Palatin Announces Exercise of Warrants for Approximately $3.4 Million Gross Proceeds

Rhea-AI Summary

Palatin Technologies (NYSE American: PTN) has secured approximately $3.4 million in gross proceeds through a warrant exercise agreement with an institutional investor. The agreement involves the exercise of warrants from June 2024 and October 2023, totaling 3,907,679 shares at an amended exercise price of $0.875 per share.

As part of the inducement agreement, Palatin will issue new unregistered Series C warrants for 3,907,679 shares and Series D warrants for 1,953,839 shares, both with an exercise price of $0.875. Series C warrants are immediately exercisable with a 5-year expiration, while Series D warrants require stockholder approval. The transaction is expected to close around December 17, 2024, with proceeds intended for working capital and general corporate purposes.

Positive

• Secured $3.4 million in immediate gross proceeds through warrant exercise
• Successful restructuring of existing warrants at $0.875 per share
• Strengthened cash position for working capital needs

Negative

• Potential future dilution from new Series C and D warrants issued
• Series D warrants execution contingent on stockholder approval
• Amended warrant exercise price at $0.875 represents a pricing adjustment

Insights

Financial Analyst

This $3.4 million warrant exercise provides important working capital for PTN, though it comes with significant dilution through additional warrant issuances. The transaction structure includes immediate exercises at $0.875 per share and new Series C and D warrants at the same strike price. While the cash injection strengthens the balance sheet, the potential future dilution from the new warrants (totaling over 5.8 million shares) could pressure the stock. For a micro-cap company with a market cap of just $17.1 million, this financing maintains operations but highlights ongoing capital needs. The amended warrant price of $0.875 represents a premium to recent trading, suggesting some confidence in the company's prospects despite the dilutive impact.

Legal Expert

The warrant exercise inducement agreement demonstrates careful regulatory compliance, particularly through reliance on Section 4(a)(2) of the Securities Act for the new warrant issuances. The structured approach, requiring stockholder approval for Series D warrant exercises, shows proper corporate governance. The company's explicit disclaimers regarding securities registration and offering limitations reflect thorough legal risk management. The transaction's conditional closing and unregistered status of the new warrants highlight important compliance considerations for investors. This deal structure, while complex, appears designed to navigate securities regulations while providing financing flexibility.

CRANBURY, N.J., Dec. 16, 2024 /PRNewswire/ -- Palatin Technologies, Inc. (NYSE American: PTN) ("Palatin" or the "Company"), a biopharmaceutical company developing first-in-class medicines based on molecules that modulate the activity of the melanocortin receptor system, today announced that it has entered into a warrant exercise inducement agreement (the "inducement agreement") with an institutional investor to exercise certain outstanding warrants that the Company issued in June 2024 and October 2023 totaling 3,907,679 shares of the Company's common stock for gross proceeds of approximately $3.4 million.

Pursuant to the inducement agreement, the investor has agreed to exercise a portion of its June 2024 outstanding warrants to purchase an aggregate of 2,964,283 shares of the Company's common stock and has agreed to exercise its October 2023 outstanding warrants to purchase an aggregate of 943,396 shares of the Company's common stock, both sets at an amended exercise price of $0.875 per share. In consideration for the immediate exercise of the warrants, the Company also agreed to issue to the investor unregistered Series C warrants to purchase an aggregate of 3,907,679 shares of the Company's common stock and Series D warrants to purchase an aggregate of 1,953,839 shares of the Company's common stock. The Series C and D warrants will each have an exercise price of $0.875 per share. The Series C warrants are exercisable immediately and will expire on the five-year anniversary of closing date. The Series D warrants are exercisable beginning on the effective date of stockholder approval of the issuance of shares upon exercise of such warrants and will expire on the five-year anniversary from the date of stockholder approval.

The transaction is expected to close on or about December 17, 2024, subject to the satisfaction of customary closing conditions. The Company intends to use the net proceeds from the exercise of warrants for working capital and general corporate purposes.

The Series C and D warrants described above are being issued in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and, along with the shares of common stock underlying such warrants, have not been registered under the Securities Act or applicable state securities laws.

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

About Palatin
Palatin is a biopharmaceutical company developing first-in-class medicines based on molecules that modulate the activity of the melanocortin receptor systems, with targeted, receptor-specific product candidates for the treatment of diseases with significant unmet medical need and commercial potential. Palatin's strategy is to develop products and then form marketing collaborations with industry leaders to maximize their commercial potential. For additional information regarding Palatin, please visit Palatin's website at www.Palatin.com and follow Palatin on Twitter at @PalatinTech.

Forward-looking Statements
Statements in this press release that are not historical facts, including statements related to the timing and completion of the offering, the satisfaction of customary closing conditions related to the offering and the intended use of proceeds therefrom, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and as that term is defined in the Private Securities Litigation Reform Act of 1995. Palatin intends that such forward-looking statements be subject to the safe harbors created thereby. Forward-looking statements reflect the Company's current views with respect to future events and are based on assumptions and subject to known and unknown risks and uncertainties, which change over time, and other factors that may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, without limitation, market and other conditions; the anticipated use of proceeds from the offering; results of clinical trials; regulatory actions by the FDA and other regulatory and the need for regulatory approvals; Palatin's ability to fund development of its technology and establish and successfully complete clinical trials; the length of time and cost required to complete clinical trials and submit applications for regulatory approvals; products developed by competing pharmaceutical, biopharmaceutical and biotechnology companies; commercial acceptance of Palatin's products; and other factors discussed in Palatin's periodic filings with the SEC. All forward-looking statements included in this press release are made only as of the date of this press release. The Company assumes no obligation to update any written or oral forward-looking statement, whether as a result of new information, future events or otherwise unless required by law.

Palatin Technologies^® is a registered trademark of Palatin Technologies, Inc.

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SOURCE Palatin Technologies, Inc.

FAQ

How much did Palatin (PTN) raise through the warrant exercise agreement in December 2024?

Palatin raised approximately $3.4 million in gross proceeds through the warrant exercise agreement.

What is the exercise price for the new Series C and D warrants issued by PTN?

Both Series C and D warrants have an exercise price of $0.875 per share.

How many shares are covered under PTN's new Series C and D warrants?

Series C warrants cover 3,907,679 shares, while Series D warrants cover 1,953,839 shares.

When do PTN's new Series C and D warrants expire?

Series C warrants expire five years from the closing date, while Series D warrants expire five years from the date of stockholder approval.

What will Palatin (PTN) use the warrant exercise proceeds for?

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