UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

 Washington, D.C. 20549

 FORM 10-K

 ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the Fiscal Year Ended September 30, 2025

 TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 Commission File Number 001-38174

 Citius Pharmaceuticals, Inc.

 (Exact name of Registrant as specified in its
Charter)

 Nevada

 27-3425913

 (State or other jurisdiction of
 incorporation or organization)

 (I.R.S. Employer
 Identification No.)

 11 Commerce Drive, First Floor, Cranford,
 NJ 07016

 (Address of principal executive offices) (Zip
Code)

 (908) 967-6677

 (Registrant's telephone number, including
area code)

 Securities registered pursuant to Section 12(b)
of the Exchange Act:

 Title of Each Class

 Trading Symbol(s)

 Name of Each Exchange on Which Registered

 Common Stock, par value $0.001 per share

 CTXR

 The NASDAQ Capital Market

 Indicate by check mark if the registrant is a
well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No

 Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No

(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes No

has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit such files). Yes No

is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.
See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company,"
and "emerging growth company" in Rule 12b-2 of the Exchange Act.

 Large accelerated filer

 Accelerated filer

 Non-accelerated filer

 Smaller reporting company

 Emerging growth company

 If an emerging growth company, indicate by check
mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.

has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that prepared or issued its audit report.

 If securities are registered pursuant to Section
12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction
of an error to previously issued financial statements.

 Indicate by check mark whether any of those error
corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's
executive officers during the relevant recovery period pursuant to §240.10D-1(b).

is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

 The aggregate market value of the voting and
non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average
bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal
quarter (March 31, 2025) was approximately $ 11,390,000.

 Affiliates for the purpose of this item refers
to the issuer's executive officers and directors and/or any persons or firms (excluding those brokerage firms and/or clearing houses
and/or depository companies holding issuer's securities as record holders only for their respective clients' beneficial interest)
owning 10% or more of the issuer's common stock, both of record and beneficially.

 Indicate the number of shares outstanding of
each of the registrant's classes of common stock, as of the latest practicable date:

 20,762,917 shares as of December 17, 2025, all
of one class of common stock, $0.001 par value.

 DOCUMENTS INCORPORATED BY REFERENCE

 Portions of the Company's Proxy Statement
for the Annual Meeting of Stockholders expected to be filed in January 2026 are incorporated by reference in Part III of this Report.

 Citius Pharmaceuticals, Inc.

 FORM 10-K

 September 30, 2025

 Page

 PART
 I

 Item
 1.

 Business

 Item
 1A.

 Risk
 Factors

 Item
 1B.

 Unresolved
 Staff Comments

 Item
 1C.

 Cybersecurity

 Item
 2.

 Properties

 Item
 3.

 Legal
 Proceedings

 Item
 4.

 Mine
 Safety Disclosures

 PART
 II

 Item
 5.

 Market
 for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 Item
 6.

 [Reserved]

 Item
 7.

 Management's
 Discussion and Analysis of Financial Condition and Results of Operations

 Item
 7A.

 Quantitative
 and Qualitative Disclosures About Market Risk

 Item
 8.

 Financial
 Statements and Supplementary Data

 Item
 9.

 Changes
 in and Disagreements With Accountants on Accounting and Financial Disclosure

 Item
 9A.

 Controls
 and Procedures

 Item
 9B.

 Other
 Information

 Item
 9C.

 Disclosure
 Regarding Foreign Jurisdictions that Prevent Inspections

 PART
 III

 Item
 10.

 Directors,
 Executive Officers and Corporate Governance

 Item
 11.

 Executive
 Compensation

 Item
 12.

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

 Item
 13.

 Certain
 Relationships and Related Transactions, and Director Independence

 Item
 14.

 Principal
 Accountant Fees and Services

 PART
 IV

 Item
 15.

 Exhibits
 and Financial Statement Schedules

 Item
 16.

 Form
 10-K Summary

 Signatures

 NOTES

 In this annual report on Form 10-K, and unless
the context otherwise requires, the "Company," "we," "us" and "our" refer to Citius Pharmaceuticals,
Inc. and its wholly-owned subsidiaries Citius Pharmaceuticals, LLC and Leonard-Meron Biosciences, Inc., and its majority-owned subsidiaries,
Citius Oncology, Inc. (Nasdaq: CTOR) ("Citius Oncology") and NoveCite, Inc., taken as a whole.

 Mino-Lok and LYMPHIR TM (denileukin
diftitox) are our registered trademarks. All other trade names, trademarks and service marks appearing in this annual report are the
property of their respective owners. We have assumed that the reader understands that all such terms are source-indicating. Accordingly,
such terms, when first mentioned in this report, appear with the trade name, trademark or service mark notice and then throughout the
remainder of this report without trade name, trademark or service mark notices for convenience only and should not be construed as being
used in a descriptive or generic sense.

 FORWARD-LOOKING STATEMENTS

 This Annual Report on Form 10-K contains "forward-looking
statements." Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations,
plans, strategies, predictions, or any other statements relating to our future activities or other future events or conditions. These
statements are based on current expectations, estimates and projections about our business based, in part, on assumptions made by management.
These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict.
Therefore, actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking
statements due to numerous factors discussed from time to time in this report, including the risks described under Item 1A - "Risk
Factors," and Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations"
in this report and in other documents which we file with the Securities and Exchange Commission ("SEC"). In addition, such
statements could be affected by risks and uncertainties related to:

 our
 independent registered public accounting firm's report includes an explanatory paragraph
 stating that there is substantial doubt about our ability to continue as a going concern;

 our need for substantial
 additional funds and its ability to raise those funds;

 our ongoing evaluation
 of strategic alternatives;

 the ability of Citius Oncology
 to commercialize LYMPHIR, including covering the costs of licensing payments, product manufacturing and other third-party goods and
 services;

 our ability to recognize
 the anticipated benefits of the August 2024 reverse merger whereby Citius Oncology became a standalone publicly-traded company and
 our majority-owned subsidiary (the "Merger"), which may not be realized fully, if at all, or may take longer to realize
 than expected;

 our ability to obtain regulatory
 approval for and successfully commercialize Mino-Lok;

 the cost, timing, and results
 of our pre-clinical and clinical trials for our other product candidates;

 our ability to apply for,
 obtain and maintain required regulatory approvals for our other product candidates;

 our ability to maintain
 compliance with the continued listing requirements of the Nasdaq Stock Market LLC ("Nasdaq");

 our ability to obtain,
 perform under and maintain financing and strategic agreements and relationships;

 the commercial feasibility
 and success of our technology and our product candidates;

 our ability to recruit
 qualified management and technical personnel to carry out our operations; and

 other risks and uncertainties
 set forth under the section entitled "Risk Factors."

 Any forward-looking statements speak only as
of the date on which they are made, and, except as may be required under applicable securities laws, we do not undertake any obligation
to update any forward-looking statement to reflect events or circumstances after the filing date of this report.

 SUMMARY OF RISK FACTORS

 An investment in our securities involves a high
degree of risk. You should carefully consider the risks summarized in Item 1A, "Risk Factors" included in this report. These
risks include, but are not limited to, the following:

 Our independent registered
 public accounting firm's report includes an explanatory paragraph stating that there is substantial doubt about our ability
 to continue as a going concern.

 We require substantial
 additional funding, which may not be available on acceptable terms, or at all. Failure to obtain this necessary capital when needed
 on acceptable terms, or at all, or execute on alternative strategic paths, could force us to delay, limit, reduce or terminate our
 commercialization efforts and business operations.

 We have a history of net
 losses and expect to incur losses for the foreseeable future. We may never generate revenues or, if we are able to generate revenues,
 achieve profitability.

 Our exploration of alternative
 strategic paths may not result in completing a transaction and the process or conclusion thereof could adversely affect our stock
 price. If we do not successfully complete a strategic transaction, our Board of Directors (the "Board") may decide to
 pursue a dissolution and liquidation of our Company.

 Both the Company and Citius
 Oncology are heavily dependent on the launch and commercial success of LYMPHIR.

 We, through Citius Oncology,
 have one approved product, LYMPHIR, that we launched in December 2025, and have an unproven business strategy, and a limited operating
 history upon which to evaluate it, and may never achieve successful commercialization of LYMPHIR or any future product candidates
 or achieve or maintain profitability.

 We are the guarantor of
 milestone payments to the licensor and former licensee of the LYMPHIR intellectual property, which could adversely affect our profitability. A
 material breach under our license agreements, including timely payment, gives the licensor party the right to terminate the license
 agreement, which would materially harm our business.

 Our failure to abide by
 our contractual obligations with third parties upon whom we rely on to formulate and manufacture our product candidates, including
 timely payment, could result in the loss third-party support.

 We face significant risks
 in our development and commercialization efforts of LYMPHIR and development of our other product candidates.

 We may choose not to continue
 developing any of our product candidates at any time during development, which would reduce or eliminate our potential return on
 investment for those product candidates.

 While our business strategy
 generally is to focus on the development of late-stage product candidates to lessen the development risk, there is still significant
 risk to successfully developing a product candidate.

 If we are unable to file
 for approval of Mino-Lok or Halo-Lido under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, or if we are required to
 generate additional data related to safety and efficacy under Section 505(b)(2), we may be unable to meet our anticipated development
 and commercialization timelines.

 Two of our product candidates,
 Mino-Lok and Halo-Lido, are combination products consisting of components that have each been separately approved by the FDA for
 other indications and which are commercially available and marketed by other companies. Our approval under Section 505(b)(2), if
 received, would not preclude physicians, pharmacists, and patients from obtaining individual drug products and titrating the dosage
 of these drug products as close to our approved dose as possible.

 Any fast track designation
 or grant of priority review status by the FDA may not actually lead to a faster development or regulatory review or approval process,
 nor will it assure FDA approval of our product candidates. Additionally, our product candidates may treat indications that do not
 qualify for priority review vouchers.

 We do not own Citius Oncology
 or NoveCite, Inc. outright and will share any benefits from the commercialization of LYMPHIR and the development of the NoveCite
 product candidate with the other stockholders.

 Even if we receive regulatory
 approval to commercialize a product candidate, that product may not gain market acceptance among physicians, patients, healthcare
 payers or the medical community and may not generate significant revenue.

 Even if approved for marketing
 by applicable regulatory bodies, we will not be able to create a market for any of our product candidates if we fail to establish
 marketing, sales, and distribution capabilities, either on our own or through arrangements with third parties.

 Our projections regarding
 the market opportunity for LYMPHIR and our other product candidates may not be accurate.

 The markets in which we
 operate are highly competitive and we may be unable to compete successfully against new entrants or established companies.

 Our ability to generate
 product revenues will be diminished if any of our product candidates that may be approved sell for inadequate prices or patients
 are unable to obtain adequate levels of reimbursement.

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

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

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

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

 We rely on the specialized
 expertise of the executive management and other key personnel and the loss of any of them or our inability to successfully hire their
 successors could harm our business.

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

 We are subject to information
 technology and cyber-security threats which could have an adverse effect on our business and results of operations.

 The results of pre-clinical
 studies and completed clinical trials are not necessarily predictive of future results, and our current and any future product candidates
 may not have favorable results in later studies or trials.

 Conflicts of interest may
 arise from our relationships with Citius Oncology and NoveCite.

 We might not obtain the
 necessary U.S. or foreign regulatory approvals to commercialize any current product candidates.

 Following any regulatory
 approval of any product candidate, we will be subject to ongoing regulatory obligations and restrictions, which may result in significant
 expense and limit our ability to commercialize our other product candidates.

 We could be forced to pay
 substantial damage awards if product liability claims that may be brought against us are successful.

 Failure to protect our
 intellectual property may be adversely affect our business. Our business may also suffer, and/or we may have to pay damages or defend
 against litigation, if we infringe the rights of third parties.

 The U.S. government could
 have "march-in rights" to certain of our intellectual property.

 We may be unable to achieve
 some or all of the benefits that we expect to achieve from the Merger.

 A planned distribution
 by Citius Pharma to its stockholders of shares of Citius Oncology could result in significant tax liability to Citius Pharma and
 our stockholders.

 Our failure to maintain
 compliance with Nasdaq's continued listing requirements could result in the delisting of our common stock.

 The market price of our
 common stock is highly volatile, and you may lose some or all of your investment. Volatility in our share price could also subject
 us to securities litigation.

 You may experience dilution
 of your ownership interests because of the future issuance of additional shares of our common stock or securities convertible into
 common stock.

 Our Certificate of Incorporation
 allows our Board of Directors to create new series of preferred stock without further approval by our stockholders, which could adversely
 affect the rights of the holders of the common stock.

 We have not paid cash dividends
 in the past and we do not expect to pay cash dividends in the foreseeable future. Any return on investment may be limited to the
 capital appreciation, if any, of our common stock.

 Provisions in our Amended
 and Restated Articles of Incorporation, as amended, and under Nevada law could discourage a takeover that stockholders may consider
 favorable and may lead to entrenchment of management.

 If our estimates or judgments
 relating to our critical accounting policies prove to be incorrect or applicable standards or interpretations change, the Company's
 results of operations could be adversely affected.

 Item 1. Business

 Citius Pharmaceuticals, Inc., headquartered in
Cranford, New Jersey, is a biopharmaceutical company dedicated to the development and commercialization of first-in-class critical care
products, with a focus on oncology, anti-infectives in adjunct cancer care and unique prescription products. Our goal generally is to
achieve leading market positions by providing therapeutic products that address unmet medical needs yet have a lower development risk
than usually is associated with new chemical entities. New formulations of previously approved drugs with substantial existing safety
and efficacy data are a core focus. We seek to reduce development and clinical risks associated with drug development, yet still focus
on innovative applications. Our strategy centers on products that have intellectual property and regulatory exclusivity protection, while
providing competitive advantages over other existing therapeutic approaches.

 In December 2025, we became a commercial company
with the launch of LYMPHIR by our majority owned subsidiary Citius Oncology. We also have late-stage product candidates in development.

 Since its inception, the Company has devoted
substantially all of its efforts to business planning, acquiring our proprietary technology, research and development, recruiting management
and technical staff, and raising capital. We are developing three proprietary products Mino-Lok, an antibiotic lock solution used to
treat patients with catheter-related bloodstream infections by salvaging the infected catheter; Halo-Lido, a corticosteroid-lidocaine
topical formulation that is intended to provide anti-inflammatory and anesthetic relief to persons suffering from hemorrhoids; and NoveCite,
a mesenchymal stem cell therapy for the treatment of ARDS. Citius Oncology achieved the approval from the FDA for LYMPHIR, in-licensed
by Citius Pharma in September 2021 (now owned by Citius Oncology), an engineered IL-2 diphtheria toxin fusion protein, for the treatment
of patients with persistent or recurrent cutaneous T-cell lymphoma ("CTCL"). We believe these unique markets for our products
are large, growing, and underserved by the current prescription products or procedures.

 We are subject to a number of risks common to
companies in the pharmaceutical industry including, but not limited to, risks related to the development by us or our competitors of
research and development stage products, market acceptance of our products that receive regulatory approval, 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.

 The Company was founded as Citius Pharmaceuticals,
LLC, a Massachusetts limited liability company, on January 23, 2007. On September 12, 2014, Citius Pharmaceuticals, LLC entered into
a Share Exchange and Reorganization Agreement, with Citius Pharma (formerly Trail One, Inc.), a publicly traded company incorporated
under the laws of the State of Nevada. Citius Pharmaceuticals, LLC became a wholly-owned subsidiary of Citius Pharma. On March 30, 2016,
Citius Pharma acquired Leonard-Meron Biosciences, Inc. ("LMB") as a wholly-owned subsidiary. LMB was a pharmaceutical company
focused on the development and commercialization of critical care products with a concentration on anti-infectives. On September 11,
2020, we formed NoveCite, Inc. ("NoveCite"), a Delaware corporation, of which we own 75% of the issued and outstanding capital
stock. NoveCite is focused on the development and commercialization of its proprietary mesenchymal stem cells for the treatment of acute
respiratory disease syndrome ("ARDS").

 Citius Oncology and the Merger

 On August 23, 2021, we formed Citius Acquisition
Corp. ("SpinCo") as a wholly-owned subsidiary in conjunction with the acquisition of LYMPHIR. SpinCo began operations in
April 2022, when Citius Pharma transferred the assets related to LYMPHIR to SpinCo, including the related license agreement with Eisai
Co., Ltd. ("Eisai") and the related asset purchase agreement with Dr. Reddy's Laboratories SA, a subsidiary of Dr.
Reddy's Laboratories, Ltd. (collectively, "Dr. Reddy's").

 On October 23, 2023, Citius Pharma and SpinCo
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 SpinCo, with SpinCo surviving as a wholly owned subsidiary of TenX, which was subsequently renamed Citius Oncology Sub. Prior to
the closing of the Merger (the "Closing"), 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: CTOR). Immediately after the closing
of the Merger, Citius Pharma owned approximately 92% of the outstanding shares of common stock of Citius Oncology. As of December 17,
2025, Citius Pharma owned approximately 77.9% of Citius Oncology (excluding pre-funded warrants to purchase up to 15,229,358 shares of
Citius Oncology common stock in a transaction that closed on December 10, 2025).

 Since its inception, Citius Pharma has funded
and continues to fund Citius Oncology, and Citius Pharma and Citius Oncology are party to an amended and restated shared services agreement
(the "A&R Shared Services Agreement"), which governs certain management and scientific services that Citius Pharma provides
Citius Oncology.

 LYMPHIR TM (denileukin diftitox-cdxl)

 In September 2021, the Company announced that
it had entered into an asset purchase agreement with Dr. Reddy's to acquire its exclusive license of E7777 (denileukin diftitox).
E7777, an engineered IL-2-diphtheria toxin fusion protein, is an improved formulation of oncology agent, ONTAK, which was previously
approved by the FDA for the treatment of patients with persistent or recurrent CTCL. Dr. Reddy's had previously exclusively licensed
E777 in select markets from Eisai and as part of the transaction, Eisai entered into a license agreement whereby Eisai assigned all of
its rights to E7777 to Citius Pharma. Citius Pharma renamed E7777 as I/ONTAK and also obtained the trade name LYMPHIR for the product.
Denileukin diftitox is referred to in this report as E7777, I/ONTAK or LYMPHIR, depending on the period of time and context that is being
discussed. In April 2022 LYMPHIR was assigned to Citius Oncology.

 LYMPHIR is a recombinant DNA-derived fusion protein
designed to direct the cytocidal action of diphtheria toxin (DT) to cells which express the IL-2 receptor. After uptake into the cell,
the DT fragment is cleaved and the free DT fragments inhibit protein synthesis, resulting in cell death. Consequently, LYMPHIR's
differentiated mechanism of action supports two therapeutic effects: (i) killing tumors by binding to IL-2 receptors to deliver diphtheria
toxin directly to the tumor cells, and (ii) depleting immunosuppressive regulatory T lymphocytes (Tregs) to enhance antitumor activity.

 Phase 3 Trial (E7777-G000-302) Design

 LYMPHIR is an improved formulation of oncology
agent, ONTAK, which was previously approved by the FDA for the treatment of patients with persistent or recurrent CTCL. ONTAK was
marketed in the U.S. previously. The manufacturing formulation improvements were substantial enough that the FDA required a new clinical
study to be performed (Study E7777-G000-302). The safety profile of LYMPHIR from study E7777-G000-302 is comparable to Study 93-04-11/L4389-11,
which served as the basis for the full approval of ONTAK. Study E7777-G000-302, a global, multicenter, open-label single-arm pivotal
clinical trial for the treatment of patients with persistent or recurrent CTCL, commenced (first subject consented) in May 2013 and completed
(data cutoff for primary analysis) in December 2021. The study was sponsored by Eisai and was conducted at 17 sites in the United States
and three sites in Australia. Inclusion criteria for the study were to evaluate patients in advanced stage CTCL (Mycosis Fungoides or
S zary Syndrome), who received at least one prior CTCL therapy. The objectives were met for Study E7777-G000-302, in both the
lead-in phase and the main phase. Overall, the primary and secondary endpoints of Study E7777-G000-302 demonstrate the tolerability and
clinical benefit of 9 g/kg/day LYMPHIR for the treatment of adult patients with relapsed or refractory Stage I-III CTCL. No new
safety signals were identified compared to ONTAK.

 The pivotal trial of E7777 was divided into two
phases, a lead-in phase with 21 subjects that evaluated dose finding, pharmacokinetics and immunogenicity, and assessed the Objective
Response Rate (the "ORR"). An ORR is defined as a greater than 50% reduction in tumor burden. Patients received a daily intravenous
infusion of denileukin diftitox from Day 1 through Day 5 of each 21-day cycle. In the lead-in phase, the main objectives were to determine
the maximum tolerated dose (MTD) of LYMPHIR and to select the dose of LYMPHIR to be used in the main phase (subjects were treated at
doses ranging from 6 to 15 g/kg/day). The MTD was 12 g/kg/day and, based on data of the lead-in phase, 9 g/kg/day
was selected for the main phase of the study. The objectives of the main phase were to evaluate the efficacy and safety of LYMPHIR (at
the dose determined in the lead-in phase of 9 g/kg/day).

 The primary efficacy endpoint was tumor response
rate, i.e. ORR per the Independent Review Committee (IRC) assessment based on International Society for Cutaneous Lymphomas/ European
Organization for Research and Treatment of Cancer Global Response Score (GRS; Olsen, et al., 2011).

 The secondary efficacy endpoints were:

 Duration of response (DOR)
 based on GRS;

 Time to response based
 on GRS;

 ORR assessed by investigator
 using GRS;

 Objective response assessed
 by IRC using Prince (Prince, et al., 2010);

 Skin response (according
 to modified Severity Weighted Assessment Tool [mSWAT]);

 Duration of skin response;
 and

 Time to skin response.

 Overall, there were 25 responders out of 69 subjects
in the Primary Efficacy Analysis Set (i.e., subjects with CTCL disease Stages I to III (9 g/kg/day)) as assessed by the IRC, with
an ORR of 36.2% (95% CI: 25.0%, 48.7%), with 8.7% (6/69) achieving a Complete Response (CR) and 27.5% (19/69) achieving a Partial Response.

 Among responders, the median follow-up for duration
of response was 6.5 months (range: 3.5+, 23.5+ months). Median time to response was 1.4 months (range: 0.7 to 5.6 months).

 ORR (95% CI) by investigator was 42.3% (30.6%,
54.6%) (30 of 71 subjects), with 8.5% (6 subjects) achieving a CR. ORR (95% CI) by IRC assessment using the Prince (2010) criteria was
36.2% (25.0%, 48.7%) (25 of 69 subjects). Further, an ORR of 38.1% in the intent to treat population and 44.4% in the efficacy evaluable
populations were observed. The 2-sided, exact 95% CI of ORR was calculated using the Clopper-Pearson method. Per protocol, LYMPHIR demonstrated
clinical benefit if the lower bound of the 2-sided 95% exact CI of the ORR exceeded 25%.

 Skin responses were the same as GRS objective
responses, for both IRC and investigator assessments. Responses were deep, reflected by the substantial decrease in skin tumor burden,
including 8 subjects with 100% clearance of skin lesions per IRC.

 In the second and main phase of the pivotal trial,
70 patients were administered the 9 g/kg/day rate for 5 consecutive days in 21-day cycles. The inclusion criteria were identical
to the lead-in phase.

 Phase 3 Trial Efficacy & Safety Results

 The efficacy population of the main phase included
69 patients with relapsed or refractory stage I to III CTCL. Of the 69 patients, the median age was 64 years (range: 28 to 87 years),
65% were male, 73% were White, 19% Black or African American, 1% Asian, and 14% Hispanic or Latino. The CTCL disease stage was IA in
7%, IB in 23%, IIA in 13%, IIB in 35%, IIIA in 12%, and IIIB in 10%. The median number of prior therapies was 4 (range: 1 to 18), including
both skin-directed and systemic therapies. Prior therapies included photodynamic therapy (56%), total skin electron beam therapy (42%),
systemic retinoids (49%), methotrexate/pralatrexate (49%), histone deacetylase inhibitor (35%), brentuximab vedotin (26%) and mogamulizumab
(12%).

 Efficacy was established based on ORR, according
to ISCL/EORTC Global Response Score (GRS) per Independent Review Committee (Olsen 2011). Efficacy results are shown in the table below.

 LYMPHIR

 Efficacy Results of E7777-G000-302

 9 g/kg/day

 (N = 69)

 ORR (GRS)% a

 36%

 (95% CI b)

 (25, 49)

 Complete Response

 9%

 Partial Response

 27%

 Duration of Response

 Median (range), months

 6.5 (3.0 +, 23.5 +)

 Duration 6 months, n (%)

 52%

 Median Time to Response, months

 1.4

 (95% CI b)

 (0.7, 5.6)

 (a)

 ORR, Objective Response
 Rate per Olsen, et all (2011) Global Response Score (GRS), by Independent Review Committee (IRC)

 (b)

 CI = confidence interval

 Both the endpoints and objectives of Study E7777-G000-302
were met, while the statistical confidence interval (95% CI) resulted in a marginal shortfall (25% actual achievement vs. >25% from
the statistical plan). Throughout the initial BLA review period, the FDA accepted the Study E7777-G000-302 data which demonstrated both
tolerability and clinical benefit.

 Overall, LYMPHIR was well-tolerated with the
use of pre-medications, close patient monitoring, and prompt initiation of supportive measures and drug management. There was no evidence
of cumulative toxicity and most patients experienced low grade 1 or 2 treatment emergent adverse events.

 Serious adverse reactions occurred in 38% of
patients who received LYMPHIR. Serious adverse reactions in > 2% of patients included capillary leak syndrome (10%), infusion-related
reaction (9%), sepsis (7%), skin infection (2.9%), pyrexia (2.9%), and rash (2.9%). There were no Grade 5 adverse events in the Study
E7777-G000-302, Stage I-III Safety Set (which is the safety set FDA required for inclusion in the package insert/label).

 Adverse Reactions ( 10%) in Patients with
Relapsed or Refractory Stage I-III CTCL Who Received

 LYMPHIR in E7777-G000-302

 LYMPHIR
 N = 69

 Adverse Reaction

 All Grades
 (%)

 Grade 3 or 4
 (%)

 Gastrointestinal disorders

 Nausea

 1.4

 Diarrhea

 Vomiting

 Constipation

 General disorders and administration site conditions

 Fatigue a

 Edema b

 1.4

 Chills

 1.4

 Fever c

 1.4

 Musculoskeletal and connective tissue disorders

 Musculoskeletal
 pain d

 2.9

 Arthralgia e

 Nervous system disorders

 Headache f

 Dizziness

 Mental
 status changes g

 Injury, poisoning and procedural complications

 Infusion-related reaction

 Skin and subcutaneous tissue disorders

 Rash h

 Pruritis i

 Vascular disorders

 Capillary leak syndrome

 Metabolism and nutrition disorders

 Decreased appetite

 1.4

 Eye disorders

 Vision
 changes j

 Investigations

 Weight increased

 Infections and infestations

 Skin infection

 1.4

 Renal and urinary disorders

 Renal insufficiency l

 2.9

 Psychiatric disorders

 Insomnia

 (a)

 Includes fatigue, asthenia,
 and lethargy.

 (b)

 Includes edema, edema peripheral
 generalized edema, face edema, swelling face, peripheral swelling.

 (c)

 Includes fever, pyrexia,
 tumor associated fever.

 (d)

 Includes musculoskeletal
 pain, back pain, neck pain, pain in extremity, myalgia, bone pain, flank pain.

 (e)

 Includes arthralgia, joint
 swelling, joint range of motion decreased, musculoskeletal stiffness.

 (f)

 Includes headache, migraine.

 (g)

 Includes mental status
 changes, amnesia, confusional state, delirium, altered state of consciousness, hallucinations (including auditory), memory impairment,
 disturbance in attention, somnolence, cognitive disorder.

 (h)

 Includes rash, dermatitis,
 drug eruption, erythema, palmar erythema, toxic skin eruption, rash maculo-papular, rash papular, rash pustular, rash pruritic, dermatitis
 exfoliative generalized, acute generalized exanthematous pustulosis.

 (i)

 Includes pruritis, itching.

 (j)

 Includes vision blurred,
 photopsia, visual impairment.

 (k)

 Includes skin infection,
 skin bacterial infection, staphylococcal skin infection, cellulitis, impetigo.

 (l)

 Includes renal failure,
 nephropathy, acute kidney injury, blood creatinine increased, renal impairment.

 Grade refers to the severity of the adverse reaction.
The Common Terminology Criteria for Adverse Events displays Grades 1 through 5 with unique clinical descriptions of severity for each
adverse reaction based on this general guideline:

 Grade 1 - Mild; asymptomatic
 or mild symptoms; clinical or diagnostic observations only; intervention not indicated.

 Grade 2 - Moderate; minimal,
 local or noninvasive intervention indicated; limiting age-appropriate instrumental activities of daily living.

 Grade 3 - Severe or medically
 significant but not immediately life-threatening; hospitalization or prolongation of hospitalization indicated; disabling; limiting
 self-care activities of daily living.

 Grade 4 - Life-threatening
 consequences; urgent intervention indicated.

 Grade 5 - Death related
 to the adverse reaction.

 Investigator Initiated Trials

 We believe there is an opportunity in the field
of immuno-oncology and have undertaken two investigator-initiated trials to evaluate the potential safety and efficacy of LYMPHIR as
an immuno-oncology combination therapy.

 A Phase 1 trial was initiated in June 2021 at
the University of Minnesota, Masonic Cancer Center. This study is a single-arm open-label trial which has an estimated enrollment of
20 participants who will be administered denileukin diftitox prior to Chimeric Antigen Receptor ("CAR-T") therapies. The
Phase 1 study consists of two components: dose finding to establish a maximum tolerated dose ("MTD") of denileukin diftitox
in combination with CART-T therapies, and an extension component to provide an estimate of efficacy at that MTD. (Title: Phase I/II Trial
Using E7777 to Enhance Regulatory T-Cell Depletion Prior to CAR-T Therapy for Relapsed/Refractory B-Cell Lymphoma (DLBCL). NCT04855253).
Preliminary results are anticipated in the first quarter of 2026.

 A second Phase 1 Study was initiated in September
2022 at the University of Pittsburg Medical Center, Hillman Cancer Center. This study is an open label, Phase 1/1b study to investigate
the safety and efficacy of a combined regimen of pembrolizumab with T-regulatory cell depletion and denileukin diftitox in patients diagnosed
with recurrent or metastatic solid tumors in the second line setting. (Title: The efficacy of T-regulatory cell depletion with E7777
combined with immune checkpoint inhibitor, pembrolizumab, in recurrent or metastatic solid tumors: Phase I/II Study. NCT05200559).

 The study consists of two parts. Part I is a
dose escalation study of four cohorts (3,6,9,12 mcg of LYMPHIR) and is expected to enroll 18-30 patients. Part II is a dose expansion
study of approximately 40 patients to evaluate the safety and tolerability of the recommended combination dose of LYMPHIR and pembrolizumab
(to include ovarian cancer and MSI-H cancer cohorts). The study will also investigate the alteration of the immune microenvironment within
tumors and peripheral blood. Secondary endpoints include the objective response (complete response plus partial response), progression-free
survival, and overall survival.

 In November 2024, the Company announced promising
preliminary results of the Phase I Clinical Trial of Pembrolizumab (KEYTRUDA) and LYMPHIR in cancer patients with recurrent
solid tumors conducted at the University of Pittsburg Hillman Cancer Center.

 Preliminary Results

 The results of this chemotherapy-free regimen
combining two immuno-modulator agents, pembrolizumab (anti-PD-1) and LYMPHIR (transient Treg depletion) demonstrated:

 An overall response rate
 (ORR) of 27% (4/15) and a clinical benefit rate of 33% (5/15) among evaluable patients; and,

 Median progression-free
 survival (PFS) for patients achieving clinical benefit of 57 weeks, with a range of 30 to 96 weeks.

 Notably, two
 of the four patients who achieved partial remission had received prior checkpoint inhibitors (i.e. anti-PD-1 therapy). This highlights
 the therapeutic potential of LYMPHIR plus immune checkpoint inhibitors to be effective in patients who fail prior anti-PD-1/L1 therapy.

 The trial enrolled 21 patients with recurrent
or metastatic solid tumors. Among the evaluable participants, four patients achieved a partial response, and one patient demonstrated
durable stable disease lasting over six months. The combination regimen was generally well tolerated, with most adverse events related
to the patients' underlying disease. Importantly, no significant immune-related adverse events were observed, and only one case
of dose-limiting toxicity (capillary leak syndrome) was reported at the highest dose level (12 mcg/kg).

 Table 1: Efficacy Data

 Value

 Patients Enrolled

 Patients Evaluable for Response

 Partial Responses (PR)

 (27%)

 Stable Disease ( 6 months)

 Clinical Benefit Rate (CBR)

 33%
 (PR + SD 6 months)

 Median Progression-Free Survival (PFS)

 weeks (range: 30-96 weeks)

 Table 2: Safety Data

 Value

 Dose-Limiting Toxicities (DLTs)

 1 (Capillary
 Leak Syndrome at 12 mcg/kg)

 Immune-Related Adverse Events (irAEs)

 None
 documented ( Grade 3)

 Adverse Events (Grade 3)

 Most
 related to underlying disease

 Regulatory Development

 In the 1990s, denileukin diftitox was developed
at Boston University and the National Cancer Institute ("NCI") in collaboration with Seragen, Inc.

 In 1999, ONTAK (denileukin diftitox) was
granted accelerated approval by the FDA for the treatment of persistent or recurrent CTCL. Ligand Pharmaceuticals, Inc. ("Ligand")
acquired the marketing rights in that same year.

 In 2006, Eisai acquired the commercial rights
to ONTAK from Ligand.

 In 2008, the FDA granted full approval to ONTAK
for CTCL.

 In 2011, a new formulation of denileukin diftitox
was developed under the code name E7777 in response to a post-marketing condition established by the FDA upon approval. As the FDA considered
this a new product, an Investigational New Drug Application ("IND") was filed. As a part of ensuing discussions, the FDA
agreed to a development plan that included a single arm, open label study to confirm the safety and efficacy of E7777 and a chemistry,
manufacturing, and controls ("CMC") development plan that demonstrates the new process results in a comparable drug product.

 In 2011, the FDA Office of Orphan Products Development
granted E7777 orphan drug designation status for the treatment of Peripheral T-Cell Lymphoma ("PTCL"). In 2013, the FDA Office
of Orphan Products Development granted E7777 orphan drug designation status for the treatment of CTCL.

 In 2013, the first patient was enrolled into
the lead-in phase of the pivotal study for the E7777 U.S. CTCL clinical trial.

 In 2014, commercial sales of ONTAK were discontinued
when the product was voluntarily withdrawn from the market due to manufacturing issues at the contract manufacturer.

 In 2015, the last patient enrolled exited the
lead-in phase of the E7777 U.S. CTCL clinical trial.

 In March 2016, Dr. Reddy's exclusively
licensed the global rights to E7777 from Eisai, other than the rights in countries retained by Eisai, which consists of Japan, China,
Korea, Taiwan, Hong Kong, Macau, Indonesia, Thailand, Malaysia, Brunei, Singapore, India, Pakistan, Sri Lanka, Philippines, Vietnam,
Myanmar, Cambodia, Laos, Afghanistan, Bangladesh, Bhutan, Nepal, Mongolia and Papua New Guinea. The license included an option on the
right to develop and market the product in India prior to FDA approval.

 In June 2016, the first patient was enrolled
in the main phase of the Phase 3 U.S. CTCL clinical trial for E7777.

 In March 2020, Eisai filed a New Drug Application
("NDA") for E7777 in Japan for both CTCL and PTCL, and in March 2021 received approvals in both indications.

 In September 2021, Citius Pharma acquired the
marketing rights to E7777 in selected markets. Citius Pharma subsequently renamed E7777 as LYMPHIR.

 In December 2021, patient
enrollment for the Phase 3 Pivotal study of LYMPHIR was completed.

 In April 2022, we reported
that topline results from the Phase 3 trial were consistent with the prior formulation. Moreover, no new safety signals were identified.

 In December 2022, a
Biologics License Application ("BLA") for LYMPHIR was accepted for filing with the FDA and a PDUFA goal date was set for
July 28, 2023.

 In July 2023, the FDA
issued a complete response letter ("CRL") requiring us to incorporate enhanced product testing and additional controls agreed
to with the FDA during the market application review. There were no concerns relating to the safety and efficacy clinical data package
submitted with the BLA, or the proposed prescribing information.

 In September 2023, we
announced that the FDA agreed with the plans to address the requirements outlined in the CRL, which guidance provided the Company with
a path for completing the necessary activities to support the resubmission of the BLA for LYMPHIR.

 In February 2024, based on the feedback from
the FDA, Citius Pharma completed the CRL remediation activities and filed the resubmission.

 In March 2024, Citius Pharma announced the acceptance
of the BLA by the FDA. The FDA assigned a PDUFA goal date of August 13, 2024 and approved LYMPHIR on August 8, 2024.

 In August 2024, Citius Pharma announced that
the FDA had approved LYMPHIR. Citius Oncology launched LYMPHIR in December 2025.

 Market Opportunity

 CTCL's are a heterogeneous subset of extranodal
non-Hodgkin lymphomas ("NHL") of mature, skin-homing T-cells that are mainly localized to the skin. The most common types
of CTCL are mycosis fungoides ("MF") and primary cutaneous CD30+ anaplastic large cell lymphoma (pcALCL), jointly representing
an estimated 80 to 85% of all CTCL. S zary Syndrome ("SS"), a very rare subtype (~2 to 5% of CTCL) characterized by
diffuse inflammatory, often exfoliative, erythroderma and by leukemic and nodal involvement, displays a significant degree of clinical
and biological overlap with MF and has long been considered a clinical variant of MF, although recent evidence suggests that it may be
a separate entity. The rest is represented by extremely rare, generally more aggressive subtypes.

 In light of the overlap between MF and SS, and
considering that many of the systemic therapy options for the two neoplasms are the same, some consider the treatment approach to MF
and SS as if they were a single disease entity (MF/SS). However, some of the drugs currently in use, or in development, for MF/SS appear
to be more effective in clearing different anatomical compartments (skin versus blood, for example) and therefore have differential efficacy
in MF and SS.

 Based on Surveillance Epidemiology and End Results
(SEER) data from 2001 to 2007, the estimated incidence rate of MF/SS in the U.S. is 0.5/100,000 or about 2,500 to 3,000 new cases per
year representing about 25% of all T-cell lymphomas. In total, the Company estimates that there are approximately 30,000 to 40,000 patients
living with CTCL in the U.S.

 Based on internal estimates, the Company believes
the addressable U.S. market for LYMPHIR exceeds $400 million and may further expand with the introduction of a new therapeutic.

 Mino-Lok

 Mino-Lok is a patented solution containing minocycline,
disodium ethylenediaminetetraacetic acid (edetate), and ethyl alcohol, all of which act synergistically to treat and salvage infected
central venous catheters ("CVCs") in patients with catheter related bloodstream infections ("CRBSIs"). Mino-Lok
breaks down biofilm barriers formed by bacterial colonies, eradicates the bacteria, and provides anti-clotting properties to maintain
patency in CVCs.

 The administration of Mino-Lok consists of filling
the lumen of the catheter with 0.8 ml to 2.0 ml of Mino-Lok solution. The catheter is then "locked", meaning that the solution
remains in the catheter without flowing into the vein. The lock is maintained for a dwell-time of two hours while the catheter is not
in use. If the catheter has multiple lumens, all lumens may be locked with the Mino-Lok solution either simultaneously or sequentially.
If patients are receiving continuous infusion therapy, the catheters alternate between being locked with the Mino-Lok solution and delivering
therapy. The Mino-Lok therapy is two hours per day for at least five days, usually with two additional locks in the subsequent two weeks.
After locking the catheter for two hours, the Mino-Lok solution is aspirated, and the catheter is flushed with normal saline. At that
time, either the infusion will be continued, or will be locked with the standard-of-care lock solution until further use of the catheter
is required. In a clinical study conducted by MD Anderson Cancer Center ("MDACC"), there were no serum levels of either minocycline
or edetate detected in the sera of several patients who underwent daily catheter lock solution with minocycline and edetate ("M-EDTA")
at the concentration level proposed in Mino-Lok treatment. Thus, it has been demonstrated that the amount of either minocycline or edetate
that leaks into the serum is very low or none at all.

 Phase 2b Results

 From April 2013 to July 2014, 30 patients with
CVC-related bloodstream infection were enrolled at MDACC in a prospective Phase 2b study. Patients received Mino-Lok therapy for two
hours once daily for a minimum of five days within the first week, followed by two additional locks within the next two weeks. Patients
were followed for one month post-lock therapy. Demographic information, clinical characteristics, laboratory data, therapy, as well as
adverse events and outcome were collected for each patient. Median age at diagnosis was 56 years (range: 21-73 years). In all patients,
prior to the use of lock therapy, systemic treatment with a culture-directed, first-line intravenous antibiotic was started. Microbiological
eradication was achieved at the end of therapy in all cases. None of the patients experienced any serious adverse event related to the
lock therapy.

 The active arm, which is the Mino-Lok treated
group of patients, was then compared to 60 patients in a matched cohort that experienced removal and replacement of their CVCs within
the same contemporaneous timeframe. The patients were matched for cancer type, infecting organism, and level of neutropenia. All patients
were cancer patients and treated at MDACC. The efficacy of Mino-Lok therapy was 100% in salvaging CVCs, demonstrating equal effectiveness
to removing the infected CVC and replacing it with a new catheter.

 The main purpose of the study was to show that
Mino-Lok therapy was at least as effective as the removal and replacement of CVCs when CRBSIs are present, and that the safety was better,
that is, the complications of removing an infected catheter and replacing with a new one could be avoided. In addition to having a 100%
efficacy rate with all CVCs being salvaged, Mino-Lok therapy had no significant adverse events ("SAEs"), compared to an 18%
SAE rate in the matched cohort where patients had the infected CVCs removed and replaced with a fresh catheter. There were no overall
complication rates in the Mino-Lok arm group compared to 11 patients with events (18%) in the control group. These events included bacterial
relapse (5%) at four weeks post-intervention, and a number of complications associated with mechanical manipulation in the removal or
replacement procedure for the catheter (10%) or development of deep-seated infections such as septic thrombophlebitis and osteomyelitis
(8%). As footnoted, six patients had more than one complication in the control arm group.

 Mino-Lok Arm

 Control Arm

 Parameter

 N

 (%)

 N

 (%)%

 Patients

 (100
)%

 (100
)%

 Cancer type

 - Hematologic

 (67
)

 (80
)

 - Solid tumor

 (33
)

 (20
)

 ICU Admission

 (13
)

 (7
)

 Mech. Ventilator

 (10
)

 (0
)

 Bacteremia

 - Gram+

 (57
)*

 (53
)

 - Gram-

 (47
)*

 (47
)

 Neutropenia (<500)

 (63
)

 (60
)

 Microbiologic Eradication

 (100
)

 (100
)

 - Relapse

 (0
)

 (5
)

 Complications

 (0
)

 (13
)

 SAEs related R&R

 (0
)

 (10
)

 Overall Complication Rate

 (0
)%

 **

 (18
)%

 *

 1 Polymicrobial patient
 had a Gram+ and a Gram- organism cultured

 **

 6 Patients had > 1 complication

 Source: Dr. Issam Raad, Antimicrobial Agents
and Chemotherapy, June 2016, Vol. 60 No. 6, Page 3429

 Phase 3 Trial

 In November 2016, the Company initiated site
recruitment for Phase 3 clinical trials. From initiation through the first quarter of 2017, the Company received input from several sites
related to the control arm as being less than standard-of-care for some of the respective institutions. The Company worked closely with
the FDA with respect to the design of the Phase 3 trial and received feedback on August 17, 2017. The FDA stated that they recognized
that there is an unmet medical need in salvaging infected catheters and agreed that an open label, superiority design would address the
Company's concerns and would be acceptable to meet the requirements of a new drug application. The Company amended the Phase 3
study design to remove the saline and heparin placebo control arm and to use an active control arm that conforms with today's current
standard-of-care. Patient enrollment commenced in February 2018.

 The Mino-Lok Phase 3 Trial was originally planned
to enroll 700 patients in 50 participating institutions, all located in the U.S. There were interim analyses at both the 50% and 75%
points of the trial as measured by the number of patients treated. In September 2019, the Company announced that the FDA agreed
to a new primary efficacy endpoint of "time to catheter failure" in comparing Mino-Lok to the antibiotic lock control arm.
This change in the trial design reduced the required patient sample size of the trial from 700 subjects to approximately 144 available
subjects to achieve the pre-specified 92 catheter failure events needed to conclude the trial. Additionally, the Company submitted a
response to the FDA that it would implement this change in the primary endpoint and expected it to result in less than 150 subjects needed
in its Phase 3 trial. The new primary endpoints require that the time to catheter failure be at least 38 days for Mino-Lok versus 21
days for the standard of care antibiotic locks.

 In October 2019, the FDA agreed that the patient
sample size of approximately 144 patients was acceptable.

 In October 2019, the Company announced that the
Phase 3 trial had reached the 40% completion triggering an interim futility analysis by the data monitoring committee (the "DMC").
The DMC is an independent panel of experts that review progress regarding the safety and efficacy of drugs in clinical trials, and to
determine if the trial may be futile in achieving its endpoints or if the trial should be modified in any way.

 In December 2019, the DMC convened and recommended
that the trial continue with no changes because the analysis showed a positive outcome, as it met the prespecified interim futility analysis
criteria.

 In May 2020, we announced that we are providing
free access to Mino-Lok for healthcare providers under an Expanded Access protocol to ease the burden associated with the COVID-19 pandemic.
Through the Expanded Access protocol, an infected central venous catheter can now be treated with Mino-Lok, potentially avoiding the
need for the removal and replacement procedure.

 In June 2020, we announced that we had received
positive feedback from the FDA on our proposed catheter compatibility studies for Mino-Lok. The studies, if and when successfully completed,
should allow Mino-Lok to be labeled for use with all commercially available CVCs and peripherally inserted central catheters (PICCs)
on the U.S. market. We further assume that these studies will meet European and world standards. The ability to be labeled without restrictions
with respect to catheter type would allow Mino-Lok unrestricted access to the full U.S. and world markets for an effective antibiotic
lock therapy for central line associated blood stream infections ("CLABSIs").

 In September 2020, we announced that another
DMC meeting was held to review the data being generated and analyzed in the Mino-Lok Phase 3 trial based on progress to date, and to
make recommendations to us as to any action that may be necessary regarding the study. After reviewing these data, the DMC members stated
that they did not find any safety signals; and they also recommended continuing the trial without any modifications. The DMC further
conducted an ad hoc meeting and agreed with the Company that a 75% interim analysis be conducted as planned in which superior
efficacy is evaluated. The 75% interim analysis was subsequently changed to a 65% interim analysis by the Company.

 In September 2020, the Company announced that
the three registration batches for all components of Mino Lok were manufactured and that clinical sites were resupplied with registration
product.

 In November 2020, the Company announced that
the three components of Mino-Lok, minocycline, disodium edetate ("EDTA"), and ethanol, were superior to EDTA and ethanol
in their ability to eradicate resistant staphylococcal biofilms.

 The 65% interim analysis was completed in June
2021. In July 2021, the Company announced that following an unblinded data review of safety and efficacy, the independent DMC for the
trial recommended proceeding with the trial as planned. The DMC did not identify any safety concerns and no modifications were recommended
to the protocol-defined sample size or power to achieve the primary endpoint.

 In May 2022, the Company selected Biorasi, LLC
("Biorasi"), a global clinical research organization ("CRO"), to help expand the Company's Phase 3 Mino-Lok
trial by implementing additional sites outside the U.S The Mino-Lok Phase 3 study enrolled 241 patients across 34 sites in the U.S. and
India. Eligible patients were randomized 1:1 to receive either Mino-Lok or site-specific standard-of-care lock solution plus systemic
antibiotics.

 In August 2023, the Company announced all 92
events required to complete the trial had been achieved. Several patients remain in active treatment, which may result in additional
events.

 In late December 2023, the Company determined
that patient enrollment for the Mino-Lok trial was complete and that it would begin site shutdown activities.

 In May 2024, the Company announced positive topline
results of the trial. The study met its primary endpoint with a statistically significant improvement in the time to failure event in
patients receiving Mino-Lok compared to Control arm patients receiving clinician-directed anti-infective lock solution. The data demonstrates
that Mino-Lok is well-tolerated. Key findings include:

 Median
 time to catheter failure in the Mino-Lok arm was significantly prolonged in both the intent-to-treat
 (ITT) and modified ITT populations ( p 0.0006);

 Catheter
 retention was achieved in 57% of patients treated with Mino-Lok versus 38% in the control
 arm ( p = 0.0025);

 Rates
 of clinical failure and microbiological failure were significantly lower in the Mino-Lok
 arm ( p = 0.0058 and p = 0.012, respectively); and

 No
 drug-related serious adverse events (SAEs) were reported; the safety profile was comparable
 between groups.

 A subset analysis of the Phase 3 trial, focused
on hemodialysis patients, examined the impact of Mino-Lok in this subgroup and found favorable outcomes for catheter salvage and infection
control compared to the overall study population. Key findings in this hemodialysis population include:

 Longer
 catheter survival with Mino-Lok: Patients receiving standard-of-care (SOC) therapy experienced
 a significantly shorter time to catheter failure compared with those treated with Mino-Lok
 ( p=0.03):

 o
 SOC arm: 25% of catheters failed by Day
 6, 50% failed by Day 22; and

 o
 Mino-Lok arm: 25% catheter failure delayed
 until Day 37.

 Lower
 catheter failure rate with Mino-Lok:

 o
 57% (16/28) of SOC patients experienced
 catheter failure; and

 o
 31% (8/26) of Mino-Lok patients experienced
 catheter failure.

 Adverse
 events and serious adverse events were comparable between groups, and no drug-related SAEs
 occurred.

 These outcomes demonstrate that the differentiated
efficacy and safety profile of Mino-Lok extends into an important hemodialysis subgroup of patients who often have limited vascular access
and face increased risk from catheter removal and replacement. Moreover, this subset reinforces Mino-Lok's potential clinical utility
in one of the most vulnerable patient populations.

 In November 2024, the Company held a Type C meeting
with the FDA to discuss the results of the Phase 3 study and to obtain the FDA's view on development plans for Mino-Lok. The FDA
provided clear, constructive, and actionable guidance during the discussion, underscoring a pathway to support a future New Drug Application
(NDA) submission for Mino-Lok. Citius continues to engage with the FDA to define the regulatory path forward. No FDA-approved alternative
currently exists to salvage infected indwelling central venous catheters.

 Fast Track Designation

 In October 2017, the Company received official
notice from the FDA that the investigational program for Mino-Lok was granted "Fast Track" status. Fast Track is a designation
that expedites FDA review to facilitate development of drugs which treat a serious or life-threatening condition and fill an unmet medical
need. A drug that receives Fast Track designation is eligible for the following:

 More frequent meetings
 with the FDA to discuss the drug's development plan and ensure collection of appropriate data needed to support drug approval;

 More frequent written correspondence
 from the FDA about the design of the clinical trials;

 Priority review to shorten
 the FDA review process for a new drug from ten months to six months; and

 Rolling review, which means
 we can submit completed sections of our NDA for review by the FDA, rather than waiting until every section of the application is
 completed before the entire application can be submitted for review.

 Mino-Lok International Study

 In October 2017, data from an international study
on Mino-Lok was presented at the Infectious Disease Conference, ("ID Week"), in San Diego, California. The 44-patient study
was conducted in Brazil, Lebanon and Japan and showed Mino-Lok therapy was an effective intervention to salvage long-term, infected CVCs
in CRBSIs in patients who had cancer with limited vascular access. This study showed 95% effectiveness for Mino-Lok therapy in achieving
microbiological eradication of the CVCs as compared to 83% for the control. The single failure in the Mino-Lok arm was due to a patient
with Burkholderia cepacia that was resistant to all antibiotics tested.

 Stability Patent Application for Mino-Lok

 In October 2018, the U.S. Patent and Trademark
Office ("USPTO") issued U.S. Patent No. 10,086,114, entitled "Antimicrobial Solutions with Enhanced Stability."
On October 9, 2019, the European Patent Office ("EPO") granted European Patent No. 3370794, entitled "Antimicrobial
Solutions with Enhanced Stability." The grant of this European patent strengthens the intellectual property protection for Mino-Lok
through November of 2036. This invention overcomes limitations in mixing antimicrobial solutions in which components have precipitated
because of physical and/or chemical factors, thus limiting the stability of the post-mix solutions. The scientists and technologists
at MDACC have been able to improve the stability of the post-mixed solutions through adjustments of the post-mixed pH of the solution.
This may allow for longer storage time of the ready-to-use solution. Citius Pharma holds the exclusive worldwide license which provides
access to this patented technology for development and commercialization of Mino-Lok.

 Market Opportunity

 In spite of best clinical practice, catheters
contribute to approximately 70% of blood stream infections that occur in the intensive care unit or are associated with hemodialysis
or cancer patients (approximately 470,000 per year). Bacteria enter the catheter either from the skin or intraluminally through the catheter
hub. Once in the catheter, bacteria tend to form a protective biofilm on the interior surface of the catheter that is resistant to most
antimicrobial solutions. The most frequently used maintenance flush, heparin, actually stimulates biofilm formation. Heparin is widely
used as a prophylactic lock solution, in spite of the evidence that it contributes to the promotion of biofilm formation. The formation
of bacterial biofilm usually precedes CRBSIs.

 The standard of care in the management of CRBSI
patients consists of removing the infected CVC and replacing it with a new catheter at a different vascular access site. However, in
cancer and hemodialysis patients with long-term surgically implantable silicone catheters, removal of the CVC and reinsertion of a new
one at a different site might be difficult, or even impossible, because of the unavailability of other accessible vascular sites and
the need to maintain infusion therapy. Furthermore, critically ill patients with short-term catheters often have underlying coagulopathy,
which makes reinsertion of a new CVC at a different site, in the setting of CRBSIs, risky in terms of mechanical complications, such
as pneumothorax, misplacement, or arterial puncture. Studies have also revealed that CRBSI patients may be associated with serious complications,
including septic thrombosis, endocarditis and disseminated infection, particularly if caused by Staphylococcus aureus or Candida
 species. Furthermore, catheter retention in patients with CRBSIs is associated with a higher risk of relapse and poor response to
antimicrobial therapy.

 According to Maki et al., published in the Mayo
Clinic Proceedings in 2006, there are approximately 250,000 CRBSIs annually in the U.S. Subsequent to this study, our estimates have
ranged upwards to over 450,000 CLABSIs annually (see analysis in the table below). CRBSIs are associated with a 12% to 35% mortality
rate and an attributable cost of $35,000 to $56,000 per episode.

 We estimate that the potential market for Mino-Lok
in the U.S. to be approximately $500 million to $1 billion as shown in the table below based on a target price of up to $400 per dose
of each salvage flush treatment.

 Short-Term
 CVC

 Long-Term
 CVC

 Total

 No. of Catheters

 Avg. Duration (Days)

 N/A

 Catheter Days

 Infection Rate

 2/1,000
 days

 1/1,000
 days

 N/A

 Catheters Infected

 72,000

 400,000

 472,000

 Flushes/Catheter

 6.7

 Total Salvage Flushes

 360,000

 2,800,000

 3,160,000

 Sources: Ann Intern Med 2000; 132:391-402,
Clev Clin J Med 2011; 78(1):10-17, JAVA 2007; 12(1):17-27, J Inf Nurs 2004; 27(4):245-250, Joint Commission website Monograph, CLABSI
and Internal Estimates.

 Under various plausible pricing scenarios, we
believe that Mino-Lok would be cost-saving to the healthcare system given that the removal of an infected CVC and replacement of a new
catheter in a different venous access site is estimated by us to cost between $8,000 and $10,000. Furthermore, there are potential additional
medical benefits, a reduction in patient discomfort and avoidance of serious adverse events with the Mino-Lok approach since the catheter
remains in place and is not subject to manipulation. We believe there will be an economic argument to enhance the adoption of Mino-Lok
by infection control committees at acute care institutions.

 In January of 2017, we commissioned a primary
market research study with MEDACore, a subsidiary of Leerink, a healthcare focused network with more than 35,000 healthcare professionals,
including key opinion leaders, experienced practitioners and other healthcare professionals throughout North America, Europe, Asia and
other locations around the world. This network includes approximately 55 clinical specialties, 21 basic sciences and 20 business specialties.
As part of this market research project, we commissioned a third-party survey of 31 physicians to qualify the need for catheter salvage
in patients with infected, indwelling central venous lines, especially when the catheter is a tunneled or an implanted port. There were
19 infectious disease experts and 12 intensivists surveyed who all agreed that salvage would be preferable to catheter exchange to avoid
catheter misplacements, blood clots, or vessel punctures that can potentially occur during reinsertion. Most were also concerned that
viable venous access may not be available in patients who were vitally dependent on a central line.

 Halo-Lido

 Halo-Lido is a topical formulation of halobetasol
propionate, a corticosteroid, and lidocaine that is intended for the treatment of hemorrhoids. To our knowledge, there are currently
no FDA-approved prescription drug products for the treatment of hemorrhoids. Some physicians are known to prescribe topical steroids
for the treatment of hemorrhoids. In addition, there are various topical combination prescription products containing halobetasol propionate
along with lidocaine or pramoxine, each a topical anesthetic, that are prescribed by physicians for the treatment of hemorrhoids. These
products contain drugs that were in use prior to the start of the Drug Efficacy Study Implementation ("DESI") program and
are commonly referred to as DESI drugs. However, none of these single-agent or combination prescription products have been clinically
evaluated for safety and efficacy and approved by the FDA for the treatment of hemorrhoids. Further, many hemorrhoid patients use over
the counter ("OTC") products as their first line therapy. OTC products contain any one of several active ingredients including
glycerin, phenylephrine, pramoxine, white petrolatum, shark liver oil and/or witch hazel, for symptomatic relief.

 Development of Hemorrhoids Drugs

 Hemorrhoids are a common gastrointestinal disorder,
characterized by anal itching, pain, swelling, tenderness, bleeding and difficulty defecating. In the U.S., hemorrhoids affect nearly
5% of the population, with approximately 10 million persons annually admitting to having symptoms of hemorrhoidal disease. Of these persons,
approximately one third visit a physician for evaluation and treatment of their hemorrhoids. The data also indicate that for both sexes
a peak of prevalence occurs from age 45 to 65 years with a subsequent decrease after age 65 years. Caucasian populations are affected
significantly more frequently than African Americans, and increased prevalence rates are associated with higher socioeconomic status
in men but not women. Development of hemorrhoids before age 20 is unusual. In addition, between 50% and 90% of the general U.S., Canadian
and European population will experience hemorrhoidal disease at least once in life. Although hemorrhoids and other anorectal diseases
are not life-threatening, individual patients can suffer from agonizing symptoms which can limit social activities and have a negative
impact on the quality of life.

 Hemorrhoids are defined as internal or external
according to their position relative to the dentate line. Classification is important for selecting the optimal treatment for an individual
patient. Accordingly, physicians use the following grading system referred to as the Goligher's classification of internal hemorrhoids:

 Grade I

 Hemorrhoids not prolapsed
 but bleeding.

 Grade II

 Hemorrhoids prolapse and
 reduce spontaneously with or without bleeding.

 Grade III

 Prolapsed hemorrhoids that
 require reduction manually.

 Grade IV

 Prolapsed and cannot be
 reduced including both internal and external hemorrhoids that are confluent from skin tag to inner anal canal.

 Development Activities to Date

 In the fall of 2015, we completed dosing patients
in a double-blind dose ranging placebo-controlled Phase 2a study where six different formulations containing hydrocortisone and lidocaine
in various strengths were tested against the vehicle control. The objectives of this study were to: (1) demonstrate the safety and efficacy
of the formulations when applied twice daily for two weeks in subjects with Grade I or II hemorrhoids, and (2) assess the potential contribution
of lidocaine hydrochloride and hydrocortisone acetate, alone or in combination for the treatment of symptoms of Goligher's Classification
Grade I or II hemorrhoids.

 Symptom improvement was observed based on a global
score of disease severity ("GSDS") and based on some of the individual signs and symptoms of hemorrhoids, specifically itching
and overall pain and discomfort. Within the first few days of treatment, the combination products (containing both hydrocortisone and
lidocaine) were directionally favorable versus the placebo and their respective individual active treatment groups (e.g., hydrocortisone
or lidocaine alone) in achieving 'almost symptom free' or 'symptom free' status according to the GSDS scale.
These differences suggested the possibility of a benefit for the combination product formulation. As a result of this study, we determined
that the performance of the active arms of the study relative to the vehicle could be improved by re-formulating our topical preparation.
Therefore, we initiated work on vehicle formulation and evaluation of higher potency steroids.

 Overall, results from adverse event reporting
support the safety profile of all test articles evaluated in this study and demonstrate similar safety profiles as compared to the vehicle.
The safety findings were unremarkable. There was a low occurrence of adverse events and a similar rate of treatment related adverse events
across all treatment groups. The majority of adverse events were mild and only one was severe. None of the adverse events were an SAE
and the majority of adverse events were recovered/resolved at the end of the study. There were only two subjects who were discontinued
from the study due to adverse events.

 As part of this Phase 2 trial, information was
obtained relating to the use of the GSDS as an assessment tool for measuring the effectiveness of the test articles. Individual signs
and symptoms were also assessed but can vary from patient to patient. Therefore, the goal of the GSDS was to provide an assessment tool
that could be used for all patients regardless of which signs and symptoms they are experiencing. The GSDS proved to be a more effective
tool for assessing the severity of the disease and the effectiveness of the drug when compared to the assessment of the individual signs
and symptoms.

 We developed this assessment tool as well as
other patient reported outcome endpoints for use in the Phase 2b trial begun in April 2022 and in subsequent trials. In June and July
2016, we engaged the Dominion Group, a leading provider of healthcare and pharmaceutical marketing research services. The primary market
research was conducted to understand the symptoms that are most bothersome to patients better in order to develop meaningful endpoints
for the clinical trials. We also learned about the factors that drive patients to seek medical attention for hemorrhoids in an effort
to understand the disease impact on quality of life. The results of this survey, along with the information from the Phase 2b trial,
allowed us to develop our patient reported outcome evaluation tool, ePro. This tool can be used in clinical trials to evaluate the patients'
conditions and to assess the performance of the test articles.

 In March 2018, we announced that we had selected
a higher potency corticosteroid in our steroid/anesthetic topical formulation program for the treatment of hemorrhoids. The original
topical preparation, which we referred to as Hydro-Lido or CITI-001, which was used in the Phase 2a study, was a combination of hydrocortisone
acetate and lidocaine hydrochloride. The new formulation, CITI-002, which we refer to as Halo-Lido, combine lidocaine with the higher
potency corticosteroid halobetasol propionate for symptomatic relief of the pain and discomfort of hemorrhoids.

 We held a Type C meeting with the FDA in December
2017 to discuss the results of the Phase 2a study and to obtain the FDA's view on development plans to support the potential formulation
change for the planned Phase 2b study. We also requested the FDA's feedback on our Phase 2b study design, including target patient
population, inclusion/exclusion criteria, and efficacy endpoints. The pre-clinical and clinical development programs for CITI-002 are
planned to be similar to those conducted for the development of CITI-001 to support the design for a planned Phase 3 clinical trial.

 CITI-002 Phase 2b Trial Overview

 Approximately 300 adults with a clinical diagnosis
of symptomatic hemorrhoids were enrolled in the Halo-Lido Phase 2b study (NCT05348200), a multi-center, randomized, dose-ranging, double-blind,
parallel group comparison clinical trial, which was initiated in April 2022. The study assessed a high dose (CITI-002H) and low dose
(CITI-002L) formulation of the combination drug products in comparison to the single active drug monads: high dose halobetasol, low dose
halobetasol and lidocaine.

 Recently, there has been a shift from the use
of traditional clinical analysis and outcomes to patients' perspectives and patients' experiences in assessing treatment
efficacy. Following the 21 st Century Cures Act, higher emphasis is placed on using Patient Reported Outcome ("PRO")
instruments in clinical trials. Currently, for hemorrhoidal disease, there are no validated clinical outcomes assessment ("COA")
tools available in the U.S. The FDA directed Citius Pharma to develop a "fit for purpose" PRO instrument to assess the efficacy
of treatments in this disease. Symptom intensity and impact data (Hemorrhoid Quality of Life Index or "HQLI") were recorded
by patients utilizing a proprietary mobile-enabled PRO instrument developed by the Company for this study.

 Data collected using the HQLI was analyzed to
derive a meaningful change threshold ("MCT") to test for the change in hemorrhoidal symptoms considered relevant to the patient
during and following treatment.

 CITI-002 Phase 2b Trial Results

 In June 2023, we announced positive results from
the Phase 2b study of Halo-Lido for the treatment of hemorrhoids. Treatment effect on hemorrhoidal symptoms was analyzed using the MCT.
At the end of the seven-day treatment period, 42% of the patients in the high dose CITI-002 (CITI-002H) group reached MCT compared to
patients treated with high dose halobetasol alone (29%) or patients treated with lidocaine alone (21%). Moreover, proportionally more
patients in the CITI-002H cohort reported meaningful and statistically significant improvement as compared to patients treated with lidocaine
alone ( CMH test, p = 0.035).

 We additionally assessed clinical treatment efficacy
outcomes during seven-day treatment and seven-day follow-up periods using an analysis of covariance, which analyzed changes from baseline.
Substantial improvements were seen across all active treatment groups. Although no statistical significance was determined in the changes
between the comparison groups, directionally the data signaled that the combination products provided faster relief compared to individual
monads, and the relief persisted after completing treatment.

 In addition, results from the study indicated
that there were no material clinical safety concerns across the five active treatment groups during the seven-day treatment or follow-up
periods. There were no serious adverse events reported.

 Data from the Phase 2b trial confirmed that the
HQLI is appropriate to measure patient-reported changes in hemorrhoidal symptoms. Consequently, Citius Pharma believes the instrument
can be used in future Phase 3 trial development. Citius Pharma is actively pursuing intellectual property protections for its groundbreaking
work in developing the fit for purpose PRO instrument and has filed patent applications on its CITI-002 formulations.

 Based on the positive clinical results utilizing
the Meaningful Change Threshold analysis, Citius Pharma had a Phase 2 meeting with the FDA in April 2024 to discuss the go-forward path
for the program. Citius Pharma will continue to have ongoing engagement with the FDA regarding the next steps of development.

 Market Opportunity

 The current market for OTC and topical prescription
("Rx") products for the symptomatic treatment of hemorrhoids is highly fragmented and includes approximately 20 million units
of OTC and over 4 million prescriptions. None of the Rx products have received FDA approval and are only available due to the DESI program,
which started decades ago after enactment of the 1962 Kefauver-Harris Drug Amendments. These DESI products have no FDA reviewed evidence
of efficacy or safety and may be subject to withdrawal if an approved product were to be introduced. Several topical combination prescription
products for the treatment of hemorrhoids are available containing hydrocortisone in strengths ranging from 0.5% to 3.0%, combined with
lidocaine in strengths ranging from 1.0% to 3.0%. The various topical formulations include creams, ointments, gels, lotions, enemas,
pads, and suppositories. The most commonly prescribed topical combination gel is sold as a branded generic product and contains 2.5%
hydrocortisone and 3.0% lidocaine.

 We believe there are currently no FDA-approved
prescription drug products for the treatment of hemorrhoids. Although there are numerous Rx and OTC products commonly used to treat hemorrhoids,
none possess proven safety and efficacy data generated from rigorously conducted clinical trials. We believe that a novel topical formulation
of halobetasol propionate and lidocaine designed to provide anti-inflammatory and anesthetic relief and which has an FDA-approved label
specifically claiming the treatment of hemorrhoids will become an important treatment option for physicians who want to provide their
patients with a therapy that has demonstrated safety and efficacy in treating this uncomfortable and often recurring disease. We believe
that our Halo-Lido product represents an attractive, low-risk product opportunity with meaningful upside potential.

 Citius Pharma intends to monetize the value of
Halo-Lido by seeking a strategic or financial partner.

 Market Exclusivity

 We believe that we will be the first company
to conduct rigorous clinical trials and receive FDA approval of a topical corticosteroid-lidocaine combination product for the treatment
of hemorrhoids. If we receive FDA approval, we will qualify for three years of market exclusivity for our dosage strength and formulation.
In addition, to our knowledge as of the date of this report, we would also be the only product on the market specifically proven to be
safe and effective for the treatment of hemorrhoids. Generally, if a company conducts clinical trials and receives FDA approval of a
product for which there are similar, but non FDA-approved, prescription products on the market, the manufacturers of the unapproved but
marketed products are required to withdraw them from the market. However, the FDA has significant latitude in determining how to enforce
its regulatory powers in these circumstances. We have not had any communication with the FDA regarding this matter and cannot predict
what action, if any, the FDA would take with respect to the unapproved products.

 We believe that should Halo-Lido demonstrate
proven safety and efficacy data and receive FDA approval, and if Halo-Lido obtains three years of market exclusivity based on our dosage
strength and formulation, we are likely to have a meaningful advantage in our pursuit of achieving a significant position in the market
for topical combination prescription products for the treatment of hemorrhoids.

 NoveCite

 In October 2020, we, through our subsidiary,
NoveCite, signed an exclusive agreement with Novellus Therapeutics Limited ("Novellus") to license iPSC-derived mesenchymal
stem cells (iMSCs). Under this worldwide exclusive license, we are focused on developing cellular therapies. Specifically, we are seeking
to develop and commercialize the NoveCite mesenchymal stem cells ("NC- i MSCs") to treat acute respiratory conditions
with a near term focus on ARDS.

 NC- i MSCs are the next generation mesenchymal
stem cell therapy. We believe them to be differentiated and superior to donor-derived MSCs. Human donor-derived MSCs are sourced from
human bone marrow, adipose tissue, placenta, umbilical tissue, etc. and have significant challenges (e.g., variable donor and tissue
sources, limited supply, low potency, inefficient and expensive manufacturing). NC-iMSCs overcome these challenges because they:

 Are more potent and secrete
 exponentially higher levels of immunomodulatory proteins;

 Have practically unlimited
 supply for high doses and repeat doses;

 Are from a single donor
 and clonal so they are economically produced at scale with consistent quality and potency, as well as being footprint free (compared
 to viral reprogramming methods); and

 Have a significantly higher
 expansion capability.

 Several cell therapy companies using donor-derived
MSC therapies in treating ARDS have demonstrated that MSCs reduce inflammation, enhance clearance of pathogens and stimulate tissue repair
in the lungs. Almost all these positive results are from early clinical trials or under the FDA's emergency authorization program.

 In December 2020, the Company announced interim
data from a proof-of-concept ("POC") large animal study of its proprietary NC-iMSC therapy. The available results of NC-iMSC
therapy in the study show improvement in critical parameters, such as improved oxygenation, less systemic shock, and reduced lung injury,
compared to the control group. The study was conducted in a widely accepted large animal model.

 In the third quarter of 2021, the Company completed
the characterization and expansion of its NC-iMSC accession cell bank (ACB) at Waisman Biomanufacturing at the University of Wisconsin-Madison
to create a cGMP master cell bank (MCB).

 In July 2021, Novellus was acquired by Brooklyn
ImmunoTherapeutics, Inc. ("Brooklyn"). Pursuant to this transaction, the NoveCite license was assumed by Brooklyn with all
of the original terms and conditions in the exclusive license agreement.

 In October 2022, Brooklyn changed its name to
Eterna Therapeutics Inc.

 At this time the Company has paused most development
initiatives for NoveCite to prioritize LYMPHIR and its other product candidates.

 Market Opportunity

 Globally, there are 3 million cases of ARDS every
year, out of which approximately 200,000 cases are in the U.S. The COVID-19 outbreak added significantly to the number of ARDS cases
during that pandemic. Once COVID-19 patients advance to ARDS, they are put on mechanical ventilators. Death rate among patients on ventilators
can be as high as 50% depending on associated co-morbidities. There are no approved treatments for ARDS, and the current standard of
care only attempts to provide symptomatic relief.

 Sales and Marketing

 We are primarily focused on identifying opportunities
within the critical care and cancer care market segments. In our product acquisition criteria, we concentrate on markets that are highly
influenced by key opinion leaders, commonly referred to as KOLs, and in which products are prescribed by a relatively small number of
physicians, yet provide opportunities for growth and market share. This strategy allows for a manageable commercialization effort for
our Company in terms of resources and capital. We also seek to provide cost-effective therapies that would be endorsed by payers, patients,
and providers. We believe that we will be able to commercialize products within the scope of these criteria ourselves, and that we can
create marketing synergies by having a common narrow audience for our marketing efforts ("several products in the bag for the same
customer").

 For our product candidates that fall out of the
narrow scope criteria, we have identified pharmaceutical companies with large sales forces, experienced sales and marketing management
teams, direct-to-consumer capabilities, significantly larger resources than ours, and non-competing product portfolios that we believe
would make excellent sales and marketing partners. We intend to license our mass audience, non-specialty product candidates to such companies
for sales and marketing.

 LYMPHIR Sales and Marketing

 Citius Oncology does not currently have its own
commercial infrastructure and has finalized its initial sales and marketing capabilities by contracting with a large third-party commercial
sales and marketing organization with an existing commercial infrastructure and product launch experience to assist in its commercial
efforts. Through this third-party organization, Citius Oncology has developed a dedicated field force combined with various marketing
programs which will be tailored to both physicians and patients to facilitate the successful launch of LYMPHIR and grow its market share.
We, through Citius Oncology, plan to focus our commercial efforts on a concentrated group of prescribing hematologists, oncologists and
dermatologist-oncologists, along with key opinion leaders and advocacy groups who play an important role in the CTCL treatment regimen.

 To support the launch and commercialization of
LYMPHIR, Citius Oncology has entered into distribution agreements with Cardinal Health, Cencora and McKesson Corporation. In addition,
Citius Oncology has contracted with EVERSANA an innovative AI platform, to support the launch and commercialization of LYMPHIR whereby
EVERSANA provides an integrated suite of pre- and post-launch services, including medical information, pharmacovigilance, revenue cycle
management, program management, data and analytics, and channel management. In addition, in October 2025, Citius Oncology announced that
it is actively engaging with regional distribution partners to make LYMPHIR available to eligible patients through country-specific
Named Patient Programs (NPPs) in Europe, South America and the Middle East. As part of its NPP strategy, Citius Oncology has entered
into an exclusive distribution agreement with Integris Pharma S.A., headquartered in Athens, Greece. The partnership covers Greece, Cyprus,
Malta, Bulgaria, Romania, Croatia, Serbia, Albania, Bosnia Herzegovina, Kosovo, Montenegro and North Macedonia.

 In September 2024, the Company announced the
inclusion of LYMPHIR in the National Comprehensive Cancer Network ("NCCN") guidelines and compendia. LYMPHIR was included
bases on an NCCN Category 2A recommendation which indicates a uniform NCCN consensus that LYMPHIR is appropriate as an option for patients
with CTCL. The Company believes that LYMPHIR's addition to the NCCN guidelines will assist LYMPHIR in obtaining coverage and reimbursement
from the Centers for Medicare and Medicaid Services ("CMS").

 In February 2025, Citius Pharma announced that
LYMPHIR had been assigned a unique, permanent Healthcare Common Procedure Coding System (HCPCS) J-code (J9161) by CMS.

 Intellectual Property

 We rely on a combination of patent, trade secret,
copyright, and trademark laws, as well as confidentiality, licensing and other agreements, to establish and protect our proprietary rights.
Our policy is to actively seek to obtain, where appropriate, the broadest intellectual property protection possible for our current product
candidates and any future product candidates both in the U.S. and abroad. However, patent protection may not provide us with complete
protection against competitors who seek to circumvent our patents. To help protect our proprietary know-how that is not patentable, and
for inventions for which patents may be difficult to enforce, we currently rely and will in the future rely on trade secret protection
and confidentiality agreements to protect our interests.

 LYMPHIR Intellectual Property

 On September 3, 2021, Citius Pharma acquired
the exclusive license of E7777 (denileukin diftitox), an oncology immunotherapy for the treatment of CTCL, from Dr. Reddy's, who
had exclusively licensed it previously from Eisai. The exclusive license, which was amended as part of the transaction, is with Eisai
and includes rights to develop and commercialize LYMPHIR in all markets except for Japan, China, Korea, Taiwan, Hong Kong, Macau, Indonesia,
Thailand, Malaysia, Brunei, Singapore, India, Pakistan, Sri Lanka, Philippines, Vietnam, Myanmar, Cambodia, Laos, Afghanistan, Bangladesh,
Bhutan, Nepal, Mongolia, and Papua New Guinea. Citius Pharma renamed E7777 as I/ONTAK and also obtained the trade name LYMPHIR for the
product. In April 2022, Citius Pharma assigned the license agreement to SpinCo, at which time SpinCo began operations. Upon the completion
of the Merger, SpinCo became a wholly owned subsidiary of Citius Oncology. Citius Pharma remains a guarantor on all of Citius Oncology's
payment obligations thereunder.

 Obligations to Eisai under the License
Agreement

 Under the license agreement, Eisai is to receive
a $5.9 million development milestone payment upon initial approval by the FDA of LYMPHIR for the CTCL indication and an aggregate of
up to $22 million related to the achievement of net product sales thresholds. Pursuant to the terms of the license agreement, through
2022, Citius Pharma reimbursed Eisai for approximately $2.65 million of Eisai's costs to complete the ongoing Phase 3 pivotal clinical
trial for LYMPHIR for the CTCL indication and for all reasonable costs associated with the preparation of a BLA for LYMPHIR. The Company
has accrued the $2.9 million unpaid balance of the development milestone payment as of September 30, 2025.

 Pursuant to the terms of the license agreement,
Eisai was responsible for completing the current CTCL clinical trial, and chemistry, manufacturing and controls development activities
through the production of the BLA, which Citius Pharma filed with the FDA in September 2022. Citius Pharma is responsible for the costs
of correcting any major deficiencies in the BLA, as well as the costs of any further studies and development costs associated with potential
additional indications.

 On March 28, 2025, Citius
Oncology and Eisai entered into a letter agreement that amended the license agreement to provide for a payment schedule to Eisai for
the milestone payment and certain unpaid invoices. We agreed to pay Eisai on or before July 15, 2025, an aggregate amount of $2,535,318
and thereafter on the 15th of each of the next four months to pay Eisai $2.35 million and make a final payment of $2,197,892 to Eisai
on or before December 15, 2025, in each case with interest on each obligation from its original due date through the date of actual payment
under the letter agreement at the rate of 2% per annum. During the year ended September 30, 2025, we recorded $218,032 in interest expense
under the agreement. The parties released each other from any and all claims, losses, damages, costs and expenses that arise from or
related to our failure to pay the milestone payment or the other incurred costs under the license agreement except for any claims arising
out of a breach of the letter agreement. All other terms of the license agreement remain in full force and effect. During the year ended
September 30, 2025, we paid $3 million of the development milestone and the balance of $2.9 million is included in license fee payable
at September 30, 2025. On July 21, 2025, we made a payment to Eisai of $1,616,522 for other invoices and accumulated interest associated
with the letter agreement.

 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. Citius Oncology expects the first commercial sale to occur in the December 2025. 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. Either 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.

 The Company, through its subsidiary, is responsible
for preparing, filing, prosecuting, and maintaining all patent applications and patents included in the licensed patents that we intend
to pursue within the territory.

 Obligations to
Dr. Reddy's under the Asset Purchase Agreement

 The Company and Dr. Reddy's entered into
an asset purchase agreement whereby Dr. Reddy's transferred to the Company the then-existing patents, know-how, regulatory documentation
and other assets related to LYMPHIR and the Company agreed to assume certain liabilities associated with Dr. Reddy's development
of LYMPHIR. The agreement was assigned to Citius Oncology in April 2022.

 Under the terms of the asset purchase agreement
with Dr. Reddy's and subsequent to the April 2022 assignment to SpinCo, Citius Oncology, as guaranteed by Citius Pharma, will be
obligated to pay up to an aggregate of $40 million related to CTCL approvals in the U.S. and other markets, up to $70 million in development
milestones for additional indications, and up to $300 million for commercial sales milestones. Citius Oncology will also be obligated
to pay on a fiscal quarter basis tiered royalties equal to low double-digit percentages of net product sales (within a range of 10% to
15%). 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. Citius Oncology 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 Citius Oncology 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.

 Also under the agreement with Dr. Reddy's,
the Company, through Citius Oncology, is required to (i) use commercially reasonable efforts to make commercially available products
in the CTCL indication, peripheral T-cell lymphoma indication and immuno-oncology indication, (ii) initiate two investigator initiated
immuno-oncology trials, (iii) use commercially reasonable efforts to achieve each of the approval milestones, and (iv) complete each
specified immuno-oncology investigator trial on or before the four-year anniversary of the effective date of the definitive agreement.
Additionally, the Company, through Citius Oncology, is required to commercially launch a product in a territory within six months of
receiving regulatory approval for such product in each such jurisdiction. The Company, through Citius Oncology, is responsible for these
and any and all further developmental activities relating to LYMPHIR.

 Dr. Reddy's agreed to not compete against
the Company in the development of products containing compounds in LYMPHIR in the territory covered by the license for a designated period
of time. There are no termination provisions included in the asset purchase agreement other than those related to the term of the royalties.
To assist in the transfer of the LYMPHIR assets, the Company and Dr. Reddy's entered into a transition services agreement at the
closing of the transaction, which was in effect until March 2022.

approval for LYMPHIR, a $27.5 million milestone became payable to Dr. Reddy's, of which a balance of $19.75 million included in
license fee payable, remained due as of September 30, 2025. After discussions, Dr. Reddy's agreed to a partial deferral without
penalty of this milestone payment. During the years ended September 30, 2025 and 2024, we paid $2,750,000 and $5,000,000, respectively,
against the outstanding milestone fee.

 LYMPHIR Patents

 As part of the definitive
agreement with Dr. Reddy's, Citius Pharma acquired, and later transferred to Citius Oncology, the method of use patents in which
E7777 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:

 U.S. Provisional Application
 No. 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. Expiration date of August 23, 2041.

 International Patent Application
 Number: PCT/IB2021/0576733, which was filed with the World Intellectual Property Organization on August 23, 2021 for Europe, and
 subsequently published as WO 2022/043863 A1 on March 3, 2022, entitled, Combination for Use in Methods of Treating Cancer. Expiration
 date of August 23, 2041.

 Mino-Lok Intellectual Property

 In May 2014, our subsidiary LMB entered into
a patent and technology license agreement with Novel Anti-Infective Therapeutics, Inc. ("NAT"), who licensed the intellectual
property from MDACC, to develop and commercialize Mino-Lok on an exclusive, worldwide (except for South America), sub-licensable basis.
LMB incurred a one-time license fee in May 2014. On March 20, 2017, LMB entered into an amendment to the license agreement that expanded
the licensed territory to include South America, providing LMB with worldwide rights. We are obligated to pay annual maintenance fees
that increase annually until reaching a designated amount, which we must pay until the first sale of product. We also must pay up to
an aggregate of approximately $1.1 million in milestone payments, depending on the achievement of various regulatory and commercial milestones.
Under the terms of the license agreement, we also must pay a royalty equal to mid-single digit percentages to low-double digit percentages
of net sales, depending on the level of sales in that year, 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 country of sale at the time of sale. After the first sale of product, we
will owe an annual minimum royalty payment that will increase annually until reaching a designated amount, which we must pay for the
duration of the term. We will be responsible for all patent expenses for the term of the agreement although MDACC is responsible for
filing, prosecution and maintenance of all patents.

 Unless earlier terminated by NAT based on the
failure to achieve certain development or 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. The license agreement will terminate in the event we breach any of our payment or reporting obligations or NAT
breaches any of its obligations under the agreement. NAT will have the right to terminate the agreement if we bring or participate in
an action to challenge NAT's ownership of any of the licensed patent rights. We may terminate the license agreement upon 180 days'
notice. The license agreement may also be terminated upon our and NAT's mutual consent.

 Mino-Lok is covered in relation to the composition
by issued U.S. patent No. 7,601,731, entitled "Antimicrobial Flush Solutions," which was issued on October 13, 2009. Mino-Lok
is further covered in relation to its method of use by issued U.S. Patent No. 9,078,441, which was issued on July 14, 2015. The patents
provide intellectual property protection until June 7, 2024. There are corresponding patents granted in Europe and Canada (European Patent
No. EP 1644024, and Canadian Patent No. 2528522).

 Stability Patent Application for Mino-Lok

 In October 2018, the USPTO issued U.S. Patent
No. 10,086,114 (the "114 patent"), entitled "Antimicrobial Solutions with Enhanced Stability." On October 9,
2019, the European Patent Office ("EPO") granted European Patent No. 3370794, which corresponds to the 114 patent. The grant
of these patents strengthens the intellectual property protection for Mino-Lok through November 2036. While the original patents for
Mino-Lok (discussed above) cover the basic composition, this invention overcomes limitations in mixing antimicrobial solutions in which
components have precipitated because of physical and/or chemical factors, thus limiting the stability of the post-mix solutions. The
scientists and technologists at MDACC have been able to improve the stability of the post-mixed solutions through adjustments of the
post-mixed pH of the solution. This may allow for longer storage time of the ready-to-use solution. As such, the patents claiming the
enhanced stability may effectively extend patent protection for Mino-Lok beyond the 2024 expiration of the original patents since it
is expected that the compositions providing enhanced stability would be preferred over any non-stabilized versions that a competitor
may introduce after June 7, 2024. Citius Pharma holds the exclusive worldwide license which provides access to this patented technology
for development and commercialization of Mino-Lok.

 Mino-Lok has received a Qualified Infectious
Disease Product ("QIDP") designation. The QIDP designation provides New Drug Applications an additional five years of market
exclusivity, which together with the potential three years of exclusivity for the new strength and formulation of Mino-Lok, would result
in a combined total of eight years of market exclusivity regardless of patent protection.

 Halo-Lido Intellectual Property

 We are developing Halo-Lido to have a unique
combination of excipients as well as unique concentrations of the active ingredients. The goal is to have a product that is optimized
for stability and activity. Once the formulation development is completed and data is obtained, we intend to apply for a patent on this
new topical formulation.

 We seek to achieve approval for Halo-Lido by
utilizing the FDA's 505(b)(2) pathway. This pathway allows an applicant to file an NDA that contains full reports of investigations
of safety and effectiveness, but where at least some of the information required for approval comes from prior studies not conducted
by or for the applicant and for which the applicant has not obtained a right of reference to such prior third-party studies. This pathway
would provide three years of market exclusivity.

 NoveCite Intellectual Property

 In October 2020, we, through our subsidiary NoveCite,
Inc., entered into a license agreement with Novellus Therapeutics Limited, whereby NoveCite acquired an exclusive, worldwide license,
with the right to sublicense, to develop and commercialize a stem cell therapy based on Novellus's patented technology for the
treatment of acute pneumonitis of any etiology in which inflammation is a major agent in humans. The patented technology consists of
mesenchymal stem cells ("MSCs") derived from an induced pluripotent stem cell line that is made by Novellus using the mRNA
cell reprogramming methods in the patents covering the licensed technology.

 Upon execution of the license agreement, NoveCite
paid an upfront payment of $5,000,000 and issued to Novellus shares of NoveCite's common stock representing 25% of NoveCite's
currently outstanding equity. We own the other 75% of NoveCite's currently outstanding equity.

 NoveCite is obligated to pay Novellus up to an
aggregate of $51,000,000 in milestone payments upon the achievement of various regulatory and developmental milestones. NoveCite also
must pay on a fiscal quarter basis a royalty equal to low double-digit percentages of net sales, commencing upon the first commercial
sale of a licensed product. This royalty is subject to downward adjustment on a product-by-product and country-by-country basis 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) the date on which a biosimilar product is first marketed,
sold, or distributed by Novellus or any third party 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 Novellus
an amount equal to a mid-twenties percentage of any sublicensee fees it receives.

 During the term of the license agreement, NoveCite
is required to use commercially reasonable efforts to make commercially available at least one product in at least two markets: the U.S.
and either the United Kingdom, France, Germany, China or Japan. Additionally, NoveCite shall (i) on or before the five-year anniversary
of the date of the license agreement, file an IND for a licensed product in the field of acute pneumonitis treatment and (ii) receive
regulatory approval for a licensed product in the field of acute pneumonitis treatment in the U.S. or in a major market country on or
before the ten-year anniversary of the date of the license agreement.

 Pursuant to the terms of the license agreement,
NoveCite has been granted a right of first negotiation to exclusively license the rights to any new products developed or acquired by
Novellus which cannot include MSC's, that may be used within the field of acute pneumonitis treatment. After receiving notice from
Novellus of the new product opportunity, NoveCite has 30 days to notify Novellus of its desire to negotiate a license agreement for the
new product. If such notice is given by NoveCite, the parties shall then have a period of 150 days from the date of Novellus's
notice to NoveCite to negotiate, exclusively and in good faith, the terms and conditions for the new product license agreement.

 The term of the license agreement will continue
on a country-by-country and licensed product-by-licensed product basis until the expiration of the last-to-expire royalty term for any
and all licensed products unless earlier terminated in accordance with its terms. Either party may terminate the license agreement upon
written notice if the other party is in material default or breach of the agreement, subject to cure within the designated time periods.
Either party also may terminate the license agreement if the other party files for bankruptcy or takes related actions or is unable to
pay its debts as they become due, subject to cure within the designated time period. Additionally, Novellus will have the right to terminate
the agreement if NoveCite directly or indirectly challenges the patentability, enforceability or validity of any licensed patent. NoveCite
may terminate the license agreement at any time without cause upon 90 days prior written notice.

 Novellus 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 Novellus decides that it is not interested in maintaining a particular licensed patent or in preparing, filing, or prosecuting
a licensed patent, it will promptly advise NoveCite in writing and NoveCite will have the right, but not the obligation, to assume such
responsibilities in the territory at NoveCite's sole cost and expense.

 During the term of the license agreement, Novellus
is prohibited from commercializing or exploiting (directly or indirectly) any product that includes mesenchymal stem cells for any purpose
in acute pneumonitis treatment (subject to certain sponsored research exceptions), or exploiting (directly or indirectly) or enabling
a third party to exploit, for any purpose in acute pneumonitis treatment or otherwise, the original licensed cell banks line or any GMP-grade
cell banks of a cell line derived therefrom and that can be used as starting material for the manufacture of products derived from the
licensed technology. During the term of the license agreement, each party is prohibited from soliciting any employee of the other party,
subject to certain exceptions.

 In July 2021, Novellus was acquired by Brooklyn.
Pursuant to this transaction, the NoveCite license was assumed by Brooklyn with all of its original terms and conditions. In October
2021, Brooklyn changed its name to Eterna Therapeutics Inc.

 Competition

 We operate in a highly competitive and regulated
industry which is subject to change. We face significant competition from organizations that are pursuing drugs that would compete with
the drug candidates that we are developing and the same or similar products that target the same conditions we intend to treat. Due to
our limited resources, we may not be able to compete successfully against these organizations, which include many large, well-financed
and experienced pharmaceutical and biotechnology companies, as well as academic and research institutions and government agencies.

 LYMPHIR Competition

 There are currently several approved targeted
therapeutics for patients with persistent or recurrent CTCL. However, there are limitations to these targeted therapies, which are often
discontinued due to toxicity, adverse events, or a limited duration of response due to resistance over time. Consequently, we believe
there continues to be an unmet medical need for patients with CTCL and an opportunity for LYMPHIR to be included among the treatment
armamentarium for advanced-stage CTCL.

 The following products are approved for the systemic
treatment of advanced CTCL:

 Mogamulizumab, sold under
 the brand name Poteligeo, is a humanized, afucosylated monoclonal antibody targeting CC chemokine receptor 4. The FDA approved it
 for treatment of relapsed or refractory mycosis fungoides and S zary disease.

 Brentuximab vedotin, sold
 under the brand name Adcetris, is an antibody-drug conjugate medication used to treat relapsed or refractory Hodgkin lymphoma and
 systemic anaplastic large cell lymphoma, a type of T-cell non-Hodgkin lymphoma. It selectively targets tumor cells expressing the
 CD30 antigen, a defining marker of Hodgkin lymphoma and ALC.

 Romidepsin sold under the
 brand name Istodax, is a histone deacetylase ("HDAC") inhibitor indicated for the treatment of CTCL in adult patients
 who have received at least one prior systemic therapy.

 Vorinostat sold under the
 brand name Zolinza, is a HDAC inhibitor indicated for the treatment of cutaneous manifestations in patients with CTCL who have progressive,
 persistent or recurrent disease on or following two systemic therapies.

 Mino-Lok Competition

 Currently, the only alternative to Mino-Lok in
the treatment of infected CVCs in CRBSI/CLABSI patients of which we are aware, is the standard of care of removing the culprit CVC and
replacing a new CVC at a different vascular site. The Company is not aware of any INDs for a salvage antibiotic lock solution and does
not expect any to be forthcoming due to the difficulty of meeting the necessary criteria to be effective and practical.

 At this time, there are no pharmacologic agents
approved in the U.S. for the prevention or treatment of CRBSIs or CLABSIs in central venous catheters. The Company is aware that there
are several agents either approved or in development for prevention but none for salvage. The most prominent of these appear to be Defencath
from CorMedix Inc. ("Cormedix") and B-Lock from Great Lakes Pharmaceuticals, Inc. ("GLP"). Neither of these lock
solutions have been shown to be effective in salvaging catheters in bacteremic patients as Mino-Lok is intended to do, and Citius Pharma
does not expect that either would be pursued for this indication.

 Defencath TM (CorMedix Inc.)

 Defencath is a formulation of Taurolidine 1.35%,
Citrate 3.5%, and Heparin 1000 units/mL. Neutrolin is an anti-microbial catheter lock solution approved by the FDA in November 2023 to
reduce the incidence of catheter-related bloodstream infections (CRBSIs) for the limited population of adult patients with kidney failure
receiving chronic hemodialysis through a central venous catheter (CVC). Defencath was shown to reduce the risk of CRBSIs by up to 71%
in a Phase 3 clinical study. The FDA approved Defencath in November 2023 and Cormedix, launched Defencath in April 2024.

 B-Lock (Great Lakes Pharmaceuticals,
Inc.)

 B-Lock is a triple combination of trimethoprim,
EDTA and ethanol from Great Lakes Pharmaceuticals, Inc. ("GLP"). On July 24, 2012, GLP announced the initiation of a clinical
study of B-Lock. We are unaware as to the progress or results of these studies. In addition, we are not aware of any IND being filed
in the U.S. for B-Lock, nor are we aware of any clinical studies to support salvage of infected catheters in bacteremic patients.

 There has been no further public information
available on GLP. GLP's web site and phone number are no longer active and the Company believes that they have ceased operations.

 Halo-Lido Competition

 The primary competition in the hemorrhoid market
is non-prescription OTC products. If approved by the FDA, to our knowledge as of the date of this report, Halo-Lido would be the only
prescription product for the treatment of hemorrhoids.

 NoveCite Competition

 There are multiple participants in the cell therapy
field both in the U.S. and abroad. We believe that the following companies most directly compete with NoveCite in our licensed field
of acute pneumonitis treatment.

 Cynata Therapeutics Limited ("Cynata")
develops and commercializes a proprietary mesenchymal stem cell technology under the Cymerus brand for human therapeutic use in Australia.
The company's lead therapeutic product candidate is CYP-001, which has completed a Phase 1 clinical trial and for which Cynata
is actively recruiting patients for a Phase 2 clinical trial for the treatment of graft versus host disease. Cynata also develops products
for the treatment of asthma, heart attack, diabetic wounds, coronary artery disease, acute respiratory distress syndrome, brain cancer,
melanoma, sepsis, osteoarthritis, and critical limb ischemia, which are in a preclinical model.

 Healios K.K. is a biotechnology company that focuses
on the research and development activities in the field of regenerative medicine. Its clinical development programs are focused on treating
neurological conditions, cardiovascular diseases, inflammatory and immune disorders, and pulmonary and other conditions. The company's
lead platform product includes MultiStem cell therapy, an allogeneic stem cell product, for which it is preparing for a Phase 3 clinical
trial for the treatment of ARDS and has an ongoing clinical trial in Japan for the treatment of RDS. The MultiStem therapy also is in
a Phase 3 clinical study for the treatment of patients suffering from neurological damage from an ischemic stroke.

 Mesoblast Limited is a biopharmaceutical company
that develops and commercializes allogeneic cellular medicines. The company offers products in the areas of cardiovascular, spine orthopedic
disorder, oncology, hematology, and immune-mediated and inflammatory diseases. Its proprietary regenerative medicine technology platform
is based on specialized cells known as mesenchymal lineage adult stem cells. In April 2020, Mesoblast initiated a Phase 3 trial using
mesenchymal stromal cells for the treatment of moderate to severe COVID-19 acute respiratory distress syndrome. The trial was halted
in December 2020 after the Data Safety Monitoring Board (DSMB) performed a third interim analysis on the trial's first 180 patients,
noting that the trial was not likely to meet the 30-day mortality reduction endpoint at the planned 300 patient enrolment. The trial
was powered to achieve a primary endpoint of 43% reduction in mortality at 30 days for treatment with remestemcelL on top of maximal
care. The DSMB recommended that the trial complete with the enrolled 222 patients, and that all be followed-up as planned. At follow-up
through day 60, remestemcel-L showed a positive but non-significant trend in overall mortality reduction across the entire population
of treated patients (n=217). In the pre-specified population of patients under age 65 (n=123), remestemcel-L reduced mortality through
day 60 by 46%, but not in patients 65 or older (n=94). In an exploratory analysis through day 60, remestemcelL reduced mortality by 75%
and increased days alive off mechanical ventilation in patients under age 65 when combined with dexamethasone, in comparison with controls
on dexamethasone.

 Supply and Manufacturing

 We do not currently have and we do not intend
to set up our own manufacturing facilities. We rely on and will continue to rely on approved contract manufacturers for manufacturing
our product candidates in all stages of development after we file for FDA approval. Each of our domestic and foreign contract manufacturing
establishments, including any contract manufacturers we may decide to use, must be listed in the NDA or the BLA, as applicable, and must
be registered with the FDA. Also, the FDA imposes substantial annual fees on manufacturers of branded products.

 In general, our suppliers purchase raw materials
and supplies on the open market. Substantially all such materials are obtainable from a number of sources so that the loss of any one
source of supply would not have a material adverse effect on us.

 Our product development and manufacturing for
LYMPHIR is subject to regulation under various federal and state laws, including the Food, Drug and Cosmetic Act, Occupational Safety
and Health Act, the Environmental Protection Act, the Toxic Substances Control Act, the Resource Conservation and Recovery Act, the Controlled
Substances Act and other present and potential future federal, state or local regulations.

 We have contracted with proven suppliers and
manufacturers for active pharmaceutical ingredients, commercial supply, development and packaging. We are confident that all materials
meet or will meet specifications discussed at the chemistry, manufacturing and controls meeting with the FDA.

 If we fail to raise additional capital, and as
a result are unable to abide by our contractual obligations with these third-party manufacturers and suppliers, including making timely
payment, the necessary third-party support to continue to commercialize LYMPHIR could be delayed or terminated.

 Supply and Manufacturing of LYMPHIR

 We have either contracted directly or contracted
through Citius Oncology, to secure supply agreements with third-party cGMP facilities who are in compliance with current good manufacturing
practices as generally accepted by the FDA. We are confident that all drug substance and drug product materials meet or will meet specifications
as agreed with the FDA.

 We believe our contract manufacturers have sufficient
capacity to support demand for our products as our business grows. In addition to our supply agreements with third-party manufacturers,
we, through Citius Oncology, have contracted with other proven suppliers for, testing, labeling, packaging, and distribution of LYMPHIR.

 Regulation

 U.S. Government Regulation

 The research, development, testing, manufacture,
labeling, promotion, advertising, distribution, and marketing, among other things, of our product candidates, is extensively regulated
by governmental authorities in the U.S. and other countries.

 In the U.S., the FDA regulates drugs under the
Federal Food, Drug, and Cosmetic Act (the "FDCA") and the agency's implementing regulations. If the Company fails to
comply with the applicable U.S. requirements at any time during the product development process, including clinical testing, as well
as at any time before and after the approval process, we may become subject to administrative or judicial sanctions, or other actions,
such as the FDA's delay in review of or refusal to approve a pending NDA or BLA, withdrawal of an approval, imposition of a clinical
hold or study termination, issuance of Warning Letters or Untitled Letters, mandated modifications to promotional materials or issuance
of corrective information, requests for product recalls, consent decrees, corporate integrity agreements, deferred prosecution agreements,
product seizures or detentions, refusal to allow product import or export, total or partial suspension of or restriction of or imposition
of other requirements relating to production or distribution, injunctions, fines, debarment from government contracts and refusal of
future orders under existing contracts, exclusion from participation in federal and state healthcare programs, FDA debarment, restitution,
disgorgement or civil or criminal penalties, including fines and imprisonment. Any enforcement action could have a material adverse effect
on the Company and our operations.

 FDA Marketing Approval

 Before any one of the Company's drug product
candidates may be marketed in the U.S., it must be approved by the FDA. Obtaining FDA marketing approval for new products requires substantial
time, effort and financial resources. In order for the FDA to determine that a product is safe and effective for the proposed indication,
the product must first undergo testing in animals (nonclinical studies). The data generated from nonclinical studies is used to support
the filing of an IND under which human studies are conducted. Human testing is generally conducted under an IND in three phases following
Good Clinical Practices ("GCP") regulations:

 Phase 1 studies evaluate
 the safety and tolerability of the drug, generally in normal, healthy volunteers;

 Phase 2 studies evaluate
 safety and efficacy, as well as appropriate doses; these studies are typically conducted in patient volunteers who suffer from the
 particular disease condition that the drug is designed to treat; and

 Phase 3 studies evaluate
 safety and efficacy of the product at specific doses in one or more larger pivotal trials.

 In addition to human testing, the manufacturing
process of the potential product must be developed in accordance with cGMP regulations. Prior to the approval of a new product, the FDA
will inspect the facilities at which the proposed drug product is manufactured to ensure cGMP compliance.

 The cumulative safety and efficacy data generated
from the clinical trials described above, chemistry, manufacturing and control ("CMC") information, nonclinical study data
and proposed labeling are used as the basis to support approval of a marketing application (NDA or BLA) to the FDA. The preparation of
an NDA or BLA requires the expenditure of substantial funds and the commitment of substantial resources. Additionally, at the time of
an NDA or BLA submission a user fee is required (unless the product has ODD) to be paid. The FDA conducts a preliminary administrative
review upon receipt of the NDA or BLA submission, the FDA either accepts the NDA or BLA submission or does not. If the application is
not accepted for review by FDA, the sponsor of the application must resolve the deficiencies and re-submit the application, re-starting
the review clock.

 After evaluating the NDA or BLA and all related
information, including the advisory committee recommendation, if any, and inspection reports regarding the manufacturing facilities and
clinical trial sites, the FDA may issue an approval letter, or, in some cases, a CRL. A CRL generally contains a statement of specific
conditions that must be met in order to secure final approval of the NDA or BLA and may require additional clinical or preclinical studies,
or other information, in order for FDA approval. Even with submission of this additional information, the FDA may decide that the NDA
or BLA does not satisfy the regulatory criteria for approval. If and when those conditions have been met to the FDA's satisfaction,
the FDA may issue an approval letter. An approval letter authorizes commercial marketing of the drug with specific prescribing information
for specific indications.

 Data obtained from the development program are
not always conclusive and may be susceptible to varying interpretations. These instances may delay, limit or prevent regulatory approval.
The FDA may not grant approval on a timely basis, or at all. We may encounter difficulties or unanticipated costs in our efforts to secure
necessary governmental approvals, which could delay or preclude us from marketing our products. The FDA may limit the indications for
use or place other conditions on any approvals that could restrict the commercial application of the product.

 FDA Post - Approval Considerations

 Drugs manufactured or distributed pursuant to
FDA approvals are subject to continuing regulation by the FDA, including, among other things, requirements relating to recordkeeping,
manufacturing, periodic reporting, product sampling and distribution, advertising and promotion, and reporting of adverse experiences
with the product and drug shortages. During the approval process, the FDA and the sponsor may agree that specific studies or clinical
trials should be conducted as post-marketing commitments, but they are not required. The FDA may also impose post-marketing requirements
as a condition of approval of an NDA or BLA. For example, the FDA may require post-marketing testing, including Phase 4 clinical trials
and surveillance, to further assess and monitor the product's safety and effectiveness after commercialization. Once an approval
is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems
occur after the product becomes available in the market.

 After approval, most changes to the approved
product, such as manufacturing changes and adding new indications or other labeling claims, are subject to FDA review and approval. There
are also annual user fee requirements for any marketed product and new application fees for supplemental applications with clinical data.
Additionally, the FDA strictly regulates the labeling, advertising and promotion of products under an approved NDA or BLA. The FDA and
other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to
have improperly marketed or promoted off-label uses may be subject to significant liability, including criminal and civil penalties under
the FDCA and False Claims Act, exclusion from participation in federal healthcare programs, debarment from government contracts, refusal
of future orders under existing contracts and mandatory compliance programs under corporate integrity agreements or deferred prosecution
agreements.

 Other Regulations of the Healthcare Industry

 In addition to FDA regulations governing the
marketing of pharmaceutical products, there are various state and federal laws that may restrict business practices in the biopharmaceutical
industry. These include the following:

 The federal Anti-Kickback
 laws and implementing regulations, which prohibit persons from knowingly and willfully soliciting, offering, receiving or providing
 remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual, or furnishing or arranging
 for a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;

 Other Medicare laws, regulations,
 rules, manual provisions and policies that prescribe the requirements for coverage and payment for services performed by our customers,
 including the amount of such payment;

 The federal False Claims
 Act, which imposes civil and criminal liability on individuals and entities who submit, or cause to be submitted, false or fraudulent
 claims for payment to the government;

 The Foreign Corrupt Practices
 Act ("FCPA"), which prohibits certain payments made to foreign government officials;

 State and foreign law equivalents
 of the foregoing and state laws regarding pharmaceutical company marketing compliance, reporting and disclosure obligations;

 The Patient Protection
 and Affordable Care Act of 2010, as amended by the Health Care and Education Affordability Reconciliation Act of 2010 (collectively,
 the "Affordable Care Act" or "ACA"), which among other things: changes access to healthcare products and
 services; creates new fees for the pharmaceutical and medical device industries; changes rebates and prices for health care products
 and services; and requires additional reporting and disclosure;

 The Health Insurance Portability
 and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, and
 its implementing regulations (collectively, "HIPAA"), which creates federal criminal laws that prohibit executing a scheme
 to defraud any healthcare benefit program and which also imposes certain obligations on entities with respect to the privacy, security
 and transmission of individually identifiable health information; and

 The federal Physician Payment
 Sunshine Act, which requires certain pharmaceutical and biological manufacturers to engage in extensive tracking of payments or transfers
 of value to physicians and teaching hospitals and public reporting of the payment data.

 If our operations are found to be in violation
of any of these laws, regulations, rules or policies or any other law or governmental regulation, or if interpretations of the foregoing
change, we may be subject to civil and criminal penalties, damages, fines, exclusion from the Medicare and Medicaid programs and the
curtailment or restructuring of our operations.

 To the extent that any of our products are sold
in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable post-marketing
requirements, including safety surveillance, anti-fraud and abuse laws, and implementation of corporate compliance programs and reporting
of payments or transfers of value to healthcare professionals. This is currently not applicable as our only approved product is not currently
sold in a foreign country nor have we applied for any foreign approvals. Citius Oncology has signed international distribution agreements
covering Greece, Cyprus other Balkan countries as well as Turkey, Bahrain, Qatar, Oman, Kuwait, Saudi Arabia, and the UAE through named
patient programs which allows access to LYMPHIR where permitted by local law without constituting commercial approval outside the United
States.

 Coverage and Reimbursement

 The commercial success of our product candidates
and our ability to commercialize any approved product candidates successfully will depend in part on the extent to which governmental
authorities, private health insurers and other third-party payers provide coverage for and establish adequate reimbursement levels for
our therapeutic product candidates. In the United States, the European Union and other potentially significant markets for our product
candidates, government authorities and third-party payers are increasingly imposing additional requirements and restrictions on coverage,
attempting to limit reimbursement levels or regulate the price of drugs and other medical products and services, particularly for new
and innovative products and therapies, which often has resulted in average selling prices lower than they would otherwise be. For example,
in the United States, federal and state governments reimburse covered prescription drugs at varying rates generally below average wholesale
price. Federal programs also impose price controls through mandatory ceiling prices on purchases by federal agencies and federally funded
hospitals and clinics and mandatory rebates on retail pharmacy prescriptions paid by Medicaid and Tricare. These restrictions and limitations
influence the purchase of healthcare services and products. Legislative proposals to reform healthcare or reduce costs under government
programs may result in lower reimbursement for our products and product candidates or exclusion of our products and product candidates
from coverage. Moreover, the Medicare and Medicaid programs increasingly are used as models for how private payers and other governmental
payers develop their coverage and reimbursement policies.

 In addition, the increased emphasis on managed
healthcare in the United States and on country and regional pricing and reimbursement controls in the European Union will put additional
pressure on product pricing, reimbursement and utilization, which may adversely affect our future product sales and results of operations.
These pressures can arise from rules and practices of managed care groups, competition within therapeutic classes, availability of generic
equivalents, judicial decisions and governmental laws and regulations related to Medicare, Medicaid and healthcare reform, coverage and
reimbursement policies and pricing in general. The cost containment measures that healthcare payers and providers are instituting and
any healthcare reform implemented in the future could significantly reduce our revenues from the sale of any approved products. We cannot
provide any assurances that we will be able to obtain and maintain third-party coverage or adequate reimbursement for our approved products
in whole or in part.

 Healthcare Reform

 The United States and many foreign jurisdictions
have enacted or proposed legislative and regulatory changes affecting the healthcare system. The United States government, state legislatures
and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid
healthcare costs, including price controls, restrictions on reimbursement and requirements for substitution of generic products for branded
prescription drugs.

 In recent years, Congress has considered reductions
in Medicare reimbursement levels for drugs administered by physicians. Further, CMS, the agency that administers the Medicare and Medicaid
programs, also has authority to revise reimbursement rates and to implement coverage restrictions for some drugs. Cost reduction initiatives
and changes in coverage implemented through legislation or regulation could decrease utilization of and reimbursement for any approved
products. While Medicare regulations apply only to drug benefits for Medicare beneficiaries, private payers often follow Medicare coverage
policy and payment limitations in setting their own reimbursement rates. Therefore, any reduction in reimbursement that results from
federal legislation or regulation may result in a similar reduction in payments from private payers.

 The ACA substantially changed the way healthcare
is financed by both governmental and private insurers, and significantly impacts the pharmaceutical industry. The ACA was intended to
broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud
and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical
and medical device manufacturers, and impose additional health policy reforms. Since its passage, there have been significant ongoing
efforts to modify or eliminate the ACA.

 The first Trump administration pushed for modifications
to the ACA. In addition, the Tax Cuts and Jobs Act (the "TCJA"), enacted on December 22, 2017, repealed the shared responsibility
payment for individuals who fail to maintain minimum essential coverage under section 5000A of the Internal Revenue Code of 1986, as
amended (the "IRC"), as amended, commonly referred to as the individual mandate. While the Biden administration rolled back
many of the executive orders issued by President Trump in his first term, ongoing repeal and reform efforts impacting the ACA and the
healthcare sector more broadly are being sought and are likely under the current Trump administration.

 Other legislative changes have been proposed
and adopted since passage of the ACA. These have, among other things, reduced Medicare payments to several types of providers, including
hospitals, imaging centers and cancer treatment centers, and increased the statute of limitations period for the government to recover
overpayments to providers.

 Further legislative and regulatory changes under
the ACA remain possible. The Inflation Reduction Act of 2022, enacted on August 16, 2022, includes several provisions to lower prescription
drug costs for Medicare patients and reduce drug spending by the federal government. It is unknown what form any future changes or any
law would take under the current Trump administration and how or whether it may affect our business in the future. We expect that changes
or additions to the ACA, the Medicare and Medicaid programs, changes allowing the federal government to directly negotiate drug prices
(which becomes effective in January 2026 for 10 prescription drugs) and changes stemming from other healthcare reform measures, especially
with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare
industry. In addition, the Affordable Care Act has also been subject to challenges in the courts, which remain ongoing.

 Payment methodologies may be subject to changes
in healthcare legislation and regulatory initiatives as well. In addition, at the state level, legislatures have passed and implemented
regulations, and may pass additional legislation, designed to control pharmaceutical product pricing, including price or patient reimbursement
constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some
cases, designed to encourage importation from other countries and bulk purchasing.

 We expect that additional federal, state and
foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments
will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products,
once approved, or additional pricing pressures.

 Foreign Regulation

 The Company and any of our collaborative partners
may be subject to widely varying foreign regulations, which may be different from those of the FDA, governing clinical trials, manufacture,
product registration and approval and pharmaceutical sales. Whether or not FDA approval has been obtained, the Company or our collaborative
partners must obtain a separate approval for a product by the comparable regulatory authorities of foreign countries prior to the commencement
of product marketing in such countries. In certain countries, regulatory authorities also establish pricing and reimbursement criteria.
The approval process varies from country to country, and the time may be longer or shorter than that required for FDA approval. In addition,
under current U.S. law, there are restrictions on the export of products not approved by the FDA, depending on the country involved and
the status of the product in that country.

 Employees

 As of September 30, 2025, we had 23 employees
and various consultants providing support. Through our consulting and collaboration arrangements, and including our Scientific Advisory
Board, we have access to more than 30 additional professionals, who possess significant expertise in business development, legal, accounting,
regulatory affairs, clinical operations, and manufacturing. We also rely upon a network of consultants to support our clinical studies
and manufacturing efforts.

 Executive Officers of Citius Pharma

 Leonard Mazur, Chief Executive
Officer, Chairman and Secretary – Mr. Mazur, 80, was appointed Chief Executive Officer effective May 1, 2022, and has been a member
of the Board since September 2014. Mr. Mazur previously served as Chief Executive Officer, President, and Chief Operating Officer from
September 2014 until March 2016.

 Myron Holubiak, Executive Vice
Chairman and Director – Mr. Holubiak, 78, was appointed Executive Vice Chairman effective May 1, 2022, and has been a member of
the Board since October 2015. He previously served as President and Chief Executive Officer from March 2016 through April 2022. He was
also the founder and Chief Executive Officer and President of Leonard-Meron Biosciences, Inc., an acquired subsidiary of Citius Pharma,
from March 2013 until March 2016.

 Jaime Bartushak, Chief Business
Officer, Chief Financial Officer and Principal Financial Officer – Mr. Bartushak, 58, was appointed as Chief Financial Officer
in November 2017. Previously, he was one of the founders and Chief Financial Officer of Leonard-Meron Biosciences, Inc., an acquired
subsidiary of Citius Pharma.

 Myron Czuczman, Chief Medical Officer
and Executive Vice President – Dr. Czuczman, 66, was appointed as Chief Medical Officer and Executive Vice President in July 2020.
Dr. Czuczman previously served as Vice President, Global Clinical Research and Development, Therapeutic Head of Lymphoma/CLL at Celgene
Corporation.

 Item 1A. Risk Factors

 This report contains forward-looking statements
that involve risks and uncertainties. Our actual results could differ materially from those discussed in this report. Factors that could
cause or contribute to these differences include, but are not limited to, those discussed below and elsewhere in this report.

 If any of the following risks, or other
risks not presently known to us or that we currently believe to not be significant, develop into actual events, then our business, financial
condition, results of operations or prospects could be materially adversely affected. If that happens, the market price of our securities
could decline, and stockholders may lose all or part of their investment.

 Risks Related to Our Financial Position and
Need for Additional Capital

 Our independent registered public accounting
firm's report includes an explanatory paragraph stating that there is substantial doubt about our ability to continue as a going
concern.

 At September 30, 2025, we estimated that we have
sufficient capital to continue our operations through March 2026, after taking into account the $6.0 million raised by us in October
2025 and the $18.0 million raised by Citius Oncology in December 2025. You should not rely on our consolidated balance sheet as an indication
of the amount of proceeds that would be available to satisfy claims of creditors, and potentially be available for distribution to stockholders,
in the event of liquidation.

 The Company has generated no operating revenue
to date and has principally raised capital through the issuance of debt and equity instruments to finance its operations. However, the
Company's continued operations beyond March 2026 including its continued commercialization of LYMPHIR (through Citius Oncology)
and its development plans for Mino-Lok, Halo-Lido and NoveCite, will depend on its ability to successfully launch LYMPHIR and/or obtain
regulatory approval to market Mino-Lok and generate substantial revenue from the sale of LYMPHIR and/or Mino-Lok and on its ability to
raise additional capital through various potential sources, such as equity and/or debt financings, strategic relationships, or out-licensing
of its product candidates. However, the Company can provide no assurances on the commercialization, or future sales of LYMPHIR and/or
the approval, commercialization, or future sales of Mino-Lok or that financing or strategic relationships will be available on acceptable
terms, or at all. If the Company is unable to raise sufficient capital, find strategic partners or generate substantial revenue from
the sale of LYMPHIR and/or Mino-Lok (if approved), there would be a material adverse effect on its business. Further, the Company expects
in the future to incur additional expenses as it continues to develop its product candidates, including seeking regulatory approval,
and protecting its intellectual property.

 We require substantial additional funding
in the near future to support our operations, complete the commercialization of LYMPHIR, and continue the development of our other product
candidates, which capital may not be available on acceptable terms, or at all.

 Our operations have consumed substantial amounts
of cash since inception. We have significantly increased our spending to continue our commercialization efforts for LYMPHIR through Citius
Oncology, advance development of LYMPHIR for other indications, and advance development of our other product candidates. Furthermore,
following the Merger, Citius Oncology has additional costs associated with operating as a public company and requires additional capital
to fund our other operating expenses and capital expenditures. As a result, we continue to evaluate strategic alternatives, including
but not limited to, partnerships, joint ventures, mergers, acquisitions, licensing or other strategic transactions.

 As of September 30, 2025, and without giving
effect to subsequent capital raises in October and December 2025, our cash and cash equivalents were approximately $4.3 million and we
had an accumulated deficit of approximately $238.8 million. The amount and timing of our future funding requirements will depend on many
factors, some of which are outside of our control, including but not limited to:

 the costs and expenses
 associated with our ongoing commercialization efforts for LYMPHIR, including the continuing costs of maintaining or contracting for
 sales, marketing, and distribution capabilities for LYMPHIR;

 the degree of success we
 experience in commercializing LYMPHIR;

 the revenue generated by
 sales of LYMPHIR and other future product candidates that may be approved, if any;

 the extent to which LYMPHIR
 or any of our other potential product candidates, if approved for commercialization, is adopted by the physician community;

 the effect of competing
 products and product candidates and other market developments;

 the scope, progress, results
 and costs of conducting studies and clinical trials for our other future product candidates, if any, resulting from our ongoing research
 with LYMPHIR for other possible indications;

 the timing of, and the
 costs involved in, obtaining regulatory approvals for our product candidates;

 the costs of manufacturing
 LYMPHIR and any other potential product candidates we develop;

 the timing and amount of
 any milestone, royalty or other payments we are required to make pursuant to any current or future license agreements;

 the number and types of
 future product candidates we might develop and commercialize;

 any product liability or
 other lawsuits related to our products;

 the expenses needed to
 attract, hire and retain skilled personnel;

 the costs associated with
 being a public company;

 costs of preparing, filing
 and prosecuting patent applications and maintaining, enforcing and defending intellectual property-related claims; and

 the extent and scope of
 our general and administrative expenses.

 Until we are able to generate significant revenue,
if ever, we expect to finance our operations through a combination of equity offerings, debt financings, collaborations or other strategic
transactions. We cannot be sure that any additional funding, if needed, will be available on terms favorable to us, or at all. Any additional
fundraising efforts may divert our management from their day-to-day activities, which may adversely affect our ability to develop and
commercialize our product candidates. Furthermore, any additional equity or equity-related financing may be dilutive to our stockholders,
and debt or equity financing, if available, may subject us to restrictive covenants and significant interest costs. If we raise additional
funds through collaborations or strategic alliances with third parties, we may have to relinquish valuable rights to our product candidates,
future revenue streams, research programs or technologies, or grant licenses on terms that may not be favorable to us. If we are unsuccessful
in our efforts to raise additional financing on acceptable terms or execute on other strategic alternatives, we may be required to significantly
reduce or cease our operations.

 We have a history of net losses and expect
to incur losses for the foreseeable future. We may never generate revenues or, if we are able to generate revenues, achieve profitability.

 We were formed in 2007 and since our inception
have incurred a net loss in each of our previous operating years. Our ability to become profitable depends upon our ability to obtain
marketing approval for and generate revenues from sales of our product candidates. We have been focused on product development, have
not received approval for any of our product candidates, and have not generated any revenues to date. Our subsidiary, Citius Oncology,
received approval for LYMPHIR in August 2024 and launched LYMPHIR in December 2025, but has not generated any revenues to date. We have
incurred losses in each period of our operations, and we expect to continue to incur losses for the foreseeable future. These losses
are likely to continue to adversely affect our working capital, total assets, and stockholders' equity. The process of developing
our product candidates requires significant clinical development, laboratory testing and clinical trials. In addition, commercialization
of our product candidates will require that we obtain necessary regulatory approvals and establish sales, marketing, and manufacturing
capabilities, either through internal hiring or through contractual relationships with others. We expect to incur substantial losses
for the foreseeable future as a result of anticipated increases in our research and development costs, including costs associated with
conducting preclinical testing and clinical trials, and regulatory compliance activities. We expect Citius Oncology to begin generating
revenues following the launch of LYMPHIR, which occurred in December 2025. We incurred net losses of $39,740,269 and $39,425,839 for
the years ended September 30, 2025 and 2024, respectively. At September 30, 2025, we had stockholders' equity of $77,527,600 and
an accumulated deficit of $238,804,129. Our net cash used in operating activities was $26,552,738 and $28,201,375 for the years ended
September 30, 2025 and 2024, respectively.

 As of September 30, 2025, we had outstanding
liabilities of $38.4 million and outstanding commitments of $22.7 million to third parties for LYMPHIR licensing, supply and other costs,
that, if left unpaid, could result in an interruption in the commercialization of LYMPHIR, breach of contract, loss of licensing rights
or other events that would have a material adverse effect on our business and operations.

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

 Citius Oncology
 successfully commercializing LYMPHIR;

 developing and testing
 product candidates;

 receiving regulatory approvals
 for our other product candidates;

 commercializing our other
 product candidates that receive regulatory approval;

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

 obtaining medical insurance
 coverage for any approved product candidate; and

 establishing a favorable
 competitive position for any approved product candidates.

 Many of these factors will depend on circumstances
beyond our control. We cannot assure you that any of our product candidates will be approved by the FDA or any foreign regulatory body
or obtain medical insurance coverage, that we will successfully bring any approved product to market or, if so, that we will ever become
profitable.

 Our and Citius Oncology's ongoing
explorations of alternative strategic paths may not result in entering into or completing transactions, when necessary, and the process
of reviewing alternative strategic paths or their conclusion could adversely affect our stock price.

 We and Citius Oncology continue to evaluate strategic
paths to provide the resources necessary to successfully commercialize LYMPHIR, continue the development of our other product candidates,
and maximize stockholder value. Potential strategic paths may include partnerships, joint ventures, mergers, acquisitions, or licensing
transactions, a combination of these, or other strategic transactions. There can be no assurance, however, that our evaluation will result
in transactions or other alternatives, even when deemed necessary. There is no set timetable for our strategic process, and we do not
intend to provide updates unless or until the Board approves a specific action or otherwise determines that disclosure is appropriate
or necessary.

 Any potential transaction would be dependent
on a number of factors that may be beyond our control, including, among other things, market conditions, industry trends, the interest
of third parties in a potential transaction with us, obtaining stockholder approval and the availability of financing to third parties
in a potential transaction with us on reasonable terms. The process of reviewing alternative strategic paths may be time consuming and
may involve the dedication of significant resources and may require us to incur significant costs and expenses. It could negatively impact
our ability to attract, retain and motivate employees, and expose us to potential litigation in connection with this process or any resulting
transaction. If we are unable to effectively manage the process, our financial condition and results of operations could be adversely
affected. In addition, speculation regarding any developments related to the review of strategic alternatives and perceived uncertainties
related to the future of our Company could cause our stock price to fluctuate significantly. Further, any alternative strategic paths
that may be pursued and completed ultimately may not deliver the anticipated benefits or enhance stockholder value. There can be no guarantee
that the process of evaluating alternative strategic paths will result in our Company or Citius Oncology entering into or completing
potential transactions within the anticipated timing or at all.

 In the event we or Citius Oncology do not
successfully complete a strategic transaction, should this be deemed necessary, our Board may decide to pursue a dissolution and liquidation
of our Company. In such an event, the amount of cash available for distribution to our stockholders will depend heavily on the timing
of such liquidation as well as the amount of cash that will need to be reserved for commitments and contingent liabilities.

 There can be no guarantee that the process to
identify strategic transactions will result in successfully completed transactions when necessary. If additional transactions are not
completed that enable us or Citius Oncology to successfully commercialize LYMPHIR and sustain our business operations, our Board may
decide that it is in the best interest of our stockholders to dissolve our Company and liquidate our assets. In that event, the amount
of cash available for distribution to our stockholders will depend heavily on the timing of such decision and, ultimately, such liquidation
since the amount of cash available for distribution continues to decrease as we fund our operations and evaluate our strategic alternatives.
In addition, if our Board were to approve and recommend, and our stockholders were to approve, a dissolution of our Company, we would
be required under Nevada corporate law to pay our outstanding obligations, as well as to make reasonable provision for contingent and
unknown obligations, prior to making any distributions in liquidation to our stockholders. As a result of this requirement, a portion
of our assets may need to be reserved pending the resolution of such obligations. In addition, we may be subject to litigation or other
claims related to a dissolution and liquidation of our Company. If a dissolution and liquidation were pursued, our Board, in consultation
with its advisors, would need to evaluate these matters and make a determination about a reasonable amount to reserve. Accordingly, holders
of our common stock could lose all or a significant portion of their investment in the event of a dissolution, liquidation or winding
up of our Company.

 Risks Related to Our Business and our Industry

 If we are unable
to execute our commercial strategy for LYMPHIR, fail to satisfy the conditions of our marketing approval for LYMPHIR, or if we experience
significant delays in accomplishing such goals, our business will be materially harmed.

 We
have invested a significant portion of our efforts and financial resources to bring LYMPHIR to market. Our ability to generate product
revenues will depend heavily on the successful commercialization of LYMPHIR. Further, while we believe we have sufficient funds
on hand for the successful commercialization of LYMPHIR, which began with its launch in December 2025, various factors could increase
the cost to successfully commercialize LYMPHIR, which we expect would require us to obtain additional capital to complete those efforts.
Financing might not be available on acceptable terms or at all.

 If we do not receive
new marketing approvals in other jurisdictions for LYMPHIR, our ability to generate additional revenue will be jeopardized and, consequently,
our business will be materially harmed. Additionally, our ability to make LYMPHIR available within the U.S. is largely dependent upon
the maintenance of our marketing approval. The success of LYMPHIR will depend on a number of additional factors, including the following:

 our
 ability to negotiate, secure and maintain adequate pricing, coverage and reimbursement terms
 on a timely basis, or at all;

 the
 timing, scope and outcome of our commercial launch in the U.S. and in other potential jurisdictions;

 the
 maintenance and expansion of a commercial infrastructure capable of supporting product sales,
 marketing and distribution;

 the
 implementation and maintenance of marketing and distribution relationships with third parties;

 our
 ability to establish and maintain commercial manufacturing arrangements with third-party
 manufacturers;

 our
 ability or the ability of our third-party manufacturers to successfully produce commercial
 and clinical supply of LYMPHIR on a timely basis sufficient to meet the needs of our commercial
 and clinical activities;

 successful
 identification of eligible patients;

 acceptance
 of LYMPHIR as a treatment for the approved indication by patients, the medical community
 and third-party payors;

 effectively
 competing with other therapies;

 global
 trade policies;

 a
 continued acceptable safety profile of LYMPHIR;

 the
 costs, timing and outcome of post-marketing studies and trials required for LYMPHIR;

 protecting
 our rights in our intellectual property portfolio, obtaining and maintaining regulatory exclusivity;
 and

 our
 ability to successfully prepare and advance regulatory submissions for marketing approval
 for LYMPHIR in additional territories and for additional or expanded indications and whether
 and in what timeframe we may obtain such approval.

 If we do not achieve
one or more of these factors in a timely manner or at all, we could experience significant delays or an inability to continue to commercialize
our products, either of which would have a material adverse effect on our business, results of operations and financial condition.

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

 We anticipate that we will incur operating losses
for the foreseeable future as we continue developing our product candidates which have not received regulatory approval. The amount and
timing of our future funding requirements will depend on many factors, including, but not limited to:

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

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

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

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

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

 We expect to need to access the capital markets
in the near future for additional capital for research and development and for operations. Traditionally, pharmaceutical companies have
funded their research and development expenditures through raising capital in the equity markets. Declines and uncertainties in these
markets over the past several years have severely restricted raising new capital and have affected companies' abilities to continue
to expand or fund existing research and development efforts. If economic conditions continue to be uncertain or become worse, our future
cost of equity or debt capital and access to the capital markets could be adversely affected. If we are not successful in securing additional
financing, we may be required to significantly delay, reduce the scope of or eliminate one or more of our research or development programs,
downsize our general and administrative infrastructure, or seek alternative measures to avoid insolvency, including arrangements with
collaborative partners or others that may require us to relinquish rights to certain of our technologies or product candidates.

 We are primarily a commercial and late-stage
development company with an unproven business strategy and may never achieve commercialization of all our therapeutic product candidates
or profitability.

 Citius Pharma has no approved products. Our subsidiary,
Citius Oncology, received approval for LYMPHIR in August 2024 and launched LYMPHIR in December 2025, but has not generated any revenues
to date. All other current product candidates of Citius Pharma are in the pre-clinical or clinical stage. We rely on third parties to
conduct the research and development activities for our product candidates and our product commercialization capabilities are unproven.
We, through Citius Oncology, have developed our sales and marketing capabilities for LYMPHIR and have contracted with Innovation Partners,
a large third-party commercial sales and marketing organization with an existing commercial infrastructure and product launch experience
to assist in our commercial efforts related to LYMPHIR. Citius Oncology also has distribution agreements with three national companies
and an agreement with EVERSANA to support the launch and commercialization of LYMPHIR. Citius Pharma has no sales or marketing capabilities
with respect to our other product candidates. Our success will depend upon the sales and marketing infrastructure developed by Citius
Oncology for LYMPHIR and also on Citius Pharma's ability to develop such capabilities on its own or to enter into and maintain
collaboration agreements on favorable terms and to select an appropriate commercialization strategy for each product candidate that it
chooses to pursue and that receives approval, whether on its own or in collaboration. If we are not successful in implementing our strategy
to commercialize our product candidates, we may never achieve, maintain, or increase profitability. Our ability to successfully commercialize
any of our other product candidates will depend, among other things, on our ability to:

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

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

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

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

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

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

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

 There are no guarantees that we will be successful
in completing these tasks. If we are unable to successfully complete these tasks, we may not be able to commercialize any of our product
candidates in a timely manner, or at all, in which case we may be unable to generate sufficient revenues to sustain and grow our business.
If we experience unanticipated delays or problems, our development costs could substantially increase and our business, financial condition
and results of operations will be adversely affected.

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

 Citius Oncology has only recently launched its
one product, LYMPHIR. Citius Pharma has one late-stage stage product candidate, Mino-Lok, while our other product candidates are clinical
stage. As a result, our success is dependent upon Citius Oncology's success in commercializing LYMPHIR and Citius Pharma's
ability to obtain regulatory approval for and commercialize our product candidates and we, as a company, have not demonstrated an ability
to perform the functions necessary for the successful commercialization of any product candidates, given the recent launch of LYMPHIR.
While various members of our executive management and key employees have significant prior experience in pharmaceutical development,
as a company we have to date successfully completed only one late-stage clinical trial (much of which had been undertaken by Eisai prior
to our in-licensing of the intellectual property of LYMPHIR) and have just launched LYMPHIR (through Citius Oncology). Despite our progress
with LYMPHIR, our operations have been limited primarily to business planning, acquiring our proprietary technology, research and development,
recruiting management and technical staff, and raising capital. These operations provide a limited basis for you to assess our ability
to successfully commercialize our product candidates and the advisability of investing in our securities.

 We may choose not to continue developing
any of our product candidates at any time during development, which would reduce or eliminate our potential return on investment for
those product candidates.

 At any time, we may decide to discontinue the
development of any of our product candidates for a variety of reasons, including inadequate financial resources, the appearance of new
technologies that render our product candidates obsolete, competition from a competing product or changes in or failure to comply with
applicable regulatory requirements. If we terminate a program in which we have invested significant resources, we will not receive any
return on our investment and we will have missed the opportunity to allocate those resources to potentially more productive uses.

 As an example, on July 1, 2016, we announced
that we were discontinuing the development of Suprenza, which was our first commercial product candidate, for strategic reasons and not
due to safety or regulatory concerns, in order to focus our management and cash resources on the Phase 3 development of Mino-Lok and
the Phase 2b development of Halo-Lido. Further, in December 2023, we terminated development of Mino-Wrap to devote resources to the development
of LYMPHIR. The resources expended on Suprenza and Mino-Wrap therefore did not provide us any benefit.

 We face significant risks in our product
candidate development efforts.

 Our business depends on the successful development
and commercialization of our product candidates. We are not permitted to market any of our product candidates in the U.S. until we receive
approval from the FDA, or in any foreign jurisdiction until we receive the requisite approvals from such jurisdiction. The process of
developing new drugs and/or therapeutic products is inherently complex, unpredictable, time-consuming, expensive and uncertain. We must
make long-term investments and commit significant resources before knowing whether our development programs will result in products that
will receive regulatory approval and achieve market acceptance. As an example, in response to the submission of our BLA for LYMPHIR,
the FDA issued a complete response letter ("CRL") on July 28, 2023. The FDA required us to incorporate enhanced product testing
and additional controls agreed to with the FDA during the market application review. There were no concerns relating to the safety and
efficacy clinical data package submitted with the BLA, or the proposed prescribing information. In September 2023, we announced that
the FDA had agreed with our plans to address the requirements outlined in the CRL, which guidance provided us with a path for completing
the necessary activities to support the resubmission of the BLA for LYMPHIR and we received approval from the FDA in August 2024.

 Product candidates that appear to be promising
at some or all stages of development may not receive approval or reach the market for a number of reasons that may not be predictable
based on results and data of the clinical program. Product candidates may be found ineffective or may cause harmful side effects during
clinical trials, may take longer to progress through clinical trials than had been anticipated, may not be able to achieve the pre-defined
clinical endpoints due to statistical anomalies even though clinical benefit may have been achieved, may fail to receive necessary regulatory
approvals, may prove impracticable to manufacture in commercial quantities at reasonable cost and with acceptable quality, or may fail
to achieve market acceptance.

 We cannot predict whether or when we will obtain
regulatory approval to commercialize our other product candidates that are under development, notably Mino-Lok. In addition, we expect
that it will take time for LYMPHIR to be accepted in the market, generate revenues and a return on investment. For example, while LYMPHIR
received FDA approval in August 2024, we had incurred significant expenses in its development and planned commercialization prior to
its launch in December 2025; as of September 30, 2025, we had outstanding commitments of approximately $21.1 million to third parties
for LYMPHIR licensing, supply and other costs. We cannot, therefore, predict the timing of any future revenues from LYMPHIR or any other
product candidate.

 The FDA has substantial discretion in the drug
approval process, including the ability to delay, limit or deny approval of a product candidate for many reasons. For example, the FDA:

 may not find the data from
 clinical trials sufficient to support the submission of an NDA or BLA or to obtain marketing approval in the U.S., including any
 findings that the clinical and other benefits of our product candidates outweigh their safety risks;

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

 may disagree with our trial
 design or our interpretation of data from preclinical studies or clinical trials, or may change the requirements for approval even
 after it has reviewed and commented on the design for our trials;

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

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

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

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

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

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

 These same risks are generally applicable to
the regulatory process in foreign countries. Any failure to obtain regulatory approval of our product candidates would significantly
limit our ability to generate revenues, and any failure to obtain such approval for all of the indications and labeling claims we deem
desirable could reduce our potential revenues.

 We, through Citius Oncology, may be required
to make milestone payments to the licensor and former licensee of the LYMPHIR intellectual property in connection with its development
and commercialization of LYMPHIR, which could adversely affect the profitability of LYMPHIR.

 Under the terms of the License Agreement with
Eisai, Citius Oncology was required to pay Eisai a $5.9 million development milestone payment upon initial approval by the FDA of LYMPHIR
for the CTCL indication, which occurred in August 2024, and an aggregate of up to $22 million related to the achievement of net product
sales thresholds. Under the terms of the agreement with Dr. Reddy's, Citius Oncology is obligated to pay up to an aggregate of
$40 million related to CTCL approvals in the U.S. and other markets, up to $70 million in development milestones for additional indications,
and up to $300 million for commercial sales milestones. Further, under the agreement with Dr. Reddy's, Citius Oncology is required
to (i) use commercially reasonable efforts to make commercially available products in the CTCL indication, peripheral T-cell lymphoma
indication and immuno-oncology indication, (ii) initiate two investigator initiated immuno-oncology trials, (iii) use commercially reasonable
efforts to achieve each of the approval milestones, and (iv) complete each specified immuno-oncology investigator trial on or before
September 1, 2025, the four-year anniversary of the effective date of the definitive agreement. Additionally, Citius Oncology is required
to commercially launch a product in a territory within six months of receiving regulatory approval for such product in each such jurisdiction;
the launch of LYMPHIR in December 2025 satisfied this requirement in the U.S. Citius Pharma is a guarantor of the obligations of Citius
Oncology under the Asset Purchase Agreement.

 Pending further discussions with Dr. Reddy's,
Dr. Reddy's agreed to a partial deferral without penalty of a milestone payment by Citius Oncology, which was triggered upon regulatory
approval of LYMPHIR by the FDA and due on September 9, 2024, pursuant to the terms of the Asset Purchase Agreement. These development
and milestone obligations impose substantial additional costs on us, and could divert resources from other aspects of our business and
adversely affect the overall profitability of LYMPHIR. We, through Citius Oncology, need to obtain additional financing to satisfy these
milestone payments, and cannot be sure that any additional funding will be available on terms favorable to us, or at all.

 On March 28, 2025, Citius
Oncology and Eisai entered into a letter agreement that amended the license agreement to provide for a payment schedule to Eisai for the
milestone payment and certain unpaid invoices. We agreed to pay Eisai on or before July 15, 2025, an aggregate amount of $2,535,318 and
thereafter on the 15th of each of the next four months to pay Eisai $2.35 million and make a final payment of $2,197,892 to Eisai on or
before December 15, 2025, in each case with interest on each obligation from its original due date through the date of actual payment
under the letter agreement at the rate of 2% per annum. During the year ended September 30, 2025, we recorded $218,032 in interest expense
under the agreement. The parties released each other from any and all claims, losses, damages, costs and expenses that arise from or related
to our failure to pay the milestone payment or the other incurred costs under the license agreement except for any claims arising out
of a breach of the letter agreement. All other terms of the license agreement remain in full force and effect. During the year ended September
30, 2025 we paid $3 million of the development milestone and the balance of $2.9 million is included in license fee payable at September
30, 2025. On July 21, 2025, we made a payment to Eisai of $1,616,522 for other invoices and accumulated interest associated with the letter
agreement.

 A material breach or default under any
of our license agreements, including failure to make timely payments when due, gives the licensor party to such agreement the right to
terminate the license agreement, which termination would materially harm our business.

 Our commercial success will depend in part on
the maintenance of our current and any future license agreements. Our license agreements impose, and we expect that future license agreements
will impose on us, various diligence, milestone payment, royalty and other obligations. For example, under the license agreement and
related purchase agreement for the intellectual property for LYMPHIR, we, through our subsidiary Citius Oncology, are required to use
commercially reasonable diligence to develop and commercialize a product and to satisfy specified payment obligations for various developmental
and regulatory milestones. Specifically, upon the approval of LYMPHIR, we, through Citius Oncology, became subject to the payment of
an aggregate of $33.4 million under the license and asset purchase agreements covering LYMPHIR.

approval for LYMPHIR, a $27.5 million milestone became payable to Dr. Reddy's, of which a balance of $19.75 million included in
license fee payable, remained due as of September 30, 2025. After discussions, Dr. Reddy's agreed to a partial deferral without
penalty of this milestone payment. During the years ended September 30, 2025 and 2024, we paid $2,750,000 and $5,000,000, respectively,
against the outstanding milestone fee.

 On March 28, 2025, Citius
Oncology and Eisai entered into a letter agreement that amended the license agreement to provide for a payment schedule to Eisai for
the milestone payment and certain unpaid invoices. We agreed to pay Eisai on or before July 15, 2025, an aggregate amount of $2,535,318
and thereafter on the 15th of each of the next four months to pay Eisai $2.35 million and make a final payment of $2,197,892 to Eisai
on or before December 15, 2025, in each case with interest on each obligation from its original due date through the date of actual payment
under the letter agreement at the rate of 2% per annum. During the year ended September 30, 2025, we recorded $218,032 in interest expense
under the agreement. The parties released each other from any and all claims, losses, damages, costs and expenses that arise from or
related to our failure to pay the milestone payment or the other incurred costs under the license agreement except for any claims arising
out of a breach of the letter agreement. All other terms of the license agreement remain in full force and effect. During the year ended
September 30, 2025 we paid $3 million of the development milestone and the balance of $2.9 million is included in license fee payable
at September 30, 2025. On July 21, 2025, we made a payment to Eisai of $1,616,522 for other invoices and accumulated interest associated
with the letter agreement.

 If we fail to comply with our obligations under
the current license agreements or any future license agreements with any party, or we are subject to a bankruptcy, the licensor may have
the right to terminate the license, in which event we would not be able to market products covered by the license. Each of our license
agreements provides the licensor with a right to terminate the license agreement for our material breach or default under the agreement,
including the failure to make any required milestone or other payments. Should the licensor under any of the license agreements exercise
such a termination right, we would lose our right to the intellectual property under the respective license agreement, which loss would
materially harm our business.

 We rely exclusively on third parties to
formulate and manufacture our product candidates. Our failure to abide by our contractual obligations with these third parties, including
timely payment, could result in a delay or the loss of necessary third-party support.

 We do not have and do not intend to establish
our own manufacturing facilities. Consequently, we lack the physical plant to formulate and manufacture our product candidates, which
have to be produced by third-party manufacturers. If we fail to raise additional capital, and as a result are unable to abide by our
contractual obligations with these third-party manufacturers and suppliers, including making timely payment, the necessary third-party
support to commercialize LYMPHIR could be delayed or terminated.

 We, through Citius Oncology, have secured supply
agreements for LYMPHIR with two third-party facilities who are in compliance with current good manufacturing practices ("cGMP")
as generally accepted by the FDA. We rely on these third-party contractors for our manufacturing. Manufacturing of drugs for clinical
and commercial purposes must comply with the FDA's cGMP and applicable non-U.S. regulatory requirements and before any of our collaborators
can begin to commercially manufacture our product candidates, each must obtain regulatory approval of the manufacturing facility and
process. If, for any reason, we become unable to rely on these sources or any future source or sources to manufacture LYMPHIR or any
future product candidates, either for pre-clinical or clinical trials or for commercial quantities, then we would need to identify and
contract with additional or replacement third-party manufacturers to manufacture compounds for preclinical, clinical, and commercial
purposes. We might not be successful in identifying additional or replacement third-party manufacturers, or in negotiating acceptable
terms with any that we might identify. If we are unable to secure and maintain third-party manufacturing capacity, the commercialization
and sales of LYMPHIR, and any future product candidates, and our financial performance might be materially and adversely affected.

 Additionally, if any of our collaborators fails
to comply with the cGMP requirements, we would be subject to possible regulatory action which could limit the jurisdictions in which
we are permitted to sell LYMPHIR, or any future product candidate. As a result, our business, financial condition, and results of operations
might be materially harmed.

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

 We might be unable to identify
 manufacturers for commercial supply on acceptable terms or at all because the number of potential manufacturers is limited and the
 FDA must approve any replacement contractor. This approval would generally require compliance inspections. In addition, a new manufacturer
 would have to be educated in, or develop substantially equivalent processes for, the production of LYMPHIR and any product candidate
 approved by the FDA;

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

 Our contract manufacturers
 might not perform as agreed or might not remain in the contract manufacturing business for the time required to supply our clinical
 trials or to successfully produce, store and distribute LYMPHIR, and any future product candidate approved by the FDA, for commercialization;

 Currently, one of the contract
 manufacturers for LYMPHIR is foreign (located in Italy), which increases the risk of shipping delays, adds the risk of import restrictions,
 and adds the risk of political and environmental uncertainties that might affect those countries;

 Drug manufacturers are
 subject to ongoing periodic unannounced inspection by the FDA and corresponding state agencies to ensure strict compliance with cGMP
 and other government regulations and corresponding foreign standards. We do not have control over third-party manufacturers'
 compliance with these regulations and standards;

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

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

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

 Each of these risks could delay our clinical
trials or the approval, if any, of our product candidates by the FDA or any foreign regulatory agency or the commercialization of any
approved product candidate and could result in higher costs or deprive us of potential product revenues. As a result, our business, financial
condition, and results of operations might be materially harmed.

 While our business strategy generally is
to focus on the development of late-stage product candidates to lessen the development risk, there is still significant risk to successfully
developing a product candidate.

 Our goal in generally pursuing late-stage therapeutic
product candidates with what we believe is a promising pre-clinical and early clinical stage track record is to avoid the risk of failure
at the pre-clinical and early clinical stages. However, there is still significant risk to obtaining regulatory approval and successfully
commercializing any late-stage product candidate that we pursue. For example, we acquired LYMHIR in September 2021, received approval
in August 2024 and launched it in December 2025, during which time we expended significant resources on the acquisition, development and
launch of LYMPHIR. All of the risks inherent in drug development of initial stage product candidates also apply to late-stage candidates.
We cannot assure you that our business strategy will be successful.

 The results of pre-clinical studies and
completed clinical trials are not necessarily predictive of future results, and our current product candidates may not have favorable
results in later studies or trials.

 Pre-clinical studies and Phase 1 and Phase 2
clinical trials are not primarily designed to test the efficacy of a product candidate in the general population, but rather to test
initial safety, to study pharmacokinetics and pharmacodynamics, to study limited efficacy in a small number of study patients in a selected
disease population, and to identify and attempt to understand the product candidate's side effects at various doses and dosing
schedules. Success in pre-clinical studies or completed clinical trials does not ensure that later studies or trials, including continuing
pre-clinical studies and large-scale clinical trials, will be successful nor does it predict future results. Favorable results in early
studies or trials may not be repeated in later studies or trials, and product candidates in later stage trials may fail to show acceptable
safety and efficacy despite having progressed through earlier trials. In addition, the placebo rate in larger studies may be higher than
expected.

 We may be required to demonstrate through large,
long-term outcome trials that our product candidates are safe and effective for use in a broad population prior to obtaining regulatory
approval. This would increase the duration and cost of any such trial.

 There is typically a high rate of attrition from
the failure of product candidates proceeding through clinical trials. In addition, certain subjects in our clinical trials may respond
positively to placebo treatment – these subjects are commonly known as "placebo responders" – making it more
difficult to demonstrate efficacy of the trial drug compared to placebo. This effect is likely to be observed in the treatment of hemorrhoids,
which could negatively impact the development program for Halo-Lido.

 If any of our product candidates fail to demonstrate
sufficient safety and efficacy in any clinical trial, we will experience potentially significant delays and cost increases in, or may
decide to abandon development of, that product candidate. If we abandon or are delayed, or experience increased costs, in our development
efforts related to any of our product candidates, we may not have sufficient resources to continue or complete development of that product
candidate or any other product candidates. We may not be able to continue our operations and clinical studies, or generate any revenue
or become profitable. Our reputation in the industry and in the investment community would likely be significantly damaged. Further,
it might not be possible for us to raise funds in the public or private markets, and our stock price would likely decrease significantly.

 If we are unable to file for approval of
Mino-Lok or Halo-Lido under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, or if we are required to generate additional
data related to safety and efficacy in order to obtain approval of Mino-Lok or Halo-Lido under Section 505(b)(2), we may be unable to
meet our anticipated development and commercialization timelines.

 Our current plans for filing NDAs or BLAs for
our product candidates include efforts to minimize the data we will be required to generate in order to obtain marketing approval for
certain of our product candidates and therefore possibly reduce the time and cost of development of a product candidate and obtain a
shortened review period for the application. The timeline for filing and review of our planned NDA for each of Mino-Lok and Halo-Lido
is based upon our plan to submit each such NDA under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act, wherein we will rely
in part on data generated by third parties and that is in the public domain or elsewhere. Depending on the data that may be required
by the FDA for approval, some of the data may be related to products already approved by the FDA. If the data relied upon is related
to products already approved by the FDA and covered by third-party patents, we would be required to certify that we do not infringe the
listed patents or that such patents are invalid or unenforceable. As a result of the certification, the third party would have 45 days
from notification of our certification to initiate an action against us. In the event that an action is brought in response to such a
certification, the approval of our NDA could be subject to a stay of up to 30 months or more while we defend against such a suit. Approval
of any product candidate under Section 505(b)(2) may therefore be delayed until patent exclusivity expires or until we successfully challenge
the applicability of those patents applicable to our product candidates. Alternatively, we may elect to generate sufficient additional
clinical data so that we no longer rely on data which triggers a potential stay of the approval of any product candidate. Even if no
exclusivity periods apply to an application under Section 505(b)(2), the FDA has broad discretion to require us to generate additional
data on the safety and efficacy of our product candidates to supplement third-party data on which we may be permitted to rely. In either
event, we could be required, before obtaining marketing approval for such product candidate, to conduct substantial new research and
development activities beyond those in which we currently plan to engage in order to obtain approval of that product candidate. Such
additional new research and development activities would be costly and time consuming.

 We may not be able to obtain shortened review
of our applications where available, and in any event the FDA may not agree that any of our product candidates qualify for marketing
approval. If we are required to generate additional data to support approval, we may be unable to meet our anticipated development and
commercialization timelines, may be unable to generate the additional data at a reasonable cost, or at all, and may be unable to obtain
marketing approval of that product candidate. In addition, notwithstanding the approval of many products by the FDA pursuant to Section
505(b)(2), over the last few years, some pharmaceutical companies and others have objected to the FDA's interpretation of Section
505(b)(2). If the FDA changes its interpretation of Section 505(b)(2), or if the FDA's interpretation is successfully challenged
in court, this could delay or even prevent the FDA from approving any Section 505(b)(2) application that we submit.

 Two of our product candidates, Mino-Lok
and Halo-Lido, are combination products consisting of components that have each been separately approved by the FDA for other indications
and which are commercially available and marketed by other companies. Our approval under Section 505(b)(2), if received, would not preclude
physicians, pharmacists, and patients from obtaining individual drug products and titrating the dosage of these drug products as close
to our approved dose as possible.

 Our Mino-Lok solution contains minocycline, disodium
ethylenediaminetetraacetic acid (edetate), and ethyl alcohol, all of which have been separately approved by the FDA for other indications
or are used as excipients in other parenteral products. Assuming FDA approval as a branded pharmaceutical product, we would need to obtain
hospital formulary acceptance to generate sales of Mino-Lok. Additionally, we may encounter reluctance by the infectious disease physician
community to vary from the existing standard of care to remove and replace an infected catheter. Currently, hospitals are reimbursed
for the treatment of CRBSIs CMS through a Diagnosis Related Group ("DRG") classification or code. Commercial insurance plans
reimburse for CRBSIs in a similar manner. With Mino-Lok being priced as a branded FDA-approved pharmaceutical product, this could result
in the participating hospital retaining a lower share of CMS or commercial reimbursement which may impact the acceptance and use of Mino-Lok
by these institutions.

 Our Halo-Lido product candidate for the treatment
of hemorrhoids is a combination product consisting of two drugs, halobetasol propionate, a corticosteroid, and lidocaine, that have each
been separately approved by the FDA for other indications and which are commercially available and marketed by other companies. Halobetasol
propionate cream is available in a 0.05% strength, and lidocaine creams are also available in strengths up to 5%. From our market analysis
and discussions with a limited number of physicians, we know that patients sometimes obtain two separate cream products and co-administer
them as prescribed, giving them a combination treatment that could be very similar to what we intend to continue to study and seek approval
for. As a branded, FDA-approved product with safety and efficacy data, we intend to price our product substantially higher than the generically
available individual creams. We will then have to convince third-party payers and pharmacy benefit managers of the advantages of our
product and justify our premium pricing. We may encounter resistance from these entities and will then be dependent on patients'
willingness to pay the premium and not seek alternatives. In addition, pharmacists often suggest lower cost prescription treatment alternatives
to both physicians and patients. If approved, our Section 505(b)(2) approval and the market exclusivity we may receive will not guarantee
that such alternatives will not exist, that substitution will not occur, or that there will be immediate or any acceptance to our pricing
by payer formularies.

 Any fast track designation or grant of
priority review status by the FDA may not actually lead to a faster development or regulatory review or approval process, nor will it
assure FDA approval of our product candidates. Additionally, our product candidates may treat indications that do not qualify for priority
review vouchers.

 We have received fast track designation for Mino-Lok
to treat and salvage infected central venous catheters in patients with CRBSIs. We may seek fast track designation for some of our other
product candidates or priority review of applications for approval of our product candidates for certain indications. If a drug is intended
for the treatment of a serious or life-threatening condition and the drug demonstrates the potential to address unmet medical needs for
this condition, the drug sponsor may apply for the FDA fast track designation. If a product candidate offers major advances in treatment,
the FDA may designate it eligible for priority review. The FDA has broad discretion whether or not to grant these designations, so even
if we believe a particular product candidate is eligible for these designations, we cannot assure you that the FDA would decide to grant
them. Even with the fast track designation for Mino-Lok and if we do receive fast track designation or priority review for any other
product candidate, we may not experience a faster development process, review or approval compared to conventional FDA procedures. The
FDA may withdraw fast track designation from Mino-Lok or any other product candidate to be so designated if it believes that the designation
is no longer supported by data from our clinical development program.

 We do not own Citius Oncology or NoveCite,
Inc. outright and will share any benefits from the commercialization of LYMPHIR and the development of the NoveCite product candidate
with the other stockholders.

 As of December 17, 2025, we owned approximately
77.9% of the outstanding common stock of Citius Oncology (excluding pre-funded warrants to purchase up to 15,229,358 shares of Citius
Oncology common stock in a transaction that closed on December 10, 2025) and 75% of the outstanding common stock of NoveCite. As a result,
we will only be entitled to a portion of any benefits that flow from the commercialization by Citius Oncology of LYMPHIR and the development
by NoveCite of its NoveCite product candidate or any other product candidates that either company might develop. In the event that Citius
Oncology or NoveCite were to issue additional equity securities in the future this would likely reduce our percentage ownership, which
would further reduce the portion of any benefit that might be derived from that company's successful development and/or commercialization
of its approved drugs and drug candidates, unless we were to increase our investment.

 Additionally, as previously announced by the
Company, Citius Pharma intends to distribute Citius Oncology shares to its stockholders at a yet-to-be-determined date in the future,
following the expiration of the six-month lockup period, in accordance with terms of the amended and restated registration rights agreement
entered into in connection with the Merger. Following the distribution of the Citius Oncology shares, Citius Pharmaceuticals will not
be entitled to any benefits that flow to those shares from the commercialization by Citius Oncology of LYMPHIR or would otherwise be
derived from Citius Oncology, based on its ownership as of December 17, 2025.

 Because our NoveCite product candidate
is based on novel technologies, it is difficult to predict the regulatory approval process and the time, the cost and our ability to
successfully initiate, conduct and complete clinical development, and obtain the necessary regulatory and reimbursement approvals, required
for commercialization of our NoveCite product candidate.

 NoveCite's cell programming technology
and platform for generating cell therapy products using allogenic mesenchymal stem cells derived from iPSCs represent novel therapeutic
approaches, and to our knowledge there are currently no iPSC-derived cell products approved anywhere in the world for commercial sale.
As such, it is difficult to accurately predict the type and scope of challenges that NoveCite may incur during development of its NoveCite
product candidate, and it faces uncertainties associated with the preclinical and clinical development, manufacture and regulatory requirements
for the initiation and conduct of clinical trials, regulatory approval, and reimbursement required for successful commercialization of
its NoveCite product candidate. In addition, because NoveCite's iPSC-derived cell product candidate is in the pre-clinical stage,
NoveCite is currently assessing safety in humans and has not yet been able to assess the long-term effects of treatment. Animal models
and assays may not accurately predict the safety and efficacy of our product candidate in our target patient populations, and appropriate
models and assays may not exist for demonstrating the safety and purity of the NoveCite product candidate, as required by the FDA and
other regulatory authorities for ongoing clinical development and regulatory approval.

 The pre-clinical and clinical development, manufacture,
and regulatory requirements for approval of the NoveCite product candidate may be more expensive and take longer than for other more
well-known or extensively studied pharmaceutical or biopharmaceutical product candidates due to a lack of prior experiences on the side
of both developers and regulatory agencies. Additionally, due to the uncertainties associated with the pre-clinical and clinical development,
manufacture, and regulatory requirements for approval of the NoveCite product candidate, NoveCite may be required to modify or change
its pre-clinical and clinical development plans or its manufacturing activities and plans or be required to meet stricter regulatory
requirements for approval. Any such modifications or changes could delay or prevent NoveCite's ability to develop, manufacture,
obtain regulatory approval for or commercialize its NoveCite product candidate, which would adversely affect NoveCite's and our
business, financial condition and results of operations.

 Cellular immunotherapies, and stem cell therapies
and iPSC-derived cell therapies in particular, represent relatively new therapeutic areas, and the FDA has cautioned consumers about
potential safety risks associated with cell therapies. To date, there are relatively few approved cell therapies. As a result, the regulatory
approval process for a product candidate such as NoveCite is uncertain and may be more expensive and take longer than the approval process
for product candidates based on other, better known or more extensively studied technologies and therapeutic approaches. For example,
there are currently no FDA approved products with a label designation that supports the use of a product to treat and reduce the severity
of ARDS in patients with COVID-19, which makes it difficult to determine the clinical endpoints and data required to support an application
or regulatory approval, and the time and cost required to obtain regulatory approval in the U.S. for our product candidate.

 Regulatory requirements in the U.S. governing
cell therapy products have changed frequently and the FDA or other regulatory bodies may change the requirements, or identify different
regulatory pathways, for approval of the NoveCite product candidate. For example, within the FDA, the Center for Biologics Evaluation
and Research ("CBER") restructured and created a new Office of Tissues and Advanced Therapies to better align its oversight
activities with FDA Centers for Drugs and Medical Devices. It is possible that over time new or different divisions may be established
or be granted the responsibility for regulating cell and/or gene therapy products, including iPSC-derived cell products, such as the
NoveCite product candidate. As a result, NoveCite may be required to change its regulatory strategy or to modify its applications for
regulatory approval, which could delay and impair its ability to complete the pre-clinical and clinical development and manufacture of,
and obtain regulatory approval for, its NoveCite product candidate. Changes in regulatory authorities and advisory groups, or any new
requirements or guidelines they promulgate, may lengthen the regulatory review process, require NoveCite to perform additional studies,
increase its development and manufacturing costs, lead to changes in regulatory pathways, positions and interpretations, delay or prevent
approval and commercialization of the NoveCite product candidate or lead to significant post-approval limitations or restrictions. As
NoveCite advances its NoveCite product candidate, NoveCite will be required to consult with the FDA and other regulatory authorities,
and its NoveCite product candidate will likely be reviewed by an FDA advisory committee. NoveCite also must comply with applicable requirements,
and if it fails to do so, it may be required to delay or discontinue development of its NoveCite product candidate. Delays or unexpected
costs in obtaining, or the failure to obtain, the regulatory approval necessary to bring the NoveCite product candidate to market could
impair NoveCite's and our ability to generate sufficient product revenues to maintain our respective businesses.

 NoveCite has assumed that the biological
capabilities of iPSCs and adult-donor derived cells are likely to be comparable. If it is discovered that this assumption is incorrect,
the NoveCite product candidate research and development activities could be harmed.

 NoveCite anticipates that its research and development
for its NoveCite product candidate will involve iPSCs, rather than adult-donor derived cells. With respect to iPSCs, NoveCite believes
that scientists are still somewhat uncertain about the clinical utility, life span, and safety of such cells, and whether such cells
differ in any clinically significant ways from adult-donor derived cells. If NoveCite discovers that iPSCs will not be useful for whatever
reason for its NoveCite product candidate program, this would negatively affect NoveCite's ability to develop a marketable product
and it and we may never become profitable, which would have an adverse effect on our respective businesses, prospects, financial condition
and results of operations.

 Any FDA programs related to the development
and approval of treatments for COVID-19 and its symptoms may not be available to us or actually lead to a faster development or regulatory
review or approval process for NoveCite, our proposed treatment for ARDS, nor will it assure FDA approval of such a treatment.

 In late April 2020, we made a pre-IND submission
to the FDA for NoveCite as a treatment for ARDS. The submission was made under the FDA's Coronavirus Treatment Acceleration Program
("CTAP") and we requested the FDA's feedback to support the most expeditious pathway for clinical development of the
therapy. The CTAP program is relatively new and the FDA has broad discretion in administering the CTAP program and therefore we cannot
assure you what the FDA might decide and whether there would be a faster development process.

 Even if we receive regulatory approval
to commercialize a product candidate, that product may not gain market acceptance among physicians, patients, healthcare payers or the
medical community and may not generate significant revenue.

 Even if one of our product candidates obtains
regulatory approval, that product may not gain market acceptance among physicians, patients, healthcare payers or the medical community.
The indication may be limited to a subset of the population or we may implement a distribution system and patient access program that
is limited. Coverage and reimbursement of our product candidates by third-party payers, including government payers, generally is also
necessary for commercial success. While LYMPHIR's approval was not so restricted, its acceptance in the marketplace as an effective
treatment will depend on various factors as discussed herein. We believe that the degree of market acceptance and our ability to generate
revenues from any approved product candidate, such as LYMPHIR, or acquired approved product will depend on a number of factors, including:

 strength of
 sales, marketing and distribution support;

 potential or perceived
 advantages or disadvantages over alternative treatments;

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

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

 the relative convenience
 and ease of administration and dosing schedule;

 prevalence and severity
 of any side effects;

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

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

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

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

 results of any post-approval
 studies of the product;

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

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

 Even if approved, any product candidate may fail
to achieve market acceptance or generate significant revenue to achieve or sustain profitability, which would harm the Company's
business. In addition, our efforts to educate the medical community and third-party payers on the benefits of any product candidate may
require significant resources and may never be successful.

 Even if approved for marketing by applicable
regulatory bodies, we will not be able to create a market for any of our product candidates if we fail to establish marketing, sales,
and distribution capabilities, either on our own or through arrangements with third parties.

 Our strategy with LYMPHIR (through Citius Oncology)
and for our unapproved product candidates is to outsource to third parties all or most aspects of the product development process, as
well as much of our marketing, sales, and distribution activities. In order to generate sales of any product candidate that receives
regulatory approval, we must either acquire or develop an internal marketing and sales force with technical expertise and with supporting
distribution capabilities or make arrangements with third parties to perform these services for us. Currently, we, through Citius Oncology,
have developed our sales, marketing and distribution capabilities for LYMPHIR and have contracted with Innovation Partners, a large third-party
commercial sales and marketing organization with an existing commercial infrastructure and product launch experience, to assist in our
commercialization efforts. In addition, Citius Oncology has entered into distribution agreements with Cardinal Health, Cencora and McKesson
Corporation and has contracted with EVERSANA to support the launch and commercialization of LYMPHIR. We do not have any sales, marketing
or distribution capabilities with respect to our other product candidates. The acquisition or development of a sales and distribution
infrastructure requires substantial resources, which may divert the attention of our management and key personnel and defer our product
development efforts. To the extent that we enter into marketing and sales arrangements with other companies for any product candidates,
our revenues will depend on the efforts of others. These efforts may not be successful. If we fail to develop and maintain sales, marketing,
and distribution channels, or fail to enter into arrangements with third parties or the collaboration is terminated or is otherwise unsuccessful,
we will experience delays in product launch and sales and incur increased costs.

 Our projections regarding the market opportunity for our LYMPHIR
may not be accurate, and the actual market for LYMPHIR may be smaller than we estimate.

 Our projections of incidence rate of MF/SS and the people living with
CTCL and who have the potential to benefit from treatment with LYMPHIR are based on our beliefs and estimates. These estimates have been
derived from a variety of sources, including SEER data from 2001 to 2007, and may prove to be incorrect. The number of patients may turn
out to be lower than expected. Additionally, the potentially addressable patient population for LYMPHIR may be limited or may not be
amenable to treatment with LYMPHIR and may also be limited by the cost of our treatments for patients, any future increase to such costs,
and the reimbursement of those treatment costs by third-party payors. Even if we obtain significant market share for LYMPHIR, because
the potential target populations are small, we may never achieve profitability.

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

 Even with the approval of LYMPHIR, and if the
FDA approves one of our other product candidates, physicians and patients might not accept and use it. Acceptance and use of our approved
product candidates will depend upon a number of factors, including:

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

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

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

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

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

 If any of our current product candidates are
approved, we expect their sales to generate substantially all of our revenues for the foreseeable future, and as a result, the failure
of any of these product candidates to find market acceptance would harm our business and would require us to seek additional financing.
Prior to the planned distribution of any Citius Oncology shares to our stockholders, we anticipate LYMPHIR will be our only revenue-generating
product for the foreseeable future, unless and until we are able to gain approval for another product candidate, namely Mino-Lok.

 Our ability to generate product revenues
will be diminished if any of our product candidates that may be approved sell for inadequate prices or patients are unable to obtain
adequate levels of reimbursement.

 Our ability to commercialize our approved product
candidates, alone or with collaborators, will depend in part on the extent to which reimbursement will be available from:

 government and health administration
 authorities;

 private health maintenance
 organizations (HMOs) and health insurers; and

 other healthcare payers.

 Significant uncertainty exists as to the reimbursement
status of newly approved healthcare products. Healthcare payers, including Medicare, are challenging the prices charged for medical products
and services. Government and other healthcare payers increasingly attempt to contain healthcare costs by limiting both coverage and the
level of reimbursement for drugs. Even if our product candidates are approved by the FDA, insurance coverage might not be available,
and reimbursement levels might be inadequate, to cover our products. If government and other healthcare payers do not provide adequate
coverage and reimbursement levels for our products, once approved, market acceptance of such products could be reduced. We cannot predict
whether federal or state legislation will be passed that may impact reimbursement policies nor what the impact of any such legislation
would be on the healthcare industry in general or on our business specifically.

 We are actively engaged with CMS in order to obtain
the necessary coverage to facilitate reimbursement for LYMPHIR. However, we can offer no assurance as to any reimbursement coverage. In
February, CMS assigned LYMPHIR a unique, permanent Healthcare Common Procedure Coding System J-code, which is expected to provide coding
clarity for physicians and facilities who administer LYMPHIR, thereby facilitating reimbursement. This achievement is a key step in ensuring
that LYMPHIR is accessible to patients with commercial and government insurance (VA, DoD, Medicare) coverage.

 Health administration authorities in countries
other than the U.S. may not provide reimbursement for our products at rates sufficient for us to achieve profitability, or at all. Like
the U.S., these countries have considered health care reform proposals and could materially alter their government-sponsored health care
programs by reducing reimbursement rates. Any reduction in reimbursement rates under Medicare or foreign health care programs could negatively
affect the pricing of our approved product candidates. If we are not able to charge a sufficient amount for our approved product candidates,
then our margins and our profitability will be adversely affected.

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

 If we are found to have improperly promoted any
off-label use of LYMPHIR or for any product candidates, if approved, or if we are found to have improperly engaged in pre-approval promotion
prior to the approval of such product candidates, we may become subject to significant liability. Such enforcement has become more common
in the pharmaceutical industry. The FDA and other regulatory agencies strictly regulate the promotional claims that may be made about
prescription products, such as LYMPHIR and any product candidates that might be approved. In particular, a product may not be promoted
for uses that are not approved by the FDA or such other regulatory agencies as reflected in the product's approved labeling. If
the Company receives marketing approval for its product candidates for its proposed indications, physicians may nevertheless use its
product for their patients in a manner that is inconsistent with the approved label, if the physicians believe in their professional
medical judgment it could be used in such manner. However, if the Company is found to have promoted its product for any off-label uses,
the federal government could levy civil, criminal and/or administrative penalties, and seek fines against us. The FDA, Department of
Justice or other regulatory authorities could also request that we enter into a consent decree or a corporate integrity agreement, or
seek a permanent injunction against us under which specified promotional conduct is monitored, changed or curtailed. If we cannot successfully
manage the promotion of LYMPHIR or any product candidates that receive approval, we could become subject to significant liability, which
would materially adversely affect our business, financial condition and results of operations.

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

 Competition in the pharmaceutical and medical
products industries is intense and is characterized by costly sales and marketing infrastructures, as well as extensive research efforts
and rapid technological progress. We are aware of several pharmaceutical companies also actively engaged in the development of therapies
or products for at least some of the same conditions we are targeting. Many of these companies have substantially greater research and
development capabilities as well as substantially greater marketing, financial and human resources than we do. In addition, many of these
companies have significantly greater experience than us in undertaking pre-clinical testing, clinical trials and other regulatory approval
procedures. Our competitors may develop technologies and products that are more effective than those we are researching and developing.
Such developments could render our product candidates, if approved, less competitive or possibly obsolete. We are also competing with
respect to marketing capabilities and manufacturing efficiency, areas in which we have no current capabilities and in which we have no
experience as a company, although our executive officers do have pharmaceutical commercialization and launch experience. We, through
Citius Oncology, have contracted with Innovation Partners, a large third-party commercial sales and marketing organization with an existing
commercial infrastructure and product launch experience, and with EVERSANA, a large third-party provider of global commercialization
services, to assist in our commercial efforts for LYMPHIR. However, our prior experience and our third-party arrangements might not translate
into the successful launch of LYMPHIR or any of our product candidates. Mergers, acquisitions, joint ventures and similar events may
also significantly increase the competition we face. In addition, new developments, including the development of other drug technologies
and methods of preventing the incidence of disease, occur in the pharmaceutical and medical technology industries at a rapid pace. These
developments may render our approved products and our product candidates obsolete or noncompetitive. Compared to us, many of our potential
competitors have substantially greater as well as access to strategic partners and capital resources.

 As a result of these factors, our competitors
may obtain regulatory approval of their products more rapidly than we can or may obtain patent protection or other intellectual property
rights that limit our ability to develop or commercialize our product candidates. Our competitors might also develop products that are
more effective, more useful and less costly than ours and might also be more successful in manufacturing and marketing their products.
In addition, our competitors might be more effective than us in commercializing their products and as a result, our business and prospects
might be materially harmed.

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

 There have been, and the Company expects there
will continue to be, a number of legislative and regulatory changes to health care systems in the U.S. and abroad that could impact its
ability to sell its products profitably. The U.S. government and other governments have shown significant interest in pursuing healthcare
reform. For example, in 2010, the Patient Protection and Affordable Care Act ("ACA") was enacted, which substantially changed
the way healthcare is financed by both governmental and private insurers in the U.S. Healthcare reform measures like the ACA may adversely
impact the pricing of healthcare products and services in the U.S. or internationally and the amount of reimbursement available from
governmental agencies or other third-party payors.

 Since its enactment, there have been ongoing
efforts to modify the ACA and its implementing regulations. The Company cannot predict what healthcare reform measures may be enacted
by the U.S. Congress or implemented by any administration or how such efforts would impact its business. Litigation and legislation over
the ACA and other healthcare reform measures are likely to continue, with unpredictable and uncertain results. Further, additional legislative
changes to and regulatory changes under or related to the ACA remain possible.

 In addition, other legislative changes have been
proposed and adopted in the U.S. since the ACA was enacted that impact government health programs. Moreover, payment methodologies may
be subject to changes in healthcare legislation and regulatory initiatives. For example, CMS may develop new payment and delivery models,
such as bundled payment models. In addition, recently there has been heightened governmental scrutiny over the manner in which manufacturers
set prices for their marketed products, which has resulted in several U.S. Congressional inquiries and proposed and enacted federal and
state legislation designed to, among other things, bring more transparency to drug pricing, reduce the cost of prescription drugs under
government payor programs, and review the relationship between pricing and manufacturer patient programs. The Company expects that additional
U.S. federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal health care
programs and commercial payers will pay for healthcare products and services, which could result in reduced demand for our product candidates,
if approved, or additional pricing pressures.

 Individual states in the U.S. have also increasingly
passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or
patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures,
and, in some cases, designed to encourage importation from other countries and bulk purchasing. Legally mandated price controls on payment
amounts by third party payors or other restrictions could harm our business, financial condition and results of operations. In addition,
regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products
and which suppliers will be included in their prescription drug and other healthcare programs. Furthermore, there has been increased
interest by third party payors and governmental authorities in reference pricing systems and publication of discounts and list prices.
These or other reforms could reduce the ultimate demand for our product candidates, if approved, or put pressure on its product pricing.

 The Company cannot predict the likelihood, nature
or extent of government regulation that may arise from future legislation or administrative action in the U.S. If the Company or any
third parties it may engage are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies,
or if the Company or such third parties are not able to maintain regulatory compliance, any approved product candidates may lose any
regulatory approval that may have been obtained and we may not achieve or sustain profitability.

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

 We are and will be dependent on third-party research
organizations to conduct all of our clinical trials with respect to our product candidates, including any candidates that we may develop
in the future. If we are unable to obtain any necessary testing services on acceptable terms, we may not complete our product development
efforts in a timely or cost-effective manner or at all. If we rely on third parties for human trials, we may lose some control over these
activities and become too dependent upon these parties. These third parties may not complete testing activities on schedule or when we
so request. We may not be able to secure and maintain suitable research organizations to conduct our human trials. We are responsible
for confirming that each of our clinical trials is conducted in accordance with the trial's general plan and protocol. Moreover,
the FDA and foreign regulatory agencies require us to comply with regulations and standards, commonly referred to as good clinical practices,
for conducting, recording, and reporting the results of clinical trials to assure that data and reported results are credible and accurate
and that the trial participants are adequately protected. Our reliance on third parties does not relieve us of these responsibilities
and requirements. If these third parties do not successfully carry out their contractual duties or regulatory obligations or meet expected
deadlines, if the third parties need to be replaced or if the quality or accuracy of the data they obtain is compromised due to the failure
to adhere to our clinical protocols or regulatory requirements or for other reasons, our preclinical development activities or clinical
trials may be extended, delayed, suspended or terminated, and we may not be able to obtain regulatory approval for any of our product
candidates.

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

 If we or any of our current or future collaborators
fail to renew or terminate any of our collaboration or license agreements or if either party fails to satisfy its obligations under any
of our collaboration or license agreements or complete them in a timely manner, we could have difficulty continuing marketing and sales
efforts for LYMPHIR or any other approved product candidate, or completing the development of any of our product candidates and potentially
lose significant sources of revenue, which could result in an adverse impact on our operations and financial condition as well as volatility
in any future revenue. In addition, our agreements with our collaborators may have provisions that give rise to disputes regarding the
rights and obligations of the parties. These and other possible disagreements could lead to termination of the agreement or delays in
collaborative research, development, supply, or commercialization of our product candidates, or could require or result in litigation
or arbitration. Any such conflicts with our collaborators could reduce our ability to obtain future collaboration agreements and could
have a negative impact on our relationship with existing collaborators, adversely affecting our business and revenues. Finally, any of
our collaborations may prove to be unsuccessful.

 We rely on the significant experience and
specialized expertise of our executive management and other key personnel and the loss of any of our executive management or key personnel
or our inability to successfully hire their successors could harm our business.

 Our performance is substantially dependent on
the continued services and on the performance of our executive management and other key personnel, who have extensive experience and
specialized expertise in our business. Our Chief Executive Officer, Leonard Mazur, our Vice Chairman, Myron Holubiak, our Chief Financial
Officer and Chief Business Officer, Jaime Bartushak, and our Chief Medical Officer and Executive Vice President, Myron Czuczman, in particular
have significant experience in the running of pharmaceutical companies and/or drug development itself. This depth of experience is of
significant benefit to us, especially given the small size of our management team and our company, including our subsidiaries. The loss
of the services of any of Mr. Mazur, Mr. Holubiak, Mr. Bartushak and Dr. Czuczman as well as any other member of our executive management
or any key employees, including those at NoveCite or Citius Oncology, could harm our ability to attract capital and develop and commercialize
our product candidates. Neither we nor NoveCite nor Citius Oncology has key man life insurance policies.

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

 We utilize the services of a clinical management
team on a part-time basis to assist us in managing our ongoing Phase 2 and Phase 3 trials and intend to do so for future preclinical
and clinical trials. Pursuant to the shared services agreement with Citius Pharma, Citius Oncology utilizes the services of Citius Pharma's
management team to assist it in managing the clinical and pre-clinical trials. Pursuant to the amended and restated shared services agreement,
Citius Oncology will continue to utilize the services of Citius Pharma employees with expertise in product manufacturing and commercialization
for the post-launch support of LYMPHIR. While we believe this will provide us with sufficient staffing for our current and future development
efforts, we will need to hire or contract with additional qualified personnel with expertise in preclinical testing, clinical research
and testing, government regulation, formulation and manufacturing and sales and marketing in connection with the continued development,
regulatory approval and commercialization of our product candidates. We compete for qualified individuals with numerous pharmaceutical
and biopharmaceutical companies, universities, and other research institutions.

 All but one of Citius Oncology's board
members are also directors of Citius Pharma, and the executive officers of Citius Oncology are also employees of Citius Pharma pursuant
to the shared services agreement. Citius Oncology expects to rely on these individuals and the other expertise and personnel made available
under the shared services agreement for the foreseeable future.

 Competition for qualified directors, officers
and employees is intense, and we cannot be certain that our retention of these individuals or any search for additional such personnel
will be successful. Attracting and retaining qualified personnel will be critical to our success. As a small company with no marketed
product and with limited resources, we might not be able to compete with more established entities for the attraction and retention of
qualified directors, officers and employees. In addition, we may be unable to attract and retain those qualified officers, directors
and members of Board committees required to provide for effective management. If we are unable to attract and retain qualified employees,
officers and directors, the management and operation of our business could be adversely affected.

 We expect to need to increase the size
of our organization to further develop our product candidates, and we may experience difficulties in managing growth.

 We will need to manage our anticipated growth
and increased operational activity, including as a result of the recent launch by Citius Oncology of LYMPHIR and our continued development
of our other product candidates. Our personnel, systems, and facilities currently in place may not be adequate to support this future
growth. Our need to effectively execute our growth strategy will require that we:

 maintain and strengthen,
 as necessary, Citius Oncology's collaborations with third parties for the sales and marketing of LYMPHIR;

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

 develop internal sales
 and marketing capabilities or establish collaborations with third parties with such capabilities for any other product candidates
 that receive approval;

 commercialize our product
 candidates that receive approval;

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

 attract and motivate sufficient
 numbers of talented employees or consultants; and

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

 This planned future growth could place a strain
on our administrative and operational infrastructure and may require our management to divert a disproportionate amount of its attention
away from our day-to-day activities. We may not be able to effectively manage the expansion of our operations or recruit and train additional
qualified personnel, which may result in weaknesses in our infrastructure, and give rise to operational mistakes, loss of business opportunities,
loss of employees and consultants and reduced productivity among remaining employees and consultants. We may not be able to make improvements
to our management information and control systems in an efficient or timely manner and may discover deficiencies in existing systems
and controls. If our management is unable to effectively manage our expected growth, our expenses may increase more than expected, our
ability to generate or increase our revenues could be reduced and we may not be able to implement our business strategy. Our future financial
performance and our ability to compete effectively will depend, in part, on our ability to effectively manage any future growth.

 We are subject
to information technology and cyber-security threats which could have an adverse effect on our business and results of operations.

 Our business is increasingly
dependent on information technology systems, including Internet-based systems, to support our business processes and internal and external
communications. We have outsourced significant elements of these systems and our information technology infrastructure and operations
to third-party service providers who provide and maintain these systems, maintain proprietary and sensitive information on our behalf,
and provide related information technology services that are important to our operations. We and these service providers have taken measures
that are designed to ensure the secure and uninterrupted operation of our information technology systems and to protect those systems
against cybersecurity threats. For more information on how we manage cybersecurity risk, see Item 1C -- Cybersecurity in this
Report.

 Despite our and our
service providers' efforts to protect our information technology systems against cybersecurity threats and other disruptions, we
are vulnerable to damage to and disruption of those systems from computer viruses and other malware, natural disasters, terrorism, war,
telecommunication and electrical failures, and cyberattacks or cyber intrusions. The risk of a security breach or disruption, particularly
through cyberattacks or cyber intrusions by computer hackers, foreign governments, and cyber-terrorists, has increased as the number,
intensity, and sophistication of attempted attacks and intrusions from around the world have increased. A security breach or other damage
to or disruption of our information technology systems could cause interruptions to our operations, including material disruptions of
our product development programs. For example, the loss of data from completed, ongoing, or planned clinical trials could result in delays
in our regulatory approval efforts and cause us to incur significant costs to recover or reproduce the data, resulting in lost revenues
and delays in further development of our product candidates.

 A security breach or
other damage to or disruption of our information technology systems could also lead to the loss of trade secrets or other intellectual
property, result in the theft of funds or demands for ransom, and lead to the unauthorized exposure of personal information (including
sensitive personal information) of our employees, clinical trial patients, customers, and others. We could be required to spend significant
financial and other resources to respond to and remedy the damage caused by such an incident, including the costs to recover data or
to repair or replace networks and information technology systems, increased cybersecurity protection costs, and increased insurance premiums.
If we or our suppliers and/or service providers fail to maintain or protect our information technology systems effectively and in compliance
with U.S. and foreign laws, or otherwise to prevent, detect, or control security breaches or other system disruptions, we could also
be exposed to government investigations, become subject to lawsuits or other legal proceedings, and experience damage to our reputation,
which could have a material adverse effect on our business, prospects, operating results, and financial condition.

 We plan to grow and develop our business
through acquisitions of or investment in new or complementary businesses, products or technologies, and the failure to manage these acquisitions
or investments, or the failure to integrate them with our existing business, could have a material adverse effect on us.

 Our business strategy is based on the acquisition
of additional product candidates. This is evidenced by our in-licensing of NoveCite in October 2020 and LYMPHIR in September 2021. We
might consider opportunities to acquire or invest in other technologies, products and businesses that might enhance our capabilities
or complement our current product candidates. Potential and completed acquisitions and strategic investments involve numerous risks,
including potential problems or issues associated with the following:

 assimilating the acquired
 technologies, products, or business operations;

 maintaining uniform standards,
 procedures, controls, and policies;

 unanticipated costs associated
 with the acquisition or investment;

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

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

 adverse effects on existing
 business operations.

 We have no current commitments with respect to
any acquisition or investment in other technologies or businesses. We do not know if we will identify other suitable acquisitions, whether
we will be able to successfully complete any acquisitions, or whether we will be able to successfully integrate any acquired product,
technology or business into our business operations or retain key personnel, suppliers, or collaborators.

 Our ability to successfully develop our business
through acquisitions will depend on our ability to identify, negotiate, complete, and integrate suitable target businesses or technologies
and obtain any necessary financing. These efforts could be expensive and time consuming and might disrupt our ongoing operations. If
we are unable to efficiently integrate any acquired business, technology or product into our business operations, our business and financial
condition might be adversely affected.

 Conflicts of interest may arise from our
relationship with Citius Oncology and NoveCite.

 As of December 17, 2025, we beneficially owned
approximately 77.9% (excluding pre-funded warrants to purchase up to 15,229,358 shares of Citius Oncology common stock in a transaction
that closed on December 10, 2025) of the voting power of Citius Oncology (Nasdaq: CTOR) and 75% of the voting power of NoveCite's
outstanding common stock and Novellus owns the other 25% of NoveCite. As a result of our partial ownership, our relationship with each
of Citius Oncology and NoveCite could give rise to certain conflicts of interest that could have an impact on our, Citius Oncology's
and NoveCite's respective research and development programs, business opportunities, and operations generally.

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

 Each of Citius Oncology
 and NoveCite will engage for its own business in research and product development programs, investments, and business ventures, and
 we will not be entitled to participate or to receive an interest in those programs, investments, or business ventures other than
 to the extent as a stockholder in the subsidiary. Citius Oncology and NoveCite will not be obligated to present any particular research
 and development, investment, or business opportunity to us, even if the opportunity would be within the scope of our research and
 development plans or programs, business objectives, or investment policies. These opportunities may include, for example, opportunities
 to acquire businesses or assets, including but not limited to patents and other intellectual property that could be used by us or
 by Citius Oncology or NoveCite.

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

 There is overlap among
 our board of directors, senior management and research staffs and that of Citius Oncology and NoveCite. All of our directors also
 serve as directors of Citius Oncology. Two of our directors, Leonard Mazur and Myron Holubiak, also serve as directors of NoveCite.
 In addition, Myron Holubiak serves as Chief Executive Officer and Jaime Bartushak serves as Chief Financial Officer of each of Citius
 Pharma, Citius Oncology and NoveCite. These overlapping positions could interfere with the duties owed by such individuals to Citius
 Pharma.

 Risks Related to Our Regulatory and Legal Environment

 We might not obtain the necessary U.S.
or foreign regulatory approvals to commercialize any current product candidates.

 We cannot assure you that we will receive the
approvals necessary to commercialize for sale any product candidates we are currently developing or that we may acquire or seek to develop
in the future. We will need FDA approval to commercialize our product candidates in the U.S. In order to obtain FDA approval of any product
candidate, we must submit to the FDA an NDA or a BLA demonstrating that the product candidate is safe for humans and effective for its
intended use. This demonstration requires significant research, pre-clinical studies, and clinical trials. Satisfaction of the FDA's
regulatory requirements typically takes many years, depends upon the type, complexity and novelty of the product candidate and requires
substantial resources for research, development and testing. We cannot predict whether our research and clinical approaches will result
in products that the FDA considers safe for humans and effective for their indicated uses. The FDA has substantial discretion in the
product approval process and might require us to conduct additional pre-clinical and clinical testing, perform post-marketing studies
or otherwise limit or impose conditions on any additional approvals we obtain. The approval process might also be delayed by changes
in government regulation, future legislation or administrative action or changes in FDA policy that occur prior to or during our product
candidate's regulatory review. Delays in obtaining regulatory approvals might:

 delay commercialization
 of, and our ability to derive product revenues from, our product candidates;

 impose costly procedures
 on us; and

 diminish any competitive
 advantages that we might otherwise enjoy.

 Even if we comply with all FDA requests, the
FDA might ultimately reject one or more of our NDAs or BLAs. Even if we are able to obtain regulatory approval for a particular product
candidate, the approval might limit the indicated medical uses for the product, limit our ability to promote, sell, and distribute the
product, require that we conduct costly post-marketing surveillance, and/or require that we conduct ongoing post-marketing studies. We
cannot be sure that we will ever obtain regulatory clearance for any of our product candidates. Failure to obtain FDA approval of one
or more of our product candidates could severely undermine our business by leaving us with only one saleable product, LYMPHIR, and therefore
with a limited source of revenue, until another product candidate could be developed or obtained and successfully developed, approved
and commercialized. Foreign jurisdictions impose similar regulatory approval processes and we will face the same risks if we seek foreign
approval for any of our product candidates. There is no guarantee that we will ever be able to successfully develop or acquire any product
candidate.

 Following any regulatory approval of any
product candidate, we will be subject to ongoing regulatory obligations and restrictions, which may result in significant expense and
limit our ability to commercialize our other product candidates.

 When a product candidate is approved by the FDA
or by a foreign regulatory authority, we will be required to comply with extensive regulations for product manufacturing, labeling, packaging,
adverse event reporting, storage, distribution, advertising, promotion and record keeping. Regulatory approvals may also be subject to
significant limitations on the indicated uses or marketing of the product or to whom and how we may distribute an approved product. Even
if U.S. regulatory approval is obtained, the FDA may still impose significant restrictions on a product's indicated uses or marketing
or impose ongoing requirements for potentially costly post-approval studies. For example, the label ultimately approved for any of our
product candidates, if any, may include restrictions on use. If so, we may be subject to ongoing regulatory obligations and restrictions,
which may result in significant expense and limit our ability to commercialize that product candidate. The FDA could also require a registry
to track the patients utilizing the product or implement a Risk Evaluation and Mitigation Strategy ("REMS") that could restrict
access to the product, which would reduce our revenues and/or increase our costs. Potentially costly post-marketing clinical studies
may be required as a condition of approval to further substantiate safety or efficacy, or to investigate specific issues of interest
to the regulatory authority. Similar risks apply in foreign jurisdictions.

 Manufacturers of pharmaceutical products and their
facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP
regulations, which include requirements relating to quality control and quality assurance as well as the corresponding maintenance of
records and documentation. Similar regulatory programs exist in foreign jurisdictions. Further, regulatory agencies must approve these
manufacturing facilities before they can be used to manufacture an approved product and these facilities are subject to ongoing regulatory
inspections. In addition, regulatory agencies subject an approved pharmaceutical product, its manufacturer and the manufacturer's
facilities to continual review and inspections. The subsequent discovery of previously unknown problems with a product, including adverse
events of unanticipated severity or frequency, or problems with the facility where the product is manufactured, may result in restrictions
on the marketing of that product, up to and including, withdrawal of the product from the market. If the manufacturing facilities of our
suppliers fail to comply with applicable regulatory requirements, it could result in regulatory action and additional costs to us. Failure
to comply with applicable FDA and other regulatory requirements may subject us to administrative or judicially imposed sanctions, either
before or after product approval, if any.

 In addition, the law or regulatory policies governing
pharmaceutical products may change. New statutory requirements may be enacted or additional regulations may be enacted that could prevent
or delay regulatory approval of our product candidates. CMOs and their vendors or suppliers may also face changes in regulatory requirements
from governmental agencies in the U.S. and other countries. We cannot predict the likelihood, nature, extent or effects of government
regulation that may arise from future legislation or administrative action, either in the U.S. or elsewhere. If we are not able to maintain
regulatory compliance, we might not be permitted to market any future approved products and our business could suffer.

 We could be forced to pay substantial damage
awards if product liability claims that may be brought against us are successful.

 The use of any of our product candidates in pre-clinical
and clinical trials, and the sale of any approved products, may expose us to liability claims and financial losses resulting from the
use or sale of our product candidates. We have obtained limited product liability insurance coverage for our pre-clinical and clinical
trials of $5 million per occurrence and in the aggregate, subject to a deductible of $25,000 per bodily injury and property damage occurrence,
and a medical expense per person limit of $25,000. There can be no assurance that our existing insurance coverage will extend to any
other product candidates in the future. Any product liability insurance coverage may not be sufficient to satisfy all liabilities resulting
from product liability claims. A successful claim may prevent us from obtaining adequate product liability insurance in the future on
commercially desirable terms, if at all. Even if a claim is not successful, defending such a claim would be time consuming and expensive,
may damage that product's and our reputations in the marketplace, and would likely divert management's attention, any of
which could have a material adverse effect on our Company.

 Risks Related to Our Intellectual Property

 Our business depends on protecting our
intellectual property.

 Without the intellectual property rights we have
already obtained, as well as the further rights we are also pursuing, our competitors would have opportunity to take advantage of our
research and development efforts to develop competing products. Our success, competitive position, and future revenues, if any, depend
in part on our ability and the abilities of our licensors to obtain and maintain patent protection for our product candidates, methods,
processes and other technologies, to preserve our trade secrets, to prevent third parties from infringing on our proprietary rights and
to operate without infringing the proprietary rights of third parties. We anticipate filing additional patent applications both in the
U.S. and in other countries, as appropriate. However, the patent process is subject to numerous risks and uncertainties, and there can
be no assurance that we will be successful in protecting our product candidates by obtaining and defending patents. These risks and uncertainties
include the following:

 our patent rights might
 be challenged, invalidated, or circumvented, or otherwise might not provide any competitive advantage;

 our competitors, many of
 which have substantially greater resources than we do and many of which might make significant investments in competing technologies,
 might seek, or might already have obtained, patents that will limit, interfere with, or eliminate our ability to make, use, and sell
 our product candidates either in the U.S. or in international markets;

 countries other than the
 U.S. might have less restrictive patent laws than those upheld by U.S. courts, allowing foreign competitors the ability to exploit
 these laws to create, develop, and market competing products; and

 as a matter of public policy
 regarding worldwide health concerns, there might be significant pressure on the U.S. government and other international governmental
 bodies to limit the scope of patent protection both inside and outside the U.S. for product candidates that prove successful.

 In addition, the USPTO and patent offices in
other jurisdictions have often required that patent applications concerning pharmaceutical and/or biotechnology-related inventions be
limited or narrowed substantially to cover only the specific innovations exemplified in the patent application, thereby limiting the
scope of protection against competitive challenges. Thus, even if we or our licensors are able to obtain patents, the patents might be
substantially narrower than anticipated.

 Because the time period from filing a patent
application to the issuance, if ever, of the patent is often more than three years and because any regulatory approval and marketing
for a pharmaceutical product often occurs several years after the related patent application is filed, the resulting market exclusivity
afforded by any patent on our drug candidates and technologies will likely be substantially less than 20 years. For example, the U.S.
patent on the original Mino-Lok composition expired in June 2024, and the U.S. patent on the stabilized Mino-Lok composition expires
in November 2036. Since we anticipate significant additional time before FDA approval could be obtained, the maximum market exclusivity
afforded by the statutory term of the currently issued patents would be less than 10 years. In the U.S., the European Union and some
other jurisdictions, patent term extensions are available for certain delays in either patent office proceedings or marketing and regulatory
approval processes. However, due to the specific requirements for obtaining these extensions, there is no assurance that our patents
will be granted extensions even if we encounter significant delays in patent office proceedings or marketing and regulatory approval.

 Additionally, patent law is subject to change
and varies among the U.S. and foreign countries. Depending on decisions by the U.S. Congress, the U.S. federal courts, the USPTO or similar
authorities in foreign jurisdictions, the laws and regulations governing patents could change in unpredictable ways that may weaken our
and our licensors' abilities to obtain new patents or to enforce existing patents that we and our licensors or partners may obtain
in the future.

 Patent and other intellectual property protection
is crucial to the success of our business and prospects, and there is a substantial risk that such protections will prove inadequate.
Our business and prospects will be harmed if these protections prove insufficient.

 We rely on trade secret protections through
confidentiality agreements with our employees and other parties, and the breach of these agreements could adversely affect our business
and prospects.

 We rely on trade secrets, which we seek to protect,
in part, through confidentiality and non-disclosure agreements with our employees, collaborators, suppliers, and other parties. There
can be no assurance that these agreements will not be breached, that we would have adequate remedies for any such breach or that our
trade secrets will not otherwise become known to or independently developed by our competitors. We might be involved from time to time
in litigation to determine the enforceability, scope and validity of our proprietary rights. Any such litigation could result in substantial
cost and divert management's attention from our operations.

 If we infringe the rights of third parties
we might have to forego developing and/or selling any approved products, pay damages, or defend against litigation.

 If our product candidates, methods, processes,
and other technologies infringe the proprietary rights of other parties, we could incur substantial costs and we might have to:

 obtain licenses, which
 might not be available on commercially reasonable terms, if at all;

 abandon an infringing product
 candidate;

 redesign our product candidates
 or processes to avoid infringement;

 stop using the subject
 matter claimed in the patents held by others;

 pay damages; and/or

 defend litigation or administrative
 proceedings which might be costly whether we win or lose, and which could result in a substantial diversion of our financial and
 management resources.

 Any of these events could substantially harm
our earnings, financial condition, and operations.

 The U.S. government could have "march-in
rights" to certain of our intellectual property.

 If at any time federal monies are used in support
of the research and development activities at MDACC that resulted or in the future result in certain of our issued pending U.S. patent
applications, the federal government retains what are referred to as "march-in rights" to patents that are granted on these
applications. Our license agreement for Mino-Lok provides that in the event of such governmental funding, our rights are subject to the
government's prior rights, if any. In addition, the license agreement provides that we will comply with the requirements of any
agreement between MDACC and the governmental funding entity. If applicable, this could require us to grant the U.S. government either
a nonexclusive, partially exclusive, or exclusive license to the patented invention in any field of use, upon terms that are reasonable
for a particular situation. Circumstances that could trigger march-in rights generally would be set out in the agreement between MDACC
and the funding governmental entity and could include, for example, failure to take, within a reasonable time, effective steps to achieve
practical application of the invention in a field of use, failure to satisfy the health and safety needs of the public and failure to
meet requirements of public use specified by federal regulations. A funding governmental entity could elect to exercise these march-in
rights on their own initiative or at the request of a third party; however, the exercise of such march-in rights has been historically
rare when the patent holder (or its licensee) is practicing the patent invention although there can be no assurance that such rights
would not be exercised. This same risk would apply to any other license into which we enter if the licensor receives government funding
for the product candidate that is the subject of the license.

 If our trademarks and trade names are not
adequately protected, then we may not be able to build name recognition and our business, financial condition and results of operations
may be adversely affected.

 We have registered a trademark with the USPTO
for the marks "LYMPHIR" and "Mino-Lok". These and any other trademarks or trade names we may obtain may be challenged,
infringed, diluted, tarnished, circumvented or declared generic or determined to be infringing on other marks. We may not be able to
protect our rights to these trademarks and trade names, which we need to build name recognition among potential partners or customers
in the markets of interest. At times, competitors or other third parties may adopt similar trade names or trademarks, thereby impeding
our ability to build brand identity and possibly leading to market confusion. In addition, there could be potential trade name or trademark
infringement, dilution or tarnishment claims brought by owners of other registered trademarks or trademarks that incorporate variations
of our registered or unregistered trademarks or trade names. Over the long term, if we are unable to establish name recognition based
on our trademarks and trade names, then we may not be able to compete effectively and our business, financial condition and results of
operations may be adversely affected. Our efforts to enforce or protect our proprietary rights related to trademarks, trade secrets,
domain names, copyrights or other intellectual property may be ineffective and could result in substantial costs and diversion of resources.

 Risks Related to the Recently Completed Merger
of Citius Oncology

 We may be unable to achieve some or all
of the benefits that we expect to achieve from the Merger.

 The Company believes that separating LYMPHIR
into a standalone entity has created two focused standalone public companies that are better positioned to pursue their respective strategic
priorities, invest in growth opportunities, and attract new investors. The Company also believes that the Merger will result in significant
benefits to our Company and our stockholders as a result of unlocking the value we believe that Citius Oncology will have as a standalone
publicly traded company. However, by separating from Citius Pharma, Citius Oncology might be more susceptible to market fluctuations
and we may be unable to achieve some or all of the benefits that we expect Citius Oncology to achieve as an independent company in the
time we expect, if at all. Further, if the Merger's benefits do not meet the expectations of financial analysts, or due to the
other factors discussed in this " Risk Factors " section and elsewhere in this report, the market price of both Citius
Pharma common stock and Citius Oncology common stock might decline or increase in volatility.

 Additionally, as previously announced by the
Company, Citius Pharma intends to distribute an undetermined amount of Citius Oncology shares to its stockholders at a yet-to-be-determined
date in the future. Following the distribution of any Citius Oncology shares, Citius Pharmaceuticals will be entitled to less of any
benefits that flow from the commercialization by Citius Oncology of LYMPHIR or would otherwise be derived from Citius Oncology if it
were to remain a majority-owned subsidiary.

 A planned distribution by Citius Pharma
to its stockholders of shares of Citius Oncology could result in significant tax liability to Citius Pharma and our stockholders.

 A planned distribution of Citius Oncology shares
to our stockholders would not qualify for non-recognition of gain and loss, and therefore, our stockholders could be subject to tax.
Each U.S. holder who received Citius Oncology stock in a distribution would generally be treated as receiving a distribution in an amount
equal to the fair market value of Citius Oncology common stock received, which would generally result in (i) a taxable dividend to the
stockholder to the extent that stockholder's pro rata share of Citius Pharma's current or accumulated earnings and profits;
(ii) a reduction in the stockholder's basis (but not below zero) in Citius Pharma's common stock to the extent the amount
received exceeds the stockholder's shares of Citius Pharma's earnings and profits; and (iii) a taxable gain from the exchange
of Citius Pharma's stock to the extent the amount received exceeds the sum of the stockholder's share of Citius Pharma's
earnings and profits and the stockholder's basis in its Citius Pharma stock.

 Citius Pharma will also recognize a taxable gain
in an amount up to the fair market value of any distributed Citius Oncology shares in excess of the taxable basis in such distributed
shares.

 Risks Related to Our Common Stock

 Our failure to maintain compliance with
Nasdaq's continued listing requirements could result in the delisting of our common stock.

 Citius Pharma common stock is currently listed
on The Nasdaq Capital Market. In order to maintain this listing, we must satisfy minimum financial and other requirements.

 On September 12, 2023, Citius Pharma
received a notification letter from Nasdaq indicating that we were not in compliance with Nasdaq Listing Rule 5550(a)(2) because the
minimum bid price of our common stock on the Nasdaq Capital Market closed below $1.00 per share for 30 consecutive business days
(the "Bid Price Rule"). In accordance with Nasdaq Listing Rule 5810(c)(3)(A), a company has a compliance period of 180
calendar days to regain compliance with the Bid Price Rule and may be eligible for a second 180 calendar day extension period for
compliance. As the Company did not regain compliance with the Bid Price Rule within the compliance periods, the Company received a
delisting determination letter on September 10, 2024. Accordingly, the Company timely requested a hearing before a Nasdaq
Hearing Panel ("Panel"). The hearing request automatically stayed any suspension or delisting action pending the hearing
and the expiration of any additional extension period granted by the Panel following the hearing. On November 6, 2024, the Company
received notification that the Panel, which determined that the Company must be in compliance with the Bid Price Rule by December 3,
2024. On December 18, 2024, following the execution of the Company's reverse stock split, the Company received notification
from Nasdaq that it had regained compliance with the Bid Price Rule.

 On May 29, 2025, the
Company received a second determination letter from Nasdaq notifying the Company that, based upon the closing bid price of the Company's
common stock for the prior 33 consecutive business days, the Company was not in compliance with the Bid Price Rule and, pursuant to Nasdaq
Listing Rule 5810(c)(3)(A)(iv), the Company was not eligible for any compliance period due to the fact that the Company had effected
a reverse stock split during the prior one-year period. The Company timely requested an appeal of Nasdaq's determination, which
stayed the suspension and delisting of the Company's common stock pending a the Panel's decision. Prior to the
hearing, the Company received written notice of compliance from Nasdaq that for 10 consecutive trading days, from June 20, 2025 to July
3, 2025, the closing bid price of the Company's common stock had been at $1.00 per share or greater, and accordingly, the Company
regained compliance with the Bid Price Rule. Nasdaq informed the Company in the compliance notice that it considered this matter closed.

 While Citius Pharma intends to maintain compliance
in the future, and thus maintain our listing, there can be no assurance that we will be successful and continue to meet all applicable
Nasdaq Capital Market requirements in the future.

 If Citius Pharma's common stock were to
be removed from listing with Nasdaq, it may be subject to the so-called "penny stock" rules. The SEC has adopted regulations
that define a "penny stock" to be any equity security that has a market price per share of less than $5.00, subject to certain
exceptions, such as any securities listed on a national securities exchange, which is the exception on which we currently rely. For any
transaction involving a "penny stock," unless exempt, the rules impose additional sales practice requirements on broker-dealers,
subject to certain exceptions. If our common stock were delisted and determined to be a "penny stock," a broker-dealer may
find it more difficult to trade our common stock and an investor may find it more difficult to acquire or dispose of our common stock
on the secondary market.

 If Citius Pharma's common stock is delisted
and there is no longer an active trading market for our shares, it may, among other things:

 cause
 stockholders difficulty in selling Citius Pharma's shares without depressing the market price for the shares or selling the
 shares at all;

 substantially
 impair the ability to raise additional funds;

 result
 in a loss of institutional investor interest and fewer financing opportunities; and/or

 result
 in potential breaches of representations or covenants of agreements pursuant to which Citius Pharma made representations or covenants
 relating to compliance with applicable listing requirements. Claims related to any such breaches, with or without merit, could result
 in costly litigation, significant liabilities and diversion of management's time and attention and could have a material adverse
 effect on the financial condition, business and results of operations.

 A delisting would also reduce the value of Citius
Pharma's equity compensation plans, which could negatively impact the ability to retain employees.

 The market price of our common stock is
highly volatile, and you may lose some or all of your investment.

 The market price of our common stock has fluctuated
significantly due to a number of factors, some of which are beyond our control, including those factors discussed in this " Risk
Factors" and "Risk Factor Summary " section of this report and many others, such as:

 the Company's cash
 resources available to successfully commercialize LYMPHIR, including covering the costs of licensing payments, product manufacturing
 and other third-party goods and services;

 the Company's ability
 to meet its contractual obligations;

 the ability of the Company
 to maintain compliance with the Nasdaq continued listing requirements;

 the Company's ability
 to commercialize its product candidates, if approved and Citius Oncology's ability to successfully commercialize LYMPHIR;

 the level of success and
 the cost of Company's marketing efforts for LYMPHIR and its other product candidates, if approved;

 the Company's dependence
 on third parties

 unanticipated serious safety
 concerns related to the use of its product candidates;

 announcements regarding
 results of any pre-clinical or clinical trials relating to Company's product candidates;

 adverse regulatory decisions;

 changes in laws or regulations
 applicable to any product candidates, including but not limited to clinical trial requirements for approvals;

 future issuances of debt
 or equity securities;

 actual or anticipated fluctuations
 in the Company's financial condition and operating results, including fluctuations in our quarterly and annual results;

 the Company's inability
 to establish additional partnerships, the termination of license agreements by our existing partners or announcements by our partners
 regarding therapeutic candidates competitive with ours;

 the introduction of new
 technologies or enhancements to existing technology by the Company or others in the industry;

 the recruitment or departure
 of key scientific or management personnel;

 announcements of significant
 acquisitions, strategic partnerships, joint ventures or capital commitments by the Company or our competitors;

 the Company's failure
 to meet the estimates and projections of the investment community or that we may otherwise provide to the public;

 publication of research
 reports about the Company or our industry, or antibody discovery in particular, or positive or negative recommendations or withdrawal
 of research coverage by securities analysts;

 changes in the market valuations
 of similar companies;

 overall performance of
 the equity markets;

 announcements or actions
 taken by Citius Oncology, as a majority-owned subsidiary of the Company;

 the planned distribution
 of shares common stock of Citius Oncology by Citius Pharma;

 sales of shares of common
 stock by Citius Pharma;

 trading volume of the Company's
 common stock;

 legal disputes or other
 developments relating to proprietary rights, including patents, litigation matters and Company's ability to obtain and maintain
 patent protection of its product candidates, government investigations and the results of any proceedings or lawsuits, including,
 but not limited to, patent or stockholder litigation;

 significant lawsuits, including
 patent or stockholder litigation;

 the impact of any natural
 disasters or public health emergencies;

 general economic, industry
 and market conditions other events or factors, many of which are beyond the Company's control; and

 changes in accounting standards,
 policies, guidelines, interpretations or principles.

 In addition, in the past,
stockholders have initiated Company action lawsuits against biotechnology and biopharmaceutical companies following periods of volatility
in the market prices of these companies' stock. Such litigation, if instituted against us, could cause the Company to incur substantial
costs and divert our management's attention and resources, which could have a material adverse effect on our business, financial
condition and results of operations.

 You may experience dilution of your ownership
interests because of the future issuance of additional shares of our common stock or securities convertible into common stock.

 For the foreseeable future until LYMPHIR generates
significant revenue, if at all, we will need to raise capital to finance our operations, including possible acquisitions or strategic
transactions. To do so we might be required to issue equity securities, resulting in the dilution of the ownership interests of our present
stockholders. We are currently authorized to issue an aggregate of 250,000,000 shares of common stock and 10,000,000 shares of preferred
stock. As of September 30, 2025, there were 18,067,744 shares of common stock outstanding, 14,479,372 shares underlying warrants with
a weighted average exercise price of $7.41 per share and 839,510 shares underlying options with a weighted average exercise price of
$30.09 per share. We may also issue additional shares of common stock or other securities that are convertible into or exercisable for
common stock in connection with hiring or retaining employees, or for other business purposes. The future issuance of any such additional
shares of common stock or common stock equivalents may create downward pressure on the trading price of our common stock.

 Our Certificate of Incorporation allows
for our Board to create new series of preferred stock without further approval by our stockholders, which could adversely affect the
rights of the holders of the common stock.

 Our Board has the authority to issue up to 10,000,000
shares of preferred stock and to fix and determine the relative rights and preferences of any such preferred stock without further stockholder
approval. As a result, our Board could authorize the issuance of one or more series of preferred stock that would grant preferential
rights to our assets upon liquidation, the right to receive dividend payments before dividends are distributed to the holders of common
stock and the right to the redemption of the preferred shares, together with a premium, prior to the redemption of the common stock.
In addition, our Board could authorize the issuance of a series of preferred stock that has greater voting power than the common stock
or that is convertible into our common stock, which could decrease the relative voting power of the common stock or result in dilution
to our existing stockholders. For example, in April 2025, our Board authorized the issuance of Series A preferred stock. Each share of
Series A preferred stock carried 1,000,000,000 votes and voted together with the outstanding shares of our common stock as a single class,
exclusively with respect to a proposed increase in the authorized shares allowed under our Amended and Restated Articles of Incorporation
and were not entitled to vote on any other matter. The Series A preferred stock had no other voting rights, including in respect of any
other proposal to stockholders, except as otherwise mandated by applicable law. The Series A preferred stock was not convertible into,
or exchangeable for, shares of any other class or series of stock or other securities of the Company. The Series A preferred stock had
no rights with respect to any distribution of assets of the Company and was not entitled to receive dividends of any kind. By its terms,
the Series A preferred stock was redeemed and retired on June 9, 2025.

 We have not paid cash dividends in the
past and we do not expect to pay cash dividends in the foreseeable future. Any return on investment may be limited to the capital appreciation,
if any, of our common stock.

 We have not paid cash dividends on our common
stock and we do not anticipate paying cash dividends on our common stock in the foreseeable future. The payment of dividends on our common
stock will depend on our earnings, financial condition and other business and economic factors affecting us at such time as the Board
may consider relevant. In addition, our ability to pay dividends may be limited by covenants in any future outstanding indebtedness that
we may incur. Since we do not intend to pay dividends, a stockholder's ability to receive a return on such stockholder's
investment will depend on any future appreciation in the market value of the Company's common stock. There is no guarantee that
our common stock will appreciate or even maintain the price at which our stockholders have purchased it.

 Provisions in our Amended and Restated
Articles of Incorporation, as amended, and under Nevada law could discourage a takeover that stockholders may consider favorable and
may lead to entrenchment of management.

 Provisions of our articles of incorporation and
bylaws may delay or discourage transactions involving an actual or potential change of control or change in our management, including
transactions in which stockholders might otherwise receive a premium for their shares, or transactions that our stockholders might otherwise
deem to be in their best interests. Therefore, these provisions could adversely affect the price of our common stock. Among other things,
these provisions include:

 the authorization of 10,000,000
 shares of "blank check" preferred stock, the rights, preferences and privileges of which may be established and shares
 of which may be issued by our Board of Directors at its discretion from time to time and without stockholder approval;

 limiting the removal of
 directors by the stockholders;

 allowing for the creation
 of a staggered Board of Directors;

 eliminating the ability
 of stockholders to call a special meeting of stockholders; and

 establishing advance notice
 requirements for nominations for election to the Board of Directors or for proposing matters that can be acted upon at stockholder
 meetings.

 Additionally, Nevada's "combinations
with interested stockholders" statutes prohibit certain business "combinations" between certain Nevada corporations
and any person deemed to be an "interested stockholder" for two years after such person first becomes an "interested
stockholder" unless (i) the corporation's Board of Directors approves the combination (or the transaction by which such person
becomes an "interested stockholder") in advance, or (ii) the combination is approved by the Board of Directors and 60% of
the corporation's voting power not beneficially owned by the interested stockholder, its affiliates and associates. Furthermore,
in the absence of prior approval, certain restrictions may apply even after such two-year period. For purposes of these statutes, an
"interested stockholder" is any person who is (x) the beneficial owner, directly or indirectly, of 10% or more of the voting
power of the outstanding voting shares of the corporation, or (y) an affiliate or associate of the corporation and at any time within
the two previous years was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then outstanding shares
of the corporation. The definition of the term "combination" is sufficiently broad to cover most significant transactions
between the corporation and an "interested stockholder". Subject to certain timing requirements set forth in the statutes,
a corporation may elect not to be governed by these statutes. We have not included any such provision in our articles of incorporation.

 We are not currently subject to Nevada's
"acquisition of controlling interest" statutes that contain provisions governing the acquisition of a controlling interest
in certain Nevada corporations. If these laws were to apply to us, they might further discourage companies or persons interested in acquiring
a significant interest in or control of the Company, regardless of whether such acquisition may be in the interest of our stockholders.

 The effect of these statutes may be to potentially
discourage parties interested in taking control of the Company from doing so if it cannot obtain the approval of our Board of Directors.

 Item 1B. Unresolved Staff Comments

 Not applicable.

 Item 1C. Cybersecurity

 Risk Management and Strategy

 The Company has established processes to assess,
identify, and manage risks from cybersecurity threats as part of our broader enterprise-wide risk management system and processes, which
is overseen by our Board through our Audit Committee, along with our executive management.

 Our cybersecurity program focuses on all areas
of our business, including cloud-based environments, devices used by employees and contractors, facilities, networks, applications, vendors,
disaster recovery, business continuity and controls and safeguards enabled through business processes and tools. We continuously monitor
for unauthorized access to our information technology systems and identify potential security threats through various automated detection
solutions. To protect the security of our information infrastructure and protect our systems and information from unauthorized access,
we draw on the knowledge and insights of an external information technology consultant who acts as our primary IT administrator and employ
an array of third-party tools and technologies. As part of its oversight, the Audit Committee also oversees and identifies risks from
cybersecurity threats associated with our use of an external information technology consultant, as well cybersecurity threats posed by
our engagement of other similar third-party providers.

 As of the date of this Annual Report, we have
not encountered any risks from cybersecurity threats that have materially affected or are reasonably likely to materially affect the
Company, including its business strategy, results of operations, or financial condition. For more information on our cybersecurity related
risks, see " Risk Factors - Risks Related to Our Business and Our Industry" included elsewhere in this Annual Report
on Form 10-K.

 Governance

 The Board is responsible for overseeing our enterprise
risk management program. The Audit Committee of the Board has been designated by the Board to oversee cybersecurity risks and our processes
to identify, prioritize, assess, manage, and mitigate those risks. The Audit Committee receives updates on cybersecurity and information
technology matters and related risk exposures from our Chief Financial Officer.

 The Chief Financial Officer oversees the operation
of our cybersecurity program and has over 10 years of executive experience overseeing risk management and internal controls. The Chief
Financial Officer is informed about and monitors the prevention, detection, mitigation, and remediation of cybersecurity incidents through
the Chief Financial Officer's oversight of the Company's information technology function and supervision of the Company's
IT administrator.

 Item 2. Properties

 We lease our offices at 11 Commerce Drive, First
Floor, Cranford, New Jersey 07016. The lease runs until February 28, 2030.

 Item 3. Legal Proceedings

 We are not involved in any litigation that we
believe could have a material adverse effect on our 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 our executive officers, threatened against or affecting our Company or our officers or directors in their capacities
as such.

 In the future, we might from time to time become
involved in litigation relating to claims arising from our ordinary course of business.

 Item 4. Mine Safety Disclosures

 Not applicable.

 Item 5. Market for Registrant's Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

 The information regarding our equity compensation
plans required by this Item is found in Item 12 of this report.

 Market Information

 Our common stock trades on The Nasdaq Capital
Market under the symbol "CTXR."

 Holders of Common Stock

 Based upon information furnished by our transfer
agent, as of December 17, 2025, we had approximately 90 stockholders of record of our common stock. However, because many of the shares
of our common stock are held by brokers and other institutions on behalf of stockholders, we believe there are substantially more beneficial
holders of our common stock than record holders.

 Dividends

 We have never paid dividends on our common stock.
We intend to follow a policy of retaining earnings, if any, to finance the growth of our business and do not anticipate paying any cash
dividends in the foreseeable future. The declaration and payment of future dividends on the common stock will be at the sole discretion
of our Board and will depend on our profitability and financial condition, capital requirements, statutory and contractual restrictions,
future prospects and other factors deemed relevant by the Board.

 Recent Sales of Unregistered Securities

 On December 2, 2025, in consideration for the
Pagoda Note Amendment (as defined below), we issued to Pagoda Resources, Inc. ("Pagoda") a warrant to purchase 75,000 shares
of our common stock. The warrant has a five-year term commencing on the date of issuance and an exercise price equal to the closing price
of our common stock on Nasdaq on the date of issuance, which was $1.26 per share.

 During the year ended September 30, 2025, we
did not issue or sell any unregistered securities not previously disclosed in a Quarterly Report on Form 10-Q or in a Current Report
on Form 8-K, except for the following: On July 1, 2025, we issued 20,000 shares of common stock for media, and public and investor relations
services and on October 14, 2025, we issued an aggregate of 83,036 shares of common stock for investor relations services. The issuance
of the shares was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.

 Issuer Purchases of Equity Securities

 We did not make any purchases of our common stock
during the three months ended September 30, 2025, which is the fourth quarter of our fiscal year.

 Item 6. [Reserved]

 Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations

 The following discussion and analysis of our
financial condition and results of operations should be read together with our financial statements and related notes included elsewhere
in this annual report on Form 10-K. Management's discussion and analysis contains forward-looking statements, such as statements
of our plans, objectives, expectations, and intentions. Any statements that are not statements of historical fact are forward-looking
statements. When used, the words "believe," "plan," "intend," "anticipate," "target,"
"estimate," "expect" and the like, and/or future tense or conditional constructions ("will," "may,"
"could," "should," etc.), or similar expressions, identify these forward-looking statements. These forward-looking
statements are subject to risks and uncertainties including those under "Risk Factors" in Item 1A in this Form 10-K that
could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. Our actual
results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several
factors. We do not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the
filing date of this report.

 Business

 We are a biopharmaceutical company dedicated
to the development and commercialization of first-in-class critical care products. On September 12, 2014, we acquired Citius Pharmaceuticals,
LLC as a wholly-owned subsidiary. Citius Pharmaceuticals, LLC was dissolved on December 29, 2023.

 On March 30, 2016, we acquired all of the outstanding
stock of Leonard-Meron Biosciences, Inc. by issuing shares of our common stock. We acquired identifiable intangible assets of $19,400,000
related to in-process research and development and recorded goodwill of $9,346,796 for the excess of the purchase consideration over
the net assets acquired.

 On September 11, 2020, we formed NoveCite, Inc.,
of which we own 75% of the issued and outstanding capital stock.

 On August 23, 2021, we formed Citius Acquisition
Corp., or SpinCo, as a wholly-owned subsidiary in conjunction with the acquisition of LYMPHIR, but Citius Acquisition did not begin operations
until April 2022, when Citius Pharma transferred to it the assets related to LYMPHIR, including the related license agreement with Eisai
and the related asset purchase agreement with Dr. Reddy's Laboratories SA, a subsidiary of Dr. Reddy's. At this time, Citius
Acquisition changed its name to Citius Oncology, Inc. In August 2024, as part of the merger, the new publicly-traded company and majority-owned
subsidiary was named Citius Oncology, Inc.

 In-process research and development of $19,400,000
represents the value of LMB's leading drug candidate (Mino-Lok), which is an antibiotic solution 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. Goodwill of $9,346,796 represents the value of LMB's industry relationships and its assembled workforce. Goodwill
will not be amortized but will be tested at least annually for impairment. In-process research and development of $73,400,000 represents
the value of our 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 in December 2025.

 Through September 30, 2025, we have devoted substantially
all our efforts to product development, raising capital, building infrastructure through strategic alliances and coordinating activities
relating to our proprietary products. We have not yet realized any revenues from our operations.

 Reverse Stock Split

 Effective November 25, 2024, we executed a reverse
stock split of our common stock, at a ratio of 1-for-25. All share amounts have been retroactively adjusted to reflect the split.

 Patent and Technology License Agreements

 Mino-Lok – 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. Since May 2014, LMB has paid an annual maintenance fee, which began at $30,000
and has increased over five years to $90,000, where it will remain until the commencement of commercial sales of a product subject to
the license. 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 single digits. After a commercial sale is obtained, LMB must pay minimum
aggregate annual royalties that increase in subsequent years. 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.

 NoveCite – On October 6, 2020, our
subsidiary NoveCite entered into a license agreement with Novellus Therapeutics Limited, whereby NoveCite acquired an exclusive, worldwide
license, with the right to sublicense, to develop and commercialize a stem cell therapy based on Novellus's patented technology
for the treatment of acute pneumonitis of any etiology in which inflammation is a major agent in humans. Upon execution of the license
agreement, NoveCite paid $5,000,000 to Novellus and issued Novellus shares of Novecite's common stock representing 25% of NoveCite's
currently outstanding equity. We own the other 75% of NoveCite's currently outstanding equity.

 In July 2021, Novellus was acquired by Brooklyn
ImmunoTherapeutics. Pursuant to this transaction, the NoveCite license was assumed by Brooklyn with all original terms and conditions.
In October 2021, Brooklyn changed its name to Eterna Therapeutics Inc.

 As part of the Novellus and Brooklyn merger transaction,
the 25% non-dilutive position per the subscription agreement between Novellus and NoveCite was removed.

 Under the license agreement, NoveCite is obligated
to pay Novellus up to an aggregate of $51,000,000 in regulatory and developmental milestone payments. NoveCite also must pay a royalty
equal to low double-digit percentages of net sales, commencing upon the first commercial sale of a licensed product. This royalty is
subject to downward adjustment on a product-by-product and country-by-country basis 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 by Novellus or any
third party 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 Novellus an amount equal to a mid-twenties percentage
of any sublicensee fees it receives.

 Under the terms of the license agreement, in
the event that Novellus receives any revenue involving the original cell line included in the licensed technology, then Novellus shall
remit to NoveCite 50% of such revenue.

 LYMPHIR – In September 2021, the
Company entered into an asset purchase agreement with Dr. Reddy's and a license agreement with Eisai to acquire an exclusive license
of E7777 (denileukin diftitox), an oncology immunotherapy for the treatment of CTCL, a rare form of non-Hodgkin lymphoma. Citius Pharma
assigned these agreements to SpinCo effective April 1, 2022. We renamed E7777 as I/ONTAK and also obtained the trade name LYMPHIR TM
for the product. Denileukin diftitox is referred to in this annual report as E7777, I/ONTAK or LYMPHIR, depending on the period of time
and context that is being discussed.

 Under the terms of these agreements, Citius Pharma
acquired Dr. Reddy's exclusive license of E7777 from Eisai and other related assets owned by Dr. Reddy's (which are now owned
by Citius Oncology). The exclusive license includes rights to develop and commercialize E7777 in all markets except for Japan and certain
parts of Asia. Eisai retains exclusive development and marketing rights for the agent in Japan, China, Korea, Taiwan, Hong Kong, Macau,
Indonesia, Thailand, Malaysia, Brunei, Singapore, India, Pakistan, Sri Lanka, Philippines, Vietnam, Myanmar, Cambodia, Laos, Afghanistan,
Bangladesh, Bhutan, Nepal, Mongolia, and Papua New Guinea. Citius Pharma paid Dr. Reddy's a $40 million upfront payment which represents
the acquisition date fair value of the in-process research and development acquired. 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 (within
a range of 10% to 15%), and up to $300 million for commercial sales milestones. Citius Oncology also must pay on a fiscal quarter basis
tiered royalties equal to low double-digit percentages of net product sales (within a range of 10% to 15%). 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. Citius
Oncology will also pay 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. Citius Pharma is a guarantor of Citius Oncology's payment obligations
under these agreements.

 At the time of the FDA approval for LYMPHIR,
a $27.5 million milestone payment became payable to Dr. Reddy's under the terms of the asset purchase agreement for which a balance
of $19.75 million remains due as of September 30, 2025. Dr. Reddy's agreed to a partial deferral without penalty of this milestone
payment.

 Under the license agreement, Eisai was due a
$5.9 million milestone payment, upon FDA approval, of which $2.9 million remains payable at September 30, 2025, and additional commercial
milestone payments related to the achievement of net product sales thresholds and an aggregate of up to $22 million related to the achievement
of net product sales thresholds. Citius Oncology was required to reimburse Eisai for up to $2.65 million of its costs to complete the
Phase 3 pivotal clinical trial for LYMPHIR for the CTCL indication and reimburse Eisai for all reasonable costs associated with the preparation
of a BLA for LYMPHIR. Eisai was responsible for completing the CTCL clinical trial, and CMC activities through the filing of the BLA
for LYMPHIR with the FDA. Citius Oncology is responsible for development costs associated with potential additional indications.

 On March 28, 2025, Citius Oncology and Eisai
entered into a letter agreement that amended the license agreement to provide for a payment schedule to Eisai for the milestone payment
and certain unpaid invoices. Citius Oncology agreed to pay Eisai on or before July 15, 2025, an aggregate amount of $2,535,318 and thereafter
on the 15 th of each of the next four months to pay Eisai $2.35 million and make a final payment of $2,197,892 to Eisai
on or before December 15, 2025, in each case with interest on each obligation from its original due date through the date of actual payment
under the letter agreement at the rate of 2% per annum. During the year ended September 30, 2025, Citius Oncology recorded $218,032 in
interest expense under the agreement. The parties released each other from any and all claims, losses, damages, costs and expenses that
arise from or related to our failure to pay the milestone payment or the other incurred costs under the license agreement except for
any claims arising out of a breach of the letter agreement. All other terms of the license agreement remain in full force and effect.
During the year ended September 30, 2025 Citius Oncology paid $3 million of the development milestone and the balance of $2.9 million
is included in license fee payable at September 30, 2025. On July 21, 2025, Citius Oncology made a payment to Eisai of $1,616,522 for
other invoices and accumulated interest associated with the letter agreement.

 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 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. We expect the first commercial sale to occur in the first quarter of 2026. 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. Either 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.

 Under the 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 (both of which have been initiated), (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; the launch of LYMPHIR in December 2025 satisfied this requirement in the U.S.

 Specialty Distribution
Agreements

 In 2025, the Company
executed three service agreements with pharmaceutical wholesalers to provide distribution of its LYMPHIR product to healthcare organizations
which include academic centers, community oncology practices, as well as infusion centers.

 RESULTS OF OPERATIONS

 Year ended September 30, 2025 compared to
year ended September 30, 2024

 Year Ended

2025

 Year Ended

2024

 Revenues

 $
 -

 $
 -

 Operating expenses:

 Research and development

 9,156,474

 11,906,601

 General and administrative

 18,532,843

 18,249,402

 Stock-based compensation – general and administrative

 10,836,291

 Total operating expenses

 38,525,608

 41,995,681

 Operating loss

 (38,525,608
)

 (41,995,681
)

 Interest income

 110,081

 758,000

 Interest expense

 (267,782
)

 -

 Gain on sale of New Jersey net operating losses

 -

 2,387,842

 Loss before income taxes

 (38,683,309
)

 (38,849,839
)

 Income tax expense

 1,056,960

 576,000

 Net loss

 $
 (39,740,269
)

 $
 (39,425,839
)

 Revenues

 We did not generate any revenues for the years ended September 30,
2025 or 2024. Revenue commenced in December 2025.

 Research and Development Expenses

 For the year ended September 30, 2025, research
and development expenses were $9,156,474 as compared to $11,906,601 during the year ended September 30, 2024, a decrease of $2,750,127.

 Research and development costs for LYMPHIR were
$8,328,588 during the year ended September 30, 2025 as compared to $5,118,977 for the year ended September 30, 2024. The $3,209,611 increase
in expenses was primarily due to costs associated with the expense of a drug substance batch needed for the pre-license inspection of
the manufacturer.

 Research and development costs for Mino-Lok decreased
by $3,863,984 to $798,984 for the year ended September 30, 2025 as compared to $4,662,968 for the year ended September 30, 2024, due
primarily to decreased costs since the completion of the Phase 3 trial and subsequent shutdown costs. In November 2024, the Company held
a Type C meeting with the FDA to discuss the results of the Phase 3 study and to obtain the FDA's view on development plans for
Mino-Lok. The FDA provided clear, constructive, and actionable guidance during the discussion, underscoring a pathway to support a future
an NDA submission for Mino-Lok.

 Research and development costs for Halo-Lido
decreased by $493,084 to $14,690 for the year ended September 30, 2025 as compared to $507,774 for the year ended September 30, 2024
due to lower costs since the completion of the Phase 2 study in April 2023. Citius subsequently met with the FDA for an end of Phase
2 meeting to discuss the next steps in the clinical development program.

 We expect that research and development expenses
will continue to decrease in fiscal 2026 as we continue to focus on the commercialization of LYMPHIR and because we have completed the
Phase 3 trial for Mino-Lok.

 General and Administrative Expenses

 For the year ended September 30, 2025, general
and administrative expenses were $18,532,843 as compared to $18,249,402 for the year ended September 30, 2024. General and administrative
expenses increased by $283,441 in comparison with the prior period. The primary reason for the increase were higher costs for pre-launch
commercial activities associated with LYMPHIR. General and administrative expenses consist primarily of compensation costs, professional
fees for legal, regulatory, accounting, and corporate development services, and investor relations expenses.

 Stock-based Compensation Expense

 For the year ended September 30, 2025, stock-based
compensation expense was $10,836,291 as compared to $11,839,678 for the year ended September 30, 2024. Stock-based compensation expense
includes $2,515,872 for stock options under the Citius Pharma stock plans, $8,116,678 for stock options and $203,741 for restricted stock
awards under the Citius Oncology stock plans for the year ended September 30, 2025. Stock-based compensation expense includes $4,293,287
for stock options under the Citius Pharma stock plans, $7,498,817 for stock options under the Citius Oncology stock plans, and $47,574
for stock options under the NoveCite Stock plan for the year ended September 30, 2024. Stock-based compensation expense for the year
ended September 30, 2025 decreased by $1,003,387 in comparison to the prior period primarily due to lower costs for the Citius Pharma
stock plans.

 Other Income (Expense)

 Interest income for the year ended September
30, 2025 was $110,081 as compared to interest income of $758,000 for the prior period. The decrease is due to lower average investable
balances of the remaining proceeds of our equity offerings in money market accounts.

 Interest expense of $267,782 for the year ended
September 30, 2025 consists of $218,032 in interest expense under the payment agreement with Eisai and $49,750 in interest expense on
the note payable.

 Other income for the year ended September 30,
2024 included a gain of $2,387,842 recognized 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.

 Income Taxes

 The Company recorded deferred income tax expense
of $1,056,960 and $576,000 for the years ended September 30, 2025 and 2024, respectively. Deferred income tax expense is related to the
amortization for taxable purposes of our in-process research and development asset.

 Net Loss

 For the year ended September 30, 2025, we incurred
a net loss of $39,740,269, compared to a net loss for the year ended September 30, 2024 of $39,425,839. The $314,430 increase in the
net loss was primarily due to the increase of $283,441 in general and administrative expenses, the decrease in other income (expense)
of $3,303,543 partially offset by lower research and development expense of $2,750,127 and lower stock-based compensation expense of
$1,003,387.

 LIQUIDITY AND CAPITAL RESOURCES

 Liquidity and Working Capital

 Citius Pharma has incurred operating losses since
inception and incurred net losses of $39,740,269 and $39,425,839 for the years ended September 30, 2025 and 2024, respectively. At September
30, 2025, Citius Pharma had an accumulated deficit of $238,804,129. Citius Pharma's net cash used in operations during the years
ended September 30, 2025 and 2024 was $26,552,738 and $28,201,375, respectively.

 The Company had working capital of approximately
($16,980,000) at September 30, 2025. At September 30, 2025, Citius Pharma had cash and cash equivalents of approximately $4,252,000 available
to fund its operations. The Company's only source of cash flow since inception has been from financing activities.

 During the years ended September 30, 2025 and
2024, the Company received net proceeds of $32,329,748 and $13,803,684, respectively from the issuance of equity.

 Our primary uses of operating cash were for in-licensing
of intellectual property, product development and commercialization activities, employee compensation, consulting fees, legal and accounting
fees, insurance, and investor relations expenses.

 After giving effect to a $6.0 million capital
raise by us in October 2025 and an $18.0 million capital raise by Citius Oncology in December 2025, we expect that we will have sufficient
funds to continue our operations through March 2026.

 Financing Activities

 In the quarter ended December 31, 2023, the Company
was selected to participate in New Jersey's Technology Business Tax Certificate Transfer (NOL) Program and received $2,387,842
million in non-dilutive capital through the New Jersey Economic Development Authority in March 2024.

 On April 30, 2024, Citius Pharma sold 857,143
shares of common stock and warrants to purchase 857,143 shares, at $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 after issuance, and expire on October 30, 2029.

 During the year ended September 30, 2024, Citius
Pharma sold 18,168 shares for gross proceeds of $252,140 under its at the market offering agreement.

 On November 15, 2024, Citius Pharma sold 480,000
shares of common stock and warrants to purchase 480,000 shares at $6.25 per share for gross proceeds of $3,000,000. The immediately
exercisable warrants have an exercise price of $6.25 per share and expire on November 19, 2029.

 On January 7, 2025, Citius Pharma sold 743,496
shares of common stock and warrants to purchase 743,496 shares at $4.035 per share for gross proceeds of $3,000,000. The immediately
exercisable warrants have an exercise price of $3.91 per share and expire on January 8, 2030.

 On April 1, 2025, Citius Pharma sold 465,000
shares of common stock, and pre-funded warrants to purchase 1,274,131 shares at offering prices of $1.15 per share and $1.1499 per pre-funded
warrant for gross proceeds of $1,999,873. The immediately exercisable pre-funded warrants have an exercise price of $0.0001 per
share and do not expire. All of the pre-funded warrants were exercised during the year ended September 30, 2025.

 On June 11, 2025, Citius Pharma sold 540,000
shares of common stock at $1.22 per share, sold pre-funded warrants to purchase 4,380,000 shares at $1.2199 per share, and issued immediately
exercisable two-year warrants to purchase 9,840,000 shares at $1.00 per share. for gross proceeds of $6,001,962. The pre-funded
warrants are exercisable immediately at $0.0001 per share and do not expire. During the year ended September 30, 2025 all of the pre-funded
warrants were exercised.

 On July 17, 2025, Citius Oncology sold 6,818,182
shares of common stock and warrants to purchase 6,818,182 shares at a unit price of $1.32 for gross proceeds of $9,000,000. The immediately
exercisable five-year warrants have an exercise price of $1.32 per share.

 On September 10, 2025, Citius Oncology sold 5,142,858
shares of common stock and warrants to purchase 5,142,858 shares at a unit price of $1.75 for gross proceeds of $9,000,000. The warrants
are exercisable at $1.84 per share beginning on March 10, 2026 and expire on March 10, 2031.

 During the year ended September 30, 2025, Citius
Pharma sold 2,917,874 shares for gross proceeds of $4,968,618 under its at-the-market offering facility.

 On October 21, 2025, Citius Pharma sold 3,973,510
shares of common stock (or pre-funded warrants in lieu thereof) and accompanying warrants to purchase 3,973,510 shares of common stock
at a combined per unit price of $1.51 per share for gross proceeds of $6,000,000. The immediately exercisable five-year warrants have
an exercise price of $1.40 per share.

 We need to obtain substantial additional financing
in order to satisfy our outstanding milestone payment obligations, as well as meet minimum purchase commitments under our agreements
for the manufacture and supply of our drug product, and cannot be sure that any additional funding will be available on terms favorable
to us, or at all. As of September 30, 2025, our outstanding milestone payments and purchase commitments for 2025 include:

 On March 28, 2025, we entered
 into a letter agreement to pay Eisai on or before July 15, 2025, $2,535,318 and thereafter on the 15 th of each of
 the next four months $2,350,000 and make a final payment of $2,197,892 to Eisai on or before December 15, 2025, in each case with
 interest on each obligation from its original due date at the rate of 2% per annum. As of September 30, 2025, we owe a balance of
 $2,900,000 for the milestone approval fee and $6,697,892 for certain other invoices.

 approval for LYMPHIR, a $27.5 million milestone payment became payable to Dr. Reddy's of which a balance of $19.75 million
 remains due as of September 30, 2025. Dr. Reddy's has agreed to a partial deferral without penalty of this milestone payment.

 We entered into an agreement
 with a contract manufacturing organization for the manufacture and supply of drug substance. Under this agreement, we are obligated
 to purchase minimum annual quantities of batches at a set price per batch, subject to annual increases. As of September 30, 2025,
 the total minimum purchase commitment under this agreement was approximately $16.2 million, consisting of payments of $8.5 million
 and $5.3 million for calendar years 2025 and 2026, respectively and $2.4 million for 2026 pass-throughs and consumable manufacturing
 components.

 As of September 30, 2025,
 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 are approximately $4.9 million consisting of purchase commitment obligations
 of $1.2 million in calendar years 2025 and $1.9 million in 2026 and $1.8 million in 2027.

 Based on our cash and cash equivalents at September
30, 2025 and our October 21, 2025 equity sale and the December 2025 equity sale by Citius Oncology, we expect that we will have sufficient
funds to continue our operations through March 2026. We will need to raise additional capital in the future to support our operations
beyond March 2026. There is no assurance, however, that we will be successful in raising the needed capital or that the proceeds will
be received in an amount or in a timely manner to support our operations.

 Inflation

 Our management believes that inflation has not
had a material effect on our results of operations.

 Off Balance Sheet Arrangements

 We do not have any off-balance sheet arrangements.

 CRITICAL ACCOUNTING POLICIES

 Our discussion and analysis of our financial
condition and results of operations is based on our financial statements, which have been prepared in accordance with accounting principles
generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities. We review
our estimates on an ongoing basis. We base our estimates on historical experience and on various other factors that we believe to be
reasonable under the circumstances. Actual results may differ from these estimates. We believe the judgments and estimates required by
the following accounting policies to be critical in the preparation of our financial statements.

 In-process Research and Development

 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 for the period identified. No impairments have occurred since
the acquisitions of our intangible assets through September 30, 2025.

 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 generation.

 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), an 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
12 years commencing upon revenue generation. Citius Oncology's In-process research and development consists of $40,000,000 paid
to Dr. Reddy's from the asset purchase agreement and approval milestone fees of $27,500,000 to Dr. Reddy's and $5,900,000
to Eisai.

 Incremental costs incurred on IPR&D after
the acquisition date are expensed as incurred, unless there is an alternative future use.

 Goodwill

 Goodwill represents the value of LMB's
industry relationships and its assembled workforce. Goodwill will not be amortized and will be 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. 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 ASU 2017-04. Under the simplified model, a goodwill
impairment is calculated as the difference between the carrying amount of the reporting unit and its fair value.

 For its 2025 goodwill analysis, the Company performed a quantitative assessment as of September 30, 2025. Based on this analysis, management
concluded that the estimated fair value of the reporting unit exceeded its carrying amount. Accordingly, no impairment charge was recorded,
and goodwill continues to be carried at its current value.

 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.

 Income Taxes

 We follow accounting guidance regarding the recognition,
measurement, presentation, and disclosure of uncertain tax positions in the financial statements. Tax positions taken or expected to
be taken in the course of preparing our 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 financial statements.

 We recognize deferred tax assets and liabilities
based on differences between the financial reporting and tax basis of assets and liabilities using the enacted tax rates and laws that
are expected to be in effect when the differences are expected to reverse. We provide a valuation allowance for deferred tax assets for
which we do not consider realization of such assets to be more likely than not.

 Item 7A. Quantitative and Qualitative Disclosures
About Market Risk

 Not required.

 Item 8. Financial Statements and Supplementary Data

 See the financial statements included in this report beginning on
page F-1.

 Item 9. Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure

 None.

 Item 9A. Controls and Procedures

 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, 2025, 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, 2025, 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. 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,
2025 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,
2025.

 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
Reporting

 There were no changes in our internal controls
over financial reporting during the fourth quarter of fiscal 2025 that materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.

 Attestation Report of Registered Public Accounting
Firm

 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
filer".

 Item 9B. Other Information.

 On December 2, 2025, we approved and entered into an amendment (the
"Pagoda Note Amendment") to our existing unsecured promissory note with Pagoda. The original note provided for aggregate principal
of $1,000,000, bore interest at a per annum rate of 15.00% compounded monthly (or such lesser rate as the maximum permitted by applicable
law), and was scheduled to mature on December 2, 2025. Pursuant to the Pagoda Note Amendment, we extended the maturity date to January
2, 2026. In consideration for the extension, we issued to Pagoda a warrant to purchase 75,000 shares of our common stock. The warrant
has a five-year term commencing on the date of issuance and an exercise price equal to the closing price of our common stock on Nasdaq
on the date of issuance, which was $1.26 per share.

 On December 10, 2025, in connection with a common stock transaction
effected by Citius Oncology, we amended the promissory note, dated August 16, 2024, as previously amended on September 10, 2025 (the "Note"),
issued by Citius Oncology to us to provide that the maturity of the Note would be the date at which Citius Oncology has closed a series
of capital raises that in the aggregate provide gross proceeds of at least $50 million through the issuance of debt or equity securities
or the royalty-backed monetization of LYMPHIR. All other terms of the Note remain the same.

 On December 23, 2025, we extended the term of the Amended and Restated
Employment Agreement between us and Myron Holubiak for an additional 12 months until October 31, 2026, effective as of October 31, 2025.

 Item 9C. Disclosure Regarding Foreign Jurisdictions
that Prevent Inspections.

 Not applicable.

 Item 10. 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. Additionally, we have adopted an insider trading policy to establish guidelines for our employees, officers, directors,
and consultants regarding transactions in our securities and the disclosure of material nonpublic information related to our Company,
which are reasonably designed to promote compliance with insider trading laws, rules and regulations, and any listing standards applicable
to the registrant. Each of these policies can be found in the "Investors - Governance – Governance Documents" 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 2026 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.

 Item 11. Executive Compensation

 The information required by this Item concerning
directors and executive compensation is incorporated by reference from the sections captioned "Corporate Governance", "Director
Compensation" and "Executive Compensation", respectively, to be contained in the Proxy Statement.

 Item 12. Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters

 The following table sets forth the indicated
information as of September 30, 2025 with respect to our equity compensation plans:

 Plan Category

 Number of
 securities
 to be issued upon
 exercise of
 outstanding
 options,
 warrants
 and rights

 average
 exercise
 price of
 outstanding
 options, warrants
 and rights

 Number of
 securities
 remaining
 available for
 future
 issuance under equity
 compensation
 plans

 Equity compensation plans approved by security holders

 2014 Stock Incentive Plan

 16,910

 $
 166.67

 —

 2018 Omnibus Stock Incentive Plan

 67,200

 27.20

 —

 2020 Omnibus Stock Incentive Plan

 66,000

 27.83

 —

 2021 Omnibus Stock Incentive Plan

 330,000

 41.67

 —

 2023 Omnibus Stock Incentive Plan

 359,400

 13.99

 118,000

 Total

 839,510

 $
 30.09

 118,000

 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.

 Item 13. Certain Relationships and Related
Transactions, and Director Independence

 The information required by this Item is incorporated
by reference to the information under the sections captioned "Corporate Governance", "Certain Relationships and Related
Transactions" and "Proposal No. 1—Election of Directors" to be contained in the Proxy Statement.

 Item 14. Principal Accountant Fees and Services

 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 Statement.

 Item 15. Exhibits and Financial Statement Schedules

 Description of Document

 Registrant's

Form

 Dated

 Filed

Herewith

 2.1+

 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.

 10/24/2023

 2.1

 3.1.1

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

 9/18/2014

 3.1

 3.1.2

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

 9/21/2016

 3.1

 3.1.3

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

 6/8/2017

 3.1

 3.1.4

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

 8-K/A

 6/22/2021

 3.1

 3.1.5

 Certificate of Designation of Series A Preferred Stock.

 4/18/2025

 3.1

 3.1.6

 Certificate of Amendment to the Articles of Incorporation of Citius Pharmaceuticals, Inc., dated June 9, 2025.

 6/9/2025

 3.1

 3.1.7

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

 11/26/2024

 3.1

 3.2.1

 Amended and Restated Bylaws of Citius Pharmaceuticals, Inc.

 2/9/2018

 3.1

 3.2.2

 Amendment to the Amended and Restated Bylaws of Citius Pharmaceuticals, Inc.

 4/18/2025

 3.2

 4.1

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

 12/29/2023

 4.1

 4.2

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

 8/13/2018

 4.2

 4.3

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

 12/29/2023

 4.3

 4.4

 Form of Investor Warrant issued April 3, 2019.

 4/03/2019

 4.1

 4.5

 Form of Placement Agent Warrant issued April 3, 2019.

 4/03/2019

 4.2

 4.6

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

 9/27/2019

 4.1

 4.7

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

 9/27/2019

 4.3

 4.8

 Form of Investor Warrant issued on February 19, 2020.

 2/19/2020

 4.1

 4.9

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

 2/19/2020

 4.2

 4.10

 Form of Investor Warrant issued May 18, 2020.

 5/18/2020

 4.1

 4.11

 Form of Placement Agent Warrant issued May 18, 2020.

 5/18/2020

 4.2

 4.12

 Form of Underwriter Warrant issued August 10, 2020.

 8/10/2020

 4.1

 4.13

 Form of Investor Warrant issued January 27, 2021.

 1/27/2021

 4.1

 4.14

 Form of Placement Agent Warrant issued January 27, 2021.

 1/27/2021

 4.2

 Description
 of Document

 Registrant's

 Form

 Dated

 Filed

 Herewith

 4.15

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

 1/27/2021

 4.3

 4.16

 Form of Investor Warrant issued February 19, 2021.

 2/19/2021

 4.1

 4.17

 Form of Placement Agent Warrant issued February 19, 2021

 2/19/2021

 4.2

 4.18

 Form of Warrant issued May 8, 2023.

 5/8/2023

 4.1

 4.19

 Form of Placement Agent Warrant issued May 8, 2023.

 5/8/2023

 4.2

 4.20

 Form of Investor Warrant issued April 30, 2024.

 4/30/2024

 4.1

 4.21

 Form of Investor Warrant issued November 18, 2024.

 11/18/2024

 4.1

 4.22

 Form of Investor Warrant issued on January 8, 2025

 1/8/2025

 4.1

 4.23

 Form of Pre-funded Warrant issued on April 2, 2025

 4/2/2025

 4.1

 4.24

 Form of Placement Agent Warrant issued on April 2, 2025

 4/2/2025

 4.2

 4.25

 Form of Investor Warrant issued on June 11, 2025.

 6/12/2025

 4.1

 4.26

 Form of Pre-Funded Warrant issued on June 11, 2025.

 6/12/2025

 4.2

 4.27

 Form of Placement Agent Warrant issued on June 11, 2025.

 6/12/2025

 4.3

 4.28

 Form of Investor Warrant issued on October 21, 2025.

 10/21/2025

 4.1

 4.29

 Form of Pre-Funded Warrant issued on October 21, 2025.

 10/21/2025

 4.2

 4.30

 Form of Placement Agent Warrant issued on October 21, 2025.

 10/21/2025

 4.3

 4.31

 Form of Warrant issued on December 2, 2025.

 X

 4.32

 Description of Common Stock.

 12/27/2025

 4.22

 10.1*

 Citius Pharmaceuticals, Inc. 2014 Stock Incentive Plan.

 8/15/2016

 10.1

 10.2*

 Form of Citius Pharmaceuticals, Inc. 2014 Stock Incentive Plan Nonqualified Stock Option.

 8/15/2016

 10.2

 10.3*

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

 5/12/2022

 10.1

 10.4

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

 5/15/2017

 10.8

 10.5*

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

 12/11/2018

 10.23

 10.6*

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

 12/1/2017

 10.1

 10.7*

 Citius Pharmaceuticals, Inc. 2018 Omnibus Stock Incentive Plan

 2/14/2018

 10.2

 10.8

 Form of Securities Purchase Agreement between Citius Pharmaceuticals, Inc. and the purchasers named therein, dated March 28, 2018.

 3/29/2018

 10.1

 10.9+

 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. D. Anderson Cancer Center and Citius Pharmaceuticals, Inc.

 2/14/2019

 10.1

 10.10

 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.

 2/14/2019

 10.2

 10.11+

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

 5/12/2023

 10.1

 Description
 of Document

 Registrant's

 Form

 Dated

 Filed

 Herewith

 10.12

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

 4/03/2019

 10.1

 10.13*

 Citius Pharmaceuticals, Inc. 2020 Omnibus Stock Incentive Plan.

 Schedule 14A

 12/20/2019

 Appendix A

 10.14*

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

 2/13/2020

 10.2

 10.15

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

 2/19/2020

 10.1

 10.16

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

 2/19/2020

 10.2

 10.17

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

 5/18/2020

 10.1

 10.18*

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

 8/14/2020

 10.3

 10.19+

 License Agreement, dated October 6, 2020, between NoveCite, Inc. and Novellus Therapeutics, Limited.

 12/16/2020

 10.24

 10.20

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

 1/27/2021

 10.1

 10.21

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

 2/19/2021

 10.1

 10.22*

 Citius Pharmaceuticals, Inc. 2021 Omnibus Incentive Stock Plan.

 Schedule 14A

 4/12/2021

 Appendix B

 10.23*

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

 10.29

 10.24+

 Asset Purchase Agreement, dated as of September 1, 2021, between Dr. Reddy's Laboratories S.A. and Citius Pharmaceuticals, Inc.

 10.30

 10.25+

 Amended and Restated License, Development and Commercialization Agreement, dated as of February 26, 2018, between Eisai, Ltd. and Dr. Reddy's Laboratories S.A.

 10.31

 10.26+

 Amendment to Amended and Restated License, Development and Commercialization Agreement, dated as of August 9, 2018, between Eisai, Ltd. and Dr. Reddy's Laboratories S.A.

 10.32

 10.27+

 Amendment No. 2 to Amended and Restated License, Development and Commercialization Agreement, dated as of August 31, 2021, between Eisai, Ltd. and Dr. Reddy's Laboratories S.A.

 10.33

 10.28*

 Citius Pharmaceuticals, Inc. 2023 Omnibus Stock Incentive Plan.

 Schedule 14A

 12/22/2022

 Annex A

 10.29

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

 5/8/2023

 10.1

 10.30+

 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.

 10/24/2023

 10.1

 Description
 of Document

 Registrant's

 Form

 Dated

 Filed

 Herewith

 10.31+

 Form of Amended and Restated Registration Rights Agreement.

 10/24/2023

 10.2

 10.32+

 Form of Amended and Restated Shared Services Agreement.

 10/24/2023

 10.3

 10.33+

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

 4/30/2024

 10.1

 10.34+

 Amended and Restated Shared Services Agreement, dated, August, 9, 2023, between Citius Pharmaceuticals, Inc. and Citius Oncology, Inc.

 8/16/2024

 10.1

 10.35+

 Amended and Restated Registration Rights Agreement, dated as of August 9, 2024, by and between Citius Oncology, Inc. and the signatories thereto.

 8/16/2024

 10.2

 10.36+

 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.

 8/16/2024

 10.3

 10.37+

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

 8/16/2024

 10.4

 10.38

 Amendment to Promissory Note, dated September 10, 2025, by and between Citius Oncology, Inc. and Citius Pharmaceuticals, Inc.

 X

 10.39

 Second Amendment to Promissory Note, dated December 10, 2025, by and between Citius Oncology, Inc. and Citius Pharmaceuticals, Inc.

 X

 10.40

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

 11/18/2024

 10.1

 10.41

 Form of Securities Purchase Agreement, dated as of January 7, 2025, by and among Citius Pharmaceuticals, Inc. and the investors signatory thereto.

 1/8/2025

 10.1

 10.42

 Form of Securities Purchase Agreement, dated as of April 1, 2025, by and among Citius Pharmaceuticals, Inc. and the investor signatory thereto.

 4/2/2025

 10.1

 10.43

 Subscription and Investment Representation Agreement, dated April 17, 2025, by and between Citius Pharmaceuticals, Inc. and Leonard Mazur.

 4/18/2025

 10.1

 10.44

 Unsecured Promissory Note issued to Pagoda Resources, Inc., dated June 2, 2025.

 6/3/2025

 10.1

 10.45

 Amendment No. 1 to Unsecured Promissory Note issued to Pagoda Resources, Inc., dated December 2, 2025.

 X

 10.46

 Form of Securities Purchase Agreement, dated as of June 9, 2025, by and among Citius Pharmaceuticals, Inc. and the investor signatory thereto.

 6/12/2025

 10.1

 10.47

 Form of Securities Purchase Agreement, dated as of October 20, 2025, by and among Citius Pharmaceuticals, Inc. and the investor signatory thereto.

 10/21/2025

 10.1

 10.48*

 First Amendment to Amended and Restated Employment Agreement by and between Myron Holubiak and Citius Pharmaceuticals, Inc., executed September 25, 2024, effective May 31, 2024.

 X

 10.49*

 Second Amendment to Amended and Restated Employment Agreement by and between Myron Holubiak and Citius Pharmaceuticals, Inc., executed December 23, 2025, effective October 31, 2025.

 X

 19.1

 Insider Trading Policy.

 12/27/2024

 19.1

 Subsidiaries.

 12/29/2023

 23.1

 Consent of Independent Registered Public Accounting Firm.

 --

 --

 --

 X

 31.1

 Certification of the Chief Executive Officer pursuant to Exchange Act Rule 13a-14(a).

 --

 --

 --

 X

 31.2

 Certification of the Chief Financial Officer pursuant to Exchange Act Rule 13a-14(a).

 --

 --

 --

 X

 32.1

 Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.

 --

 --

 --

 X

 97.1

 Compensation Recovery Policy.

 10-K/A

 1/27/2025

 97.1

 EX-101.INS

 --

 --

 --

 X

 EX-101.SCH

 --

 --

 --

 X

 EX-101.CAL

 --

 --

 --

 X

 EX-101.DEF

 --

 --

 --

 X

 EX-101.LAB

 --

 --

 --

 X

 EX-101.PRE

 --

 --

 --

 X

 --

 --

 --

 X

 +

 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.

 Item 16. Form 10-K Summary.

 Not applicable.

 SIGNATURES

 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.

 Date: December 23, 2025

 By:

 /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.

 Signature

 Title

 Date

 /s/
 Leonard Mazur

 Chief Executive Officer
 and Director

 Leonard Mazur

 (Principal Executive Officer)

 /s/
 Myron Holubiak

 Executive Vice Chairman
 and Director

 Myron Holubiak

 /s/ Jaimie
 Bartushak

 Chief Financial Officer

 Jaime Bartushak

 (Principal Financial Officer and Principal Accounting
 Officer)

 /s/
 Suren Dutia

 Suren Dutia

 /s/
 Eugene Holuka

 Eugene Holuka

 /s/
 Dennis McGrath

 Dennis McGrath

 /s/
 Robert J. Smith

 Robert J. Smith

 /s/
 Carol Webb

 Carol Webb

 CONSOLIDATED FINANCIAL STATEMENTS

 Page

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

 Consolidated Balance Sheets

 Consolidated Statements of Operations

 Consolidated Statements of Changes in Stockholders' Equity

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 F- 1

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM

 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, 2025 and 2024, 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, 2025 and 2024, 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, 2025. 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. The 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
audits. 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 23, 2025

 F- 2

 CONSOLIDATED BALANCE SHEETS

 SEPTEMBER 30, 2025 AND 2024

 2025

 2024

 ASSETS

 Current Assets:

 Cash and cash equivalents

 $
 4,252,290

 $
 3,251,880

 Inventory

 22,286,693

 8,268,766

 Prepaid expenses

 1,395,490

 2,700,000

 Total Current Assets

 27,934,473

 14,220,646

 Operating lease right-of-use asset, net

 818,694

 246,247

 Other Assets:

 Deposits

 38,062

 38,062

 In-process research and development

 92,800,000

 92,800,000

 Goodwill

 9,346,796

 9,346,796

 Total Other Assets

 102,184,858

 102,184,858

 Total Assets

 $
 130,938,025

 $
 116,651,751

 LIABILITIES AND STOCKHOLDERS' EQUITY

 Current Liabilities:

 Accounts payable

 $
 13,693,692

 $
 4,927,211

 License payable

 22,650,000

 28,400,000

 Accrued expenses

 4,190,253

 17,027

 Accrued compensation

 3,292,447

 2,229,018

 Note payable

 1,000,000

 —

 Operating lease liability

 88,348

 241,547

 Total Current Liabilities

 44,914,740

 35,814,803

 Deferred tax liability

 7,770,760

 6,713,800

 Operating lease liability – non current

 724,925

 21,318

 Total Liabilities

 53,410,425

 42,549,921

 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; 250,000,000 and 16,000,000 shares authorized at September 30, 2025 and 2024, respectively; 18,067,744 and 7,247,243 shares issued and outstanding at September 30, 2025 and 2024, respectively

 18,068

 7,247

 Additional paid-in capital

 306,336,239

 271,440,421

 Accumulated deficit

 ( 238,804,129
)

 ( 201,370,218
)

 Total Citius Pharmaceuticals, Inc. Stockholders' Equity

 67,550,178

 70,077,450

 Non-controlling interest

 9,977,422

 4,024,380

 Total Equity

 77,527,600

 74,101,830

 Total Liabilities and Equity

 $
 130,938,025

 $
 116,651,751

 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.

 F- 3

 CONSOLIDATED STATEMENTS OF OPERATIONS

 FOR THE YEARS ENDED SEPTEMBER 30, 2025 AND
2024

 2025

 2024

 Revenues

 $
 —

 $
 —

 Operating Expenses:

 Research and development

 9,156,474

 11,906,601

 General and administrative

 18,532,843

 18,249,402

 Stock-based compensation – general and administrative

 10,836,291

 Total Operating Expenses

 38,525,608

 41,995,681

 Operating Loss

 ( 38,525,608
)

 ( 41,995,681
)

 Other Income (Expense):

 Interest income

 110,081

 758,000

 Interest expense

 ( 267,782
)

 —

 Gain on sale of New Jersey net operating losses

 —

 2,387,842

 Total Other Income (Expense), Net

 ( 157,701
)

 3,145,842

 Loss before Income Taxes

 ( 38,683,309
)

 ( 38,849,839
)

 Income tax expense

 1,056,960

 576,000

 Net Loss

)

)

 Net loss attributable to non-controlling interest

 2,306,358

 287,000

 Deemed dividend on warrant extension

 —

 ( 1,047,312
)

 Net Loss Applicable to Common Stockholders

 $
 ( 37,433,911
)

 ( 40,186,151
)

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

 $
 ( 3.38
)

 ( 5.97
)

 Weighted Average Common Shares Outstanding

 Basic and diluted

 11,065,225

 6,726,999

 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.

 F- 4

 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY

 FOR THE YEARS ENDED SEPTEMBER 30, 2025 AND
2024

 Preferred

 Common Stock

 Additional
 Paid-In

 Accumulated

 Total Citius Pharmaceuticals, Inc.
 Stockholders'

 Non-Controlling

 Total

 Stock

 Shares

 Amount

 Capital

 Deficit

 Equity

 Interest

 Equity

 Balance, September 30, 2023

 —

 6,354,371

 $
 6,354

 $
 253,056,133

 $
 ( 162,231,379
)

 $
 90,831,108

 $
 600,380

 $
 91,431,488

 Issuance of common stock for services

 —

 15,479

 284,161

 —

 284,176

 —

 284,176

 Issuance of common stock upon exercise of stock options

 —

 2,082

 ( 2
)

 —

 —

 —

 —

 Sale of common stock, net of costs

 —

 875,311

 13,802,808

 —

 13,803,684

 —

 13,803,684

 Stock-based compensation expense

 —

 —

 —

 —

 —

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

 —

 —

 —

 ( 3,831,357
)

 —

 ( 3,831,357
)

 —

 ( 3,831,357
)

 Minority interest from Merger

 —

 —

 —

 ( 3,711,000
)

 —

 ( 3,711,000
)

 3,711,000

 —

 Net loss

 —

 —

 —

 —

)

)

 —

)

 Net loss attributable to noncontrolling interest

 —

 —

 —

 —

 287,000

 287,000

 ( 287,000
)

 —

 Balance, September 30, 2024

 —

 7,247,243

 7,247

 271,440,421

 ( 201,370,218
)

 70,077,450

 4,024,380

 74,101,830

 November 2024 sale of common stock, net of costs of $ 425,949

 —

 480,000

 2,573,571

 —

 2,574,051

 —

 2,574,051

 January 2025 sale of common stock, net of costs of $ 342,833

 —

 743,496

 2,656,423

 —

 2,657,167

 —

 2,657,167

 April 2025 sale of common stock and pre-funded warrants, net of costs of $ 256,116

 —

 465,000

 1,743,292

 —

 1,743,757

 —

 1,743,757

 June 2025 sale of common stock and pre-funded warrants, net of costs of $ 571,126

 —

 540,000

 5,430,296

 —

 5,430,836

 —

 5,430,836

 July 2025 sale of common stock by Citius Oncology, net of costs of $ 1,453,012

 —

 —

 —

 3,770,278

 —

 3,770,278

 ( 3,776,710
)

 7,546,988

 September 2025 sale of common stock by Citius Oncology, net of costs of $ 1,380,146

 —

 —

 —

 4,090,493

 —

 4,090,493

 ( 3,529,361
)

 7,619,854

 Issuance of common stock for services

 —

 20,000

 26,580

 —

 26,600

 —

 26,600

 Issuance of common stock upon exercise of pre-funded warrants

 —

 5,654,131

 5,654

 ( 5,088
)

 —

 —

 Sales of common stock under at the market offering agreement, net of costs

 —

 2,917,874

 2,918

 4,727,011

 —

 4,729,929

 —

 4,729,929

 Sale of Series A preferred stock

 —

 —

 —

 —

 Redemption of Series A preferred stock

 ( 1
)

 —

 —

 ( 100
)

 —

 ( 100
)

 —

 ( 100
)

 Stock-based compensation expense

 —

 —

 —

 9,882,962

 —

 9,882,962

 953,329

 10,836,291

 Net loss

 —

 —

 —

 —

)

)

 —

)

 Net loss attributable to noncontrolling interest

 —

 —

 —

 —

 2,306,358

 2,306,358

 ( 2,306,358
)

 —

 Balance, September 30, 2025

 —

 18,067,744

 $
 18,068

 $
 306,336,239

 $
 ( 238,804,129
)

 $
 67,550,178

 $
 9,977,422

 $
 77,527,600

 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.

 F- 5

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 FOR THE YEARS ENDED SEPTEMBER 30, 2025 AND
2024

 2025

 2024

 Cash Flows From Operating Activities:

 Net loss

 $
)

 $
)

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

 Stock-based compensation

 10,836,291

 Issuance of common stock for services

 26,600

 284,176

 Amortization of operating lease right-of-use asset

 214,250

 208,179

 Depreciation

 —

 1,432

 Deferred income tax expense

 1,056,960

 576,000

 Changes in operating assets and liabilities:

 Inventory

 ( 12,649,207
)

 ( 2,133,871
)

 Prepaid expenses

 ( 64,210
)

 ( 945,389
)

 Accounts payable

 8,766,481

 1,999,877

 Accrued expenses

 4,173,226

 ( 459,273
)

 Accrued compensation

 1,063,429

 72,035

 Operating lease liability

 ( 236,289
)

 ( 218,380
)

 Net Cash Used In Operating Activities

 ( 26,552,738
)

 ( 28,201,375
)

 Cash Flows From Investing Activities:

 License payment

 ( 5,750,000
)

 ( 5,000,000
)

 Net Cash Used In Investing Activities

 ( 5,750,000
)

 ( 5,000,000
)

 Cash Flows From Financing Activities:

 Proceeds from note payable and advance from employee

 1,300,000

 —

 Repayment of advance from employee

 ( 300,000
)

 —

 Merger, net

 —

 ( 3,831,357
)

 Net proceeds from common stock offerings

 32,303,148

 13,803,684

 Net Cash Provided By Financing Activities

 33,303,148

 9,972,327

 Net Change in Cash and Cash Equivalents

 1,000,410

 ( 23,229,048
)

 Cash and Cash Equivalents – Beginning of Year

 3,251,880

 26,480,928

 Cash and Cash Equivalents – End of Year

 $
 4,252,290

 $
 3,251,880

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

 IPR&D Milestones included in License Payable

 $
 —

 $
 28,400,000

 Net Prepaid Manufacturing transferred to Inventory

 $
 1,368,720

 $
 6,134,895

 Operating lease right-of-use asset and liability recorded

 $
 786,697

 $
 —

 Interest paid

 $
 187,389

 $
 —

 See accompanying report
of independent registered public accounting firm and notes to the financial statements.

 F- 6

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 FOR THE YEARS ENDED SEPTEMBER 30, 2025 AND
2024

 1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

 Business

 Citius Pharmaceuticals, Inc. ("Citius Pharma,"
the "Company," "we," or "us") 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 therapies.

 On March 30, 2016, we acquired Leonard-Meron
Biosciences, Inc. ("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.
We recorded 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,
Inc. ("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 was owned 92.3 % by Citius
Pharma, and is named Citius Oncology, Inc. (see Note 10).

 Since our inception, we have devoted substantially
all our efforts to business planning, research and development, recruiting management and technical staff, and raising capital. We are
subject to a number of risks common to companies in the pharmaceutical industry including, but not limited to, risks related to the development
by us or our 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, our ability to obtain additional
financing and our 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 subsidiary LMB and its majority-owned subsidiaries NoveCite
and Citius Oncology. On August 12, 2024, Citius Oncology, previously a wholly-owned subsidiary, became a majority-owned subsidiary. As
of September 30, 2025, Citius Oncology was a 79.1% 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 stockholders' 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 became effective on November 25, 2024.

 2. GOING CONCERN UNCERTAINTY AND MANAGEMENT'S
PLAN

 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. We experienced negative cash flows from operations of $ 26,552,738 and $ 28,201,375, for the years ended September
30, 2025 and 2024, respectively. We had a negative working capital of approximately $ 17 million at September 30, 2025. We estimate that
our available cash resources will be sufficient to fund its operations through March 2026 which raises substantial doubt about our ability
to continue as a going concern within one year after the date that the accompanying consolidated financial statements are issued.

 F- 7

 We have generated no operating revenue to date
and have principally raised capital through the issuance of debt and equity instruments to finance our operations. However, our continued
operations beyond March 2026, including our development plans for Mino-Lok, Halo-Lido and NoveCite, will depend on our ability to obtain
regulatory approval for Mino-Lok and generate substantial revenue from the sale of LYMPHIR and on our ability to raise additional capital
through various potential sources, such as equity and/or debt financings, strategic relationships, or out-licensing of our product candidates.
We 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 we are 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 our business. Further, we expect in the future to incur
additional expenses as we continue to develop our product candidates, including seeking regulatory approval, and protecting our intellectual
property. The accompanying financial statements do not include any adjustments that might result from the outcome of the above uncertainty.

 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 A summary of the significant accounting policies
followed by us 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

 We consider all highly liquid instruments with
maturities of less than three months at the time of purchase to be cash equivalents. From time to time, we may have cash balances in
financial institutions in excess of insurance limits. We have never experienced any losses related to these balances.

 Prepaid Expenses

 Prepaid expenses at September 30, 2025 and 2024
consist of $ 64,210 and $ 0 in prepaid annual service fees, respectively, and $ 1,331,280 and $ 2,700,000 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.

 F- 8

 Inventory

 Inventory is stated at the lower of actual accumulated
costs or net realizable value as of September 30, 2025 and 2024, related to the manufacturing of LYMPHIR commercial products to be sold
commencing in 2025. No reserves against inventory were deemed necessary based on an evaluation of the product expiration dating.

2025

2024

 Finished goods

 $
 10,577,876

 $
 6,134,895

 Work in process

 11,708,817

 2,133,871

 Total

 $
 22,286,693

 $
 8,268,766

 During 2024 and 2025, $ 6,134,895 and $ 1,368,720
respectively, of prepaid manufacturing costs were transferred to inventory upon product approval and production commencement at our third-party
manufacturers.

 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 us,
are expensed as incurred. We defer and capitalize our nonrefundable advance payments that are for research and development activities
until the related goods are delivered or the related services are performed. When we are reimbursed by a collaboration partner for work
we perform, we record the costs incurred as research and development expenses and the related reimbursement as a reduction to research
and development expenses in our 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

 We capitalize 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, we anticipate 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 generation.

 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. Reddy's from 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, 2025.

 F- 9

 Goodwill

 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 ASU 2017-04. Under the simplified model, a goodwill impairment is calculated as the difference between the carrying
amount of the reporting unit and its fair value.

 For its 2025 goodwill analysis, the Company performed a quantitative
assessment as of September 30, 2025. Based on this analysis, management concluded that the estimated fair value of the reporting unit
exceeded its carrying amount. Accordingly, no impairment charge was recorded, and goodwill continues to be carried at its current value.

 Stock-Based Compensation

 We recognize 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. We estimate volatility using the trading activity of our common stock.
Because our 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 our stock options.

 We recognize 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 record forfeitures as they occur.

 Income Taxes

 We follow 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 our 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, 2025. Any interest or penalties are charged to expense. During the years ended September 30, 2025 and 2024, the Company
did not recognize any interest and penalties. Tax years subsequent to September 30, 2021 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.

 F- 10

 Segment Reporting

 The Company operates through a single operating
and reportable segment which is focused on developing and commercializing innovative targeted oncology therapies. The Company's
lead product candidate is LYMPHIR, an engineered IL-2 diphtheria toxin fusion protein, for the treatment of patients with persistent
or recurrent CTCL, a rare form of non-Hodgkin lymphoma. LYMPHIR was approved by the FDA in August 2024. The Company manages all business
activities on a consolidated basis. The Company's Chief Operating Decision Maker ("CODM") is the Chief Executive Officer.

 The accounting policies of the operating segment
are as described in Note 3. The CODM evaluates the performance of the operating segment and allocates resources based on amounts as reported
on the consolidated statements of operations and cash flows. Segment expenses are presented on the Company's consolidated statements
of operations. The operating segment assets are reported on the consolidated balance sheet as total assets.

 Concentrations of Credit Risk

 We have no significant off-balance-sheet concentration
of credit risk such as foreign exchange contracts, option contracts or other hedging arrangements.

 Recently Adopted 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.
Since the Company has one reportable segment, adoption of this new standard did not have a material impact on the Company's consolidated
financial statements.

 Recently Issued Accounting Standards

 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. We are currently evaluating the impact of adoption of the standard on our financial statement disclosures.

 F- 11

 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. We are currently evaluating the impact of adoption of
the standard on ours financial statement disclosures.

 4. PATENT AND TECHNOLOGY LICENSE AGREEMENTS

 Patent and Technology License Agreement
– Mino-Lok

 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
commence. We recorded an annual maintenance fee expense of $ 90,000 in both 2025 and 2024.

 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.

 License Agreement with Eterna

 On October 6, 2020, NoveCite, entered into a
license agreement with Novellus Therapeutics Limited ("Novellus"), whereby NoveCite acquired an exclusive, worldwide license,
with the right to sublicense, develop and commercialize a stem cell therapy based on the Novellus's patented technology for the
treatment of acute pneumonitis of any etiology in which inflammation is a major agent in humans. Upon execution of the license agreement,
NoveCite, paid an upfront payment of $ 5,000,000 to Novellus, which was charged to research and development expense during the year ended
September 30, 2021, and issued to 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 this transaction, the NoveCite license was assumed by Brooklyn with all original
terms and conditions. The stock subscription agreement was amended to assign to Brooklyn all of Novellus's rights 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. ("Eterna").

 We are responsible for the operational activities
of NoveCite and bear all costs necessary to operate NoveCite. Our 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 we have not allocated any losses to the noncontrolling interest.

 Under the license agreement, NoveCite is obligated
to pay Eterna up to an aggregate of $ 51,000,000 in regulatory and developmental milestone payments. NoveCite also must pay a royalty
equal to a mid-teens percentage of net sales, commencing upon the first commercial sale of a licensed product. This royalty is subject
to downward adjustment on a product-by-product and country-by-country basis to a mid-single digit percentage (within a range of 4 % to
 8 %) 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 by Eterna
or any third party 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 it receives.

 F- 12

 Under the terms of the license agreement, in
the event that 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. Either party
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, we
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), an oncology immunotherapy for the treatment of CTCL, a rare form of non-Hodgkin lymphoma. We
renamed E7777 as I/ONTAK and also obtained the trade name of LYMPHIR for the product. We assigned these agreements to Citius Oncology
effective April 1, 2022 and received a BLA approval from the FDA for LYMPHIR in August 2024.

 Under the terms of these
agreements, we acquired Dr. Reddy's exclusive license for E7777 from Eisai and other related assets (which are now owned by Citius
Oncology). The exclusive license rights, through Citius Oncology, include rights to develop and commercialize E7777 in all markets except
for Japan and certain parts of Asia. Eisai retains exclusive development and marketing rights for the agent in Japan, China, Korea, Taiwan,
Hong Kong, Macau, Indonesia, Thailand, Malaysia, Brunei, Singapore, India, Pakistan, Sri Lanka, Philippines, Vietnam, Myanmar, Cambodia,
Laos, Afghanistan, Bangladesh, Bhutan, Nepal, Mongolia, and Papua New Guinea. We paid Dr. Reddy's a $ 40 million upfront payment,
which represents the acquisition date fair value of the in-process research and development acquired. 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 (within a range of 10 % to 15 %), and up to $ 300 million for commercial sales milestones. Citius Oncology also must pay on a fiscal
quarter basis tiered royalties equal to low double-digit percentages of net product sales (within a range of 10 % to 15 %). 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.
Citius Oncology 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. Citius Pharma is a guarantor of Citius Oncology's payment
obligations under these agreements.

approval for LYMPHIR, a $ 27.5 million milestone became payable to Dr. Reddy's, of which a balance of $ 19.75 million included in
license fee payable, remained due as of September 30, 2025. After discussions, Dr. Reddy's agreed to a partial deferral without
penalty of this milestone payment. During the years ended September 30, 2025 and 2024, we paid $ 2,750,000 and $ 5,000,000, respectively,
against the outstanding milestone fee.

 F- 13

approval for LYMPHIR, a $ 5.9 million milestone became payable to Eisai, of which a balance of $ 2.9 million included in license fee payable,
remained due as of September 30, 2025. During the year ended September 30, 2025, we paid $ 3,000,000 against the outstanding milestone
fee. Eisai is to receive additional commercial milestone payments related to the achievement of net product sales thresholds and an aggregate
of up to $ 22 million related to the achievement of net product sales thresholds. Citius Oncology was o required to reimburse Eisai for
up to $ 2.65 million of its costs to complete the Phase 3 pivotal clinical trial 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 the BLA with
the FDA. The BLA was approved by the FDA on August 8, 2024. We are responsible for development costs associated with potential additional
indications.

 On March 28, 2025, Citius
Oncology and Eisai entered into a letter agreement that amended the license agreement to provide for a payment schedule to Eisai for
the milestone payment and certain unpaid invoices. We agreed to pay Eisai on or before July 15, 2025, an aggregate amount of $ 2,535,318
and thereafter on the 15th of each of the next four months to pay Eisai $ 2,350,000 and make a final payment of $ 2,197,892 to Eisai on
or before December 15, 2025, in each case with interest on each obligation from its original due date through the date of actual payment
under the letter agreement at the rate of 2 % per annum. During the year ended September 30, 2025, we recorded $ 218,032 in interest expense
under the agreement. The parties released each other from any and all claims, losses, damages, costs and expenses that arise from or
related to our failure to pay the milestone payment or the other incurred costs under the license agreement except for any claims arising
out of a breach of the letter agreement. All other terms of the license agreement remain in full force and effect. During the year ended
September 30, 2025 we paid $ 3,000,000 of the development milestone and the balance of $ 2,900,000 is included in license fee payable at
September 30, 2025. On July 21, 2025, we made a payment to Eisai of $1,616,522 for other invoices and accumulated interest associated
with the letter agreement.

 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. We expect the first commercial sale to occur in the first quarter of 2026. 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. Either 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.

 Under the 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 (both of which have been initiated), (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; the launch of LYMPHIR in December 2025 satisfied this requirement in the U.S.

 As part of the definitive
agreement with Dr. Reddy's, we 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.

 F- 14

 The following patents
were acquired and subsequently transferred to Citius Oncology:

 US Provisional Application
No. 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.

 5. NOTE PAYABLE AND ADVANCE FROM EMPLOYEE

 On June 2, 2025, The Company borrowed $ 1,000,000
from an unrelated lender. The note payable is due in full on December 2, 2025 with interest at 15 % compounded monthly. Leonard Mazur
(Chairman and Chief Executive Officer of the Company) personally guaranteed repayment of the note. Interest expense for the year ended
September 30, 2025 was $ 49,750.

 On May 28, 2025, an employee provided a $ 300,000
non-interest-bearing advance to the Company. On June 5, 2025, the Company repaid the employee in full.

 6. COMMON STOCK, STOCK OPTIONS, RESTRICTED
STOCK AWARDS, AND WARRANTS

 Authorized Common Stock and Reverse Stock
Split

 We filed a Certificate of Change with the Secretary
of State of the State of Nevada to (i) effect a 1-for-25 reverse stock split of our issued and outstanding shares of common stock, and
(ii) decrease the number of total authorized shares of common stock from 400,000,000 shares to 16,000,000 shares. The reverse stock split
was intended 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 on November 25, 2024, and our common stock began trading on a reverse
stock split-adjusted basis on the Nasdaq Capital Market on November 26, 2024. All share amounts have been retroactively adjusted to reflect
the split.

 Series A Preferred Stock and Authorized
Common Stock

 On April 17, 2025, we entered into an agreement
with Leonard Mazur (Chairman and Chief Executive Officer of the Company), pursuant to which we sold one share of Series A Preferred Stock,
par value $ 0.001 per share for $ 100 to Mr. Mazur. The Series A Preferred Stock was sold in connection with the June 9, 2025 special meeting
of the stockholders for the purpose of approving an amendment to our Articles of Incorporation, as amended, to increase the number of
shares of our authorized common stock from 16,000,000 to 250,000,000. Our stockholders approved the authorized share increase on June
9, 2025.

 On April 17, 2025, we filed a certificate of
designation with the Nevada Secretary of State, designating the powers, rights, privileges and restrictions of the Series A Preferred
Stock. The certificate provides that each share of Series A Preferred Stock will have 1,000,000,000 votes and will vote together with
the outstanding shares of common stock as a single class, exclusively with respect to the authorized share increase proposal and shall
not be entitled to vote on any other matter. The Series A Preferred Stock will be voted on the authorized share increase in the same
proportion as the aggregate votes cast by holders of common stock "for" and "against" the proposal. The Series
A Preferred Stock otherwise has no other voting rights, including in respect of any other proposal. The voting power attributable to
the Series A Preferred Stock will be disregarded for purposes of determining whether a quorum is present at the special meeting, and
the establishment of a quorum at the special meeting will be determined only with reference to the common stock.

 Pursuant to its terms, on June 9, 2025, the outstanding
share of Series A Preferred Stock was redeemed automatically for $ 100 after we published the final results of the stockholder vote on
the authorized stock increase.

 F- 15

 Common Stock Issued for Services

 On October 10, 2023, we 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, we 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 issued.

 On April 25, 2024, we 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
issued.

 On July 1, 2025, we issued 20,000 shares of common
stock for media, and public and investor relations services and expensed the $ 26,600 fair value of the common stock issued.

 Common Stock Offerings

 On April 30, 2024, Citius Pharma
sold 857,143 shares of common stock and warrants to purchase 857,143 shares of common stock, 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 after 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.
We 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
$ 756,000.

 On November 15, 2024, Citius Pharma
sold 480,000 shares of common stock and warrants to purchase 480,000 shares of common stock. Gross proceeds were $ 3,000,000 and net proceeds
were $ 2,574,051 after deducting fees and expenses. The shares and warrants were sold at a combined offering price of $ 6.25. The
immediately exercisable warrants have an exercise price of $ 6.25 per share and expire on November 19, 2029. The estimated fair value
of the warrants issued to the investors was approximately $ 1,575,000.

 We paid the placement agent 7 % of the gross proceeds
and granted the placement agent immediately exercisable warrants to purchase 33,600 shares of common stock at an exercise price is $ 7.8125
per share which expire on November 15, 2029. The estimated fair value of the warrants issued to the placement agent was approximately
$ 104,000.

 On January 7, 2025, Citius Pharma
sold 743,496 shares of common stock and warrants to purchase 743,496 shares of common stock. Gross proceeds were approximately
$ 3,000,000 and net proceeds were $ 2,657,167 after deducting fees and expenses. The shares and warrants were sold at a combined
offering price of $ 4.035. The immediately exercisable warrants have an exercise price of $ 3.91 per share and expire on January
8, 2030. The estimated fair value of the warrants issued to the investors was approximately $ 2,091,000.

 We paid the placement agent 7 % of the gross
proceeds and granted the placement agent immediately exercisable warrants, to purchase 52,045 shares of common stock at $ 5.0438 per
share which expire on January 7, 2030. The estimated fair value of the warrants issued to the placement agent was approximately $ 138,000.

 On April 1, 2025, Citius Pharma
sold 465,000 shares of common stock, and pre-funded warrants to purchase 1,274,131 shares of common stock at an offering price of $ 1.15
and $ 1.1499. Gross proceeds were $ 1,999,873 and net proceeds were $ 1,743,757 after deducting fees and expenses. The immediately exercisable
pre-funded warrants have an exercise price of $ 0.0001 per share and do not expire. All 1,274,131 of the pre-funded warrants were
exercised during the year ended September 30, 2025.

 We paid the placement agent 7 % of the gross
proceeds and granted the placement agent warrants to purchase 121,739 shares of common stock at $ 1.4375 per share which
are exercisable commencing on October 2, 2025 and expire on April 1, 2030. The estimated fair value of the warrants issued to the placement
agent was approximately $ 100,000.

 F- 16

 On June 11, 2025, Citius Pharma
sold 540,000 shares of common stock, and pre-funded warrants to purchase 4,380,000 shares of common stock at offering prices of $ 1.22
and $ 1.2199, respectively, along with immediately exercisable two-year warrants to purchase 9,840,000 shares of common stock at $ 1.00
per share. Gross proceeds were $ 6,001,962 and net proceeds of the offering were $ 5,430,836 after deducting fees and expenses. The
pre-funded warrants are exercisable immediately at $ 0.0001 per share and do not expire. During the year ended September 30, 2025 all
 4,380,000 of the pre-funded warrants were exercised. The estimated fair value of the 9,840,000 warrants issued to the investors was approximately
$ 4,867,000.

 We paid the placement agent a fee of $ 420,168
and other fees and expenses were $ 150,958. In addition, we granted placement agent warrants to purchase 344,400 shares of common stock
at an exercise price equal to $ 1.525 per share. The warrants are exercisable six months after issuance and expire after five years. On
the expiration date, any warrants outstanding will be exercised via cashless exercise. The estimated fair value of the warrants issued
to the placement agent was approximately $ 222,000.

 On July 17, 2025, Citius Oncology
sold 6,818,182 shares of common stock and warrants to purchase 6,818,182 shares of common stock. The shares and warrants were sold at
a per unit price of $ 1.32. The immediately exercisable five-year warrants have an exercise price of $ 1.32 per share. Gross proceeds from
the offering were approximately $ 9.0 million and net proceeds were $ 7,546,988, after deducting placement agent fees and other offering
expenses. The estimated fair value of the warrants issued to the investors was approximately $ 8,197,000.

 Citius Oncology paid the placement agent a fee
of 7.0 % of the gross proceeds and expenses of $ 125,000, and issued the placement agent warrants to purchase up to 272,727 shares of common
stock at an exercise price of $ 1.65 per share. The warrants are exercisable commencing on January 17, 2026 and expire on July 17, 2030.
Citius Oncology also paid an additional 7.0 % fee to a prior placement agent and issued the prior placement agent warrants to purchase
up to 477,273 shares of common stock at an exercise price of $ 1.65 per share. The placement agent warrants are exercisable commencing
on August 17, 2025 and expire on July 17, 2030. The estimated fair value of the warrants issued to the placement agents was approximately
$ 905,000.

 On September 10, 2025, Citius Oncology
sold 5,142,858 shares of common stock and warrants to purchase 5,142,858 shares of common stock. The shares and warrants were sold at
a per unit price of $ 1.75. The warrants are exercisable beginning on March 10, 2026 and expire on March 10, 2031 at an exercise price
of $ 1.84 per share. Gross proceeds from the offering were approximately $ 9.0 million and net proceeds were $ 7,619,854, after deducting
placement agent fees and other offering expenses. The estimated fair value of the warrants issued to the investors was approximately
$ 6,995,000.

 Citius Oncology paid the placement agent a fee
of 7.0 % of the gross proceeds and expenses of $ 125,000. Additionally, Citius Oncology issued the placement agent warrants to purchase
up to 205,714 shares of common stock at an exercise price of $ 1.92 per share. The warrants are exercisable commencing on March 10, 2026
and expire on March 10, 2031. We also paid an additional 7.0 % fee to a prior placement agent and issued the prior placement agent warrants
to purchase up to 360,000 shares of common stock at an exercise price of $ 2.1875 per share. The placement agent warrants are exercisable
commencing on March 10, 2026 and expire on March 10, 2031. The estimated fair value of the warrants issued to the placement agents was
approximately $ 717,000.

 Citius Pharma At the Market Offering Agreement

 On August 12, 2024, we entered into a sales agreement,
to sell, from time to time during the term of the agreement our shares of common stock.

 During the year ended September 30, 2024, Citius
Pharma sold 18,168 shares for gross proceeds of $ 252,140. Net proceeds after deducting broker fees and other offering expenses were $ 84,735.

 During the three months ended March 31, 2025,
Citius Pharma sold 289,910 shares for gross proceeds of $ 839,468. Net proceeds after deducting broker fees and other offering expenses
were $ 808,640.

 F- 17

 During the three months ended June 30, 2025,
Citius Pharma sold 2,185,249 shares for gross proceeds of $ 3,471,866. Net proceeds after deducting broker fees and other offering expenses
were $ 3,294,446.

 During the three months ended September 30, 2025,
Citius Pharma sold 442,715 shares for gross proceeds of $ 657,284. Net proceeds after deducting broker fees and other offering expenses
were $ 626,843.

 Citius Pharma Stock Option Plans

 Under our 2014 Stock Plan, we reserved 34,667
shares of common stock. As of September 30, 2025, there were options to purchase 16,910 shares outstanding and no shares were available
for future grants.

 Under our 2018 Stock Plan, we reserved 80,000
shares of common stock. As of September 30, 2025, there were options to purchase 67,200 shares outstanding and no shares were available
for future grants.

 Under our 2020 Stock Plan, we reserved 124,400
shares of common stock. As of September 30, 2025, there were options to purchase 66,000 shares outstanding and no shares available for
future grants.

 Under our 2021 Stock Plan, we reserved 349,600
shares of common stock. As of September 30, 2025, options to purchase 330,000 shares were outstanding and no shares reserved for future
grants

 Under our 2023 Stock Plan, we reserved for issuance
 481,400 shares of common stock. As of September 30, 2025, options to purchase 359,400 shares were outstanding, and 118,000 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 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.

 The following assumptions were used in determining
the fair value of stock option grants for the years ended September 30, 2025 and 2024:

 2025

 2024

 Risk-free interest rate

 4.17 – 4.31 %

 4.62 – 4.66 %

 Expected dividend yield

 0.00 %

 0.00 %

 Expected term

 5.50 – 10 years

 5.50 – 10 years

 Expected volatility

 85 %

 85 – 86 %

 A summary of option activity under our plans
(excluding the NoveCite and Citius Oncology Stock Plans) is presented below:

 Option
 Shares

 Average
 Exercise
 Price

 Average
 Remaining
 Contractual
 Term

 Aggregate
 Intrinsic
 Value

 Outstanding at September 30, 2024

 656,084

 $
 36.41

 7.26 years

 $
 0.00

 Granted

 185,000

 $
 9.50

 Exercised

 —

 Forfeited or expired

 ( 1,574
)

 $
 242.80

 Outstanding at September 30, 2025

 839,510

 $
 30.09

 6.90 years

 $
 0.00

 Exercisable at September 30, 2025

 512,509

 $
 39.70

 5.88 years

 $
 0.00

 F- 18

 The weighted average grant date fair value of
the options granted during the year ended September 30, 2025 was estimated at $ 7.15 per share. All these options vest over terms of 12
to 36 months and have a term of 10 years.

 At September 30, 2025, unrecognized total
compensation cost related to unvested awards under the Citius Pharma stock plans of $ 1,485,612 is expected to be recognized over a
weighted average period of 1.55 years.

 NoveCite Stock Plan – Under
the NoveCite Stock Plan, we reserved 2,000,000 shares of common stock of NoveCite. As of September 30, 2025, there were options outstanding
to purchase 1,911,500 shares and 88,500 shares of common stock available for future grants.

 During the year ended September 30, 2021, NoveCite
granted options to purchase 2,000,000 shares of common stock to employees at an exercise price of $ 0.24 per share, 88,500 shares were
forfeited, and options to purchase 1,911,500 shares were exercisable as of September 30, 2025. These options vested 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 5.39
years. No options were issued in fiscal years 2025 and 2024. At September 30, 2025, there is no remaining unrecognized total compensation
cost related to awards under the plan.

 Citius Oncology Stock Plan - Under
the 2023 Citius Oncology Stock Plan, we reserved 15,000,000 shares of common stock of Citius Oncology. On August 2, 2024, Citius Oncology
reserved 15,000,000 shares under the Citius Oncology 2024 Stock plan The Citius Oncology Stock Plans provide incentives to employees,
directors, and consultants through grants of options, SARs, dividend equivalent rights, restricted stock, restricted stock units, or
other rights. As of September 30, 2025, options to purchase 18,100,000 shares were outstanding, restricted stock awards of 11,600,000
have not vested and 300,000 shares remain available for future grants.

 The following assumptions were used in determining
the fair value of the Citius Oncology stock option grants for the year ended September 30, 2025 and 2024:

 2025

 2024

 Risk-free interest rate

 4.08 - 4.18 %

 4.66 %

 Expected dividend yield

 0.00

 0.00 %

 Expected term

 5.50 - 6.50 years

 6.50 years

 Expected volatility

 85 %

 87 %

 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
on the U.S. 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

 Average
 Exercise
 Price

 Average
 Remaining
 Contractual
 Term

 Aggregate
 Intrinsic
 Value

 Outstanding at September 30, 2024

 12,750,000

 $
 2.15

 8.78 years

 $
 —

 Granted

 5,750,000

 1.07

 Forfeited

 ( 400,000
)

 Outstanding at September 30, 2025

 18,100,000

 $
 1.83

 8.21 years

 $
 5,386,000

 Exercisable at September 30, 2025

 9,781,250

 $
 2.02

 7.94 years

 $
 1,136,500

 F- 19

 On December 2, 2024, the Board of Directors granted
options to purchase 200,000 shares of common stock at an exercise price of $ 1.02 per share. On December 12, 2024, the Board of Directors
granted options to purchase 5,550,000 shares of common stock at an exercise price of $ 1.07 per share. The weighted average grant date
fair value of the options granted during the year ended September 30, 2025 was estimated at $ 0.80 per share. All these options vest over
terms of 12 to 36 months and have a term of 10 years.

 At September 30, 2025, unrecognized total compensation
cost related to unvested awards of $ 7,814,682 is expected to be recognized over a weighted average period of 1.23 years.

 Citius Oncology Restricted Stock Awards

 On September 19, 2025, the Board of Directors
granted restricted stock awards of 11,600,000 shares of common stock to employees and directors. The restricted stock awards vest on
September 30, 2028. The fair value of the common stock on the date of grant was $ 20,300,000 ($ 1.75 per share).

 Stock-based compensation expense for restricted
stock awards for the year ended September 30, 2025 was $ 203,741.

 At September 30, 2025, unrecognized total compensation
cost related to unvested restricted stock awards under the stock plans of $ 20,096,259 is expected to be recognized over a weighted average
period of 2.97 years.

 Stock-based compensation expense - under
all plans for the years ended September 30, 2025 and 2024 was $ 10,836,291 (including $ 8,116,678 for Citius Oncology options and $ 203,741
for Citius Oncology restricted stock awards) and $ 11,839,678 (including $ 47,574 for the NoveCite plan and $ 7,498,817 for the Citius Oncology
plan). respectively.

 Citius Pharmaceuticals Warrants

 We reserved 14,479,372 shares of common stock
for the exercise of outstanding warrants. The following table summarizes the warrants outstanding at September 30, 2025:

 Exercise
 price

 Expiration Dates

 August 2018 Offering Investors

 28.75

 156,863

 August 14, 2026

 August 2018 Offering Agent

 39.84

 7,576

 August 8, 2026

 September 2019 Offering Investors

 19.25

 111,732

 September 27, 2026

 September 2019 Offering Underwriter

 27.97

 7,774

 September 27, 2026

 May 2020 Offering Investors

 25.00

 66,824

 November 18, 2025

 January 2021 Offering Investors

 30.78

 123,648

 July 27, 2026

 January 2021 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 Offering Investors

 37.50

 500,000

 May 8, 2028

 May 2023 Offering Agent

 37.50

 35,000

 May 3, 2028

 April 2024 Offering Investors

 18.75

 857,143

 October 30, 2029

 April 2024 Offering Agent

 21.875

 60,000

 April 25, 2029

 November 2024 Offering Investors

 6.25

 480,000

 November 18, 2029

 November 2024 Offering Agent

 7.8125

 33,600

 November 15, 2029

 January 2025 Offering Investors

 3.91

 743,496

 January 8, 2030

 January 2025 Offering Agent

 5.0438

 52,045

 January 7, 2030

 April 2025 Offering Agent

 1.4375

 121,739

 April 1, 2030

 June 2025 Offering Investor

 1.00

 9,840,000

 June 11, 2027

 June 2025 Offering Agent

 1.525

 344,400

 June 11, 2027

 14,479,372

 F- 20

 On April 2, 2024, we extended the term to April
5, 2025, for 51,780 warrants with an exercise price of $ 35.50 per share and extended the term 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 which increased the net loss attributable to common shareholders
for the year ended September 30, 2024.

 On August 7, 2024, we extended the term to August
14, 2025, for 156,863 warrants with an exercise price of $ 28.75 per share and extended the term 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 which increased the net loss attributable to common shareholders
for the year ended September 30, 2024.

 On September 25, 2024, we extended the term to
September 27, 2025, for 111,732 warrants with an exercise price of $ 19.25 per share and extended the term 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 which increased the net loss attributable
to common shareholders for the year ended September 30, 2024.

 On August 7, 2025, we extended the term to August
14, 2026 for 156,863 warrants with an exercise price of $ 28.75 per share and extended the term to August 8, 2026 for 7,577 warrants with
an exercise price of $ 39.84 per share. On August 7, 2025, we also extended the term to September 27, 2026 for 111,732 warrants with an
exercise price of $ 19.25 per share and 7,774 warrants with an exercise price of $ 27.97 per share. We did not record a deemed dividend
for the year ended September 30, 2025, as there was no increase in the fair value of the modified warrants over the fair value of the
warrants before the modification.

 At September 30, 2025, the weighted average remaining
life of the outstanding warrants is 2.02 years, all warrants are exercisable, and the aggregate intrinsic value of the warrants
outstanding was $ 2,361,600.

 Citius Oncology Warrants

 We have reserved 13,276,754 shares of common
stock for the exercise of outstanding warrants. The following table summarizes the warrants outstanding at September 30, 2025:

 Exercise
 price

 Expiration Dates

 July 2025 Offering Investors

 $
 1.32

 6,818,182

 July 17, 2030

 July 2025 Offering Agent

 1.65

 272,727

 July 17, 2030

 July 2025 Prior Offering Agent

 1.65

 477,273

 July 17, 2030

 September 2025 Offering Investors

 1.84

 5,142,858

 March 10, 2031

 September 2025 Offering Agent

 1.92

 205,714

 March 10, 2031

 September 2025 Prior Offering Agent

 2.1875

 360,000

 March 10, 2031

 13,276,754

 At September 30, 2025, the weighted average remaining
life of the outstanding warrants is 5.08 years, all warrants are exercisable except for the September 2025 Offering warrants which become
exercisable on March 10, 2026, and the aggregate intrinsic value of the warrants outstanding was $ 6,125,681.

 Citius Pharma Common Stock Reserved

 A summary of common stock reserved for future
issuances by Citius Pharma excluding our subsidiaries as of September 30, 2025 is as follows:

 Stock plan options outstanding

 839,510

 Stock plan shares available for future grants

 118,000

 Warrants outstanding

 14,479,372

 Total

 15,436,882

 F- 21

 Citius Oncology Common Stock Reserved

 A summary of common stock reserved for future
issuances by Citius Oncology as of September 30, 2025 is as follows:

 Stock plan options outstanding

 18,100,000

 Restricted stock awards

 11,600,000

 Stock plan shares available for future grants

 300,000

 Warrants outstanding

 13,276,754

 Total

 43,276,754

 7. RELATED PARTY TRANSACTIONS

 During the year ended September 30, 2024, Citius
Pharma extended warrants held by our Chairman and Executive Vice Chairman (see Note 6) for 51,780 warrants on April 5, 2024, 156,863
warrants on August 7, 2024 and 111,732 warrants on September 25, 2024. During the year ended September 30, 2025, Citius Pharma extended
warrants held by our Chairman and Executive Vice Chairman (see Note 6) for 156,863 warrants and 111,732 warrants on August 7, 2025.

 See also Note 10 for Merger transaction and transactions
consummated with our subsidiary to facilitate the Merger.

 Citius Pharma is a party to a Shared Services
Agreement with Citius Oncology. Under the terms of the agreement, the Citius Pharma 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
Citius Pharma is currently approximately $ 1,006,000.

 8. 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. Under the terms of the agreement, we are 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, we entered into an employment
agreement with Jaime Bartushak to serve as our Chief Financial Officer and Principal Financial Officer.. The agreement requires us 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 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. The agreement requires us 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 us 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 us to pay base compensation plus incentives over the employment term plus severance benefits upon the occurrence
of certain events as described in the agreement.

 F- 22

 9. COMMITMENTS AND CONTINGENCIES

 Operating Lease

 Effective July 1, 2019, we entered into a 76-month
lease for office space in Cranford, NJ. On February 28, 2025 we extended the lease to February 28, 2030. A right-of-use asset of $ 786,697
was recognized as a non-cash asset and liability on the amendment date. 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 our right-of-use assets and corresponding lease liabilities:

 As the Cranford lease does
 not provide an implicit rate, we estimated the incremental borrowing rate in calculating the present value of the lease payments.
 We estimated the incremental borrowing rate based on the remaining lease term as of the amendment date.

 Since we 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

 2025

 Year
 Ended

 2024

 Operating lease cost

 $

 269,143

 $

 238,823

 Variable lease cost

 32,692

 25,809

 Total lease cost

 $

 301,835

 $

 264,632

 Other information

 Weighted-average remaining lease term - operating leases

 4.42 Years

 1.1 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,

 2026

 $
 171,280

 2027

 232,827

 2028

 237,686

 2029

 242,545

 2030

 102,849

 Total lease payments

 987,187

 Less: interest

 ( 173,914
)

 Present value of lease liabilities

 $
 813,273

 Leases

 Classification

 2025

 2024

 Assets

 Lease asset

 Operating

 $
 818,694

 $
 246,247

 Total lease assets

 $
 818,694

 $
 246,247

 Liabilities

 Current

 Operating

 $
 88,348

 $
 241,547

 Non-current

 Operating

 724,925

 21,318

 Total lease liabilities

 $
 813,273

 $
 262,865

 Interest expense on the lease liability was $ 39,054
and $ 30,644 for the years ended September 30, 2025 and 2024, respectively. This amount is classified within general & administrative
expense.

 F- 23

 Commercial Manufacturing Contracts

 We 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, we are obligated to purchase minimum annual quantities of batches at a set
price per batch, subject to annual increases. Additionally, we are required to pay an annual service fee of $ 250,000. 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, 2025, the total minimum purchase commitment under this agreement
was approximately $ 16.2 million consisting of payments of $ 8.5 million and $ 5.3 million for 2025 and 2026 respectively and approximately
$ 2.4 million for 2026 pass-throughs and consumable manufacturing components.

 As of September 30, 2025, we also have 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 $ 4.9 million consisting of purchase commitment obligations of $ 1.2 million in 2025 and $ 1.9
million in 2026 and $ 1.8 million in 2027.

 Legal Proceedings

 We are not involved in any litigation that we
believe could have a material adverse effect on our 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 our executive officers, threatened against or affecting us or our officers or directors in their capacities as such.

 10. 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 the 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: CTOR). 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, we 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 us. Simultaneously, we 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. The Merger resulted in an initial 92.3 % ownership
interest by Citius Pharma in Citius Oncology.

 F- 24

 11. GAIN ON SALE OF NEW JERSEY NET OPERATING
LOSSES

 We recognized a gain of $ 2,387,842 for the year
ended September 30, 2024, 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.

 12. INCOME TAXES

 We recorded deferred income tax expense of $ 1,056,960
and $ 576,000 for the years ended September 30, 2025 and 2024 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, 2025
and 2024 due to the following:

 2025

 2024

 Computed "expected" tax benefit

 ( 21.0
)%

 ( 21.0
)%

 Increase (decrease) in income taxes resulting from:

 State taxes, net of federal benefit

 ( 6.3
)

 ( 6.3
)

 Permanent differences

 4.0

 5.5

 Increase in the valuation reserve

 26.0

 23.3

 2.7
 %

 1.5
 %

 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 our deferred tax assets and liabilities are as follows:

 2025

 2024

 Deferred tax assets:

 Net operating loss carryforward

 $
 48,987,000

 $
 39,888,000

 Stock-based compensation

 4,269,000

 3,310,000

 Capitalized research and development

 6,695,000

 5,762,000

 Other

 6,420,000

 4,933,000

 Valuation allowance on deferred tax assets

 ( 66,147,000
)

 ( 53,826,000
)

 Total deferred tax assets

 224,000

 67,000

 Deferred tax liabilities:

 ROU Asset

 ( 224,000
)

 ( 67,000
)

 In-process research and development

 ( 7,770,760
)

 ( 6,713,800
)

 Total deferred tax liability

 ( 7,994,760
)

 ( 6,780,800
)

 Net deferred tax liability

 $
 ( 7,770,760
)

 $
 ( 6,713,800
)

 We recorded a valuation allowance against deferred
tax assets as the utilization of the net operating loss carry-forward and other deferred tax assets is uncertain. During the years ended
September 30, 2025 and 2024, the valuation allowance increased by $ 12,321,000 and $ 8,911,000, respectively. The increase in the valuation
allowance during the years ended September 30, 2025 and 2024 was primarily due to our net operating loss. At September 30, 2025, we have
a federal net operating loss carryforward of approximately $ 181,000,000. Federal net operating loss carryforwards of approximately $ 29,000,000
begin expiring in 2034 and carryforwards of approximately $ 152,000,000 generated in tax years beginning after 2017 may be carried forward
indefinitely. Use of federal net operating losses may be limited under Section 382 of the Internal Revenue Code due to changes in ownership.

 As of September 30, 2025, we also have estimated
federal research and development credits of $ 5,297,000 to offset future income taxes. The tax credit carryforwards will begin to expire
in 2036.

 On July 4, 2025, the "One Big Beautiful Bill Act" ("OBBBA") was signed into law in the United States. The OBBBA
includes a broad range of tax reform provisions for businesses, including extensions of key Tax Cuts and Jobs Act provisions, modifications
to the international tax framework, and restoration of favorable tax treatment for certain business provisions. Certain provisions of
the legislation will become effective in 2025, while others are effective in 2026. The OBBBA was enacted during our fourth fiscal quarter
of 2025, and we have considered its potential effects and reflected the impact of the OBBBA on our financial position, results of operations,
and cash flows. We are in the process of evaluating the impact of these provisions on future periods, but we do not expect the OBBBA to
have a material impact on our consolidated financial statements.

 F- 25

 We account 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 us to date.

 13. SUBSEQUENT EVENTS

 On October 20, 2025, Citius Pharmaceuticals,
Inc. entered into a securities purchase agreement with a certain institutional investor for the issuance and sale, in a registered direct
offering by the Company, of 1,460,000 shares of the Company's common stock, par value $ 0.001 per share, and pre-funded warrants
to purchase up to 2,513,510 shares of common stock at an offering price of $ 1.51 and $ 1.5099, respectively. The Company also issued to
the investor warrants to purchase up to 3,973,510 shares of common stock. The offering closed on October 21, 2025. Gross proceeds were
approximately $ 6.0 million, before deducting placement agent fees and other expenses.

 On December 8, 2025, Citius Oncology entered into
a securities purchase agreement with a certain institutional investor in a registered direct offering for the purchase and sale of 1,284,404
shares of our common stock at an offering price of $ 1.09 per share of common stock. In a concurrent private placement, the Company also
agreed to sell such institutional investor warrants to purchase up to 1,284,404 shares of common stock, with an exercise price of $ 1.09
per share of our common stock, which are exercisable upon the requisite stockholder approval, and have a term of five years from the date
of the stockholder approval. The aggregate gross proceeds to the Company from the offering were approximately $ 18.0 million. Net proceeds
were approximately $ 15.2 million, after deducting placement agent fees and other offering expenses payable by the Company.

 On December 8, 2025, Citius Oncology also entered
into a securities purchase agreement with such institutional investor to issue in a concurrent private placement pre-funded warrants to
purchase up to 15,229,358 shares of common stock and 15,229,358 warrants, at a combined price of $ 1.0899 per pre-funded warrant and accompanying
warrant. The pre-funded warrants are exercisable immediately, at an exercise price of $ 0.0001 per share, and will remain valid and exercisable
until all the pre-funded warrants are exercised in full.

 In connection with the offering, Citius Oncology
agreed to pay the placement agent a cash fee of 7.0 % of the aggregate gross proceeds Citius Oncology received in the offering. In addition,
the Company granted warrants to the placement agent, or its designees, to purchase up to 1,155,963 shares of common stock. The terms of
the placement agent warrants are substantially the same as the terms of the warrants, except that the exercise price is $ 1.3625 per share
and expire five years from the commencement of sales in the offering.

 F- 26

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