Petros Pharmaceuticals to deconsolidate subsidiary to improve finances

NEW YORK - Petros Pharmaceuticals, Inc. (NASDAQ:PTPI), a micro-cap pharmaceutical company with a market capitalization of $1.27 million, announced Wednesday it will deconsolidate its wholly owned subsidiary, Metuchen Pharmaceuticals LLC, from its consolidated balance sheet beginning with its quarterly report for the period ending June 30, 2025. According to InvestingPro data, the company currently holds more cash than debt on its balance sheet, though it’s quickly burning through available funds.

The company, which focuses on over-the-counter drug development programs and has posted revenue growth of 54.7% in the last twelve months, said the move is expected to significantly improve its financial position by increasing stockholders’ equity and reducing consolidated debt. This strategic move comes as InvestingPro analysis shows the company’s current ratio at 0.53, indicating short-term obligations exceed liquid assets.

The deconsolidation is part of a corporate realignment strategy aimed at streamlining operations and enhancing financial flexibility. With negative EBITDA of $7.43 million in the last twelve months, Petros anticipates the action will strengthen its balance sheet and help meet the minimum stockholders’ equity requirement for listing on the Nasdaq Capital Market. Get access to 14 additional financial insights and ProTips for PTPI with an InvestingPro subscription.

"Deconsolidating Metuchen is a strategic and necessary step to improve our financial condition and enhance our ability to progress the development of our proprietary technology to market availability," said Fady Boctor, President and Chief Commercial Officer of Petros Pharmaceuticals.

The company is currently appealing Nasdaq’s recent decision to delist its common stock and believes the deconsolidation, along with other internal initiatives, demonstrates progress toward regaining compliance.

The deconsolidation includes Metuchen’s wholly owned subsidiaries, Timm Medical Technologies, Inc. and Pos-T-Vac, LLC. Additional details regarding the financial impact will be disclosed in future SEC filings, according to the company’s press release statement.

Petros Pharmaceuticals is developing technology to assist pharmaceutical companies in meeting FDA standards for prescription-to-OTC switches in the self-care market.

In other recent news, Petros Pharmaceuticals, Inc. has been notified by the Nasdaq Hearings Panel that its securities will be delisted due to non-compliance with several listing standards, including minimum stockholders’ equity and bid price requirements. The company intends to appeal this decision, although trading on Nasdaq will be suspended, and the stock is expected to trade on the OTC Markets. Meanwhile, Petros has announced a 1-for-25 reverse stock split, effective April 30, 2025, to address the delisting concerns. Additionally, Petros has partnered with Innolitics to enhance its Software-as-a-Medical Device platform, which is designed to facilitate the transition of prescription drugs to over-the-counter status. The collaboration aims to integrate AI and cybersecurity features into the platform, aligning with FDA standards for nonprescription drug products. Petros has also upgraded its AI platform with advanced features to support the Rx-to-OTC switch process, enhancing fraud detection and user experience. The company’s efforts are part of a broader strategy to become a key player in the self-care market, valued at over $38 billion.

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