PALATIN TECHNOLOGIES INC

Previous wording

Our significant accounting policies, which are described in the notes to our consolidated financial statements included in this report and in our Annual Report on Form 10-K for the year ended June 30, 2025, have not changed during the three months ended September 30, 2025. We believe that our accounting policies and estimates relating to the carrying value of inventory, revenue recognition, accrued expenses, purchase commitment liabilities, warrants and stock-based compensation are the most critical.

Current wording

Our significant accounting policies, which are described in the notes to our consolidated financial statements included in this report and in our Annual Report on Form 10-K for the year ended June 30, 2025, have not changed during the three and six months ended December 31, 2025. We believe that our accounting policies and estimates relating to the carrying value of inventory, revenue recognition, accrued expenses, purchase commitment liabilities, warrants and stock-based compensation are the most critical.

Previous wording

We are a biopharmaceutical company developing first-in-class medicines based on molecules that modulate the activity of the melanocortin peptide receptor systems. Our product candidates are targeted, receptor-specific therapeutics for the treatment of diseases with significant unmet medical need and commercial potential.

Current wording

We are a biopharmaceutical company developing first-in-class medicines based on molecules that modulate the activity of the melanocortin receptor systems. Our product candidates are targeted, receptor-specific therapeutics for the treatment of diseases with significant unmet medical need and commercial potential. Our primary focus is the development of novel ‘next generation’ melanocortin-4 receptor (“MC4R”) agonists for treatment of rare neuroendocrine diseases.

Previous wording

Our prior commercial product, Vyleesi®, was approved by the U.S. Food and Drug Administration (“FDA”) in June 2019 and was being marketed in the United States by AMAG Pharmaceuticals, Inc. (“AMAG”) for the treatment of hypoactive sexual desire disorder (“HSDD”) in premenopausal women pursuant to a license agreement between them for Vyleesi for North America, which was entered into on January 8, 2017 (the “AMAG License Agreement”). The AMAG License Agreement was terminated effective July 24, 2020, and we commenced marketing Vyleesi in North America. As disclosed in Note 6 to the Consolidated Financial Statements, effective December 19, 2023, Cosette acquired all rights to Vyleesi.

Current wording

Our prior commercial product, Vyleesi®, was approved by the U.S. Food and Drug Administration (“FDA”) in June 2019 and was initially marketed in the United States by AMAG Pharmaceuticals, Inc. (“AMAG”) for the treatment of hypoactive sexual desire disorder (“HSDD”) in premenopausal women pursuant to a license agreement for Vyleesi for North America, which was entered into on January 8, 2017 (the “AMAG License Agreement”). The AMAG License Agreement was terminated effective July 24, 2020, and we commenced marketing Vyleesi in North America. Effective December 19, 2023, Cosette Pharmaceuticals, Inc.(“Cosette”) acquired all rights to Vyleesi. As disclosed in Note 6 to the Consolidated Financial Statements, effective June 5, 2025, we entered into a Release and Settlement Agreement with Cosette.

Previous wording

Our new product development activities focus on obesity, including co-administration of bremelanotide with tirzepatide, a GLP-1 agonist for treatment of obesity, which has completed Phase 2 in the fourth quarter of calendar year 2024, with topline results expected in the first quarter of calendar year 2025 announced in March 2025, in which co-administration demonstrated an increased weight loss over tirzepatide alone; and secondarily on ocular indications, including PL9643, an ophthalmic peptide solution for dry eye disease (“DED”), which completed Phase 3 clinical trials and announced top line results from the first Phase 3 clinical trial in the first quarter of calendar year 2024; ulcerative colitis, including PL8177, an oral peptide formulation, which entered Phase 2 ulcerative colitis clinical trials in the third quarter of calendar year 2022 and announced topline results in March 2025, with one-third of patients dosed with PL8177 achieving clinical remission while the placebo group saw no clinical remission is expected to report topline results later this quarter. We are actively engaged in discussions with potential partners and licensees that have the financial and operational resources to progress our products for ocular conditions, including PL9643, through development, approval and commercialization.

Current wording

Our new product development activities focus on obesity, primarily MC4R agonists for the treatment of rare MC4R pathway diseases, like hypothalamic obesity (HO) and Prader-Willi syndrome (PWS); and secondarily on ocular, gastroenterology, and renal indications. We are actively engaged in discussions with potential partners and licensees that have the financial and operational resources to progress non-obesity products through development, approval and commercialization.

Previous wording

The following chart illustrates the status of our drug development programs.

Current wording

The following charts illustrate the status of our drug development programs. Multiple clinical trials are planned in calendar year 2026 for treatment of rare MC4R pathway diseases:

Previous wording

We were incorporated under the laws of the State of Delaware on November 21, 1986 and commenced operations in the biopharmaceutical area in 1996. Our corporate offices are located at 103 Carnegie Center Drive, Suite 300 Princeton, New Jersey 08852, and our telephone number is (609) 495-2200. We maintain an Internet site, where among other things, we make available free of charge on and through this website our Forms 3, 4 and 5, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) and Section 16 of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our website and the information contained in it or connected to it are not incorporated into this Quarterly Report on Form 10-Q. The reference to our website is an inactive textual reference only.

Current wording

We were incorporated under the laws of the State of Delaware on November 21, 1986 and commenced operations in the biopharmaceutical area in 1996. Our corporate offices are located at 301 Carnegie Center Drive, Suite 304 Princeton, New Jersey 08540, and our telephone number is (609) 495-2200. We maintain an Internet site, where among other things, we make available free of charge on and through this website our Forms 3, 4 and 5, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) and Section 16 of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Our website and the information contained in it or connected to it are not incorporated into this Quarterly Report on Form 10-Q. The reference to our website is an inactive textual reference only.

Previous wording

Revenues – For the three months ended September 30, 2025, we recognized $8,847,550 in collaboration and license revenue compared to $0 for the three months ended September 30, 2024. The increase in collaboration and license revenue is related to the BI Agreement which consisted of an upfront payment, the achievement of a research milestone, and FTE related reimbursements.

Current wording

Revenues – For the three and six months ended December 31, 2025, we recognized $116,036 and $8,963,586 in collaboration and license revenue compared to $0 for the three and six months ended December 31, 2024. The increase in collaboration and license revenue is related to the BI Agreement which consisted of an upfront payment, the achievement of a research milestone during the three months ended September 30, 2025, and FTE related reimbursements.

Previous wording

Research and Development – Research and development expenses were $2,525,766 for the three months ended September 30, 2025, compared to $5,743,754 for the three months ended September 30, 2024. The decrease was primarily related to a decrease in spending on our MCR programs.

Current wording

Research and Development – Research and development expenses were $4,319,767 and $6,845,533 for the three and six months ended December 31, 2025, respectively, compared to $3,429,479 and $9,173,233 for the three and six months ended December 31, 2024, respectively. The increase for the three months ended December 31, 2025 compared to the three months ended December 31, 2024 was primarily related to an increase in spending on our MCR programs. The decrease for the six months ended December 31, 2025 compared to the six months ended December 31, 2024 was primarily related to a decrease in spending on our MCR programs.

Previous wording

Research and development expenses related to our MCR programs were $970,629 for the three months ended September 30, 2025, compared to $4,081,037 for the three months ended September 30, 2024. The decrease was primarily related to a decrease in spending on our MCR programs.

Current wording

Research and development expenses related to our MCR programs were $2,290,073 and $3,260,702 for the three and six months ended December 31, 2025, respectively, compared to $1,888,065 and $5,969,102 for the three and six months ended December 31, 2024, respectively. The increase for the three months ended December 31, 2025 compared to the three months ended December 31, 2024 was primarily related to an increase in spending on our MCR programs. The decrease for the six months ended December 31, 2025 compared to the six months ended December 31, 2024 was primarily related to a decrease in spending on our MCR programs.

Previous wording

The amounts of project spending above exclude general research and development spending which was $1,554,137 for the three months ended September 30, 2025 compared to $1,662,718 for the three months ended September 30, 2024. The decrease is primarily attributable to a decrease in compensation-related expenses.

Current wording

The amounts of project spending above exclude general research and development spending which was $2,029,694 and 3,584,831 for the three and six months ended December 31, 2025, respectively, compared to $1,662,717 and $3,204,131 for the three and six months ended December 31, 2024. The increase is primarily attributable to an increase in compensation-related expenses.

Previous wording

Cumulative spending from inception to September 30, 2025, was approximately $311,900,000 on our Vyleesi program and approximately $251,400,000 on all our other programs (which include PL3994, melanocortin receptor agonists, other discovery programs and terminated programs). Due to various risk factors described in our Annual Report on Form 10-K for the year ended June 30, 2025, under “Risk Factors,” including the difficulty in currently estimating the costs and timing of future Phase 1 clinical trials and larger-scale Phase 2 and Phase 3 clinical trials for any product under development, we cannot predict with reasonable certainty when, if ever, a program will advance to the next stage of development or be successfully completed, or when, if ever, related net cash inflows will be generated.

Current wording

Cumulative spending from inception to December 31, 2025, was approximately $311,900,000 on our Vyleesi program and approximately $254,500,000 on all our other programs (which include melanocortin receptor agonists, other discovery programs and terminated programs). Due to various risk factors described in our Annual Report on Form 10-K for the year ended June 30, 2025, under “Risk Factors,” including the difficulty in currently estimating the costs and timing of future Phase 1 clinical trials and larger-scale Phase 2 and Phase 3 clinical trials for any product under development, we cannot predict with reasonable certainty when, if ever, a program will advance to the next stage of development or be successfully completed, or when, if ever, related net cash inflows will be generated.

Previous wording

Selling, General and Administrative – Selling, general and administrative expenses, which consist mainly of compensation and related costs, were $1,660,731 for the three months ended September 30, 2025, compared to $2,020,931 for the three months ended September 30, 2024. The decrease is a result of decreased compensation costs.

Current wording

General and Administrative – Selling, general and administrative expenses, which consist mainly of compensation and related costs, were $3,124,817 and $4,785,548 for the three and six months ended December 31, 2025, respectively, compared to $1,681,844 and $3,702,775 for the three and six months ended December 31, 2024, respectively. The increase is a result of increased compensation costs and professional fees.

Previous wording

*Other Income (Expense) –*Total other income (expense), net was $16,481 for the three months ended September 30, 2025, compared to $(58,964) for the three months ended September 30, 2024. The increase was a result of foreign currency transaction losses incurred during the three months ended September 30, 2024 and a decrease interest expense offset by a decrease in investment income.

Current wording

Other Income (Expense) – For the three and six months ended, December 31, 2025, total other income (expense), net was $64,687 and $81,168, respectively. For the three and six months ended, December 31, 2024, total other income (expense), net was $168,841 and $109,877, respectively. The decrease was a result of a decrease in investment income and foreign currency translation gain, offset by a decrease in interest expense.

Previous wording

During the three months ended September 30, 2025, net cash used in operating activities was $1,619,382 compared to $7,016,213 for the three months ended September 30, 2024. The decrease was primarily related to license and produce revenue recognized during the three months ended September 30, 2025.

Current wording

During the six months ended December 31, 2025, net cash used in operating activities was $6,426,227 compared to $11,863,319 for the six months ended December 31, 2024. The decrease was primarily related to license and produce revenue recognized during the six months ended December 31, 2025.

Previous wording

During the three months ended September 30, 2025, net cash provided by financing activities was $328,200 which consisted of proceeds from the exercise of warrants. During the three months ended September 30, 2024, net cash used in financing activities was $126,969, which consisted $99,482 for payment of withholding taxes related to restricted stock units and $27,487 for payment of finance lease obligations.

Current wording

During the six months ended December 31, 2025, net cash used in investing activities was $12,816 which consisted of cash used for the purchase of property and equipment. During the six months ended December 31, 2024, net cash provided by investing activities was $2,500,000, which consisted of proceeds from the sale of Vyleesi.

Previous wording

We have incurred cumulative negative cash flows from operations since our inception, and have expended substantial funds to advance our planned product development efforts. Continued operations are dependent upon our ability to complete equity or debt financing activities and to enter into additional licensing or collaboration arrangements. As of September 30, 2025, our cash and cash equivalents were $1,273,083, and our current liabilities were $8,218,261.

Current wording

We have incurred cumulative negative cash flows from operations since our inception, and have expended substantial funds to advance our planned product development efforts. Continued operations are dependent upon our ability to complete equity or debt financing activities and to enter into additional licensing or collaboration arrangements. As of December 31, 2025, our cash and cash equivalents were $14,476,162 and our current liabilities were $6,332,648.

Previous wording

There have been no material changes outside the ordinary course of business to our contractual obligations and commitments, as disclosed in our Annual Report on Form 10-K for the year ended June 30, 2025.

Current wording

On January 8, 2026, we entered into a sublicense agreement (the “Altanispac Agreement”) with Altanispac Labs, LLC (“Altanispac”), exclusively licensing PL9643, an MCR1 agonist for dry eye disease. In partial consideration for the rights to PL9643, the Altanispac Agreement provided for upfront consideration in the form of non-cash debt cancellation of approximately $3,800,000, which is reflected in our current liabilities as of December 31, 2025. We will recognize this $3,800,000 million as license revenue in our Consolidated Statements of Operations for quarter ending March 31, 2026. There have been no material changes outside the ordinary course of business to our contractual obligations and commitments, as disclosed in our Annual Report on Form 10-K for the year ended June 30, 2025.

Previous wording

We intend to utilize existing capital resources for general corporate purposes and working capital requirements, including preclinical and clinical development of our MC1R and MC4R programs, and development of other portfolio products.

Current wording

We intend to utilize existing capital resources for general corporate purposes and working capital requirements, including preclinical and clinical development of our MC4R programs for the treatment of rare MC4R pathway diseases.

Previous wording

Based on the Company’s available cash and cash equivalents as of September 30, 2025, of $1,273,083 approximately $5,400,000 in cash received during October 2025 in conjunction with the agreement with Boehringer Ingelheim, and approximately $16,900,000 in net proceeds from a public offering in November, 2025, we have concluded that the prior conditions and events raising substantial doubt about our ability to continue as a going concern no longer exist as of the date our consolidated financial statements are issued. Based on our current operating and development plans, we expect that our existing cash and cash equivalents as of the date of this filing will be sufficient to enable us to fund operations through the next twelve months following the issuance of the financial statements.

Current wording

Based on the Company’s current operating and development plans, the Company expects that its existing cash and cash equivalents as of the date of this filing will be sufficient to enable it to fund operations through the next twelve months following the issuance of the financial statements.