Company: PTPI
Filing Date: 2025-02-13
Form Type: S-1/A
Source: 0001410578-25-000122
Chunk: 235

Company: Petros Pharmaceuticals, Inc.
Filing Date: 2025-02-13
Form: S-1/A
Chunk 235
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 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 $7.3million 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 $1,542,904with 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 released100% of the quantity of bulk Stendra® tablets by the end of the first quarter 2022.
F-23

As a result of entering into the Vivus Settlement Agreement, the Company decreased accrued expenses by $ 6.5million and decreased accrued inventory purchases by $ 14.2million; which were partially offset by a decrease in API purchase commitments of $ 6.2million and an increase to liabilities for the Note of $ 10.2million (which is net of the $ 0.9million prepayment on the Note). As a result, the Company recorded a $ 3.4million gain on settlement. As of December 31, 2023, and 2022, the Company has $ 0.0and $ 0.0million, 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 $ 1.2million 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