Item 5. Other Information
Item 5. Other Information.
Private Placement
On May 11, 2022, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Pontifax Medison Finance (Israel) L.P. and Pontifax Medison Finance (Cayman) L.P. (collectively, “Pontifax”), pursuant to which we agreed to issue and sell, in a private placement (the “Offering”), 8,100,000 shares of our Series B Convertible Redeemable Preferred Stock, par value $0.01 per share (“Series B Convertible Preferred Stock”), and 900,000 shares of Series C Convertible Redeemable Preferred Stock, par value $0.01 per share (“Series C Convertible Preferred Stock” and together with Series B Convertible Preferred Stock, “Preferred Stock”), for an aggregate offering price of $15,000,000. The Preferred Stock has a stated value of $1.666667 per share and is convertible into an aggregate of 33,333,340 shares of common stock of the Company. The Preferred Stock is also redeemable at the option of Pontifax either in cash, in an amount equal to their stated value, or in notes, having an aggregate principal amount equal to their stated value. We have also issued to Pontifax warrants to purchase up to a number of shares of our common stock equal to 5% of the conversion shares issuable upon Pontifax’s conversion of the Preferred Stock, with an exercise price equal to $0.50.
The Offering was made in reliance upon an exemption from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) thereof, as a transaction by an issuer not involving any public offering.
Series B and C Preferred Stock
On May 11, 2022, we filed Certificates of Designations (“the Certificate of Designations”) with the Secretary of State of the State of Delaware to establish the preferences, limitations and relative rights of the Series B Convertible Preferred Stock and Series C Convertible Preferred Stock. The Certificates of Designations became effective upon filing. The number of authorized shares of Series B Convertible Preferred Stock and Series C Convertible Preferred Stock are 8,100,000 and 900,000 shares, respectively. The following is a summary of the principal terms of the Certificate of Designations:
Dividends
The holders of the Preferred Stock will be entitled to dividends, on an as-if converted basis, equal to and in the same form as dividends actually paid on shares of common stock, when and if actually paid.
Voting Rights
The Preferred Stock has no voting rights, except the right to vote, with the holders of common stock and any other class or series of capital stock of the Company entitled to vote on such matter, as a single class, with each share of Preferred Stock entitled to vote on an as-converted basis on any resolution presented to stockholders for the purpose of obtaining approval of a proposed amendment to the Company’s Restated Certificate of Incorporation, as amended, to effect a reverse split of the outstanding shares of the Common Stock at a ratio to be determined (the “Reverse Split Amendment”) and any proposal to adjourn any meeting of stockholders called for the purpose of voting on the Reverse Split Amendment.
Liquidation
Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”), the then holders of the Preferred Stock shall be entitled to receive out of the assets of the Company available for distribution to stockholders an amount per share equal to the stated value of each outstanding shares of Preferred Stock plus an amount equal to any dividends that have been declared on such share but not yet paid.
Beneficial Ownership Limitation
The Preferred Stock cannot be converted to common stock if the holder and its affiliates would beneficially own more than 4.99% (or 9.99% at the election of the holder) of the outstanding common stock. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99% upon notice to us, provided that any increase in this limitation will not be effective until 61 days after such notice from the holder to us and such increase or decrease will apply only to the holder providing such notice.
Trading Market
There is no established trading market for any of the Preferred Stock, and we do not expect a market to develop. We do not intend to apply for a listing for any of the Preferred Stock on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the Preferred Stock will be limited.
Conversion and Redemption
See information included under the caption “Private Placement” above.
Certificate of Elimination and Certificate of Decrease
On May 11, 2022, we filed a Certificate of Elimination with the Secretary of State of the State of Delaware, eliminating our Series A Preferred Stock, par value $0.01 per share, and Series B Preferred Stock, par value $0.01 per share, and returning them to authorized but undesignated shares of our preferred stock. None of the authorized shares of Series A Preferred Stock and Series B Preferred Stock were outstanding prior to the filing of the Certificate of Elimination.
On May 11, 2022, we filed a Certificate of Decrease with the Secretary of State of the State of Delaware, reducing the allocation of Series A Convertible Preferred Stock, par value $0.01 per share, from 264,000 shares to 4,030 shares.
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Item 6. Exhibits.
Exhibits filed or furnished with this report:
Exhibit Number
Description
Filed Herewith
Form
Filing Date
SEC File No.
3.1
Amended and Restated Bylaws of Palatin Technologies, Inc.
8-K
September 17, 2021
001-15543
3.2
Restated Certificate of Incorporation of Palatin Technologies, Inc., as amended.
10-K
September 27, 2013
001-15543
3.3
Certificate of Designation of Series B Convertible Redeemable Preferred Stock
X
3.4
Certificate of Designation of Series C Convertible Redeemable Preferred Stock
X
3.5
Certificate of Elimination with respect to Series A Preferred Stock and Series B Preferred Stock
X
3.6
Certificate of Decrease of Series A Convertible Preferred Stock
X
10.1
Form of Securities Purchase Agreement, dated May 11, 2022, by and among Palatin Technologies, Inc., Pontifax Medison Finance (Israel) L.P. and Pontifax Medison Finance (Cayman) L.P.
X
10.2
Form of Common Stock Purchase Warrant
X
10.3
Form of Common Stock Purchase Warrant
X
31.1
Certification of Chief Executive Officer.
X
31.2
Certification of Chief Financial Officer.
X
32.1
Certification of principal executive officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*
32.2
Certification of principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
*
101.INS
Inline XBRL Taxonomy Extension Instance Document (the instance document does not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document).
X
101.SCH
Inline XBRL Taxonomy Extension Schema Document.
X
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
X
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.
X
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.
X
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
X
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
*In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release Nos. 33-8238 and 34-47986, Final Rule: Management’s Reports on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports, the certification furnished in Exhibits 32.1 and 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Exchange Act. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Palatin Technologies, Inc.
(Registrant)
/s/ Carl Spana
Date: May 16, 2022
Carl Spana, Ph.D.
President and
Chief Executive Officer (Principal
Executive Officer)
/s/ Stephen T. Wills
Date: May 16, 2022
Stephen T. Wills, CPA, MST
Executive Vice President, Chief Financial Officer and Chief Operating Officer
(Principal Financial and Accounting Officer)
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