect of the anti-dilution adjustment was estimated utilizing the Black Scholes model and the following key inputs and assumptions: the number of the Series A Warrants totaling 13,105,802; the exercise price of $0.36625 per 0.25 share; dividend yield of 0%; remaining term of 4.95 years; equity volatility of 165%; and a risk-free interest rate of 3.7%.

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The exercisability of the Series Warrants was subject to receipt of such stockholder approval was required by the applicable rules and regulations of the Nasdaq Capital Market LLC, including, but not limited to, with respect to (i) the issuance of all of the shares of Common Stock issuable upon exercise the Series Warrants in accordance with their terms (including adjustment provisions set forth therein), and (ii) to consent to any adjustment to the exercise price or number of shares of Common Stock underlying the Series Warrants in the event of a Share Combination Event and Dilutive Issuance, each as defined in the Series Warrants (collectively, the “Warrant Stockholder Approval”). The Company agreed to use its reasonable best efforts to obtain such approval within 60 days from the closing of the Offering, and agreed to cause an additional stockholder meeting to be held every 90 days thereafter until such Warrant Stockholder Approval is obtained. The Series B Warrants specifically can be settled by way of an alternative cashless exercise after stockholder approval is obtained, in which the Series B Warrant holders can receive three times the number of shares of Common Stock that would be issuable under a cash exercise. The Warrant Stockholder Approval was obtained at the Company’s special meeting of stockholders held on April 10, 2025. Subsequent to March 31, 2025, and pursuant to the terms of the Series Warrants, upon receipt of the Warrant Stockholder Approval, the Floor Price (as defined in the Series Warrants) was adjusted to $1.465 per share.

The Series B Warrants became exercisable beginning on the first trading day following the date of Warrant Stockholder Approval (the “Initial Exercise Date.”). Holders of the Series B Warrants may effect an “alternative cashless exercise” at any time while the Series B Warrants are outstanding following the Initial Exercise Date. Under the alternative cashless exercise option, a holder of a Series B Warrant has the right to receive an aggregate number of shares equal to the product of (i) the aggregate number of shares of Common Stock that would be issuable upon a cash rather than a cashless exercise of the Series B Warrant and (ii) 3.0.

Subject to certain limitations described in the Pre-Funded Warrants, the Pre-Funded Warrants were immediately exercisable and could have been exercised at a nominal consideration of $0.0001 per share any time until all of the Pre-Funded Warrants were exercised in full. A holder did not have the right to exercise any portion of the Series Warrants or the Pre-Funded Warrants if the holder (together with its affiliates) would have beneficially owned in excess of 4.99% or 9.99%, respectively (or at the election of the holder of the Series Warrants, 9.99%) of the number of shares of Common Stock outstanding immediately after having given effect to the exercise, as such percentage ownership was determined in accordance with the terms of the Series Warrants or the Pre-Funded Warrants, respectively. However, upon notice from the holder to the Company, the holder could have increased the beneficial ownership limitation pursuant to the Series Warrants, which may not have exceeded 9.99% of the number of shares of Common Stock outstanding immediately after having given effect to the exercise, as such percentage ownership was determined in accordance with the terms of the Series Warrants, provided that any increase in the beneficial ownership limitation would not have taken effect until 61 days following notice to the Company.

In connection with the Public Offering, (i) the conversion price of the Series A Preferred Stock was adjusted to $6.00 per share pursuant to the full ratchet anti-dilution provisions contained in the Certificate of Designations and, (ii) the exercise price of the Warrants was adjusted to $6.00 per share and the number of shares of Common Stock issuable upon exercise of the Warrants was adjusted proportionally to 2,700,000 shares pursuant to the full ratchet anti-dilution provisions contained in the Warrants. In connection with the Company’s 1-for-25 Reverse Stock Split and pursuant to the share combination event adjustment provisions in the Series A Certificate of Designations and the Warrants, the conversion price of the Series A Preferred Stock was further adjusted to $0.1269 and the exercise price of the Warrants was further adjusted to $0.1269 per share, and the number of shares of Common Stock issuable upon exercise of the Warrants was adjusted proportionally to 127,659,584 shares pursuant to the full ratchet anti-dilution provisions contained in the Warrants.

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The Company considers the change in exercise price due to the anti-dilution trigger related to the Warrants to be of an equity nature, as the issuance allowed the Warrant holders to exercise the Warrants for shares of Common Stock, which represents an equity-for-equity exchange. Therefore, the changes in the fair value of the Warrants before and after the effect of the anti-dilution adjustments will be treated as deemed dividend in the amount of approximately $35.4 and $43.8 million during the three and six months ended June 30, 2025, respectively. The Company valued the deemed dividend in connection with the Public Offering as the difference between: (a) the modified fair value of the Warrants in the amount of approximately $9.1 million and (b) the fair value of the original award prior to the modification of approximately $0.7 million. The fair value of the Warrants before the effect of the anti-dilution adjustments was estimated utilizing the Black Scholes model using the following key inputs and assumptions: the number of shares issuable upon exercise of the Warrants totaling 288,000 shares; the exercise price of $56.25 per share; dividend yield of 0%; remaining term of 3.40 years; equity volatility of 165.0%; and a risk-free interest rate of 4.3%. The fair value of the Warrants after the effect of the anti-dilution adjustments was estimated utilizing the Black Scholes model and the following key inputs and assumptions: the number of shares issuable upon exercise of the Warrants totaling 2,700,000 shares; the exercise price of $6.00 per share; dividend yield of 0%; remaining term of 3.40 years; equity volatility of 165.0%; and a risk-free interest rate of 4.3%. The Company valued the deemed dividend in connection with the Company’s 25-for-1 Reverse Stock Split as the difference between: (a) the modified fair value of the Warrants in the amount of approximately $35.9 million and (b) the fair value of the original award prior to the modification of approximately $0.5 million. The fair value of the Warrants before the effect of the anti-dilution triggering event was estimated utilizing the Black Scholes model using the following key inputs and assumptions: the number of shares issuable upon exercise of the Warrants totaling 2,700,000 shares; the exercise price of $6.00 per share; dividend yield of 0%; remaining term of 3.20 years; equity volatility of 182.0%; and a risk-free interest rate of 3.6%. The fair value of the Warrants after the effect of the anti-dilution adjustments was estimated utilizing the Black Scholes model and the following key inputs and assumptions: the number of shares issuable upon exercise of the Warrants totaling 127,659,584 shares; the exercise price of $0.1269 per share; dividend yield of 0%; remaining term of 3.20 years; equity volatility of 182.0%; and a risk-free interest rate of 3.6%.

Dawson James Securities, Inc. (“Dawson”) acted as the Company’s exclusive placement agent in connection with the Public Offering, pursuant to that certain engagement letter, dated as of January 24, 2025, between the Company and Dawson (the “Engagement Letter”). Pursuant to the Engagement Letter, the Company agreed to pay Dawson a cash fee equal to 8.0% of the aggregate gross proceeds of the Public Offering and reimbursed certain expenses and legal fees.

The aggregate gross proceeds from the Public Offering are approximately $9.6 million before deducting estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes.

The Company assessed the Pre-Funded Warrants and Series A Warrants under ASC 480 and ASC 815 and determined that the Pre-Funded and Series A Warrants met the requirements to be classified in stockholders’ equity. However, as discussed in the following paragraph, as the fair value of the Series B Warrants exceeded the proceeds received from the Public Offering, and thus the Pre-Funded Warrants and Series A Warrants were recorded at their residual fair value of $0 upon issuance.

Transaction costs incurred attributable to the Series B Warrants of approximately $10.4 million were expensed immediately upon issuance, of which approximately $1.1 million represents cash broker and legal fees, and approximately $9.3 million represents the excess of the issuance date fair value of the Series B Warrants over cash proceeds.

During the three months ended June 30, 2025, investors exercised a total of 13,069,610 of the Series B Warrants under the alternative cashless exercise option pursuant to which the Company issued a total of 39,208,828 shares of the Company’s Common Stock. As a result of the exercises, the Company relieved approximately $8.6 million of the corresponding warrant liability which was recognized as an increase to stockholders’ equity.

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6) Stock-Based Compensation

The Company held a special meeting of stockholders on April 10, 2025, at which the Company’s stockholders approved an amendment to the Petros Pharmaceuticals, Inc. Amended and Restated 2020 Omnibus Incentive Compensation Plan (the “Incentive Plan”) to increase the aggregate number of shares of Common Stock available for the grant of awards under the Incentive Plan by 40,000,000, to a total of 40,110,400 shares of Common Stock.

The following is a summary of restricted stock awards for the six months ended June 30, 2025:



		Weighted-
	Number of	Average
	Shares	Grant Date Fair Value
Restricted Stock Awards Unvested at December 31, 2024	—		—
Restricted Stock Awards granted	88,000	$	6.78
Restricted Stock Awards vested	—		—
Restricted Stock Awards Unvested at June 30, 2025	88,000	$	6.78

Stock-based compensation expense associated with restricted stock awards recognized for the three and six months ended June 30, 2025, was $74,321 and $154,359, respectively, and is recorded in general and administrative expenses in the consolidated statements of operations. As of June 30, 2025, unrecognized stock-based compensation expense is approximately $482,000 to be recognized over a term of 1.62 years.

7) Common Stock Warrants

The following is a summary of warrants for the six months ended June 30, 2025:


					Aggregate
					Intrinsic
		Weighted-Average		Remaining	Value ($ in
	Number of Warrants	Exercise Price		Contractual Term	thousands)
Warrants outstanding - December 31, 2024	324,273	$	340.50	3.3	$	—
Warrants issued in 2025	154,625,446		0.41	—		—
Warrants exercised 2025	(14,108,922)		1.39	—		—
Warrants expired in 2025	(2,912)		1,428.37	—		—
Warrants outstanding and exercisable - June 30, 2025	140,837,885	$	0.84	3.2	$	—

Of the 154,625,446 warrants issued per the table above, 150,383,446 were the result of adjustments due to warrant repricing pursuant to the terms of the corresponding warrants (See Note 5).

On February 17, 2025, the Company issued a total of 1,042,000 Pre-Funded Warrants to purchase one share of Common Stock per Pre-Funded Warrant, 1,600,000 Series A Warrants to purchase 0.25 share of Common Stock per Series A Warrant, and 1,600,000 Series B Warrants to purchase one share of Common Stock per Series B Warrant in connection with the Public Offering. The Series A Warrants are exchangeable in the ratio of four Series A Warrants for one share of Common Stock.

The Company assessed the Pre-Funded Warrants and Series A Warrants under ASC 480 and ASC 815 and determined that the Pre-Funded and Series A Warrants met the requirements to be classified in stockholders’ equity. The Company assessed the Series B Warrants under ASC 480 and ASC 815 and determined that the Series B Warrants will be classified as liabilities as they do not meet the requirements to be considered indexed to the Company’s own stock, due to the potential change in the settlement amount of the Series B Warrants upon an alternative cashless exercise election.

The Company utilized a scenario-based option pricing model to calculate the value of the Series B Warrants issued during the six months ended June 30, 2025. The fair value of the Series B Warrants of $18.9 million was estimated at the date of issuance using the following inputs and assumptions: the issuance date closing stock price of $4.00, the number of Series B Warrants issued totaling 1,600,000, and a 100% probability of the investors’ election for alternative cashless exercise at a ratio of Common Stock per Series B Warrant of 3:1 upon receipt of the Warrant Stockholder Approval. The Warrant Stockholder Approval was obtained on April 10, 2025.

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During the three and six months ended June 30, 2025, the Company recorded a loss of $0.3 million and a gain of approximately $10.3 million, respectively, related to the change in fair value of the warrant liability which is recorded in other income (expense) on the condensed consolidated statement of operations, and relieved the warrant liability by approximately $8.6 million in conjunction with the exercise of warrants during the three and six months ended June 30, 2025 (See Note 5). The fair value of the remaining outstanding Series B Warrants of approximately $3,600 was estimated at June 30, 2025 utilizing a scenario-based option pricing model using the following inputs and assumptions: the valuation date stock price of $0.34, the number of Series B Warrants outstanding as of the valuation date totaling 36,198, and a 100% probability of the investors’ election for alternative cashless exercise at a ratio of Common Stock per Series B Warrant of 3:1 upon receipt of the Warrant Stockholder Approval.

8) Dilutive convertible securities

The following table summarizes the potentially dilutive securities convertible into shares of Common Stock that were excluded from the calculation of diluted net income (loss) per share because their inclusion would have been antidilutive:


	For the Three and Six Months Ended
	June 30,
	2025	2024
Stock options	14,624	20,365
RSA’s	88,000	—
Series A Convertible Preferred stock	—	81,528
Warrants	131,080,918	327,683
Total	131,183,542	429,576

9) Commitments and Contingencies

(a) Legal Proceedings

From time to time, the Company is involved in various legal matters arising in the normal course of business. The Company does not expect the outcome of such proceedings, either individually or in the aggregate, to have a material effect on the Company’s financial position, cash flows or results of operations.

10) Segment Information

During the current year, the Company has reorganized its business operations resulting in a change in the number of reportable segments. As a result of the Vivus Termination Agreement (as defined herein) entered into by the Company in March 2025, the Company is no longer engaged in the commercialization, development or sales of Stendra®. Additionally, Metuchen, Timm Medical and PTV have been assigned to a third-party in connection with the ABC (as defined herein), and accordingly, the Company is no longer engaged in the marketing or selling of VEDs. As a result, two segments, Prescription Medications and Medical Devices have been reclassified as discontinued operations. Accordingly, subsequent to the ABC the Company operations comprise a single operating segment at the consolidated level. The Company’s CODM reviews and evaluates consolidated net income as presented in the accompanying consolidated statements of operations for purposes of assessing performance, making operating decisions, allocating resources, and planning and forecasting for future periods.

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11) Fair Value Measurements

The Company maintains cash in checking and money market accounts with financial institutions. The Company considers all highly liquid investments purchased with an original maturity of three months or less from the time they are acquired to be cash equivalents. The Company had approximately $6.6 million of cash equivalents as of June 30, 2025, and approximately $1.0 million as of December 31, 2024.

Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of and during the year ended June 30, 2025. The carrying amounts of cash equivalents, other current assets, other assets, accounts payable, and accrued expenses approximated their fair values as of June 30, 2025, due to their short-term nature.

During the six months ended June 30, 2025, the Company had warrant liabilities that were measured at fair value on a recurring basis. These fair value measurements were estimated using a scenario-based option pricing model, with the key inputs described in Note 7 above. Each of these fair value measurements was considered to be a Level 3 measurement by the Company as they used significant unobservable inputs, including the probability and expected date of stockholder approval.

The following table details the Company’s financial instruments that are required to be remeasured at fair value on a recurring basis and their fair value hierarchy as of June 30, 2025:


June 30, 2025	Level 1		Level 2		Level 3
Liabilities
Warrant Liabilities	$	—	$	—	$	3,600
Total Liabilities	$	—	$	—	$	3,600

The following table provides a roll forward of the fair value of the warrant liability noted above:


	Series B		Total Warrant
	Warrants		Liabilities
Beginning balance - January 1, 2025	$	—	$	—
Issuances	$	18,924,000	$	18,924,000
Exercises	$	(8,617,743)	$	(8,617,743)
Gain on change in fair value	$	(10,302,657)	$	(10,302,657)
Ending balance - June 30, 2025	$	3,600	$	3,600

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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, 2024.

Overview

Petros was incorporated in Delaware on May 14, 2020, for the purpose of effecting the transactions contemplated by that certain Agreement and Plan of Merger, dated as of May 17, 2020 (as amended, the “Merger Agreement”), by and between Petros, Neurotrope, Inc., a Nevada corporation (“Neurotrope”), Metuchen Pharmaceuticals LLC, a Delaware limited liability company (“Metuchen”), and certain subsidiaries of Petros and Neurotrope. Prior to June 2025, Petros consisted of wholly owned subsidiaries: Metuchen, Neurotrope, Timm Medical Technologies, Inc. (“Timm Medical”), and Pos-T-Vac, LLC (“PTV” and, collectively with Metuchen and Timm Medical, the “Subsidiaries”). The Company has historically been engaged in the commercialization and development of Stendra®, a U.S. Food and Drug Administration (“FDA”) approved PDE-5 inhibitor prescription medication for the treatment of erectile dysfunction (“ED”), which the Company licensed from Vivus, Inc. (“Vivus”). Petros also historically marketed its own line of ED products in the form of vacuum erection device products (“VEDs”) through its previous subsidiaries, Timm Medical and PTV, including VEDs marketed as “Osbon ErecAid” and “PosTVac.”

In December 2024, the Company determined to discontinue sales of Stendra® to wholesalers. As of March 2025, the Company is no longer engaged in the commercialization, development or sales of Stendra®. In addition, on June 16, 2025, in accordance with California state law, the Company effected an assignment (the “Assignment”) of all of the business, assets, properties, contractual rights, goodwill, going concern value, rights and claims (“Assets”) of Metuchen, including Metuchen’s wholly-owned subsidiaries, Timm Medical and PTV and each of their respective Assets (collectively, the “ABC Assets”), for the benefit of creditors to a special purpose vehicle that is managed by a third-party fiduciary (the “Assignee”) such that, as of June 16, 2025, the Assignee succeeded to all of each Subsidiary’s right, title and interest in and to the respective ABC Assets. Upon the completion of the Assignment, the Assignee obtained sole control over the ABC Assets and each Subsidiary no longer operates its business or controls the liquidation or distribution of its assets or the resolution of claims. The Assignment is a judicial insolvency procedure, which was commenced by each Subsidiary entering a contractual assignment for the benefit of creditors on June 16, 2025, that effectuates the assignment, grant, conveyance, transfer, and setting over to the Assignee, in trust, of all of the ABC Assets. Accordingly, the Company is no longer engaged in the marketing or selling of VEDs following the completion of the Assignment. Today, the Company is working towards the goal of becoming a leading innovator in the emerging self-care market driving expanded access to key nonprescription pharmaceuticals as Over-the-Counter (“OTC”) and nonprescription drug products with additional condition for nonprescription use (“ACNU Products”) treatment options.

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The Company believes the platform will be anchored in recent FDA adopted rules, such as the FDA’s Nonprescription Drug Product with an Additional Condition for Nonprescription Use rule (“ACNU Rule”), intended to increase options to develop and market nonprescription drug products; Trusted Exchange Framework and Common Agreement (“TEFCA”), a nationwide framework for health information sharing; and Qualified Health Information Networks, which are sponsored by the FDA and the Department of Health and Human Services.

The Company’s Business

The Company has historically been engaged in the commercialization and development of Stendra®. In December 2024, the Company determined to discontinue sales of Stendra® to wholesalers to mitigate the risk of returns associated with expired or near-expired prescription medication due to Stendra® having less than a six-month shelf life. In addition, as of March 2025, the Company is no longer engaged in the commercialization, development or sales of Stendra® and is no longer engaged in the marketing or selling of VEDs. Today, the Company is working towards the goal of becoming a leading innovator in the emerging self-care market driving expanded access to key nonprescription pharmaceuticals as Over-the-Counter (“OTC”) and nonprescription drug products with additional condition for nonprescription use (“ACNU Products”) treatment options.

Discontinued Operations

In connection with the Assignment, the results of the Subsidiaries are presented as discontinued operations in the accompanying unaudited condensed consolidated financial statements. Management’s discussion and analysis of the Company’s financial condition and results of operations that follows reflects the continuing operations of the Company. The Company’s liquidity is likely to be significantly affected by the discontinued operations, as Metuchen accounted for a significant portion of the Company’s revenue. Without this revenue stream, the Company may face challenges generating sufficient cash flow to fund operations, unless it secures alternative income sources or financing.

Reverse Stock Split

On April 29, 2025, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware to effect a 1-for-25 reverse stock split of the shares of the Company’s Common Stock, either issued and outstanding or held by the Company as treasury stock, effective as of 4:05 p.m. (New York time) on April 30, 2025 (the “Reverse Stock Split”) and began trading on a Reverse Stock Split-adjusted basis on Nasdaq on May 1, 2025. All share amounts have been retroactively adjusted for the Reverse Stock Split.

The ABC

On March 31, 2025, the Board determined and approved that it is advisable and in the best interests of the Company and the Company’s stockholders to effect the Assignment. In accordance with California state law, on June 16, 2025, the Company assigned all of its right, title, interest in, and custody and control of each Subsidiary’s property to the Assignee, such that, as of June 16, 2025, the Assignee succeeded to all of each Subsidiary’s right, title and interest in and to the respective ABC Assets. Upon the completion of the Assignment, the Assignee obtained sole control over the ABC Assets and each Subsidiary no longer operates its business or controls the liquidation or distribution of its assets or the resolution of claims. The Assignment is a judicial insolvency procedure, which was commenced by each Subsidiary entering a contractual assignment for the benefit of creditors on June 16, 2025, that effectuates the assignment, grant, conveyance, transfer, and setting over to the Assignee, in trust, of all of the ABC Assets. The Assignee liquidated the property through an auction sale and distributed the proceeds to the Subsidiaries’ creditors according to their respective priorities at law to satisfy the Subsidiaries’ obligations, in accordance with the rules and regulations of the State of California. If any proceeds remain and costs associated with the liquidation process have been satisfied, any remaining proceeds will be distributed to the Subsidiaries’ equity holder, which is the Company.

NASDAQ Capital Market Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard

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On May 20, 2025, the Company received a letter (the “Letter”) from the Panel indicating that the Panel has determined to delist the Company’s securities from Nasdaq as a result of the foregoing. Pursuant to the Letter, the Panel determined to deny the Company’s request to continue its listing on Nasdaq and the Company’s Common Stock was suspended at the open of trading on May 22, 2025. Following the suspension of trading on Nasdaq, the Company’s Common Stock continues trade publicly on the OTC Markets under its existing symbol “PTPI” beginning on May 22, 2025. The Company is currently appealing the decision by Nasdaq to delist the Company’s securities. There can be no assurance that an appeal will be successful.

Critical Accounting Estimates

The preparation of the unaudited condensed consolidated financial statements requires us to make assumptions, estimates and judgments that affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities as of the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Certain of our more critical accounting policies require the application of significant judgment by management in selecting the appropriate assumptions for calculating financial estimates. By their nature, these judgments are subject to an inherent degree of uncertainty. On an ongoing basis, we evaluate our judgments, including but not limited to those related to income taxes, litigation, and contingencies. We use historical experience and other assumptions as the basis for our judgments and making these estimates. Because future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates. Any changes in those estimates will be reflected in our consolidated financial statements as they occur.

Our critical accounting estimates have not changed materially from those described in Part II, Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on March 31, 2025.

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Results of Operations

Six Months Ended June 30, 2025, and 2024 (Unaudited)

The following table sets forth a summary of our statements of operations for the six months ended June 30, 2025, and 2024:


	For the Six Months Ended June 30,
	2025		2024
Operating expenses:
Selling, general and administrative		3,259,127		2,852,030
Total operating expenses		3,259,127		2,852,030

Loss from continuing operations		(3,259,127)		(2,852,030)
Other income (expenses):
Warrant issuance costs		(10,420,982)		—
Change in fair value of derivative liability		—		3,348,000
Change in fair value of warrant liability		10,302,657		—
Interest income		136,639		271,210
Total other income		18,314		3,619,210

Income (loss) before income taxes		(3,240,813)		767,180
Provision for income taxes		—		—
Income (loss) from continuing operations, net of tax		(3,240,813)		767,180

Gain on asset disposition/Vivus		6,973,302		—
Loss on discontinued operations		(559,665)		(3,591,869)

Net Income (loss)	$	3,172,824	$	(2,284,689)

Operating Expenses

Selling, general and administrative expenses for the six months ended June 30, 2025, and June 30, 2024, were $3,259,127 and $2,852,030, respectively. Selling, general and administrative expenses include administrative and corporate expenses.

Selling, general and administrative expenses increased by $407,097, or 14%, during the six months ended June 30, 2025, compared to the six months ended June 30, 2024. Increased selling general and administrative expenses were primarily driven by increased professional service fees of $519,665, payroll and benefits expenses of $13,509, partially offset by decreased stock-based compensation expense of $42,856, and other operating expenses of $83,222.

Warrant Issuance Costs

Warrant issuance costs for the six months ended June 30, 2025, and June 30, 2024, were $10,420,982 and $0, respectively. The warrant issuance costs of $10.4 million were associated with the February 2025 Public Offering (as defined herein).

Change in fair value of derivative liability

For the six months ended June 30, 2025, and June 30, 2024, the Company recorded gains of $0.0 million and $3.3 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.

Change in fair value of warrant liability

For the six months ended June 30, 2025, and June 30, 2024, the Company recorded a gain of approximately $10.3 million and $0 million, respectively, for the change in fair value of the warrant liability. The gain in 2025 is related to the decrease in fair value of the Series Warrants issued in the Public Offering.

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Interest Income

Interest income for the six months ended June 30, 2025, and 2024, was $136,639 and $271,210, respectively. Petros invested its cash in money market securities during 2025 and 2024.

Gain on from assignment of subsidiaries and Vivus settlement

For the six months ended June 30, 2025, and June 30, 2024, the Company recorded a gain of $7.0 million and $0 million, respectively, for the disposal of assets and the settlement with Vivus. The gain in 2025 is related to the assignment of the net liabilities of the Subsidiaries on June 15, 2025.

Loss on Discontinued Operations

For the six months ended June 30, 2025, and June 30, 2024, the Company recorded losses of $0.6 million and $3.6 million, respectively, from discontinued operation.

Three Months Ended June 30, 2025, and 2024 (Unaudited)

The following table sets forth a summary of our statements of operations for the three months ended June 30, 2025, and 2024:


	For the Three Months Ended June 30,
	2025		2024
Operating expenses:
Selling, general and administrative		1,800,778		1,349,103
Total operating expenses		1,800,778		1,349,103

Loss from continuing operations		(1,800,778)		(1,349,103)
Other income (expenses):
Warrant issuance costs		—		—
Change in fair value of derivative liability		—		1,614,000
Change in fair value of warrant liability		(329,343)		—
Interest income		88,849		119,391
Total other income (expenses)		(240,494)		1,733,391

Income (loss) before income taxes		(2,041,272)		384,288
Provision for income taxes		—		—
Income (loss) from continuing operations, net of tax		(2,041,272)		384,288

Gain on asset disposition/Vivus		6,973,302		—
Gain (loss) on discontinued operations		500,816		(1,046,314)

Net income (loss)	$	5,432,846	$	(662,026)

Operating Expenses

Selling, general and administrative expenses for the three months ended June 30, 2025, and June 30, 2024, were $1,800,778 and $1,349,103, respectively. Selling, general and administrative expenses include administrative and corporate expenses.

Selling, general and administrative expenses increased by $451,675, or 33%, during the three months ended June 30, 2025, compared to the three months ended June 30, 2024. Increased selling general and administrative expenses were primarily driven by increased professional service fees of $381,691, stock-based compensation expense of $57,487, payroll and benefits expenses of $69,937, partially offset by decreased other operating expenses of $57,440.

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Change in fair value of derivative liability

For the three months ended June 30, 2025, and June 30, 2024, the Company recorded gains of $0.0 million and $1.6 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.

Change in fair value of warrant liability

For the three months ended June 30, 2025, and June 30, 2024, the Company recorded a loss of approximately $0.3 million and $0 million, respectively, for the change in fair value of the warrant liability. The loss in 2025 is related to the increase in fair value of Series Warrants issued in the Public Offering.

Interest Income

Interest income for the three months ended June 30, 2025, and 2024, was $88,849 and $119,391, respectively. Petros invested its cash in money market securities during 2025 and 2024.

Gain on from assignment of subsidiaries and Vivus settlement

For the three months ended June 30, 2025, and June 30, 2024, the Company recorded gains of $7.0 million and $0 million, respectively, for the disposal of assets and the settlement with Vivus. The gain in 2025 is related to the assignment of the net liabilities of the Subsidiaries on June 15, 2025.

Gain (loss) on Discontinued Operations

For the three months ended June 30, 2025, and June 30, 2024, the Company recorded a gain of $0.5 million and losses of $1.0 million, respectively, from discontinued operation.

Liquidity and Capital Resources

Historically, the Company has raised capital through private placements of convertible preferred stock and warrants and through public offerings of its securities. The Company’s future capital needs and the adequacy of its available funds will depend on many factors, including, but not necessarily limited to, the success and costs of commercialization of the Company’s platform. We will require additional financing to further develop and market future products, fund operations, and otherwise implement our business strategy at amounts relatively consistent with the expenditure levels disclosed herein. We are exploring additional ways to raise capital, but we cannot assure you that we will be able to raise capital. Our failure to raise capital as and when needed would have a material adverse impact on our financial condition, our ability to meet our obligations, and our ability to pursue our business strategies. We expect to seek additional funds through a variety of sources, which may include additional public or private equity or debt financings, collaborative, or other arrangements with corporate sources, or through other sources of financing.

We are focused on expanding our service offering through internal development, collaborations, and through strategic acquisitions. We are continually evaluating potential asset acquisitions and business combinations. To finance such acquisitions, we might raise additional equity capital, incur additional debt, or both. However, adequate additional financing may not be available to us on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or debt, the terms of these securities may restrict our ability to operate. If we raise additional funds through collaborations, strategic alliances or marketing, distribution or licensing arrangements with third parties, we may be required to relinquish valuable rights. If we are unable to raise capital when needed or on attractive terms, we could be forced to delay, reduce or altogether cease our research and development programs or future commercialization efforts of our platform.

Going Concern

Petros has experienced net losses and negative cash flows from operations since our inception. As of June 30, 2025, the Company had cash and cash equivalents of approximately $7.3 million, working capital of $4.4 million from continuing operations, an accumulated deficit of approximately $110 million and used cash in operations during the six months ended June 30, 2025, of approximately $2.7 million.

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The Company does not currently have sufficient available liquidity to fund its operations for at least the next 12 months. These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these consolidated financial statements are issued. The accompanying consolidated financial statements do not include any adjustments that might result from these uncertainties. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern.

In response to these conditions and events, the Company is evaluating various financing strategies to obtain sufficient additional liquidity to meet its operating, debt service and capital requirements for the next twelve months following the date of our unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q. The potential sources of financing that the Company is evaluating include one or any combination of secured or unsecured debt, convertible debt and equity in both public and private offerings. The Company also plans to finance near-term operations by exploring additional ways to raise capital and increasing cash flows from operations. There is no assurance the Company will manage to raise additional capital or otherwise increase cash flows, if required or that the Company will have sufficient cash to develop its platform.

July 2023 Private Placement

On July 13, 2023, we entered into a Securities Purchase Agreement (the “Series A Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which we agreed to sell in a private placement to the Investors (i) an aggregate of 15,000 shares of our newly-designated Series A Preferred Stock initially convertible into up to 266,667 shares of our Common Stock at an initial conversion price of $56.25 per share and (ii) Warrants to acquire up to an aggregate of 266,667 shares of Common Stock at an initial exercise price of $56.25 per share. 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 June 30, 2025, the Conversion Price and the exercise price of the Warrants was equal to $0.1269 per share.

The Private Placement was exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D of the Securities Act and in reliance on similar exemptions under applicable state laws. The closing of the Private Placement occurred on July 17, 2023. The aggregate gross proceeds from the Private Placement was approximately $15 million. We used the net proceeds from the Private Placement for general corporate purposes.

We engaged Katalyst Securities LLC (the “Placement Agent”) to act as exclusive placement agent in connection with the Private Placement. Pursuant to an Engagement Letter with the Placement Agent, we paid to the Placement Agent or its designees (i) a cash fee equal to 8% of the gross proceeds of the Private Placement and (ii) warrants to acquire up to an aggregate of 21,334 shares of Common Stock on the same term as the Warrants.

Series A Preferred Stock

The terms of the Series A Preferred Stock are as set forth in the form of Certificate of Designations. The Series A Preferred Stock is convertible into shares of Common Stock (the “Conversion Shares”) at the election of the holder at any time at an initial conversion price of $56.25 (the “Conversion Price”). The Conversion Price 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). In connection with the Public Offering, in February 2025, (i) the conversion price of the Series A Preferred Stock was adjusted to $6.00 per share pursuant to the full ratchet anti-dilution provisions contained in the Certificate of Designations and, (ii) the exercise price of the Warrants was adjusted to $6.00 per share and the number of shares of Common Stock issuable upon exercise of the Warrants was adjusted proportionally to 2,700,000 shares pursuant to the full ratchet anti-dilution provisions contained in the Warrants. In connection with the Company’s 1-for-25 Reverse Stock Split and pursuant to the share combination event adjustment provisions in the Series A Certificate of Designations and the Warrants, the conversion price of the Series A Preferred Stock was further adjusted to $0.1269 and the exercise price of the Warrants was further adjusted to $0.1269 per share and the number of shares of Common Stock issuable upon exercise of the Warrants was adjusted proportionally to 127,659,584 shares pursuant to the full ratchet anti-dilution provisions contained in the Warrants.

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Pursuant to the Certificate of Designations and prior to the November 2024 Certificate of Amendment (as defined below) and the January 2025 Certificate of Amendment (as defined below), we were initially required to redeem the Series A Preferred Stock in 13 equal monthly installments, which commenced on November 1, 2023.

On November 13, 2024, the Company entered into an Amendment Agreement with the Required Holders (as defined in the Certificate of Designations), pursuant to which, the Required Holders agreed to (i) amend the Certificate of Designations, by filing a Certificate of Amendment with the Secretary of State of the State of Delaware (the “November 2024 Certificate of Amendment”), (ii) defer any payment amounts that have accrued and that are unpaid as of November 13, 2024, pursuant to the Certificate of Designations, to January 15, 2025, and (iii) waive any breach or violation of the Purchase Agreement, the Certificate of Designations, or the Warrants resulting from the Company’s failure to pay such outstanding amounts (the “November 2024 Certificate of Amendment”). The November 2024 Certificate of Amendment amends the Certificate of Designations to, (i) extend the maturity date to January 15, 2025, (ii) modify the schedule of Installment Dates (as defined in the Certificate of Designations), and (iii) adds an additional restrictive covenant to the Certificate of Designations requiring the Company from November 13, 2024 until January 15, 2025, to maintain unencumbered, unrestricted cash and cash equivalents on hand in amount equal to at least $1,500,000. The November 2024 Certificate of Amendment was filed with the Secretary of State of the State of Delaware, effective as of November 13, 2024.

On January 23, 2025, the Company entered into an Amendment Agreement with the Required Holders (as defined in the Certificate of Designations), pursuant to which, the Required Holders agreed to (i) amend the Certificate of Designations of the Company’s Series A Preferred Stock by filing a Certificate of Amendment to the Certificate of Designations (the “January 2025 Certificate of Amendment”) with the Secretary of State of the State of Delaware, (ii) defer any payment amounts that have accrued and that are unpaid as of January 23, 2025, pursuant to the Certificate of Designations, to February 15, 2025, and (iii) waive any breach or violation of the Purchase Agreement, the Certificate of Designations, or the Warrants resulting from the Company’s failure to pay such outstanding amounts. The January 2025 Certificate of Amendment amends the Certificate of Designations to, (i) extend the maturity date to February 15, 2025, (ii) modify the schedule of Installment Dates (as defined in the Certificate of Designations), (iii) amends the restrictive covenant to the Certificate of Designations requiring the Company from January 15, 2025 until February 15, 2025, to maintain unencumbered, unrestricted cash and cash equivalents on hand in amount equal to at least $500,000, and (iv) amends the restrictive covenant relating to the change in nature of the Company’s business, such that such covenant does not apply to the Company’s change in sales strategy related to the Company’s Stendra® avanafil and product development strategy as it relates to the development and commercialization of a proprietary platform focused on prescription medication to over-the-counter switch solutions. The January 2025 Certificate of Amendment was filed with the Secretary of State of the State of Delaware, effective as of January 24, 2025.

The amortization payments due upon redemptions are payable, at our election, in cash at 107% of the Installment Redemption Amount (as defined in the Certificate of Designations), or subject to certain limitations, in shares of Common Stock valued at the lower of (i) the Conversion Price then in effect and (ii) the greater of (A) 80% of the average of the three lowest closing prices of the Common Stock during the thirty trading day period immediately prior to the date the amortization payment is due or (B) $9.90 or such lower amount as permitted, from time to time, by the Nasdaq Stock Market, subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events. We may require holders to convert their Series A Preferred Stock into Conversion Shares if the closing price of the Common Stock exceeds $168.75 per share (subject to adjustment for stock splits, stock dividends, stock combinations, recapitalizations or other similar events) for 20 consecutive trading days and the daily dollar trading volume of the Common Stock exceeds two million dollars ($2,000,000) per day during the same period and certain equity conditions described in the Certificate of Designations are satisfied.

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The holders of the Series A Preferred Stock are entitled to dividends of 8% per annum, compounded monthly, which are payable, at our option, in cash or shares of Common Stock, or in a combination thereof, in accordance with the terms of the Certificate of Designations. On September 29, 2023, we filed an amendment to the Certificate of Designations with the Secretary of State for the State of Delaware, pursuant to which the terms of the Series A Preferred Stock were amended to permit certain additional procedures for the payment of redemptions and conversions. Upon the occurrence and during the continuance of a Triggering Event (as defined in the Certificate of Designations), the Series A Preferred Stock will accrue dividends at the rate of 15% per annum. In connection with a Triggering Event, each holder of Series A Preferred Stock will be able to require us to redeem in cash any or all of the holder’s Series A Preferred Stock at a premium set forth in the Certificate of Designations. Upon conversion or redemption, the holders of the Series A Preferred Stock are also entitled to receive a dividend make-whole payment.

The event of default under the Settlement Agreement and the Security Agreement with Vivus existing and continuing by virtue of Metuchen’s failure to pay the Installment (as defined in the Promissory Note) that was due October 1, 2024, constitutes a Triggering Event pursuant to the terms of the Certificate of Designations. As a result, the dividend rate of the Series A Preferred Stock was automatically increased to 15% per annum beginning on October 1, 2024.

During December 2023, the Company issued as equity awards, shares of Common Stock and options to purchase shares of Common Stock representing an aggregate of 13,949 shares of Common Stock and shares of Common Stock issuable upon exercise of the options to certain directors, officers, and employees of the Company, representing an aggregate number of shares of Common Stock in excess of 5% of the shares of Common Stock issued and outstanding immediately prior to the date of the Purchase Agreement (the “December Issuances”). On March 21, 2024, the Company entered into an Omnibus Waiver and Amendment (the “Waiver and Amendment”) with the Investors, effective as of December 31, 2023. The Waiver and Amendment provides that the December Issuances are deemed to constitute “Excluded Securities” under the Transaction Documents (as such term is defined in the Purchase Agreement) and waives the applicability of certain other provisions of the Transaction Documents with respect to such grants.

On October 11, 2024, the Company entered into an Amendment Agreement with the Required Holders (as defined in the Certificate of Designations) pursuant to which, the Required Holders agreed to amend the Certificate of Designations of the Company’s Series A Preferred Stock, by filing a Certificate of Amendment with the Secretary of State of the State of Delaware (“October 2024 Certificate of Amendment”). The October 2024 Certificate of Amendment amends the Certificate of Designations to, among other things, provide that, except as required by applicable law, the holders of the Series A Preferred Stock will be entitled to vote with holders of the Common Stock on an as converted basis, with the number of votes to which each holder of Series A Preferred Stock is entitled to be determined by dividing the Stated Value (as defined in the Certificate of Designations) by a conversion price equal to $56.25 per share, which was the “Minimum Price” (as defined in Nasdaq Listing Rule 5635(d)) applicable immediately before the execution and delivery of the purchase agreement executed in connection with the issuance of the Series A Preferred Stock, subject to certain beneficial ownership limitations and adjustments for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions, as set forth in the Certificate of Designations. The October 2024 Certificate of Amendment was filed with the Secretary of State of the State of Delaware, effective as of October 11, 2024.

We are subject to certain affirmative and negative covenants regarding the incurrence of indebtedness, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends (other than dividends pursuant to the Certificate of Designations), distributions or redemptions, and the transfer of assets, among other matters.

There is no established public trading market for the Series A Preferred Stock and we do not intend to list the Series A Preferred Stock on any national securities exchange or nationally recognized trading system.

Warrants

The Warrants became exercisable for shares of Common Stock (the “Warrant Shares”) immediately upon issuance, at an initial exercise price of $56.25 per share (the “Exercise Price”) and expire five years from the date of issuance. The Exercise Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment, on a “full ratchet” basis, 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 Exercise Price (subject to certain exceptions). Upon any such price-based adjustment, the number of Warrant Shares issuable upon exercise of the Warrants will be increased proportionately. There is no established public trading market for the Warrants and we do not intend to list the Warrants on any national securities exchange or nationally recognized trading system.

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On March 21, 2024, we entered into the Waiver and Amendment with the Investors in the Private Placement, effective as of December 31, 2023. The Waiver and Amendment, among other things, amended certain terms of the Warrants relating to the rights of the holders of the Warrants to provide that, in the event of a Fundamental Transaction (as defined in the Warrants) that is not within our control, including not approved by our Board of Directors, the holder of a Warrant shall only be entitled to receive from the Company or any successor entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of such Warrant, that is being offered and paid to the holders of our Common Stock in connection with the Fundamental Transaction.

In connection with the Public Offering (as defined herein), in February 2025, (i) the conversion price of the Series A Preferred Stock was adjusted to $6.00 per share pursuant to the full ratchet anti-dilution provisions contained in the Certificate of Designations and, (ii) the exercise price of the Warrants was adjusted to $6.00 per share and the number of shares of Common Stock issuable upon exercise of the Warrants was adjusted proportionally pursuant to the full ratchet anti-dilution provisions contained in the Warrants.

In connection with the Warrant Reset (as defined herein) and pursuant to the full ratchet anti-dilution provisions contained in the Certificate of Designations and the Warrants, (i) the Series A Preferred Stock conversion price was adjusted to $0.4883 per share and (ii) the exercise price of the Warrants was adjusted to $0.4883 per share and the number of shares of Common Stock issuable upon exercise of the Warrants was adjusted proportionally. In connection with the Company’s 1-for-25 Reverse Stock Split and pursuant to the share combination event adjustment provisions in the Series A Certificate of Designations and the Warrants, the conversion price of the Series A Preferred Stock was further adjusted to $0.1269 and the exercise price of the Warrants was further adjusted to $0.1269 per share.

Registration Rights

In connection with the Private Placement, we entered into a Registration Rights Agreement with the Investors (the “Registration Rights Agreement”), pursuant to which we agreed to file a resale registration statement (the “Registration Statement”) with the SEC to register for resale 200% of the Conversion Shares and the Warrant Shares promptly following the Closing Date (as defined in the Purchase Agreement), but in no event later than 30 calendar days after the effective date of the Registration Rights Agreement, and to have such Registration Statement declared effective by the Effectiveness Date (as defined in the Registration Rights Agreement). We filed a registration statement on Form S-3 covering such securities, which registration statement, as amended, was declared effective on September 18, 2023. Under the Registration Rights Agreement, we are obligated to pay certain liquidated damages to the investors if we fail to maintain the effectiveness of the Registration Statement.

February 2025 Equity Financing

On February 17, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional and accredited investors (collectively, the “Investors”) for the issuance and sale, in a best efforts public offering (the “Public Offering”), of (i) 558,000 units (the “Units”), each Unit consisting of one share (the “Shares”) of the Company’s Common Stock, one Series A Warrant (the “Series A Warrants”) to purchase 0.25 share of Common Stock (the “Series A Warrant Shares”) and one Series B Warrant (the “Series B Warrants,” and together with the Series A Warrants, the “Series Warrants”) to purchase one shares of Common Stock (the “Series B Warrant Shares” and, together with the Series A Warrant Shares, the “Series Warrant Shares”) and (ii) 1,042,000 pre-funded units (the “Pre-Funded Units”), each Pre-Funded Unit consisting of one pre-funded warrant (the “Pre-Funded Warrants”) to purchase one share of Common Stock (the “Pre-Funded Warrant Shares”), one Series A Warrant and one Series B Warrant. The public offering price was $6.00 per Unit and $5.9975 per Pre-Funded Unit. The Offering closed on February 19, 2025. The initial exercise price of each of the Series A Warrants and the Series B Warrants was $12.00 per share of Common Stock, which was subsequently adjusted as set forth herein. The aggregate gross proceeds from the Offering were approximately $9.6 million before deducting estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes.

In connection with the Company’s Reverse Stock Split, the exercise price of the Series A Warrants was adjusted to $0.36625 per 0.25 share, and the number of Series A Warrants was adjusted proportionally to 13,105,802 which are exercisable into 3,276,451 shares of Common Stock; and the exercise price of the Series B Warrants was adjusted to $0.4883 and the number of shares of Common Stock issuable upon exercise of the Series B Warrants was adjusted to 13,105,802 shares pursuant to the full ratchet anti-dilution provisions contained in the Series Warrants. As the Series B Warrants were classified as liabilities upon issuance, the changes in fair value as a result of these adjustments were recognized in earnings for the three and six months ended June 30, 2025.

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The Company considers the change in exercise price due to the anti-dilution trigger related to the Warrants to be of an equity nature, as the issuance allowed the Warrant holders to exercise the Warrants for shares of Common Stock, which represents an equity-for-equity exchange. Therefore, the changes in the fair value of the Warrants before and after the effect of the anti-dilution adjustments will be treated as deemed dividend in the amount of approximately $35.4 and $43.8 million during the three and six months ended June 30, 2025, respectively. The Company valued the deemed dividend in connection with the Public Offering as the difference between: (a) the modified fair value of the Warrants in the amount of approximately $9.1 million and (b) the fair value of the original award prior to the modification of approximately $0.7 million. The fair value of the Warrants before the effect of the anti-dilution adjustments was estimated utilizing the Black Scholes model using the following key inputs and assumptions: the number of shares issuable upon exercise of the Warrants totaling 288,000 shares; the exercise price of $56.25 per share; dividend yield of 0%; remaining term of 3.40 years; equity volatility of 165.0%; and a risk-free interest rate of 4.3%. The fair value of the Warrants after the effect of the anti-dilution adjustments was estimated utilizing the Black Scholes model and the following key inputs and assumptions: the number of shares issuable upon exercise of the Warrants totaling 2,700,000 shares; the exercise price of $6.00 per share; dividend yield of 0%; remaining term of 3.40 years; equity volatility of 165.0%; and a risk-free interest rate of 4.3%. The Company valued the deemed dividend in connection with the Company’s 25-for-1 Reverse Stock Split as the difference between: (a) the modified fair value of the Warrants in the amount of approximately $35.9 million and (b) the fair value of the original award prior to the modification of approximately $0.5 million. The fair value of the Warrants before the effect of the anti-dilution triggering event was estimated utilizing the Black Scholes model using the following key inputs and assumptions: the number of shares issuable upon exercise of the Warrants totaling 2,700,000 shares; the exercise price of $6.00 per share; dividend yield of 0%; remaining term of 3.20 years; equity volatility of 182.0%; and a risk-free interest rate of 4.6%. The fair value of the Warrants after the effect of the anti-dilution adjustments was estimated utilizing the Black Scholes model and the following key inputs and assumptions: the number of shares issuable upon exercise of the Warrants totaling 127,659,584 shares; the exercise price of $0.1269 per share; dividend yield of 0%; remaining term of 3.20 years; equity volatility of 182.0%; and a risk-free interest rate of 3.6%.

The aggregate gross proceeds from the Public Offering were approximately $9.6 million before deducting estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes.

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Cash Flows

The following table summarizes the Company’s cash flows for the six months ended June 30, 2025, and 2024:


	For the Six Months Ended June 30,
	2025		2024
Net cash used in operating activities – continuing operations	$	(2,675,913)	$	(2,205,164)
Net cash provided by (used in) financing activities – continuing operations		8,278,769		(2,699,960)
Net increase (decrease) in cash and cash equivalents – continuing operations	$	5,602,856	$	(4,905,124)

Cash Flows from Operating Activities

Net cash used in operating activities for the six months ended June 30, 2025, was $2,675,913, which primarily reflected the Company’s net loss of $3,172,824, which was inclusive of a loss from discontinued operations of $559,665, in addition to noncash adjustments to reconcile net loss to net cash used in operating activities of $6,700,618 consisting of the change in the fair value of the warrant liability, noncash warrant expense, and the gain on the assignment of the Subsidiaries and Vivus settlement, and changes in operating assets and liabilities of $292,216 largely driven by accounts payable and accrued expenses related to professional fees and employee bonuses and equity issuance fees.

Net cash used in operating activities for the six months ended June 30, 2024, was $2,205,164, 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 $2,940,785 consisting primarily of the change in fair value of derivative liability, and changes in operating assets and liabilities of $31,559.

Cash Flows from Financing Activities

Net cash provided by financing activities was $8,278,769 for the six months ended June 30, 2025, consisting of proceeds from the Public Offering, and the payment for the redemption of Series A Preferred Stock.

Net cash used in financing activities was $2,699,960 for the six months ended June 30, 2024, consisting of redemptions of Series A Preferred Stock.

Off-Balance Sheet Commitments and Arrangements

The Company has not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. The Company has not entered into any derivative contracts that are indexed to the Company’s shares and classified as stockholder’s equity or that are not reflected in the Company’s financial statements included in this Quarterly Report on Form 10-Q. Furthermore, the Company does not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. The Company does not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.

Contingencies

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.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)) as of the period covered by this report. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered in this Quarterly Report on Form 10-Q, our disclosure controls and procedures were not effective to ensure that information required to be disclosed in reports filed by us under the Exchange Act is recorded, processed, summarized and reported within the required time periods and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

A material weakness is a control deficiency (within the meaning of Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 5) or combination of control deficiencies that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. As disclosed in Part II Item 9A Controls and Procedures in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, we identified a material weaknesses in internal control related to (1) Petros has an insufficient level of monitoring and oversight controls and does not enforce the implementation of key controls reflected on its internal control process matrices; (2) the sizes of Petros’ accounting and IT departments make it impracticable to achieve an appropriate segregation of duties; and (3) Petros does not have appropriate IT access related controls.

Management plans to expand the scope of its remediation of its internal controls over financial reporting at the consolidated level and has developed a plan to address the remediation of the foregoing deficiencies. Petros’ remediation efforts are ongoing and it will continue its initiatives to implement and document policies, procedures, and internal controls. The remediation efforts include the implementation of additional controls to ensure all risks have been addressed. Management is further emphasizing compliance with existing internal controls. The Company has continued to utilize an external consultant to assist in the remediation of the deficiencies.

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all errors or fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Due to the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Management believes that the financial statements included in this Quarterly Report on Form 10-Q fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting other than as noted above.

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PART II—OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of business.

The information set forth in Note 9 Commitments and Contingencies of the Notes to Consolidated Financial Statements of this Quarterly Report on Form 10-Q is incorporated by reference herein.

ITEM 1A. RISK FACTORS.

The following description of risk factors includes any material changes to, and supersedes the description of, risk factors associated with our business, financial condition and results of operations previously disclosed in “Item 1A. Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC on March 31, 2025. Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in our annual report, any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results, and stock price.

The following discussion of risk factors contains forward-looking statements. These risk factors may be important to understanding other statements in this Quarterly Report on Form 10-Q. The following information should be read in conjunction with the condensed consolidated financial statements and related notes in Part I, Item 1, “Financial Statements” and Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q.

The Company’s financial statements have been prepared on a going concern basis and do not include adjustments that might be necessary if the Company is unable to continue as a going concern. Management has substantial doubt about the Company’s ability to continue as a going concern.

The Company’s unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the six months ended June 30, 2025, the Company’s cash used in operations was $2,675,913, leaving a cash balance of $7,321,501 as of June 30, 2025. Because the Company does not have sufficient resources to fund its operations for the next twelve months from the date of this filing, management has substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

The Company will need to raise additional capital to finance its losses and negative cash flows from operations and may continue to be dependent on additional capital raising as long as our products do not reach commercial profitability. There are no assurances that the Company would be able to raise additional capital on terms favorable to it. If the Company is unsuccessful in commercializing its products and raising capital, it will need to reduce activities, curtail or cease operations.

Our suspension from the Nasdaq Capital Market and transition to over-the-counter trading may adversely affect the liquidity and market price of our Common Stock.

On May 20, 2025, the Company received a letter (the “Letter”) from the Nasdaq Hearings Panel (the “Panel”) indicating that the Panel has determined to delist the Company’s securities from The Nasdaq Stock Market LLC (“Nasdaq”) as a result of (i) the Company’s failure to maintain compliance with the minimum stockholders’ equity requirement under Nasdaq Listing Rule 5550(b)(1), (ii) the Company’s failure to meet the minimum bid price of $1.00 per share pursuant to Nasdaq Listing Rule 5550(a)(2), (iii) the Company’s low bid price pursuant to Nasdaq Listing Rule 5810(c)(3)(A)(iii), and (iv) Nasdaq’s public interest concerns regarding the Company’s public offering of securities that closed on February 19, 2025, pursuant to Nasdaq Listing Rule 5810(d). Pursuant to the Letter, the Panel determined to deny the Company’s request to continue its listing on Nasdaq and the Company’s Common Stock was suspended at the open of trading on May 22, 2025. As a result, our shares now trade on the over-the-counter (“OTC”) market under the symbol “PTPI”.

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Trading on the OTC market may limit the liquidity of our common stock, making it more difficult for investors to buy or sell shares at desired prices or in desired quantities. In addition, OTC markets are generally less regulated and more volatile than national securities exchanges. The lack of analyst coverage and lower visibility may also reduce investor interest and negatively affect our stock price. Furthermore, the delisting may hinder our ability to raise capital, attract institutional investors, or retain key personnel.

There can be no assurance that we will be able to relist our securities on a national exchange or maintain compliance with any applicable OTC market requirements.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

There were no unregistered sales of the Company’s equity securities during the six months ended June 30, 2025, other than those previously reported in a Current Report on Form 8-K.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

On August 13, 2025, the Company entered into an executive compensation agreement (the “Employment Agreement”) with Mr. Silverman setting forth the terms and conditions of Mr. Silverman’s employment as the Company’s Chairman. The Employment Agreement has a three-year initial term commencing on August 13, 2025, which term automatically renews each year for successive one-year terms, unless earlier terminated by either party in accordance with the terms of the Employment Agreement.

The Employment Agreement provides that Mr. Silverman will be entitled to receive an annual base salary of three hundred thousand dollars ($300,000) (“Base Salary”), payable in accordance with the Company’s normal payroll practices. For each fiscal year during the employment period, Mr. Silverman is eligible to receive an annual bonus upon achievement of target objectives and performance criteria, payable on or before March 15 of the fiscal year following the fiscal year to which the bonus relates. The Employment Agreement also entitles Mr. Silverman to receive customary benefits and reimbursement for ordinary business expenses.

In connection with Mr. Silverman’s appointment, the Company agreed to grant Mr. Silverman long-term incentive awards under the Company’s long-term equity incentive plan (the “LTIP”) on such terms and conditions as determined by the Board and the Compensation Committee in their sole discretion. For each fiscal year during the employment period, Mr. Silverman shall receive annual long-term incentive awards under the LTIP of up to 300% of his Base Salary upon achievement of target objectives and performance criteria established by the Board in their sole discretion, subject to and governed by the terms and provisions of the LTIP as in effect from time to time and the award agreements evidencing such awards.

In the event Mr. Silverman’s employment is terminated by the Company for Cause (as defined in the Employment Agreement) or by Mr. Silverman without Good Reason (as defined in the Employment Agreement), Mr. Silverman will be entitled to: (i) any earned but unpaid Base Salary earned during his employment and applicable to all pay periods prior to the termination date, and (ii) any unpaid expense reimbursements and vested amounts and benefits in accordance with the terms of any applicable plan, program, corporate governance document, policy, agreement or arrangement of the Company (collectively, “Accrued Compensation”).

If Mr. Silverman’s employment is terminated prior to the end of the term by the Company without Cause or by Mr. Silverman for Good Reason, then, subject to certain conditions set forth in the Employment Agreement (including the execution and non-revocation of a general release of claims), Mr. Silverman will be entitled to: (i) Accrued Compensation; (ii) severance equal to two times the sum of (A) Mr. Silverman’s Base Salary in effect at the time his employment terminates and (B) the target bonus for the year of termination prorated based upon the number of days worked for the year of termination; and (iii) accelerated vesting of the unvested portion of any outstanding equity awards.

If Mr. Silverman’s employment is terminated prior to the end of the term by the Company without Cause or by Mr. Silverman for Good Reason within two (2) years after a Change in Control (as defined in the Employment Agreement) or within six (6) months prior to a

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Change in Control, Mr. Silverman will be entitled to: (i) Accrued Compensation; (ii) severance equal to three times the sum of (A) Mr. Silverman’s Base Salary in effect at the time his employment terminates and (B) the target bonus for the year of termination prorated based upon the number of days worked for the year of termination; and (iii) accelerated vesting of the unvested portion of any outstanding equity awards.

The Employment Agreement also contains customary provisions relating to, among other things, confidentiality and non-disparagement.

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ITEM 6. EXHIBITS.

Exhibit No.		Description
10.1#		Executive Compensation Agreement, by and between Petros Pharmaceuticals, Inc. and Joshua Silverman, dated as of August 13, 2025.
31.1*		Rule 13a-14(a)/15d-14(a) Certification – Principal Executive Officer.
31.2*		Rule 13a-14(a)/15d-14(a) Certification – Principal Financial Officer.
32**		Section 1350 Certification – Principal Executive Officer and Principal Financial Officer.
101		The following materials from Petros Pharmaceuticals, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2025, formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Changes in Stockholders’ Equity/Members’ Capital; (iv) Consolidated Statements of Cash Flows; and (v) Notes to the Consolidated Financial Statements.
104		Cover Page Interactive Data File, formatted in iXBRL and contained in Exhibit 101.

*	Filed herewith.

**	Furnished herewith.

#	Management contract or compensatory plan or arrangement.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Petros Pharmaceuticals, Inc.

Date: August 14, 2025	By:	/s/ Fady Boctor
		Fady Boctor
		Chief Commercial Officer and Principal Executive Officer

Date: August 14, 2025	By:	/s/ Mitchell Arnold
		Mitchell Arnold
		Vice President of Finance and Principal Financial Officer

Petros Pharmaceuticals, Inc. 10-Q