Company: PTPI
Filing Date: 2025-02-13
Form Type: S-1/A
Source: 0001410578-25-000122
Chunk: 248

Company: Petros Pharmaceuticals, Inc.
Filing Date: 2025-02-13
Form: S-1/A
Chunk 248
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 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:

| ​                                        
 ​                                        
 Description                              
 Liabilities:                             | ​ 
 ​ |     ​ 
     ​ 
 Level | ​ 
 ​ | ​           
 December 31 
 2023        
 ​           |         ​ |
|:-----------------------------------------|:--|------:|:--|:------------|----------:|
| 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