Blueprint





 







EXHIBIT 4.12

 


 


 



DESCRIPTION OF SECURITIES




General



 


The
following description of our capital stock is intended as a summary
only and is qualified in its entirety by reference to our amended
and restated certificate of incorporation and bylaws, which are
filed as exhibits to the report of which this exhibit is attached.
Our authorized capital stock consists of:


 




●

300,000,000
shares of common stock, par value $0.01 per share, and








●

10,000,000
shares of preferred stock, par value $0.01 per share, of which
9,736,000 shares are undesignated.






 


As
of September 10, 2019, we had outstanding:


 




●

227,039,363
shares of our common stock;








●

4,030
shares of Series A Convertible Preferred Stock, convertible into
65,625 shares of common stock, subject to adjustment, for no
further consideration;








●

stock
options to purchase 14,358,550 shares of common stock at a weighted
average exercise price of $0.84 per share;








●

restricted
stock units representing 4,125,683 shares of common stock which
vest on dates between December 12, 2019 and June 24, 2023, subject
to the fulfillment of service conditions or attaining defined
performance conditions;








●

5,978,150
shares of common stock which have vested under restricted stock
unit agreements, but are subject to provisions to delay delivery;
and








●

warrants
to purchase 22,288,713 shares of common stock issuable on the
exercise of warrants at a weighted average exercise price of $0.77
per share.







 



Common Stock


 


             
We have the authority to issue 300,000,000 shares of common stock,
par value $0.01 per share. As of September 10, 2019, there were
227,039,363 shares of our common stock outstanding, and a maximum
of 46,816,721 shares of common stock were issuable on conversion of
outstanding convertible preferred stock, exercise of outstanding
options and warrants, and vesting and delivery of restricted stock
units.

 


             
Holders of our common stock are entitled to one vote per share for
the election of directors and on all other matters that require
stockholder approval. Holders of shares of common stock do not have
any cumulative voting rights. Subject to any preferential rights of
any outstanding preferred stock, in the event of our liquidation,
dissolution or winding up, holders of our common stock are entitled
to share ratably in the assets remaining after payment of
liabilities and the liquidation preferences of any outstanding
preferred stock. See “Preferred Stock” and
“Series A Convertible Preferred Stock,” below. Our
common stock does not carry any redemption rights or any preemptive
or preferential rights enabling a holder to subscribe for, or
receive shares of, any class of our common stock or any other
securities convertible into shares of any class of our common
stock. Holders of our common stock have the right to participate
ratably in dividend distributions. Our outstanding Series A
Preferred Stock, consisting of 4,030 shares on September 10, 2019,
provides that we may not pay a dividend or make any distribution to
holders of any class of stock unless we first pay a special
dividend or distribution of $100 per share to the holders of the
Series A Preferred Stock.

 



Market Information


 


             
Our common stock is listed on the NYSE American under the symbol
“PTN.” On September 10, 2019, the closing price of the
common stock was $1.01 per share. We do not have any other class of
securities listed for trading.



  


 




 








 






 

 


 


 



Transfer Agent and Registrar


 

The transfer agent for our common
stock is American Stock Transfer & Trust Company, located at
6201 15th Avenue, Brooklyn, New York
11219. Their telephone number is (800)
937-5449.



 



Preferred Stock


 


             
We have the authority to issue 10,000,000 shares of preferred
stock. As of September 10, 2019, 264,000 shares of our preferred
stock were designated as a single class, Series A Convertible
Preferred Stock, of which 4,030 shares were outstanding (see
“Series A Convertible Preferred Stock” below). The
description of preferred stock provisions set forth below is not
complete and is subject to and qualified in its entirety by
reference to our amended and restated certificate of incorporation
and the certificate of designations relating to the Series A
Convertible Preferred Stock.

 


             
The board of directors has the right, without the consent of
holders of common stock, to designate and issue one or more series
of preferred stock, which may be convertible into common stock at a
ratio determined by the board. A series of preferred stock may bear
rights superior to common stock as to voting, dividends,
redemption, distributions in liquidation, dissolution, or winding
up, and other relative rights and preferences. The board may set
the following terms of any series preferred stock (which will be
specified in any applicable prospectus or prospectus
supplement):

 




●

the
number of shares constituting the series and the distinctive
designation of the series;








●

dividend
rates, whether dividends are cumulative, and, if so, from what date
and the relative rights of priority of payment of
dividends;








●

voting
rights and the terms of the voting rights;








●

conversion
privileges and the terms and conditions of conversion, including
provision for adjustment of the conversion rate;








●

redemption
rights and the terms and conditions of redemption, including the
date or dates upon or after which shares may be redeemable, and the
amount per share payable in case of redemption, which may vary
under different conditions and at different redemption
dates;








●

sinking
fund provisions for the redemption or purchase of
shares;








●

rights
in the event of voluntary or involuntary liquidation, dissolution
or winding up of the corporation, and the relative rights of
priority of payment; and








●

any
other relative powers, preferences, rights, privileges,
qualifications, limitations and restrictions of the
series.
















             
Dividends on outstanding shares of preferred stock will be paid or
declared and set apart for payment before any dividends may be paid
or declared and set apart for payment on the common stock with
respect to the same dividend period.

 


             
If upon any voluntary or involuntary liquidation, dissolution or
winding up of the corporation, the assets available for
distribution to holders of preferred stock are insufficient to pay
the full preferential amount to which the holders are entitled,
then the available assets will be distributed ratably among the
shares of all series of preferred stock in accordance with the
respective preferential amounts (including unpaid cumulative
dividends, if any) payable with respect to each
series.

 


             
Holders of preferred stock will not be entitled to preemptive
rights to purchase or subscribe for any shares of any class of
capital stock of the corporation. The preferred stock will, when
issued, be fully paid and non-assessable. The rights of the holders
of preferred stock will be subordinate to those of our general
creditors.



 



Series A Convertible Preferred Stock


 


The
board of directors established a series of 264,000 shares of
preferred stock, designated Series A Convertible Preferred Stock,
par value $0.01 per share (the “Series A”). We issued
137,780 shares of Series A in 1997, of which 4,030 shares remain
outstanding as of September 10, 2019, the rest having been
converted into common stock. The Series A has the following rights
and preferences.


 




 








 






 

 


 

             
Optional
conversion. Each share of Series A is
convertible at any time, at the option of the holder, into the
number of shares of common stock equal to $100 divided by the
conversion price, as defined in the Series A certificate of
designations. As of September 10, 2019, the conversion price is
$6.14, so each share of Series A is convertible as of September 10,
2019, into approximately 16.3 shares of common
stock.

 

             
Mandatory
conversion. We may, at our option,
cause the conversion of the Series A, in whole or in part, on a pro
rata basis, into common stock, if the closing bid price of the
common stock has exceeded 200% of the conversion price for at least
20 trading days in any 30 consecutive trading day period, ending
three days prior to the date of mandatory
conversion.

 

             
Price
protection provisions. The conversion price
decreases if we sell common stock (or equivalents) for a price per
share less than the conversion price or less than the market price
of the common stock, subject to certain exceptions. The conversion
price is also subject to adjustment upon the occurrence of a
merger, reorganization, consolidation, reclassification, stock
dividend or stock split which results in an increase or decrease in
the number of shares of common stock
outstanding.

 

             
Dividend and
distribution preference. We may not pay a dividend
or make any distribution to holders of any other capital stock
unless and until we first pay a special dividend or distribution of
$100 per share to the holders of Series A.

 

             
Liquidation
preference. Upon (i) liquidation,
dissolution or winding up of the Company, whether voluntary or
involuntary, (ii) sale or other disposition of all or substantially
all of the assets of the Company, or (iii) any consolidation,
merger, combination, reorganization or other transaction in which
Palatin is not the surviving entity or in which the shares of
common stock constituting in excess of 50% of the voting power of
the Company are exchanged for or changed into other stock or
securities, cash and/or any other property, after payment or
provision for payment of the debts and other liabilities of the
Company, the holders of Series A will be entitled to receive, pro
rata and in preference to the holders of any other capital stock,
an amount per share equal to $100 plus accrued but unpaid
dividends, if any.

 

             
Voting
rights. Each holder of Series A has
the number of votes equal to the number of shares of common stock
issuable upon conversion of the holder’s Series A at the
record date for determination of the stockholders entitled to vote
or, if no record date is established, at the date a vote is taken.
Except as provided above or as required by applicable law, the
holders of the Series A are entitled to vote together with the
holders of the common stock and not as a separate
class.



 



Debt Securities


 


As
of September 10, 2019, we have no debt securities issued and
outstanding.


 

The
following description, together with the additional information we
include in any applicable prospectus or prospectus supplement,
summarizes the material terms and provisions of the debt securities
that we may offer under any applicable prospectus or prospectus
supplement. While the terms we have summarized below will apply
generally to any future debt securities we may offer, we will
describe the particular terms of any debt securities that we may
offer in more detail in any applicable prospectus or prospectus
supplement. The terms of any debt securities we offer under a
prospectus or prospectus supplement may differ from the terms we
describe below.

 

We
will issue notes under an indenture, which we will enter into with
the trustee named in the indenture. Any indenture will be qualified
under the Trust Indenture Act of 1939. You should read the summary
below, any applicable prospectus or prospectus supplement and the
provisions of the applicable indenture and any related security
documents, if any, in their entirety before investing in our debt
securities.

 

We
will describe in each prospectus supplement the following terms
relating to a series of debt securities:

 




●

the
title;








●

the
principal amount being offered, and if a series, the total amount
authorized and the total amount outstanding;








●

any
limit on the amount that may be issued;








●

whether
or not we will issue the series of debt securities in global form,
and if so, the terms and who the depository will be;








●

the
maturity date;






 




 








 






 

 














●

the
principal amount due at maturity, and whether the debt securities
will be issued with an original issue discount;








●

whether
and under what circumstances, if any, we will pay additional
amounts on any debt securities held by a person who is not a United
States person for tax purposes, and whether we can redeem the debt
securities if we have to pay such additional amounts;








●

the
annual interest rate, which may be fixed or variable, or the method
for determining the rate and the date interest will begin to
accrue, the dates interest will be payable and the regular record
dates for interest payment dates or the method for determining such
dates;








●

whether
or not the debt securities will be secured or unsecured, and the
terms of any secured debt;








●

the
terms of the subordination of any series of subordinated
debt;








●

the
place where payments will be payable;








●

restrictions
on transfer, sale or other assignment, if any;








●

our
right, if any, to defer payment of interest and the maximum length
of any such deferral period;








●

the
date, if any, after which the conditions upon which, and the price
at which, we may, at our option, redeem the series of debt
securities pursuant to any optional or provisional redemption
provisions and the terms of those redemption
provisions;








●

the
date, if any, on which, and the price at which we are obligated,
pursuant to any mandatory sinking fund or analogous fund provisions
or otherwise, to redeem, or at the holder’s option to
purchase, the series of debt securities and the currency or
currency unit in which the debt securities are
payable;








●

whether
the indenture will restrict our ability to pay dividends, or will
require us to maintain any asset ratios or reserves;








●

whether
we will be restricted from incurring any additional indebtedness,
issuing additional securities, or entering into a merger,
consolidation or sale of our business;








●

a
discussion of any material or special United States federal income
tax considerations applicable to the debt securities;








●

information
describing any book-entry features;








●

provisions
for a sinking fund purchase or other analogous fund, if
any;








●

any
provisions for payment of additional amounts for taxes and any
provision for redemption, if we must pay such additional amount
with respect to any debt security;








●

whether
the debt securities are to be offered at a price such that they
will be deemed to be offered at an “original issue
discount” as defined in paragraph (a) of Section 1273 of the
Internal Revenue Code;








●

the
denominations in which we will issue the series of debt securities,
if other than denominations of $1,000 and any integral multiple
thereof;








●

the
terms on which a series of debt securities may be convertible into
or exchangeable for our common stock, any other of our securities
or securities of a third party, and whether conversion or exchange
is mandatory, at the option of the holder or at our
option;








●

events
of default;








●

whether
we and/or the debenture trustee may change an indenture without the
consent of any holders;








●

the
form of debt security and how it may be exchanged and
transferred;








●

descriptions
of the debenture trustee and paying agent, and the method of
payments; and








●

any
other specific terms, preferences, rights or limitations of, or
restrictions on, the debt securities, including any additional
events of default or covenants provided with respect to the debt
securities, and any terms which may be required by us or advisable
under applicable laws or regulations.






             

Specific
indentures will contain additional important terms and provisions
and will be incorporated by reference as an exhibit to the
registration statement that includes a prospectus, or as an exhibit
to a report filed under the Exchange Act, incorporated by reference
in any applicable prospectus or prospectus supplement.



 


 




 








 






 

 


 



Warrants


 


As
of September 10, 2019, warrants for the purchase of 22,288,713
shares of our common stock were outstanding, exercisable at a
weighted average exercise price of $0.77 per share. The outstanding
warrants expire on various dates from December 23, 2019 through
December 6, 2021.


 

The
following description, together with the additional information we
may include in any applicable prospectus or prospectus supplement,
summarizes the material terms and provisions of the warrants that
we may offer and the related warrant agreements and warrant
certificates. While the terms summarized below will apply generally
to any warrants that we may offer, we will describe the particular
terms of any series of warrants in more detail in the applicable
prospectus or prospectus supplement. The terms of any warrants
offered under a prospectus or prospectus supplement may differ from
the terms described below. Specific warrant agreements will contain
additional important terms and provisions and will be incorporated
by reference as exhibits to the registration statement that
includes such a prospectus or prospectus supplement, or as exhibits
to a report filed under the Exchange Act, incorporated by reference
in this prospectus.

 

General. We
will describe in the applicable prospectus or prospectus supplement
the terms of the series of warrants, including:

 




●

the
title of warrants;








●

the
offering price and aggregate number of warrants
offered;








●

the
currency for which the warrants may be purchased;








●

if
applicable, the designation and terms of the securities with which
the warrants are issued and the number of warrants issued with each
such security or each principal amount of such
security;








●

if
applicable, the date on and after which the warrants and the
related securities will be separately transferable;








●

in
the case of warrants to purchase common stock or preferred stock,
the number of shares of common stock or preferred stock, as the
case may be, purchasable upon the exercise of one warrant and the
price at which these shares may be purchased upon
exercise;








●

in
the case of warrants to purchase debt securities, the principal
amount of debt securities purchasable upon exercise of one warrant
and the price at which, and currency in which, this principal
amount of debt securities may be purchased upon
exercise;








●

the
effect of any merger, consolidation, sale or other disposition of
our business on the warrant agreement and the
warrants;








●

the
terms of any rights to redeem or call the warrants;








●

any
provisions for changes to or adjustments in the exercise price or
number of securities issuable upon exercise of the
warrants;








●

the
dates on which the right to exercise the warrants will commence and
expire;








●

the
manner in which the warrant agreement and warrants may be
modified;








●

federal
income tax consequences of holding or exercising the
warrants;








●

information
relating to book-entry procedures, if any;








●

the
terms of the securities issuable upon exercise of the warrants;
and








●

any
other specific terms, preferences, rights or limitations of or
restrictions on the warrants.






 


Before
exercising their warrants, holders of warrants will not have any of
the rights of holders of the securities purchasable upon such
exercise, including:


 




●

in
the case of warrants to purchase debt securities, the right to
receive payments of principal of, or premium, if any, or interest
on, the debt securities purchasable upon exercise or to enforce
covenants in the applicable indenture; or








●

in
the case of warrants to purchase common stock or preferred stock,
the right to receive dividends, if any, or, payments upon our
liquidation, dissolution or winding up or to exercise voting
rights, if any.






 




 








 






 

 

Exercise of
Warrants. Each warrant will entitle
the holder to purchase the securities that we specify in the any
applicable prospectus or prospectus supplement at the exercise
price that we describe in any applicable prospectus or prospectus
supplement. Unless we otherwise specify in the applicable
prospectus supplement, holders of the warrants may exercise the
warrants at any time up to 5:00 P.M. New York time on the
expiration date that we set forth in the applicable prospectus or
prospectus supplement. After the close of business on the
expiration date, unexercised warrants will become
void.

 

Holders
of the warrants may exercise the warrants by delivering the warrant
certificate representing the warrants to be exercised together with
specified information, and paying the required amount to the
warrant agent in immediately available funds, as provided in the
applicable prospectus or prospectus supplement. We will set forth
on the reverse side of the warrant certificate and/or in the
applicable prospectus or prospectus supplement the information that
the holder of the warrant will be required to deliver to the
warrant agent.

 

Upon
receipt of the required payment and the warrant certificate
properly completed and duly executed at the corporate trust office
of the warrant agent or any other office indicated in the
applicable prospectus or prospectus supplement, we will issue and
deliver the securities purchasable upon such exercise. If fewer
than all of the warrants represented by the warrant certificate are
exercised, then we will issue a new warrant certificate for the
remaining amount of warrants. If we so indicate in the applicable
prospectus or prospectus supplement, holders of the warrants may
surrender securities as all or part of the exercise price for the
warrants (cashless exercise).

 

Enforceability
of Rights by Holders of Warrants. Each warrant agent will act
solely as our agent under the applicable warrant agreement and will
not assume any obligation or relationship of agency or trust with
any holder of any warrant. A single bank or trust company may act
as warrant agent for more than one issue of warrants. A warrant
agent will have no duty or responsibility in case of any default by
us under the applicable warrant agreement or warrant, including any
duty or responsibility to initiate any proceedings at law or
otherwise, or to make any demand upon us. Any holder of a warrant
may, without the consent of the related warrant agent or the holder
of any other warrant, enforce by appropriate legal action its right
to exercise, and receive the securities purchasable upon exercise
of, its warrants.