What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-09-30 compared with 2023-09-28 · 185 added, 185 removed, 513 unchanged (42% of the section changed)

2 unchanged sentences

The following consolidated financial statements are filed as part of this Annual Report:

Report of Independent Registered Public Accounting Firm ID 185

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity

Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ (Deficiency) Equity

Consolidated Statements of Cash Flows

1 unchanged sentence

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

To the To the Stockholders and Board of Directors

Palatin Technologies, Inc.:

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We have audited the accompanying consolidated balance sheets of Palatin Technologies, Inc.

and subsidiary (the Company) as of June 30, 2023 and 2022, the related consolidated statements of operations, changes in redeemable convertible preferred stock and stockholders’ equity, and cash flows for the years then ended, and the related notes (collectively, the consolidated financial statements).

and subsidiary (the Company) as of June 30, 2024 and 2023, the related consolidated statements of operations, changes in redeemable convertible preferred stock and stockholders’ (deficiency) equity, and cash flows forthe years then ended, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2024 and 2023, and the results of its operations and its cash flows for the years then ended, in conformity with U.S.

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The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the Company has incurred operating losses and negative cash flows from operations since inception and will need additional funding to complete planned product development efforts that raise substantial doubt about its ability to continue as a going concern.

As discussed in Note 1 to the consolidated financial statements, the Company hasincurred operating losses and negative cash flows from operations since inception and will need additional funding to complete planned product development efforts that raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 1.

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Right-of-use assets - operating leases

LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY

LIABILITIES AND STOCKHOLDERS’ DEFICIENCY

Current liabilities:

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Other long-term liabilities

Warrant liabilities

Total liabilities

Commitments and contingencies (Note 14)

Series B and Series C Redeemable Convertible Preferred Stock of $ 0.01 par value:

authorized 9,000,000 shares, 9,000,000 shares issued and outstanding as of June 30, 2022, with a liquidation preference of $ 15,000,000

Escrowed proceeds

( 15,000,000 )

Stockholders’ equity:

Preferred stock of $ 0.01 par value – authorized 10,000,000 shares (including amounts authorized for Series B and Series C Redeemable Convertible Preferred Stock) :

Contingently redeemable warrants

Stockholders’ deficiency:

Preferred stock of $ 0.01 par value – authorized 10,000,000 shares:

shares issued and outstanding designated as follows:

Series A Convertible:

authorized 4,030 as of June 30, 2023:

authorized 4,030 shares as of June 30, 2024:

issued and outstanding 4,030 shares as of June 30, 2024 and June 30, 2023

Common stock of $ 0.01 par value – authorized 300,000,000 shares:

issued and outstanding 11,656,714 shares as of June 30, 2023 and 9,270,947 shares as of June 30, 2022 (Note 1)

issued and outstanding 17,926,640 shares as of June 30, 2024 and 11,656,714 shares as of June 30, 2023

Additional paid-in capital

2 unchanged sentences

( 412,030,437 )

Total stockholders’ equity

Total liabilities, redeemable convertible preferred stock, and stockholders’ equity

Total stockholders’ deficiency

( 1,979,871 )

Total liabilities and stockholders’ deficiency

The accompanying notes are an integral part of these consolidated financial statements

10 unchanged sentences

Selling, general and administrative

Gain on sale of Vyleesi

( 7,781,844 )

Gain on purchase commitment

6 unchanged sentences

Investment income

Foreign currency (loss) gain

Foreign currency gain (loss)

Interest expense

Offering expenses

( 1,115,765 )

Change in fair value of warrant liabilities

( 6,962,562 )

Total other income (expense), net

( 7,239,992 )

Loss before income taxes

5 unchanged sentences

Basic and diluted net loss per common share

Weighted average number of common shares outstanding used in computing basic and diluted net loss per common share (Note 1)

Weighted average number of common shares outstanding used in computing basic and diluted net loss per common share

The accompanying notes are an integral part of these consolidated financial statements

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and Subsidiary

Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ Equity

Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders’ (Deficiency) Equity

Redeemable Convertible Preferred Stock

Stockholders' Equity

Contigently redeemable

Series A Convertible Preferred Stock

Additional paid-in

Balance, June 30, 2022

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$ 404,168,822

Stock-based compensation

Issuance of Redeemable Convertible Preferred stock and warrants

$ ( 387,993,696 )

Stock-based compensation

Withholding taxes related to restricted stock units

Redemption of convertible series B & series C preferred stock

( 8,100,000 )

( 13,500,000 )

( 1,500,000 )

Sale of common stock and warrants, net of costs

Conversion of liability classified warrants

Warrant exercises

Option exercises

Reverse stock split fractional shares

Reclassification of contingently redeemable warrants

( 24,036,741 )

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Withholding taxes related to restricted stock units

Redemption of convertible series B & series C preferred stock

( 8,100,000 )

( 13,500,000 )

( 1,500,000 )

Sale of common stock and warrants, net of costs

Warrant excercises

Reverse stock split fractional shares

Sale of common stock, net of costs

Conversion of liability classified warrants

Conversion of liability classified warrants upon warrant exercise

Warrant exercises

Shares held in abeyance

Reclassification of contingently redeemable warrants

( 29,736,113 )

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$ ( 441,766,550 )

$ ( 111,497 )

The accompanying notes are an integral part of these consolidated financial statements

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Decrease in right-of-use asset

Unrealized foreign currency transaction loss

Non-cash warrant expense

Unrealized foreign currency transaction gain (loss)

Stock-based compensation

Change in fair value of liability classified warrants

( 4,620,911 )

Gain on sale of Vyleesi

( 7,781,844 )

Gain on purchase commitment

4 unchanged sentences

Prepaid expenses and other assets

( 1,154,355 )

Accounts payable

Accrued expenses

( 2,367,651 )

Operating lease liabilities

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CASH FLOWS FROM INVESTING ACTIVITIES:

Maturity of marketable securities

Purchase of marketable securities

( 2,992,890 )

Proceeds from sale of Vyleesi

Purchases of property and equipment

Net cash used in investing activities

Net cash provided by (used in) investing activities

( 3,426,817 )

1 unchanged sentence

Payment of withholding taxes related to restricted stock units

Proceeds from the sale of common stock and warrants, net of costs

Proceeds from the sale of common stock and warrants, net

Payment of finance lease obligations

Proceeds from exercise of warrants

Proceeds from exercise of stock options

Net cash provided by financing activities

NET DECREASE IN CASH AND CASH EQUIVALENTS

( 21,949,572 )

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

( 21,949,572 )

CASH AND CASH EQUIVALENTS, beginning of year

CASH AND CASH EQUIVALENTS, end of year

CASH AND CASH EQUIVALENTS, beginning of period

CASH AND CASH EQUIVALENTS, end of period

SUPPLEMENTAL CASH FLOW INFORMATION:

Cash paid for interest

Conversion of liability classified warrants

Conversion of liability classified warrants upon warrant exercise

The accompanying notes are an integral part of these consolidated financial statements

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Modulation of these receptors, through use of receptor-specific agonists, which activate receptor function, or receptor-specific antagonists, which block receptor function, can have significant pharmacological effects.

The Company’s commercial product, Vyleesi®, was approved by the U.S.

Food and Drug Administration (“FDA”) in June 2019 for the treatment of hypoactive sexual desire disorder (“HSDD”) in premenopausal women and is being marketed by the Company in North America.

The Company’s new product development activities focus primarily on MC1r agonists, with potential to treat inflammatory and autoimmune diseases such as dry eye disease, which is also known as keratoconjunctivitis sicca, uveitis, diabetic retinopathy, and inflammatory bowel disease.

The Company’s prior commercial product, Vyleesi®, was approved by the U.S.

Food and Drug Administration (“FDA”) in June 2019 for the treatment of hypoactive sexual desire disorder (“HSDD”) in premenopausal women.

As disclosed in Note 4, this product was acquired by Cosette Pharmaceuticals, Inc.

(“Cosette”) on December 19, 2023.

Our new product development activities focus primarily on use of bremelanotide, or other MC4r agonists, with tirzepatide, a GLP-1 agonist for treatment of obesity, which entered Phase 2 in the second quarter of calendar year 2024, and a co-formulation of bremelanotide with a PDE5i for treatment of erectile dysfunction in patients that do not respond to PDE5i monotherapy.

The Company is also developing, dependent on resources for development activities, MC1r agonist products, with potential to treat inflammatory and autoimmune diseases, such as dry eye disease, which is also known as keratoconjunctivitis sicca, uveitis, diabetic retinopathy, and inflammatory bowel disease.

The Company believes that the MC1r agonist peptides in development have broad anti-inflammatory effects and appear to utilize mechanisms engaged by the endogenous melanocortin system in regulation of the immune system and resolution of inflammatory responses.

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Business Risks and Liquidity – The Company has incurred operating losses and negative cash flows from operations since inception and will need additional funding to complete its planned product development efforts.

As shown in the accompanying consolidated financial statements, the Company had an accumulated deficit as of June 30, 2023 of $ 415,535,583 and a net loss for the year ended June 30, 2023 of $ 27,541,887 , and the Company anticipates incurring significant expenses in the future as a result of spending on developing marketing and distribution capabilities for Vyleesi in the United States and spending on its development programs and will require substantial additional financing or revenues to continue to fund its planned activities.

As shown in the accompanying consolidated financial statements, the Company had an accumulated deficit as of June 30, 2024 of $ 441,766,550 and a net loss for the year ended June 30, 2024 of $ 29,736,113 .

The Company anticipates incurring significant expenses in the future as a result of spending on its development programs and will require substantial additional financing or revenues to continue to fund its planned activities.

To achieve sustained profitability, if ever, the Company, alone or with others, must successfully develop and commercialize its technologies and proposed products, conduct successful preclinical studies and clinical trials, obtain required regulatory approvals, and successfully manufacture and market such technologies and proposed products.

The time required to reach sustained profitability is highly uncertain, and the Company may never be able to achieve profitability on a sustained basis, if at all.

As of June 30, 2023, the Company’s cash, cash equivalents and marketable securities were $ 10,982,472 and current liabilities were $ 15,131,830 .

Management intends to utilize existing capital resources for general corporate purposes and working capital, including establishing marketing and distribution capabilities for Vyleesi in the United States and preclinical and clinical development of the Company’s MC1r and MC4r programs, and development of other portfolio products.

As of June 30, 2024, the Company’s cash and cash equivalents were $ 9,527,396 and current liabilities were $ 9,657,681 .

Management intends to utilize existing capital resources for general corporate purposes and working capital, including clinical development of the Company’s MC1r and MC4r programs, and development of other portfolio products.

The Company follows the provisions of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 205-40, Presentation of Financial Statements — Going Concern , which requires management to assess the Company’s ability to continue as a going concern for one year after the date the consolidated financial statements are issued.

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As such, under the requirements of ASC 205-40, management may not consider the potential for future funding in their assessment of the Company’s ability to meet its obligations for the next year.

Based on the Company’s cash, cash equivalents and marketable securities at June 30, 2023, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for one year from the date these consolidated financial statements are issued.

Based on our available cash and cash equivalents as of June 30, 2024, management has concluded that substantial doubt exists about the Company’s ability to continue as a going concern for one year from the date these consolidated financial statements are issued.

The Company is evaluating strategies to obtain additional funding for future operations which include but are not limited to obtaining equity financing, issuing debt, or reducing planned expenses.

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The consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates the continuity of operations, the realization of assets and the satisfaction of liabilities and commitments in the normal course of business.

Assuming no additional funding and based on its current operating and development plans, the Company expects that existing cash, cash equivalents and marketable securities as of the date of this filing will be sufficient to fund currently anticipated operating expenses through calendar year 2023.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

The Company will receive a royalty on sales of Vyleesi by its licensees.

It has licensed third parties to sell Vyleesi in China and Korea.

There may be delays in obtaining regulatory approvals to sell Vyleesi in China and Korea, which would delay when the Company receives royalty income from sales in those countries.

Assuming no additional funding and based on its current operating and development plans, the Company expects that existing cash and cash equivalents as of the date of this filing will be sufficient to fund currently anticipated operating expenses through the second half of calendar year 2024.

The Company may receive contingent, sales-based milestone payments of up to $159,000,000 on sales of Vyleesi by Cosette Pharmaceuticals, Inc.

(“Cosette”) and its licensees .

Concentrations – Concentrations in the Company’s assets and operations subject it to certain related risks.

Financial instruments that subject the Company to concentrations of credit risk primarily consist of cash, cash equivalents, and accounts receivable.

The Company’s cash, cash equivalents, and marketable securities are primarily invested in one investment account sponsored by a large financial institution.

The Company’s cash and cash equivalents are primarily invested in one investment account sponsored by a large financial institution.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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All intercompany accounts and transactions have been eliminated in consolidation.

Revision of Previously Issued Financial Statements - The Company has revised certain prior period amounts on the consolidated financial statements to correct a misstatement with respect to improperly classifying warrants as equity instead of as a warrant liability that is adjusted to the income statement each quarter to reflect changes in the fair value of the warrants, under the guidance of ASC 815-40, Contracts in Entity’s Own Equity .

The Company recorded an adjustment to record a liability for the warrants of $ 1,850,544 million as of June 30, 2023, and adjusted contingently redeemable warrants for $ 263,400 , decreased additional paid-in capital for $ 5,619,090 and increased accumulated deficit for $ 3,505,146 .

The Company also recorded a gain of $ 4,620,911 as a result in the change in fair value of the warrant liabilities for the year ended June 30, 2023.

The Company recorded $ 1,115,765 of offering expenses for the year ended June 30, 2023.

As a result of these adjustments, the cash flow from operations decreased by $ 852,345 and cash flows from financing activities increased by $ 852,345 for the year ended June 30, 2023.

Use of Estimates – The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S.

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Cash, Cash Equivalents – Cash and cash equivalents include cash on hand, cash in banks, and all highly liquid investments with a purchased maturity of less than three months.

Cash equivalents consist of $ 5,789,218 in money market and treasury bills and $ 29,740,565 in a money market account at June 30, 2023 and 2022, respectively.

Marketable Securities - The Company’s marketable securities consist of its investments in debt securities with original maturities of greater than 90 days that are classified as available for sale securities..

Cash equivalents consist of $ 9,089,113 in a money market accounts and $ 5,789,218 in money market and treasury bills at June 30, 2024 and 2023, respectively.

Marketable Securities - The Company’s marketable securities consist of debt securities with original maturities of greater than 90 days that are classified as available for sale securities.

Fair Value of Financial Instruments – The Company’s financial instruments consist primarily of cash equivalents, marketable securities, accounts receivable, and accounts payable.

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Maintenance and repairs are expensed as incurred while expenditures that extend the useful life of an asset are capitalized.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

Impairment of Long-Lived Assets – The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable.

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Trade accounts receivable due to the Company from contracts with its customers are stated separately in the consolidated balance sheet, net of various allowances as described in the Trade Accounts Receivable policy above.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

Product revenues consist of sales of Vyleesi in the United States.

The Company sells Vyleesi to specialty pharmacies at the wholesale acquisition cost and payment is currently made within approximately 30 days.

Prior to selling the Vyleesi product to Cosette in December 2023, the Company sold Vyleesi to specialty pharmacies at the wholesale acquisition cost and payment is currently made within approximately 30 days.

In addition to distribution agreements with customers, the Company enters into arrangements with healthcare payers that provide for privately negotiated rebates, chargebacks, and discounts with respect to the purchase of the Company’s products.

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If the Company does not identify services performed for it but not billed by the service-provider, or if it underestimates or overestimates the value of services performed as of a given date, reported expenses will be understated or overstated.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

Stock-Based Compensation – The Company charges to expense the fair value of stock options and other equity awards granted to employees and nonemployees for services.

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Net Loss per Common Share –Basic and diluted loss per common share (“EPS”) are calculated in accordance with the provisions of FASB ASC Topic 260, Earnings per Share .

The Company’s Series B and Series C Redeemable Convertible Preferred Stock and warrants issued during the year ended June 30, 2022 met the definition of a participating security given their rights to participate in dividends if declared on common stock, which required the Company to apply the two-class method to compute both basic and diluted net income or loss per share.

The two-class method is an earnings allocation formula that treats participating securities as having rights to earnings that would otherwise have been available to common stockholders.

In addition, as these securities are participating securities, the Company was required to calculate diluted net income or loss per share under the if-converted and treasury stock method in addition to the two-class method and utilize the most dilutive result.

In periods where there is a net loss, no allocation of undistributed net loss to the Redeemable Convertible Preferred stockholders or warrant holders was performed as the holders of these securities were not contractually obligated to participate in the Company’s losses.

For the years ended June 30, 2024 and 2023, no additional common shares were added to the computation of diluted EPS because to do so would have been anti-dilutive.

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(3) NEW AND RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS

In May 2021, the FASB issued Accounting Standards Update (“ASU”) No.

2021-04, Earnings Per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40):

Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options .

The FASB issued this update to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange.

The amendments in ASU No.

2021-04 are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years.

Early adoption is permitted.

The guidance is applicable to the Company beginning July 1, 2022.

The adoption of this standard did not have an impact on the Company’s consolidated financial statements.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

In August 2020, the FASB issued ASU No.

2020-06, Debt (Topic 470) and Derivatives and Hedging (Topic 815):

Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.

The amendments in ASU No.

2020-06 address issues identified as a result of the complexity associated with applying U.S.

GAAP for certain financial instruments with characteristics of liabilities and equity.

The guidance is effective for public entities for fiscal years beginning after December 15, 2021, and for interim periods within those fiscal years, with early adoption permitted.

The Company early adopted this standard during the year ended June 30, 2022.

The adoption of this standard did not have an impact on the Company’s consolidated financial statements.

In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures.

This ASU requires that a public entity provide additional segment disclosures on an interim and annual basis.

The amendments in this ASU should be applied retrospectively to all prior periods presented in the financial statements, unless impracticable.

Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

In June 2016, the FASB issued ASU No.

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The adoption of this standard did not have an impact on the Company’s consolidated financial statements.

(4) ASSET PURCHASE AGREEMENT

On December 19, 2023, the Company entered into an asset purchase agreement (the “Cosette Purchase Agreement”) with Cosette pursuant to which Cosette acquired from the Company worldwide rights to Vyleesi®.

Under the terms of the Cosette Purchase Agreement, the Company sold certain assets (the “Purchased Assets”) to Cosette, comprising the exclusive right to market and sell Vyleesi for treatment of hypoactive sexual desire disorder in women, and contracts relating manufacturing and distribution of Vyleesi.

The Purchased Assets include applicable intellectual property pertaining to the marketing and sale of Vyleesi, including patents, patent applications, trademarks and copyrights.

In addition, Cosette acquired records pertaining to the historical sales and distribution of Vyleesi, as well as quality control and pharmacovigilance records and other records.

The Company will receive up to $ 171,000,000 , consisting of an upfront purchase price of $ 9,500,000 , $ 2,500,000 payable upon the settlement of certain purchase commitments, and sales-based milestone payments of up to $ 159,000,000 based on annual net sales of from $ 15,000,000 to $ 20,000,000 .

The closing of the transaction took place simultaneously with the signing of the Cosette Purchase Agreement.

As a result of the transaction, the Company recorded gain of $ 7,781,844 on the sale of Vyleesi for the year ended June 30, 2024.

The Cosette Purchase Agreement includes customary representations, warranties and covenants, as well as standard mutual indemnities covering losses arising from any material breach of the Cosette Purchase Agreement or inaccuracy of representations and warranties.

The parties also entered into a transition service agreement pursuant to which the Company provided certain transition services to Cosette for a period time and the Company was reimbursed for the costs of the transition services.

The Company is also eligible to receive regulatory approval milestones associated with the previous licensing of Vyleesi to Fosun for China (see Note 6) and Kwangdong for the Republic of Korea (“Korea”) (see Note 7).

(5) MANUFACTURING SUPPLY AGREEMENTS FOR VYLEESI

The Company has Vyleesi manufacturing contracts with Catalent Belgium S.A.

(“Catalent”), a subsidiary of Catalent Pharma Solutions, Inc., to manufacture drug product and prefilled syringes and assemble prefilled syringes into an auto-injector device (the “Catalent Agreement”);

The Company has transferred to Cosette its right, title and interest in contracts and agreements to manufacture Vyleesi, including manufacturing contracts with Catalent Belgium S.A.

(“Catalent”), a subsidiary of Catalent Pharma Solutions, Inc., to manufacture drug product and prefilled syringes and assemble prefilled syringes into an auto-injector device;

Ypsomed AG (“Ypsomed”), to manufacture the auto-injector device (the “Ypsomed Agreement”);

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(“Lonza”), to manufacture the active pharmaceutical ingredient peptide (the “Lonza Agreement”).

On September 29, 2020, the Company and Catalent entered into an agreement to terminate the Catalent Agreement (the “Catalent Termination Agreement”) in consideration for a one-time payment of six million euros (€6,000,000) which was paid in October 2020 and accrued as part of the estimated losses on inventory purchase commitments.

The Company and Catalent then entered into a new Vyleesi manufacturing agreement (the “Catalent Agreement”) which includes reduced minimum annual purchase requirements (see Note 13) as compared to the original Catalent Agreement and modification of other financial terms.

The Catalent Agreement provides that Catalent will provide manufacturing and supply services to Palatin related to production of Vyleesi, including that Catalent will supply specified minimums of Palatin’s requirements for Vyleesi during the term of the Catalent Agreement through August 21, 2025, unless earlier terminated in accordance with the terms of the Catalent Agreement.

The initial term of the Catalent Agreement will be automatically extended for one 24-month period unless either party notifies the other of its desire to terminate as of the end of the initial term.

The Catalent Agreement also includes customary terms and conditions relating to forecasting and minimum commitments, ordering, delivery, inspection and acceptance, and termination, among other matters (See Note 13).

The initial term of the Ypsomed Agreement is through December 31, 2025, with automatic renewal for successive one-year periods unless either party terminates the Ypsomed Agreement by ten months’ written notice prior to the expiration of the Ypsomed Agreement or any automatic renewal period.

There are specified minimum purchase requirements under the Ypsomed Agreement, and under specified circumstances, termination fees may be payable upon termination of the Ypsomed Agreement by the Company (see Note 13).

The term of the Lonza Agreement was set to expire on December 31, 2022.

In November 2022, Lonza and the Company amended the Lonza Agreement to extend contract peptide manufacturing services until June 30, 2024.

The Company intends to seek to extend contract peptide manufacturing services with Lonza past June 30, 2024, and is also actively evaluating potential new contract manufacturers.

Establishing a new contractual relationship and establishing and validating manufacturing in a manner that complies with FDA regulations is a time-consuming and costly process.

The amendment reduced certain minimum purchase commitments that were previously accrued for.

As a result, the Company recorded a gain on the purchase commitment of $ 1,027,322 upon the reversal of the accrual (see Note 13).

(6) AGREEMENT WITH FOSUN

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(“Fosun”) for exclusive rights to commercialize Vyleesi in China (the “Fosun License Agreement”).

Under the terms of the agreement, the Company received $ 4,500,000 in October 2017, which consisted of an upfront payment of $ 5,000,000 less $ 500,000 that was withheld in accordance with tax withholding requirements in China and recorded as an expense during the year ended June 30, 2018.

The Company is entitled to receive a $ 7,500,000 milestone payment when regulatory approval in China is obtained, provided that a commercial supply agreement for Vyleesi has been entered into.

The Company has the potential to receive up to $ 92,500,000 in additional sales related milestone payments and high single-digit to low double-digit royalties on net sales in the licensed territory.

All development, regulatory, sales, marketing, and commercial activities and associated costs in the licensed territory will be the sole responsibility of Fosun.

the Company recorded $ 3,000 and $ 250,000 of license and contract revenue related to the Fosun License Agreement for the years ended June 30, 2023 and 2022, respectively.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

Under the terms of the Fosun License Agreement, the Company received $ 4,500,000 in October 2017, which consisted of an upfront payment of $ 5,000,000 less $ 500,000 that was withheld in accordance with tax withholding requirements in China and recorded as an expense during the year ended June 30, 2018.

The Company has agreed to assign the Fosun License Agreement to Cosette, provided that the Company retains the right to receive a $ 7,500,000 milestone payment upon regulatory approval in China.

(7) AGREEMENT WITH KWANGDONG

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(“Kwangdong”) for exclusive rights to commercialize Vyleesi in Korea (the “Kwangdong License Agreement”).

Under the terms of the agreement, the Company received $ 417,500 in December 2017, consisting of an upfront payment of $ 500,000 , less $ 82,500 , which was withheld in accordance with tax withholding requirements in Korea and recorded as an expense during the year ended June 30, 2018.

The Company is entitled to receive a $ 3,000,000 milestone payment based on the first commercial sale in Korea.

The Company has the potential to receive up to $ 37,500,000 in additional sales related milestone payments and mid-single-digit to low double-digit royalties on net sales in the licensed territory.

All development, regulatory, sales, marketing, and commercial activities and associated costs in the licensed territory will be the sole responsibility of Kwangdong.

Under the terms of the Kwangdong License Agreement, the Company received $ 417,500 in December 2017, consisting of an upfront payment of $ 500,000 , less $ 82,500 , which was withheld in accordance with tax withholding requirements in Korea and recorded as an expense during the year ended June 30, 2018.

The Company has agreed to assign the Kwangdong License Agreement to Cosette, provided that the Company retains the right to receive a $ 3,000,000 milestone payment based on the first commercial sale in Korea.

(8) PREPAID EXPENSES AND OTHER CURRENT ASSETS

Prepaid expensesand other current assets consist of the following:

Prepaid expenses and other current assets consist of the following:

Clinical / regulatory costs

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active markets

Other quoted/

inputs (Level 2)

unobservable inputs

Other quoted/observable inputs (Level 2)

Significant unobservable inputs

June 30, 2024:

Cash equivalents - Money market funds

June 30, 2023:

Cash equivalents - Money market funds

Cash equivalents - Treasury bill

Marketable securities - Treasury bill

June 30, 2022:

Money market account

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

(10) INVENTORIES

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Supplemental cash flow information related to leases was as follows:

Year ended June 30,

Cash paid for the amounts included in the measurement of lease liabilities:

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Right-of-use assets obtained in exchange for new operating lease obligation

Right-of-use assets obtained in exchange for new finance lease obligations

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

The following table summarizes the maturity of the Company’s lease liabilities as of June 30, 2024:

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(13) ACCRUED EXPENSES

Accrued expensesconsist of the following:

Accrued expenses consist of the following:

Clinical / regulatory costs

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(14) COMMITMENTS AND CONTINGENCIES

Inventory Purchases –The Company has certain supply agreements with manufacturers and suppliers, including the Catalent Agreement, Ypsomed Agreement, and Lonza Agreement.

The Company is required to make certain payments for the manufacture and supply of Vyleesi.

The term of the Lonza Agreement was set to expire on December 31, 2022.

In November 2022, Lonza and the Company amended the Lonza Agreement to extend contract peptide manufacturing services until June 30, 2024.

The Company intends to seek to extend contract peptide manufacturing services with Lonza past June 30, 2024, and is also actively evaluating potential new contract manufacturers.

Establishing a new contractual relationship and establishing and validating manufacturing in a manner that complies with FDA regulations is a time-consuming and costly process.

The amendment reduced certain minimum purchase commitments that were previously accrued for.

As a result, the Company recorded a gain on the purchase commitment of $ 1,027,322 .

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

The following table summarizes the contractual obligations under the New Catalent Agreement, Yposmed Agreement, and Lonza Agreement as of June 30, 2023:

Inventory Purchases –The Company had certain supply agreements with manufacturers and suppliers, including the Catalent Agreement, Ypsomed Agreement, and Lonza Agreement, all of which have been transferred to Cosette.

As a result of the sale of Vyleesi to Cosette, the Company is still required to make certain payments for the manufacture and supply of Vyleesi.

The following table summarizes the contractual obligations under the Catalent Agreement, Ypsomed Agreement, and Lonza Agreement as of June 30, 2024:

Inventory purchase commitments

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Accordingly, the Company and investors directed the escrow agent for the escrow account to release $ 15,750,000 to the investors, comprising the total gross proceeds from the offering of $ 15,000,000 and a fee of $ 750,000 .

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

Given that the fee and other costs were not refundable to the Company as of June 30, 2022, regardless of the election selected by the investors, the $ 750,000 fee, the fair value of the warrants ($ 234,443 ), and other costs of $ 150,995 were recorded as expenses within selling, general and administrative expenses during the year ended June 30, 2022.

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Each share of Series A Convertible Preferred Stock is convertible at any time, at the option of the holder, into the number of shares of common stock equal to $ 100 divided by the Series A Conversion Price.

As of June 30, 2023, the Series A Conversion Price was $ 114.77 , so each share of Series A Convertible Preferred Stock is currently convertible into approximately 0.66 shares of common stock.

As of June 30, 2024, the Series A Conversion Price was $ 75.45 , and each share of Series A Convertible Preferred Stock is convertible into approximately 1.33 shares of common stock.

The Series A Conversion Price is subject to adjustment, under certain circumstances, upon the sale or issuance of common stock for consideration per share less than either (i) the Series A Conversion Price in effect on the date of such sale or issuance, or (ii) the market price of the common stock as of the date of such sale or issuance.

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Additionally, the Company may not pay a dividend or make any distribution to holders of any class of stock unless the Company first pays a special dividend or distribution of $ 100 per share to holders of the Series A Convertible Preferred Stock.

Financing Transactions – On October 31, 2022, the Company entered into a securities purchase agreement with a certain institutional investor to sell, in a registered direct offering (the “Offering”), an aggregate of (i) 1,020,000 shares of the Company’s common stock, (ii) prefunded warrants (the “Pre-Funded Warrants”) to purchase up to 798,182 shares of the Company’s common stock, and (iii) common stock warrants (the “Common Warrants”) to purchase up to 1,818,182 shares of the Company’s common stock.

Each share of common stock was offered with one accompanying Common Warrant with a combined offering price of $5.50.

Each Pre-Funded Warrant was offered with one accompanying Common Warrant with a combined offering price of $5.4999 .

The Offering was completed on November 2, 2022.

The Common Warrants have an exercise price of $ 5.83 per share, are exercisable beginning six months after the date of issuance and will expire five and one-half years from the date of issuance.

The Pre-Funded Warrants have an exercise price of $ 0.0001 per share, are exercisable upon issuance, and will expire when exercised in full.

The Common Warrants will be exercisable for cash, or, solely during any period when a registration statement for the issuance or resale of the shares of common stock issuable upon exercise of the Common Warrants to or by the holder of such Common Warrants is not in effect, on a cashless basis.

During the year ended June 30, 2023, the institutional investor exercised the outstanding Pre-Funded Warrants to purchase 798,182 shares of the Company’s common stock.

The proceeds from the Offering, after deducting the placement agent fees and expenses and other estimated offering expenses, were $ 9,109,117 .

On April 12, 2023, the Company entered into a new equity distribution agreement with Canaccord Genuity LLC (the “2023 Equity Distribution Agreement”), pursuant to which the Company may, from time to time, sell shares of the Company’s common stock at market prices by methods deemed to be an “at-the-market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended.

Financing Transactions – On January 29, 2024, the Company entered into a securities purchase agreement (the “January 2024 Purchase Agreement”) to sell in a registered direct offering (the “January 2024 RD Offering”), an aggregate of 1,831,503 shares of common stock, of the Company.

Pursuant to the January 2024 Purchase Agreement, the Company issued to the investors in the January 2024 RD Offering unregistered warrants (the “January 2024 Private Warrants”) to purchase up to 1,831,503 shares of the Company’s common stock (the “January 2024 Private Warrant Shares”) in a concurrent private placement (the “January 2024 Private Offering” and together with the January 2024 RD Offering, the “January 2024 Offering”).

The shares of common stock and accompanying January 2024 Private Warrants were offered at a combined offering price of $5.46 .

The January 2024 Private Warrants are exercisable on the six-month anniversary of the issuance date for a period of four years from the issuance date, at an exercise price equal to $ 5.46 per January 2024 Private Warrant Share.

The January 2024 Private Warrants are exercisable for cash, or, solely during any period when a registration statement for the issuance or resale of the January 2024 Private Warrant Shares issuable upon exercise of the January 2024 Private Warrants to or by the holder of such January 2024 Private Warrants is not in effect, on a cashless basis.

The Company paid the placement agent a cash fee equal to 7.0% of the aggregate gross proceeds of the January 2024 Offering and for certain expenses and legal fees in connection with the January 2024 Offering.

In addition, the Company also issued to the placement agent or its designees warrants (the “January 2024 Placement Agent Warrants”) to purchase up to 91,575 shares of the Company’s common stock (the “January 2024 Placement Agent Warrant Shares”) as part of the compensation payable to the placement agent.

The January 2024 Placement Agent Warrants have substantially the same terms as the January 2024 Private Warrants, except that the January 2024 Placement Agent Warrants have an exercise price of $ 6.82 5 per share.

On March 14, 2024, the Company filed a registration statement on Form S-1 to register the January 2024 Private Warrants and the January 2024 Placement Agent Warrants, which registration statement was declared effective on March 28, 2024 and a prospectus was filed on the same date.

The gross proceeds from the January 2024 Offering totaled $ 10,000,006 , with net proceeds from the January 2024 Offering, after deducting the placement agent fees and offering expenses, amounting to $ 9,224,056 .

The Company intends to use the net proceeds received from the January 2024 Offering for general working capital purposes.

On October 20, 2023, the Company entered into a securities purchase agreement (the “October 2023 Purchase Agreement”) with a certain institutional investor, to sell in a registered direct offering (the “October 2023 RD Offering”), an aggregate of (i) 1,325,000 shares of common stock (the “October 2023 Shares”), of the Company and (ii) pre-funded warrants (the “October 2023 Pre-Funded Warrants”) to purchase up to 1,033,491 shares of the Company’s common stock (the “October 2023 Pre-Funded Warrant Shares”).

Pursuant to the October 2023 Purchase Agreement the Company also issued unregistered warrants (the “October 2023 Private Warrants”) to purchase up to 2,358,491 shares of the Company’s common stock (the “October 2023 Private Warrant Shares”) in a concurrent private placement (the “October 2023 Private Offering” and together with the October 2023 RD Offering, the “October 2023 Offering”).

The October 2023 Shares and accompanying October 2023 Private Warrants were offered at a combined offering price of $ 2.12 .

The October 2023 Pre-Funded Warrants and accompanying October 2023 Private Warrants were offered at a combined offering price of $2.1199.

The October 2023 Offering closed on October 24, 2023.

The October 2023 Private Warrants are exercisable on the six-month anniversary of issuance for a period of five and one-half years from the issuance date, at an exercise price equal to $2.12 per October 2023 Private Warrant Share.

The October 2023 Private Warrants will be exercisable for cash, or, solely during any period when a registration statement for the issuance or resale of the October 2023 Private Warrant Shares issuable upon exercise of the October 2023 Private Warrants to or by the holder of such October 2023 Private Warrants is not in effect, on a cashless basis.

The October 2023 Pre-Funded Warrants had an exercise price of $ 0.0001 per October 2023 Pre-Funded Warrant Share and were exercisable upon issuance.

During the three months ended December 31, 2023, the institutional investor exercised the outstanding October 2023 Pre-Funded Warrants to purchase 1,033,491 shares of the Company’s common stock.

The net proceeds from the October 2023 Offering, after deducting the placement agent fees and offering expenses, were $ 4,573,948 .

On October 31, 2022, the Company entered into a securities purchase agreement with a certain institutional investor to sell, in a registered direct offering (the “October 2022 RD Offering”), an aggregate of (i) 1,020,000 shares of the Company’s common stock, (ii) prefunded warrants (the “October 2022 Pre-Funded Warrants”) to purchase up to 798,182 shares of the Company’s common stock, and (iii) common stock warrants (the “October 2022 Common Warrants”) to purchase up to 1,818,182 shares of the Company’s common stock.

Each share of common stock was offered with one accompanying October 2022 Common Warrant with a combined offering price of $5.50.

Each October 2022 Pre-Funded Warrant was offered with one accompanying October 2022 Common Warrant with a combined offering price of $5.4999 .

The October 2022 RD Offering was completed on November 2, 2022.

The October 2022 Common Warrants have an exercise price of $ 5.83 per share, are exercisable beginning six months after the date of issuance and will expire five and one-half years from the date of issuance.

The October 2022 Pre-Funded Warrants had an exercise price of $ 0.0001 per share and were exercisable upon issuance.

During the year ended June 30, 2023, the institutional investor exercised the outstanding October 2022 Pre-Funded Warrants to purchase 798,182 shares of the Company’s common stock.

The October 2022 Common Warrants will be exercisable for cash, or, solely during any period when a registration statement for the issuance or resale of the shares of common stock issuable upon exercise of the October 2022 Common Warrants to or by the holder of such October 2022 Common Warrants is not in effect, on a cashless basis.

The proceeds from the October RD 2022 Offering, after deducting the placement agent fees and expenses and other estimated offering expenses, were $ 9,109,117 .

The private warrants and common warrants related to the October 2022 and October 2023 financings met the definition of a derivative instrument under ASC Subtopic 815-40 and were reported as liabilities as of June 30, 2023 since the warrants did not meet the criteria for equity classification.

The Company recorded the warrants at fair value on its balance sheet with changes in the fair value of the warrants recorded as a non-cash charge or gain in the consolidated statements of operations.

The January 2024 Placement Agent Warrants were issued to non-employees in exchange for services related to the offering are accounting for in accordance ASC 718 which requires the fair value of the warrants to be recognized as an offering expense.

The placement agent warrants contain certain contingent cash settlement features that are not probable of occurring and not within the control of Company, therefore the placement agent warrants are classified out of permanent equity.

On January 24, 2024, the Company and warrant holders amended the terms of warrants related to the October 2022 and October 2023 financings.

As a result, all liability classified warrants were reclassified to additional paid-in capital.

On April 12, 2023, the Company entered into a new equity distribution agreement (the “2023 Equity Distribution Agreement”) with Canaccord Genuity LLC (“Canaccord”), pursuant to which the Company may, from time to time, sell shares of the Company’s common stock at market prices by methods deemed to be an “at-the-market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended.

The 2023 Equity Distribution Agreement and related prospectus is limited to sales of up to an aggregate maximum $50.0 million of shares of the Company’s common stock .

The Company pays Canaccord 3.0% of the gross proceeds as a commission .

For the year ended June 30, 2023, a total of 504,034 shares of common stock were sold through Canaccord under the 2023 Equity Distribution Agreement for net proceeds of $ 1,034,035 after payment of commission fees of $ 35,902 and other related expenses of $ 126,801 .

Sale of shares after July 1, 2023 is reported in Note 16, Subsequent events.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

Proceeds raised under the 2023 Equity Distribution Agreement are as follows:

Year Ended June 30, 2024

Year Ended June 30, 2023

Gross proceeds

Stock Warrants - On June 20, 2024, the Company entered into a letter agreement (the “Inducement Letter”) with a holder (the “Exercising Holder”) of outstanding common stock purchase warrants that the Company issued on November 2, 2022, and October 24, 2023 (the “Existing Warrants”).

Pursuant to the Inducement Letter, the Exercising Holder agreed to exercise, for cash, Existing Warrants to purchase, in the aggregate, 3,233,277 shares of common stock in exchange for the Company’s agreement to (i) lower the exercise price to $1.88 per share for the 3,233,277 Existing Warrants being exercised pursuant to the Inducement Letter and (ii) issue to the Exercising Holder an aggregate of 4,849,915 warrants to purchase shares of common stock, comprised of Series A common stock purchase warrants to purchase 2,727,273 shares of common stock (the “Series A Warrants”) and Series B common stock purchase warrants to purchase 2,122,642 (of which 1,624,201 shares of common stock are subject to stockholder approval) shares of common stock (the “Series B Warrants” and together with the Series A Warrants, the “Inducement Warrants”).

The Company received aggregate gross proceeds of $ 6,078,561 from the exercise of the Existing Warrants by the Exercising Holder (the “Warrant Inducement”).

As part of the agreement, 1,443,277 shares were held in abeyance on behalf of the Exercising Holder.

The Company intends to use the net proceeds for working capital and general corporate purposes.

The incremental value of the Warrant Inducement was recorded as an offering expense against the proceeds received in additional paid-in capital.

As of June 30, 2024, the Company had outstanding warrants for shares of common stock as follows:

May 2022 Warrants

November 2022 Common Warrants

November 2022 Placement Agent Warrants

October 2022 Placement Agent Warrants

October 31, 2027

Stock Plan – The Company’s 2011 Stock Incentive Plan (“2011 Stock Plan”) was approved by the Company’s stockholders at the annual meeting of stockholders held in May 2011 and amended at the annual meeting of stockholders held on June 8, 2017, June 26, 2018, June 25, 2020, June 24, 2022 and again at the annual meeting of stockholders held on June 20, 2023.

October 2023 Private Warrants

April 24, 2029

October 2023 Placement Agent Warrants

October 20, 2028

January 2024 Private Warrants

February 1, 2028

January 2024 Placement Agent Warrants

February 1, 2028

June 2024 Series A Warrants

June 24, 2029

June 2024 Series B Warrants

* 1,624,201 shares expire on the five year anniversary following stockholder approval

Stock Plan – The Company’s 2011 Stock Incentive Plan (“2011 Stock Incentive Plan”) was approved by the Company’s stockholders at the annual meeting of stockholders held in May 2011 and amended at the annual meeting of stockholders held on June 8, 2017, June 26, 2018, June 25, 2020, June 24, 2022, June 20, 2023 and again at the annual meeting of stockholders held on June 27, 2024.

The 2011 Stock Incentive Plan, as amended, provides for incentive and nonqualified stock option grants, restricted stock unit awards and other stock-based awards to employees, non-employee directors and consultants for up to 4,300,000 shares of common stock.

The 2011 Stock Incentive Plan is administered under the direction of the Board of Directors, which may specify grant terms and recipients.

The 2011 Stock Incentive Plan is administered under the direction of the Company’s board of directors, which may specify grant terms and recipients.

Options granted by the Company generally expire ten years from the date of grant and generally vest over three to four years.

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The following table summarizes option activity and related information for the years ended June 30, 2024 and 2023:

Number of Shares

Weighted Average

Exercise Price

Weighted Average Remaining

Weighted Average Exercise Price

Weighted Average Remaining Term in Years

Aggregate Intrinsic Value

Outstanding - June 30, 2022

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Expected to vest at June 30, 2024

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

On December 16, 2022, Carl Spana, President and CEO of the Company, and Stephen T.

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Time-based restricted stock units granted to the Company’s executive officers, employees and non-employee directors generally vest over 48 months, 48 months, and 12 months, respectively.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

Included in the outstanding restricted stock units in the table above are 274,549 and 59,842 unvested performance-based restricted stock units granted to executive officers and other employees, respectively, which were granted in June 2021, 2022, 2023, and 2024.

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For fiscal 2024 and 2023, the Company recorded no income tax expense as a result of the generation of operating losses that were subject to a full valuation allowance.

Deferred tax assets and liabilities are determined based on the estimated future tax effect of differences between the financial statement and tax reporting basis of assets and liabilities, as well as for, net operating loss carryforwards and research and development credit carryforwards, given the provisions of existing tax laws.

Deferred tax assets and liabilities are determined based on the estimated future tax effect of differences between the financial statement and tax reporting basis of assets and liabilities, as well as for, NOL carryforwards and R&D credit carryforwards, given the provisions of existing tax laws.

As of June 30, 2024, the Company had state NOL carryforwards of approximately $ 181,000,000 , which will expire, if not utilized, between 2036 and 2043, federal NOL carryforwards of approximately $ 130,000,000 and federal R&D and Alternative Minimum Tax (“AMT”) credits of approximately $ 9,500,000 , which expire, if not utilized, between 2035 and 2043, and foreign tax credits of $ 582,500 , which expire, if not utilized, in 2028.

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Until such time, the use of NOL carryforwards and tax credits to offset profits, if any, will reduce the overall level of deferred tax assets subject to valuation allowance.

The Tax Reform Act of 1986 (the “Act”) provides for limitation on the use of the Company’s net operating loss and research and development tax credit carryforwards following certain ownership changes (as defined by the Act) that could limit the Company’s ability to utilize these carryforwards.

Since its inception, the Company has completed several financings and sales of common stock which has resulted in multiple ownership changes defined by Section 382 of the Act.

The Tax Reform Act of 1986 (the “Tax Reform Act”) provides for limitation on the use of the Company’s NOL and R&D tax credit carryforwards following certain ownership changes (as defined by the Tax Reform Act) that could limit the Company’s ability to utilize these carryforwards.

Since its inception, the Company has completed several financings and sales of common stock which has resulted in multiple ownership changes defined by Section 382 of the Tax Reform Act.

Accordingly, the Company’s ability to utilize the aforementioned carryforwards are subject to limitation under Section 382.

If the Company undergoes a future ownership change or as it completes its Section 382 limitation assessments, any unutilized carryforwards that were not previously subject to a Section 382 limitation may become subject to limitation which may result in a significant limitation and loss of net operating loss carryforwards and research and development credits.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

Additionally, U.S.

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As of June 30, 2024 and 2023, the Company had no liabilities for uncertain income tax matters.

(16) SUBSEQUENT EVENTS

Between July 1, 2023 and September 27, 2023, a total of 217,027 shares of common stock were sold through Canaccord under the 2023 Equity Distribution Agreement for net proceeds of $ 531,369 after payment of commission fees of $ 16,434 .

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data