[10-Q] TenX Keane Acquisition Unit Quarterly Earnings Report

Rhea-AI Filing Summary

Citius Oncology, Inc. is commercializing LYMPHIR (denileukin diftitox), an FDA-approved immunotherapy for cutaneous T-cell lymphoma, and is preparing for a U.S. commercial launch in the second half of 2025 with distribution agreements in place with Cardinal Health and Cencora. The company has built inventory of $17.2 million and reports operational readiness to transition from development to commercial operations.

Financially, the company reported a $19.76 million net loss for the nine months ended June 30, 2025, an accumulated deficit of $59.04 million, only $112 in cash and negative working capital of approximately $34.7 million at June 30, 2025. Material near-term obligations include a remaining $22.5 million milestone to Dr. Reddy's, a $5.9 million Eisai milestone included in license payable, and minimum supply commitments of approximately $18.3 million (manufacturing) plus $4.5 million (packaging). The company completed a public offering on July 17, 2025 raising gross proceeds of $9.0 million (net approx. $7.44 million), which the company states extends runway through September 2025 but additional financing will be required thereafter.

Positive

• FDA approval of LYMPHIR (E7777/denileukin diftitox) in August 2024 enabling commercialization
• Distribution agreements executed with Cardinal Health and Cencora to support U.S. launch
• Inventory build of $17.2 million to support anticipated commercial sales
• Completed public offering on July 17, 2025 raising gross $9.0 million (net approx. $7.44 million)
• Regained Nasdaq compliance after closing bid price exceeded $1.00 for required period

Negative

• Extremely limited cash: only $112 on hand at June 30, 2025 and negative working capital of ~$34.7 million
• Significant operating losses: net loss of $19.76 million for the nine months ended June 30, 2025 and accumulated deficit of $59.04 million
• Large near-term liabilities: remaining $22.5 million milestone payable to Dr. Reddy's and $5.9 million Eisai milestone included in license payable, plus scheduled payments under the Eisai letter agreement
• Substantial purchase commitments: manufacturing minimums of ~$18.3 million and packaging commitments of ~$4.5 million
• Heavy dependence on related‑party funding: Citius Pharmaceuticals provided funding, holds majority ownership (~84.3% as of July 17, 2025), and funds operations via due-to-related-party balances

Insights

Financial Analyst

TL;DR: FDA approval and launch readiness offset by an acute cash shortfall and large near-term contractual obligations.

The company has achieved the critical regulatory milestone of FDA approval for LYMPHIR and has established distribution partnerships and inventory to support an imminent commercial launch. However, the balance sheet shows only $112 of cash and negative working capital of ~$34.7 million at June 30, 2025. Material obligations include a $22.5 million remaining milestone to Dr. Reddy's, a $5.9 million Eisai milestone, and multi‑million dollar manufacturing and packaging purchase commitments. The July 17, 2025 offering (gross $9.0 million, net ~$7.44 million) temporarily extends runway to September 2025 but is insufficient to cover all near-term cash needs. From a financial perspective, the company faces a significant funding cliff that is material to investors.

Corporate Governance / Risk Analyst

TL;DR: Regulatory and commercial progress reduces execution risk, but heavy reliance on related-party funding and deferred payment arrangements raise governance and liquidity risk.

The company has converted development assets into a commercial product (BLA approved Aug 8, 2024) and contracted distributors to support launch. It also renegotiated payment schedules with licensors (Eisai) and obtained partial deferrals from counterparties (Dr. Reddy's). Nevertheless, the company remains substantially dependent on Citius Pharmaceuticals for funding and shared services, and significant milestone and supply commitments remain. These factors increase execution and counterparty risk despite operational progress.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: June 30, 2025

OR

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

For the transition period from ______________ to ______________

Commission File Number 001-41534

Citius Oncology, Inc.

(Exact name of registrant as specified in its charter)

Delaware		99-4362660
(State or other jurisdiction of incorporation or organization)		(IRS 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 Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common stock, $0.0001 par value		CTOR		Nasdaq Capital Market

Indicate by check mark whether the registrant (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 ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant 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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 11, 2025, there were 78,370,584 shares of common stock, $0.0001 par value, of the registrant issued and outstanding.

Citius Oncology, Inc.

FORM 10-Q

TABLE OF CONTENTS

June 30, 2025

				Page
PART I. FINANCIAL INFORMATION:				1
Item 1.		Financial Statements (Unaudited)		1
		Condensed Consolidated Balance Sheets as of June 30, 2025 and September 30, 2024		1
		Condensed Consolidated  Statements of Operations for the Three and Nine Months Ended June 30, 2025 and 2024		2
		Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended June 30, 2025 and 2024		3
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended June 30, 2025 and 2024		4
		Notes to Condensed Consolidated Financial Statements		5
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		12
Item 3.		Quantitative and Qualitative Disclosures about Market Risk		18
Item 4.		Controls and Procedures		18
PART II. OTHER INFORMATION				19
Item 1.		Legal Proceedings		19
Item 1A.		Risk Factors		19
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		19
Item 3.		Defaults Upon Senior Securities		19
Item 4.		Mine Safety Disclosures		19
Item 5.		Other Information		19
Item 6.		Exhibits		20
		SIGNATURES		21

i

EXPLANATORY NOTE

In this Quarterly Report on Form 10-Q, and unless the context otherwise requires, the “Company,” “Citius Oncology” “we,” “us” and “our” refer to Citius Oncology, Inc. and its wholly-owned subsidiary Citius Oncology Sub Inc., “Citius Oncology Sub”, taken as a whole. 

LYMPHIR^TM (denileukin diftitox) is our registered trademark. All other trade names, trademarks and service marks appearing in this quarterly 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.

ii

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains “forward-looking statements.” Forward-looking statements include, but are not limited to, statements that express our intentions, beliefs, expectations, 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 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;
	●	the Company’s need for substantial additional funds, including for the launch of LYMPHIR, and its ability to raise those funds;
	●	the ability of the Company to commercialize LYMPHIR, including covering the costs of licensing payments, product manufacturing and other third-party goods and services;
	●	the ability of the Company to recognize the anticipated benefits of the Merger (as defined herein), which may not be realized fully, if at all, or may take longer to realize than expected;
	●	our ongoing evaluations of strategic alternatives;
	●	the ability of the Company to maintain compliance with the continued listing requirements of the Nasdaq Stock Market LLC (“Nasdaq”);
	●	the ability of LYMPHIR or any of our future product candidates to impact the quality of life of our target patient populations;
	●	the estimated markets for LYMPHIR or any of our future product candidates and the acceptance thereof by any market;
	●	our ability to procure cGMP commercial-scale supply;
	●	our dependence on third-party suppliers;
	●	risks arising from changes in the fields in which LYMPHIR and any of our future product candidates, if approved, may compete;
	●	risks relating to the results of research and development activities, including those from our existing and any new pipeline assets;
	●	ability to obtain, perform under and maintain financing and strategic agreements and relationships;
	●	the Company’s operating results and financial performance;
	●	uncertainties relating to preclinical and clinical testing, approval and commercialization of any future product candidates by the Company;
	●	the Company’s ability to manage and grow our business and execution of our business and growth strategies;

iii

	●	the competitive environment in the life sciences and biotechnology industry;
	●	failure to maintain, protect and defend the Company’s intellectual property rights;
	●	changes in government laws and regulations, including laws governing intellectual property, and the enforcement thereof affecting the Company’s business;
	●	changes in general economic conditions, global trade conditions, including the level of tariffs imposed by governments, geopolitical risk, including as a result of any unexpected global tariffs, pandemic or international conflict, including in the Middle East and between Russia and Ukraine;
	●	the effect of the transactions on the Company’s business relationships, operating results, and businesses generally;
	●	volatility in the price of the Company’s securities due to a variety of factors, including the Company’s inability to implement its business plans or meet or exceed our financial projections;
	●	the outcome of any litigation related to or arising out of the Merger, or any adverse developments therein or delays or costs resulting therefrom; and
	●	the other factors discussed in the “Risk Factors” section of our most recent Annual Report on Form 10-K for the fiscal year ended September 30, 2024, filed with the SEC on December 27, 2024, as amended on January 27, 2025, and our most recent Quarterly Report on Form 10-Q for the six months ended March 31, 2025, filed with the SEC on May 14, 2025, and elsewhere in this Report.

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.

iv

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

CITIUS ONCOLOGY, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

		June 30, 2025				September 30, 2024
Current Assets:
Cash and cash equivalents		$	112			$	112
Inventory			17,208,967				8,268,766
Prepaid expenses			1,100,000				2,700,000
Total Current Assets			18,309,079				10,968,878
Other Assets:
In-process research and development			73,400,000				73,400,000
Total Other Assets			73,400,000				73,400,000
Total Assets		$	91,709,079			$	84,368,878
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable		$	8,667,419			$	3,711,622
License payable			28,400,000				28,400,000
Accrued expenses			8,458,554				—
Due to related party			7,464,362				588,806
Total Current Liabilities			52,990,335				32,700,428
Deferred tax liability			2,520,720				1,728,000
Note payable to related party			3,800,111				3,800,111
Total Liabilities			59,311,166				38,228,539
Stockholders’ Equity:
Preferred stock - $0.0001 par value; 10,000,000 shares authorized: no shares issued and outstanding			—				—
Common stock - $0.0001 par value; 400,000,000 and 100,000,000 shares authorized at June 30, 2025 and September 30, 2024, respectively; 71,552,402 shares issued and outstanding			7,155				7,155
Additional paid-in capital			91,434,058				85,411,771
Accumulated deficit			(59,043,300	)			(39,278,587	)
Total Stockholders’ Equity			32,397,913				46,140,339
Total Liabilities and Stockholders’ Equity		$	91,709,079			$	84,368,878

See notes to unaudited condensed consolidated financial statements.

1

CITIUS ONCOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2025 AND 2024

(Unaudited)

		Three Months Ended								Nine Months Ended
		June 30,				June 30,				June 30,				June 30,
		2025				2024				2025				2024
Revenues		$	—			$	—			$	—			$	—
Operating Expenses
Research and development			938,277				1,131,439				5,342,198				3,628,900
General and administrative			1,881,447				1,540,411				7,446,753				4,443,899
Stock-based compensation – general and administrative			2,125,237				1,957,000				6,022,287				5,831,000
Total Operating Expenses			4,944,961				4,628,850				18,811,238				13,903,799
Operating Loss			(4,944,961	)			(4,628,850	)			(18,811,238	)			(13,903,799	)
Interest expense			160,755				—				160,755				—
Loss before Income Taxes			(5,105,716	)			(4,628,850	)			(18,971,993	)			(13,903,799	)
Income tax expense			264,240				144,000				792,720				432,000
Net Loss		$	(5,369,956	)		$	(4,772,850	)		$	(19,764,713	)		$	(14,335,799	)
Net Loss Per Share - Basic and Diluted		$	(0.08	)		$	(0.07	)		$	(0.28	)		$	(0.21	)
Weighted Average Common Shares Outstanding
Basic and diluted			71,552,402				67,500,000				71,552,402				67,500,000

 See notes to unaudited condensed consolidated financial statements.

2

CITIUS ONCOLOGY, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND NINE MONTHS ENDED JUNE 30, 2025 AND 2024

(Unaudited)

		Preferred Stock								Common Stock								Additional Paid-In				Accumulated				Total Stockholders’
		Shares				Amount				Shares				Amount				Capital				Deficit				Equity
Balance, September 30, 2024			-			$	-				71,552,402			$	7,155			$	85,411,771			$	(39,278,587	)		$	46,140,339
Stock-based compensation expense			-				-				-				-				1,808,478				-				1,808,478
Net loss			-				-				-				-				-				(6,659,205	)			(6,659,205	)
Balance, December 31, 2024			-				-				71,552,402				7,155				87,220,249				(45,937,792	)			41,289,612
Stock-based compensation expense			-				-				-				-				2,088,572				-				2,088,572
Net loss			-				-				-				-				-				(7,735,552	)			(7,735,552	)
Balance, March 31, 2025			-				-				71,552,402				7,155				89,308,821				(53,673,344	)			35,642,632
Stock-based compensation expense			-				-				-				-				2,125,237				-				2,125,237
Net loss			-				-				-				-				-				(5,369,956	)			(5,369,956	)
Balance, June 30, 2025			-			$	-				71,552,402			$	7,155			$	91,434,058			$	(59,043,300	)		$	32,397,913
Balance, September 30, 2023			-			$	-				67,500,000			$	6,750			$	43,658,750			$	(18,129,840	)		$	25,535,660
Stock-based compensation expense			-				-				-				-				1,917,000				-				1,917,000
Net loss			-				-				-				-				-				(4,727,403	)			(4,727,403	)
Balance, December 31, 2023			-				-				67,500,000				6,750				45,575,750				(22,857,243	)			22,725,257
Stock-based compensation expense			-				-				-				-				1,957,000				-				1,957,000
Net loss			-				-				-				-				-				(4,835,546	)			(4,835,546	)
Balance, March 31, 2024			-				-				67,500,000				6,750				47,532,750				(27,692,789	)			19,846,711
Stock-based compensation expense			-				-				-				-				1,957,000				-				1,957,000
Net loss			-				-				-				-				-				(4,772,850	)			(4,772,850	)
Balance, June 30, 2024			-			$	-				67,500,000			$	6,750			$	49,489,750			$	(32,465,639	)		$	17,030,861

See notes to unaudited condensed consolidated financial statements.

3

CITIUS ONCOLOGY, INC.

Condensed Consolidated STATEMENTS OF CASH FLOWS

FOR THE NINE MONTHS ENDED JUNE 30, 2025 AND 2024

(Unaudited)

		2025				2024
Cash Flows From Operating Activities:
Net loss		$	(19,764,713	)		$	(14,335,799	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Stock-based compensation expense			6,022,287				5,831,000
Deferred income tax expense			792,720				432,000
Changes in operating assets and liabilities:
Inventory			(8,940,201	)			-
Prepaid expenses			1,600,000				(2,271,920	)
Accounts payable			4,955,797				(1,289,045	)
Accrued expenses			8,458,554				185,930
Due to related party			6,875,556				11,447,834
Net Cash Provided By Operating Activities			-				-
Net Change in Cash and Cash Equivalents			-				-
Cash and Cash Equivalents – Beginning of Period			112				-
Cash and Cash Equivalents – End of Period		$	112			$	-

See notes to unaudited condensed consolidated financial statements.

4

CITIUS ONCOLOGY, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE NINE MONTHS ENDED JUNE 30, 2025 AND 2024

(Unaudited)

1. NATURE OF OPERATIONS, BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

Citius Oncology, Inc. (“Citius Oncology”, the “Company”, “we” or “us”) is a specialty pharmaceutical company dedicated to the development and commercialization of critical care products targeting unmet needs with a focus on oncology products. We are commercializing E7777 (denileukin diftitox), an approved oncology immunotherapy for the treatment of cutaneous T-cell lymphoma (“CTCL”), a rare form of non-Hodgkin lymphoma. We have obtained the trade name of LYMPHIR for E7777.

Since our inception, we have devoted substantially all our efforts to business planning, research and development, and recruiting management and technical staff. We are subject to a number of risks common to companies in the pharmaceutical industry including, but not limited to, the Company’s ability to obtain additional financing, risks related to the development by the Company or its competitors of research and development stage products, market acceptance of any of its products approved for marketing, competition from larger companies, dependence on key personnel, dependence on key suppliers and strategic partners and the Company’s compliance with governmental and other regulations.

Since our inception, Citius Pharmaceuticals, Inc. (“Citius Pharma”) (Nasdaq: CTXR) has funded and continues to fund the Company. Citius Pharma and the Company 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 the Company.

Merger

On August 23, 2021, Citius Pharma formed Citius Acquisition Corp. (“SpinCo”) as a wholly-owned subsidiary in conjunction with the acquisition of LYMPHIR, which began operations in April 2022, when Citius Pharma transferred the assets related to LYMPHIR to SpinCo, including the related license agreement and asset purchase agreement (see Note 5).

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 (the “Merger”) which was subsequently renamed Citius Oncology Sub, Inc. Prior to closing of the Merger, TenX migrated to and domesticated as a Delaware corporation in accordance with Section 388 of the General Corporation Law of the State of Delaware and the Cayman Islands Companies Act (As Revised) (the “Domestication”). As part of the Domestication, TenX changed its name to “Citius Oncology, Inc.” (Nasdaq: CTOR). Immediately after the closing of the Merger, Citius Pharma owned approximately 92.3% of the outstanding shares of common stock of the Company. As of July 17, 2025, Citius Pharma owned approximately 84.3% of the outstanding shares of common stock of the Company.

While the Merger Sub was the legal acquirer of the Company, for accounting purposes, the Company was deemed to be the accounting acquirer. Accordingly, for accounting purposes, the Merger was treated as the equivalent of the Company issuing stock for the assets and liabilities of the Merger Sub, accompanied by a recapitalization. Total shares outstanding of the Company after the Merger and recapitalization increased to 71,552,402. The net assets of the merged entities are stated at historical cost, with no goodwill or other intangible assets recorded. Additionally, the historical financial statements of the Company became the historical financial statements of the Company.

5

The Merger, net amount of $2,753,795 charged to additional paid-in capital consists of $395,015 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 of $2,358,780.

As part of the Merger, Citius Pharma made capital investments in the Company 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 the Company to Citius Pharma. Simultaneously, Citius Pharma advanced an additional $3,800,111 to the Company under the terms of a note payable (see Note 8).

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Preparation - The accompanying unaudited condensed consolidated financial statements include the operations of Citius Oncology, Inc., and its wholly-owned subsidiary, Citius Oncology Sub, Inc., which was formed in connection with Merger. All significant inter-company balances and transactions have been eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to fairly state the condensed consolidated financial position of the Company as of June 30, 2025, and the results of its operations and cash flows for the three and nine months ended June 30, 2025 and 2024. The operating results for the three and nine months ended June 30, 2025 are not necessarily indicative of the results that may be expected for the year ending September 30, 2025. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024 filed with the Securities and Exchange Commission (“SEC”) on December 27, 2024, as amended on January 27, 2025.

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, stock-based compensation, net realizable value of inventory and income taxes. Actual results could differ from those estimates and changes in estimates may occur.

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 and consisting of stock options, were not included in the calculation of the diluted loss per share because they were anti-dilutive.

Recently Issued Accounting Standards

Other than as disclosed in our Form 10-K, we are not aware of any other recently issued accounting standards not yet adopted that may have a material impact on our financial statements.

2. GOING CONCERN UNCERTAINTY AND MANAGEMENT’S PLAN

The accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company had a net loss of $19,764,713 for the nine months ended June 30, 2025. The Company has no revenue and has relied on funding from Citius Pharma to finance its operations. At June 30, 2025, the Company had $112 in cash and a negative working capital of $34.7 million.

On July 17, 2025, Citius Oncology completed a public offering of 6,818,182 shares of its common stock and warrants to purchase 6,818,182 shares of its common stock at $1.32 per share. The immediately exercisable five-year warrants have an exercise price of $1.32 per share. Gross proceeds from the offering, before deducting placement agent fees and other estimated offering expenses, were approximately $9.0 million. The net proceeds from the offering were approximately $7.44 million, after deducting placement agent fees and other offering expenses.

6

After giving effect to the July 17, 2025 financing, we expect that we will have sufficient funds to continue our operations through September 2025. We will need to raise additional capital in the future to support our operations beyond September 2025, which raises substantial doubt about our ability to continue as a going concern within one year after the date that the accompanying financial statements are issued.

The Company plans to continue to rely on funding from Citius Pharma, to raise capital through equity financings from outside investors and to generate revenue from the future sales of LYMPHIR. Both the Company and Citius Pharma are actively engaged in capital raising efforts to extend the cash runway. The Company also has retained Jefferies LLC as its exclusive financial advisor in evaluating strategic alternatives aimed at maximizing shareholder value. There is no assurance, however, that Citius Pharma will have the resources to continue funding the Company, that the Company will be successful in raising the needed capital and, if funding is available, that it will be available on terms acceptable to the Company or that the Company will find strategic partners or generate substantial revenue from the sale of LYMPHIR. The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might result from the outcome of the above uncertainty.

3. INVENTORY

Inventory is stated at the lower of actual accumulated costs or net realizable value. Inventory consists of finished goods of $8,962,493, and work in process of $8,246,474 as of June 30, 2025. Inventory consists of finished goods of $6,134,895, and work in process of $2,133,862 as of September 30, 2024. Inventory is all related to the manufacturing of LYMPHIR commercial products expected to be sold commencing in the fourth quarter of 2025. No reserves against inventory were deemed necessary based on an evaluation of the product expiration dating.

4. PREPAID EXPENSES

Prepaid expenses at June 30, 2025 and September 30, 2024 consist of $1,100,000 and $2,700,000, respectively, 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.

5. PATENT AND TECHNOLOGY LICENSE AGREEMENTS

License Agreement with Eisai

In September 2021, Citius Pharma 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. Citius Pharma renamed E7777 as I/ONTAK and also obtained the trade name of LYMPHIR for the product. Citius Pharma assigned these agreements to us effective April 1, 2022. The Company received a BLA approval from the FDA for LYMPHIR in August 2024.

Under the terms of these agreements, Citius Pharma acquired Dr. Reddy’s exclusive license for E7777 from Eisai and other related assets owned by Dr. Reddy’s (which are now owned by Citius Oncology). The exclusive license rights include rights to develop and commercialize E7777 in all markets except for Japan and certain parts of Asia. Additionally, we retained an option on the right to develop and market the product in India. Eisai retains exclusive development and marketing rights for the agent in Japan, China, Korea, Taiwan, Hong Kong, Macau, Indonesia, Thailand, Malaysia, Brunei, Singapore, India (subject to the India option prior to FDA approval), 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 from Dr. Reddy’s. 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.

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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 $22.5 million remains due as of June 30, 2025. Pending further discussions with Dr. Reddy’s, Dr. Reddy’s agreed to a partial deferral without penalty of this milestone payment. On July 10, 2025, Citius Pharma made a payment of $1,000,000 to Dr. Reddy’s against the outstanding milestone approval fee. On July 28, 2025, Citius Oncology made a payment of $1,250,000 to Dr. Reddy’s against the outstanding milestone approval fees.

Under the license agreement, Eisai was to receive a $5.9 million milestone payment upon FDA approval, which is included in license payable at June 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 also 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 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 for LYMPHIR 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. Citius Oncology has 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 $2,350,000 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 nine months ended June 30, 2025 Citius Oncology recorded $160,755 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 the failure of Citius Oncology 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. On July 15, 2025, Citius Pharma made a payment of $1,091,167.12 to Eisai for the outstanding milestone approval fee and accumulated interest associated with the letter agreement. On July 21, 2025, Citius Oncology made a payment to Eisai of $1,616,521.96 for other certain 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. 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) 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.

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As part of the definitive agreement with Dr. Reddy’s, Citius Pharmaceuticals acquired method of use patents in which LYMPHIR is administered in combination with the programmed cell death protein 1 (“PD-1”) pathway inhibitor drug class. PD-1 plays a vital role in inhibiting immune responses and promoting self-tolerance through modulating the activity of T-cells, activating apoptosis of antigen-specific T cells and inhibiting apoptosis of regulatory T cells.

The following patents were acquired and subsequently transferred to us:

● 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.

Upon FDA approval of LYMPHIR in August 2024, the Company was subject to approval milestone payments totaling $33.4 million. The $33.4 million was recorded as in-process research and development asset and will be subject to amortization over the regulatory exclusivity period commencing upon revenue generation.

6. STOCKHOLDER’S EQUITY

Authorized Capital Stock

The certificate of incorporation adopted on August 5, 2024, in connection with the Merger, authorized 110,000,000 shares, of which 100,000,000 shares are common stock with a par value of $0.0001, and 10,000,000 shares are preferred stock with a par value of $0.0001. On April 7, 2025, pursuant to Board and stockholder approval, the Company amended its Certificate of Amendment to increase the authorized shares of common stock from 100,000,000 shares to 400,000,000 shares.

Stock Plans

Under the 2023 Citius Oncology Omnibus Stock Incentive Plan, adopted on April 29, 2023, we reserved 15,000,000 common shares for issuance. On August 2, 2024, we reserved an additional 15,000,000 common shares for issuance under the 2024 Citius Oncology Omnibus Stock Incentive Plan. The 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.

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 Citius Pharmaceuticals common stock until such time as we have 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 stock plans is presented below:

		Shares				Weighted- Average Exercise Price				Weighted- 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			(333,333	)			1.74
Outstanding at June 30, 2025			18,166,667			$	1.82				8.43 years			$	46,051,667
Exercisable at June 30, 2025			5,554,167			$	1.99				8.13 years			$	13,098,333

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On December 2, 2024, the Board of Directors granted options to purchase 200,000 common shares at an exercise price of $1.02 per share.

On December 12, 2024, the Board of Directors granted options to purchase 5,550,000 common shares at an exercise price of $1.07 per share.

The weighted average grant date fair value of the options granted during the nine months ended June 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.

Stock-based compensation expense for the three months ended June 30, 2025 and 2024 was $2,125,237 and $1,957,000, respectively. Stock-based compensation expense for the nine months ended June 30, 2025 and 2024 was $6,022,287 and $5,831,000, respectively.

At June 30, 2025, unrecognized total compensation cost related to unvested awards under the Citius Oncology stock plans of $9,909,073 is expected to be recognized over a weighted average period of 1.41 years.

7. COMMERCIAL MANUFACTURING CONTRACTS

The Company has entered into an agreement with a contract manufacturing organization for the manufacture and supply of drug substance. The agreement runs through calendar 2026, with an automatic renewal for a subsequent four-year term. Under this agreement, the Company is obligated to purchase minimum annual quantities of batches at a set price per batch, subject to annual increases. Additionally, the Company is required to pay an annual service fee of $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 June 30, 2025, the total minimum purchase commitment under this agreement was approximately $18.3 million consisting of payments of $11.9 million and $5.4 million for calendar years 2025 and 2026, respectively, and $1.0 million for 2026 pass-throughs and consumable manufacturing components.

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

8. RELATED PARTY TRANSACTIONS

The Company’s officers and directors also serve as officers of Citius Pharma. As of June 30, 2025, the Company does not have any employees. The Company and Citius Pharma entered into the A&R Shared Services Agreement. Under the terms of the agreement, Citius Pharma provides management and scientific services to the Company.

During the three months ended June 30, 2025, Citius Pharma charged the Company $567,937 for reimbursement of general and administrative payroll, $480,000 for reimbursement of research and development payroll, and $27,939 for the use of shared office space. During the three months ended June 30, 2024, Citius Pharma charged the Company $474,688 for reimbursement of general and administrative payroll, $515,838 for reimbursement of research and development payroll, and $30,368 for the use of shared office space.

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During the nine months ended June 30, 2025, Citius Pharma charged the Company $1,703,811 for reimbursement of general and administrative payroll, $1,440,000 for reimbursement of research and development payroll, and $86,246 for the use of shared office space. During the nine months ended June 30, 2024, Citius Pharma charged the Company $1,330,364 for reimbursement of general and administrative payroll, $1,481,964 for reimbursement of research and development payroll, and $91,103 for the use of shared office space.

The Company has limited cash, therefore all the Company’s expenditures are paid by Citius Pharma and reflected in the due to related party account.

Citius Pharma advanced cash to the Company for a non-interest bearing, unsecured promissory note issued by the Company, dated August 16, 2024, in the principal amount of $3,800,111. The note is repayable in full upon a financing of at least $10 million by the Company.

9. NASDAQ LISTING

On April 23, 2025, we received a notification letter from the Nasdaq Stock Market LLC (“Nasdaq”) that we were not in compliance with Nasdaq Listing Rule 5550(a)(2) because the minimum bid price of our common stock closed below $1.00 per share for 30 consecutive business days. On June 26, 2025, we received written notice that for 10 consecutive trading days the closing bid price of our common stock has been at $1.00 per share or greater, and accordingly, we had regained compliance with Nasdaq Listing Rule 5550(a)(2).

9. SUBSEQUENT EVENTS

On July 17, 2025, we completed a public offering of 6,818,182 shares of common stock and warrants to purchase 6,818,182 shares of common stock for gross proceeds of $9,000,000. 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 approximately $7.44 million, after deducting placement agent fees and other offering expenses.

We paid the placement agent a fee of 7.0% of the gross proceeds and expenses of $125,000. Additionally, we 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 five years after such date.

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Item 2. 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 for the three and nine months ended June 30, 2025 and 2024 should be read together with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Report and in conjunction with the audited financial statements of Citius Oncology, Inc. included in our Annual Report on Form 10-K for the year ended September 30, 2024, filed with the Securities and Exchange Commission (“SEC”) on December 27, 2024, as amended on January 27, 2025. The following discussion contains “forward-looking statements” that reflect our future plans, estimates, beliefs and expected performance. Our actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors. We caution that assumptions, expectations, projections, intentions, or beliefs about future events may, and often do, vary from actual results and the differences can be material. Please see “Cautionary Note Regarding Forward-Looking Statements” on page iii of this Report.

Business

Citius Oncology is a specialty biopharmaceutical company focused on developing and commercializing innovative targeted oncology therapies. We are commercializing LYMPHIR (denileukin diftitox), an oncology immunotherapy for the treatment of CTCL, a rare form of non-Hodgkin lymphoma. LYMPHIR was approved by the FDA in August 2024.

We were incorporated in the Cayman Islands on March 1, 2021, for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. In August 2024, we reincorporated in Delaware and completed the Merger whereby we acquired SpinCo as a wholly owned subsidiary and changed our name to Citius Oncology, Inc. SpinCo began operations in April 2022.

Since inception, we devoted substantially all of our efforts to business planning, research and development, and recruiting management and technical staff. The Company is subject to a number of risks common to companies in the pharmaceutical industry including, but not limited to, the Company’s ability to obtain additional financing, risks related to the development by the Company or our competitors of research and development stage products, market acceptance of our approved products, competition from larger companies, dependence on key personnel, dependence on key suppliers and strategic partners and the Company’s compliance with governmental and other regulations.

License Agreement with Eisai

In September 2021, Citius Pharma 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 renamed E7777 as I/ONTAK and also obtained the trade name LYMPHIR^TM for the product. Citius Pharma assigned these agreements to us effective April 1, 2022. 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.

Under the terms of these agreements, Citius Pharma acquired Dr. Reddy’s exclusive license for E7777 from Eisai and other related assets owned by Dr. Reddy’s which are now owned by us. The exclusive license rights include rights to develop and commercialize E7777 in all markets except for Japan and certain parts of Asia. Additionally, we retained an option on the right to develop and market the product in India. Eisai retains exclusive development and marketing rights for the agent in Japan, China, Korea, Taiwan, Hong Kong, Macau, Indonesia, Thailand, Malaysia, Brunei, Singapore, India (subject to the India option prior to FDA approval), 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 from Dr. Reddy’s. 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. We 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. We will also pay to Dr. Reddy’s an amount equal to a low-thirties percentage of any sublicense upfront consideration or milestone payments (or the like) received by us and the greater of (i) a low-thirties percentage of any sublicensee sales-based royalties or (ii) a mid-single digit percentage of such licensee’s net sales. Citius Pharma is a guarantor of Citius Oncology’s payment obligations under these agreements.

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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 $22.5 million remains due as of June 30. 2025. Pending further discussions with Dr. Reddy’s, Dr. Reddy’s agreed to a partial deferral without penalty of this milestone payment.

Under the license agreement, Eisai was to receive a $5.9 million milestone payment, upon FDA approval which is included in license payable at June 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. We were also 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 a BLA for LYMPHIR with the FDA. The BLA was approved by the FDA on August 8, 2024. The Company will be 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 has 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 $2,350,000 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 nine months ended June 30, 2025 we recorded $160,755 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 the failure of Citius Oncology 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. On July 15, 2025, we paid Eisai $2,535,318 plus accrued interest of $172,371.

The term of the license agreement will continue until (i) March 30, 2026, if there has not been a commercial sale of a licensed product in the territory, or (ii) if there has been a first commercial sale of a licensed product in the territory by March 30, 2026, the 10-year anniversary of the first commercial sale on a country-by-country basis. The term of the license may be extended for additional 10-year periods for all countries in the territory by notifying Eisai and paying an extension fee equal to $10 million. Either party may terminate the license agreement upon written notice if the other party is in material breach of the agreement, subject to cure within the designated time periods. 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) 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.

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RESULTS OF OPERATIONS

Three months ended June 30, 2025 compared with the three months ended June 30, 2024

		Three Months Ended June 30, 2025				Three Months Ended June 30, 2024
Revenues		$	—			$	—
Operating expenses:
Research and development			938,277				1,131,439
General and administrative			1,881,447				1,540,411
Stock-based compensation – general and administrative			2,125,237				1,957,000
Total operating expenses			4,944,961				4,628,850
Operating loss			(4,944,961	)			(4,628,850	)
Interest expense			160,755				—
Loss before income taxes			(5,105,716	)			(4,628,850	)
Income tax expense			264,240				144,000
Net loss		$	(5,369,956	)		$	(4,772,850	)

Revenues

We did not generate any revenues for the three months ended June 30, 2025 and 2024.

On June 9, 2025, we announced that we entered into a distribution services agreement with Cardinal Health (NYSE: CAH), a leading provider of pharmaceutical and specialty pharmaceutical distribution services in the United States. This agreement is designed to help provide access to LYMPHIR in support of its anticipated U.S. commercial launch.

On June 17, 2025, we announced that preparations for the commercial launch of LYMPHIR™, an FDA-approved immunotherapy for the treatment of adults with relapsed or refractory cutaneous T-cell lymphoma (CTCL), are nearing completion. The Company believes it is now operationally positioned to transition from a development-stage enterprise to a fully integrated commercial organization, with all major launch-enabling activities underway. Final preparations are in process for an anticipated U.S. launch of LYMPHIR in the second half of 2025.

On July 15, 2025, we announced the execution of a distribution services agreement with Cencora (formerly AmerisourceBergen), a global pharmaceutical services company. This agreement marks another significant step forward in the Company's commercial launch strategy for LYMPHIR.

Research and Development Expenses

For the three months ended June 30, 2025, research and development expenses were $938,277 as compared to $1,131,439 for the three months ended June 30, 2024, a decrease of $193,162 primarily related to lower costs associated with product validation studies.

General and Administrative Expenses

For the three months ended June 30, 2025, general and administrative expenses were $1,881,447 as compared to $1,540,411 for the three months ended June 30, 2024, an increase of $341,036. The primary reason for the increase was the efforts associated with the pre-commercial and commercial launch activities of LYMPHIR associated with market research, marketing, distribution and drug product reimbursement from health plans and payers.

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Stock-based Compensation Expense

For the three months ended June 30, 2025, stock-based compensation expense was $2,125,237 as compared to $1,957,000 for the three months ended June 30, 2024. The primary reason for the $168,237 increase in stock-based compensation expense was the new options granted in December 2024.

Interest Expense

For the nine months ended June 30, 2025, interest expense was $160,755 as compared to $0 for the three months ended June 30, 2024. This was related to the letter agreement with Eisai.

Income Taxes

The Company recorded deferred income tax expense of $264,240 in the three months ended June 30, 2025 as compared to $144,000 in the three months ended June 30, 2024 related to the amortization for taxable purposes of its in-process research and development asset.

Net Loss

For the three months ended June 30, 2025, we incurred a net loss of $5,369,956 compared to a net loss of $4,772,850 for the three months ended June 30, 2024. The $597,106 increase in the net loss was primarily due to the increases of $341,036 in general and administrative expenses and $168,237 in stock-based compensation expense.

Nine months ended June 30, 2025 compared with the nine months ended June 30, 2024

		Nine Months Ended June 30, 2025				Nine Months Ended June 30, 2024
Revenues		$	—			$	—
Operating expenses:
Research and development			5,342,198				3,628,900
General and administrative			7,446,753				4,443,899
Stock-based compensation – general and administrative			6,022,287				5,831,000
Total operating expenses			18,811,238				13,903,799
Operating loss			(18,811,238	)			(13,903,799	)
Interest expense			160,755				—
Loss before income taxes			(18,971,993	)			(13,903,799	)
Income tax expense			792,720				432,000
Net loss		$	(19,764,713	)		$	(14,335,799	)

Revenues

We did not generate any revenues for the nine months ended June 30, 2025 and 2024.

Research and Development Expenses

For the nine months ended June 30, 2025, research and development expenses were $5,342,198 as compared to $3,628,900 for the nine months ended June 30, 2024, an increase of $1,713,298 primarily related to costs associated with the expense of a drug substance batch needed for the pre-license inspection of the manufacturer.

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General and Administrative Expenses

For the nine months ended June 30, 2025, general and administrative expenses were $7,446,753 as compared to $4,443,899 for the nine months ended June 30, 2024, an increase of $3,002,854. The primary reason for the increase was the efforts associated with the pre-commercial and commercial launch activities of LYMPHIR associated with market research, marketing, distribution and drug product reimbursement from health plans and payers.

Stock-based Compensation Expense

For the nine months ended June 30, 2025, stock-based compensation expense was $6,022,287 as compared to $5,831,000 for the nine months ended June 30, 2024. The primary reason for the $191,287 increase in stock-based compensation expense was the new options granted in December 2024.

Interest Expense

For the nine months ended June 30, 2025, interest expense was $160,755 as compared to $0 for the nine months ended June 30, 2024. This was related to the letter agreement with Eisai.

Income Taxes

The Company recorded deferred income tax expense of $792,720 in the nine months ended June 30, 2025 as compared to $432,000 in the nine months ended June 30, 2024 related to the amortization for taxable purposes of its in-process research and development asset.

Net Loss

For the nine months ended June 30, 2025, we incurred a net loss of $19,764,713 compared to a net loss of $14,335,799 for the nine months ended June 30, 2024. The $5,428,914 increase in the net loss was primarily due to the increases of $1,713,298 in research and development and $3,002,854 in general and administrative expenses.

LIQUIDITY AND CAPITAL RESOURCES

Liquidity and Working Capital

Citius Oncology has incurred operating losses since inception and incurred a net loss of $19,764,713 for the nine months ended June 30, 2025. At June 30, 2025, we had an accumulated deficit of $59,043,300. The Company has no revenue and has relied on funding from Citius Pharma to finance its operations. At June 30, 2025, we had $112 in cash and a negative working capital of approximately $34.7 million. 

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 June 30, 2025, the Company’s outstanding milestone payments and purchase commitments for 2025 include:

● We have 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 $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. On July 15, 2025, Citius Pharma made a payment of $1,091,167.12 to Eisai for the outstanding milestone approval fee and accumulated interest associated with the letter agreement.  On July 21, 2025, Citius Oncology made a payment to Eisai of $1,616,521.96 for certain other invoices and accumulated interest associated with the letter agreement.

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● 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 $22.5 million remains due as of June 30, 2025. Pending further discussions with Dr. Reddy’s, Dr. Reddy’s agreed to a partial deferral without penalty of this milestone payment.  On July 10, 2025, Citius Pharma made a payment of $1,000,000 to Dr. Reddy’s against the outstanding milestone approval fee.  On July 28, 2025, Citius Oncology made a payment of $1,250,000 to Dr. Reddy’s against the outstanding milestone approval fee.

● We have entered into an agreement with a contract manufacturing organization for the manufacture and supply of drug substance. Under this agreement, the Company is obligated to purchase minimum annual quantities of batches at a set price per batch, subject to annual increases. As of June 30, 2025, the total minimum purchase commitment under this agreement was approximately $18.3 million, consisting of payments of $11.9 million and $5.4 million for calendar years 2025 and 2026, respectively, and $1.0 million for 2026 pass-throughs and consumable manufacturing components.

● As of June 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 amount to approximately $4.5 million consisting of purchase commitment obligations of $2.9 million in calendar years 2025 and $1.6 million in 2026.

We plan to continue to rely on funding from Citius Pharma, to raise capital through equity financings from outside investors and to generate revenue from the future sales of LYMPHIR. We also have retained Jefferies LLC as our exclusive financial advisor in evaluating strategic alternatives aimed at maximizing shareholder value. There is no assurance, however, that Citius Pharma will have the resources to continue funding us, that we will be successful in raising the needed capital and, if funding is available, that it will be available on terms acceptable to us or that we will find strategic partners or generate substantial revenue from the sale of LYMPHIR.

During the three months ended June 30, 2025, Citius Pharma received net proceeds from equity offerings of approximately $10.5 million.

On July 17, 2025, we completed a public offering of 6,818,182 shares of common stock and warrants to purchase 6,818,182 shares of common stock for gross proceeds of $9,000,000. 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 approximately $7.44 million, after deducting placement agent fees and other offering expenses.

After giving effect to the Citius Pharma equity offerings during the three months ended June 30, 2025 and our July 2025 public offering, we expect that we and Citius Pharma collectively will have sufficient funds to continue our operations through September 2025. We will need to raise additional capital in the future to support our operations beyond September 2025, including to complete the launch of LYMPHIR. 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.

17

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 and Estimates

The preparation of our financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities as of the date of the financial statements and the amounts of revenues and expenses recorded during the reporting periods. We base our estimates on historical experience, where applicable, and other assumptions that we believe are reasonable under the circumstances. Actual results may differ from our estimates under different assumptions or conditions.

Our critical accounting policies and use of estimates are discussed in, and should be read in conjunction with, the annual consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended September 30, 2024, filed with the SEC on December 27, 2024, as amended on January 27, 2025.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Evaluation of 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 June 30, 2025. 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 June 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.

Changes In Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A. Risk Factors.

There have been no material changes to the Company’s risk factors as disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024, filed with the SEC on December 27, 2024, as amended on January 27, 2025, or in the Company’s Quarterly Report on Form 10-Q for the nine months ended June 30, 2025.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

During the quarter ended June 30, 2025, none of our directors or officers adopted or terminated any contract or written plan for the purchase or sale of our securities.

On August 17, 2025, we issued to a financial advisor warrants to purchase up to 477,273 shares of our common stock with an exercise price of $1.65 per shares and that expire on August 17, 2030. The warrants were issued in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended.

19

Item 6. Exhibits.

3.1		Certificate of Incorporation of Citius Oncology, Inc. (incorporated by reference to Exhibit 3.1 of Form 8-K filed on August 16, 2024).
3.2		Certificate of Amendment to the Certificate of Incorporation of Citius Oncology, Inc., filed with the Secretary of State of the State of Delaware on April 7, 2025.
4.1		Warrant Agency Agreement, dated as of July 17, 2025, by and between Citius Oncology, Inc. and Equiniti Trust Company, LLC (incorporated by reference to Exhibit 4.1 of Form 8-K filed on July 18, 2025).
4.2		Form of Common Warrant (incorporated by reference to Exhibit 4.2 of Form 8-K filed on July 18, 2025).
4.3		Form of Placement Agent Warrant (incorporated by reference to Exhibit 4.3 of Form 8-K filed on July 18, 2025).
10.1		Placement Agency Agreement, dated as of July 16, 2025, between Citius Oncology, Inc. and Maxim Group LLC (incorporated by reference to Exhibit 10.1 of Form 8-K filed on July 18, 2025).
10.2		Securities Purchase Agreement, dated as of July 16, 2025, between Citius Oncology, Inc. and the purchaser named therein (incorporated by reference to Exhibit 10.2 of Form 8-K filed on July 18, 2025).
31.1		Certification of the Principal Executive Officer pursuant to Exchange Act Rule 13a-14(a).*
31.2		Certification of the Principal Financial Officer pursuant to Exchange Act Rule 13a-14(a).*
32.1		Certification of the Principal Executive and Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes Oxley Act of 2002.*
EX-101.INS		Inline XBRL Instance Document*
EX-101.SCH		Inline XBRL Taxonomy Extension Schema Document*
EX-101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document*
EX-101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document*
EX-101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document*
EX-101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document*
EX-104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)*

* Filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CITIUS ONCOLOGY, INC.
Date: August 12, 2025	By:	/s/ Leonard Mazur
		Leonard Mazur
		Chief Executive Officer (Principal Executive Officer)
Date: August 12, 2025	By:	/s/ Jaime Bartushak
		Jaime Bartushak
		Chief Financial Officer (Principal Financial and Accounting Officer)

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FAQ

What was Citius Oncology's cash position as of June 30, 2025 (symbol: TENKU)?

As of June 30, 2025 the company reported $112 in cash and cash equivalents.

How long is Citius Oncology's cash runway after the July 17, 2025 offering (symbol: TENKU)?

After giving effect to the July 17, 2025 financing, the company expects sufficient funds to continue operations through September 2025.

How much did the July 17, 2025 public offering raise for Citius Oncology (symbol: TENKU)?

The offering raised gross proceeds of $9.0 million and net proceeds of approximately $7.44 million after fees and expenses.

Has LYMPHIR been approved by the FDA for Citius Oncology (symbol: TENKU)?

Yes. The company received FDA approval for LYMPHIR (denileukin diftitox) with the BLA approved on August 8, 2024.

What are the company’s material near-term payment obligations (symbol: TENKU)?

Material near-term obligations include a remaining $22.5 million milestone to Dr. Reddy's, a $5.9 million Eisai milestone included in license payable and scheduled payments under the Eisai letter agreement, plus manufacturing commitments of ~$18.3 million and packaging commitments of ~$4.5 million.

Is Citius Oncology compliant with Nasdaq listing rules (symbol: TENKU)?

The company received notice that it regained compliance with Nasdaq Listing Rule 5550(a)(2) on June 26, 2025 after the closing bid price met the $1.00 threshold for the required period.