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Palatin Technologies Inc. Message Board

  • rayonman1 rayonman1 Jan 25, 2013 8:56 PM Flag

    How many warrants has QVT exercised?

    Looking at the Quarterly report for the quarter ending 9/30/12, , I see there were 71.67 million shares outstanding as of 9/30/2012.
    PTN had 38.373 million shares after the last financing 7/2/12 with warrants for 67.5 million shares exercisable at a penny. Unless I am missing something, it sounds like 31.3 million warrants were exercised since 7/2/12. But then QVT would have 3.873 million shares acquired at the financing plus 31.3 million shares from the exercise of warrants or 35.173 million shares and own 49.1 % of PTN.
    But I would think this would be reflected in the "Major Holders" which it wasn't as of a couple of days ago.

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    • A few comments here...

      The 8K filed 11/15/2012 stated
      Shares outstandin as of Sept 30 2012
      * common 38.9M
      * fully diluted 133.6M

      The "B" warrents were not authorized till the special vote on Sept 29, I would suspect that they are not included in the numbers you quoted (sec filing
      424B3filed 12/6/2012)

      also from that filing
      As of December 5, 2012, holders of our outstanding dilutive securities had the right to acquire the following amounts of underlying common stock:

      * 52,834 shares issuable on the conversion of immediately convertible Series A Convertible preferred stock, subject to adjustment, for no further consideration;

      * 2,758,633 shares issuable on the exercise of stock options, at exercise prices ranging from $0.65 to $42.10 per share;

      * 472,500 shares issuable under restricted stock units which vest on dates between June 22, 2013 and July 17, 2014, subject to the fulfillment of service conditions; and

      * 91,951,276 shares issuable on the exercise of warrants at exercise prices ranging from $0.01 to $3.30 per share, which includes warrants issued in our 2012 private placement for 67,476,531 shares issuable at an exercise price of $0.01 per share.

      I would expect that QVC will remain a less than 5% owner, executing warrent amounts similar to what they sell on the market. They are making a very good short term return on shares selling from the upper 5-0 cent range on.

      It would be highly unlikely that they have executed more than a small fraction of the shares to date... My guess is they still hold most of the warrents

      glad to see some pickup on the topic... I had tried to open up this discussion on a thread entitled "Company Discussion". I got 1 reply that misread the statement and argued with the perceived content and a couple of thumbs down... Seeing your post allowed me a moment to reflect on last nights decission to drop off this board (sorry to those that would have liked that)...

      Once again I am holding shares, but my strategy remains the same.. the long term outlook looks like a losing play. (dilution events then maybe a product to market)

      • 1 Reply to c78596998785
      • C78, glad you've decided to hang around the PTN message board for discussion.
        You point out the further data point that as of 12/5/12, QVT had not exercised any of its 67.5 million warrants.

        QVT bought 3.873 million shares at the financing so they are already a more than 5% owner and I think that means they have to report their buys and sells within a few days of the transactions (3 days?). They are about a 10% owner of PTN.

        If they would like to make a tiny profit on their warrants (assuming they can be exercised now, which I have not checked) they could sell maybe 80,000 shares per week without unduly affecting the stock price and by one year (if the stock price holds over 50 cents) they would have exercised 4 million warrants at a small profit which would probably be insignificant to them but it would be something positive and a tiny hedge against the possibility of ultimate failure with their investment.
        But, as above, as a more than 5% stockholder, I think QVT would have to report sale of shares that came from the warrants so I think we would hear about by the filing of a Form with the SEC.

        So I think the fact that we have not heard about QVT selling shares means that at least they have not sold shares. Maybe they don't have to immediately report an increase in their holding of shares that came from the exercise of warrants, as long as they didn't sell the shares. I don't know. But we will see QVT's holdings updated from time to time and probably quarterly, including the annual proxy.

        Perhaps one valuable thing about QVT's 67.5 million warrants is they could take over majority control of the company in a flash by exercising their warrants and then could remove PTN management and the Board of Directors if they wanted to.

        Even if they exercised 80,000 warrants per week they would still have more than 63 million warrants one year from now and still therefore would be able to take a majority stake in the company by exercising warrants.

        If true that QVT could easily and automatically take a majority stake in the company (i.e. if the shares are all voting shares, which I bet they are, and there is no waiting period before the warrants can be exercised-- and if my figures are correct) I imagine PTN management and the PTN Board of Directors are very aware that they are basically serving at the whim of QVT. And I imagine PTN's decisions would probably be heavily influenced (if not dictated) by what QVT communicates to them QVT would like.

    • It is likely that all of QVT warrants have been exercised. We won't know until the quarterly report comes out.

      Sentiment: Strong Buy

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