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Petros Pharmaceuticals , Inc. (NASDAQ:PTPI), a Delaware-based pharmaceutical company with a market capitalization of $2.73 million and annual revenue of $5.11 million, has announced a change in its independent registered public accounting firm. The company disclosed in a recent SEC filing that it has engaged CBIZ (NYSE:CBZ) CPAs P.C. ("CBIZ CPAs") as its new auditor for the fiscal year ending December 31, 2025. According to InvestingPro analysis, the company currently shows signs of being undervalued, though it faces significant operational challenges.
This decision came after CBIZ CPAs acquired the attest business of Marcum LLP, Petros Pharmaceuticals' previous auditor, effective November 1, 2024. Marcum continued to serve as the company's auditor until April 5, 2025, after which the company terminated the relationship. The Audit Committee of Petros Pharmaceuticals' Board of Directors approved the engagement of CBIZ CPAs.
The company's reports for the fiscal years ended December 31, 2024, and 2023, prepared by Marcum, did not contain any adverse opinion or disclaimer of opinion, but they included an explanatory paragraph regarding substantial doubt about the company's ability to continue as a going concern. This concern appears well-founded, as InvestingPro data reveals the company is quickly burning through cash, with negative EBITDA of $7.46 million and a concerning current ratio of 0.4, indicating short-term obligations exceed liquid assets. InvestingPro subscribers have access to 15 additional key insights about PTPI's financial health and market performance.
Throughout the relationship with Marcum, Petros Pharmaceuticals reported no disagreements on matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedures that would have required Marcum to reference such disagreements in their reports. However, a material weakness was identified in the company's internal control over financial reporting, related to monitoring and oversight controls, the size of the accounting and IT departments, and IT access controls, as disclosed in the company's Annual Report for the fiscal year ended December 31, 2024. These internal control challenges come amid broader financial difficulties, with InvestingPro data showing the company operates with a significant debt burden and maintains an overall Financial Health Score of 1.44, rated as WEAK by InvestingPro's comprehensive analysis system.
Petros Pharmaceuticals provided Marcum with a copy of the SEC filing containing these changes and requested a letter from Marcum to the SEC, confirming their agreement with the statements made. Marcum's letter, dated April 9, 2025, is filed as Exhibit 16.1 with the SEC and is included in the company's Form 8-K filing.
This announcement is based on the company's recent SEC filing and does not contain any additional statements or endorsements from the company.
In other recent news, Petros Pharmaceuticals, Inc. has reported promising results from its Application Comprehension study, which evaluates consumer understanding of its proprietary technology for transitioning prescription medications to over-the-counter status. The study involved 400 participants and demonstrated that consumers successfully met comprehension thresholds required by the FDA, with at least 84% understanding key objectives. In a strategic move, Petros has announced a collaboration to enhance its AI-driven platform for Rx-to-OTC switches, incorporating advanced big data solutions to improve patient eligibility verification. Additionally, Petros has priced a public stock offering at $0.24 per share, with the aim of raising approximately $9.6 million for working capital and general corporate purposes. The offering includes Series A and Series B Warrants, and Dawson James Securities, Inc. is acting as the exclusive placement agent. In another development, Petros has amended terms with investors related to its Series A Convertible Preferred Stock, extending the maturity date to February 15, 2025, and adjusting financial covenants to maintain operational flexibility. These recent developments reflect Petros Pharmaceuticals' ongoing efforts to strengthen its position in the growing self-care market, valued at over $38 billion.
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