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Item 1A. Risk Factors

2023-12-29 compared with 2022-12-22 · 1448 added, 1051 removed, 35 unchanged (99% of the section changed)

This report contains forward-looking statements

that involve risks and uncertainties.

Our actual results could differ materially from those discussed in this report.

Factors that could

cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this report.

If any of the following risks, or other

risks not presently known to us or that we currently believe to not be significant, develop into actual events, then our business, financial

condition, results of operations or prospects could be materially adversely affected.

If that happens, the market price of our securities

could decline, and stockholders may lose all or part of their investment.

Risks Related to Our Business and our Industry

We have a history of net losses and expect

to incur losses for the foreseeable future.

We may never generate revenues or, if we are able to generate revenues, achieve profitability.

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

received approval for any of our product candidates, and have 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 incurred net losses of $33,640,646 and $23,054,434 for the years ended September 30, 2022 and 2021,

respectively.

At September 30, 2022, we had stockholders’ equity of $102,825,865 and an accumulated deficit of $129,688,467.

net cash used in operating activities was $28,361,256 and $24,250,414 for the years ended September 30, 2022 and 2021, respectively.

Our ability to generate revenues and achieve profitability

will depend on numerous factors, including success in:

developing and testing product candidates;

receiving regulatory approvals for our product candidates;

commercializing our product candidates that receive regulatory approval;

manufacturing commercial quantities of our product candidates at acceptable cost levels;

obtaining medical insurance coverage for any approved product candidate;

establishing a favorable competitive position for any approved product candidates.

Many of these factors will depend on circumstances

beyond our control.

We cannot assure you that any of our product candidates will be approved by the FDA or any foreign regulatory body

or obtain medical insurance coverage, that we will successfully bring any approved product to market or, if so, that we will ever become

Ability to continue as a going concern.

At September 30, 2022, we estimated that we have

sufficient capital to continue our operations through December 2023.

You should not rely on our consolidated balance sheet as an indication

of the amount of proceeds that would be available to satisfy claims of creditors, and potentially be available for distribution to stockholders,

in the event of liquidation.

The Company has generated no operating revenue

to date and has principally raised capital through the issuance of debt and equity instruments to finance its operations.

Company’s continued operations beyond December 2023, including its development plans for I/ONTAK, Mino-Lok, Halo-Lido, Mino-Wrap

and NoveCite, will depend on its ability to obtain regulatory approval to market I/ONTAK and/or Mino-Lok and generate substantial revenue

from the sale of I/ONTAK and/or Mino-Lok and on its ability to raise additional capital through various potential sources, such as equity

and/or debt financings, strategic relationships, or out-licensing of its product candidates.

However, the Company can provide no assurances

on the approval, commercialization, or future sales of I/ONTAK and/or Mino-Lok or that financing or strategic relationships will be available

on acceptable terms, or at all.

If the Company is unable to raise sufficient capital, find strategic partners or generate substantial

revenue from the sale of I/ONTAK and/or Mino-Lok, there would be a material adverse effect on its business.

Further, the Company expects

in the future to incur additional expenses as it continues to develop its product candidates, including seeking regulatory approval, and

protecting its intellectual property.

We need to secure additional financing in

the future to complete the development of our current product candidates and support our operations.

We anticipate that we will incur operating losses

for the foreseeable future as we continue developing our product candidates.

The amount and timing of our future funding requirements

will depend on many factors, including, but not limited to:

the rate of progress and cost of our trials and other product development and commercialization programs for our current product candidates;

the costs and timing of obtaining licenses for additional product candidates or acquiring other complementary technologies;

the timing of any regulatory approvals of any of our product candidates;

the costs of establishing or contracting for sales, marketing, and distribution capabilities for our product candidates;

the status, terms and timing of any collaborative, licensing, co-promotion, or other arrangements.

We will need to access the capital markets in

the future for additional capital for research and development and for operations.

As of the date of this report, we do not anticipate

seeking additional capital until sometime in 2023.

Traditionally, pharmaceutical companies have funded their research and development

expenditures through raising capital in the equity markets.

Declines and uncertainties in these 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.

The COVID-19 pandemic could also adversely impact future fundraising activities.

If the COVID-19 pandemic and related

and/or other economic conditions continue 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 late-stage development

company with an unproven business strategy and may never achieve commercialization of our therapeutic product candidates or profitability.

We have no approved products.

All of our current

product candidates are in the pre-clinical or clinical stage.

We rely on third parties to conduct the research and development activities

report contains forward-looking statements that involve risks and uncertainties.

Our actual results could differ materially from those

discussed in this report.

Factors that could cause or contribute to these differences include, but are not limited to, those discussed

below and elsewhere in this report.

any of the following risks, or other risks not presently known to us or that we currently believe to not be significant, develop into

actual events, then our business, financial condition, results of operations or prospects could be materially adversely affected.

that happens, the market price of our securities could decline, and stockholders may lose all or part of their investment.

Related to Our Business and our Industry

have a history of net losses and expect to incur losses for the foreseeable future.

We may never generate revenues or, if we are able

to generate revenues, achieve profitability.

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 received approval for any of our product candidates, and have not generated any revenues to date.

have incurred losses in each period of our operations, and we expect to continue to incur losses for the foreseeable future.

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 incurred net losses of $32,542,912 and $33,640,646

for the years ended September 30, 2023 and 2022, respectively.

At September 30, 2023, we had stockholders’ equity of $90,831,108

and an accumulated deficit of $162,231,379.

Our net cash used in operating activities was $29,060,212 and $28,361,256 for the years ended

September 30, 2023 and 2022, respectively.

ability to generate revenues and achieve profitability will depend on numerous factors, including success in:

developing and testing

product candidates;

receiving regulatory approvals

for our product candidates;

Further, we have no sales or marketing capability at this time.

Even if we decide to use collaborative partners

to assist us in the commercialization of our product candidates, our product commercialization capabilities are unproven.

will depend upon our ability to develop such capabilities on our own or to enter into collaboration agreements on favorable terms and

commercializing our product

candidates that receive regulatory approval;

manufacturing commercial

quantities of our product candidates at acceptable cost levels;

obtaining medical insurance

coverage for any approved product candidate;

establishing a favorable

competitive position for any approved product candidates.

of these factors will depend on circumstances beyond our control.

We cannot assure you that any of our product candidates will be approved

by the FDA or any foreign regulatory body or obtain medical insurance coverage, that we will successfully bring any approved product

to market or, if so, that we will ever become profitable.

independent registered public accounting firm’s report includes an explanatory paragraph stating that there is substantial doubt

about our ability to continue as a going concern .

September 30, 2023, we estimated that we have sufficient capital to continue our operations through August 2024.

You should not rely

on our consolidated balance sheet as an indication of the amount of proceeds that would be available to satisfy claims of creditors,

and potentially be available for distribution to stockholders, in the event of liquidation.

Company has generated no operating revenue to date and has principally raised capital through the issuance of debt and equity instruments

to finance its operations.

However, the Company’s continued operations beyond August 2024, including its development plans for

LYMPHIR (through Citius Oncology), Mino-Lok, Halo-Lido, Mino-Wrap and NoveCite, will depend on its ability to obtain regulatory approval

to market LYMPHIR and/or Mino-Lok and generate substantial revenue from the sale of LYMPHIR and/or Mino-Lok and on its ability to raise

additional capital through various potential sources, such as equity and/or debt financings, strategic relationships, or out-licensing

of its product candidates.

However, the Company can provide no assurances on the approval, commercialization, or future sales of LYMPHIR

and/or Mino-Lok or that financing or strategic relationships will be available on acceptable terms, or at all.

If the Company is unable

to raise sufficient capital, find strategic partners or generate substantial revenue from the sale of LYMPHIR and/or Mino-Lok, there

would be a material adverse effect on its business.

Further, the Company expects in the future to incur additional expenses as it continues

to develop its product candidates, including seeking regulatory approval, and protecting its intellectual property.

in the resubmission and review of our BLA for LYMPHIR or other factors could increase the cost to develop and launch LYMPHIR.

we believe we have sufficient funds on hand to complete the regulatory development and commercially launch LYMPHIR, delays in our anticipated

submission of the BLA for LYMPHIR, issues raised by the FDA after resubmission or other factors could increase the cost to develop and

launch 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.

need to secure additional financing in the future to complete the development of our other current product candidates and support our

anticipate that we will incur operating losses for the foreseeable future as we continue developing our other product candidates besides

The amount and timing of our future funding requirements will depend on many factors, including, but not limited to:

the rate of progress and

cost of our trials and other product development and commercialization programs for our current product candidates;

the costs and timing of

obtaining licenses for additional product candidates or acquiring other complementary technologies;

the timing of any regulatory

approvals of any of our product candidates;

the costs of establishing

or contracting for sales, marketing, and distribution capabilities for our product candidates;

the status, terms and timing

of any collaborative, licensing, co-promotion, or other arrangements.

will need to access the capital markets in the future for additional capital for research and development and for operations.

date of this report, we do not anticipate seeking additional capital until sometime in 2024.

Traditionally, pharmaceutical companies

have funded their research and development expenditures through raising capital in the equity markets.

Declines and uncertainties in

these 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

are primarily a late-stage development company with an unproven business strategy and may never achieve commercialization of our therapeutic

product candidates or profitability.

have no approved products.

All of our current product candidates are in the pre-clinical or clinical stage, although we have applied

for approval for LYMPHIR.

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, are in the early stages of developing 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.

We have no sales or marketing capabilities with respect to our other product candidates.

Our success will depend

upon our ability to develop such capabilities on our 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 choose to pursue and that receives approval, whether

4 unchanged sentences

among other things, on our ability to:

successfully complete pre-clinical and clinical trials for our product candidates;

receive marketing approvals from the FDA and similar foreign regulatory authorities for our product candidates;

establish commercial manufacturing arrangements with third-party manufacturers for our product candidates;

produce, through a validated process, sufficiently large quantities of our drug compound(s) to permit successful commercialization of our product candidates;

build and maintain strong sales, distribution, and marketing capabilities sufficient to launch commercial sales of any approved products or establish collaborations with third parties for such commercialization;

secure acceptance of any approved products from physicians, health care payers, patients, and the medical community;

manage our spending as costs and expenses increase due to clinical trials, regulatory applications and development and commercialization activities.

There are no guarantees that we will be successful

in completing these tasks.

If we are unable to successfully complete these tasks, we may not be able to commercialize any of our product

candidates in a timely manner, or at all, in which case we may be unable to generate sufficient revenues to sustain and grow our business.

If we experience unanticipated delays or problems, our development costs could substantially increase and our business, financial condition

and results of operations will be adversely affected.

We have a limited operating history upon

which to evaluate our ability to successfully commercialize our product candidates.

We have two late-stage stage product candidates

while our other product candidates are clinical stage.

As a result, our success is dependent upon our 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.

While various members of our executive management and key

employees have significant prior experience in pharmaceutical development, as a company we have to date successfully completed only one

late-stage clinical trial and are just beginning to undertake commercialization activities, in each case for I/ONTAK.

Despite our progress

with I/ONTAK, 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.

The COVID-19 pandemic may materially and

adversely affect our clinical trial operations and our financial results.

The COVID-19 pandemic has adversely impacted hospitals

and medical facilities where we are currently conducting our Mino-Lok phase 3 trial.

The full extent to which COVID-19 may impact this

trial is not known at this time, but it has slowed the estimated completion date for the trial, which we now expect to be in 2023.

same risk applies to our recently begun Phase 2b trial for Halo-Lido and our planned clinical trials for our other product candidates.

The exact duration of the delay and any other impact will depend on future developments, which are highly uncertain and cannot be predicted

with confidence, such as the duration of the outbreak, the severity of COVID-19, or the effectiveness of actions to contain and treat

for COVID-19.

The continued spread of COVID-19 also could adversely impact our ability to recruit and retain patients and principal investigators

and site staff who, as healthcare providers, may have heightened exposure to COVID-19, which could further negatively impact the Mino-Lok

and Halo-Lido trials.

In addition, if the FDA elects to delay face-to-face meetings for an extended period of time due to COVID-19, it

could have a material adverse effect on our Mino-Lok and Halo-Lido trials and our other product candidates.

Any or all of these events

could increase our operating expenses and the length of time to complete a trial and have a material adverse effect on our financial results.

We may choose not to continue developing

any of our product candidates at any time during development, which would reduce or eliminate our potential return on investment for those

successfully complete pre-clinical

and clinical trials for our product candidates;

receive marketing approvals

from the FDA and similar foreign regulatory authorities for our product candidates;

establish commercial manufacturing

arrangements with third-party manufacturers for our product candidates;

produce, through a validated

process, sufficiently large quantities of our drug compound(s) to permit successful commercialization of our product candidates;

build and maintain strong

sales, distribution, and marketing capabilities sufficient to launch commercial sales of any approved products or establish collaborations

with third parties for such commercialization;

secure acceptance of any

approved products from physicians, health care payers, patients, and the medical community;

manage our spending as

costs and expenses increase due to clinical trials, regulatory applications and development and commercialization activities.

are no guarantees that we will be successful in completing these tasks.

If we are unable to successfully complete these tasks, we may

not be able to commercialize any of our product candidates in a timely manner, or at all, in which case we may be unable to generate

sufficient revenues to sustain and grow our business.

If we experience unanticipated delays or problems, our development costs could

substantially increase and our business, financial condition and results of operations will be adversely affected.

have a limited operating history upon which to evaluate our ability to successfully commercialize our product candidates.

have two late-stage stage product candidates while our other product candidates are clinical stage.

As a result, our success is dependent

upon our 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.

While various

members of our executive management and key employees have significant prior experience in pharmaceutical 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 are just beginning to undertake commercialization activities, in each case for 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.

may choose not to continue developing any of our product candidates at any time during development, which would reduce or eliminate our

potential return on investment for those product candidates.

any time, we may decide to discontinue the development of any of our product candidates for a variety of reasons, including inadequate

financial resources, the appearance of new technologies that render our product candidates obsolete, competition from a competing product

or changes in or failure to comply with applicable regulatory requirements.

If we terminate a program in which we have invested significant

resources, we will not receive any return on our investment and we will have missed the opportunity to allocate those resources to potentially

more productive uses.

an example, on July 1, 2016, we announced that we were discontinuing the development of Suprenza, which was our first commercial product

candidate, for strategic reasons and not due to safety or regulatory concerns, in order to focus our management and cash resources on

the Phase 3 development of Mino-Lok and the Phase 2b development of Halo-Lido.

The resources expended on Suprenza therefore did not provide

us any benefit.

face significant risks in our product candidate development efforts.

business depends on the successful development and commercialization of our product candidates.

We are not permitted to market any of

our product candidates in the U.S.

until we receive approval from the FDA, or in any foreign jurisdiction until we receive the requisite

approvals from such jurisdiction.

The process of developing new drugs and/or therapeutic products is inherently complex, unpredictable,

time-consuming, expensive and uncertain.

We must make long-term investments and commit significant resources before knowing whether our

development programs will result in products that will receive regulatory approval and achieve market acceptance.

Product candidates

At any time, we may decide to discontinue the

development of any of our product candidates for a variety of reasons, including inadequate financial resources, the appearance of new

technologies that render our product candidates obsolete, competition from a competing product or changes in or failure to comply with

applicable regulatory requirements.

If we terminate a program in which we have invested significant resources, we will not receive any

return on our investment and we will have missed the opportunity to allocate those resources to potentially more productive uses.

As an example, on July 1, 2016, we announced that

we were discontinuing the development of Suprenza, which was our first commercial product candidate, for strategic reasons and not due

to safety or regulatory concerns, in order to focus our management and cash resources on the Phase 3 development of Mino-Lok and the Phase

2b development of Halo-Lido.

The resources expended on Suprenza therefore did not provide us any benefit.

We face significant risks in our product

candidate development efforts.

Our business depends on the successful development

and commercialization of our product candidates.

We are not permitted to market any of our product candidates in the United States until

we receive approval from the FDA, or in any foreign jurisdiction until we receive the requisite approvals from such jurisdiction.

process of developing new drugs and/or therapeutic products is inherently complex, unpredictable, time-consuming, expensive and uncertain.

We must make long-term investments and commit significant resources before knowing whether our development programs will result in products

that will receive regulatory approval and achieve market acceptance.

Product candidates that appear to be promising at some or all stages

of development may not receive approval or reach the market for a number of reasons that may not be predictable based on results and data

of the clinical program.

Product candidates may be found ineffective or may cause harmful side effects during clinical trials, may take

longer to progress through clinical trials than had been anticipated, may not be able to achieve the pre-defined clinical endpoints due

to statistical anomalies even though clinical benefit may have been achieved, may fail to receive necessary regulatory approvals, may

prove impracticable to manufacture in commercial quantities at reasonable cost and with acceptable quality, or may fail to achieve market

We cannot predict whether or when we will obtain

regulatory approval to commercialize our product candidates that are under development and we cannot, therefore, predict the timing of

any future revenues from these product candidates, if any.

The FDA has substantial discretion in the drug approval process, including

the ability to delay, limit or deny approval of a product candidate for many reasons.

that appear to be promising at some or all stages of development may not receive approval or reach the market for a number of reasons

that may not be predictable based on results and data of the clinical program.

Product candidates may be found ineffective or may cause

harmful side effects during clinical trials, may take longer to progress through clinical trials than had been anticipated, may not be

able to achieve the pre-defined clinical endpoints due to statistical anomalies even though clinical benefit may have been achieved,

may fail to receive necessary regulatory approvals, may prove impracticable to manufacture in commercial quantities at reasonable cost

and with acceptable quality, or may fail to achieve market acceptance.

cannot predict whether or when we will obtain regulatory approval to commercialize our product candidates that are under development

and we cannot, therefore, predict the timing of any future revenues from these product candidates, if any.

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.

requiring 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

In September 2023, we announced that the FDA has agreed with our plans to address the requirements outlined in the CRL,

which guidance has provided us with a path for completing the necessary activities to support the resubmission of the BLA for LYMPHIR.

FDA has substantial discretion in the drug approval process, including the ability to delay, limit or deny approval of a product candidate

for many reasons.

For example, the FDA:

may not find the data from clinical trials, including

from our Phase 3 trial for I/ONTAK, sufficient to support the submission of an NDA or BLA or to obtain marketing approval in the United

States, including any findings that the clinical and other benefits of our product candidates outweigh their safety risks;

could determine that the information provided by us was inadequate, contained clinical deficiencies or otherwise failed to demonstrate the safety and effectiveness of any of our product candidates for any indication;

may disagree with our trial design or our interpretation

of data from preclinical studies or clinical trials, or may change the requirements for approval even after it has reviewed and commented

on the design for our trials;

could determine that we cannot rely on Section 505(b)(2) for Mino-Lok or Halo-Lido or any future product candidate whose composition includes components previously approved by the FDA;

may determine that we have identified the wrong reference listed drug or drugs or that approval of a Section 505(b)(2) application for any of our product candidates is blocked by patent or non-patent exclusivity of the reference listed drug or drugs;

may identify deficiencies in the manufacturing processes or facilities of third-party manufacturers with which we enter into agreements for the manufacture of our product candidates;

may approve our product candidates for fewer or more limited indications than we request, or may grant approval contingent on the performance of costly post-approval clinical trials;

may change its approval policies or adopt new regulations that could adversely impact our product candidate development programs;

may not approve the labeling claims that we believe are necessary or desirable for the successful commercialization of our product candidates, or may require labeling claims that impair the potential market acceptance of our product candidates.

These same risks are generally applicable to the

regulatory process in foreign countries.

Any failure to obtain regulatory approval of our product candidates would significantly limit

our ability to generate revenues, and any failure to obtain such approval for all of the indications and labeling claims we deem desirable

could reduce our potential revenues.

While our business strategy generally is

to focus on the development of late-stage product candidates to lessen the development risk, there is still significant risk to successfully

developing a product candidate.

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.

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.

The results of pre-clinical studies and

completed clinical trials are not necessarily predictive of future results, and our current product candidates may not have favorable

results in later studies or trials.

Pre-clinical studies and Phase 1 and Phase 2 clinical

trials are not primarily designed to test the efficacy of a product candidate in the general population, but rather to test initial safety,

to study pharmacokinetics and pharmacodynamics, to study limited efficacy in a small number of study patients in a selected disease population,

and to identify and attempt to understand the product candidate’s side effects at various doses and dosing schedules.

pre-clinical studies or completed clinical trials does not ensure that later studies or trials, including continuing pre-clinical studies

and large-scale clinical trials, will be successful nor does it predict future results.

Favorable results in early studies or trials may

not be repeated in later studies or trials, and product candidates in later stage trials may fail to show acceptable safety and efficacy

despite having progressed through earlier trials.

In addition, the placebo rate in larger studies may be higher than expected.

We may be required to demonstrate through large,

long-term outcome trials that our product candidates are safe and effective for use in a broad population prior to obtaining regulatory

not find the data from clinical trials, including from our Phase 3 trial for LYMPHIR, sufficient to support the submission of an

NDA or BLA or to obtain marketing approval in the U.S., including any findings that the clinical and other benefits of our product

candidates outweigh their safety risks;

could determine that the

information provided by us was inadequate, contained clinical deficiencies or otherwise failed to demonstrate the safety and effectiveness

of any of our product candidates for any indication;

disagree with our trial design or our interpretation of data from preclinical studies or clinical trials, or may change the requirements

for approval even after it has reviewed and commented on the design for our trials;

could determine that we

cannot rely on Section 505(b)(2) for Mino-Lok or Halo-Lido or any future product candidate whose composition includes components

previously approved by the FDA;

may determine that we have

identified the wrong reference listed drug or drugs or that approval of a Section 505(b)(2) application for any of our product candidates

is blocked by patent or non-patent exclusivity of the reference listed drug or drugs;

may identify deficiencies

in the manufacturing processes or facilities of third-party manufacturers with which we enter into agreements for the manufacture

of our product candidates;

may approve our product

candidates for fewer or more limited indications than we request, or may grant approval contingent on the performance of costly post-approval

clinical trials;

may change its approval

policies or adopt new regulations that could adversely impact our product candidate development programs;

may not approve the labeling

claims that we believe are necessary or desirable for the successful commercialization of our product candidates, or may require

labeling claims that impair the potential market acceptance of our product candidates.

same risks are generally applicable to the regulatory process in foreign countries.

Any failure to obtain regulatory approval of our

product candidates would significantly limit our ability to generate revenues, and any failure to obtain such approval for all of the

indications and labeling claims we deem desirable could reduce our potential revenues.

through Citius Oncology, may be required to make milestone payments to the licensor and former licensee of the LYMPHIR intellectual property

in connection with its development and commercialization of LYMPHIR, which could adversely affect the profitability of LYMPHIR, if approved.

the terms of the License Agreement with Eisai, we, through Citius Oncology, are required to pay Eisai a $6 million development milestone

payment upon initial approval by the FDA of LYMPHIR for the CTCL indication (which increases to $7 million in the event Citius Oncology

exercises the option to add India to the licensed territory prior to FDA approval) 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 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.

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 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.

development and milestone obligations could impose substantial additional costs on us, divert resources from other aspects of the business,

and adversely affect the overall profitability of LYMPHIR, if approved.

We, through Citius Oncology, may need to obtain additional financing

to satisfy these milestone payments, and cannot be sure that any additional funding, if needed, will be available on favorable terms,

our business strategy generally is to focus on the development of late-stage product candidates to lessen the development risk, there

is still significant risk to successfully developing a product candidate.

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.

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.

results of pre-clinical studies and completed clinical trials are not necessarily predictive of future results, and our current product

candidates may not have favorable results in later studies or trials.

studies and Phase 1 and Phase 2 clinical trials are not primarily designed to test the efficacy of a product candidate in the general

population, but rather to test initial safety, to study pharmacokinetics and pharmacodynamics, to study limited efficacy in a small number

of study patients in a selected disease population, and to identify and attempt to understand the product candidate’s side effects

at various doses and dosing schedules.

Success in pre-clinical studies or completed clinical trials does not ensure that later studies

or trials, including continuing pre-clinical studies and large-scale clinical trials, will be successful nor does it predict future results.

Favorable results in early studies or trials may not be repeated in later studies or trials, and product candidates in later stage trials

may fail to show acceptable safety and efficacy despite having progressed through earlier trials.

In addition, the placebo rate in larger

studies may be higher than expected.

may be required to demonstrate through large, long-term outcome trials that our product candidates are safe and effective for use in

a broad population prior to obtaining regulatory approval.

This would increase the duration and cost of any such trial.

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

could negatively impact the development program for Halo-Lido.

If any of our product candidates fail to demonstrate

sufficient safety and efficacy in any clinical trial, we will experience potentially significant delays and cost increases in, or may

decide to abandon development of, that product candidate.

If we abandon or are delayed, or experience increased costs, in our development

efforts related to any of our product candidates, we may not have sufficient resources to continue or complete development of that product

candidate or any other product candidates.

We may not be able to continue our operations and clinical studies, or generate any revenue

or become profitable.

Our reputation in the industry and in the investment community would likely be significantly damaged.

might not be possible for us to raise funds in the public or private markets, and our stock price would likely decrease significantly.

We might not decide to proceed with the

proposed spinoff of our I/ONTAK asset.

In May 2022, we

announced that we intend to split the Company’s assets into two separate publicly traded entities.

We plan to form a new company

focused on developing and commercializing I/ONTAK.

Our other pipeline assets, including Mino-Lok, would remain at Citius.

continue to trade on the Nasdaq exchange under its current ticker CTXR.

The strategic action is intended to optimize organizational resources

and investment capital to support the successful execution of each development program.

The transactions are expected to be completed

in calendar year 2023, subject to the satisfaction of customary conditions, including final approval from the Citius Board of Directors,

market conditions, regulatory approvals, and SEC filings.

However, there can be no assurance regarding the ultimate timing of the proposed

transaction or that the transaction will be completed at all.

If we are unable to file for approval of

Mino-Lok or Halo-Lido under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, or if we are required to generate additional

data related to safety and efficacy in order to obtain approval of Mino-Lok or Halo-Lido under Section 505(b)(2), we may be unable to

meet our anticipated development and commercialization timelines.

Our current plans for filing NDAs or BLAs for

our product candidates include efforts to minimize the data we will be required to generate in order to obtain marketing approval for

certain of our product candidates and therefore possibly reduce the time and cost of development of a product candidate and obtain a shortened

review period for the application.

The timeline for filing and review of our planned NDA for each of Mino-Lok and Halo-Lido is based upon

our plan to submit each such NDA under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, wherein we will rely in part on data

generated by third parties and that is in the public domain or elsewhere.

Depending on the data that may be required by the FDA for approval,

some of the data may be related to products already approved by the FDA.

If the data relied upon is related to products already approved

by the FDA and covered by third-party patents, we would be required to certify that we do not infringe the listed patents or that such

patents are invalid or unenforceable.

As a result of the certification, the third party would have 45 days from notification of our certification

to initiate an action against us.

In the event that an action is brought in response to such a certification, the approval of our NDA

could be subject to a stay of up to 30 months or more while we defend against such a suit.

Approval of any product candidate under Section

505(b)(2) may therefore be delayed until patent exclusivity expires or until we successfully challenge the applicability of those patents

applicable to our product candidates.

Alternatively, we may elect to generate sufficient additional clinical data so that we no longer

rely on data which triggers a potential stay of the approval of any product candidate.

Even if no exclusivity periods apply to an application

under Section 505(b)(2), the FDA has broad discretion to require us to generate additional data on the safety and efficacy of our product

candidates to supplement third-party data on which we may be permitted to rely.

In either event, we could be required, before obtaining

marketing approval for such product candidate, to conduct substantial new research and development activities beyond those in which we

currently plan to engage in order to obtain approval of that product candidate.

Such additional new research and development activities

would be costly and time consuming.

We may not be able to obtain shortened review

of our applications where available, and in any event the FDA may not agree that any of our product candidates qualify for marketing approval.

If we are required to generate additional data to support approval, we may be unable to meet our anticipated development and commercialization

timelines, may be unable to generate the additional data at a reasonable cost, or at all, and may be unable to obtain marketing approval

of that product candidate.

In addition, notwithstanding the approval of many products by the FDA pursuant to Section 505(b)(2), over the

last few years, some pharmaceutical companies and others have objected to the FDA’s interpretation of Section 505(b)(2).

FDA changes its interpretation of Section 505(b)(2), or if the FDA’s interpretation is successfully challenged in court, this could

delay or even prevent the FDA from approving any Section 505(b)(2) application that we submit.

Two of our product candidates, Mino-Lok

and Halo-Lido, are combination products consisting of components that have each been separately approved by the FDA for other indications

and which are commercially available and marketed by other companies.

Our approval under Section 505(b)(2), if received, would not preclude

physicians, pharmacists, and patients from obtaining individual drug products and titrating the dosage of these drug products as close

to our approved dose as possible.

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

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.

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 study and seek approval for.

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

and justify our premium pricing.

We may encounter resistance from these entities and will then be dependent on patients’ willingness

to pay the premium and not seek alternatives.

In addition, pharmacists often suggest lower cost prescription treatment alternatives 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 .

Any fast track designation or grant of priority

review status by the FDA may not actually lead to a faster development or regulatory review or approval process, nor will it assure FDA

approval of our product candidates.

Additionally, our product candidates may treat indications that do not qualify for priority review

We have received fast track designation for Mino-Lok

to treat and salvage infected central venous catheters in patients with CRBSIs.

We may seek fast track designation for some of our other

product candidates or priority review of applications for approval of our product candidates for certain indications.

If a drug is intended

for the treatment of a serious or life-threatening condition and the drug demonstrates the potential to address unmet medical needs for

this condition, the drug sponsor may apply for the FDA fast track designation.

If a product candidate offers major advances in treatment,

the FDA may designate it eligible for priority review.

The FDA has broad discretion whether or not to grant these designations, so even

if we believe a particular product candidate is eligible for these designations, we cannot assure you that the FDA would decide to grant

Even with the fast track designation for Mino-Lok and if we do receive fast track designation or priority review for any other product

candidate, we may not experience a faster development process, review or approval compared to conventional FDA procedures.

withdraw fast track designation from Mino-Lok or any other product candidate to be so designated if it believes that the designation is

no longer supported by data from our clinical development program.

We do not own NoveCite, Inc.

will share any benefits from the development of its NoveCite product candidate with the other stockholder.

As of November 30, 2022, we owned 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 development by NoveCite

of its NoveCite product candidate or any other product candidates that it might develop.

In the event that NoveCite issues 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 the NoveCite drug candidate’s successful development, unless we were to increase our investment.

Any FDA programs related to the development

and approval of treatments for COVID-19 and its symptoms may not be available to us or actually lead to a faster development or regulatory

review or approval process for NoveCite, our proposed treatment for ARDS, nor will it assure FDA approval of such a treatment.

We intend to develop NoveCite under the FDA’s

Coronavirus Treatment Acceleration Program, or CTAP.

The CTAP program was designed to accelerate the development of COVID-19 treatments

via faster communications and regulatory review protocols.

In late April 2020, we made a pre-IND submission to the FDA for this treatment

and requested the FDA’s feedback to support the most expeditious pathway for clinical development of the therapy.

The CTAP program

is relatively new and the FDA has broad discretion in administering the CTAP program and therefore we cannot assure you what the FDA might

Even though we believe that the response from the FDA was favorable, we did not specifically request guidance on the CTAP program.

As a result, we may encounter problems at a later date under the CTAP program, or with the therapy itself, and we may not experience a

faster development process, review or approval compared to conventional FDA procedures.

Because our NoveCite product candidate is

based on novel technologies, it is difficult to predict the regulatory approval process and the time, the cost and our ability to successfully

initiate, conduct and complete clinical development, and obtain the necessary regulatory and reimbursement approvals, required for commercialization

of our NoveCite product candidate.

NoveCite’s cell programming technology and

platform for generating cell therapy products using allogenic mesenchymal stem cells derived from iPSCs represent novel therapeutic approaches,

and to our knowledge there are currently no iPSC-derived cell products approved anywhere in the world for commercial sale.

is difficult to accurately predict the type and scope of challenges that NoveCite may incur during development of its NoveCite product

candidate, and it faces uncertainties associated with the preclinical and clinical development, manufacture and regulatory requirements

for the initiation and conduct of clinical trials, regulatory approval, and reimbursement required for successful commercialization of

its NoveCite product candidate.

In addition, because NoveCite’s iPSC-derived cell product candidate is in the pre-clinical stage,

NoveCite is currently assessing safety in humans and has not yet been able to assess the long-term effects of treatment.

Animal models

and assays may not accurately predict the safety and efficacy of our product candidate in our target patient populations, and appropriate

models and assays may not exist for demonstrating the safety and purity of the NoveCite product candidate, as required by the FDA and

other regulatory authorities for ongoing clinical development and regulatory approval.

The pre-clinical and clinical development, manufacture,

and regulatory requirements for approval of the NoveCite product candidate may be more expensive and take longer than for other more well-known

or extensively studied pharmaceutical or biopharmaceutical product candidates due to a lack of prior experiences on the side of both developers

and regulatory agencies.

Additionally, due to the uncertainties associated with the pre-clinical and clinical development, manufacture,

and regulatory requirements for approval of the NoveCite product candidate, NoveCite may be required to modify or change its pre-clinical

and clinical development plans or its manufacturing activities and plans or be required to meet stricter regulatory requirements for approval.

Any such modifications or changes could delay or prevent NoveCite’s ability to develop, manufacture, obtain regulatory approval

for or commercialize its NoveCite product candidate, which would adversely affect NoveCite’s and our business, financial condition

and results of operations.

Cellular immunotherapies, and stem cell therapies

and iPSC-derived cell therapies in particular, represent relatively new therapeutic areas, and the FDA has cautioned consumers about potential

safety risks associated with cell therapies.

To date, there are relatively few approved cell therapies.

As a result, the regulatory approval

process for a product candidate such as NoveCite is uncertain and may be more expensive and take longer than the approval process for

product candidates based on other, better known or more extensively studied technologies and therapeutic approaches.

For example, there

are currently no FDA approved products with a label designation that supports the use of a product to treat and reduce the severity of

ARDS in patients with COVID-19, which makes it difficult to determine the clinical endpoints and data required to support an application

or regulatory approval, and the time and cost required to obtain regulatory approval in the United States for our product candidate.

Regulatory requirements in the United States governing

cell therapy products have changed frequently and the FDA or other regulatory bodies may change the requirements, or identify different

regulatory pathways, for approval of the NoveCite product candidate.

For example, within the FDA, the Center for Biologics Evaluation

and Research, or CBER, restructured and created a new Office of Tissues and Advanced Therapies to better align its oversight activities

with FDA Centers for Drugs and Medical Devices.

It is possible that over time new or different divisions may be established or be granted

the responsibility for regulating cell and/or gene therapy products, including iPSC-derived cell products, such as the NoveCite product

As a result, NoveCite may be required to change its regulatory strategy or to modify its applications for regulatory approval,

which could delay and impair its ability to complete the pre-clinical and clinical development and manufacture of, and obtain regulatory

approval for, its NoveCite product candidate.

Changes in regulatory authorities and advisory groups, or any new requirements or guidelines

they promulgate, may lengthen the regulatory review process, require NoveCite to perform additional studies, increase its development

and manufacturing costs, lead to changes in regulatory pathways, positions and interpretations, delay or prevent approval and commercialization

of the NoveCite product candidate or lead to significant post-approval limitations or restrictions.

As NoveCite advances its NoveCite

product candidate, NoveCite will be required to consult with the FDA and other regulatory authorities, and its NoveCite product candidate

will likely be reviewed by an FDA advisory committee.

NoveCite also must comply with applicable requirements, and if it fails to do so,

it may be required to delay or discontinue development of its NoveCite product candidate.

Delays or unexpected costs in obtaining, or

the failure to obtain, the regulatory approval necessary to bring the NoveCite product candidate to market could impair NoveCite’s

and our ability to generate sufficient product revenues to maintain our respective businesses.

NoveCite has assumed that the biological

capabilities of iPSCs and adult-donor derived cells are likely to be comparable.

If it is discovered that this assumption is incorrect,

the NoveCite product candidate research and development activities could be harmed.

NoveCite anticipates that its research and development

for its NoveCite product candidate will involve iPSCs, rather than adult-donor derived cells.

With respect to iPSCs, NoveCite believes

that scientists are still somewhat uncertain about the clinical utility, life span, and safety of such cells, and whether such cells differ

in any clinically significant ways from adult-donor derived cells.

If NoveCite discovers that iPSCs will not be useful for whatever reason

for its NoveCite product candidate program, this would negatively affect NoveCite’s ability to develop a marketable product and

it and we may never become profitable, which would have an adverse effect on our respective businesses, prospects, financial condition

and results of operations.

Even if we receive regulatory approval to

commercialize a product candidate, our ability to generate revenues from any resulting product will be subject to a variety of risks,

many of which are out of our control.

Even if one of our product candidates obtains

regulatory approval, that product may not gain market acceptance among physicians, patients, healthcare payers or the medical community.

The indication may be limited to a subset of the population or we may implement a distribution system and patient access program that

Coverage and reimbursement of our product candidates by third-party payers, including government payers, generally is also

necessary for commercial success.

We believe that the degree of market acceptance and our ability to generate revenues from any approved

product candidate or acquired approved product will depend on a number of factors, including:

prevalence and severity of any side effects;

results of any post-approval studies of the product;

potential or perceived advantages or disadvantages over alternative treatments;

availability of coverage and reimbursement from government and other third-party payers;

the willingness of patients to pay out of pocket in the absence of government or third-party coverage;

the relative convenience and ease of administration and dosing schedule;

product labeling or product insert requirements of the FDA or other regulatory authorities;

strength of sales, marketing and distribution support;

price of any future products, if approved, both in absolute terms and relative to alternative treatments;

the effectiveness of our or any future collaborators’ sales and marketing strategies;

the effect of current and future healthcare laws on any approved products;

patient access programs that require patients to provide certain information prior to receiving new and refill prescriptions;

requirements for prescribing physicians to complete certain educational programs for prescribing drugs.

If approved, any product candidate may fail to

achieve market acceptance or generate significant revenue to achieve or sustain profitability.

In addition, our efforts to educate the

medical community and third-party payers on the benefits of any product candidate may require significant resources and may never be successful.

Even if approved for marketing by applicable

regulatory bodies, we will not be able to create a market for any of our product candidates if we fail to establish marketing, sales,

and distribution capabilities, either on our own or through arrangements with third parties.

Our strategy with our product candidates is to

outsource to third parties all or most aspects of the product development process, and possibly marketing, sales, and distribution activities.

Currently, we do not have any sales, marketing or distribution capabilities.

In order to generate sales of any product candidate that

receives regulatory approval, we must either acquire or develop an internal marketing and sales force with technical expertise and with

supporting distribution capabilities or make arrangements with third parties to perform these services for us.

The acquisition or development

of a sales and distribution infrastructure would require 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,

our revenues will depend on the efforts of others.

These efforts may not be successful.

If we fail to develop sales, marketing, and distribution

channels, or enter into arrangements for such with third parties, we will experience delays in product launch and sales and incur increased

The markets in which we operate are highly

competitive and we may be unable to compete successfully against new entrants or established companies.

Competition in the pharmaceutical and medical

products industries is intense and is characterized by costly and extensive research efforts and rapid technological progress.

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

commercialization experience.

However, that experience might not translate into the successful development and launch of any of our product

Mergers, acquisitions, joint ventures and similar events may also significantly increase the competition we face.

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 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.

As a result of these factors, our competitors

may obtain regulatory approval of their products more rapidly than we can or may obtain patent protection or other intellectual property

rights that limit our ability to develop or commercialize our product candidates.

Our competitors may also develop products that are more

effective, more useful and less costly than ours and may also be more successful in manufacturing and marketing their products.

our competitors may be more effective than us in commercializing their products and as a result, our business and prospects might be materially

Physicians and patients might not accept

and use any of our product candidates for which regulatory approval is obtained.

Even if the FDA approves one of our product candidates,

physicians and patients might not accept and use it.

Acceptance and use of our approved product candidates will depend upon a number of

factors, including:

perceptions by members of the health care community, including physicians, about the safety and effectiveness of any of our product candidates;

perceptions by members of the health care community, including physicians, about the use of our product candidates versus the then respective standards of care for the disease or problem that we seek to address with our product candidates;

cost-effectiveness of our product candidates relative to competing products or therapies;

availability of reimbursement for our product candidates from government or other healthcare payers;

effective marketing and distribution efforts by us and/or our licensees and distributors, if any.

If any of our current product candidates are approved,

we expect their sales to generate substantially all of our revenues for the foreseeable future, and as a result, the failure of any of

these product candidates to find market acceptance would harm our business and would require us to seek additional financing.

Our ability to generate product revenues

will be diminished if any of our product candidates that may be approved sell for inadequate prices or patients are unable to obtain adequate

levels of reimbursement.

Our ability to commercialize our product candidates,

alone or with collaborators, will depend in part on the extent to which reimbursement will be available from:

government and health administration authorities;

private health maintenance organizations and health insurers;

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 could negatively impact the development program for Halo-Lido.

any of our product candidates fail to demonstrate sufficient safety and efficacy in any clinical trial, we will experience potentially

significant delays and cost increases in, or may decide to abandon development of, that product candidate.

If we abandon or are delayed,

or experience increased costs, in our development efforts related to any of our product candidates, we may not have sufficient resources

to continue or complete development of that product candidate or any other product candidates.

We may not be able to continue our operations

and clinical studies, or generate any revenue or become profitable.

Our reputation in the industry and in the investment community would

likely be significantly damaged.

Further, it might not be possible for us to raise funds in the public or private markets, and our stock

price would likely decrease significantly.

the planned Business Combination is not completed, our common stock could be adversely affected.

the planned Business Combination is not completed for whatever reason, the price of our common stock could be adversely impacted if investors

view the Business Combination as providing more value to both Citius Pharma and Citius Oncology on a standalone basis.

Further, depending

on the reason for an inability to complete the Business Combination, our business reputation could be impaired.

we are unable to file for approval of Mino-Lok or Halo-Lido under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, or if

we are required to generate additional data related to safety and efficacy in order to obtain approval of Mino-Lok or Halo-Lido under

Section 505(b)(2), we may be unable to meet our anticipated development and commercialization timelines.

current plans for filing NDAs or BLAs for our product candidates include efforts to minimize the data we will be required to generate

in order to obtain marketing approval for certain of our product candidates and therefore possibly reduce the time and cost of development

of a product candidate and obtain a shortened review period for the application.

The timeline for filing and review of our planned NDA

for each of Mino-Lok and Halo-Lido is based upon our plan to submit each such NDA under Section 505(b)(2) of the Federal Food, Drug and

Cosmetic Act, wherein we will rely in part on data generated by third parties and that is in the public domain or elsewhere.

on the data that may be required by the FDA for approval, some of the data may be related to products already approved by the FDA.

the data relied upon is related to products already approved by the FDA and covered by third-party patents, we would be required to certify

that we do not infringe the listed patents or that such patents are invalid or unenforceable.

As a result of the certification, the third

party would have 45 days from notification of our certification to initiate an action against us.

In the event that an action is brought

in response to such a certification, the approval of our NDA could be subject to a stay of up to 30 months or more while we defend against

Approval of any product candidate under Section 505(b)(2) may therefore be delayed until patent exclusivity expires or until

we successfully challenge the applicability of those patents applicable to our product candidates.

Alternatively, we may elect to generate

sufficient additional clinical data so that we no longer rely on data which triggers a potential stay of the approval of any product

Even if no exclusivity periods apply to an application under Section 505(b)(2), the FDA has broad discretion to require us

to generate additional data on the safety and efficacy of our product candidates to supplement third-party data on which we may be permitted

In either event, we could be required, before obtaining marketing approval for such product candidate, to conduct substantial

new research and development activities beyond those in which we currently plan to engage in order to obtain approval of that product

Such additional new research and development activities would be costly and time consuming.

may not be able to obtain shortened review of our applications where available, and in any event the FDA may not agree that any of our

product candidates qualify for marketing approval.

If we are required to generate additional data to support approval, we may be unable

to meet our anticipated development and commercialization timelines, may be unable to generate the additional data at a reasonable cost,

or at all, and may be unable to obtain marketing approval of that product candidate.

In addition, notwithstanding the approval of many

products by the FDA pursuant to Section 505(b)(2), over the last few years, some pharmaceutical companies and others have objected to

the FDA’s interpretation of Section 505(b)(2).

If the FDA changes its interpretation of Section 505(b)(2), or if the FDA’s

interpretation is successfully challenged in court, this could delay or even prevent the FDA from approving any Section 505(b)(2) application

that we submit.

of our product candidates, Mino-Lok and Halo-Lido, are combination products consisting of components that have each been separately approved

by the FDA for other indications and which are commercially available and marketed by other companies.

Our approval under Section 505(b)(2),

if received, would not preclude physicians, pharmacists, and patients from obtaining individual drug products and titrating the dosage

of these drug products as close to our approved dose as possible.

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 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.

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 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 and justify our premium pricing.

We may encounter resistance from

these entities and will then be dependent on patients’ willingness to pay the premium and not seek alternatives.

In addition, pharmacists

often suggest lower cost prescription treatment alternatives 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 .

fast track designation or grant of priority review status by the FDA may not actually lead to a faster development or regulatory review

or approval process, nor will it assure FDA approval of our product candidates.

Additionally, our product candidates may treat indications

that do not qualify for priority review vouchers.

have received fast track designation for Mino-Lok to treat and salvage infected central venous catheters in patients with CRBSIs.

may seek fast track designation for some of our other product candidates or priority review of applications for approval of our product

candidates for certain indications.

If a drug is intended for the treatment of a serious or life-threatening condition and the drug demonstrates

the potential to address unmet medical needs for this condition, the drug sponsor may apply for the FDA fast track designation.

product candidate offers major advances in treatment, the FDA may designate it eligible for priority review.

The FDA has broad discretion

whether or not to grant these designations, so even if we believe a particular product candidate is eligible for these designations,

we cannot assure you that the FDA would decide to grant them.

Even with the fast track designation for Mino-Lok and if we do receive

fast track designation or priority review for any other product candidate, we may not experience a faster development process, review

or approval compared to conventional FDA procedures.

The FDA may withdraw fast track designation from Mino-Lok or any other product candidate

to be so designated if it believes that the designation is no longer supported by data from our clinical development program.

do not own NoveCite, Inc.

outright and will share any benefits from the development of its NoveCite product candidate with the other

of September 30, 2023, we owned 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 development by NoveCite of its NoveCite product candidate or any other product candidates that it might

In the event that NoveCite issues 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 the NoveCite drug candidate’s successful development,

unless we were to increase our investment.

FDA programs related to the development and approval of treatments for COVID-19 and its symptoms may not be available to us or actually

lead to a faster development or regulatory review or approval process for NoveCite, our proposed treatment for ARDS, nor will it assure

FDA approval of such a treatment.

late April 2020, we made a pre-IND submission to the FDA for NoveCite as a treatment for ARDS.

The submission was made under the FDA’s

Coronavirus Treatment Acceleration Program (“CTAP”) and we requested the FDA’s feedback to support the most expeditious

pathway for clinical development of the therapy.

The CTAP program is relatively new and the FDA has broad discretion in administering

the CTAP program and therefore we cannot assure you what the FDA might decide and whether there would be a faster development process.

our NoveCite product candidate is based on novel technologies, it is difficult to predict the regulatory approval process and the time,

the cost and our ability to successfully initiate, conduct and complete clinical development, and obtain the necessary regulatory and

reimbursement approvals, required for commercialization of our NoveCite product candidate.

cell programming technology and platform for generating cell therapy products using allogenic mesenchymal stem cells derived from iPSCs

represent novel therapeutic approaches, and to our knowledge there are currently no iPSC-derived cell products approved anywhere in the

world for commercial sale.

As such, it is difficult to accurately predict the type and scope of challenges that NoveCite may incur during

development of its NoveCite product candidate, and it faces uncertainties associated with the preclinical and clinical development, manufacture

and regulatory requirements for the initiation and conduct of clinical trials, regulatory approval, and reimbursement required for successful

commercialization of its NoveCite product candidate.

In addition, because NoveCite’s iPSC-derived cell product candidate is in

the pre-clinical stage, NoveCite is currently assessing safety in humans and has not yet been able to assess the long-term effects of

Animal models and assays may not accurately predict the safety and efficacy of our product candidate in our target patient

populations, and appropriate models and assays may not exist for demonstrating the safety and purity of the NoveCite product candidate,

as required by the FDA and other regulatory authorities for ongoing clinical development and regulatory approval.

pre-clinical and clinical development, manufacture, and regulatory requirements for approval of the NoveCite product candidate may be

more expensive and take longer than for other more well-known or extensively studied pharmaceutical or biopharmaceutical product candidates

due to a lack of prior experiences on the side of both developers and regulatory agencies.

Additionally, due to the uncertainties associated

with the pre-clinical and clinical development, manufacture, and regulatory requirements for approval of the NoveCite product candidate,

NoveCite may be required to modify or change its pre-clinical and clinical development plans or its manufacturing activities and plans

or be required to meet stricter regulatory requirements for approval.

Any such modifications or changes could delay or prevent NoveCite’s

ability to develop, manufacture, obtain regulatory approval for or commercialize its NoveCite product candidate, which would adversely

affect NoveCite’s and our business, financial condition and results of operations.

immunotherapies, and stem cell therapies and iPSC-derived cell therapies in particular, represent relatively new therapeutic areas, and

the FDA has cautioned consumers about potential safety risks associated with cell therapies.

To date, there are relatively few approved

cell therapies.

As a result, the regulatory approval process for a product candidate such as NoveCite is uncertain and may be more expensive

and take longer than the approval process for product candidates based on other, better known or more extensively studied technologies

and therapeutic approaches.

For example, there are currently no FDA approved products with a label designation that supports the use

of a product to treat and reduce the severity of ARDS in patients with COVID-19, which makes it difficult to determine the clinical endpoints

and data required to support an application or regulatory approval, and the time and cost required to obtain regulatory approval in the

for our product candidate.

requirements in the U.S.

governing cell therapy products have changed frequently and the FDA or other regulatory bodies may change the

requirements, or identify different regulatory pathways, for approval of the NoveCite product candidate.

For example, within the FDA,

the Center for Biologics Evaluation and Research (“CBER”) restructured and created a new Office of Tissues and Advanced Therapies

to better align its oversight activities with FDA Centers for Drugs and Medical Devices.

It is possible that over time new or different

divisions may be established or be granted the responsibility for regulating cell and/or gene therapy products, including iPSC-derived

cell products, such as the NoveCite product candidate.

As a result, NoveCite may be required to change its regulatory strategy or to

modify its applications for regulatory approval, which could delay and impair its ability to complete the pre-clinical and clinical development

and manufacture of, and obtain regulatory approval for, its NoveCite product candidate.

Changes in regulatory authorities and advisory

groups, or any new requirements or guidelines they promulgate, may lengthen the regulatory review process, require NoveCite to perform

additional studies, increase its development and manufacturing costs, lead to changes in regulatory pathways, positions and interpretations,

delay or prevent approval and commercialization of the NoveCite product candidate or lead to significant post-approval limitations or

restrictions.

As NoveCite advances its NoveCite product candidate, NoveCite will be required to consult with the FDA and other regulatory

authorities, and its NoveCite product candidate will likely be reviewed by an FDA advisory committee.

NoveCite also must comply with

applicable requirements, and if it fails to do so, it may be required to delay or discontinue development of its NoveCite product candidate.

Delays or unexpected costs in obtaining, or the failure to obtain, the regulatory approval necessary to bring the NoveCite product candidate

to market could impair NoveCite’s and our ability to generate sufficient product revenues to maintain our respective businesses.

has assumed that the biological capabilities of iPSCs and adult-donor derived cells are likely to be comparable.

If it is discovered

that this assumption is incorrect, the NoveCite product candidate research and development activities could be harmed.

anticipates that its research and development for its NoveCite product candidate will involve iPSCs, rather than adult-donor derived

With respect to iPSCs, NoveCite believes that scientists are still somewhat uncertain about the clinical utility, life span, and

safety of such cells, and whether such cells differ in any clinically significant ways from adult-donor derived cells.

If NoveCite discovers

that iPSCs will not be useful for whatever reason for its NoveCite product candidate program, this would negatively affect NoveCite’s

ability to develop a marketable product and it and we may never become profitable, which would have an adverse effect on our respective

businesses, prospects, financial condition and results of operations.

if we receive regulatory approval to commercialize a product candidate, that product may not gain market acceptance among physicians,

patients, healthcare payers or the medical community and may not generate significant revenue.

if one of our product candidates obtains regulatory approval, that product may not gain market acceptance among physicians, patients,

healthcare payers or the medical community.

The indication may be limited to a subset of the population or we may implement a distribution

system and patient access program that is limited.

Coverage and reimbursement of our product candidates by third-party payers, including

government payers, generally is also necessary for commercial success.

We believe that the degree of market acceptance and our ability

to generate revenues from any approved product candidate or acquired approved product will depend on a number of factors, including:

prevalence and severity

of any side effects;

results of any post-approval

studies of the product;

potential or perceived

advantages or disadvantages over alternative treatments;

availability of coverage

and reimbursement from government and other third-party payers;

the willingness of patients

to pay out of pocket in the absence of government or third-party coverage;

the relative convenience

and ease of administration and dosing schedule;

product labeling or product

insert requirements of the FDA or other regulatory authorities;

strength of sales, marketing

and distribution support;

price of any future products,

if approved, both in absolute terms and relative to alternative treatments;

the effectiveness of our

or any future collaborators’ sales and marketing strategies;

the effect of current and

future healthcare laws on any approved products;

patient access programs

that require patients to provide certain information prior to receiving new and refill prescriptions;

requirements for prescribing

physicians to complete certain educational programs for prescribing drugs.

approved, any product candidate may fail to achieve market acceptance or generate significant revenue to achieve or sustain profitability,

which would harm the Company’s business.

In addition, our efforts to educate the medical community and third-party payers on the

benefits of any product candidate may require significant resources and may never be successful.

if approved for marketing by applicable regulatory bodies, we will not be able to create a market for any of our product candidates if

we fail to establish marketing, sales, and distribution capabilities, either on our own or through arrangements with third parties.

strategy with our 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

approval, we must either acquire or develop an internal marketing and sales force with technical expertise and with supporting distribution

capabilities or make arrangements with third parties to perform these services for us.

Currently, we, through Citius Oncology, are in

the early stages of developing our sales, marketing and distribution capabilities 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.

We do not have any sales, marketing or distribution capabilities with respect to our other product

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 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.

FDA and other regulatory agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses.

we are found to have improperly promoted any off-label use of LYMPHIR or any other product candidates, if approved, or if we are found

to have improperly engaged in pre-approval promotion prior to the approval of such product candidates, Citius Pharma may become subject

to significant liability.

Such enforcement has become more common in the pharmaceutical industry.

The FDA and other regulatory agencies

strictly regulate the promotional claims that may be made about prescription products, such as LYMPHIR and any other product candidates

that might be approved.

In particular, a product may not be promoted for uses that are not approved by the FDA or such other regulatory

agencies as reflected in the product’s approved labeling.

If the Company receives marketing approval for its product candidates

for its proposed indications, physicians may nevertheless use its product for their patients in a manner that is inconsistent with the

approved label, if the physicians believe in their professional medical judgment it could be used in such manner.

However, if the Company

is found to have promoted its product for any off-label uses, the federal government could levy civil, criminal and/or administrative

penalties, and seek fines against us.

The FDA, Department of Justice or other regulatory authorities could also request that we enter

into a consent decree or a corporate integrity agreement, or seek a permanent injunction against us under which specified promotional

conduct is monitored, changed or curtailed.

If we cannot successfully manage the promotion of LYMPHIR or any other product candidates

that receive approval, we could become subject to significant liability, which would materially adversely affect our business, financial

condition and results of operations.

markets in which we operate are highly competitive and we might be unable to compete successfully against new entrants or established

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

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

We, through Citius Oncology, 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 for LYMPHIR.

However, our prior experience and our third party arrangements might not translate into the successful development and launch of any

of our product candidates.

Mergers, acquisitions, joint ventures and similar events may also significantly increase the competition we

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 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.

a result of these factors, our competitors may obtain regulatory approval of their products more rapidly than we can or may obtain patent

protection or other intellectual property rights that limit our ability to develop or commercialize our product candidates.

Our competitors

might also develop products that are more effective, more useful and less costly than ours and might also be more successful in manufacturing

and marketing their products.

In addition, our competitors might be more effective than us in commercializing their products and as a

result, our business and prospects might be materially harmed.

and patients might not accept and use any of our product candidates for which regulatory approval is obtained.

if the FDA approves one of our product candidates, physicians and patients might not accept and use it.

Acceptance and use of our approved

product candidates will depend upon a number of factors, including:

perceptions by members

of the health care community, including physicians, about the safety and effectiveness of any of our product candidates;

perceptions by members

of the health care community, including physicians, about the use of our product candidates versus the then respective standards

of care for the disease or problem that we seek to address with our product candidates;

cost-effectiveness of our

product candidates relative to competing products or therapies;

availability of reimbursement

for our product candidates from government or other healthcare payers;

effective marketing and

distribution efforts by us and/or our licensees and distributors, if any.

any of our current product candidates are approved, we expect their sales to generate substantially all of our revenues for the foreseeable

future, and as a result, the failure of any of these product candidates to find market acceptance would harm our business and would require

us to seek additional financing.

ability to generate product revenues will be diminished if any of our product candidates that may be approved sell for inadequate prices

or patients are unable to obtain adequate levels of reimbursement.

ability to commercialize our product candidates, alone or with collaborators, will depend in part on the extent to which reimbursement

will be available from:

government and health administration

private health maintenance

organizations and health insurers;

other healthcare payers.

Significant uncertainty exists as to the reimbursement

status of newly approved healthcare products.

Healthcare payers, including Medicare, are challenging the prices charged for medical products

and services.

Government and other healthcare payers increasingly attempt to contain healthcare costs by limiting both coverage and the

level of reimbursement for drugs.

Even if our product candidates are approved by the FDA, insurance coverage might not be available, and

reimbursement levels might be inadequate, to cover our products.

If government and other healthcare payers do not provide adequate coverage

and reimbursement levels for our products, once approved, market acceptance of such products could be reduced.

We cannot predict whether

federal or state legislation will be passed that may impact reimbursement policies nor what the impact of any such legislation would be

on the healthcare industry in general or on our business specifically.

Health administration authorities in countries

other than the U.S.

may not provide reimbursement for our products at rates sufficient for us to achieve profitability, or at all.

the U.S., these countries have considered health care reform proposals and could materially alter their government-sponsored health care

programs by reducing reimbursement rates.

Any reduction in reimbursement rates under Medicare or foreign health care programs could negatively

affect the pricing of our product candidates.

If we are not able to charge a sufficient amount for our product candidates, then our margins

and our profitability will be adversely affected.

We are and will be dependent on third-party

contract research organizations to conduct all of our clinical trials.

We are and will be dependent on third-party research

organizations to conduct all of our clinical trials with respect to our product candidates, including any candidates that we may develop

in the future.

If we are unable to obtain any necessary testing services on acceptable terms, we may not complete our product development

efforts in a timely or cost-effective manner or at all.

If we rely on third parties for human trials, we may lose some control over these

activities and become too dependent upon these parties.

These third parties may not complete testing activities on schedule or when we

We may not be able to secure and maintain suitable research organizations to conduct our human trials.

We are responsible

for confirming that each of our clinical trials is conducted in accordance with the trial’s general plan and protocol.

the FDA and foreign regulatory agencies require us to comply with regulations and standards, commonly referred to as good clinical practices,

for conducting, recording, and reporting the results of clinical trials to assure that data and reported results are credible and accurate

and that the trial participants are adequately protected.

Our reliance on third parties does not relieve us of these responsibilities

and requirements.

If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected

deadlines, if the third parties need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure

to adhere to our clinical protocols or regulatory requirements or for other reasons, our preclinical development activities or clinical

trials may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval for any of our product

We rely exclusively on third parties to

formulate and manufacture our product candidates.

We do not have and do not intend to establish

our own manufacturing facilities.

Consequently, we lack the physical plant to formulate and manufacture our product candidates, which

are currently being manufactured entirely by commercial third-party manufacturers.

If any product candidate we might develop or acquire

in the future receives FDA approval, we will rely on one or more third-party contractors to manufacture our products.

If, for any reason,

we become unable to rely on our current source or any future source or sources to manufacture our 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 do identify.

If we are unable to secure

and maintain third-party manufacturing capacity, the development and sales of our product candidates and our financial performance might

be materially and adversely affected.

In addition, before any of our collaborators can

begin to commercially manufacture our product candidates, each must obtain regulatory approval of the manufacturing facility and process.

Manufacturing of drugs for clinical and commercial purposes must comply with the FDA’s good manufacturing practice, or cGMP, and

applicable non-U.S.

uncertainty exists as to the reimbursement status of newly approved healthcare products.

Healthcare payers, including Medicare, are challenging

the prices charged for medical products and services.

Government and other healthcare payers increasingly attempt to contain healthcare

costs by limiting both coverage and the level of reimbursement for drugs.

Even if our product candidates are approved by the FDA, insurance

coverage might not be available, and reimbursement levels might be inadequate, to cover our products.

If government and other healthcare

payers do not provide adequate coverage and reimbursement levels for our products, once approved, market acceptance of such products

could be reduced.

We cannot predict whether federal or state legislation will be passed that may impact reimbursement policies nor what

the impact of any such legislation would be on the healthcare industry in general or on our business specifically.

are actively engaged with CMS in order to obtain the necessary coverage to facilitate reimbursement for LYMPHIR.

However, we can offer

no assurance as to any reimbursement coverage.

administration authorities in countries other than the U.S.

may not provide reimbursement for our products at rates sufficient for us

to achieve profitability, or at all.

Like the U.S., these countries have considered health care reform proposals and could materially

alter their government-sponsored health care programs by reducing reimbursement rates.

Any reduction in reimbursement rates under Medicare

or foreign health care programs could negatively affect the pricing of our approved product candidates.

If we are not able to charge

a sufficient amount for our approved product candidates, then our margins and our profitability will be adversely affected.

reform measures could hinder or prevent our product candidates’ commercial success.

have been, and the Company expects there will continue to be, a number of legislative and regulatory changes to health care systems in

and abroad that could impact its ability to sell its products profitably.

government and other governments have shown

significant interest in pursuing healthcare reform.

For example, in 2010, the Patient Protection and Affordable Care Act (“ACA”)

was enacted, which substantially changed the way healthcare is financed by both governmental and private insurers in the U.S.

reform measures like the ACA may adversely impact the pricing of healthcare products and services in the U.S.

or internationally and

the amount of reimbursement available from governmental agencies or other third-party payors.

its enactment, there have been ongoing efforts to modify the ACA and its implementing regulations.

The Company cannot predict what healthcare

reform measures may be enacted by the U.S.

Congress or implemented by any administration or how such efforts would impact its business.

Litigation and legislation over the ACA and other healthcare reform measures are likely to continue, with unpredictable and uncertain

Further, additional legislative changes to and regulatory changes under or related to the ACA remain possible.

addition, other legislative changes have been proposed and adopted in the U.S.

since the ACA was enacted that impact government health

Moreover, payment methodologies may be subject to changes in healthcare legislation and regulatory initiatives.

CMS may develop new payment and delivery models, such as bundled payment models.

In addition, recently there has been heightened governmental

scrutiny over the manner in which manufacturers set prices for their marketed products, which has resulted in several U.S.

Congressional

inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to drug pricing,

reduce the cost of prescription drugs under government payor programs, and review the relationship between pricing and manufacturer patient

While any proposed measures may require authorization through additional legislation to become effective, the U.S.

and the Biden administration have each indicated that it will continue to seek new legislative and/or administrative measures to control

The Company expects that additional U.S.

federal healthcare reform measures will be adopted in the future, any of which could

limit the amounts that federal health care programs and commercial payers will pay for healthcare products and services, which could

result in reduced demand for our product candidates, if approved, or additional pricing pressures.

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 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 its 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 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.

Company cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative

action in the U.S.

If the Company or any third parties it may engage are slow or unable to adapt to changes in existing requirements

or the adoption of new requirements or policies, or if the Company or such third parties are not able to maintain regulatory compliance,

any approved product candidates may lose any regulatory approval that may have been obtained and we may not achieve or sustain profitability.

are and will be dependent on third-party contract research organizations to conduct all of our clinical trials.

are and will be dependent on third-party research organizations to conduct all of our clinical trials with respect to our product candidates,

including any candidates that we may develop in the future.

If we are unable to obtain any necessary testing services on acceptable terms,

we may not complete our product development efforts in a timely or cost-effective manner or at all.

If we rely on third parties for human

trials, we may lose some control over these activities and become too dependent upon these parties.

These third parties may not complete

testing activities on schedule or when we so request.

We may not be able to secure and maintain suitable research organizations to conduct

our human trials.

We are responsible for confirming that each of our clinical trials is conducted in accordance with the trial’s

general plan and protocol.

Moreover, the FDA and foreign regulatory agencies require us to comply with regulations and standards, commonly

referred to as good clinical practices, for conducting, recording, and reporting the results of clinical trials to assure that data and

reported results are credible and accurate and that the trial participants are adequately protected.

Our reliance on third parties does

not relieve us of these responsibilities and requirements.

If these third parties do not successfully carry out their contractual duties

or regulatory obligations or meet expected deadlines, if the third parties need to be replaced or if the quality or accuracy of the data

they obtain is compromised due to the failure to adhere to our clinical protocols or regulatory requirements or for other reasons, our

preclinical development activities or clinical trials may be extended, delayed, suspended or terminated, and we may not be able to obtain

regulatory approval for any of our product candidates.

rely exclusively on third parties to formulate and manufacture our product candidates.

do not have and do not intend to establish our own manufacturing facilities.

Consequently, we lack the physical plant to formulate and

manufacture our product candidates, which are currently being manufactured entirely by commercial third-party manufacturers.

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.

If LYMPHIR, or any other product candidate we develop

or might acquire in the future receives FDA approval, we will rely on one or more third-party contractors to manufacture our products.

If, for any reason, we become unable to rely on our current source or any future source or sources to manufacture our 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 do

If we are unable to secure and maintain third-party manufacturing capacity, the development and sales of our product candidates

and our financial performance might be materially and adversely affected.

addition, before any of our collaborators can begin to commercially manufacture our product candidates, each must obtain regulatory approval

of the manufacturing facility and process.

Manufacturing of drugs for clinical and commercial purposes must comply with the FDA’s

cGMP and applicable non-U.S.

regulatory requirements.

The cGMP requirements govern quality control and documentation policies and procedures.

with cGMP and non-U.S.

regulatory requirements will require that we expend time, money, and effort in production, recordkeeping, and quality

control to assure that the product meets applicable specifications and other requirements.

Our contracted manufacturing facilities must

also pass a pre-approval inspection prior to FDA approval.

Failure to pass a pre-approval inspection might significantly delay FDA approval

of our product candidates.

If any of our collaborators fails to comply with these requirements, we would be subject to possible regulatory

action which could limit the jurisdictions in which we are permitted to sell our product candidates.

As a result, our business, financial

condition, and results of operations might be materially harmed.

Our reliance on a limited number of third-party

manufacturers exposes us to the following risks:

We might be unable to identify manufacturers for commercial supply on acceptable terms or at all because the number of potential manufacturers is limited and the FDA must approve any replacement contractor.

Complying with cGMP and non-U.S.

regulatory requirements will require that we expend time, money, and effort in production, recordkeeping,

and quality control to assure that the product meets applicable specifications and other requirements.

Our contracted manufacturing facilities

must also pass a pre-approval inspection prior to FDA approval.

Failure to pass a pre-approval inspection might significantly delay FDA

approval of our product candidates.

If any of our collaborators fails to comply with these requirements, we would be subject to possible

regulatory action which could limit the jurisdictions in which we are permitted to sell our product candidates.

As a result, our business,

financial condition, and results of operations might be materially harmed.

reliance on a limited number of third-party manufacturers exposes us to the following risks:

We might be unable to identify

manufacturers for commercial supply on acceptable terms or at all because the number of potential manufacturers is limited and the

FDA must approve any replacement contractor.

This approval would generally require compliance inspections.

In addition, a new manufacturer would have to be educated in, or develop substantially equivalent processes for, production of our product candidates after receipt of FDA approval, if any;

Our third-party manufacturers might be unable to formulate and manufacture our product candidates in the volume and of the quality required to meet our clinical and commercial needs, if any;

Our contract manufacturers might not perform as agreed or might not remain in the contract manufacturing business for the time required to supply our clinical trials or to successfully produce, store and distribute our product candidates for commercialization;

Currently, the contract manufacturer for our clinical supplies is foreign, which increases the risk of shipping delays, adds the risk of import restrictions, and adds the risk of political and environmental uncertainties that might affect those countries;

Drug manufacturers are subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP and other government regulations and corresponding foreign standards.

We do not have control over third-party manufacturers’ compliance with these regulations and standards;

If any third-party manufacturer makes improvements in the manufacturing process for our product candidates, we might not own, or might have to share, the intellectual property rights to the innovation with our licensors;

Operations of our third-party manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including a bankruptcy of the manufacturer or supplier or a natural disaster or a pandemic such as COVID-19;

We might compete with other companies for access to these manufacturers’ facilities and might be subject to manufacturing delays if the manufacturers give other clients higher priority than us.

Each of these risks could delay our clinical trials

or the approval, if any, of our product candidates by the FDA or any foreign regulatory agency or the commercialization of our product

candidates 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.

If we materially breach or default under

any of our license agreements, the licensor party to such agreement will have the right to terminate the license agreement, which termination

may materially harm our business.

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, various diligence, milestone payment, royalty and other obligations on us.

For example, under our current license agreements,

we are required to use commercially reasonable diligence to develop and commercialize a product and to satisfy specified payment obligations.

If we fail to comply with our obligations under our current license agreements or any future license agreements with any party, or we

are subject to a bankruptcy, the licensor may have the right to terminate the license, in which event we would not be able to market products

covered by the license.

Each of our license agreements provides the licensor with a right to terminate the license agreement for our material

breach or default under the agreement, including the failure to make any required milestone or other payments.

Should the licensor under

any of our license agreements exercise such a termination right, we would lose our right to the intellectual property under the respective

license agreement, which loss may materially harm our business.

Any termination, or breach by, or conflict

with our strategic partners could harm our business .

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 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.

In addition, a new manufacturer

would have to be educated in, or develop substantially equivalent processes for, production of our product candidates after receipt

of FDA approval, if any;

Our third-party manufacturers

might be unable to formulate and manufacture our product candidates in the volume and of the quality required to meet our clinical

and commercial needs, if any;

Our contract manufacturers

might not perform as agreed or might not remain in the contract manufacturing business for the time required to supply our clinical

trials or to successfully produce, store and distribute our product candidates for commercialization;

Currently, the contract

manufacturer for our clinical supplies is foreign, which increases the risk of shipping delays, adds the risk of import restrictions,

and adds the risk of political and environmental uncertainties that might affect those countries;

Drug manufacturers are

subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP

and other government regulations and corresponding foreign standards.

We do not have control over third-party manufacturers’

compliance with these regulations and standards;

If any third-party manufacturer

makes improvements in the manufacturing process for our product candidates, we might not own, or might have to share, the intellectual

property rights to the innovation with our licensors;

Operations of our third-party

manufacturers or suppliers could be disrupted by conditions unrelated to our business or operations, including a bankruptcy of the

manufacturer or supplier or a natural disaster or a pandemic such as COVID-19;

We might compete with other

companies for access to these manufacturers’ facilities and might be subject to manufacturing delays if the manufacturers give

other clients higher priority than us.

of these risks could delay our clinical trials or the approval, if any, of our product candidates by the FDA or any foreign regulatory

agency or the commercialization of our product candidates 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.

we materially breach or default under any of our license agreements, the licensor party to such agreement will have the right to terminate

the license agreement, which termination may materially harm our business.

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, various diligence, milestone payment, royalty and other obligations on us.

For example, under our current license agreements, we are required to use commercially reasonable diligence to develop and commercialize

a product and to satisfy specified payment obligations for various developmental and regulatory milestones.

If we fail to comply with

our obligations under our current license agreements or any future license agreements with any party, or we are subject to a bankruptcy,

the licensor may have the right to terminate the license, in which event we would not be able to market products covered by the license.

Each of our license agreements provides the licensor with a right to terminate the license agreement for our material breach or default

under the agreement, including the failure to make any required milestone or other payments.

Should the licensor under any of our license

agreements exercise such a termination right, we would lose our right to the intellectual property under the respective license agreement,

which loss may materially harm our business.

termination, or breach by, or conflict with our strategic partners could harm our business .

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 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.

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.

We rely on the significant experience and

specialized expertise of our executive management and other key personnel and the loss of any of our executive management or key personnel

or our inability to successfully hire their successors could harm our business.

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

expertise in our business.

Our Chief Executive Officer, Leonard Mazur, our Vice Chairman, Myron Holubiak, 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.

In addition, Matt Angel, a director of NoveCite, is serving as a technical consultant to that company and was

instrumental in the discovery and development to date of NoveCite.

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.

Holubiak, Dr.

Czuczman or Dr.

Angel, as well as any other member of our executive management or any key employees, including those

at NoveCite, could harm our ability to attract capital and develop and commercialize our product candidates.

Neither we nor NoveCite has

key man life insurance policies.

If we are unable to retain or hire additional

qualified personnel, our ability to grow our business might be harmed.

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

clinical trials.

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.

Competition for these individuals is intense,

and we cannot be certain that our search for such personnel will be successful.

Attracting and retaining qualified personnel will be critical

to our success.

In addition, we may be unable to attract and retain those qualified officers, directors and members of board committees

required to provide for effective management.

If we are unable to attract and retain qualified employees, officers and directors, the

management and operation of our business could be adversely affected.

We expect to need to increase the size of

our organization to further develop our product candidates, and we may experience difficulties in managing growth.

We will need to manage our anticipated growth

and increased operational activity, including as a result of the in-licensing of I/ONTAK in September 2021 and the continuing development

of I/ONTAK and our other product candidates.

Our personnel, systems, and facilities currently in place may not be adequate to support

this future growth.

rely on the significant experience and specialized expertise of our executive management and other key personnel and the loss of any

of our executive management or key personnel or our inability to successfully hire their successors could harm our business.

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 expertise in our business.

Our Chief Executive Officer, Leonard Mazur, our Vice Chairman,

Myron Holubiak, 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

Holubiak 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 product candidates.

we nor NoveCite and Citius Oncology has key man life insurance policies.

we are unable to retain or hire additional qualified personnel, our ability to grow our business might be harmed.

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 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.

Following the Business Combination, pursuant to an 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 planned launch 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.

Combined Company’s board members are anticipated to also be directors of Citius Pharma, and the executive officers are also employees

of Citius Pharma pursuant to the shared services agreement.

Citius Oncology expects to rely on these individuals and the other expertise

and personnel made available under the shared services agreement for the foreseeable future.

for qualified directors, officers and employees is intense, and we cannot be certain that our retention of these individuals or any search

for additional such personnel will be successful.

Attracting and retaining qualified personnel will be critical to our success.

we may be unable to attract and retain those qualified officers, directors and members of board committees required to provide for effective

If we are unable to attract and retain qualified employees, officers and directors, the management and operation of our business

could be adversely affected.

expect to need to increase the size of our organization to further develop our product candidates, and we may experience difficulties

in managing growth.

will need to manage our anticipated growth and increased operational activity, including as a result of the continuing development of

LYMPHIR and 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:

manage our research and development activities and our regulatory trials effectively;

attract and motivate sufficient numbers of talented employees or consultants;

manage our internal development efforts effectively while complying with our contractual obligations to licensors, licensees, contractors, collaborators and other third parties;

develop internal sales and marketing capabilities or establish collaborations with third parties with such capabilities;

commercialize our product candidates;

improve our operational, financial and management controls, reporting systems and procedures.

This planned future growth could place a strain

on our administrative and operational infrastructure and may require our management to divert a disproportionate amount of its attention

away from our day-to-day activities.

We may not be able to effectively manage the expansion of our operations or recruit and train additional

qualified personnel, which may result in weaknesses in our infrastructure, and give rise to operational mistakes, loss of business opportunities,

loss of employees and consultants and reduced productivity among remaining employees and consultants.

We may not be able to make improvements

to our management information and control systems in an efficient or timely manner and may discover deficiencies in existing systems and

If our management is unable to effectively manage our expected growth, our expenses may increase more than expected, our ability

to generate or increase our revenues could be reduced and we may not be able to implement our business strategy.

Our future financial

performance and our ability to compete effectively will depend, in part, on our ability to effectively manage any future growth.

We plan to grow and develop our business

through acquisitions of or investment in new or complementary businesses, products or technologies, and the failure to manage these acquisitions

or investments, or the failure to integrate them with our existing business, could have a material adverse effect on us.

Our business strategy is based on the acquisition

of additional product candidates.

This is evidenced by our in-licensing of NoveCite in October 2020 and I/ONTAK in September 2021.

might consider opportunities to acquire or invest in other technologies, products and businesses that might enhance our capabilities or

complement our current product candidates.

Potential and completed acquisitions and strategic investments involve numerous risks, including

potential problems or issues associated with the following:

assimilating the acquired technologies, products, or business operations;

maintaining uniform standards, procedures, controls, and policies;

unanticipated costs associated with the acquisition or investment;

diversion of our management’s attention from our preexisting business;

maintaining or obtaining the necessary regulatory approvals or complying with regulatory standards;

adverse effects on existing business operations.

We have no current commitments with respect to

any acquisition or investment in other technologies or businesses.

We do not know if we will identify other suitable acquisitions, whether

we will be able to successfully complete any acquisitions, or whether we will be able to successfully integrate any acquired product,

technology or business into our business operations or retain key personnel, suppliers, or collaborators.

Our ability to successfully develop our business

through acquisitions including the recent in-licensing of I/ONTAK, will depend on our ability to identify, negotiate, complete, and integrate

suitable target businesses or technologies and obtain any necessary financing.

These efforts could be expensive and time consuming and

might disrupt our ongoing operations.

If we are unable to efficiently integrate any acquired business, technology or product into our

business operations, our business and financial condition might be adversely affected.

Conflicts of interest may arise from our

relationship with NoveCite.

As of November 30, 2022, we beneficially owned

75% of the voting power of NoveCite’s outstanding common stock;

Novellus owns the other 25%.

As a result of our partial ownership,

our relationship with NoveCite could give rise to certain conflicts of interest that could have an impact on our and NoveCite’s

respective research and development programs, business opportunities, and operations generally.

Even though we utilize different technologies than NoveCite, we could find ourselves in competition with it for research scientists, financing and other resources, licensing, manufacturing, and distribution arrangements.

NoveCite will engage for its own business in research and product development programs, investments, and business ventures, and we will not be entitled to participate or to receive an interest in those programs, investments, or business ventures other than to the extent as a stockholder in NoveCite.

NoveCite will not be obligated to present any particular research and development, investment, or business opportunity to us, even if the opportunity would be within the scope of our research and development plans or programs, business objectives, or investment policies.

These opportunities may include, for example, opportunities to acquire businesses or assets, including but not limited to patents and other intellectual property that could be used by us or by NoveCite.

Each conflict of interest will be resolved by our respective boards of directors in keeping with their fiduciary duties and such policies as they may implement from time to time.

There is overlap among our board of directors, senior management and research staffs and that of NoveCite.

Two of our directors, Myron Holubiak and Leonard Mazur, also serve as directors of NoveCite.

In addition, Myron Holubiak serves as Chief Executive Officer and Jaime Bartushak serves as Chief Financial Officer of both Citius and NoveCite.

These overlapping positions could interfere with the duties owed by such individuals to Citius.

Risks Related to Our Regulatory and Legal Environment

We might not obtain the necessary U.S.

foreign regulatory approvals to commercialize any product candidates.

We cannot assure you that we will receive the

approvals necessary to commercialize for sale any product candidates we are currently developing or that we may acquire or seek to develop

in the future.

manage our research and

development activities and our regulatory trials effectively;

attract and motivate sufficient

numbers of talented employees or consultants;

manage our internal development

efforts effectively while complying with our contractual obligations to licensors, licensees, contractors, collaborators and other

third parties;

develop internal sales

and marketing capabilities or establish collaborations with third parties with such capabilities;

commercialize our product

improve our operational,

financial and management controls, reporting systems and procedures.

planned future growth could place a strain on our administrative and operational infrastructure and may require our management to divert

a disproportionate amount of its attention away from our day-to-day activities.

We may not be able to effectively manage the expansion

of our operations or recruit and train additional qualified personnel, which may result in weaknesses in our infrastructure, and give

rise to operational mistakes, loss of business opportunities, loss of employees and consultants and reduced productivity among remaining

employees and consultants.

We may not be able to make improvements to our management information and control systems in an efficient

or timely manner and may discover deficiencies in existing systems and controls.

If our management is unable to effectively manage our

expected growth, our expenses may increase more than expected, our ability to generate or increase our revenues could be reduced and

we may not be able to implement our business strategy.

Our future financial performance and our ability to compete effectively will depend,

in part, on our ability to effectively manage any future growth.

plan to grow and develop our business through acquisitions of or investment in new or complementary businesses, products or technologies,

and the failure to manage these acquisitions or investments, or the failure to integrate them with our existing business, could have

a material adverse effect on us.

business strategy is based on the acquisition of additional product candidates.

This is evidenced by our in-licensing of NoveCite in

October 2020 and LYMPHIR in September 2021.

We might consider opportunities to acquire or invest in other technologies, products and

businesses that might enhance our capabilities or complement our current product candidates.

Potential and completed acquisitions and

strategic investments involve numerous risks, including potential problems or issues associated with the following:

assimilating the acquired

technologies, products, or business operations;

maintaining uniform standards,

procedures, controls, and policies;

unanticipated costs associated

with the acquisition or investment;

diversion of our management’s

attention from our preexisting business;

maintaining or obtaining

the necessary regulatory approvals or complying with regulatory standards;

adverse effects on existing

business operations.

have no current commitments with respect to any acquisition or investment in other technologies or businesses.

We do not know if we will

identify other suitable acquisitions, whether we will be able to successfully complete any acquisitions, or whether we will be able to

successfully integrate any acquired product, technology or business into our business operations or retain key personnel, suppliers,

or collaborators.

ability to successfully develop our business through acquisitions including the in-licensing of LYMPHIR, will depend on our ability to

identify, negotiate, complete, and integrate suitable target businesses or technologies and obtain any necessary financing.

These efforts

could be expensive and time consuming and might disrupt our ongoing operations.

If we are unable to efficiently integrate any acquired

business, technology or product into our business operations, our business and financial condition might be adversely affected.

of interest may arise from our relationship with NoveCite.

of September 30, 2023, we beneficially owned 75% of the voting power of NoveCite’s outstanding common stock;

Novellus owns the

As a result of our partial ownership, our relationship with NoveCite could give rise to certain conflicts of interest that

could have an impact on our and NoveCite’s respective research and development programs, business opportunities, and operations

Even though we utilize

different technologies than NoveCite, we could find ourselves in competition with it for research scientists, financing and other

resources, licensing, manufacturing, and distribution arrangements.

NoveCite will engage for

its own business in research and product development programs, investments, and business ventures, and we will not be entitled to

participate or to receive an interest in those programs, investments, or business ventures other than to the extent as a stockholder

NoveCite will not be obligated to present any particular research and development, investment, or business opportunity

to us, even if the opportunity would be within the scope of our research and development plans or programs, business objectives,

or investment policies.

These opportunities may include, for example, opportunities to acquire businesses or assets, including but

not limited to patents and other intellectual property that could be used by us or by NoveCite.

Each conflict of interest

will be resolved by our respective boards of directors in keeping with their fiduciary duties and such policies as they may implement

from time to time.

There is overlap among

our board of directors, senior management and research staffs and that of NoveCite.

Two of our directors, Myron Holubiak and Leonard

Mazur, also serve as directors of NoveCite.

In addition, Myron Holubiak serves as Chief Executive Officer and Jaime Bartushak serves

as Chief Financial Officer of both Citius Pharma and NoveCite.

These overlapping positions could interfere with the duties owed by

such individuals to Citius Pharma.

Related to Our Regulatory and Legal Environment

might not obtain the necessary U.S.

or foreign regulatory approvals to commercialize any product candidates.

cannot assure you that we will receive the approvals necessary to commercialize for sale any product candidates we are currently developing

or that we may acquire or seek to develop in the future.

We will need FDA approval to commercialize our product candidates in the U.S.

In order to obtain FDA approval of any product

candidate, we must submit to the FDA an NDA or a BLA demonstrating that the product candidate is safe for humans and effective for its

intended use.

This demonstration requires significant research, pre-clinical studies, and clinical trials.

Satisfaction of the FDA’s

regulatory requirements typically takes many years, depends upon the type, complexity and novelty of the product candidate and requires

substantial resources for research, development and testing.

We cannot predict whether our research and clinical approaches will result

in products that the FDA considers safe for humans and effective for their indicated uses.

The FDA has substantial discretion in the product

approval process and might require us to conduct additional pre-clinical and clinical testing, perform post-marketing studies or otherwise

limit or impose conditions on any additional approvals we obtain.

The approval process might also be delayed by changes in government

regulation, future legislation or administrative action or changes in FDA policy that occur prior to or during our product candidate’s

regulatory review.

In order to obtain FDA approval of any product candidate, we must submit to the FDA an NDA or a BLA demonstrating that the product candidate

is safe for humans and effective for its intended use.

This demonstration requires significant research, pre-clinical studies, and clinical

Satisfaction of the FDA’s regulatory requirements typically takes many years, depends upon the type, complexity and novelty

of the product candidate and requires substantial resources for research, development and testing.

We cannot predict whether our research

and clinical approaches will result in products that the FDA considers safe for humans and effective for their indicated uses.

has substantial discretion in the product approval process and might require us to conduct additional pre-clinical and clinical testing,

perform post-marketing studies or otherwise limit or impose conditions on any additional approvals we obtain.

The approval process might

also be delayed by changes in government regulation, future legislation or administrative action or changes in FDA policy that occur

prior to or during our product candidate’s regulatory review.

Delays in obtaining regulatory approvals might:

delay commercialization of, and our ability to derive product revenues from, our product candidates;

impose costly procedures on us;

diminish any competitive advantages that we might otherwise enjoy.

Even if we comply with all FDA requests, the 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,

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 without saleable products, and therefore without any potential sources

of revenues, until another product candidate could be developed or obtained and successfully developed, approved and commercialized.

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.

Following any regulatory approval of any

product candidate, we will be subject to ongoing regulatory obligations and restrictions, which may result in significant expense and

limit our ability to commercialize our other product candidates.

If one of our product candidates 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 products or to whom and how we may distribute an approved

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, or 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 be required as a condition of approval to further substantiate safety or efficacy, or to investigate specific issues of interest

to the regulatory authority.

delay commercialization

of, and our ability to derive product revenues from, our product candidates;

impose costly procedures

diminish any competitive

advantages that we might otherwise enjoy.

if we comply with all FDA requests, the 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, 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.

to obtain FDA approval of one or more of our product candidates could severely undermine our business by leaving us without saleable

products, and therefore without any potential sources of revenues, 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.

any regulatory approval of any product candidate, we will be subject to ongoing regulatory obligations and restrictions, which may result

in significant expense and limit our ability to commercialize our other product candidates.

one of our product candidates 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 products

or to whom and how we may distribute an approved product.

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

Potentially costly post-marketing clinical studies 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.

Manufacturers of pharmaceutical products and their

facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP

regulations, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of

records and documentation.

Manufacturers

of pharmaceutical products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory

authorities for compliance with cGMP regulations, which include requirements relating to quality control and quality assurance as well

as the corresponding maintenance of records and documentation.

Similar regulatory programs exist in foreign jurisdictions.

Further, regulatory agencies must approve these

manufacturing facilities before they can be used to manufacture our future approved products, if any, and these facilities are subject

to ongoing regulatory inspections.

In addition, regulatory agencies subject a pharmaceutical product, its manufacturer and the manufacturer’s

facilities to continual review and inspections.

The subsequent discovery of previously unknown problems with a product, including adverse

events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, may result in restrictions

on the marketing of that product, up to and including, withdrawal of the product from the market.

If the manufacturing facilities of our

suppliers fail to comply with applicable regulatory requirements, it could result in regulatory action and additional costs to us.

to comply with applicable FDA and other regulatory requirements may, either before or after product approval, if any, subject our company

to administrative or judicially imposed sanctions.

In addition, the law or regulatory policies governing

pharmaceutical products may change.

New statutory requirements may be enacted or additional regulations may be enacted that could prevent

or delay regulatory approval of our product candidates.

Contract manufacturing organizations, or CMOs, and their vendors or suppliers

Further, regulatory

agencies must approve these manufacturing facilities before they can be used to manufacture our future approved products, if any, and

these facilities are subject to ongoing regulatory inspections.

In addition, regulatory agencies subject a pharmaceutical product, its

manufacturer and the manufacturer’s facilities to continual review and inspections.

The subsequent discovery of previously unknown

problems with a product, including adverse events of unanticipated severity or frequency, or problems with the facility where the product

is manufactured, may result in restrictions on the marketing of that product, up to and including, withdrawal of the product from the

If the manufacturing facilities of our suppliers fail to comply with applicable regulatory requirements, it could result in regulatory

action and additional costs to us.

Failure to comply with applicable FDA and other regulatory requirements may, either before or after

product approval, if any, subject our company to administrative or judicially imposed sanctions.

addition, the law or regulatory policies governing pharmaceutical products may change.

New statutory requirements may be enacted or additional

regulations may be enacted that could prevent or delay regulatory approval of our product candidates.

CMOs and their vendors or suppliers

may also face changes in regulatory requirements from governmental agencies in the U.S.

3 unchanged sentences

or elsewhere.

If we are not able to maintain regulatory compliance, we might not be permitted to market any future approved products and

our business could suffer.

We could be forced to pay substantial damage

awards if product liability claims that may be brought against us are successful.

The use of any of our product candidates in pre-clinical

and clinical trials, and the sale of any approved products, may expose us to liability claims and financial losses resulting from the

use or sale of our product candidates.

We have obtained limited product liability insurance coverage for our pre-clinical and clinical

trials of $5.0 million per occurrence and in the aggregate, subject to a deductible of $25,000 per bodily injury and property damage occurrence,

and a medical expense per person limit of $25,000.

There can be no assurance that our existing insurance coverage will extend to any other

product candidates in the future.

Any product liability insurance coverage may not be sufficient to satisfy all liabilities resulting

from product liability claims.

A successful claim may prevent us from obtaining adequate product liability insurance in the future on

commercially desirable terms, if at all.

Even if a claim is not successful, defending such a claim would be time consuming and expensive,

may damage that product’s and our reputations in the marketplace, and would likely divert management’s attention, any of which

could have a material adverse effect on our Company.

Risks Related to Our Intellectual Property

Our business depends on protecting our intellectual

Without the intellectual property rights we have

already obtained, as well as the further rights we are also pursuing, our competitors would have opportunity to take advantage of our

research and development efforts to develop competing products.

Our success, competitive position, and future revenues, if any, depend

in part on our ability and the abilities of our licensors to obtain and maintain patent protection for our product candidates, methods,

processes and other technologies, to preserve our trade secrets, to prevent third parties from infringing on our proprietary rights and

to operate without infringing the proprietary rights of third parties.

We anticipate filing additional patent applications both in the

If we are not able to maintain regulatory compliance, we might not be permitted to market any future approved products

and our business could suffer.

could be forced to pay substantial damage awards if product liability claims that may be brought against us are successful.

use of any of our product candidates in pre-clinical and clinical trials, and the sale of any approved products, may expose us to liability

claims and financial losses resulting from the use or sale of our product candidates.

We have obtained limited product liability insurance

coverage for our pre-clinical and clinical trials of $5.0 million per occurrence and in the aggregate, subject to a deductible of $25,000

per bodily injury and property damage occurrence, and a medical expense per person limit of $25,000.

There can be no assurance that our

existing insurance coverage will extend to any other product candidates in the future.

Any product liability insurance coverage may not

be sufficient to satisfy all liabilities resulting from product liability claims.

A successful claim may prevent us from obtaining adequate

product liability insurance in the future on commercially desirable terms, if at all.

Even if a claim is not successful, defending such

a claim would be time consuming and expensive, may damage that product’s and our reputations in the marketplace, and would likely

divert management’s attention, any of which could have a material adverse effect on our Company.

Related to Our Intellectual Property

business depends on protecting our intellectual property.

the intellectual property rights we have already obtained, as well as the further rights we are also pursuing, our competitors would

have opportunity to take advantage of our research and development efforts to develop competing products.

Our success, competitive position,

and future revenues, if any, depend in part on our ability and the abilities of our licensors to obtain and maintain patent protection

for our product candidates, methods, processes and other technologies, to preserve our trade secrets, to prevent third parties from infringing

on our proprietary rights and to operate without infringing the proprietary rights of third parties.

We anticipate filing additional

patent applications both in the U.S.

and in other countries, as appropriate.

However, the patent process is subject to numerous risks and uncertainties, and there can

be no assurance that we will be successful in protecting our product candidates by obtaining and defending patents.

These risks and uncertainties

include the following:

Our patent rights might be challenged, invalidated, or circumvented, or otherwise might not provide any competitive advantage;

Our competitors, many of which have substantially greater resources than we do and many of which might make significant investments in competing technologies, might seek, or might already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use, and sell our product candidates either in the U.S.

However, the patent process is subject to numerous risks

and uncertainties, and there can be no assurance that we will be successful in protecting our product candidates by obtaining and defending

These risks and uncertainties include the following:

Our patent rights might

be challenged, invalidated, or circumvented, or otherwise might not provide any competitive advantage;

Our competitors, many of

which have substantially greater resources than we do and many of which might make significant investments in competing technologies,

might seek, or might already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use, and sell

our product candidates either in the U.S.

or in international markets;

Countries other than the U.S.

Countries other than the

might have less restrictive patent laws than those upheld by U.S.

courts, allowing foreign competitors the ability to exploit these laws to create, develop, and market competing products;

As a matter of public policy regarding worldwide health concerns, there might be significant pressure on the U.S.

government and other international governmental bodies to limit the scope of patent protection both inside and outside the U.S.

courts, allowing foreign competitors the ability to exploit

these laws to create, develop, and market competing products;

As a matter of public policy

regarding worldwide health concerns, there might be significant pressure on the U.S.

government and other international governmental

bodies to limit the scope of patent protection both inside and outside the U.S.

for product candidates that prove successful.

In addition, the U.S.

Patent and Trademark Office

and patent offices in other jurisdictions have often required that patent applications concerning pharmaceutical and/or biotechnology-related

inventions be limited or narrowed substantially to cover only the specific innovations exemplified in the patent application, thereby

limiting the scope of protection against competitive challenges.

Thus, even if we or our licensors are able to obtain patents, the patents

might be substantially narrower than anticipated.

Because the time period from filing a patent application

to the issuance, if ever, of the patent is often more than three years and because any regulatory approval and marketing for a pharmaceutical

product often occurs several years after the related patent application is filed, the resulting market exclusivity afforded by any patent

on our drug candidates and technologies will likely be substantially less than 20 years.

addition, the USPTO and patent offices in other jurisdictions have often required that patent applications concerning pharmaceutical

and/or biotechnology-related inventions be limited or narrowed substantially to cover only the specific innovations exemplified in the

patent application, thereby limiting the scope of protection against competitive challenges.

Thus, even if we or our licensors are able

to obtain patents, the patents might be substantially narrower than anticipated.

the time period from filing a patent application to the issuance, if ever, of the patent is often more than three years and because any

regulatory approval and marketing for a pharmaceutical product often occurs several years after the related patent application is filed,

the resulting market exclusivity afforded by any patent on our drug candidates and technologies will likely be substantially less than

For example, the U.S.

patent on the original

Mino-Lok composition expires in June 2024, and the U.S.

patent on the stabilized Mino-Lok composition expires in November 2036.

we anticipate significant additional time before FDA approval could be obtained, the maximum market exclusivity afforded by the statutory

term of the currently issued patents would be less than 17 years.

In the United States, the European Union and some other jurisdictions,

patent term extensions are available for certain delays in either patent office proceedings or marketing and regulatory approval processes.

However, due to the specific requirements for obtaining these extensions, there is no assurance that our patents will be granted extensions

even if we encounter significant delays in patent office proceedings or marketing and regulatory approval.

Additionally, patent law is subject to change

and varies among the U.S.

patent on the original Mino-Lok composition expires in June 2024, and the U.S.

patent on the stabilized

Mino-Lok composition expires in November 2036.

Since we anticipate significant additional time before FDA approval could be obtained,

the maximum market exclusivity afforded by the statutory term of the currently issued patents would be less than 17 years.

the European Union and some other jurisdictions, patent term extensions are available for certain delays in either patent office proceedings

or marketing and regulatory approval processes.

However, due to the specific requirements for obtaining these extensions, there is no

assurance that our patents will be granted extensions even if we encounter significant delays in patent office proceedings or marketing

and regulatory approval.

Additionally,

patent law is subject to change and varies among the U.S.

and foreign countries.

Depending on decisions by the United States Congress, the U.S.

federal courts, the USPTO

or similar authorities in foreign jurisdictions, the laws and regulations governing patents could change in unpredictable ways that may

weaken our and our licensors’ abilities to obtain new patents or to enforce existing patents that we and our licensors or partners

may obtain in the future.

Patent and other intellectual property protection

is crucial to the success of our business and prospects, and there is a substantial risk that such protections will prove inadequate.

Depending on decisions by the U.S.

Congress, the U.S.

federal courts, the USPTO or similar authorities in foreign jurisdictions, the laws and regulations governing patents could change in

unpredictable ways that may weaken our and our licensors’ abilities to obtain new patents or to enforce existing patents that we

and our licensors or partners may obtain in the future.

and other intellectual property protection is crucial to the success of our business and prospects, and there is a substantial risk that

such protections will prove inadequate.

Our business and prospects will be harmed if these protections prove insufficient.

We rely on trade secret protections through

confidentiality agreements with our employees and other parties, and the breach of these agreements could adversely affect our business

and prospects.

We rely on trade secrets, which we seek to protect,

in part, through confidentiality and non-disclosure agreements with our employees, collaborators, suppliers, and other parties.

can be no assurance that these agreements will not be breached, that we would have adequate remedies for any such breach or that our trade

secrets will not otherwise become known to or independently developed by our competitors.

We might be involved from time to time in litigation

to determine the enforceability, scope and validity of our proprietary rights.

Any such litigation could result in substantial cost and

divert management’s attention from our operations.

If we infringe the rights of third parties

we might have to forego developing and/or selling any approved products, pay damages, or defend against litigation.

If our product candidates, methods, processes,

and other technologies infringe the proprietary rights of other parties, we could incur substantial costs and we might have to:

obtain licenses, which might not be available on commercially reasonable terms, if at all;

abandon an infringing product candidate;

redesign our product candidates or processes to avoid infringement;

stop using the subject matter claimed in the patents held by others;

defend litigation or administrative proceedings which might be costly whether we win or lose, and which could result in a substantial diversion of our financial and management resources.

Any of these events could substantially harm our

earnings, financial condition, and operations.

government could have “march-in

rights” to certain of our intellectual property.

If at any time federal monies are used in support

of the research and development activities at MDACC that resulted or in the future result in certain of our issued pending U.S.

applications, the federal government retains what are referred to as “march-in rights” to patents that are granted on these

applications.

Our license agreements for Mino-Lok and Mino-Wrap each provide that in the event of such governmental funding, our rights

are subject to the government’s prior rights, if any.

In addition, the license agreements provide that we will comply with the requirements

of any agreement between MDACC and the governmental funding entity.

If applicable, this could require us to grant the U.S.

either a nonexclusive, partially exclusive, or exclusive license to the patented invention in any field of use, upon terms that are reasonable

for a particular situation.

Circumstances that could trigger march-in rights generally would be set out in the agreement between MDACC

and the funding governmental entity and could include, for example, failure to take, within a reasonable time, effective steps to achieve

practical application of the invention in a field of use, failure to satisfy the health and safety needs of the public and failure to

meet requirements of public use specified by federal regulations.

A funding governmental entity could elect to exercise these march-in

rights on their own initiative or at the request of a third party;

however, the exercise of such march-in rights has been historically

rare when the patent holder (or its licensee) is practicing the patent invention although there can be no assurance that such rights would

not be exercised.

This same risk would apply to any other license into which we enter if the licensor receives government funding for

the product candidate that is the subject of the license.

Risks Related to Our Securities

If we fail to meet the continued listing

requirements of Nasdaq it could result in a delisting of our common stock.

Our common stock is currently listed for trading

on The Nasdaq Capital Market, and the continued listing of our common stock on The Nasdaq Capital Market is subject to our compliance

with a number of listing standards.

These listing standards include the requirement for avoiding sustained losses, maintaining a minimum

level of stockholders’ equity, and maintaining a minimum stock price.

The failure to meet any listing standard would subject us

to potential loss of listing.

If our common stock were no longer listed on The

Nasdaq Capital Market, investors might only be able to trade on one of the over-the-counter markets, including the OTC Bulletin Board

® or in the Pink Sheets ® (a quotation medium operated by Pink Sheets LLC).

This would impair the liquidity of our common stock

not only in the number of shares that could be bought and sold at a given price, which might be depressed by the relative illiquidity,

but also through delays in the timing of transactions and reduction in media coverage.

In addition, we could face significant material

adverse consequences, including:

a limited availability of market quotations for our securities;

a limited amount of news and analyst coverage for us;

a decreased ability to issue additional securities or obtain additional financing in the future.

We have twice failed to meet the listing standards,

between October 2019 and January 2020 and between April 2020 and July 2020, because the closing bid price for our common stock had fallen

below $1.00 per share for 30 consecutive business days, as a result of which we did not comply with the $1.00 minimum bid price requirement

for continued listing on The Nasdaq Capital Market under Rule 5550(a)(2) of the Nasdaq Listing Rules.

Pursuant to Nasdaq Marketplace Rule

5810(c)(3)(A).

In each instance, we regained compliance within the time period allowed by Nasdaq.

In the event of a future delisting, we would take

actions to restore our compliance with Nasdaq’s listing requirements, but we can provide no assurance that any such action taken

by us would allow our common stock to become listed again, stabilize the market price or improve the liquidity of our common stock, prevent

our common stock from dropping below the Nasdaq minimum bid price requirement or prevent future non-compliance with Nasdaq’s listing

requirements.

If our common stock were delisted and determined

to be a “penny stock,” a broker-dealer may find it more difficult to trade our common stock and an investor may find it more

difficult to acquire or dispose of our common stock in the secondary market.

If our common stock were removed from listing

with The Nasdaq Capital Market, it may be subject to the so-called “penny stock” rules.

The SEC has adopted regulations that

define a “penny stock” to be any equity security that has a market price per share of less than $5.00, subject to certain

exceptions, such as any securities listed on a national securities exchange, which is the exception on which we currently rely.

transaction involving a “penny stock,” unless exempt, the rules impose additional sales practice requirements on broker-dealers,

subject to certain exceptions.

If our common stock were delisted and determined to be a “penny stock,” a broker-dealer may

find it more difficult to trade our common stock and an investor may find it more difficult to acquire or dispose of our common stock

on the secondary market.

You may experience dilution of your ownership

interests because of the future issuance of additional shares of our common stock or securities convertible into common stock.

For the foreseeable future, to finance our operations,

including possible acquisitions or strategic transactions, we expect to issue equity securities, resulting in the dilution of the ownership

interests of our present stockholders.

We are currently authorized to issue an aggregate of 400,000,000 shares of common stock and 10,000,000

shares of preferred stock.

As of September 30, 2022, there were 146,211,130 shares of common stock outstanding, 38,325,489 shares underlying

warrants with a weighted average exercise price of $1.57 per share and 9,400,171 shares underlying options with a weighted average exercise

price of $2.07 per share.

We may also issue additional shares of our common stock or other securities that are convertible into or exercisable

for common stock in connection with hiring or retaining employees, or for other business purposes.

The future issuance of any such additional

shares of common stock or common stock equivalents may create downward pressure on the trading price of our common stock or publicly traded

Our Certificate of Incorporation allows

for our Board of Directors to create new series of preferred stock without further approval by our stockholders, which could adversely

affect the rights of the holders of the common stock.

Our Board of Directors has the authority to issue

up to 10,000,000 shares of preferred stock and to fix and determine the relative rights and preferences of any such preferred stock without

further stockholder approval.

As a result, our Board of Directors could authorize the issuance of one or more series of preferred stock

that would grant preferential rights to our assets upon liquidation, the right to receive dividend payments before dividends are distributed

to the holders of common stock and the right to the redemption of the preferred shares, together with a premium, prior to the redemption

of the common stock.

In addition, our Board of Directors could authorize the issuance of a series of preferred stock that has greater

voting power than the common stock or that is convertible into our common stock, which could decrease the relative voting power of the

common stock or result in dilution to our existing stockholders.

rely on trade secret protections through confidentiality agreements with our employees and other parties, and the breach of these agreements

could adversely affect our business and prospects.

rely on trade secrets, which we seek to protect, in part, through confidentiality and non-disclosure agreements with our employees, collaborators,

suppliers, and other parties.

There can be no assurance that these agreements will not be breached, that we would have adequate remedies

for any such breach or that our trade secrets will not otherwise become known to or independently developed by our competitors.

be involved from time to time in litigation to determine the enforceability, scope and validity of our proprietary rights.

Any such litigation

could result in substantial cost and divert management’s attention from our operations.

we infringe the rights of third parties we might have to forego developing and/or selling any approved products, pay damages, or defend

against litigation.

our product candidates, methods, processes, and other technologies infringe the proprietary rights of other parties, we could incur substantial

costs and we might have to:

obtain licenses, which

might not be available on commercially reasonable terms, if at all;

abandon an infringing product

redesign our product candidates

or processes to avoid infringement;

stop using the subject

matter claimed in the patents held by others;

defend litigation or administrative

proceedings which might be costly whether we win or lose, and which could result in a substantial diversion of our financial and

management resources.

of these events could substantially harm our earnings, financial condition, and operations.

government could have “march-in rights” to certain of our intellectual property.

at any time federal monies are used in support of the research and development activities at MDACC that resulted or in the future result

in certain of our issued pending U.S.

patent applications, the federal government retains what are referred to as “march-in rights”

to patents that are granted on these applications.

Our license agreements for Mino-Lok and Mino-Wrap each provide that in the event of

such governmental funding, our rights are subject to the government’s prior rights, if any.

In addition, the license agreements

provide that we will comply with the requirements of any agreement between MDACC and the governmental funding entity.

If applicable,

this could require us to grant the U.S.

government either a nonexclusive, partially exclusive, or exclusive license to the patented invention

in any field of use, upon terms that are reasonable for a particular situation.

Circumstances that could trigger march-in rights generally

would be set out in the agreement between MDACC and the funding governmental entity and could include, for example, failure to take,

within a reasonable time, effective steps to achieve practical application of the invention in a field of use, failure to satisfy the

health and safety needs of the public and failure to meet requirements of public use specified by federal regulations.

A funding governmental

entity could elect to exercise these march-in rights on their own initiative or at the request of a third party;

however, the exercise

of such march-in rights has been historically rare when the patent holder (or its licensee) is practicing the patent invention although

there can be no assurance that such rights would not be exercised.

This same risk would apply to any other license into which we enter

if the licensor receives government funding for the product candidate that is the subject of the license.

our trademarks and trade names are not adequately protected, then we may not be able to build name recognition and our business, financial

condition and results of operations may be adversely affected.

have registered a trademark with the USPTO for the marks “LYMPHIR” and “Mino-Lok”.

Thses and any other trademarks

or trade names we may obtain may be challenged, infringed, diluted, tarnished, circumvented or declared generic or determined to be infringing

on other marks.

The Company may not be able to protect our rights to these trademarks and trade names, which we need to build name recognition

among potential partners or customers in the markets of interest.

At times, competitors or other third parties may adopt similar trade

names or trademarks, thereby impeding our ability to build brand identity and possibly leading to market confusion.

In addition, there

could be potential trade name or trademark infringement, dilution or tarnishment claims brought by owners of other registered trademarks

or trademarks that incorporate variations of our registered or unregistered trademarks or trade names.

Over the long term, if we are

unable to establish name recognition based on our trademarks and trade names, then we may not be able to compete effectively and our

business, financial condition and results of operations may be adversely affected.

The Company’s efforts to enforce or protect

our proprietary rights related to trademarks, trade secrets, domain names, copyrights or other intellectual property may be ineffective

and could result in substantial costs and diversion of resources.

Related to Our Planned Spinoff of Citius Oncology

Business Combination is subject to the satisfaction or waiver of certain conditions, which may not be satisfied or waived on a timely

basis, if at all, and we may be unable to complete the Spinoff of Citius Oncology as a separate public company.

consummation of the Business Combination is subject to customary closing conditions for transactions involving special purpose ac quisition

companies, including, among others:

expiration or termination of the waiting period under the Hart Scott Rodino Act;

of required consents and approvals from certain governmental authorities;

agreement with any governmental authority pursuant to which Citius Pharma or TenX has agreed

not to consummate the Business Combination;

governmental authority of competent jurisdiction shall have enacted, issued or granted any

law that has the effect of restraining, enjoining or prohibiting the consummation of the

has at least $5,000,001 of net tangible assets as of the Closing;

outstanding or uncured written notice has been received by TenX from Nasdaq stating that

it has failed, or would reasonably be expected to fail to meet the Nasdaq initial listing

requirements or Nasdaq continued listing requirements as of the Effective Date for any reason;

parties have performed and complied in all material respects with the obligations, covenants

and agreements required by the Merger Agreement;

bring down conditions related to the accuracy of the parties’ respective representations,

warranties and pre-Closing covenants in the Merger Agreement, including the absence of any

“Material Adverse Effect” (as defined in the Merger Agreement);

registration statement that has been filed with the SEC has become effective;

requisite TenX’s shareholders’ approvals have been received.

Additionally,

as previously announced, Citius Pharma is in the process of formulating a plan of distribution to its stockholders of a portion of the

shares of the Combined Company that Citius Pharma is to receive in the Business Combination (the “Distributi on”).

The criteria to determine the timing, size and other factors related to such Distribution will be determined and announced by us at a

cannot assure you that we will be able to complete the Business Combination or Spinoff or a Distribution due to many factors outside

of our control.

The completion of the anticipated Spinoff of Citius Oncology and any Distribution will also require significant

amounts of our management’s time and effort, which may divert management’s attention from operating and growing our business.

may be unable to achieve some or all of the benefits that we expect to achieve from the Spinoff.

Company believes that separating LYMPHIR into a standalone entity would create two focused standalone public companies that are better

positioned to pursue their strategic priorities, invest in growth opportunities, and attract new investors.

The Company also believes

that the Business Combination and Spinoff will result in significant benefits to our Company and our stockholders as a result of unlocking

the value we believe that Citius Oncology would have as a standalone publicly traded company.

However, by separating from Citius Pharma,

Citius Oncology might be more susceptible to market fluctuations and we may be unable to achieve some or all of the benefits that we

expect Citius Oncology to achieve as an independent company in the time we expect, if at all.

Further, if the Business Combination’s

benefits do not meet the expectations of financial analysts, or due to the other factors discussed in this “ Risk Factors ”

section and elsewhere in this report, the market price of the Combined Company’s common stock might decline or increase in volatility.

Oncology currently has only one product candidate that is in late stage development and it is heavily dependent on the approval, launch

and commercial success of LYMPHIR.

April 2022, Citius Pharma transferred the assets related to LYMPHIR to Citius Oncology.

LYMPHIR is Citius Oncology’s only late-stage

product candidate, and it has not been approved for commercial sale, while the other product candidates are in the pre-clinical stage.

Upon completion of the anticipated Business Combination, Citius Pharma will become a majority stockholder of the Combined Company, and

as a result, we will only be entitled to a portion of the benefits, if any, that flow from the development by Citius Oncology of its

LYMPHIR product candidate or any other product candidates that it might develop.

Oncology is entirely dependent upon the successful commercial launch of LYMPHIR to generate revenue for the foreseeable future.

if Citius Oncology receives approval for LYMPHIR for the treatment of CTCL, the commercial launch in the U.S.

is not expected to occur

until the second half of 2024.

As a result, it is difficult to evaluate Citius Oncology’s current business and predict its future

prospects due to the other factors discussed in this “ Risk Factors ” section and elsewhere in this report.

assure you that LYMPHIR will gain market acceptance among physicians, health care payors, patients and the medical community, which is

critical to its commercial success.

after the completion of the Business Combination, the Combined Company will require substantial additional funding, which may not be

available on acceptable terms, or at all.

Oncology’s operations have consumed substantial amounts of cash since inception and Citius Oncology expects to significantly increase

its spending to continue its commercialization efforts for LYMPHIR, advance development of LYMPHIR for other indications and launch and

commercialize any product candidates for such indications for which it receives regulatory approval.

Furthermore, following the Business

Combination, the Combined Company will have additional costs associated with operating as a public company.

The Combined Company will

require additional capital to fund its other operating expenses and capital expenditures.

consummation of the Business Combination, until the Combined Company is able to generate significant revenue, if ever, we expect it to

finance its operations through a combination of equity offerings, debt financings, collaborations or other strategic transactions.

cannot be sure that any additional funding, if needed, will be available on terms favorable to it, or at all.

Any additional fundraising

efforts may divert its management from their day-to-day activities, which may adversely affect its ability to develop and commercialize

its product candidates.

Citius Oncology or the Combined Company raises additional funds through collaborations or strategic alliances with third parties, it

may have to relinquish valuable rights to its product candidates, future revenue streams, research programs or technologies, or grant

licenses on terms that may not be favorable to it.

If Citius Oncology or the Combined Company is unsuccessful in its efforts to raise

additional financing on acceptable terms, it may be required to significantly reduce or cease its operations.

amount and timing of its future funding requirements will depend on many factors, some of which are outside of our control, including

but not limited to:

the costs and expenses

associated with its ongoing commercialization efforts for LYMPHIR;

the degree of success it

experiences in commercializing LYMPHIR;

the revenue generated by

sales of LYMPHIR and other products that may be approved, if any;

the scope, progress, results

and costs of conducting studies and clinical trials for its other product candidates, if any, resulting from its ongoing research

with LYMPHIR for other possible indications;

the timing of, and the

costs involved in, obtaining regulatory approvals for LYMPHIR and its other product candidates;

the costs of manufacturing

LYMPHIR and any other potential product candidates it develops;

the timing and amount of

any milestone, royalty or other payments it is required to make pursuant to any current or future license agreements;

the extent to which LYMPHIR

or any of its other potential product candidates, if approved for commercialization, is adopted by the physician community;

the effect of competing

products and product candidates and other market developments;

the number and types of

future product candidates it might develop and commercialize;

any product liability or

other lawsuits related to its products candidates and any approve products;

the expenses needed to

attract, hire and retain skilled personnel;

the costs associated with

being a public company after the closing of the Business Combination;

its need to implement additional

internal systems and infrastructure, including financial and reporting systems;

the costs of preparing,

filing and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims;

the extent and scope of

its general and administrative expenses.

sales or issuances of a substantial number of shares of the Combined Company’s common stock may cause the price of its common stock

Oncology is, and after the Business Combination, the Combined Company is expected to be, authorized to issue an aggregate of 100,000,000

shares of common stock and 10,000,000 shares of preferred stock.

Any additional equity or equity-related financing may be dilutive to

its stockholders, and debt or equity financing, if available, might subject Citius Oncology or the Combined Company to restrictive covenants

and significant interest costs.

Citius Oncology, and after the Business Combination, the Combined Company, might also issue additional

shares of common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining

employees, or for other business purposes.

to the amended and restated registration rights agreement to be entered into in connection with the Business Combination, certain stockholders

TenX, the TenX sponsor and certain equity holders of Citius Pharma can demand that the Combined Company can register their registrable

securities under certain circumstances and will each also have piggyback registration rights for these securities.

The registration of

these securities will permit the public sale of such securities, subject to certain contractual restrictions imposed by the amended and

restated registration rights agreement and the Merger Agreement.

future sales or issuances of any such shares of the Combined Company’s common stock or common stock equivalents may create downward

pressure on the trading price of the Combined Company or our common stock.

announcement of the proposed Business Combination could disrupt Citius Pharma’s or Citius Oncology’s relationships with their

respective customers, suppliers, business partners and others, as well as their respective operating results and business generally.

rela ting to the impact of the announcement of the Business Combination on our business include the following:

employees may experience uncertainty about their future roles, which might adversely affect

our ability to retain and hire key personnel and other employees;

suppliers, business partners and other parties with which we maintain business relationships

may experience uncertainty about its future and seek alternative relationships with third

parties, seek to alter their business relationships with us or fail to extend an existing

relationship with us;

have expended and will continue to expend significant costs, fees and expenses for professional

services and transaction costs in connection with the proposed Business Combination.

any of the aforementioned risks were to materialize, they could lead to significant costs which may impact the Combined Company’s

results of operations and cash available to fund its business.

of interest may arise from the Combined Company’s relationship with Citius Pharma.

after the Business Combination, all of the Combined Company’s directors, executive officers and employees will also be directors

and employees of Citius Pharma;

the employees will all be available pursuant to the amended and restated shared services agreement.

a result of this arrangement, the Combined Company’s relationship with Citius Pharma could give rise to certa in

conflicts of interest that could have an impact on its research and development programs, business opportunities, and operations generally.

though the Combined Company is developing different technologies in different fields than Citius Pharma, the Combined Company could find

itself in competition with Citius Pharma for research scientists, financing and other resources, licensing, manufacturing, and distribution

arrangements.

The Combined Company will engage for its own business in research and product development programs, investments, and business

ventures, and Citius Pharma will not be entitled to participate or to receive an interest in those programs, investments, or business

The Combined Company will not be obligated to present any particular research and development, investment, or business opportunity

to us, even if the opportunity would be within the scope of our research and development plans or programs, business objectives, or investment

These opportunities may include, for example, opportunities to acquire businesses or assets, including but not limited to patents

and other intellectual property that could be used by the Combined Company or by Citius Pharma.

conflicts of interest could also arise in connection with the resolution of any dispute that may arise between Citius Pharma and the

Combined Company regarding the terms of the amended and restated shared services agreement governing the services provided by Citius

Pharma to the Combined Company and the relationship between the companies.

Potential conflicts of interest may also arise if the Combined

Company enters into additional commercial arrangements with Citius Pharma in the future.

As a result of these actual or apparent conflicts,

the Combined Company or Citius Pharma, might be precluded from pursuing certain growth initiatives.

conflict of interest will be resolved by the respective boards of directors in keeping with their fiduciary duties and such policies

as they may implement from time to time.

As noted above, there will be overlap among the Combined Company’s board of directors,

senior management and research staffs and that of Citius Pharma.

These overlapping positions could interfere with the duties owed by

such individuals to Citius Pharma.

Distribution in connection with or following the Spinoff of Combined Company shares to our stockholders could result in significant tax

liability to Citius Pharma and our stockholders.

Distribution of Combined Company shares to our stockholders would not qualify for non-recognition of gain and loss, and therefore, our

stockholders could be subject to tax.

holder who receives Combined Company stock in a Distribution would generally be treated

as receiving a Distribution in an amount equal to the fair market value of the Combined Company common stock received, which would generally

result in (i) a taxable dividend to the stockholder to the extent that stockholder’s pro rata share of Citius Pharma’s current

or accumulated earnings and profits;

(ii) a reduction in the stockholder’s basis (but not below zero) in Citius Pharma’s

common stock to the extent the amount received exceeds the stockholder’s shares of Citius Pharma’s earnings and profits;

and (iii) a taxable gain from the exchange of Citius Pharma’s stock to the extent the amount received exceeds the sum of the stockholder’s

share of Citius Pharma’s earnings and profits and the stockholder’s basis in its Citius Pharma stock.

Pharma will also recognize a taxable gain in an amount up to the fair market value of any distributed Combined Company stock in excess

of the taxable basis in such distributed shares.

legal proceedings in connection with the Business Combination, the outcomes of which are uncertain, could delay or prevent the completion

of the Business Combination.

connection with business combination transactions similar to the proposed Business Combination, it is not uncommon for lawsuits to be

filed against the parties and/or their respective directors and officers alleging, among other things, that the proxy statement/prospectus

provided to stockholders contains false and misleading statements and/or omits material information concerning the transaction.

no such lawsuits have yet been filed in connection with the Business Combination, it is possible that such actions may arise and, if

such actions do arise, they generally would seek, among other things, injunctive relief and an award of attorneys’ fees and expenses.

Defending such lawsuits could require the parties to incur significant costs and draw the attention of the parties’ management

teams away from the consummation of the Business Combination.

Further, the defense or settlement of any lawsuit or claim that remains

unresolved at the time the Business Combination is consummated may adversely affect the Combined Company’s business, financial

condition, results of operations and cash flows.

Such legal proceedings could delay or prevent the Business Combination from being consummated

within the expected timeframe.

Related to Our Securities

failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our common stock.

Pharma common stock is currently listed on The Nasdaq Capital Market and following the Business Combination, the Combined Company intends

to separately list its common stock on The Nasdaq Global Market.

In order to maintain these listings, each entity must satisfy minimum

financial and other requirements.

September 12, 2023, Citius Pharma received a notification letter from the Nasdaq Stock Market LLC (“Nasdaq”) indicating that

we were not in compliance with Nasdaq Listing Rule 5550(a)(2) because the minimum bid price of our common stock on the Nasdaq Capital

Market closed below $1.00 per share for 30 consecutive business days.

In accordance with Nasdaq Listing Rule 5810(c)(3)(A), the Company

has a compliance period of 180 calendar days, or until March 11, 2024, to regain compliance with the Bid Price Rule.

If at any time before

March 11, 2024, the bid price of the Company's common stock closes at $1.00 per share or more for a minimum of ten consecutive business

days, Nasdaq will provide the Company with a written confirmation of compliance with the Bid Price Rule.

While Citius Pharma intends

to engage in efforts to regain compliance, and thus maintain our listing, there can be no assurance that we will be successful or continue

to meet all applicable Nasdaq Capital Market requirements in the future.

Citius Pharma’s (or following the Business Combination, the Combined Company’s) common stock were to be removed from listing

with Nasdaq, it may be subject to the so-called “penny stock” rules.

The SEC has adopted regulations that define a “penny

stock” to be any equity security that has a market price per share of less than $5.00, subject to certain exceptions, such as any

securities listed on a national securities exchange, which is the exception on which we currently rely.

For any transaction involving

a “penny stock,” unless exempt, the rules impose additional sales practice requirements on broker-dealers, subject to certain

If our common stock were delisted and determined to be a “penny stock,” a broker-dealer may find it more difficult

to trade our common stock and an investor may find it more difficult to acquire or dispose of our common stock on the secondary market.

Citius Pharma’s (or following the Business Combination, the Combined Company’s) common stock is delisted and there is no

longer an active trading market for our shares, it may, among other things:

stockholders difficulty in selling Citius Pharma’s or the Combined Company’s shares without depressing the market price

for the shares or selling the shares at all;

substantially

impair the ability to raise additional funds;

in a loss of institutional investor interest and fewer financing opportunities;

in potential breaches of representations or covenants of agreements pursuant to which Citius Pharma or the Combined Company made

representations or covenants relating to compliance with applicable listing requirements.

Claims related to any such breaches, with

or without merit, could result in costly litigation, significant liabilities and diversion of management’s time and attention

and could have a material adverse effect on the financial condition, business and results of operations.

delisting would also reduce the value of Citius Pharma’s or the Combined Company’s equity compensation plans, which could

negatively impact the ability to retain employees.

may experience dilution of your ownership interests because of the future issuance of additional shares of our common stock or securities

convertible into common stock.

the foreseeable future, to finance our operations, including possible acquisitions or strategic transactions, we expect to issue equity

securities, resulting in the dilution of the ownership interests of our present stockholders.

We are currently authorized to issue an

aggregate of 400,000,000 shares of common stock and 10,000,000 shares of preferred stock.

As of September 30, 2023, there were 158,857,798

shares of common stock outstanding, 50,923,819 shares underlying warrants with a weighted average exercise price of $1.50 per share and

13,305,171 shares underlying options with a weighted average exercise price of $1.79 per share.

We may also issue additional shares of

our common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining

employees, or for other business purposes.

The future issuance of any such additional shares of common stock or common stock equivalents

may create downward pressure on the trading price of our common stock or publicly traded warrants.

Certificate of Incorporation allows for our Board of Directors to create new series of preferred stock without further approval by our

stockholders, which could adversely affect the rights of the holders of the common stock.

Board of Directors has the authority to issue up to 10,000,000 shares of preferred stock and to fix and determine the relative rights

and preferences of any such preferred stock without further stockholder approval.

As a result, our Board of Directors could authorize

the issuance of one or more series of preferred stock that would grant preferential rights to our assets upon liquidation, the right

to receive dividend payments before dividends are distributed to the holders of common stock and the right to the redemption of the preferred

shares, together with a premium, prior to the redemption of the common stock.

In addition, our Board of Directors could authorize the

issuance of a series of preferred stock that has greater voting power than the common stock or that is convertible into our common stock,

which could decrease the relative voting power of the common stock or result in dilution to our existing stockholders.

have not paid cash dividends in the past and we do not expect to pay cash dividends in the foreseeable future.

Any return on investment

may be limited to the capital appreciation, if any, of our common stock.

have not paid cash dividends on our common stock and we (and following the Business Combination, the Combined Company) do not anticipate

paying cash dividends on its capital in the foreseeable future.

The payment of dividends on the capital stock will depend on the respective

earnings, financial condition and other business and economic factors affecting them at such time as the board of directors may consider

In addition, the ability to pay dividends may be limited by covenants in any future outstanding indebtedness that either entity

Since the Combined Company does not intend to pay dividends, a stockholder’s ability to receive a return on such stockholder’s

investment will depend on any future appreciation in the market value of the Combined Company’s common stock.

There is no guarantee

that either entity’s common stock will appreciate or even maintain the price at which its stockholders have purchased it.

in our Amended and Restated Articles of Incorporation, as amended, and under Nevada law could discourage a takeover that stockholders

may consider favorable and may lead to entrenchment of management.

of our articles of incorporation and bylaws may delay or discourage transactions involving an actual or potential change of control or

change in our management, including transactions in which stockholders might otherwise receive a premium f or

their shares, or transactions that our stockholders might otherwise deem to be in their best interests.

Therefore, these provisions could

adversely affect the price of our common stock.

Among other things, these provisions include:

authorization of 10,000,000 shares of “blank check” preferred stock, the rights,

preferences and privileges of which may be established and shares of which may be issued

by our Board of Directors at its discretion from time to time and without stockholder approval;

the removal of directors by the stockholders;

for the creation of a staggered Board of Directors;

● eliminating

the ability of stockholders to call a special meeting of stockholders;

● establishing

advance notice requirements for nominations for election to the Board of Directors or for

proposing matters that can be acted upon at stockholder meetings.

Additionally ,

Nevada’s “combinations with interested stockholders” statutes prohibit certain business “combinations”

between certain Nevada corporations and any person deemed to be an “interested stockholder” for two years after such person

first becomes an “interested stockholder” unless (i) the corporation’s Board of Directors approves the combination

(or the transaction by which such person becomes an “interested stockholder”) in advance, or (ii) the combination is approved

by the Board of Directors and 60% of the corporation’s voting power

not beneficially owned by the interested stockholder, its affiliates and associates.

Furthermore, in the absence of prior approval, certain

restrictions may apply even after such two-year period.

For purposes of these statutes, an “interested stockholder” is any

person who is (x) the beneficial owner, directly or indirectly, of 10% or more of the voting power of the outstanding voting shares of

the corporation, or (y) an affiliate or associate of the corporation and at any time within the two previous years was the beneficial

owner, directly or indirectly, of 10% or more of the voting power of the then outstanding shares of the corporation.

The definition of

the term “combination” is sufficiently broad to cover most significant transactions between the corporation and an “interested

stockholder”.

Subject to certain timing requirements set forth in the statutes, a corporation may elect not to be governed by these

We have not included any such provision in our articles of incorporation.

are not currently subject to Nevada’s “acquisition of controlling interest” statutes that contain provisions governing

the acquisition of a controlling interest in certain Nevada corporations.

If these laws were to apply to us, they might further discourage

companies or persons interested in acquiring a significant interest in or control of the Company, regardless of whether such acquisition

may be in the interest of our stockholders.

effect of these statutes may be to potentially discourage parties interested in taking control of the Company from doing so if it cannot

obtain the approval of our Board of Directors.

Unresolved Staff Comments

Cybersecurity

Not applicable.

We lease our offices at 11 Commerce Drive, First Floor, Cranford, New

Jersey 07016.

lease our offices at 11 Commerce Drive, First Floor, Cranford, New Jersey 07016.

The lease runs until October 31, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors