Palatin Technologies(PTN) - 2024 Q1 - Quarterly Report

PART I – FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) Unaudited Q3 2023 financials show total assets decreased to $11.2 million, a net loss of $5.9 million, and a significant going concern warning Consolidated Balance Sheets Total assets decreased to $11.2 million from $17.9 million, leading to a stockholders' deficiency of $4.9 million | | September 30, 2023 | June 30, 2023 | | :--- | :--- | :--- | | Current Assets | | | | Cash and cash equivalents | $5,524,973 | $7,989,582 | | Marketable securities | $0 | $2,992,890 | | Total current assets | $9,805,457 | $16,321,513 | | Total Assets | $11,247,464 | $17,939,440 | | Current Liabilities | | | | Accounts payable | $2,269,640 | $4,303,527 | | Accrued expenses | $7,152,271 | $6,511,059 | | Total current liabilities | $13,609,513 | $15,131,830 | | Total Liabilities | $16,136,486 | $17,805,367 | | Total Stockholders' (Deficiency) Equity | ($4,889,022) | $134,073 | Consolidated Statements of Operations Net loss improved to $5.9 million (from $8.3 million YoY), driven by increased product revenue and reduced operating expenses | | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Product revenue, net | $2,105,977 | $869,654 | | Research and development | $5,014,630 | $6,027,031 | | Selling, general and administrative | $3,200,244 | $3,508,798 | | Total operating expenses | $8,214,874 | $9,622,325 | | Loss from operations | ($6,108,897) | ($8,752,671) | | NET LOSS | ($5,888,399) | ($8,255,408) | | Basic and diluted net loss per common share | ($0.48) | ($0.86) | Consolidated Statements of Cash Flows Net cash used in operations was $5.9 million, with cash and equivalents decreasing by $2.5 million to $5.5 million | | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($5,906,393) | ($8,581,320) | | Net cash provided by (used in) investing activities | $2,992,890 | ($141,228) | | Net cash provided by (used in) financing activities | $448,894 | ($24,731) | | NET DECREASE IN CASH AND CASH EQUIVALENTS | ($2,464,609) | ($8,747,279) | | CASH AND CASH EQUIVALENTS, end of period | $5,524,973 | $21,191,875 | Notes to Consolidated Financial Statements Notes highlight the going concern warning, with cash funding operations only into H1 2024, and recent $4.6 million financing - Management has concluded that substantial doubt exists about the Company's ability to continue as a going concern for one year from the date the financial statements are issued[37] - Existing cash, cash equivalents, and marketable securities, including funds raised in October 2023, are expected to be sufficient to fund operations only into the first half of calendar year 2024[37] - In October 2023, the company completed a registered direct offering and private placement, raising net proceeds of $4,573,948[120][123] | | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Gross product sales | $4,587,150 | $2,292,450 | | Product sales allowances and accruals | ($2,481,173) | ($1,422,796) | | Net sales | $2,105,977 | $869,654 | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses 100% Vyleesi sales volume growth, reduced R&D, and reiterates going concern warning for H1 2024 Pipeline Overview Pipeline focuses on melanocortin receptor programs, with PL9643 Phase 3 data expected Q4 2023, and other Phase 2 trials | Program | Indication | Status | Next Steps / Expected Data | | :--- | :--- | :--- | :--- | | Vyleesi | Hypoactive Sexual Desire Disorder | Commercial | Seeking U.S. and ROW Licenses | | PL9643 | Dry eye disease | Phase 3 | Data Expected 4Q2023 | | PL8177 | Ulcerative colitis (UC) | Phase 2 | Interim data 4Q2023 / Final data 1H2024 | | MCr Agonist | Diabetic nephropathy | Phase 2 | Final data 1H2024 | Results of Operations Net product revenue increased to $2.1 million (from $0.9 million YoY) due to 100% sales volume growth and lower R&D - Net revenue increased due to a 100% increase in sales volume and reduced product sales allowances as a percentage of gross sales in Q3 2023 compared to Q3 2022[137] - Research and development expenses decreased to $5.0 million from $6.0 million YoY, mainly due to reduced spending on MCr programs[139] - Selling, general and administrative expenses decreased to $3.2 million from $3.5 million YoY, primarily due to lower Vyleesi selling expenses and compensation costs[143] Liquidity and Capital Resources Cash and equivalents at $5.5 million against $13.6 million liabilities, with going concern doubt for H1 2024 - As of September 30, 2023, the company had cash and cash equivalents of $5,524,973 and current liabilities of $13,609,513[151] - Management concluded that substantial doubt exists about the company's ability to continue as a going concern for one year from the filing date[154] - Existing cash, including funds raised in October 2023, is expected to fund operations only into the first half of the calendar year 2024[154] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide these disclosures - Disclosure is not required to be provided by smaller reporting companies[158] Item 4. Controls and Procedures Disclosure controls and procedures were effective as of September 30, 2023, with no material changes - Management concluded that the company's disclosure controls and procedures were effective as of September 30, 2023[159] PART II – OTHER INFORMATION Item 1. Legal Proceedings The company is not currently a party to any material claim or legal proceeding - The company is not currently a party to any claim or legal proceeding[161] Item 1A. Risk Factors Non-compliance with NYSE American listing standards due to insufficient equity poses a delisting risk - The company is not in compliance with the NYSE American's continued listing standards due to insufficient stockholders' equity[164] - The company has submitted a plan to regain compliance by April 10, 2025, but there is no assurance the plan will be accepted or that compliance will be achieved[164][165][166] - Failure to regain compliance could result in the delisting of the company's common stock from the NYSE American exchange[164][165] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 25,467 shares were withheld at $2.21 per share for employee tax obligations on restricted stock units - In August 2023, 25,467 shares were withheld to satisfy tax withholding obligations for employees upon the vesting of restricted stock units[167] Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported Item 4. Mine Safety Disclosures Mine safety disclosures are not applicable to the company Item 5. Other Information No other information was reported Item 6. Exhibits This section lists exhibits filed with Form 10-Q, including CEO/CFO certifications and interactive data files