Palatin Announces $15 Million Private Placement of Convertible Redeemable Preferred Stock

CRANBURY, N.J., May 12, 2022 /PRNewswire/ -- Palatin Technologies, Inc. ("Palatin" or the "Company") (NYSE American: PTN), a biopharmaceutical company developing first-in-class medicines based on molecules that modulate the activity of the melanocortin peptide receptor system, today announced  that it has entered into a securities purchase agreement with institutional investors pursuant to which Palatin will issue and sell 8,100,000 shares of its Series B convertible redeemable preferred stock and 900,000 shares of its Series C convertible redeemable preferred stock to such investors. Each share of Series B and Series C preferred stock has a purchase price of $1.67. Each share of Series B and Series C preferred stock is convertible into shares of Palatin's common stock at an initial conversion price of $0.45 per share. The investors in the Series B and Series C preferred stock also received warrants to purchase up to 1,666,667 shares of common stock at an exercise price of $0.50 per share, expiring 48 months following issuance. Total gross proceeds from the offering, before deducting estimated offering expenses, is approximately $15 million.

Shares of the Series B and Series C preferred stock are convertible, at the option of the holder,  at the earlier of 90 days from closing of the issuances of the Series B and Series C preferred stock and any time following the Company's receipt of stockholder approval for a reverse stock split (RSS) of the Company's common stock and until the thirtieth (30^th) calendar day following the RSS date, into 33,333,333 common shares, computed by dividing the aggregate stated value of the preferred stock of $15 million by the conversion price of $0.45. Alternatively, following approval for a RSS and before the thirtieth (30^th) calendar day following the RSS date, the holders of Series B and Series C preferred stock shall have the right to elect to have all of the outstanding shares of Series B and Series C preferred stock redeemed by the Company for cash in an amount equal to the stated value of such shares or for debt in an aggregate principal amount equal to the stated value of such shares, and receive a redemption fee of $750,000, representing 5% of the aggregate stated value of the preferred shares.

Palatin expects to call a meeting of stockholders to seek approval of, among other things, an amendment to its certificate of incorporation to effect the RSS (the "Proposal"). Except as otherwise required by law, holders of the Series B and Series C preferred stock are entitled to vote only on the Proposal and any proposal to adjourn any meeting of stockholders at which the Proposal is submitted and will vote together with the holders of common stock and each other class or series of capital stock of the Company as a single class. The holders of Series B preferred stock are entitled to a number of votes equal to the number of shares of common stock into which the Series B preferred is convertible on the issuance date. The holders of the Series C preferred stock are entitled to a number of votes equal to 20,000 votes per share of common stock into which the Series C preferred is convertible. The holders of Series C preferred stock have agreed to vote the shares of Series C preferred stock with respect to the Proposal (or any proposal to adjourn the meeting of stockholders at which the Proposal is submitted) in the same proportion as the shares of common stock, Series A preferred stock, and Series B preferred stock that are voted on such proposals.

To the extent any shares of Series B or Series C preferred stock are converted to common shares or redeemed for debt, the Company will use such net proceeds from this offering for working capital and general corporate purposes.

Additional information regarding the securities described above and the terms of the offering will be included in a filing with the United States Securities and Exchange Commission ("SEC").

The Series B and Series C preferred stock and warrants and shares of common stock into which these preferred shares and warrants are convertible are being issued in reliance upon the exemption from the securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the "1933 Act") and/or Rule 506 of Regulation D as promulgated by SEC under the 1933 Act.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, 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 and natriuretic peptide 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.

Forward-looking Statements

Statements in this press release that are not historical facts, including statements about future expectations of Palatin Technologies, Inc., such as statements about potential conversion of Series A and B preferred stock, clinical trial results, potential actions by regulatory agencies including the FDA, regulatory plans, development programs, proposed indications for product candidates, market potential for product candidates, and potential adverse impacts due to the global COVID-19 pandemic such as delays in regulatory review, manufacturing and supply chain interruptions, adverse effects on healthcare systems and disruption of the global economy, 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. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause Palatin's actual results to be materially different from its historical results or from any results expressed or implied by such forward-looking statements. Palatin's actual results may differ materially from those discussed in the forward-looking statements for reasons including, but not limited to, Palatin's ability to establish and maintain the capability for manufacturing, marketing and distribution of Vyleesi, sales of Vyleesi in the United States and elsewhere in the world, 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 Securities and Exchange Commission. Palatin is not responsible for updating for events that occur after the date of this press release.

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SOURCE Palatin Technologies, Inc.