# Citius Pharmaceuticals, Inc.: Form 10-Q for the period ended Jun 30, 2024

- Company: [Citius Pharmaceuticals, Inc.](/companies/ctxr.md) (CIK 1506251)
- Form: 10-Q
- Filed: 2024-08-12
- Accepted by EDGAR: Aug 12, 2024, 16:51 ET
- Period: 2024-06-30
- Accession: 0001213900-24-067732
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1506251/000121390024067732/ea0210893-10q_citius.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1506251/000121390024067732/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-06-30.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Research and development | 3 months, 2024-04-01 to 2024-06-30 | $2.8m | us-gaap:ResearchAndDevelopmentExpense |
| Research and development | 9 months, 2023-10-01 to 2024-06-30 | $9.0m | us-gaap:ResearchAndDevelopmentExpense |
| Operating income | 3 months, 2024-04-01 to 2024-06-30 | −$10.6m | us-gaap:OperatingIncomeLoss |
| Operating income | 9 months, 2023-10-01 to 2024-06-30 | −$30.9m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-04-01 to 2024-06-30 | $144.0k | us-gaap:IncomeTaxExpenseBenefit |
| Income tax | 9 months, 2023-10-01 to 2024-06-30 | $432.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-04-01 to 2024-06-30 | −$10.6m | us-gaap:NetIncomeLoss |
| Net income | 9 months, 2023-10-01 to 2024-06-30 | −$28.3m | us-gaap:NetIncomeLoss |
| Diluted shares (weighted) | 3 months, 2024-04-01 to 2024-06-30 | 173,856,960 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Diluted shares (weighted) | 9 months, 2023-10-01 to 2024-06-30 | 163,947,311 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 9 months, 2023-10-01 to 2024-06-30 | −$22.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Cash and equivalents | at 2024-06-30 | $17.9m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-06-30 | $28.0m | us-gaap:AssetsCurrent |
| Total assets | at 2024-06-30 | $97.1m | us-gaap:Assets |
| Current liabilities | at 2024-06-30 | $4.2m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-06-30 | $10.8m | us-gaap:Liabilities |
| Shareholders' equity | at 2024-06-30 | $85.7m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 28,531 characters.

*The following discussion and analysis of our financial condition and results of operations for the three and nine months ended June 30, 2024 and 2023 should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Report and in conjunction with the audited financial statements of Citius Pharmaceuticals, Inc. included in our Annual Report on Form 10-K for the year ended September 30, 2023, filed with the Securities and Exchange Commission (“SEC”) on December 29, 2023. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors. We caution that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Cautionary Note Regarding Forward-Looking Statements” on page iii of this Report.*

### Historical Background

Citius Pharmaceuticals, Inc. (“Citius Pharma,” and together with its subsidiaries, the “Company,” “we” or “us”) is a late-stage biopharmaceutical company dedicated to the development and commercialization of first-in-class critical care products with a focus on oncology, anti-infectives in adjunct cancer care, unique prescription products and stem cell therapies. On September 12, 2014, we acquired Citius Pharmaceuticals, LLC as a wholly-owned subsidiary. Citius Pharmaceuticals, LLC, was dissolved on December 29, 2023.

On March 30, 2016, we acquired all of the outstanding stock of Leonard-Meron Biosciences, Inc. (“LMB”) by issuing shares of our common stock. We acquired identifiable intangible assets of $19,400,000 related to in-process research and development and recorded goodwill of $9,346,796 for the excess of the purchase consideration over the net assets acquired.

On September 11, 2020, we formed NoveCite, Inc. (“NoveCite”), a Delaware corporation, of which we own 75% of the issued and outstanding capital stock.

On August 23, 2021, we formed Citius Oncology, Inc. (formerly named Citius Acquisition Corp.) (“Citius Oncology”) (now named “Citius Oncology Sub, Inc.), as a wholly-owned subsidiary in conjunction with the acquisition of LYMPHIR, which began operations in April 2022. On August 12, 2024, Citius Pharma completed the Spinoff of Citius Oncology as a separate publicly traded entity (Nasdaq: CTOR) focused on commercializing LYMPHIR.

In-process research and development (“IPR&D”) consists of (i) the $19,400,000 acquisition value of LMB’s drug candidate Mino-Lok®, which is an antibiotic solution used to treat catheter-related bloodstream infections and is expected to be amortized on a straight-line basis over a period of eight years commencing upon revenue generation, and (ii) the $40,000,000 acquisition value of the exclusive license for LYMPHIR (denileukin diftitox), which is a late-stage oncology immunotherapy for the treatment of cutaneous T-cell lymphoma (“CTCL”), a rare form of non-Hodgkin lymphoma, and is expected to be amortized on a straight-line basis over a period of twelve years commencing upon revenue generation.

Goodwill of $9,346,796 represents the value of LMB’s industry relationships and its assembled workforce. Goodwill will not be amortized but will be tested at least annually for impairment.

Through June 30, 2024, we have devoted substantially all our efforts to business planning, research and development, recruiting management and technical staff, and raising capital. We have not yet realized any revenues from our operations.

### Recent Developments

On October 23, 2023, Citius Pharma and Citius Oncology entered into an agreement and plan of merger and reorganization with TenX Keane Acquisition, and its wholly owned subsidiary, TenX Merger Sub Inc., whereby TenX Merger Sub Inc. will merge with and into Citius Oncology, with Citius Oncology surviving as a wholly owned subsidiary of TenX Keane Acquisition. The newly combined publicly traded company is to be named “Citius Oncology, Inc.” On August 2, 2024, the shareholders of TenX Keane Acquisition approved the transaction. The transaction closed on August 12, 2024.

### Patent and Technology License Agreements

**Mino-Lok® –** LMB has a patent and technology license agreement with Novel Anti-Infective Therapeutics, Inc. (“NAT”) to develop and commercialize Mino-Lok on an exclusive, worldwide sub-licensable basis, as amended. Since May 2014, LMB has paid an annual maintenance fee, which began at $30,000 and increased over five years to $90,000, where it will remain until the commencement of commercial sales of a product subject to the license. LMB will also pay annual royalties on net sales of licensed products, with a low double digit royalty rate (with a range of 10% to 15%). In limited circumstances in which the licensed product is not subject to a valid patent claim and a competitor is selling a competing product, the royalty rate is in the low- to mid-single digits (within a range of 2% to 7%). After a commercial sale is obtained, LMB must pay minimum aggregate annual royalties that increase in subsequent years. LMB must also pay NAT up to $1,100,000 upon achieving specified regulatory and sales milestones. Finally, LMB must pay NAT a specified percentage of payments received from any sub licensees.

**Mino-Wrap –** On January 2, 2019, we entered into a patent and technology license agreement with the Board of Regents of the University of Texas System on behalf of the University of Texas M. D. Anderson Cancer Center (“Licensor”), whereby we in-licensed exclusive worldwide rights to the patented technology for any and all uses relating to breast implants. We terminated the Mino-Wrap license agreement on December 11, 2023.

**NoveCite –** On October 6, 2020, our subsidiary NoveCite entered into a license agreement with Novellus Therapeutics Limited (“Licensor”), whereby NoveCite acquired an exclusive, worldwide license, with the right to sublicense, develop and commercialize a stem cell therapy based on the Licensor’s patented technology for the treatment of acute pneumonitis of any etiology in which inflammation is a major agent in humans. Upon execution of the license agreement, NoveCite paid an upfront payment of $5,000,000 to Licensor and issued to Licensor shares of Novecite’s common stock representing 25% of NoveCite’s currently outstanding equity. We own the other 75% of NoveCite’s currently outstanding equity.

Citius Pharma is responsible for the operational activities of NoveCite and bears all costs necessary to operate NoveCite. Citius Pharma’s officers are also the officers of NoveCite and oversee the business strategy and operations of NoveCite. As such, NoveCite is accounted for as a consolidated subsidiary with a noncontrolling interest.

In July 2021, Novellus was acquired by Brooklyn ImmunoTherapeutics (“Brooklyn”). Pursuant to this transaction, the NoveCite license was assumed by Brooklyn with all original terms and conditions. As part of the Novellus and Brooklyn merger transaction, the 25% non-dilutive position per the subscription agreement between Novellus and NoveCite was removed. In October 2021, Brooklyn changed its name to Eterna Therapeutics Inc. (“Eterna”).

Under the license agreement, NoveCite is obligated to pay Licensor up to an aggregate of $51,000,000 in regulatory and developmental milestone payments. NoveCite also must pay a royalty equal to a mid-teens percentage of net sales, commencing upon the first commercial sale of a licensed product. This royalty is subject to downward adjustment on a product-by-product and country-by-country basis to a mid-single digit percentage (within a range of 4% to 8%) of net sales in any country in the event of the expiration of the last valid patent claim or if no valid patent claim exists in that country. The royalty will end on the earlier of (i) date on which a biosimilar product is first marketed, sold, or distributed by Licensor or any third party in the applicable country or (ii) the 10-year anniversary of the date of expiration of the last-to-expire valid patent claim in that country. In the case of a country where no licensed patent ever exists, the royalty will end on the later of (i) the date of expiry of such licensed product’s regulatory exclusivity and (ii) the 10-year anniversary of the date of the first commercial sale of the licensed product in the applicable country. In addition, NoveCite will pay to Licensor an amount equal to a mid-twenties percentage of any sublicensee fees it receives.

Under the terms of the license agreement, in the event that Licensor receives any revenue involving the original cell line included in the licensed technology, then Licensor shall remit to NoveCite 50% of such revenue.

**LYMPHIR –** In September 2021, Citius Pharma entered into an asset purchase agreement with Dr. Reddy’s and a license agreement with Eisai to acquire an exclusive license for E7777 (denileukin diftitox), a late-stage oncology immunotherapy for the treatment of CTCL, a rare form of non-Hodgkin lymphoma. Citius Pharma renamed E7777 as I/ONTAK and also obtained the trade name LYMPHIR for the product. Citius Pharma assigned these agreements to Citius Oncology effective April 1, 2022.

Under the terms of the agreements, Citius Pharma acquired Dr. Reddy’s exclusive license for E7777 from Eisai and other related assets owned by Dr. Reddy’s (now owned by Citius Oncology). The exclusive license rights, through Citius Oncology, include rights to develop and commercialize E7777 in all markets except for Japan and certain parts of Asia. Additionally, we, through Citius Oncology, retain an option on the right to develop and market the product in India. Eisai retains exclusive development and marketing rights for the agent in Japan, China, Korea, Taiwan, Hong Kong, Macau, Indonesia, Thailand, Malaysia, Brunei, Singapore, India (subject to the India option), Pakistan, Sri Lanka, Philippines, Vietnam, Myanmar, Cambodia, Laos, Afghanistan, Bangladesh, Bhutan, Nepal, Mongolia, and Papua New Guinea. Citius Pharma paid a $40 million upfront payment, which represents the acquisition date fair value of the in-process research and development acquired from Dr. Reddy’s. Dr. Reddy’s is entitled to up to $40 million in development milestone payments related to CTCL approvals in the U.S. and other markets, up to $70 million in development milestones for additional indications, as well as commercial milestone payments and low double-digit tiered royalties on net product sales (within a range of 10% to 15%), and up to $300 million for commercial sales milestones. We also must pay on a fiscal quarter basis tiered royalties equal to low double-digit percentages of net product sales (within a range of 10% to 15%). The royalties will end on the earlier of (i) the 15-year anniversary of the first commercial sale of the latest indication that received regulatory approval in the applicable country and (ii) the date on which a biosimilar product results in the reduction of net sales in the applicable product by 50% in two consecutive quarters, as compared to the four quarters prior to the first commercial sale of the biosimilar product. We will also pay to Dr. Reddy’s an amount equal to a low-thirties percentage of any sublicense upfront consideration or milestone payments (or the like) received by us and the greater of (i) a low-thirties percentage of any sublicensee sales-based royalties or (ii) a mid-single digit percentage of such licensee’s net sales.

Under the license agreement, Eisai is to receive a $6 million development milestone payment upon initial approval and additional commercial milestone payments related to the achievement of net product sales thresholds (which increases to $7 million in the event we have exercised our option to add India to the licensed territory prior to FDA approval) and an aggregate of up to $22 million related to the achievement of net product sales thresholds. Citius Oncology was also required to reimburse Eisai for up to $2.65 million of its costs to complete the Phase 3 pivotal clinical trial for LYMPHIR for the CTCL indication and reimburse Eisai for all reasonable costs associated with the preparation of a BLA for LYMPHIR. Eisai was responsible for completing the CTCL clinical trial, and CMC activities through the filing of a Biologics License Application (“BLA”) for LYMPHIR with the FDA. The BLA was filed with the FDA on September 27, 2022. We, through Citius Oncology, will be responsible for development costs associated with potential additional indications.

On July 29, 2023, we received a Complete Response Letter (“CRL”) from the FDA regarding the BLA seeking approval for LYMPHIR. The FDA has required that we incorporate enhanced product testing, and additional controls agreed to with the FDA during the market application review. The FDA raised no concerns relating to the safety and efficacy clinical data package.

On September 8, 2023, we announced that the FDA agreed with our plans to address the requirements outlined in the CRL. No additional clinical efficacy or safety trials were requested by FDA for the resubmission. On February 13, 2024, we filed the BLA resubmission package with the FDA and on March 18, 2024, the FDA accepted the resubmission of the BLA, and on August 8, 2024, we a announced that the FDA had approved LYMPHIR.

### RESULTS OF OPERATIONS

### Three months ended June 30, 2024 compared with the three months ended June 30, 2023

|  | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 |
| --- | ---: | ---: |
| Revenues | $— | $— |
| Operating expenses: |  |  |
| Research and development | 2,763,865 | 3,764,675 |
| General and administrative | 4,808,551 | 3,733,326 |
| Stock-based compensation expense | 3,061,763 | 1,174,111 |
| Total operating expenses | 10,634,179 | 8,672,112 |
| Operating loss | (10,634,179) | (8,672,112) |
| Interest income | 204,843 | 336,780 |
| Loss before income taxes | (10,429,336) | (8,335,332) |
| Income tax expense | 144,000 | 144,000 |
| Net loss | $(10,573,336) | $(8,479,332) |

### Revenues

We did not generate any revenues for the three months ended June 30, 2024 or 2023.

### Research and Development Expenses

For the three months ended June 30, 2024, research and development expenses were $2,763,865 as compared to $3,764,675 during the three months ended June 30, 2023, a decrease of $1,000,810.

Research and development costs for Mino-Lok increased by $52,558 to $1,144,058 for the three months ended June 30, 2024 as compared to $1,091,500 for the three months ended June 30, 2023, due primarily to study close out costs related to the Phase 3 trial. On January 2, 2024, Citius Pharma announced that it had completed enrollment in its pivotal Phase 3 clinical trial for Mino-Lok, an antibiotic lock solution to salvage catheters in patients with catheter-related bloodstream infections. A total of 109 catheter failure events were observed in the event-based trial; a minimum of 92 catheter failure events were required to complete the trial. The study enrolled 241 patients at clinical sites in the U.S. and India. On May 21, 2024, we announced positive topline data from our Phase 3 study as primary and secondary endpoints were met with statistical significance. The next steps are to prepare a submission to the FDA and schedule a Type B meeting.

Research and development costs for Halo-Lido decreased by $973,287 to $29,596 for the three months ended June 30, 2024 as compared to $1,002,883 for the three months ended June 30, 2023 due to lower costs associated with the Phase 2b trial incurred in the current quarter. On June 20, 2023, we announced that the high dose formulation of CITI-002, a lidocaine and halobetasol propionate combination formulation, provided a meaningful reduction in symptom severity, as reported by patients, when compared to individual components alone. Moreover, there were no reported significant adverse events and CITI-002 was well tolerated by patients in the study. An end of Phase 2 meeting was held with the FDA in the second calendar quarter of 2024 and we have begun planning the next steps in the regulatory and clinical development program for CITI-002.

Research and development costs for LYMPHIR were $1,583,970 during the three months ended June 30, 2024 as compared to $1,658,838 for the three months ended June 30, 2023. The $74,868 decrease in expenses was primarily due to completion of the BLA resubmission package in the prior quarter. On February 13, 2024, we filed the BLA resubmission package with the FDA and on March 18, 2024, the FDA accepted the resubmission of the BLA and assigned a PDUFA goal date of August 13, 2024.

We expect that research and development expenses will stabilize at current levels in fiscal 2024 as we focus on the commercialization of LYMPHIR, prepare a submission to the FDA and schedule a Type B meeting for Mino-Lok, and analyze the data from our Phase 2b trial and begin planning our Phase 3 trial for Halo-Lido.

### General and Administrative Expenses

For the three months ended June 30, 2024, general and administrative expenses were $4,808,551 as compared to $3,733,326 during the three months ended June 30, 2023. General and administrative expenses increased by $1,075,225 in comparison with the prior period. The primary reasons for the increase were higher costs for pre-launch sales and market research activities associated with LYMPHIR. General and administrative expenses consist primarily of compensation costs, professional fees for legal, regulatory, accounting, and corporate development services, and investor relations expenses.

### Stock-based Compensation Expense

For the three months ended June 30, 2024, stock-based compensation expense was $3,061,763 as compared to $1,174,111 for the three months ended June 30, 2023. For the three months ended June 30, 2024 and 2023, stock-based compensation includes $13,858 and $31,858, respectively, in expense for the NoveCite stock plan. For the three months ended June 30, 2024, stock-based compensation also includes $1,957,000 in expense for the Citius Oncology stock plan. Stock-based compensation expense for the most recently completed quarter increased by $1,887,652 in comparison to the prior period primarily due to the Citius Oncology stock plan.

### Other Income

Interest income for the three months ended June 30, 2024 was $204,843 as compared to interest income of $336,780 for the prior period. The decrease is due to lower investable balances of the remaining proceeds of our equity offerings and common stock warrant exercises in money market accounts.

### Income Taxes

The Company recorded deferred income tax expense of $144,000 for both the three months ended June 30, 2024 and 2023, related to the amortization for taxable purposes of its in-process research and development asset.

### Net Loss

For the three months ended June 30, 2024, we incurred a net loss of $10,573,336, compared to a net loss for the three months ended June 30, 2023 of $8,479,332. The $2,094,004 increase in the net loss was primarily due to increases of $1,075,225 in general and administrative expenses and $1,887,652 in stock-based compensation expense, being partially offset by the $1,000,810 decrease in research and development expenses.

### Nine months ended June 30, 2024 compared with the nine months ended June 30, 2023

|  | Nine Months Ended June 30, 2024 | Nine Months Ended June 30, 2023 |
| --- | ---: | ---: |
| Revenues | $— | $— |
| Operating expenses: |  |  |
| Research and development | 8,991,673 | 11,937,045 |
| General and administrative | 12,755,190 | 11,129,463 |
| Stock-based compensation expense | 9,198,340 | 3,540,787 |
| Total operating expenses | 30,945,203 | 26,607,295 |
| Operating loss | (30,945,203) | (26,607,295) |
| Interest income | 640,686 | 854,604 |
| Gain on sale of New Jersey net operating losses | 2,387,842 | 3,585,689 |
| Loss before income taxes | (27,916,675) | (22,167.002) |
| Income tax expense | 432,000 | 432,000 |
| Net loss | $(28,348,675) | $(22,599,002) |

19

### Revenues

We did not generate any revenues for the nine months ended June 30, 2024 or 2023.

### Research and Development Expenses

For the nine months ended June 30, 2024, research and development expenses were $8,991,673 as compared to $11,937,045 during the nine months ended June 30, 2023, a decrease of $2,945,372.

Research and development costs for Mino-Lok increased by $364,721 to $3,673,969 for the nine months ended June 30, 2024 as compared to $3,309,248 for the nine months ended June 30, 2023, due primarily to study close out costs associated with the Phase 3 trial. On January 2, 2024, Citius Pharma announced that it had completed enrollment in its pivotal Phase 3 clinical trial for Mino-Lok, an antibiotic lock solution to salvage catheters in patients with catheter-related bloodstream infections. A total of 109 catheter failure events were observed in the event-based trial; a minimum of 92 catheter failure events were required to complete the trial. The study enrolled 241 patients at clinical sites in the U.S. and India. On May 21, 2024, we announced positive topline data from our Phase 3 study as primary and secondary endpoints were met with statistical significance. The next steps are to prepare a submission to the FDA and schedule a Type B meeting.

Research and development costs for Halo-Lido decreased by $3,255,843 to $478,138 for the nine months ended June 30, 2024 as compared to $3,733,981 for the nine months ended June 30, 2023 due to lower costs associated with the Phase 2b trial. On June 20, 2023, we announced that the high dose formulation of CITI-002, a lidocaine and halobetasol propionate combination formulation, provided a meaningful reduction in symptom severity, as reported by patients, when compared to individual components alone. Moreover, there were no reported significant adverse events and CITI-002 was well tolerated by patients in the study. An end of Phase 2 meeting was held with the FDA in the second calendar quarter of 2024 and we have begun planning the next steps in the regulatory and clinical development program for CITI-002.

Research and development costs for LYMPHIR were $4,817,350 during the nine months ended June 30, 2024 as compared to $4,490,291 for the nine months ended June 30, 2023. The $327,059 increase in expenses was primarily due to costs associated with new analytical testing methods related to the remediation activities to respond to the CRL. On February 13, 2024, we filed the BLA resubmission package with the FDA and on March 18, 2024, the FDA accepted the resubmission of the BLA and assigned a PDUFA goal date of August 13, 2024.

We expect that research and development expenses will stabilize at current levels in fiscal 2024 as we focus on the commercialization of LYMPHIR, prepare a submission to the FDA and schedule a Type B meeting for Mino-Lok, and analyze the data from our Phase 2b trial and begin planning our Phase 3 trial for Halo-Lido.

### General and Administrative Expenses

For the nine months ended June 30, 2024, general and administrative expenses were $12,755,190 as compared to $11,129,463 during the nine months ended June 30, 2023. General and administrative expenses increased by $1,625,727 in comparison with the prior period. The primary reasons for the increase were higher costs for pre-launch sales and market research activities associated with LYMPHIR. General and administrative expenses consist primarily of compensation costs, professional fees for legal, regulatory, accounting, and corporate development services, and investor relations expenses.

### Stock-based Compensation Expense

For the nine months ended June 30, 2024, stock-based compensation expense was $9,198,340 as compared to $3,540,787 for the nine months ended June 30, 2023. For the nine months ended June 30, 2024 and 2023, stock-based compensation includes $47,574 and $98,524, respectively, in expense for the NoveCite stock plan. For the nine months ended June 30, 2024, stock-based compensation also includes $5,831,000 in expense for the Citius Oncology stock plan. Stock-based compensation expense for the nine months ended June 30, 2024 increased by $5,657,553 in comparison to the prior period primarily due to the Citius Oncology stock plan.

### Other Income

Interest income for the nine months ended June 30, 2024 was $640,686 as compared to interest income of $854,604 for the prior period. The decrease is due to lower investable balances of the remaining proceeds of our equity offerings and common stock warrant exercises in money market accounts.

Other income for the nine months ended June 30, 2024 and 2023 includes gains of $2,387,842 and $3,585,689, respectively, recognized in connection with the sale of certain New Jersey income tax net operating losses to third parties under the New Jersey Technology Business Tax Certificate Transfer Program.

### Income Taxes

The Company recorded deferred income tax expense of $432,000 for both the nine months ended June 30, 2024 and 2023, related to the amortization for taxable purposes of its in-process research and development asset.

### Net Loss

For the nine months ended June 30, 2024, we incurred a net loss of $28,348,675 compared to a net loss for the nine months ended June 30, 2023 of $22,599,002. The $5,749,673 increase in the net loss was primarily due to the increase in stock-based compensation expense of $5,657,553.

### LIQUIDITY AND CAPITAL RESOURCES

### Liquidity and Working Capital

Citius Pharma has incurred operating losses since inception and incurred a net loss of $28,348,675 for the nine months ended June 30, 2024. At June 30, 2024, Citius Pharma had an accumulated deficit of $190,580,054. Citius Pharma’s net cash used in operations during the nine months ended June 30, 2024 was $22,288,687.

As a result of the Company’s common stock offerings and common stock warrant exercises during the year ended September 30, 2021, the May 2023 registered direct offering and the April 2024 registered direct offering, the Company had working capital of approximately $23,800,000 at June 30, 2024. At June 30, 2024, Citius Pharma had cash and cash equivalents of $17,911,192 available to fund its operations. The Company’s primary sources of cash flow since inception have been from financing activities. Our primary uses of operating cash were for in-licensing of intellectual property, product development and commercialization activities, employee compensation, consulting fees, legal and accounting fees, insurance, and investor relations expenses.

Based on our cash and cash equivalents at June 30, 2024, we expect that we will have sufficient funds to continue our operations through December 2024. We expect to need to raise additional capital in the future to support our operations beyond December 2024. There is no assurance, however, that we will be successful in raising the needed capital or that the proceeds will be received in an amount or in a timely manner to support our operations.

### Inflation

Our management believes that inflation has not had a material effect on our results of operations.

### Off Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

### Critical Accounting Policies and Estimates

The preparation of our financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities as of the date of the financial statements and the amounts of revenues and expenses recorded during the reporting periods. We base our estimates on historical experience, where applicable, and other assumptions that we believe are reasonable under the circumstances. Actual results may differ from our estimates under different assumptions or conditions.

Our critical accounting policies and use of estimates are discussed in, and should be read in conjunction with, the annual consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2023, filed with the SEC on December 29, 2023.

## Controls and procedures

As filed, 1,874 characters.

### Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the specified time periods and accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding disclosure.

Our Chief Executive Officer (who is our principal executive officer) and Chief Financial Officer (who is our principal financial officer and principal accounting officer), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act) as of June 30, 2024. In designing and evaluating disclosure controls and procedures, we recognize that any disclosure controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objective. As of June 30, 2024, based on the evaluation of these disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

### Changes In Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 209 characters.

There have been no material changes to the Company’s risk factors as disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023, filed with the SEC on December 29, 2023.

Filed Aug 12, 2024.
Source: SEC EDGAR, the filing index for accession 0001213900-24-067732. Last ingested by Listed: Nov 4, 2026, 17:46 ET. No prices; not investment advice.