PALATIN TECHNOLOGIES INC

To the Stockholders and Board of Directors

Palatin Technologies, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Palatin Technologies, Inc. and subsidiary (the Company) as of June 30, 2026 and 2025, the related consolidated statements of operations, stockholders’ equity (deficiency), and cash flows for the fiscal years then ended, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for the fiscal years then ended, in conformity with U.S. generally accepted accounting principles.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred operating losses and negative cash flows from operations since inception and will need additional funding to complete its planned product development efforts that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue from license agreement

As discussed in Note 4 to the consolidated financial statements, on August 14, 2025, the Company entered into a Research Collaboration, License and Patent Assignment Agreement (the Agreement) with Boehringer Ingelheim International GmbH (BI) to research, develop and commercialize proprietary melanocortin receptor-targeted compounds for the treatment of retinal diseases. Under the terms of the Agreement, the Company assigned certain patent rights, granted BI an exclusive license to related intellectual property, and agreed to provide research and development services. The Company concluded that the Agreement is accounted for under Accounting Standards Codification Topic 606, Revenue from Contracts with Customers, (ASC 606) and identified two distinct performance obligations: (i) the assignment of patents and license rights and (ii) the provision of research and development services.

We identified the Company’s determination of performance obligations and accounting for revenue under the Agreement as a critical audit matter. Especially challenging and complex auditor judgment was required to evaluate the Company’s application of ASC 606, including its of distinct performance obligations, the determination and allocation of the transaction price to those performance obligations, the timing of recognition of the consideration allocated to the patents and license rights and the accounting for variable milestone consideration. Addressing these matters required the involvement of professionals with specialized skills and knowledge.

The following are the primary procedures we performed to address this critical audit matter. We inspected the agreement executed and evaluated whether the Company identified and appropriately considered the significant contractual terms affecting the accounting for revenue. With the assistance of professionals having specialized skills and knowledge in revenue recognition, we evaluated the Company’s accounting analysis and assessed the reasonableness of the Company’s judgments, the identification of distinct performance obligations, the determination and allocation of the transaction price to such obligations, the timing of recognition of revenue of the consideration allocated to the patents and license rights and the accounting for variable milestone consideration. We assessed the reasonableness of these judgments by comparing the Company’s accounting analysis to the contractual terms, underlying supporting documentation and the requirements of the applicable accounting guidance. We also evaluated the appropriateness and consistency of the Company's accounting policies and compared amounts recorded under the agreement for consistency with those policies and the underlying documentation.

/s/ KPMG LLP

We have served as the Company’s auditor since 2002.

Philadelphia, Pennsylvania

September 28, 2026