Petros Pharmaceuticals , Inc. (NASDAQ:PTPI), a micro-cap pharmaceutical company with a market capitalization of $3.25 million, has reached an agreement with key investors to amend certain terms related to its Series A Convertible Preferred Stock and associated Warrants, as disclosed in a recent SEC filing.
According to InvestingPro analysis, the company currently shows signs of undervaluation, though it faces significant financial challenges with an EBITDA of -$10.61 million in the last twelve months. This move comes as the company aims to adjust its financial strategy and maintain operational flexibility.
On Thursday, the company filed an amendment with the Secretary of State of Delaware, effectively altering the Certificate of Designations for its Series A Preferred Stock. The primary changes extend the maturity date of the preferred stock to February 15, 2025, and modify the schedule of installment dates. Moreover, the company has secured an agreement to defer any accrued and unpaid payment amounts until February 15, 2025, and received a waiver for any breaches resulting from the delay in payments.
Additionally, the amendment revises certain restrictive covenants. Petros Pharmaceuticals is now required to maintain a minimum of $500,000 in unencumbered, unrestricted cash and cash equivalents from January 15, 2025, to February 15, 2025. InvestingPro data reveals concerning liquidity metrics, with a current ratio of 0.85 and revenue declining by 42.41% year-over-year to $4.02 million.
Furthermore, a covenant related to changes in the company's business nature has been adjusted to accommodate a shift in the company's sales strategy for its product Stendra avanafil and its development strategy towards over-the-counter switch solutions. InvestingPro subscribers have access to 11 additional key insights about PTPI's financial health and market performance.
In other recent news, Petros Pharmaceuticals faced a financial obligation acceleration when its wholly owned subsidiary, Metuchen Pharmaceuticals LLC, defaulted on a payment obligation, triggering an immediate debt repayment of approximately $7.2 million in principal and $237,300 in interest. The outstanding obligations became immediately due, leading to a Foreclosure Notice issued by Vivus LLC. Metuchen Pharmaceuticals agreed to the terms of the Foreclosure Notice, accepting collateral as partial satisfaction of the debt. This development could impact Petros Pharmaceuticals' financial stability and future operations.
Additionally, Petros Pharmaceuticals held its annual shareholder meeting, resulting in several outcomes, including the re-election of three directors, approval of executive compensation, and approval of a potential reverse stock split. The company also announced changes to executive roles, with Fady Boctor, the President and Chief Commercial Officer, seeing a reduction in his base salary.
In other developments, Petros Pharmaceuticals has amended its Series A Convertible Preferred Stock, which is expected to increase preferred stockholders' influence over corporate decisions. The company is also progressing in transitioning its erectile dysfunction drug, STENDRA, from prescription to over-the-counter status. Furthermore, Petros Pharmaceuticals has partnered with telehealth provider Lemonaid Health in a strategic move to expand its customer base.
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