Citius Pharma(CTXR) - 2024 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) The company reported no revenue, a higher net loss of $9.2 million, and declining cash reserves to $20.3 million Condensed Consolidated Balance Sheets Total assets decreased to $97.4 million due to lower cash, while stockholders' equity fell to $85.3 million Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | Dec 31, 2023 | Sep 30, 2023 | Change | | :--- | :--- | :--- | :--- | | Assets | | | | | Cash and cash equivalents | $20,345,618 | $26,480,928 | ($6,135,310) | | Total Current Assets | $28,210,114 | $34,370,434 | ($6,160,320) | | Total Assets | $97,399,822 | $103,611,150 | ($6,211,328) | | Liabilities & Equity | | | | | Total Current Liabilities | $5,578,819 | $5,778,997 | ($200,178) | | Total Liabilities | $12,065,188 | $12,179,662 | ($114,474) | | Total Equity | $85,334,634 | $91,431,488 | ($6,096,854) | Condensed Consolidated Statements of Operations The company reported no revenue and a net loss of $9.2 million, widened by higher operating expenses Statement of Operations Summary (Unaudited) | Metric | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2022 | Change | | :--- | :--- | :--- | :--- | | Revenues | $0 | $0 | - | | Research and development | $2,621,910 | $3,445,515 | ($823,605) | | General and administrative | $3,660,728 | $2,603,287 | $1,057,441 | | Stock-based compensation | $3,058,185 | $1,201,081 | $1,857,104 | | Operating Loss | ($9,340,823) | ($7,249,883) | ($2,090,940) | | Gain on sale of NJ NOLs | $0 | $3,585,689 | ($3,585,689) | | Net Loss | ($9,231,185) | ($3,593,645) | ($5,637,540) | | Net Loss Per Share | ($0.06) | ($0.02) | ($0.04) | Condensed Consolidated Statements of Cash Flows Net cash used in operations was $6.1 million, reducing the quarter-end cash balance to $20.3 million Cash Flow Summary (Unaudited) | Metric | Three Months Ended Dec 31, 2023 | Three Months Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net Cash Used In Operating Activities | ($6,135,310) | ($4,824,439) | | Cash and Cash Equivalents - Beginning of Period | $26,480,928 | $41,711,690 | | Cash and Cash Equivalents - End of Period | $20,345,618 | $36,887,251 | Notes to Condensed Consolidated Financial Statements Notes highlight a going concern uncertainty, a planned merger for Citius Oncology, and the BLA resubmission for LYMPHIR - The company's available cash resources are estimated to be sufficient to fund operations only through August 2024, which raises substantial doubt about its ability to continue as a going concern[36] - On October 23, 2023, Citius Oncology entered into a merger agreement with TenX Keane Acquisition, expected to be completed in the first half of 2024[86][87] - The company terminated its patent and technology license agreement for Mino-Wrap on December 11, 2023[42] - On February 13, 2024, the company filed the Biologics License Application (BLA) resubmission package for LYMPHIR with the FDA[89][59] Management's Discussion and Analysis of Financial Condition and Results of Operations The increased net loss is attributed to higher G&A and stock compensation, with liquidity concerns necessitating future capital raises - The company expects to need to raise additional capital to support operations beyond August 2024[127] - The increase in net loss was primarily due to a $1.1 million increase in G&A expenses, a $1.9 million increase in stock-based compensation, and a $3.5 million decrease in other income compared to the prior year period[123] - R&D expenses decreased by $0.8 million, mainly due to lower costs for the Mino-Lok Phase 3 trial and the Halo-Lido Phase 2b trial[113][114][115] Results of Operations R&D expenses decreased to $2.6 million while G&A and stock compensation expenses increased significantly Change in Operating Expenses (Q4 2023 vs Q4 2022) | Expense Category | Q4 2023 | Q4 2022 | Change | Reason | | :--- | :--- | :--- | :--- | :--- | | Research & Development | $2.6M | $3.4M | ($0.8M) | Decreased Mino-Lok and Halo-Lido trial costs | | General & Administrative | $3.7M | $2.6M | $1.1M | Increased pre-launch activities for LYMPHIR | | Stock-based Compensation | $3.1M | $1.2M | $1.9M | Expense from Citius Oncology stock plan | - The company announced the completion of enrollment in its pivotal Phase 3 clinical trial for Mino-Lok on January 2, 2024[114] Liquidity and Capital Resources With $20.3 million in cash, the company faces a going concern uncertainty as funds are only sufficient through August 2024 Liquidity Position as of Dec 31, 2023 | Metric | Amount | | :--- | :--- | | Cash and cash equivalents | $20,345,618 | | Working Capital | ~$22,600,000 | | Accumulated Deficit | $171,462,564 | - Based on cash at December 31, 2023, the company expects it has sufficient funds to continue operations only through August 2024[127] Quantitative and Qualitative Disclosures about Market Risk This section is not applicable for the reporting period - Not applicable[132] Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes during the quarter - As of December 31, 2023, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective[134] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[135] PART II. OTHER INFORMATION Legal Proceedings The company reported no legal proceedings during the period - None[137] Risk Factors No material changes were reported to the risk factors disclosed in the previous Annual Report - There have been no material changes to the Company's risk factors as disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2023[138] Unregistered Sales of Equity Securities and Use of Proceeds The company issued 108,778 unregistered shares of common stock for investor relations services - On October 10, 2023, the company issued 108,778 shares of common stock for investor relations services, exempt from registration under Section 4(a)(2) of the Securities Act[139] Other Information The company reported no other information for the period - None[143] Exhibits Filed exhibits include the Citius Oncology merger agreement and standard officer certifications - Filed exhibits include the Agreement and Plan of Merger and Reorganization dated October 23, 2023, concerning Citius Oncology, Inc. and TenX Keane Acquisition[145]