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 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.

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 nine months ended March 31, 2026. We believe that our accounting policies and estimates relating to 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 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.

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. We are developing MC4R selective long-acting peptide agonists and small molecule agonists with potential utility in obesity and metabolic-related disorders, rare MC4R pathway diseases, such as hypothalamic obesity, Prader-Willi syndrome, Bardet-Biedl syndrome, and other orphan indications.

Previous wording

In August 2025, as disclosed in Note 5 to the Consolidated Financial Statements, we entered into a Research Collaboration, License and Patent Assignment Agreement with Boehringer-Ingelheim International GmbH (“Boehringer Ingelheim”) to research, develop and commercialize first-in-class melanocortin receptor-targeted peptides we developed for the treatment of retinal diseases, including diabetic retinopathy.

Current wording

In August 2025, as disclosed in Note 5 to the Consolidated Financial Statements, we entered into a Research Collaboration, License and Patent Assignment Agreement (the “BI Agreement”) with Boehringer-Ingelheim International GmbH (“Boehringer Ingelheim” or “BI”) to research, develop and commercialize first-in-class melanocortin receptor-targeted compounds we developed for the treatment of retinal diseases.

Previous wording

In January 2026, as disclosed in Note 13 to the Consolidated Financial Statements, we entered into a sublicense agreement with Altanispac Labs, LLC to exclusively license PL9643, a clinical development MCR1 agonist for the treatment of dry eye disease.

Current wording

In January 2026, as disclosed in Note 6 to the Consolidated Financial Statements, we entered into a sublicense agreement (the “Altanispac Agreement”) with Altanispac Labs, LLC to exclusively license PL9643, a clinical development MC1R agonist for the treatment of dry eye disease.

Previous 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.

Current wording

Our non-obesity development activities focus 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 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:

Current wording

The following chart illustrates the status of our drug development programs for treatment of rare MC4R pathway diseases and next steps, dependent on resources:

Previous wording

As we continue to explore commercial opportunities and partners in both U.S. and international markets, we remain attentive to evolving global economic conditions, including uncertainties related to international trade policies, tariffs, and supply chain dynamics. Although these factors have not had a material impact on our operations to date, future changes in trade regulations, tariff structures, or logistical constraints could influence the cost, availability, or timing of materials, services and other components associated with the development of our product candidates and manufacturing capabilities. We continue to monitor these developments closely to maintain operational efficiency and help mitigate potential future impacts.

Current wording

As we continue to advance our development programs and explore commercial opportunities and partners in both U.S. and international markets, we remain attentive to evolving global economic conditions, including uncertainties related to international trade policies, tariffs, and supply chain dynamics. Although these factors have not had a material impact on our operations to date, future changes in trade regulations, tariff structures, or logistical constraints could influence the cost, availability, or timing of materials, services and other components associated with the development of our product candidates and manufacturing capabilities. We continue to monitor these developments closely to maintain operational efficiency and help mitigate potential future impacts.

Previous 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.

Current wording

Revenues – For the three and nine months ended March 31, 2026, we recognized $3,920,675 and $12,884,261 in collaboration and license revenue compared to $0 for the three and nine months ended March 31, 2025. The primary increase in collaboration and license revenue consists of $3,751,122 related to the Altanispac Agreement during the three months ended March 31, 2026, and $3,751,122 related to the Altanispac Agreement and $9,133,139 related to the BI Agreement during the nine months ended March 31, 2026.

Previous 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.

Current wording

Research and Development – Research and development expenses were $3,517,223 and $10,362,756 for the three and nine months ended March 31, 2026, respectively, compared to $3,755,158 and $12,928,391 for the three and nine months ended March 31, 2025, respectively. The decrease for the three and nine months ended March 31, 2026, compared to the three and nine months ended March 31, 2025, was primarily related to a decrease in spending on our MCR programs.

Previous 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.

Current wording

Research and development expenses related to our MCR programs were $2,012,143 and $5,272,845 for the three and nine months ended March 31, 2026, respectively, compared to $1,853,851 and $7,822,953 for the three and nine months ended March 31, 2025, respectively. The increase for the three months ended March 31, 2026, compared to the three months ended March 31, 2025, was primarily related to an increase in spending on our MCR programs. The decrease for the nine months ended March 31, 2026, compared to the nine months ended March 31, 2025, 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 $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.

Current wording

The amounts of project spending above exclude general research and development spending which was $1,505,080 and 5,089,911 for the three and nine months ended March 31, 2026, respectively, compared to $1,901,307 and $5,105,438 for the three and nine months ended March 31, 2025, respectively. The decrease is primarily attributable to a decrease in compensation-related expenses.

Previous 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.

Current wording

Cumulative spending from inception to March 31, 2026, was approximately $311,900,000 on our Vyleesi program and approximately $257,900,000 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

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.

Current wording

General and Administrative – General and administrative expenses, which consist mainly of compensation and related costs, were $1,984,446 and $6,769,994 for the three and nine months ended March 31, 2026, respectively, compared to $1,474,019 and $5,176,794 for the three and nine months ended March 31, 2025, respectively. The increase is a result of increased compensation costs and professional fees.

Previous 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.

Current wording

Other Income (Expense) – For the three and nine months ended, March 31, 2026 total other income (expense), net was $148,007 and $229,175, respectively. For the three and nine months ended March 31, 2025, total other income (expense), net was $1,757 and $111,634, respectively. The increase was a result of an increase in investment income, offset by a decrease in interest expense and foreign currency translation losses.

Previous 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.

Current wording

During the nine months ended March 31, 2026, net cash used in operating activities was $10,843,290 compared to $17,217,595 for the nine months ended March 31, 2025. The decrease was primarily related to collaboration and license revenue recognized during the nine months ended March 31, 2026.

Previous 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.

Current wording

During the nine months ended March 31, 2026, net cash used in investing activities was $51,299 which consisted of cash used for the purchase of property and equipment. During the nine months ended March 31, 2025, net cash provided by investing activities was $2,500,000, which consisted of proceeds from the sale of Vyleesi.

Previous wording

During the six months ended December 31, 2025, net cash provided by financing activities was $18,350,940 which consisted of proceeds $16,911,453 of proceeds from an equity financing and $1,458,932 of proceeds from the exercise of warrants, offset by $19,444 for payment of withholding taxes related to RSUs. During the six months ended December 31, 2024, net cash provided by financing activities was $3,252,527, which consisted of $3,398,023 of proceeds from the exercise of warrants, offset by $99,482 for payment of withholding taxes related to RSUs and $46,014 for payment of finance lease obligations

Current wording

During the nine months ended March 31, 2026, net cash provided by financing activities was $18,489,818 which consisted of net proceeds $16,910,891 from an equity financing and $1,598,441 of net proceeds from the exercise of warrants, offset by $19,514 for payment of withholding taxes related to restricted stock units. During the nine months ended March 31, 2025, net cash provided by financing activities was $7,710,261, which consisted of $3,398,237 of net proceeds from the exercise of warrants and 4,457,520 from the sale of common stock, offset by $99,482 for payment of withholding taxes related to restricted stock units and $46,014 for payment of finance lease obligations.

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 December 31, 2025, our cash and cash equivalents were $14,476,162 and our current liabilities were $6,332,648.

Current wording

We have incurred cumulative negative cash flows from operations since our inception and have expended substantial funds to advance our 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 March 31, 2026, our cash and cash equivalents were $10,159,494, other receivables were $2,167,215 and our current liabilities were $2,536,002.

Previous 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.

Current 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.

Previous 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.

Current wording

Based on our current operating and development plans, including the ability to reduce or delay operating expenses that are within management’s control, we expect that 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.

Previous wording

We will need additional funding to complete required clinical trials for our product candidates and development programs and, if those clinical trials are successful (which we cannot predict), to complete submission of required regulatory applications to the FDA. However, current economic conditions (including current economic uncertainty, high interest rates, rising inflation, tariffs, and the potential for local and/or global economic recession) may negatively impact our operations, including possible effects on our financial condition, ability to access the capital markets on attractive terms or at all, liquidity, operations, suppliers, industry, and workforce. We will continue to evaluate the impact that these events could have on the operations, financial position, and the results of operations and cash flows during fiscal year 2026 and beyond.

Current wording

We will need additional funding to complete required clinical trials for our product candidates and development programs and, if those clinical trials are successful (which we cannot predict), to complete submission of required regulatory applications to the FDA. However, current economic conditions (including current economic uncertainty, high interest rates, rising inflation, tariffs, trade restrictions, and the potential for local and/or global economic recession) may negatively impact our operations, including possible effects on our financial condition, ability to access the capital markets on attractive terms or at all, liquidity, operations, suppliers, industry, and workforce. We will continue to evaluate the impact that these events could have on the operations, financial position, and the results of operations and cash flows during fiscal year 2026 and beyond.