Financial Performance - Citius Oncology reported $3.9 million in revenue for the fiscal first quarter 2026, marking its first reported revenue following the launch of LYMPHIR in December 2025[1][7]. - The net loss for the quarter was $5.5 million, or $(0.06) per share, compared to a net loss of $6.7 million, or $(0.09) per share, for the prior-year period[7][14]. - The net loss for 2025 was $5,534,069, an improvement from a net loss of $6,659,205 in 2024[16]. - Stock-based compensation expense increased to $3,956,050 in 2025 from $1,808,478 in 2024[16]. - Net cash used in operating activities was $(7,354,946) for 2025, with significant changes in accounts receivable and inventory[16]. - License payments for investing activities amounted to $(4,400,000) in 2025[16]. - Net proceeds from the issuance of common stock were $15,125,489, contributing positively to financing activities[16]. - The net change in cash and cash equivalents for 2025 was an increase of $3,370,543[16]. - Cash and cash equivalents at the end of the period reached $7,295,451, up from $3,924,908 at the beginning[16]. - Interest paid during the period was $14,460[16]. Expenses - Research and development expenses decreased to $1.0 million from $1.3 million in the prior-year period, reflecting reduced clinical development activity[7][14]. - General and administrative expenses were $2.9 million, down from $3.3 million in the prior-year period[7][14]. Market Opportunity - The initial market for LYMPHIR is estimated to exceed $400 million and is growing, indicating a significant opportunity in an underserved market[6][7]. - Citius Oncology is advancing an international access strategy through regional distribution partners and Named Patient Programs in key European and Middle Eastern markets[7][4]. - The company is focused on expanding its field presence to support a concentrated prescriber base in the rare cancer setting, utilizing an AI-enabled commercial platform[2][7]. Strategic Focus - Citius Oncology is evaluating strategic opportunities to enhance long-term shareholder value while maintaining capital management[3][7]. - The company established a nationwide specialty distribution infrastructure to ensure immediate product availability and support rapid physician adoption of LYMPHIR[4][7].

Core Viewpoint - Purcell & Lefkowitz LLP is investigating Citius Oncology, Inc. to determine if its directors breached fiduciary duties related to recent corporate actions [1] Group 1 - The investigation is on behalf of Citius Oncology's shareholders [1] - Shareholders interested in more information about their rights and options are encouraged to visit the law firm's website or contact them directly [1] - The law firm specializes in representing shareholders affected by securities fraud and corporate misconduct [2]

Product Launch and Market Potential - Citius Oncology launched LYMPHIR™, a novel immunotherapy, in the U.S. in December 2025 for treating adult patients with relapsed or refractory Stage I–III cutaneous T-cell lymphoma (CTCL) after at least one prior systemic therapy[3] - The initial market for LYMPHIR is estimated to exceed $400 million, indicating significant growth potential in an underserved market[5] - Citius Oncology secured access to LYMPHIR in 19 international markets through regional distribution partners via Named Patient Programs, marking a step in its global access strategy[6] - The company executed service agreements with three leading U.S. pharmaceutical wholesalers to distribute LYMPHIR to healthcare organizations across the U.S.[3] - Citius Oncology announced a collaboration with Verix to enhance commercial targeting and provider engagement for LYMPHIR's U.S. commercialization[6] Financial Performance - The net loss for the fiscal year ended September 30, 2025, was $24.8 million, or ($0.34) per share, compared to a net loss of $21.1 million, or ($0.31) per share, in 2024[6] - Net loss for 2025 was $(24,761,369), compared to $(21,148,747) in 2024, indicating a worsening financial position[16] - Cash and cash equivalents stood at $3.9 million as of September 30, 2025, compared to $112 in 2024[11] - Stock-based compensation expense increased to $8,320,419 in 2025 from $7,498,817 in 2024, reflecting higher employee compensation costs[16] - Inventory changes resulted in a significant increase of $(12,649,207) in 2025, compared to $(2,133,871) in 2024, indicating potential overstock issues[16] Cash Flow and Financing Activities - Net cash used in operating activities was $(5,492,046) in 2025, a decline from a positive cash flow of $126,353 in 2024[16] - Net cash provided by financing activities rose to $15,166,842 in 2025, up from $4,873,759 in 2024, showing increased capital raising efforts[16] - Cash and cash equivalents at the end of 2025 were $3,924,908, a significant increase from $112 at the beginning of the year[16] - License payments for 2025 amounted to $(5,750,000), consistent with $(5,000,000) in 2024, indicating ongoing investment in licenses[16] - Interest paid in 2025 was $187,389, while no interest was reported in 2024, suggesting new debt obligations[16] Expenses Overview - Research and development expenses increased to $6.4 million for the fiscal year ended September 30, 2025, up from $4.9 million in 2024[6] - General and administrative expenses rose to $8.8 million for the fiscal year ended September 30, 2025, compared to $8.1 million in 2024[6] - The company reported a capital contribution of due to related party by parent of $33,180,961 in 2024, which was not repeated in 2025[16] - Net prepaid manufacturing transferred to inventory was $1,368,720 in 2025, down from $6,134,895 in 2024, indicating a shift in production strategy[16]

Product Development and Approval - The Company’s lead product, LYMPHIR, is projected to address a market estimated to exceed $400 million for the treatment of persistent or recurrent CTCL[28]. - LYMPHIR received FDA approval in August 2024 and was launched in December 2025[28]. - The Phase 3 trial for LYMPHIR demonstrated an overall response rate (ORR) of 36.2% among 69 subjects, with 8.7% achieving a complete response[39]. - The median duration of response for LYMPHIR was 6.5 months, with 52% of responders maintaining their response for at least 6 months[46]. - Serious adverse reactions occurred in 38% of patients, with capillary leak syndrome (10%) and infusion-related reactions (9%) being the most common[49]. - The pivotal trial for LYMPHIR included 69 patients with a median age of 64 years, and the median number of prior therapies was 4[43]. - The Phase I Clinical Trial of Pembrolizumab and LYMPHIR demonstrated a partial response rate of 27% (4 out of 15 evaluable patients) and a clinical benefit rate of 33% (5 out of 15) among evaluable patients[64][65]. - The median progression-free survival (PFS) for patients achieving clinical benefit was 57 weeks, with a range of 30 to 96 weeks[65]. - LYMPHIR was included in the National Comprehensive Cancer Network (NCCN) guidelines with a Category 2A recommendation, indicating its appropriateness for CTCL patients[89]. - The FDA assigned a PDUFA goal date of August 13, 2024, for the Biologics License Application (BLA) resubmission for LYMPHIR[81]. Commercialization Strategy - The Company has established a targeted oncology sales force for LYMPHIR, focusing on major cancer centers in the U.S.[29]. - The Company plans to commercialize products independently in the U.S. while partnering for international markets[29]. - The Company has entered into distribution agreements with Cardinal Health, Cencora, and McKesson Corporation to support the launch and commercialization of LYMPHIR[88]. - The Company plans to focus its commercial efforts on a targeted group of prescribing hematologists, oncologists, and dermatologist-oncologists[87]. - The company has contracted with Innovation Partners and three national companies to assist in the commercialization of LYMPHIR, indicating reliance on third-party infrastructure[154]. - The company has contracted with third-party organizations for sales, marketing, and distribution of LYMPHIR, which may require significant resources[176]. Financial Obligations and Funding - The Company is obligated to pay up to $40 million related to CTCL approvals and up to $300 million for commercial sales milestones under the asset purchase agreement with Dr. Reddy's[104]. - A $27.5 million milestone payment became payable to Dr. Reddy's upon FDA approval for LYMPHIR, with a remaining balance of $19.75 million as of September 30, 2025[107]. - The Company has accrued a $2.9 million unpaid balance of the development milestone payment to Eisai as of September 30, 2025[98]. - The license agreement with Eisai includes a $5.9 million development milestone payment upon initial FDA approval of LYMPHIR for CTCL[98]. - The Company is required to commercially launch a product within six months of receiving regulatory approval, which was satisfied with the launch of LYMPHIR in December 2025[158]. - The company has raised $6.0 million in October 2025 and $18.0 million in December 2025 to support operations through March 2026[137]. - As of September 30, 2025, the company had approximately $3.9 million in cash and cash equivalents and an accumulated deficit of approximately $64 million[140]. - The company has generated no operating revenue to date and relies on equity instruments and funding through Citius Pharma for financing[138]. - The company anticipates needing to increase its organizational size to support the commercialization of LYMPHIR and future product candidates, which may strain existing infrastructure[197]. Market and Competitive Landscape - The addressable U.S. market for LYMPHIR is estimated to exceed $400 million, potentially expanding with new therapeutic introductions[85]. - The estimated incidence rate of mycosis fungoides and Sézary syndrome in the U.S. is approximately 0.5 per 100,000, translating to about 2,500 to 3,000 new cases annually[84]. - Citius Oncology's revenues are expected to depend substantially on the market acceptance of LYMPHIR, which may not be guaranteed[175]. - Market acceptance of LYMPHIR may be limited by factors such as pricing, reimbursement, and perceptions of healthcare providers[174]. - The actual market for LYMPHIR may be smaller than projected, affecting the company's ability to achieve profitability[178]. - The competitive landscape in the pharmaceutical industry is intense, with several companies targeting the same conditions as LYMPHIR, many of which have greater resources and experience[184]. Regulatory Compliance and Risks - The FDA requires substantial time and resources for marketing approval, including nonclinical studies and clinical trials[112]. - The Company must comply with ongoing FDA regulations post-approval, including recordkeeping and reporting of adverse experiences[116]. - The company faces potential challenges in obtaining sufficient reimbursement rates from health administration authorities in countries outside the U.S., which could adversely affect profitability[181]. - Legislative changes, such as the Inflation Reduction Act of 2022, could materially affect the healthcare industry and the company's business[129]. - The company is subject to increased scrutiny over drug pricing, which may lead to legislative changes that could limit reimbursement amounts from federal health care programs[188]. - Regulatory compliance is critical, as failure to maintain compliance could result in significant costs and hinder the ability to market future products[210]. - The approval process for future product candidates may be delayed by changes in government regulation or FDA policy, impacting commercialization timelines[212]. Operational Challenges - The company faces challenges in obtaining adequate reimbursement levels for its products due to increasing restrictions from governmental authorities and private insurers[122]. - The company has a limited operating history and has not yet demonstrated the ability to successfully commercialize any product candidates beyond LYMPHIR[154]. - The company faces substantial additional costs due to milestone payments and obligations under license agreements, which could adversely affect the profitability of LYMPHIR[159]. - The company faces risks related to reliance on third-party manufacturers, which could delay clinical trials and commercialization[167]. - The company is dependent on third parties and Citius Pharma under the A&R Shared Services Agreement[226]. - Recruitment or departure of key scientific or management personnel could impact the company's operations[226]. - Cybersecurity threats pose a risk to the company's information technology systems, which are critical for operations and could lead to significant disruptions if compromised[199]. Intellectual Property and Legal Risks - The company anticipates filing additional patent applications in the U.S. and other countries, but the patent process is fraught with risks and uncertainties that may limit competitive advantages[215]. - The company may face substantial costs if its product candidates infringe on third-party proprietary rights, which could harm earnings and financial condition[222]. - The company has registered the trademark "LYMPHIR," but inadequate protection could impede brand recognition and market competitiveness[223]. - The company has limited product liability insurance coverage of $5 million per occurrence, which may not be sufficient to cover all liabilities from product liability claims[211]. - The company relies on trade secret protections through confidentiality agreements, but breaches could adversely affect business prospects[221]. Financial Performance - The company incurred a net loss of $24.7 million for the year ended September 30, 2025, with stockholders' equity of $44.9 million and an accumulated deficit of $64 million[143]. - As of September 30, 2025, the company has outstanding commitments totaling $38.4 million due to third-party suppliers and manufacturers, primarily related to the development and commercialization of LYMPHIR[144]. - The company recorded $218,032 in interest expense related to the payment schedule with Eisai during the year ended September 30, 2025[162]. - The company has raised $18 million in capital raises through December 10, 2025, with an uncertain likelihood of raising an additional $12 million to trigger repayment obligations on a $3.8 million promissory note[145]. - Future issuances of debt or equity securities may influence the company's financial condition and operating results[226].

[Fiscal Third Quarter 2025 Report Overview](index=1&type=section&id=Fiscal%20Third%20Quarter%202025%20Report%20Overview) This section provides an overview of Citius Oncology's fiscal Q3 2025 performance, focusing on LYMPHIR's commercial launch preparations and financial results [Introduction and Business Context](index=1&type=section&id=Introduction%20and%20Business%20Context) Citius Oncology, Inc. reported its business and financial results for the fiscal third quarter ended June 30, 2025, as it prepares for the commercial launch of its primary asset, LYMPHIR - Citius Oncology, Inc. is a specialty biopharmaceutical company developing and commercializing novel targeted oncology therapies[1](index=1&type=chunk) - This report covers the fiscal third quarter ended June 30, 2025[1](index=1&type=chunk) [Key Business Developments](index=1&type=section&id=Key%20Business%20Developments) Citius Oncology is in the final stages of preparing for the U.S. commercial launch of LYMPHIR, planned for the fourth quarter of 2025, supported by recent financings and established distribution agreements - LYMPHIR commercial availability is planned for the **fourth quarter of 2025**[1](index=1&type=chunk)[2](index=2&type=chunk) - Citius Pharmaceuticals raised **$12.5 million** in gross financings, with Citius Oncology securing an additional **$9 million** in July 2025 for LYMPHIR pre-launch initiatives[1](index=1&type=chunk) - The launch strategy includes cutting-edge technology, targeted marketing, ready supplies, distribution agreements, and strong key opinion leader engagement[2](index=2&type=chunk) [Fiscal Third Quarter 2025 Financial Highlights](index=1&type=section&id=Fiscal%20Third%20Quarter%202025%20Financial%20Highlights) The company completed a public offering generating $7.4 million in net proceeds. R&D expenses decreased year-over-year, while G&A expenses, stock-based compensation, and net loss increased. Cash and cash equivalents remained minimal at $112 - On July 17, 2025, Citius Oncology completed a public offering, generating net proceeds of approximately **$7.4 million**[3](index=3&type=chunk) Fiscal Third Quarter Financial Performance | Financial Metric (Q3) | June 30, 2025 ($) | June 30, 2024 ($) | Change (YoY) ($) | Percentage Change (YoY) (%) | | :-------------------- | :---------------- | :---------------- | :--------------- | :-------------------------- | | R&D expenses | 938,000 | 1,100,000 | (162,000) | -14.73 | | G&A expenses | 1,900,000 | 1,500,000 | 400,000 | 26.67 | | Stock-based comp. | 2,100,000 | 2,000,000 | 100,000 | 5.00 | | Net loss | (5,400,000) | (4,800,000) | (600,000) | 12.50 | | Net loss per share | (0.08) | (0.07) | (0.01) | 14.29 | - As of June 30, 2025, the Company held **$112** in cash and cash equivalents with **71,552,402** common shares outstanding[3](index=3&type=chunk) - Citius Pharma, the parent company, received net proceeds of approximately **$10.5 million** from equity offerings during the three months ended June 30, 2025[3](index=3&type=chunk) [Company Information](index=2&type=section&id=Company%20Information) This section provides an overview of Citius Oncology's business, its key product LYMPHIR, and a disclaimer regarding forward-looking statements [About Citius Oncology, Inc.](index=2&type=section&id=About%20Citius%20Oncology%2C%20Inc.) Citius Oncology is a biopharmaceutical company specializing in targeted oncology therapies, with its key asset LYMPHIR approved by the FDA for relapsed or refractory CTCL. The company estimates a significant and underserved market for LYMPHIR, supported by robust intellectual property - Citius Oncology is a specialty biopharmaceutical company focused on developing and commercializing novel targeted oncology therapies[5](index=5&type=chunk) - LYMPHIR, the primary asset, received FDA approval in August 2024 for adults with relapsed or refractory Cutaneous T-cell Lymphoma (CTCL) after at least one prior systemic therapy[5](index=5&type=chunk) - Management estimates the initial market for LYMPHIR exceeds **$400 million**, is growing, and remains underserved by current therapies[5](index=5&type=chunk) - The company's competitive position is bolstered by robust intellectual property, including orphan drug designation, complex technology, trade secrets, and pending patents for immuno-oncology combination therapy[5](index=5&type=chunk) [Forward-Looking Statements](index=2&type=section&id=Forward-Looking%20Statements) This section provides a standard disclaimer regarding forward-looking statements, highlighting that future performance is subject to various risks and uncertainties, including funding needs, commercialization challenges, regulatory compliance, and intellectual property matters - The press release contains forward-looking statements based on expectations and beliefs about future events, identifiable by specific keywords[6](index=6&type=chunk) - Key risks include the need for substantial additional funds beyond September 2025, LYMPHIR commercialization challenges, maintaining agreements, market acceptance, Nasdaq compliance, supplier dependence, and intellectual property matters[6](index=6&type=chunk) - Readers are cautioned against undue reliance on these statements, and the company disclaims any obligation to update or revise them, except as legally required[6](index=6&type=chunk) [Financial Statements](index=3&type=section&id=Financial%20Statements) This section presents the condensed consolidated balance sheets, statements of operations, and cash flows, detailing the company's financial position and performance [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased primarily due to a significant rise in inventory, while total liabilities also grew substantially, mainly driven by increases in accounts payable and accrued expenses. This led to a decrease in total stockholders' equity Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2025 ($) | September 30, 2024 ($) | Change ($) | Percentage Change (%) | | :------------------------ | :---------------- | :--------------------- | :------------ | :-------------------- | | Cash and cash equivalents | 112 | 112 | 0 | 0.00 | | Inventory | 17,208,967 | 8,268,766 | 8,940,201 | 108.14 | | Total Current Assets | 18,309,079 | 10,968,878 | 7,340,201 | 66.92 | | Total Assets | 91,709,079 | 84,368,878 | 7,340,201 | 8.70 | | Accounts payable | 8,667,419 | 3,711,622 | 4,955,797 | 133.52 | | Accrued expenses | 8,458,554 | — | 8,458,554 | N/A | | Total Current Liabilities | 52,990,335 | 32,700,428 | 20,289,907 | 62.05 | | Total Liabilities | 59,311,166 | 38,228,539 | 21,082,627 | 55.15 | | Total Stockholders' Equity| 32,397,913 | 46,140,339 | (13,742,426) | -29.78 | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the three and nine months ended June 30, 2025, Citius Oncology reported no revenues. Operating expenses, operating loss, and net loss all increased significantly year-over-year for both periods, primarily driven by higher general and administrative expenses and, for the nine-month period, increased R&D Condensed Consolidated Statements of Operations Highlights (Three Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change ($) | Percentage Change (%) | | :-------------------------- | :------------ | :------------ | :------------ | :-------------------- | | Revenues | 0 | 0 | 0 | 0.00 | | Research and development | 938,277 | 1,131,439 | (193,162) | -17.07 | | General and administrative | 1,881,447 | 1,540,411 | 341,036 | 22.14 | | Total Operating Expenses | 4,944,961 | 4,628,850 | 316,111 | 6.83 | | Operating Loss | (4,944,961) | (4,628,850) | (316,111) | 6.83 | | Net Loss | (5,369,956) | (4,772,850) | (597,106) | 12.51 | | Net Loss Per Share | (0.08) | (0.07) | (0.01) | 14.29 | Condensed Consolidated Statements of Operations Highlights (Nine Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change ($) | Percentage Change (%) | | :-------------------------- | :------------ | :------------ | :------------ | :-------------------- | | Revenues | 0 | 0 | 0 | 0.00 | | Research and development | 5,342,198 | 3,628,900 | 1,713,298 | 47.21 | | General and administrative | 7,446,753 | 4,443,899 | 3,002,854 | 67.57 | | Total Operating Expenses | 18,811,238 | 13,903,799 | 4,907,439 | 35.30 | | Operating Loss | (18,811,238) | (13,903,799) | (4,907,439) | 35.30 | | Net Loss | (19,764,713) | (14,335,799) | (5,428,914) | 37.87 | | Net Loss Per Share | (0.28) | (0.21) | (0.07) | 33.33 | [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended June 30, 2025, the company's net loss significantly increased. Adjustments to reconcile net loss to net cash provided by operating activities included substantial increases in inventory, accounts payable, accrued expenses, and amounts due to related parties, resulting in no net cash provided by operating activities for both periods Condensed Consolidated Statements of Cash Flows Highlights (Nine Months Ended June 30) | Metric | 2025 ($) | 2024 ($) | Change ($) | Percentage Change (%) | | :---------------------------------------- | :------------ | :------------ | :------------ | :-------------------- | | Net loss | (19,764,713) | (14,335,799) | (5,428,914) | 37.87 | | Stock-based compensation expense | 6,022,287 | 5,831,000 | 191,287 | 3.28 | | Deferred income tax expense | 792,720 | 432,000 | 360,720 | 83.50 | | Inventory | (8,940,201) | 0 | (8,940,201) | N/A | | Prepaid expenses | 1,600,000 | (2,271,920) | 3,871,920 | -170.43 | | Accounts payable | 4,955,797 | (1,289,045) | 6,244,842 | -484.46 | | Accrued expenses | 8,458,554 | 185,930 | 8,272,624 | 4449.27 | | Due to related party | 6,875,556 | 11,447,834 | (4,572,278) | -39.94 | | Net Cash Provided By Operating Activities | 0 | 0 | 0 | 0.00 | | Cash and Cash Equivalents – End of Period | 112 | 0 | 112 | N/A | [Additional Information](index=2&type=section&id=Additional%20Information) This section provides contact details for investor relations and media inquiries [Investor and Media Contacts](index=2&type=section&id=Investor%20and%20Media%20Contacts) Contact information is provided for investor relations and media inquiries - Investor Contact: Ilanit Allen at ir@citiuspharma.com or **908-967-6677 x113**[7](index=7&type=chunk) - Media Contact: Greg Salsburg at Greg@STiR-communications.com[7](index=7&type=chunk)

[FORM 10-Q Cover Page](index=1&type=section&id=FORM%2010-Q%20Cover%20Page) Citius Oncology, Inc. filed its Quarterly Report on Form 10-Q for the period ended June 30, 2025, classifying as a non-accelerated filer, smaller reporting company, and emerging growth company - Citius Oncology, Inc. filed its Quarterly Report on Form 10-Q for the period ended June 30, 2025. The company is incorporated in Delaware, with its common stock (CTOR) registered on the Nasdaq Capital Market. It is classified as a non-accelerated filer, a smaller reporting company, and an emerging growth company[1](index=1&type=chunk)[2](index=2&type=chunk)[3](index=3&type=chunk) Company Classification | Classification | Status | | :-------------------- | :----- | | Large accelerated filer | ☐ | | Accelerated filer | ☐ | | Non-accelerated filer | ☒ | | Smaller reporting company | ☒ | | Emerging growth company | ☒ | - As of August 11, 2025, there were **78,370,584 shares** of common stock, $0.0001 par value, issued and outstanding[3](index=3&type=chunk) [TABLE OF CONTENTS](index=2&type=section&id=TABLE%20OF%20CONTENTS) [EXPLANATORY NOTE](index=3&type=section&id=EXPLANATORY%20NOTE) This section defines key terms used throughout the report, specifically "Company," "Citius Oncology," and the trademark LYMPHIR - The terms 'Company,' 'Citius Oncology,' 'we,' 'us,' and 'our' refer to Citius Oncology, Inc. and its wholly-owned subsidiary Citius Oncology Sub Inc. LYMPHIR (denileukin diftitox) is a registered trademark of the Company[7](index=7&type=chunk)[8](index=8&type=chunk) [CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS](index=4&type=section&id=CAUTIONARY%20NOTE%20REGARDING%20FORWARD-LOOKING%20STATEMENTS) This section highlights that the report contains forward-looking statements subject to risks and uncertainties, with no obligation to update them beyond the filing date - This report contains forward-looking statements based on current expectations, estimates, and projections, which are subject to risks, uncertainties, and assumptions that could cause actual results to differ materially[10](index=10&type=chunk) - Key risks include substantial doubt about the Company's ability to continue as a going concern, the need for additional funds for LYMPHIR launch, ability to commercialize LYMPHIR, maintaining Nasdaq listing compliance, dependence on third-party suppliers, and uncertainties related to clinical testing, approval, and commercialization of product candidates[10](index=10&type=chunk)[12](index=12&type=chunk) - The Company does not undertake any obligation to update forward-looking statements beyond the filing date, except as required by applicable securities laws[11](index=11&type=chunk) PART I - FINANCIAL INFORMATION [Item 1. Financial Statements.](index=6&type=section&id=Item%201.%20Financial%20Statements.) This section presents the unaudited condensed consolidated financial statements, including the balance sheets, statements of operations, changes in stockholders' equity, and cash flows, along with detailed notes explaining the company's nature of operations, significant accounting policies, financial position, and recent events [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's assets, liabilities, and equity at specific points in time, highlighting changes in financial position Condensed Consolidated Balance Sheets (Unaudited) | Metric | June 30, 2025 | September 30, 2024 | | :-------------------------------- | :-------------- | :----------------- | | Cash and cash equivalents | $112 | $112 | | Inventory | $17,208,967 | $8,268,766 | | Total Current Assets | $18,309,079 | $10,968,878 | | Total Assets | $91,709,079 | $84,368,878 | | Total Current Liabilities | $52,990,335 | $32,700,428 | | Total Liabilities | $59,311,166 | $38,228,539 | | Total Stockholders' Equity | $32,397,913 | $46,140,339 | - Total Current Assets increased by approximately **$7.34 million**, primarily driven by a significant increase in inventory. Total Current Liabilities increased by approximately **$20.29 million**, mainly due to increases in accounts payable and accrued expenses. Total Stockholders' Equity decreased by approximately **$13.74 million**[15](index=15&type=chunk) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's revenues, expenses, and net loss over specific periods, reflecting operational performance Condensed Consolidated Statements of Operations (Unaudited) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | Revenues | $— | $— | $— | $— | | Research and development | $938,277 | $1,131,439 | $5,342,198 | $3,628,900 | | General and administrative | $1,881,447 | $1,540,411 | $7,446,753 | $4,443,899 | | Stock-based compensation | $2,125,237 | $1,957,000 | $6,022,287 | $5,831,000 | | Total Operating Expenses | $4,944,961 | $4,628,850 | $18,811,238 | $13,903,799 | | Operating Loss | $(4,944,961) | $(4,628,850) | $(18,811,238) | $(13,903,799) | | Interest expense | $160,755 | $— | $160,755 | $— | | Net Loss | $(5,369,956) | $(4,772,850) | $(19,764,713) | $(14,335,799) | | Net Loss Per Share - Basic and Diluted | $(0.08) | $(0.07) | $(0.28) | $(0.21) | - The Company reported **no revenues** for both periods. Net loss increased for both the three-month and nine-month periods ended June 30, 2025, primarily due to higher general and administrative expenses, stock-based compensation, and the introduction of interest expense[17](index=17&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This section outlines the changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit Changes in Stockholders' Equity (Unaudited) | Metric | Balance, September 30, 2024 | Balance, June 30, 2025 | | :-------------------------- | :-------------------------- | :--------------------- | | Common Stock (Shares) | 71,552,402 | 71,552,402 | | Common Stock (Amount) | $7,155 | $7,155 | | Additional Paid-In Capital | $85,411,771 | $91,434,058 | | Accumulated Deficit | $(39,278,587) | $(59,043,300) | | Total Stockholders' Equity | $46,140,339 | $32,397,913 | - Total stockholders' equity decreased from **$46.14 million** at September 30, 2024, to **$32.40 million** at June 30, 2025, primarily due to accumulated net losses, partially offset by increases in additional paid-in capital from stock-based compensation[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the cash inflows and outflows from operating, investing, and financing activities, showing changes in cash and cash equivalents Condensed Consolidated Statements of Cash Flows (Unaudited) | Metric | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------ | :------------------------------ | | Net loss | $(19,764,713) | $(14,335,799) | | Stock-based compensation expense | $6,022,287 | $5,831,000 | | Deferred income tax expense | $792,720 | $432,000 | | Inventory change | $(8,940,201) | $0 | | Prepaid expenses change | $1,600,000 | $(2,271,920) | | Accounts payable change | $4,955,797 | $(1,289,045) | | Accrued expenses change | $8,458,554 | $185,930 | | Due to related party change | $6,875,556 | $11,447,834 | | Net Cash Provided By Operating Activities | $0 | $0 | | Cash and Cash Equivalents – End of Period | $112 | $0 | - Despite a net loss, the company reported **zero net cash provided by operating activities** for both periods, with cash and cash equivalents remaining at **$112** at June 30, 2025. Significant adjustments include stock-based compensation, deferred income tax, and changes in working capital accounts like inventory, accounts payable, and accrued expenses[21](index=21&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering accounting policies and significant events [1. NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=1.%20NATURE%20OF%20OPERATIONS,%20BASIS%20OF%20PRESENTATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note describes Citius Oncology's business, its reliance on Citius Pharma, and the accounting treatment of its merger and subsequent capital structure - Citius Oncology is a specialty pharmaceutical company focused on developing and commercializing critical care oncology products, primarily LYMPHIR (denileukin diftitox) for cutaneous T-cell lymphoma (CTCL). The company has relied on funding from Citius Pharmaceuticals, Inc. (Citius Pharma) since its inception[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) - The Company completed a merger on August 12, 2024, with TenX Keane Acquisition, where TenX was renamed Citius Oncology, Inc. and SpinCo (holding LYMPHIR assets) became a wholly-owned subsidiary. For accounting purposes, Citius Oncology was deemed the accounting acquirer, and the merger was treated as a recapitalization[29](index=29&type=chunk)[30](index=30&type=chunk) - Post-merger, Citius Pharma owned approximately **92.3%** of Citius Oncology's common stock, which decreased to **84.3%** by July 17, 2025. Citius Pharma made significant capital investments, including cash contributions and reclassifying intercompany receivables[29](index=29&type=chunk)[32](index=32&type=chunk) [2. GOING CONCERN UNCERTAINTY AND MANAGEMENT'S PLAN](index=11&type=section&id=2.%20GOING%20CONCERN%20UNCERTAINTY%20AND%20MANAGEMENT'S%20PLAN) This note addresses the company's financial viability concerns and outlines management's strategies to secure additional funding and generate revenue - The Company reported a net loss of **$19,764,713** for the nine months ended June 30, 2025, and had **$112** in cash with a negative working capital of **$34.7 million** at period end, raising substantial doubt about its ability to continue as a going concern beyond September 2025[38](index=38&type=chunk)[40](index=40&type=chunk) - To address this, Citius Oncology completed a public offering on July 17, 2025, raising approximately **$7.44 million** in net proceeds. The company plans to continue relying on Citius Pharma funding, raise additional capital through equity financings, and generate revenue from LYMPHIR sales[39](index=39&type=chunk)[41](index=41&type=chunk) - There is no assurance that Citius Pharma will continue funding, that the Company will successfully raise needed capital on acceptable terms, or that it will find strategic partners or generate substantial revenue from LYMPHIR sales[41](index=41&type=chunk) [3. INVENTORY](index=12&type=section&id=3.%20INVENTORY) This note details the composition and significant increase in the company's inventory, primarily for its commercial product LYMPHIR Inventory Composition | Inventory Type | June 30, 2025 | September 30, 2024 | | :--------------- | :-------------- | :----------------- | | Finished goods | $8,962,493 | $6,134,895 | | Work in process | $8,246,474 | $2,133,862 | | Total Inventory | $17,208,967 | $8,268,766 | - Inventory, primarily related to LYMPHIR commercial products expected to be sold starting in Q4 2025, significantly increased from **$8.27 million** to **$17.21 million**. No reserves against inventory were deemed necessary[42](index=42&type=chunk) [4. PREPAID EXPENSES](index=12&type=section&id=4.%20PREPAID%20EXPENSES) This note explains the nature and changes in prepaid expenses, representing advance payments for manufacturing and R&D costs Prepaid Expenses | Date | Amount | | :------------- | :------- | | June 30, 2025 | $1,100,000 | | September 30, 2024 | $2,700,000 | - Prepaid expenses decreased from **$2.7 million** to **$1.1 million**, representing advance payments for long-lead time drug substance and product costs for R&D or LYMPHIR manufacturing[43](index=43&type=chunk) [5. PATENT AND TECHNOLOGY LICENSE AGREEMENTS](index=12&type=section&id=5.%20PATENT%20AND%20TECHNOLOGY%20LICENSE%20AGREEMENTS) This note describes the company's exclusive license for LYMPHIR, related milestone payments, and commercialization obligations - Citius Oncology holds an exclusive license for LYMPHIR (E7777/denileukin diftitox) from Eisai, acquired via Dr. Reddy's, for most markets outside Japan and parts of Asia. The FDA approved LYMPHIR in August 2024[44](index=44&type=chunk)[45](index=45&type=chunk) - Upon FDA approval, a **$27.5 million** milestone payment became due to Dr. Reddy's, with **$22.5 million** remaining as of June 30, 2025, partially deferred without penalty. Payments of **$1 million** (by Citius Pharma) and **$1.25 million** (by Citius Oncology) were made in July 2025[46](index=46&type=chunk) - A **$5.9 million** milestone payment to Eisai was also due upon FDA approval, included in license payable. An amended payment schedule was agreed upon in March 2025, incurring **$160,755** in interest expense for the nine months ended June 30, 2025. Subsequent payments to Eisai totaling **$2,535,318** plus interest were made in July 2025[47](index=47&type=chunk)[48](index=48&type=chunk) - The Company acquired method-of-use patents for LYMPHIR in combination with PD-1 pathway inhibitors and is obligated to use commercially reasonable efforts to launch products in CTCL and other indications within six months of regulatory approval[50](index=50&type=chunk)[51](index=51&type=chunk) [6. STOCKHOLDER'S EQUITY](index=14&type=section&id=6.%20STOCKHOLDER'S%20EQUITY) This note details changes in the company's authorized common stock, stock option activity, and stock-based compensation expenses - The Company's authorized common stock increased from **100,000,000** to **400,000,000 shares** on April 7, 2025. Two stock incentive plans (2023 and 2024 Omnibus Stock Incentive Plans) reserved a total of **30,000,000 common shares** for issuance[53](index=53&type=chunk)[54](index=54&type=chunk) Stock Option Activity Summary | Metric | Outstanding at September 30, 2024 | Granted | Forfeited | Outstanding at June 30, 2025 | | :-------------------------- | :-------------------------------- | :-------- | :-------- | :--------------------------- | | Shares | 12,750,000 | 5,750,000 | (333,333) | 18,166,667 | | Weighted Average Exercise Price | $2.15 | $1.07 | $1.74 | $1.82 | | Weighted Average Remaining Contractual Term | 8.78 years | N/A | N/A | 8.43 years | | Aggregate Intrinsic Value | $— | N/A | N/A | $46,051,667 | - Stock-based compensation expense was **$2,125,237** for the three months and **$6,022,287** for the nine months ended June 30, 2025, an increase from the prior year, primarily due to new options granted in December 2024. Unrecognized compensation cost of **$9,909,073** is expected to be recognized over **1.41 years**[58](index=58&type=chunk)[59](index=59&type=chunk) [7. COMMERCIAL MANUFACTURING CONTRACTS](index=15&type=section&id=7.%20COMMERCIAL%20MANUFACTURING%20CONTRACTS) This note outlines the company's minimum purchase commitments under contracts for drug substance and finished drug product manufacturing - The Company has a contract with a manufacturing organization for drug substance supply through 2026, with minimum purchase commitments of approximately **$18.3 million** as of June 30, 2025 (**$11.9 million** for 2025 and **$5.4 million** for 2026, plus **$1.0 million** for 2026 pass-throughs)[60](index=60&type=chunk) - Additionally, commercial supply agreements for finished drug product completion and packaging with two other vendors amount to approximately **$4.5 million** in minimum purchase commitments (**$2.9 million** for 2025 and **$1.6 million** for 2026)[61](index=61&type=chunk) [8. RELATED PARTY TRANSACTIONS](index=15&type=section&id=8.%20RELATED%20PARTY%20TRANSACTIONS) This note describes the shared services agreement with Citius Pharma and financial transactions between the two entities - Citius Pharma provides management and scientific services to Citius Oncology under a shared services agreement. All Citius Oncology expenditures are paid by Citius Pharma and reflected in the 'due to related party' account[62](index=62&type=chunk)[65](index=65&type=chunk) Charges from Citius Pharma to Citius Oncology | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Nine Months Ended June 30, 2025 | Nine Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------ | :------------------------------ | | General & Administrative Payroll | $567,937 | $474,688 | $1,703,811 | $1,330,364 | | Research & Development Payroll | $480,000 | $515,838 | $1,440,000 | $1,481,964 | | Shared Office Space | $27,939 | $30,368 | $86,246 | $91,103 | - Citius Pharma advanced **$3,800,111** to the Company via a non-interest bearing, unsecured promissory note, repayable upon a financing of at least **$10 million** by the Company[65](index=65&type=chunk) [9. NASDAQ LISTING](index=16&type=section&id=9.%20NASDAQ%20LISTING) This note reports on the company's compliance status with Nasdaq's minimum bid price rule - Citius Oncology received a Nasdaq notification on April 23, 2025, for non-compliance with the minimum bid price rule (below **$1.00** for 30 consecutive business days). The Company regained compliance on June 26, 2025, after its common stock closed at or above **$1.00** for 10 consecutive trading days[66](index=66&type=chunk) [9. SUBSEQUENT EVENTS](index=16&type=section&id=9.%20SUBSEQUENT%20EVENTS) This note discloses significant events occurring after the reporting period, including a public offering and warrant issuance - On July 17, 2025, the Company completed a public offering of **6,818,182 shares** of common stock and warrants, generating gross proceeds of **$9.0 million** and net proceeds of approximately **$7.44 million** after deducting fees and expenses[67](index=67&type=chunk) - The offering included warrants to purchase **6,818,182 shares** at an exercise price of **$1.32 per share**, immediately exercisable for five years. The placement agent also received warrants to purchase up to **272,727 shares** at **$1.65 per share**[67](index=67&type=chunk)[68](index=68&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.](index=17&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations.) This section provides management's perspective on the company's financial condition and results of operations, comparing the three and nine months ended June 30, 2025, to the corresponding periods in 2024. It covers business overview, license agreements, detailed analysis of operating expenses, liquidity, and capital resources [Business](index=17&type=section&id=Business) This section provides an overview of Citius Oncology as a specialty biopharmaceutical company focused on targeted oncology therapies, particularly LYMPHIR - Citius Oncology is a specialty biopharmaceutical company focused on developing and commercializing targeted oncology therapies, with LYMPHIR (denileukin diftitox) approved by the FDA in August 2024 for CTCL[71](index=71&type=chunk) - The Company reincorporated in Delaware in August 2024 and acquired SpinCo, which began operations in April 2022. Since inception, efforts have focused on business planning, R&D, and staffing[72](index=72&type=chunk)[73](index=73&type=chunk) [License Agreement with Eisai](index=17&type=section&id=License%20Agreement%20with%20Eisai) This section details the exclusive license agreement for LYMPHIR, including FDA approval, milestone payments, and commercialization obligations - Citius Oncology holds an exclusive license for LYMPHIR (E7777) from Eisai, acquired from Dr. Reddy's, for development and commercialization in most markets, excluding Japan and parts of Asia. The FDA approved LYMPHIR on August 8, 2024[74](index=74&type=chunk)[75](index=75&type=chunk)[77](index=77&type=chunk) - Milestone payments due upon FDA approval included **$27.5 million** to Dr. Reddy's (with **$22.5 million** outstanding as of June 30, 2025, partially deferred) and **$5.9 million** to Eisai (included in license payable). An amended payment schedule for Eisai incurred **$160,755** in interest expense[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - The Company is obligated to use commercially reasonable efforts to launch LYMPHIR in CTCL and other indications and to initiate two immuno-oncology trials, both of which have been initiated[80](index=80&type=chunk) [RESULTS OF OPERATIONS](index=19&type=section&id=RESULTS%20OF%20OPERATIONS) This section analyzes the company's financial performance, focusing on revenues, operating expenses, and net loss for the reported periods [Three months ended June 30, 2025 compared with the three months ended June 30, 2024](index=19&type=section&id=Three%20months%20ended%20June%2030,%202025%20compared%20with%20the%20three%20months%20ended%20June%2030,%202024) This subsection compares the company's financial results for the three-month periods, highlighting changes in net loss and operating expenses - No revenues were generated in either period. Net loss increased by **$597,106** to **$5,369,956**, primarily due to higher general and administrative expenses and stock-based compensation[83](index=83&type=chunk)[84](index=84&type=chunk)[92](index=92&type=chunk) Operating Expenses (Three Months Ended June 30) | Expense Category | 2025 | 2024 | Change ($) | Change (%) | | :------------------------------------- | :--------- | :--------- | :--------- | :--------- | | Research and development | $938,277 | $1,131,439 | $(193,162) | -17.1% | | General and administrative | $1,881,447 | $1,540,411 | $341,036 | 22.1% | | Stock-based compensation | $2,125,237 | $1,957,000 | $168,237 | 8.6% | | Total Operating Expenses | $4,944,961 | $4,628,850 | $316,111 | 6.8% | | Interest expense | $160,755 | $— | $160,755 | N/A | | Income tax expense | $264,240 | $144,000 | $120,240 | 83.5% | - General and administrative expenses increased by **$341,036** due to pre-commercial and commercial launch activities for LYMPHIR. Research and development expenses decreased by **$193,162** due to lower product validation study costs[87](index=87&type=chunk)[88](index=88&type=chunk) - The Company announced distribution agreements with Cardinal Health and Cencora (formerly AmerisourceBergen) in June and July 2025, respectively, in preparation for LYMPHIR's anticipated U.S. commercial launch in the second half of 2025[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) [Nine months ended June 30, 2025 compared with the nine months ended June 30, 2024](index=20&type=section&id=Nine%20months%20ended%20June%2030,%202025%20compared%20with%20the%20nine%20months%20ended%20June%2030,%202024) This subsection compares the company's financial results for the nine-month periods, detailing changes in net loss and operating expenses - No revenues were generated. Net loss increased by **$5,428,914** to **$19,764,713**, primarily driven by increases in research and development and general and administrative expenses[93](index=93&type=chunk)[94](index=94&type=chunk)[100](index=100&type=chunk) Operating Expenses (Nine Months Ended June 30) | Expense Category | 2025 | 2024 | Change ($) | Change (%) | | :------------------------------------- | :---------- | :---------- | :---------- | :---------- | | Research and development | $5,342,198 | $3,628,900 | $1,713,298 | 47.2% | | General and administrative | $7,446,753 | $4,443,899 | $3,002,854 | 67.6% | | Stock-based compensation | $6,022,287 | $5,831,000 | $191,287 | 3.3% | | Total Operating Expenses | $18,811,238 | $13,903,799 | $4,907,439 | 35.3% | | Interest expense | $160,755 | $— | $160,755 | N/A | | Income tax expense | $792,720 | $432,000 | $360,720 | 83.5% | - Research and development expenses increased by **$1,713,298** due to costs associated with a drug substance batch for manufacturer pre-license inspection. General and administrative expenses rose by **$3,002,854** due to pre-commercial and commercial launch activities for LYMPHIR[95](index=95&type=chunk)[96](index=96&type=chunk) [LIQUIDITY AND CAPITAL RESOURCES](index=21&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section discusses the company's cash position, funding needs, and strategies to secure additional capital for ongoing operations and product launch - Citius Oncology incurred a net loss of **$19,764,713** for the nine months ended June 30, 2025, with an accumulated deficit of **$59,043,300** and negative working capital of approximately **$34.7 million**, indicating a need for substantial additional financing[102](index=102&type=chunk) - Outstanding obligations as of June 30, 2025, include **$22.5 million** milestone payment to Dr. Reddy's, scheduled payments to Eisai totaling over **$9 million**, and minimum purchase commitments of approximately **$18.3 million** for drug substance and **$4.5 million** for finished drug products[103](index=103&type=chunk)[108](index=108&type=chunk) - Following Citius Pharma's equity offerings and Citius Oncology's **$7.44 million** net proceeds from its July 2025 public offering, the Company expects sufficient funds through September 2025 but will require additional capital for operations beyond that, including the LYMPHIR launch[105](index=105&type=chunk)[106](index=106&type=chunk)[107](index=107&type=chunk) [Inflation](index=23&type=section&id=Inflation) This section addresses the impact of inflation on the company's operations and financial results - Management believes inflation has not had a material effect on the Company's results of operations[109](index=109&type=chunk) [Off Balance Sheet Arrangements](index=23&type=section&id=Off%20Balance%20Sheet%20Arrangements) This section confirms the absence of any off-balance sheet arrangements for the company - The Company does not have any off-balance sheet arrangements[110](index=110&type=chunk) [Critical Accounting Policies and Estimates](index=23&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the key accounting policies and estimates that require significant management judgment in preparing financial statements - The preparation of financial statements requires management to make estimates and assumptions, particularly for in-process research and development, stock-based compensation, net realizable value of inventory, and income taxes. Actual results may differ from these estimates[111](index=111&type=chunk) - Critical accounting policies and estimates are discussed in the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2024[112](index=112&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk.](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk.) This section states that there are no applicable quantitative and qualitative disclosures about market risk for the Company - This item is not applicable to the Company[113](index=113&type=chunk) [Item 4. Controls and Procedures.](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures.) This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=23&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This subsection reports on the effectiveness of the company's disclosure controls and procedures as assessed by its executive officers - As of June 30, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective in ensuring timely and accurate reporting of information required under the Exchange Act[115](index=115&type=chunk) [Changes In Internal Control Over Financial Reporting](index=23&type=section&id=Changes%20In%20Internal%20Control%20Over%20Financial%20Reporting) This subsection reports on any material changes to the company's internal control over financial reporting during the quarter - There were no changes in the Company's internal control over financial reporting during the quarter ended June 30, 2025, that materially affected, or are reasonably likely to materially affect, its internal control over financial reporting[116](index=116&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings.](index=24&type=section&id=Item%201.%20Legal%20Proceedings.) This section reports on any legal proceedings involving the Company - There are no legal proceedings to report[118](index=118&type=chunk) [Item 1A. Risk Factors.](index=24&type=section&id=Item%201A.%20Risk%20Factors.) This section addresses any material changes to the Company's risk factors - There have been no material changes to the Company's risk factors as disclosed in its Annual Report on Form 10-K for the fiscal year ended September 30, 2024, or its Quarterly Report on Form 10-Q for the six months ended March 31, 2025[119](index=119&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) This section reports on any unregistered sales of equity securities and the use of proceeds - There are no unregistered sales of equity securities or use of proceeds to report[120](index=120&type=chunk) [Item 3. Defaults Upon Senior Securities.](index=24&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities.) This section reports on any defaults upon senior securities - There are no defaults upon senior securities to report[121](index=121&type=chunk) [Item 4. Mine Safety Disclosures.](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures.) This section provides mine safety disclosures - This item is not applicable to the Company[122](index=122&type=chunk) [Item 5. Other Information.](index=24&type=section&id=Item%205.%20Other%20Information.) This section provides other information not covered elsewhere in the report - No directors or officers adopted or terminated any contract or plan for securities purchase/sale during the quarter ended June 30, 2025[123](index=123&type=chunk) - On August 17, 2025, the Company issued warrants to a financial advisor to purchase up to **477,273 shares** of common stock at an exercise price of **$1.65 per share**, expiring on August 17, 2030, in a private placement[123](index=123&type=chunk) [Item 6. Exhibits.](index=25&type=section&id=Item%206.%20Exhibits.) This section lists all exhibits filed as part of the Form 10-Q - The exhibits include the Certificate of Amendment to the Certificate of Incorporation, Warrant Agency Agreement, Forms of Common and Placement Agent Warrants, Placement Agency Agreement, Securities Purchase Agreement, and various certifications (31.1, 31.2, 32.1) and XBRL documents[125](index=125&type=chunk) [SIGNATURES](index=26&type=section&id=SIGNATURES) This section provides the official signatures of the company's executive officers, certifying the report's contents - The report was signed on August 12, 2025, by Leonard Mazur, Chief Executive Officer, and Jaime Bartushak, Chief Financial Officer[129](index=129&type=chunk)

Core Viewpoint - Citius Oncology is preparing for the U.S. commercial launch of its product LYMPHIR, expected in the fourth quarter of 2025, having raised significant capital to support pre-launch activities and secured distribution agreements with global providers [2][5]. Financial Highlights - Citius Pharmaceuticals raised $12.5 million in gross financings during the quarter, with an additional $9 million raised by Citius Oncology in July 2025 [1]. - For the fiscal third quarter ended June 30, 2025, the company reported a net loss of $5.4 million, or $0.08 per share, compared to a net loss of $4.8 million, or $0.07 per share, for the same period in 2024 [7][11]. - Research and development expenses were $938,000 for the quarter, down from $1.1 million in the same quarter of 2024 [7]. - General and administrative expenses increased to $1.9 million from $1.5 million year-over-year [7]. - As of June 30, 2025, the company had $112 in cash and cash equivalents and 71,552,402 common shares outstanding [7]. Market Potential - The initial market for LYMPHIR is estimated to exceed $400 million and is considered underserved by existing therapies [5]. - The company has robust intellectual property protections, including orphan drug designation and pending patents for immuno-oncology use, which support its competitive positioning [5].

[PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%2E%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements) The unaudited condensed consolidated financial statements for March 31, 2025, reveal a $14.4 million net loss and negative working capital, raising substantial doubt about the company's going concern [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2025, shows increased assets and liabilities, leading to a decrease in total stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | September 30, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Total Current Assets | $18,039 | $10,969 | | Total Assets | $91,439 | $84,369 | | **Liabilities & Equity** | | | | Total Current Liabilities | $49,740 | $32,700 | | Total Liabilities | $55,797 | $38,229 | | Total Stockholders' Equity | $35,643 | $46,140 | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company reported no revenue for the six months ended March 31, 2025, with net loss increasing to $14.4 million due to higher operating expenses Statement of Operations Summary (in thousands) | Metric | Six Months Ended Mar 31, 2025 | Six Months Ended Mar 31, 2024 | | :--- | :--- | :--- | | Revenues | $0 | $0 | | Total Operating Expenses | $13,866 | $9,275 | | Net Loss | $(14,395) | $(9,563) | | Net Loss Per Share | $(0.20) | $(0.14) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) Total stockholders' equity decreased to $35.6 million at March 31, 2025, primarily due to the period's net loss - Total stockholders' equity declined to **$35.6 million** at March 31, 2025, from **$46.1 million** at September 30, 2024, primarily due to the period's net loss[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities was zero for the six months ended March 31, 2025, with expenditures funded by the parent company - Net cash provided by operating activities for the six months ended March 31, 2025 was **zero**, with the cash balance remaining at **$112**[21](index=21&type=chunk) - The company's expenditures are paid by its parent, Citius Pharma, and reflected in the 'due to related party' account, explaining the lack of cash flow from operations[63](index=63&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's focus on LYMPHIR, merger, accounting policies, going concern uncertainty, reliance on parent funding, license agreements, and manufacturing commitments - There is **substantial doubt** about the Company's ability to continue as a going concern, given its net loss of **$14.4 million** for the six months ended March 31, 2025, negative working capital of **$31.7 million**, and reliance on funding from Citius Pharma, which is only secured through **May 2025**[38](index=38&type=chunk) - Following FDA approval of LYMPHIR, milestone payments became due. As of March 31, 2025, a balance of **$22.5 million** is owed to Dr. Reddy's and **$5.9 million** is owed to Eisai, with a payment plan established for the latter[44](index=44&type=chunk)[45](index=45&type=chunk) - The company has minimum purchase commitments of approximately **$17.3 million** for drug substance and **$4.5 million** for finished drug products for calendar years **2025** and **2026**[58](index=58&type=chunk)[59](index=59&type=chunk) - On April 7, 2025, the company increased its authorized shares of common stock from **100 million** to **400 million**[52](index=52&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) MD&A discusses LYMPHIR commercialization, increased net loss due to higher expenses, and critical liquidity challenges with parent funding expiring soon [Results of Operations](index=20&type=section&id=RESULTS%20OF%20OPERATIONS) For the six months ended March 31, 2025, the company reported no revenue and a $14.4 million net loss, driven by increased R&D and G&A expenses Comparison of Operating Results (Six Months Ended March 31) | Account (in thousands) | 2025 | 2024 | Change | | :--- | :--- | :--- | :--- | | Research and development | $4,404 | $2,497 | +$1,907 | | General and administrative | $5,565 | $2,903 | +$2,662 | | Stock-based compensation | $3,897 | $3,874 | +$23 | | **Net loss** | **$(14,395)** | **$(9,563)** | **+$(4,832)** | - The increase in R&D expenses was primarily related to costs for a drug substance batch needed for a pre-license inspection of the manufacturer[88](index=88&type=chunk) - The increase in G&A expenses was driven by pre-commercial and commercial launch activities for LYMPHIR, including market research, marketing, and distribution[89](index=89&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company faces a severe liquidity crisis with minimal cash, negative working capital, and reliance on parent funding expiring in May 2025 - As of March 31, 2025, the company had **$112** in cash, an accumulated deficit of **$53.7 million**, and negative working capital of approximately **$31.7 million**[93](index=93&type=chunk) - Funding from parent company Citius Pharma is only expected to sustain operations through **May 2025**, creating an immediate need to raise additional capital[96](index=96&type=chunk) - Significant financial obligations for **2025** include a **$22.5 million** milestone payment to Dr. Reddy's, a structured payment plan to Eisai, and minimum purchase commitments of **$11.9 million** for drug substance and **$2.9 million** for finished drug products[99](index=99&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company states that this section is not applicable, indicating no significant exposure to market risks at its current stage - The company has determined that disclosures about market risk are not applicable[102](index=102&type=chunk) [Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of March 31, 2025[104](index=104&type=chunk) - There were no changes in internal control over financial reporting during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[105](index=105&type=chunk) [PART II. OTHER INFORMATION](index=24&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=24&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings to disclose for the period - The company reported no legal proceedings[108](index=108&type=chunk) [Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) Substantial doubt exists about the company's going concern due to losses and limited parent funding, alongside a recent Nasdaq non-compliance notice - The independent registered public accounting firm's report includes an explanatory paragraph stating there is **substantial doubt** about the company's ability to continue as a going concern[110](index=110&type=chunk) - The company expects to have sufficient funds to continue operations only through **May 2025** and will need to raise additional capital to support operations beyond that date[111](index=111&type=chunk) - On April 23, 2025, the company received a non-compliance notice from Nasdaq because its stock price closed below **$1.00** for **30 consecutive business days**. It has until **October 20, 2025**, to regain compliance[65](index=65&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities during the period - The company reported no unregistered sales of equity securities[112](index=112&type=chunk) [Defaults Upon Senior Securities](index=24&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - The company reported no defaults upon senior securities[113](index=113&type=chunk) [Mine Safety Disclosures](index=24&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company's business operations - The company states that mine safety disclosures are not applicable[114](index=114&type=chunk) [Other Information](index=24&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated any plan for the purchase or sale of company securities during the quarter - During the quarter ended March 31, 2025, none of the company's directors or officers adopted or terminated any plan for the purchase or sale of the company's securities[115](index=115&type=chunk) [Exhibits](index=25&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the 10-Q report, including stock amendment and officer certifications - Key exhibits filed with this report include the Certificate of Amendment to the Certificate of Incorporation, and certifications from the Principal Executive and Financial Officers[116](index=116&type=chunk)

[Business Update](index=1&type=section&id=Business%20Update) Citius Oncology is transitioning from a development-stage to a commercial-stage company following the FDA approval of its primary asset, LYMPHIR, with immediate focus on disciplined capital deployment for a successful U.S. launch and seeking additional capital - Citius Oncology is advancing its transformation from a development-stage to a commercial-stage organization following the FDA approval of LYMPHIR[2](index=2&type=chunk) - The company is actively engaged in discussions with prospective commercial and strategic partners while also seeking to secure additional capital to ensure financial flexibility for the LYMPHIR launch[3](index=3&type=chunk) [Fiscal Second Quarter 2025 Financial Results](index=1&type=section&id=FISCAL%20SECOND%20QUARTER%202025%20FINANCIAL%20RESULTS%3A) For the second fiscal quarter ended March 31, 2025, Citius Oncology reported a net loss of $7.7 million, driven by higher operating expenses, with critical liquidity of only $112 necessitating additional funding beyond May 2025 [Liquidity and Capital Resources](index=1&type=section&id=Liquidity) As of March 31, 2025, Citius Oncology's cash position was extremely low at $112, dependent on its parent, Citius Pharma, for continued funding and requiring additional capital to support operations beyond May 2025 Liquidity Status as of March 31, 2025 | Metric | Value | | :--- | :--- | | Cash and cash equivalents | $112 | | Common shares outstanding | 71,552,402 | - The company requires additional capital to fund operations beyond May 2025[5](index=5&type=chunk) - Citius Pharma, the parent company, intends to continue funding Citius Oncology until it can raise external capital or generate revenue, with Jefferies LLC retained to evaluate strategic alternatives[4](index=4&type=chunk) [Operating Expenses](index=1&type=section&id=Operating%20Expenses) Operating expenses increased significantly in Q2 2025 compared to the prior year, with R&D expenses more than doubling to $3.1 million and G&A expenses rising to $2.2 million due to pre-commercial and launch activities for LYMPHIR Operating Expenses Comparison (Three Months Ended March 31) | Expense Category | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Research and Development (R&D) | $3.1 million | $1.3 million | | General and Administrative (G&A) | $2.2 million | $1.4 million | | Stock-based Compensation | $2.1 million | $2.0 million | - The increase in R&D expenses is mainly related to the cost of a drug substance batch required for a pre-license inspection of the manufacturer[6](index=6&type=chunk) - The rise in G&A expenses was primarily due to pre-commercial and commercial launch activities for LYMPHIR, including market research, marketing, and distribution planning[7](index=7&type=chunk) [Net Loss](index=2&type=section&id=Net%20loss) The company's net loss for Q2 2025 was $7.7 million, or ($0.11) per share, compared to a net loss of $4.8 million, or ($0.07) per share, for Q2 2024, attributed to higher operating expenses Net Loss and EPS Comparison | Period | Net Loss 2025 | EPS 2025 | Net Loss 2024 | EPS 2024 | | :--- | :--- | :--- | :--- | :--- | | Three Months Ended Mar 31 | $7.7 million | ($0.11) | $4.8 million | ($0.07) | | Six Months Ended Mar 31 | $14.4 million | ($0.20) | $9.6 million | ($0.14) | [Financial Statements](index=4&type=section&id=Financial%20Statements) The unaudited condensed consolidated financial statements reflect the company's financial position as of March 31, 2025, and its results of operations and cash flows, showing increased inventory and liabilities, no revenue, and a growing net loss sustained by non-cash financing [Condensed Consolidated Balance Sheets](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) As of March 31, 2025, total assets increased to $91.4 million, driven by a rise in inventory to $15.3 million, while total liabilities grew substantially to $55.8 million, primarily due to increases in accounts payable and accrued expenses, leading to a decline in total stockholders' equity Key Balance Sheet Items (As of March 31, 2025 vs. Sept 30, 2024) | Account | March 31, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $112 | $112 | | Inventory | $15,339,253 | $8,268,766 | | Total Assets | $91,439,365 | $84,368,878 | | Total Current Liabilities | $49,740,142 | $32,700,428 | | Total Liabilities | $55,796,733 | $38,228,539 | | Total Stockholders' Equity | $35,642,632 | $46,140,339 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) For the three months ended March 31, 2025, Citius Oncology generated no revenue and reported total operating expenses of $7.5 million, leading to a net loss of $7.7 million, an increase from the prior year due to higher R&D and G&A spending Statement of Operations Summary (Three Months Ended March 31) | Line Item | 2025 | 2024 | | :--- | :--- | :--- | | Revenues | $0 | $0 | | Total Operating Expenses | $7,471,312 | $4,691,546 | | Net Loss | $(7,735,552) | $(4,835,546) | | Net Loss Per Share | $(0.11) | $(0.07) | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) For the six months ended March 31, 2025, the company's cash flow statement shows a net loss of $14.4 million with no net change in cash, as operations were sustained by non-cash financing, including increases in inventory, accrued expenses, and amounts due to a related party - Net cash provided by operating activities was zero for the six months ended March 31, 2025, with the cash balance remaining unchanged at **$112**[18](index=18&type=chunk) Key Changes in Operating Assets & Liabilities (Six Months Ended March 31, 2025) | Account | Change (Use)/Source of Cash | | :--- | :--- | | Inventory | $(7,070,487) | | Accrued expenses | $8,722,168 | | Due to related party | $4,352,858 | [About Citius Oncology, Inc.](index=2&type=section&id=About%20Citius%20Oncology%2C%20Inc.) Citius Oncology is a specialty biopharmaceutical company focused on developing and commercializing novel targeted oncology therapies, with its lead product LYMPHIR approved by the FDA for CTCL, targeting an initial market exceeding $400 million - The company's primary asset, LYMPHIR, was approved by the FDA in August 2024 for the treatment of relapsed or refractory CTCL[10](index=10&type=chunk) - Management estimates the initial, underserved market for LYMPHIR is greater than **$400 million**[10](index=10&type=chunk) [Forward-Looking Statements](index=3&type=section&id=Forward-Looking%20Statements) This section serves as a legal disclaimer, cautioning that future-oriented statements are subject to significant risks and uncertainties, primarily the company's need for substantial additional funds to operate beyond May 2025, along with operational risks related to commercialization and supply chain - The company highlights a critical risk: its need for substantial additional funds to continue operations beyond May 2025 and to remain a going concern[11](index=11&type=chunk) - Major operational risks include the ability to commercialize LYMPHIR, dependence on third-party suppliers, and securing cGMP commercial-scale supply[11](index=11&type=chunk)

Core Insights - Citius Oncology is transitioning from a development-stage company to a commercial-stage organization following the FDA approval of its drug LYMPHIR, aimed at treating cutaneous T-cell lymphoma [2][3] - The company is focused on disciplined capital deployment and operational execution to support the U.S. launch of LYMPHIR, while also seeking additional capital to enhance financial flexibility [3][4] Financial Results - As of March 31, 2025, Citius Oncology had $112 million in cash and cash equivalents, with a total of 71,552,402 common shares outstanding [5] - Research and Development (R&D) expenses for Q2 2025 were $3.1 million, up from $1.3 million in Q2 2024, primarily due to costs associated with drug substance batch expenses [6] - General and Administrative (G&A) expenses increased to $2.2 million in Q2 2025 from $1.4 million in Q2 2024, driven by pre-commercial and commercial launch activities for LYMPHIR [7] - The net loss for Q2 2025 was $7.7 million, or ($0.11) per share, compared to a net loss of $4.8 million, or ($0.07) per share, in Q2 2024 [9] Market Position and Strategy - LYMPHIR, approved in August 2024, targets a market estimated to exceed $400 million, which is currently underserved by existing therapies [11] - The company is engaging in discussions with potential commercial and strategic partners to secure additional capital and maximize stockholder value [3][4]