Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 14, 2022 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-39752 | |
Entity Registrant Name | Petros Pharmaceuticals, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-1410058 | |
Entity Address, Address Line One | 1185 Avenue of the Americas | |
Entity Address, Address Line Two | 3rd Floor | |
Entity Address, City or Town | New York | |
Entity Address State Or Province | NY | |
Entity Address, Postal Zip Code | 10036 | |
City Area Code | 973 | |
Local Phone Number | 242-0005 | |
Title of 12(b) Security | Common stock | |
Trading Symbol | PTPI | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 20,708,024 | |
Entity Central Index Key | 0001815903 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash | $ 11,181,662 | $ 23,847,572 |
Accounts receivable, net | 3,733,143 | 2,455,386 |
Inventories | 2,154,031 | 519,649 |
Prepaid expenses and other current assets | 1,702,784 | 3,720,088 |
Total current assets | 18,771,620 | 30,542,695 |
Fixed assets, net | 41,732 | 49,397 |
Intangible assets, net | 13,158,203 | 25,293,149 |
API purchase commitment | 5,335,808 | 11,029,260 |
Other assets | 389,080 | 475,557 |
Total assets | 37,696,443 | 67,390,058 |
Current liabilities: | ||
Current portion of promissory note | 906,092 | |
Accounts payable | 2,084,519 | 4,557,969 |
Accrued expenses | 4,482,477 | 11,957,384 |
Accrued inventory purchases | 14,203,905 | |
Other current liabilities | 471,478 | 260,818 |
Total current liabilities | 7,944,566 | 30,980,076 |
Promissory note, net of current portion | 8,756,742 | |
Derivative liability | 460,000 | |
Other long-term liabilities | 300,153 | 405,018 |
Total liabilities | 17,001,461 | 31,845,094 |
Stockholders' Equity: | ||
Preferred stock (par value $0.0001 per share, 50,000,000 shares authorized, 0 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively) | ||
Common stock (par value $0.0001 per share, 150,000,000 shares authorized, 20,708,024 and 20,684,723 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively | 2,071 | 2,068 |
Additional paid-in capital | 107,197,944 | 106,231,716 |
Accumulated deficit | (86,505,033) | (70,688,820) |
Total Stockholders' Equity | 20,694,982 | 35,544,964 |
Total Liabilities and Stockholders' Equity | $ 37,696,443 | $ 67,390,058 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 20,708,024 | 20,684,723 |
Common stock, shares outstanding | 20,708,024 | 20,684,723 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net sales | $ 2,145,169 | $ 5,193,953 | $ 8,678,424 | |
Net sales | $ (1,457,732) | |||
Cost of goods sold | 286,525 | 319,158 | 1,408,086 | 1,355,838 |
Gross profit (loss) | (1,744,257) | 1,826,011 | 3,785,867 | 7,322,586 |
Operating expenses: | ||||
Selling, general and administrative | 2,170,975 | 3,413,223 | 9,285,317 | 11,411,113 |
Gain on settlement with Vivus | (3,389,941) | |||
Research and development expense | 735,916 | 280,576 | 1,562,518 | 799,803 |
Depreciation and amortization expense | 1,560,870 | 1,728,829 | 4,682,610 | 5,186,486 |
Intangible asset impairment | 7,460,000 | 7,460,000 | ||
Total operating expenses | 11,927,761 | 5,422,628 | 19,600,504 | 17,397,402 |
Loss from operations | (13,672,018) | (3,596,617) | (15,814,637) | (10,074,816) |
Change in fair value of derivative liability | 1,970,000 | 460,000 | 9,640,000 | |
Interest expense, senior debt | (67,936) | (356,873) | ||
Interest expense, promissory note | (147,677) | (451,075) | ||
Loss before income taxes | (13,819,695) | (1,694,553) | (15,805,712) | (791,689) |
Income tax expense | 10,501 | 2,345 | 10,501 | 9,045 |
Net Loss | $ (13,830,196) | $ (1,696,898) | $ (15,816,213) | $ (800,734) |
Net Loss per common share | ||||
Basic (in dollars per share) | $ (0.67) | $ (0.17) | $ (0.76) | $ (0.08) |
Diluted (in dollars per share) | $ (0.67) | $ (0.17) | $ (0.76) | $ (0.08) |
Weighted average common shares outstanding | ||||
Basic | 20,692,321 | 9,826,599 | 20,687,284 | 9,794,267 |
Diluted | 20,692,321 | 9,826,599 | 20,687,284 | 9,794,267 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2020 | $ 971 | $ 79,170,225 | $ (61,702,144) | $ 17,469,052 | |
Balance (in shares) at Dec. 31, 2020 | 500 | 9,707,655 | |||
Conversion of Preferred Stock to Common Stock | $ 6 | (6) | |||
Conversion of Preferred Stock to Common Stock (in shares) | (500) | 60,606 | |||
Stock-based compensation expense | 990,876 | 990,876 | |||
Non-employee stock-based compensation | $ 6 | 187,796 | 187,802 | ||
Non-employee stock-based compensation (in shares) | 58,338 | ||||
Net loss | (800,734) | (800,734) | |||
Balance at Sep. 30, 2021 | $ 983 | 80,348,891 | (62,502,878) | 17,846,996 | |
Balance (in shares) at Sep. 30, 2021 | 9,826,599 | ||||
Balance at Jun. 30, 2021 | $ 983 | 80,295,724 | (60,805,980) | 19,490,727 | |
Balance (in shares) at Jun. 30, 2021 | 9,826,599 | ||||
Conversion of Preferred Stock to Common Stock | 53,167 | 53,167 | |||
Stock-based compensation expense | 80,348,891 | (62,502,878) | 17,846,996 | ||
Non-employee stock-based compensation | (1,696,898) | (1,696,898) | |||
Net loss | (1,696,898) | ||||
Balance at Sep. 30, 2021 | $ 983 | 80,348,891 | (62,502,878) | 17,846,996 | |
Balance (in shares) at Sep. 30, 2021 | 9,826,599 | ||||
Balance at Dec. 31, 2021 | $ 2,068 | 106,231,716 | (70,688,820) | 35,544,964 | |
Balance (in shares) at Dec. 31, 2021 | 20,684,723 | ||||
Stock-based compensation expense | 966,231 | $ 966,231 | |||
Non-employee exercise of restricted stock units | $ 3 | (3) | |||
Non-employee exercise of restricted stock units (in shares) | 23,301 | 23,301 | |||
Net loss | (15,816,213) | $ (15,816,213) | |||
Balance at Sep. 30, 2022 | $ 2,071 | 107,197,944 | (86,505,033) | 20,694,982 | |
Balance (in shares) at Sep. 30, 2022 | 20,708,024 | ||||
Balance at Jun. 30, 2022 | $ 2,068 | 106,889,809 | (72,674,836) | 34,217,041 | |
Balance (in shares) at Jun. 30, 2022 | 20,684,723 | ||||
Stock-based compensation expense | 308,138 | 308,138 | |||
Non-employee exercise of restricted stock units | $ 3 | (3) | |||
Non-employee exercise of restricted stock units (in shares) | 23,301 | ||||
Net loss | (13,830,196) | (13,830,196) | |||
Balance at Sep. 30, 2022 | $ 2,071 | $ 107,197,944 | $ (86,505,033) | $ 20,694,982 | |
Balance (in shares) at Sep. 30, 2022 | 20,708,024 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (15,816,213) | $ (800,734) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 4,682,610 | 5,186,486 |
Intangible asset impairment | 7,460,000 | |
Bad debt expense (recoveries) | (103,651) | 74,953 |
Inventory and sample inventory reserve | (14,688) | (90,844) |
Amortization of deferred financing costs and debt discount | 12,500 | |
Lease expense | 86,477 | 76,838 |
Derivative liability | (460,000) | (9,640,000) |
Deferred revenue | 56,274 | 70,343 |
Gain on settlement with Vivus | (3,389,941) | |
Employee stock-based compensation | 966,231 | 990,876 |
Non-employee stock-based compensation | 187,802 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,174,106) | 3,125,595 |
Inventories | (1,619,694) | 361,282 |
Prepaid expenses and other current assets | 1,478,267 | 79,865 |
Accounts payable | (2,473,450) | (297,212) |
Accrued expenses | (954,607) | (3,089,672) |
Other current liabilities | 154,370 | 357,361 |
Other long-term liabilities | (104,865) | (163,171) |
Net cash used in operating activities | (11,226,985) | (3,557,732) |
Cash flows from financing activities: | ||
Payment of promissory note | (1,438,925) | |
Payment of senior debt | (4,912,541) | |
Payment of portion of senior dent end of term fee | (534,237) | |
Net cash used in financing activities | (1,438,925) | (5,446,778) |
Net decrease in cash | (12,665,910) | (9,004,510) |
Cash, beginning of period | 23,847,572 | 17,139,694 |
Cash, end of period | 11,181,662 | 8,135,184 |
Supplemental cash flow information: | ||
Cash paid for interest during the period | 451,075 | $ 393,577 |
Noncash Items: | ||
Noncash decrease in accrued expenses related to Vivus settlement | (6,520,283) | |
Noncash decrease in accrued inventory purchases related to Vivus Settlement | (14,203,905) | |
Noncash increase in promissory note related to Vivus settlement | 9,662,834 | |
Noncash decrease in API purchase commitment | 6,232,489 | |
Noncash issuance of common stock to non-employee | $ 3 |
Nature of Operations, Basis of
Nature of Operations, Basis of Presentation, and Liquidity | 9 Months Ended |
Sep. 30, 2022 | |
Nature of Operations, Basis of Presentation, and Liquidity | |
Nature of Operations, Basis of Presentation, and Liquidity | 1) Nature of Operations, Basis of Presentation, and Liquidity Nature of Operations Petros Pharmaceuticals, Inc. (“Petros” or the “Company”) is a pharmaceutical company focused on men’s health therapeutics with a full range of commercial capabilities including sales, marketing, regulatory and medical affairs, finance, trade relations, pharmacovigilance, market access relations, manufacturing, and distribution. Petros consists of wholly owned subsidiaries, Metuchen Pharmaceuticals LLC, a Delaware limited liability company (“Metuchen”), Neurotrope, Inc., a Nevada corporation (“Neurotrope”), Timm Medical Technologies, Inc. (“Timm Medical”), and Pos-T-Vac, LLC (“PTV”). The Company is 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 we have licensed from Vivus, Inc. (“Vivus”). Petros also markets its own line of ED products in the form of vacuum erection device products through its subsidiaries, Timm Medical and PTV. In addition to ED products, we have acquired an exclusive global license to develop and commercialize H100™, a novel and patented topical formulation candidate for the treatment of acute Peyronie’s disease. The Company was organized as a Delaware corporation 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 (the “Merger Agreement”), by and between Petros, Neurotrope,, PM Merger Sub 1, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Petros (“Merger Sub 1”), PN Merger Sub 2, Inc., a Delaware corporation and a wholly-owned subsidiary of Petros (“Merger Sub 2”), and Metuchen. The Merger Agreement provided for (1) the merger of Merger Sub 1, with and into Metuchen, with Metuchen surviving as a wholly-owned subsidiary of Petros (the “Metuchen Merger”) and (2) the merger of Merger Sub 2 with and into Neurotrope, with Neurotrope surviving as a wholly-owned subsidiary of Petros (the “Neurotrope Merger” and together with the Metuchen Merger, the “Mergers”). As a result of the Mergers, Metuchen and Neurotrope became wholly-owned subsidiaries of Petros, and Petros became a publicly traded corporation on December 1, 2020. On December 7, 2020, Neurotrope completed the spin-off of certain assets, whereby (i) any cash in excess of $20,000,000, subject to adjustment as provided in the Merger Agreement, and all of the operating assets and liabilities of Neurotrope not retained by Neurotrope in connection with the Mergers were contributed to Synaptogenix, Inc. (formerly known as Neurotrope Bioscience, Inc.), a Delaware corporation (“Synaptogenix”), and a wholly-owned subsidiary of Neurotrope. Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. In the opinion of management, the accompanying unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, considered necessary to present fairly our financial position, results of operations and cash flows. However, actual results could differ from those estimates. The unaudited interim consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the United States Securities and Exchange Commission. This Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements and notes previously distributed in our Annual Report on Form 10-K for the year ended December 31, 2021. All transactions between the consolidated entities have been eliminated in consolidation. Liquidity and Going Concern The Company has experienced net losses and negative cash flows from operations since our inception. As of September 30, 2022, the Company had cash of approximately $11.2 million, positive working capital of $10.8 million, an accumulated deficit of approximately $86.5 million and used cash in operations during the nine months ended September 30, 2022 of approximately $11.2 million. In January 2022, the Company executed a promissory note in favor of Vivus in connection with the Vivus Settlement Agreement in the principal amount of $10,201,758. The terms of this promissory note are discussed in Note 8. 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 interim consolidated financial statements are issued. 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 this Quarterly Report. 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 with its cash on hand, as well by as exploring additional ways to raise capital in addition to increasing cash flows from operations. There is no assurance the Company will manage to raise additional capital or otherwise increase cash flows, if required. The sources of financing described above that could be available to the Company and the timing and probability of obtaining sufficient capital depend, in part, on expanding the use of Stendra® and continuing to invest in research and development pursuant to our Non-Prescription / Over-The-Counter (“OTC”) strategies related to Stendra®, which we believe has the potential to dramatically increase product sales in the future; further developing and commercializing H100; and future capital market conditions. If the Company’s current assumptions regarding timing of these events are incorrect or if there are any other changes or differences in our current assumptions that negatively impact our financing strategy, the Company may have to further reduce expenditures or significantly delay, scale back or discontinue the development or commercialization of Stendra® OTC or H100 in order to extend its cash resources. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2) Summary of Significant Accounting Policies Use of Estimates The preparation of Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the Consolidated Financial Statements and reported amounts of revenue and expenses during the reporting periods. Such estimates include the adequacy of accounts receivable reserves, return reserves, inventory reserves, assessment of long-lived assets, including intangible asset impairment and the valuation of the derivative liability, among others. Actual results could differ from these estimates and changes in these estimates are recorded when known. Risks and Uncertainties The Company is subject to risks common to companies in the pharmaceutical industry including, but not limited to, uncertainties related to commercialization of competitor products, regulatory approvals, dependence on key products, dependence on key customers and suppliers, and protection of intellectual property rights. The World Health Organization (“WHO”) declared the coronavirus (“COVID-19”) a global pandemic on March 11, 2020, and since that time many of the previously imposed restrictions and other measures which were instituted in response have been subsequently reduced or lifted. However, the COVID-19 pandemic remains highly unpredictable and dynamic, and its duration and extent continue to be dependent on various developments, such as the emergence of variants to the virus that may cause additional strains of COVID-19. Accordingly, the COVID-19 pandemic may continue to have negative effects on the health of the U.S. economy for the foreseeable future. The Company cannot reasonably estimate the length or severity of the impact that the COVID-19 pandemic, including the emergence of any new variants will have on its financial results, and the Company may experience a material adverse impact on its sales, results of operations, and cash flows in fiscal 2022 and beyond. During 2020, government regulations and the voluntary business practices of the Company and prescribing physicians had prevented in-person visits by sales representatives to physicians’ offices. The Company had taken steps to mitigate the negative impact on its businesses of such restrictions. In March 2020, the Company reduced our sales representative head count to reflect the lack of in-person visits. The Company has maintained a core sales team which continued to contact physicians via telephone and videoconference as well as continuing to have webinars provided by the Company’s key opinion leaders to other physicians and pharmacists. In response to the spread of COVID-19, in March 2020, the Company closed its administrative offices. In January 2022, the Company sub-leased its Manalapan office and all administrative employees are working remotely for the foreseeable future. The Company has fully resumed in-person interactions by its customer-facing personnel in compliance with any local and state restrictions. The Company also continues to engage with customers virtually as the Company seeks to continue to support healthcare professionals and patient care. Since the beginning of the COVID-19 pandemic, we have experienced a shift from in-person sales to online, telehealth-based sales. These online sales generally have lower gross margins than in-person sales, which has impacted our net revenues. Revenue Recognition Prescription Medication Sales The Company’s prescription medication sales consist of sales of Stendra® in the U.S. for the treatment of male erectile dysfunction. Under Accounting Standards Codification (“ASC”) Topic 606, Revenue Recognition (“Topic 606”), the Company recognizes revenue from prescription medication sales when its performance obligations with a customer has been satisfied. In the contracts with its customers, the Company has identified a single performance obligation to provide Stendra® upon receipt of a customer order. The performance obligation is satisfied at a point in time when the Company’s customers obtain control of Stendra®, which is typically upon delivery. The Company invoices its customers after Stendra® has been delivered and invoice payments are generally due within 30 to 75 days of invoice date. In determining the transaction price, a significant financing component does not exist since the timing from when the Company delivers Stendra® to when the customers pay for the product is typically less than one year. The Company records prescription medication sales net of any variable consideration, including but not limited to discounts, rebates, returns, chargebacks, and distribution fees. The Company uses the expected value method when estimating its variable consideration, unless terms are specified within contracts. The identified variable consideration is recorded as a reduction of revenue at the time revenues from sales of Stendra® are recognized. The Company recognizes revenue to the extent that it is probable that a significant revenue reversal will not occur in a future period. These estimates may differ from actual consideration received. The Company evaluates these estimates each reporting period to reflect known changes. As of September 30, 2022 and December 31, 2021, the reserves for sales deductions were $4.1 million and $4.7 million, respectively. The most significant sales deductions included in this reserve relate to returns, contract rebates, and distribution service (“DSA”) fees. Our estimates are based on factors such as our direct and indirect customers’ buying patterns and the estimated resulting contractual deduction rates, historical experience, specific known market events and estimated future trends, current contractual and statutory requirements, industry data, estimated customer inventory levels, current contract sales terms with our direct and indirect customers, and other competitive factors. Significant judgment and estimation is required in developing the foregoing and other relevant assumptions. The most significant sales deductions are further described below. Product Returns Consistent with industry practice, the Company maintains a return policy that generally allows its customers to return Stendra® and receive credit for product within six months prior to expiration date and up to one year after expiration date. The provision for returns is based upon the Company’s estimates for future Stendra® returns and historical experience. The provision of returns is part of the variable consideration recorded at the time revenue is recognized. As of September 30, 2022 and December 31, 2021, the reserves for product returns were $3.5 million and $3.8 million, respectively, and are included as a component of accrued expenses. During the three months ended September 30, 2022, the Company revised and increased its estimate of reserves for product returns by $2.7 million. Higher than estimated wholesaler returns of Stendra® during the third quarter was primarily related to the return of short-dated product sold in prior periods above our initial estimates. Throughout each quarter, we regularly seek to obtain periodic retail demand information and current inventory levels from our significant wholesalers. As part of this process, certain wholesalers indicated an increased ability to sell short-dated product before expiration because prescription demand for Stendra was strong at that time. Citing the demand of wholesalers at that time, management expected the short-dated product would sell through to end customers. Because sell through was below that estimated by the wholesalers, the Company had to increase its current return exposure. Contract Rebates, Coupon Redemptions and DSA Fees The Company establishes contracts with wholesalers, chain stores, and indirect customers that provide for rebates, sales incentives, DSA fees and other allowances. Some customers receive rebates upon attaining established sales volumes. Direct rebates are generally rebates paid to direct purchasing customers based on a percentage applied to a direct customer’s purchases from us, including fees paid to wholesalers under our DSAs, as described below. Indirect rebates are rebates paid to indirect customers that have purchased our products from a wholesaler under a contract with us. The Company has entered into DSAs with certain of our significant wholesaler customers that obligate the wholesalers, in exchange for fees paid by us, to: (i) manage the variability of their purchases and inventory levels within specified limits based on product demand and (ii) provide us with specific services, including the provision of periodic retail demand information and current inventory levels for our pharmaceutical products held at their warehouse locations. See Note 3 Accounts Receivable, net for further discussion of these reserves. Medical Device Sales The Company’s medical device sales consist of domestic and international sales of men’s health products for the treatment of erectile dysfunction. The men’s health products do not require a prescription and include Vacuum Erection Devices, PreBoost, VenoSeal, penile injections (Rx), and urinary tract infection tests. Under Topic 606, the Company recognizes revenue from medical device sales when its performance obligations with its customers have been satisfied. In the contracts with its customers, the Company has identified a single performance obligation to provide medical devices upon receipt of a customer order. The performance obligation is satisfied at a point in time when the Company’s customers obtain control of the medical device, which is typically upon shipment. The Company invoices its customers after the medical devices have been shipped and invoice payments are generally due within 30 days of invoice date for domestic customers and 90 days for international customers. In determining the transaction price, a significant financing component Product Returns Consistent with industry practice, the Company maintains a return policy that generally allows its customers to return medical devices and receive credit for products within 90 days of the sale. The provision for returns is based upon the Company’s estimates for future product returns and historical experience. As of September 30, 2022 and December 31, 2021, the reserves for product returns for medical devices were not significant. Contract Costs In relation to customer contracts, the Company incurs costs to fulfill a contract but does not incur costs to obtain a contract. These costs to fulfill a contract do not meet the criteria for capitalization and are expensed as incurred. As such, the Company did not have any contract assets at September 30, 2022 and December 31, 2021. Fair Value of Financial Instruments Certain assets and liabilities are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market. Level 3 — Unobservable inputs which are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. Financial instruments recognized at historical amounts in the consolidated balance sheets consist of cash, accounts receivable, other current assets, accounts payable, accrued expenses, and other current liabilities. The Company believes that the carrying values of cash, accounts receivable, other current assets, accounts payable, accrued expenses, and other current liabilities approximate their fair values due to the short-term nature of these instruments. In connection with the Mergers in December 2020, each security holder of Metuchen received an earnout consideration classified as a derivative liability to be paid in the form of Petros Common Stock. The Company estimated their fair value using a Monte Carlo Simulation approach. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of the derivative liability as of September 30, 2022 and December 31, 2021 was $0 million and $0.5 million, respectively. See Note 9 Stockholders’ Equity. Intangible Assets The Company accounts for recognized intangible assets at cost. Intangible assets with finite useful lives are amortized over the useful life which the assets are expected to contribute directly or indirectly to future cash flows. Intangible assets are amortized using an accelerated method based on the pattern in which the economic benefits of the assets are consumed. The Company reviews the carrying value and useful lives of its intangible assets with definite lives whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable or the period over which they should be amortized has changed. When indicators of impairment exist, the Company determines whether the estimated undiscounted sum of the future cash flows of such assets is less than their carrying amounts. If less, an impairment loss is recognized in the amount, if any, by which the carrying amount of such assets exceeds their respective fair values. The Company evaluates the remaining useful life of each intangible asset that is being amortized during each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization. If the estimate of the intangible asset’s remaining useful life has changed, the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life. During the three months ended September 30, 2022, the Company noted that indicators of impairment existed and prepared an undiscounted cash flow analysis, which indicated, for the Stendra® product an impairment. The Company then prepared a discounted cash flow analysis resulting in an impairment of approximately $7.5 million. Stock-Based Compensation The Company accounts for stock-based awards to employees and consultants in accordance with applicable accounting principles, which requires compensation expense related to stock-based transactions, including employee stock options and consultant warrants, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options or warrants. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. Employee stock option and consulting expenses are recognized over the employee’s or consultant’s requisite service period (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the volatility and expected term. Any changes in these highly subjective assumptions can significantly impact stock-based compensation expense. See Note 10 Stock Options. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize deferred tax assets in the future in excess of its net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. As of September 30, 2022 and December 31, 2021, no accrued interest or penalties are recorded in the consolidated balance sheet. Basic and Diluted Net Loss per Common Share The Company computes basic net loss per common share by dividing net loss applicable to common stockholders by the weighted average number of shares of common stocks outstanding during the period, excluding the anti-dilutive effects of stock options and warrants to purchase common stocks. The Company computes diluted net loss per common stock by dividing the net loss applicable to common stocks by the sum of the weighted-average number of common stocks outstanding during the period plus the potential dilutive effects of its convertible preferred stocks, stock options and warrants to purchase common stocks, but such items are excluded if their effect is anti-dilutive. Because the impact of these items is anti-dilutive during periods of net loss, there was no difference between the Company’s basic and diluted net loss per stock of common stock for the three and nine months ended September 30, 2022 and 2021. See Note 13 Basic and Diluted Net Loss per Common Share. Recent Accounting Pronouncements Pending Adoption as of September 30, 2022 In June 2016, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13, together with a series of subsequently issued related ASUs, has been codified in Topic 326. Topic 326 establishes new requirements for companies to estimate expected credit losses when measuring certain financial assets, including accounts receivables. The new guidance is effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the effect that the new guidance will have on its consolidated financial statements and related disclosures. |
Accounts Receivable, net
Accounts Receivable, net | 9 Months Ended |
Sep. 30, 2022 | |
Accounts Receivable, net | |
Accounts Receivable, net | 3) Accounts Receivable, net Accounts receivable, net is comprised of the following: September 30, December 31, 2022 2021 Gross accounts receivables $ 4,318,139 $ 3,363,827 Distribution service fees (211,521) (371,310) Chargebacks accrual (11,455) — Cash discount allowances (87,986) (159,446) Allowance for doubtful accounts (274,034) (377,685) Total accounts receivable, net $ 3,733,143 $ 2,455,386 For the nine months ended September 30, 2022, gross sales from customers representing 10% or more of the Company’s total gross billings included four customers which represented approximately 27%, 22%, and 18% and 15% of total gross sales, respectively. For the nine months ended September 30, 2021, gross billings from customers representing 10% or more of the Company’s total gross billings included four customers which represented approximately 78% of total gross sales. Receivables from customers representing 10% or more of the Company’s gross accounts receivable included three customers at September 30, 2022 equal to 32%, 31%, and 11%, respectively, of the Company’s total gross accounts receivables. Receivables from customers representing 10% or more of the Company’s gross accounts receivable included two customers at December 31, 2021 equal to 40%, 19% and 15%, of the Company’s total gross accounts receivables. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2022 | |
Inventories | |
Inventories | 4) Inventories Inventory is comprised of the following: September 30, 2022 December 31, 2021 Raw Materials $ 1,480,047 $ 359,741 Finished goods 673,984 159,908 Total inventory $ 2,154,031 $ 519,649 Finished goods are net of valuation reserves of $368,610 and $383,298 as of September 30, 2022 and December 31, 2021, respectively. Raw materials are net of valuation reserves of $2,872,977 as of September 30, 2022 and December 31, 2021, which is related to bulk inventory. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended |
Sep. 30, 2022 | |
Prepaid Expenses and Other Current Assets. | |
Prepaid Expenses and Other Current Assets | 5) Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets are comprised of the following: September 30, 2022 December 31, 2021 Prepaid insurance 241,663 73,223 Prepaid FDA fees — 831,179 Prepaid coupon fees 71,500 71,500 API purchase commitment asset (see Note 13) 552,114 1,419,538 Due from wholesalers 104,059 609,059 Other prepaid expenses 591,861 605,422 Other current assets 141,587 110,167 Total prepaid expenses and other current assets $ 1,702,784 $ 3,720,088 |
Intangible Assets
Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Intangible Assets | |
Intangible Assets | 6) Intangible Assets Balance at December 31, 2020 $ 32,160,919 Amortization expense (6,867,770) Balance at December 31, 2021 25,293,149 Amortization expense (4,674,946) Intangible Impairment (7,460,000) Balance at September 30, 2022 $ 13,158,203 The future annual amortization related to the Company’s intangible assets is as follows as of September 30, 2022: 2022 (remaining 3 months) $ 913,720 2023 3,272,747 2024 2,800,622 2025 1,754,328 2026 1,442,186 Thereafter 2,974,600 Total $ 13,158,203 The intangible assets held by the Company are the Stendra® product, Timm Medical product, and PTV product and are being amortized over their estimated useful lives of 10 years, 12 years, and 12 years, respectively. The carrying value of the Stendra® product, Timm Medical product, and PTV product as of September 30, 2022 are $7.8 million, $4.2 million and $1.2 million, respectively. The carrying value of the Stendra® product, Timm Medical product, and PTV product as of December 31, 2021 were $19.1 million, $4.9 million and $1.4 million, respectively. During the three months ended September 30, 2022, the Company determined that the intangible asset related to the Stendra® product was impaired resulting in an impairment charge of approximately $7.5 million. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Expenses | |
Accrued Expenses | 7) Accrued Expenses Accrued expenses are comprised of the following: September 30, 2022 December 31, 2021 Accrued price protection (see Note 13) $ — $ 1,853,979 Accrued product returns 3,463,597 6,192,845 Accrued contract rebates 278,670 379,242 Due to Vivus (see Note 13) — 2,267,523 Due to 3PL/Wholesalers 133,177 479,178 Accrued bonuses 532,797 527,563 Accrued professional fees 1,164 125,392 Other accrued expenses 73,072 131,662 Total accrued expenses $ 4,482,477 $ 11,957,384 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt | |
Debt | 8) Debt Promissory Note In connection with the Settlement Agreement entered into with Vivus (see Note 13), Petros 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 a Security Agreement to secure Petros’ obligations under the Note. Under the terms of the Note, the original principal amount of $10,201,758 is payable in consecutive quarterly installments of principal and interest beginning on April 1, 2022 through January 1, 2027. Interest on the principal amount will accrue at a rate of 6% per year. 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). 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. Future minimum principal payments of the promissory note are as follows: 2022 (remaining 3 months) $ — 2023 1,274,741 2024 1,530,729 2025 2,720,940 2026 3,264,351 2027 872,074 Total $ 9,662,835 Senior Debt The Company did not have any senior indebtedness as of September 30, 2022 and December 31, 2021. On September 30, 2016, the Company entered into a loan agreement with Hercules, a third party, for a $35 million term loan (“Senior Debt”) with a stated interest rate of the greater of either (i) Prime plus 7.25% or (ii) 10.75%. The Senior Debt included an additional Paid-In-Kind (“PIK”) interest that increased the outstanding principal on a monthly basis at an annual rate of 1.35% and a $787,500 end of term charge. On November 22, 2017, the Company amended its loan agreement with Hercules (“First Amendment”). The end of term charge was increased from $787,500 to $1,068,750. The minimum EBITDA for each of the trailing six months and the fixed charge coverage ratio (1:1 to 0.9:1) were reduced. The Company was also required to prepay $10,000,000 in principal. Monthly principal payments, including interest, commenced November 1, 2018 with the outstanding balance of the Senior Debt due in full on November 1, 2020. The end of term charge was being recognized as interest expense and accreted over the term of the Senior Debt using the effective interest method. On April 13, 2020, the Company amended its loan agreement with Hercules. The amendment waived all financial covenant defaults for all periods since inception through the period ending March 31, 2020. The amendment also included the following changes: ● Removed the Adjusted EBITDA and Fixed Cost Coverage Ratio Covenants. ● Extended the maturity date from October 1, 2020 to April 2021, which was further extendable to December 1, 2021 upon achieving the Financing Milestone, as defined in the agreement. ● Increased the cash interest rate from the greater of (a) 10.75% or (b) 10.75% plus the US WSJ Prime minus 4.50% to the greater of (a) 11.50% or (b) 11.50% plus the US WSJ Prime minus 4.25% . ● Removed the PIK interest rate. ● Removed the prepayment penalty. The end of term charge of $1,068,750 was partially extended with $534,375 paid on October 1, 2020 and $534,375 paid on February 1, 2021. Effective September 30, 2020, the Company and Hercules entered into the Third Amendment to Loan and Security Agreement (“Third Amendment”) to provide for interest only payments commencing on October 1, 2020 and continuing through December 22, 2020, unless the Company raised net cash proceeds of at least $25 million through an equity or debt financing or other transaction on or before December 21, 2020. The Third Amendment also amended the minimum cash, minimum net revenue and minimum EBITDA financial covenants. On that same date, Juggernaut Capital Partners III, L.P., Hercules and Wells Fargo Bank, N.A. entered into an escrow agreement (the “Escrow Agreement”) to escrow funds amounting to approximately $1.5 million, an amount equal to the aggregate of certain principal payments due under the Loan Agreement, as amended. In connection with the consummation of the Mergers, the funds held in escrow were disbursed back to Juggernaut Capital Partners III, L.P. and the Escrow Agreement was terminated. The Company satisfied the maturity date extension requirement pursuant to funds retained upon the closing of the Mergers in December 2020. As a result, the Senior Debt had a maturity date of December 1, 2021. On November 3, 2021, the Company repaid $1,179,651 towards the senior debt. This payment satisfied the remaining balance of the senior debt as of that date. Interest expense on the Senior Debt was $356,873 and $67,936 for the nine and three months ended September 30, 2021, respectively. As of December 31, 2021. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 9) Stockholders’ Equity On January 26, 2021, 500 shares of the Company’s Preferred Stock were converted into 60,606 shares of the Company’s common stock. Effective January 1, 2021, the Company entered into a Marketing and Consulting Agreement (the “CoreIRAgreement”) with CorProminence, LLC (the “Consultant”) for certain shareholder information and relation services. The term of the CoreIRAgreement is for one year with automatic consecutive one-year renewal terms. As consideration for the shareholder information and relation services, the Company will pay the Consultant a monthly retainer of $7,500 and issued 30,000 restricted shares of the Company’s common stock to the Consultant on March 24, 2021 (the “CoreIR Grant Date”). The restricted shares vested immediately on the CoreIR Grant Date. Effective April 1, 2021, the Company entered into a Consulting and Advisory Agreement (the “King Agreement”) with Tania King, an employee of Juggernaut Capital Partners LLP, a related party, for certain services. The term of the King Agreement is indefinite but may be terminated by either party, with or without cause. As consideration for the consulting and advisory services, the Company will pay Ms. King a monthly fee of $4,000, an additional $12,000 payment included with the first monthly fee for services provided since January 1, 2021, and issue restricted stock units for shares of the Company’s common stock (“RSU’s”) with a cash value of $72,000 as of the date of the grant (the “King Grant Date”). The RSU’s shall vest and settle in full on the one-year anniversary of the King Grant Date. On April 7, 2022, the Company issued an additional grant of 60,505 RSU’s of the Company’s common stock with a value of $72,001 as of the date of the grant. The RSU’s vest and settle in full on the one-year anniversary of the additional grant date. Effective June 4, 2021, the Company entered into a Service Agreement with IRTH Communications, LLC (“IRTH”) for certain investor relations services (the “IRTH Agreement”). The term of the IRTH Agreement is for one year with an optional one-year renewal term. As consideration for the services, the Company will pay IRTH a fixed fee of $6,750 per month for the term of the IRTH Agreement and issued 28,338 restricted shares of the Company’s common stock with a value of $90,002 as of the date of the grant (the “IRTH Grant Date”). The restricted shares vest immediately on the IRTH Agreement Grant Date. The company has elected not to renew the IRTH Agreement as of June 2022. Contingent Consideration Pursuant to the Merger Agreement, each security holder of Metuchen received a right to receive such security holder’s pro rata stock of an aggregate of 14,232,090 shares of Petros Common Stock potentially issuable upon the achievement of certain milestones set forth in the Merger Agreement. The milestones are for the achievement of stock price and market capitalization, as defined over a two-year period. Market Capitalization/Gross Proceeds Earnout Payments In connection with the Mergers, each security holder of Metuchen received the right to receive earnout consideration, which was liability classified, to be paid in the form of Petros Common Stock if either Petros’ Market Capitalization (as defined in the Merger Agreement) or Petros receives aggregate gross proceeds that equals or exceeds certain milestones set forth in the Merger Agreement, as discussed below. Each milestone earnout payment was only achievable and payable one time and upon attainment of such milestone. In no event will the sum of the milestone earnout payments be greater than 10,232,090 shares of Petros Common Stock. As of September 30, 2022, the milestones have not been achieved. The fair value of the derivative liability was $0 and $0.5 million as of September 30, 2022 and December 31, 2021, respectively. Metuchen equity holders will have the opportunity to receive the following during the period ending December 2022: a. The Earnout Payment shall be equal to 2,000,000 shares of Petros Common Stock if: i. Petros’ Market Capitalization (as defined in the Merger Agreement) is greater than or equal to $250,000,000 for a period of twenty (20) trading days during any thirty (30) consecutive trading day period with a Closing Price of no less than $17.50 on each such trading day; or ii. Petros receives aggregate gross proceeds of at least $25,000,000 in an offering (or series of offerings within a sixty (60) calendar day period) of Petros Common Stock with a price per share of Petros Common Stock sold equal to no less than $17.50 in each offering (or series of offerings) and where Petros has a Market Capitalization immediately prior to each such offering (or series of offerings) equal to at least $250,000,000 . b. The Earnout Payment shall be equal to 2,000,000 shares of Petros Common Stock if: i. Petros’ Market Capitalization is greater than or equal to $300,000,000 for a period of twenty (20) trading days during any thirty (30) consecutive trading day period with a Closing Price of no less than $18.75 on each such trading day; or ii. Petros receives aggregate gross proceeds of at least $30,000,000 in an offering (or series of offerings within a sixty (60) calendar day period) of Petros Common Stock with a price per share of Petros Common Stock sold equal to no less than $18.75 in each offering (or series of offerings) and where Petros has a Market Capitalization immediately prior to each such offering (or series of offerings) equal to at least $300,000,000 . c. The Earnout Payment shall be equal to 3,000,000 shares of Petros Common Stock if: i. Petros’ Market Capitalization is greater than or equal to $400,000,000 for a period of twenty (20) trading days during any thirty (30) consecutive trading day period with a Closing Price of no less than $22.50 on each such trading day; or ii. Petros receives aggregate gross proceeds of at least $40,000,000 in an offering (or series of offerings within a sixty (60) calendar day period) of Petros Common Stock with a price per share of Petros Common Stock sold equal to no less than $22.50 in each offering (or series of offerings) and where Petros has a Market Capitalization immediately prior to each such offering (or series of offerings) equal to at least $400,000,000 . d. The Earnout Payment shall be equal to 3,232,090 shares of Petros Common Stock if: i. Petros’ Market Capitalization is greater than or equal to $500,000,000 for a period of twenty (20) trading days during any thirty (30) consecutive trading day period with a Closing Price of no less than $23.75 on each such trading day; or ii Petros receives aggregate gross proceeds of at least $50,000,000 in an offering (or series of offerings within a sixty |
Stock Options and Restricted St
Stock Options and Restricted Stock Units ("RSU's") | 9 Months Ended |
Sep. 30, 2022 | |
Stock Options and Restricted Stock Units ("RSU's") | |
Stock Options and Restricted Stock Units ("RSU's") | 10) Stock Options and Restricted Stock Units (“RSU’s”) The Company established the 2020 Omnibus Incentive Compensation plan (the “2020 Plan”) which provides for the grants of awards to our directors, officers, employees, and consultants. The 2020 Plan authorizes the grant of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, stock units and other stock-based awards and cash-based awards. On December 22, 2021, our stockholders approved the Second Amendment to the 2020 Plan to increase the total number of shares of common stock issuable under the 2020 Plan by 1,521,654 shares to a total of 2,600,000 shares of common stock. As of September 30, 2022, there were 2,600,000 shares authorized and 1,583,701 shares available for issuance under the 2020 Plan. The following is a summary of stock options for the nine months ended September 30, 2022 and for the year ended December 31, 2021: Weighted-Average Weighted- Remaining Aggregate Intrinsic Number of Average Contractual Value Shares Exercise Price Term (Years) ($ in thousands) Options outstanding at December 31, 2020 574,331 $ 51.43 0.9 $ — Options granted 615,669 3.38 9.23 — Less: options forfeited — — — — Less: options expired/cancelled (574,331) 51.43 — — Less: options exercised — — — — Options outstanding at December 31, 2021 615,669 3.38 9.23 — Options granted 50,000 3.34 9.26 — Less: options forfeited (75,000) (3.21) — — Less: options expired/cancelled — — — — Less: options exercised — — — — Options outstanding at September 30, 2022 590,669 $ 3.40 8.55 $ — Options exercisable at September 30, 2022 475,502 $ 3.39 8.57 $ — The following is a summary of RSU’s for the nine months ended September 30, 2022 and for the year ended December 31, 2021: Weighted-Average Weighted- Remaining Aggregate Intrinsic Number of Average Contractual Value Shares Exercise Price Term (Years) ($ in thousands) RSU’s outstanding at December 31, 2020 — — — — RSU’s granted 116,383 $ 3.29 9.84 — Less: RSU’s forfeited — — — — Less: RSU’s expired/cancelled — — — — Less: RSU’s exercised — — — — RSU’s outstanding at December 31, 2021 116,383 $ 3.29 9.84 — RSU’s granted 309,247 $ 1.19 9.52 — Less: RSU’s forfeited — — — — Less: RSU’s expired/cancelled — — — — Less: RSU’s exercised (23,301) $ (3.09) — — RSU’s outstanding at September 30, 2022 402,329 $ 1.69 9.45 — RSU’s exercisable at September 30, 2022 — — — — On January 4, 2022, pursuant to a consulting agreement, the Company awarded a grant of 50,000 options to purchase shares of common stock of the Company at an exercise price of $3.34 per share. The shares of common stock underlying the options vested 100% upon issuance. On April 7, 2022, the Company awarded the four Directors grants of 248,742 total RSU’s with a stock price of $1.19 per share. The RSU’s shall vest 100% on the one-year anniversary of the date of grant. Also on April 7, 2022, Tania King, an employee of Juggernaut Capital Partners LLP, pursuant to her contract, was granted 60,505 RSUs with a stock price of $1.19 per share. The RSU’s shall vest 100% on the one-year anniversary of the date of grant. Total stock-based compensation expense recognized for the nine months ended September 30, 2022 and 2021 was $966,231 and $1,178,678, respectively and, for the three months ended September 30, 2022 and 2021 was $308,138 and $53,167, respectively, and is recorded in general and administrative expenses in the consolidated statements of operations. |
Common Stock Warrants
Common Stock Warrants | 9 Months Ended |
Sep. 30, 2022 | |
Common Stock Warrants | |
Common Stock Warrants | 11) Common Stock Warrants The following is a summary of warrants for the nine months ended September 30, 2022 and for the year ended December 31, 2021: Number of Shares Warrants outstanding at December 31, 2020 4,407,962 Warrants issued 7,853,558 Warrants exercised (2,014,586) Warrants expired (207,913) Warrants outstanding at December 31, 2021 and September 30, 2022 10,039,021 As of September 30, 2022, the Company’s warrants by expiration date were as follows: Number of Warrants Exercise Price Expiration Date 2,780 $ 1.60 August 23, 2023 22,800 35.65 June 1, 2024 74,864 21.85 June 17, 2024 20,043 31.25 June 19, 2024 22,800 26.55 September 1, 2024 10,500 12.738 September 16, 2024 22,800 4.30 December 1, 2024 28,000 5.65 March 2, 2025 28,000 7.30 June 1, 2025 28,000 5.50 September 1, 2025 28,000 4.705 December 1, 2025 2,221,829 7.50 December 1, 2025 908,498 17.50 December 1, 2025 623,303 51.25 December 1, 2025 157,832 125.00 December 1, 2025 1,751,311 1.715 October 19, 2026 2,337,719 3.50 December 2, 2026 1,749,942 3.50 December 27, 2026 10,039,021 |
Basic and Diluted Net Income (L
Basic and Diluted Net Income (Loss) per Common Share | 9 Months Ended |
Sep. 30, 2022 | |
Basic and Diluted Net Income (Loss) per Common Share | |
Basic and Diluted Net Income (Loss) per Common Share | 12) Basic and Diluted Net Income (Loss) per Common Share The following is a reconciliation of the weighted average number of common shares outstanding used in calculating basic and diluted net loss per share: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Numerator Net loss $ (13,830,196) $ (1,696,898) $ (15,816,213) $ (800,734) Denominator Weighted-average common shares for basic net income (loss) per share 20,692,321 9,826,599 20,687,284 9,794,267 Basic and diluted net income (loss) per common share $ (0.67) $ (0.17) $ (0.76) $ (0.08) The following table summarizes the potentially dilutive securities convertible into common shares that were excluded from the calculation of diluted net income (loss) per share because their inclusion would have been antidilutive: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Stock Options 590,669 1,213,301 590,669 1,213,301 Warrants 10,039,021 4,405,182 10,039,021 4,405,182 Total 10,629,690 5,618,483 10,629,690 5,618,483 |
Marketing, Licensing and Distri
Marketing, Licensing and Distribution Agreements | 9 Months Ended |
Sep. 30, 2022 | |
Marketing, Licensing and Distribution Agreements. | |
Marketing, Licensing and Distribution Agreements | 13) Marketing, Licensing and Distribution Agreements (a) Vivus On September 30, 2016, the Company entered into a License and Commercialization Agreement (the “License Agreement”) with Vivus, Inc (“Vivus”) to purchase and receive the license for the commercialization and exploitation of Stendra® for a one-time fee of $70 million. The License Agreement gives the Company the right to sell Stendra® in the U.S and its territories, Canada, South America, and India. In December 2000, Vivus originally was granted the license from Mitsubishi Tanabe Pharma Corporation (“MTPC”) to develop, market, and manufacture Stendra®. Stendra® was approved by the Food and Drug Administration (“FDA”) in April 2012 to treat male erectile dysfunction. Under the License Agreement, the Company will pay MTPC a royalty of 5% on the first $500 million of net sales and 6% of net sales thereafter. In consideration for the trademark assignment and the use of the trademarks associated with the product and the Vivus technology, the Company shall (a) during the first, second, and third years following the expiration of the Royalty Period in a particular country in the Company’s territory, pay to Vivus a royalty equal to 2% of the net sales of products in such territory; and (b) following the fourth and fifth years following the end of the Royalty Period in such territory, pay to Vivus a royalty equal to 1% of the net sales of products in such territory. Thereafter, no further royalties shall be owed with respect to net sales of Stendra® in such territory. In addition, the Company will be responsible for a pro-rata portion of a $6 million milestone payment to be paid once $250 million in sales has been reached on the separate revenue stream of Stendra®. Should the $250 million of sales threshold be reached, the Company will be responsible for $3.2 million of the milestone payment. In connection with the License Agreement, the Company and Vivus also entered into a Supply Agreement. The Supply Agreement was terminated, effective September 30, 2021. On January 18, 2022, Petros and 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 the Company’s Stendra® product that were delivered to the third-party retailer and later returned. In connection with the Vivus Settlement Agreement, Petros retained approximately $7.3 million of API inventory under the Vivus Supply Agreement. In exchange for the API and reduction of current liabilities after prepayment of $900,000, Petros executed an interest-bearing promissory note (the “Note”) in favor of Vivus in the original principal amount of $10,201,758, which the Company believes approximates fair value (See Note 8). In addition to the payments to be made in accordance with the Note, the Company 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) 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, the Company 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 the Company’s satisfaction of certain regulatory submissions, Vivus released 50% of the quantity of bulk Stendra® tablets on January 18, 2022 under the Company’s existing open purchase order (the “Open Purchase Order”) being held by Vivus, which represents approximately a six-month supply of inventory. Pursuant to the Vivus Settlement Agreement, Vivus also released the remaining 50% of the quantity of bulk Stendra® tablets under the Open Purchase Order, later during the first quarter of 2022, upon the Company’s satisfaction of the remaining regulatory submission requirements. As a result of entering into the Vivus Settlement Agreement, the Company decreased accrued expenses by $6.5 million and decreased accrued inventory purchases by $14.2 million; which were partially offset by a decrease in API purchase commitments of $6.2 million and an increase to liabilities for the Note of $10.2 million (which is net of the $0.9 million prepayment on the Note). As a result, the Company recorded a $3.4 million gain on settlement for the nine months ended September 30, 2022. As of September 30, 2022 and December 31, 2021, the Company has API inventory is not a finished good. The Company has $0.2 million of API inventory which it has title to and is classified as raw materials inventory. The additional API inventory that the Company does not have title to is classified as API Inventory in either other current assets or other assets, depending on whether the Company expects to take title to the product within one year from the date of the financial statements. As of September 30, 2022 and December 31, 2021, there was $0.6 million and $1.4 million respectively included in other current assets (see Note 5 Prepaid and Other Current Assets). As of September 30, 2022 and December 31, 2021, there was $5.3 million and $11.0 million included as other assets on the accompanying consolidated balance sheets, respectively. The Company reviews its inventory levels and purchase commitments for excess amounts that it is required to purchase but projects it will not be able to sell prior to product expiry. The Company did not record any reserve for the three and nine months ended September 30, 2022 and 2021. During the nine months ended September 30, 2022 and 2021, the Company incurred royalties to MTPC for Stendra® of $135,816 and $302,346, respectively. Royalties incurred were included in cost of goods sold in the consolidated statements of operations. As of September 30, 2022 and December 31, 2021, the Company had a receivable for royalties of $107,031 and $81,136, which are included in other current assets. (see Note 7 Accrued Expenses and Note 5 Prepaid and other Current Assets). The license agreement between MTPC and Vivus (“MTPC License”) contains certain termination rights that would allow MTPC to terminate the agreement if Vivus were to breach any of the terms of the MTPC License or become insolvent or bankrupt. In the event that MTPC terminates the MTPC License with Vivus because of any contractual breach the Company has step-in rights with MTPC, which would allow the Company to continue to sell Stendra (b) Patheon Following the termination of the Vivus Supply Agreement, Petros, through its subsidiary Metuchen, entered into a Technology Transfer Service Agreement on January 20, 2022 with Patheon Pharmaceuticals Inc., part of Thermo Fisher Scientific (“Patheon”), pursuant to which the Company and Patheon agreed to collaborate as strategic partners for commercial production of Stendra® tablets at Patheon’s facilities in Cincinnati, Ohio. Under the Agreement, Patheon or one of its affiliates will provide pharmaceutical development and technology transfer services in order to establish and validate its ability to manufacture supply of the Company’s Stendra® product. Any commercial sale of product manufactured during the performance of the Agreement must be subject to a subsequent commercial manufacturing services agreement (with associated quality agreement) between the parties before it can be offered for commercial sale. (c) Hybrid In March 2020, the Company acquired the exclusive license to H100™ from Hybrid. H100™ is a topical candidate with at least one active ingredient and potentially a combination of ingredients responsible for the improvement of penile curvature during the acute phase of Peyronie’s disease. The Company paid an initial license fee of $100,000, with an additional $900,000 payment due upon obtainment of orphan indication for H100™ and termination of Hybrid’s existing agreement with a compounding pharmacy, and additional annual payments of $125,000, $150,000 and $200,000 due on each of the first, second and third anniversaries of the license agreement and $250,000 annual payments due thereafter. The Company is also required to make a $1,000,000 payment upon first commercial sale and a sliding scale of percentage payments on net sales in the low single digits. Annual anniversary payments will not be required after commercialization. The Company is also obligated to make royalty payments between 3-6% of any net sales. In addition, the Company may terminate at any time after its first anniversary, without cause, upon ninety The Company has treated the acquisition as an asset acquisition and has concluded that the asset acquired and the upfront payment should be expensed as it was considered an IPR&D asset with no alternative future uses. On September 24, 2020, the Company and Hybrid entered into a letter agreement, pursuant to which the term of the license agreement was extended for an additional six months to March 24, 2021. In consideration for the extension, the Company paid Hybrid $50,000 in October 2020 and an additional $100,000 in December 2020. On March 31, 2021, the Company and Hybrid, entered into a second letter agreement, pursuant to which the parties agreed to extend the Second Period (as defined in the Hybrid License) for an additional six seven |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 14) Commitments and Contingencies (a) Employment Agreements The Company has employment agreements with certain executive officers and key employees that provide for, among other things, salary and performance bonuses. In connection with the consummation of the Mergers, on December 24, 2020, the Company and Mr. Keith Lavan entered into a Separation Agreement (the “Separation Agreement”), pursuant to which Mr. Lavan resigned as Senior Vice President and Chief Financial Officer of the Company and agreed to serve as an advisor to the Company through December 31, 2020 (the “Separation Date”). Pursuant to the Separation Agreement, in addition to other benefits, Mr. Lavan received a stay-on bonus of $50,000 for continuing to remain employed by the Company through the Separation Date. For his services as an advisor, the Company agreed to pay Mr. Lavan an amount equal to 50% of his base salary as of immediately prior to the Separation Date. The Company paid 70% of such amount on January 15, 2021 and 30% of such amount in equal installments from the Separation Date through June 30, 2021. In addition, Mr. Lavan executed a general release of liabilities in favor of the Company. (b) Legal Proceedings On July 14, 2020, Greg Ford, the Chief Executive Officer of the Company, was terminated. On July 14, 2020, Mr. Ford, through his attorney, claimed that he was entitled to severance pay pursuant to an employment agreement following the termination of his employment on that same date. This claim is currently at an early stage where the Company is unable to determine the likelihood of any unfavorable outcome. The Company is not currently involved in any other significant claims or legal actions that, in the opinion of management, will have a material adverse impact on the Company’s operations, financial position or cash flows. (c) Operating Leases The Company has commitments under operating leases for office and warehouse space used in its operations. The Company’s leases have remaining lease terms ranging from 1.9 years to 4.3 years. On November 30, 2021, the Company entered into a sublease with respect to its entire headquarters facility. The sublessor delivered a $14,000 security deposit to the Company on the lease commencement date and also agreed to pay $7,000 per month for the term beginning January 10, 2022 and continuing until the expiration of the head lease on August 30, 2024. The Company will account for this sublease as an operating lease in accordance with the lessor accounting guidance within ASC 842. The components of lease expense consisted entirely of fixed lease costs related to operating leases. These costs were $134,435 and $134,435 for the nine months ended September 30, 2022 and 2021. Fixed lease costs for the nine months ended September 30, 2022 were offset by sublease income of $63,000. Supplemental balance sheet information related to leases was as follows: As of September 30, 2022 As of December 31, 2021 Operating lease ROU asset: Other assets $ 389,079 $ 475,557 Operating lease liability: Other current liabilities 137,596 125,579 Other long-term liabilities 300,152 405,018 Total operating lease liability $ 437,748 $ 530,597 Supplemental lease term and discount rate information related to leases was as follows: As of September 30, 2022 As of December 31, 2021 Weighted-average remaining lease terms - operating leases 2.9 years 3.7 years Weighted-average discount rate - operating leases 12.6 % 12.6 % Supplemental cash flow information related to leases was as follows: For the Three Months For the Nine Months Ended September 30, Ended September 30, 2022 2021 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 46,935 $ 45,942 $ 140,805 $ 137,826 Future minimum lease payments under non-cancelable leases as of September 30, 2022, were as follows: Lease Liability Maturity Analysis Operating Leases 2022 (remaining 3 months) 46,935 2023 189,374 2024 155,242 2025 81,107 2026 82,324 Thereafter — Total lease payments 554,982 Less: Imputed Interest (117,234) Total $ 437,748 Future minimum sublease income under non-cancelable leases as of September 30, 2022, were as follows: Sublease income Operating Leases 2022 (remaining 3 months) 21,000 2023 84,000 2024 56,000 Total $ 161,000 As of September 30, 2022, the Company had no operating leases that had not yet commenced. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Information | |
Segment Information | 15) Segment Information The Company manages its operations through two segments. The Company’s two segments, Prescription Medications and Medical Devices, focus on the treatment of male erectile dysfunction. The Prescription Medications segment consists primarily of operations related to Stendra®, which is sold generally in the United States, and H100™ for the treatment of Peyronie’s disease. The Medical Devices segment consists primarily of operations related to vacuum erection devices, which are sold domestically and internationally. The Company separately presents the costs associated with certain corporate functions as Corporate, primarily consisting of unallocated operating expenses including costs that were not specific to a particular segment but are general to the group, expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees and other similar corporate expenses. Interest and other income (expense), net is also not allocated to the operating segments. The Company’s results of operations by reportable segment for the nine months ended September 30, 2022 are summarized as follows: Prescription Medical For the Nine Months Ended September 30, 2022 Medications Devices Corporate Consolidated Net sales $ 2,716,311 $ 2,477,642 $ — $ 5,193,953 Cost of goods sold 525,073 883,013 — 1,408,086 Selling, general and administrative expenses 3,933,295 1,352,239 3,999,783 9,285,317 Gain on settlement of contingent liability (3,389,941) — — (3,389,941) Research and development expenses 1,428,848 133,670 — 1,562,518 Depreciation and amortization expense 3,808,991 873,619 — 4,682,610 Intangible asset impairment 7,460,000 — — 7,460,000 Change in fair value of derivative liability — — (460,000) (460,000) Interest expense — — 451,075 451,075 Income tax expense — (10,501) — (10,501) Net loss $ (11,049,955) $ (775,400) $ (3,990,858) $ (15,816,213) The Company’s results of operations by reportable segment for the nine months ended September 30, 2021 are summarized as follows: Prescription Medical For the Nine Months Ended September 30, 2021 Medications Devices Corporate Consolidated Net sales $ 6,227,753 $ 2,450,671 $ — $ 8,678,424 Cost of goods sold 607,582 748,256 — 1,355,838 Selling, general and administrative expenses 4,985,603 2,014,424 4,411,086 11,411,113 Gain on settlement of contingent liability — — — — Research and development expenses 799,803 — — 799,803 Depreciation and amortization expense 4,194,809 991,677 — 5,186,486 Change in fair value of derivative liability — — (9,640,000) (9,640,000) Interest expense — — 356,873 356,873 Income tax expense — (9,045) — (9,045) Net income (loss) $ (4,360,044) $ (1,312,731) $ 4,872,041 $ (800,734) The Company’s results of operations by reportable segment for the three months ended September 30, 2022 are summarized as follows: Prescription Medical For the Three Months Ended September 30, 2022 Medications Devices Corporate Consolidated Net sales $ (2,140,629) $ 682,897 $ — $ (1,457,732) Cost of goods sold 36,067 250,458 — 286,525 Selling, general and administrative expenses 493,128 467,701 1,210,147 2,170,975 Research and development expenses 678,552 57,364 — 735,916 Depreciation and amortization expense 1,269,664 291,206 — 1,560,870 Intangible asset impairment 7,460,000 — — 7,460,000 Interest expense — — 147,677 147,677 Income tax expense — (10,501) — (10,501) Net loss $ (12,078,040) $ (394,332) $ (1,357,824) $ (13,830,196) The Company’s results of operations by reportable segment for the three months ended September 30, 2021 are summarized as follows: Prescription Medical For the Three Months Ended September 30, 2021 Medications Devices Corporate Consolidated Net sales $ 1,377,291 $ 767,878 $ — $ 2,145,169 Cost of goods sold 45,254 273,904 — 319,158 Selling, general and administrative expenses 1,318,610 722,998 1,371,615 3,413,223 Research and development expenses 280,576 — — 280,576 Depreciation and amortization expense 1,398,270 330,559 — 1,728,829 Change in fair value of derivative liability — — (1,970,000) (1,970,000) Interest expense — — 67,936 67,936 Income tax expense — (2,345) — (2,345) Net income (loss) $ (1,665,419) $ (561,928) $ 530,449 $ (1,696,898) The following table reflects net sales by geographic region for the three and nine months ended September 30, 2022 and 2021: For the Three Months Ended For the Nine Months Ended September 30, September 30, Net Sales 2022 2021 2022 2021 United States $ (1,647,367) $ 1,861,222 $ 4,260,171 $ 7,754,534 International 189,635 283,947 933,782 923,890 $ (1,457,732) $ 2,145,169 $ 5,193,953 $ 8,678,424 No individual country other than the United States accounted for 10% of total sales for the three and nine months ended September 30, 2022 and 2021. The Company’s assets by reportable segment and reconciliation of segment assets to consolidated assets as of September 30, 2022, are summarized as follows: Prescription Medical Medications Devices Consolidated Intangible assets, net $ 7,810,080 $ 5,348,123 $ 13,158,203 Total segment assets $ 30,614,587 $ 7,081,856 $ 37,696,443 The Company’s assets by reportable segment and reconciliation of segment assets to consolidated assets as of December 31, 2021, are summarized as follows: Prescription Medical Medications Devices Consolidated Intangible assets, net $ 19,071,407 $ 6,221,742 $ 25,293,149 Total segment assets $ 59,657,514 $ 7,732,544 $ 67,390,058 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Use of Estimates | Use of Estimates The preparation of Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the Consolidated Financial Statements and reported amounts of revenue and expenses during the reporting periods. Such estimates include the adequacy of accounts receivable reserves, return reserves, inventory reserves, assessment of long-lived assets, including intangible asset impairment and the valuation of the derivative liability, among others. Actual results could differ from these estimates and changes in these estimates are recorded when known. |
Risks and Uncertainties | Risks and Uncertainties The Company is subject to risks common to companies in the pharmaceutical industry including, but not limited to, uncertainties related to commercialization of competitor products, regulatory approvals, dependence on key products, dependence on key customers and suppliers, and protection of intellectual property rights. The World Health Organization (“WHO”) declared the coronavirus (“COVID-19”) a global pandemic on March 11, 2020, and since that time many of the previously imposed restrictions and other measures which were instituted in response have been subsequently reduced or lifted. However, the COVID-19 pandemic remains highly unpredictable and dynamic, and its duration and extent continue to be dependent on various developments, such as the emergence of variants to the virus that may cause additional strains of COVID-19. Accordingly, the COVID-19 pandemic may continue to have negative effects on the health of the U.S. economy for the foreseeable future. The Company cannot reasonably estimate the length or severity of the impact that the COVID-19 pandemic, including the emergence of any new variants will have on its financial results, and the Company may experience a material adverse impact on its sales, results of operations, and cash flows in fiscal 2022 and beyond. During 2020, government regulations and the voluntary business practices of the Company and prescribing physicians had prevented in-person visits by sales representatives to physicians’ offices. The Company had taken steps to mitigate the negative impact on its businesses of such restrictions. In March 2020, the Company reduced our sales representative head count to reflect the lack of in-person visits. The Company has maintained a core sales team which continued to contact physicians via telephone and videoconference as well as continuing to have webinars provided by the Company’s key opinion leaders to other physicians and pharmacists. In response to the spread of COVID-19, in March 2020, the Company closed its administrative offices. In January 2022, the Company sub-leased its Manalapan office and all administrative employees are working remotely for the foreseeable future. The Company has fully resumed in-person interactions by its customer-facing personnel in compliance with any local and state restrictions. The Company also continues to engage with customers virtually as the Company seeks to continue to support healthcare professionals and patient care. Since the beginning of the COVID-19 pandemic, we have experienced a shift from in-person sales to online, telehealth-based sales. These online sales generally have lower gross margins than in-person sales, which has impacted our net revenues. |
Revenue Recognition | Revenue Recognition Prescription Medication Sales The Company’s prescription medication sales consist of sales of Stendra® in the U.S. for the treatment of male erectile dysfunction. Under Accounting Standards Codification (“ASC”) Topic 606, Revenue Recognition (“Topic 606”), the Company recognizes revenue from prescription medication sales when its performance obligations with a customer has been satisfied. In the contracts with its customers, the Company has identified a single performance obligation to provide Stendra® upon receipt of a customer order. The performance obligation is satisfied at a point in time when the Company’s customers obtain control of Stendra®, which is typically upon delivery. The Company invoices its customers after Stendra® has been delivered and invoice payments are generally due within 30 to 75 days of invoice date. In determining the transaction price, a significant financing component does not exist since the timing from when the Company delivers Stendra® to when the customers pay for the product is typically less than one year. The Company records prescription medication sales net of any variable consideration, including but not limited to discounts, rebates, returns, chargebacks, and distribution fees. The Company uses the expected value method when estimating its variable consideration, unless terms are specified within contracts. The identified variable consideration is recorded as a reduction of revenue at the time revenues from sales of Stendra® are recognized. The Company recognizes revenue to the extent that it is probable that a significant revenue reversal will not occur in a future period. These estimates may differ from actual consideration received. The Company evaluates these estimates each reporting period to reflect known changes. As of September 30, 2022 and December 31, 2021, the reserves for sales deductions were $4.1 million and $4.7 million, respectively. The most significant sales deductions included in this reserve relate to returns, contract rebates, and distribution service (“DSA”) fees. Our estimates are based on factors such as our direct and indirect customers’ buying patterns and the estimated resulting contractual deduction rates, historical experience, specific known market events and estimated future trends, current contractual and statutory requirements, industry data, estimated customer inventory levels, current contract sales terms with our direct and indirect customers, and other competitive factors. Significant judgment and estimation is required in developing the foregoing and other relevant assumptions. The most significant sales deductions are further described below. Product Returns Consistent with industry practice, the Company maintains a return policy that generally allows its customers to return Stendra® and receive credit for product within six months prior to expiration date and up to one year after expiration date. The provision for returns is based upon the Company’s estimates for future Stendra® returns and historical experience. The provision of returns is part of the variable consideration recorded at the time revenue is recognized. As of September 30, 2022 and December 31, 2021, the reserves for product returns were $3.5 million and $3.8 million, respectively, and are included as a component of accrued expenses. During the three months ended September 30, 2022, the Company revised and increased its estimate of reserves for product returns by $2.7 million. Higher than estimated wholesaler returns of Stendra® during the third quarter was primarily related to the return of short-dated product sold in prior periods above our initial estimates. Throughout each quarter, we regularly seek to obtain periodic retail demand information and current inventory levels from our significant wholesalers. As part of this process, certain wholesalers indicated an increased ability to sell short-dated product before expiration because prescription demand for Stendra was strong at that time. Citing the demand of wholesalers at that time, management expected the short-dated product would sell through to end customers. Because sell through was below that estimated by the wholesalers, the Company had to increase its current return exposure. Contract Rebates, Coupon Redemptions and DSA Fees The Company establishes contracts with wholesalers, chain stores, and indirect customers that provide for rebates, sales incentives, DSA fees and other allowances. Some customers receive rebates upon attaining established sales volumes. Direct rebates are generally rebates paid to direct purchasing customers based on a percentage applied to a direct customer’s purchases from us, including fees paid to wholesalers under our DSAs, as described below. Indirect rebates are rebates paid to indirect customers that have purchased our products from a wholesaler under a contract with us. The Company has entered into DSAs with certain of our significant wholesaler customers that obligate the wholesalers, in exchange for fees paid by us, to: (i) manage the variability of their purchases and inventory levels within specified limits based on product demand and (ii) provide us with specific services, including the provision of periodic retail demand information and current inventory levels for our pharmaceutical products held at their warehouse locations. See Note 3 Accounts Receivable, net for further discussion of these reserves. Medical Device Sales The Company’s medical device sales consist of domestic and international sales of men’s health products for the treatment of erectile dysfunction. The men’s health products do not require a prescription and include Vacuum Erection Devices, PreBoost, VenoSeal, penile injections (Rx), and urinary tract infection tests. Under Topic 606, the Company recognizes revenue from medical device sales when its performance obligations with its customers have been satisfied. In the contracts with its customers, the Company has identified a single performance obligation to provide medical devices upon receipt of a customer order. The performance obligation is satisfied at a point in time when the Company’s customers obtain control of the medical device, which is typically upon shipment. The Company invoices its customers after the medical devices have been shipped and invoice payments are generally due within 30 days of invoice date for domestic customers and 90 days for international customers. In determining the transaction price, a significant financing component Product Returns Consistent with industry practice, the Company maintains a return policy that generally allows its customers to return medical devices and receive credit for products within 90 days of the sale. The provision for returns is based upon the Company’s estimates for future product returns and historical experience. As of September 30, 2022 and December 31, 2021, the reserves for product returns for medical devices were not significant. Contract Costs In relation to customer contracts, the Company incurs costs to fulfill a contract but does not incur costs to obtain a contract. These costs to fulfill a contract do not meet the criteria for capitalization and are expensed as incurred. As such, the Company did not have any contract assets at September 30, 2022 and December 31, 2021. |
Intangible Assets | Intangible Assets The Company accounts for recognized intangible assets at cost. Intangible assets with finite useful lives are amortized over the useful life which the assets are expected to contribute directly or indirectly to future cash flows. Intangible assets are amortized using an accelerated method based on the pattern in which the economic benefits of the assets are consumed. The Company reviews the carrying value and useful lives of its intangible assets with definite lives whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable or the period over which they should be amortized has changed. When indicators of impairment exist, the Company determines whether the estimated undiscounted sum of the future cash flows of such assets is less than their carrying amounts. If less, an impairment loss is recognized in the amount, if any, by which the carrying amount of such assets exceeds their respective fair values. The Company evaluates the remaining useful life of each intangible asset that is being amortized during each reporting period to determine whether events and circumstances warrant a revision to the remaining period of amortization. If the estimate of the intangible asset’s remaining useful life has changed, the remaining carrying amount of the intangible asset is amortized prospectively over that revised remaining useful life. During the three months ended September 30, 2022, the Company noted that indicators of impairment existed and prepared an undiscounted cash flow analysis, which indicated, for the Stendra® product an impairment. The Company then prepared a discounted cash flow analysis resulting in an impairment of approximately $7.5 million. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Certain assets and liabilities are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market. Level 3 — Unobservable inputs which are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. Financial instruments recognized at historical amounts in the consolidated balance sheets consist of cash, accounts receivable, other current assets, accounts payable, accrued expenses, and other current liabilities. The Company believes that the carrying values of cash, accounts receivable, other current assets, accounts payable, accrued expenses, and other current liabilities approximate their fair values due to the short-term nature of these instruments. In connection with the Mergers in December 2020, each security holder of Metuchen received an earnout consideration classified as a derivative liability to be paid in the form of Petros Common Stock. The Company estimated their fair value using a Monte Carlo Simulation approach. This fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement within the fair value hierarchy. The fair value of the derivative liability as of September 30, 2022 and December 31, 2021 was $0 million and $0.5 million, respectively. See Note 9 Stockholders’ Equity. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based awards to employees and consultants in accordance with applicable accounting principles, which requires compensation expense related to stock-based transactions, including employee stock options and consultant warrants, to be measured and recognized in the financial statements based on a determination of the fair value of the stock options or warrants. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model. Employee stock option and consulting expenses are recognized over the employee’s or consultant’s requisite service period (generally the vesting period of the equity grant). The Company’s option pricing model requires the input of highly subjective assumptions, including the volatility and expected term. Any changes in these highly subjective assumptions can significantly impact stock-based compensation expense. See Note 10 Stock Options. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent that it believes that these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If the Company determines that it would be able to realize deferred tax assets in the future in excess of its net recorded amount, the Company would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which (1) it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits on the income tax expense line in the accompanying consolidated statement of operations. As of September 30, 2022 and December 31, 2021, no accrued interest or penalties are recorded in the consolidated balance sheet. |
Basic and Diluted Net Loss per Common Share | Basic and Diluted Net Loss per Common Share The Company computes basic net loss per common share by dividing net loss applicable to common stockholders by the weighted average number of shares of common stocks outstanding during the period, excluding the anti-dilutive effects of stock options and warrants to purchase common stocks. The Company computes diluted net loss per common stock by dividing the net loss applicable to common stocks by the sum of the weighted-average number of common stocks outstanding during the period plus the potential dilutive effects of its convertible preferred stocks, stock options and warrants to purchase common stocks, but such items are excluded if their effect is anti-dilutive. Because the impact of these items is anti-dilutive during periods of net loss, there was no difference between the Company’s basic and diluted net loss per stock of common stock for the three and nine months ended September 30, 2022 and 2021. See Note 13 Basic and Diluted Net Loss per Common Share. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Pending Adoption as of September 30, 2022 In June 2016, the Financial Accounting Standard Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Measurement of Credit Losses on Financial Instruments. ASU 2016-13, together with a series of subsequently issued related ASUs, has been codified in Topic 326. Topic 326 establishes new requirements for companies to estimate expected credit losses when measuring certain financial assets, including accounts receivables. The new guidance is effective for fiscal years beginning after December 15, 2022. The Company is currently evaluating the effect that the new guidance will have on its consolidated financial statements and related disclosures. |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accounts Receivable, net | |
Schedule of accounts receivable | September 30, December 31, 2022 2021 Gross accounts receivables $ 4,318,139 $ 3,363,827 Distribution service fees (211,521) (371,310) Chargebacks accrual (11,455) — Cash discount allowances (87,986) (159,446) Allowance for doubtful accounts (274,034) (377,685) Total accounts receivable, net $ 3,733,143 $ 2,455,386 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventories | |
Schedule of Inventories | September 30, 2022 December 31, 2021 Raw Materials $ 1,480,047 $ 359,741 Finished goods 673,984 159,908 Total inventory $ 2,154,031 $ 519,649 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Prepaid Expenses and Other Current Assets. | |
Schedule of Prepaid Expenses and Other Current Assets | September 30, 2022 December 31, 2021 Prepaid insurance 241,663 73,223 Prepaid FDA fees — 831,179 Prepaid coupon fees 71,500 71,500 API purchase commitment asset (see Note 13) 552,114 1,419,538 Due from wholesalers 104,059 609,059 Other prepaid expenses 591,861 605,422 Other current assets 141,587 110,167 Total prepaid expenses and other current assets $ 1,702,784 $ 3,720,088 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Intangible Assets | |
Schedule of intangible assets | Balance at December 31, 2020 $ 32,160,919 Amortization expense (6,867,770) Balance at December 31, 2021 25,293,149 Amortization expense (4,674,946) Intangible Impairment (7,460,000) Balance at September 30, 2022 $ 13,158,203 |
Schedule of future annual amortization related to the company's of intangible assets | 2022 (remaining 3 months) $ 913,720 2023 3,272,747 2024 2,800,622 2025 1,754,328 2026 1,442,186 Thereafter 2,974,600 Total $ 13,158,203 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accrued Expenses | |
Schedule of accrued expenses | September 30, 2022 December 31, 2021 Accrued price protection (see Note 13) $ — $ 1,853,979 Accrued product returns 3,463,597 6,192,845 Accrued contract rebates 278,670 379,242 Due to Vivus (see Note 13) — 2,267,523 Due to 3PL/Wholesalers 133,177 479,178 Accrued bonuses 532,797 527,563 Accrued professional fees 1,164 125,392 Other accrued expenses 73,072 131,662 Total accrued expenses $ 4,482,477 $ 11,957,384 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt | |
Schedule of future principal payments of the promissory note | 2022 (remaining 3 months) $ — 2023 1,274,741 2024 1,530,729 2025 2,720,940 2026 3,264,351 2027 872,074 Total $ 9,662,835 |
Stock Options and Restricted _2
Stock Options and Restricted Stock Units ("RSU's") (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Stock Options and Restricted Stock Units ("RSU's") | |
Schedule of stock options | Weighted-Average Weighted- Remaining Aggregate Intrinsic Number of Average Contractual Value Shares Exercise Price Term (Years) ($ in thousands) Options outstanding at December 31, 2020 574,331 $ 51.43 0.9 $ — Options granted 615,669 3.38 9.23 — Less: options forfeited — — — — Less: options expired/cancelled (574,331) 51.43 — — Less: options exercised — — — — Options outstanding at December 31, 2021 615,669 3.38 9.23 — Options granted 50,000 3.34 9.26 — Less: options forfeited (75,000) (3.21) — — Less: options expired/cancelled — — — — Less: options exercised — — — — Options outstanding at September 30, 2022 590,669 $ 3.40 8.55 $ — Options exercisable at September 30, 2022 475,502 $ 3.39 8.57 $ — Weighted-Average Weighted- Remaining Aggregate Intrinsic Number of Average Contractual Value Shares Exercise Price Term (Years) ($ in thousands) RSU’s outstanding at December 31, 2020 — — — — RSU’s granted 116,383 $ 3.29 9.84 — Less: RSU’s forfeited — — — — Less: RSU’s expired/cancelled — — — — Less: RSU’s exercised — — — — RSU’s outstanding at December 31, 2021 116,383 $ 3.29 9.84 — RSU’s granted 309,247 $ 1.19 9.52 — Less: RSU’s forfeited — — — — Less: RSU’s expired/cancelled — — — — Less: RSU’s exercised (23,301) $ (3.09) — — RSU’s outstanding at September 30, 2022 402,329 $ 1.69 9.45 — RSU’s exercisable at September 30, 2022 — — — — |
Common Stock Warrants (Tables)
Common Stock Warrants (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Common Stock Warrants | |
Schedule of warrants | Number of Shares Warrants outstanding at December 31, 2020 4,407,962 Warrants issued 7,853,558 Warrants exercised (2,014,586) Warrants expired (207,913) Warrants outstanding at December 31, 2021 and September 30, 2022 10,039,021 |
Schedule of warrants by expiration date | Number of Warrants Exercise Price Expiration Date 2,780 $ 1.60 August 23, 2023 22,800 35.65 June 1, 2024 74,864 21.85 June 17, 2024 20,043 31.25 June 19, 2024 22,800 26.55 September 1, 2024 10,500 12.738 September 16, 2024 22,800 4.30 December 1, 2024 28,000 5.65 March 2, 2025 28,000 7.30 June 1, 2025 28,000 5.50 September 1, 2025 28,000 4.705 December 1, 2025 2,221,829 7.50 December 1, 2025 908,498 17.50 December 1, 2025 623,303 51.25 December 1, 2025 157,832 125.00 December 1, 2025 1,751,311 1.715 October 19, 2026 2,337,719 3.50 December 2, 2026 1,749,942 3.50 December 27, 2026 10,039,021 |
Basic and Diluted Net Income _2
Basic and Diluted Net Income (Loss) per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Basic and Diluted Net Income (Loss) per Common Share | |
Summary of Computation of Basic and Diluted Net Loss per Share | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Numerator Net loss $ (13,830,196) $ (1,696,898) $ (15,816,213) $ (800,734) Denominator Weighted-average common shares for basic net income (loss) per share 20,692,321 9,826,599 20,687,284 9,794,267 Basic and diluted net income (loss) per common share $ (0.67) $ (0.17) $ (0.76) $ (0.08) |
Summary of Computation of Basic and Diluted Net Loss per Share | For the Three Months Ended For the Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Stock Options 590,669 1,213,301 590,669 1,213,301 Warrants 10,039,021 4,405,182 10,039,021 4,405,182 Total 10,629,690 5,618,483 10,629,690 5,618,483 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies | |
Summary of supplemental balance sheet information related to leases | As of September 30, 2022 As of December 31, 2021 Operating lease ROU asset: Other assets $ 389,079 $ 475,557 Operating lease liability: Other current liabilities 137,596 125,579 Other long-term liabilities 300,152 405,018 Total operating lease liability $ 437,748 $ 530,597 |
Summary of supplemental lease term and discount rate information related to leases | As of September 30, 2022 As of December 31, 2021 Weighted-average remaining lease terms - operating leases 2.9 years 3.7 years Weighted-average discount rate - operating leases 12.6 % 12.6 % |
Summary of supplemental cash flow information related to leases | For the Three Months For the Nine Months Ended September 30, Ended September 30, 2022 2021 2022 2021 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 46,935 $ 45,942 $ 140,805 $ 137,826 |
Summary of future minimum lease payments under non-cancelable leases | Future minimum lease payments under non-cancelable leases as of September 30, 2022, were as follows: Lease Liability Maturity Analysis Operating Leases 2022 (remaining 3 months) 46,935 2023 189,374 2024 155,242 2025 81,107 2026 82,324 Thereafter — Total lease payments 554,982 Less: Imputed Interest (117,234) Total $ 437,748 |
Schedule of future minimum sublease income under non-cancelable leases | Future minimum sublease income under non-cancelable leases as of September 30, 2022, were as follows: Sublease income Operating Leases 2022 (remaining 3 months) 21,000 2023 84,000 2024 56,000 Total $ 161,000 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Information | |
Summary of results of operations by reportable segment | The Company’s results of operations by reportable segment for the nine months ended September 30, 2022 are summarized as follows: Prescription Medical For the Nine Months Ended September 30, 2022 Medications Devices Corporate Consolidated Net sales $ 2,716,311 $ 2,477,642 $ — $ 5,193,953 Cost of goods sold 525,073 883,013 — 1,408,086 Selling, general and administrative expenses 3,933,295 1,352,239 3,999,783 9,285,317 Gain on settlement of contingent liability (3,389,941) — — (3,389,941) Research and development expenses 1,428,848 133,670 — 1,562,518 Depreciation and amortization expense 3,808,991 873,619 — 4,682,610 Intangible asset impairment 7,460,000 — — 7,460,000 Change in fair value of derivative liability — — (460,000) (460,000) Interest expense — — 451,075 451,075 Income tax expense — (10,501) — (10,501) Net loss $ (11,049,955) $ (775,400) $ (3,990,858) $ (15,816,213) The Company’s results of operations by reportable segment for the nine months ended September 30, 2021 are summarized as follows: Prescription Medical For the Nine Months Ended September 30, 2021 Medications Devices Corporate Consolidated Net sales $ 6,227,753 $ 2,450,671 $ — $ 8,678,424 Cost of goods sold 607,582 748,256 — 1,355,838 Selling, general and administrative expenses 4,985,603 2,014,424 4,411,086 11,411,113 Gain on settlement of contingent liability — — — — Research and development expenses 799,803 — — 799,803 Depreciation and amortization expense 4,194,809 991,677 — 5,186,486 Change in fair value of derivative liability — — (9,640,000) (9,640,000) Interest expense — — 356,873 356,873 Income tax expense — (9,045) — (9,045) Net income (loss) $ (4,360,044) $ (1,312,731) $ 4,872,041 $ (800,734) The Company’s results of operations by reportable segment for the three months ended September 30, 2022 are summarized as follows: Prescription Medical For the Three Months Ended September 30, 2022 Medications Devices Corporate Consolidated Net sales $ (2,140,629) $ 682,897 $ — $ (1,457,732) Cost of goods sold 36,067 250,458 — 286,525 Selling, general and administrative expenses 493,128 467,701 1,210,147 2,170,975 Research and development expenses 678,552 57,364 — 735,916 Depreciation and amortization expense 1,269,664 291,206 — 1,560,870 Intangible asset impairment 7,460,000 — — 7,460,000 Interest expense — — 147,677 147,677 Income tax expense — (10,501) — (10,501) Net loss $ (12,078,040) $ (394,332) $ (1,357,824) $ (13,830,196) The Company’s results of operations by reportable segment for the three months ended September 30, 2021 are summarized as follows: Prescription Medical For the Three Months Ended September 30, 2021 Medications Devices Corporate Consolidated Net sales $ 1,377,291 $ 767,878 $ — $ 2,145,169 Cost of goods sold 45,254 273,904 — 319,158 Selling, general and administrative expenses 1,318,610 722,998 1,371,615 3,413,223 Research and development expenses 280,576 — — 280,576 Depreciation and amortization expense 1,398,270 330,559 — 1,728,829 Change in fair value of derivative liability — — (1,970,000) (1,970,000) Interest expense — — 67,936 67,936 Income tax expense — (2,345) — (2,345) Net income (loss) $ (1,665,419) $ (561,928) $ 530,449 $ (1,696,898) |
Summary of net sales by geographic region | For the Three Months Ended For the Nine Months Ended September 30, September 30, Net Sales 2022 2021 2022 2021 United States $ (1,647,367) $ 1,861,222 $ 4,260,171 $ 7,754,534 International 189,635 283,947 933,782 923,890 $ (1,457,732) $ 2,145,169 $ 5,193,953 $ 8,678,424 |
Summary of assets by reportable segment and reconciliation of segment assets to consolidated assets | The Company’s assets by reportable segment and reconciliation of segment assets to consolidated assets as of September 30, 2022, are summarized as follows: Prescription Medical Medications Devices Consolidated Intangible assets, net $ 7,810,080 $ 5,348,123 $ 13,158,203 Total segment assets $ 30,614,587 $ 7,081,856 $ 37,696,443 The Company’s assets by reportable segment and reconciliation of segment assets to consolidated assets as of December 31, 2021, are summarized as follows: Prescription Medical Medications Devices Consolidated Intangible assets, net $ 19,071,407 $ 6,221,742 $ 25,293,149 Total segment assets $ 59,657,514 $ 7,732,544 $ 67,390,058 |
Nature of Operations, Basis o_2
Nature of Operations, Basis of Presentation, and Liquidity (Details) | Dec. 07, 2020 USD ($) |
Nature of Operations, Basis of Presentation, and Liquidity | |
Cash in excess of certain limit, subject to adjustment as provided in the Merger Agreement | $ 20,000,000 |
Nature of Operations, Basis o_3
Nature of Operations, Basis of Presentation, and Liquidity - Additional information (Details) - USD ($) | 1 Months Ended | 9 Months Ended | ||
Jan. 31, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Nature of Operations, Basis of Presentation, and Liquidity | ||||
Cash | $ 11,200,000 | |||
Working capital | 10,800,000 | |||
Accumulated deficit | (86,505,033) | $ (70,688,820) | ||
Cash in operations | $ (11,226,985) | $ (3,557,732) | ||
Number of shares issued | $ 10,201,758 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |||
Reserves for product returns | $ 3.5 | $ 3.5 | $ 3.8 |
Increase in estimates of reserve | 2.7 | ||
Revenue practical expedient, financing component | true | ||
Prescription Medications | |||
Summary of Significant Accounting Policies | |||
Reserves for sales deductions | $ 4.1 | $ 4.1 | $ 4.7 |
Medical Devices | |||
Summary of Significant Accounting Policies | |||
Right to return and receive credit for product | 90 days | ||
Minimum | Prescription Medications | |||
Summary of Significant Accounting Policies | |||
Due period for invoice payments | 30 days | ||
Right to return and receive credit for product | 6 months | ||
Minimum | Medical Devices | Domestic customers | |||
Summary of Significant Accounting Policies | |||
Due period for invoice payments | 30 days | ||
Maximum | Prescription Medications | |||
Summary of Significant Accounting Policies | |||
Due period for invoice payments | 75 days | ||
Right to return and receive credit for product | 1 year | ||
Maximum | Medical Devices | International customers | |||
Summary of Significant Accounting Policies | |||
Due period for invoice payments | 90 days |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value of Financial Instruments | |||
Fair value of the derivative liability | $ 0 | $ 0 | $ 500,000 |
Income Taxes | |||
Accrued interest or penalties | 0 | 0 | $ 0 |
Impairment charge of approximate | $ 7,460,000 | $ 7,460,000 |
Accounts Receivable, net (Detai
Accounts Receivable, net (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Accounts Receivable, net | ||
Gross accounts receivables | $ 4,318,139 | $ 3,363,827 |
Distribution service fees | (211,521) | (371,310) |
Chargebacks accrual | (11,455) | |
Cash discount allowances | (87,986) | (159,446) |
Allowance for doubtful accounts | (274,034) | (377,685) |
Total accounts receivable, net | $ 3,733,143 | $ 2,455,386 |
Accounts Receivable, net - Addi
Accounts Receivable, net - Additional information (Details) - customer | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Gross billings from customers | Customer concentration risk | |||
Accounts Receivable, net | |||
Number of customers | 4 | 4 | |
Gross billings from customers | Customer concentration risk | One customers | |||
Accounts Receivable, net | |||
Concentration risk percentage | 27% | 78% | |
Gross billings from customers | Customer concentration risk | Two customers | |||
Accounts Receivable, net | |||
Concentration risk percentage | 22% | ||
Gross billings from customers | Customer concentration risk | Three customers | |||
Accounts Receivable, net | |||
Concentration risk percentage | 18% | ||
Gross billings from customers | Customer concentration risk | Four customers | |||
Accounts Receivable, net | |||
Concentration risk percentage | 15% | ||
Account receivables | Credit concentration risk | |||
Accounts Receivable, net | |||
Number of customers | 3 | 2 | |
Account receivables | Credit concentration risk | One customers | |||
Accounts Receivable, net | |||
Concentration risk percentage | 32% | 40% | |
Account receivables | Credit concentration risk | Two customers | |||
Accounts Receivable, net | |||
Concentration risk percentage | 31% | 19% | |
Account receivables | Credit concentration risk | Three customers | |||
Accounts Receivable, net | |||
Concentration risk percentage | 11% | 15% |
Inventories (Details)
Inventories (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Inventories | ||
Raw Materials | $ 1,480,047 | $ 359,741 |
Finished goods | 673,984 | 159,908 |
Total inventory | $ 2,154,031 | $ 519,649 |
Inventories - Additional Inform
Inventories - Additional Information (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Inventories | ||
Finished goods are net of valuation reserves | $ 368,610 | $ 383,298 |
Raw materials are net of valuation reserves | $ 2,872,977 | $ 2,872,977 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Prepaid Expenses and Other Current Assets. | ||
Prepaid insurance | $ 241,663 | $ 73,223 |
Prepaid FDA fees | 831,179 | |
Prepaid coupon fees | 71,500 | 71,500 |
API purchase commitment asset | 552,114 | 1,419,538 |
Due from wholesalers | 104,059 | 609,059 |
Other prepaid expenses | 591,861 | 605,422 |
Other current assets | 141,587 | 110,167 |
Total prepaid expenses and other current assets | $ 1,702,784 | $ 3,720,088 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Finite-lived Intangible Assets [Roll Forward] | |||
Balance | $ 25,293,149 | $ 32,160,919 | |
Amortization expense | (4,674,946) | (6,867,770) | |
Intangible Impairment | $ (7,460,000) | (7,460,000) | |
Balance | $ 13,158,203 | $ 13,158,203 | $ 25,293,149 |
Intangible Assets - Future annu
Intangible Assets - Future annual amortization (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Intangible Assets | |||
2022 (remaining 3 months) | $ 913,720 | ||
2023 | 3,272,747 | ||
2024 | 2,800,622 | ||
2025 | 1,754,328 | ||
2026 | 1,442,186 | ||
Thereafter | 2,974,600 | ||
Total | $ 13,158,203 | $ 25,293,149 | $ 32,160,919 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Intangible Assets | ||||
Carrying value of intangible assets | $ 13,158,203 | $ 13,158,203 | $ 25,293,149 | $ 32,160,919 |
Impairment charge of approximate | 7,460,000 | $ 7,460,000 | ||
Stendra product | ||||
Intangible Assets | ||||
Estimated useful lives of intangible assets | 10 years | |||
Carrying value of intangible assets | 7,800,000 | $ 7,800,000 | 19,100,000 | |
Timm Medical product | ||||
Intangible Assets | ||||
Estimated useful lives of intangible assets | 12 years | |||
Carrying value of intangible assets | 4,200,000 | $ 4,200,000 | 4,900,000 | |
PTV product | ||||
Intangible Assets | ||||
Estimated useful lives of intangible assets | 12 years | |||
Carrying value of intangible assets | $ 1,200,000 | $ 1,200,000 | $ 1,400,000 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Accrued Expenses | ||
Accrued price protection | $ 1,853,979 | |
Accrued product returns | $ 3,463,597 | 6,192,845 |
Accrued contract rebates | 278,670 | 379,242 |
Due to Vivus | 2,267,523 | |
Due to 3PL/Wholesalers | 133,177 | 479,178 |
Accrued bonuses | 532,797 | 527,563 |
Accrued professional fees | 1,164 | 125,392 |
Other accrued expenses | 73,072 | 131,662 |
Total accrued expenses | $ 4,482,477 | $ 11,957,384 |
Debt - Promissory Note (Details
Debt - Promissory Note (Details) - Note | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Debt Instrument | |
Principal amount of notes payable | $ 10,201,758 |
Interest rate (in percent) | 6% |
Interest rate at the time of default (in percent) | 9% |
Debt - Future minimum principal
Debt - Future minimum principal payments (Details) | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Debt Instrument | |
Payment Amount | $ 9,662,835 |
2023 | |
Debt Instrument | |
Payment Amount | 1,274,741 |
2024 | |
Debt Instrument | |
Payment Amount | 1,530,729 |
2025 | |
Debt Instrument | |
Payment Amount | 2,720,940 |
2026 | |
Debt Instrument | |
Payment Amount | 3,264,351 |
2027 | |
Debt Instrument | |
Payment Amount | $ 872,074 |
Debt - Financial covenant (Deta
Debt - Financial covenant (Details) - Senior debt - USD ($) | Feb. 01, 2021 | Oct. 01, 2020 | Apr. 13, 2020 | Mar. 31, 2020 | Nov. 22, 2017 | Sep. 30, 2016 |
Debt Instrument | ||||||
Stated interest rate | 11.50% | 10.75% | 10.75% | |||
Spread on variable rate | 4.25% | 4.50% | ||||
End of term fee paid | $ 534,375 | $ 534,375 | ||||
End of term charge | $ 1,068,750 | $ 787,500 |
Debt - Senior debt (Details)
Debt - Senior debt (Details) - Senior debt | Nov. 22, 2017 USD ($) | Sep. 30, 2016 USD ($) | Apr. 13, 2020 | Mar. 31, 2020 |
Debt Instrument | ||||
Face amount of debt | $ 1,068,750 | $ 35,000,000 | ||
Stated interest rate | 10.75% | 11.50% | 10.75% | |
Paid-In-Kind ("PIK") interest rate | 1.35% | |||
End of term charge | 1,068,750 | $ 787,500 | ||
Amount of principal prepaid | $ 10,000,000 | |||
Prime rate | ||||
Debt Instrument | ||||
Stated interest rate | 7.25% | |||
Minimum | ||||
Debt Instrument | ||||
Fixed charge coverage ratio | 0.9 | |||
Maximum | ||||
Debt Instrument | ||||
Fixed charge coverage ratio | 1 |
Debt - Interest Expenses (Detai
Debt - Interest Expenses (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Debt | ||
Interest expense, senior debt | $ 67,936 | $ 356,873 |
Debt - Third Amendment (Details
Debt - Third Amendment (Details) - USD ($) | Nov. 03, 2021 | Sep. 30, 2020 |
Debt Instrument | ||
Repayment of senior debt | $ 1,179,651 | |
Senior debt | ||
Debt Instrument | ||
Required cash proceeds through an equity or debt financing or other transaction | $ 25,000,000 | |
Escrow fund | $ 1,500,000 |
Stockholders' Equity - Number o
Stockholders' Equity - Number of shares held (Details) | Jan. 26, 2021 shares |
Common Stock | |
Class of Stock | |
Number of common stock issued upon conversion | 60,606 |
Preferred Stock | |
Class of Stock | |
Number of preferred stock converted | 500 |
Stockholders' Equity - Marketin
Stockholders' Equity - Marketing and Consulting Agreement (Details) - USD ($) | Apr. 07, 2022 | Jun. 04, 2021 | Apr. 01, 2021 | Jan. 01, 2021 |
Marketing and Consulting Agreement | CorProminence, LLC | ||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||
Term of agreement | 1 year | |||
Renewal term of agreement | 1 year | |||
Monthly retainer amount | $ 7,500 | |||
Number of restricted shares issued | 30,000 | |||
Consulting and Advisory Agreement | Tania King | ||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||
Monthly retainer amount | $ 4,000 | |||
Additional payment included with the first monthly fee | 12,000 | |||
Restricted share cash value | $ 72,000 | |||
Vesting period | 1 year | |||
Issued additional grants | 60,505 | |||
Amount of additional grant | $ 72,001 | |||
Service Agreement | ||||
Collaborative Arrangement and Arrangement Other than Collaborative | ||||
Term of agreement | 1 year | |||
Renewal term of agreement | 1 year | |||
Monthly retainer amount | $ 6,750 | |||
Number of restricted shares issued | 28,338 | |||
Restricted share cash value | $ 90,002 |
Stockholders' Equity - Continge
Stockholders' Equity - Contingent Consideration (Details) | 9 Months Ended |
Sep. 30, 2022 shares | |
Stockholders' Equity | |
Common Stock potentially issuable upon the achievement of certain milestones | 14,232,090 |
Milestones term for achievement of stock price and market capitalization | 2 years |
Stockholders' Equity - Market C
Stockholders' Equity - Market Capitalization (Details) | 9 Months Ended | |
Sep. 30, 2022 USD ($) D $ / shares shares | Dec. 31, 2021 USD ($) | |
Collaborative Arrangement and Arrangement Other than Collaborative | ||
Fair value of the derivative liability | $ 0 | $ 500,000 |
Market Capitalization/Gross Proceeds Earnout Payments | Metuchen | ||
Collaborative Arrangement and Arrangement Other than Collaborative | ||
Fair value of the derivative liability | $ 0 | $ 500,000 |
Market Capitalization/Gross Proceeds Earnout Payments | Maximum | Metuchen | ||
Collaborative Arrangement and Arrangement Other than Collaborative | ||
Milestone earnout payments (in shares) | shares | 10,232,090 | |
Market Capitalization/Gross Proceeds Earnout Payments | Market Capitalization is greater than or equal to $250,000,000 | Metuchen | ||
Collaborative Arrangement and Arrangement Other than Collaborative | ||
Milestone earnout payments (in shares) | shares | 2,000,000 | |
Market Capitalization | $ 250,000,000 | |
Number of trading days for stock price trigger | D | 20 | |
Number of consecutive trading days for stock price trigger | D | 30 | |
Stock price | $ / shares | $ 17.50 | |
Aggregate gross proceeds | $ 25,000,000 | |
Term to receive gross proceeds | 60 days | |
Market Capitalization/Gross Proceeds Earnout Payments | Market Capitalization is greater than or equal to $300,000,000 | Metuchen | ||
Collaborative Arrangement and Arrangement Other than Collaborative | ||
Milestone earnout payments (in shares) | shares | 2,000,000 | |
Market Capitalization | $ 300,000,000 | |
Number of trading days for stock price trigger | D | 20 | |
Number of consecutive trading days for stock price trigger | D | 30 | |
Stock price | $ / shares | $ 18.75 | |
Aggregate gross proceeds | $ 30,000,000 | |
Term to receive gross proceeds | 60 days | |
Market Capitalization/Gross Proceeds Earnout Payments | Market Capitalization is greater than or equal to $400,000,000 | Metuchen | ||
Collaborative Arrangement and Arrangement Other than Collaborative | ||
Milestone earnout payments (in shares) | shares | 3,000,000 | |
Market Capitalization | $ 400,000,000 | |
Number of trading days for stock price trigger | D | 20 | |
Number of consecutive trading days for stock price trigger | D | 30 | |
Stock price | $ / shares | $ 22.50 | |
Aggregate gross proceeds | $ 40,000,000 | |
Term to receive gross proceeds | 60 days | |
Market Capitalization/Gross Proceeds Earnout Payments | Market Capitalization is greater than or equal to $500,000,000 | Metuchen | ||
Collaborative Arrangement and Arrangement Other than Collaborative | ||
Milestone earnout payments (in shares) | shares | 3,232,090 | |
Market Capitalization | $ 500,000,000 | |
Number of trading days for stock price trigger | D | 20 | |
Number of consecutive trading days for stock price trigger | D | 30 | |
Stock price | $ / shares | $ 23.75 | |
Aggregate gross proceeds | $ 50,000,000 | |
Term to receive gross proceeds | 60 days |
Stock Options and Restricted _3
Stock Options and Restricted Stock Units ("RSU's") (Details) - shares | Dec. 22, 2021 | Sep. 30, 2022 |
Stock Options and Restricted Stock Units ("RSU's") | ||
Number of shares authorized | 2,600,000 | |
Number of shares available for issuance | 2,600,000 | 1,583,701 |
Number of shares increased for issuance | 1,521,654 |
Stock Options and Restricted _4
Stock Options and Restricted Stock Units ("RSU's") - Summary of stock options (Details) - $ / shares | 9 Months Ended | 12 Months Ended | |||
Apr. 07, 2022 | Jan. 04, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Number of Shares | |||||
Options outstanding and exercisable on beginning | 615,669 | 574,331 | |||
Options granted | 50,000 | 50,000 | 615,669 | ||
Less: options and RSU's forfeited | (75,000) | ||||
Less: options and RSU's expired/cancelled | (574,331) | ||||
Less: options and RSU's exercised | (23,301) | ||||
Options and RSU's outstanding at the end | 590,669 | 615,669 | 574,331 | ||
Options and RSU's exercisable at the end | 475,502 | ||||
Weighted-Average Exercise Price | |||||
Options outstanding and exercisable at the beginning (in dollars per share) | $ 3.38 | $ 51.43 | |||
Options granted (in dollars per share) | $ 3.34 | 3.34 | 3.38 | ||
Less: options forfeited (in dollars per share) | (3.21) | ||||
Less: options expired/cancelled (in dollars per share) | 51.43 | ||||
Less: options exercised (in dollars per share) | (3.09) | ||||
Options outstanding at the end (in dollars per share) | 3.40 | $ 3.38 | $ 51.43 | ||
Options exercisable at the end (in dollars per share) | $ 3.39 | ||||
Weighted-Average Remaining Contractual Term (Years) and Aggregate Intrinsic Value | |||||
Options outstanding and exercisable at the beginning (in years) | 8 years 6 months 18 days | 9 years 2 months 23 days | 10 months 24 days | ||
Options granted (in years) | 9 years 3 months 3 days | 9 years 2 months 23 days | |||
Options outstanding at the end (in years) | 8 years 6 months 18 days | 9 years 2 months 23 days | 10 months 24 days | ||
Options exercisable at the end (in years) | 8 years 6 months 25 days | ||||
Restricted Stock Units | |||||
Number of Shares | |||||
Options outstanding and exercisable on beginning | 116,383 | 0 | |||
Options granted | 248,742 | 309,247 | 116,383 | ||
Options and RSU's outstanding at the end | 402,329 | 116,383 | 0 | ||
Weighted-Average Exercise Price | |||||
Options outstanding and exercisable at the beginning (in dollars per share) | $ 3.29 | $ 0 | |||
Options granted (in dollars per share) | $ 1.19 | 1.19 | 3.29 | ||
Options outstanding at the end (in dollars per share) | $ 1.69 | $ 3.29 | $ 0 | ||
Weighted-Average Remaining Contractual Term (Years) and Aggregate Intrinsic Value | |||||
Options outstanding and exercisable at the beginning (in years) | 9 years 5 months 12 days | 9 years 10 months 2 days | 0 years | ||
Options granted (in years) | 9 years 6 months 7 days | 9 years 10 months 2 days | |||
Options outstanding at the end (in years) | 9 years 5 months 12 days | 9 years 10 months 2 days | 0 years |
Stock Options and Restricted _5
Stock Options and Restricted Stock Units ("RSU's") - Additional Information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Apr. 07, 2022 director $ / shares shares | Jan. 04, 2022 $ / shares shares | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) $ / shares shares | Sep. 30, 2021 USD ($) | Dec. 31, 2021 $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Number of options granted | shares | 50,000 | 50,000 | 615,669 | ||||
Exercise price | $ / shares | $ 3.34 | $ 3.34 | $ 3.38 | ||||
Vesting percentage | 100% | ||||||
Stock-based compensation expense | $ | $ 308,138 | $ 53,167 | $ 966,231 | $ 1,178,678 | |||
Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Number of directors to whom option is granted | director | 4 | ||||||
Number of options granted | shares | 248,742 | 309,247 | 116,383 | ||||
Exercise price | $ / shares | $ 1.19 | $ 1.19 | $ 3.29 | ||||
Vesting percentage | 100% | ||||||
Vesting period | 1 year | ||||||
Tania King | Restricted Stock Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award | |||||||
Number of options granted | shares | 60,505 | ||||||
Exercise price | $ / shares | $ 1.19 | ||||||
Vesting percentage | 100% | ||||||
Vesting period | 1 year |
Common Stock Warrants - Summary
Common Stock Warrants - Summary of warrants (Details) | 21 Months Ended |
Sep. 30, 2022 shares | |
Common Stock Warrants | |
Warrants outstanding at the beginning | 4,407,962 |
Warrants issued | 7,853,558 |
Warrants exercised | (2,014,586) |
Warrants expired | (207,913) |
Warrants outstanding at the end | 10,039,021 |
Common Stock Warrants - Company
Common Stock Warrants - Company's warrants by expiration date (Details) - $ / shares | Sep. 30, 2022 | Dec. 31, 2020 |
Class of Warrant or Right | ||
Number of Warrants | 10,039,021 | 4,407,962 |
Expiration Date of August 23, 2023 | ||
Class of Warrant or Right | ||
Number of Warrants | 2,780 | |
Exercise Price | $ 1.60 | |
Expiration Date of June 1, 2024 | ||
Class of Warrant or Right | ||
Number of Warrants | 22,800 | |
Exercise Price | $ 35.65 | |
Expiration Date of June 17, 2024 | ||
Class of Warrant or Right | ||
Number of Warrants | 74,864 | |
Exercise Price | $ 21.85 | |
Expiration Date of June 19, 2024 | ||
Class of Warrant or Right | ||
Number of Warrants | 20,043 | |
Exercise Price | $ 31.25 | |
Expiration Date of September 1, 2024 | ||
Class of Warrant or Right | ||
Number of Warrants | 22,800 | |
Exercise Price | $ 26.55 | |
Expiration Date of September 16, 2024 | ||
Class of Warrant or Right | ||
Number of Warrants | 10,500 | |
Exercise Price | $ 12.738 | |
Expiration Date of December 1, 2024 | ||
Class of Warrant or Right | ||
Number of Warrants | 22,800 | |
Exercise Price | $ 4.30 | |
Expiration Date of March 2, 2025 | ||
Class of Warrant or Right | ||
Number of Warrants | 28,000 | |
Exercise Price | $ 5.65 | |
Expiration Date of June 1, 2025 | ||
Class of Warrant or Right | ||
Number of Warrants | 28,000 | |
Exercise Price | $ 7.30 | |
Expiration Date of September 1, 2025 | ||
Class of Warrant or Right | ||
Number of Warrants | 28,000 | |
Exercise Price | $ 5.50 | |
Expiration Date of December 1, 2025, One | ||
Class of Warrant or Right | ||
Number of Warrants | 28,000 | |
Exercise Price | $ 4.705 | |
Expiration Date of December 1, 2025, Two | ||
Class of Warrant or Right | ||
Number of Warrants | 2,221,829 | |
Exercise Price | $ 7.50 | |
Expiration Date of December 1, 2025, Three | ||
Class of Warrant or Right | ||
Number of Warrants | 908,498 | |
Exercise Price | $ 17.50 | |
Expiration Date of December 1, 2025, Four | ||
Class of Warrant or Right | ||
Number of Warrants | 623,303 | |
Exercise Price | $ 51.25 | |
Expiration Date of December 1, 2025, Five | ||
Class of Warrant or Right | ||
Number of Warrants | 157,832 | |
Exercise Price | $ 125 | |
Expiration Date Of October 19 2026 | ||
Class of Warrant or Right | ||
Number of Warrants | 1,751,311 | |
Exercise Price | $ 1.715 | |
Expiration Date of December 2, 2026 | ||
Class of Warrant or Right | ||
Number of Warrants | 2,337,719 | |
Exercise Price | $ 3.50 | |
Expiration Date of December 27, 2026 | ||
Class of Warrant or Right | ||
Number of Warrants | 1,749,942 | |
Exercise Price | $ 3.50 |
Basic and Diluted Net Income _3
Basic and Diluted Net Income (Loss) per Common Share - Summary of Computation of Basic and Diluted Net Loss per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator | ||||
Net loss | $ (13,830,196) | $ (1,696,898) | $ (15,816,213) | $ (800,734) |
Weighted average common shares outstanding | ||||
Weighted-average common shares for basic net income ( loss) per unit | 20,692,321 | 9,826,599 | 20,687,284 | 9,794,267 |
Weighted-average common shares for diluted net income ( loss) per unit | 20,692,321 | 9,826,599 | 20,687,284 | 9,794,267 |
Basic net income (loss) per common share | $ (0.67) | $ (0.17) | $ (0.76) | $ (0.08) |
Diluted net income (loss) per common share | $ (0.67) | $ (0.17) | $ (0.76) | $ (0.08) |
Basic and Diluted Net Income _4
Basic and Diluted Net Income (Loss) per Common Share - Summary of Potentially Dilutive Securities Convertible Into Common Shares Excluded from Calculation of Net Loss Per Share (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 10,629,690 | 5,618,483 | 10,629,690 | 5,618,483 |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 590,669 | 1,213,301 | 590,669 | 1,213,301 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total | 10,039,021 | 4,405,182 | 10,039,021 | 4,405,182 |
Marketing, Licensing and Dist_2
Marketing, Licensing and Distribution Agreements - Vivus (Details) | 9 Months Ended | ||||
Sep. 30, 2016 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jan. 18, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Marketing, Licensing and Distribution Agreements | |||||
Noncash decrease in accrued expenses related to Vivus settlement | $ (6,520,283) | ||||
Noncash decrease in API purchase commitment | 6,232,489 | ||||
Noncash decrease in accrued inventory purchases related to Vivus Settlement | (14,203,905) | ||||
Gain on settlement with Vivus | 3,389,941 | ||||
API purchase commitment asset | 552,114 | $ 1,419,538 | |||
License Agreement | Royalty on the first $500 million of net sales | |||||
Marketing, Licensing and Distribution Agreements | |||||
Threshold net sales | 500,000,000 | ||||
License Agreement | Milestone payment to be paid once $250 million in sales has been reached | |||||
Marketing, Licensing and Distribution Agreements | |||||
Threshold net sales | 250,000,000 | ||||
Milestone payment | 6,000,000 | ||||
License Agreement | Milestone payment to be paid after $250 million in sales has been reached | |||||
Marketing, Licensing and Distribution Agreements | |||||
Threshold net sales | 250,000,000 | ||||
Milestone payment | $ 3,200,000 | ||||
License Agreement | Vivus, Inc | |||||
Marketing, Licensing and Distribution Agreements | |||||
One-time fee to purchase and receive the license for the commercialization and exploitation of Stendra | $ 70,000,000 | ||||
License Agreement | Vivus, Inc | Royalty during the first, second, and third years following the expiration of the Royalty Period | |||||
Marketing, Licensing and Distribution Agreements | |||||
Royalty percentage | 2% | ||||
License Agreement | Vivus, Inc | Royalty following the fourth and fifth years following the end of the Royalty Period | |||||
Marketing, Licensing and Distribution Agreements | |||||
Royalty percentage | 1% | ||||
License Agreement | MTPC | |||||
Marketing, Licensing and Distribution Agreements | |||||
Royalty incurred | $ 135,816 | $ 302,346 | |||
Royalty receivable | $ 107,031 | 81,136 | |||
License Agreement | MTPC | Royalty on the first $500 million of net sales | |||||
Marketing, Licensing and Distribution Agreements | |||||
Royalty percentage | 5% | ||||
License Agreement | MTPC | Royalty on net sales after $500 million | |||||
Marketing, Licensing and Distribution Agreements | |||||
Royalty percentage | 6% | ||||
Settlement Agreement | Vivus, Inc | |||||
Marketing, Licensing and Distribution Agreements | |||||
Inventory amount retained - API | $ 7,300,000 | ||||
Prepayment amount | 900,000 | ||||
Noncash decrease in accrued expenses related to Vivus settlement | $ 6,500,000 | ||||
Noncash decrease in API purchase commitment | 6,200,000 | ||||
Noncash decrease in accrued inventory purchases related to Vivus Settlement | 14,200,000 | ||||
Payment made for purchase order | $ 1,542,904 | ||||
Percentage of stendra tablets released | 50 | ||||
Gain on settlement with Vivus | 3,400,000 | ||||
Accrued inventory purchases | 0 | 14,200,000 | |||
Raw materials inventory | 200,000 | ||||
Settlement Agreement | Vivus, Inc | Other Current Assets | |||||
Marketing, Licensing and Distribution Agreements | |||||
API purchase commitment asset | 600,000 | 1,400,000 | |||
Settlement Agreement | Vivus, Inc | Other Noncurrent Assets | |||||
Marketing, Licensing and Distribution Agreements | |||||
Accrued inventory purchases, other assets | 5,300,000 | $ 11,000,000 | |||
Settlement Agreement | Vivus, Inc | Promissory Note | |||||
Marketing, Licensing and Distribution Agreements | |||||
Prepayment amount | $ 900,000 | ||||
Principal amount of notes payable | $ 10,200,000 | $ 10,201,758 |
Marketing, Licensing and Dist_3
Marketing, Licensing and Distribution Agreements - Hybrid (Details) - Hybrid - USD ($) | 1 Months Ended | |||||||||
Mar. 24, 2022 | Dec. 23, 2021 | Dec. 01, 2021 | Oct. 31, 2021 | Oct. 01, 2021 | Mar. 31, 2021 | Sep. 24, 2020 | Dec. 31, 2020 | Oct. 31, 2020 | Mar. 31, 2020 | |
Exclusive license to H100 | ||||||||||
Marketing, Licensing and Distribution Agreements | ||||||||||
Initial license fee | $ 100,000 | |||||||||
Additional payment due upon obtainment of orphan indication for H100 | 900,000 | |||||||||
Annual payments due on first anniversary of the license agreement | 125,000 | |||||||||
Annual payments due on second anniversary of the license agreement | 150,000 | |||||||||
Annual payments due on third anniversary of the license agreement | 200,000 | |||||||||
Annual payments due after third anniversary of the license agreement | 250,000 | |||||||||
Payments upon first commercial sale and a sliding scale of percentage payments on net sales | $ 1,000,000 | |||||||||
Threshold period of notice required to terminate agreement at any time after first anniversary | 90 days | |||||||||
Extension term of license agreement | 6 months | 6 months | ||||||||
Extension payment of license agreement | $ 100,000 | $ 50,000 | ||||||||
One-time, non-creditable and non-refundable payment | $ 200,000 | |||||||||
Threshold period for payments of one-time, non-creditable and non-refundable payment | 7 days | |||||||||
Exclusive license to H100 | Minimum | ||||||||||
Marketing, Licensing and Distribution Agreements | ||||||||||
Royalty percentage | 3% | |||||||||
Exclusive license to H100 | Maximum | ||||||||||
Marketing, Licensing and Distribution Agreements | ||||||||||
Royalty percentage | 6% | |||||||||
Amended license agreement of H100 | ||||||||||
Marketing, Licensing and Distribution Agreements | ||||||||||
Payment of License Fees | $ 150,000 | $ 200,000 | $ 200,000 | $ 200,000 | $ 150,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - Separation Agreement - Mr. Keith Lavan - USD ($) | Jun. 30, 2021 | Jan. 15, 2021 | Dec. 31, 2020 |
Commitments And Contingencies [Line Items] | |||
Stay-on bonus | $ 50,000 | ||
Percentage of base salary to be paid as an advisor | 50% | ||
Percentage of fees as an advisor paid | 70% | ||
Percentage of fees as an advisor to be paid in equal installments | 30% |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Jan. 10, 2022 | |
Lessee, Lease, Description [Line Items] | ||
Security deposit received for sublease | $ 14,000 | |
Operating lease expense per month | $ 7,000 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease terms | 1 year 10 months 24 days | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease terms | 4 years 3 months 18 days |
Commitments and Contingencies_3
Commitments and Contingencies - Lease expense (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating Lease Cost: | ||
Fixed lease cost | $ 134,435 | $ 134,435 |
Amount of fixed lease cost which are offset by sublease income | $ 63,000 |
Commitments and Contingencies_4
Commitments and Contingencies - Supplemental balance sheet (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Supplemental balance sheet information related to leases | ||
Operating lease ROU asset: Other assets | $ 389,079 | $ 475,557 |
Operating lease ROU asset | Other assets | Other assets |
Operating lease liability: | ||
Operating lease liability, current | $ 137,596 | $ 125,579 |
Other current liabilities | Other current liabilities | Other current liabilities |
Operating lease liability, noncurrent | $ 300,152 | $ 405,018 |
Other long-term liabilities | Other long-term liabilities | Other long-term liabilities |
Total operating lease liability | $ 437,748 | $ 530,597 |
Commitments and Contingencies_5
Commitments and Contingencies - Lease term and discount (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Commitments and Contingencies | |||||
Weighted-average remaining lease terms - operating leases | 2 years 10 months 24 days | 2 years 10 months 24 days | 3 years 8 months 12 days | ||
Weighted-average discount rate - operating leases | 12.60% | 12.60% | 12.60% | ||
Cash paid for amounts included in the measurement of lease liabilities: | |||||
Operating cash flows from operating leases | $ 46,935 | $ 45,942 | $ 140,805 | $ 137,826 |
Commitments and Contingencies_6
Commitments and Contingencies - Minimum lease payments (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Future minimum lease payments under non-cancelable leases | ||
2022 (remaining 3 months) | $ 46,935 | |
2023 | 189,374 | |
2024 | 155,242 | |
2025 | 81,107 | |
2026 | 82,324 | |
Total lease payments | 554,982 | |
Less: Imputed Interest | (117,234) | |
Total operating lease liability | $ 437,748 | $ 530,597 |
Commitments and Contingencies_7
Commitments and Contingencies - Future Minimum Sublease Income (Details) | Sep. 30, 2022 USD ($) |
Sublease income | |
2022 (remaining 3 months) | $ 21,000 |
2023 | 84,000 |
2024 | 56,000 |
Total | $ 161,000 |
Commitments and Contingencies_8
Commitments and Contingencies - Additional information (Details) | Sep. 30, 2022 USD ($) |
Commitments and Contingencies | |
Operating leases that had not yet commenced | $ 0 |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) segment | Sep. 30, 2021 USD ($) | |
Results of operations by reportable segment | ||||
Net sales | $ 2,145,169 | $ 5,193,953 | $ 8,678,424 | |
Net sales | $ (1,457,732) | |||
Cost of goods sold | 286,525 | 319,158 | 1,408,086 | 1,355,838 |
Selling, general and administrative expenses | 2,170,975 | 3,413,223 | 9,285,317 | 11,411,113 |
Gain on settlement of contingent liability | (3,389,941) | |||
Research and development expenses | 735,916 | 280,576 | 1,562,518 | 799,803 |
Depreciation and amortization expense | 1,560,870 | 1,728,829 | 4,682,610 | 5,186,486 |
Intangible asset impairment | 7,460,000 | 7,460,000 | ||
Change in fair value of derivative liability | (1,970,000) | (460,000) | (9,640,000) | |
Interest expense | 147,677 | 67,936 | 451,075 | 356,873 |
Income tax expense | (10,501) | (2,345) | (10,501) | (9,045) |
Net loss | (13,830,196) | (1,696,898) | $ (15,816,213) | (800,734) |
Operating segments | ||||
Segment Information | ||||
Number of Operating Segments | segment | 2 | |||
Corporate | ||||
Results of operations by reportable segment | ||||
Selling, general and administrative expenses | 1,210,147 | 1,371,615 | $ 3,999,783 | 4,411,086 |
Change in fair value of derivative liability | (1,970,000) | (460,000) | (9,640,000) | |
Interest expense | 147,677 | 67,936 | 451,075 | 356,873 |
Net loss | (1,357,824) | 530,449 | (3,990,858) | 4,872,041 |
Prescription Medications | ||||
Results of operations by reportable segment | ||||
Net sales | (2,140,629) | 1,377,291 | 2,716,311 | 6,227,753 |
Cost of goods sold | 36,067 | 45,254 | 525,073 | 607,582 |
Selling, general and administrative expenses | 493,128 | 1,318,610 | 3,933,295 | 4,985,603 |
Gain on settlement of contingent liability | (3,389,941) | |||
Research and development expenses | 678,552 | 280,576 | 1,428,848 | 799,803 |
Depreciation and amortization expense | 1,269,664 | 1,398,270 | 3,808,991 | 4,194,809 |
Intangible asset impairment | 7,460,000 | 7,460,000 | ||
Net loss | (12,078,040) | (1,665,419) | (11,049,955) | (4,360,044) |
Medical Devices | ||||
Results of operations by reportable segment | ||||
Net sales | 682,897 | 767,878 | 2,477,642 | 2,450,671 |
Cost of goods sold | 250,458 | 273,904 | 883,013 | 748,256 |
Selling, general and administrative expenses | 467,701 | 722,998 | 1,352,239 | 2,014,424 |
Research and development expenses | 57,364 | 133,670 | ||
Depreciation and amortization expense | 291,206 | 330,559 | 873,619 | 991,677 |
Income tax expense | (10,501) | (2,345) | (10,501) | (9,045) |
Net loss | $ (394,332) | $ (561,928) | $ (775,400) | $ (1,312,731) |
Segment Information - Net Sales
Segment Information - Net Sales by Geographic region (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenues from External Customers and Long-Lived Assets | ||||
Net sales | $ 2,145,169 | $ 5,193,953 | $ 8,678,424 | |
Net sales | $ (1,457,732) | |||
United States | ||||
Revenues from External Customers and Long-Lived Assets | ||||
Net sales | (1,647,367) | 1,861,222 | 4,260,171 | 7,754,534 |
International | ||||
Revenues from External Customers and Long-Lived Assets | ||||
Net sales | $ 189,635 | $ 283,947 | $ 933,782 | $ 923,890 |
Segment Information - Segment a
Segment Information - Segment assets (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Segment Reporting, Asset Reconciling Item | ||
Intangible assets, net | $ 13,158,203 | $ 25,293,149 |
Total segment assets | 37,696,443 | 67,390,058 |
Prescription Medications | ||
Segment Reporting, Asset Reconciling Item | ||
Intangible assets, net | 7,810,080 | 19,071,407 |
Total segment assets | 30,614,587 | 59,657,514 |
Medical Devices | ||
Segment Reporting, Asset Reconciling Item | ||
Intangible assets, net | 5,348,123 | 6,221,742 |
Total segment assets | $ 7,081,856 | $ 7,732,544 |