Palatin Technologies Inc 10-Q for FY2022 Q3

Palatin Technologies Inc (PTN)

10-Q 2022-05-16 For: 2022-03-31

Added on April 06, 2026

About this 10-Q

Palatin Technologies Inc filed this 10-Q on May 16, 2022, covering the quarter ended March 31, 2022 (FY2022 Q3).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $216.1K; up 143.5% from $88.74K a year earlier
Net loss: $7.63M; compared with a net loss of $5.73M a year earlier

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →

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)

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, 2022 and June 30, 2021	1
	Consolidated Statements of Operations for the Three and Nine Months Ended March 31, 2022 and 2021	2
	Consolidated Statements of Stockholders’ Equity for the Three and Nine Months Ended March 31, 2022 and 2021	3
	Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2022 and 2021	5
	Notes to Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	22
Item 4.	Controls and Procedures	22

PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Mine Safety Disclosures	23
Item 5.	Other Information	23
Item 6.	Exhibits	24

Signatures		25

	·	our business, financial condition, and results of operations may be adversely affected by conditions related to global health epidemics, including the novel strain of coronavirus (“COVID-19”) pandemic, such as, for example, the increase in costs of and delays in conducting human clinical trials and the performance of our contractors and suppliers, reduction in our productivity or the productivity of our contractors and suppliers, supply chain constraints, and labor shortages;

	·	our ability to successfully commercialize Vyleesi® (the trade name for bremelanotide) for the treatment of premenopausal women with hypoactive sexual desire disorder (“HSDD”) in the United States, which may be adversely affected by delays or disruptions related to the ongoing COVID-19 pandemic;

	·	our ability to manage the infrastructure to successfully manufacture, through contract manufacturers, Vyleesi, and to develop the infrastructure to successfully market and distribute Vyleesi in the United States;

	·	our ability to meet post marketing commitments of the U.S. Food and Drug Administration (“FDA”);

	·	our expectations regarding the potential market size and market acceptance for Vyleesi for HSDD in the United States and elsewhere in the world;

	·	our expectations regarding performance of our exclusive licensees of Vyleesifor the treatment of premenopausal women with HSDD, which is a type of female sexual dysfunction (“FSD”), including:

	·	our expectations and the ability of our licensees to timely obtain approvals and successfully commercialize Vyleesi in countries other than the United States;

	·	the results of clinical trials with our late stage products, including PL9643, an ophthalmic peptide solution for dry eye disease (“DED”), which entered Phase 3 clinical trials in the fourth quarter of calendar year 2021, and PL8177, an oral peptide formulation for treatment of ulcerative colitis, which is scheduled to enter Phase 2 clinical trials in calendar year 2022;

	·	estimates of our expenses, future revenue, and capital requirements;

	·	our ability to achieve profitability;

	·	our ability to obtain additional financing on terms acceptable to us, or at all, including unavailability of funds or delays in receiving funds as a result of the ongoing COVID-19 pandemic;

	·	our ability to advance product candidates into, and successfully complete, clinical trials;

	·	the initiation, timing, progress and results of future preclinical studies and clinical trials, and our research and development programs;

	·	the timing or likelihood of regulatory filings and approvals;

	·	our expectations regarding the clinical efficacy and utility of our melanocortin agonist product candidates for treatment of inflammatory and autoimmune related diseases and disorders, including ocular indications;

	·	our ability to compete with other products and technologies treating the same or similar indications as our product candidates;

	·	the ability of our third-party collaborators to timely carry out their duties under their agreements with us;

	·	the ability of our contract manufacturers to perform their manufacturing activities for us in compliance with applicable regulations;

	·	our ability to recognize the potential value of our licensing arrangements with third parties;

	o	Shanghai Fosun Pharmaceutical Industrial Development Co. Ltd. (“Fosun”), a subsidiary of Shanghai Fosun Pharmaceutical (Group) Co., Ltd., for the territories of the People’s Republic of China, Taiwan, Hong Kong S.A.R. and Macau S.A.R. (collectively, “China”), and

	o	Kwangdong Pharmaceutical Co., Ltd. (“Kwangdong”) for the Republic of Korea (“Korea”);

	·	the potential to achieve revenues from the sale of our product candidates;

	·	our ability to obtain adequate reimbursement from private insurers and other healthcare payers;

	·	our ability to maintain product liability insurance at a reasonable cost or in sufficient amounts, if at all;

	·	the performance of our management team, senior staff professionals, and third-party contractors and consultants;

	·	the retention of key management, employees, and third-party contractors;

	·	the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and technology in the United States and throughout the world;

	·	our compliance with federal and state laws and regulations;

	·	the timing and costs associated with obtaining regulatory approval for our product candidates, including delays and additional costs related to the ongoing COVID-19 pandemic;

	·	the impact of fluctuations in foreign exchange rates;

	·	the impact of legislative or regulatory healthcare reforms in the United States;

	·	our ability to adapt to changes in global economic conditions as well as competing products and technologies; and

	·	our ability to remain listed on the NYSE American stock exchange.

PALATIN TECHNOLOGIES, INC.
and Subsidiary
Consolidated Balance Sheets
(unaudited)

	March 31, 2022			June 30, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	37,719,531		$	60,104,919
Accounts receivable		790,005			1,580,443
Inventories		1,031,988			1,162,000
Prepaid expenses and other current assets		2,704,886			3,059,679
Total current assets		42,246,410			65,907,041

Property and equipment, net		544,622			94,817
Right-of-use assets - operating leases		968,957			1,237,813
Other assets		56,916			56,916
Total assets	$	43,816,905		$	67,296,587

LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities:
Accounts payable	$	2,402,739		$	640,650
Accrued expenses		3,175,414			5,797,378
Short-term operating lease liabilities		367,478			351,853
Short-term finance lease liabilities		99,602			-
Other current liabilities		5,931,414			3,721,907
Total current liabilities		11,976,647			10,511,788

Long-term operating lease liabilities		621,660			900,520
Long-term finance lease liabilities		178,139			-
Other long-term liabilities		2,955,000			6,232,907
Total liabilities		15,731,446			17,645,215

Commitments and contingencies (Note 12)

Stockholders equity:
Preferred stock of $0.01 par value authorized 10,000,000 shares: issued and outstanding designated as follows:
Series A Convertible: authorized 264,000 shares: issued and outstanding 4,030 shares as of March 31, 2022 and June 30, 2021		40			40
Common stock of $0.01 par value authorized 300,000,000 shares:
issued and outstanding 231,773,670 shares as of March 31, 2022 and 230,049,691 shares as of June 30, 2021		2,317,737			2,300,497
Additional paid-in capital		400,993,760			399,146,232
Accumulated deficit		(375,226,078	)		(351,795,397	)
Total stockholders equity		28,085,459			49,651,372
Total liabilities and stockholders equity	$	43,816,905		$	67,296,587

PALATIN TECHNOLOGIES, INC.
and Subsidiary
Consolidated Statements of Operations
(unaudited)

	Three Months Ended March 31,						Nine Months Ended March 31,
	2022			2021			2022			2021

REVENUES
Product revenue, net	$	216,097		$	88,741		$	447,719		$	(363,790	)
License and contract		-			-			250,000			-
Total revenues		216,097			88,741			697,719			(363,790	)
OPERATING EXPENSES
Cost of products sold		46,908			55,440			130,012			110,040
Research and development		4,980,074			2,509,490			13,891,235			9,444,759
Selling, general and administrative		3,009,528			4,010,055			10,163,830			11,386,574
Gain on license termination agreement		-			-			-			(1,623,795	)
Total operating expenses		8,036,510			6,574,985			24,185,077			19,317,578

Loss from operations		(7,820,413	)		(6,486,244	)		(23,487,358	)		(19,681,368	)

OTHER INCOME (EXPENSE)
Investment income		1,127			2,834			4,100			19,769
Foreign currency gain		190,719			753,750			64,000			8,748
Interest expense		(3,019	)		-			(11,423	)		(9,360	)
Total other income, net		188,827			756,584			56,677			19,157
NET LOSS	$	(7,631,586	)	$	(5,729,660	)	$	(23,430,681	)	$	(19,662,211	)


Basic and diluted net loss per common share	$	(0.03	)	$	(0.02	)	$	(0.10	)	$	(0.08	)

Weighted average number of common shares outstanding used in computing basic and diluted net loss per common share		238,805,370			236,832,283			238,444,206			236,525,514

PALATIN TECHNOLOGIES, INC.
and Subsidiary
Consolidated Statements of Stockholders Equity
(unaudited)

Three Months EndedMarch 31, 2022											Additional
	Preferred Stock				Common Stock						Paid-in			Accumulated
	Shares		Amount		Shares			Amount			Capital			Deficit			Total
Balance,December 31, 2021		4,030	$	40		231,695,273		$	2,316,953		$	400,473,806		$	(367,594,492	)	$	35,196,307
Stock-based compensation		-		-		111,000			1,110			532,669			-			533,779
Withholding taxes related to restricted stock units		-		-		(32,603	)		(326	)		(12,715	)		-			(13,041	)
Net loss		-		-		-			-			-			(7,631,586	)		(7,631,586	)
Balance, March 31, 2022		4,030	$	40		231,773,670		$	2,317,737		$	400,993,760		$	(375,226,078	)	$	28,085,459

Nine Months EndedMarch 31, 2022											Additional
	Preferred Stock				Common Stock						Paid-in			Accumulated
	Shares		Amount		Shares			Amount			Capital			Deficit			Total
Balance, June 30, 2021		4,030	$	40		230,049,691		$	2,300,497		$	399,146,232		$	(351,795,397	)	$	49,651,372
Stock-based compensation		-		-		1,735,158			17,352			1,772,595			-			1,789,947
Withholding taxes related to restricted stock units		-		-		(404,779	)		(4,048	)		(217,263	)		-			(221,311	)
Warrant exercises		-		-		350,000			3,500			276,500			-			280,000
Option exercises		-		-		43,600			436			15,696			-			16,132
Net loss		-		-		-			-			-			(23,430,681	)		(23,430,681	)
Balance, March 31, 2022		4,030	$	40		231,773,670		$	2,317,737		$	400,993,760		$	(375,226,078	)	$	28,085,459

PALATIN TECHNOLOGIES, INC.
and Subsidiary
Consolidated Statements of Cash Flows
(unaudited)

	Nine Months Ended March 31,
	2022			2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(23,430,681	)	$	(19,662,211	)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization		84,244			38,561
Cash received in excess of gain on termination agreement		-			14,676,205
Decrease in right-of-use asset		268,856			240,580
Unrealized foreign currency transaction gain		(64,000	)		(8,748	)
Stock-based compensation		1,789,947			2,459,162
Changes in operating assets and liabilities:
Accounts receivable		790,438			(1,869,120	)
Prepaid expenses and other assets		354,793			(2,022,026	)
Inventories		130,012			(296,923	)
Accounts payable		1,762,089			148,340
Accrued expenses		(2,621,964	)		(1,338	)
Operating lease liabilities		(263,235	)		(229,661	)
Other liabilities		(1,004,400	)		(7,584,420	)
Net cash used in operating activities		(22,203,901	)		(14,111,599	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(224,258	)		(5,721	)
Net cash used in investing activities		(224,258	)		(5,721	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of withholding taxes related to restricted
stock units		(221,311	)		(93,638	)
Payment of finance lease obligations		(32,050	)		-
Proceeds from exercise of warrants		280,000			-
Proceeds from exercise of stock options		16,132			-
Net cash provided by (used in) financing activities		42,771			(93,638	)

NET DECREASE IN CASH AND CASH EQUIVALENTS		(22,385,388	)		(14,210,958	)

CASH AND CASH EQUIVALENTS, beginning of period		60,104,919			82,852,270

CASH AND CASH EQUIVALENTS, end of period	$	37,719,531		$	68,641,312

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for interest	$	11,423		$	9,360

	March 31,		June 30,
	2022		2021
Clinical / regulatory costs	$	1,037,350	$	454,750
Insurance premiums		39,864		259,468
Vyleesi contractual advances		815,750		1,200,000
Other		811,922		1,145,461
	$	2,704,886	$	3,059,679

	Carrying Value		Quoted prices in active markets (Level 1)		Other quoted/observable inputs (Level 2)		Significant unobservable inputs (Level 3)
March 31, 2022:
Money Market Account	$	37,651,838	$	37,651,838	$	-	$	-
June 30, 2021:
Money Market Account	$	59,730,428	$	59,730,428	$	-	$	-

		Total				Current				1 - 3 Years				4 - 5 Years
Inventory purchase commitments		$	9,832,614			$	5,931,414			$	2,896,800			$	1,004,400

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

Outstanding - June 30, 2021		21,882,500		$	0.72		7.2	$	1,034,273

Granted		197,650			0.48
Forfeited		(240,528	)		0.69
Exercised		(43,600	)		0.37
Expired		(103,349	)		0.81
Outstanding - March 31, 2022		21,692,673		$	0.72		6.5	$	237,370

Exercisable at March 31, 2022		14,155,952		$	0.75		5.5	$	236,358

Expected to vest at March 31, 2022		7,536,721		$	0.68		8.4	$	1,012

Outstanding at June 30, 2021	14,840,762
Granted	-
Forfeited	(157,467	)
Vested	(1,735,158	)
Outstanding at March 31, 2022	12,948,137

	·	Discovering and developing melanocortin-based therapeutics for treating inflammatory and autoimmune diseases, with a focus on ocular diseases;

	·	Growing our Vyleesi net revenue by marketing Vyleesi in the United States and supporting the development activities of our existing licensees for China and South Korea;

	·	Entering into licenses for the sale, distribution and marketing of Vyleesi in the United States and additional regions;

	·	Recruiting and maintaining employees to discover, develop and commercialize our MCr and NPR therapeutic products;

	·	Entering into strategic alliances and partnerships with pharmaceutical companies to facilitate the development, manufacture, marketing, sale, and distribution of therapeutic products we are developing;

	·	Partially funding our therapeutic product development programs with the cash flow generated from Vyleesi and existing license agreements, as well as any future research, collaboration, or license agreements; and

	·	Completing development and seeking regulatory approval of certain of our therapeutic product candidates.

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, 2022 through January 31, 2022		-	$	-		-		-
February 1, 2022 through February 28, 2022		32,603		0.40		-		-
March 1, 2021 through March 31, 2022		-		-		-		-
Total		32,603	$	0.40		-		-

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)

		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)

1.	I have reviewed this Quarterly Report on Form 10-Q of Palatin Technologies, Inc.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiary, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

/s/ Carl Spana
Carl Spana, President and Chief Executive Officer

	ii.	Failure to Deliver Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Corporation at any time on or before its receipt of such Conversion Shares, to rescind such Conversion, in which event the Corporation shall promptly return to the Holder any original Preferred Stock certificate delivered to the Corporation.

	iii.	Reservation of Shares Issuable Upon Conversion. From and after the Reverse Stock Split Date and until no shares of Series B Preferred Stock remain outstanding, the Corporation covenants that it will use its best efforts to cause a number of its authorized and unissued shares of Common Stock to be available for issuance upon conversion of the Series B Preferred Stock as herein provided. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.

	iv.	Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Series B Preferred Stock. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.

	v.	Transfer Taxes and Expenses. The issuance of Conversion Shares on conversion of the Series B Preferred Stock shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such Conversion Shares upon conversion in a name other than that of the Holders of such shares of Series B Preferred Stock and the Corporation shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. The Corporation shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Conversion Shares.

Date to Effect Conversion: ____________________________________________________
Number of shares of Series B Preferred Stock owned prior to Conversion: _________________
Number of shares of Series B Preferred Stock to be Converted: _________________________
Stated Value of shares of Series B Preferred Stock to be Converted: ______________________
Number of shares of Common Stock to be Issued: ___________________________________
Applicable Conversion Price: ___________________________________________________
Number of shares of Series B Preferred Stock subsequent to Conversion: __________________
Address for Delivery: ______________________ ______________________ ______________________ Or DWAC Instructions: Broker no: _________ Account no: ___________
	HOLDER

	By:	___________________________________ Name: Title:

Date to Effect Conversion: _____________________________________________________
Number of shares of Series C Preferred Stock owned prior to Conversion: __________________
Number of shares of Series C Preferred Stock to be Converted: __________________________
Stated Value of shares of Series C Preferred Stock to be Converted: _______________________
Number of shares of Common Stock to be Issued: ____________________________________
Applicable Conversion Price: ___________________________________________________
Number of shares of Series C Preferred Stock subsequent to Conversion: __________________
Address for Delivery: ______________________ ______________________ ______________________ Or DWAC Instructions: Broker no: _________ Account no: ___________
	HOLDER

	By:	___________________________________ Name: Title:

	Palatin Technologies, Inc.

	By:
	Name:	Stephen T. Wills
	Title:	Chief Financial Officer, Chief Operating Officer and Executive Vice President

PALATIN TECHNOLOGIES, INC.	Address for Notice:

By:_________________________________________	E-mail:
Name:
Title:
With a copy to (which shall not constitute notice):

	(A) =	the Current Market Price (as defined below) per Common Share as of the applicable exercise date;

	(B) =	the Exercise Price of this Warrant, as adjusted hereunder; and

	(X) =	the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

	ii.	Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

	iii.	Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

	iv.	Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date (other than any such failure that is solely due to any action by the Holder with respect to such exercise), and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver shares of Common Stock upon exercise of the Warrant as required pursuant to the terms hereof.

	v.	No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

	vi.	Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

	vii.	Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

	i.	Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

	ii.	Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.