PALATIN TECHNOLOGIES INC (Form: 10-K, Received: 09/27/2013 16:31:31)

	(A) The number of shares of Common Stock deemed outstanding at any given time shall include all shares of capital stock convertible into or exchangeable for Common Stock and all shares of Common Stock issuable upon the exercise of any convertible debt, warrants outstanding on the date thereof and options outstanding on the date thereof.

	(B) No adjustment of the Conversion Price shall be made unless such adjustment would require an increase or decrease of at least $.01 in such price; provided that any adjustments which by reason of this clause (B) are not required to be made shall be carried forward and shall be made at the time of and together with the next subsequent adjustment which, together with any adjustment(s) so carried forward, shall require an increase or decrease of at least $.01 in the Conversion Price then in effect hereunder.

	(C) In case of (1) the sale by the Corporation (including as a component of a unit) of any rights or warrants to subscribe for or purchase, or any options for the purchase of, Common Stock or any securities convertible into or exchangeable for Common Stock (such securities convertible, exercisable or exchangeable into Common Stock being herein called "Convertible Securities"), or (2) the issuance by the Corporation, without the receipt by the Corporation of any consideration therefor, of any rights or warrants to subscribe for or purchase, or any options for the purchase of, Common Stock or Convertible Securities, whether or not such rights, warrants or options, or the right to convert or exchange such Convertible Securities, are immediately exercisable, and the consideration per share for which Common Stock is issuable upon the exercise of such rights, warrants or options or upon the conversion or exchange of such Convertible Securities (determined by dividing (x) the minimum aggregate consideration, as set forth in the instrument relating thereto without regard to any antidilution or similar provisions contained therein for a subsequent adjustment of such amount, payable to the Corporation upon the exercise of such rights, warrants or options, plus the consideration received by the Corporation for the issuance or sale of such rights, warrants or options, plus, in the case of such Convertible Securities, the minimum aggregate amount, as set forth in the instrument relating thereto without regard to any antidilution or similar provisions contained therein for a subsequent adjustment of such amount, of additional consideration, if any, other than such Convertible Securities, payable upon the conversion or exchange thereof, by (y) the total maximum number, as set forth in the instrument relating thereto without regard to any antidilution or similar provisions contained therein for a subsequent adjustment of such amount, of shares of Common Stock issuable upon the exercise of such rights, warrants or options or upon the conversion or exchange of such Convertible Securities issuable upon the exercise of such rights, warrants or options) is less than either the Conversion Price or the Market Price of the Common Stock as of the date of the issuance or sale of such rights, warrants or options, then such total maximum number of shares of Common Stock issuable upon the exercise of such rights, warrants or options or upon the conversion or exchange of such Convertible Securities (as of the date of the issuance or sale of such rights, warrants or options) shall be deemed to be “Common Stock” for purposes of Section 4(c)(i) hereof and shall be deemed to have been sold for an amount equal to such consideration per share and shall cause an adjustment to be made in accordance with Section 4(c)(i).

	(D) In case of the sale by the Corporation of any Convertible Securities, whether or not the right of conversion or exchange thereunder is immediately exercisable, and the price per share for which Common Stock is issuable upon the conversion or exchange of such Convertible Securities (determined by dividing (x) the total amount of consideration received by the Corporation for the sale of such Convertible Securities, plus the minimum aggregate amount, as set forth in the instrument relating thereto without regard to any antidilution or similar provisions contained therein for a subsequent adjustment of such amount, of additional consideration, if any, other than such Convertible Securities, payable upon the conversion or exchange thereof, by (y) the total maximum number, as set forth in the instrument relating thereto without regard to any antidilution or similar provisions contained therein for a subsequent adjustment of such amount, of shares of Common Stock issuable upon the conversion or exchange of such Convertible Securities) is less than either the Conversion Price or the Market Price of the Common Stock as of the date of the sale of such Convertible Securities, then such total maximum number of shares of Common Stock issuable upon the conversion or exchange of such Convertible Securities (as of the date of the sale of such Convertible Securities) shall be deemed to be “Common Stock” for purposes of Section 4(c)(i) hereof and shall be deemed to have been sold for an amount equal to such consideration per share and shall cause an adjustment to be made in accordance with Section 4(c)(i).

	(E) In case the Corporation shall modify the rights of conversion, exchange or exercise of any of the securities referred to in (C) and (D) above or any other securities of the Corporation convertible, exchangeable or exercisable for shares of Common Stock, for any reason other than an event that would require adjustment to prevent dilution, so that the consideration per share received by the Corporation after such modification is less than either the Conversion Price or the Market Price as of the date prior to such modification, then such securities, to the extent not theretofore exercised, converted or exchanged, shall be deemed to have expired or terminated immediately prior to the date of such modification and the Corporation shall be deemed for purposes of calculating any adjustments pursuant to this Section 4(c) to have issued such new securities upon such new terms on the date of modification. Such adjustment shall become effective as of the date upon which such modification shall take effect. On the expiration or cancellation of any such right, warrant or option or the termination or cancellation of any such right to convert or exchange any such Convertible Securities, the Conversion Price then in effect hereunder shall forthwith be readjusted to such Conversion Price as would have obtained (a) had the adjustments made upon the issuance or sale of such rights, warrants, options or Convertible Securities been made upon the basis of the issuance of only the number of shares of Common Stock theretofore actually delivered (and the total consideration received therefor) upon the exercise of such rights, warrants or options or upon the conversion or exchange of such Convertible Securities and (b) had adjustments been made on the basis of the Purchase Price as adjusted under clause (a) for all transactions (which would have affected such adjusted Purchase Price) made after the issuance or sale of such rights, warrants, options or Convertible Securities.

	(F) In case of the sale of any shares of Common Stock, any Convertible Securities, any rights or warrants to subscribe for or purchase, or any options for the purchase of, Common Stock or Convertible Securities, the consideration received by the Corporation therefor shall be deemed to be the gross sales price therefor without deducting therefrom any expense paid or incurred by the Corporation or any underwriting discounts or commissions or concessions paid or allowed by the Corporation in connection therewith. In the event that any securities shall be issued in connection with any other securities of the Corporation, together comprising one integral transaction in which no specific consideration is allocated among the securities, then each of such securities shall be deemed to have been issued for such consideration as the Board of Directors of the Corporation determines in good faith; provided, however that if holders of in excess of 10% of the then outstanding Series A Preferred Stock disagree with such determination, the Corporation shall retain an independent investment banking firm for the purpose of obtaining an appraisal.

(vi)	Notwithstanding any other provision hereof, no adjustment to the Conversion Price will be made

	(A) upon the exercise of any of the options outstanding on the date hereof under the Corporation's existing stock option plans; or

	(B) upon the issuance or exercise of options which may hereafter be granted with the approval of the Board of Directors, or exercised, under the Corporation’s 1996 Stock Option Plan or under any other employee benefit plan of the Company to officers, directors or employees, but only with respect to such options as are exercisable at prices no lower than the Closing Bid Price (or, if the prices referenced in the definition of Closing Bid Price cannot be determined, the Fair Market Value) of the Common Stock as of the date of grant thereof; or

	(C) upon the sale of any shares of Common Stock, warrants to purchase Common Stock or Convertible Securities in a firm commitment underwritten public offering, including, without limitation, shares sold upon the exercise of any overallotment option granted to the underwriters in connection with such offering; or

	(D) upon issuance or exercise of the Placement Warrants (in each case as defined in the placement agency agreement between the Corporation and the placement agent for sales of the Series A Preferred Stock), or upon the issuance or conversion of the Preferred Stock included in Liquidity Enhanced Exchangeable Preferred Stock Units of the Company issued (i) on or prior to the Final Closing Date or (ii) pursuant to the exercise of the Placement Warrants, or

	(E) upon the issuance or sale of Common Stock or Convertible Securities pursuant to the exercise of any rights, options or warrants to receive, subscribe for or purchase, or any options for the purchase of, Common Stock or Convertible Securities, whether or not such rights, warrants or options were outstanding on the date of the original sale of the Series A Preferred Stock or were thereafter issued or sold, provided that an adjustment was either made or not required to be made in accordance with Section 4(c)(i) in connection with the issuance or sale of such securities or any modification of the terms thereof; or

	(F) upon the issuance or sale of Common Stock upon conversion or exchange of any Convertible Securities, provided that any adjustments required to be made upon the issuance or sale of such Convertible Securities or any modification of the terms thereof were so made, and whether or not such Convertible Securities were outstanding on the date of the original sale of the Series A Preferred Stock or were thereafter issued or sold.

EXHIBIT 10.16



	EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”), effective as of this 1st day of July, 2013, is entered into by Palatin Technologies, Inc., a Delaware corporation with its principal place of business at 4B Cedar Brook Drive, Cranbury, NJ, 08512 (the “Company”), and Carl Spana (“Employee”).

The Company desires to continue employing the Employee, and the Employee desires to continue to be employed by the Company. In consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties agree that the following terms of this Employment Agreement shall supersede in all respects any prior agreements governing employment between the parties:

1.0

Term of Employment . The Company hereby agrees to continue employing the Employee, and the Employee hereby accepts the continuation of employment with the Company, upon the terms set forth in this Agreement, for the period commencing on July 1, 2013 (the “Commencement Date”) and ending on June 30, 2016 unless sooner terminated in accordance with the provisions of Section 4 (the “Employment Period”).

2.0	Position Title & Capacity.

2.1

The Employee shall serve as Chief Executive Officer and President, with responsibilities consistent with this position and as the Company’s Board of Directors (the "Board") may determine from time to time, with powers and duties as may be determined, from time to time, by the Board, consistent with the Employee’s position. The Employee shall report to the Company’s Board of Directors. The Employee shall be based at the Company’s corporate headquarters, which is based in Cranbury, New Jersey. The Employee shall also be available for travel at such times and to such places as may be reasonably necessary in connection with the performance of his duties hereunder.

2.2

The Employee may serve as an employee director on the Board as determined and approved by the Board during the Employment Period and for no additional compensation; however, upon termination of employment for any reason, the Employee will no longer serve as a member of the Company’s Board of Directors and will take any and all actions necessary to effectuate such resignation as may be reasonably requested by the Company.

2.3

The Employee hereby accepts such employment and agrees to undertake the duties and responsibilities inherent in such position and such other duties and responsibilities as the Board shall from time to time reasonably assign to him. The Employee agrees to devote substantially all of his business time, attention and energies to the business and interests of the Company during the Employment Period. The Employee agrees to abide by the rules, regulations, instructions, personnel practices and policies of the Company and any changes therein which may be adopted from time to time by the Company. The Employee acknowledges receipt of copies of all such rules and policies committed to writing as of the date of this Agreement.

2.4

The Employee specifically covenants, warrants and represents to the Company that he has the full, complete and entire right and authority to enter into this Agreement, that he has no agreement, duty, commitment or responsibility of any kind or nature whatsoever with any corporation, partnership, firm, company, joint venture or other entity or other person which would conflict in any manner whatsoever with any of his duties, obligations or responsibilities to the Company pursuant to this Agreement, that he is not in possession of any document or other tangible property of any corporation, partnership, firm, company, joint venture or other entity or other person of a confidential or proprietary nature which would conflict in any manner whatsoever with any of his duties, obligations or responsibilities to the Company pursuant to his Agreement, and that he is fully ready, willing and able to perform each and all of his duties, obligations and responsibilities to the Company pursuant to this Agreement.

3.0	Compensation and Benefits . During the Employment Period, unless sooner terminated in accordance with the provisions of Section 4, the Employee shall receive the following compensation and benefits:

3.1

Salary . The Company shall pay the Employee, in equal semi-monthly installments or otherwise in accordance with the Company’s standard payroll policies as such policies may exist from time to time, an annual base salary of $450,000, effective July 1, 2013. Such salary shall be subject to review, as determined by the Company’s Compensation Committee and approved by the Board, on an annual basis, but the Board shall not decrease the Employee’s annual base salary at any such annual review.

3.2

Cash Performance Bonus . The Employee will be included in the Company’s annual discretionary bonus compensation program based on a June 30 th year end in an amount to be decided by the Company’s Compensation Committee and approved by the Board, payable no later than September 30 th of each year during the Employment Period.

3.3

Stock Options. As additional compensation for services rendered, the Company has granted to the Employee the right and option to purchase shares of the Company’s Common Stock and in the future may grant additional options to purchase shares of the Company’s Common Stock to the Employee in accordance with the terms of the Company’s stock plan then in effect. Notwithstanding any option certificate or agreement to the contrary, the following provisions apply to all options granted to the Employee either prior to or after the Commencement Date:

(a)

All such options that are not vested as of the Date of Termination (as defined in Section 6) shall immediately vest and become fully exercisable as of the Date of Termination, except in the case of termination: (i) for Cause (as defined in Section 6) or (ii) at the election of the Employee for any reason other than for Good Reason pursuant to Section 4.4 or 4.5. Notwithstanding the foregoing if upon a Change in Control as defined in Section 6.5 (c) or (d), any of the options are terminated in connection with the Change in Control, then all such options that are not vested as of the date of the Change in Control shall immediately vest and become fully exercisable immediately prior to the Change in Control; and

(b)

All of such options that are vested as of the Date of Termination shall expire on the first to occur of: (i) 24 months following the Employee’s retirement; (ii) 24 months following the Employee’s Date of Termination other than (A) for Cause (as defined in Section 6), or (B) termination at the election of the Employee pursuant to Section 4.6; (iii) the expiration date of the option as set forth in the applicable option certificate or agreement; or (iv) as otherwise provided in the applicable option plan in the event of the dissolution or liquidation of the Company, or a merger, reorganization or consolidation in which the Company is not the surviving corporation. For purposes of this subsection, “retirement” requires that the Employee not render services of any nature for any entity as a regular employee, and not render services of any nature for any entity for more than an average of twenty (20) hours per week as a consultant or term employee.

Nothing in this Section 3.3 shall apply to or affect any equity award that is not either an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”) or a non-qualified stock option.

3.4

Restricted Share Units. As additional compensation for services rendered, the Company has granted to the Employee restricted share units for the issuance of the Company’s Common Stock and in the future may grant additional restricted share units for the issuance of the Company’s Common Stock to the Employee in accordance with the terms of the Company’s stock plan then in effect. Notwithstanding any restricted share unit certificate or agreement to the contrary, all restricted share units granted to the Employee either prior to or after the Commencement Date that are not vested as of the Date of Termination (as defined in Section 6) shall immediately vest as of the Date of Termination, except in the case of termination: (a) for Cause (as defined in Section 6) or (b) at the election of the Employee for any reason other than for Good Reason pursuant to Section 4.4 or 4.5. To the extent that vesting of any such restricted shares units otherwise would have been contingent upon the achievement of performance objectives, vesting of such restricted share units pursuant to this Section 3.4 shall be (i) at the “target” level, regardless of achievement of performance objectives, in the case of termination pursuant to Section 4.3 or 4.5; or (ii) based upon actual achievement of performance objectives as determined after the end of the applicable performance period, in the case of termination under any other circumstances entitling the Employee to accelerated vesting pursuant to this Section 3.4. Notwithstanding the foregoing, if upon a Change in Control as defined in Section 6.5 (c) or (d), any of the restricted share units are terminated in connection with the Change in Control, then all such restricted share units that are not vested as of the date of the Change in Control shall vest as of the date of the Change in Control.

3.5

Fringe-Benefits . The Employee shall be entitled to participate in all benefit programs that the Company establishes and makes available to its employees, if any, to the extent that the Employee’s position, tenure, salary, age, health and other qualifications make him eligible to participate. The Employee shall also be entitled to holidays and annual vacation leave in accordance with the Company’s policy as it exists from time to time.

3.6

Reimbursement of Expenses . The Company shall reimburse the Employee for all reasonable travel, entertainment and other expenses incurred or paid by the Employee in connection with, or related to, the performance of his duties, responsibilities or services under this Agreement, upon presentation by the Employee of documentation, expense statements, vouchers and/or such other supporting information as the Company may request, provided however, that the amount available for such travel, entertainment and other expenses may be fixed in advance by the Board.

3.7	Insurance . The Employee will be covered under the Company’s Directors’ and Officers’ liability insurance to the same extent the Company’s directors and other officers are covered.

4.0	Employment Termination . The employment of the Employee by the Company pursuant to this Agreement shall terminate upon the occurrence of any of the following:

4.1	Expiration of the Employment Period in accordance with Section 1, unless the Company and Employee agree to extend the Agreement term or otherwise continue Employee’s employment on mutually agreeable terms.

4.2	At the election of the Company, for Cause (as defined in Section 6), immediately upon written notice by the Company to the Employee, which notice of termination shall have been approved by a majority of the Board.

4.3	Immediately upon the death or determination of Disability (as defined in Section 6) of the Employee.

4.4	At the election of the Employee, for Good Reason (as defined in Section 6), immediately upon written notice of not less than sixty (60) days prior to termination by the Employee to the Company.

4.5

At the election of the Company upon or within twelve (12) months following a Change in Control (as defined in Section 6), or at the election of the Employee for Good Reason (as defined in Section 6) upon or within twelve (12) months following a Change in Control (as defined in Section 6), immediately upon written notice of termination.

4.6	At the election of either party, upon written notice of termination.

5.0	Effect of Termination .

5.1	Compensation & Benefits .

(a)	As referenced in this section, compensation following the Employee’s termination shall be in the form of severance. Severance will be based on the employee’s base salary in effect as of the employee’s last day of employment, and will be paid in one lump-sum amount.

(b)	Severance is not considered compensation for purposes of employee and employer matching contributions under the 401(k) plan.

(c)

As referenced in this section, upon termination of the Employee’s employment with the Company, medical and dental benefits will be available to the Employee, at his election, solely pursuant to the provisions of COBRA with the Company paying the full cost of COBRA coverage for a period up to 24 months if employment is terminated for any reason except an Employee resignation without Good Reason (as defined in Section 6) and a Company discharge for Cause (as defined in Section 6). If the Employee is discharged for Cause or the Employee resigns without Good Reason, the Employee will be required to remit the COBRA cost (102% of total benefit cost) of coverage.

(d)

Upon termination of the Employee’s employment with the Company, apart from the Employee’s election under COBRA to continue medical and dental benefits (as described in Section 5.1(c)), the Employee will cease to be eligible for participation in the Company’s health and welfare insurance and any other fringe benefit programs that pursuant to their contracts or Company policy require an active employee status.

5.2	Termination By The Company or at Election of the Employee (other than for Good Reason) .

(a)

If the Employee elects to terminate his employment for any reason other than for Good Reason pursuant to Section 4.4 or 4.5, no severance and/or benefits shall be paid, and the Employee shall be entitled only to receive payment of his earned but unpaid salary, and accrued vacation, as of his last day of actual employment by the Company;

(b)

If the Company elects to terminate the Employee (other than for Cause) pursuant to Section 4.6 or upon the expiration of this Agreement, the Company shall pay to the Employee twenty-four (24) months of his salary in effect on the Date of Termination in one-lump sum amount within sixty (60) days after the Date of Termination, plus medical and dental benefits (as described in Section 5.1(c));

(c)

If the Company terminates the Employee for Cause pursuant to Section 4.2, no severance and/or benefits shall be paid, and the Employee shall be entitled only to receive payment of his earned but unpaid salary, and accrued vacation, as of the Date of Termination. Employee may elect COBRA medical and dental benefits, in which case the Employee will be required to remit the COBRA cost (102% of total benefit cost) of coverage.

5.3

Termination By Employee Election For Good Reason . If the Employee terminates employment at his election for Good Reason pursuant to Section 4.4, other than as provided for in Section 5.4, the Company shall pay to the Employee twenty-four (24) months of his salary in effect on the Date of Termination in one-lump sum amount within sixty (60) days after the Date of Termination, plus medical and dental benefits (as described in Section 5.1(c)).

5.4	Termination Following a Change In Control . If the Company terminates the employment relationship upon or following a Change In Control pursuant to Section 4.5, or if the Employee terminates employment at his election for Good Reason upon or following a Change in Control pursuant to Section 4.5:

(a)	The Company shall pay to the Employee his annual salary in effect at that time in a lump sum amount, calculated at two (2.0) times such annual salary, within ten (10) business days following the Date of Termination plus medical/dental care benefits (as described in Section 5.1(c)); and

(b)

For a six (6) month period after the Date of Termination, the Company shall reimburse the Employee for reasonable fees and expenses actually incurred by him outplacement services in an amount, not to exceed $25,000, mutually agreed upon by and between the Employee and the Company, promptly, within ten days, receipt by the Company of satisfactory evidence of payment of such fees and expenses, but in no event no later than March 15 of the year following the year in which the expenses were actually incurred.

5.5

Termination by Reason of the Employee’s Death or Disability . If, prior to the expiration of the Employment Period, the Employee’s employment is terminated by the Employee’s death or Disability pursuant to Section 4.3, the Company shall pay to the Employee, or in the case of the Employee’s death, to the estate of the Employee, twenty-four (24) months of his salary in effect on the Date of Termination in one-lump sum amount within sixty (60) days after the Date of Termination, plus medical and dental benefits (as described in Section 5.1(c)).

5.6	Withholding and Deductions, 409A .

(a)

All payments hereunder shall be subject to withholding and to such other deductions as shall at the time of such payment be required pursuant to any income tax or other law, whether of the United States or any other jurisdiction, and, in the case of payments to the executors or administrators to the Employee's estate, the delivery to the Company of all necessary tax waivers and other documents.

(b)

In the event the Employee is required pursuant to Section 4999 of the Code to pay (through withholding or otherwise) an excise tax on “excess parachute payments” (as defined in Section 280G(b) of the Code) made by the Company pursuant to Section 5.4 of this Agreement, the Company shall pay the Employee within thirty (30) days of the Change in Control, such additional amounts as are necessary to place the Employee in the same after tax financial position that he would have been in if he had not incurred any tax liability under Section 4999 of the Code.

(c)

In the event the Employee is required to pay any federal, state or local income taxes as a result of the Company’s payment of the Employee’s COBRA premiums under this Section 5, the Company shall pay the Employee not later than the end of the year after the year in which the taxes are paid such additional amounts as are necessary to place the Employee in the same after-tax financial position that he would have been in if he had not incurred any such tax liability.

(d)

The payments and benefits provided for in Sections 5.2(b), 5.3, 5.4 and 5.5 of this Agreement are intended to constitute a short-term deferral pursuant to Treas. Reg. § 1.409A-1(b)(4) and thus not “nonqualified deferred compensation” subject to Section 409A. If the payments and benefits provided for in Sections 5.2(b), 5.3, 5.4 or 5.5 of this Agreement are deemed to provide for the payment of non-qualified deferred compensation benefits in connection with a separation of service under Section 409A(2)(a)(i) of the Code, the following interpretations apply to Sections 5.2(b), 5.3, 5.4 and 5.5: (i) Any termination of the Employee’s employment triggering payment of benefits under Sections 5.2(b), 5.3, 5.4 or 5.5 must constitute a “separation from service” under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits can commence. To the extent that the termination of Employee’s employment does not constitute a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be provided by Employee to the Company at the time the Employee’s employment terminates, any benefits payable under Sections 5.2(b), 5.3, 5.4 or 5.5 that constitute deferred compensation under Section 409A of the Code shall be delayed until after the date of a subsequent event constituting a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h). For purposes of clarification, this Section 5.6(d) shall not cause any forfeiture of benefits on the Employee’s part, but shall only act as a delay until such time as a “separation from service” occurs; (ii) If the Employee is a “specified employee” (as that term is used in Section 409A of the Code and regulations and other guidance issued thereunder) on the date his separation from service becomes effective, any benefits payable under Sections 5.2(b), 5.3, 5.4 or 5.5 that constitute non-qualified deferred compensation under Section 409A of the Code shall be delayed until the earlier of (A) the business day following the six-month anniversary of the date his separation from service becomes effective, and (B) the date of his death, but only to the extent necessary to avoid such penalties under Section 409A of the Code. On the earlier of (A) the business day following the six-month anniversary of the date his separation from service becomes effective, and (B) the Employee’s death, the Company shall pay the Employee in a lump sum the aggregate value of the non-qualified deferred compensation that the Company otherwise would have paid to the Employee prior to that date under Sections 5.2(b), 5.3, 5.4 and 5.5 of this Agreement; (iii) It is intended that each installment of the payments and benefits provided under Sections 5.2(b), 5.3, 5.4 and 5.5 of this Agreement shall be treated as a separate “payment” for purposes of Section 409A of the Code; (iv) Neither the Company nor the Employee shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A of the Code); and (v) to the extent that the period between the Termination Date and the date upon which payment is required to be made or commence begins in one calendar year and ends in a second calendar year, payment will be made or commence in the second calendar year.

5.7

Release of Claims . The Employee’s entitlement to severance, payment of COBRA premiums, and accelerated vesting of options, restricted share units and other equity incentive awards, is contingent upon the Employee’s execution of a general release of claims in a form prepared by the Company and presented to the Employee upon termination of his employment hereunder, as well as the Employee’s compliance with the provisions of Section 7 hereof.

5.8	No Requirement to Mitigate . The Employee shall not be required to mitigate the amount of any payment provided for in this Section 5 by seeking other employment or otherwise.

6.0	Definitions . For purposes of this Agreement the following definitions apply:

6.1	“ Cause ” shall mean the occurrence of any of the following circumstances:

(a)

(i) the Employee’s material breach of, or habitual neglect or failure to perform the material duties which he is required to perform under, the terms of this Agreement; (ii) the Employee’s material failure to follow the reasonable directives or policies established by or at the direction of the Board; or (iii) the Employee’s engaging in conduct that is materially detrimental to the interests of the Company such that the Company sustains a material loss or injury as a result thereof, provided that the breach or failure of performance by the Employee under subparagraphs (i) through (iii) hereof is not cured, to the extent cure is possible, within ten (10) days of the delivery to the Employee of written notice thereof;

(b)	the willful breach by the Employee of Section 7 of this Agreement or any provision of any confidentiality, invention and non-disclosure, non-competition or similar agreement between the Employee and the Company; or

(c)	the conviction of the Employee of, or the entry of a pleading of guilty or nolo contendere by the Employee to, any crime involving moral turpitude or any felony.

6.2	“ Date of Termination ” shall mean the Employee’s last day of actual employment by the Company (or its successor) for any reason including death or Disability.

6.3

“ Disability ” shall mean the inability of the Employee, by reason of illness, accident or other physical or mental disability, for a period of 120 days, whether or not consecutive, during any 360-day period, to perform the services contemplated under this Agreement. A determination of disability shall be made by a physician satisfactory to both the Employee and the Company; provided, however, that if the Employee and the Company do not agree on a physician, the Employee and the Company shall each select a physician and these two together shall select a third physician, whose determination as to disability shall be binding on all parties.

6.4	“ Good Reason ” shall mean the occurrence of any of the following circumstances, and the Company’s failure to cure such circumstances within thirty (30) days of the delivery to the Company of written notice by the Employee of such circumstances:

(a)

any material adverse change in the Employee’s duties, authority or responsibilities as described in Section 2.1 hereof which causes the Employee’s position with the Company to become of significantly less responsibility or assignment of duties and responsibilities inconsistent with the Employee’s position;

(b)	a material reduction in the Employee’s salary as in effect on the Commencement Date or as the same may be increased from time to time;

(c)

the failure of the Company to continue in effect any material compensation or benefit plan in which the Employee participates as in effect on the Commencement Date, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Employee’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount of benefits provided and the level of the Employee’s participation relative to other participants, as in effect on the Commencement Date;

(d)

any material adverse change in the Employee’s compensation resulting from (i) the failure by the Company to continue to provide the Employee with benefits substantially similar to those enjoyed by the Employee under any of the Company’s health and welfare insurance, retirement and other fringe-benefit plans insurance, in which the Employee was participating as in effect on the Commencement Date, (ii) the taking of any action by the Company which would directly or indirectly materially reduce any of such benefits, or (iii) the failure by the Company to provide the Employee with the number of paid vacation days to which he is entitled in accordance with the Company’s normal vacation policy in effect on the Commencement Date or in accordance with any agreement between the Employee and the Company existing at that time; or

(e)	the relocation of the Employee to a location which is a material distance from Cranbury, New Jersey.

(f)	For purposes of this Agreement, “Good Reason” shall be interpreted in a manner, and limited to the extent necessary, so that it will not cause adverse tax consequences for either party with respect to Section 409A, and any successor statute, regulation and guidance thereto.

6.5	“ Change in Control ” shall mean the occurrence of any of the following events:

(a)

any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportion as their ownership of stock of the Company) becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities;

(b)

the date the individuals who, during any twelve month period, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director during the twelve month period whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board;

(c)

a merger or consolidation of the Company approved by the stockholders of the Company with any other corporation, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) 50% or more of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or (ii) a merger or consolidation effected to implement a re-capitalization of the Company (or similar transaction) in which no “person” (as defined in Section 6.4(a)) acquires more than 50% of the combined voting power of the Company’s then outstanding securities; or

(d)	a sale of all or substantially all of the assets of the Company.

7.0	Restrictive Covenants .

(a)	For the purposes of this Agreement:

(i)

“ Competing Products ” means any products or processes of any person or organization other than the Company in existence or under development, which are substantially the same, may be substituted for, or applied to substantially the same end use as the products or processes that the Company is developing or has developed or commercialized during the time of the Employee’s employment with the Company.

(ii)	“Competing Organization ” means any person or organization engaged in, or with definitive plans to become engaged in, research or development, production, distribution, marketing or selling of a Competing Product.

(b)

The Employee acknowledges that he has, on or prior to the date of the Agreement, executed and delivered to the Company an Employee Agreement on Confidentiality, Intellectual Property, Debarment Certification and Conflict of Interest (the “Confidentiality Agreement”) and the Employee hereby affirms and ratifies his obligations thereunder; and the Employee agrees that after termination by the Company for Cause pursuant to Section 4.2 (except in the case where such termination occurs within 12 months following a Change in Control), by the Employee pursuant to Section 4.6, or by either party upon expiration of the Employment Period, he will not render services of any nature, directly or indirectly, to any Competing Organization in connection with any Competing Product within any geographical territory as the Company and such Competing Organization are or would be in actual competition, for a period of twenty-four (24) months, commencing on the Date of Termination.

(c)

The Employee agrees that he will not, during the Employment Period and for a period of nine (9) months commencing on the Date of Termination, directly or indirectly employ, solicit for employment, or advise or recommend to any other person that they employ or solicit for employment, any person whom he knows to be an employee of the Company or any parent, subsidiary or affiliate of the Company.

(d)

In the event a court of competent jurisdiction should find any provision in this Section 7 to be unfair or unreasonable, such finding shall not render such provision unenforceable, but, rather, this provision shall be modified as to subject matter, time and geographic area so as to render the entire section valid and enforceable.

8.0

Notices . All notices required or permitted under this Agreement shall be in writing and shall be deemed effective upon either: (a) personal delivery; or (b) three (3) days following deposit with the United States Postal Service for delivery by registered or certified mail, postage prepaid, or one (1) day following deposit with a reputable overnight courier service, addressed to the other party at the address shown above, or at such other address or addresses as either party shall designate to the other in accordance with this Section 8.

9.0	Pronouns . Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns and pronouns shall include the plural, and vice versa.

10.0	Entire Agreement . This Agreement, together with the Confidentiality Agreement, constitutes the entire agreement between the parties and supersedes all prior agreements and understandings, whether written or oral, relating to the subject matter of this Agreement.

11.0	Amendment . This Agreement may be amended or modified only by a written instrument executed by both the Company and the Employee. Any such amendment shall comply with the requirements of Section 409A, if applicable.

12.0	Governing Law . This Agreement shall be construed, interpreted and enforced in accordance with the laws of New Jersey, without regard to its principles of conflict of laws.

13.0

Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of both parties and their respective successors and assigns, including any corporation with which or into which the Company may be merged or which may succeed to its assets or business; provided, however, that the obligations of the Employee are unique and personal and shall not be assigned by him.

14.0	Waiver of Breach .

14.1

Waiver by the Company . No delay or omission by the Company in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion. No waiver by the Company shall be valid unless in writing signed by an authorized officer of the Company and approved by a majority of the Board.

14.2

Waiver by the Employee . No delay or omission by the Employee in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Employee on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion. No waiver by the Employee shall be valid unless in a writing signed by the Employee.

15.0	Miscellaneous .

15.1	The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.

15.2	In case any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

16.0	Survival . The provisions of Sections 3.3, 5, 6, 7 and 8 shall survive the termination of this Agreement.

17.0	Attorney’s Fees . The Company shall reimburse the Employee for all legal fees and expenses associated with the negotiation and drafting of this Agreement, upon reasonable documentation thereof, up to a maximum of $5,000.

18.0

Timing of Reimbursements . All reimbursements made by the Company pursuant to this Agreement will be made within 30 days from the date the Employee submits documentation of the expenses. Employee will submit documentation substantiating expenses within 30 days from the date the expenses are incurred.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as an instrument under seal effective as of the day and year set forth above.

PALATIN TECHNOLOGIES, INC.			EMPLOYEE

By: /s/ Stephen T. Wills			/s/ Carl Spana
Name: Stephen T. Wills			Carl Spana
Title: Executive V.P., Chief Financial Officer and Chief Operating Officer			Chief Executive Officer and President

Date: June 28, 2013			Date: June 28, 2013

Delaware		95-4078884
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

4B Cedar Brook Drive Cranbury, New Jersey		08512
(Address of principal executive offices)		(Zip Code)

Title of Each Class		Name of Each Exchange on Which Registered
Common Stock, par value $.01 per share		NYSE MKT

Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	þ
(Do not check if a smaller reporting company)

		Page
PART I
Item 1.	Business		3
Item 1A.	Risk Factors		13
Item 1B.	Unresolved Staff Comments		23
Item 2.	Properties		23
Item 3.	Legal Proceedings		23
Item 4.	Mine Safety Disclosures		23
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		24
Item 6.	Selected Financial Data		24
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		25
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		28
Item 8.	Financial Statements and Supplementary Data		29
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		48
Item 9A.	Controls and Procedures		48
Item 9B.	Other Information		48
PART III
Item 10.	Directors, Executive Officers and Corporate Governance		49
Item 11.	Executive Compensation		53
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		59
Item 13.	Certain Relationships and Related Transactions, and Director Independence		64
Item 14.	Principal Accountant Fees and Services		64
PART IV
Item 15.	Exhibits, Financial Statement Schedules		65

FISCAL YEAR ENDED JUNE 30, 2013	HIGH		LOW
Fourth Quarter	$	0.79	$	0.51
Third Quarter		0.71		0.54
Second Quarter		1.10		0.53
First Quarter		1.20		0.45

FISCAL YEAR ENDED JUNE 30, 2012	HIGH		LOW
Fourth Quarter	$	0.77	$	0.40
Third Quarter		0.75		0.39
Second Quarter		0.73		0.39
First Quarter		1.28		0.50

	Payments due by Period
	Total		Less than 1 Year		1 - 3 Years		3 - 5 Years		More than 5 Years
Facility operating leases	$	472,670	$	236,335	$	236,335	$	-	$	-
Capital lease obligations		20,615		20,615		-		-		-
Total contractual obligations	$	493,285	$	256,950	$	236,335	$	-	$	-

	Page

Report of Independent Registered Public Accounting Firm		30

Consolidated Balance Sheets		31

Consolidated Statements of Operations		32

Consolidated Statements of Comprehensive Loss		33

Consolidated Statements of Stockholders’ Equity		34

Consolidated Statements of Cash Flows		35

Notes to Consolidated Financial Statements		36

PALATIN TECHNOLOGIES, INC .
and Subsidiary
Consolidated Balance Sheets

	June 30, 2013			June 30, 2012
ASSETS
Current assets:
Cash and cash equivalents	$	19,167,632		$	3,827,198
Short-term investments		5,249,654			-
Accounts receivable		-			27,631
Restricted cash		-			350,000
Prepaid expenses and other current assets		332,267			532,010
Total current assets		24,749,553			4,736,839

Property and equipment, net		266,415			318,653
Other assets		58,131			324,992
Total assets	$	25,074,099		$	5,380,484

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Capital lease obligations	$	19,909		$	22,277
Accounts payable		338,726			294,894
Accrued expenses		1,701,727			2,706,496
Accrued compensation		-			433,333
Total current liabilities		2,060,362			3,457,000

Capital lease obligations		-			19,909
Deferred rent		35,460			72,677
Total liabilities		2,095,822			3,549,586

Commitments and contengencies (Note 8)

Stockholders’ equity:
Preferred stock of $0.01 par value – authorized 10,000,000 shares;
Series A Convertible; issued and outstanding 4,697 shares as of June 30, 2013 and 4,997 as of June 30, 2012		47			50
Common stock of $0.01 par value – authorized 300,000,000 shares;
issued and outstanding 39,116,948 shares as of June 30, 2013 and 34,900,591 as of June 30, 2012, respectively		391,169			349,006
Additional paid-in capital		282,692,520			240,725,127
Accumulated deficit		(260,105,459	)		(239,243,285	)
Total stockholders’ equity		22,978,277			1,830,898
Total liabilities and stockholders’ equity	$	25,074,099		$	5,380,484

	Year Ended June 30,
	2013			2012			2011

REVENUES:
License and contract	$	10,361		$	73,736		$	497,540
Grant		-			-			977,917
		10,361			73,736			1,475,457

OPERATING EXPENSES:
Research and development		10,528,691			13,813,376			10,377,019
General and administrative		5,066,830			5,045,741			4,751,824
Total operating expenses		15,595,521			18,859,117			15,128,843

Loss from operations		(15,585,160	)		(18,785,381	)		(13,653,386	)

OTHER INCOME (EXPENSE):
Investment income		42,734			32,133			99,258
Interest expense		(8,411	)		(10,411	)		(10,606	)
Increase in fair value of warrants		(7,069,165	)		-			(2,266	)
Gain on sale of securities		-			-			119,346
Gain on disposition of supplies and equipment		4,620			442,248			(5,666	)
Total other income (expense), net		(7,030,222	)		463,970			200,066

Loss before income taxes		(22,615,382	)		(18,321,411	)		(13,453,320	)
Income tax benefit		1,753,208			1,068,233			637,391

NET LOSS	$	(20,862,174	)	$	(17,253,178	)	$	(12,815,929	)

Basic and diluted net loss per common share	$	(0.21	)	$	(0.49	)	$	(0.64	)

Weighted average number of common shares outstanding used in computing basic and diluted net loss per common share		97,618,714			34,900,591			20,084,022

																Accumulated
													Additional			Other
	Preferred Stock						Common Stock						Paid-in			Comprehensive			Accumulated
	Shares			Amount			Shares			Amount			Capital			Income			Deficit			Total
Balance, June 30, 2010		4,997		$	50			11,702,818		$	117,028		$	218,236,723		$	138,650		$	(209,174,178	)	$	9,318,273
Stock split adjustment for fractional shares		-			-			(46	)		-			-			-			-			-
Sale of common stock units, net of costs		-			-			23,000,000			230,000			15,688,150			-			-			15,918,150
Reclassification of warrants from liability
to equity		-			-			-			-			5,115,130			-			-			5,115,130
Exercise of warrants		-			-			32,200			322			64,078			-			-			64,400
Stock-based compensation		-			-			183,500			1,835			754,762			-			-			756,597
Payment of withholding taxes related to
restricted stock units		-			-			(17,881	)		(179	)		(26,017	)		-			-			(26,196	)
Realized gain on sale of securities		-			-			-			-			-			(119,346	)		-			(119,346	)
Unrealized loss on investments		-			-			-			-			-			(19,304	)		-			(19,304	)
Net loss		-			-			-			-			-			-			(12,815,929	)		(12,815,929	)
Balance, June 30, 2011		4,997			50			34,900,591			349,006			239,832,826			-			(221,990,107	)		18,191,775
Stock-based compensation		-			-			-			-			892,301			-			-			892,301
Net loss		-			-			-			-			-			-			(17,253,178	)		(17,253,178	)
Balance, June 30, 2012		4,997			50			34,900,591			349,006			240,725,127			-			(239,243,285	)		1,830,898
Stock-based compensation		-			-			500,000			5,000			620,031			-			-			625,031
Sale of common stock, net of costs		-			-			3,873,000			38,730			17,403,075			-			-			17,441,805
Reclassification of warrants from liability
to equity		-			-			-			-			24,030,128			-			-			24,030,128
Payment of withholding taxes related to
restricted stock units		-			-			(158,264	)		(1,583	)		(85,828	)		-			-			(87,411	)
Series A Conversion		(300	)		(3	)		1,621			16			(13	)		-			-			-
Net loss		-			-			-			-			-			-			(20,862,174	)		(20,862,174	)
Balance, June 30, 2013		4,697		$	47			39,116,948		$	391,169		$	282,692,520		$	-		$	(260,105,459	)	$	22,978,277

	Carrying Value		Quoted prices in active markets (Level 1)		Other quoted/observable inputs (Level 2)		Significant unobservable inputs (Level 3)
June 30, 2013:
Money Market Fund	$	16,284,184	$	16,284,184	$	-	$	-
U.S. Government Securities		5,249,654		5,249,160		-		-
TOTAL	$	21,533,838	$	21,533,344	$	-	$	-

June 30, 2012:
Money Market Fund	$	3,344,146	$	3,344,146	$	-	$	-

	June 30,			June 30,
	2013			2012
Office equipment	$	1,180,210		$	1,157,553
Laboratory equipment		311,369			317,418
Leasehold improvements		751,226			7,088,462
		2,242,805			8,563,433
Less: Accumulated depreciation and amortization		(1,976,390	)		(8,244,780	)
	$	266,415		$	318,653

Year Ending June 30,
2014	$	20,615
Amount representing interest		(706	)
Net	$	19,909

Shares of Common		Exercise Price per		Latest Termination
Stock		Share		Date
	317,776	$	3.00	August 30, 2013
	50,000		0.75	January 24, 2014
	331,969		3.30	August 12, 2014
	50,000		0.60	November 9, 2014
	50,000		1.00	November 9, 2014
	100,000		1.50	November 9, 2014
	575,000		1.00	February 23, 2016
	2,000,000		1.00	March 1, 2016
	21,000,000		1.00	March 2, 2017
	31,988,151		0.01	July 3, 2022
	35,488,380		0.01	September 27, 2022
	91,951,276

			Weighted		Weighted
			Average		Average
	Number of		Exercise		Remaining		Aggregate
	Shares		Price		Term in Years		Intrinsic Value
Options outstanding at end of
year		3,851,448	$	1.99		8.2		$	400
Options vested and exercisable
at end of year		1,673,973	$	3.64		6.8		$	-
Unvested options expected to
vest		1,976,752	$	0.73		9.3		$	287

	Three Months Ended
	June 30,			March 31,			December 31,			September 30,
	2013			2013			2012			2012
	(amounts in thousands, except per share data)
Revenues	$	-		$	-		$	7		$	3
Operating expenses		4,720			4,024			3,447			3,404
Other income/(expense), net		2			9			11			(7,052	)
Loss before income taxes		(4,718	)		(4,015	)		(3,429	)		(10,453	)
Income tax benefit		-			-			1,753			-
Net loss	$	(4,718	)	$	(4,015	)	$	(1,676	)	$	(10,453	)
Basic and diluted net loss per
common share	$	(0.04	)	$	(0.04	)	$	(0.02	)	$	(0.15	)
Weighted average number of
common shares outstanding used in computing basic and diluted net loss per common share		106,435,741			106,424,443			106,424,443			71,669,170

Name	Age	Position with Palatin
Carl Spana, Ph.D.	51	Chief executive officer, president and a director
John K.A. Prendergast, Ph.D.	59	Director, chairman of the board of directors
Perry B. Molinoff, M.D. (1) (3)	73	Director
Robert K. deVeer, Jr. (1) (2)	67	Director
Zola P. Horovitz, Ph.D. (2) (3)	78	Director
Robert I. Taber, Ph.D. (1) (2)	77	Director
J. Stanley Hull (3)	61	Director
Alan W. Dunton, M.D. (1) (2)	59	Director
Angela Rossetti (3)	60	Director

Name and Principal Position	Fiscal Year	Salary ($)		Stock awards (1) ($)		Option awards (1) ($)		Nonequity incentive plan compensation (2) ($)		All other compen sation (3) ($)		Total ($)
Carl Spana, Ph.D.,	2013		436,771		217,400		245,971		250,000		12,938		1,163,080
chief executive officer and president	2012		420,000		-		-		112,500		12,750		545,250

Stephen T. Wills, MST, CPA,	2013		394,167		203,200		222,742		225,000		13,000		1,058,109
chief financial officer, chief operating officer and	2012		375,000		-		-		105,000		13,375		493,375
executive vice president

		Option awards (1)							Stock awards (2)
Name	Option or stock award grant date	Number of securities underlying unexercised options (#) exercisable		Number of securities underlying unexercised options (#) unexercisable		Option exercise price ($)		Option expiration date	Number of shares or units of stock that have not vested (#)		Market value of shares or units of stock that have not vested ($) (3)
Carl Spana	07/16/03		10,000		-		32.40	07/16/13
	07/01/05		7,500		-		37.50	07/01/15
	07/01/05		8,300		-		17.50	07/01/15
	10/06/06		12,500		-		24.90	10/06/16
	03/26/08		28,125		-		2.80	03/26/18
	03/26/08		4,687		-		5.00	03/26/18
	03/26/08		4,688		-		6.60	03/26/18
	07/01/08		25,000		-		1.80	07/01/18
	07/01/09		18,750		6,250		2.80	07/01/19
	06/22/11		150,000		150,000		1.00	06/22/21
	07/17/12		-		150,000		0.72	07/17/22
	07/17/12									112,500		69,750
	06/27/13		-		275,000		0.62	06/27/23
	06/27/13									220,000		136,400

Stephen T. Wills	07/16/03		8,000		-		32.40	07/16/13
	07/01/05		5,000		-		37.50	07/01/15
	07/01/05		7,300		-		17.50	07/01/15
	10/06/06		10,000		-		24.90	10/06/16
	03/26/08		22,500		-		2.80	03/26/18
	03/26/08		3,750		-		5.00	03/26/18
	03/26/08		3,750		-		6.60	03/26/18
	07/01/08		20,000		-		1.80	07/01/18
	07/01/09		15,000		5,000		2.80	07/01/19
	06/22/11		125,000		125,000		1.00	06/22/21
	07/17/12		-		135,000		0.72	07/17/22
	07/17/12									110,000		68,200
	06/27/13		-		250,000		0.62	06/27/23
	06/27/13									200,000		124,000

Name (1)	Fees earned or paid in cash ($)		Option awards ($) (2)		Total ($)

John K.A. Prendergast, Ph.D.		75,000		47,153		122,153

Perry B. Molinoff, M.D.		37,000		25,964		62,964

Robert K. deVeer, Jr.		43,500		25,964		69,464

Zola P. Horovitz, Ph.D.		37,500		25,964		63,464

Robert I. Taber, Ph.D.		42,000		25,964		67,964

J. Stanley Hull		32,000		25,964		57,964

Alan W. Dunton, M.D.		38,500		25,964		64,464

Angela Rossetti		-		16,411		16,411

Dr. Prendergast			253,350
Dr. Molinoff			159,333
Mr. deVeer			157,000
Dr. Horovitz			153,500
Dr. Taber			153,500
Mr. Hull			152,166
Dr. Dunton			77,500
Ms. Rossetti			30,000

Equity Compensation Plan Information as of June 30, 2013
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights			Weighted-average exercise price of outstanding options, warrants and rights			Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)			(b)			(c)
Equity compensation plans approved by security holders		4,608,948	(1)	$	1.99	(2)		2,936,331
Equity compensation plans not approved by security holders		0			0			0
Total		4,608,948		$	1.99			2,936,331

Class	Name of beneficial owner	Amount and nature of beneficial ownership			Percent of class			Percent of total voting power

Common	Carl Spana, Ph.D.		679,141	(1)		1.7	%		*

Common	Stephen T. Wills		611,538	(2)		1.5	%		*

Common	John K.A. Prendergast, Ph.D.		195,117	(3)		*			*

Common	Perry B. Molinoff, M.D.		137,833	(4)		*			*

Common	Robert K. deVeer, Jr.		149,060	(5)		*			*

Common	Zola P. Horovitz, Ph.D.		134,000	(6)		*			*

Common	Robert I. Taber, Ph.D.		129,000	(7)		*			*

Common	J. Stanley Hull		124,166	(8)		*			*

Common	Alan W. Dunton, M.D.		55,020	(9)		*			*

Common	Angela Rossetti		10,000	(10)		*			*

	All current directors and executive officers as a group (ten persons)		2,224,875	(11)		5.5	%		1.8	%

Class	Name and address of beneficial owner	Amount and nature of beneficial ownership (1)			Percent of class			Percent of total voting power

Common	Mark N. Lampert BVF Inc. BVF Partners L.P. 900 North Michigan Avenue Suite 1100 Chicago, Illinois 60611		5,200,000	(2)		13.3	%		13.3	%

Common	QVT Financial LP 1177 Avenue of the Americas, 9th Floor New York, New York 10036		3,919,935	(3)		9.9	%		9.9	%

Common	Great Point Partners LLC Jeffrey R. Jay, M.D. David Kroin 165 Mason Street, 3rd Floor Greenwich, CT 06830		4,057,092	(4)		9.9	%		6.7	%

Common	James E. Flynn 780 Third Avenue, 37th Floor New York, NY 10017		4,094,759	(5)		9.9	%		5.9	%

Common	First Eagle Investment Management, LLC 1345 Avenue of the Americas New York, NY 10105		2,298,660	(6)		5.6	%		2.0	%

Series A Preferred	Tokenhouse PTE LTD 9 – 11 Reitergasse Zurich 8027, Switzerland		667			14.2	%		*

Series A Preferred	Steven N. Ostrovsky 43 Nikki Ct. Morganville, NJ 07751		500			10.6	%		*

Series A Preferred	Thomas L. Cassidy IRA Rollover 38 Canaan Close New Canaan, CT 06840		500			10.6	%		*

Series A Preferred	Jonathan E. Rothschild 300 Mercer St., #28F New York, NY 10003		500			10.6	%		*

No.		Description

3.01		Restated certificate of incorporation, as amended. *

3.02		Bylaws. Incorporated by reference to Exhibit 3.1 of our Quarterly Report on Form 10-Q for the quarter ended December 31, 2007, filed with the SEC on February 8, 2008.

4.01		Form of warrant issued to purchasers in our August 2009 registered direct offering. Incorporated by reference to Exhibit 4.1 of our Current Report on Form 8-K, filed with the SEC on August 13, 2009.

4.02		Warrant Agreement dated as of March 1, 2011, between Palatin and American Stock Transfer & Trust Company, a New York limited liability trust company. Incorporated by reference to Exhibit 4.1 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, filed with the SEC on May 13, 2011.

4.03		Definitive form of Series A 2011 Warrant certificate pursuant to Palatin’s effective registration statement No. 333-170227 on Form S-1. Incorporated by reference to Exhibit 4.2 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, filed with the SEC on May 13, 2011.

4.04		Definitive form of Series B 2011 Warrant certificate pursuant to Palatin’s effective registration statement No. 333-170227 on Form S-1. Incorporated by reference to Exhibit 4.3 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, filed with the SEC on May 13, 2011.

4.05		Definitive form of underwriters’ warrant to purchase common stock pursuant to Palatin’s effective registration statement No. 333-170227 on Form S-1. Incorporated by reference to Exhibit 4.4 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, filed with the SEC on May 13, 2011.

4.06		Warrant issued to Noble International Investments, Inc. at an exercise price of $0.60 per share in connection with entering into a contract for financial advisory services.Incorporated by reference to Exhibit 4.1 of our Quarterly Report on Form 10-Q for the quarter ended December 31, 2011, filed with the SEC on February 14, 2012.

4.07		Form of warrant issued to Noble International Investments, Inc. at exercise prices of $1.00 and $1.50 per share in connection with entering into a contract for financial advisory services. Incorporated by reference to Exhibit 4.2 of our Quarterly Report on Form 10-Q for the quarter ended December 31, 2011, filed with the SEC on February 14, 2012.

4.08		Warrant issued to Chardan Capital Markets, LLC at an exercise price of $0.75 per share in connection with entering into a contract for financial advisory services. Incorporated by reference to Exhibit 4.1 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2012, filed with the SEC on May 14, 2012.

4.09		Form of Series A 2012 common stock purchase warrant. Incorporated by reference to Exhibit 4.1 of our Current Report on Form 8-K, filed with the SEC on July 6, 2012.

No.		Description

4.10		Form of Series B 2012 common stock purchase warrant. Incorporated by reference to Exhibit 4.2 of our Current Report on Form 8-K, filed with the SEC on July 6, 2012.

10.01		1996 Stock Option Plan, as amended. Incorporated by reference to Exhibit 10.01 of our Annual Report on Form 10-K for the year ended June 30, 2009, filed with the SEC on September 28, 2009.†

10.02		Form of Option Certificate (incentive option) under the 2005 Stock Plan. Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K, filed with the SEC on September 21, 2005. †

10.03		Form of Incentive Stock Option Agreement under the 2005 Stock Plan. Incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K, filed with the SEC on September 21, 2005. †

10.04		Form of Option Certificate (non-qualified option) under the 2005 Stock Plan. Incorporated by reference to Exhibit 10.3 of our Current Report on Form 8-K, filed with the SEC on September 21, 2005. †

10.05		Form of Non-Qualified Stock Option Agreement under the 2005 Stock Plan. Incorporated by reference to Exhibit 10.4 of our Current Report on Form 8-K, filed with the SEC on September 21, 2005. †

10.06		Research Collaboration and License Agreement dated January 30, 2007, between Palatin and AstraZeneca AB. Incorporated by reference to Exhibit 10.2 of our Quarterly Report on Form 10-Q for the quarter ended December 31, 2006, filed with the SEC on February 8, 2007. We have obtained confidential treatment of certain provisions contained in this exhibit. The copy filed as an exhibit omits the information subject to the confidentiality request.

10.07		Palatin Technologies, Inc. 2007 Change in Control Severance Plan. Incorporated by reference to Exhibit 10.4 of our Quarterly Report on Form 10-Q for the quarter ended December 31, 2007, filed with the SEC on February 8, 2008. †

10.08		2005 Stock Plan, as amended December 7, 2007, March 10, 2009 and May 13, 2009. Incorporated by reference to Exhibit 10.1 of our Quarterly Report on Form 10-Q for the quarter ended December 31, 2009, filed with the SEC on May 15, 2009. †

10.09		Form of Executive Officer Option Certificate. Incorporated by reference to Exhibit 10.1 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, filed with the SEC on May 14, 2008. †

10.10		Form of Amended Restricted Stock Unit Agreement. Incorporated by reference to Exhibit 10.2 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, filed with the SEC on May 14, 2008. †

10.11		Form of Amended Option Certificate (incentive option) under the 2005 Stock Plan. Incorporated by reference to Exhibit 10.3 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, filed with the SEC on May 14, 2008. †

10.12		First Amendment dated June 27, 2008 to the Research Collaboration and License Agreement between Palatin and AstraZeneca AB. Incorporated by reference to Exhibit 10.28 of our Annual Report on Form 10-K for the year ended June 30, 2008, filed with the SEC on September 29, 2008. We have obtained confidential treatment of certain provisions contained in this exhibit. The copy filed as an exhibit omits the information subject to the confidentiality request.

10.13		Second Amendment dated December 5, 2008 to the Research Collaboration and License Agreement between Palatin and AstraZeneca AB. Incorporated by reference to Exhibit 10.2 of our Quarterly Report on Form 10-Q for the quarter ended December 31, 2008, filed with the SEC on February 13, 2009. We have obtained confidential treatment of certain provisions contained in this exhibit. The copy filed as an exhibit omits the information subject to the confidentiality request.

10.14		Clinical Trial Sponsored Research Agreement dated December 5, 2008 to the Research Collaboration and License Agreement between Palatin and AstraZeneca AB. Incorporated by reference to Exhibit 10.3 of our Quarterly Report on Form 10-Q for the quarter ended December 31, 2008, filed with the SEC on February 13, 2009. We have obtained confidential treatment of certain provisions contained in this exhibit. The copy filed as an exhibit omits the information subject to the confidentiality request.

10.15		Form of securities purchase agreement for our August 2009 registered direct offering. Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K, filed with the SEC on August 13, 2009.

No.		Description

10.16		Employment Agreement, effective as of July 1, 2013, between Palatin and Carl Spana. * †

10.17		Employment Agreement, effective as of July 1, 2013, between Palatin and Stephen T. Wills. * †

10.18		Third Amendment dated September 24, 2009 to the Research Collaboration and License Agreement between Palatin and AstraZeneca AB. Incorporated by reference to Exhibit 10.1 of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, filed with the SEC on November 13, 2009. We have obtained confidential treatment of certain provisions contained in this exhibit. The copy filed as an exhibit omits the information subject to the confidentiality request.

10.19		Underwriting Agreement dated February 24, 2011 by and between Palatin and Roth Capital Partners, LLC. Incorporated by reference to Exhibit 1.1 of our Current Report on Form 8-K, filed with the SEC on February 24, 2011.

10.20		2011 Stock Incentive Plan, as amended. * †

10.21		Form of Restricted Share Unit Agreement under the 2011 Stock Incentive Plan. Incorporated by reference to Exhibit 10.2 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, filed with the SEC on May 13, 2011. †

10.22		Form of Nonqualified Stock Option Agreement under the 2011 Stock Incentive Plan. Incorporated by reference to Exhibit 10.3 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, filed with the SEC on May 13, 2011. †

10.23		Form of Incentive Stock Option Agreement under the 2011 Stock Incentive Plan. Incorporated by reference to Exhibit 10.4 of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, filed with the SEC on May 13, 2011. †

10.24		Letter agreement dated October 7, 2011 between Palatin and Biotechnology Value Fund, L.P. Incorporated by reference to Exhibit 10.01 of our Current Report on Form 8-K, filed with the SEC on October 7, 2011.

10.25		Purchase Agreement, dated July 2, 2012, by and between Palatin Technologies, Inc. and QVT Fund IV LP, QVT Fund V LP and Quintessence Fund L.P. Incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K, filed with the SEC on July 6, 2012.

10.26		Registration Rights Agreement, dated July 2, 2012, by and between Palatin Technologies, Inc. and QVT Fund IV LP, QVT Fund V LP and Quintessence Fund L.P. Incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K, filed with the SEC on July 6, 2012.

21		Subsidiaries of the registrant. *

23		Consent of KPMG LLP. *

31.1		Certification of Chief Executive Officer. *

31.2		Certification of Chief Financial Officer. *

32.1		Certification of principal executive officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

32.2		Certification of principal financial officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *

101.INS		XBRL Instance Document *

101.SCH		XBRL Taxonomy Extension Schema Document *

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document *

101.LAB		XBRL Taxonomy Extension Label Linkbase Document *

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document *

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document *

	PALATIN TECHNOLOGIES, INC.

Date: September 27, 2013	By:	/s/ Carl Spana
		Carl Spana, Ph.D.
		President and Chief Executive Officer
		(principal executive officer)

Signature	Title	Date

/s/ Carl Spana	President, Chief Executive Officer and Director	September 27, 2013
Carl Spana	(principal executive officer)

/s/ Stephen T. Wills	Executive Vice President, Chief Financial Officer and	September 27, 2013
Stephen T. Wills	Chief Operating Officer (principal financial and accounting officer)

/s/ John K.A. Prendergast	Chairman and Director	September 27, 2013
John K.A. Prendergast

/s/ Perry B. Molinoff	Director	September 27, 2013
Perry B. Molinoff

/s/ Robert K. deVeer, Jr.	Director	September 27, 2013
Robert K. deVeer, Jr.

/s/ Zola P. Horovitz	Director	September 27, 2013
Zola P. Horovitz

/s/ Robert I. Taber	Director	September 27, 2013
Robert I. Taber

/s/ J. Stanley Hull	Director	September 27, 2013
J. Stanley Hull

/s/ Alan W. Dunton	Director	September 27, 2013
Alan W. Dunton

/s/ Angela Rossetti	Director	September 27, 2013
Angela Rossetti

	INTERFILM, INC.

	By:	/s/ Lawrence B. Kuppin
		Lawrence B. Kuppin
		President, Chief Executive
		Officer and Secretary

	By:	/s/ John J. McDonough
		Name: John J. McDonough
		Title: Vice President

	(i) Securities not subject to an investment letter or other similar restriction on free marketability:

		(A) If traded on a securities exchange or on Nasdaq (as defined below), or if actively traded over-the-counter, the value shall be deemed to be the Market Price (as defined below) of the securities as of the third day prior to the date of valuation.

	“Market Price” of a security shall mean the average Closing Bid Price (as defined below) of such security, for twenty (20) consecutive trading days, ending with the day prior to the date as of which the Market Price is being determined.

	“Fair Market Value” of any asset (including any security) means the fair market value thereof as mutually determined by the Corporation and the holders of a majority (measured in terms of voting power) of the outstanding Series A Preferred Stock.

	The "Closing Bid Price" for any security for each trading day shall be the reported closing bid price of such security on the national securities exchange on which such security is listed or admitted to trading, or, if such security is not listed or admitted to trading on any national securities exchange, shall mean the reported closing bid price of such security on the Nasdaq SmallCap Market or the Nasdaq National Market System (collectively referred to as, "Nasdaq") or, if such security is not listed or admitted to trading on any national securities exchange or quoted on Nasdaq, shall mean the reported closing bid price of such security on the principal securities exchange on which such security is listed or admitted to trading (based on the aggregate dollar value of all securities listed or admitted to trading) or, if such security is not listed or admitted to trading on a national securities exchange, quoted on Nasdaq or listed or admitted to trading on any other securities exchange, shall mean the closing bid price in the over-the-counter market as furnished by any NASD member firm selected from time to time by the Corporation for that purpose.

	"Trading day" shall mean a day on which the securities exchange or NASDAQ used to determine the Closing Bid Price is open for the transaction of business or the reporting of trades or, if the Closing Bid Price is not so determined, a day on which such securities exchange is open for the transaction of business.

	(ii) For securities for which there is an active public market but which are subject to investment letter or other restrictions on free marketability, the value shall be the Fair Market Value thereof, determined by discounting appropriately the Market Price thereof.

	(iii) For all other securities, the value shall be the Fair Market Value thereof.

	PALATIN TECHNOLOGIES, INC.

	By:	/s/ Edward J. Quilty
		Edward J. Quilty
		Chairman and Chief Executive Officer