Company: PTPI
Filing Date: 2025-02-10
Form Type: S-1/A
Source: 0001410578-25-000108
Chunk: 112

Company: Petros Pharmaceuticals, Inc.
Filing Date: 2025-02-10
Form: S-1/A
Chunk 112
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 of the Series Warrants deemed surrendered and the U.S. Holder’s tax basis in such Series Warrants. Such gain or loss would be long-term or short-term, depending on the U.S. Holder’s holding period in the Series Warrants deemed surrendered. In this case, a U.S. Holder’s tax basis in the common stock received would equal the sum of the U.S. Holder’s initial investment in the exercised Series Warrants (i.e., the portion of the U.S. Holder’s purchase price for the investment unit that is allocated to the Series Warrants, as described above under the section titled “Allocation of Purchase Price”) and the exercise price of such Series Warrants. It is unclear whether a U.S. Holder’s holding period for the common stock would commence on the date of exercise of the Series Warrants or the day following the date of exercise of the Series Warrants. There may also be alternative characterizations of any such taxable exchange that would result in similar tax consequences, except that a U.S. Holder’s gain or loss would be short-term.

Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders should consult their own tax advisors regarding the tax consequences of a cashless exercise of the Series Warrants.

Distributions

In the event that we make distributions on our common stock to a U.S. Holder, those distributions generally will constitute dividends for U.S. tax purposes to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Distributions in excess of our current and accumulated earnings and profits will constitute a return of capital that is applied against and reduces, but not below zero, a U.S. Holder’s adjusted tax basis in our common stock. Any remaining excess will be treated as gain realized on the sale or exchange of shares of common stock as described below under the section titled “Disposition of Common Stock, Pre-Funded Warrants or Series Warrants.”

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Certain Adjustments to Pre-Funded Warrants or Series Warrants

The number of shares of common stock issued upon the exercise of the Pre-Funded Warrants or Series Warrants and the exercise price of Pre-Funded Warrants or Series Warrants are subject to adjustment in certain circumstances. Adjustments (