Petros Pharmaceuticals Announces Pricing of $9.6 Million Public Offering of Common Stock and Warrants

Rhea-AI Summary

Petros Pharmaceuticals (NASDAQ:PTPI) has announced the pricing of a $9.6 million public offering of approximately 40,000,000 shares of common stock (or pre-funded warrants). Each share comes with a Series A Warrant to purchase 0.25 share at $0.48 per 0.25 share and a Series B Warrant to purchase one share at $0.48.

The combined offering price is $0.24 per common stock unit and $0.2399 for pre-funded warrant units. The offering is expected to close around February 19, 2025. Dawson James Securities is serving as the exclusive placement agent. The company plans to use the net proceeds for working capital and general corporate purposes.

Positive

• Secured $9.6 million in gross proceeds through public offering
• Additional funding for working capital strengthens financial position

Negative

• Significant dilution for existing shareholders with 40 million new shares
• Offering price of $0.24 per share indicates low valuation
• Additional potential dilution from warrant exercises

Insights

Investment Banking Analyst

This $9.6 million public offering represents a significant and highly dilutive capital raise that warrants careful analysis. The offering structure reveals several critical points for investors:

The sheer size of the offering - approximately 40 million shares - compared to the company's current market capitalization of $3.3 million indicates an extraordinary level of dilution for existing shareholders. This represents a dilution factor that will fundamentally reshape the company's capital structure.

The offering's complexity is noteworthy, featuring both Series A and B warrants with exercise prices of $0.48. This structure suggests potential additional dilution if warrants are exercised, though the higher exercise price could provide some upside participation for investors willing to take the risk. The warrant coverage is particularly generous, with Series B warrants offering 1-for-1 coverage, indicating the company needed to provide significant incentives to attract investors.

The pricing at $0.24 per share represents a substantial discount to current trading levels, reflecting both market conditions and investor risk perception. This aggressive pricing, combined with the extensive warrant coverage, suggests challenging market conditions for raising capital and potential concerns about the company's near-term prospects.

While the company states the proceeds will be used for working capital and general corporate purposes, the urgency and terms of this financing raise questions about the company's cash position and burn rate. For an OTC drug development company, this capital injection might be important for advancing their pipeline, but the dilutive impact is severe.

The involvement of Dawson James Securities as the exclusive placement agent, rather than a traditional underwritten offering, also provides insight into the challenging nature of this capital raise. This structure typically indicates a more difficult fundraising environment and potentially higher costs of capital.

NEW YORK, NY / ACCESS Newswire / February 18, 2025 / Petros Pharmaceuticals, Inc. (NASDAQ:PTPI) ("Petros" or the "Company"), a company focused on expanding consumer access to medication through over-the-counter ("OTC") drug development programs, today announces the pricing of a public offering of approximately 40,000,000 shares of the Company's common stock ("Common Stock"), par value $0.0001 per share (or pre-funded warrants in lieu thereof), with each share of Common Stock (or pre-funded warrant) accompanied by (i) a Series A Warrant to purchase 0.25 share of Common Stock at an exercise price of $0.48 per 0.25 share ("Series A Warrant") and (ii) a Series B Warrant to purchase one (1) share of Common Stock at an exercise price of $0.48 per share ("Series B Warrant"). The combined public offering price of each share of Common Stock together with the accompanying Series A Warrant and Series B Warrant is $0.24, and the combined public offering price of each pre-funded warrant together with the accompanying Series A Warrant and Series B Warrant is $0.2399, which represents the per share offering price for the Common Stock less the $0.0001 per share exercise price for each pre-funded warrant. The closing of the public offering is expected to occur on or about February 19, 2025, subject to the satisfaction of customary closing conditions.

Dawson James Securities, Inc. is acting as the exclusive placement agent for the public offering.

The gross proceeds of the public offering are expected to be approximately $9.6 million before deducting estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes.

This public offering is being made by the Company pursuant to a registration statement on Form S-1 (File No. 333-284495), as amended, originally filed on January 24, 2025, and declared effective by the U.S. Securities and Exchange Commission ("SEC") on February 14, 2025 and an additional registration statement on Form S-1 (No. 333-285005) filed on February 14, 2025, pursuant to Rule 462(b) as promulgated under the Securities Act of 1933, as amended. The securities may only be offered by means of a prospectus which forms a part of the effective registration statement relating to the offering. A preliminary prospectus relating to the offering has been filed with the SEC and a final prospectus relating to the offering will be filed with the SEC. Copies of the final prospectus may be obtained, when available, at the SEC's website at www.sec.gov or from Dawson James Securities, Inc. Attention: Prospectus Department, 101 North Federal Highway, Suite 600, Boca Raton, FL 33432, investmentbanking@dawsonjames.com or toll free at 866.928.0928.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of that state or jurisdiction.

About Petros Pharmaceuticals, Inc.

Petros Pharmaceuticals, Inc. is committed to the goal of becoming a leading innovator in the emerging $38 billion self-care market by providing expanded access to key prescription pharmaceuticals as OTC treatment options. The Company is currently developing a proprietary SaaS platform designed to assist pharmaceutical companies in meeting FDA standards to assist in the Rx-to-OTC switch.

Cautionary Note Regarding Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based upon Petros Pharmaceuticals, Inc.'s ("Petros," "we," "our," "us" or the "Company") management's assumptions, expectations, projections, intentions, and beliefs about future events. In some cases, predictive, future-tense or forward-looking words such as "intend," "develop," "goal," "plan," "predict", "may," "will," "project," "estimate," "anticipate," "believe," "expect," "continue," "potential," "opportunity," "forecast," "should," "target," "strategy" and similar expressions, whether in the negative or affirmative, that reflect our current views with respect to future events and operational, economic and financial performance are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. Such forward-looking statements are only predictions, and actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of risks and uncertainties. Such forward-looking statements include, without limitation, statements relating to the completion of the offering, including the satisfaction of customary closing conditions, and the intended use of proceeds. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors that could cause actual results and events to differ materially and adversely from those indicated by such forward-looking statements including, among others: risks and uncertainties related to market conditions and the satisfaction of customary closing conditions related to the offering, and other risks and uncertainties related to the offering, as well as the risks and uncertainties set forth in the Company's periodic reports and in other filings that the Company has filed, or may file, with the U.S. Securities and Exchange Commission (the "SEC") under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere. The Company cautions readers that the forward-looking statements included in this press release represent our beliefs, expectations, estimates and assumptions only as of the date of hereof and are not intended to give any assurance as to future results. New factors emerge from time to time, and it is not possible for us to predict all these factors. Further, the Company cannot assess the effect of each such factor on our business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward-looking statement. Accordingly, you should not unduly rely on any forward-looking statements.

Investor Contacts:

Investors:
CORE IR
ir@petrospharma.com

Media:

Jules Abraham
CORE IR
917-885-7378
pr@coreir.com

SOURCE: Petros Pharmaceuticals, Inc.

View the original press release on ACCESS Newswire

FAQ

What is the size and price of PTPI's February 2025 public offering?

PTPI's February 2025 public offering consists of approximately 40 million shares priced at $0.24 per unit, with total gross proceeds of $9.6 million.

What warrants are included in PTPI's February 2025 offering?

The offering includes Series A Warrants (0.25 share at $0.48 per 0.25 share) and Series B Warrants (1 share at $0.48 per share) with each common stock unit.

When is PTPI's public offering expected to close?

The public offering is expected to close on or about February 19, 2025, subject to customary closing conditions.

How will PTPI use the proceeds from the February 2025 offering?

PTPI intends to use the net proceeds from the offering for working capital and general corporate purposes.

Who is the placement agent for PTPI's February 2025 offering?

Dawson James Securities, Inc. is acting as the exclusive placement agent for the public offering.