Company: PTPI
Filing Date: 2025-03-18
Form Type: DEF 14A
Source: 0001104659-25-025104
Chunk: 65

Company: Petros Pharmaceuticals, Inc.
Filing Date: 2025-03-18
Form: DEF 14A
Chunk 65
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stock option, the excess of the fair market value of the shares of Common Stock acquired over the option exercise price will be an item
of tax preference to the participant, which may be subject to an alternative minimum tax for the year of exercise. The federal alternative
minimum tax may produce significant tax repercussions depending upon the participant’s particular tax status. If no disposition
of the shares is made within two years from the date of granting of the incentive stock option or within one year from the date
of exercise, any gain or loss realized on the sale of the shares will be treated as a long-term capital gain or loss and the tax basis
of the shares received for capital gain treatment is the option exercise price. If the participant disposes of the shares within either
of the two-year or one-year periods referred to above, the participant will realize ordinary income at that time in an amount equal to
the excess of the fair market value of the shares at the time of exercise (or the net proceeds of disposition, if less) over the option
exercise price. For capital gain treatment on such a disposition, the tax basis of the shares will be their fair market value at the
time of exercise. In addition, to the extent that the fair market value (determined as of the date of grant) of the shares with respect
to which a participant’s incentive stock options are exercisable for the first time during any year exceeds $100,000, the incentive
stock options for the shares over the $100,000 threshold will be treated as nonqualified stock options, and not incentive stock options,
for federal tax purposes, and the participant will recognize income as if the incentive stock options were actually nonqualified stock
options. the Company is not entitled to a tax deduction upon either the exercise of an incentive stock option or upon disposition of
the shares acquired pursuant to such exercise, except to the extent that the participant recognizes ordinary income on disposition of
the shares because the holding periods described above were not met.

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Special Rule if Exercise Price is Paid for in Shares. If a participant pays the exercise price of a nonqualified stock option
with previously-owned shares of the Company’s Common Stock and the transaction is not a disqualifying disposition of shares previously
acquired under an incentive stock option, the shares received equal to the number of shares surrendered are treated as having been received
in a tax-free exchange. The participant’s tax basis and holding period for these shares received will be equal to the participant