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Risks Related to Our BusinessFinancial Position and Need ourfor IndustryAdditional Capital

Our operations have consumed substantial amounts of cash since inception. We have significantly increased our spending to continue our commercialization efforts for LYMPHIR through Citius Oncology, advance development of LYMPHIR for other indications, and advance development of our other product candidates. Furthermore, following the Merger, Citius Oncology has additional costs associated with operating as a public company and requirerequires additional capital to fund our other operating expenses and capital expenditures. As a result, we continue to evaluate strategic alternatives, including but not limited to, partnerships, joint ventures, mergers, acquisitions, licensing or other strategic transactions.

As of September 30, 2024,2025, and without giving effect to subsequent capital raises in October and December 2025, our cash and cash equivalents were $3,251,880approximately $4.3 million and we had an accumulated deficit of $201,370,218.approximately $238.8 million. The amount and timing of our future funding requirements will depend on many factors, some of which are outside of our control, including but not limited to:

We were formed in 2007 and since our inception have incurred a net loss in each of our previous operating years. Our ability to become profitable depends upon our ability to obtain marketing approval for and generate revenues from sales of our product candidates. We have been focused on product development, have not not received approval for any of our product candidates, and have not generated any revenues to date. Our subsidiary, Citius Oncology, received received approval for LYMPHIR in August 2024 and launched LYMPHIR in December 2025, but has not generated any revenues to date. We have incurred losses in each period of our operations, and we expect to continue to incur losses for the foreseeable future. These losses are likely to continue to adversely affect our working capital, total assets, and stockholders’ equity. The process of developing our product candidates requires significant clinical development, laboratory testing and clinical trials. In addition, commercialization of our product candidates will require that we obtain necessary regulatory approvals and establish sales, marketing, and manufacturing capabilities, either through internal hiring or through contractual relationships with others. We expect to incur substantial losses for the foreseeable future as a result of anticipated increases in our research and development costs, including costs associated with conducting preclinical testing and clinical trials, and regulatory compliance activities. We expect Citius Oncology to begin generating revenues following the launch of LYMPHIRLYMPHIR, which occurred in the first half ofDecember 2025. We incurred net losses of $39,138,839$39,740,269 and $32,542,912$39,425,839 for the years ended September 30, 20242025 and 2023,2024, respectively. At September 30, 2024, 2025, we had stockholders’ equity of $74,101,830$77,527,600 and an accumulated deficit of $201,370,218.$238,804,129. Our net cash used in operating activities was $28,201,375$26,552,738 and $29,060,212$28,201,375 for the years ended September 30, 20242025 and 2023,2024, respectively.

As of September 30, 2024,2025, we had outstanding liabilities liabilities of $33.3$38.4 million and outstanding commitments of $21.8$22.7 million to third parties for LYMPHIR licensing, supply and other costs, that, if left unpaid, could result in aan delayinterruption in the commercialization of LYMPHIR, breach of contract, loss of licensing rights or other events that would have a material adverse effect on our business and operations.

We and Citius Oncology continue to evaluate strategic paths to provide the resources necessary to successfully commercialize LYMPHIRLYMPHIR, continue the development of our other product candidates, and maximize stockholder value. Potential strategic paths may include partnerships, joint ventures, mergers, acquisitions, or licensing transactions, a combination of these, or other strategic transactions. There can be no assurance, however, that our evaluation will result in transactions or other alternatives, even when deemed necessary. There is no set timetable for our strategic process, and we do not intend to provide updates unless or until the Board ofapproves Directors approves a specific action or otherwise determines that disclosure is appropriate or necessary.

In the event we or Citius Oncology do not successfully complete a strategic transaction, should this be deemed necessary, our Board of Directors may decide to pursue a dissolution and liquidation of our Company. In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

There can be no guarantee that the process to identify strategic transactions will result in successfully completed transactions when necessary. If additional transactions are not completed that enable us or Citius Oncology to continuesuccessfully the commercialization ofcommercialize LYMPHIR and sustain our business operations, our Board of Directors may decide that it is in the best interest of our stockholders to dissolve our Company and liquidate our assets. In that event, the amount of cash available for distribution to our stockholders will depend heavily on the timing of such decision and, ultimately, such liquidation since the amount of cash available for distribution continues to decrease as we fund our operations and evaluate our strategic alternatives. In addition, if our Board were to approve and recommend, and our stockholders were to approve, a dissolution of our Company, we would be required under DelawareNevada corporate law to pay our outstanding obligations, as well as to make reasonable provision for contingent and unknown obligations, prior to making any distributions in liquidation to our stockholders. As a result of this requirement, a portion of our assets may need to be reserved pending the resolution of such obligations. In addition, we may be subject to litigation or other claims related to a dissolution and liquidation of our Company. If a dissolution and liquidation were pursued, our Board, in consultation consultation with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders holders of our common stock could lose all or a significant portion of their investment in the event of a dissolution, liquidation or winding winding up of our Company.

WhileWe have invested a significant portion of our efforts and financial resources to bring LYMPHIR to market. Our ability to generate product revenues will depend heavily on the successful commercialization of LYMPHIR. Further, while we believe we have sufficient funds on hand to commerciallyfor the successful commercialization of LYMPHIR, which began with its launch LYMPHIR,in December 2025, various factors could increase the cost to launchsuccessfully commercialize LYMPHIR, which we expect would require us to obtain additional capital to complete those efforts. Financing might not be available on acceptable terms or at all.

We willexpect to need to access the capital markets in in the near future for additional capital for research and development and for operations. Traditionally, pharmaceutical companies have funded funded their research and development expenditures through raising capital in the equity markets. Declines and uncertainties in these markets markets over the past several years have severely restricted raising new capital and have affected companies’ abilities to continue to expand or fund existing research and development efforts. If economic conditions continue to be uncertain or become worse, our future cost of equity or debt capital and access to the capital markets could be adversely affected. If we are not successful in securing additional financing, we may be required to significantly delay, reduce the scope of or eliminate one or more of our research or development programs, downsize our general and administrative infrastructure, or seek alternative measures to avoid insolvency, including arrangements with collaborative partners or others that may require us to relinquish rights to certain of our technologies or product candidates.

We are primarily a commercial and late-stage development development company with an unproven business strategy and may never achieve commercialization of all our therapeutic product candidates or profitability.

Citius Pharma has no approved products. Our subsidiary, Citius Oncology, received approval for LYMPHIR in August 2024 and launched LYMPHIR in December 2025, but has not generated any revenues to date. All other current product candidates of Citius Pharma are in the pre-clinical or clinical stage. We rely on third parties to conduct the research and development activities for our product candidates and our product commercialization capabilities are unproven. We, through Citius Oncology, arehave developingdeveloped our sales and marketing capabilities at this time for LYMPHIR and have contracted with Innovation Partners, a large third-party commercial sales and marketing organization with an existing commercial infrastructure and product launch experience to assist in our commercial efforts related to LYMPHIR. WeCitius haveOncology also has distribution agreements with three national companies and an agreement with EVERSANA to support the launch and commercialization of LYMPHIR. Citius Pharma has no sales or marketing capabilities with respect to our other product candidates. Our success will depend upon ourthe sales and marketing infrastructure developed by Citius Oncology for LYMPHIR and also on Citius Pharma’s ability to develop such capabilities on ourits own or to enter into and maintain collaboration agreements on favorable terms and to select an appropriate commercialization strategy for each product candidate that we chooseit chooses to pursue and that receives approval, whether on ourits own or in collaboration. If we are not successful in implementing our strategy to commercialize our product candidates, we may never achieve, maintain, or increase profitability. Our ability to successfully commercialize any of our other product candidates will depend, among other things, on our ability to:

Citius Oncology has oneonly recently approvedlaunched butits not yet launchedone product, LYMPHIR, andLYMPHIR. Citius Pharma has one late-stage stage product candidate, Mino-Lok, while our other product candidates are clinical stage. As a result, our success is dependent upon ourCitius Oncology’s success in commercializing LYMPHIR and Citius Pharma’s ability to obtain regulatory approval for and commercialize our product candidates and we, as a company, have not demonstrated an ability to perform the functions necessary for the approval or successful commercialization of any product candidates.candidates, given the recent launch of LYMPHIR. While various members of our executive management and key employees have significant prior experience in pharmaceutical development, development, as a company we have to date successfully completed only one late-stage clinical trial (much of which had been undertaken by Eisai prior to our in-licensing of the intellectual property of LYMPHIR) and arehave just beginning to undertake commercialization activities, in each case forlaunched LYMPHIR (through Citius Oncology). Despite our progress with LYMPHIR, our operations have been limited primarily to business planning, acquiring our proprietary technology, research and development, recruiting management and technical staff, and raising capital. These operations provide a limited basis for you to assess our ability to successfully commercialize our product candidates and the advisability of investing in our securities.

WhileOur webusiness anticipatedepends thaton Citiusthe Oncologysuccessful willdevelopment launchand LYMPHIRcommercialization of our product candidates. We are not permitted to market any of our product candidates in the firstU.S. halfuntil we receive approval from the FDA, or in any foreign jurisdiction until we receive the requisite approvals from such jurisdiction. The process of developing 2025,new thatdrugs timelineand/or therapeutic products is subjectinherently tocomplex, changeunpredictable, fortime-consuming, variousexpensive reasons.and Moreover,uncertain. weWe cannotmust make predictlong-term investments and commit significant resources before knowing whether or whenour wedevelopment programs will obtainresult in products that will receive regulatory approval toand commercializeachieve ourmarket other product candidates that are under development, notably Mino-Lok. We cannot, therefore, predict the timing of any future revenues from LYMPHIR or any other product candidate.acceptance. As an example, in response to the submission of our BLA for LYMPHIR, the FDA issued a complete response letter (“CRL”) on July 28, 2023. The FDA required us to incorporate enhanced product testing and additional controls agreed to with the FDA during the market application review. There were no concerns relating to the safety and efficacy clinical data package submitted with the BLA, or the proposed prescribing information. In September 2023, we announced that the FDA had agreed with our plans to address the requirements outlined in the CRL, which guidance provided us with a path for completing the necessary activities to support the resubmission of the BLA for LYMPHIR and we received approval from the FDA in August 2024.

Under the terms of the License Agreement with Eisai, Citius Oncology iswas required to pay Eisai a $5.9 million development milestone payment upon initial approval by the FDA of LYMPHIR for the CTCL indication, which occurred in August 2024, and an aggregate of up to $22 million related to the achievement of net product sales thresholds. Under the terms of the agreement with Dr. Reddy’s, Citius Oncology is obligated to pay up to an aggregate of $40 $40 million related to CTCL approvals in the U.S. and other markets, up to $70 million in development milestones for additional indications, and up to $300 million for commercial sales milestones. Further, under the agreement with Dr. Reddy’s, Citius Oncology is 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, (iii) use commercially reasonable efforts to achieve each of the approval milestones, and (iv) complete each specified immuno-oncology investigator trial on or before September September 1, 2025, the four-year anniversary of the effective date of the definitive agreement. Additionally, Citius Oncology is required to commercially launch a product in a territory within six months of receiving regulatory approval for such product in each such jurisdiction.jurisdiction; the launch of LYMPHIR in December 2025 satisfied this requirement in the U.S. Citius Pharmaceuticals, Inc. (the “Company”)Pharma is a guarantor of the obligations of Citius Oncology, Inc. Oncology under the Asset Purchase Agreement.

Pending further discussions with Dr. Reddy’s, Dr. Reddy’s agreed to a partial deferral without penalty of a milestone payment by Citius Oncology, which was triggered upon regulatory approval of LYMPHIR by the FDA and due on September 9, 2024, pursuant to the terms of the Asset Purchase Agreement. These development and milestone obligations impose substantial additional costs on us, and could divert resources from other aspects of theour business,business and adversely affect the overall profitability of LYMPHIR. We, through Citius Oncology, need to obtain additional financing to satisfy these milestone payments, and cannot be sure that any additional funding,funding will be available on terms favorable terms,to us, or at all.

Our commercial success will depend in part on the maintenance of our current and any future license agreements. Our license agreements impose, and we expect that future license agreements will impose on us, various diligence, milestone payment, royalty and other obligations. For example, under the license agreement and related related purchase agreement for the intellectual property for LYMPHIR, we, through our subsidiary Citius Oncology, are required to use commercially commercially reasonable diligence to develop and commercialize a product and to satisfy specified payment obligations for various developmental and and regulatory milestones. Specifically, upon the approval of LYMPHIR, we, through Citius Oncology, became subject to the payment of an aggregate of $28.4$33.4 million under the license and asset purchase agreements covering LYMPHIR. Pending further discussions with Dr. Reddy’s, Dr. Reddy’s agreed to a partial deferral without penalty of a milestone payment by us, which was triggered upon regulatory approval of LYMPHIR by the FDA and due on September 9, 2024, pursuant to the terms of the Asset Purchase Agreement.

We, through Citius Oncology, have secured supply agreements for LYMPHIR with the two third-party facilities who are in compliance with current good manufacturing practices (“cGMP”) as generally accepted by the FDA. We rely on these third-party contractors for our manufacturing. Manufacturing of drugs for clinical and commercial purposes must comply with the FDA’s cGMP and applicable non-U.S. regulatory requirements and before any of our collaborators can begin to commercially manufacture our product candidates, each must obtain regulatory approval of the manufacturing facility and process. process. If, for any reason, we become unable to rely on these sources or any future source or sources to manufacture LYMPHIR or any future product candidates, either for pre-clinical or clinical trials or for commercial quantities, then we would need to identify and contract with additional or replacement third-party manufacturers to manufacture compounds for preclinical, clinical, and commercial purposes. We might not be successful in identifying additional or replacement third-party manufacturers, or in negotiating acceptable terms with any that we might identify. If we are unable to secure and maintain third-party manufacturing capacity, the development commercialization and sales of LYMPHIR, and any future product candidates, and our financial performance might be materially and adversely affected.

Each of these risks could delay our clinical trials trials or the approval, if any, of our product candidates by the FDA or any foreign regulatory agency or the commercialization of LYMPHIRany approved product candidate and could result in higher costs or deprive us of potential product revenues. As a result, our business, financial condition, and results of operations might be materially harmed.

Our goal in generally pursuing late-stage therapeutic product candidates with what we believe is a promising pre-clinical and early clinical stage track record is to avoid the risk of failure at the pre-clinical and early clinical stages. However, there is still significant risk to obtaining regulatory approval and successfully commercializing any late-stage product candidate that we pursue. For example, we acquired LYMHIR in September 2021, received approval in August 2024 and launched it in December 2025, during which time we expended significant resources on the acquisition, development and launch of LYMPHIR. All of the risks inherent in drug development of initial stage product candidates also apply to late-stage candidates. We cannot assure you that our business strategy will be successful.

There is typically a high rate of attrition from the failure of product candidates proceeding through clinical trials. In addition, certain subjects in our clinical trials may respond positively to placebo treatment -– these subjects are commonly known as “placebo responders” -– making it more difficult to demonstrate efficacy of the trial drug compared to placebo. This effect is likely to be observed in the treatment of hemorrhoids, which which could negatively impact the development program for Halo-Lido.

Our Mino-Lok solution contains minocycline, disodium ethylenediaminetetraacetic acid (edetate), and ethyl alcohol, all of which have been separately approved by the FDA for other indications or are used as excipients in other parenteral products. Assuming FDA approval as a branded pharmaceutical product, we would need to obtain hospital formulary acceptance to generate sales of Mino-Lok. Additionally, we may encounter reluctance by the infectious disease physician community to vary from the existing standard of care to remove and replace an infected catheter. Currently, hospitals are reimbursed for for the treatment of CRBSIs by the Center for Medicare and Medicare Services (“CMS”) through a Diagnosis Related Group (“DRG”) classification or code. Commercial insurance plans reimburse for CRBSIs in a similar manner. With Mino-Lok being priced as a branded FDA-approved pharmaceutical product, this could result in the participating hospital retaining a lower share of CMS or commercial reimbursement which may impact the acceptance and use of Mino-Lok by these institutions.

Our Halo-Lido product candidate for the treatment of hemorrhoids is a combination product consisting of two drugs, halobetasol propionate, a corticosteroid, and lidocaine, that have each been separately approved by the FDA for other indications and which are commercially available and marketed by other companies. Halobetasol propionate cream is available in a 0.05% strength, and lidocaine creams are also available in strengths up to 5%. From our market analysis and discussions with a limited number of physicians, we know that patients sometimes obtain two separate cream products and co-administer them as prescribed, giving them a combination treatment that could be very similar to what we intend to continue to study and seek approval for. As a branded, FDA-approved product with safety and efficacy data, we intend to price our product substantially higher than the generically available individual creams. We will then have to convince third-party payers and pharmacy benefit managers of the advantages of our product product and justify our premium pricing. We may encounter resistance from these entities and will then be dependent on patients’ willingness willingness to pay the premium and not seek alternatives. In addition, pharmacists often suggest lower cost prescription treatment alternatives to to both physicians and patients. If approved, our Section 505(b)(2) approval and the market exclusivity we may receive will not guarantee that such alternatives will not exist, that substitution will not occur, or that there will be immediate or any acceptance to our pricing by payer formularies.

We do not own Citius Oncology or NoveCite, Inc. outright and will share any benefits from the commercialization of LYMPHIR and the development of the NoveCite product candidate with the other stockholder.stockholders.

As of SeptemberDecember 30,17, 2024,2025, we owned approximately 92.3%77.9% of the outstanding common stock of Citius Oncology (excluding pre-funded warrants to purchase up to 15,229,358 shares of Citius Oncology common stock in a transaction that closed on December 10, 2025) and 75% of the outstanding common stock of NoveCite. As a result, we will only be entitled to a portion of any benefits that flow from the commercialization by Citius Oncology of LYMPHIR and the development by NoveCite of its NoveCite product candidate or any other product candidates that either company might develop. In the event that Citius Oncology Oncology or NoveCite were to issue additional equity securities in the future this would likely reduce our percentage ownership, which would further reduce the portion of any benefit that might be derived from that company’s successful development and/or commercialization of its approved drugs and drug candidates, unless we were to increase our investment.

Additionally, as previously announced by the Company, Company, Citius Pharma intends to distribute Citius Oncology shares to its stockholders at a yet-to-be-determined date in the future, following following the expiration of the six-month lockup period, in accordance with terms of the amended and restated registration rights agreement entered entered into in connection with the Merger. Following the distribution of the Citius Oncology shares, Citius Pharmaceuticals will not be entitled to any benefits that flow to those shares from the commercialization by Citius Oncology of LYMPHIR or would otherwise be derived from Citius Oncology ifOncology, itbased wereon toits remainownership aas majority-ownedof subsidiary.December 17, 2025.

IfEven if approved, any product candidate may fail to to achieve market acceptance or generate significant revenue to achieve or sustain profitability, which would harm the Company’s business. business. In addition, our efforts to educate the medical community and third-party payers on the benefits of any product candidate may require require significant resources and may never be successful.

Our strategy with LYMPHIR (through Citius Oncology) and for our unapproved product candidates is to outsource to third parties all or most aspects of the product development process, as well as much of our marketing, sales, and distribution activities. In order to generate sales of any product candidate that receives regulatory regulatory approval, we must either acquire or develop an internal marketing and sales force with technical expertise and with supporting distribution distribution capabilities or make arrangements with third parties to perform these services for us. Currently, we, through Citius Oncology, have aredeveloped developing our sales, marketing and distribution capabilities for LYMPHIR and have contracted with Innovation Partners, a large third-party commercial commercial sales and marketing organization with an existing commercial infrastructure and product launch experience, to assist in our commercialization commercialefforts. In addition, Citius Oncology has entered into distribution agreements with Cardinal Health, Cencora and McKesson efforts.Corporation and has contracted with EVERSANA to support the launch and commercialization of LYMPHIR. We do not have any sales, marketing or distribution capabilities with respect to our other product candidates. The acquisition or development of a sales and distribution infrastructure requires substantial resources, which may divert the attention of our management and key personnel and defer our product development efforts. To the extent that we enter into marketing and sales arrangements with other companies for any product candidates, our revenues will depend on the efforts of others. These efforts may not be successful. If we fail to develop and maintain sales, marketing, and distribution channels, or fail to enter into arrangements with third parties or the collaboration is terminated or is otherwise unsuccessful, we will experience delays in product launch and sales and incur increased costs.

Competition in the pharmaceutical and medical products industries is intense and is characterized by costly sales and marketing infrastructures, as well as extensive research efforts and rapid technological progress. We are aware of several pharmaceutical companies also actively engaged in the development of therapies or products for at least some of the same conditions we are targeting. Many of these companies have substantially greater research and development capabilities as well as substantially greater marketing, financial and human resources than we do. In addition, many of these companies have significantly greater experience than us in undertaking pre-clinical testing, clinical trials and other regulatory approval procedures. Our competitors may develop technologies and products that are more effective than those we are researching and developing. Such developments could render our product candidates, if approved, less competitive or possibly obsolete. We are also competing with respect to marketing capabilities and manufacturing efficiency, areas in which we have no current capabilities and in which we have no experience as a company, although our executive officers do have pharmaceutical commercialization and launch experience. We, through Citius Citius Oncology, have contracted with Innovation Partners, a large third-party commercial sales and marketing organization with an existing commercial commercial infrastructure and product launch experienceexperience, and with EVERSANA, a large third-party provider of global commercialization services, to assist in our commercial efforts for LYMPHIR. However, our prior experience and our third partythird-party arrangements might not translate into the successful development and launch of LYMPHIR or any of our product candidates. Mergers, acquisitions, joint ventures and similar events may also significantly increase the competition we face. In addition, new developments, including the development of other drug technologies and methods of preventing the incidence of disease, occur in the pharmaceutical and medical technology industries at a rapid pace. These developments may render our approved products and our product candidates obsolete or noncompetitive. Compared to us, many of our potential competitors have substantially greater as well as access to strategic partners and capital resources.

Individual states in the U.S. have also increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Legally mandated price controls on payment amounts by third party payors or other restrictions could harm itsour business, financial condition and results of operations. In addition, regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs. Furthermore, there has been increased interest interest by third party payors and governmental authorities in reference pricing systems and publication of discounts and list prices. These or other reforms could reduce the ultimate demand for our product candidates, if approved, or put pressure on its product pricing.

If we or any of our current or future collaborators fail to renew or terminate any of our collaboration or license agreements or if either party fails to satisfy its obligations under any of our collaboration or license agreements or complete them in a timely manner, we could have difficulty continuing marketing and sales efforts for LYMPHIR or any other approved product candidate, or completing the development of any of our product candidates and potentially lose significant sources of revenue, which could result in an adverse impact on our operations and financial condition as well as volatility in any future revenue. In addition, our agreements with our collaborators may have provisions that give rise to disputes regarding the rights and obligations of the parties. These and other possible disagreements could lead to termination of the agreement or delays in collaborative research, development, supply, or commercialization of our product candidates, or could require or result in litigation or arbitration. Any such conflicts with our collaborators could reduce our ability to obtain future collaboration agreements and could have a negative impact on our relationship with existing collaborators, adversely affecting our business and revenues. Finally, any of our collaborations may prove to be unsuccessful.

Our performance is substantially dependent on the continued services and on the performance of our executive management and other key personnel, who have extensive experience and specialized specialized expertise in our business. Our Chief Executive Officer, Leonard Mazur, our Vice Chairman, Myron Holubiak, our Chief Financial Officer Officer and Chief Business Officer, Jaime Bartushak, and our Chief Medical Officer and Executive Vice President, Myron Czuczman, in particular have significant experience in the running of pharmaceutical companies and/or drug development itself. This depth of experience is of significant benefit to us, especially given the small size of our management team and our company, including our subsidiaries. The loss of the services of any of Mr. Mazur, Mr. HolubiakHolubiak, Mr. Bartushak and Dr. Czuczman as well as any other member of our executive management or any key employees, including those at NoveCite or Citius Oncology, could harm our ability to attract capital and develop and commercialize our our product candidates. Neither we nor NoveCite nor Citius Oncology has key man life insurance policies.

We utilize the services of a clinical management team on a part-time basis to assist us in managing our ongoing Phase 2 and Phase 3 trials and intend to do so for future preclinical and and clinical trials. Pursuant to the shared services agreement with Citius Pharma, Citius Oncology utilizes the services of Citius Pharma’s management team to assist it in managing the clinical and pre-clinical trials. Pursuant to the amended and restated shared services agreement, Citius Oncology will continue to utilize the services of Citius Pharma employees with expertise in product manufacturing and commercialization for the plannedpost-launch launchsupport of LYMPHIR. While we believe this will provide us with sufficient staffing for our current and future development efforts, we will need to hire or contract with additional qualified personnel with expertise in preclinical testing, clinical research and testing, government regulation, formulation and manufacturing and sales and marketing in connection with the continued development, regulatory approval and commercialization of our product candidates. We compete for qualified individuals with numerous pharmaceutical and biopharmaceutical companies, universities, and other research institutions.

We will need to manage our anticipated growth and increased operational activity, including as a result of the plannedrecent launch by Citius Oncology of LYMPHIR and our continued development of our other product candidates. Our personnel, systems, and facilities currently in place may not be adequate to support this future growth. Our need to effectively execute our growth strategy will require that we:

As of SeptemberDecember 30,17, 2024,2025, we beneficially owned approximately 92.3%77.9% (excluding pre-funded warrants to purchase up to 15,229,358 shares of Citius Oncology common stock in a transaction that closed on December 10, 2025) of the voting power of Citius Oncology (Nasdaq: CTOR) and 75% of the voting power of NoveCite’s outstanding common stock and Novellus owns the other 25% of NoveCite. As a result of our partial ownership, our relationship with each of Citius Oncology and NoveCite could give rise to certain conflicts of interest that could have an impact on our, Citius Oncology’s and NoveCite’s respective research and development programs, business opportunities, and operations generally.

Even if we comply with all FDA requests, the FDA FDA might ultimately reject one or more of our NDAs or BLAs. Even if we are able to obtain regulatory approval for a particular product candidate, candidate, the approval might limit the indicated medical uses for the product, limit our ability to promote, sell, and distribute the product, require that we conduct costly post-marketing surveillance, and/or require that we conduct ongoing post-marketing studies. We cannot be sure that we will ever obtain regulatory clearance for any of our product candidates. Failure to obtain FDA approval of one or more of our product candidates could severely undermine our business by leaving us withoutwith only one saleable products,product, LYMPHIR, and therefore with withouta anylimited potentialsource sources of revenues,revenue, until another product candidate could be developed or obtained and successfully developed, approved and commercialized. Foreign jurisdictions impose similar regulatory approval processes and we will face the same risks if we seek foreign approval for any of our product candidates. There is no guarantee that we will ever be able to successfully develop or acquire any product candidate.

When a product candidatescandidate is approved by the FDA or by a foreign regulatory authority, we will be required to comply with extensive regulations for product manufacturing, labeling, packaging, adverse event reporting, storage, distribution, advertising, promotion and record keeping. Regulatory approvals may also be subject to significant limitations on the indicated uses or marketing of the productsproduct or to whom and how we may distribute an approved product. Even if U.S. regulatory approval is obtained, the FDA may still impose significant restrictions on a product’s indicated uses or marketing or impose ongoing requirements for potentially costly post-approval studies. For example, the label ultimately approved for any of our product candidates, if any, may include restrictions on use. If so, we may be subject to ongoing regulatory obligations and restrictions, which may result in significant expense and limit our ability to commercialize that product candidate. The FDA could also require a registry to track the patients utilizing the product or implement a Risk Evaluation and Mitigation Strategy (“REMS”) that could restrict access to the product, which would reduce our revenues and/or increase our costs. Potentially costly post-marketing clinical studies may may be required as a condition of approval to further substantiate safety or efficacy, or to investigate specific issues of interest to the regulatory authority. Similar risks apply in foreign jurisdictions.

We are a biopharmaceutical company dedicated to 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 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,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 withinin the first half ofDecember 2025.

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

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.

LYMPHIR -– In September 2021, the Company Company entered into an asset purchase agreement with Dr. Reddy’s and a license agreement with Eisai to acquire an exclusive license of of E7777 (denileukin diftitox), a late-stagean oncology immunotherapy for the treatment of CTCL, a rare form of non-Hodgkin lymphoma. We have obtained the trade name of LYMPHIR for E7777. Citius Pharma assigned these agreements to SpinCo effective April 1, 2022. We renamed E7777 as I/ONTAK and also obtained the trade name LYMPHIRTM for the product. Denileukin diftitox is referred to in this annual 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 forof E7777 from Eisai and other related assets owned by Dr. Reddy’s (which are now owned by Citius Oncology). The exclusive license includes rights to develop and commercialize E7777 in all markets except for Japan and certain parts of Asia. Additionally,Eisai we, through our subsidiary, 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 JapanJapan, China, Korea, Taiwan, Hong Kong, Macau, Indonesia, Thailand, Malaysia, Brunei, Singapore, India, Pakistan, Sri Lanka, Philippines, Vietnam, Myanmar, Cambodia, Laos, Afghanistan, Bangladesh, Bhutan, Nepal, Mongolia, and Asia.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 acquiredacquired. 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.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 product by 50% in two consecutive quarters, as compared to the four quarters prior to the first commercial sale of the biosimilar product. Citius 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 obligations under these agreements.

At the time of the FDA approval for LYMPHIR, a 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$19.75 million remains due as of September 30, 2024. Pending further discussions with Dr. Reddy’s,2025. Dr. Reddy’s agreed to a partial deferral without penalty of this milestone payment.

Under the license agreement, Eisai iswas todue receivea a $5.9 million milestone payment, upon FDA approvalapproval, of which is$2.9 includedmillion in licenseremains payable at September 30, 2024,2025, 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. TheCitius CompanyOncology 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 the BLA for for LYMPHIR with the FDA. TheCitius CompanyOncology will beis responsible for development costs associated with potential additional indications.

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, the 10-year anniversaryor of the original license effective date, March 30, 2016, or (ii) if there has been a first commercial sale of a licensed product in the territory withinby theMarch 10-year30, anniversary of the original license effective date,2026, the 10-year anniversary of the first commercial sale on a country-by-country basis. We expect the first commercial sale to occur in the first quarter of 2026. 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.

Also underUnder the purchase agreement 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) to 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.jurisdiction; the launch of LYMPHIR in December 2025 satisfied this requirement in the U.S.

Results of Operations for Year Ended September 30, 2024 compared to Year Endedended September 30, 20232025 compared to year ended September 30, 2024

We did not generate any revenues for the years ended September 30, 2025 2024or and2024. 2023.Revenue commenced in December 2025.

For the year ended September 30, 2025, research and development expenses were $9,156,474 as compared to $11,906,601 during the year ended September 30, 2024, research and development expenses were $11,906,601 as compared to $14,819,729 for the year ended September 30, 2023, a decrease of $2,913,128.$2,750,127.

Research and development costs for Mino-Lok®LYMPHIR were increased$8,328,588 byduring $446,207the year ended September 30, 2025 as compared to $4,662,968$5,118,977 for the year ended September 30, 20242024. asThe compared$3,209,611 toincrease in $4,216,761expenses for the year ended September 30, 2023, drivenwas primarily bydue shutdownto costs associated with the endexpense of thea Phasedrug 3substance trialbatch needed for Mino-Lok.the pre-license inspection of the manufacturer.

Research and development costs for our Halo-Lido product candidateMino-Lok decreased by $3,538,640$3,863,984 to $507,774$798,984 for the year ended September 30, 20242025 as compared to $4,046,414$4,662,968 for the year ended September 30, 20232024, due primarily to decreased costs since the completion of the Phase 23 studytrial inand Aprilsubsequent 2023.shutdown Citiuscosts. subsequentlyIn metNovember 2024, the Company held a Type C meeting with the FDA at an end of Phase 2 meeting to discuss nextthe stepsresults inof the clinicalPhase 3 study and to obtain the FDA’s view on development program.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.

For the year ended September 30, 2024,2025, general and administrative expenses were $18,249,402$18,532,843 as compared to $15,295,584$18,249,402 for the year ended September 30, 2023,2024. anGeneral increaseand ofadministrative expenses $2,953,818. increased by $283,441 in comparison with the prior period. The primary reason for the increase waswere higher costs associated withfor pre-launch and market research commercial activities associated with LYMPHIR. General and administrative expenses consist primarily of compensation costs, professional fees for legal, regulatory, accountingaccounting, and corporate development services, and investor relations expenses.

Other Income (Expense)

DuringInterest income for the year ended September 30, 2024,2025 the Companywas earned$110,081 $758,000as ofcompared netto interest income compared to $1,179,417 of interest$758,000 income duringfor the yearprior ended September 30, 2023.period. The decrease of $421,417 wasis due to lower average cash investable balances overof the courseremaining proceeds of 2024our vs.equity 2023.offerings in money market accounts.

Other income for the year ended September 30, 2024 alsoincluded includesa thegain of $2,387,842 gain recognized in connection with the sale of certain New Jersey income tax net operating losses to a a third party under the New Jersey Technology Business Tax Certificate Transfer Program.

The Company recorded deferred income tax expense of $1,056,960 and $576,000 in each offor the years ended September 30, 20242025 and 20232024, respectively. Deferred income tax expense is related to the amortization for taxable purposes of itsour in-process research and development asset.

The Company had working capital of approximately $(21,600,000$16,980,000) at September 30, 2024.2025. At September 30, 2024,2025, Citius Pharma had cash and cash equivalents of $3,251,880approximately $4,252,000 available to fund its operations. The Company’s only source of cash flow since inception has been from financing activities. During the year ended September 30, 2024, the Company received net proceeds of $13,803,684 from the issuance of equity. 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.

WeAfter giving effect to a $6.0 million capital raise by us in October 2025 and an $18.0 million capital raise by Citius Oncology in December 2025, we expect that we will have sufficient funds to continue our operations through FebruaryMarch 2025.2026.

On April 30, 2024, theCitius CompanyPharma closedsold a registered857,143 direct offeringshares of 857,143 common sharesstock and warrants to purchase up to 857,143 common shares, at a purchase price of $17.50 per share and accompanying warrant for gross proceeds of $15,000,002. The warrants have an exercise price of $18.75 per share, are exercisable six months from the date ofafter issuance, and expire on October 30, 2029. The estimated fair value of the warrants issued to the investors was approximately $11,206,000.

Based on our cash and cash equivalents at September 30, 2024,2025 and our October 21, 2025 equity sale and the December 2025 equity sale by Citius Oncology, we expect that we will have sufficient funds to continue our operations through FebruaryMarch 2025.2026. We expectwill need to raise additional capital in the future to support our operations beyond FebruaryMarch 2025.2026. 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.

In-process research and development includes $19,400,000 $19,400,000 representing the value of LMB’s drug candidate, Mino-Lok, an antibiotic lock solution in Phase 3 clinical development, which if approved, would be 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. In-process research and development also includes $73,400,000 representing representing the value of Citius Oncology’s exclusive license for LYMPHIR (denileukin diftitox), a late-stagean oncology immunotherapy for the 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 12 twelve years commencing upon revenue generation. Citius Oncology’s In-process research and development consists of $40,000,000 paid to to Dr. Reddy’s from the asset purchase agreement and approval milestone fees of $27,500,000 to Dr. Reddy’s and $5,900,000 to to Eisai.

TheFor its 2025 goodwill analysis, the Company performed a qualitativequantitative assessment for its 2024 analysisas of goodwill.September 30, 2025. Based on this assessment,analysis, management does not believe that it is more likely than not concluded that the carrying estimated fair value of the reporting unit exceedsexceeded its faircarrying value.amount. Accordingly, no furtherimpairment testingcharge was performedrecorded, and asgoodwill management believes that there are no impairment issues with respectcontinues to goodwillbe ascarried ofat Septemberits 30,current 2024.value.

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, 2025, filed with the the SEC on December 23, 2025, as amended January 28, 2026.2026, except as set forth below.

The following discussion and analysis of our financial condition and results of operations for the three and sixnine months ended MarchJune 31,30, 2026 and 2025 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, 2025, filed with the SEC on December 23, 2025, as amended on January 28, 2026. 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.

Through MarchJune 31,30, 2026, we have devoted substantially all of our efforts to product development, raising capital, building infrastructure through strategic alliances and coordinating activities relating to our proprietary products. We have realized limited revenues from the sale of LYMPHIR, which commenced in December 2025.

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 digitdouble-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 athe 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.

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 $17.65$15.65 million remains due as of MarchJune 31,30, 2026. Dr. Reddy’s agreed to a partial deferral without penalty of this milestone payment.

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. We agreed to pay Eisai $2,535,318 on July 15, 2025, $2,350,000 on the 15th of each of the subsequent four months, and make a final payment of $2,197,892 on or before December 15, 2025, in each case with interest on each obligation from its original due date through the date of payment at the rate of 2% per annum. During the sixnine months ended MarchJune 31,30, 2026, we recorded $78,872$112,270 in interest expense under the agreement. The parties released each other from any and all claims, losses, damages, costs and expenses expenses that arise from or related to our failure to pay the milestone payment or the other incurred costs under the license agreement except 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. effect. On December 15, 2025, we paid Eisai the balance of the outstanding milestone approval fee and accumulated interest on the license fee. fee. At MarchJune 31,30, 2026, we owe Eisai approximately $6.3 million for certain other unpaid invoices.

On February11,February 11, 2026, Citius Oncology announced an exclusive distribution agreement with Uniphar ("“Uniphar"”), a leading international healthcare services company, to support support access to LYMPHIR. Under the agreement, Uniphar will serve as Citius Oncology’s uexclusiveexclusive distribution partner in designated international international territories in Western and sternEastern Europe. Citius Oncology will supply finished product and provide ongoing support in accordance with the agreement. LYMPHIR is not approved for commercial use outside the U.S. and,and will be provided solely through country-specific managed access access programs, which do not constitute marketing authorization or a commercial launch.

Three months ended MarchJune 31,30, 2026 compared with the Three months ended MarchJune 31,30, 2025

Product revenues for the three months ended MarchJune 31,30, 2026 were $1,667,298,$1,493,788, as Citius Oncology began commercial distribution of LYMPHIR in December 2025. Gross profit on product revenues for the three months ended MarchJune 31,30, 2026 was approximately 80%.67%.

For the three months ended MarchJune 31,30, 2026, research and development expenses were $1,633,518,$1,053,869, as compared to $3,766,525$1,621,325 during the three months ended MarchJune 31,30, 2025, a decrease of $2,133,007.$567,456.

Research and development costs for LYMPHIRMino-Lok decreased by $2,085,664$9,701 to $1,555,815 during the three months ended March 31, 2026, as compared to $3,641,479$152,030 for the three months ended MarchJune 31, 202530, was2026, primarilyas relatedcompared to expense$161,731 recognized infor the three months ended MarchJune 31,30, 2025 for a pre-license inspection batch of LYMPHIR previously manufactured.2025.

Amortization of in-process research and development commenced upon revenue generation in December 2025. For the three months ended MarchJune 31,30, 2026, amortization was $1,720,312. In-process research and development is being amortized on a straight-line basis over the remaining FDA product exclusivity period, which ends in August 2036.

For the three months ended MarchJune 31,30, 2026, general and administrative expenses were $26,391,101,$6,149,173, as compared to $4,792,122$4,447,008 during the three months ended MarchJune 31,30, 2025. General and administrative expenses increased by $21,598,979$1,702,165 in comparison with the prior period. The increase was primarily related to athe noticeexpansion of terminationCitius fromOncology’s acommercial contractorganization. manufacturing organization received in February 2026. In March 2026, we recorded a contract cancellation fee of $19,733,307. Other generalGeneral and administrative expenses consist primarily of compensation costs, professional fees for legal, regulatory, accounting, accounting, and corporate development services, and investor relations expenses.

For the three months ended MarchJune 31,30, 2026, stock-based compensation was $3,788,275$3,810,665 as compared to $2,702,031$2,719,674 for the three months ended MarchJune 31,30, 2025. Stock-based compensation increased by $1,086,244$1,090,991 primarily due to the Citius Oncology restricted stock awardsunits granted in September 2025.

For the three months ended MarchJune 31,30, 2026, interest income was $53,584,$116,691, as compared to interest income of $13,413$20,637 for the three months ended MarchJune 31,30, 2025. We have invested the remaining proceeds of our equity offerings in money market accounts.

For the three months ended MarchJune 31,30, 2026, interest expense was $33,031,$231,732, as compared to $0$172,262 for the three months ended MarchJune 31,30, 2025 allprimarily related to theCitius MarchOncology’s 28,new loan 2025 letter agreement with Eisai.agreement.

The Company recorded a deferred income tax benefit benefit of $231,210$107,347 in the three months ended MarchJune 31,30, 2026 and a deferred income tax expense of $264,240 in the three months ended March 31,June 30, 2025. Deferred income tax expense or benefit is related to the difference in amortization for taxable purposes of ourCitius Oncology’s in-process research and development asset and the financial statement amortization.

For the three months ended MarchJune 31,30, 2026, we incurred incurred a net loss of $28,109,746,$11,919,260, as compared to a net loss of $11,511,505$9,203,872 for the three months ended MarchJune 31,30, 2025. The increase of $2,715,388 $16,598,241 in the net loss was primarily due to the increase of $22,272,528$3,946,012 in operating expenses offset by the increase in gross profit of $1,338,420, the increase in other income of $3,840,417 and the decrease in income tax expense of $495,450.$1,001,945.

SixNine months ended MarchJune 31,30, 2026 compared with the sixnine months ended MarchJune 31,30, 2025

Product revenues for the sixnine months ended MarchJune 31,30, 2026 were $5,611,409,$7,105,197, as Citius Oncology began commercial distribution of LYMPHIR in December 2025. Gross profit on product revenues for the sixnine months ended MarchJune 31,30, 2026 was approximately 80%.77%.

For the sixnine months ended MarchJune 31,30, 2026, research and development expenses were $3,233,237,$4,287,106, as compared to $5,893,563$7,514,888 during the sixnine months ended MarchJune 31,30, 2025, a decrease of $2,660,326.$3,227,782.

Research and development costs for LYMPHIR decreased by $2,303,609$2,865,388 to $3,065,410$3,959,231 during the sixnine months ended MarchJune 31,30, 2026, as compared to $5,369,019$6,824,619 for the sixnine months ended MarchJune 31,30, 2025, which decrease was primarily related to expense recognized in the threenine months ended MarchJune 31,30, 2025 for a pre-license inspection batch LYMPHIR previously previously manufactured.manufactured as well as a refund of FDA PDUFA fees associated with LYMPHIR.

Amortization of in-process research and development commenced upon revenue generation by LYMPHIR in December 2025. For the sixnine months ended MarchJune 31,30, 2026 amortization was $2,293,750.$4,014,062. In-process research and development is being amortized on a straight-line basis over the remaining FDA product exclusivity period which ends in August 2036.

For the sixnine months ended MarchJune 31,30, 2026, general and administrative expenses were $32,111,828,$38,261,001, as compared to $10,179,874$14,626,882 during the sixnine months ended MarchJune 31,30, 2025. General and administrative expenses increased by $21,931.954$23,634,119 in comparison with the prior period. The increase of $21,931,954$23,634,119 was primarily related to a notice of termination from a contract manufacturing organization received in February 2026. In March 2026, we recorded a contract cancellation fee of $19,733,307.$19,733,307 as well as increased expense in the commercial organization related to the launch of LYMPHIR. Other 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 under all plans for the sixnine months ended MarchJune 31,30, 2026 and 2025 was $8,068,502$11,879,167 (including $585,742$835,616 for Citius Pharma options, $4,110,478$5,968,921 for Citius Oncology Oncology options and $3,372,282$5,074,630 for Citius Oncology restricted stock unit awardsunits) and $5,226,825$7,946,529 (including $1,329,775$1,924,242 for Citius Pharma options and $3,897,050$6,022,287 for Citius Oncology options), respectively.

Stock-based compensation expense for the sixnine months months ended MarchJune 31,30, 2026 increased by $2,841,647$3,932,638 in comparison to the prior period primarily due to the Citius Oncology restricted stock unit awardsunits granted in September 2025.

For the sixnine months ended MarchJune 31,30, 2026, interest income was $98,681,$215,372, as compared to interest income of $36,021$56,658 for the sixnine months ended MarchJune 31,30, 2025. We have invested the remaining proceeds of our equity offerings in money market accounts.

We recognized a gain of $3,833,277 for the sixnine months ended MarchJune 31,30, 2026, in connection with the sale of certain New Jersey income tax net operating losses to a third party under the the New Jersey Technology Business Tax Certificate Transfer Program.

The Company recorded a deferred income tax expensebenefit of $33,030$74,317 for the sixnine months ended MarchJune 31,30, 2026 and a deferred income tax expense of $528,480$792,720 for the sixnine months ended MarchJune 31,30, 2025. Deferred income tax expense is related to the amortization for taxable purposes of our in-process research and development asset offset by the financial statement amortization of our in-process research and development asset.

For the sixnine months ended MarchJune 31,30, 2026, we incurred a net loss of $37,503,635,$49,422,895, as compared to a net loss of $21,792,751$30,996,623 for the sixnine months ended MarchJune 31,30, 2025. The increase of $15,710,884$18,426,272 in the net loss was due to the increase of $24,407,025$28,353,037 in operating expenses offset by the increase in gross profit of $4,493,323,$5,495,268, the increase in other income of $3,707,368$3,564,460 and the decrease in income tax expense of $495,450.$867,037.

We have incurred operating losses since inception and incurred a net loss of approximately $37.5$49.4 million for the sixnine months ended MarchJune 31,30, 2026. At MarchJune 31,30, 2026, we had an accumulated deficit of approximately $268.3$277.1 million. At MarchJune 31,30, 2026, we had approximately $4.6$17.0 million in cash and a negative working capital of approximately $23.3$8.3 million. Our net cash used in operations during the sixnine months ended MarchJune 31,30, 2026 was approximately $14.3$23.0 million. Our primary source of cash flow since inception has been from financing activities. We have had limited revenue from sales of LYMPHIR, which commenced in December 2025.

On May 5, 20262026, Citius Oncology,Oncology entered into a Loan Agreement that makes available term loansloan inagreement anwith aggregatetwo principallenders amount(the of“Lenders”) for up to $25.0 million (collectively, the “LoansLoan Agreement”), with (i) $10.0 million to be funded on May 6, 2026, (ii) up to $7.0 million beginningavailable on the later of (A) the date on which certain net revenue and liquidity milestones are achieved and (B)between October 1, 2026,1 and continuing through December 31, 2026, if certain net revenue and liquidity milestones are achieved (iii“Tranche 2”), and up to $8.0 million beginningavailable onbetween theJanuary later1 ofand (A)March the31, date2027, on whichif certain additional net revenue milestones are achieved and onea loan was drawn between October 1 and December 31, 2026 (“Tranche 3”). The loans bear interest at the greater of the prime rate plus 6% or more12.75%. TrancheThe loans are secured by all of Citius Oncology’s assets, subject 2to Loansagreed haveexceptions. beenThe drawnmaturity anddate (B)of Januarythe loans is November 1, 2027, and continuing through March 31, 2027.2029.

In order to satisfy our outstanding milestone payment obligations, as well as meet minimum purchase commitments under our agreements for the manufacture and supply of our drug product, in addition to generating income from the sale of LYMPHIR, we need to obtain substantial additional financing and cannot be sure that any additional funding will be available on terms favorable to us, or at all. As of MarchJune 31,30, 2026, our outstanding milestone payments and purchase commitments include:

During the sixnine months ended MarchJune 31,30, 2026, we paid the final $2,900,000 due to Eisai in connection with the LYMPHIR approval milestone and paid $2,100,000$4,100,000 in connection with the milestone payment due to Dr. Reddy’s. At MarchJune 31,30, 2026, we owe Dr. Reddy’s $17,650,000$15,650,000 representing the balance of the approval milestone.