What changed in this filing

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Item 9A. Controls and Procedures

2024-12-27 compared with 2023-12-29 · 1342 added, 165 removed, 60 unchanged (96% of the section changed)

Controls and Procedures

maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in reports

filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and

reported within the specified time periods and accumulated and communicated to our management, including our principal executive officer

and principal financial officer, as appropriate to allow timely decisions regarding disclosure.

Chief Executive Officer (who is our principal executive officer) and Chief Financial Officer (who is our principal financial officer

and principal accounting officer), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e)

and 15d-15(e) promulgated under the Exchange Act) as of September 30, 2023, the end of our fiscal year.

In designing and evaluating disclosure

controls and procedures, we recognize that any disclosure controls and procedures, no matter how well designed and operated, can only

provide reasonable assurance of achieving the desired control objective.

As of September 30, 2023, based on the evaluation of these disclosure

controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures

were effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is

recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms.

Annual Report on Internal Control over Financial Reporting

management is responsible for establishing and maintaining effective internal control over financial reporting as defined in Rule 13a-15(f)

under the Exchange Act.

Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute

assurance that a misstatement of our financial statements would be prevented or detected.

Under the supervision of our Chief Executive

Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of our internal control over financial

reporting as of September 30, 2023 using the criteria established in Internal Control— Integrated Framework issued by the

Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) (2013 Framework).

on this evaluation, management has concluded that our internal controls were effective and that we maintained effective controls over

our financial reporting as of September 30, 2023.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of

any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in

conditions, or that the degree of compliance with the policies or procedures may deteriorate.

in Internal Controls over Financial Reporting

were no changes in our internal controls over financial reporting during the fourth quarter of fiscal 2023 that materially affected,

or are reasonably likely to materially affect, our internal control over financial reporting.

Disclosure Controls and Procedures

We maintain disclosure controls and procedures

designed to provide reasonable assurance that information required to be disclosed in reports filed under the Securities Exchange

Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized, and reported within the specified time periods

and accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate

to allow timely decisions regarding disclosure.

Our Chief Executive Officer (who is our principal

executive officer) and Chief Financial Officer (who is our principal financial officer and principal accounting officer), evaluated the

effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange

Act) as of September 30, 2024, the end of our fiscal year.

In designing and evaluating disclosure controls and procedures, we recognize

that any disclosure controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving

the desired control objective.

As of September 30, 2024, based on the evaluation of these disclosure controls and procedures, our Chief

Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective in ensuring that information

required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized,

and reported within the time periods specified in the SEC’s rules and forms.

Management’s Annual Report on Internal

Control over Financial Reporting

Our management is responsible for establishing

and maintaining effective internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act.

of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement

of our financial statements would be prevented or detected.

Under the supervision of our Chief Executive Officer and Chief Financial Officer,

the Company conducted an evaluation of the effectiveness of our internal control over financial reporting as of September 30, 2024 using

the criteria established in Internal Control- Integrated Framework issued by the Committee of Sponsoring Organizations of the

Treadway Commission (“COSO”) (2013 Framework).

Based on this evaluation, management has concluded

that our internal controls were effective and that we maintained effective controls over our financial reporting as of September 30, 2024.

Because of its inherent limitations, internal

control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future

periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance

with the policies or procedures may deteriorate.

Changes in Internal Controls over Financial

There were no changes in our internal controls

over financial reporting during the fourth quarter of fiscal 2024 that materially affected, or are reasonably likely to materially affect,

our internal control over financial reporting.

Attestation Report of Registered Public Accounting

Our independent registered public accounting firm

has not assessed the effectiveness of our internal control over financial reporting and, under SEC rules, will not be required to provide

an attestation report on the effectiveness of our internal control over financial reporting so long as we qualify as a “non-accelerated

Other Information.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Disclosure Regarding Foreign Jurisdictions

that Prevent Inspections.

Not applicable.

Directors, Executive Officers and Corporate Governance

have adopted a written Code of Ethics and Business Conduct that applies to our directors, officers, and all employees.

We intend to disclose

any amendments to, or waivers from, our code of ethics and business conduct that are required to be publicly disclosed pursuant to rules

of the SEC by filing such amendment or waiver with the SEC.

This code of ethics and business conduct can be found in the “Investors

- Corporate Governance” section of our website, www.citiuspharma.com .

other information required by this Item concerning our directors and executive officers is incorporated by reference to the section captioned

“Proposal No.

1—Election of Directors” and “Corporate Governance” to be contained in our proxy statement

related to the 2024 Annual Meeting of Stockholders (the “Proxy Statement”), which information is expected to be filed with

the SEC within 120 days of the end of our fiscal year pursuant to General Instruction G(3) of Form 10-K.

The information required by

this Item concerning compliance with Section 16(a) of the Exchange Act by our directors, executive officers and persons who own more

than 10% of our outstanding common stock is incorporated by reference from the section captioned “Section 16(a) Beneficial Ownership

Reporting Compliance” to be contained in the Proxy Statement.

Directors, Executive Officers and

Corporate Governance

We have adopted a written Code of Ethics and Business

Conduct that applies to our directors, officers, and all employees.

We intend to disclose any amendments to, or waivers from, our code

of ethics and business conduct that are required to be publicly disclosed pursuant to rules of the SEC by filing such amendment or waiver

with the SEC.

This code of ethics and business conduct can be found in the “Investors - Corporate Governance” section of our

website, www.citiuspharma.com .

The other information required by this Item concerning

our directors and executive officers is incorporated by reference to the section captioned “Proposal No.

1—Election of Directors”

and “Corporate Governance” to be contained in our proxy statement related to the 2025 Annual Meeting of Stockholders (the

“Proxy Statement”), which information is expected to be filed with the SEC within 120 days of the end of our fiscal year pursuant

to General Instruction G(3) of Form 10-K.

The information required by this Item concerning compliance with Section 16(a) of the Exchange

Act by our directors, executive officers and persons who own more than 10% of our outstanding common stock is incorporated by reference

from the section captioned “Section 16(a) Beneficial Ownership Reporting Compliance” to be contained in the Proxy Statement.

Executive Compensation

information required by this Item concerning directors and executive compensation is incorporated by reference from the sections captioned

“Director Compensation” and “Executive Compensation”, respectively, to be contained in the Proxy Statement.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

following table sets forth the indicated information as of September 30, 2023 with respect to our equity compensation plans:

The information required by this Item concerning

directors and executive compensation is incorporated by reference from the sections captioned “Director Compensation” and

“Executive Compensation”, respectively, to be contained in the Proxy Statement.

Security Ownership of Certain Beneficial

Owners and Management and Related Stockholder Matters

The following table sets forth the indicated information

as of September 30, 2024 with respect to our equity compensation plans:

Plan Category

3 unchanged sentences

issuance under equity

Equity compensation plans approved by security

Equity compensation plans approved by security holders

2014 Stock Incentive Plan

2 unchanged sentences

2021 Omnibus Stock Incentive Plan

2023 Omnibus Stock Incentive

equity compensation plans consist of the Citius Pharmaceuticals, Inc.

2023 Omnibus Stock Incentive Plan, 2021 Omnibus Stock Incentive

Plan, 2020 Omnibus Stock Incentive Plan, 2018 Omnibus Stock Incentive Plan and 2014 Stock Incentive Plan, which were all approved by

our stockholders.

We do not have any equity compensation plans or arrangements that have not been approved by our stockholders.

no longer may grant awards under the 2014 Stock Incentive Plan, the 2018 Omnibus Stock Incentive Plan, the 2020 Omnibus Stock Incentive

Plan or the 2021 Omnibus Stock Incentive Plan.

other information required by this Item is incorporated by reference to the information under the section captioned “Security Ownership

of Certain Beneficial Owners and Management” to be contained in the Proxy Statement.

Certain Relationships and Related Transactions, and Director Independence

information required by this Item is incorporated by reference to the information under the section captioned “Certain Relationships

and Related Transactions” and “Proposal No.

2023 Omnibus Stock Incentive Plan

Our equity compensation plans consist of the Citius

Pharmaceuticals, Inc.

2023 Omnibus Stock Incentive Plan, 2021 Omnibus Stock Incentive Plan, 2020 Omnibus Stock Incentive Plan, 2018 Omnibus

Stock Incentive Plan and 2014 Stock Incentive Plan, which were all approved by our stockholders.

We do not have any equity compensation

plans or arrangements that have not been approved by our stockholders.

We no longer may grant awards under the 2014 Stock

Incentive Plan, the 2018 Omnibus Stock Incentive Plan, the 2020 Omnibus Stock Incentive Plan or the 2021 Omnibus Stock Incentive Plan.

The other information required by this Item is

incorporated by reference to the information under the section captioned “Security Ownership of Certain Beneficial Owners and

Management” to be contained in the Proxy Statement.

Certain Relationships and Related

Transactions, and Director Independence

The information required by this Item is incorporated

by reference to the information under the section captioned “Certain Relationships and Related Transactions” and “Proposal

1—Election of Directors” to be contained in the Proxy Statement.

Principal Accountant Fees and Services

information required by this Item is incorporated by reference to the information under the section captioned “Auditor and Audit

Committee Matters” to be contained in the Proxy Statement.

The information required by this Item is incorporated

by reference to the information under the section captioned “Auditor and Audit Committee Matters” to be contained in the Proxy

Exhibits and Financial Statement Schedules

and Plan of Merger, dated as of October 23, 2023, by and among Citius Pharmaceuticals, Inc., Citius Oncology, Inc., TenX Keane Acquisition,

and TenX Merger Sub Inc.

and Restated Articles of Incorporation of Citius Pharmaceuticals, Inc.

of Amendment to the Amended and Restated Articles of Incorporation of Citius Pharmaceuticals, Inc., effective September 16, 2016.

of Amendment to the Amended and Restated Articles of Incorporation of Citius Pharmaceuticals, Inc., effective June 9, 2017.

of Amendment to the Articles of Incorporation of Citius Pharmaceuticals Inc., dated June 21, 2021.

and Restated Bylaws of Citius Pharmaceuticals, Inc.

Description of Document

Agreement and Plan of Merger, dated as of October 23, 2023, by and among Citius Pharmaceuticals, Inc., Citius Oncology, Inc., TenX Keane Acquisition, and TenX Merger Sub Inc.

Amended and Restated Articles of Incorporation of Citius Pharmaceuticals, Inc.

Certificate of Amendment to the Amended and Restated Articles of Incorporation of Citius Pharmaceuticals, Inc., effective September 16, 2016.

Certificate of Amendment to the Amended and Restated Articles of Incorporation of Citius Pharmaceuticals, Inc., effective June 9, 2017.

Certificate of Amendment to the Articles of Incorporation of Citius Pharmaceuticals Inc., dated June 21, 2021.

Amended and Restated Bylaws of Citius Pharmaceuticals, Inc.

Certificate of Change filed with the Secretary of State of Nevada on November 22, 2024.

Form of Common Stock Purchase Warrant, dated August 13, 2018, as amended August 8, 2023.

of Pre-Funded Common Stock Purchase Warrant, dated August 13, 2018.

Form of Pre-Funded Common Stock Purchase Warrant, dated August 13, 2018.

Form of Underwriter’s Common Stock Purchase Warrant, dated August 13, 2018, as amended August 8, 2023.

of Investor Warrant issued April 3, 2019.

of Placement Agent Warrant issued April 3, 2019.

of Common Stock Purchase Warrant issued September 27, 2019.

of Underwriters Common Stock Purchase Warrant issued September 27, 2019.

of Investor Warrant issued on February 19, 2020.

of Placement Agent Warrant issued on February 19, 2020.

of Investor Warrant issued May 18, 2020.

of Placement Agent Warrant issued May 18, 2020.

of Underwriter Warrant issued August 10, 2020.

of Investor Warrant issued January 27, 2021.

of Placement Agent Warrant issued January 27, 2021.

of Registration Rights Agreement, dated January 24, 2021, by and between Citius Pharmaceuticals, Inc.

and the purchasers signatory

of Investor Warrant issued February 19, 2021.

of Placement Agent Warrant issued February 19, 2021

of Warrant issued May 8, 2023.

of Placement Agent Warrant issued May 8, 2023.

of Common Stock

Pharmaceuticals, Inc.

Form of Investor Warrant issued April 3, 2019.

Form of Placement Agent Warrant issued April 3, 2019.

Form of Common Stock Purchase Warrant issued September 27, 2019.

Form of Underwriters Common Stock Purchase Warrant issued September 27, 2019.

Form of Investor Warrant issued on February 19, 2020.

Form of Placement Agent Warrant issued on February 19, 2020.

Form of Investor Warrant issued May 18, 2020.

Form of Placement Agent Warrant issued May 18, 2020.

Form of Underwriter Warrant issued August 10, 2020.

Form of Investor Warrant issued January 27, 2021.

Form of Placement Agent Warrant issued January 27, 2021.

Form of Registration Rights Agreement, dated January 24, 2021, by and between Citius Pharmaceuticals, Inc.

and the purchasers signatory thereto.

Form of Investor Warrant issued February 19, 2021.

Form of Placement Agent Warrant issued February 19, 2021

Form of Warrant issued May 8, 2023.

Form of Placement Agent Warrant issued May 8, 2023.

Form of Investor Warrant issued April 30, 2024.

Form of Investor Warrant issued November 18, 2024.

Description of Common Stock .

Citius Pharmaceuticals, Inc.

2014 Stock Incentive Plan.

of Citius Pharmaceuticals, Inc.

Form of Citius Pharmaceuticals, Inc.

2014 Stock Incentive Plan Nonqualified Stock Option.

and Restated Employment Agreement between Myron Holubiak and Citius Pharmaceuticals, Inc., executed April 12, 2022, effective May

Amendment to the Patent and Technology License Agreement between Novel Anti-Infective Technologies, LLC and Leonard-Meron Biosciences,

Inc., dated March 20, 2017.

and Restated Employment Agreement between Leonard Mazur and Citius Pharmaceuticals, Inc., dated October 19, 2017.

Agreement between Jaime Bartushak and Citius Pharmaceuticals, Inc., dated November 27, 2017.

Pharmaceuticals, Inc.

Amended and Restated Employment Agreement between Myron Holubiak and Citius Pharmaceuticals, Inc., executed April 12, 2022, effective May 1, 2022.

Second Amendment to the Patent and Technology License Agreement between Novel Anti-Infective Technologies, LLC and Leonard-Meron Biosciences, Inc., dated March 20, 2017.

Amended and Restated Employment Agreement between Leonard Mazur and Citius Pharmaceuticals, Inc., dated October 19, 2017.

Employment Agreement between Jaime Bartushak and Citius Pharmaceuticals, Inc., dated November 27, 2017.

Citius Pharmaceuticals, Inc.

2018 Omnibus Stock Incentive Plan

of Securities Purchase Agreement between Citius Pharmaceuticals, Inc.

Form of Securities Purchase Agreement between Citius Pharmaceuticals, Inc.

and the purchasers named therein, dated March 28, 2018.

and Technology License Agreement, dated January 2, 2019, between the Board of Regents of the University of Texas System on behalf

of the University of Texas M.

Patent and Technology License Agreement, dated January 2, 2019, between the Board of Regents of the University of Texas System on behalf of the University of Texas M.

Anderson Cancer Center and Citius Pharmaceuticals, Inc.

Amendment, dated October 15, 2015, to Patent and Technology License Agreement, dated May 14, 2014, between Novel Anti-Infective Technologies,

LLC and Leonard-Meron Biosciences, Inc.

First Amendment, dated October 15, 2015, to Patent and Technology License Agreement, dated May 14, 2014, between Novel Anti-Infective Technologies, LLC and Leonard-Meron Biosciences, Inc.

Patent and Technology License Agreement, dated May 14, 2014, between Novel Anti-Infective Technologies, LLC and Leonard-Meron Biosciences, Inc.

of Securities Purchase Agreement, dated April 1, 2019, by and between Citius Pharmaceuticals, Inc.

Description of Document

Form of Securities Purchase Agreement, dated April 1, 2019, by and between Citius Pharmaceuticals, Inc.

and the purchasers named therein.

Pharmaceuticals, Inc.

Citius Pharmaceuticals, Inc.

2020 Omnibus Stock Incentive Plan.

of Notice of Stock Option Grant and Stock Option Award Agreement.

of Warrant Exercise Agreement, dated February 14, 2020, by and between Citius Pharmaceuticals, Inc.

Form of Notice of Stock Option Grant and Stock Option Award Agreement.

Form of Warrant Exercise Agreement, dated February 14, 2020, by and between Citius Pharmaceuticals, Inc.

and the investor signatory thereto.

of Warrant Exercise Agreement, dated February 14, 2020, by and between Citius Pharmaceuticals, Inc.

Form of Warrant Exercise Agreement, dated February 14, 2020, by and between Citius Pharmaceuticals, Inc.

and the investor signatory thereto.

of Securities Purchase Agreement, dated May 14, 2020, by and between Citius Pharmaceuticals, Inc.

Form of Securities Purchase Agreement, dated May 14, 2020, by and between Citius Pharmaceuticals, Inc.

and the purchasers signatory thereto.

Agreement, effective as of July 14, 2020, between Citius Pharmaceuticals, Inc.

Employment Agreement, effective as of July 14, 2020, between Citius Pharmaceuticals, Inc.

and Myron Czuczman.

Agreement, dated October 6, 2020, between NoveCite, Inc.

License Agreement, dated October 6, 2020, between NoveCite, Inc.

and Novellus Therapeutics, Limited.

of Securities Purchase Agreement, dated January 24, 2021, by and between Citius Pharmaceuticals, Inc.

and the purchasers signatory

of Securities Purchase Agreement, dated February 16, 2021, by and between Citius Pharmaceuticals, Inc.

and the purchasers signatory

Pharmaceuticals, Inc.

Form of Securities Purchase Agreement, dated January 24, 2021, by and between Citius Pharmaceuticals, Inc.

and the purchasers signatory thereto.

Form of Securities Purchase Agreement, dated February 16, 2021, by and between Citius Pharmaceuticals, Inc.

and the purchasers signatory thereto.

Citius Pharmaceuticals, Inc.

2021 Omnibus Incentive Stock Plan.

of Notice of Stock Option Grant and Stock Option Award Agreement.

Purchase Agreement, dated as of September 1, 2021, between Dr.

Form of Notice of Stock Option Grant and Stock Option Award Agreement.

Asset Purchase Agreement, dated as of September 1, 2021, between Dr.

Reddy’s Laboratories S.A.

and Citius Pharmaceuticals, Inc.

and Restated License, Development and Commercialization Agreement, dated as of February 26, 2018, between Eisai, Ltd.

Laboratories S.A.

to Amended and Restated License, Development and Commercialization Agreement, dated as of August 9, 2018, between Eisai, Ltd.

Amended and Restated License, Development and Commercialization Agreement, dated as of February 26, 2018, between Eisai, Ltd.

Reddy’s Laboratories S.A.

Amendment to Amended and Restated License, Development and Commercialization Agreement, dated as of August 9, 2018, between Eisai, Ltd.

Reddy’s Laboratories S.A.

Amendment No.

2 to Amended and Restated License, Development and Commercialization Agreement, dated as of August 31, 2021, between Eisai, Ltd.

Reddy’s Laboratories S.A.

Pharmaceuticals, Inc.

Citius Pharmaceuticals, Inc.

2023 Omnibus Stock Incentive Plan.

of Securities Purchase Agreement, dated May 3, 2023, by and between Citius Pharmaceuticals, Inc.

Form of Securities Purchase Agreement, dated May 3, 2023, by and between Citius Pharmaceuticals, Inc.

and the purchasers signatory thereto.

Support Agreement, dated as of October 23, 2023, by and among 10XYZ Holdings LP, TenX Keane Acquisition, Citius Pharmaceuticals,

Sponsor Support Agreement, dated as of October 23, 2023, by and among 10XYZ Holdings LP, TenX Keane Acquisition, Citius Pharmaceuticals, Inc.

and Citius Oncology, Inc.

of Amended and Restated Registration Rights Agreement.

of Amended and Restated Shared Services Agreement.

Description of Document

Form of Amended and Restated Registration Rights Agreement.

Form of Amended and Restated Shared Services Agreement.

Form of Securities Purchase Agreement, dated as of April 25, 2024, by and among Citius Pharmaceuticals, Inc.

and the investors signatory thereto.

Amended and Restated Shared Services Agreement, dated, August, 12, 2024, between Citius Pharmaceuticals, Inc.

and Citius Oncology, Inc.

Amended and Restated Registration Rights Agreement, dated as of August 12, 2024, by and between Citius Oncology, Inc.

and the signatories thereto.

Side Letter Agreement, dated August 12, 2024, by and by and among Citius Pharmaceuticals, Inc., Citius Oncology, Inc., TenX Keane Acquisition and TenX Merger Sub, Inc.

Promissory note, dated August 16, 2024, issued to Citius Pharmaceuticals, Inc.

by Citius Oncology, Inc.

Form of Securities Purchase Agreement, dated as of November 15, 2024, by and among Citius Pharmaceuticals, Inc.

and the investors signatory thereto.

Insider Trading Policy.

Subsidiaries.

4 unchanged sentences

1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

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of this exhibit have been omitted pursuant to Item 601(b)10 of Regulation S-K or certain

of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation

S-K Item 601(b)(2) or 601(a)(5), as applicable.

Citius Pharma agrees to furnish

supplementally an unredacted copy such exhibit, including any omitted exhibits and schedules,

to the SEC upon its request.

contract or compensatory plan.

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Portions of this exhibit have been omitted pursuant to Item 601(b)10 of Regulation S-K or certain of the exhibits and schedules to this exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2) or 601(a)(5), as applicable.

Citius Pharma agrees to furnish supplementally an unredacted copy such exhibit, including any omitted exhibits and schedules, to the SEC upon its request.

Management contract or compensatory plan.

Form 10-K Summary.

Not applicable.

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of Section 13 or

15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,

thereunto duly authorized.

CITIUS PHARMACEUTICALS, INC.

December 27, 2024

Leonard Mazur

Executive Officer

Executive Officer)

to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the

registrant and in the capacities and on the dates indicated.

/s/ Leonard Mazur

Leonard Mazur

Chief Executive Officer

(Principal Executive Officer)

Pursuant to the requirements of the Securities

Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and

on the dates indicated.

/s/ Leonard Mazur

Chief Executive Officer and Director

December 27, 2024

Leonard Mazur

(Principal Executive Officer)

Myron Holubiak

Executive Vice Chairman

/s/ Myron Holubiak

Executive Vice Chairman and Director

December 27, 2024

Myron Holubiak

/s/ Jaimie Bartushak

Chief Financial Officer

1 unchanged sentence

Jaime Bartushak

(Principal Financial Officer and Principal Accounting

Eugene Holuka

(Principal Financial Officer and Principal Accounting Officer)

/s/ Suren Dutia

December 27, 2024

/s/ Carol Webb

December 27, 2024

/s/ Eugene Holuka

December 27, 2024

Eugene Holuka

Dennis McGrath

/s/ Dennis McGrath

December 27, 2024

Dennis McGrath

/s/ Robert J.

December 27, 2024

CITIUS PHARMACEUTICALS, INC.

CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID # 392 ) F-2

Consolidated Balance Sheets F-3

Consolidated Statements of Operations F-4

Consolidated Statements of Changes in Stockholders’ Equity F-5

Consolidated Statements of Cash Flows F-6

Notes to Consolidated Financial Statements F-7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING

To the Stockholders and Board of Directors of

Citius Pharmaceuticals, Inc.:

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheets of Citius Pharmaceuticals, Inc.

(the Company) as of September 30, 2024 and 2023, and the related consolidated statements

of operations, changes in stockholders’ equity and cash flows for the years then ended, and the related notes to the consolidated

financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material

respects, the financial position of the Company as of September 30, 2024 and 2023, and the results of its operations and its cash flows

for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Emphasis of a Matter Regarding Going Concern

The accompanying financial statements have been

prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the financial statements, the Company has

suffered recurring losses and has a working capital deficit as of September 30, 2024.

These conditions raise substantial doubt about the

Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are described in Note 2.

financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are

required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the

standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial

statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged

to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required to obtain an understanding

of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s

internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

Critical audit matters are matters arising from

the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially

challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ Wolf & Company, P.C.

We have served as the Company’s auditor since 2014.

Boston, Massachusetts

December 27, 2024

CITIUS PHARMACEUTICALS, INC.

CONSOLIDATED BALANCE SHEETS

SEPTEMBER 30, 2024 AND 2023

Current Assets:

Cash and cash equivalents

Prepaid expenses

Total Current Assets

Property and equipment, net

Operating lease right-of-use asset, net

Other Assets:

In-process research and development

Total Other Assets

$ 116,651,751

$ 103,611,150

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities:

Accounts payable

License payable

Accrued expenses

Accrued compensation

Operating lease liability

Total Current Liabilities

Deferred tax liability

Operating lease liability – non current

Total Liabilities

Commitments and Contingencies

Stockholders’ Equity:

Preferred stock - $ 0.001 par value;

10,000,000 shares authorized;

no shares issued and outstanding

Common stock - $ 0.001 par value;

16,000,000 shares authorized;

7,247,243 and 6,354,371 shares issued and outstanding at September 30, 2024 and 2023, respectively

Additional paid-in capital

Accumulated deficit

( 201,370,218 )

( 162,231,379 )

Total Citius Pharmaceuticals, Inc.

Stockholders’ Equity

Non-controlling interest

Total Liabilities and Equity

$ 116,651,751

$ 103,611,150

See accompanying report of independent registered

public accounting firm and notes to the financial statements.

Reflects a 1-for-25 reverse stock split effective

November 25, 2024.

CITIUS PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED SEPTEMBER 30, 2024 AND 2023

Operating Expenses:

Research and development

General and administrative

Stock-based compensation – general and administrative

Total Operating Expenses

Operating Loss

( 41,995,681 )

( 36,732,018 )

Other Income:

Interest income, net

Gain on sale of New Jersey net operating losses

Total Other Income Net

Loss before Income Taxes

( 38,849,839 )

( 31,966,912 )

Income tax expense

( 39,425,839 )

( 32,542,912 )

Net loss attributable to non-controlling interest

Deemed dividend on warrant extension

( 1,047,312 )

( 1,151,208 )

Net Loss Applicable to Common Stockholders

$ ( 40,186,151 )

( 33,694,120 )

Net Loss Per Share Applicable to Common Stockholders - Basic and Diluted

Weighted Average Common Shares Outstanding

Basic and diluted

See accompanying report of independent registered

public accounting firm and notes to the financial statements.

Reflects a 1-for-25 reverse stock split effective

November 25, 2024.

CITIUS PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’

FOR THE YEARS ENDED SEPTEMBER 30, 2024 AND 2023

Total Citius Pharmaceuticals, Inc.

Stockholders’

Non-Controlling

Balance, September 30, 2022

$ 232,508,484

$ ( 129,688,467 )

$ 102,825,865

$ 103,426,245

Issuance of common stock for services

Issuance of common stock upon exercise of stock options

Issuance of common stock in registered direct offering, net of costs of $ 1,201,818

Stock-based compensation expense

( 32,542,912 )

Balance, September 30, 2023

( 162,231,379 )

Issuance of common stock for services

Issuance of common stock upon exercise of stock options

Issuance of common stock offerings, net of costs

Stock-based compensation expense

Merger, net of transaction costs of $ 2,358,780

( 3,831,357 )

Minority interest from Merger

( 3,711,000 )

( 39,425,839 )

Net loss attributable to noncontrolling interest

Balance, September 30, 2024

$ 271,440,421

$ ( 201,370,218 )

See accompanying report of independent registered

public accounting firm and notes to the financial statements.

Reflects a 1-for-25 reverse stock split effective

November 25, 2024.

CITIUS PHARMACEUTICALS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED SEPTEMBER 30, 2024 AND 2023

Cash Flows From Operating Activities:

$ ( 39,425,839 )

$ ( 32,542,912 )

Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation

Issuance of common stock for services

Amortization of operating lease right-of-use asset

Deferred income tax expense

Changes in operating assets and liabilities:

( 2,133,871 )

Prepaid expenses

( 5,036,926 )

Accounts payable

Accrued expenses

Accrued compensation

Operating lease liability

Net Cash Used In Operating Activities

( 28,201,375 )

( 29,060,212 )

Cash Flows From Investing Activities:

License payment

( 5,000,000 )

Net Cash Used In Investing Activities

( 5,000,000 )

Cash Flows From Financing Activities:

Proceeds from common stock option exercises

( 3,831,357 )

Net proceeds from registered direct offerings

Net Cash Provided By Financing Activities

Net Change in Cash and Cash Equivalents

( 23,229,048 )

( 15,230,762 )

Cash and Cash Equivalents – Beginning of Year

Cash and Cash Equivalents – End of Year

Supplemental Disclosures of Cash Flow Information and Non-cash Activities:

IPR&D Milestones included in License Payable

Prepaid Manufacturing transferred to Inventory

See accompanying report of independent registered

public accounting firm and notes to the financial statements.

CITIUS PHARMACEUTICALS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED SEPTEMBER 30, 2024 AND 2023

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Citius Pharmaceuticals, Inc.

(“Citius Pharma,”

the “Company” or “we”) is a late-stage biopharmaceutical company dedicated to the development and commercialization

of critical care products with a focus on oncology, anti-infectives in adjunct cancer care, unique prescription products and stem cell

On March 30, 2016, we acquired Leonard-Meron Biosciences,

(“LMB”) as a wholly-owned subsidiary.

We acquired all the outstanding stock of LMB by issuing shares of our common stock.

The net assets acquired included identifiable intangible assets of $ 19,400,000 related to in-process research and development.

goodwill of $ 9,346,796 for the excess of the purchase price over the net assets acquired.

On September 11, 2020, we formed NoveCite, Inc.

(“NoveCite”), a Delaware corporation, of which we own 75 % of the issued and outstanding capital stock.

On August 23, 2021, we formed Citius Oncology,

(formerly named Citius Acquisition Corp.) (“Citius Oncology”), as a wholly-owned subsidiary in conjunction with the acquisition

of LYMPHIR, which began operations in April 2022.

On August 12, 2024, Citius Pharma and Citius Oncology entered into a merger agreement

with TenX Keane Acquisition, and its wholly owned subsidiary, TenX Merger Sub Inc (“Merger Sub”), whereby Merger Sub merged

with and into Citius Oncology.

After the merger and recapitalization (the “Merger”), the newly combined publicly traded company

is owned 92.3 % by Citius Pharma, and is named Citius Oncology, Inc.

(see Note 9).

Since its inception, we have devoted substantially

all our efforts to business planning, research and development, recruiting management and technical staff, and raising capital.

subject to a number of risks common to companies in the pharmaceutical industry including, but not limited to, risks related to the development

by the Company or its competitors of research and development stage products, regulatory approval and market acceptance of its products,

competition from larger companies, dependence on key personnel, dependence on key suppliers and strategic partners, the Company’s

ability to obtain additional financing and the Company’s compliance with governmental and other regulations.

Basis of Presentation

The accompanying consolidated financial statements

include the operations of Citius Pharmaceuticals, Inc., and its wholly-owned subsidiaries, Citius Pharmaceuticals, LLC and LMB and its

majority-owned subsidiaries NoveCite and Citius Oncology.

NoveCite, was inactive until October 2020.

On August 12, 2024, Citius Oncology,

previously a wholly-owned subsidiary, became a 92.3 % majority-owned subsidiary.

The operations of NoveCite and Citius Oncology

are included in the consolidated results.

The portion of equity that is not attributable to the Company, is presented as a non-controlling

interest within stockholder’s equity.

Unless excluded by shareholder agreements, the portion of net loss attributable to non-controlling

interests is included in the statement of operations.

All significant inter-company balances and transactions

have been eliminated in consolidation.

All share amounts and per share data reflect a

1-for-25 reverse stock split which went effective on November 25, 2024, subsequent to year-end which is more fully descripted in Note

GOING CONCERN UNCERTAINTY AND MANAGEMENT’S

The accompanying consolidated financial statements

have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal

course of business.

The Company experienced negative cash flows from operations of $ 28,201,375 and $ 29,060,212 , for the years ended September

30, 2024 and 2023, respectively.

The Company had a negative working capital of approximately $ 21.6 million at September 30, 2024.

Company estimates that its available cash resources will be sufficient to fund its operations through February 2025 which raises substantial

doubt about the Company’s ability to continue as a going concern within one year after the date that the accompanying consolidated

financial statements are issued.

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 February 2025, including its development plans for Mino-Lok, Mino-Wrap, Halo-Lido and NoveCite,

will depend on its ability to obtain regulatory approval for Mino-Lok and generate substantial revenue from the sale of LYMPHIR 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 regulatory approval, commercialization,

or future sales of LYMPHIR 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, 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.

The accompanying financial

statements do not include any adjustments that might result from the outcome of the above uncertainty.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies

followed by the Company in the preparation of the consolidated financial statements is as follows:

Use of Estimates

The process of preparing financial statements

in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to

make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities

at the date of financial statements and the reported amounts of revenues and expenses during the reporting period.

Estimates having relatively

higher significance include the accounting for in-process research and development, goodwill, stock-based compensation and income taxes.

Actual results could differ from those estimates and changes in estimates may occur.

Cash and Cash Equivalents

The Company considers all highly liquid instruments

with maturities of less than three months at the time of purchase to be cash equivalents.

From time to time, the Company may have cash

balances in financial institutions in excess of insurance limits.

The Company has never experienced any losses related to these balances.

Prepaid Expenses

Prepaid expenses at September 30, 2024 and 2023

consist of $ 0 and $ 154,611 of prepaid insurance, respectively, and $ 2,700,000 and $ 7,734,895 of advance payments made for the preparation

of long-lead time drug substance and product costs, respectively, which will be utilized in research and development activities or in

the manufacturing of LYMPHIR for sales.

Inventory is stated at the lower of actual accumulated

costs or net realizable value as of September 30, 2024 consisting of finished goods of $ 6,134,895 , and work in process of $ 2,133,862 related

to the manufacturing of LYMPHIR commercial products to be sold in 2025.

No reserves against inventory were deemed necessary based on an

evaluation of the product expiration dating.

During 2024, $ 6,134,895 of prepaid manufacturing

costs were transferred to inventory upon product approval and production commencement at our third-party manufacturers.

The Company has not yet selected a specific inventory

costing methodology (e.g., FIFO or weighted average).

Management plans to implement an appropriate inventory costing method prior to the

commencement of sales activities.

The selection of this method may impact future financial statements once sales begin.

Research and Development

Research and development costs, including upfront

fees and milestones paid to collaborators who are performing research and development activities under contractual agreements with the

Company, are expensed as incurred.

The Company defers and capitalizes its nonrefundable advance payments that are for research and development

activities until the related goods are delivered or the related services are performed.

When the Company is reimbursed by a collaboration

partner for work the Company performs, it records the costs incurred as research and development expenses and the related reimbursement

as a reduction to research and development expenses in its consolidated statement of operations.

Research and development expenses primarily

consist of clinical and non-clinical studies, materials and supplies, third-party costs for contracted services, and payments related

to external collaborations and other research and development related costs.

In-process Research and Development

The Company capitalizes intangible assets purchased from others for

use in research and development activities as In Process Research & Development (IPR&D) when the assets acquired have an alternative

future use, the Company anticipates future economic benefit from that use and the assets acquired are not dependent on future development.

Milestone payments upon regulatory approval that meet the same criteria are capitalized when the payments are considered recoverable based

on expected future cash flows.

Amortization of IPR&D over the exclusive regulatory period of the acquired asset commences upon revenue

In-process research and development includes $ 19,400,000 representing

the value of LMB’s drug candidate, Mino-Lok, an antibiotic lock solution in Phase 3 clinical development, which if approved, would

be used to treat catheter-related bloodstream infections, and is expected to be amortized on a straight-line basis over a period of eight

years commencing upon revenue generation.

In-process research and development also includes $ 73,400,000 representing the value of Citius

Oncology’s exclusive license for LYMPHIR (denileukin diftitox), a late-stage oncology immunotherapy for the treatment of CTCL, a

rare form of non-Hodgkin lymphoma and is expected to be amortized on a straight-line basis over a period of twelve years commencing upon

revenue generation.

Citius Oncology’s In-process research and development consists of $ 40,000,000 paid to Dr.

the asset purchase agreement and approval milestone fees of $ 27,500,000 to Dr.

Reddy’s and $ 5,900,000 to Eisai.

Included in the

IPR&D is the historical know-how, formula protocols, designs, and procedures that were needed to complete Phase 3.

In addition, the

contracts acquired in connection with Dr.

Reddy’s transaction with the clinical research and manufacturing organization are at market

rates and could be provided by multiple vendors in the marketplace.

Therefore, there is no fair value associated with the contracts acquired.

The Company reviews intangible assets annually

to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the

remaining useful life of any intangible asset.

If the carrying value of an asset exceeds its undiscounted cash flows, the Company writes

down the carrying value of the intangible asset to its fair value in the period identified.

No impairment has occurred since the acquisitions

through September 30, 2024.

Goodwill represents the value of LMB’s industry

relationships and its assembled workforce.

Goodwill is not amortized but it is tested at least annually for impairment.

The Company evaluates the recoverability of goodwill

annually or more frequently if events or changes in circumstances indicate that the carrying value of an asset might be impaired, in accordance

with Accounting Standard Update (“ASU”) 2017-04, Intangibles – Goodwill and Other (Topic 350):

Simplifying the Accounting

for Goodwill Impairment issued by the Financial Accounting Standards Bureau (“FASB”).

Goodwill is first qualitatively

assessed to determine whether further impairment testing is necessary.

Factors that management considers in this assessment include macroeconomic

conditions, industry and market considerations, overall financial performance (both current and projected), changes in management and

strategy and changes in the composition or carrying amount of net assets.

If this qualitative assessment indicates that it is more likely

than not that the fair value of a reporting unit is less than its carrying amount, a one-step test is then performed in accordance with

Under the simplified model, a goodwill impairment is calculated as the difference between the carrying amount of the reporting

unit and its fair value.

The Company performed a qualitative assessment

for its 2024 analysis of goodwill.

Based on this assessment, management does not believe that it is more likely than not that the carrying

value of the reporting unit exceeds its fair value.

Accordingly, no further testing was performed as management believes that there are

no impairment issues with respect to goodwill as of September 30, 2024.

Stock-Based Compensation

The Company recognizes compensation costs resulting

from the issuance of stock-based awards to employees and directors as an expense in the consolidated statement of operations over the

requisite service period based on the fair value for each stock award on the grant date.

The fair value of each option grant is estimated

as of the date of grant using the Black-Scholes option pricing model.

The Company estimates volatility using the trading activity of its

common stock.

Because the Company’s stock options have characteristics significantly different from those of traded options, and

because changes in the input assumptions can materially affect the fair value estimate, the existing model may not necessarily provide

a reliable single measure of fair value of the Company’s stock options.

The Company recognizes compensation costs resulting

from the issuance of stock-based awards to non-employees as an expense in the consolidated statement of operations over the service period

based on the measurement of fair value for each stock award and records forfeitures as they occur.

The Company follows accounting guidance regarding

the recognition, measurement, presentation, and disclosure of uncertain tax positions in the consolidated financial statements.

Tax positions

taken or expected to be taken in the course of preparing the Company’s tax returns are required to be evaluated to determine whether

the tax positions are “more-likely-than-not” of being sustained by the applicable tax authorities.

Tax positions not deemed

to meet a more-likely-than-not threshold would be recorded in the consolidated financial statements.

There are no uncertain tax positions

that require accrual or disclosure as of September 30, 2024.

Any interest or penalties are charged to expense.

During the years ended

September 30, 2024 and 2023, the Company did not recognize any interest and penalties.

Tax years subsequent to September 30, 2020 are

subject to examination by federal and state authorities.

The Company recognizes deferred tax assets and

liabilities based on differences between the financial reporting and tax basis of assets and liabilities, and operating loss and tax credit

carry forwards.

Deferred tax assets and liabilities are measured using the enacted tax rates and laws that are expected to be in effect

when the differences are expected to reverse.

The Company provides a valuation allowance, if necessary, for deferred tax assets for which

it does not consider realization of such assets to be “more-likely-than-not.” The deferred tax benefit or expense for the

period represents the change in the deferred tax asset or liability from the beginning to the end of the period.

Basic and Diluted Net Loss per Common Share

Basic and diluted net loss per common share applicable

to common stockholders is computed by dividing net loss applicable to common stockholders in each period by the weighted average number

of shares of common stock outstanding during such period.

For the periods presented, common stock equivalents, consisting of options and

warrants were not included in the calculation of the diluted loss per share because they were anti-dilutive.

Segment Reporting

The Company currently operates as a single segment.

Concentrations of Credit Risk

The Company has no significant off-balance-sheet

concentration of credit risk such as foreign exchange contracts, option contracts or other hedging arrangements.

Recently Issued Accounting Standards

Reportable Segment Disclosures

In November 2023, the

FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures.

The change in the standard improves

reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The changes improve

financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities

to enable investors to develop more decision-useful financial analyses.

The guidance will be effective for annual reporting periods beginning

after December 15, 2023, and for interim periods beginning after December 15, 2024.

Early adoption is permitted.

The standard will be

applied retrospectively.

The Company is currently evaluating the impact of adoption of the standard on its financial statement disclosures.

Income Tax Disclosures

In December 2023, the

FASB issued ASU 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures.

The standard enhances the transparency, decision

usefulness and effectiveness of income tax disclosures by requiring consistent categories and greater disaggregation of information in

the reconciliation of income taxes computed using the enacted statutory income tax rate to the actual income tax provision and effective

income tax rate, as well as the disaggregation of income taxes paid (refunded) by jurisdiction.

The standard also requires disclosure

of income (loss) before provision for income taxes and income tax expense (benefit) in accordance with U.S.

Securities and Exchange Commission

(SEC) Regulation S-X 210.4-08(h), Rules of General Application – General Notes to Financial Statements:

Income Tax Expense, and

the removal of disclosures no longer considered cost beneficial or relevant.

The guidance will be effective for annual reporting periods

beginning after December 15, 2024.

Early adoption is permitted.

The standard will be applied on a prospective basis, with retrospective

application permitted.

The Company is currently evaluating the impact of adoption of the standard on its financial statement disclosures.

Disaggregation of Income Statement Expenses

In November 2024, the

FASB issued ASU 2024-03, Income Statement Reporting–Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40),

Disaggregation of Income Statement Expenses.

The standard update improves the disclosures about a public business entity’s expenses

by requiring more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation

and amortization) included within income statement expense captions.

The guidance will be effective for annual reporting periods beginning

after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The standard updates

are to be applied prospectively with the option for retrospective application.

The Company is currently evaluating the impact of adoption

of the standard update on its financial statement disclosures.

PATENT AND TECHNOLOGY LICENSE AGREEMENTS

Patent and Technology License Agreement

LMB has a patent and technology license agreement

with Novel Anti-Infective Therapeutics, Inc.

(“NAT”) to develop and commercialize Mino-Lok® on an exclusive, worldwide

sub licensable basis, as amended.

LMB pays an annual maintenance fee each June until commercial sales of a product subject to the license

The Company recorded an annual maintenance fee expense of $ 90,000 in 2024 and 2023.

LMB will also pay annual royalties on net sales

of licensed products, with royalties ranging from the mid-single digits to the low double digits.

In limited circumstances in which the

licensed product is not subject to a valid patent claim and a competitor is selling a competing product, the royalty rate is in the low-

to mid-single digits.

After a commercial sale is obtained, LMB must pay minimum aggregate annual royalties of $ 100,000 in the first commercial

year which is prorated for a less than 12-month period, increasing $ 25,000 per year to a maximum of $ 150,000 annually.

LMB must also pay

NAT up to $ 1,100,000 upon achieving specified regulatory and sales milestones.

Finally, LMB must pay NAT a specified percentage of payments

received from any sub-licensees.

Unless earlier terminated by NAT, based on the

failure to achieve certain development and commercial milestones, the license agreement remains in effect until the date that all patents

licensed under the agreement have expired and all patent applications within the licensed patent rights have been cancelled, withdrawn,

or expressly abandoned.

Patent and Technology License Agreement

On January 2, 2019, we entered into a patent and

technology license agreement with the Board of Regents of the University of Texas System on behalf of the University of Texas M.

Cancer Center (“Licensor”), whereby we in-licensed exclusive worldwide rights to the patented technology for any and all uses

relating to breast implants.

We intend to develop a liquefying gel-based wrap containing minocycline and rifampin for the reduction

of infections associated with breast implants following breast reconstructive surgeries (“Mino-Wrap”).

We are required to

use commercially reasonable efforts to commercialize Mino-Wrap under several regulatory scenarios and achieve milestones associated with

these regulatory options leading to an approval from the U.S.

Food and Drug Administration (the “FDA”).

Under the license agreement, we paid an annual

maintenance fee of $ 75,000 and $ 60,000 in January 2023 and 2022, respectively.

The annual maintenance fee increases by $ 15,000 per year

up to a maximum of $ 90,000 and ceases on the first sale of product.

We also must pay up to an aggregate of $ 2.1 million in milestone payments,

contingent on the achievement of various regulatory and commercial milestones.

Under the terms of the license agreement, we also must

pay a royalty of mid- to upper-single digit percentages of net sales, depending on the amount of annual sales, and subject to downward

adjustment to lower- to mid-single digit percentages in the event there is no valid patent for the product in the United States at the

time of sale.

After the first sale of product, we will owe an annual minimum royalty payment of $ 100,000 that will increase annually by

$ 25,000 for the duration of the term.

We will be responsible for all patent expenses incurred by Licensor for the term of the agreement

although Licensor is responsible for filing, prosecution, and maintenance of all patents.

The agreement expires on the later of the expiration

of the patents or January 2, 2034.

The Company terminated the Mino-Wrap License Agreement

in December 2024.

License Agreement with Eterna

On October 6, 2020, our subsidiary, NoveCite,

signed an exclusive license agreement for a novel cellular therapy for acute respiratory distress syndrome (ARDS) with a subsidiary of

Novellus, Inc.

(“Novellus”).

Upon execution of the agreement, we paid $ 5,000,000 to Novellus, which was charged to research

and development expense during the year ended September 30, 2021, and issued Novellus shares of NoveCite’s common stock representing

25 % of the outstanding equity.

We own the other 75 % of NoveCite’s outstanding equity.

Pursuant to the terms of the original stock

subscription agreement, if NoveCite issued additional equity, subject to certain exceptions, NoveCite had to maintain Novellus’s

ownership at 25 % by issuing additional shares to Novellus.

In July 2021, Novellus was acquired by Brooklyn

ImmunoTherapeutics, Inc.

(“Brooklyn”).

In connection with that transaction, the stock subscription agreement was amended to

assign to Brooklyn all of Novellus’s right, title, and interest in the stock subscription agreement and delete the anti-dilution

protection and replace it with a right of first refusal whereby Brooklyn will have the right to purchase all or a portion of the securities

that NoveCite intends to sell or in the alternative, at the option of NoveCite, Brooklyn may purchase that amount of the securities proposed

to be sold by NoveCite to allow Brooklyn to maintain its then percentage ownership.

In October 2022, Brooklyn changed its name to Eterna

Therapeutics Inc.

Citius is responsible for the operational activities

of NoveCite and bears all costs necessary to operate NoveCite.

Citius’s officers are also the officers of NoveCite and oversee the

business strategy and operations of NoveCite.

As such, NoveCite is accounted for as a consolidated subsidiary with a noncontrolling interest.

Eterna has no contractual rights in the profits

or obligations to share in the losses of NoveCite, and the Company has not allocated any losses to the noncontrolling interest.

NoveCite is obligated to pay Eterna up to $ 51,000,000

upon the achievement of various regulatory and developmental milestones.

NoveCite also must pay a royalty equal to low double-digit percentages

of net sales, commencing upon the sale of a licensed product.

This royalty is subject to downward adjustment to an upper-single digit

percentage of net sales in any country in the event of the expiration of the last valid patent claim or if no valid patent claim exists

in that country.

The royalty will end on the earlier of (i) date on which a biosimilar product is first marketed, sold, or distributed

in the applicable country or (ii) the 10-year anniversary of the date of expiration of the last-to-expire valid patent claim in that country.

In the case of a country where no licensed patent ever exists, the royalty will end on the later of (i) the date of expiry of such licensed

product’s regulatory exclusivity and (ii) the 10-year anniversary of the date of the first commercial sale of the licensed product

in the applicable country.

In addition, NoveCite will pay to Eterna an amount equal to a mid-twenties percentage of any sublicensee fees

Under the terms of the license agreement, if Eterna

receives any revenue involving the original cell line included in the licensed technology, then Eterna shall remit to NoveCite 50 % of

such revenue.

The term of the license agreement continue on

a country-by-country and licensed product-by-licensed product basis until the expiration of the last-to-expire royalty term.

may terminate the license agreement upon written notice if the other party is in material default.

NoveCite may terminate the license

agreement at any time without cause upon 90 days prior written notice.

Eterna will be responsible for preparing, filing,

prosecuting, and maintaining all patent applications and patents included in the licensed patents in the territory, provided however,

that if Eterna decides that it is not interested in maintaining a particular licensed patent or in preparing, filing, or prosecuting a

licensed patent, NoveCite will have the right, but not the obligation, to assume such responsibilities in the territory at NoveCite’s

sole cost and expense.

License Agreement with Eisai

In September 2021, the Company entered into an

asset purchase agreement with Dr.

Reddy’s Laboratories SA, a subsidiary of Dr.

Reddy’s Laboratories, Ltd.

(collectively, “Dr.

Reddy’s”) and a license agreement with Eisai Co., Ltd.

(“Eisai”) to acquire an exclusive license of E7777 (denileukin

diftitox), a late-stage oncology immunotherapy for the treatment of CTCL, a rare form of non-Hodgkin lymphoma.

We have obtained the trade

name of LYMPHIR for E7777.

Citius Pharma assigned these agreements to Citius Oncology effective April 1, 2022.

Under the terms of these

agreements, we acquired Dr.

Reddy’s exclusive license for E7777 from Eisai and other related assets owned by Dr.

The exclusive license includes rights to develop and commercialize E7777 in all markets except for Japan and certain parts of Asia.

Additionally,

we retained an option on the right to develop and market the product in India.

Eisai retains exclusive development and marketing rights

for the agent in Japan and Asia.

Citius Pharma paid $ 40 million upfront payment which represents the acquisition date fair value of the

in-process research and development acquired from Dr.

Reddy’s is entitled to up to $ 40 million in development

milestone payments related to CTCL approvals in the U.S.

and other markets, up to $ 70 million in development milestones for additional

indications, as well as commercial milestone payments and low double-digit tiered royalties on net product sales, and up to $ 300 million

for commercial sales milestones.

We also must pay on a fiscal quarter basis tiered royalties equal to low double-digit percentages of

net product sales.

The royalties will end on the earlier of (i) the 15-year anniversary of the first commercial sale of the latest indication

that received regulatory approval in the applicable country and (ii) the date on which a biosimilar product results in the reduction of

net sales in the applicable product by 50 % in two consecutive quarters, as compared to the four quarters prior to the first commercial

sale of the biosimilar product.

We will also pay to Dr.

Reddy’s an amount equal to a low-thirties percentage of any sublicense upfront

consideration or milestone payments (or the like) received by us and the greater of (i) a low-thirties percentage of any sublicensee sales-based

royalties or (ii) a mid-single digit percentage of such licensee’s net sales.

Under the license agreement, Eisai is to receive

a $5.9 million development milestone payment upon initial approval and additional commercial milestone payments related to the achievement

of net product sales thresholds (which increases to $6.9 million in the event we have exercised our 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.

also were required to reimburse Eisai for up to $2.65 million of its costs to complete the ongoing Phase 3 pivotal clinical trial for

LYMPHIR for the CTCL indication and reimburse Eisai for all reasonable costs associated with the preparation of a Biologics License Application

(“BLA”) for LYMPHIR.

Eisai was responsible for completing the CTCL clinical trial, and chemistry, manufacturing, and controls

(CMC) activities through the filing of a BLA for LYMPHIR with the FDA.

The BLA was filed with the FDA on September 27, 2022.

be responsible for development costs associated with potential additional indications.

The term of the license

agreement will continue until (i) March 30, 2026, if there has not been a commercial sale of a licensed product in the territory, or (ii)

if there has been a first commercial sale of a licensed product in the territory by March 30.

2026, the 10-year anniversary of the first

commercial sale on a country-by-country basis.

The term of the license may be extended for additional 10-year periods for all countries

in the territory by notifying Eisai and paying an extension fee equal to $ 10 million.

Either party may terminate the license agreement

upon written notice if the other party is in material breach of the agreement, subject to cure within the designated time periods.

party also may terminate the license agreement immediately upon written notice if the other party files for bankruptcy or takes related

actions or is unable to pay its debts as they become due.

Additionally, either party will have the right to terminate the agreement if

the other party directly or indirectly challenges the patentability, enforceability or validity of any licensed patent.

Also under the asset

purchase agreement with Dr.

Reddy’s, we are required to (i) use commercially reasonable efforts to make commercially available products

in the CTCL indication, peripheral T-cell lymphoma indication and immuno-oncology indication, (ii) initiate two investigator initiated

immuno-oncology trials, (iii) use commercially reasonable efforts to achieve each of the approval milestones, and (iv) to complete each

specified immuno-oncology investigator trial on or before the four-year anniversary of the effective date of the definitive agreement.

Additionally, we are required to commercially launch a product in a territory within six months of receiving regulatory approval for such

product in each such jurisdiction.

On July 29, 2023, we received a Complete Response

Letter, (“CRL”) from the FDA regarding the BLA seeking approval for LYMPHIR.

The FDA has required that we incorporate enhanced

product testing, and additional controls agreed to with the FDA during the market application review.

The FDA raised no concerns relating

to the safety and efficacy clinical data package.

On September 8, 2023,

we announced that the FDA agreed with our plans to address the requirements outlined in the CRL.

The guidance from the FDA provides a

path for completing the necessary activities to support the resubmission of the BLA.

No additional clinical efficacy or safety trials

have been requested by FDA for the resubmission.

The Company remediated

the issues raised in the CRL by the FDA and received a BLA approval in August 2024.

As part of the definitive

agreement with Dr.

Reddy’s, Citius Pharmaceuticals acquired method of use patents in which LYMPHIR is administered in combination

with the programmed cell death protein 1 (“PD-1”) pathway inhibitor drug class.

PD-1 plays a vital role in inhibiting immune

responses and promoting self-tolerance through modulating the activity of T-cells, activating apoptosis of antigen-specific T cells and

inhibiting apoptosis of regulatory T cells.

The following patents

were acquired and subsequently transferred to Citius Oncology, Inc.:

US Provisional Application

63/070,645, which was filed on August 26, 2020, and subsequently published as US 2022/0062390 A1 on March 3, 2022, entitled Methods

of Treating Cancer.

International Patent

Application Number:

PCT/IB2021/0576733, which was filed with the World Intellectual Property Organization on August 23, 2021, and subsequently

published as WO 2022/043863 A1 on March 3, 2022, entitled, Combination for Use in Methods of Treating Cancer.

Upon FDA approval of

Lymphir in August 2024, Citius Oncology was subject to approval milestone fees totaling $ 33.7 million.

Citius Oncology paid $ 5.0 million

prior to year end and the remaining balance is reflected as a License Payable on the balance sheet.

The $ 33.7 million was recorded as

in-process research and development asset and will be subject to amortization as further discussed in Note 3.

COMMON STOCK, STOCK OPTIONS AND WARRANTS

Common Stock Issued for Services

On October 10, 2023, the Company issued 4,351

shares of common stock for media, and public and investor relations services and expensed the $ 76,146 fair value of the common stock issued.

On January 17, 2024, the Company issued 5,128

shares of common stock for general and business development advisory services and expensed the $ 98,079 fair value of the common stock

On April 25, 2024, the Company issued 6,000 shares

of common stock for financial, general and business development advisory services and expensed the $ 109,950 fair value of the common stock

Common Stock Offering

On April 30, 2024, the Company closed a registered

direct offering of 857,143 common shares and warrants to purchase up to 857,143 common shares, at a purchase price of $ 17.50 per share

and accompanying warrant for gross proceeds of $ 15,000,002 .

The warrants have an exercise price of $ 18.75 per share, are exercisable six

months from the date of issuance, and expire on October 30, 2029 .

The estimated fair value of the warrants issued to the investors was

approximately $ 11,206,000 .

Net proceeds were $ 13,718,951 after deducting

the placement agent fee of $ 1,050,000 , placement agent expenses of $ 135,000 , legal fees of $ 80,101 , and other offering expenses of $ 15,950 .

The Company also issued 60,000 warrants to the placement agent at an exercise price of $ 21.875 per share, that are exercisable six months

from the date of issuance and expire on April 25, 2029 .

The estimated fair value of the warrants issued to the placement agent was approximately

At the Market Offering Agreement

On August 12, 2024, the Company entered into

an agreement with HC Wainwright, (the “Manager’) to issue and sell through or to the Manager, as sales agent and/or

principal, from time to time during the term of this Agreement the Company’s common shares.

The Company completed the

following sales of its common shares through the Manager in September.

1) Net proceeds after deducting the broker fee and trading expenses but before offering expenses.

There were additional offering expenses of approximately

$ 162,000 in placement agent expenses and legal fees for net proceeds after expenses of $ 84,735 .

Stock Option Plans

Pursuant to our 2014 Stock Incentive Plan, we

reserved 34,667 shares of common stock.

As of September 30, 2024, there were options to purchase 18,484 shares outstanding, options to

purchase 2,318 shares were exercised, options to purchase 13,865 shares expired or were forfeited, and no shares were available for future

Pursuant to our 2018 Omnibus Stock Incentive Plan,

we reserved 80,000 shares of common stock.

As of September 30, 2024, there were options to purchase 67,200 shares outstanding, options

to purchase 4,667 shares were exercised, options to purchase 3,733 shares expired or were forfeited, and the remaining 4,400 shares were

transferred to the 2020 Omnibus Stock Incentive Plan (“2020 Plan”).

Pursuant to our 2020 Plan, we reserved 124,400

shares of common stock.

As of September 30, 2024, there were options to purchase 66,000 shares outstanding, options to purchase 8,800

shares expired or were forfeited, and the remaining 49,600 shares were transferred to the 2021 Omnibus Stock Incentive Plan (“2021

Stock Plan”).

Pursuant to our 2021 Stock Plan, we reserved 349,600

shares of common stock.

As of September 30, 2024, options to purchase 330,000 shares were outstanding, options to purchase 18,200 shares

expired or were forfeited, and the remaining 1,400 shares were transferred to the 2023 Omnibus Stock Incentive Plan (“2023 Stock

In November 2022, our Board approved the 2023

Stock Plan, subject to stockholder approval, which was received on February 7, 2023.

The 2023 Stock Plan has reserved for issuance 481,400

shares of common stock.

As of September 30, 2024, options to purchase 174,400 shares were outstanding, 4,000 shares were expired or forfeited

303,000 shares remain available for future grants.

The fair value of each stock option award is estimated

on the date of grant using the Black-Scholes option pricing model.

Volatility is estimated using the trading activity of our common stock.

The risk-free interest rate is based on the U.S.

Treasury yield curve in effect at the time of grant commensurate with the expected term

The expected term of stock options granted to employees and directors, all of which qualify as “plain vanilla,”

is based on the average of the contractual term (generally 10 years ) and the vesting period.

For non-employee options, the expected

term is the contractual term.

The following assumptions were used in determining

the fair value of stock option grants for the years ended September 30, 2024 and 2023:

Risk-free interest rate

4.62 – 4.66 %

1.05 – 2.94 %

Expected dividend yield

Expected term

5.50 – 10 years

6.50 – 10 years

Expected volatility

A summary of option activity under the Citius

Pharma plans (excluding the NoveCite and Citius Oncology Stock Plans) is presented below:

Shares Weighted-

Price Weighted-

Term Aggregate

Outstanding at September 30, 2023 532,207 $ 44.75 7.41 years $ 56,203

Granted 166,400 $ 17.50 9.04 years $ 0.00

Exercised ( 2,125 ) $ 0.38 $ 39,068

Forfeited or expired ( 40,398 ) $ 68.50

Outstanding at September 30, 2024 656,084 $ 36.41 7.26 years $ 0.00

Exercisable at September 30, 2024 347,618 $ 44.40 6.27 years $ 0.00

The weighted average grant date fair value of

the options granted during the year ended September 30, 2023 was estimated at $ 24.44 per share.

All these options vest over terms of 12

to 36 months and have a term of 10 years.

The weighted average grant date fair value of

the options granted during the year ended September 30, 2024 was estimated at $ 13.38 per share.

All these options vest over terms of 12

to 36 months and have a term of 10 years.

At September 30, 2024, unrecognized total compensation

cost related to unvested awards under the Citius stock plans of $ 2,678,274 is expected to be recognized over a weighted average period

of 1.44 years.

NoveCite Stock Plan – Under

the NoveCite Stock Plan, we reserved 2,000,000 common shares of NoveCite.

As of September 30, 2024, there were options outstanding to

purchase 1,911,500 common shares of NoveCite and 88,500 common shares of NoveCite available for future grants.

During the year ended September 30, 2021, NoveCite

granted options to purchase 2,000,000 common shares to employees at a weighted average exercise price of $ 0.24 per share, of which options

to purchase 88,500 common shares were forfeited, and options to purchase 1,911,500 common shares were exercisable as of September 30,

These options vest over 36 months and have a term of 10 years.

The weighted average remaining contractual term of options outstanding

under the NoveCite Stock Plan is 6.39 years.

No options were issued in fiscal years 20243 and 2023.

At September 30, 2024, there is no

remaining unrecognized total compensation cost related to unvested awards under the NoveCite Stock Plan.

Citius Oncology Stock Plan - Under

the Citius Oncology Stock Plan, adopted on April 29, 2023, we reserved 15,000,000 common shares of Citius Oncology.

The Citius Oncology

Stock Plan provides incentives to employees, directors, and consultants through grants of options, SARs, dividend equivalent rights, restricted

stock, restricted stock units, or other rights.

The following assumptions were used in determining

the fair value of the Citius Oncology stock option grants for the year ended September 30, 2024 and 2023:

Risk-free interest rate

Expected dividend yield

Expected term

Expected volatility

Volatility is estimated using the trading activity

of Citius Pharmaceuticals common stock.

until such time as Citius Oncology has sufficient history.

The risk-free interest rate is based

Treasury yield curve in effect at the time of grant commensurate with the expected term assumption.

The expected term of stock

options granted to employees and directors, all of which qualify as “plain vanilla,” is based on the average of the contractual

term (generally 10 years ) and the vesting period.

For non-employee options, the expected term is the contractual term.

A summary of option activity under the Citius Oncology plan is

presented below:

Shares Weighted-

Price Weighted-

Term Aggregate

Outstanding at September 30, 2023 12,600,000 $ 2.15 9.77 years $ —

Granted 150,000 2.15

Outstanding at September 30, 2024 12,750,000 $ 2.15 8.78 years $ —

Exercisable at September 30, 2024 3,937,500 $ 2.15 8.77 years $ —

The weighted average grant date fair value of

the Citius Oncology options granted during the year ended September 30, 2024 was estimated at $ 1.66 per share.

All these options vest

over terms of 12 to 36 months and have a term of 10 years.

At September 30, 2024, unrecognized total compensation cost related to unvested

awards under the Citius Oncology stock plan of $ 11,592,383 is expected to be recognized over a weighted average period of 1.77 years.

Stock-based compensation expense under all plans

for the years ended September 30, 2024 and 2023 was $ 11,839,678 (including $ 47,574 for the NoveCite plan and $ 7,498,817 for the Citius

Oncology plan) and $ 6,616,705 (including $ 130,382 for the NoveCite plan and $ 1,965,500 for the Citius Oncology plan), respectively.

The Company has reserved 2,945,337 shares of common

stock for the exercise of outstanding warrants.

The following table summarizes the warrants outstanding at September 30, 2024:

price Number Expiration Dates

August 2018 Offering Investors 28.75 156,863 August 14, 2024

August 2018 Offering Agent 39.84 7,576 August 8, 2024

April 2019 Registered Direct/Private Placement Investors 35.50 51,780 April 5, 2024

April 2019 Registered Direct/Private Placement Agent 48.28 9,605 April 5, 2024

September 2019 Offering Investors 19.25 111,732 September 27, 2024

September 2019 Offering Underwriter 27.97 7,774 September 27, 2024

February 2020 Exercise Agreement Placement Agent 31.88 5,555 August 19, 2025

May 2020 Registered Direct Offering Investors 25.00 66,824 November 18, 2025

May 2020 Registered Direct Offering Placement Agent 33.20 6,226 May 14, 2025

August 2020 Underwriter 32.81 8,079 August 10, 2025

January 2021 Registered Direct Offering Investors 30.78 123,648 July 27, 2026

January 2021 Registered Direct Offering Agent 40.44 14,065 July 27, 2026

February 2021 Offering Investors 42.50 823,211 February 19, 2026

February 2021 Offering Agent 47.03 100,256 February 19, 2026

May 2023 Registered Direct Offering Investors 37.50 500,000 May 8, 2028

May 2023 Registered Direct Offering Agent 37.50 35,000 May 3, 2028

April 2024 Registered Direct Offering Investors 18.75 857,143 October 30, 2029

April 2024 Registered Direct Offering Agent 21.875 60,000 April 25, 2029

On April 2, 2024, we extended the term by one

year to April 5, 2025, for 51,780 warrants for common stock with an exercise price of $ 35.50 per share and extended the term by one year

to April 5, 2025, for 9,605 warrants with an exercise price of $ 48.28 per share.

We recorded a deemed dividend of $ 321,559 based on the

excess of the fair value of the modified warrants over the fair value of the warrants before the modification, the effect of which was

an increase in the net loss attributable to common shareholders in the statement of operations for the year ended September 30, 2024.

On August 7, 2024, we extended the term by one

year to August 14, 2025, for 156,863 warrants for common stock with an exercise price of $ 28.75 per share and extended the term by one

year to August 8, 2025, for 7,576 warrants with an exercise price of $ 39.84 per share.

We recorded a deemed dividend of $ 375,511 based

on the excess of the fair value of the modified warrants over the fair value of the warrants before the modification, the effect of which

was an increase in the net loss attributable to common shareholders in the statement of operations

for the year ended September 30, 2024.

On September 25, 2024, we extended the term by

one year to September 27, 2025, for 111,732 warrants for common stock with an exercise price of $ 19.25 per share and extended the term

by one year to September 27, 2025, for 7,774 warrants with an exercise price of $ 27.97 per share.

We recorded a deemed dividend of $ 350,241

based on the excess of the fair value of the modified warrants over the fair value of the warrants before the modification, the effect

of which was an increase in the net loss attributable to common shareholders in the statement of operations for the year ended September

At September 30, 2024, the weighted average remaining

life of the outstanding warrants is 2.88 years, all warrants are exercisable, and there was no aggregate intrinsic value for the

warrants outstanding.

Common Stock Reserved

A summary of common stock reserved for future issuances by the Company

excluding all subsidiaries as of September 30, 2024 is as follows:

Stock plan options outstanding

Stock plan shares available for future grants

Warrants outstanding

RELATED PARTY TRANSACTIONS

On the following dates, we extended warrants held

by our Chairman and by our Executive Vice Chairman (see Note 5).

April 5, 2024

August 7, 2024

September 25, 2024

See also Note 9 for Merger transaction and transactions

consummated with our subsidiary to facilitate the Merger.

The Company is a party to a Shared Services Agreement

with Citius Oncology.

Under the terms of the agreement, the Company provides all executive, operational, financial, and administrative

support to Citius Oncology for a period of up to two (2) years.

The quarterly allocated expense to Citius Oncology by the Company is approximately

EMPLOYMENT AGREEMENTS

Employment Agreements

On October 19, 2017, the Company and its Chairman

of the Board, Leonard Mazur, entered into an employment agreement with a three-year term.

Upon expiration, the agreement automatically

renews for successive periods of one-year unless terminated pursuant to its terms.

Under the terms of the agreement, the Company is required

to pay base compensation plus incentives over the employment term plus severance benefits upon the occurrence of certain events as described

in the agreement.

On November 27, 2017, the Company entered into

an employment agreement with Jaime Bartushak to serve as the Chief Financial Officer and Principal Financial Officer of the Company.

agreement requires the Company to pay base compensation plus incentives over the employment term plus severance benefits upon the occurrence

of certain events as described in the agreement.

On April 12, 2022, we entered into an 18-month

employment agreement with Myron Holubiak to serve as Executive Vice Chairman.

Upon expiration, the agreement automatically renews for

successive periods of one-year unless terminated pursuant to its terms.

The agreement requires the Company to pay base compensation plus

incentives over the employment term plus severance benefits upon the occurrence of certain events as described in the agreement.

On July 13, 2020, we entered into an employment

agreement with Myron Czuczman, M.D.

to serve as Executive Vice President, Chief Medical Officer.

The agreement requires the Company to

pay base compensation plus incentives over the employment term plus severance benefits upon the occurrence of certain events as described

in the agreement.

The Company has employment agreements with certain

other employees that require the Company to pay base compensation plus incentives over the employment term plus severance benefits upon

the occurrence of certain events as described in the agreement.

COMMITMENTS AND CONTINGENCIES

Operating Lease

Effective July 1, 2019, we entered into a 76-month

lease for office space in Cranford, NJ.

We pay our proportionate share of real estate taxes and operating expenses in excess of the base

year expenses.

These costs are variable lease payments and are not included in the determination of the lease’s right-of-use asset

or lease liability.

We identified and assessed the following significant

assumptions in recognizing its right-of-use assets and corresponding lease liabilities:

As the Cranford lease does not provide an implicit rate, the Company estimated the incremental borrowing rate in calculating the present value of the lease payments.

The Company has estimated its incremental borrowing rate based on the remaining lease term as of the adoption date.

Since the Company elected to account for each lease component and its associated non-lease components as a single combined component, all contract consideration was allocated to the combined lease component.

The expected lease terms include noncancelable lease periods.

The elements of lease expense are as follows:

Lease cost Year Ended

September 30,

2024 Year Ended

September 30,

Operating lease cost $ 238,823 $ 238,824

Variable lease cost 25,809 4,771

Total lease cost $ 264,632 $ 243,595

Other information

Weighted-average remaining lease term - operating leases 1.1 Years 2.1 Years

Weighted-average discount rate - operating leases 8.0 % 8.0 %

Maturities of lease liabilities due under the Company’s non-cancellable

leases are as follows:

Year Ending September 30,

Total lease payments

Present value of lease liabilities

Classification

September 30,

Total lease assets

Total lease liabilities

Interest expense on the lease liability was $ 30,644

and $ 47,176 for the years ended September 30, 2024 and 2023, respectively.

This amount is classified within general & administrative

Commercial Manufacturing Contracts

The Company has entered into an agreement with

a Contract Manufacturing Organization for the manufacture and supply of drug substance.

The agreement runs through calendar 2026, with

an automatic renewal for a subsequent 4-year term.

Under this agreement, the Company is obligated to purchase minimum annual quantities

of batches at a set price per batch, subject to annual increases.

Additionally, the Company is required to pay an annual service fee of

The agreement also includes provisions for potential price increases

based on increases in the manufacturer’s operating expenses or industry indices, as well as significant termination fees

and obligations.

As of September 30, 2024, the total minimum purchase commitment under this agreement was approximately

$ 17.3 million consisting of payments of $ 11.9 million and $ 5.4 million for 2025 and 2026 respectively.

As of September 30, 2024, the Company also has commercial supply agreements

with two other vendors for the completion and packaging of finished drug products.

Minimum purchase commitments under these two agreements

amount to approximately $ 4.5 million consisting of purchase commitment obligations of $ 2.9 million in 2025 and $ 1.6 million in 2026.

Legal Proceedings

The Company is not involved in any litigation

that it believes could have a material adverse effect on its financial position or results of operations.

There is no action, suit, proceeding,

inquiry, or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to

the knowledge of the Company’s executive officers, threatened against or affecting the Company or its officers or directors in their

capacities as such.

MERGER AGRFEEMENT

On October 23, 2023, the Company and its then

wholly owned subsidiary Citius Oncology entered into an agreement and plan of merger and reorganization (the “Merger Agreement”)

with TenX Keane Acquisition, a Cayman Islands exempted company (“TenX”), and TenX Merger Sub Inc., a Delaware corporation

and a wholly owned subsidiary of TenX (“Merger Sub”).

On August 12, 2024, pursuant to the terms and

conditions of the Merger Agreement, Merger Sub merged with and into Citius Oncology, with Citius Oncology surviving as a wholly owned

subsidiary of TenX (the “Merger”) which was subsequently renamed Citius Oncology Sub.

Prior to closing of the Merger, TenX

migrated to and domesticated as a Delaware corporation in accordance with Section 388 of the General Corporation Law of the State of Delaware

and the Cayman Islands Companies Act (As Revised) (the “Domestication”).

As part of the Domestication, TenX changed its name

to “Citius Oncology, Inc.” (Nasdaq:

Immediately after the closing of the Merger, Citius Pharma owned approximately

92.3 % of the outstanding shares of common stock of Citius Oncology.

The Merger, net amount of $ 3,831,357 charged to

additional paid in capital consists of $ 395,515 of net liabilities of TenX on the date of the Merger (cash of $ 163,500 less liabilities

of $ 559,015 ) plus directly related transaction costs $ 2,358,780 and the cost of public rights in the amount of $ 1,077,062 .

As part of the Merger, the Company made capital

investments in Citius Oncology through cash contributions of $ 3,827,944 to fund transactions related to the Merger and by reclassifying

to additional paid in capital intercompany receivables of $ 33,180,961 that were due from Citius Oncology to the Company.

Simultaneously,

the Company advanced an additional $ 3,800,111 to Citius Oncology under the terms of a non-interest bearing note payable.

The note is repayable

upon a capital raise by Citius Oncology of at least $ 10,000,000 through the issuance of debt, equity or royalty financing.

recapitalization resulted in a 92.3 % ownership interest by the Company in Citius Oncology.

GAIN ON SALE OF NEW JERSEY NET OPERATING

The Company recognized a gain of $ 2,387,842 and

$ 3,585,689 for the years ended September 30, 2024 and 2023, respectively, in connection with the sale of certain New Jersey income tax

net operating losses to a third party under the New Jersey Technology Business Tax Certificate Transfer Program.

The Company recorded deferred income tax expense

of $ 576,000 for the both the years ended September 30, 2024 and 2023 related to the amortization for taxable purposes of its in-process

research and development asset.

The income tax expense (benefit) differs from

the amount of income tax determined by applying the U.S.

federal income tax rate to pretax income for the years ended September 30, 2024

and 2023 due to the following:

Computed “expected” tax benefit

Increase (decrease) in income taxes resulting from:

State taxes, net of federal benefit

Permanent differences

Increase in the valuation reserve

Deferred income taxes reflect the net tax effects

of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used

for income tax purposes.

Significant components of the Company’s deferred tax assets and liabilities are as follows:

September 30,

Deferred tax assets:

Net operating loss carryforward

Stock-based compensation

Capitalized research and development

Valuation allowance on deferred tax assets

( 53,821,000 )

( 44,915,000 )

Total deferred tax assets

Deferred tax liabilities:

In-process research and development

( 6,713,800 )

( 6,137,800 )

Total deferred tax liability

( 6,713,800 )

( 6,137,800 )

Net deferred tax liability

$ ( 6,713,800 )

$ ( 6,137,800 )

The Company has recorded a valuation allowance

against deferred tax assets as the utilization of the net operating loss carryforward and other deferred tax assets is uncertain.

the years ended September 30, 2024 and 2023, the valuation allowance increased by $ 8,906,000 and $ 4,984,000 , respectively.

in the valuation allowance during the years ended September 30, 2024 and 2023 was primarily due to the Company’s net operating loss.

At September 30, 2024, the Company has a federal net operating loss carryforward of approximately $ 155,000,000 .

Federal net operating

loss carryforwards of approximately $ 35,000,000 begin expiring in 2034 and carryforwards of approximately $ 120,000,000 generated in tax

years beginning after 2017 may be carried forward indefinitely.

As of September 30, 2024, the Company also has

estimated federal research and development credits of $ 4,250,000 to offset future income taxes.

The tax credit carryforwards will begin

to expire in 2036.

The Company accounts for uncertain tax positions

in accordance with the guidance provided in ASC 740, “Accounting for Income Taxes.” This guidance describes a recognition

threshold and measurement attribute for the financial statement disclosure of tax positions taken or expected to be taken in a tax return

and requires recognition of tax benefits that satisfy a more-likely-than-not threshold.

ASC 740 also provides guidance on de-recognition,

classification, interest and penalties, accounting in interim periods and disclosure.

There have been no reserves for uncertain tax positions

recorded by the Company to date.

NASDAQ LISTING

On March 12, 2024, the Company received formal

notice that the Nasdaq Stock Market LLC (“Nasdaq”) granted our request for an extension through September 9, 2024 (the “Extension

Notice”) to evidence compliance with the $ 1.00 per share requirement for continued inclusion on the Nasdaq Capital Market pursuant

to Nasdaq Listing Rule 5550(a)(2) (the “Bid Price Rule”).

On September 9, 2024 the Company received a letter

from the Listing Qualifications Staff of Nasdaq indicating that, based upon the closing bid price of the Company’s common stock,

par value $ 0.001 per share, for the prior 30 consecutive business days, the Company was not in compliance with the Bid Price Rule.

As the Company did not regain compliance with

the Bid Price Rule by September 9, 2024, the Company received a delisting determination letter on September 10, 2024.

Accordingly, the

Company intends to timely request a hearing before a Nasdaq Hearing Panel (“Panel”).

On October 28, 2024 the Panel held its hearing

with the Company.

On November 6, 2024, the Company received a decision

letter from the Panel granting the Company’s request to continue its listing on The Nasdaq Capital Market, subject to regaining

compliance with the Bid Price Rule on or before December 3, 2024.

On December 18, 2024, the Company received notification

from Nasdaq that it had regained compliance with the Bid Price Rule.

SUBSEQUENT EVENTS

On November 15, 2024, the Company entered into a securities purchase

agreement (the “Purchase Agreement”) with certain institutional investors for the issuance and sale, in a registered direct

offering by the Company (the “Offering”), of 480,000 shares of the Company’s common stock, par value $ 0.001 per share

(the “Shares”) and warrants (the “Warrants”) to purchase up to 480,000 shares of common stock.

Gross proceeds

received were $ 3,000,000 and net proceeds were approximately $ 2,650,000 after deducting for fees and expenses.

The Shares and Warrants

were sold at a combined offering price of $ 6.25 .

The Offering closed on November 18, 2024.

The Warrants have an exercise price equal to $ 6.25 per share, are exercisable

immediately upon issuance and will expire five years after the initial exercise date.

The Company also paid the placement agent 7 % of the gross proceeds

and also agreed to grant to the placement agent or its designees, placement agent warrants, to purchase up to 33,600 shares of the common

stock (the “Placement Agent Warrants”).

The terms of the Placement Agent Warrants are substantially the same as the terms

of the Warrants, except that the exercise price is $ 7.8125 per share.

The Company filed a Certificate

of Change (the “Certificate of Change”) with the Secretary of State of the State of Nevada to (i) effect a 1-for-25 reverse

stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding shares of common stock, par value $ 0.001

per share, and (ii) decrease the number of total authorized shares of common stock from 400,000,000 shares to 16,000,000 shares.

Stock Split was intended for the Company to regain compliance with the minimum bid price requirement of $ 1.00 per share of common stock

for continued listing on the Nasdaq Capital Market.

The Reverse Stock Split became effective at 5:00 p.m., Eastern Time, on November 25,

2024, and the Company’s Common Stock began trading on a Reverse Stock Split-adjusted basis on the Nasdaq Capital Market at the opening

of the market on November 26, 2024.

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 9A. Controls and Procedures