Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Mar. 26, 2024 | Jun. 30, 2023 | |
Document and Entity Information | ||||
Document Type | 10-K | |||
Document Annual Report | true | |||
Document Period End Date | Dec. 31, 2023 | |||
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 Well-known Seasoned Issuer | No | |||
Entity Voluntary Filers | No | |||
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 | |||
ICFR Auditor Attestation Flag | false | |||
Document Financial Statement Error Correction [Flag] | false | |||
Entity Shell Company | false | |||
Entity Public Float | $ 3,145,008 | |||
Entity Common Stock, Shares Outstanding | 6,875,814 | |||
Entity Central Index Key | 0001815903 | |||
Current Fiscal Year End Date | --12-31 | |||
Document Fiscal Year Focus | 2023 | |||
Document Fiscal Period Focus | FY | |||
Amendment Flag | false | |||
Auditor Name | Marcum LLP | EisnerAmper LLP | ||
Auditor Location | East Hanover, New Jersey | Iselin, New Jersey | ||
Auditor Firm ID | 688 | 274 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash | $ 13,336,975 | $ 9,426,264 |
Accounts receivable, net | 2,226,151 | 2,110,246 |
Inventories | 1,610,391 | 1,815,113 |
Prepaid inventory | 1,182,899 | |
Prepaid expenses and other current assets | 2,033,980 | 1,316,282 |
Total current assets | 20,390,396 | 14,667,905 |
Fixed assets, net | 28,957 | 39,177 |
Intangible assets, net | 8,971,737 | 12,244,484 |
API purchase commitment | 4,178,446 | 5,111,176 |
Right of use assets | 226,259 | 358,472 |
Total assets | 33,795,795 | 32,421,214 |
Current liabilities: | ||
Current portion of promissory note | 1,156,550 | 1,089,683 |
Accounts payable | 1,713,253 | 1,806,399 |
Accrued expenses | 5,360,077 | 3,634,662 |
Accrued Series A Convertible Preferred payments payable | 2,047,583 | |
Other current liabilities | 493,288 | 537,232 |
Total current liabilities | 10,770,751 | 7,067,976 |
Promissory note, net of current portion | 6,857,364 | 8,388,093 |
Derivative Liability | 3,550,000 | |
Other long-term liabilities | 137,657 | 262,678 |
Total liabilities | 21,315,772 | 15,718,747 |
Commitments and contingencies (see note 15) | ||
Series A convertible redeemable preferred stock (par value $0.0001 per share and $1,000 stated value), 15,000 and 0 shares authorized at December 31, 2023 and 2022, respectively; 10,022 and 0 shares issued and outstanding at December 31, 2023 and 2022, respectively. Liquidation preference of $10,209,277 as of December 31, 2023 | 408,982 | |
Stockholders' Equity: | ||
Common stock (par value $0.0001 per share, 250,000,000 and 150,000,000 shares authorized at December 31, 2023 and 2022, respectively; 2,991,377 and 2,079,387 shares issued and outstanding as of December 31, 2023 and 2022, respectively) | 298 | 208 |
Additional paid-in capital | 110,960,324 | 107,428,652 |
Accumulated deficit | (98,889,581) | (90,726,393) |
Total Stockholders' Equity | 12,071,041 | 16,702,467 |
Total Liabilities, Convertible Redeemable Preferred Stock and Stockholders' Equity | $ 33,795,795 | $ 32,421,214 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
CONSOLIDATED BALANCE SHEETS | ||
Redeemable convertible preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Redeemable convertible preferred stock, stated value | $ 1,000 | $ 1,000 |
Redeemable convertible preferred stock, authorized (in shares) | 15,000 | 0 |
Redeemable convertible preferred stock, issued (in shares) | 10,022 | 0 |
Redeemable convertible preferred stock, outstanding (in shares) | 10,022 | 0 |
Redeemable convertible preferred stock, Liquidation preference | $ 11,271,365 | |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 250,000,000 | 150,000,000 |
Common stock, shares issued | 2,991,377 | 2,079,387 |
Common stock, shares outstanding | 2,991,377 | 2,079,387 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Net sales | $ 5,822,388 | $ 5,992,054 |
Cost of goods sold | 1,631,220 | 2,289,418 |
Gross profit | 4,191,168 | 3,702,636 |
Operating expenses: | ||
Selling, general and administrative | 9,261,471 | 12,209,162 |
Warrant issuance costs | 2,855,000 | |
Gain on settlement with Vivus | (3,389,941) | |
Research and development expense | 2,409,094 | 1,740,280 |
Depreciation and amortization expense | 3,282,967 | 5,598,884 |
Intangible asset impairment | 7,460,000 | |
Total operating expenses | 17,808,532 | 23,618,385 |
Loss from operations | (13,617,364) | (19,915,749) |
Other income (expenses): | ||
Change in Fair Value of Derivative Liability | 2,590,000 | 460,000 |
Change in fair value of warrant liability | (13,974,000) | |
Loss on issuance of Series A Preferred Stock | 11,088,997 | |
Interest income | 515,311 | 14,194 |
Interest expense, promissory note | 536,138 | 596,018 |
Total other income (expenses) | 5,454,176 | (121,824) |
Net loss before income taxes | (8,163,188) | (20,037,573) |
Net loss | (8,163,188) | (20,037,573) |
Preferred Stock dividend and cash premiums | (821,456) | |
Preferred Stock accretion | (4,829,755) | |
Net loss attributable to common stockholders | $ (13,814,399) | $ (20,037,573) |
Net loss per common share | ||
Basic (in dollars per share) | $ (6.35) | $ (9.68) |
Diluted (in dollars per share) | $ (6.35) | $ (9.68) |
Weighted average common shares outstanding | ||
Basic (in shares) | 2,176,017 | 2,070,210 |
Diluted (in shares) | 2,176,017 | 2,070,210 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - USD ($) | Preferred Stock Convertible Redeemable Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2021 | $ 0 | $ 207 | $ 106,233,577 | $ (70,688,820) | $ 35,544,964 |
Balance (in shares) at Dec. 31, 2021 | 0 | 2,068,472 | |||
Stock-based compensation expense | 1,195,076 | 1,195,076 | |||
Non-employee exercise of restricted stock units (in shares) | 2,331 | ||||
Issuance of Common Stock for split | $ 1 | (1) | |||
Issuance of Common Stock for split (in shares) | 8,584 | ||||
Net loss | (20,037,573) | (20,037,573) | |||
Balance at Dec. 31, 2022 | $ 0 | $ 208 | $ 107,428,652 | (90,726,393) | $ 16,702,467 |
Balance (in shares) at Dec. 31, 2022 | 0 | 2,079,387 | 107,428,652 | 16,702,467 | |
Stock-based compensation expense | $ 5 | $ 417,225 | $ 417,230 | ||
Stock-based compensation expense (in shares) | 49,645 | ||||
Issuance of Series A Preferred Stock in private placement, net of discount and transaction costs $15,000,003 (in shares) | 15,000 | ||||
Preferred Stock redemption including cash premium (in shares) | (2,930) | 822,112 | |||
Accrual of Series A Preferred Stock and dividend redemption (in shares) | (2,048) | ||||
Accrual of Series A Preferred Stock and dividend redemption | $ (2,047,583) | ||||
Series A Preferred Stock accretion | 4,829,755 | (4,829,755) | (4,829,755) | ||
Series A Preferred Stock dividends | 556,733 | (556,733) | (556,733) | ||
Shares issued for vested RSU's | $ 3 | (3) | |||
Shares issued for vested RSU's (in shares) | 40,233 | ||||
Deemed dividends on Preferred Stock | (264,723) | (264,723) | |||
Reclass of warrant liability upon warrant modification | 7,570,000 | 7,570,000 | |||
Net loss | (8,163,188) | (8,163,188) | |||
Balance at Dec. 31, 2023 | $ 408,982 | $ 298 | 110,960,324 | $ (98,889,581) | 12,071,041 |
Balance (in shares) at Dec. 31, 2023 | 10,022 | 2,991,377 | |||
Preferred Stock redemption including cash premium | $ (2,929,923) | $ 82 | $ 1,195,661 | $ 1,195,743 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (Parenthetical) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Series A Preferred Stock | |
Issuance of Series A Preferred Stock in private placement, net of discount and transaction costs | $ 15,000,003 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (8,163,188) | $ (20,037,573) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 3,282,967 | 5,598,884 |
Intangible asset impairment | 0 | 7,460,000 |
Bad debt expense (recoveries) | 28,228 | (170,816) |
Inventory and sample inventory reserve | (68,889) | (18,998) |
Amortization of right of use asset | 132,212 | 117,085 |
Change in fair value of derivative liability | (2,590,000) | (460,000) |
Change in fair value of warrant liability | (13,974,000) | |
Loss on issuance of Series A Preferred Stock | 11,088,997 | |
Noncash Warrant expense | 1,595,000 | |
Gain on settlement with Vivus | (3,389,941) | |
Employee stock-based compensation | 417,230 | 1,195,076 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (144,133) | 515,957 |
Inventories | 273,611 | (835,317) |
Prepaid inventory | (1,182,899) | |
Prepaid expenses and other current assets | 215,032 | 1,648,252 |
Accounts payable | (93,148) | (2,751,570) |
Accrued expenses | 1,725,415 | (1,802,422) |
Deferred revenue | (164,133) | 211,029 |
Other current liabilities | 120,190 | 65,369 |
Other long-term liabilities | (125,021) | (142,340) |
Net cash used in operating activities | (7,626,529) | (12,797,325) |
Cash flows from financing activities: | ||
Payment of promissory note | (1,463,862) | (1,623,983) |
Proceeds from Private Placement, net of transaction costs | 15,000,003 | |
Redemption of Series A Preferred Stock | (1,998,901) | |
Net cash (used in) provided by financing activities | 11,537,240 | (1,623,983) |
Net (decrease) increase in cash | 3,910,711 | (14,421,308) |
Cash, beginning of year | 9,426,264 | 23,847,572 |
Cash, end of year | 13,336,975 | 9,426,264 |
Supplemental cash flow information: | ||
Cash paid for interest during the period | 536,138 | 596,018 |
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 | 10,201,758 | |
Noncash increase in inventory due to API reclass | (441,149) | |
Noncash decrease in API purchase commitment | 5,918,084 | |
Noncash decrease in other current assets: API purchase commitment | 755,554 | |
Noncash issuance of common stock to non-employee | $ 3 | |
Noncash initial fair value of warrant liability pursuant to private placement | 21,544,000 | |
Noncash initial fair value of derivative liability pursuant to private placement | 6,140,000 | |
Noncash redemption of Series A convertible preferred stock | 1,195,743 | |
Accrued Series A Convertible Preferred payments payable | 2,047,583 | |
Accretion of Series A convertible preferred stock to redemption value | 4,829,755 | |
Accrual of Series convertible preferred stock dividends | 556,733 | |
Reclass of warrant liability upon warrant modification | $ 7,570,000 |
Nature of Operations, Basis of
Nature of Operations, Basis of Presentation, and Liquidity | 12 Months Ended |
Dec. 31, 2023 | |
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 and Basis of Presentation Petros Pharmaceuticals, Inc. (“Petros” or the “Company”) was incorporated in Delaware on May 14, 2020, for the purpose of effecting the transactions contemplated by that certain Agreement and Plan of Merger, dated as of May 17, 2020 (as amended, the “Merger Agreement”), by and between Petros, Neurotrope, Inc. Petros consists of wholly owned subsidiaries, Metuchen, Neurotrope, Timm Medical Technologies, Inc. (“Timm Medical”), and Pos-T-Vac, LLC (“PTV”). We are 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. Petros Pharmaceuticals is committed to the goal of becoming a leading innovator in the emerging self-care market driving expanded access to key prescription pharmaceuticals as Over-The-Counter (“OTC”) treatment options. Currently, Petros is pursuing increased access for its flagship prescription ED therapy, Stendra®, via potential OTC designation. If ultimately approved by the FDA for OTC access, Stendra® may be the first in its class to achieve this marketing status, also establishing company know how as a proven platform for other prospective prescription therapeutics. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and in accordance with the accounting rules under Regulation S-X, as promulgated by the Securities and Exchange Commission (“SEC”). All significant intercompany accounts and transactions have been eliminated in consolidation. The Company’s priority is the ability to sell Stendra® OTC. Reverse Stock Split At the 2022 Annual Meeting, the stockholders approved our proposal to effect one reverse stock split of our outstanding shares of Common stock, at any ratio between 1-for-4 1-for-10 1-for-10 Liquidity and Going Concern In accordance with Financial Accounting Standards Board (the “FASB”) Accounting Standards Update (“ASU”) ASU 2014-15, Presentation of Financial Statements - going Concern (Subtopic 205-40) (“ASC 205-40”), the Company has the responsibility to evaluate whether conditions and/or events raise substantial doubt about its ability to meet its future financial obligations as they become due within one year after the date that the financial statements are issued. To date, our principal sources of capital used to fund our operations have been the revenues from product sales, private sales, registered offerings and private placements of equity securities. We have experienced net losses and negative cash flows from operations since our inception. As of December 31, 2023, we had cash of $13.3 million, positive working capital of $9.6 million, and accumulated deficit of $98.9 million. Our plans include, or may include, utilizing our cash on hand, as well as exploring additional ways to raise capital in addition to increasing cash flows from operations. In January 2022, the Company executed a promissory note in favor of Vivus in connection with the Vivus Settlement Agreement in the principal amount of $10,201,758. As of December 31, 2023, the principal balance of the note is $8.0. 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 audited 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 Annual 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, including the gross proceeds of $15 million raised in the Private Placement, as well as by exploring additional ways to raise capital and increasing cash flows from operations. The company intends to use the proceeds from the July 2023 capital raise to funds its OTC progress into 2024. 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 / OTC strategies related to Stendra®, which we believe has the potential to dramatically increase product sales in the future; 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 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 | 12 Months Ended |
Dec. 31, 2023 | |
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 generally accepted accounting principles ("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 warrant liability and 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. In January 2022, the Company sub-leased its Manalapan, New Jersey 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. Concentration of Credit Risk Financial instruments that subject the Company to concentrations of credit risk includes cash. The Company maintains cash on deposit at U.S.-based banks in amounts which, at times, may be in excess of insured limits of $250,000. Segment Reporting Operating segments are components of a Company for which separate financial information is available and evaluated regularly by the chief operating decision maker in assessing performance and deciding how to allocate resources. 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. The Medical Devices segment consists primarily of operations related to vacuum erection devices, which are sold domestically and internationally. See Note 18 Segment Reporting. 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 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 service fees (“DSA”). 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 December 31, 2023, and 2022, the reserves for sales deductions were $4.7 million and $3.0 million, respectively. The most significant sales deductions included in this reserve relate to returns, contract rebates, and 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 December 31, 2023, and 2022, the reserves for product returns were $4.2 million and $2.3 million, respectively, and are included as a component of accrued expenses. During the years ended December 31, 2023, and December 2022, respectively, the Company recorded $3.4 million and $9.4 million of returns as a reduction of gross revenue. 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 does not exist since the timing from when the Company delivers the medical devices to when the customers pay for the product is typically less than one year. The Company records medical device sales net of any variable consideration, including but not limited to returns. The Company uses the expected value method when estimating its variable consideration. The identified variable consideration is recorded as a reduction of revenue at the time revenues from the medical device sales 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. 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. The Company has not made significant changes to the judgments made in applying Topic 606. As of December 31, 2023, and 2022, 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 December 31, 2023, and 2022. Fair Value of Financial Instruments Certain assets and liabilities are carried at fair value under 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, note payable, 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. This option expired as of December 31, 2022. See Notes 10 and 20. In connection with the Private Placement, the Company incurred liabilities related to issued warrants and derivatives arising from embedded features that were not clearly and closely related to the host instruments. The Company estimated the fair value of the warrants and derivative liability utilizing the Black Scholes Model and a Monte Carlo Simulation approach, respectively. These fair value measurements are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy. See Notes 12, 19 and 20. Accounts Receivable, net The Company extends credit to its customers on an unsecured basis. Accounts receivable are recorded at the invoiced amount, net of chargebacks, distribution service fees, and cash discounts. Management determines each allowance based on historical experience along with the present knowledge of potentially uncollectible accounts. Expected credit losses are measured at amortized cost, including trade and unbilled receivables, on a collective basis, based on their similar risk characteristics. Expected credits losses are based on historical credit loss experience, review of the current aging or status of accounts receivable and current and forward-looking views from an economic and industry perspective. Receivables are written off when it is determined that amounts are uncollectible. The allowance for credit losses was de minimis as of December 31, 2023, and 2022. See Note 3 Accounts Receivable, net. Inventories Inventories consist of finished goods held for sale and raw materials. Inventories are stated at the lower of cost or net realizable value, with cost determined using the first-in, first-out method. Inventories are adjusted for excess and obsolescence. Evaluation of excess inventory includes such factors as expiry date, inventory turnover, and management’s assessment of current product demand. See Note 4 Inventories. Intangible Assets The Company accounts for recognized intangible assets at cost. Intangible assets with finite useful lives are amortized over the useful life that 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, 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 through December 2029, representing the remaining economic useful life for the Stendra® product resulting in an impairment of approximately $7.5 million. As indicators of impairment exist as of December 31, 2022, the Company prepared an undiscounted cash flow analysis. This analysis includes projections of future revenue and expenses, which if not achieved could result in future impairment charges. These projections include continued significant sales growth based in part on expectation of higher sales volume resulting from increased product availability as a result of the Vivus settlement. Additionally, the Company is planning to invest in research and development pursuant to our Non-Prescription / OTC Strategies related to Stendra®, which we anticipate will dramatically increase product sales in the future, such that if our Stendra OTC strategy is not successful, we may have to partially or fully impair the remaining intangible balance. The Company’s prepared projections including the undiscounted cash flows of the remaining estimated useful lives through December 2031 for the medical device products. Management continued to analyze the Company’s intangible assets during 2023. Management noted that the Company’s financial results were consistent with the projections used in the December 31, 2022, analysis. Based on its analysis, Management concluded that there were no triggering events noted that would indicate a potential impairment for long-lived assets for any of the two asset groups, Metuchen Pharmaceuticals and TIMM/PTV. Fixed Assets Fixed assets consist of furniture and fixtures. Furniture and fixtures are recorded at cost, less accumulated depreciation, and are depreciated on a straight-line basis over its estimated useful life. The Company uses an estimated useful life of 7 years for furniture and fixtures. Depreciation expense for the years ended December 31, 2023, and 2022 was $10,220 and $10,220, respectively. Leases The Company accounts for leases in accordance with Accounting Standards Codification (“ASC”) Topic 842. Topic 842 requires organizations to recognize leased assets and liabilities on the balance sheet. The standard also requires disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The Company determines if an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified fixed asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. The Company has lease agreements that include lease and non-lease components, which the Company accounts for as a single lease component for all leases. Operating lease right-of-use (“ROU”) assets are included in other assets whereas operating lease liabilities are included in other current liabilities and other long-term liabilities on the Company’s consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating lease payments are recognized as lease expense on a straight-line basis over the lease term. Lease payments included in the measurement of the lease liability are comprised of fixed payments. Variable lease payments associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Variable lease payments are presented in the Company’s consolidated statements of operations in the same line item as expense arising from fixed lease payments for operating leases. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company applies this policy to all underlying asset categories. Topic 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The lease term for all of the Company’s leases includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. See Note 9 Leases Stock-Based Compensation The Company accounts for stock-based awards to employees in accordance with applicable accounting principles, which requires compensation expense related to stock-based transactions, including employee stock options and restricted stock units, to be measured and recognized in the consolidated financial statements based on a determination of the fair value of the stock options or restricted stock units. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model for stock options and the closing price per share on the date of the award for restricted stock units. Employee stock option and restricted stock units expense is recognized over the employee’s requisite service period (generally the vesting period of the equity grant), except for performance based milestones which is recognized upon the probability of achievement. The Company accounts for forfeitures as they occur. 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 11 Stock Options. Derivative Financial Instruments The Company evaluates all its financial instruments to determine if such instruments contain features that qualify as embedded derivatives per ASC 815, Derivatives and Hedging Preferred Stock The Company records shares of convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The Company concluded that the Series A Preferred Stock is more akin to a debt-type instrument than an equity-type instrument, therefore certain conversion features associated with the convertible preferred stock were deemed to not be clearly and closely related to the host instrument and were bifurcated as a derivative under ASC 815. The Company has applied the guidance in ASC 480-10-S99-3A, SEC Staff Announcement: Classification and Measurement of Redeemable Securities Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be liability classified and recorded at their initial fair value on the date of issuance and remeasured at fair value and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The warrants are classified as liabilities in accordance with ASC 815 as they could be net cash settled in the event of a Fundamental Transaction. The fair value of the warrant liability was estimated using a Black-Scholes approach (see Note 20). Modification of warrants The Company applies the guidance in ASC 815-40 to account for warrants that are liability classified that are subsequently modified resulting in a reclassification to equity. The warrants are remeasured at fair value on the modification date, the change in fair value is recognized as a non-cash gain or loss on the statements of operations, and the warrants are reclassified to additional paid-in capital. 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 consolidated financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the consolidated 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. As of December 31, 2023, and 2022, the Company has recorded a full valuation allowance against its deferred tax assets. The Company records uncertain tax positions in accordance under Accounting Standards Codification (“ASC “) Topic 740, Income taxes (“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 December 31, 2023, and 2022, no accrued interest or penalties are recorded in the consolidated balance sheet. Contingencies The Company may be subject to various patent challenges, product liability claims, government investigations and other legal proceedings in the ordinary course of business. Legal fees and other expenses related to litigation are expensed as incurred and included in general and administrative expenses in the consolidated statements of operations. Shipping Costs The Company records the costs of shipping related to prescription medication sales in general and administrative expense in its consolidated statements of operations. There were no shipping costs for the years ended December 31, 2023, and 2022. Shipping costs related to medical devices are recorded as revenue and subsequently deducted as a component of cost of goods sold in the consolidated statements of operations. Shipping costs for the years ended December 31, 2023, and 2022 were $60,216 and $125,368, 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. In accordance with ASC 260, warrants that are accounted for as liabilities which are potentially dilutive have not been included in diluted earnings per share as they would have been anti-dilutive during the year ended December 31, 2023. 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 years ended December 31, 2023, and 2022. See Note 13 Basic and Diluted Net Loss per Common Share. Recent Accounting Pronouncements Accounting Pronouncements Adopted In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for convertible instruments by removing certain separation models in ASC 470-20, Debt—Debt with Conversion and Other Options, for convertible instruments. The ASU updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. Further, the ASU made amendments to the EPS guidance in Topic 260 for convertible debt instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. The Company adopted the new guidance with its fiscal year beginning January 1, 2023. The adoption of ASU 2020-06 did not have a material effect on the company’s financial statements. Accounting Pronouncements Not Yet Adopted In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires an enhanced disclosure of significant segment expenses on an annual and interim basis. This guidance will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025. Early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating segment expense disclosures related to its annual report for fiscal year 2024. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for the annual periods beginning the year ended December 31, 2025. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company is currently evaluating income tax disclosures related to its annual report for fiscal year 2025. |
Accounts Receivable, net
Accounts Receivable, net | 12 Months Ended |
Dec. 31, 2023 | |
Accounts Receivable, net | |
Accounts Receivable, net | 3) Accounts Receivable, net Accounts receivable, net is comprised of the following: December 31, December 31, 2023 2022 Gross accounts receivables $ 2,887,317 $ 2,757,839 Distribution service fees (398,968) (339,094) Chargebacks accrual (2,462) (1,960) Cash discount allowances (24,639) (99,671) Allowance for doubtful accounts (235,097) (206,868) Total accounts receivable, net $ 2,226,151 $ 2,110,246 For the year ended December 31, 2023, gross billings to customers representing 10% or more of the Company’s total gross billings included 3 customers which represented approximately 22%, 21%, and 17% of total gross billings. For the year ended December 31, 2022, gross billings to customers representing 10% or more of the Company’s total gross billings included four customers which represented approximately 26%, 21%, 17%, and 16% of total gross billings. Receivables from customers representing 10% or more of the Company’s gross accounts receivable included 3 customers at December 31, 2023, equal to 36%, 24% and 16%, 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, 2022, equal to 43%, and 16%, respectively, of the Company’s total gross accounts receivables. |
Inventories, net
Inventories, net | 12 Months Ended |
Dec. 31, 2023 | |
Inventories, net | |
Inventories, net | 4) Inventories, net Inventory is comprised of the following: December 31, 2023 December 31, 2022 Raw materials $ 1,430,139 $ 1,574,683 Finished goods 180,252 240,430 Total inventory $ 1,610,391 $ 1,815,113 Finished goods are net of valuation reserves of $295,411 and $364,300 as of December 31, 2023, and 2022, respectively. Raw materials are net of valuation reserves of $0 and $2,872,977 as of December 31, 2023, and 2022, respectively, which is related to bulk inventory. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2023 | |
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: December 31, 2023 December 31, 2022 Prepaid insurance $ 45,664 $ 109,414 Prepaid FDA fees 937,652 — Prepaid coupon fees — 71,500 API purchase commitment asset (see Note 14) 704,729 663,984 Other prepaid expenses 234,459 333,158 Other current assets 111,476 138,226 Total prepaid expenses and other current assets $ 2,033,980 $ 1,316,282 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Intangible Assets | |
Intangible Assets | 6) Intangible Assets Balance at December 31, 2021 $ 25,293,149 Amortization expense (5,588,665) Intangible Impairment (7,460,000) Balance at December 31, 2022 12,244,484 Amortization expense (3,272,747) Balance at December 31, 2023 $ 8,971,737 The future annual amortization related to the Company’s intangible assets is as follows as of December 31, 2023: 2024 $ 2,800,623 2025 1,754,329 2026 1,442,186 2027 1,212,871 2028 996,637 Thereafter 765,091 Total $ 8,971,737 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 December 31, 2023, are $4.9 million, $3.2 million and $0.9 million, respectively. The carrying value of the Stendra® product, Timm Medical product, and PTV product as of December 31, 2022, are $7.2 million, $4.0 million and $1.1 million, respectively. During the year ended December 31, 2023, no impairment was recorded. During the year ended December 31, 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 | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Expenses | |
Accrued Expenses | 7) Accrued Expenses Accrued expenses are comprised of the following: December 31, 2023 December 31, 2022 Accrued product returns $ 4,178,176 $ 2,311,647 Accrued contract rebates 128,562 279,018 Due to 3PL/Wholesalers 75,727 155,081 Accrued bonuses 665,184 427,500 Accrued professional fees 15,000 51,620 Other accrued expenses 297,428 409,796 Total accrued expenses $ 5,360,077 $ 3,634,662 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt | |
Debt | 8) Debt Promissory Note In connection with the Settlement Agreement entered into with Vivus (see Note 14), 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. For the years ended December 31, 2023, and December 31, 2022, the Company paid Vivus $2.0 million and $1.6 million, respectively. As of December 31, 2023, and 2022, the principal balance on the Note is $8.0 million and $9.5 million, respectively. Future minimum principal payments of the promissory note are as follows: 2024 $ 1,156,550 2025 2,720,940 2026 3,264,351 2027 872,073 Total $ 8,013,914 Less: current portion (1,156,550) Promissory note, net of current portion $ 6,857,364 |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2023 | |
Operating Leases | |
Operating Leases | 9) 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 0.7 years to 3.0 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 accounts 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 $179,246 and $179,246 for the years ended December 31, 2023, and 2022, respectively. Fixed lease costs for the year ended December 31, 2023, were offset by sublease income of $84,000. Supplemental balance sheet information related to leases was as follows: As of December 31, 2023 As of December 31, 2022 Operating lease ROU asset: Other assets $ 226,259 $ 358,472 Operating lease liability: Other current liabilities $ 125,022 $ 142,340 Other long-term liabilities 137,655 262,677 Total operating lease liability $ 262,677 $ 405,017 Supplemental lease term and discount rate information related to leases was as follows: As of December 31, 2023 As of December 31, 2022 Weighted-average remaining lease terms – operating leases 1.7 years 2.7 years Weighted-average discount rate – operating leases 12.6 % 12.6 % Supplemental cash flow information related to leases was as follows: For the Years Ended December 31, 2023 2022 Operating cash flows from operating leases $ 189,374 $ 187,739 Future minimum lease payments under non-cancelable leases as of December 31, 2023, were as follows: Lease Liability Maturity Analysis Operating Leases 2024 155,242 2025 81,107 2026 82,325 Total lease payments 318,674 Less: Imputed Interest (55,997) Total $ 262,677 Future minimum sublease income under non-cancelable leases as of December 31, 2023, were as follows: Sublease income Operating Leases 2024 $ 56,000 Total $ 56,000 As of December 31, 2023, and 2022, the Company had no operating leases that had not yet commenced |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity | |
Stockholders' Equity | 10) Stockholders’ Equity On December 21, 2023, the Company approved a one-time grant under the Company’s Amended and Restated 2020 Omnibus Incentive Compensation Plan (the “Plan”) to Fady Boctor, the Company’s President and Chief Commercial Officer, of 49,645 shares of the Company’s common stock. Also on December 21, 2023, the Company approved and accrued for the issuance of $200,000 of common stock, payable in two equal installments, with the first installment to be paid upon approval by the Board and the second installment six months after the first installment, to CorProminence, LLC (“CoreIR”) for services rendered pursuant to a Marketing and Consulting Agreement. The first installment of 70,922 shares was issued on February 29, 2024. 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 1,423,209 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 an equity classified earnout consideration to be paid in the form of Petros Common Stock if the Closing Price (as defined in the Merger Agreement) per share of stock of Petros’ Common Stock 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 earnout payment. In no event will the sum of the milestone earnout payments be greater than 400,000 shares of Petros Common Stock. The earnout expired on December 2, 2022. In connection with the Mergers, each security holder of Metuchen received the right to receive earnout consideration, which is 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. Each milestone earnout payment is 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 1,023,209 shares of Petros Common Stock. As of December 31, 2022, the milestones were not achieved prior to earnout expiry. The fair value of the derivative liability was $0.0 million as of December 31, 2022. For the year ended December 31, 2022, the Company recognized a gain on the revaluation of the derivative liability of $0.5 million. |
Stock Options and Restricted St
Stock Options and Restricted Stock Units ("RSU's") | 12 Months Ended |
Dec. 31, 2023 | |
Stock Options and Restricted Stock Units ("RSU's") | |
Stock Options and Restricted Stock Units ("RSU's") | 11) Stock Options and Restricted Stock Units (“RSUs”) The Company established the 2020 Omnibus Incentive Compensation plan (the “2020 Plan”) which provides for the grants of awards to our directors, officers, employees, and consultants of 107,834. The 2020 Plan authorizes the grant of incentive stock options, nonqualified stock options, stock appreciation rights, stock awards, stock units and other stock-based awards and cash-based awards. On December 22, 2021, our stockholders approved the Second Amendment to the 2020 Plan to increase the total number of shares of common stock issuable under the 2020 Plan by 152,166 shares to a total of 260,000 shares of common stock. On September 14, 2023, our stockholders approved the Third Amendment to the 2020 Plan to increase the total number of shares of common stock issuable under the 2020 Plan by 2,500,000 shares to a total of 2,760,000 shares of common stock. As of December 31, 2023, there were 2,760,000 shares authorized and 2,158,658 shares available for issuance under the 2020 Plan. The following is a summary of stock options for the years ended December 31, 2023, and 2022: Weighted-Average Aggregate Intrinsic Weighted-Average Remaining Contractual Value Number of Shares Exercise Price Term (Years) ($ in thousands) Options outstanding at December 31, 2021 61,567 $ 33.80 9.23 $ — Options granted 5,000 33.40 Less: options expired/cancelled (7,500) (32.10) Options outstanding at December 31, 2022 59,067 $ 34.02 8.29 $ — Options granted 455,066 1.27 Less: options forfeited (5,000) (33.40) Options outstanding at December 31, 2023 509,133 $ 4.75 9.46 $ 66 Options exercisable at December 31, 2023 138,600 $ 14.15 8.90 $ — The following is a summary of RSUs for the years ended December 31, 2023, and 2022: Weighted-Average Number of Shares Price RSUs outstanding at December 31, 2021 11,642 $ 32.90 RSUs granted 30,927 11.90 Less: RSUs forfeited — — Less: RSUs expired/cancelled — — Less: RSUs vested (2,331) (30.90) RSUs outstanding at December 31, 2022 40,238 $ 16.87 RSUs granted — — Less: RSUs forfeited — — Less: RSUs expired/cancelled — — Less: RSUs vested (40,238) (16.87) RSUs outstanding at December 31, 2023 — $ — On January 4, 2022, pursuant to a consulting agreement, the Company awarded a grant of 5,000 options to purchase shares of common stock of the Company at an exercise price of $33.40 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 24,876 total RSUs with a stock price of $11.90 per share. The RSUs 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 6,050 RSUs with a stock price of $11.90 per share. The RSUs shall vest 100% on the one-year anniversary of the date of grant. On September 2, 2022, Ms. King RSUs vested. On April 10, 2023, the Company awarded four Directors grants totaling 156,000 options with an exercise price of $0.99 per share, vesting 100% on the one-year Stock-based compensation expense recognized for the years ended December 31, 2023, and 2022, was $417,230 and $1,195,076, respectively, and is recorded in general and administrative expenses in the consolidated statements of operations. As of December 31, 2023, unrecognized stock-based compensation expense (excluding performance awards) is approximately $197,000 to be recognized over a term of 0.27 years. |
Common Stock Warrants
Common Stock Warrants | 12 Months Ended |
Dec. 31, 2023 | |
Common Stock Warrants | |
Common Stock Warrants | 12) Common Stock Warrants Pursuant to the Private Placement (see Note 19), the Company issued to investors Warrants to purchase 6,666,668 shares of Common Stock, with an exercise price of $2.25 per share (subject to adjustment), for a period of five years from the date of issuance. In connection with the Private Placement, pursuant to the Engagement Letter, between the Company and the Placement Agent, the Company issued the Placement Agent warrants to purchase shares of Common Stock equal to 8% of the number of shares of common stock that the Preferred Shares are initially convertible into (533,333 warrant shares), with an exercise price of $2.25 per share and a five-year term (the “Placement Agent Warrants” collectively the “Warrants”). The Warrants were originally determined to be within the scope of ASC 815 as they are puttable to the Company at the Holders’ election upon the occurrence of a Fundamental Transaction (as defined in the agreements). As such, the Company recorded the Warrants as a liability at fair value with subsequent changes in fair value recognized in earnings. The Company utilized the Black Scholes Model to calculate the value of these warrants issued during the year ended December 31, 2023. The fair value of the Warrants of $21,544,000 was estimated at the date of issuance using the following weighted average assumptions: dividend yield 0%; expected term of 5.0 years; equity volatility of 110.0%; and a risk-free interest rate of 3.93%. Transaction costs incurred attributable to the issuance of the Warrants of $2,855,000 were immediately expensed in accordance with ASC 480. On March 21, 2024, the Company entered into waiver and amendment agreements with the investors effective December 31, 2023, which modified certain terms and conditions of the Warrants, including modifying the form of consideration that the Holders’ could receive upon the occurrence of a Fundamental Transaction (the “Warrant Amendment”), specifically, the Holders can only receive the same consideration as common stockholders upon a Fundamental Transaction. The modification resulted in the reclassification of the Warrants to be considered equity classified as they were no longer in the scope of ASC 815. In accordance with ASC 815-40, the Company remeasured the Warrants at fair value as of December 31, 2023, the effective date of the modification, and recognized the change in fair value as a non-cash gain and reclassified the Warrants to additional paid-in capital at December 31, 2023 (see below). During the year ended December 31, 2023, the Company recorded a gain of $13,974,000 related to the change in fair value of the warrant liability which is recorded in other income (expense) on the Statements of Operations. The fair value of the Warrants of $7,570,000 was estimated at December 31, 2023, prior to the effective date of the Warrant Amendment, utilizing the Black Scholes Model using the following weighted average assumptions: dividend yield 0%; remaining term of 4.53 years; equity volatility of 115.0%; and a risk-free interest rate of 3.88%. As a result of the Warrant Amendment, the Company reclassified the remaining fair value of the Warrants of $7,570,000 to additional paid-in capital. The following is a summary of warrants for the years ended December 31, 2023, and 2022: Aggregate Intrinsic Weighted-Average Remaining Value ($ in Number of Warrants Exercise Price Contractual Term thousands) Warrants outstanding - December 31, 2021 1,004,115 $ 105.85 4.5 $ — Warrants issued in 2022 — — — — Warrants outstanding - December 31, 2022 1,004,115 $ 105.85 3.5 $ — Warrants issued in 2023 7,200,002 2.25 Warrants expired in 2023 (278) (16.00) Warrants outstanding - December 31, 2023 8,203,839 $ 14.93 4.3 $ — |
Dilutive convertible securities
Dilutive convertible securities | 12 Months Ended |
Dec. 31, 2023 | |
Dilutive convertible securities | |
Dilutive convertible securities | 13) Dilutive convertible securities The following table summarizes the potentially dilutive securities convertible into common shares that were excluded from the calculation of diluted net loss per share because their inclusion would have been antidilutive: For the Years Ended December 31, 2023 2022 Stock options 509,133 59,067 RSUs — 40,238 Series A Convertible Preferred stock 5,985,519 — Warrants 8,203,839 1,004,115 Total 14,698,491 1,103,420 |
Marketing, Licensing and Distri
Marketing, Licensing and Distribution Agreements | 12 Months Ended |
Dec. 31, 2023 | |
Marketing, Licensing and Distribution Agreements. | |
Marketing, Licensing and Distribution Agreements | 14) 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 on the effective date of the License Agreement, which has since been 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 Active Pharmaceutical Ingredient (“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 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 100% of the quantity of bulk Stendra® tablets by the end of the first quarter 2022. 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. As of December 31, 2023, and 2022, the Company has $0.0 and $0.0 million, respectively, of accrued inventory purchases related to the Company’s minimum purchase obligations with Vivus for raw material or API inventory. API inventory is not a finished good. The Company has $1.2 million of API which is classified as prepaid inventory. The additional API inventory that the Company does not have title to is classified as API Product 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 December 31, 2023, and 2022, there was $0.7 million and $0.7 million respectively included in other current assets (see Note 5 Prepaid and Other Current Assets). As of December 31, 2023, and 2022, there was $4.2 million and $5.1 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 years ended December 31, 2023, and 2022. During the years ended December 31, 2023, and 2022, the Company incurred royalties to MTPC for Stendra (R) 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. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 15) Commitments and Contingencies 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. From time to time, we are involved in various legal matters arising in the normal course of business. We do not expect the outcome of such proceedings, either individually or in the aggregate, to have a material effect on our financial position, cash flows or results of operations. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Income Taxes | 16) Income Taxes The current and deferred income tax expense (benefit) for the years ended December 31, 2023, and 2022 is as follows: For the Years Ended December 31, 2023 2022 Current expense (benefit): Federal $ — $ — State — — Total current expense (benefit) — — Deferred expense (benefit): Federal — — State — — Total deferred expense (benefit) — — Total income tax expense (benefit) $ — $ — A reconciliation of the Company’s statutory income tax rate to the Company’s effective income tax rate is as follows: For the Years Ended December 31, 2023 2022 Income at US statutory rate 21.00 % 21.00 % State taxes, net of federal benefit 3.85 % 1.56 % Change in Fair Value of Derivative Liability 6.66 % — % Revaluation of Warrants 35.95 % — % Warrant Issuance Costs (7.34) % — % Loss on Issuance of Preferred Stock (28.53) % — % Change in State Rate 11.25 % — % Valuation allowance (43.74) % (23.98) % Other 0.90 % 1.42 % Effective income tax rate 0.00 % 0.00 % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2023, and December 31, 2022, are as follows: For the Years Ended December 31, 2023 2022 Accruals $ 221,841 $ 229,348 Intangible assets (737,719) (818,127) Depreciation and amortization 7,458,252 7,379,214 Expenses not currently deductible 982,475 1,140,594 Net operating loss carryforwards 9,475,773 6,013,400 Interest expense limitation 251,023 226,588 Stock-based compensation 400,813 2,882,814 Valuation allowance (18,052,458) (17,053,830) Total deferred tax asset (liability) $ — $ — The valuation allowance recorded by the Company as of December 31, 2023, and 2022 resulted from the uncertainties of the future utilization of deferred tax assets relating primarily to net operating loss (“NOL”) carryforwards for federal and state income tax purposes. Realization of the NOL carryforwards is contingent on future taxable earnings. The deferred tax asset was reviewed for expected utilization using a “more likely than not” approach by assessing the available positive and negative evidence surrounding its recoverability. Accordingly, a full valuation allowance continues to be recorded against the Company’s deferred tax assets, as it was determined based upon past and projected future losses that it was “more likely than not” that the Company’s deferred tax assets would not be realized. The cumulative valuation allowance as of December 31, 2023, is $18.1 million, which will be reduced if and when the Company determines that the deferred income tax assets are more likely than not to be realized. As of December 31, 2023, the Company’s estimated aggregate total NOLs were $40.4 million for U.S. federal purposes with an indefinite life due to regulations set forth in the Tax Cuts and Jobs Act of 2017 (“TCJA”). The future utilization of the NOLs are limited to 80% of taxable income. The Company has not completed an IRC Section 382 analysis regarding the limitation of NOL carryforwards. As of December 31, 2023, the Company’s estimated State NOLs were $17.9 million. The Company files its tax return’ in the U.S. federal jurisdiction, as well as in various state and local jurisdictions. The Company is not currently under audit in any taxing jurisdictions. The federal statute of limitations for audit consideration is 3 years from the filing date, and generally states implement a statute of limitations between 3 The calculation of the Company’s tax liabilities involves dealing with uncertainties in the application of complex tax laws and regulations for both federal taxes and the many states in which we operate or do business in. ASC 740 states that a tax benefit from an uncertain tax position may be recognized when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes, on the basis of the technical merits. The Company records uncertain tax positions as liabilities in accordance with ASC 740 and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the unrecognized tax benefit liabilities. These differences will be reflected as increases or decreases to income tax expense in the period in which new information is available. As of December 31, 2023, the Company has not recorded any uncertain tax positions in its consolidated financial statements. 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 December 31, 2023, no accrued interest or penalties are included on the related tax liability line in the consolidated balance sheet. Provision enacted in the TCJA related to the capitalization for tax purposes of research and experimental expenditures became effective on January 1, 2022. This provision requires us to capitalize research and experimental expenditures and amortize them on the U.S. tax return over five or fifteen years, depending on where the research is conducted. This provision is not expected to have a material impact on our calendar year 2023 effective tax rate on a net basis or our cash paid for taxes due to our net operating loss position. On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into federal law. The IRA provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. However, for purposes of calculating the excise tax, repurchasing corporations are permitted to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable year. In addition, certain exceptions apply to the excise tax. Exceptions may apply, for example, if the repurchases are less than $1,000 or issued to employees. The U.S. Department of the Treasury (the “Treasury”) has been given authority to provide regulations and other guidance to carry out and prevent the abuse or avoidance of the excise tax. Management believes that this will not have a material impact on its financial statements. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2023 | |
Defined Contribution Plan | |
Defined Contribution Plan | 17) Defined Contribution Plan The Company has a qualified defined contribution plan under Section 401(k) of the Internal Revenue Code covering eligible employees. Eligible employees can contribute to the defined contribution plan, subject to certain limitations, on a pre-tax basis. The Company matches up to 100% of the first 6% of each employee’s contribution and is recognized as expense in general and administrative expenses on the consolidated statement of operations. Employer contributions were $64,062 and $51,276 for the years ended December 31, 2023, and 2022, respectively. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2023 | |
Segment Information | |
Segment Information | 18) 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. 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 year ended December 31, 2023, are summarized as follows: Prescription Medical For the Year Ended December 31, 2023 Medications Devices Corporate Consolidated Net sales $ 2,286,373 $ 3,536,015 $ — $ 5,822,388 Cost of goods sold 277,490 1,353,730 — 1,631,220 Selling, general and administrative expenses 1,736,512 1,885,489 5,639,470 9,261,471 Warrant issuance costs — — 2,855,000 2,855,000 Research and development expenses 2,272,069 137,025 — 2,409,094 Depreciation and amortization expense 2,285,175 997,792 — 3,282,967 Change in fair value of derivative liability — — (2,590,000) (2,590,000) Change in fair value of warrant liability — — (13,974,000) (13,974,000) Interest income — — (515,311) (515,311) Interest expense, promissory note — — 536,138 536,138 Loss on issuance of Series A Preferred Stock — — 11,088,997 11,088,997 Net loss $ (4,284,873) $ (838,021) $ (3,040,294) $ (8,163,188) The Company’s results of operations by reportable segment for the year ended December 31, 2022, are summarized as follows: Prescription Medical For the Year Ended December 31, 2022 Medications Devices Corporate Consolidated Net sales $ 2,734,639 $ 3,257,415 $ — $ 5,992,054 Cost of goods sold 949,197 1,340,221 — 2,289,418 Selling, general and administrative expenses 4,947,466 1,685,678 5,576,018 12,209,162 Gain on settlement with Vivus (3,389,941) — — (3,389,941) Research and development expenses 1,541,714 198,566 — 1,740,280 Depreciation and amortization expense 4,442,922 1,155,962 — 5,598,884 Intangible asset impairment 7,460,000 — — 7,460,000 Change in fair value of derivative liability — — (460,000) (460,000) Interest income (14,194) — — (14,194) Interest expense, promissory note — — 596,018 596,018 Net loss $ (13,202,525) $ (1,123,012) $ (5,712,036) $ (20,037,573) The following table reflects net sales by geographic region for the years ended December 31, 2023, and 2022: For the Years Ended December 31, Net sales 2023 2022 United States $ 4,526,635 $ 4,799,132 International 1,295,753 1,192,922 $ 5,822,388 $ 5,992,054 No individual country other than the United States accounted for 10% of total sales for the year ended December 31, 2023, and 2022. The Company’s assets by reportable segment and reconciliation of segment assets to consolidated assets as of December 31, 2023, are summarized as follows: Prescription Medications Medical Devices Consolidated Intangible assets, net $ 4,903,749 $ 4,067,988 $ 8,971,737 Total segment assets $ 27,891,180 $ 5,904,615 $ 33,795,795 The Company’s assets by reportable segment and reconciliation of segment assets to consolidated assets as of December 31, 2022, are summarized as follows: Prescription Medications Medical Devices Consolidated Intangible assets, net $ 7,178,704 $ 5,065,780 $ 12,244,484 Total segment assets $ 25,831,048 $ 6,590,166 $ 32,421,214 |
Private Placement
Private Placement | 12 Months Ended |
Dec. 31, 2023 | |
Private placement. | |
Private Placement | 19) Private Placement On July 13, 2023, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with certain accredited investors (the “Investors”), pursuant to which we agreed to sell in a private placement to the Investors (i) an aggregate of 15,000 shares of our newly-designated Series A Convertible Preferred Stock, with a par value of $0.0001 per share and a stated value of $1,000 per share (the “Series A Preferred Stock”), initially convertible into up to 6,666,668 shares of our common stock, par value $0.0001 per share (the “Common Stock”) at an initial conversion price of $2.25 per share (the “Series A Preferred Shares”), and (ii) warrants to acquire up to an aggregate of 6,666,668 shares of Common Stock (the “Warrants”) at an initial exercise price of $2.25 per share (collectively, the “Private Placement”). Pursuant to the terms of the Certificate of Designations of Series A Convertible Preferred Stock (the “Certificate of Designations”) and the Warrants, each of the Conversion Price (as defined below) and the exercise price and the number of shares underlying the Warrants is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to certain exceptions). As of December 31, 2023, the Conversion Price and the exercise price of the Warrants was equal to $2.25 per share. The Private Placement was exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D of the Securities Act and in reliance on similar exemptions under applicable state laws. The closing of the Private Placement occurred on July 17, 2023. The aggregate net proceeds from the Private Placement were $13,740,003. We intend to use the net proceeds from the Private Placement for general corporate purposes. We engaged Katalyst Securities LLC (the “Placement Agent”) to act as exclusive placement agent in connection with the Private Placement. Pursuant to an Engagement Letter with the Placement Agent, we paid to the Placement Agent or its designees (i) a cash fee equal to 8% of the gross proceeds of the Private Placement and (ii) warrants to acquire up to an aggregate of 533,334 shares of Common Stock (the “Placement Agent Warrants”) on the same terms as the Warrants. Transaction costs totaling $2,855,000 were incurred related to the Private Placement and consisted of $1,260,000 in cash expenses for placement agent and legal fees and $1,595,000 representing the fair value of the Placement Agent Warrants. These costs were proportionately allocated to the Series A Preferred Stock and Warrants based on the allocated gross proceeds of the instruments. Accordingly, none of the transaction costs were allocated against the carrying value of the Preferred Stock and $2,855,000 of transaction costs were immediately expensed related to the Warrants which are accounted for under ASC 480 (see Note 12). Series A Preferred Stock The terms of the Series A Preferred Shares are as set forth in the form of Certificate of Designations. The Series A Preferred Shares will be convertible into shares of Common Stock (the “Conversion Shares”) at the election of the holder at any time at an initial conversion price of $2.25 (the “Conversion Price”). The Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and the like, and subject to price-based adjustment in the event of any issuances of Common Stock, or securities convertible, exercisable or exchangeable for Common Stock, at a price below the then-applicable Conversion Price (subject to certain exceptions). We are required to redeem the Series A Preferred Shares in 13 equal monthly installments, commencing on November thirty stock splits, stock dividends, stock combinations, recapitalizations or other similar events) for 20 consecutive trading days and the daily dollar trading volume of the Common Stock exceeds two million dollars ($2,000,000) per day during the same period and certain equity conditions described in the Certificate of Designations are satisfied. The holders of the Series A Preferred Shares are entitled to dividends of 8% per annum, compounded monthly, which are payable, at our option, in cash or shares of Common Stock, or in a combination thereof, in accordance with the terms of the Certificate of Designations. On September 29, 2023, we filed an amendment to the Certificate of Designations with the Secretary of State for the State of Delaware, pursuant to which the terms of the Series A Preferred Stock were amended to permit certain additional procedures for the payment of redemptions and conversions Upon the occurrence and during the continuance of a Triggering Event (as defined in the Certificate of Designations), the Series A Preferred Shares will accrue dividends at the rate of 15% per annum. In connection with a Triggering Event, each holder of Series A Preferred Shares will be able to require us to redeem in cash any or all of the holder’s Series A Preferred Shares at a premium set forth in the Certificate of Designations. Upon conversion or redemption, the holders of the Series A Preferred Shares are also entitled to receive a dividend make-whole payment. The holders of Series A Preferred Shares have no voting rights on account of the Series A Preferred Shares, other than with respect to certain matters affecting the rights of the Series A Preferred Shares. During December 2023, the Company issued as equity awards shares of Common Stock and options to purchase shares of Common Stock representing an aggregate of 348,711 shares of Common Stock and shares of Common Stock issuable upon exercise of the options to certain directors, officers, and employees of the Company, representing an aggregate number of shares of Common Stock in excess of 5% of the shares of Common Stock issued and outstanding immediately prior to the date of the Purchase Agreement (the “December Issuances”). Under the terms of the Certificate of Designations, the Conversion Price of the Series A Preferred Shares was required to be adjusted as a result of the December Issuances. On March 21, 2024, the Company entered into waiver and amendment agreements with investors effective December 31, 2023, in which the investors waived the contractual requirement to adjust the Conversion Price related to the December Issuances and designated the December Issuances as Excluded Securities as defined in the Certificate of Designations. The Series A Preferred Shares were determined to be more akin to a debt-like host than an equity-like host. The Company identified the following embedded features that are not clearly and closely related to the debt host instrument: 1) make-whole interest upon a contingent redemption event, 2) make-whole interest upon a conversion event, 3) an installment redemption upon an Equity Conditions Failure (as defined in the Certificate of Designation), and 4) variable share-settled installment conversion. These features were bundled together, assigned probabilities of being affected and measured at fair value. Subsequent changes in fair value of these features are recognized in the Consolidated Statements of Operations. The Company estimated the $6,140,000 fair value of the bifurcated embedded derivative at issuance using a Monte Carlo simulation model, with the following inputs the fair value of our common stock of $3.54 on the issuance date, estimated equity volatility of 165.0%, estimated traded volume volatility of 790.0%, the time to maturity of 1.38 years, a risk free rate of 5.0%, a discounted market interest rate of 8.1%, dividend rate of 8.0%, a penalty dividend rate of 15.0%, and probability of default of 9.7%. The fair value of the bifurcated derivative liability was estimated utilizing the with and without method which uses the probability weighted difference between the scenarios with the derivative and the plain vanilla maturity scenario without a derivative. The discount to the fair value is included as a reduction to the carrying value of the Series A Preferred Shares. During the year ended December 31, 2023, the Company recorded a total discount of $15,000,000 upon issuance of the Series A Preferred Shares, which was comprised of the issuance date fair value of the associated embedded derivative of $6,140,000 and the difference between the remaining gross proceeds after allocation to the derivative liability and the residual fair value of the Series A Preferred Shares of $8,860,003, which represents the portion of the Warrant liability allocated to the discount. It was deemed probable that the Series A Preferred Shares will become redeemable, the Company accreted the Series A Preferred Shares from inception to December 31, 2023, pursuant to ASC 480-10-S99-3A utilizing the effective interest method. As the fair value of the liabilities required to be subsequently measured at fair value exceeded the net proceeds received, the Company recognized the excess of the fair value over the net proceeds received as a loss upon issuance of preferred stock of $11,088,997 which is included in other income (expense) in the Consolidated Statement of Operations. During the year ended December 31, 2023, the Company recorded a gain of $2,590,000 related to the change in fair value of the derivative liability which is recorded in other income (expense) on the Consolidated Statements of Operations. The Company estimated the $3,550,000 fair value of the bifurcated embedded derivative at December 31, 2023 using a Monte Carlo simulation model, with the following inputs the fair value of our common stock of $1.41 on the valuation date, estimated equity volatility of 115.0%, estimated traded volume volatility of 435.0%, the time to maturity of 0.92 years, risk free rate of 4.9%, a discounted market interest rate of 14.0%, dividend rate of 8.0%, a penalty dividend rate of 15.0%, and probability of default of 10.1%. As of December 31, 2023, the Company has notified the investors of its intention to redeem the upcoming installments due in cash and recorded a liability of $2,047,582 representing the cash payable to investors which includes $1,726,352 of the stated value of the Series A Preferred Shares, $187,277 of accrued dividends payable, and $133,955 for the cash premium which was recognized as a deemed dividend. As of December 31, 2023, the Company has redeemed an aggregate 2,930 Series A Preferred Shares for cash of $1,998,901 and issued 822,112 shares of Common Stock, elected pursuant to the terms of the Certificate of Designations, worth $1,195,745 in relief of the accrued Series A Preferred Stock payments payable. As of December 31, 2023, the Company has recognized $821,456 of preferred dividends which is comprised of $556,733 of preferred dividends at the stated dividend rate and $264,723 of deemed dividends for cash premium for installment redemptions. We are subject to certain affirmative and negative covenants regarding the incurrence of indebtedness, the existence of liens, the repayment of indebtedness, the payment of cash in respect of dividends (other than dividends pursuant to the Certificate of Designations), distributions or redemptions, and the transfer of assets, among other matters. There is no established public trading market for the Series A Preferred Shares and we do not intend to list the Series A Preferred Shares on any national securities exchange or nationally recognized trading system. Warrants The Warrants became exercisable for shares of Common Stock (the “Warrant Shares”) immediately upon issuance, at an initial exercise price of $2.25 per share (the “Exercise Price”) and expire five years On March 21, 2024, the Company entered into an Omnibus Waiver and Amendment (the “Waiver and Amendment”) with the Investors in the Private Placement, effective as of December 31, 2023. The Waiver and Amendment amended certain terms of the Warrants relating to the rights of the holders of the Warrants to provide that, in the event of a Fundamental Transaction (as defined in the Warrants) that is not within our control, including not approved by the Company’s Board of Directors, the holder of a Warrant shall only be entitled to receive from the Company or any successor entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of such Warrant, that is being offered and paid to the holders of our common stock in connection with the Fundamental Transaction. Registration Rights In connection with the Private Placement, we entered into a Registration Rights Agreement with the Investors (the “Registration Rights Agreement”), pursuant to which we agreed to file a resale registration statement (the “Registration Statement”) with the SEC to register for resale 200% of the Conversion Shares and the Warrant Shares promptly following the Closing Date, but in no event later than 30 Nasdaq Stockholder Approval Our ability to issue Conversion Shares and Warrant Shares using shares of Common Stock is subject to certain limitations set forth in the Certificate of Designations. Prior to receiving the Nasdaq Stockholder Approval, such limitations included a limit on the number of shares that may be issued until the time, if any, that our stockholders have approved the issuance of more than 19.99% of our outstanding shares of Common Stock in accordance with the rules of the Nasdaq Stock Market (the “Nasdaq Stockholder Approval”). In the Purchase Agreement we agreed to seek the Nasdaq Stockholder Approval at a meeting of stockholders, and we received the Nasdaq Stockholder Approval at a special meeting of stockholders held on September 14, 2023. Our directors and officers, who held approximately 29% of issued and our outstanding Common Stock as of the date of the Purchase Agreement, were party to a voting agreement pursuant to which, among other things, each party agreed, solely in their capacity as a stockholder, to vote all of their shares of Common Stock in favor of the approval of the Nasdaq Stockholder Approval and against any actions that could adversely affect our ability to perform our obligations under the Purchase Agreement. The voting agreement also placed certain restrictions on the transfer of the shares of Common Stock held by the signatories thereto. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | 20) Fair Value Measurements Fair value measurements discussed herein are based upon certain market assumptions and pertinent information available to management as of and during the year ended December 31, 2023. The carrying amounts of cash equivalents, accounts receivable, other current assets, other assets, accounts payable, and accrued expenses approximated their fair values as of December 31, 2023, due to their short-term nature. The fair value of the bifurcated embedded derivative related to the convertible preferred stock was estimated using a Monte Carlo simulation model, which uses as inputs the fair value of our common stock and estimates for the equity volatility and traded volume volatility of our common stock, the time to maturity of the convertible preferred stock, the risk-free interest rate for a period that approximates the time to maturity, dividend rate, a penalty dividend rate, and our probability of default. The fair value of the warrant liability was estimated using the Black Scholes Model which uses as inputs the following weighted average assumptions: dividend yield, expected term in years; equity volatility; the stock price and risk-free interest rate. Fair Value on a Recurring Basis The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The estimated fair value of the warrant liability and bifurcated embedded derivatives represent Level 3 measurements. The following table presents information about the Company’s liabilities that are measured at fair value on a recurring basis at December 31, 2023, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value: December 31 Description Level 2023 Liabilities: Bifurcated embedded derivative liability 3 $ 3,550,000 The following table sets forth a summary of the change in the fair value of the warrant liability that is measured at fair value on a recurring basis: Balance on December 31, 2022 $ — Issuance of warrants reported at fair value 21,544,000 Change in fair value of warrant liability (13,974,000) Reclassification of warrant liability to equity upon amendment (7,570,000) Balance on December 31, 2023 $ — The following table sets forth a summary of the change in the fair value of the bifurcated embedded derivative liability that is measured at fair value on a recurring basis: Balance on December 31, 2022 $ — Issuance of convertible preferred stock with bifurcated embedded derivative 6,140,000 Change in fair value of bifurcated embedded derivative (2,590,000) Balance on December 31, 2023 $ 3,550,000 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions | |
Related Party Transactions | 21) Related Party Transactions On November 28, 2023, the Board approved a payment to JCP III AIV of $125,000 in recognition of various management and advisory services previously provided to the Company by JCP III AIV. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Use of Estimates | Use of Estimates The preparation of Consolidated Financial Statements in conformity with generally accepted accounting principles ("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 warrant liability and 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. In January 2022, the Company sub-leased its Manalapan, New Jersey 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. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that subject the Company to concentrations of credit risk includes cash. The Company maintains cash on deposit at U.S.-based banks in amounts which, at times, may be in excess of insured limits of $250,000. |
Segment Reporting | Segment Reporting Operating segments are components of a Company for which separate financial information is available and evaluated regularly by the chief operating decision maker in assessing performance and deciding how to allocate resources. 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. The Medical Devices segment consists primarily of operations related to vacuum erection devices, which are sold domestically and internationally. See Note 18 Segment Reporting. |
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 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 service fees (“DSA”). 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 December 31, 2023, and 2022, the reserves for sales deductions were $4.7 million and $3.0 million, respectively. The most significant sales deductions included in this reserve relate to returns, contract rebates, and 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 December 31, 2023, and 2022, the reserves for product returns were $4.2 million and $2.3 million, respectively, and are included as a component of accrued expenses. During the years ended December 31, 2023, and December 2022, respectively, the Company recorded $3.4 million and $9.4 million of returns as a reduction of gross revenue. 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 does not exist since the timing from when the Company delivers the medical devices to when the customers pay for the product is typically less than one year. The Company records medical device sales net of any variable consideration, including but not limited to returns. The Company uses the expected value method when estimating its variable consideration. The identified variable consideration is recorded as a reduction of revenue at the time revenues from the medical device sales 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. 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. The Company has not made significant changes to the judgments made in applying Topic 606. As of December 31, 2023, and 2022, 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 December 31, 2023, and 2022. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Certain assets and liabilities are carried at fair value under 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, note payable, and other current liabilities approximate their fair values due to the short-term nature of these instruments. |
Accounts Receivable, net | Accounts Receivable, net |
Inventories | Inventories Inventories consist of finished goods held for sale and raw materials. Inventories are stated at the lower of cost or net realizable value, with cost determined using the first-in, first-out method. Inventories are adjusted for excess and obsolescence. Evaluation of excess inventory includes such factors as expiry date, inventory turnover, and management’s assessment of current product demand. See Note 4 Inventories. |
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 that 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, 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 through December 2029, representing the remaining economic useful life for the Stendra® product resulting in an impairment of approximately $7.5 million. As indicators of impairment exist as of December 31, 2022, the Company prepared an undiscounted cash flow analysis. This analysis includes projections of future revenue and expenses, which if not achieved could result in future impairment charges. These projections include continued significant sales growth based in part on expectation of higher sales volume resulting from increased product availability as a result of the Vivus settlement. Additionally, the Company is planning to invest in research and development pursuant to our Non-Prescription / OTC Strategies related to Stendra®, which we anticipate will dramatically increase product sales in the future, such that if our Stendra OTC strategy is not successful, we may have to partially or fully impair the remaining intangible balance. The Company’s prepared projections including the undiscounted cash flows of the remaining estimated useful lives through December 2031 for the medical device products. Management continued to analyze the Company’s intangible assets during 2023. Management noted that the Company’s financial results were consistent with the projections used in the December 31, 2022, analysis. Based on its analysis, Management concluded that there were no triggering events noted that would indicate a potential impairment for long-lived assets for any of the two asset groups, Metuchen Pharmaceuticals and TIMM/PTV. |
Fixed Assets | Fixed Assets Fixed assets consist of furniture and fixtures. Furniture and fixtures are recorded at cost, less accumulated depreciation, and are depreciated on a straight-line basis over its estimated useful life. The Company uses an estimated useful life of 7 years for furniture and fixtures. Depreciation expense for the years ended December 31, 2023, and 2022 was $10,220 and $10,220, respectively. |
Leases | Leases The Company accounts for leases in accordance with Accounting Standards Codification (“ASC”) Topic 842. Topic 842 requires organizations to recognize leased assets and liabilities on the balance sheet. The standard also requires disclosures to help investors and other financial statement users better understand the amount, timing and uncertainty of cash flows arising from leases. The Company determines if an arrangement is a lease at inception. This determination generally depends on whether the arrangement conveys to the Company the right to control the use of an explicitly or implicitly identified fixed asset for a period of time in exchange for consideration. Control of an underlying asset is conveyed to the Company if the Company obtains the rights to direct the use of and to obtain substantially all of the economic benefits from using the underlying asset. The Company has lease agreements that include lease and non-lease components, which the Company accounts for as a single lease component for all leases. Operating lease right-of-use (“ROU”) assets are included in other assets whereas operating lease liabilities are included in other current liabilities and other long-term liabilities on the Company’s consolidated balance sheets. Operating lease ROU assets and operating lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. The operating lease payments are recognized as lease expense on a straight-line basis over the lease term. Lease payments included in the measurement of the lease liability are comprised of fixed payments. Variable lease payments associated with the Company’s leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Variable lease payments are presented in the Company’s consolidated statements of operations in the same line item as expense arising from fixed lease payments for operating leases. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company applies this policy to all underlying asset categories. Topic 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The lease term for all of the Company’s leases includes the non-cancellable period of the lease plus any additional periods covered by either a Company option to extend (or not to terminate) the lease that the Company is reasonably certain to exercise, or an option to extend (or not to terminate) the lease controlled by the lessor. |
Stock-Based Compensation | See Note 9 Leases Stock-Based Compensation The Company accounts for stock-based awards to employees in accordance with applicable accounting principles, which requires compensation expense related to stock-based transactions, including employee stock options and restricted stock units, to be measured and recognized in the consolidated financial statements based on a determination of the fair value of the stock options or restricted stock units. The grant date fair value is determined using the Black-Scholes-Merton (“Black-Scholes”) pricing model for stock options and the closing price per share on the date of the award for restricted stock units. Employee stock option and restricted stock units expense is recognized over the employee’s requisite service period (generally the vesting period of the equity grant), except for performance based milestones which is recognized upon the probability of achievement. The Company accounts for forfeitures as they occur. |
Derivative Financial Instruments | Derivative Financial Instruments The Company evaluates all its financial instruments to determine if such instruments contain features that qualify as embedded derivatives per ASC 815, Derivatives and Hedging |
Preferred Stock | Preferred Stock The Company records shares of convertible preferred stock at their respective fair values on the dates of issuance, net of issuance costs. The Company concluded that the Series A Preferred Stock is more akin to a debt-type instrument than an equity-type instrument, therefore certain conversion features associated with the convertible preferred stock were deemed to not be clearly and closely related to the host instrument and were bifurcated as a derivative under ASC 815. The Company has applied the guidance in ASC 480-10-S99-3A, SEC Staff Announcement: Classification and Measurement of Redeemable Securities |
Warrants | Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be liability classified and recorded at their initial fair value on the date of issuance and remeasured at fair value and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations. The warrants are classified as liabilities in accordance with ASC 815 as they could be net cash settled in the event of a Fundamental Transaction. The fair value of the warrant liability was estimated using a Black-Scholes approach (see Note 20). Modification of warrants The Company applies the guidance in ASC 815-40 to account for warrants that are liability classified that are subsequently modified resulting in a reclassification to equity. The warrants are remeasured at fair value on the modification date, the change in fair value is recognized as a non-cash gain or loss on the statements of operations, and the warrants are reclassified to additional paid-in capital. |
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 consolidated financial statements. Under this method, the Company determines deferred tax assets and liabilities on the basis of the differences between the consolidated 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. As of December 31, 2023, and 2022, the Company has recorded a full valuation allowance against its deferred tax assets. The Company records uncertain tax positions in accordance under Accounting Standards Codification (“ASC “) Topic 740, Income taxes (“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 December 31, 2023, and 2022, no accrued interest or penalties are recorded in the consolidated balance sheet. |
Contingencies | Contingencies The Company may be subject to various patent challenges, product liability claims, government investigations and other legal proceedings in the ordinary course of business. Legal fees and other expenses related to litigation are expensed as incurred and included in general and administrative expenses in the consolidated statements of operations. |
Shipping Costs | Shipping Costs The Company records the costs of shipping related to prescription medication sales in general and administrative expense in its consolidated statements of operations. There were no shipping costs for the years ended December 31, 2023, and 2022. Shipping costs related to medical devices are recorded as revenue and subsequently deducted as a component of cost of goods sold in the consolidated statements of operations. Shipping costs for the years ended December 31, 2023, and 2022 were $60,216 and $125,368, |
Basic and Diluted Net Loss per Common Share | Basic and Diluted Net Loss per Common Share |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Accounting Pronouncements Adopted In June 2016, the FASB issued ASU No. 2016-13, Measurement of Credit Losses on Financial Instruments In August 2020, the FASB issued ASU 2020-06, Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The ASU simplifies the accounting for convertible instruments by removing certain separation models in ASC 470-20, Debt—Debt with Conversion and Other Options, for convertible instruments. The ASU updates the guidance on certain embedded conversion features that are not required to be accounted for as derivatives under Topic 815, Derivatives and Hedging, or that do not result in substantial premiums accounted for as paid-in capital, such that those features are no longer required to be separated from the host contract. Further, the ASU made amendments to the EPS guidance in Topic 260 for convertible debt instruments, the most significant impact of which is requiring the use of the if-converted method for diluted EPS calculation, and no longer allowing the net share settlement method. The ASU also made revisions to Topic 815-40, which provides guidance on how an entity must determine whether a contract qualifies for a scope exception from derivative accounting. The amendments to Topic 815-40 change the scope of contracts that are recognized as assets or liabilities. The Company adopted the new guidance with its fiscal year beginning January 1, 2023. The adoption of ASU 2020-06 did not have a material effect on the company’s financial statements. Accounting Pronouncements Not Yet Adopted In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires an enhanced disclosure of significant segment expenses on an annual and interim basis. This guidance will be effective for the annual periods beginning the year ended December 31, 2024, and for interim periods beginning January 1, 2025. Early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. The Company is currently evaluating segment expense disclosures related to its annual report for fiscal year 2024. In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for the annual periods beginning the year ended December 31, 2025. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company is currently evaluating income tax disclosures related to its annual report for fiscal year 2025. |
Accounts Receivable, net (Table
Accounts Receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounts Receivable, net | |
Schedule of accounts receivable | December 31, December 31, 2023 2022 Gross accounts receivables $ 2,887,317 $ 2,757,839 Distribution service fees (398,968) (339,094) Chargebacks accrual (2,462) (1,960) Cash discount allowances (24,639) (99,671) Allowance for doubtful accounts (235,097) (206,868) Total accounts receivable, net $ 2,226,151 $ 2,110,246 |
Inventories, net (Tables)
Inventories, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventories, net | |
Schedule of Inventories | December 31, 2023 December 31, 2022 Raw materials $ 1,430,139 $ 1,574,683 Finished goods 180,252 240,430 Total inventory $ 1,610,391 $ 1,815,113 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Prepaid Expenses and Other Current Assets. | |
Schedule of prepaid expenses and other current assets | December 31, 2023 December 31, 2022 Prepaid insurance $ 45,664 $ 109,414 Prepaid FDA fees 937,652 — Prepaid coupon fees — 71,500 API purchase commitment asset (see Note 14) 704,729 663,984 Other prepaid expenses 234,459 333,158 Other current assets 111,476 138,226 Total prepaid expenses and other current assets $ 2,033,980 $ 1,316,282 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Intangible Assets | |
Schedule of intangible assets | Balance at December 31, 2021 $ 25,293,149 Amortization expense (5,588,665) Intangible Impairment (7,460,000) Balance at December 31, 2022 12,244,484 Amortization expense (3,272,747) Balance at December 31, 2023 $ 8,971,737 |
Schedule of future annual amortization related to the company's intangible assets | The future annual amortization related to the Company’s intangible assets is as follows as of December 31, 2023: 2024 $ 2,800,623 2025 1,754,329 2026 1,442,186 2027 1,212,871 2028 996,637 Thereafter 765,091 Total $ 8,971,737 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Expenses | |
Schedule of accrued expenses | December 31, 2023 December 31, 2022 Accrued product returns $ 4,178,176 $ 2,311,647 Accrued contract rebates 128,562 279,018 Due to 3PL/Wholesalers 75,727 155,081 Accrued bonuses 665,184 427,500 Accrued professional fees 15,000 51,620 Other accrued expenses 297,428 409,796 Total accrued expenses $ 5,360,077 $ 3,634,662 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt | |
Schedule of future principal payments of the promissory note | 2024 $ 1,156,550 2025 2,720,940 2026 3,264,351 2027 872,073 Total $ 8,013,914 Less: current portion (1,156,550) Promissory note, net of current portion $ 6,857,364 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Operating Leases | |
Summary of supplemental balance sheet information related to leases | As of December 31, 2023 As of December 31, 2022 Operating lease ROU asset: Other assets $ 226,259 $ 358,472 Operating lease liability: Other current liabilities $ 125,022 $ 142,340 Other long-term liabilities 137,655 262,677 Total operating lease liability $ 262,677 $ 405,017 |
Summary of supplemental lease term and discount rate information related to leases | As of December 31, 2023 As of December 31, 2022 Weighted-average remaining lease terms – operating leases 1.7 years 2.7 years Weighted-average discount rate – operating leases 12.6 % 12.6 % |
Summary of supplemental cash flow information related to leases | For the Years Ended December 31, 2023 2022 Operating cash flows from operating leases $ 189,374 $ 187,739 |
Summary of future minimum lease payments under non-cancelable leases | Lease Liability Maturity Analysis Operating Leases 2024 155,242 2025 81,107 2026 82,325 Total lease payments 318,674 Less: Imputed Interest (55,997) Total $ 262,677 |
Schedule of future minimum sublease income under non-cancelable leases | Sublease income Operating Leases 2024 $ 56,000 Total $ 56,000 |
Stock Options and Restricted _2
Stock Options and Restricted Stock Units ("RSU's") (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stock Options and Restricted Stock Units ("RSU's") | |
Schedule of stock options | Weighted-Average Aggregate Intrinsic Weighted-Average Remaining Contractual Value Number of Shares Exercise Price Term (Years) ($ in thousands) Options outstanding at December 31, 2021 61,567 $ 33.80 9.23 $ — Options granted 5,000 33.40 Less: options expired/cancelled (7,500) (32.10) Options outstanding at December 31, 2022 59,067 $ 34.02 8.29 $ — Options granted 455,066 1.27 Less: options forfeited (5,000) (33.40) Options outstanding at December 31, 2023 509,133 $ 4.75 9.46 $ 66 Options exercisable at December 31, 2023 138,600 $ 14.15 8.90 $ — Weighted-Average Number of Shares Price RSUs outstanding at December 31, 2021 11,642 $ 32.90 RSUs granted 30,927 11.90 Less: RSUs forfeited — — Less: RSUs expired/cancelled — — Less: RSUs vested (2,331) (30.90) RSUs outstanding at December 31, 2022 40,238 $ 16.87 RSUs granted — — Less: RSUs forfeited — — Less: RSUs expired/cancelled — — Less: RSUs vested (40,238) (16.87) RSUs outstanding at December 31, 2023 — $ — |
Common Stock Warrants (Tables)
Common Stock Warrants (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Common Stock Warrants | |
Schedule of warrants | Aggregate Intrinsic Weighted-Average Remaining Value ($ in Number of Warrants Exercise Price Contractual Term thousands) Warrants outstanding - December 31, 2021 1,004,115 $ 105.85 4.5 $ — Warrants issued in 2022 — — — — Warrants outstanding - December 31, 2022 1,004,115 $ 105.85 3.5 $ — Warrants issued in 2023 7,200,002 2.25 Warrants expired in 2023 (278) (16.00) Warrants outstanding - December 31, 2023 8,203,839 $ 14.93 4.3 $ — |
Dilutive convertible securiti_2
Dilutive convertible securities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Dilutive convertible securities | |
Summary of potentially dilutive securities convertible into common shares | For the Years Ended December 31, 2023 2022 Stock options 509,133 59,067 RSUs — 40,238 Series A Convertible Preferred stock 5,985,519 — Warrants 8,203,839 1,004,115 Total 14,698,491 1,103,420 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Summary of current and deferred income tax expense (benefit) | For the Years Ended December 31, 2023 2022 Current expense (benefit): Federal $ — $ — State — — Total current expense (benefit) — — Deferred expense (benefit): Federal — — State — — Total deferred expense (benefit) — — Total income tax expense (benefit) $ — $ — |
Summary of reconciliation of the Company's statutory income tax rate to the Company's effective income tax rate | For the Years Ended December 31, 2023 2022 Income at US statutory rate 21.00 % 21.00 % State taxes, net of federal benefit 3.85 % 1.56 % Change in Fair Value of Derivative Liability 6.66 % — % Revaluation of Warrants 35.95 % — % Warrant Issuance Costs (7.34) % — % Loss on Issuance of Preferred Stock (28.53) % — % Change in State Rate 11.25 % — % Valuation allowance (43.74) % (23.98) % Other 0.90 % 1.42 % Effective income tax rate 0.00 % 0.00 % |
Summary of significant components of the Company's deferred tax assets and liabilities | For the Years Ended December 31, 2023 2022 Accruals $ 221,841 $ 229,348 Intangible assets (737,719) (818,127) Depreciation and amortization 7,458,252 7,379,214 Expenses not currently deductible 982,475 1,140,594 Net operating loss carryforwards 9,475,773 6,013,400 Interest expense limitation 251,023 226,588 Stock-based compensation 400,813 2,882,814 Valuation allowance (18,052,458) (17,053,830) Total deferred tax asset (liability) $ — $ — |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Information | |
Summary of results of operations by reportable segment | Prescription Medical For the Year Ended December 31, 2023 Medications Devices Corporate Consolidated Net sales $ 2,286,373 $ 3,536,015 $ — $ 5,822,388 Cost of goods sold 277,490 1,353,730 — 1,631,220 Selling, general and administrative expenses 1,736,512 1,885,489 5,639,470 9,261,471 Warrant issuance costs — — 2,855,000 2,855,000 Research and development expenses 2,272,069 137,025 — 2,409,094 Depreciation and amortization expense 2,285,175 997,792 — 3,282,967 Change in fair value of derivative liability — — (2,590,000) (2,590,000) Change in fair value of warrant liability — — (13,974,000) (13,974,000) Interest income — — (515,311) (515,311) Interest expense, promissory note — — 536,138 536,138 Loss on issuance of Series A Preferred Stock — — 11,088,997 11,088,997 Net loss $ (4,284,873) $ (838,021) $ (3,040,294) $ (8,163,188) Prescription Medical For the Year Ended December 31, 2022 Medications Devices Corporate Consolidated Net sales $ 2,734,639 $ 3,257,415 $ — $ 5,992,054 Cost of goods sold 949,197 1,340,221 — 2,289,418 Selling, general and administrative expenses 4,947,466 1,685,678 5,576,018 12,209,162 Gain on settlement with Vivus (3,389,941) — — (3,389,941) Research and development expenses 1,541,714 198,566 — 1,740,280 Depreciation and amortization expense 4,442,922 1,155,962 — 5,598,884 Intangible asset impairment 7,460,000 — — 7,460,000 Change in fair value of derivative liability — — (460,000) (460,000) Interest income (14,194) — — (14,194) Interest expense, promissory note — — 596,018 596,018 Net loss $ (13,202,525) $ (1,123,012) $ (5,712,036) $ (20,037,573) |
Summary of net sales by geographic region | For the Years Ended December 31, Net sales 2023 2022 United States $ 4,526,635 $ 4,799,132 International 1,295,753 1,192,922 $ 5,822,388 $ 5,992,054 |
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 December 31, 2023, are summarized as follows: Prescription Medications Medical Devices Consolidated Intangible assets, net $ 4,903,749 $ 4,067,988 $ 8,971,737 Total segment assets $ 27,891,180 $ 5,904,615 $ 33,795,795 The Company’s assets by reportable segment and reconciliation of segment assets to consolidated assets as of December 31, 2022, are summarized as follows: Prescription Medications Medical Devices Consolidated Intangible assets, net $ 7,178,704 $ 5,065,780 $ 12,244,484 Total segment assets $ 25,831,048 $ 6,590,166 $ 32,421,214 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements | |
Schedule of fair value of financial liabilities on recurring basis | December 31 Description Level 2023 Liabilities: Bifurcated embedded derivative liability 3 $ 3,550,000 The following table sets forth a summary of the change in the fair value of the warrant liability that is measured at fair value on a recurring basis: Balance on December 31, 2022 $ — Issuance of warrants reported at fair value 21,544,000 Change in fair value of warrant liability (13,974,000) Reclassification of warrant liability to equity upon amendment (7,570,000) Balance on December 31, 2023 $ — |
summary of the change in the fair value of financial liabilities | Balance on December 31, 2022 $ — Issuance of convertible preferred stock with bifurcated embedded derivative 6,140,000 Change in fair value of bifurcated embedded derivative (2,590,000) Balance on December 31, 2023 $ 3,550,000 |
Nature of Operations, Basis o_2
Nature of Operations, Basis of Presentation, and Liquidity - Additional Information (Details) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2022 | Jul. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Nature of Operations, Basis of Presentation, Liquidity and Going Concern | ||||
Reverse stock split ratio | 0.1 | |||
Cash | $ 13,300,000 | |||
Working capital | 9,600,000 | |||
Accumulated deficit | (98,889,581) | $ (90,726,393) | ||
Principal amount of notes payable | 10,201,758 | |||
Interest Amount | 8,000,000 | |||
Proceeds from gross proceeds | $ 15,000,000 | 15,000,003 | ||
Minimum | ||||
Nature of Operations, Basis of Presentation, Liquidity and Going Concern | ||||
Reverse stock split ratio | 0.25 | |||
Maximum | ||||
Nature of Operations, Basis of Presentation, Liquidity and Going Concern | ||||
Reverse stock split ratio | 0.1 | |||
Vivus, Inc | Settlement Agreement | ||||
Nature of Operations, Basis of Presentation, Liquidity and Going Concern | ||||
Principal amount of notes payable | $ 10,201,758 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | |
Summary of Significant Accounting Policies | ||
Number of operating segments | segment | 2 | |
Reserves for product returns | $ 4.2 | $ 2.3 |
Amount of returns | $ 3.4 | 9.4 |
Revenue practical expedient, financing component | true | |
Prescription Medications | ||
Summary of Significant Accounting Policies | ||
Reserves for sales deductions | $ 4.7 | $ 3 |
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 ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Summary of Significant Accounting Policies | ||
Impairment charge of approximate | $ 0 | $ 7,460,000 |
Income Taxes | ||
Accrued interest or penalties | 0 | 0 |
Shipping costs | 0 | 0 |
Stendra product | ||
Summary of Significant Accounting Policies | ||
Impairment charge of approximate | 7,500,000 | |
Medical Devices | ||
Income Taxes | ||
Shipping costs | $ 60,216 | 125,368 |
Furniture and Fixtures [Member] | ||
Summary of Significant Accounting Policies | ||
Estimated useful life (in years) | 7 years | |
Depreciation expense | $ 10,220 | $ 10,220 |
Accounts Receivable, net (Detai
Accounts Receivable, net (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts Receivable, net | ||
Gross accounts receivables | $ 2,887,317 | $ 2,757,839 |
Distribution service fees | (398,968) | (339,094) |
Chargebacks accrual | (2,462) | (1,960) |
Cash discount allowances | (24,639) | (99,671) |
Allowance for doubtful accounts | (235,097) | (206,868) |
Total accounts receivable, net | $ 2,226,151 | $ 2,110,246 |
Accounts Receivable, net - Addi
Accounts Receivable, net - Additional information (Details) - customer | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Gross billings from customers | Customer concentration risk | ||
Accounts Receivable, net | ||
Number of customers | 3 | 4 |
Gross billings from customers | Customer concentration risk | One customers | ||
Accounts Receivable, net | ||
Concentration risk percentage | 22% | 26% |
Gross billings from customers | Customer concentration risk | Two customers | ||
Accounts Receivable, net | ||
Concentration risk percentage | 21% | 21% |
Gross billings from customers | Customer concentration risk | Three customers | ||
Accounts Receivable, net | ||
Concentration risk percentage | 17% | 17% |
Gross billings from customers | Customer concentration risk | Four customers | ||
Accounts Receivable, net | ||
Concentration risk percentage | 16% | |
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 | 36% | 43% |
Account receivables | Credit concentration risk | Two customers | ||
Accounts Receivable, net | ||
Concentration risk percentage | 24% | 16% |
Account receivables | Credit concentration risk | Three customers | ||
Accounts Receivable, net | ||
Concentration risk percentage | 16% |
Inventories, net (Details)
Inventories, net (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Inventories, net | ||
Raw Materials | $ 1,430,139 | $ 1,574,683 |
Finished goods | 180,252 | 240,430 |
Total inventory | $ 1,610,391 | $ 1,815,113 |
Inventories, net - Additional I
Inventories, net - Additional Information (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Inventories, net | ||
Finished goods are net of valuation reserves | $ 295,411 | $ 364,300 |
Raw materials are net of valuation reserves | $ 0 | $ 2,872,977 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Prepaid Expenses and Other Current Assets. | ||
Prepaid insurance | $ 45,664 | $ 109,414 |
Prepaid FDA fees | 937,652 | |
Prepaid coupon fees | 71,500 | |
API purchase commitment asset (see Note 14) | 704,729 | 663,984 |
Other prepaid expenses | 234,459 | 333,158 |
Other current assets | 111,476 | 138,226 |
Total prepaid expenses and other current assets | $ 2,033,980 | $ 1,316,282 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Intangible Assets | ||
Balance | $ 12,244,484 | $ 25,293,149 |
Amortization expense | (3,272,747) | (5,588,665) |
Intangible Impairment | 0 | (7,460,000) |
Balance | $ 8,971,737 | $ 12,244,484 |
Intangible Assets - Future annu
Intangible Assets - Future annual amortization (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Intangible Assets | |||
2024 | $ 2,800,623 | ||
2025 | 1,754,329 | ||
2026 | 1,442,186 | ||
2027 | 1,212,871 | ||
2028 | 996,637 | ||
Thereafter | 765,091 | ||
Total | $ 8,971,737 | $ 12,244,484 | $ 25,293,149 |
Intangible Assets - Additional
Intangible Assets - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible Assets | |||
Carrying value of intangible assets | $ 8,971,737 | $ 12,244,484 | $ 25,293,149 |
Impairment charge of approximate | $ 0 | 7,460,000 | |
Stendra product | |||
Intangible Assets | |||
Estimated useful lives of intangible assets | 10 years | ||
Carrying value of intangible assets | $ 4,900,000 | 7,200,000 | |
Impairment charge of approximate | 7,500,000 | ||
Timm Medical product | |||
Intangible Assets | |||
Estimated useful lives of intangible assets | 12 years | ||
Carrying value of intangible assets | $ 3,200,000 | 4,000,000 | |
PTV product | |||
Intangible Assets | |||
Estimated useful lives of intangible assets | 12 years | ||
Carrying value of intangible assets | $ 900,000 | $ 1,100,000 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued Expenses | ||
Accrued product returns | $ 4,178,176 | $ 2,311,647 |
Accrued contract rebates | 128,562 | 279,018 |
Due to 3PL/Wholesalers | 75,727 | 155,081 |
Accrued bonuses | 665,184 | 427,500 |
Accrued professional fees | 15,000 | 51,620 |
Other accrued expenses | 297,428 | 409,796 |
Total accrued expenses | $ 5,360,077 | $ 3,634,662 |
Debt - Promissory Note (Details
Debt - Promissory Note (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Debt Instrument | ||
Principal amount of notes payable | $ 10,201,758 | |
Payment of promissory note | (1,463,862) | $ (1,623,983) |
Note | ||
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% | |
Repayments of notes payable | $ 2,000,000 | 1,600,000 |
Principal balance | $ 8,000,000 | $ 9,500,000 |
Debt - Future minimum principal
Debt - Future minimum principal payments (Details) - Promissory note | Dec. 31, 2023 USD ($) |
Debt Instrument | |
2024 | $ 1,156,550 |
2025 | 2,720,940 |
2026 | 3,264,351 |
2027 | 872,073 |
Total | 8,013,914 |
Less: current portion | (1,156,550) |
Promissory note, net of current portion | $ 6,857,364 |
Operating Leases - (Details)
Operating Leases - (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Jan. 10, 2022 | |
Operating Leases | ||
Security deposit received for sublease | $ 14,000 | |
Operating lease expense per month | $ 7,000 | |
Minimum | ||
Operating Leases | ||
Remaining lease terms | 8 months 12 days | |
Maximum | ||
Operating Leases | ||
Remaining lease terms | 3 years |
Operating Leases - Lease expens
Operating Leases - Lease expense (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Lease Cost: | ||
Fixed lease cost | $ 179,246 | $ 179,246 |
Amount of fixed lease cost which are offset by sublease income | $ 84,000 |
Operating Leases - Supplemental
Operating Leases - Supplemental balance sheet information related to leases (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Supplemental balance sheet information related to leases | ||
Operating lease ROU asset: | $ 226,259 | $ 358,472 |
Other assets | Operating lease ROU asset: | Operating lease ROU asset: |
Operating lease liability: | ||
Operating lease liability, current | $ 125,022 | $ 142,340 |
Other current liabilities | Other current liabilities | Other current liabilities |
Operating lease liability, noncurrent | $ 137,655 | $ 262,677 |
Other long-term liabilities | Other long-term liabilities | Other long-term liabilities |
Total | $ 262,677 | $ 405,017 |
Operating Leases - Supplement_2
Operating Leases - Supplemental lease term and discount rate information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Leases | ||
Weighted-average remaining lease terms - operating leases | 1 year 8 months 12 days | 2 years 8 months 12 days |
Weighted-average discount rate - operating leases | 12.60% | 12.60% |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 189,374 | $ 187,739 |
Operating Leases - Future minim
Operating Leases - Future minimum lease payments under non-cancelable leases (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Lease Liability Maturity Analysis | ||
2024 | $ 155,242 | |
2025 | 81,107 | |
2026 | 82,325 | |
Total lease payments | 318,674 | |
Less: Imputed Interest | (55,997) | |
Total | $ 262,677 | $ 405,017 |
Operating Leases - Future min_2
Operating Leases - Future minimum sublease income under non-cancelable leases (Details) | Dec. 31, 2023 USD ($) |
Sublease income | |
2024 | $ 56,000 |
Total | $ 56,000 |
Operating Leases - Additional i
Operating Leases - Additional information (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
Operating leases that had not yet commenced | $ 0 | $ 0 |
Stockholders' Equity - Number o
Stockholders' Equity - Number of shares held (Details) | Feb. 29, 2024 shares | Dec. 21, 2023 installment shares |
CorProminence, LLC | ||
Class of Stock | ||
Issuance of common stock | 200,000 | |
Number of installments | installment | 2 | |
CorProminence, LLC | Subsequent event | ||
Class of Stock | ||
Number of common stock issued upon share based compensation plan | 70,922 | |
Fady Boctor, the President and Chief Commercial Officer | ||
Class of Stock | ||
Number of common stock issued upon share based compensation plan | 49,645 |
Stockholders' Equity - Continge
Stockholders' Equity - Contingent Consideration (Details) | 12 Months Ended |
Dec. 31, 2023 shares | |
Stockholders' Equity | |
Common stock potentially issuable upon the achievement of certain milestones | 1,423,209 |
Milestones term for achievement of stock price and market capitalization | 2 years |
Stockholders' Equity - Market C
Stockholders' Equity - Market Capitalization (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Collaborative Arrangement and Arrangement Other than Collaborative | ||
Gains on revaluation of derivative liabilities | $ 2,590,000 | $ 460,000 |
Maximum | Metuchen | ||
Collaborative Arrangement and Arrangement Other than Collaborative | ||
Milestone earnout payments (in shares) | 400,000 | |
Market Capitalization/Gross Proceeds Earnout Payments | Metuchen | ||
Collaborative Arrangement and Arrangement Other than Collaborative | ||
Fair value of the derivative liability | 0 | |
Gains on revaluation of derivative liabilities | $ 500,000 | |
Market Capitalization/Gross Proceeds Earnout Payments | Maximum | Metuchen | ||
Collaborative Arrangement and Arrangement Other than Collaborative | ||
Milestone earnout payments (in shares) | 1,023,209 |
Stock Options and Restricted _3
Stock Options and Restricted Stock Units ("RSU's") (Details) - shares | Sep. 14, 2023 | Dec. 22, 2021 | Dec. 31, 2023 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares increased for issuance | 2,500,000 | 152,166 | |
Number of shares available for issuance | 2,760,000 | 260,000 | 2,158,658 |
Number of shares authorized | 2,760,000 | ||
Fady Boctor, the President and Chief Commercial Officer | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for issuance | 107,834 |
Stock Options and Restricted _4
Stock Options and Restricted Stock Units ("RSU's") - Summary of stock options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Apr. 07, 2022 | Jan. 04, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Shares | |||||
Options outstanding and exercisable on beginning | 59,067 | 61,567 | |||
Options granted | 5,000 | 455,066 | 5,000 | ||
Less: options and RSU's forfeited | (5,000) | ||||
Less: options and RSU's expired/cancelled | (7,500) | ||||
Options and RSU's outstanding at the end | 509,133 | 59,067 | 61,567 | ||
Options and RSU's exercisable at the end | 138,600 | ||||
Weighted-Average Fair Value at Grant Date | |||||
Options outstanding and exercisable at the beginning (in dollars per share) | $ 34.02 | $ 33.80 | |||
Options granted (in dollars per share) | $ 33.40 | 1.27 | 33.40 | ||
Less: options forfeited (in dollars per share) | (33.40) | ||||
Less: options expired/cancelled (in dollars per share) | (32.10) | ||||
Options outstanding at the end (in dollars per share) | 4.75 | $ 34.02 | $ 33.80 | ||
Options exercisable at the end (in dollars per share) | $ 14.15 | ||||
Weighted-Average Remaining Contractual Term (Years) and Aggregate Intrinsic Value | |||||
Options and RSU's outstanding at the beginning (in years) | 9 years 5 months 15 days | 8 years 3 months 14 days | 9 years 2 months 23 days | ||
Options outstanding and exercisable at the beginning (in dollars) | $ 66 | ||||
Options and RSU's outstanding at the ending (in years) | 9 years 5 months 15 days | 8 years 3 months 14 days | 9 years 2 months 23 days | ||
Options exercisable at the end (in years) | 8 years 10 months 24 days | ||||
Options outstanding at the end (in dollars) | $ 66 | ||||
Restricted Stock Units | |||||
Number of Shares | |||||
Options outstanding and exercisable on beginning | 40,238 | 11,642 | |||
Options granted | 24,876 | 30,927 | |||
Less: RSU's vested | (40,238) | (2,331) | |||
Options and RSU's outstanding at the end | 40,238 | 11,642 | |||
Weighted-Average Fair Value at Grant Date | |||||
Options outstanding and exercisable at the beginning (in dollars per share) | $ 16.87 | $ 32.90 | |||
Options granted (in dollars per share) | $ 11.90 | 11.90 | |||
Less: RSU's vested | $ 16.87 | 30.90 | |||
Options outstanding at the end (in dollars per share) | $ 16.87 | $ 32.90 |
Stock Options and Restricted _5
Stock Options and Restricted Stock Units ("RSU's") - Additional Information (Details) | 12 Months Ended | ||||||||
Apr. 10, 2024 $ / shares shares | Apr. 10, 2024 item $ / shares | Apr. 10, 2024 employee $ / shares | Dec. 21, 2023 director shares | Apr. 10, 2023 director $ / shares shares | Apr. 07, 2022 director $ / shares shares | Jan. 04, 2022 $ / shares shares | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | |
Stock Options and Restricted Stock Units ("RSUs") | |||||||||
Number of options granted | 5,000 | 455,066 | 5,000 | ||||||
Exercise price | $ / shares | $ 33.40 | $ 1.27 | $ 33.40 | ||||||
Vesting percentage | 100% | ||||||||
Stock-based compensation expense | $ | $ 417,230 | $ 1,195,076 | |||||||
Unrecognized stock-based compensation expense | $ | $ 197,000 | ||||||||
Unrecognized stock-based compensation expense, term | 3 months 7 days | ||||||||
Fady Boctor, the President and Chief Commercial Officer | Director | |||||||||
Stock Options and Restricted Stock Units ("RSUs") | |||||||||
Number of options granted | 160,000 | 156,000 | |||||||
Exercise price | $ / shares | $ 0.99 | ||||||||
Number of directors to whom option is granted | director | 4 | 4 | |||||||
Vesting percentage | 100% | 100% | |||||||
Vesting period | 1 year | ||||||||
Fady Boctor, the President and Chief Commercial Officer | Executive and Employees | |||||||||
Stock Options and Restricted Stock Units ("RSUs") | |||||||||
Exercise price | $ / shares | $ 1.01 | ||||||||
Options to purchase shares of common stock | 139,066 | ||||||||
Options to exercise price of common stock | $ / shares | $ 1.41 | $ 1.41 | $ 1.41 | ||||||
Share-based Compensation Arrangement by Share-based Payment | 2 | 1 | |||||||
Dividend rate | 0% | ||||||||
Volatility | 107.10% | ||||||||
Risk-free rate | 3.70% | ||||||||
Restricted Stock Units | |||||||||
Stock Options and Restricted Stock Units ("RSUs") | |||||||||
Number of options granted | 24,876 | 30,927 | |||||||
Exercise price | $ / shares | $ 11.90 | $ 11.90 | |||||||
Number of directors to whom option is granted | director | 4 | ||||||||
Vesting percentage | 100% | ||||||||
Vesting period | 1 year | ||||||||
Vesting options and executive | 40,238 | 2,331 | |||||||
Tania King | Restricted Stock Units | |||||||||
Stock Options and Restricted Stock Units ("RSUs") | |||||||||
Number of options granted | 6,050 | ||||||||
Exercise price | $ / shares | $ 11.90 | ||||||||
Vesting period | 1 year | ||||||||
Share-Based Payment Arrangement, Tranche One | Fady Boctor, the President and Chief Commercial Officer | Executive and Employees | |||||||||
Stock Options and Restricted Stock Units ("RSUs") | |||||||||
Vesting options and executive | 84,533 | ||||||||
Share Based Compensation Award Tranche Two | Fady Boctor, the President and Chief Commercial Officer | Executive and Employees | |||||||||
Stock Options and Restricted Stock Units ("RSUs") | |||||||||
Vesting options and executive | 54,533 |
Common Stock Warrants - Additio
Common Stock Warrants - Additional Information (Details) | 12 Months Ended | |||
Jul. 13, 2023 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) $ / shares | Dec. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares | |
Common Stock Warrants | ||||
Exercise price of warrants | $ / shares | $ 2.25 | $ 14.93 | $ 105.85 | $ 105.85 |
Warrants term | 5 years | |||
Reclass of warrant liability upon warrant modification | $ 7,570,000 | |||
Gain from change in fair value of the warrant liability | (13,974,000) | |||
Private Placement | ||||
Common Stock Warrants | ||||
Fair value of warrants | $ 21,544,000 | 7,570,000 | ||
Transaction costs incurred | $ 1,595,000 | 2,855,000 | ||
Gain from change in fair value of the warrant liability | $ 13,974,000 | |||
Private Placement | Placement Agent Warrants | ||||
Common Stock Warrants | ||||
Warrants to purchase shares of common stock | shares | 533,333 | |||
Exercise price of warrants | $ / shares | $ 2.25 | |||
Warrants term | 5 years | |||
Percentage of common stock | 8% | |||
Private Placement | Investor Warrants | ||||
Common Stock Warrants | ||||
Warrants to purchase shares of common stock | shares | 6,666,668 | |||
Exercise price of warrants | $ / shares | $ 2.25 | |||
Warrants term | 5 years | |||
Private Placement | Dividend yield | ||||
Common Stock Warrants | ||||
Warrants, measurement input | 0 | 0 | ||
Private Placement | Expected term | ||||
Common Stock Warrants | ||||
Warrants, measurement input | 0.050 | 0.0453 | ||
Private Placement | Equity volatility | ||||
Common Stock Warrants | ||||
Warrants, measurement input | 1.100 | 1.150 | ||
Private Placement | Risk-free interest rate | ||||
Common Stock Warrants | ||||
Warrants, measurement input | 0.0393 | 0.0388 |
Common Stock Warrants - Summary
Common Stock Warrants - Summary of warrants (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of Warrants | |||
Warrants outstanding at the beginning | 1,004,115 | 1,004,115 | |
Warrants issued | 7,200,002 | ||
Warrants expired | (278) | ||
Warrants outstanding at the end | 8,203,839 | 1,004,115 | 1,004,115 |
Weighted Average Exercise Price | |||
Weighted-Average Exercise Price at the beginning (in dollars per share) | $ 105.85 | $ 105.85 | |
Warrants issued (in dollars per share) | 2.25 | ||
Warrants expired (in dollars per share) | 16 | ||
Weighted-Average Exercise Price at the ending (in dollars per share) | $ 14.93 | $ 105.85 | $ 105.85 |
Remaining Contractual Term | |||
Warrants outstanding (in years) | 4 years 3 months 18 days | 3 years 6 months | 4 years 6 months |
Dilutive convertible securiti_3
Dilutive convertible securities - Potentially dilutive securities convertible into common shares that were excluded from the calculation of diluted net loss per share (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Basic and Diluted Net Loss per Common Share | ||
Total | 14,698,491 | 1,103,420 |
Employee Stock Option | ||
Basic and Diluted Net Loss per Common Share | ||
Total | 509,133 | 59,067 |
RSUs | ||
Basic and Diluted Net Loss per Common Share | ||
Total | 40,238 | |
Series A Convertible Preferred stock | ||
Basic and Diluted Net Loss per Common Share | ||
Total | 5,985,519 | |
Warrants | ||
Basic and Diluted Net Loss per Common Share | ||
Total | 8,203,839 | 1,004,115 |
Marketing, Licensing and Dist_2
Marketing, Licensing and Distribution Agreements - Vivus (Details) | 12 Months Ended | |||
Jan. 18, 2022 USD ($) | Sep. 30, 2016 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Marketing, Licensing and Distribution Agreements | ||||
Principal amount of notes payable | $ 10,201,758 | |||
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 decrease in API purchase commitment | 5,918,084 | |||
Gain on settlement with Vivus | 3,389,941 | |||
API purchase commitment asset | 704,729 | 663,984 | ||
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 | $ 114,319 | 136,732 | ||
Royalty receivable | $ 56,503 | 106,115 | ||
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 | |||
Principal amount of notes payable | $ 10,201,758 | |||
Payment made for purchase order | $ 1,542,904 | |||
Percentage of stendra tablets released | 100 | |||
Noncash decrease in accrued expenses related to Vivus settlement | $ 6,500,000 | |||
Noncash decrease in accrued inventory purchases related to Vivus Settlement | 14,200,000 | |||
Noncash decrease in API purchase commitment | 6,200,000 | |||
Gain on settlement with Vivus | 3,400,000 | |||
Raw materials inventory | 1,200,000 | |||
Accrued inventory purchases | 0 | 0 | ||
Settlement Agreement | Vivus, Inc | Other Current Assets | ||||
Marketing, Licensing and Distribution Agreements | ||||
API purchase commitment asset | 700,000 | 700,000 | ||
Settlement Agreement | Vivus, Inc | Other Noncurrent Assets | ||||
Marketing, Licensing and Distribution Agreements | ||||
Accrued inventory purchases, other assets | $ 4,200,000 | $ 5,100,000 | ||
Settlement Agreement | Vivus, Inc | Promissory Note | ||||
Marketing, Licensing and Distribution Agreements | ||||
Prepayment amount | 900,000 | |||
Principal amount of notes payable | $ 10,201,758 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of the Company's statutory income tax rate to the Company's effective income tax rate (Details) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Reconciliation of the Company's statutory income tax rate to the Company's effective income tax rate | ||
Income at US statutory rate | 21% | 21% |
State taxes, net of federal benefit | 3.85% | 1.56% |
Change in Fair Value of Derivative Liability | 6.66% | |
Revaluation of Warrants | 35.95% | |
Warrant Issuance Costs | (7.34%) | |
Loss on Issuance of Preferred Stock | (28.53%) | |
Change in State Rate | 11.25% | |
Valuation allowance | (43.74%) | (23.98%) |
Other | 0.90% | 1.42% |
Effective income tax rate | 0% | 0% |
Income Taxes - Significant comp
Income Taxes - Significant components of the Company's deferred tax assets and liabilities (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Significant components of the Company's deferred tax assets and liabilities | ||
Accruals | $ 221,841 | $ 229,348 |
Intangible assets | 737,719 | 818,127 |
Depreciation and amortization | 7,458,252 | 7,379,214 |
Expenses no currently deductible | 982,475 | 1,140,594 |
Net operating loss carryforwards | 9,475,773 | 6,013,400 |
Interest expense limitation | 251,023 | 226,588 |
Stock-based compensation | 400,813 | 2,882,814 |
Valuation allowance | $ (18,052,458) | $ (17,053,830) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Taxes | ||
Cumulative valuation allowance | $ 18,052,458 | $ 17,053,830 |
NOLs | $ 40,400,000 | |
Percentage of future utilization of the NOLs | 80% | |
Estimated State NOLs | $ 17,900,000 | |
Accrued interest or penalties | $ 0 | $ 0 |
Maximum | ||
Income Taxes | ||
Statue of limitations period | 5 years | |
Minimum | ||
Income Taxes | ||
Statue of limitations period | 3 years |
Defined Contribution Plan (Deta
Defined Contribution Plan (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Defined Contribution Plan | ||
Employer matching contribution | 100% | |
Employer's contribution as a percentage of employee's gross pay | 6% | |
Employer contributions | $ 64,062 | $ 51,276 |
Segment Information (Details)
Segment Information (Details) | 12 Months Ended | |
Dec. 31, 2023 USD ($) segment | Dec. 31, 2022 USD ($) | |
Statements | ||
Number of operating segments | segment | 2 | |
Results of operations by reportable segment | ||
Net sales | $ 5,822,388 | $ 5,992,054 |
Cost of goods sold | 1,631,220 | 2,289,418 |
Selling, general and administrative expenses | 9,261,471 | 12,209,162 |
Warrant issuance costs | 2,855,000 | |
Gain on settlement of contingent liability | (3,389,941) | |
Research and development expenses | 2,409,094 | 1,740,280 |
Depreciation and amortization expense | 3,282,967 | 5,598,884 |
Intangible asset impairment | 0 | 7,460,000 |
Change in fair value of derivative liability | (2,590,000) | (460,000) |
Change in fair value of warrant liability | (13,974,000) | |
Interest income | (515,311) | (14,194) |
Interest expense, promissory note | 536,138 | 596,018 |
Loss on issuance of Series A Preferred Stock | 11,088,997 | |
Net Income (Loss) | $ (8,163,188) | (20,037,573) |
Operating segments | ||
Statements | ||
Number of operating segments | segment | 2 | |
Corporate | ||
Results of operations by reportable segment | ||
Selling, general and administrative expenses | $ 5,639,470 | 5,576,018 |
Warrant issuance costs | 2,855,000 | |
Change in fair value of derivative liability | (2,590,000) | (460,000) |
Change in fair value of warrant liability | (13,974,000) | |
Interest income | (515,311) | |
Interest expense, promissory note | 536,138 | 596,018 |
Loss on issuance of Series A Preferred Stock | 11,088,997 | |
Net Income (Loss) | (3,040,294) | (5,712,036) |
Prescription Medications | Operating segments | ||
Results of operations by reportable segment | ||
Net sales | 2,286,373 | 2,734,639 |
Cost of goods sold | 277,490 | 949,197 |
Selling, general and administrative expenses | 1,736,512 | 4,947,466 |
Gain on settlement of contingent liability | (3,389,941) | |
Research and development expenses | 2,272,069 | 1,541,714 |
Depreciation and amortization expense | 2,285,175 | 4,442,922 |
Intangible asset impairment | 7,460,000 | |
Interest income | (14,194) | |
Net Income (Loss) | (4,284,873) | (13,202,525) |
Medical Devices | Operating segments | ||
Results of operations by reportable segment | ||
Net sales | 3,536,015 | 3,257,415 |
Cost of goods sold | 1,353,730 | 1,340,221 |
Selling, general and administrative expenses | 1,885,489 | 1,685,678 |
Research and development expenses | 137,025 | 198,566 |
Depreciation and amortization expense | 997,792 | 1,155,962 |
Net Income (Loss) | $ (838,021) | $ (1,123,012) |
Segment Information - Net Sales
Segment Information - Net Sales by Geographic region (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statements | ||
Net sales | $ 5,822,388 | $ 5,992,054 |
United States | ||
Statements | ||
Net sales | 4,526,635 | 4,799,132 |
International | ||
Statements | ||
Net sales | $ 1,295,753 | $ 1,192,922 |
Segment Information - Segment a
Segment Information - Segment assets (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Statements | ||
Intangible assets, net | $ 8,971,737 | $ 12,244,484 |
Total segment assets | 33,795,795 | 32,421,214 |
Prescription Medications | ||
Statements | ||
Intangible assets, net | 4,903,749 | 7,178,704 |
Total segment assets | 27,891,180 | 25,831,048 |
Medical Devices | ||
Statements | ||
Intangible assets, net | 4,067,988 | 5,065,780 |
Total segment assets | $ 5,904,615 | $ 6,590,166 |
Private Placement (Details)
Private Placement (Details) | 1 Months Ended | 12 Months Ended | ||||
Jul. 17, 2023 USD ($) shares | Jul. 13, 2023 USD ($) Y installment $ / shares shares | Jul. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares | |
Private Placement | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Exercise price of warrants | $ / shares | $ 2.25 | $ 14.93 | $ 105.85 | $ 105.85 | ||
Proceeds from gross proceeds | $ 15,000,000 | $ 15,000,003 | ||||
Number of equal monthly installments for redemption of preferred stock | installment | 13 | |||||
Number of trading days immediately prior to amortization payment is due considered for calculating conversion price | 30 days | |||||
Aggregate common shares | shares | 348,711 | |||||
Aggregate common shares in percent | 5% | |||||
Preferred stock, dividend accrued rate per annum | 15% | |||||
Warrants term | 5 years | |||||
Maximum percentage of outstanding shares approved for issuance in accordance with Nasdaq stock market rules | 19.99% | |||||
Percentage of interest on issued and our outstanding Common Stock | 29% | |||||
Embedded Derivative Liability, Measurement Input | 0.140 | |||||
Accrued dividends payable | $ 821,456 | |||||
Cash premium | (264,723) | |||||
Preferred dividends at the stated dividend rate | 556,733 | |||||
Embedded derivative instrument | ||||||
Private Placement | ||||||
Fair value of the bifurcated embedded derivative | $ 3,550,000 | |||||
Embedded Derivative Liability, Measurement Input | 1.150 | |||||
Derivative, Gain on Derivative | $ 2,590,000 | |||||
Fair value of our common stock | ||||||
Private Placement | ||||||
Embedded Derivative Liability, Measurement Input | 3.54 | 1.41 | ||||
Equity volatility | ||||||
Private Placement | ||||||
Embedded Derivative Liability, Measurement Input | 1.650 | |||||
Traded volume volatility | ||||||
Private Placement | ||||||
Embedded Derivative Liability, Measurement Input | 7.900 | 4.350 | ||||
Expected term | ||||||
Private Placement | ||||||
Embedded Derivative Liability, Measurement Input | 1.38 | 0.92 | ||||
Risk-free interest rate | ||||||
Private Placement | ||||||
Embedded Derivative Liability, Measurement Input | 5 | 0.049 | ||||
Discount Rate | ||||||
Private Placement | ||||||
Embedded Derivative Liability, Measurement Input | 0.081 | |||||
Dividend yield | ||||||
Private Placement | ||||||
Embedded Derivative Liability, Measurement Input | 0.080 | 0.080 | ||||
Penalty dividend rate | ||||||
Private Placement | ||||||
Embedded Derivative Liability, Measurement Input | 0.150 | 0.150 | ||||
Probability of default | ||||||
Private Placement | ||||||
Embedded Derivative Liability, Measurement Input | 0.097 | 0.101 | ||||
Private Placement | ||||||
Private Placement | ||||||
Transaction costs | $ 2,855,000 | |||||
Payment of equity issuance costs | 1,260,000 | |||||
Transaction costs incurred | $ 1,595,000 | $ 2,855,000 | ||||
Private Placement | Placement Agent | ||||||
Private Placement | ||||||
Warrants to purchase shares of common stock | shares | 533,334 | |||||
Cash fee (Percentage) | 8% | |||||
Series A Preferred Stock | ||||||
Private Placement | ||||||
Exercise price of warrants | $ / shares | $ 2.25 | |||||
Minimum trading days after the date that initial registration statement for considering first trading day of the calendar month | 25 days | |||||
Percentage of redemptions payable in cash on installment redemption amount | 107% | |||||
Percentage of the average of three lowest closing prices of common stock during the thirty trading day period immediately prior to amortization payment is due | 80% | |||||
Conversion price for valuation of common stock | $ / shares | $ 0.396 | |||||
Percentage of minimum price | 20% | |||||
Common stock closing price per share limit for conversion of stock for 20 consecutive trading days | $ / shares | $ 6.75 | |||||
Number of trading day considered for calculation of closing price limit of common stock for conversion | 20 days | |||||
Daily dollar trading volume of common stock limit for conversion of stock | $ 2,000,000 | |||||
Dividend rate | 8% | |||||
Loss upon issuance | 11,088,997 | |||||
Cash payable to investors | 2,047,582 | |||||
Stated value of the Series A Preferred Shares | 1,726,352 | |||||
Accrued dividends payable | 187,277 | |||||
Cash premium | $ 133,955 | |||||
Number of stock redeemed | shares | 2,930 | |||||
Amount of stock redeemed for cash | $ 1,998,901 | |||||
Number of common stock issued upon conversion | shares | 822,112 | |||||
Value of common stock issued for conversion | $ 1,195,745 | |||||
Series A Preferred Stock | Embedded derivative instrument | ||||||
Private Placement | ||||||
Fair value of the bifurcated embedded derivative | $ 6,140,000 | 6,140,000 | ||||
Total discount upon issuance | 15,000,000 | |||||
Difference between the gross proceeds and the allocated residual fair value of embedded derivative | $ 8,860,003 | |||||
Purchase Agreement | Private Placement | ||||||
Private Placement | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||
Proceeds from gross proceeds | $ 13,740,003 | |||||
Purchase Agreement | Series A Preferred Stock | ||||||
Private Placement | ||||||
Initial conversion price | $ / shares | $ 2.25 | $ 2.25 | ||||
Purchase Agreement | Series A Preferred Stock | Private Placement | ||||||
Private Placement | ||||||
Aggregate shares agreed to sell | shares | 15,000 | |||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | |||||
Preferred stock, stated value | $ / shares | $ 1,000 | |||||
Maximum shares issuable upon conversion | shares | 6,666,668 | |||||
Warrants to purchase shares of common stock | shares | 6,666,668 | |||||
Exercise price of warrants | $ / shares | $ 2.25 | |||||
Registration rights agreement | ||||||
Private Placement | ||||||
Percentage of conversion shares and warrant shares required to file for resale | 200% | |||||
Threshold number of calendar days for filing resale | 30 days |
Fair Value Measurements (Detail
Fair Value Measurements (Details) | Dec. 31, 2023 USD ($) |
Level 3 | Bifurcated embedded derivative liability | |
Fair Value Measurements | |
Total liabilities | $ 3,550,000 |
Fair Value Measurements - Chang
Fair Value Measurements - Change in the fair value of financial liabilities (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Change in the fair value of financial liabilities | |
Issuance | $ 21,544,000 |
Change in fair value of liability | $ (13,974,000) |
Fair Value, Liability, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Fair Value Adjustment of Warrants |
Reclassification of warrant liability upon amendment | $ (7,570,000) |
Bifurcated embedded derivative liability | |
Change in the fair value of financial liabilities | |
Issuance | 6,140,000 |
Change in fair value of liability | (2,590,000) |
Balance on December 31, 2023 | $ 3,550,000 |
Related Party Transactions (Det
Related Party Transactions (Details) | Nov. 28, 2023 USD ($) |
JCP III AIV | |
Related Party Transactions | |
Payment in recognition of various management and advisory services previously provided | $ 125,000 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (8,163,188) | $ (20,037,573) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |