Palatin Technologies Inc PRE 14A, filed Jun 18, 2025

Palatin Technologies Inc (PTN)

PRE 14A 2025-06-18 For: 2025-06-18

View Original

Added on October 21, 2026

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

☒	Preliminary Proxy Statement
☐	Confidential, For Use of the Commission Only (As Permitted by Rule 14a-6(e)(2))
☐	Definitive Proxy Statement
☐	Definitive Additional Materials
☐	Soliciting Material under § 240.14a-12

☒	No fee required
☐	Fee paid previously with preliminary materials.
☐	Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

DATE		Friday, July 25, 2025
TIME		9:00 a.m., Eastern Time
PLACE		The Annual Meeting will be a completely “virtual” meeting of stockholders. You may listen and participate in the virtual annual meeting as well as vote and submit your questions during the live webcast by first registering to attend at https://web.viewproxy.com/Palatin/2025 no later than July 24, 2025, at 11:59 p.m. Eastern Time.
RECORD DATE		June 20, 2025
ITEMS OF BUSINESS		(1) Election of four directors nominated by our board of directors; (2) approval of an amendment of the Company’s Restated Certificate of Incorporation to effect a reverse stock split of the Company’s common stock (“Common Stock”) at a ratio of no less than 1-for-50 and not greater than 1-for-100, with the exact ratio within such range and the timing of such reverse stock split to be determined at the sole discretion of our board of directors; (3) ratification of appointment of our independent registered public accounting firm for the fiscal year ending June 30, 2025; (4) approval of the issuance of shares of Common Stock upon exercise of certain Series B Common Stock purchase warrants (the “Series B Warrants”) that the Company issued in a private placement pursuant to an inducement letter agreement with an institutional investor dated June 20, 2024 (the “June 2024 Letter Agreement”); (5) approval of the issuance of shares of Common Stock upon exercise of certain Series D Common Stock purchase warrants (the “Series D Warrants”) that the Company issued in a private placement pursuant to an inducement letter agreement with an institutional investor, dated December 13, 2024 (the “December 2024 Letter Agreement”); (6) approval of the issuance of shares of Common Stock upon the exercise of certain Series I Common Stock purchase warrants (the “Series I Warrants”) that the Company issued in a private placement pursuant to a securities purchase agreement with certain officers and directors of the Company, dated June 10, 2025 (The “June 2025 Purchase Agreement”); (7) approval of an amendment to the Company’s 2011 Stock Incentive Plan, as amended and restated through the date hereof (the “2011 Stock Incentive Plan”) to increase the number of shares of Common Stock reserved for issuance by 3,000,000; (8) approval, on an advisory, non-binding basis, of the frequency of future advisory votes on the compensation of our named executive officers (every year, every two years or every three years) (“say-on-frequency”); (9) approval, on an advisory, non-binding basis, of the compensation of our named executive officers (“say-on-pay”); and (10) any other matters properly brought before the meeting or any adjournment or postponement thereof.
STOCK-HOLDER LIST		A list of all stockholders entitled to vote at the meeting will be available for examination by any stockholder, for any purpose germane to the meeting, during ordinary business hours for 10 days before the meeting, at our offices, Cedar Brook Corporate Center, 4B Cedar Brook Drive, Cranbury, New Jersey 08512. During the virtual annual meeting, such list will be available for examination, upon request, for holders who have previously registered to attend.

NOTICE OF VIRTUAL ANNUAL MEETING OF STOCKHOLDERS		3

IMPORTANT INFORMATION ABOUT THE ANNUAL MEETING AND VOTING		5

ITEM ONE: ELECTION OF DIRECTORS		11

THE NOMINEES		11

ITEM TWO: APPROVAL OF AN AMENDMENT TO OUR RESTATED CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF THE COMPANY’S COMMON STOCK AT A RATIO OF NO LESS THAN 1-FOR-50 AND NOT GREATER THAN 1-FOR-100, WITH THE EXACT RATIO WITHIN SUCH RANGE AND THE TIMING OF SUCH REVERSE STOCK SPLIT TO BE DETERMINED AT THE SOLE DISCRETION OF OUR BOARD OF DIRECTORS		18

ITEM THREE: RATIFICATION OF APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		25

REPORT OF THE AUDIT COMMITTEE		26

ITEM FOUR: APPROVAL OF THE ISSUANCE OF COMMON STOCK UPON EXERCISE OF CERTAIN SERIES B WARRANTS		27

ITEM FIVE: APPROVAL OF THE ISSUANCE OF COMMON STOCK UPON EXERCISE OF CERTAIN SERIES D WARRANTS		29

ITEM SIX: APPROVAL OF THE ISSUANCE OF COMMON STOCK UPON EXERCISE OF CERTAIN SERIES I WARRANTS		30

ITEM SEVEN: APPROVAL OF AN AMENDMENT TO THE COMPANY’S 2011 STOCK INCENTIVE PLAN TO INCREASE THE TOTAL NUMBER OF SHARES OF COMMON STOCK RESERVED FOR ISSUANCE BY 3,000,000 SHARES		31

ITEM EIGHT: ADVISORY APPROVAL ON THE FREQUENCY OF HOLDING FUTURE ADVISORY VOTES ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS		33

ITEM NINE: ADVISORY APPROVAL OF THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS		34

EXECUTIVE COMPENSATION		35

EXECUTIVE OFFICERS		41

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE		51

BENEFICIAL OWNERSHIP OF MANAGEMENT AND OTHERS		51

MANAGEMENT		51

MORE THAN 5% BENEFICIAL OWNERS		53

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS		54

OTHER ITEMS OF BUSINESS		55

STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING		55

ANNEX A – Form of Certificate of Amendment of the Restated Certificate of Incorporation		A-1

ANNEX B – Form of Amendment to the Amended and Restated 2011 Equity Incentive Plan		B-1

ANNEX C – Amended and Restated 2011 Equity Incentive Plan		C-1

	·	submitting another proxy over the Internet or by telephone until 11:59 p.m., Eastern Time, on July 24, 2025 (only your last Internet or telephone proxy will be counted);

	·	signing and returning another proxy card on a later date; or

	·	sending written notice of revocation or change to the Secretary at our offices, 4B Cedar Brook Drive, Cranbury, New Jersey 08512.

By order of the board of directors,

Stephen T. Wills, Secretary
__________, 2025

	·	Common Stock: Each share of our Common Stock outstanding on the Record Date entitles the holder thereof to one vote on each matter submitted to the stockholders. As of the Record Date there were 46,479,861 shares outstanding.

	·	Series A Convertible Preferred Stock: Each share of our Series A Convertible Preferred Stock outstanding on the Record Date entitles the holder thereof to 3.09 votes per share. As of the Record Date there were 4,030 shares of Series A Convertible Preferred Stock outstanding with approximately 3.09 votes per share, for an aggregate of 12,462 votes.

	·	Series D Convertible Preferred Stock: Each share of our Series D Convertible Preferred Stock outstanding on the Record Date entitles the holder thereof to 909.09 votes per share. As of the Record Date there were 3,400 shares of Series D Convertible Preferred Stock outstanding with approximately 909.09 votes per share, for an aggregate of 3,090,908 votes.

	●	Item Two: Approval of an amendment to our Restated Certificate of Incorporation to effect a reverse stock split of the Company’s Common Stock at a ratio of no less than 1-for-50 and not greater than 1-for-100, with the exact ratio within such range and the timing of such reverse stock split to be determined at the sole discretion of our board of directors, requires the affirmative vote of a majority of the votes cast by stockholders entitled to vote on that item. Brokerage firms holding shares of record for a beneficial owner have the discretionary authority to vote shares held in street name as to which they have not received instructions from the beneficial owner on this Item Two, and, therefore, we do not expect any broker non-votes to occur with respect to this Item Two. If, however, any brokerage firm fails to exercise its discretion to vote any such shares on this Item Two, the shares will not count as votes cast “for” or “Against” this Item Two. In addition, abstentions will not count as votes cast “For” or “Against” this Item Two. Accordingly, assuming a quorum has been established, abstentions and broker non-votes, if any, will have no effect on the outcome of this Item Two.

	●	Item Three: Ratifying the appointment of our independent registered public accounting firm for the fiscal year ending June 30, 2025 requires the affirmative vote of a majority of the votes cast by stockholders entitled to vote on that item. Banks, brokers, and other nominees holding shares of record for a beneficial owner have the discretionary authority to vote shares held in street name as to which they have not received instructions from the beneficial owner on this Item Three, and, therefore, we do not expect any broker non-votes to occur with respect to this Item Three. If, however, any brokerage firm fails to exercise its discretion to vote any such shares on this Item Three, the shares will not count as votes cast “For” or “Against” this Item Three. In addition, abstentions will not count as votes cast “For” or “Against” this Item Three. Accordingly, assuming a quorum has been established, abstentions and broker non-votes, if any, will have no effect on the outcome of this Item Three.

	●	Item Four: Approval of the issuance of up to 1,953,839 shares of Common Stock upon exercise of the Series D Warrants requires the affirmative vote of a majority of the votes cast by stockholders entitled to vote on that item. Banks, brokers, and other nominees holding shares of record for a beneficial owner do not have the discretionary authority to vote shares held in street name as to which they have not received instructions from the beneficial owner on this Item Four. Assuming a quorum has been established, abstentions and broker non-votes will have no effect on the outcome of this Item Four.

	●	Item Five: Approval of the issuance of up to 1,624,201 shares of Common Stock upon exercise of the Series B Warrants requires the affirmative vote of a majority of the votes cast by stockholders entitled to vote on that item. Banks, brokers, and other nominees holding shares of record for a beneficial owner do not have the discretionary authority to vote shares held in street name as to which they have not received instructions from the beneficial owner on this Item FIVE. Assuming a quorum has been established, abstentions and broker non-votes will have no effect on the outcome of this Item Five.

	●	Item Six: Approval of the issuance of shares up to 6,181,818 of Common Stock upon exercise of the Series I Warrants requires the affirmative vote of a majority of the votes cast by stockholders entitled to vote on that item. Banks, brokers, and other nominees holding shares of record for a beneficial owner do not have the discretionary authority to vote shares held in street name as to which they have not received instructions from the beneficial owner on this Item Four. Assuming a quorum has been established, abstentions and broker non-votes will have no effect on the outcome of this Item Six.

	●	Item Seven: Approval of an amendment to our 2011 Stock Incentive Plan, as amended and restated, to increase the number of shares available for equity awards by 3,000,000 shares, requires the affirmative vote of a majority of the votes cast by stockholders entitled to vote on that item. Banks, brokers, and other nominees holding shares of record for a beneficial owner do not have the discretionary authority to vote shares held in street name as to which they have not received instructions from the beneficial owner on this Item Five. Assuming a quorum has been established, abstentions and broker non-votes will have no effect on the outcome of this Item Seven.

	●	Item Eight: Advisory approval say-on-frequency for holding future advisory votes on the compensation of our named executive officers (one year, two years or three years) will be determined by a majority of the votes cast by stockholders entitled to vote on that item. Banks, brokers, and other nominees holding shares of record for a beneficial owner do not have the discretionary authority to vote shares held in street name as to which they have not received instructions from the beneficial owner on this Item Eight. Assuming a quorum has been established, abstentions and broker non-votes will have no effect on the outcome of this Item Eight.

	●	Item Nine: Advisory approval of say-on-pay for named executive officers (yes or no) will be determined based on which of the two choices receives a majority of the votes cast by stockholders entitled to vote on that item. Banks, brokers, and other nominees holding shares of record for a beneficial owner do not have the discretionary authority to vote shares held in street name as to which they have not received instructions from the beneficial owner on this Item Seven. Assuming a quorum has been established, abstentions and broker non-votes will have no effect on the outcome of this Item Nine.

Name	Age	Position with Palatin
Carl Spana, Ph.D.	62	Chief Executive Officer, President and a Director
John K.A. Prendergast, Ph.D.^(1)(2)(3)	71	Director and Chairman of the Board of Directors
Alan W. Dunton, M.D.^(1)(2)(3)	71	Director
Arlene M. Morris^(1)(2)(3)	73	Director

(1)	Member of the audit committee.
(2)	Member of the compensation committee.
(3)	Member of the nominating and corporate governance committee.

	●	The audit committee assists the Board in its oversight of the integrity of the financial reporting and our compliance with applicable legal and regulatory requirements. It also oversees our internal controls and compliance activities and meets privately with representatives from our independent registered public accounting firm.

	●	The compensation committee assists the Board in its oversight of risk relating to compensation policies and practices. The compensation committee annually reviews our compensation policies, programs, and procedures, including the incentives they create and mitigating factors that may reduce the likelihood of excessive risk taking, to determine whether they present a significant risk to our company.

Name	Fees earned or paid in cash		Stock Awards⁽¹⁾		Option Awards⁽¹⁾		Total
John K.A. Prendergast, Ph.D.	$	97,500	$	28,470	$	28,836	$	154,806
Robert K. deVeer, Jr.	$	70,000	$	21,900	$	20,972	$	112,872
J. Stanley Hull	$	60,000	$	21,900	$	20,972	$	102,872
Alan W. Dunton, M.D.	$	70,000	$	21,900	$	20,972	$	112,872
Arlene Morris	$	55,000	$	21,900	$	20,972	$	97,872
Anthony Manning, Ph.D.	$	55,000	$	21,900	$	20,972	$	97,872

Name	Option awards		Stock awards
John K.A. Prendergast, Ph.D.		82,080		16,000
Robert K. deVeer, Jr.		57,180		12,000
J. Stanley Hull		57,180		12,000
Alan W. Dunton, M.D.		57,180		12,000
Arlene Morris		57,180		12,000
Anthony Manning, Ph.D.		54,280		12,000

	●	our ability to uplist the Common Stock to a national securities exchange;

	●	the historical trading price and trading volume of the Common Stock;

	●	the number of shares of Common Stock outstanding immediately before and after the Reverse Stock Split;

	●	the dilutive impact of any potential exercise of the Company’s outstanding warrants or conversion of the Company’s outstanding convertible notes and the related impact on the trading price of the Common Stock;

	●	the then-prevailing trading price and trading volume of the Common Stock and the anticipated impact of a Reverse Stock Split on the trading price and trading volume of the Common Stock in the short- and long-term;

	●	the anticipated impact of the Reverse Stock Split Ratio on the Company’s ability to reduce administrative and transactional costs;

	●	the anticipated impact of the Reverse Stock Split Ratio on the number of holders of the Common Stock; and

	●	prevailing general market, legal, and economic conditions.

	●	the market price per share of the Common Stock after a Reverse Stock Split will rise in proportion to the reduction in the number of shares of the Common Stock outstanding before such Reverse Stock Split;

	●	a Reverse Stock Split will result in a per share price that will attract brokers and investors who do not trade in lower-priced stocks;

	●	a Reverse Stock Split will result in a per share price that will increase the ability of the Company to attract and retain employees; or

	●	the market price per share will achieve and maintain the stock price required for an uplisting to a national securities exchange.

Reverse Stock Split Ratio	Approximate Number of Shares of Common Stock Issued and Outstanding		Percentage of Authorized Common Stock
Current shares		46,479,861		15.49	%
1-for-50		929,597		0.31	%
1-for-70		663,998		0.22	%
1-for-90		516,443		0.17	%
1-for-100		464,799		0.15	%

	1.	Audit services, including work that generally only our independent registered public accounting firm can reasonably be expected to provide, such as services provided in connection with regulatory filings, statutory audits and attest services and consultation regarding financial accounting and/or reporting standards;

	2.	Audit-related services, including assurance and related services that are traditionally performed by the independent registered public accounting firm, including due diligence related to mergers and acquisitions, employee benefit plan audits and special procedures required to meet certain regulatory requirements;

	3.	Tax services, including services performed by our independent registered public accounting firm’s tax personnel except those services specifically related to the audit of the consolidated financial statements, including fees in the areas of tax compliance, tax planning and tax advice; and

	4.	All other services not described in the preceding categories. We generally do not request other services from our independent registered public accounting firm.

Year	Time-Based RSUs		Performance-Based RSUs (at target)		Time-Based Stock Options		Performance-Based Stock Options (at target)		Total Awards		Weighted Average # of Common Shares		Burn Rate
2022		72,684		58,668		164,177		146,317		441,846		9,543,762		4.63	%
2023		273,313		152,437		473,472		238,838		1,138,060		10,890,159		10.45	%
2024		333,357		184,443		477,855		264,945		1,260,600		14,697,096		8.58	%
Average Burn Rate (2022-2024)														7.89	%

	●	Assuming authorization of an increase in the number of shares of Common Stock available for issuance, the maximum number of shares that may be issued under the 2011 Stock Incentive Plan will be 7,300,000, plus the number of shares available to be granted under the Prior Plan on May 11, 2011, the date of the initial stockholder approval of the 2011 Stock Incentive Plan, and shares which become available under the 2011 Stock Incentive Plan if they are forfeited or otherwise become available under the Prior Plan on or after May 11, 2011.

	●	The 2011 Stock Incentive Plan implements a minimum vesting period of one year, except in the case of substitute awards issued in connection with acquisitions or awards that vest in connection with certain acceleration events, with the Board or its designee having the authority to grant awards covering up to 5% of the plan’s share pool that are not subject to this minimum vesting requirement.

	●	The 2011 Stock Incentive Plan does not permit what has been labeled by some stockholder groups as “liberal share counting” when determining the number of shares that have been granted. Only awards that are cancelled, forfeited or which are paid in cash can be added back to the share reserve.

	●	Dividends or dividend equivalents provided with respect to awards will be accumulated or deemed reinvested until such award is earned and vested, including the satisfaction of any service vesting conditions and any applicable performance goals.

	●	The 2011 Stock Incentive Plan prohibits the use of “discounted” stock options or SARs.

	●	The 2011 Stock Incentive Plan prohibits the re-pricing of stock options and SARs without stockholder approval.

	●	Any awards granted under the 2011 Stock Incentive Plan are subject to forfeiture or repayment if a participant has engaged in detrimental activity (as described below). Awards may also be subject to forfeiture or repayment pursuant to the terms of any compensation recovery policy adopted to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act or any rules issued by the SEC or the NYSE American.

	●	Carl Spana, Ph.D., our President and Chief Executive Officer (our “CEO”); and

	●	Stephen T. Wills, our Chief Financial Officer and Chief Operating Officer (our “CFO/COO”).

	●	Maintaining a team to create, develop and commercialize MCr products addressing unmet medical needs;

	●	Entering into strategic alliances and partnerships with pharmaceutical companies to facilitate the development, manufacture, marketing, sale, and distribution of product candidates that we are developing;

	●	Partially funding our product development programs with the cash flow generated from the sale of Vyleesi to Cosette 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 other product candidates.

	●	Revenue – Generated revenue (net product revenue and licensing and contract revenue) of $4,490,090 for fiscal 2024, compared to revenue of $4,853,678 for the fiscal year ended June 30, 2023 (“fiscal 2023”).

	●	Net Loss – Reported net loss of $(29.7) million for fiscal 2024, compared to net loss of $(24.0) million for fiscal 2023.

	●	Net Loss Per Share – Recorded net loss per share (basic and diluted) of $(2.02) for fiscal 2024, compared to net loss per share (basic and diluted) of $(2.21) for fiscal 2023.

	●	Cash at End of Fiscal 2024 – Cash and cash equivalents were $9.5 million at June 30, 2024, compared to $8.0 million at June 30, 2023.

WHAT WE HEARD	OUR RESPONSE
We would like more disclosure, and more accessible disclosure, on compensation practices.	We have revised our proxy disclosure and included more disclosure on what we have done and how our compensation process works. We have expanded disclosure on the work of our independent compensation advisor.
We would like increased disclosure on metrics used for bonuses and incentive compensation.	We have increased our disclosure. Annual bonuses are tied to specific performance metrics for the fiscal year, such as advancing clinical and regulatory development of our product candidates, entering into licensing and related agreements, and our financial condition.
We would like at least half of long-term incentives to be performance-based.	We structured the 2024 long-term incentive program so that half of the awards were subject to the achievement of pre-established performance goals.
A formal “clawback” policy should be adopted.	We adopted a compensation recovery policy (i.e., clawback policy), which requires Palatin to recover certain incentive compensation should the Board determine that compensation paid to NEOs resulted from material noncompliance with financial reporting requirements under federal securities law. Our compensation recovery policy is available on our website at www.palatin.com/about/corporate-governance/.
Elimination of “golden parachute” gross-up provisions in NEO employment agreements.	Prior to July 1, 2019, our employment agreements for the NEOs provided that they were entitled to a tax gross-up for any golden parachute excise tax imposed on payments received in connection with a change in control. Most investors disfavor this type of tax gross-up benefit. In response to stockholder feedback, effective with new employment agreements for our NEOs commencing July 1, 2019, we removed all golden parachute excise tax gross-up provisions. As a result, the company no longer provides tax gross-ups for NEOs or any other employees in the event they are subject to golden parachute excise taxes on payments received in connection with a change in control.

	●	Compensation at Risk. Our executive compensation program is designed so that a significant portion of compensation is “at risk” based on our performance, as well as short-term cash and long-term equity incentives to align the interests of our executive officers and stockholders. Long-term equity incentives will be no less than base salaries, with at least half of long-term equity incentives being performance-based.

	●	Use a Pay-for-Performance Philosophy. The compensation committee employs a mixture of compensation elements designed to balance short-term goals with longer-term performance. Our executive compensation program includes these principal elements:

	o	Base salary, which targets the comparable position median salary for our peer group;
	o	An annual incentive compensation opportunity, with a target bonus payout, effective for fiscal 2023, of no less than 60% of base salary; and
	o	A long-term incentive program consisting of stock option and restricted stock unit awards. In fiscal 2024, approximately 50% of all long-term incentive awards were performance-based, with 50% of stock options and 50% of restricted share units performance-based, and the balance time-based.

	●	Maintain an Independent Compensation Committee. The compensation committee consists entirely of independent directors.

	●	Annual Executive Compensation Review. The compensation committee conducts an annual review and approval of our compensation strategy, utilizing an independent compensation advisor at least every other year. This review, including a peer group review, is intended to ensure that our compensation programs appropriately reward corporate growth without encouraging excessive or inappropriate risk-taking.

	●	“Double Trigger” Feature for Acceleration of CEO and CFO/COO Equity Awards. Under employment agreements with our NEOs, outstanding equity awards granted to our NEOs provide that, upon a change in control of Palatin, the vesting of such awards will accelerate only in the event of a subsequent involuntary termination of employment (a “double-trigger” provision).

	●	No Stock Option Re-pricing. Our 2011 Stock Incentive Plan does not permit options to purchase shares of our Common Stock to be repriced to a lower exercise or strike price without the approval of our stockholders.

	●	No Dividends or Dividend Equivalents Payable on Unvested or Undelivered Equity Awards. Under our restricted share unit agreements, we do not pay dividends or dividend equivalents on unvested RSU awards or vested RSU awards subject to delayed delivery.

	●	No Executive Retirement Plans. We do not offer pension arrangements or retirement plans or arrangements to our executive officers that are different from or in addition to those offered to our other employees.

	●	No Special Welfare or Health Benefits. Our executive officers participate in broad-based Company-sponsored health and welfare benefit programs on the same basis as our other full-time, salaried employees.

	●	Anti-Hedging Policy. Under our Insider Trading and Securities Law Compliance Policy, employees, directors, and officers may not engage in hedging, monetization or pledging transactions of our securities.

AcelRx Pharmaceuticals, Inc.		Kala Pharmaceuticals, Inc.
AIM ImmunoTech, Inc.		Kezar Life Sciences, Inc.
Aldeyra Therapeutics, Inc.		MEI Pharma, Inc.
Aptevo Therapeutics, Inc.		MeiraGTx Holdings plc
Athersys, Inc.		Paratek Pharmaceuticals, Inc.
Clearside Biomedical, Inc.		Savara Inc.
Cumberland Pharmaceuticals, Inc.		Verastem, Inc.
Eton Pharmaceuticals, Inc.

	●	Compensation at Risk. Our executive compensation program is designed so that a significant portion of compensation is “at risk” based on our performance, as well as short-term cash and long-term equity incentives to align the interests of our executive officers and stockholders. Long-term equity incentives will be no less than base salaries, with at least half of long-term equity incentives being performance-based.

	●	Use a Pay-for-Performance Philosophy. The compensation committee employs a mixture of compensation elements designed to balance short-term goals with longer-term performance. Our executive compensation program includes these principal elements:

	●	Maintain a Stock Ownership Policy. We adopted a stock ownership policy effective April 1, 2019, that requires our named executive officers, as well as our Board members, to maintain a minimum ownership level of our common stock. As of June 30, 2024, the most recent “Determination Date” under the stock ownership policy, all Board members met the target ownership level of shares of at least two times the annual retainer for Board members. The named executive officers met the target ownership levels because they had met the policy guidelines previously, and no recalculation was required under the policy. Our stock ownership policy, which is on our website at www.palatin.com/investors/corporate-governance/, provides that if covered individuals meet the minimum ownership level of our common stock, a decrease in share price or increase in salary will not result in recalculation of the number of shares needed to satisfy the stock ownership policy unless the covered individual’s actual ownership levels drop below the number of shares required as of the Determination Date that he or she first satisfied the guidelines. The current named executive officers met the target ownership levels of shares as of June 30, 2022 and at all prior Determination Dates. In addition, certain time-based and performance-based restricted stock unit awards contain deferred delivery provisions providing for delivery of the common stock after the grantee’s separation from service or a defined change in control.

	●	Maintain a Clawback Policy. We have adopted a clawback policy allowing Palatin to recover related compensation should the Board determine that compensation paid to named executive officers resulted from material noncompliance with financial reporting requirements under federal securities law. Our clawback policy is on our website at www.palatin.com/investors/corporate-governance/.

	●	Maintain an Independent Compensation Committee. The compensation committee consists entirely of independent directors.

	●	Annual Executive Compensation Review. The compensation committee conducts an annual review and approval of our compensation strategy, utilizing an independent compensation advisor. This review, including a peer group review, is intended to ensure that our compensation programs appropriately reward corporate growth without encouraging excessive or inappropriate risk-taking.

	●	“Double Trigger” Feature for Acceleration of CEO and CFO/COO Equity Awards. Under employment agreements with our named executive officers, outstanding equity awards granted to our named executive officers provide that, upon a change in control of Palatin, the vesting of such awards will accelerate only in the event of a subsequent involuntary termination of employment (a “double-trigger” provision).

	●	No Excise Tax Gross-Ups. Prior to July 1, 2019, our employment agreements for the named executive officers provided that they were entitled to a tax gross-up for any golden parachute excise tax imposed on payments received in connection with a change in control. Most investors disfavor this type of tax gross-up benefit. In response to stockholder feedback, effective with new employment agreements for our named executive officers commencing July 1, 2019, we removed all golden parachute excise tax gross-up provisions. As a result, the Company no longer provides tax gross-ups for named executive officers or any other employees in the event they are subject to golden parachute excise taxes on payments received in connection with a change in control.

	●	No Stock Option Re-pricing. Our 2011 Stock Incentive Plan does not permit options to purchase shares of our common stock to be repriced to a lower exercise or strike price without the approval of our stockholders.

	●	No Dividends or Dividend Equivalents Payable on Unvested or Undelivered Equity Awards. Under our restricted share unit agreements, we do not pay dividends or dividend equivalents on unvested restricted stock unit awards or vested restricted stock unit awards subject to delayed delivery.

	●	No Executive Retirement Plans. We do not offer pension arrangements or retirement plans or arrangements to our executive officers that are different from or in addition to those offered to our other employees.

	●	No Special Welfare or Health Benefits. Our executive officers participate in broad-based Company-sponsored health and welfare benefit programs on the same basis as our other full-time, salaried employees.

Name and Principal Position	Fiscal Year	Salary ($)		Stock awards⁽¹⁾ ($)		Option awards⁽¹⁾ ($)		Nonequity incentive plan compensation⁽²⁾ ($)			All other compensation⁽³⁾ ($)		Total ($)
Carl Spana, Ph.D.,	2024		700,000		195,400		178,700		357,000			17,250		1,448,350
Chief Executive Officer and President	2023		700,000		170,500		154,300		262,500	(4)		16,500		1,303,800
Stephen T. Wills, MST, CPA,	2024		650,000		170,700		155,800		431,500			16,644		1,424,644
Chief Financial Officer, Chief Operating Officer and Executive Vice President	2023		650,000		148,500		134,100		243,800	(4)		16,750		1,193,150

(1)	Amounts in these columns represent the aggregate grant date fair value for stock awards and option awards computed using the Black-Scholes model. The aggregate fair value of the performance-based restricted stock units and performance-based stock options granted in fiscal 2024 was as follows: for Dr. Spana, $50,800 for performance-based restricted stock units and $34,200 for performance-based stock options; and for Mr. Wills, $44,400 for performance-based restricted stock units and $29,700 for performance-based stock options. The aggregate fair value of the performance-based restricted stock units and performance-based stock options granted in fiscal 2023 was as follows: for Dr. Spana, $25,900 for performance-based restricted stock units and $9,700 for performance-based stock options; and for Mr. Wills, $22,600 for performance-based restricted stock units and $8,400 for performance-based stock options. For a description of the assumptions we used to calculate these amounts, see Note 15 to the consolidated financial statements included in this Annual Report.
(2)	Annual incentive and merit amounts.
(3)	Consists of matching contributions to 401(k) plan.
(4)	Bonus amounts for fiscal years 2023 and 2024 paid after fiscal year end but accrued as of June 30.

Corporate Objectives Related to:	Weight			Achievement Level			Discretionary Adjustments			Total Weighted Achievement
Vyleesi (bremelanotide) SF Program		30.0	%		75.0	%		12.5	%		35.0	%
Vyleesi Obesity Program		5.0	%		50.0	%		0.0	%		2.5	%

Anti-Inflammatory Programs		25.0	%		40.0	%		0.0	%		10.0	%
Ocular Programs		25.0	%		70.0	%		5.0	%		22.5	%
Other Corporate		15.0	%		100.0	%		0.0	%		15.0	%
Total Payout											85.0	%

Name and Principal Position	Fiscal Year	Time-based stock awards (RSUs)		Performance-based stock awards (RSUs)		Time-based option awards		Performance-based option awards
Carl Spana, Ph.D., Chief Executive Officer and	2024		79,000		79,000		113,500		113,500
President	2023		66,000		66,000		103,500		103,500
Stephen T. Wills, MST, CPA, Chief Financial Officer	2024		69,000		69,000		99,000		99,000
Chief Operating Officer and Executive Vice President	2023		57,500		57,500		90,000		90,000

	●	annual discretionary bonus compensation, in an amount to be decided by the compensation committee and approved by the Board, based on achievement of yearly performance objectives; and

	●	participation in all benefit programs that we establish, to the extent the executive’s position, tenure, salary, age, health and other qualifications make him eligible to participate.