Citius Pharma(CTXR) - 2023 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements The company reported no revenue, a slight decrease in total assets, a net loss of $22.6 million, and consistent cash usage from operations Condensed Consolidated Balance Sheets | | June 30, 2023 ($) | September 30, 2022 ($) | | :--- | :--- | :--- | | Current Assets | | | | Cash and cash equivalents | $33,281,830 | $41,711,690 | | Total Current Assets | $41,114,150 | $44,564,270 | | Total Assets | $110,404,835 | $113,999,302 | | Current Liabilities | | | | Total Current Liabilities | $5,790,857 | $4,530,012 | | Total Liabilities | $12,104,668 | $10,573,057 | | Total Equity | $98,300,167 | $103,426,245 | - Cash and cash equivalents decreased from $41.7 million at September 30, 2022, to $33.3 million at June 30, 2023[15] - In-process research and development (IPR&D) and Goodwill remained unchanged at $59.4 million and $9.3 million, respectively[15] Condensed Consolidated Statements of Operations | | Three Months Ended June 30, ($) | Nine Months Ended June 30, ($) | | :--- | :--- | :--- | | | 2023 | 2022 | 2023 | 2022 | | Revenues | $0 | $0 | $0 | $0 | | Research and development | $3,764,675 | $4,888,192 | $11,937,045 | $13,798,251 | | General and administrative | $3,733,326 | $3,024,783 | $11,129,463 | $9,038,949 | | Total Operating Expenses | $8,672,112 | $8,916,652 | $26,607,295 | $25,766,479 | | Operating Loss | $(8,672,112) | $(8,916,652) | $(26,607,295) | $(25,766,479) | | Gain on sale of NJ NOLs | $0 | $0 | $3,585,689 | $0 | | Net Loss | $(8,479,332) | $(8,863,632) | $(22,599,002) | $(25,649,906) | | Net Loss Per Share | $(0.06) | $(0.06) | $(0.15) | $(0.18) | - The company generated no revenue in the reported periods[17] - Net loss for the nine months ended June 30, 2023, decreased to $22.6 million from $25.6 million in the prior year, primarily due to a $3.6 million gain on the sale of New Jersey net operating losses[17] Condensed Consolidated Statements of Changes in Stockholders' Equity - Total stockholders' equity decreased from $103.4 million on October 1, 2022, to $98.3 million on June 30, 2023[19] - Key changes in equity during the nine months ended June 30, 2023, include a net loss of $22.6 million, stock-based compensation of $3.5 million, and net proceeds of $13.8 million from a registered direct offering[19] Condensed Consolidated Statements of Cash Flows | | Nine Months Ended June 30, ($) | | :--- | :--- | | | 2023 | 2022 | | Net Cash Used In Operating Activities | $(22,259,997) | $(22,028,752) | | Net Cash Provided By Financing Activities | $13,830,137 | $0 | | Net Change in Cash and Cash Equivalents | $(8,429,860) | $(22,028,752) | | Cash and Cash Equivalents - End of Period | $33,281,830 | $48,044,194 | - Financing activities provided $13.8 million in cash during the nine months ended June 30, 2023, from a registered direct offering and stock option exercises, compared to zero in the prior-year period[23] Notes to Condensed Consolidated Financial Statements - The company is a late-stage pharmaceutical company focused on critical care products in oncology, anti-infectives, and stem cell therapies, with key product candidates including Mino-Lok®, Lymphir, Mino-Wrap, and Halo-Lido[26][29][43] - The company estimates its available cash of $33.3 million will be sufficient to fund operations through August 2024, with continued operations beyond this date dependent on regulatory approval and additional capital[38][39] - In May 2023, the company closed a registered direct offering of 12.5 million shares and accompanying warrants, raising gross proceeds of $15.0 million and net proceeds of $13.8 million[60][61] - On July 29, 2023, the company received a Complete Response Letter (CRL) from the FDA for its Lymphir BLA, requiring enhanced product testing and controls, though remediation efforts are not expected to impact its 12-month cash runway[84][85] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the $22.6 million net loss, driven by lower R&D and a gain on NOLs, with cash sufficient through August 2024 Results of Operations Comparison of Three Months Ended June 30, 2023 and 2022 | | 2023 ($) | 2022 ($) | Change ($) | | :--- | :--- | :--- | :--- | | R&D Expenses | $3.8M | $4.9M | $(1.1)M | | G&A Expenses | $3.7M | $3.0M | $0.7M | | Net Loss | $(8.5)M | $(8.9)M | $0.4M | Comparison of Nine Months Ended June 30, 2023 and 2022 | | 2023 ($) | 2022 ($) | Change ($) | | :--- | :--- | :--- | :--- | | R&D Expenses | $11.9M | $13.8M | $(1.9)M | | G&A Expenses | $11.1M | $9.0M | $2.1M | | Net Loss | $(22.6)M | $(25.6)M | $3.0M | - For the nine-month period, R&D expenses decreased by $1.9 million, primarily due to a $2.0 million reduction in costs for Lymphir following its Phase 3 trial completion and BLA preparation, partially offset by a $1.5 million increase for the Halo-Lido Phase 2b trial[116][118][119] - G&A expenses increased by $2.1 million for the nine-month period, mainly due to costs associated with pre-launch and market research activities for Lymphir[121] Liquidity and Capital Resources - As of June 30, 2023, the company had cash and cash equivalents of $33.3 million and working capital of approximately $35.3 million[130] - Net cash used in operations for the nine months ended June 30, 2023, was $22.3 million[129] - Management expects that current cash and cash equivalents will be sufficient to fund operations through August 2024, but additional capital will be needed beyond that date[131] Item 3. Quantitative and Qualitative Disclosures about Market Risk This section is not applicable to the company's operations - Not applicable[136] Item 4. Controls and Procedures Disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal financial reporting controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, 2023[138] - There were no changes in internal control over financial reporting during the quarter ended June 30, 2023, that have materially affected, or are reasonably likely to materially affect, internal controls[139] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company reports no legal proceedings - None[142] Item 1A. Risk Factors No material changes to the company's risk factors have occurred since the last Form 10-K filing - There has been no change in the Company's risk factors since the Form 10-K filed with the SEC on December 22, 2022[143] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales of equity securities - None[144] Item 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[145] Item 4. Mine Safety Disclosures This section is not applicable to the company's operations - Not applicable[146] Item 5. Other Information In August 2023, the company extended the expiration of 4.1 million warrants, held by executives and a placement agent, by one year - In August 2023, the company extended the term by one year to August 2024 for warrants issued in 2018, including 3,921,569 warrants at an exercise price of $1.15 per share held by CEO Leonard Mazur and EVP Myron Holubiak, and 189,412 placement agent warrants at an exercise price of $1.5938 per share[147] Item 6. Exhibits This section lists the exhibits filed, including officer certifications and Inline XBRL data files - The exhibits filed with the report include certifications from the Principal Executive Officer and Principal Financial Officer, as well as Inline XBRL documents[149]