Company: PTPI
Filing Date: 2025-02-14
Form Type: S-1/A
Source: 0001410578-25-000137
Chunk: 277

Company: Petros Pharmaceuticals, Inc.
Filing Date: 2025-02-14
Form: S-1/A
Chunk 277
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 gain of $ 202,000and $ 3,550,000, respectively, related to the change in fair value of the derivative liability which is recorded in other income (expense) on the unaudited consolidated statements of operations. The Company estimated the $ 0fair value of the bifurcated embedded derivative at September 30, 2024 using a Monte Carlo simulation model, with the following inputs the fair value of the Company’s Common Stock of $ 0.36on the valuation date, estimated equity volatility of 60.0%, estimated traded volume volatility of 230.0%, the time to maturity of 0.17years, risk free rate

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of 4.83%, a discounted market interest rate of 12.5%, dividend rate of 8.0%, a penalty dividend rate of 15.0%, and probability of default of 4.0%. As of September 30, 2024, the Company has notified the investors of its intention to redeem the upcoming installment due in cash and recorded a liability of $ 1,144,582representing the cash payable to investors which includes $ 965,006of the stated value of the Series A Preferred Shares, $ 104,693of accrued dividends payable, and $ 74,883for the cash premium which was recognized as a deemed dividend. During the three months ended September 30, 2024, the Company experienced an Equity Conditions Failure in which the Company’s average stock price during the Installment Conversion Price Measuring Period (as defined in the Certificate of Designations) corresponding to the September 1, 2024, and October 1, 2024, installments (the “Affected Installments”) was below the Floor Price (as defined in the Certificate of Designations) (the “Floor Price Condition”). As a result of the Floor Price Condition, the Company is required to redeem the Affected Installments as well as any previously deferred installment amounts at a 125% premium. Accordingly, the Company recorded a liability for penalty premiums totaling $ 598,336as of September 30, 2024, related to the Floor Price Condition, which is included in Accrued Series A Convertible Preferred payments payable on the accompanying condensed consolidated balance sheet, and a corresponding reduction in additional paid-in capital for the three and nine months ended September 30, 2024, which was recognized as a deemed dividend. During the three months ended September