(14) STOCKHOLDERS’ EQUITY (DEFICIENCY)

Series D Convertible Preferred Stock – On June 10, 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain accredited investors (the “Purchasers”), pursuant to which the Company agreed to sell and issue, in a private placement (the “June 2025 Private Placement”), (i) an aggregate of 3,400 shares of the Company’s newly designated Series D Convertible Preferred Stock, par value $0.01, with a stated value of $100 per share (the “Series D Preferred Stock”), initially convertible into up to 61,816 shares of the Company’s common stock (such shares underlying the Preferred Stock, the “Conversion Shares”), par value $0.01 per share at an initial conversion price of $5.50, and (ii) Series I common stock purchase warrants (the “Series I Warrants”) to purchase up to an aggregate of 123,636 shares of Common Stock (such shares underlying the Series I Warrants, the “Series I Warrant Shares”). The Series D Preferred Stock and Series I Warrants were sold at a combined offering price of $5.50 per share of Series D Preferred Stock and accompanying Series I Warrants. The Purchasers in the June 2025 Private Placement consisted of Carl Spana, the Company’s President and Chief Executive Officer, Stephen T. Wills, the Company’s Executive Vice President, Chief Financial Officer, and Chief Operating Officer, John K.A. Prendergast, a director and Chairperson of the Company’s board of directors, and Alan W. Dunton, a director on the Company’s board of directors, who are all related parties of the Company. The Series D Preferred Stock has a dividend rate of 8% per annum, which when declared may, at the option of the Company, be paid in cash or can accrete and be added to the stated value of the Series D Preferred Stock. Subject to the rights of any class or series of stock senior to or equivalent to the Series D Preferred Stock, the Series D Preferred Stock shall be entitled to be paid in the event of liquidation, dissolution or winding up of the Company, out of available funds and assets, prior and in preference to any distribution on any junior stock, an amount per share equal to the then stated value of the Series D Preferred Stock and declared but unpaid dividends. Each share of Series D Preferred Stock is convertible at any time, at the option of the holder, and such conversion could dilute the value of our common stock to current stockholders and could adversely affect the market price of our common stock. The conversion price decreases if we sell common stock (or equivalents) for a price per share less than the conversion price and is also subject to adjustment upon the occurrence of a merger, reorganization, consolidation, reclassification, stock dividend or stock split which results in an increase or decrease in the number of shares of common stock outstanding. The June 2025 Private Placement closed on June 13, 2025. The gross proceeds from the June 2025 Private Placement, before deducting offering expenses, were $340,000.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

Series A Convertible Preferred Stock – As of June 30, 2026, 4,030 shares of Series A Convertible Preferred Stock were outstanding. Each share of Series A Convertible Preferred Stock is convertible at any time, at the option of the holder, into the number of shares of common stock equal to $100 divided by the Series A Conversion Price. As of June 30, 2026, the Series A Conversion Price was $260.86, and each share of Series A Convertible Preferred Stock is convertible into approximately 0.38 shares of common stock. The Series A Conversion Price is subject to adjustment, under certain circumstances, upon the sale or issuance of common stock for consideration per share less than either (i) the Series A Conversion Price in effect on the date of such sale or issuance, or (ii) the market price of the common stock as of the date of such sale or issuance. The Series A Conversion Price is also subject to adjustment upon the occurrence of a merger, reorganization, consolidation, reclassification, stock dividend or stock split which will result in an increase or decrease in the number of shares of common stock outstanding. Shares of Series A Convertible Preferred Stock have a preference in liquidation, including certain merger transactions, of $100 per share, or $403,000 in the aggregate as of June 30, 2026. Additionally, the Company may not pay a dividend or make any distribution to holders of any class of stock unless the Company first pays a special dividend or distribution of $100 per share to holders of the Series A Convertible Preferred Stock.

Financing Transactions – On November 5, 2025, the Company entered into an underwriting agreement with A.G.P./Alliance Global Partners (“A.G.P.”) relating to the Company’s public offering of 2,430,769 shares of common stock (or pre-funded warrants in lieu thereof) together with Series J warrants to purchase up to 2,430,769 shares of common stock (the “Series J Warrants”), and Series K warrants to purchase up to 2,430,769 shares of common stock (the “Series K Warrants”) at a combined public offering price of $6.50 per share of common stock and accompanying Series J and Series K Warrants (the “November 2025 Offering”). The underwriters also had an option, which was exercised, to purchase up to an additional 364,615 shares of the Company’s common stock and associated Series J and K Warrants on the same terms and conditions.

Each Series J Warrant has an exercise price of $6.50 per share and is immediately exercisable. The Series J Warrants expire on the earlier of (i) the eighteen-month anniversary of the original issuance date or (ii) on the 31st calendar day following the date that the Company receives the FDA acceptance of the Company’s Investigational New Drug for an in-house obesity treatment compound (long-acting peptide or oral small molecule) (the “FDA Exercise Period”). Each Series K Warrant has an exercise price of $8.125 per share and is immediately exercisable. The Series K Warrants expire on the five-year anniversary of the original issuance date, however, if a holder’s Series J Warrants have not been terminated in accordance with their terms prior to the expiration of the FDA Exercise Period, such holder’s Series K Warrants will terminate automatically upon the earlier of the (i) eighteen-month anniversary of the original issuance date of the Series J Warrants or (ii) expiration of the FDA Exercise Period and prior to the five-year anniversary of the issuance of the Series K Warrant.

The gross proceeds to the Company from the November 2025 Offering, before deducting the underwriting discounts and commissions and offering expenses, were approximately $18,200,000, including the exercise by the underwriters to purchase an additional 364,615 shares of the Company’s common stock and associated Series J and K Warrants. The pre-funded warrants are exercisable at a nominal exercise price of $0.0001 per share until exercised in full and may not be exercised to the extent such exercise would cause the holder to beneficially own more than 4.99% or 9.99%, as applicable, of the Company’s outstanding common stock. The November 2025 Offering closed on November 12, 2025, and was subject to the satisfaction of customary closing conditions.

On May 7, 2025, the Company announced the closing of a reduced previously announced public offering with participation from institutional and accredited investors consisting of 146,479 shares of common stock together with Series F warrants to purchase up to 146,479 shares of common stock (the “Series F Warrants”), Series G warrants to purchase up to 146,479 shares of common stock (the “Series G Warrants”), and Series H warrants to purchase up to 146,479 shares of common stock (the “Series H Warrants”), at a combined public offering price of $7.50 per share of common stock and accompanying warrants (the “May 2025 Offering”).

The Series F Warrants have an exercise price of $15.00 per share, are immediately exercisable and expire on the five-year anniversary of the original issuance date, subject to the certain terms as defined in such warrant. The Series G Warrants have an exercise price of $7.50 per share, are immediately exercisable and expire on the earlier of (i) the 24-month anniversary of the original issuance date or (ii) the expiration of the FDA Exercise Period (as such term is defined in the Series G Warrant). The Series H Warrants will be issuable to the holder upon their exercise of the Series G Warrants, will have an exercise price of $11.25 per share, will be immediately exercisable upon issuance and will expire on the 24-month anniversary of their issuance date.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

The Company received aggregate gross proceeds from the May 2025 Offering of approximately $1,100,000. The Company used the net proceeds from the May 2025 Offering primarily for working capital and general corporate purposes.

On February 10, 2025, the Company entered into definitive agreements with a single healthcare focused institutional investor for the purchase and sale of 93,760 shares of its common stock (or common stock equivalents in lieu thereof) in a registered direct offering (the “February 2025 RD Offering”) at a purchase price of $50.00 per share.

The Company also agreed to issue to the same investor in a concurrent private placement warrants to purchase up to an aggregate of 93,760 shares of common stock (the “February 2025 Private Placement” and, together with the February 2025 RD Offering, the “February 2025 Offering”). The warrants issued in the concurrent February 2025 Private Placement have an exercise price of $50.00 per share, are exercisable 181 days after their issuance and expire approximately five and a half years from the date of issuance.

The gross proceeds from the February 2025 Offering totaled $4,687,786 with net proceeds after deducting the placement agent fees and offering expenses, amounting to $4,309,641. The Company used the net proceeds from the February 2025 Offering for general corporate purposes. The Company paid the placement agents a cash fee equal to 7.0% of the aggregate gross proceeds of the February 2025 Offering.

On February 11, 2025, the Company entered into a sales agreement (the “2025 Sales Agreement”) with A.G.P., pursuant to which the Company may, from time to time, sell shares of the Company’s common stock at market prices by methods deemed to be an “at-the-market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended. The 2025 Sales Agreement and related prospectus are limited to sales of up to an aggregate maximum of $6.0 million of shares of the Company’s common stock. The Company pays A.G.P. 3.0% of the gross proceeds as a commission.

No proceeds were raised under the 2025 Sales Agreement during the years ended June 30, 2026, and 2025.

Stock Warrants - During the year ended June 30, 2026, the Company received proceeds from the following warrant exercises:

 SCHEDULE OF WARRANT EXERCISES

As a result of the Series G warrant exercises, investors received 82,092 Series H warrants at an exercise price of $11.25 per share for the year ended June 30, 2026.

On December 13, 2024, the Company entered into a letter agreement (the “December 2024 Inducement Letter”) with a holder (the “December 2024 Exercising Holder”) of outstanding common stock purchase warrants that the Company issued on June 24, 2024, with an initial exercise price of $94.00, and October 24, 2023, with an initial exercise price of $106.00 (the “December 2024 Existing Warrants”). To induce the exercise of a portion of the December 2024 Existing Warrants by the December 2024 Exercising Holder, the Company agreed to adjust the exercise price of such portion of the December 2024 Existing Warrants to $43.75. Pursuant to the December 2024 Inducement Letter, the December 2024 Exercising Holder agreed to exercise, for cash, the December 2024 Existing Warrants to purchase an aggregate of 78,153 shares of common stock at the adjusted exercise price in exchange for the Company’s agreement to issue to the December 2024 Exercising Holder Series C common stock purchase warrants to purchase 78,153 shares of common stock (the “Series C Warrants”) and Series D common stock purchase warrants to purchase 39,076 shares of common stock (the “Series D Warrants” and together with the Series C Warrants, the “December 2024 Inducement Warrants,” and the shares issuable upon exercise of the December 2024 Inducement Warrants, the “December 2024 Inducement Warrant Shares”). The Company received aggregate gross proceeds of $3,419,219 from the exercise of the December 2024 Existing Warrants by the December 2024 Exercising Holder (the “December 2024 Warrant Inducement”). The incremental value of the December 2024 Warrant Inducement was recorded as an offering expense against the proceeds received in additional paid-in capital.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

As of June 30, 2026, the Company had outstanding warrants for shares of common stock as follows:

 SCHEDULE OF OUTSTANDING STOCK PURCHASE WARRANTS

Stock Plan – The Company’s 2011 Stock Incentive Plan (“2011 Stock Incentive Plan”) was approved by the Company’s stockholders at the annual meeting of stockholders held in May 2011 and amended at the annual meeting of stockholders held on June 8, 2017, June 26, 2018, June 25, 2020, June 24, 2022, June 20, 2023, June 27, 2024, and again at the annual meeting of stockholders held on July 25, 2025. The 2011 Stock Incentive Plan, as amended, provides for incentive and non-qualified stock option grants, restricted stock unit awards and other stock-based awards to employees, non-employee directors and consultants for up to 146,000 shares of common stock. The 2011 Stock Incentive Plan is administered under the direction of the Company’s board of directors, which may specify grant terms and recipients. Options granted by the Company generally expire ten years from the date of grant and generally vest over three to four years. The Company’s former 2005 Stock Plan was terminated and replaced by the 2011 Stock Incentive Plan, and shares of common stock that were available for grant under the 2005 Stock Plan became available for grant under the 2011 Stock Incentive Plan. No new awards can be granted under the 2005 Stock Plan, but awards granted under the 2005 Stock Plan remained outstanding in accordance with their terms. As of June 30, 2026, 973 shares were available for grant under the 2011 Stock Incentive Plan. The Company expects to settle option exercises under any of its plans with authorized but currently unissued shares.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

The following table summarizes option activity and related information for the years ended June 30, 2026, and 2025:

 SCHEDULE OF STOCK OPTION ACTIVITY

Stock options granted to its non-employee directors vest over a 12-month period.

During the year ended June 30, 2026, executive officers of the Company were granted an aggregate of 16,000 time-based stock options and 16,000 performance-based stock options which are excluded from the table above. The time-based options vest ratably over four years. The performance-based options vest over four years, upon certification by the Compensation Committee that specified performance objectives have been achieved. Compensation expense for these awards will be recognized when achievement of the applicable performance conditions is considered probable.

In addition, the executive officers received an aggregate of 48,000 performance-based stock options with an 18-month performance period. These options vest upon acceptance by the FDA of an IND application for an in-house obesity compound, subject to certification by the Compensation Committee.

All of the stock option grants described above are subject to stockholders approving an increase in the Company’s 2011 Equity Incentive Plan. In accordance with ASC 718, no compensation cost related to these awards will be recognized until stockholder approval is obtained and the awards are considered granted for accounting purposes.

Included in the outstanding options in the table above are 5,376 and 2,750 unvested performance-based stock options granted to executive officers and other employees, respectively, which were granted in June 2022, 2023, 2024 and December 2025. Grants in June 2022, 2023, 2024 and December 2025 were 1,211, 4,777, 5,299 and 1,743, respectively. The performance-based stock options vest based on annual performance criteria through the fiscal year ending June 30, 2030, relating to advancement of MCR programs.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

The Company did not grant stock options for the year ended June 30, 2025. For the year ended June 30, 2026, the fair value of option grants was estimated at the grant date using the Black-Scholes model. The Company’s weighted average assumptions for the year ended June 30, 2026, was as follows:

 SCHEDULE OF WEIGHTED AVERAGE ASSUMPTIONS

Expected volatilities are based on the Company’s historical volatility. The expected term of options is based upon the simplified method, which represents the average of the vesting term and the contractual term. The risk-free interest rate is based on U.S. Treasury yields for securities with terms approximating the expected term of the option.

For the years ended June 30, 2026, and 2025, the Company recorded stock-based compensation related to stock options of $579,389 and $702,789, respectively. As of June 30, 2026, there was $881,056 of unrecognized compensation cost related to unvested options, which is expected to be recognized over a weighted-average period of 1.9 years.

Restricted Stock Units – The following table summarizes restricted stock award activity for the years ended June 30, 2026, and 2025.

 SCHEDULE OF RESTRICTED STOCK UNITS ACTIVITY

For the years ended June 30, 2026, and 2025, the Company recorded stock-based compensation related to restricted stock units of $ 749,698 and $679,492, respectively.

During the year ended June 30, 2026, executive officers of the Company were granted, subject to stockholder approval, an aggregate of 13,000 time-based RSUs and 13,000 performance-based RSUs. The time-based RSUs vest ratably over four years. The performance-based RSUs vest over four years, upon certification by the Compensation Committee that specified performance objectives have been achieved. Compensation expense for these awards will be recognized when achievement of the applicable performance conditions is considered probable.

In addition, the executive officers received an aggregate of 39,000 performance-based RSUs with an 18-month performance period. These RSUs vest upon acceptance by the FDA of an IND application for an in-house compound, subject to certification by the Compensation Committee.

The RSU grants described above are subject to stockholders approving an increase in the Company’s 2011 Equity Incentive Plan. In accordance with ASC 718, no compensation cost related to these awards will be recognized until stockholder approval is obtained and the awards are considered granted for accounting purposes.

Included in outstanding RSUs in the table above are 7,844 vested shares that have not been issued as of June 30, 2026, due to a provision in the RSU agreements for deferred delivery.

Time-based RSUs granted to the Company’s executive officers, other employees, and non-employee directors generally vest over 48 months, 48 months, and 12 months, respectively.

PALATIN TECHNOLOGIES, INC.

and Subsidiary

Notes to Consolidated Financial Statements

Included in the outstanding RSUs in the table above are 3,457 and 2,079 unvested performance-based RSUs granted to executive officers and other employees, respectively, which were granted in June 2022, 2023, 2024 and December 2025. Grants in June 2022, 2023, 2024 and December 2025 were 814, 3,049, 3,689 and 1,432 RSUs, respectively. The performance-based RSUs vest based on annual performance criteria through the fiscal years ending June 30, 2028, relating to advancement of MC1R programs, including initiation of clinical trials.

In connection with the vesting of restricted share units during the years ended June 30, 2026, and 2025, the Company withheld 1,533 and 1,094 shares, respectively, with aggregate values of $19,513 and $99,482, respectively, in satisfaction of minimum tax withholding obligations.