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Table of Contents

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, DC 20549

FORM 10-Q

(Mark One)

|[X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
|--- | --------------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2006

or

|[  ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
|---- | ---------------------------------------------------------------------------------------------

For the transition period from ___________ to __________

Commission file number 001-15543

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PALATIN TECHNOLOGIES, INC.(Exact name of registrant as specified in its charter)

|Delaware                                                            | 95-4078884                          
|------------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of
     incorporation or organization) | (I.R.S. Employer Identification No.)
|                                                                    |                                     
|4C Cedar Brook Drive                                                |                                     
|Cranbury, New Jersey                                                | 08512                               
|(Address of principal executive
     offices)                       | (Zip code)                          

(609) 495-2200(Registrant's telephone number,
including area code)

Indicate by check mark whether the registrant (1) filed all reports required
to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
   Yes [X]   No [  ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).    Yes [X]   No [ ]

Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of November 1, 2006, 71,125,612
shares of the registrants common stock, par value $.01 per share, were outstanding.

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PALATIN TECHNOLOGIES, INC.Table of Contents

|                                    |                                                                                                   |     
|----------------------------------- | ------------------------------------------------------------------------------------------------- | ----
|                                    |                                                                                                   | Page
|PART I  FINANCIAL
     INFORMATION
|Item 1.                             | Financial Statements (Unaudited)                                                                  |     
|                                    | Consolidated Balance Sheets
     as of September 30, 2006 and June 30, 2006                       | 2   
|                                    | Consolidated Statements of Operations
     for the Three Months Ended September 30, 2006 and 2005 | 3   
|                                    | Consolidated Statements of Cash Flows
     for the Three Months Ended September 30, 2006 and 2005 | 4   
|                                    | Notes to Consolidated Financial
     Statements                                                   | 5   
|Item 2.                             | Management's Discussion and Analysis of
     Financial Conditionand Results of Operations         | 9   
|Item 3.                             | Quantitative and Qualitative
     Disclosures About Market Risk                                   | 13  
|Item 4.                             | Controls and Procedures                                                                           | 13  

PART II - OTHER
INFORMATION

|         |                                                                  |   
|-------- | ---------------------------------------------------------------- | --
|Item 1.  | Legal Proceedings                                                | 14
|Item 1A. | Risk Factors                                                     | 14
|Item 2.  | Unregistered Sales of Equity Securities and
     Use of Proceeds | 14
|Item 3.  | Defaults Upon Senior Securities                                  | 14
|Item 4.  | Submission of Matters to a Vote of Security
     Holders         | 14
|Item 5.  | Other Information                                                | 14
|Item 6.  | Exhibits                                                         | 14

SIGNATURES

1

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Table of Contents

PART I  FINANCIAL
INFORMATION

Item 1. Financial Statements

PALATIN TECHNOLOGIES,
INC.Consolidated Balance Sheets(unaudited)

|                                                                  |                   |                  |   |                   |  
|----------------------------------------------------------------- | ----------------- | ---------------- | - | ----------------- | -
|                                                                  | September 30,2006 | June 30,2006    
|                                                                  |                   |                  |   |                  
|ASSETS                                                            |                   |                  |   |                   |  
|Current assets:                                                   |                  
|Cash and cash equivalents                                         |                   | $   18,192,331   |   | $   28,333,211    |  
|Available-for-sale investments                                    |                   | 2,338,387        |   | 2,330,834         |  
|Accounts receivable                                               |                   | 919,547          |   | 69,591            |  
|Prepaid expenses and other current assets                         |                   | 913,838          |   | 1,453,650         |  
|                                                                  |                   |                  |   |                  
|Total current assets                                              |                   | 22,364,103       |   | 32,187,286        |  
|Property and equipment, net                                       |                   | 6,186,379        |   | 6,347,705         |  
|Restricted cash                                                   |                   | 475,000          |   | 475,000           |  
|Other assets                                                      |                   | 941,175          |   | 1,037,296         |  
|                                                                  |                   |                  |   |                  
|Total assets                                                      |                   | $   29,966,657   |   | $   40,047,287    |  
|                                                                  |                   |                  |   |                  
|LIABILITIES AND STOCKHOLDERS' EQUITY                              |                  
|Current liabilities:                                              |                  
|Capital lease obligations, current portion                        |                   | $        131,582 |   | $          86,564 |  
|Accounts payable                                                  |                   | 2,556,398        |   | 3,092,962         |  
|Accrued expenses                                                  |                   | 5,202,276        |   | 4,466,428         |  
|Accrued compensation                                              |                   | 131,250          |   | 803,900           |  
|Deferred revenue, current portion                                 |                   | 3,409,496        |   | 3,995,575         |  
|                                                                  |                   |                  |   |                  
|Total current liabilities                                         |                   | 11,431,002       |   | 12,445,429        |  
|Capital lease obligations, net of current portion                 |                   | 272,419          |   | 229,585           |  
|Deferred rent, net of current portion                             |                   | 2,244,243        |   | 2,358,550         |  
|Deferred revenue, net of current portion                          |                   | 5,924,068        |   | 6,713,942         |  
|                                                                  |                   |                  |   |                  
|Total liabilities                                                 |                   | 19,871,732       |   | 21,747,506        |  
|                                                                  |                   |                  |   |                  
|Commitments and contingencies                                     |                  
|Stockholders' equity:                                             |                  
|Preferred stock, $.01 par value, 10,000,000 shares authorized:    |                  
|Series A Convertible; 9,997 shares issued and outstanding as of   |                  
|September 30, 2006 and June 30, 2006                              |                   | 100              |   | 100               |  
|Common stock, $.01 par value, 150,000,000 shares authorized,      |                  
|70,878,521 shares issued and outstanding as of September 30, 2006 |                  
|and June 30, 2006                                                 |                   | 708,785          |   | 708,785           |  
|Additional paid-in capital                                        |                   | 178,313,670      |   | 178,089,176       |  
|Accumulated other comprehensive loss                              |                   | (47,183          | ) | (54,736           | )
|Accumulated deficit                                               |                   | (168,880,447     | ) | (160,443,544      | )
|                                                                  |                   |                  |   |                  
|Total stockholders equity                                        |                   | 10,094,925       |   | 18,299,781        |  
|                                                                  |                   |                  |   |                  
|Total liabilities and stockholders equity                        |                   | $   29,966,657   |   | $   40,047,287    |  
|                                                                  |                   |                  |   |                  

The accompanying notes are an integral part of these
consolidated financial statements.

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Table of Contents

PALATIN TECHNOLOGIES,
INC.Consolidated Statements of Operations(unaudited)

|                                            |                                  |                     |      |                   |  
|------------------------------------------- | -------------------------------- | ------------------- | ---- | ----------------- | -
|                                            | Three Months Ended September 30, |                    
|                                            | 2006                             |                     | 2005 |                  
|REVENUES:                                   |                                  |                     |      |                   |  
|Royalties                                   |                                  | $                 - |      | $      915,515    |  
|Licenses, grants and contracts              |                                  | 4,935,102           |      | 4,228,263         |  
|                                            |                                  |                     |      |                  
|Total revenues                              |                                  | 4,935,102           |      | 5,143,778         |  
|                                            |                                  |                     |      |                  
|OPERATING EXPENSES:                         |                                 
|Royalties                                   |                                  | -                   |      | 183,329           |  
|Research and development                    |                                  | 12,125,252          |      | 9,365,368         |  
|General and administrative                  |                                  | 1,560,922           |      | 1,752,533         |  
|                                            |                                  |                     |      |                  
|Total operating expenses                    |                                  | 13,686,174          |      | 11,301,230        |  
|                                            |                                  |                     |      |                  
|Loss from operations                        |                                  | (8,751,072          | )    | (6,157,452        | )
|                                            |                                  |                     |      |                  
|OTHER INCOME (EXPENSE):                     |                                 
|Investment income                           |                                  | 324,235             |      | 124,222           |  
|Interest expense                            |                                  | (10,066             | )    | (2,426            | )
|                                            |                                  |                     |      |                  
|Total other income, net                     |                                  | 314,169             |      | 121,796           |  
|                                            |                                  |                     |      |                  
|NET LOSS                                    |                                  | $  (8,436,903       | )    | $  (6,035,656     | )
|                                            |                                  |                     |      |                  
|Basic and diluted net loss per common share |                                  | $           (0.12   | )    | $           (0.11 | )
|                                            |                                  |                     |      |                  
|Weighted average number of common shares    |                                 
|outstanding used in computing basic and     |                                 
|diluted net loss per common share           |                                  | 70,878,521          |      | 54,488,412        |  
|                                            |                                  |                     |      |                  

The accompanying notes are an integral part of these
consolidated financial statements.

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Table of Contents

PALATIN TECHNOLOGIES,
INC.Consolidated Statements of Cash Flows(unaudited)

|                                                      |                                  |                  |      |                       |  
|----------------------------------------------------- | -------------------------------- | ---------------- | ---- | --------------------- | -
|                                                      | Three Months Ended September 30, |                 
|                                                      | 2006                             |                  | 2005 |                      
|CASH FLOWS FROM OPERATING ACTIVITIES:                 |                                  |                  |      |                       |  
|Net loss                                              |                                  | $  (8,436,903    | )    | $  (6,035,656         | )
|Adjustments to reconcile net loss to net cash         |                                 
|used in operating activities:                         |                                 
|Depreciation and amortization                         |                                  | 344,200          |      | 303,667               |  
|Stock-based compensation                              |                                  | 224,494          |      | 355,138               |  
|Changes in operating assets and liabilities:          |                                 
|Accounts receivable                                   |                                  | (849,956         | )    | 4,307,472             |  
|Inventories                                           |                                  | -                |      | (297,848              | )
|Prepaid expenses and other                            |                                  | 635,655          |      | 124,218               |  
|Accounts payable                                      |                                  | (536,564         | )    | (910,486              | )
|Accrued expenses and other                            |                                  | (51,109          | )    | (398,535              | )
|Deferred revenues                                     |                                  | (1,375,953       | )    | 114,973               |  
|                                                      |                                  |                  |      |                      
|Net cash used in operating activities                 |                                  | (10,046,136      | )    | (2,437,057            | )
|                                                      |                                  |                  |      |                      
|CASH FLOWS FROM INVESTING ACTIVITIES:                 |                                 
|Purchases of property and equipment                   |                                  | (61,248          | )    | (201,226              | )
|                                                      |                                  |                  |      |                      
|Net cash used in investing activities                 |                                  | (61,248          | )    | (201,226              | )
|                                                      |                                  |                  |      |                      
|CASH FLOWS FROM FINANCING ACTIVITIES:                 |                                 
|Payments on capital lease obligations                 |                                  | (33,496          | )    | (2,723                | )
|Proceeds from issuances of common stock and warrants, |                                 
|net                                                   |                                  | -                |      | 10,005,452            |  
|                                                      |                                  |                  |      |                      
|Net cash (used in) provided by financing              |                                  | (33,496          | )    | 10,002,729            |  
|activities                                            |                                 
|                                                      |                                  |                  |      |                      
|NET (DECREASE) INCREASE IN CASH                       |                                 
|AND CASH EQUIVALENTS                                  |                                  | (10,140,880      | )    | 7,364,446             |  
|CASH AND CASH EQUIVALENTS, beginning                  |                                 
|of period                                             |                                  | 28,333,211       |      | 15,720,364            |  
|                                                      |                                  |                  |      |                      
|CASH AND CASH EQUIVALENTS, end of period              |                                  | $   18,192,331   |      | $   23,084,810        |  
|                                                      |                                  |                  |      |                      
|SUPPLEMENTAL CASH FLOW INFORMATION:                   |                                 
|Equipment acquired by capital lease                   |                                  | $        121,348 |      | $                   - |  
|                                                      |                                  |                  |      |                      

The accompanying notes are an integral part of these financial
statements.

4

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Table of Contents

PALATIN TECHNOLOGIES, INC.Notes to
Consolidated Financial Statements (unaudited)

(1)    ORGANIZATION

Nature
of Business  Palatin Technologies, Inc. (Palatin or the
Company) is a biopharmaceutical company primarily focused on discovering and
developing targeted, receptor-specific small molecule and peptide therapeutics, including
melanocortin (MC)-based therapeutics. Therapeutics affecting the activity of
the MC family of receptors may have the potential to treat a variety of conditions and
diseases, including sexual dysfunction, obesity and related disorders, cachexia (extreme
wasting, generally secondary to a chronic disease), skin pigmentation and inflammation.
The Company is exploring other receptor-specific therapeutics using its patented drug
discovery platform, including congestive heart failure therapeutics.

Bremelanotide,
an MC receptor agonist and the Companys lead therapeutic drug candidate, is a
patented, nasally-administered peptide that is in clinical development for the treatment
of both male and female sexual dysfunction, under a collaborative development and
marketing agreement with King Pharmaceuticals, Inc. (King), a specialty
pharmaceutical company.

The
Company has preclinical development programs for the treatment of obesity and congestive
heart failure resulting from its MIDAS(TM)technology, the Companys proprietary
platform technology to design and synthesize compounds that mimic the activity of
peptides.

NeutroSpec
is a radiolabeled monoclonal antibody product for imaging and diagnosing infection and is
the subject of a strategic collaboration agreement with Tyco Healthcare Mallinckrodt
(Mallinckrodt). In December 2005, the Company and Mallinckrodt voluntarily
suspended the sales, marketing and distribution of NeutroSpec. All ongoing clinical trials
and regulatory approvals of NeutroSpec have been suspended. The Company and Mallinckrodt
are evaluating future development and marketing activities involving NeutroSpec.

Key
elements of the Companys business strategy include entering into alliances and
partnerships with pharmaceutical companies to facilitate the development, manufacture,
marketing, sale and distribution of the Companys product candidates under
development, expansion of the Companys pipeline through the utilization of its MC
expertise and patented drug discovery platform, opportunistic acquisition of synergistic
products and technologies and partial funding of the Companys development and
discovery programs with the cash flow from collaboration agreements.

Business
Risk and Liquidity  The Company has incurred negative cash flows from operations
since its inception, and has expended, and expects to continue to expend in the future,
substantial funds to complete its planned product development efforts. As shown in the
accompanying consolidated financial statements, the Company has an accumulated deficit as
of September 30, 2006 and incurred a net loss for the three months ended September 30,
2006. The Company anticipates incurring additional losses in the future as a result of
spending on its development programs. To achieve profitability, the Company, alone or with
others, must successfully develop and commercialize its technologies and proposed
products, conduct successful pre-clinical studies and clinical trials, obtain required
regulatory approvals and successfully manufacture and market such technologies and
proposed products. The time required to reach profitability is highly uncertain, and there
can be no assurance that the Company will be able to achieve profitability on a sustained
basis, if at all.

The
Company expects that its cash, cash equivalents and available-for-sale investments as of
September 30, 2006, together with expected revenue from collaboration and license
agreements and other income will be adequate to fund the Companys operations for at
least the next twelve months. Management plans to continue to refine its operations,
control expenses, evaluate alternative methods to conduct its business, and seek available
and attractive sources of financing and sharing of development costs through strategic
collaboration agreements or other resources. Should appropriate sources of financing not
be available, management would delay certain clinical trials and research activities until
such time as appropriate financing was available. There can be no assurance that the
Companys financing efforts will be successful. If adequate funds are not available,
the Companys financial condition will be materially and adversely affected.

Concentrations
 Concentrations in the Companys assets and operations subject it to certain
related risks. Financial instruments that potentially subject the Company to
concentrations of credit risk primarily consist of cash and cash equivalents,
available-for-sale investments and accounts receivable. The Companys cash and cash
equivalents are primarily invested in one money market fund sponsored by a large financial
institution. The Companys periodic accounts receivable balances primarily consist of
amounts due from its collaboration partners, including $664,033 from King and $77,076 from
Mallinckrodt.

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Revenues
from King and Mallinckrodt as a percentage of total revenues were as follows:

|             |                                  |     |      |     | 
|------------ | -------------------------------- | --- | ---- | --- | 
|             | Three Months Ended September 30, |    
|             | 2006                             |     | 2005 |    
|King         |                                  | 99% |      | 80% | 
|Mallinckrodt |                                  | 1%  |      | 20% | 

(2)    BASIS
OF PRESENTATION

The
accompanying unaudited consolidated financial statements have been prepared in accordance
with U.S. generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q. Accordingly, they do not include all of the
information and footnote disclosures required to be presented for complete financial
statements. In the opinion of management, these consolidated financial statements contain
all adjustments (consisting of normal recurring adjustments) considered necessary to
present fairly the Companys financial position as of September 30, 2006, and its
results of operations and its cash flows for the three months ended September 30, 2006 and
2005. The results of operations for the three-month period ended September 30, 2006 may
not necessarily be indicative of the results of operations expected for the full year,
except that the Company expects to incur a significant loss for the fiscal year ending
June 30, 2007.

The
accompanying consolidated financial statements should be read in conjunction with the
audited consolidated financial statements and notes thereto included in the Companys
annual report on Form 10-K for the fiscal year ended June 30, 2006, filed with the Securities and Exchange Commission
(SEC), which includes consolidated financial statements as of June 30, 2006
and 2005 and for each of the fiscal years in the three-year period ended June 30, 2006.

(3)    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES

Principles
of Consolidation  The consolidated financial statements include the accounts of
Palatin and its wholly-owned inactive subsidiary. All significant intercompany accounts
and transactions have been eliminated in consolidation.

Use
of Estimates  The preparation of consolidated financial statements in conformity
with U.S. generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amount of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.

Cash
and Statements of Cash Flows  Cash and cash equivalents include cash on hand, cash
in banks and all highly liquid investments with a purchased maturity of less than three
months. Restricted cash secures letters of credit for security deposits on leases.

Investments
 The Company classifies its investments as available-for-sale investments and all
such investments are recorded at fair value. Unrealized holding gains and losses, net of
the related tax effect, if any, are excluded from earnings and are reported in accumulated
other comprehensive loss until realized. Interest and dividends on securities classified
as available-for-sale are included in investment income. Gains and losses are recorded in
the statement of operations when realized or when unrealized holding losses are determined
to be other than temporary, on a specific-identification basis.

Fair
Value of Financial Instruments  The Companys financial instruments consist
primarily of cash and cash equivalents, available-for-sale investments, accounts
receivable, accounts payable and capital lease obligations. Management believes that the
carrying value of these assets and liabilities are representative of their respective fair
values.

Property
and Equipment  Property and equipment consists of office and laboratory equipment,
office furniture and leasehold improvements and includes assets acquired under capital
leases. Property and equipment are recorded at cost. Depreciation is recognized using the
straight-line method over the estimated useful lives of the related assets, generally five
years for laboratory equipment, seven years for office furniture and equipment and the
lesser of the term of the lease or the useful life for leasehold improvements.
Amortization of assets acquired under capital leases is included in depreciation.
Maintenance and repairs are expensed as incurred while expenditures that extend the useful
life of an asset are capitalized.

Impairment
of Long-Lived Assets  The Company reviews its long-lived assets for impairment
whenever events or changes in circumstances indicate that the carrying amount of the
assets may not be fully recoverable. To determine recoverability of a long-lived asset,
management evaluates whether the estimated future undiscounted net

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cash flows from the asset, without
interest charges, are less than its carrying amount. If impairment is indicated, the
long-lived asset would be written down to fair value. Fair value is determined by an
evaluation of available price information at which assets could be bought or sold
including quoted market prices, if available, or the present value of the estimated
future discounted cash flows based on reasonable and supportable assumptions.

Other
Assets  Other assets and other current assets include certain payments the Company
made to licensors in cash and stock as their share of up-front payments received from
collaboration partners in connection with the Companys collaboration agreements. The
Company has treated these payments as incremental direct costs of the up-front payments,
to be charged over the same period as the related deferred revenue, in accordance with
guidance contained in the SECs Staff Accounting Bulletin No. 104 and, by analogy, to
paragraph 4 of FASB Technical Bulletin 90-1.

Deferred
Rent  The Companys operating leases provide for rent increases over the terms
of the leases. Deferred rent consists of the difference between periodic rent payments and
the amount recognized as rent expense on a straight-line basis for the buildings the
Company occupies, as well as the value of tenant allowances for leasehold improvements.
Rent expense is being recognized ratably over the life of the leases.

Revenue
Recognition  Royalty revenues represent amounts earned from Mallinckrodt based on a
contractual percentage of Mallinckrodts net sales of NeutroSpec to customers prior
to the suspension of sales and marketing activities. Revenue was recognized by the Company
in the period in which Mallinckrodts net sales occurred, as reported by Mallinckrodt
to the Company on a quarterly basis.

Revenue from corporate
collaborations and licensing agreements consists of up-front fees, research and development funding, and milestone payments.
Non-refundable up-front fees are deferred and amortized to revenue over the related performance period. The Company estimates the
performance period as the period in which it performs certain development activities under the applicable agreement. Estimated
reimbursements for research and development activities and government grants are recorded in the period that the Company performs
the related activities under the terms of the applicable agreements. Revenue resulting from the achievement of milestone events
stipulated in the applicable agreements is recognized when the milestone is achieved. Revenue resulting from the achievement of
milestone events stipulated in the applicable agreements is recognized when the milestone is achieved, provided that such
milestone is substantive in nature. Grant and other contract revenues are recognized as the Company provides the services
stipulated in the underlying grants and/or contracts based on the time and materials incurred.

Research
and Development Costs  The costs of research and development activities are charged
to expense as incurred, including the cost of equipment for which there is no alternative
future use.

Stock
Options  The Company accounts for options granted to consultants in accordance with
Statement of Financial Accounting Standards (SFAS) 123(R), Share-Based
Payment. SFAS 123(R) establishes standards for the accounting for transactions in
which an entity exchanges its equity instruments for goods or services and requires that
the compensation cost relating to share-based payment transactions be recognized in the
financial statements, measured by the fair value of the equity or liability instruments
issued, adjusted for estimated forfeitures.

The
Company accounts for options granted to consultants in accordance with Emerging Issues
Task Force Issue 96-18, Accounting for Equity Instruments That Are Issued to Other
Than Employees for Acquiring, or in Conjunction with Selling, Goods or Services. The
Company determines the value of stock options utilizing the Black-Scholes option-pricing
model.

Compensation
costs for fixed awards with pro rata vesting are allocated to periods on the straight-line
basis.

Income
Taxes  The Company and its subsidiary file consolidated federal and separate-company
state income tax returns. Income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of assets and
liabilities and their respective tax bases and operating loss and tax credit
carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax assets and liabilities of
a change in tax rates is recognized in income in the period that includes the enactment
date.

In
accordance with SFAS 109 Accounting for Income Taxes, the Company has recorded
a valuation allowance against its deferred tax assets. The valuation allowance is based on
managements estimates and analysis, which includes provisions of tax laws that may
limit the Companys ability to utilize its net operating loss carryforwards.

Net
Loss per Common Share  Basic earnings per share (EPS) is computed by
dividing net loss by the weighted average number of common shares outstanding for the
period. Diluted EPS reflects the potential dilution from the exercise or conversion of
securities into common stock, such as stock options and warrants. As of

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September 30, 2006 and 2005, common shares issuable upon
conversion of outstanding Series A Convertible Preferred Stock and the exercise of
outstanding options and warrants amounted to an aggregate of 16,697,450 and 15,175,188,
respectively, and were not included in the computation of Diluted EPS because to do so would
have been anti-dilutive for the periods presented.

(4)    OTHER
COMPREHENSIVE LOSS

Other
comprehensive loss consists of the following:

|                                      |                                  |             |      |             |  
|------------------------------------- | -------------------------------- | ----------- | ---- | ----------- | -
|                                      | Three Months Ended September 30, |            
|                                      | 2006                             |             | 2005 |            
|Net loss                              |                                  | $(8,316,903 | )    | $(6,035,656 | )
|Unrealized gain (loss) on investments |                                  | 7,553       |      | (19,589     | )
|                                      |                                  |             |      |            
|Comprehensive loss                    |                                  | $(8,309,350 | )    | $(6,055,245 | )
|                                      |                                  |             |      |            

(5)    
INVESTMENTS

The
following is a summary of available-for-sale investments:

|                               |                   |             |                   |             |  
|------------------------------ | ----------------- | ----------- | ----------------- | ----------- | -
|                               | September 30,2006 |             | September 30,2005 |            
|Cost                           |                   | $ 2,385,570 |                   | $ 2,385,570 |  
|Unrealized loss on investments |                   | (47,183     | )                 | (54,736     | )
|                               |                   |             |                   |            
|Fair value                     |                   | $ 2,338,387 |                   | $ 2,330,834 |  
|                               |                   |             |                   |            

(6)    COMMITMENTS
AND CONTINGENCIES

Contingencies

The
Company is the respondent in an arbitration proceeding before the American Arbitration
Association initiated by Competitive Technologies, Inc. (CTI) alleging breach
of the terms of a license agreement for patent rights related to certain compounds and
methods of treatment for sexual dysfunction and other actions asserted to arise out of the
license agreement. On September 25, 2006 the Company filed a reply to CTIs statement
of claim, denying all material allegations asserted by CTI, and asserting counterclaims
against CTI for declaratory judgment that claims are barred by the previous settlement
agreement with CTI and that bremelanotide is not subject to the license agreement with
CTI. Palatin and CTI have not yet completed selection of the arbitration panel, and
discovery has not yet been initiated in the arbitration. The Company cannot reasonably
predict the outcome of the dispute or reasonably estimate the range of potential loss, if
any. However, the Company does not believe that the resolution of this matter will
have a material adverse effect on its financial position, results of operations or
liquidity.

(7)    SUBSEQUENT
EVENT

In
October 2006, the Company made grants of restricted stock units to three executives for an
aggregate of 975,000 shares of common stock. Of the total shares, 325,000 will vest if the
quoted market price of Palatins common stock is $4.00 or more for twenty consecutive
trading days, an additional 325,000 will vest if the quoted market price of Palatins
common stock is $6.00 or more for twenty consecutive trading days and the remaining
325,000 will vest if the quoted market price of Palatins common stock is $8.00 or
more for twenty consecutive trading days. The restricted stock units expire four years
from the date of grant and require that each grantee retain at least 33% of any vested stock for
the duration of the executives employment with the Company.

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Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations

The
following discussion and analysis should be read in conjunction with the consolidated
financial statements and notes to the consolidated financial statements filed as part of
this report.

Statements
in this quarterly report on Form 10-Q, as well as oral statements that may be made by us
or by our officers, directors, or employees acting on our behalf, that are not historical
facts constitute forward-looking statements, which are made pursuant to the
safe harbor provisions of Section 21E of the Securities Exchange Act of 1934 (the
Exchange Act). The forward-looking statements in this quarterly report on Form
10-Q do not constitute guarantees of future performance. Investors are cautioned that
statements that are not strictly historical statements contained in this quarterly report
on Form 10-Q including, without limitation, current or future financial performance,
managements plans and objectives for future operations, clinical trials and results,
product plans and performance, managements assessment of market factors, as well as
statements regarding our strategy and plans and our strategic partners, constitute
forward-looking statements. Such forward-looking statements involve known and unknown
risks, uncertainties and other factors that could cause our actual results to be
materially different from historical results or from any results expressed or implied by
such forward-looking statements. Our future operating results are subject to risks and
uncertainties and are dependent upon many factors, including, without limitation, the
risks identified in this report, in our annual report on Form 10-K for the year ended June
30, 2006 and in our other Securities and Exchange Commission (SEC) filings.

We
expect to incur losses in the future as a result of spending on our planned development
programs and losses may fluctuate significantly from quarter to quarter.

Critical Accounting
Policies and Estimates

Our
significant accounting policies 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, 2006. We believe that our accounting policies and estimates relating to
revenue recognition, accrued expenses and stock-based compensation are the most critical.

Revenue Recognition

Revenue
from corporate collaborations and licensing agreements consists of up-front fees, research
and development funding, and milestone payments. Non-refundable up-front fees are deferred
and amortized to revenue over the related performance period. Due to the uncertainty
inherent in our development programs, including the possibility that a program is
terminated prior to completion, we recognize such revenue on a straight-line basis, as we
believe that no other basis is more reflective of the pattern over which such revenue is
earned. We consider our performance period under the King collaboration to be the period
in which we perform development activities during the initial research term, which is
currently estimated to be five years from the inception of the agreement. Specific
performance periods are not stated in the agreement and are estimated by management based
on detailed development programs agreed upon by the parties. Management monitors the
progress and results of these development activities and adjusts its estimated performance
period accordingly. The actual performance period may vary based on the results of the
related development activities, changes in development plans agreed to by the parties,
regulatory requirements and other factors. Increases in the estimated performance period
would result in increases in the period over which such deferred revenue is to be
recognized and corresponding decreases in the amount of revenue recognized each period. As
of September 30, 2006, a one-year increase in the estimated period of performance would
result in a decrease in the amount of deferred revenue recognized per quarter of
approximately $0.2 million.

Accrued Expenses

A
significant portion of our development activities are performed by third parties. We
review the activities performed under significant contracts each quarter and accrue
expenses and the amount of any reimbursement to be received from our collaborators based
upon the estimated amount of work completed. Estimating the value or stage of completion
of certain services requires judgment based on available information. If we do not
identify services performed for us but not billed by the service-provider, or if we
underestimate or overestimate the value of services performed as of a given date, reported
expenses will be understated or overstated.

Stock-Based Compensation

The
fair value of stock options granted has been calculated using the Black-Scholes model,
which requires us to make estimates of volatility and expected option lives. We estimate
these factors at the time of grant based on our own prior experience, public sources of
information and information for comparable companies. The amount of recorded compensation
related to an option grant is not adjusted for subsequent changes in these estimates or
for actual experience. The amount of our recorded compensation is also dependent on our
estimates of future option forfeitures and the probability of achievement of performance
conditions. If we initially over-estimate future

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forfeitures, our reported expenses will
be understated. Changes in estimated forfeitures will affect our reported expenses in
future periods.

Certain
options are subject to periodic re-measurement over the vesting period as services are
rendered, based on changes in the fair value of our common stock. In addition, the vesting
of certain options is dependent on future events. As a result, stock-based compensation
charges may vary significantly from period to period. In October 2006, the Company granted
restricted stock units to certain executives that vest upon the achievement of specified
stock prices. The Company will record expenses in future periods pertaining to these
grants, the timing and amount of which may vary based upon the Companys future stock
price.

Overview

We
are a biopharmaceutical company focused on discovering and developing targeted,
receptor-specific small molecule and peptide therapeutics. Our proprietary drug
development pipeline is based primarily on melanocortin (MC)-based
therapeutics, and we believe we are a leader in this fast growing area of pharmaceutical
research and development. Therapeutics affecting the activity of the MC family of
receptors may have the potential to treat a variety of conditions and diseases, including
sexual dysfunction, obesity and related disorders, cachexia (extreme wasting, generally
secondary to a chronic disease), skin pigmentation and inflammation.

In
August 2004, we entered into a collaborative development and marketing agreement with King
Pharmaceuticals, Inc. (King), a specialty pharmaceutical company, to jointly
develop and commercialize bremelanotide (formerly known as PT-141), our nasally
administered MC-based peptide presently in Phase 2 clinical development for two distinct
indications, treatment of male erectile dysfunction (ED) and treatment of
female sexual dysfunction (FSD). Pursuant to the terms of the agreement,
Palatin and King share all collaboration development costs, marketing costs and net
profits derived from net sales of bremelanotide in North America based on an agreed
percentage. Palatin and King currently plan to seek a commercialization partner for
bremelanotide for territories outside of North America. We have the option to create, with
King, a urology specialty sales force to co-promote the product in the United States if
the product is successfully developed and commercialized.

We
are in the process of identifying clinical candidate MC therapeutic small molecules for
treatment of obesity and related disorders, with programs for both oral and non-oral drug
delivery. We are also in the process of identifying natriuretic peptide receptor clinical
candidate compounds for the treatment of chronic congestive heart failure
(CHF) and acutely decompensated CHF.

In
December 2005, we voluntarily suspended the sales, marketing and distribution of
NeutroSpec®, our proprietary radiolabeled monoclonal antibody product for imaging and
diagnosing equivocal appendicitis, and recalled all existing customer inventories.
NeutroSpec, which was approved for marketing by the United States Food and Drug
Administration (the FDA) in July 2004, was marketed and distributed by our
strategic collaboration partner, Tyco Healthcare Mallinckrodt (Mallinckrodt).

Key
elements of our business strategy include: entering into alliances and partnerships with
pharmaceutical companies to facilitate the development, manufacture, marketing, sale and
distribution of product candidates we are investigating; expanding our pipeline through
the utilization of our MC expertise and patented drug discovery platform; acquiring
synergistic products and technologies; and partially funding our development and discovery
programs with the cash flow from our NeutroSpec and bremelanotide collaboration
agreements.

We
incorporated in Delaware in 1986 and commenced operations in the biopharmaceutical area in
1996. Our corporate offices and research and development facility are located at 4C Cedar
Brook Drive, Cranbury, New Jersey 08512 and our telephone number is (609) 495-2200. We
maintain an Internet site at http://www.palatin.com, 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
therein or connected thereto shall not be deemed to be incorporated into this quarterly
report on Form 10-Q.

Results of Operations

Three Months Ended September 30, 2006
Compared to the Three Months Ended September 30, 2005.

Royalty Revenues
 For the three months ended September 30, 2006 and 2005, we recognized royalty
revenues of $0 and $0.9 million, respectively. Royalty revenues in the 2005 period
represent amounts earned from Mallinckrodt pursuant to our collaboration agreement, based
on a contractual percentage of Mallinckrodts net sales of NeutroSpec to customers in
the period. Sales and marketing activities related to NeutroSpec were suspended in

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December 2005. We will not earn future royalty revenues related to NeutroSpec unless and
until NeutroSpec sales resume.

Licenses,
Grants and Contracts  For the three months ended September 30, 2006 and 2005, we
recognized $4.9 million and $4.2 million, respectively, in licenses, grants and contracts
revenue consisting of (i) $4.8 million and $4.1 million, respectively, related to
bremelanotide pursuant to our collaboration agreement with King, and (ii) $0.1 million and
$0.1 million related to NeutroSpec pursuant to our collaboration agreement with
Mallinckrodt. The increase in revenue from King primarily reflects an increase from $3.3
million in the 2005 period to $4.0 million in the 2006 period in cost reimbursements from
King, which relate to our increased bremelanotide costs, primarily for the conduct of
phase 2 clinical trials and process development activities. In the three-month periods
ended September 30 of both 2006 and 2005, we also recognized $0.8 million of deferred
revenue from Kings 2004 up-front license payment. License and contract revenue from
Mallinckrodt in the three months ended September 30, 2006 reflects Mallinckrodts
share of the costs incurred in certain NeutroSpec development activities. We expect to
continue to earn contract revenue from King as the development of bremelanotide continues,
in the form of reimbursement of shared development costs and the recognition of deferred
license fees. The amount of such revenue will depend on a number of factors, including
bremelanotide development activities performed and decisions about the division of
responsibility for such activities between us and King. Future cost reimbursements from
Mallinckrodt are dependent upon decisions we make together with Mallinckrodt concerning
future NeutroSpec development activities. We may also earn contract revenue from
Mallinckrodt, subject to decisions concerning future NeutroSpec activities, and King based
on the attainment of certain development milestones.

Royalty Expense
 For the three months ended September 30, 2006 and 2005, royalty expense amounted to
$0 and $0.2 million, respectively. Royalties represented amounts due licensors based
primarily on Mallinckrodts net sales of NeutroSpec to customers. Sales and marketing
activities related to NeutroSpec were suspended in December 2005. We will not incur future
royalty expenses related to NeutroSpec unless and until commercial sales of NeutroSpec
resume.

Research
and Development  Research and development expenses increased to $12.1 million for
the three months ended September 30, 2006 from $9.4 million for the three months ended
September 30, 2005.

Research
and development expenses related to bremelanotide increased to $7.8 million in the 2006
period from $5.1 million in the 2005 period, primarily due to increased costs of ongoing
clinical trials, including our share of increased clinical development activities
performed by King, and higher process development costs. In the three months ended
September 30, 2006, we and King completed two Phase 2B studies evaluating the safety and
efficacy of bremelanotide in patients suffering from mild to severe ED, with one trial
limited to non-diabetic patients and the other to diabetic patients, and initiated patient
enrollment in a Phase 2B at home clinical trial in female patients with FSD.
Associated costs include fees to clinicians, costs of drug supplies and study monitoring
and management. We expect to spend approximately $10 million to $15 million of direct
costs (excluding allocated general expenses) on bremelanotide in the remainder of the current fiscal year
to conduct clinical studies for ED and FSD and continue related process and development
activities prior to initiating Phase 3 clinical trials. A majority of the additional
direct costs will be reimbursed by our collaboration partner, King.

Research
and development expenses related to our MIDAS program increased from $0.4 million for the
three months ended September 30, 2005 to $0.8 million for the three months ended September
30, 2006, primarily as a result of additional contract services for assistance with the
optimization of lead compounds. We expect to spend approximately $2 million to $4 million
of additional direct costs during the remainder of the current fiscal year to continue
laboratory research on various compounds in preparation for filing an Investigational New
Drug Application and commencing clinical trials. The amount of such spending and the
nature of future development activities are dependent on a number of factors, including
primarily the success of our discovery programs, preclinical studies, our ability to
progress a compound into human clinical trials and discussions with potential development
partners.

Research
and development spending on NeutroSpec decreased from $0.6 million for the three months
ended September 30, 2005 to less than $0.1 million for the three months ended September 30,
2006 as a result of lower costs related to manufacturing and process development
activities. We have suspended ongoing clinical trials and plans for future trials,
including studies to evaluate NeutroSpecs market potential as an imaging agent for
other indications such as osteomyelitis (infection deep inside a bone), fever of unknown
origin, post surgical infection, inflammatory bowel disease and pulmonary imaging. We
expect to spend approximately $0.1 million to $0.5 million of direct costs on NeutroSpec
during the remainder of the current fiscal year to conduct selected studies, review the
safety of NeutroSpec and explore other indications. A significant portion of these costs
will be reimbursed by our collaboration partner, Mallinckrodt. The amount of such spending
and the nature of future development activities are dependent on a number of factors,
including primarily the review of NeutroSpec safety and discussions with both the FDA and
Mallinckrodt.

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The
historical amounts of project spending above exclude general research and development
spending, which increased from $3.3 million for the three months ended September 30, 2005
to $3.6 million for the three months ended September 30, 2006, primarily due to increased
personnel costs and the expansion of facilities.

Cumulative
spending from inception to September 30, 2006 on our bremelanotide, NeutroSpec and MIDAS
programs amounts to approximately $95.8 million, $54.7 million and $23.5 million,
respectively. Due to risk factors described in our periodic filings with the SEC,
including the difficulty in currently estimating the costs and timing of future Phase 1
clinical trials and large-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,
significant related net cash inflows will be generated.

General
and Administrative  General and administrative expenses in the three months ended
September 30, 2006 and 2005 amounted to $1.6 million and $1.8 million, respectively. The
decrease in expenses for the 2006 period primarily reflects lower insurance expense and
decreases in miscellaneous taxes and other overhead expenses, which were partially offset
by increased consulting costs related to the bremelanotide program.

Liquidity and Capital Resources

Since
inception, we have incurred net operating losses, primarily related to spending on our
research and development programs. We have financed our net operating losses primarily
through equity financings and revenue received under collaborative agreements.

Our
product candidates are at various stages of research and development and some may never be
successfully developed or commercialized. We will need regulatory approval to market and
sell bremelanotide and obesity and CHF products. In addition, in December 2005, we
voluntarily suspended the sales, marketing and distribution of NeutroSpec and recalled all
existing customer inventories. Our product candidates under development will require
significant further research, development and testing. We may experience uncertainties,
delays, difficulties and expenses commonly experienced by early stage biopharmaceutical
companies, which may include unanticipated problems and additional costs relating to:

|  |                                                                    
|- | -------------------------------------------------------------------
| | the development and testing of products in animals and
     humans;
| | product approval or clearance;                                     
| | regulatory compliance;                                             
| | good manufacturing practices;                                      
| | intellectual property rights;                                      
| | product introduction; and                                          
| | marketing, sales and competition.                                  

Failure to obtain timely regulatory
approval for our other product candidates and indications would impact our ability to
increase revenues and could make it more difficult to attract investment capital for
funding our operations. Any of these possibilities could materially and adversely affect
our operations.

During
the three months ended September 30, 2006, we used $10.0 million of cash for our operating
activities, compared to $2.4 million in the three months ended September 30, 2005. Lower
net cash outflows from operations in the 2005 quarter resulted primarily from lower
operating expenses and the timing of the receipt of reimbursements from King for
bremelanotide costs. In the three months ended September 30, 2005, our accounts receivable
balance decreased $4.3 million. Our periodic accounts receivable balances will continue to
be highly dependent on the timing of such receipts and the division of development
responsibilities between us and King.

During the three months ended
September 30, 2006, there were no proceeds from financing activities. In the three months
ended September 30, 2005, net proceeds from the issuance of common stock and warrants
amounted to $10.0 million, reflecting proceeds from the sale of common stock and warrants
to King, related to our collaboration agreement.

We
have incurred cumulative negative cash flows from operations since our inception, and have
expended, and expect to continue to expend in the future, substantial funds to complete
our planned product development efforts. We expect that our cash, cash equivalents and
available-for-sale investments as of September 30, 2006, together with expected revenue
from collaboration and license agreements and other income will be adequate to fund the
Companys operations for at least the next twelve months. No assurance can be given
that we will earn future milestone payments that are contingent on specified events or
that we will not consume a significant amount of our available resources before that time.
We plan to continue to monitor the progress of our development programs and the timing and
amount of related expenditures and potential milestone receipts, refine our operations,
control expenses, evaluate alternative methods to conduct our business and seek additional
financing and sharing of development costs through strategic collaboration agreements or
other resources.

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We
are actively searching for certain products and technologies to license or acquire, now or
in the future, and expect to continue to do so. If we are successful in identifying a
product or technology for acquisition, we may require substantial funds for such an
acquisition and subsequent development or commercialization. We do not know whether any
acquisition will be consummated in the future or whether we will be able to obtain
additional funding if such an acquisition is located.

Our
license agreements related to NeutroSpec require royalty payments by us based on
commercial net sales and payments of up to $2.25 million contingent on the achievement of
specified cumulative net margins on sales by Mallinckrodt. No contingent amounts will be
payable related to NeutroSpec unless we recommence sales and marketing of NeutroSpec. We
do not reasonably expect to make any such contingent payments during the next twelve
months. We also have a license agreement for patent rights related to certain compounds
and methods of treatment for sexual dysfunction. The license agreement requires contingent
payments based on certain upfront fees we receive as a result of a sublicense. We do not
reasonably expect to sublicense such rights or make any material contingent payments
during the next twelve months.

We
anticipate incurring additional losses over at least the next few years. To achieve
profitability, we, alone or with others, must successfully develop and commercialize our
technologies and proposed products, conduct pre-clinical studies and clinical trials,
obtain required regulatory approvals and successfully manufacture and market such
technologies and proposed products. The time required to reach profitability is highly
uncertain, and we do not know whether we will be able to achieve profitability on a
sustained basis, if at all.

Item 3. Quantitative and
Qualitative Disclosures About Market Risk.

Interest
Rate Risk. Our exposure to market risk from changes in interest rates relates primarily to
our investment portfolio. As of September 30, 2006, our cash and cash equivalents were
$18.2 million and investments, which consisted of mutual funds, were $2.3 million. Due to
the average maturity of our investment portfolio, we do not believe that short term
fluctuations in interest rates would materially affect the value of our securities.

Item 4. Controls and
Procedures.

Our
management, with the participation of our Chief Executive Officer and Chief Financial
Officer, has evaluated the effectiveness of our disclosure controls and procedures, as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e), as of the end of the period covered
by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures were effective. There were
no changes in our internal control over financial reporting that occurred during our most
recent fiscal quarter that materially affected, or that are reasonably likely to
materially affect, our internal control over financial reporting.

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PART II  OTHER
INFORMATION

Item 1. Legal
Proceedings.

As
discussed in our annual report on Form 10-K for our fiscal year ended June 30, 2006, we are the
respondent in an arbitration proceeding before the American Arbitration Association
initiated by Competitive Technologies, Inc. (CTI) alleging breach of the terms
of our license agreement for patent rights related to certain compounds and methods of
treatment for sexual dysfunction and other actions asserted to arise out of the license
agreement. On September 25, 2006, we filed a reply to CTIs statement of claim,
denying all material allegations asserted by CTI, and asserting counterclaims against CTI
for declaratory judgment that claims are barred by the previous settlement agreement with
CTI and that bremelanotide is not subject to the license agreement with CTI. We and CTI
have not yet completed selection of the arbitration panel, and discovery has not yet been
initiated in the arbitration.

Item 1A. Risk
Factors.

There
has been no material change in our risk factors as previously disclosed in our annual
report on Form 10-K for the fiscal year ended June 30, 2006 in response to Item 1A., Part
1 of such Form 10-K.

Item 2. Unregistered
Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon
Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other
Information.

None.

Item 6. Exhibits.

Exhibits
filed with this report:

| |      |                                                                                                                                             
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------
| | 31.1 | Certification of Chief Executive Officer.                                                                                                   
| |      |                                                                                                                                             
| | 31.2 | Certification of Chief Financial Officer.                                                                                                   
| |      |                                                                                                                                             
| | 32.1 | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section
     1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.
| |      |                                                                                                                                             
| | 32.2 | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section
     1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.

14

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Signatures

In
accordance with the requirements of the Exchange Act, the registrant caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

|                       |  |                                                                                                                                         
|---------------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------
|                       |  | Palatin Technologies, Inc.(Registrant)                                                                                                  
|                       |  |                                                                                                                                         
|                       |  |                                                                                                                                         
|Date: November 9, 2006 |  | /s/ Carl
     SpanaCarl
     Spana, Ph.D.President andChief Executive Officer                                                           
|                       |  |                                                                                                                                         
|                       |  |                                                                                                                                         
|Date: November 9, 2006 |  | /s/ Stephen T. WillsStephen T. WillsExecutive Vice President andChief Financial Officer
     (PrincipalFinancial and Accounting Officer)

15

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EXHIBIT INDEX

| |      |                                                                                                                                             
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------
| | 31.1 | Certification of Chief Executive Officer.                                                                                                   
| |      |                                                                                                                                             
| | 31.2 | Certification of Chief Financial Officer.                                                                                                   
| |      |                                                                                                                                             
| | 32.1 | Certification by Chief Executive Officer pursuant to 18 U.S.C. Section
     1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.
| |      |                                                                                                                                             
| | 32.2 | Certification by Chief Financial Officer pursuant to 18 U.S.C. Section
     1350, as added by Section 906 of the Sarbanes-Oxley Act of 2002.