PTPI 10-K & 10-Q changes, risk factors and insider trading

In its report dated MarchApril 31,15, 2025,2026, MarcumHTL LLP,International, LLC, our independent registered public accounting firm, expressed substantial doubt about our ability to continue as a going concern as we have suffered recurring losses from operations and have insufficient liquidity to fund our future operations. If we are unable to improve our liquidity position, we may not be able to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result if we are unable to continue as a going concern and, therefore, be required to realize our assets and discharge our liabilities other than in the normal course of business which could cause investors to suffer the loss of all or a substantial portion of their investment. As of December 31, 2024,2025, we had approximately $3.7$5.1 million of cash and cash equivalents on hand. In order to have sufficient cash to fund our operations in the future, we will need to raise additional equity or debt capital and cannot provide any assurance that we will be successful in doing so. If we are unable to raise sufficient capital to fund our operations, we may need to delay, reduce or eliminate certain research and development programs or other operations, sell some or all of our assets or merge with another entity.

As of December 31, 2024,2025, the Company had cash and cash equivalents of $3.7$5.1 million, negative working capital of $10.7$2.9 million, and accumulated deficit of $113.2$111.3 million. Petros cannot predict if it will achieve profitability soon or at all. Petros expects to continue to expend substantial financial and other resources on, among other things:

We have historically been engaged in the commercialization and development of Stendra®. WhileBeginning wein continuedMarch to2025, sellthe Stendra®,Company weis determinedno tolonger discontinueengaged in the commercialization, development or sales of Stendra® to wholesalers.. We are separately working towards the development and commercialization of our platform. This may result in reduced overall revenue, particularly as we move away from established wholesalers and reallocate resources to the development of our platform. Additionally, the development and commercialization of our platform may present challenges, including unforeseen development delays, difficulties in market acceptance or increased competition. If we are unable to successfully execute our strategy, it could materially and adversely affect our financial condition, results of operations and long-term growth prospects.

There are numerous U.S. federal and state, as well as foreign, laws pertaining to healthcare fraud and abuse, including anti-kickback, false claims, and physician transparency laws. Efforts to ensure that our business arrangements with third parties will comply with applicable healthcare laws and regulations may involve substantial costs. Our business practices and relationships with pharmaceutical companies and consumers are subject to scrutiny under these laws. We may also be subject to patient information privacy and security regulation by both the federal government and the states and foreign jurisdictions in which we conduct our business. The healthcare laws and regulations that may affect our ability to operate include:

Petros is also exposed to potential product liability risks inherent in the development, testing, marketing, and commercialization of consumer products. Product liability insurance forcan the pharmaceutical industry isbe extremely expensive, difficult to obtain and may not be available on acceptable terms, if at all. Petros cannot guarantee that the coverage limits of such insurance policies will be adequate. A successful claim against Petros in excess of its insurance coverage could have a material adverse effect upon it and on its financial condition.

In addition to direct expenditures for damages, settlement and defense costs, there is a possibility of adverse publicity and loss of revenues as a result of product liability claims. Product liability is a significant commercial risk for Petros. Plaintiffs have received substantial damage awards in some jurisdictions against pharmaceutical companies based upon claims for injuries allegedly caused by the use of their products. In addition, in the age of social media, plaintiffs’ counsel now has a wide variety of tools to advertise their services and solicit new clients for litigation. Thus, any significant product liability litigation or mass tort in which Petros is a defendant may have a larger number of plaintiffs than such actions have seen historically because of the increasing use of widespread and media-varied advertising.

Petros’ ability to enforce its in-licensed patents also depends on the laws of individual countries and each country’s practice with respect to enforcement of intellectual property rights, and the extent to which certain sovereigns may seek to engage in policies or practices that may weaken its intellectual property framework (e.g., a policy of routine compulsory licensing (or threat of compulsory licensing) of pharmaceutical intellectual property). Patent rights are territorial, and patent protection extends only to those countries where Petros has issued patents. Filing, prosecuting and defending patents on Petros’ products and product candidates in all countries and jurisdictions throughout the world would be prohibitively expensive, and Petros’ intellectual property rights in some countries outside the United States could be less extensive than those in the United States. Some foreign countries lack rules and methods for defending intellectual property rights and do not protect proprietary rights to the same extent as the United States. Competitors may successfully challenge or avoid Petros’ patents, or manufacture products in countries where Petros has not applied for patent protection. Changes in the patent laws in the U.S. or other countries may diminish the value of Petros’ patent rights. As a result of these and other factors, the scope, validity, enforceability, and commercial value of Petros’ patent rights are uncertain and unpredictable. As such, Petros may have difficulty protecting its proprietary rights in these foreign countries.

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 consistsconsisted 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 CompanyBeginning in March 2025, the Company is no longer engaged in the commercialization, development or sales of Stendra®. Additionally,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 areand expectedeach toof betheir assignedrespective 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 connectionand withto the respective ABC Assets. Upon the completion of the Assignment, the Assignee obtained sole control over the ABC (asAssets definedand herein)each Subsidiary no longer operates its business or controls the liquidation or distribution of Metuchen,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 accordingly,setting over to the Assignee, in trust, of all of the ABC Assets. Accordingly, the Company willis no longer be engaged in the marketing or selling of VEDs following the completion of the ABC process.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.

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. AsIn aaddition, resultas 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 are expected to be assigned to a third-party in connection with the ABC (as defined herein) of Metuchen, and accordingly, the Company willis no longer be 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.

Petros has experienced net losses and negative cash flows from operations since our inception. As of December 31, 2024,2025, the Company had cash of approximately $3.7$5.1 million, negative working capital of $10.7$2.9 million, an accumulated deficit of approximately $113.2$111.3 million and used cash in operations during the twelve months ended December 31, 2024,2025, of approximately $2.6$4.7 million.

Under the terms of the Note, the principal amount of $10,201,758 iswas payable in consecutive quarterly installments beginning on April 1, 2022, through January 1, 2027. Interest on the principal amount will accrueaccrued at a rate of 6% per year until the principal is repaid in full and is due and payable, in arrears, on the first day of each January, April, July, and October of each calendar year, commencing on April 1, 2022. The Company may prepay the Note, in whole or in part, at any time, with no premium or penalty. In the event that the Company defaults under the Security Agreement, all principal outstanding under the Note at the time of the default will bear interest at a rate of 9% per year until the full and final payment of all principal and interest under the Note (regardless of whether any default is waived or cured). If the Note is placed in the hands of any attorney for collection, or if it is collected through any legal proceeding at law or in equity or in bankruptcy, receivership, or other court proceedings, the Company will also be required to pay all costs of collection including, but not limited to, court costs and attorneys’ fees. Pursuant to the Security Agreement, dated January 18, 2022, the Company granted to Vivus a continuing security interest in all of its Stendra® API and products and its rights under the License Agreement.Agreement (the “Security Agreement”). The Security Agreement contains customary events of default. For the years ended December 31, 2024,2025, and December 31, 2023,2024, the Company paid Vivus $1.0$0.0 million and $2.0$1.0 million, respectively.respectively under the Note.

Pursuant to the Security Agreement, Vivus holdsheld a security interest against the Collateral (as defined herein). 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 order to satisfy the Obligations, onOn 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 assignment of all of the business, assets, properties, contractual rights, goodwill, going concern value, rights and claims of Metuchen, including Metuchen’s wholly-owned subsidiaries, Timm Medical and PTV (the “Metuchen Assets”) for the benefit of Metuchen’s creditors.Assignment. In accordance with California state law, on June 16, 2025, the Company expects Metuchen to assign (the “Assignment”)assigned all of its right, title, interest in, and custody and control of Metuchen’seach Subsidiary’s property to a special purpose vehicle that will be 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 will haveobtained sole control over the MetuchenABC Assets and Metucheneach willSubsidiary no longer operateoperates its business or controlcontrols the liquidation or distribution of its assets or the resolution of claims. The Assignment is a judicial insolvency procedure, which iswas commenced by Metucheneach 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 MetuchenABC Assets. The Assignee is then expected to liquidateliquidated the property through an auction sale and distributedistributed the proceeds to Metuchen’sthe Subsidiaries’ creditors according to their respective priorities at law to satisfy Metuchen’sthe Subsidiaries’ 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”).

On May 15, 2024, wethe Company received notice from the Listing Qualifications Staff of Nasdaq (the “Staff”) indicating that, based upon the closing bid price of ourthe Company’s Common Stock for the 30 consecutive business day period between April 3, 2024, through May 14, 2024, wethe 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 wethe wereCompany 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”). On March 31, 2025,which the Company timelyaddressed requested an appeal of Nasdaq’s determination to delistbefore the Company’s Common Stock on April 4, 2025, as a result of the Low Bid Price Listing Rule, which automatically stayed the delisting action, pending such hearing by the Nasdaq Hearings Panel. Accordingly, the March 2025 Letter from the Staff has no immediate effect on the listing of the Company’s Common Stock at this time. The Company’s Common Stock will continue to trade on the Nasdaq Capital Market under the symbol “PTPI.”

The preparation of the 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 revenue recognition, collectability of accounts receivable, inventory valuation and obsolescence, intangibles, 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. The Company did not have any critical accounting estimates for the year ended December 31, 2025.

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 threesix months ended MarchJune 31,30, 2026, the Company’s cash used in operations was $784,272,$1,648,127, leaving a cash balance of $4,352,450$3,488,595 as of MarchJune 31,30, 2026. 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 condensed 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.

ThreeSix Months Ended MarchJune 31,30, 2026, and 2025 (Unaudited)

The following table sets forth a summary of our statements of operations for the threesix months ended MarchJune 31,30, 2026, and 2025:

Selling, general and administrative expenses for the threesix months ended MarchJune 31,30, 2026, and MarchJune 31,30, 2025, were $1,027,179$2,015,681 and $1,458,349,$3,259,127, respectively. Selling, general and administrative expenses include administrative and corporate expenses.

Selling, general and administrative expenses decreased by $431,170$1,243,446, or 30%38.2%, during the threesix months ended MarchJune 31,30, 2026, compared to the threesix months ended MarchJune 31,30, 2025. Decreased selling,selling general and administrative expenses were primarily driven by decreasedlower professional service fees of $408,646$1,186,946 anddue decreasedto otherthe operating expensesabsence of $82,646ABC-related partiallycosts offsetincurred byduring increasedthe prior-year period, payroll and benefits expenses of $19,841$100,113, and other operating expenses of $40,253, partially offset by increased stock-based compensation expense of $40,281.$83,866.

Warrant issuance costs for the threesix months ended MarchJune 31,30, 2026, and MarchJune 31,30, 2025, were $0 and $10,420,982, respectively. The warrant issuance costs of $10.4 million were associated with the February 2025 Public Offering (as defined herein).

For the threesix months ended MarchJune 31,30, 2026, and MarchJune 31,30, 2025, the Company recorded a gain of approximately $0.0 million and $10.6$10.3 million, respectively, for the change in fair value of the warrant liability. The gain in 2025 wasis related to the decrease in fair value of the Series Warrants issued in the Public Offering.

Interest income for the threesix months ended MarchJune 31,30, 2026, and March 31, 2025, was $40,143$72,120 and $47,790,$136,639, respectively. The decrease is attributable to the decrease in cash balances available for investing. Petros invested its cash in money market securities during 20252026 and 2024.2025.

For the threesix months ended MarchJune 31,30, 2026, and MarchJune 31,30, 2025, the Company recorded losses of $0.0 million and $1.1$0.6 million, respectively, from discontinued operations.operation.

The Company has experienced net losses and negative cash flows from operations since our inception. As of MarchJune 31,30, 2026, the Company had cash and cash equivalents of approximately $4.4$3.5 million, working capital of $1.8$0.7 million from continuing operations, an accumulated deficit of approximately $112.3$113.2 million and used cash in operations during the threesix months ended MarchJune 31,30, 2026, of approximately $0.8$1.6 million.

On February 17, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain institutional and accredited investors (collectively, the “2025 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 sharesshare 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.

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 Stockequal,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.

As of MarchJune 31,30, 2026, the conversion price of the Series A Preferred Stock was $0.1269$0.0062 per share.

As of MarchJune 31,30, 2026, the exercise price of the Warrants was $0.1269$0.0062 per share.

The following table summarizes the Company’s cash flows for the threesix months ended MarchJune 31,30, 2026, and 2025:

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2026, was $784,272,$1,648,127, which primarily reflected the Company’s net loss of $1,027,179,$1,942,661, which was inclusive of noncash adjustments to reconcile net loss to net cash used in operating activities of $120,319$238,225 consisting of the employee stock-based compensation expense, and changes in operating assets and liabilities of $82,445$57,209 largely driven by accounts payable and accrued expenses related to professional fees and employee bonuses.

Net cash used in operating activities for the threesix months ended MarchJune 31,30, 2025, was $1,494,593,$2,675,913, which primarily reflected the Company’s net loss of $1,199,541,$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 $130,980$6,700,618 consisting of the change in the fair value of the warrant liability, noncash warrant expense, and stock-basedthe compensation,gain on the assignment of the Subsidiaries and Vivus settlement, and changes in operating assets and liabilities of $164,072$292,216 largely driven by accounts payable and accrued expenses related to professional fees and employee bonuses and equity issuance fees.

Net cash provided by financing activities was $0 for the threesix months ended MarchJune 31,30, 2026.

Net cash provided by financing activities was $8,707,002$8,278,769 for the threesix months ended MarchJune 31,30, 2025, consisting of proceeds from the February 2025 Equity Financing.Financing Offering, and the payment for the redemption of Series A Preferred Stock.