Palatin Technologies Inc 10-Q for FY2020 Q3

Palatin Technologies Inc (PTN)

10-Q 2020-05-11 For: 2020-03-31

Added on April 06, 2026

About this 10-Q

Palatin Technologies Inc filed this 10-Q on May 11, 2020, covering the quarter ended March 31, 2020 (FY2020 Q3).

Headline figures

Quarter ended March 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $0; compared with $0 a year earlier
Net loss: $5.38M; compared with a net loss of $5.73M a year earlier

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Delaware		95-4078884
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4B Cedar Brook Drive Cranbury, New Jersey		08512
(Address of principal executive offices)		(Zip Code)

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share	PTN	NYSE American

Large accelerated filer	☐	Accelerated filer	☑
Non-accelerated filer	☐	Smaller reporting company	☑
Emerging growth company	☐

	Page

PART I – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of March 31, 2020 and June 30, 2019	1
Consolidated Statements of Operations for the Three and Nine Months Ended March 31, 2020 and 2019	2
Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended March 31, 2020 and 2019	3
Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2020 and 2019	5
Notes to Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3. Quantitative and Qualitative Disclosures About Market Risk	23
Item 4. Controls and Procedures	23

PART II – OTHER INFORMATION
Item 1. Legal Proceedings	24
Item 1A. Risk Factors	24
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 3. Defaults Upon Senior Securities	25
Item 4. Mine Safety Disclosures	25
Item 5. Other Information	25
Item 6. Exhibits	26

Signatures	27

	March 31, 2020	June 30, 2019
ASSETS
Current assets:
Cash and cash equivalents	$88,947,368	$43,510,422
Accounts receivable	-	60,265,970
Prepaid expenses and other current assets	675,443	637,289
Total current assets	89,622,811	104,413,681

Property and equipment, net	153,660	141,539
Right-of-use assets	98,491	-
Other assets	179,916	179,916
Total assets	$90,054,878	$104,735,136

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$1,612,164	$504,787
Accrued expenses	1,657,237	2,848,692
Notes payable, net of discount	-	332,896
Other current liabilities	89,429	499,517
Total current liabilities	3,358,830	4,185,892

Other liabilities	9,062	-
Total liabilities	3,367,892	4,185,892

Stockholders’ equity:
Preferred stock of $0.01 par value – authorized 10,000,000 shares; shares issued and outstanding designated as follows:
Series A Convertible: authorized 264,000 shares: issued and outstanding 4,030 shares as of March 31, 2020 and June 30, 2019	40	40
Common stock of $0.01 par value – authorized 300,000,000 shares:
issued and outstanding 229,240,596 shares as of March 31, 2020 and 226,815,363 shares as of June 30, 2019	2,292,406	2,268,154
Additional paid-in capital	395,294,270	394,053,929
Accumulated deficit	(310,899,730)	(295,772,879)
Total stockholders’ equity	86,686,986	100,549,244
Total liabilities and stockholders’ equity	$90,054,878	$104,735,136

	Three Months Ended March 31,		Nine Months Ended March 31,
	2020	2019	2020	2019

REVENUES
License and contract	$-	$-	$117,989	$34,505

OPERATING EXPENSES
Research and development	3,641,250	3,943,982	10,026,363	10,528,329
General and administrative	2,072,032	1,818,796	6,308,567	5,947,943
Total operating expenses	5,713,282	5,762,778	16,334,930	16,476,272

Loss from operations	(5,713,282)	(5,762,778)	(16,216,941)	(16,441,767)

OTHER INCOME (EXPENSE)
Investment income	331,285	107,460	1,101,921	361,212
Interest expense	(278)	(71,812)	(11,831)	(370,981)
Total other income (expense), net	331,007	35,648	1,090,090	(9,769)

NET LOSS	$(5,382,275)	$(5,727,130)	$(15,126,851)	$(16,451,536)

Basic and diluted net loss per common share	$(0.02)	$(0.03)	$(0.06)	$(0.08)

Weighted average number of common shares outstanding used in computing basic and diluted net loss per common share	235,322,087	207,016,304	234,449,813	206,148,695

					Additional
	Preferred Stock		Common Stock		Paid-in	Accumulated
	Shares	Amount	Shares	Amount	Capital	Deficit	Total
Balance, December 31, 2019	4,030	$40	229,174,754	$2,291,748	$394,592,802	$(305,517,455)	$91,367,135
Stock-based compensation	-	-	65,842	658	701,468	-	702,126
Net loss	-	-	-	-	-	(5,382,275)	(5,382,275)
Balance, March 31, 2020	4,030	$40	229,240,596	$2,292,406	$395,294,270	$(310,899,730)	$86,686,986

	March 31	June 30,
	2020	2019
Clinical / Regulatory costs	$97,020	$61,798
Insurance premiums	8,090	87,937
Other	570,333	487,554
	$675,443	$637,289

	Carrying Value	Quoted prices in active markets(Level 1)	Other quoted/observable inputs (Level 2)	Significant unobservable inputs(Level 3)
March 31, 2020:
Money Market Account	$88,736,048	$88,736,048	$-	$-
June 30, 2019:
Money Market Account	$43,381,556	$43,831,556	$-	$-

Lease cost	Three months ended March 31, 2020	Nine months ended March 31, 2020
Operating lease cost	$53,454	$152,712
Variable lease cost	17,824	53,473
Short-term lease cost	3,600	15,720
Total lease cost	$74,878	$221,905

	March 31, 2020
Operating lease ROU asset and liability	$98,491

Weighted-average remaining lease term (years)	0.5
Weighted-average discount rate	6.25%

	Three months ended March 31, 2020	Nine months ended March 31, 2020
Cash paid for the amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$77,096	$226,031
Supplemental non-cash information on lease liabilities arisng from obtaining right-of-use assets:
Right-of-use assets obtained in exchange for new lease obligation	$-	$93,435

	March 31, 2020
Year Ending June 30
2020	$77,097
2021	18,360
2022	4,590
Less imputed interest	(1,556)
Total	$98,491

					Additional
	Preferred Stock		Common Stock		Paid-in	Accumulated
	Shares	Amount	Shares	Amount	Capital	Deficit	Total
Balance, June 30, 2018	4,030	$40	200,554,205	$2,005,542	$357,005,233	$(332,045,906)	$26,964,909
Cumulative effect of accounting change	-	-	-	-	-	500,000	500,000
Stock-based compensation	-	-	319,817	3,198	2,863,581	-	2,866,779
Withholding taxes related to restricted stock units	-	-	(67,038)	(670)	(65,322)	-	(65,992)
Sale of common stock , net of costs	-	-	2,256,445	22,564	2,230,244	-	2,252,808
Net loss	-	-	-	-	-	(16,451,536)	(16,451,536)
Balance, March 31, 2019	4,030	$40	203,063,429	$2,030,634	$362,033,736	$(347,997,442)	$16,066,968

	Nine Months Ended March 31,
	2020	2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$(15,126,851)	$(16,451,536)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization	50,759	43,526
Non-cash interest expense	438	47,312
Decrease in right-of-use asset	220,078	-
Stock-based compensation	2,334,797	2,866,779
Changes in operating assets and liabilities:
Accounts receivable	60,265,970	-
Prepaid expenses and other assets	(38,154)	(183,490)
Accounts payable	1,107,377	(1,748,920)
Accrued expenses	(1,191,455)	537,187
Operating lease liability	(220,078)	-
Other liabilities	-	51,643
Net cash provided by (used in) operating activities	47,402,881	(14,837,499)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(62,880)	(36,139)
Net cash used in investing activities	(62,880)	(36,139)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of withholding taxes related to restricted
stock units	(104,236)	(65,992)
Payment on notes payable obligations	(832,851)	(5,500,000)
Warrant repurchases	(2,547,466)	-
Proceeds from the sale of common stock,
net of costs	1,581,498	2,252,808
Net cash used in financing activities	(1,903,055)	(3,313,184)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	45,436,946	(18,186,822)

CASH AND CASH EQUIVALENTS, beginning of period	43,510,422	38,000,171

CASH AND CASH EQUIVALENTS, end of period	$88,947,368	$19,813,349

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$8,132	$316,159

	March 31,	June 30,
	2020	2019
Clinical / Regulatory costs	$725,858	$943,721
Other research related expenses	799,755	1,361,414
Professional services	32,000	317,500
Other	99,624	226,057
	$1,657,237	$2,848,692

	June 30,
	2019
Notes payable under venture loan	$333,333
Unamortized related debt discount	(295)
Unamortized debt issuance costs	(142)
Notes payable	332,896

Less: current portion	332,896

Long-term portion	$-

	Nine months ended March 31, 2020
	Warrants	Buyback price
Series F Warrants	297,352	$62,712
Series H Warrants	1,466,432	577,373
Series J Warrants	4,774,889	1,907,381
	6,538,673	$2,547,466

	Number of Shares	Weighted Average Exercise Price	Weighted Average Remaining Term in Years	Aggregate Intrinsic Value

Outstanding - June 30, 2019	14,435,650	0.85	7.3

Granted	104,500	0.58
Forfeited	(104,537)	1.03
Exercised	-	-
Expired	(77,100)	2.72
Outstanding - March 31, 2020	14,358,513	$0.84	6.6	$146,877

Exercisable at March 31, 2020	9,038,250	$0.77	5.6	$84,309

Expected to vest at March 31, 2020	5,320,263	$0.94	8.3	$62,568

	RSUs
Outstanding at July 1, 2019	10,327,833
Granted	-
Forfeited	(123,438)
Vested	(612,275)
Outstanding at March 31, 2020	9,592,120

Fiscal Month Period	Total Number of Shares Purchased (1)	Weighted Average Price per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet be Purchased Under Announced Plans or Programs
January 1, 2020 through Janurary 31, 2020	22,658	$0.69	-	-
February 1, 2020 through February 29, 2020	-	-	-	-
March 1, 2020 through March 31, 2020	-	-	-	-
Total	22,658	$0.69	-	-

Exhibit Number	Description	Filed Herewith	Form	Filing Date	SEC File No.
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.	X
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.	X
101.INS	XBRL Instance Document.	X
101.SCH	XBRL Taxonomy Extension Schema Document.	X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.	X
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.	X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.	X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.	X

		Palatin Technologies, Inc.
		(Registrant)

		/s/ Carl Spana
Date: May 11, 2020		Carl Spana, Ph.D. President and Chief Executive Officer (Principal Executive Officer)

		/s/ Stephen T. Wills
Date: May 11, 2020		Stephen T. Wills, CPA, MST Executive Vice President, Chief Financial Officer and Chief Operating Officer (Principal Financial and Accounting Officer)