Citius Pharmaceuticals, Inc.: Form 10-Q for the period ended Jun 30, 2025

The following discussion and analysis of our financial condition and results of operations for the three and nine months ended June 30, 2025 and 2024 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, 2024, filed with the Securities and Exchange Commission (“SEC”) on December 27, 2024, as amended on January 27, 2025. 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

We are a biopharmaceutical company dedicated to the development and commercialization of first-in-class critical care products. 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. 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., a Delaware corporation, of which we own 75% of the issued and outstanding capital stock.

On August 23, 2021, we formed Citius Acquisition Corp., or SpinCo, as a wholly-owned subsidiary in conjunction with the acquisition of LYMPHIR, but Citius Acquisition did not begin operations until April 2022, when Citius Pharma transferred to it the assets related to LYMPHIR, including the related license agreement with Eisai and the related asset purchase agreement with Dr. Reddy’s Laboratories SA, a subsidiary of Dr. Reddy’s. At this time, Citius Acquisition changed its name to Citius Oncology, Inc. In August 2024, as part of the Merger, the new publicly-traded company and majority-owned subsidiary of Citius Pharma was named Citius Oncology, Inc.

In-process research and development of $19,400,000 represents the value of LMB’s leading 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. 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. In-process research and development of $73,400,000 represents the value of our exclusive license for LYMPHIR (denileukin diftitox), a late-stage oncology immunotherapy for the treatment of 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 in 2025.

Through June 30, 2025, we have devoted substantially all our efforts to product development, raising capital, building infrastructure through strategic alliances and coordinating activities relating to our proprietary products. We have not yet realized any revenues from our operations.

Reverse Stock Split

Effective November 25, 2024, the Company executed a reverse stock split of its common stock, par value $0.001 per share, at a ratio of 1-for-25 (“Reverse Stock Split”). All share amounts have been retroactively adjusted to reflect the split.

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 has 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 (within 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 of $100,000 in the first commercial year which is prorated for a less than 12-month period, increasing $25,000 per year to a maximum of $150,000 annually. 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.

NoveCite – On October 6, 2020, our subsidiary NoveCite entered into a license agreement with Novellus Therapeutics Limited, whereby NoveCite acquired an exclusive, worldwide license, with the right to sublicense, to develop and commercialize a stem cell therapy based on Novellus’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 Novellus and issued to Novellus 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.

In July 2021, Novellus was acquired by Brooklyn ImmunoTherapeutics. Pursuant to this transaction, the NoveCite license was assumed by Brooklyn with all original terms and conditions. In October 2021, Brooklyn changed its name to Eterna Therapeutics Inc.

As part of the Novellus and Brooklyn merger transaction, the 25% non-dilutive position per the subscription agreement between Novellus and NoveCite was removed.

Under the license agreement, NoveCite is obligated to pay Eterna 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 Eterna 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 Eterna 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 Eterna receives any revenue involving the original cell line included in the licensed technology, then Eterna 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 of E7777 (denileukin diftitox), an 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 of LYMPHIR for the product. Citius Pharma assigned these agreements to SpinCo effective April 1, 2022. Denileukin diftitox is referred to in this report as E7777, I/ONTAK or LYMPHIR, depending on the period of time and context that is being discussed.

Under the terms of these agreements, Citius Pharma acquired Dr. Reddy’s exclusive license for E7777 from Eisai and other related assets owned by Dr. Reddy’s (which are 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, retained 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 prior to FDA approval), Pakistan, Sri Lanka, Philippines, Vietnam, Myanmar, Cambodia, Laos, Afghanistan, Bangladesh, Bhutan, Nepal, Mongolia, and Papua New Guinea. Citius Pharma paid Dr. Reddy’s 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. Citius Oncology 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. Citius Oncology 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. Citius Pharma is a guarantor of Citius Oncology’s payment obligations under these agreements.

At the time of the FDA approval for LYMPHIR, a $27.5 million milestone payment became payable to Dr. Reddy’s under the terms of the asset purchase agreement for which a balance of $22.5 million remains due as of June 30, 2025. Pending further discussions with Dr. Reddy’s, Dr. Reddy’s agreed to a partial deferral without penalty of this milestone payment. On July 10, 2025, Citius Pharma made a payment of $1,000,000 to Dr. Reddy’s against the outstanding milestone approval fee. On July 28, 2025, Citius Oncology made a payment of $1,250,000 to Dr. Reddy’s against the outstanding milestone approval fees.

Under the license agreement, Eisai was to receive a $5.9 million milestone payment upon FDA approval, which is included in license payable at June 30, 2025, and additional commercial milestone payments related to the achievement of net product sales thresholds and an aggregate of up to $22 million related to the achievement of net product sales thresholds. The Company, through 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 the BLA for LYMPHIR. Eisai was responsible for completing the CTCL clinical trial, and CMC activities through the filing of the BLA for LYMPHIR with the FDA. The BLA was approved by the FDA on August 8, 2024. We, through Citius Oncology, are responsible for development costs associated with potential additional indications.

On March 28, 2025, Citius Oncology and Eisai entered into a letter agreement that amended the license agreement to provide for a payment schedule to Eisai for the milestone payment and certain unpaid invoices. Citius Oncology has agreed to pay Eisai on or before July 15, 2025, an aggregate amount of $2,535,318 and thereafter on the 15th of each of the next four months to pay Eisai $2,350,000 and make a final payment of $2,197,892 to Eisai on or before December 15, 2025, in each case with interest on each obligation from its original due date through the date of actual payment under the letter agreement at the rate of 2% per annum. During the nine months ended June 30, 2025 Citius Oncology recorded $160,755 in interest expense under the agreement. The parties released each other from any and all claims, losses, damages, costs and expenses that arise from or related to the failure of Citius Oncology to pay the milestone payment or the other incurred costs under the license agreement except for any claims arising out of a breach of the letter agreement. All other terms of the license agreement remain in full force and effect. On July 15, 2025 Citius Pharma made a payment of $1,091,167.12 to Eisai for the outstanding milestone approval fee and accumulated interest associated with the letter agreement. On July 21, 2025, Citius Oncology made a payment to Eisai of $1,616,521.96 for other certain invoices and accumulated interest associated with the letter agreement.

The term of the license agreement will continue until (i) March 30, 2026, if there has not been a commercial sale of a licensed product in the territory, or (ii) if there has been a first commercial sale of a licensed product in the territory by March 30, 2026, the 10-year anniversary of the first commercial sale on a country-by-country basis. The term of the license may be extended for additional 10-year periods for all countries in the territory by notifying Eisai and paying an extension fee equal to $10 million. Either party may terminate the license agreement upon written notice if the other party is in material breach of the agreement, subject to cure within the designated time periods. Either party also may terminate the license agreement immediately upon written notice if the other party files for bankruptcy or takes related actions or is unable to pay its debts as they become due. Additionally, either party will have the right to terminate the agreement if the other party directly or indirectly challenges the patentability, enforceability or validity of any licensed patent.

Under the purchase agreement with Dr. Reddy’s, we are required to (i) use commercially reasonable efforts to make commercially available products in the CTCL indication, peripheral T-cell lymphoma indication and immuno-oncology indication, (ii) initiate two investigator initiated immuno-oncology trials (both of which have been initiated), (iii) use commercially reasonable efforts to achieve each of the approval milestones, and (iv) complete each specified immuno-oncology investigator trial on or before the four-year anniversary of the effective date of the definitive agreement. Additionally, we are required to commercially launch a product in a territory within six months of receiving regulatory approval for such product in each such jurisdiction.

RESULTS OF OPERATIONS

Three months ended June 30, 2025 compared with the three months ended June 30, 2024

Revenues

We did not generate any revenues for the three months ended June 30, 2025 or 2024.

On June 9, 2025, we announced that we entered into a distribution services agreement with Cardinal Health (NYSE: CAH), a leading provider of pharmaceutical and specialty pharmaceutical distribution services in the United States. This agreement is designed to help provide access to LYMPHIR in support of its anticipated U.S. commercial launch.

On June 17, 2025, we announced that preparations for the commercial launch of LYMPHIR™, an FDA-approved immunotherapy for the treatment of adults with relapsed or refractory cutaneous T-cell lymphoma (CTCL), are nearing completion. The Company believes it is now operationally positioned to transition from a development-stage enterprise to a fully integrated commercial organization, with all major launch-enabling activities underway. Final preparations are in process for a U.S. launch of LYMPHIR in the fourth quarter of 2025.

On July 15, 2025, we announced the execution of a distribution services agreement with Cencora (formerly AmerisourceBergen), a global pharmaceutical services company. This agreement marks another significant step forward in the Company’s commercial launch strategy for LYMPHIR.

Research and Development Expenses

For the three months ended June 30, 2025, research and development expenses were $1,621,325 as compared to $2,763,865 during the three months ended June 30, 2024, a decrease of $1,142,540.

Research and development costs for Mino-Lok decreased by $982,327 to $161,731 for the three months ended June 30, 2025 as compared to $1,144,058 for the three months ended June 30, 2024, due primarily to decreased costs since the completion of the Phase 3 trial and subsequent shut down cost. In November 2024, the Company held a Type C meeting with the FDA to discuss the results of the Phase 3 study and to obtain the FDA’s view on development plans for Mino-Lok. The FDA provided clear, constructive, and actionable guidance during the discussion, underscoring a pathway to support a future New Drug Application (NDA) submission for Mino-Lok.

Research and development costs for Halo-Lido decreased by $25,602 to $3,994 for the three months ended June 30, 2025, as compared to $29,596 for the three months ended June 30, 2024 due to lower costs since the completion of the Phase 2 study in April 2023. Citius subsequently met with the FDA for an end of Phase 2 meeting to discuss next steps in the clinical development program.

Research and development costs for LYMPHIR were $1,455,600 during the three months ended June 30, 2025, as compared to $1,583,970 for the three months ended June 30, 2024 primarily related to a reduction of the costs of product validation studies.

We expect that research and development expenses will decrease in fiscal 2025 as we continue to focus on the commercialization of LYMPHIR and because we have completed the Phase 3 trial for Mino-Lok.

General and Administrative Expenses

For the three months ended June 30, 2025, general and administrative expenses were $4,447,008 as compared to $4,808,551 during the three months ended June 30, 2024. General and administrative expenses decreased by $361,543 in comparison with the prior period. Overall general and administrative expenses were consistent with the prior period. 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, 2025 stock-based compensation expense was $2,719,674 as compared to $3,061,763 for the three months ended June 30, 2024. Stock-based compensation expense includes $2,125,237 for the Citius Oncology plan for the three months ended June 30, 2025 and $1,957,000 for the Citius Oncology plan and $13,858 for the NoveCite Stock plan for the three months ended June 30, 2024. Stock-based compensation expense for the most recently completed quarter decreased by $342,089 in comparison to the prior period primarily due to lower costs for the Citius Pharma stock plans.

Other Income (Expense)

Interest income for the three months ended June 30, 2025 was $20,637 as compared to interest income of $204,843 for the prior period. The decrease is due to lower average investable balances of the remaining proceeds of our equity offerings in money market accounts.

Interest expense of $172,262 for the three months ended June 30, 2025 consists of $160,755 in interest expense under the payment agreement with Eisai and $11,507 in interest expense on the note payable.

Income Taxes

The Company recorded deferred income tax expense of $264,240 and $144,000 for the three months ended June 30, 2025 and 2024, respectively. Deferred income tax expense is related to the amortization for taxable purposes of our in-process research and development asset.

Net Loss

For the three months ended June 30, 2025, we incurred a net loss of $9,203,872, compared to a net loss for the three months ended June 30, 2024 of $10,573,336. The $1,369,464 decrease in the net loss was primarily due to the decreases of $1,142,540 in research and development and $361,543 in general and administrative expenses offset by the decrease in other income (expense) of $356,468.

Nine months ended June 30, 2025 compared with the nine months ended June 30, 2024

21

Revenues

We did not generate any revenues for the nine months ended June 30, 2025 or 2024.

Research and Development Expenses

For the nine months ended June 30, 2025, research and development expenses were $7,514,888 as compared to $8,991,673 during the nine months ended June 30, 2024, a decrease of $1,476,785.

Research and development costs for Mino-Lok decreased by $3,044,652 to $669,317 for the nine months ended June 30, 2025 as compared to $3,673,969 for the nine months ended June 30, 2024, due primarily to decreased costs since the completion of the Phase 3 trial and subsequent shutdown costs. In November 2024, the Company held a Type C meeting with the FDA to discuss the results of the Phase 3 study and to obtain the FDA’s view on development plans for Mino-Lok. The FDA provided clear, constructive, and actionable guidance during the discussion, underscoring a pathway to support a future an NDA submission for Mino-Lok.

Research and development costs for Halo-Lido decreased by $463,448 to $14,690 for the nine months ended June 30, 2025 as compared to $478,138 the nine months ended June 30, 2024 due to lower costs since the completion of the Phase 2 study in April 2023. Citius subsequently met with the FDA for an end of Phase 2 meeting to discuss the next steps in the clinical development program.

Research and development costs for LYMPHIR were $6,824,619 during the nine months ended June 30, 2025 as compared to $4,817,350 for the nine months ended June 30, 2024. The $2,007,269 increase in expenses was primarily due to costs associated with the expense of a drug substance batch needed for the pre-license inspection of the manufacturer.

We expect that research and development expenses will continue to decrease in fiscal 2025 as we continue to focus on the commercialization of LYMPHIR and because we have completed the Phase 3 trial for Mino-Lok.

General and Administrative Expenses

For the nine months ended June 30, 2025, general and administrative expenses were $14,626,882 as compared to $12,755,190 during the nine months ended June 30, 2024. General and administrative expenses increased by $1,871,692 in comparison with the prior period. The primary reason for the increase were higher costs for pre-launch commercial 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, 2025 stock-based compensation expense was $7,946,529 as compared to $9,198,340 for the nine months ended June 30, 2024. Stock-based compensation expense includes $6,022,287 for the Citius Oncology plan for the nine months ended June 30, 2025 and $5,831,000 for the Citius Oncology plan and $47,574 for the NoveCite Stock plan for the nine months ended June 30, 2024. Stock-based compensation expense for the nine months ended June 30, 2025 decreased by $1,251,811 in comparison to the prior period primarily due to lower costs for the Citius Pharma stock plans.

Other Income (Expense)

Interest income for the nine months ended June 30, 2025 was $56,658 as compared to interest income of $640,686 for the prior period. The decrease is due to lower average investable balances of the remaining proceeds of our equity offerings in money market accounts. Other income for the nine months ended June 30, 2024 included a gain of $2,387,842 recognized in connection with the sale of certain New Jersey income tax net operating losses to a third party under the New Jersey Technology Business Tax Certificate Transfer Program.

Interest expense of $172,262 for the nine months ended June 30, 2025 consists of $160,755 in interest expense under the payment agreement with Eisai and $11,507 in interest expense on the note payable.

Income Taxes

The Company recorded deferred income tax expense of $792,720 and $432,000 for the nine months ended June 30, 2025 and 2024, respectively. Deferred income tax expense is related to the amortization for taxable purposes of our in-process research and development asset.

Net Loss

For the nine months ended June 30, 2025, we incurred a net loss of $30,996,623, compared to a net loss for the nine months ended June 30, 2024 of $28,348,675. The $2,647,948 increase in the net loss was primarily due to the increase of $1,871,692 in general and administrative expenses, the decrease in other income (expense) of $3,144,132 partially offset by lower research and development expense of $1,476,785 and lower stock-based compensation expense of $1,251,811.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity and Working Capital

Citius Pharma has incurred operating losses since inception and incurred a net loss of $30,996,623 for the nine months ended June 30, 2025. At June 30, 2025, Citius Pharma had an accumulated deficit of $230,844,841. Citius Pharma’s net cash used in operations during the nine months ended June 30, 2025 was $14,671,948.

The Company had a negative working capital of approximately $27.2 million at June 30, 2025. At June 30, 2025, Citius Pharma had cash and cash equivalents of $6,089,126 available to fund its operations. The Company’s only source of cash flow since inception has been from financing activities. During the nine months ended June 30, 2025, the Company received net proceeds of $16,509,194 from the issuance of equity and $1,000,000 from the issuance of a note payable. Our primary uses of operating cash have been for in-licensing of intellectual property, product development and commercialization activities, employee compensation, consulting fees, legal and accounting fees, insurance, and investor relations expenses.

Until Citius Oncology raises adequate capital through equity financings from outside investors and/or generates revenue from the future sales of LYMPHIR, Citius Pharma plans to continue to fund Citius Oncology. Citius Oncology has retained Jefferies LLC as its exclusive financial advisor in evaluating strategic alternatives aimed at maximizing shareholder value. There is no assurance, however, that Citius Oncology will be successful in raising the needed capital and, if funding is available, that it will be available on terms acceptable to it or that it will find strategic partners or generate substantial revenue from the sale of LYMPHIR.

On July 17, 2025, Citius Oncology completed a public offering of 6,818,182 shares of its common stock and warrants to purchase 6,818,182 shares of its common stock at $1.32 per share. The immediately exercisable five-year warrants have an exercise price of $1.32 per share. Gross proceeds from the offering, before deducting placement agent fees and other estimated offering expenses, were approximately $9.0 million. The net proceeds from the offering were approximately $7.44 million, after deducting placement agent fees and other offering expenses.

We need to obtain substantial additional financing in order to satisfy the outstanding milestone payment obligations for LYMPHIR, for which Citius Pharma is a guarantor of Citius Oncology’s obligations, as well as fund the minimum purchase commitments under the Citius Oncology agreements for the manufacture and supply of LYMPHIR, and cannot be sure that any additional funding will be available on terms favorable to us, or at all. As of June 30, 2025, these outstanding milestone payments and purchase commitments for 2025 include:

• Citius Oncology has agreed to pay Eisai on or before July 15, 2025, an aggregate amount of $2,535,318 and thereafter on the 15th of each of the next four months $2,350,000 and make a final payment of $2,197,892 to Eisai on or before December 15, 2025, in each case with interest on each obligation from its original due date through the date of actual payment under the letter agreement at the rate of 2% per annum.
• At the time of the FDA approval for LYMPHIR, a $27.5 million milestone payment became payable to Dr. Reddy’s under the terms of the asset purchase agreement for which a balance of $22.5 million remains due as of June 30, 2025. Pending further discussions with Dr. Reddy’s, Dr. Reddy’s agreed to a partial deferral without penalty of this milestone payment.
• Citius Oncology has entered into an agreement with a contract manufacturing organization for the manufacture and supply of drug substance. Under this agreement Citius Oncology is obligated to purchase minimum annual quantities of batches at a set price per batch, subject to annual increases. As of June 30, 2025, the total minimum purchase commitment under this agreement was approximately $18.3 million, consisting of payments of $11.9 million and $5.4 million for calendar years 2025 and 2026, and $1.0 million for 2026 pass-throughs and consumable manufacturing components.
• As of June 30, 2025, Citius Oncology also has commercial supply agreements with two other vendors for the completion and packaging of finished drug products. Minimum purchase commitments under these two agreements amount to approximately $4.5 million consisting of purchase commitment obligations of $2.9 million in calendar years 2025 and $1.6 million in 2026.

After giving effect to the July 17, 2025 financing by Citius Oncology, we expect that we will have sufficient funds to continue our operations through September 2025. We will need to raise additional capital in the future to support our operations beyond September 2025. 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, 2024, filed with the SEC on December 27, 2024, as amended on January 27, 2025.

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, 2025. 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, 2025, 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, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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, 2024, filed with the SEC on December 27, 2024, as amended on January 27, 2025, or in the Company’s Quarterly Report on Form 10-Q for the nine months ended June 30, 2025.